SEATTLE – The Public Counsel Section of the Washington State Attorney General’s Office wants conditions placed on the proposed merger of CenturyTel and Embarq to protect customers served by the phone companies.
“CenturyTel and Embarq have provided little information about how they plan to operate after their pair up,” Assistant Attorney General Sarah Shifley said. “We want to ensure that service is not degraded and that customers benefit from any reductions in company expenditures.”
Public Counsel represents residential and small-business customers before the Utilities and Transportation Commission, which is considering the merger request.
In expert witness testimony filed today with the UTC, Public Counsel raised a number of concerns about the proposed merger, including how integrating operations of the two companies might lower the quality of service. To ensure that customers are not harmed, Public Counsel recommended the UTC place the following conditions on approval:
- Require written notice to all customers of the merger and any service changes, including new company name(s) or changes to billing format.
- Require that any savings resulting from the merger be shared with ratepayers in the form of bill credits. For example, savings may occur from the elimination of office locations and reduced staffing to eliminate duplication.
- Establish additional reporting requirements to monitor integration of operations and protect against deterioration of service quality.
- Not allow costs accrued by the merger or branding to be passed along to consumers in the form of higher rates.
- Require additional investment in DSL/broadband availability. Embarq and CenturyTel provide high-speed Internet service, as well as phone service.
The commission will consider Public Counsel’s recommendations along with testimony filed by other parties and will hold evidentiary hearings in Olympia this April. UTC approval is required for the merger to take place. . The UTC may approve, approve with conditions or reject the merger and is expected to issue a decision by June 2009.
CenturyTel agreed last October to acquire its local rival Embarq in an all-stock deal for about $5.8 billion, excluding debt. Including debt, the deal is reportedly worth about $11.6 billion. The proposed merger would give CenturyTel and Embarq an operating presence in 33 states.
CenturyTel, based in Monroe, La., provides local telephone service in Washington through four subsidiaries, serving approximately 150,000 customers in small and mid-sized cities. Embarq, headquartered in Overland Park, Kan., provides local telephone service to approximately 73,000 customers in Washington. For a list of service locations, see www.centurytelembarqmerger.com/stateByState.cfm.
Members of the public can comment on the proposed merger. Comments can be made online at http://utc.wa.gov/comment, by e-mail at firstname.lastname@example.org or by writing to WUTC, P.O. Box 47250, Olympia, WA, 98504. Include your name, mailing address and docket no. UT-082119.
The Public Counsel Section advocates for the interests of consumers on major rate cases, mergers and other rulemakings before the UTC. Public Counsel also advocates for consumers in court appeals, through technical study groups and before the Legislature and other policy makers. The office maintains contact with the public through a citizen advisory committee, community organizations, public hearings and personal contact with consumers in major cases. More information about Public Counsel’s work is available online atwww.atg.wa.gov/utilities.aspx.
Media Contacts: Kristin Alexander, Media Relations Manager - Seattle, (206) 464-6432
Sarah Shifley, Assistant Attorney General, (206) 464-6595