ROBERT R. RODECKER CHARLESTON,WEST VIRGINIA25337 AREA CODE 304 [email protected] 343-10U August 14,2013 __ FACSIMILE 343-1057
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J LAW OFFICES ROBERTR. RODECKER BB&T SQUARE 300 SUMMERS STREET, SUITE 1230 POST OFFICE BOX 3713 ROBERT R. RODECKER CHARLESTON,WEST VIRGINIA25337 AREA CODE 304 [email protected] 343-10U August 14,2013 __ FACSIMILE 343-1057 Ms. Sandra Squire Executive Secretary Public Service Commission 201 Brooks Street Charleston, West Virginia 25301 RE: CASENO.13- 1234 -c-PC AT&T INC. AND LEAP WIRELESS INTERNATIONAL, INC. Joint Petition for a Commission Order exempting AT&T’s acquisition of the stock of Leap Wireless from the provisions of West Virginia Code § 24-2-12, or in the alternative, for the consent and approval of proposed transaction in advance Dear Ms. Squire: Enclosed herein please find the original and twelve (12) copies of the Joint Petition of AT&T Inc. (“AT&T”) and Leap Wireless International, Inc. (“Leap”), requesting that the Commission enter an order exempting AT&T’s acquisition of the stock of Leap from the provisions of West Virginia Code § 24-2-12 to the extent such a provision is otherwise applicable. In the alternative, AT&T and Leap request that the Commission grant advance approval of AT&T’s acquisition of the stock of Leap, to the extent such approval is required by applicable law. Should you have any questions regarding this filing, please do not hesitate to contact me. Sincerely, Robert R. Rodecker WV State Bar No. 3145 cc: James Kelsh, Esquire Julie Buechler Mark A. Keffer, Esquire PU B L IC SERVICE CO MM I SS ION OF WEST VIRGINIA CHARLESTON CASE NO. 13- -c-PC AT&T INC. and LEAP WIRELESS INTERNATIONAL, INC. Joint Petition for a Commission Order exempting AT&T’s acquisition of the stock of Leap Wireless from the provisions of West Virginia Code § 24-2- 12, or in the alternative, for the consent and approval of proposed transaction in advance JOINT PETITION Come now the above-named AT&T Inc. (IIAT&TII), and Leap Wireless International, Inc. (“Leap”) (collectively, “Joint Petitioners”) to respectfully request that the Commission enter an order exempting AT&T’s acquisition of the stock of Leap from the provisions of West Virginia Code § 24-2-12 to the extent such a provision is otherwise applicable.’ In the alternative, Joint Petitioners request that the Commission grant advance approval of AT&T’s acquisition of the stock of Leap, to the extent such approval is required by applicable law. In support of their Petition, Joint Petitioners state: 1. That the name and principal business address of AT&T are: AT&T Inc. 208 South Akard Street Dallas, Texas 75202 1 The Joint Petitioners expressly reserve all rights to assert that the transaction is not subject to Commission consent or approval under West Virginia Code § 24-2-12. 2. That the name and address of Leap are: Leap Wireless International, Inc. 5887 Copley Drive San Diego, CA 921 11 3. Designated Contacts AT&T Contacts Leap Contacts Mark A. Keffer Julie Buechler AT&T Services Inc. Cricket Co mm u n icat ions, Inc. 675 W. Peachtree Street Leap Wireless International, Inc. 43'' Floor 5887 Copley Drive Atlanta, GA 30309 San Diego, CA 92111 Phone: (404) 927-3890 Phone: (858) 882-9303 E-mail: [email protected] E-mail: [email protected] Robert R. Rodecker James Kelsh Law Offices of Robert R. Rodecker Bowles Rice LLP P.O. Box 3713 P.O. Box 1386 Charleston, WV 25337 Charleston, WV 25325-1 386 Phone: (304) 343-1654 Phone: (304) 347-1 135 Facsimile: (304) 343-1657 Facsimile: (304) 347-2196 E-mail: [email protected] E-mail: j kelsh @ bowlesrice. co m SUMMARY DESCRIPTION OF THE TRANSACTION 4. On July 12, 2013, AT&T and Leap entered into a Stock Purchase Agreement whereby AT&T will acquire all of the issued and outstanding capital stock of Leap. AT&T will create a subsidiary that will merge with Leap, and as a result, Leap will become a direct subsidiary of AT&T. This will make Leap's CMRS subsidiary operating in West Virginia, Cricket Communications, Inc. ("Cricket"), an indirect subsidiary of AT&T. As a result of the transaction, AT&T will acquire all of Leap's wireless properties, including licenses, network assets, retail stores, and approximately 5 million subscribers across the United States. 2 5. AT&T Inc. is a holding company, which, through its operating subsidiaries, provides communications services throughout the United States and around the world. In West Virginia, AT&T Inc., through various subsidiaries,2 provides local and long distance voice and data networking services and, in addition, provides wireless services in West Virginia through New Cingular Wireless PCS LLC, formerly doing business as Cingular Wireless and now doing business as AT&T Mobility (“AT&T Mobility”). AT&T’s West Virginia wireless subsidiary operates as a seamless part of AT&T’s global wireless operations. 6. Leap is a holding company that provides wireless telecommunications services throughout many parts of the United States under the “Cricket” brand through its operating subsidiary, Cricket, which focuses primarily on prepaid customers. Cricket’s wireless telecommunications services are provided using its own facilities in certain areas and through resale and roaming relationships with other wireless carriers outside of its network footprint. 7. Leap, through its subsidiary Cricket, has a limited presence in West Virginia. It does not have any company-owned retail stores in West Virginia. Cricket’s wireless network facilities provide coverage limited to the Northern Pan handle of West Virginia, and it has only four cell sites in this part of the state. There are no 2 AT&T Inc. is the holding company parent of wholly-owned subsidiaries that are certificated to provide competitive telecommunications services in the State of West Virginia, but that are not involved in the proposed merger transaction. AT&T Corp., a direct subsidiary of AT&T Inc., is authorized to provide interexchange services and resold and facilities-based competitive local exchange services. Teleport Communications America, LLC, a wholly-owned subsidiary of Teleport Communications Group, Inc., which is a wholly-owned subsidiary of AT&T Corp., which in turn is a wholly-owned subsidiary of AT&T Inc., is authorized to provide resold and facilities-based local exchange and interexchange services. BellSouth Long Distance, Inc., d/b/a AT&T Long Distance Service, is a wholly-owned subsidiary of BellSouth Mobile Data, Inc., which is a wholly owned subsidiary of AT&T Inc., and is authorized to provide resold interexchange services. Leap or Cricket employees working in West Virginia. Based on Cricket’s records, it only has approximately 700 West Virginia subscribers. 8. There will be no interruption or diminution in the wireless services provided to the handful of West Virginia Cricket customers as a result of the Leap Acquisition. AT&T will assume full control of Leap and Cricket, its subsidiary serving small segments of West Virginia, and will operate them in accordance with all applicable laws, rules, and regulations. To the limited extent to which Cricket serves customers in West Virginia, the existing Cricket customers will continue to receive service, and AT&T will honor their rate plans. proposed transaction serves the public interest, including the interests of West Virginia consumers. Specifically, it will bring significant transaction-specific benefits without competitive harm. Leap has years of experience marketing and selling prepaidho- contract services with an established retail distribution system, and its Cricket brand is well-recognized in all of its service areas, including the small portion of West Virginia that Cricket serves. AT&T has a fast and reliable nationwide 4G LTE/HSPA+ network that provides its customers with a level and variety of services that Leap does not and cannot offer.4 Combining Leap’s established Cricket brand, spectrum, customer base, distribution network, and experience selling prepaidho-contract service with AT&T’s See ULS File No. 0005860676 (lead application) (filed Aug. 1, 2013), available at http://wireless2.fcc.nov/UlsApp/ApplicationSearch/a~plMain.is~?a~~llD=7710783. 4 Leap’s financial resources and limited spectrum depth make it uneconomic for Leap to upgrade its current 3G CDMA platform to LTE throughout its network. Leap has little prospect today of further financing significant necessary upgrades to cover the remainder of its network footprint. 4 nationwide 4G LTE/HSPA+ network, suite of advanced devices and services, and financial resources, will bring consumers a compelling, nationwide, facilities-based alternative for a full range of prepaidho-contract services. This will include low-cost, value-priced products as well as higher-end, data-oriented products. IO. Existing Leap customers will benefit from access to a more robust national network and a broader array of services. The combined company will offer Leap customers access to AT&T’s nationwide network footprint, superior choice in handsets, more robust data services, and Wi-Fi hotspots across the country. At the same time, AT&T will honor the rate plans of existing Leap customers. For new customers, the combined company will continue to offer competitive rate plans that appeal to value- conscious customers, including the option of choosing low-cost devices and low-cost services. 11. The benefits of the transaction will be achieved without harm to competition. As discussed above, Cricket only operates in a small portion of West Virginia, in the Northern Panhandle near Pittsburgh, Pennsylvania, and only has approximately 700 customers in West Virginia. Moreover, there will be at least seven wireless providers in West Virginia following this transaction, including national carriers AT&T, Verizon, Sprint and T-Mobile, regional carriers such as US Cellular and nTelos, and TracFone, a leading provider of prepaid wireless offerings.