VIA HAND DELIVERY Sandra Squire Executive Secretary Public Service Commission 201 Brooks Street Charleston, WV 25301 Re: Caseno
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THOMASN. HANNA Attorney at Law 1206 VIRGINIA STREET, EAST, SUITE 201 CHARLESTON, WV 25301 MAILING ADDRESS: TELEPHONE (304)342-1687 P. 0. BOX3967 March 10,2006 FAX (304)342-8761 CHARLESTON, wv 25339 e-mail: thannalawQcharter.net VIA HAND DELIVERY Sandra Squire Executive Secretary Public Service Commission 201 Brooks Street Charleston, WV 25301 Re: CaseNo. 06aL046 Sprint Long Distance, Inc., a corporation. Application for consent and approval to transfer control of Sprint Long Distance, Inc., from Sprint Nextel Corporation to Embarq Corporation. Dear Ms. Squire: On behalf of Sprint Long Distance, Inc., a corporation, I hand you herewith for filing the original and twelve (12) copies of their Application for consent and approval to transfer control of Sprint Long Distance, Inc., from Sprint Nextel Corporation to Embarq Corporation. Please note that expedited action in this filing is requested upon approval of Sprint Long Distance’s application for a certificate to provide resold intrastate interexchange telecommunications services within West Virginia, which application was filed simultaneously herewith. If you need anything further, please let me know. Thomas N. Hanna WV State Bar # 1581 TNH/th Enclosure cc: B. Atkinson, Esq. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON PETITION OF ) 1 SPRINT LONG DISTANCE, INC. 1 FOR THE CONSENT AND APPROVAL TO 1 TRANSFER CONTROL OF 1 Case No. SPRINT LONG DISTANCE, INC. FROM SPRINT NEXTEL CORPORATION TO 1 EMBARQ CORPORATION EXPEDITED APPLICATION FOR AUTHORIZATION FOR TRANSFER OF CONTROL Comes now the above-named Sprint Long Distance, Inc. (“SLDI” or “petitioner”), petitioner herein, and through counsel respectfully shows the Commission as follows: 1. That the name and address of the petitioner are: Sprint Long Distance, Inc. 6200 Sprint Parkway Overland Park, Kansas 6625 1 Correspondence regarding this application should be directed to: Julie Corsig Davis Wright Tremaine LLP 1500 K Street, N.W. Suite 450 Washington, D.C. 20005 (202) 508-6628 j uliecorsin@,dwt.com Thomas N. Hanna Attorney at Law P.O. Box 3967 Charleston, WV 25339 ~ ~ ~~ ~~~~~William R. Atkinson Sprint Nextel 3065 Cumberland Circle Mailstop GAATLD0 602 Atlanta, Georgia 303 39 (404) 649-4882 (0) -m -m 2. That the name and address of the utility whose property is sought to be acquired are: Sprint Long Distance, Inc. 6200 Sprint Parkway Overland Park, Kansas 6625 1 3. That the financial condition of the petitioner and of the utility whose property is sought to be acquired are: Attached as Exhibit A is a balance sheet and income statement for SLDI as of January 3 I, 2006. See Paragraph 6 below regarding the financial condition of the acquiring company, Embarq Corporation. Both SLDI, as the operating company, and Embarq Corporation, as the acquiring company, are financial capable to ensure quality services are provided to the residents of West Virginia. 4. Description of the transaction and the parties to the transaction. Commission approval is requested to transfer control of Sprint Long Distance, Inc. from its current parent company, Sprint Nextel Corporation (“Sprint Nextel”), to Embarq Corporation (“Embarq”). Petitioner requests expedited Commission approval of the proposed transaction no later than April 17,2006. The following is a description of the entities involved in the proposed transaction: Sprint Nextel Corporation. Sprint Nextel is a publicly-traded Kansas corporation with executive headquarters at 200 1 Edmund Halley Drive, Reston, Virginia 201 91 and operational 2 ~~ headquarters at 6200 Sprint Parkway, Overland Park, Kansas 6625 1.* Sprint Nextel is a global communications company providing wireless, long distance, and local communications services. Sprint Nextel’s ILECs provide a full portfolio of communications services, including local, long distance, high-speed data, wireless and video in approximately 18 states. Sprint has no ILEC operations in West Virginia. As of December 3 1,2004, Sprint Nextel’s ILEC operations served approximately 7.7 million local access lines in 18 states. Embarq Corporation. Embarq, a newly formed subsidiary of Sprint Nextel, is a Delaware corporation with its corporate headquarters in the Kansas City metropolitan area, at 5454 11 Ofh Street, Overland Park, Kansas 6621 1. Upon the transfer of control, Embarq will realize control of the Sprint ILEC entities in other states (Le., not in West Virginia) as well as SLDI in West Virginia. At that time, Embarq will operate independently from Sprint Nextel and will have its own management team and board of directors. Upon the separation from Sprint Nextel, Embarq is expected to be a NYSE-listed company with approximately $6 billion in annual revenues, rank among the Fortune 500 and serve as the fifth largest local communications company in the United States based on the company’s 7.4 million access lines as of September 30,2005. The company will provide a suite of communications services, consisting of local and long distance voice and data services, including high-speed Internet access. Sprint Long Distance, Inc. SLDI is a Delaware corporation with principal offices located at 6200 Sprint Parkway, Overland Park, Kansas 6625 1. SLDI is currently a wholly-owned ~~ On December 15,2004, Sprint Corporation and Nextel Communications, Inc. (Nextel) entered into a merger agreement pursuant to which, upon obtaining requisite Sprint and Nextel stockholder approval and satisfaction of the other conditions to the merger, Nextel would merge with and into a wholly owned subsidiary of Sprint. By letter filed February 16,2005, Sprint and Nextel advised this Commission of the planned merger, which did not require Commission approval. The conditions of the merger were satisfied and the merger closed on August 12,2005. The corporation’s new name is “Sprint Nextel Corporation.” In the merger agreement, Sprint and Nextel agreed to use their reasonable best efforts to separate the ILEC business of Sprint, by means of a tax-free spin-off to the then-existing stockholders of Sprint Nextel. 3 subsidiary-of~ Sprint Nextel. On March 10,2006, Sprint Long Distance, Inc. filed an Application for a Certificate of Convenience and Necessity to provide intrastate interexchange services in West Virginia. SLDI anticipates receiving its authorization to provide interexchange services in West Virginia in April, 2006. As discussed herein, SLDI has been created for the purpose of providing intrastate interexchange services for the customers of Embarq’s ILECs that have multi- state locations/offices (including in West Virginia). This transfer of control application is being filed in anticipation of SLDI receiving its authorization to provide services in West Virginia prior to the transfer of control taking place. 5. Terms and conditions of transfer and copy of any agreements. Sprint Nexte12 intends to separate its wireline local service operation into an independent, standalone operation. As part of that transaction, a new holding company, Embarq Corporation, has been created and control of the Sprint Nextel operating companies serving local customers - essentially, Sprint Nextel’s ILEC operations -- will be transferred to that holding company. The transfer of control of SLDI to Embarq is associated with, and an incidental aspect of the primary transfer of control of the Sprint Nextel ILECs (in other states) from Sprint Nextel to Embarq. For instance, SLDI is being established to provide long distance service to Embarq’s ILEC customers. Although Sprint Nextel does not have ILEC operations in West Virginia, in some cases, Sprint Nextel ILECs in other states serve business customers with multi-state offices, some of which are in West Virginia, and which require long distance services between or among On December 15,2004, Sprint Corporation and Nextel Communications, Inc. (Nextel) entered into & merger agreement pursuant to which, upon obtaining requisite Sprint and Nextel stockholder approval and satisfaction of the other conditions to the merger, Nextel would merge with and into a wholly owned subsidiary of Sprint. By letter filed February 16,2005, Sprint and Nextel advised this Cowmission of the planned merger, which did not require Commission approval. The conditions of the merger were satisfied and the merger closed on August 12,2005. The corporation’s new name is “Sprint Nextel Corporation.” In the merger agreement, Sprint and Nextel agreed to use their reasonable best efforts to separate the ILEC business of Sprint, by means of a tax-free spin-off to the then-existing stockholders of Sprint Nextel. 4 _the_offiicles._TheseSpri~~C~~usinesscustomers who have business locations in West Virginia will receive interexchange services from SLDI.3 Additional information related to the transaction is provided in paragraph 7, below. The parties consider the underlying Agreement related to the transfer of control of the entities from Sprint Nextel to Embarq to be confidential. To the extent the Commission determines that more details regarding the terms of the transaction are necessary in order to approve the transaction, Applicants will provide the Commission with relevant additional information subject, as needed, to the terms of an acceptable Protective Order. 6. The effect of the proposed transaction upon the service of the parties thereto. There will be no changes to SLDI’s operations in West Virginia nor any transfer of the operating authority held by the company. Embarq will operate independently fiom Sprint Nextel and will have its own management team and board of directors.