201 Brooks Street. PO.Box 812 Phone: (304)340-0300 Charleston, West Virginia 25323 Fax: (304)3400325

January 22,2015

Electronic Service Only

Robert R. Rodecker, Esq. Counsel, Applicants Kay Casto & Chaney PLLC PO Box 203 1 Charleston, WV 25327

RE: Case No. 14-1993-C-PC AT&T Inc., New Cingular Wireless PCS, LLC, Cricket Wireless LLC, and Cricket Communications, Inc

Dear Mr. Rodecker:

The Staff Memorandum issued today was served via email on the above-listed parties. Any responses must be submitted to the Executive Secretary’s Office in writing within 10 days of this date, unless directed otherwise. You will not receive a copy of the Staff Memorandum by regular mail.

Your failure to respond in writing to the utility’s answer, Staffs recommendations, or other documents may result in a decision in your case based on your original filing and the other documents in the case file, without further hearing or notice.

When you provide an email address, you will automatically receive electronic docket notifications as documents are filed in this proceeding. The email notifications allow recipients to view a document within an hour from the time the filing is processed.

If you have not done so, you are encouraged to file the Electronic Mail Agreement, previously mailed to you, which allows the Commission to serve all issued in this matter via electronic docket notification.

Please note - the Public Service Commission does not accept electronic filings.

Sincerely,

I IFitg Ingrid Ferrell, Director Enc. - Memo Executive Secretary Division INITIAL AND FINAL JOINT STAFF MEMORANDUM

TO: INGRID FERRELL DATE: JANUARY 22,2015 Executive Secretary , FROM: CHRIS HOWARD$+ Staff Attorney

RE: CASE NO. 14-1993-C-PC AT&T, INC., NEW CINGULAR WIRELESS PCS, LLC. CRICKET WIRELESS LLC., AND CRICKET COMMUNICATIONS, INC.

On December 19, 2014, AT&T inc., New Cingular Wireless PCS, LLC., Cricket Wireless LLC., and Cricket Communications, Inc. (Companies) filed a Joint Application exempting an internal reorganization of wireless subsidiaries and related entities from the provisions of W.Va. Code $24-2-12, or in the alternative, consent and approval with the West Virginia Public Service Commission (Commission). The Companies state the transaction will have no impact on the operations of AT&T in West Virginia. AT& T is proposing to re-organize the properties and relationships of some of its wireless operations including interests held by New Cingular Wireless PCS, LLC., Cricket Wireless LLC., and Cricket Communications, Inc., and related business entities to better align and streamline its wireless holdings and to improve its nationwide efficiencies. The Companies note this transaction is in the public interest as it will have no discemable impact on AT&T operations or services.

Initial and Final Recommendation of the Commission’s Utilities Division Staff

On January 3, 2013, David Kennedy, Utilities Analyst for the Commission’s Utilities Division (Technical Staff) issued an Initial and Final Recommendation. Technical Staff states the Companies request for an exemption from W.Va. Code $24-2- 12, should be denied. The Commission determined in Commission Case No. 06-1 199-C- PC, that these types of transactions would be subject to Commission jurisdiction and require Commission approval under W.Va. Code $24-2-12. Technical Staff notes the Companies’ Petition is filed in accordance with the statutory requirements of W.Va. Code $24-2-12, therefore, the Petition should be approved. Technical Staff recommends the Companies request to waive public notice and hearing should be granted.

Final Recommendation of the Commission’s Legal Division Staff

Legal Staff has reviewed the documents including the Companies’ application and the Final Recommendation of Technical Staff. Legal Staff agrees with the findings and recommendations of Technical Staff. The Companies Petition has met the requirements of W.Va. Code $24-2-12 which states as follows: Case No. 14-1993-C-PC January 22,2013 Page 2

W.Va. Code 24-2-12 requires a public utility to obtain consent from the Commission before entering into certain transactions. Under the statute, the Commission is authorized to consent to a proposed transfer of control of a regulated utility, without approving of its terms and conditions, if the transaction is reasonable, does not adversely affect the public and no party is given an undue advantage.

Staff believes the Commission has determined that transaction between cellular telecommunications carriers such as that described in this case are subject to this statutory requirement. Legal Staff recommends the Petition should be approved and the notice and hearing requirement waived. Legal Staff recommends the Commission approve this Petition.

CLHIsg Attachment

CWSU'6 +?4 H:\choward\word\l4-l993-C-PC(AT&T, Inc., New Cingular Wireless PCS, LLC, Cricket Wireless LLC., and Cricket Communications Inc.KINITIAL AND FINAL JOINT STAFF MEMORAh'DUM.doc PUBLIC SERVICE COMMISSION OF WEST VIRGINIA UTILITIES DIVISION INITIAL AND FINAL RECOMMENDATION

Utilities Division

Re: Case No. 14-1993-C-PC AT&T, Inc., New Cingular Wireless PCS, LLC, Cricket Wireless LLC, abd Cricket Communications, Inc.

On December 18, 2014, AT&T Inc. (AT&T) and its wireless subsidiaries requested that the Commission exempt an internal re-organization involving its wholly- owned subsidiaries providing wireless services from the statutory requirement requiring Commission approval of such transactions.’ In particular, the AT&T Inc., New Cingular Wireless PCS, LLC, (NCW),2 Cricket Wireless LLC,(CwL), and Cricket Communications, (CCI), (collectively Petitioners) request the Commission enter an order exempting an internal re-organization from the provisions of West Virginia Code 24-2- 12. In the alternative, Petitioners request that the Commission approve the internal re-organization. In addition The Petitioner’s request the Commission, waive public notice and hearing on this Petition and any other formal filing requirements. Finally, the Petitioners request that the Commission waive public notice and hearing on this Petition.

The ultimate purpose of the transaction is to re-organize the properties and relationships of some of AT&T’s wireless operations, including interests held by NCW, CWL, CCI and related business units, to better align and streamline its wireless holdings and to improve its nationwide efficiency.

1West Virginiu Code 24-2-1244 provides tlzut “no public utility muy, by any means. direct or indirect, merge or consulidate its franchises, licenses, permits, plunls, equipmmt, business or other property with lhut of unj’ other public zdity ” unless con.sent of the Commission has been grunted.

2 Stuff notes that New Cingulur Wireless PCS, LLC dba AT&T Mobility was granted Eligible Telecommunications Status (ETC) by the Commission in Case No. 08-0620-T-PC by order enteredAugust 20, 2008. Page 2 Case No. 14-1993-C-PC Utility Division Staff Recommendation

Description of the Petitioners

The Petitioner’s assert that AT&T Inc. is a holding company, which, through its operating subsidiaries, provides communications services throughout the United States and around the world.

Relevant to this Petition, its subsidiaries NCW, CWI, and CCI, provide wireless services in West Virginia. Both CWI and CCI primarily provide pre-paid wireless services using their own facilities in certain areas and through resale and roaming relationships with other wireless carriers in West Virginia. Both CWI and CCI have relatively few customers in West Virginia.

Currently, AT&T has three subsidiaries that provide wireless services in West Virginia, namely, (a) New Cingular Wireless PCS, LLC, (“NCW,” formerly doing business as Cingular Wireless and now doing business as AT&T Mobility, (b) Cricket Wireless LLC (“CWL,’’ formerly Aio Wireless LLC), and (c) Cricket Communications Inc.(“CCI”).

NCW is the entity that has provided wireless services in West Virginia for many years, primarily through term contracts with its subscribers. In May 2013, AT&T instituted a prepaid wireless service through a newly-created subsidiary Aio Wireless LLC, now CWL, which at present serves fewer than 300 West Virginia subscribers. On March 13, 2014, AT&T acquired Leap Wireless International, Inc., 3 whose subsidiary, CCI, presently provides pre-paid wireless services to fewer than 350 West Virginia subscribers.

Description of the Reorganization Upon implementation of the proposed reorganization plan, the ownership interest of NCW in AT&T Mobility Wireless Operations Holdings LLC4 will be transferred to, and consolidated into, another holding company, LWI Holdco, Inc. CCI will be converted to a limited liability corporation under Delaware law, to become Cricket Communications LLC, (“CCL”);’ Finally, CCL’s ownership interests in affiliates

See Case No. 13-1232-C-PC order dated October 2, 2013

AT&T Mobility Wireless Operations Holdings LLC is a holding company that holds the AT&T entities that provides wireless service in Galveston, Texas

The parties maintain that pursuant IO Delaware law, a conversion to an LLC does not result in a change of the corporate entity (8 Del. C. See. 266(h)) Page 3 Case No. 14-1993-C-PC Utility Division staff Recommendotion

Cricket, Inc., Cricket Music Holdco, LLC, and Cricket License Company, LLC will be transferred to other affiliates. Clarification of Information Provided in This Case and a Previous Case Decided by the Commission

On August 14, 2013 (Case No. 13-1232-C-PC), AT&T Inc. and Leap Wireless International, Inc. jointly requested that the Commission consent to AT&T purchasing the stock of Leap Wireless International, Inc. On October 2, 2013, the Commission granted the petitioner’s request in that case. Under the terms of the Stock Purchase Agreement, AT&T purchased all outstanding stock in Leap and Leap merged with an AT&T subsidiary created for that purpose. The Leap subsidiary, Cricket Communications, Inc., thus became an indirect AT&T subsidiary. At that time Cricket provided wireless telecommunications services to approximately 700 subscribers in the Northern part of West Virginia.

In order to clarify similarities in the names of the of the petitioners in the previous case as well as the number of customers served by each, Staff, informally, requested clarification in the information provided in the current case before the Commission. By way of explanation the utility provided the following information:

In April 2014, AT&T acquired Leap Wireless (“Leap”), the parent company of Cricket Communications Inc. (“CCI”) CCI provides pre-paid wireless services using an older technology, CDM6(sometimes referred to as “2Gj7, and, in West Virginia, serves only a small area in the northern Panhandle using facilities built to serve the western edge of its Pittsburgh market. CDMA service is being phased out. As customers have migrated awayfrom CDUA in favor ofmore robust 3G and 4G services offered by other wireless carriers, including AT&T MobiIiQ, the number of CCI customers has declined. As of August I, 2013, CCI had 681 WV customers, but by December 31, 2014, the number hadfallen to 269 customers.

A year earlier, in May 2013, AT&T had established its own pre-paid wireless business, which was originally called Aio Wireless LLC, but, with the acquisition of Leap, the name was changed to Cricket Wireless LLC (“CWL”)). At the time ofjling the petition in Case No. 14-1993- C-PC, CWL hadfewer than 300 Wsubscribers.

CDMA (Code-Division Multiple Access) refers to any of several protocols used in so-called second-generation (2G) and third-generation (3G) wireless communications. Poge 4 Cose No. 14-1993-C-PC Utility Division Stoff Recommendation

Petitioner’s Request for Exemption of Statutory Requirements in WV Code 24-2-12

In this case, the Petitioner’s have asked for an exemption of a statutory requirement which requires Commission approval of changes in control of utilities operating in West Virginia.

More specifically, West Virginia Code 24-2-12 states that “no public utility may. by any means, direct or indirect, merge or consolidate its franchises, licenses, permits, piants, equipment, business or other property with that of any other public utility” unless consent of the Commission has been granted.7

On February 1, 1995 in Case No 94-1143-C-PC the Commission ordered that cellular companies could merely file an informational filing which informs the Commission of any merger, transfer, sale, or acquisition within five days of the transaction.*

However, on September 18, 2006 in Case 06-1 199-C-PC the Commission ordered that such transaction would be subject to its prior consent and approval pursuant to WVCode 24-2-12.9

Staff notes the Commission has changed its policy of requiring cellular carriers to file an informational filing only informing the Commission of any merger, transfer, sale or acquisition involving wireless carriers. Accordingly, cellular carriers are now required to fulfill the requirements for mergers, transfers, sales or acquisitions as set forth in WV Code 24-2-12. Staff therefore believes that the Petitioners request for an order authorizing AT&T to file an informational filing only in this case should be denied.

’ WV Code 24-2-12 (4 See Final Order Case No. 94-1143-C-PC VANGUARD ACQUISITION CORP. dated February I, 1995 9 See Final Order in Case No. 06-1 199-C-PC AMERICAN CELLULAR CORPORATION, doing business as CELLULARONE, Oklahoma City, Oklahoma, and HIGHLAND CELLULAR LLC, also doing business as CELLULARONE, Beckley, Raleigh County, datedseptember 18, 2006 at Conclusions ofLaw No. I Page 5 Cose No. 14-1993-C-PC Utility Division Stoff Recornrnendotion

StaflConclusions and Recommendation

W.Va. Code 24-2-12 requires a public utility to obtain consent from the Commission before entering into certain transactions. Under the statute, the Commission is authorized to consent to a proposed transfer of control of a regulated utility, without approving of its terms and conditions, if the transaction is reasonable, does not adversely affect the public and no party is given an undue advantage. Staff believes the Commission has determined that transaction between cellular telecommunications carriers such as that described in this case are subject to this statutory requirement.

Staff therefore recommends denial of the request for waiver of the statutory requirement requiring Commission approval pursuant to West Virginia statute.

Staff does, however, conclude the Petitioners have shown that the transaction in this case meets the statutory test.

Staff therefore recommends approval of the internal reorganization plan of AT&T Inc. and its wireless subsidiaries, NCW, CWL, or CCI, request for approval of an internal re-organization involving its wholly-owned subsidiaries providing wireless services without approving the specific terms contained therein. Staff, finally, recommends the Commission waive public notice and hearing on this Petitioner’s request in this case. Staff understands the reorganization will have no impact on AT&T’s West Virginia operations. In addition, the prices, terms, or conditions under which AT&T’s wireless subsidiaries provide services to their West Virginia customers will not be affected. Also, implementation of the proposed plan will not cause any interruption or diminution in the wireless services provided in West Virginia by NCW, CWL, or CCI. Staff notes that CCI, presently provides pre-paid wireless services to fewer than 350 West Virginia subscribers and CWL, at present serves fewer than 300 West Virginia subscribers.