The N.Y. PSC unanimously approved the Verizon-MCI merger. Regulators there concluded the merger has great potential to benefit consumers, businesses and the overall state economy. It attached 5 conditions to its approval, saying the state conditions along with those imposed by the FCC and U.S. Justice Dept. will reduce the risk of harm. As the state where Verizon has its headquarters and its largest single market, N.Y. was crucial to completion of the merger. The PSC required the companies to: (1) Cap unbundled network element rates at current levels for 2 years. (2) Exclude MCI fiber collocations when determining if a wire center is competitive enough to be exempted from enterprise unbundling requirements. (3) Continue offering MCI's high-capacity DS-1 and DS-3 wholesale private line services at current rates and terms for 2 1/2 years. (4) Provide standalone retail DSL for 2 years. (5) Keep corporate headquarters in N.Y.C.nnThe PSC didn't impose conditions relating to service quality or retail rates. It said Verizon has been making great strides in quality improvement, and the PSC already has monitoring and enforcement tools to ensure that continues. The PSC also concluded fast-growing competition will constrain Verizon retail rates, so no explicit merger condition was needed. "This merger is a natural reaction to the vast changes in the telecom marketplace," said PSC Chmn. William Flynn. "These companies face competition from cable, VoIP, wireless and more, competition that already had forced MCI to exit the residential market. This merger will strengthen these companies, improve their service and offer important benefits to consumers and to the entire New York economy."
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