Sprint and Nextel merger should not cause ‘hardships' for consumers

Newark — According to New Jersey Ratepayer Advocate Seema M. Singh, the new local exchange telecommunications spin-off, a result of the merger of Sprint and Nextel, will not cause financial hardships for consumers because the Federal Communications Commission included her division's recommendations. The FCC concluded that Sprint and Nextel have made a commitment that the new local wireline company will receive equitable debt and asset allocation. Thus, the company will be "a financially secure Fortune 500 company. The commission released its order on Tuesday, Aug. 9, following its prior announcement 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. The ratepayer advocate looks forward to participating in upcoming proceedings that will examine the new company's impact on New Jersey." Ratepayer Advocate Singh 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. She 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 Friday, 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, telecommunications and cable service. It serves as an active participant in every proceeding whenever New Jersey companies seek changes in rates or services. It 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. For additional information on this and other matters, visit rpa.state.nj.us.