Press Release

PUC Approves TelCove Sale to Level 3

Published on 7/20/2006

Filed under: Telecommunications

HARRISBURG, Pa. – The Pennsylvania Public Utility Commission (PUC) today approved the sale of TelCove Inc. to Level 3 Communications Inc.

        The Commission voted 4-1 to approve the sale, which totals more than $1.24 billion in both cash and stock transactions. The companies filed a joint application for approval of a change in ownership on May 12, 2006. No protests or comments were received concerning the transaction. Under the terms of the agreement, Level 3 will acquire control of TelCove through a multi-step transaction. Commission Chairman Wendell F. Holland dissented.

        “I believe this acquisition is not in the public interest,” Chairman Holland said in his dissent. “Throughout the past few mergers, I have echoed a continuing concern about jobs. In the AT&T case, a majority of this Commission voted to ensure that AT&T would not eliminate 250 jobs. In the Sprint matter, the company was required to file commitments that it would not reduce job levels. My dissenting vote is based on information relating to jobs. In my opinion, this case should have been treated just like the others.”

        TelCove operates throughout the state as TelCove of Pennsylvania, TelCove of York, TelCove of Eastern Pennsylvania, TelCove Operations and TelCove Investments. TelCove and Level 3 operational entitiesalso serves consumers throughout Pennsylvania.

        According to the companies, the transaction will be seamless to consumers. The company will continue to provide service to its existing customers in Pennsylvania under the same rates, terms and conditions.

        In agreeing to the merger, the Commission determined that the joint applicants met their burden of proof that the merger is in the public interest. According to the joint application, the merger will provide significant benefits because TelCove will benefit from Level 3’s technical and management expertise, financial sources and complementary suite of services. The acquisition should enable both TelCove and Level 3 to strengthen their competitive positions in the state, benefiting consumers and the telecommunications marketplace, according to the application.

        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 stewards of competition. For recent news releases, or more information about the PUC, visit our website at www.puc.state.pa.us.

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Docket No. A-310633F0007

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