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FOR IMMEDIATE RELEASE
July 20, 2006
Embarq Customers Receive July Bill Credits, State-Mandated Protections Against Rate Increases


SEATTLE – Nearly 54,000 Washington residential and business customers who purchase local phone services from Embarq (formerly Sprint-United) will see a credit on their July bill. Customers will also receive protections against future rate hikes as part of an agreement negotiated between Washington’s Public Counsel Section of the Attorney General’s Office, staff of the state Utilities and Transportation Commission (UTC) and Embarq.

"Embarq customers will receive a one-time $7.45 credit in July and safeguards against future rate increases and to help ensure quality service," Attorney General Rob McKenna said. "Public Counsel and staff of the state Utilities and Transportation Commission recommended these provisions to benefit Washington residents impacted by Sprint’s decision to spin off its local telephone service."

In May, Sprint-Nextel spun off its local phone operations in 18 states, including Washington’s United Telephone Company of the Northwest which operated under the Sprint name. The new stand-alone company is now called Embarq and is separate from Sprint’s wireless and long-distance services. Embarq has 7.26 million subscribers nationally, including approximately 54,000 individual customers in parts of Washington, including Kitsap County/Poulsbo, Yakima Valley, and areas along the Columbia River.

The spin-off required and received the approval of regulators in 14 of the 18 states where the company provides local phone service. The Utilities and Transportation Commission approved the spin-off in March subject to several conditions that were jointly recommended by Public Counsel and UTC staff.

Under the settlement, Embarq customers will receive $400,000 in bill credits in July, amounting to $7.45 credit per account.

"Public Counsel and UTC staff negotiated the credits as a way to share profits from the 2003 sale of Sprint’s local yellow pages directory with consumers," Public Counsel Attorney Judy Krebs said. "When a local telephone company sells its yellow pages business, customers are entitled to share the profits from the sale."

"Under this agreement, the proceeds from the sale will be set aside to protect customers from rate increases until 2018, at the latest. Even if Embarq is permitted to increase rates before that time, its customers won’t have to pay the first $1.45 million of requested revenues.

As another condition of the pact, Embarq will offer a customer service guarantee program starting next year, under which the company promises to pay $15 to residential customers and $25 to business customers for missed service repair or installation appointments," Krebs said.

Public Counsel and UTC staff also negotiated dividend restrictions, debt limitations and reporting requirements that will help protect Embarq’s local customers.

The Public Counsel Section was established by the Legislature in 1984 to represent the citizens of Washington in state-regulated utility matters. Public Counsel 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.

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Contacts:
Judy Krebs, Public Counsel Attorney, (206) 464-6595
Kristin Alexander, Public Information Officer, (206) 464-6432

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