RICHMOND — The State Corporation Commission (SCC) has approved a merger plan involving Embarq, the parent company of two Virginia local telephone companies. Under the transaction that still requires other state and federal approvals, Embarq will become a wholly-owned subsidiary of CenturyTel. Embarq and CenturyTel announced the merger plan in late October.

Embarq is the parent company of Central Telephone Company of Virginia (Centel) and United Telephone Southeast (United). Under the Embarq name, Centel provides service to the Charlottesville area and a number of rural counties throughout central Virginia. United provides service to the Bristol area as well as to several rural counties in southwest Virginia. After the proposed merger transaction, the companies will continue as certificated local exchange carriers in Virginia, and customers will continue to receive service under the same rates, terms, and conditions.

Under Virginia law, the SCC must approve a merger that involves the transfer of control of a local exchange carrier operating in Virginia. In its order granting approval, the Commission applied the statutory criteria saying, "We find that adequate service to the public at just and reasonable rates will not be impaired or jeopardized by granting the joint petition."

The Commission did impose a condition recommended by the SCC staff and agreed to by the merger partners. The companies will track and provide to staff the costs and savings resulting from the merger for a period of three years following its consummation. The company anticipates that to occur by mid-year.

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Case Number PUC-2008-00104