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Telecommunications industry

MCI Reports Overwhelming Opposition to NYNEX's Controversial "Price Cap" Proposal

Strategic Insights

— 2 min read

The New York Public Service Commission (PSC) has received over 8,000 letters and telephone calls from MCI customers in New York, voicing their opposition to NYNEX's "price cap" proposal. This proposal, currently under consideration by the PSC, would force residents in New York City, Buffalo, Albany, Syracuse, and other areas to continue paying among the highest local telephone rates in the nation. The overwhelming opposition from consumers demonstrates their desire for lower phone bills and better service, which competition has proven to deliver effectively. NYNEX's proposal has been criticized for failing to address serious service quality problems, locking in high rates, and allowing the company to continue charging artificially high access fees.

Key Takeaways:

  • Over 8,000 MCI customers in New York have voiced their opposition to NYNEX's "price cap" proposal, urging the PSC to reject the plan.
  • The proposal would lock residents in New York City, Buffalo, Albany, Syracuse, and other areas into paying among the highest local telephone rates in the nation.
  • The PSC has received letters and telephone calls from concerned consumers, demonstrating their desire for lower phone bills and better service.
  • NYNEX's proposal fails to address serious service quality problems, including doubling complaints since 1992, according to the PSC's latest service quality report.
  • The plan would also allow NYNEX to continue charging artificially high access fees, with about 45 percent of all long distance revenues in New York going to the company in the form of access charges.
  • The proposal would keep competition from developing in the huge short haul toll market, harming business and residential toll customers.
  • Other groups opposing the NYNEX "price cap" plan include the American Association of Retired Persons (AARP), the New York Citizens Utility Board (CUB), AT&T, and the New York Cable TV Association.
  • MCI, the company behind the opposition, has expanded from its core long distance business to become the world's third-largest carrier of international calling and a premier provider of data communications over the Internet computer network.

Statistics:

  • Over 8,000 letters and telephone calls were received by the PSC from MCI customers opposing NYNEX's "price cap" proposal.
  • Complaints about NYNEX service have doubled since 1992, according to the PSC's latest service quality report.
  • 45 percent of all long distance revenues in New York go to NYNEX in the form of access charges.
  • The NYNEX "price cap" proposal would keep competition from developing in the huge short haul toll market.

Sources:

  • MCI press release, May 17, 1995
  • New York Public Service Commission (PSC) service quality report
  • American Association of Retired Persons (AARP)
  • New York Citizens Utility Board (CUB)
  • AT&T
  • New York Cable TV Association
  • MCI corporate profile

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