Before the Public Service Commission of South Dakota
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BEFORE THE PUBLIC SERVICE COMMISSION OF SOUTH DAKOTA In the Matter of 1 1 SBC Long Distance, Inc. 1 Case No. 1 Petition for Approval of Internal Corporate 1 Reorganization and Other Related Changes 1 PETITION AND REQUEST FOR EXPEDITED ACTION Pursuant to Section 49-31-3 of the South Dakota Code, and the regulations of the Public Service Commission, SBC Long Distance, Inc., formerly known as Southwestern Bell Co~nmunicationsSesvices Inc. d/b/a SBC Long Distance ("SBC Long ~istance"),' hereby respectfully requests Commission consent to and approval of the reorganization and conversion of SBC Long Distance from a corporation to a limited liability company, to be known as SBC Long Distance, LLC, and of other ancillary regulatory approvals as set forth below. PURSUANT TO SECTIONS 20:10:24:02(15) and 20:10:32:03(22) OF THE ADMINISTRATIVE RULES, AND FOR THE REASONS SET FORTH BELOW, SBC LONG DISTANCE FURTHER REQUESTS THE COMMISSION TO GRANT ITS APPROVAL ON AN EXPEDITED BASIS, AND TO EXEMPT IT FROM TlXE PUBLICATION AND HEAIRING REO-UIREI\/iENTS OF THE RULES, SO AS TO ALLOW SBC LONG DISTANCE TO CONSUMMATE ITS REORGANIZATION AND CONVERSION ON OR ABOUT MARCH 31,2005. In support thereof, the joint petitioners respectfully show the Commission as follows: 1. SBC Long Distance was granted authority to provide interexchange telecommunications services in the State of South Dakota by Order Granting Certificate of Authority, TC97- 1 SBC Long Distance filed a Notice with the Commission, dated November 17, 2004, regarding the change of corporate name from Southwestern Bell Communications Services Inc. to SBC Long Distance, Inc. 132, dated August 27, 1997, as amended by Order Granting Certificate of Authority, TC04-098, dated June 30,2004. See Exhibit A hereto. 2. SBC Long Distance was granted authority to provide facilities-based and resold local exchange and exchange access telecommunications service within South Dakota by Order Granting Certificate of Authority, TC04-029, dated June 11, 2004. See Exhibit B hereto. 3. SBC Long Distance currently offers intrastate interexchange telecommunications service pursuant to the terms of a filed tariff. 4. By Order TC04-192, dated October 20, 2004, the Commission approved an Adoption Agreement between SBC Long Distance and Qwest Corporation. Currently pending before the Commission in Docket No. TC04-208 is a filing for approval of an Amendment to an Interconnection Agreement between SBC Long Distance and Qwest. 5. SBC Long Distance is currently a wholly owned subsidiary of SBC Communications Inc. ("SBC"), a holding company whose subsidiaries and affiliates operate predominantly in the communications service industry and have provided telecommunications services for over 100 years. SBC is publicly traded on the New York Stock Exchange (Symbol: SBC) with a market capitalization of approximately $84 billion. 6. In support of the Consent of the Board of Directors of the joint petitioners, draft copies of which are attached hereto as Exhibit C hereto, SBC and its subsidiaries seek to undertake a corporate reorganization pursuant to which (a) SBC Long Distance will contribute its stock to its affiliate SBC Telecom, Inc.; (b) SBC Long Distance will convert to a limited liability company to be known as SBC Long Distance, LLC; (c) SBC Telecom will contribute all of its assets and liabilities to SBC Long Distance, LLC; and (d) SBC will contribute the stock of SBC Telecom (which will own SBC Long Distance, LLC) to SBC Teleholdings, Inc. At present, SBC Telecom and SBC Teleholdings are wholly owned direct subsidiaries of SBC. Following the proposed reorganization, SBC Long Distance, LLC will remain a wholly owned subsidiary of SBC, which will control SBC Long Distance, LLC through two intermediary, wholly owned subsidiaries - i.e., SBC Teleholdings (wholly owned by SBC) and SI3C Telecom (wholly owned by SBC Teleholdings). The direct parent of SBC Long Distance, LLC following the reorganization will be SBC Telecom. 7. The proposed reorganization will result in a consolidation of SBC owned and controlled assets through the rearranging of the ownership interests of SBC in its subsidiaries. At present, SBC offers local exchange service in certain states outside of its service territory through SBC Telecom, and in other states through SBC Long Distance. The proposed reorganization is being done to minimize the possibility of customer confusion, promote continuity of services, and offer a full range of services under the SBC Long Distance brand. 8. The proposed assignment will be financed completely by SBC, the joint petitioners' parent company. The financial condition of the joint petitioners' parent company, SBC Communications, Inc. ("SBC"), is attached hereto as Exhibit D. 9. The telephone customers of SBC Long Distance will see virtually no change as the result of the approval of this assignment. Currently SBC Long Distance has 4,517 residential customers, and 372 commercial customers, in the State of South Dakota. Upon approval of this joint filing by the Commission, telephone services will continue to be provided to residents of the State by SBC Long Distance, and SBC Long Distance will submit such corporate filings with the Secretary of State as are required to convert to a limited liability company. No changes to services or prices will occur as a result of the proposed assignment. The SBC Long Distance tariff currently on file with the Commission will remain unchanged, other than those cosmetic changes required to effectuate the name change to SBC Long Distance, LLC. Customer billing, customer care contacts, and company mailing addresses will remain unchanged from those currently in effect. SBC Long Distance will be eliminated as a separate corporate entity by appropriate filings with the South Dakota Secretary of State. 9. No other utility in the State of South Dakota will be affected as a result of the proposed assignment. 10. SBC Long Distance respectfully submits that approval of the proposed assignment will serve the public interest because it will permit a more efficient means of providing telecommunications services to customers in South Dakota. SBC Long Distance understands that it is bound to follow all rules and regulations of the Commission, and, upon its conversion to a limited liability company, will continue to accept as its own all requirements imposed upon it as a result of its originally issued Certificates of Convenience and Necessity. 11. Pursuant to Sections 20: lO:24:02(15) and 20: lO:32:03(22) of the Administrative Rules, SBC Long Distance respectfully urges the Commission to exempt it from the obligation to issue to its subscribers a notification of the planned reorganization. Pursuant to Section 266(f) of the General Corporation Law of the State of Delaware, where SBC Long Distance is currently incorporated, a conversion ~f a domestic cmporation to a limited liability "shall not constitute a dissolution of such corporation and shall constitute a continuation of the existence of the converting corporation in the form of the applicable other entity." Thus, the conversion of SBC Long Distance is not an assignment to another entity which might otherwise trigger applicable subscriber notification requirements. In the instant case, moreover, a subscriber notification may serve unduly to confuse customers, since SBC Communications Services Inc. already does business in the State of South Dakota under the name SBC Long Distance. The corporation's conversion to a limited liability company will not entail a name change evident to customers, and will not alter their service in any way. Nevertheless, to the extent the Commission deems it to be necessary, SBC Long Distance is prepared to provide a Customer Notice in substantially the form attached hereto as Exhibit E notifying its subscribers of its planned reorganization. The Notice will provide that the reorganization will be completed and service will start to be provided under the SBC Long Distance, LLC name on or about March 3 1,2005. Pursuant to Sections 20:10:24:02(15) and 20:10:32:03(22) of the Administrative Rules, SBC Long Distance hereby requests the Commission to process the instant filing on an expedited basis, and to exempt SBC Long Distance from otherwise applicable publication, notice, hearing and application content requirements, so as to enable SBC Long Distance to consummate the transactions set forth in this filing on or about March 31, 2005. SBC Long Distance respectfully submits that such expedited treatment and exemptions would serve the public interest by enabling SBC Long Distance to achieve the economic benefits which will result from these transactions as soon as possible. Because of SBC's nation-wide operations, the subject transactions can be consummated only when required regulatory approvals are obtained in all states where joint petitioners do business. SBC Long Distance further submits that such relief is reasonable given the fact that the subject transactions are organizational in nature, and will not affect service to end users, give any party undue advantage over another, or adversely affect South Dakota consumers or the public at large. 13. All correspondence concerning this filing should be directed as follows: SBC Long Distance: Norman Descoteaux Associate Director - Regulatory SBC Long Distance, Inc. 5850 W. Las Positas Blvd., Room NE137 Pleasanton, CA 94588 Tel: 925-468-6209 Fax: 707-435-6640 E-mail: ndl639 @ camail.sbc.com In addition, all correspondence concerning this Petition should be directed to the