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From: leichter@oddjob.uucp (LEICHTER-JERRY@CS.YALE.EDU)
Newsgroups: comp.dcom.telecom
Subject: Rate Request - No Joy For New York Telephone
Message-ID: <9737@accuvax.nwu.edu>
Date: 15 Jul 90 11:48:21 GMT
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X-Telecom-Digest: Volume 10, Issue 485, Message 1 of 6


[Based on a report in the {New York Times}, Saturday, 14 Jul 1990 -
Page 24]

The saga of New York Telephone's request for a rate increase
continues, with no joy in sight for them.  Rates were frozen for three
years back in 1987.  With the freeze set to expire at the end of this
year, NY Tel requested a $445 million rate increase.  That was
rejected back in March.  NY Tel promptly turned around and requested a
$919 million rate increase.  Now the Public Service Commission's
staff has recommended not just rejecting that request - it has instead
recommended that rates be CUT by $81 million.

The final decision is up to the PSC, which often uses its staff's
reports as the basis for its decisions.

The PSC staff reported that as part of its investigations it uncovered
evidence that NY Tel had "failed to properly account for the costs of
certain of its deregulated operations."  It further found that some of
its cable equipment had been neglected "to the detriment of those
customers relying on more traditional telephone services."

There have been a lot of allegations of such problems swirling around
NY Tel and its parent, Nynex.  In fact, NY Tel proposed its earlier
increase of $445 million as part of a package deal to settle claims of
various fraudulent practices.  The deal was rejected, and NY Tel
turned around and said "OK, no deal, here's what we REALLY think we
are entitled to."  The 1987 rate freeze itself was the result of a
settlement of this general sort, the details of which I don't recall.

Nynex was fined $1.4 million by the FCC in February after an audit
found $118.5 million in reported overcharges to its subsidiaries.
Last week, {The Wall Street Journal} reported that Nynex purchasing
managers, as the Times put it, "cavorted at Florida conventions with
suppliers and may have then increased company purchases from those
suppliers.  The Journal also reported, and [sources at] the [PSC]
confirmed, that women were hired to entertain the guests at those
conventions."  Nynex has reported taking "corrective action" since the
incident, including firing two employees.


		 Jerry