Press Release

PUC Receives Commitment Letter on Jobs and Service Quality, Approves Sprint/Nextel’s Separation of Wireline Businesses from Newly Merged Company

Published on 4/6/2006

Filed under: Telecommunications

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today gave final approval to a settlement to separate the newly merged Sprint/Nextel’s wireline local telephone service business -- United Telephone Company of Pennsylvania (United PA) -- into an independent, standalone company apart from its wireless company.  The approval came following the March 29 receipt of a commitment letter from the companies that economic development and service quality in Pennsylvania will not be adversely impacted by the transaction.

“The commitment letter addresses the concerns of the Commission relating to adequate resources and service reliability,” Chairman Wendell F. Holland said in his motion approved today.  “I appreciate the [companies’] cooperation in providing assurances to the Commission that service quality to retail PA customers will not be adversely impacted because of this transaction.  Specifically, I note the [companies’] assertion that this transaction is not expected to result in Pennsylvania job cuts and that higher Pennsylvania employment levels are projected by the end of 2006.”

On Nov. 30, 2005, Sprint, the Office of Consumer Advocate, Office of Small Business Advocate and the Commission‘s Office of Trial Staff filed a Joint Petition for Settlement seeking resolution of a number of contested issues related to this “spin-off.”  The parties reached agreement on a multi-year rate freeze, broadband availability, capital structure, dividend issuances, external debt and service-quality reporting.  In considering the proposed settlement, the PUC voted on March 16 to seek a commitment letter about whether any job cuts are planned before giving final approval to the settlement.

Today’s action addresses the second stage in a two-stage merger.  In the first stage, Sprint merged Nextel into a subsidiary of Sprint.  In the second stage, Sprint intended to spin off 17 local exchange carriers, including United PA, to Sprint/Nextel shareholders.  Commission approval is necessary for the second stage of this merger, and Sprint applied for Commission approval on Aug. 26, 2005.  United PA is Sprint’s local wireline telephone company operating in Pennsylvania.  Sprint’s local Pennsylvania operations provide service in all or parts of 25 counties in Central and Western Pennsylvania.  At the time of the filing, Sprint served approximately 386,000 access lines in Pennsylvania.                         

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition.

For recent news releases, or more information about the PUC, visit our Internet homepage at www.puc.state.pa.us.                                                             

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Docket Nos. 313200F0007 and 311379F0002

Contact:

• Tom Charles
  Director of Communications
  717-787-9504
  thcharles@pa.gov