FCC fines Nynex units $1.4 million, orders refund for excessive markups

Article Abstract:

The Federal Communications Commission fines Nynex Corp units a record $1.4 million and orders an additional $35.5 million refunded to customers. The ruling stems from allegations that Material Enterprises Co, the purchasing arm of Nynex, systematically overcharged other Nynex affiliates, including New York Telephone Co and New England Telephone and Telegraph Co, a total of $118.5 million between 1984 and 1988. The $35.5 million figure represents the interstate portion of the overcharges and Nynex is still in jeopardy from New York State for additional refunds. Nynex plans to appeal the decision, saying it did nothing wrong and that by purchasing in volume from Material Enterprises it was actually saving the rate payers money. According to FCC rules, rates of return for telephone companies are limited to 12 percent for interstate service, and Material Enterprises' return varied from between 27.7 to 80.7 percent.

Auditing, Price fixing

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FCC decision on Bell firms voided by court; agency planned to allow regulated, unregulated units to be combined

Article Abstract:

Two FCC rulings concerning activities of the Bell Regional Holding Companies (BRHCs) were overturned by a federal appeals court in San Francisco and returned to the FCC for reconsideration. The first decision involved the FCC having given permission for the BRHCs to combine their regulated telephone services with their unregulated computer information services without setting up separate subsidiaries. The second decision concerned the FCC's ruling prohibiting government regulation of these enhanced data communication services by the states. The court's opinion indicated it considered the FCC's decisions 'unlawfully arbitrary and capricious.' Representatives of the BRHCs had no immediate response but the companies have expressed the opinion that combining these functions is more efficient.

Regulation, admin. of utilities, Science and technology policy, Industry regulations, Government regulation of business, Trade regulation, Telecommunications transmission technologies, Information Services, Telecommunications Industry, Court Cases, Data Communications

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Nynex charged with violating decree on Bells; indictment says unit sold MCI services prohibited under 1982 legal accord

Article Abstract:

The United States Department of Justice files before a federal grand jury a case that indicts Nynex Corp on charges of violating one of the business prohibitions placed on the Bell regional holding companies following its breakup. Nynex is charged with illegally providing computerized information services over telephone lines. The accusations involve Telco Research Corp, a small software firm in Nashville that Nynex purchased. Nynex allegedly continued operating Telco's computer services by providing data to MCI Communications Corp between Apr 1986 and Feb 1987, in violation of the prohibition. Nynex, in its defense, claims it has operated completely within the framework of the law.

Services, United States. Department of Justice, MCI Communications Corp., Legal Issues, Telco Research Corp.

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