Commc'ns Workers of America, AFL-CIO v. Pub. Serv. Comm'n of Maryland

• Decision Date: 25 January 2012
• Docket Number: No. 39,2011.,Sept. Term,39
• Citation: 424 Md. 418,36 A.3d 449
• Parties: COMMUNICATIONS WORKERS OF AMERICA, AFL–CIO v. PUBLIC SERVICE COMMISSION OF MARYLAND, Verizon Maryland, Inc.
• Court: Maryland Court of Appeals

36 A.3d 449

424 Md. 418

COMMUNICATIONS WORKERS OF AMERICA, AFL–CIO

v.PUBLIC SERVICE COMMISSION OF MARYLAND, Verizon Maryland, Inc.

No. 39

Sept. Term

2011.

Court of Appeals of Maryland.

Jan. 25, 2012.

Vincent Trivelli (The Law Office of Vincent Trivelli, PLLC, Morgantown, WV; Angela Blythe, Oakland, MD), on brief, for Appellant.

Joseph M. English, Assistant General Counsel (Public Service Commission of Maryland, Baltimore, MD), on brief, for Appellee.

Jeffrey A. Rackow (Gregory M. Romano of Verizon, Baltimore, MD), on brief, for Appellee.

Argued before BELL, C.J., HARRELL, GREENE, ADKINS, BARBERA, JOHN C. ELDRIDGE (retired, specially assigned) and LAWRENCE F. RODOWSKY (retired, specially assigned), JJ.

RODOWSKY, J.

The appellant, the Communications Workers of America, AFL–CIO (CWA or, the Union), appeals the affirmance by the Circuit Court for Baltimore City of Order 83137 of the Public Service Commission (PSC or the Commission), one of the appellees, which approved, pursuant to Maryland Code (1998, 2008 Repl.Vol.), § 4–301 of the Public Utility Companies Article (PUC), an alternative form of regulation (AFOR) for Verizon Maryland (Verizon), the other appellee.¹

PUC § 4–301 provides, in relevant part:

“(a) In general.—Notwithstanding § 4–101 of this title or any other law to the contrary, the Commission may regulate a telephone company through alternative forms of regulation.

“(b) Required findings.—The Commission may adopt an alternative form of regulation under this section if the Commission finds, after notice and hearing, that the alternative form of regulation:

“(1) protects consumers by, at a minimum:

“(i) producing affordable and reasonably priced basic local exchange service, as defined by the Commission; and

“(ii) ensuring the quality, availability, and reliability of telecommunications services throughout the State;

“(2) encourages the development of competition; and

“(3) is in the public interest.”

CWA presents the following issues for our consideration:

“1. Is the Commission's Order 83137 supported by substantial evidence in the record?;

“2. Is the Commission's Order 83137 affected by an error of law in that it [o]rders Verizon to implement a new Alternative Form of Regulation (AFOR) that does not protect consumers by ensuring the quality, availability and reliability of telecommunications services throughout the State of Maryland? ...;

“3. Is the Commission's Order 83137 affected by an error of law in that [,] in [o]rdering Verizon to implement a new AFOR, the Commission made no finding that the new AFOR protects consumers by producing affordable and reasonably priced basic local exchange service?; ² “4. Is the Commission's Order 83137 affected by an error of law in that it [o]rders Verizon to implement a new AFOR that is not in the public interest?; ³ [and]

“5. Is the Commission's Order 83137 affected by an error of law in that it establishes a new balancing of the interest test by its approval of the AFOR?”For the reasons set forth below, we affirm the judgment of the circuit court.

The Facts and Procedural History

In December of 2008, Verizon, joined by PSC staff and the Office of the People's Counsel, submitted to the Commission a Joint Petition for Approval of Settlement Agreement to settle six cases then pending before PSC. In January of 2009, CWA, representing approximately 5,000 Verizon employees, petitioned to intervene in the settlement discussion and in PSC's investigation into the quality of Verizon's service to customers. Intervention was granted in February of 2009, conditioned on CWA's acceptance of the written testimony in the record filed by other parties, because deadlines established by PSC for filing testimony had passed. The Commission held a hearing on the first petition to settle on February 12 and 13 of 2009. Then, on April 6, 2009, the Commission rejected the settlement proposed in the December 2008 petition, but stated that it would permit a modification and resubmission of the proposal. See PSC Order 82584. On August 28, 2009, Verizon submitted its second petition to settle the six pending cases. Hearings were held on November 3 and 4, 2009. By Order 83137, the Commission approved the second petition to settle on February 2, 2010, with some modifications. On February 22, 2010, Verizon notified PSC that it had accepted the proposed modifications.

The six cases settled by Order 83137 are: (1) PSC Case 9114, begun in August 2007 to investigate Verizon's service quality as a result of consumer complaints; (2) PSC Case 9133, begun in October 2007, which rejected Verizon's requested price increases, which were not tied to service quality; (3) PSC Case 9120 which reviewed whether Verizon could bundle services with affiliates and increase its prices without violating Verizon's Price Cap Plan; ⁴ (4) PSC Case 9072, which reviewed Verizon's request to reclassify some of its services as competitive; (5) PSC Case 9121, which investigated local calling areas and foreign exchange prices; and (6) PSC Case 9123, which was filed by the Office of People's Counsel following complaints by customers who had switched from the older copper wire system to a fiber optic service. Case 9123 sought to determine if Verizon was adequately informing its customers of the difference between the two services.

Order 83137 is sixty-six pages long. It found that “Verizon's service quality performance ha[d] fallen far below [PSC's] regulatory standards, and neither competitive market forces nor an open service quality investigation ha[d] improved Verizon's performance.” The regulatory standard of principal concern on this appeal is COMAR 20.45.04.08. It provides:

“.08 Trouble Reports.

“A. Each utility shall provide for the receipt of customer trouble reports at all hours.

“B. Trouble Reporting.

“(1) Arrangement shall be made to clear all trouble of an emergency nature at all hours, consistent with the bona fide needs of the customers and the personal safety of the utility personnel.

“(2) Arrangement shall be made to clear all out-of-service troubles, not requiring unusual repairs, within 8 hours of the report to the company (excluding clock hours between 5 p.m. and 9 a.m. weekdays and Saturdays, Sundays, and holidays).

“(3) Arrangements shall be made to clear all non-out-of-service troubles, not requiring unusual repairs, within 24 hours of the report to the company (excluding clock hours between 5 p.m. and 9 a.m. weekdays, and Saturdays, Sundays, and holidays).

“(4) If unusual repairs are required, or rehabilitation programs or other factors preclude clearing of reported troubles promptly, when practical, the customer shall be so notified and an estimated time given as to when the trouble will be cleared.

“C. Appointment Missed. The utility shall grant appointments to customers on reported troubles which are consistent with the objective intervals of clearance as specified in § B(1), (2), and (3), above. If appointments with the customer cannot be kept, the utility shall make every reasonable effort to notify the customer in timely fashion of the delay. The number of appointments the utility fails to meet may not be greater than 20 percent of the total commitments given per month with a district service center.

“D. Subsequent Trouble Reports. The utility shall make reasonable efforts to prevent subsequent reports through the proper and effective administration of §§ B and C, above. To the extent possible, the utility shall grant appointments which are consistent with the needs of the customer. The rate of the subsequent reports may not be greater than 13 percent of the total reports per month registered within a district service center.

“E. Repeated Trouble Reports. It is incumbent upon the utility to make the necessary tests and inspections on reported troubles to prevent customers from again experiencing the same type trouble. These tests and inspections shall include all necessary and reasonable repairs and rehabilitation efforts which the utility feels are necessary to keep repeated reports at minimum levels. The rate of the repeated reports may not be greater than 25 percent of total trouble reports registered per month within a district service center.

“F. The utility shall keep such records of customer complaints and trouble reports as will enable it to review and analyze its procedures and actions as an aid in rendering improved service.”

The Order further compared and contrasted the second settlement offer with the previously rejected first offer. In particular, PSC noted that Verizon's first proposal for settlement included the following provisions that were unacceptable:

“Retrospective credits for missed appointments could not exclude customers who suffered missed appointments but had their complaints resolved within 24 hours of the missed appointment.

“The two-day proxy for the eight-hour standard set forth in COMAR 20.45.04.08 [B(2) ] could not average times to restore service for businesses and residential customers.⁵

“Verizon could not exclude customers [from retrospective credits] ‘who agreed or failed to object to Verizon's standard appointment offer by deeming them to have agreed affirmatively to an appointment longer than two calendar days from their call.’

“The next installation missed appointment metric could not exempt customers moving from regulated voice service over copper lines to regulated voice service over fiber.

“The amount of Verizon money at risk as a function of its failure to satisfy customer service metrics must be increased so that it ‘mirror[ed] more closely the revenue increases Verizon seeks under the current Price Cap Plan and the new AFOR the proposed settlement would create.’ ⁶

“Missed appointment compliance must be measured monthly rather than quarterly, because COMAR 20.45.04.08C prescribes a monthly standard, and Verizon could not meet the missed appointment metric by extending its standard appointment times.

“The Service Quality Plan must...