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    CenturyTel,
Inc.

    100
CenturyTel Drive

    Monroe,
LA  71203

    June 8,
2009

              United
      States Securities and Exchange Commission

              FILED
      VIA EDGAR

              100
      F Street, N.E.

              Washington,
      D.C.  20549

              ATTENTION:

              Mr.
      Larry Spirgel

              Assistant
      Director

              RE:

              CenturyTel,
      Inc.

              Form
      10-K for the year ended December 31,
2008

    Dear Mr.
Spirgel:

    By letter
dated May 27, 2009, the Staff provided to CenturyTel, Inc. certain comments with
respect to its review of our Form 10-K for the year ended December 31,
2008.  Our responses to the Staff’s letter are contained
herein.  In responding to each comment, we have reproduced below the
full text of the Staff’s comment, which is followed by our
response.

    Form 10-K for the year ended
December 31, 2008

    Financial
Statements

    (3) Goodwill and Other
Assets, page 92

    Comment
1.  We noted that goodwill accounted for 49% of total assets as of
December 31, 2008.  We note that revenues, operating income and
segment income have declined in recent quarters due to the negative impact of
the current economic environment.  As a result of your impairment test
of your reporting units as of September 30, 2008, you determined that your
goodwill balance was not impaired.  In light of the significance of
your goodwill balance, we expect robust and comprehensive disclosure in your
critical accounting policies regarding your impairment testing
policy.  This disclosure should provide investors with sufficient
information about management’s insights and assumptions with regard to the
recoverability of goodwill.  Specifically, we believe you should
provide the following information:

    •      Provide
a more detailed description of the steps you perform to review goodwill for
recoverability.

    •      Disclose
a breakdown of your goodwill balance as of December 31, 2008 by reporting
unit.

    •      Disclose
any changes to your reporting units or allocations of goodwill by reporting unit
and the reasons for such changes

    •      Describe
the nature of the valuation techniques and the significant estimates and
assumptions you employed to determine the fair value of your reporting units in
your impairment analysis.  For example, if you utilize the discounted
cash flow approach, you should disclose the discount rates for each reporting
unit and how those discount rates were determined, including your consideration
of any market risk premiums.  In addition, we believe your disclosure
should address your estimates of future cash flows, as follows:

    ♦          Provide
a discussion of your historical cash flow growth rates and explain how your
historical growth rates were considered when determining the growth rate to be
utilized in your cash flow projections.

    ♦           Disclose
the growth rate you need to achieve in your cash flow projections in order to
avoid having a goodwill impairment charge.

    ♦            In
view of the current economic environment, discuss how you considered the
uncertainties inherent in your estimated future growth rates.  For
example, you should explain if and when you anticipated a recovery of the
economy in your growth rates used in your cash flow analysis.

    •      Describe
changes to the assumptions and methodologies, if any, since your last impairment
test.

    For
further guidance, refer to Release No. 33-8350 “Interpretation: Commission
Guidance Regarding Management’s Discussion and Analysis of Financial Condition
and Results of Operations.”

    Response:

    In future
filings that include our critical accounting policies disclosure, we will
provide additional disclosure regarding our process for testing for goodwill
impairment.  Our proposed disclosure that would be included in future
filings is as follows (subject to additional updating to reflect our pending
acquisition of Embarq Corporation (“Embarq”) and 2009 impairment testing
results):

    * * * * *
* *

    We are
subject to testing for impairment of long-lived assets under two accounting
standards, Statement of Financial Accounting Standards No. 142, “Goodwill and
Other Intangible Assets” (“SFAS 142”), and Statement of Financial Accounting
Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived
Assets” (“SFAS 144”).

    SFAS 142
requires goodwill recorded in business combinations to be reviewed for
impairment at least annually and requires write-downs only in periods in which
the recorded amount of goodwill exceeds the fair value.  As disclosed
in the below table, substantially all of our goodwill is associated with our
local exchange telephone operations.  For the last several years, we
have managed our local exchange telephone operations based on three geographic
regions (which we internally refer to as Midwest, Southern and Missouri) and
have considered these three operating regions to be our reporting units in
testing for goodwill impairment of our telephone operations.  For the
last several years, the remainder of our goodwill has been associated with our
competitive local exchange carrier (CLEC), fiber transport, security monitoring
and other operations of our business, all of which have been treated as separate
reporting units in our goodwill impairment testing.

    The
breakdown of our goodwill balances as of December 31, 2008 by reporting unit is
as follows (amounts in thousands):

              Telephone
      operations (Midwest)

              $

              1,141,243

              Telephone
      operations (Southern)

              1,604,467

              Telephone
      operations (Missouri)

              1,220,175

              CLEC
      operations

              29,935

              Fiber
      transport operations

              10,607

              Security
      monitoring operations

              4,966

              All
      other operations

              4,281

              Total
      goodwill

              $

              4,015,674

    There
have been no significant changes to our reporting units or allocation of
goodwill to the respective reporting units in recent years.  We do
expect, however, to increase the number of operating regions (and reporting
units) in connection with our pending acquisition of Embarq.

    We
estimate the fair value of our telephone operations reporting units using a
multiple of earnings before interest, taxes and depreciation (EBITDA), as
described below.  For each telephone reporting unit, we compare its
estimated fair value to its carrying value.  If the estimated fair
value of the reporting unit is greater than the carrying value, we conclude that
no impairment exists.  If the fair value of the reporting unit is less
than the carrying value, a second calculation is required in which the implied
fair value of goodwill is compared to its carrying value.  If the
implied fair value of goodwill is less than its carrying value, goodwill must be
written down to its implied fair value.  We completed the required
annual test of goodwill impairment (as of September 30, 2008) for our telephone
reporting units under SFAS No. 142 and determined that our goodwill was not
impaired as of such date.

    The
multiple of EBITDA we utilize in our goodwill impairment testing for our
telephone operations is supported by a sum-of-the-parts independent valuation
analysis performed and updated annually by a major investment banking firm on
behalf of its clients.  This valuation report includes CenturyTel as
well as other peer companies in the rural local exchange carrier
industry.  In the most recent analysis performed by this firm,
valuations of specific assets were based on a combination of public and private
market comparables and EBITDA multiples were generally based on access line
trends and the future expectations of those trends. Based on the above, the firm
concluded in its independent valuation report that CenturyTel’s local exchange
telephone operations were valued based on a multiple of EBITDA of 6.5
times.  Such multiple was used in our goodwill impairment analysis
performed as of September 30, 2008.  For the past several years, we
have consistently utilized the EBITDA multiples derived from this independent
analysis.  The EBITDA multiple derived in the analyst report and
utilized in our goodwill impairment testing decreased from 7.0 in 2007 to 6.5 in
2008, in large part we believe due to the continued erosion of our access
lines.

    We
estimate the fair value of our other reporting units using various methods,
including multiples of EBITDA (as described above), multiples of revenues and
discounted cash flow analysis.  The primary assumptions used in the
discounted cash flow analysis include projections of our expected cash flows
(based on projected revenues, operating costs and capital expenditures) which
are discounted based on a weighted average cost of capital which reflects the
overall level of inherent risk involved in our operations and cash
flows.  We completed the required annual test of goodwill impairment
(as of September 30, 2008) for our other reporting units and determined that our
goodwill was not impaired as of such date.

    * * * * *
* *

    Comment
2.  We note on page 64 that you concluded that you did not have a
triggering event that would require you to perform an interim evaluation of your
goodwill for potential impairment.  You relied upon a review of the
specific factors of SFAS 142 and a determination that you had a market
capitalization in excess of your stockholders’ equity after assuming a 35%
control premium.  However, we note that you have had a continuing loss
of access lines, have been impacted by the decline in the economy and the stock
market.  It appears there has been a significant adverse change in
business climate, which is a specific factor identified in SFAS No. 142 that
would necessitate an interim impairment test.  Given these
circumstances, it appears more likely that not that the fair value of your
reporting units are below carrying value.  Please explain to us in
detail why you are not performing an interim period goodwill impairment test in
accordance with paragraph 28 of SFAS No. 142.

    Response:
Paragraph 28 of SFAS No. 142 stipulates that goodwill shall be tested for
impairment between annual tests if an event occurs or circumstances change that
would more likely than not reduce the fair value of the reporting unit below its
carrying value (including such things as a significant change in legal factors
or in the business climate, adverse actions by regulators, unanticipated
competition, loss of key personnel, the expectation that a reporting unit will
be sold, and the impairment of other long-lived assets).

    From the
time of our annual goodwill impairment test (September 30, 2008) through year
end 2008, our stock price decreased over 25%, which caused our market
capitalization at December 31, 2008 ($2.741 billion) to fall below our
consolidated equity ($3.163 billion).  As a result of such events, in
early 2009 we reviewed in detail the specific factors outlined in paragraph 28
of SFAS No. 142 to determine if a triggering event had occurred that would
necessitate an interim evaluation of goodwill impairment.  Based on
the factors discussed below, we concluded in early 2009 that there was no
triggering event that would require an interim evaluation of goodwill
impairment.

    We
believe the significant decline in our stock price and market capitalization
during the fourth quarter of 2008 was primarily attributable to the
unprecedented declines in the overall stock markets caused primarily due to the
disruptions in other major industries (specifically the financial services and
automobile industries) rather than events specific to our company or
industry.  To support this, we plotted our stock price trend for the
period from September 30, 2008 to December 31, 2008 against the stock prices of
our closest industry peers along with the trend of the Dow Jones Industrial
Average, and concluded that generally our stock price moved in tandem with these
other comparables.

    We
believe operating cash flow (and similar metrics) is the primary measure of
valuation in our industry. While our access line loss rate has increased in
recent years (and we expect to continue to experience access line losses in the
future), we have maintained a stable level of operating cash flow (which is a
non-GAAP term that we define as operating income plus depreciation and
amortization) during the past three years, as depicted in the table below
(amounts in thousands):

              2008

              2007*

              2006

              Operating
      income

              $

              721,352

              793,078

              665,538

              Add:
      Depreciation and amortization

              $

              523,786

              536,255

              523,506

              Operating
      cash flow

              $

              1,245,138

              1,329,333

              1,189,044

    ___________________

    *  2007
includes $49 million of operating income from the settlement of a dispute with a
carrier and $42.2 million of operating income associated with the settlement of
prior year revenue arrangements, both of which are non-recurring in
nature.  Exclusive of these one-time favorable adjustments, operating
cash flow for 2007 was $1.238 billion.

    Our
projections for operating cash flow for 2009 (excluding the effects of our
pending acquisition of Embarq) are not materially different than the above
amounts for prior years.  The operating cash flow of the individual
reporting units also continues to be consistent with their recent performance
and is consistent with the overall performance of the business.  Due
to our continued ability to generate consistent operating cash flows despite the
continued pressure from access line losses and declines in minutes of use, we
concluded that there was not a significant adverse change in our business
climate that would require an interim evaluation of goodwill
impairment.  We also analyzed the other factors mentioned in paragraph
28 of SFAS No. 142 and concluded that none of those other factors were triggered
to cause an interim evaluation of goodwill impairment during the fourth quarter
of 2008 (nor were any of those factors triggered in the first quarter of
2009).

    In
determining the appropriateness of the 35% control premium that was applied to
our market capitalization at December 31, 2008, we reviewed other recent control
premiums in our industry; such control premiums ranged from 17% to
46%.  The most recent control premium available in our industry
related to CenturyTel’s pending acquisition of Embarq, which, based on Embarq’s
stock price at the announcement date, represented a 36% premium to Embarq
shareholders.  Based on the most recent control premiums in our
industry, we concluded it was reasonable to apply a 35% control premium to our
stock price as of December 31, 2008 to estimate a current market capitalization
value.  After application of a 35% control premium, our market
capitalization was approximately 17% higher than our year-end consolidated
equity.  We also performed a sensitivity analysis which indicated the
application of a control premium of 15% (which is below the low end of the range
of control premiums in recent transactions) to our December 31, 2008 market
capitalization would yield an amount equal to our stockholders’ equity balance
as of such date.

    We also
believe our stock price was negatively and temporarily impacted to some extent
during the fourth quarter of 2008 due to the potential transaction risk
associated with our pending acquisition of Embarq announced in late October 20