Verizon Communications Inc. won an appeal of a Federal Communications Commission decision to require the company to abide by local telephone exchange unbundling rules in Philadelphia, Pittsburgh, New York, Boston, Providence, R.I., and Virginia Beach.

The FCC erred in relying solely on actual and not potential marketplace competition in rejecting Verizon's petition for an exemption from the rules, the U.S. Court of Appeals in Washington said today. The court sent the case back to the FCC for an explanation as to why it deviated from previous practice.

Verizon asked the FCC in 2006 to free it from limits on rates it can charge rivals for access to residential lines in the cities.    - Bloomberg News