Statement in Response to NY Merger Vote -- Attributable to Don Reed, NYNEX President
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March 20, 1997
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Statement in Response to NY Merger Vote -- Attributable
to Don Reed, NYNEX President
"What we have here is a mixed bag.
"We are pleased that the New York State Public Service Commission
voted today to approve our company's merger with Bell Atlantic. At the same
time, the PSC has imposed rigorous conditions that must be carefully reviewed
in order to assess their impact on our business.
"The commission created a laundry list of requirements and significant
obligations that qualify its approval of this transaction. Those conditions
affect our seven-year Performance Regulation Plan, as well as our near-term
investment and hiring plans.
"From the beginning we have maintained that such requirements
were unwarranted. But other commissions in NYNEX states have granted conditional
approvals as well. We need to be certain we fully understand the New York
commission's requirements, and we need to be sure that accepting this proposal
is the most appropriate option for the new Bell Atlantic.
"With respect to specific conditions the commission outlined
this morning, I would make the following observations:
"Obviously, the commission has recognized the value of the merger
to New York State. Since our announcement last year, we have been very public
about our commitment to headquarter here. Therefore, we don't believe the
guarantees the PSC has requested are necessary.
"There is nothing more critical to NYNEX than our continued
improvement in this area. While we were caught short by unanticipated growth
early last year, service has been improving dramatically for the past eight
months -- improvement that has been recognized publicly by this commission.
"One condition the commission seeks to impose is to codify and
accelerate the five-year, $1 billion Service Improvement Plan we announced
last year. This would require us to complete the first half of this plan's
capital and expense investments in the next two years. In conjunction with
this condition, the commission would require a plan to deploy an additional
750 to 1,000 people to service-affecting positions this year.
"We've said all along that one of the primary reasons for this
merger was to allow us to provide the best service in the industry by combining
the best practices of NYNEX and Bell Atlantic. Again, we think these new
regulatory conditions are unnecessary. So we need to take a careful look
at these requirements in light of our near-term business plans.
"Finally, the commission did not propose rate reductions, recognizing
that the company already has a seven-year plan in place to freeze basic
rates and reduce other charges by nearly $2 billion through the year 2002.
Still, the commission has asked to be able to reevaluate its options three
years following the merger. This is a significant concession, but in this
instance the commission has given us time to demonstrate the customer benefits
of our merger before considering taking further action."
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
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