The New York State Public Service Commission today unanimously approved a seven-year plan that dramatically changes the way NYNEX is regulated in the state.
Effective Sept. 1, NYNEX's earnings will no longer be capped and the company will operate under a new set of rules that will give the company more flexibility to introduce new products and make network investments in an increasingly competitive telecommunications market.
NYNEX Chairman Ivan Seidenberg said, "NYNEX now has the state regulatory structure it needs to compete successfully in a growing communications marketplace. This plan will give us the potential to improve our bottom line by providing better service at lower cost."
He added, "NYNEX is changing, and today's action will only accelerate that change. We're re-engineering processes to serve customers better, introducing exciting new services and improving productivity. The elimination of an earnings cap in New York means that investors will benefit from these successes."
For NYNEX customers, the plan will also freeze basic phone rates for seven years, and reduce other charges by $100 million in the first 12 months. For home telephone customers throughout the state, the basic portion of the average monthly local phone bill will be reduced by 2.7%, to $18.68 from $19.18.
Touch-tone service will be free on all residential phones statewide beginning Sept. 1, a savings of 50 cents a month per line. Monthly Flat Rate charges will also be reduced for more than 230,000 customers in Erie and Nassau counties.
The plan also calls for ever-increasing service quality targets, with a schedule of automatic customer rebates should NYNEX fail to meet these requirements.
Stanley Fink, NYNEX senior vice president for Regulatory and Government Affairs, said, "While this plan is a win for NYNEX, it's also a win for customers -- who benefit from frozen or lower rates -- and a win for New York State. NYNEX is a local resource, whose investments in technology can help create jobs, improve our health-care and education systems, and empower people by providing affordable, universal access to information."
Negotiations and public hearings on this plan lasted more than three years. The plan approved today is based on an agreement signed by NYNEX, the PSC staff and 15 other parties representing government, industry, labor and consumers.
NYNEX is a global communications and media company that provides a full range of services in the northeastern United States and high-growth markets around the world, including the United Kingdom, Thailand, Gibraltar, Greece, Indonesia, the Philippines, Poland, Slovakia and the Czech Republic.
The Corporation is a leader in the telecommunications, wireless communications, cable television, directory publishing and entertainment and information services