A state appeals court has reversed Pennsylvania's approval of a 2005 merger between Verizon and MCI, saying state regulators failed to protect ratepayers. In a 30-page ruling, the Commonwealth Court said the state Public Utility Commission did not study the anticompetitive effects of the merger and fell short of a legal duty to ensure that the merger would benefit customers.

Verizon Communications Inc., Pennsylvania's largest telephone company with about 6 million lines, and MCI Inc. applied for state approval of their merger in March 2005. The merger was completed in January 2006.

"We find that there was no evidence that the merger of Verizon and MCI in Pennsylvania would affirmatively promote the service, accommodation, convenience or safety of the public in some substantial way," Judge Dan Pellegrini wrote. The court sent the matter back to the utility commission to either reject the merger or impose conditions.

The PUC also approved the purchase of Commonwealth Telephone Enterprises by Stamford, Conn.-based Citizens Communications Company. The PUC's approval completes all required regulatory approvals. Both parties expect the transaction to close later this month. The PUC found that the merger will limit rate increases for the next three years, deploy stand-alone high-speed Internet service to customers for two years and will increase bandwidth availability within three years.

Hundreds of thousands more consumers will soon have the choice of Verizon's FiOS TV service under California's first state-issued video franchise granted by the Public Utilities Commission. Under the franchise, Verizon can offer FiOS TV in 45 more communities in Southern California, an addition to the 18 communities where the service is already available under locally approved franchises. Verizon was the first company to file an application for a state- issued video franchise under California's new, pro-consumer video franchise law, which took effect Jan. 1.

Maine

Hundreds of union members are protesting the proposed $2.7 billion sale of Verizon's local lines to FairPoint Communications, which requires Public Utilities Commission approval. The PUC must consider rates and quality of service in making its decision. FairPoint reportedly filed a memo with the PUC, asking that the union be limited to asking about labor and employment issues. The unions are contending that the sale is bad for consumers because FairPoint is too small and undercapitalized to maintain and expand Verizon's network. Dozens of parties have filed as interveners in the case. Unions that represent 2,800 Verizon employees, including the Communications Workers of America and the International Brotherhood of Electrical Workers, are worried that the deal will hurt workers.

Missouri

The Public Service Commission is reviewing the current surcharge that appears on monthly telephone bills to fund a statewide dual-party telephone relay service called Relay Missouri. The Missouri General Assembly established Relay Missouri in 1990, and the PSC is required under law to review the surcharge at least every two years, but not more than on an annual basis. The review is to ascertain that necessary funds are available for providing the program. In a memorandum filed with the PSC on Feb. 9, the PSC staff, after reviewing anticipated fund expenditures and payments, determined the current surcharge is sufficient to meet the demands of the fund. Thus, it has recommended that the PSC maintain the current 13 cents/month surcharge.

Florida

Hundreds of thousands of Floridians don't know they are eligible for a $13.50 savings on their monthly phone bill. Under bills proposed by state Rep. Juan Zapata (R-Miami) and Sen. Nancy Argenziano (R-Crystal River), phone companies would be required to automatically enroll those who fit the criteria: the poor and elderly. Currently, people have to apply with the Public Service Commission online or by mail. To qualify, one must be receiving certain types of federal or state assistance such as food stamps, Medicaid or Section 8 housing. Although a similar proposal was shot down by senators in 2005, lawmakers are confident.

In related news, more than 3,300 Verizon customers will share $89,708 in refunds ordered by the PSC. The refunds will go to customers overcharged for calling card calls made from September 2004 to August 2006. During a recent service-quality-evaluation program, PSC staff discovered Verizon was billing some customers 75 cents per minute instead of 50 cents per minute on certain optional long-distance calling plans.

Georgia

The Public Service Commission voted 4:1 to establish new rules restricting interactions between commissioners and lobbyists. Forty-eight other states have some form of limits on private conversations between utility regulators and the parties involved in the contested cases being decided by those regulators. Only Georgia and Louisiana have none, allowing lobbyists to bend regulator ears about a pending behind closed doors. The proposed legislation would require communication between commissioners and parties in a case pending before the commission to take place in the open, with all parties present. There could be exceptions, but they must come with documentation.