Nynex seeks $965 million rate increase in New York after rebuff of earlier plan

Article Abstract:

Nynex Corp files what one analyst calls a 'ho-hum filing' for a $965 million rate increase just one week after state regulators rejected a $440 million rate increase. The rate increase is submitted to the New York Public Service Commission and it is the second largest rate request ever. Nynex claims the increase is needed to keep earnings from falling to detrimental levels. Currently, the company's rate of return is at 8.5 percent compared with the 12 percent industrywide average. The proposed increase would bring Nynex up to 11.7 percent. If the increase in approved, monthly rates for an average household would increase to $43.83 from $32.69. Analysts say the proposal has no realistic chance and the firm will be lucky to get half the amount.

Laws, regulations and rules, Prices and rates, Telecommunications industry, Government Regulation, Price Increases

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Nynex warned it could lose big phone unit; New York State regulators set study on divestiture; such an action in doubt

Article Abstract:

The New York State Public Service Commission authorizes a study to determine whether Nynex Corp should divest itself of its New York Telephone Co unit. The study comes consequent to alleged overcharges and parties in Florida involving customers, suppliers and prostitutes. Nynex is continuing to work with the commission, but Nynex does not view divestment as an option. One industry analyst questions the legality of the commission's threat to break up Nynex. If the commission does decide to force a divestment, such a move could deprive the company of its most significant revenue generator. New York Telephone had revenue of $7.5 billion in 1989. Overall, Nynex had revenue of $13.2 billion and net income of $808 million, or $4.10 a share.

Mergers, acquisitions and divestments, Investigations, Divestiture, Divestment, New York Telephone Co., New York (State). Public Service Commission, New York. Public Service Commission

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