Nynex deal gets busy signal
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September 16, 1996: 10:23 a.m. ET
Regulators say bad service could delay $20 billion merger with Bell Atlantic
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NEW YORK (CNNfn) -- The $20 billion merger between Bell Atlantic Corp. and Nynex Corp. reportedly could be stalled by federal regulators unless Nynex improves its poor record for customer service.
The Wall Street Journal reported Monday that the two Baby Bells are having a difficult time convincing regulators in New York and other states to approve the merger in a speedy manner. New York, in particular, has had a long history of service problems with Nynex and would like to use this opportunity to force improvements.
John O'Mara, chairman of the New York State Public Service Commission, told the newspaper he would consider voting against the deal if Nynex does not improve service to the minimum levels required by the state. "The time for talk is past," O'Mara said. "The time for action is here."
The newspaper said that Nynex's worst problems are in New York City, where customers have long complained about incompetent service. The company has a reputation among many customers for missed repair appointments and constantly busy "help lines."
State regulators are already using financial penalties to encourage service improvement, forcing the company to pay out $19 million in fines this year.
Bell Atlantic is nearly the complete opposite of Nynex when it comes to customer service. The newspaper said executives at Bell Atlantic, which has not had to pay out any fines this year, are quietly concerned about their new partner's reputation. One executive told the newspaper that Bell Atlantic will make considerable changes after the merger is completed.
Nynex defended its record, saying that unexpected growth in the Northeast had contributed to its problems. Executives also maintained that the service record has improved.
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