N.J. Ratepayer Advocate’s Recommendation for Prevention of Post-Merger
‘Hardships’ Included in FCC’s Latest Order for Merger Between Sprint and Nextel

Newark, N.J.—New Jersey Ratepayer Advocate Seema M. Singh today said she was pleased that the Federal Communications Commission’s (FCC) recent decision included her division’s recommendation for a requirement of provisions that ensure the new local exchange telecommunications spin-off -- following the merger between Sprint and Nextel--suffer no financial hardships in operating successfully for consumers.

The FCC concluded that Sprint and Nextel have made a commitment that the new local wireline company will receive equitable debt and asset allocation so that the company will be “a financially secure FORTUNE 500® company.” The FCC released its order on Aug. 9, following its prior announcement earlier this month approving the Sprint and Nextel merger.

“We are pleased that the FCC has acknowledged our concerns about the Sprint and Nextel merger,” said Singh. “Their decision has created a path that is better for consumers and the assured vitality of the new local exchange spin-off in each state.” She added, “The Ratepayer Advocate looks forward to participating in upcoming proceedings that will examine the new company’s impact on New Jersey.”

The Ratepayer Advocate had previously filed comments with the FCC expressing concern that the spin-off from the newly formed company should not saddle the local operations of the new company with merger costs while providing no merger benefits for consumers.

The Ratepayer Advocate was particularly concerned that any post-merger financial difficulties experienced by the new company should not create an environment in which increases in rates would be passed on to consumers.

On Aug. 26, Sprint filed with the New Jersey Board of Public Utilities its petition for the new company spin-off. The Ratepayer Advocate will monitor and participate in upcoming proceedings of the merger before New Jersey’s Board of Public Utilities.

Sprint currently has a significant share of the wireline market nationwide, and as a result of the merger, the local exchange wireline business is anticipated to be the largest independent local exchange carrier in the nation.

The Division of the Ratepayer Advocate is an independent state agency that represents the interests of consumers of electric, natural gas, water/sewer and telecommunications and cable TV service. It serves as an active participant in every proceeding whenever New Jersey companies seek changes in rates or services. The Ratepayer Advocate also gives consumers a voice in setting long-range energy, water, and telecommunications policy that will affect the delivery of services well into the future. Additional information on this and other matters can be found at the Division of Ratepayer Advocate’s website at http://www.rpa.state.nj.us

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