Press Release

PUC Approves Merger of Embarq PA and CenturyTel

Published on 5/28/2009

Filed under: Telecommunications

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved the merger of Embarq Pennsylvania and CenturyTel Inc.

The Commission voted 5-0 to approve the merger with certain conditions. The following statements were issued: PUC Chairman James H. Cawley; Vice Chairman Tyrone J. Christy; and Commissioner Wayne E. Gardner. Commissioner Kim Pizzingrilli issued a statement that dissented on a portion of the decision. The company has 30 days to accept the conditions, which include: 

• Maintaining substantially the service levels that they currently provide for wholesale operations, subject to reasonable and normal allowances for the integration of their systems;
• Negotiating multiple contracts in a state at the same time in most circumstances when such consolidated negotiations will aid in addressing common issues;
• Adopting the Embarq Administration and Service Order Exchange (EASE) service order system;
• During the first three years following the merger, submiting a quarterly report on the integration of billing systems and business and repair office operations, with speed of answer included in the report;
• During the first three years following the merger, submiting a quarterly report that identifies the number of company personnel that are associated with maintenance of the Pennsylvania network facilities, with the level of maintenance expense and personnel described in the report;
• Continuing the service quality reporting obligations outlined in the 2005 Spinoff settlement for an additional three-year period following the consummation of the merger, except that the company shall notify the Commission when a service outage repair index falls below 90 percent restored/repaired within 24 hours in any month across the service territory or for three consecutive months in any one exchange;
• Not protesting or challenging a competitive local exchange carrier’s (CLEC) right to interconnect or refuse to extend their interconnection agreements because the CLEC is providing wholesale service; and
• Any merger conditions imposed by the Federal Communications Commission (FCC) with regard to offering stand-alone DSL also shall be extended to Embarq’s Pennsylvania customers to the extent possible. The Commission reserves the right to issue a subsequent order that may incorporate additional merger conditions mirroring those established by the FCC to the extent that these FCC conditions are consistent with applicable Pennsylvania law.

As a result of the transaction, Embarq PA will become an indirect, wholly-owned subsidiary of CenturyTel.   

According to the company, the transaction will not result in any transfer of assets or facilities in Pennsylvania and will be seamless to customers, who will continue to receive service from the same local company at the same terms and conditions as prior to the transaction. 

The Commission found that the merger will be beneficial for Pennsylvanians in several ways, including:

• A combined company that will be a stronger and more financially capable company than if either CenturyTel or Embarq PA were to continue to exist independently;
• The merger will bring together two companies whose businesses are built upon serving local customers in predominantly rural areas and smaller markets by creating a variety of products and services that more directly address the preferences of those customers;
• The combined companies will be better able to invest in infrastructure and bring new products to the service market; and
• A financially stronger firm will benefit all Pennsylvania’s telecommunications consumers because the combined companies will be better positioned than Embarq PA, standing alone, to compete in today’s telecommunications marketplace.

Embarq PA has approximately 326,000 customers in Pennsylvania, across 25 counties.  CenturyTel serves approximately 2.1 million local access lines in 25 states.  The proposed transfer of control will require the approval of the FCC, which has not yet ruled on the proposed merger.

On Nov. 21, 2008, the joint applicants filed the application with the Commission, seeking approvals required under the Pennsylvania Public Utility Code for the indirect transfer of control of the regulated entities to CenturyTel.  

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner.

For recent news releases, audio of select Commission proceedings or more information about the PUC, visit our Web site at www.puc.state.pa.us.

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Docket Number A-2008-2076038

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• Press Secretary
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