NYNEX
| Company type | Public |
|---|---|
| Industry | Telecommunications |
| Founded | January 1, 1984 |
| Defunct | August 14, 1997 |
| Fate | Merged with Bell Atlantic |
| Headquarters | New York City , United States |
Area served | New England states (Maine, Massachusetts, New Hampshire, Rhode Island, Vermont) and majority of New York |
Key people | Delbert C. Staley (Chairman), William C. Ferguson (President and COO), Ivan Seidenberg (President, COO, later Chairman and CEO) |
| Products | Telecommunications services |
| Website | www |
NYNEX Corporation was a telecommunications provider in the United States, serving the five New England states (Maine, Massachusetts, New Hampshire, Rhode Island, Vermont) as well as the majority of New York from January 1, 1984, until August 14, 1997.
History
NYNEX was created on January 1, 1984, as a result of the breakup of the Bell System. It emerged as a Regional Bell Operating Company by combining former AT&T subsidiaries: New York Telephone and New England Telephone. The acronym NYNEX represented New York New England Exchange. At its inception, Delbert C. Staley, then chairman of New York Telephone, served as chairman, with William C. Ferguson appointed president and COO.
In April 1986, NYNEX expanded by acquiring 84 IBM Product Centers and merged them with its existing 19 Datago outlets to form NYNEX Business Centers. Two years later, in June 1988, the company ventured into professional services through the purchase of AGS Computers Inc., which operated as a separate subsidiary. Additionally, NYNEX diversified into commercial real estate via its NYNEX Properties Company, managing leasing properties located in Westchester County and Woodcliff Lake, New Jersey.
A significant labor dispute unfolded in August 1989 when approximately 200,000 telephone workers across 20 states initiated a strike against NYNEX and other regional firms. This work stoppage lasted for 100 days, causing delays in installations and operational challenges until a new contract was finalized in November.
In February 1990, the Federal Communications Commission imposed a $1.4 million fine on NYNEX and required the company to refund $35 million to consumers due to unlawful profit practices involving inflated supply charges. Following this, NYNEX dismissed senior executives and disciplined involved staff members.
By 1993, NYNEX had withdrawn from the information services market by divesting AGS and other divisions while maintaining certain subsidiaries. In response to industry changes in 1994, the company announced plans to reduce its workforce by 16,800 employees—approximately 22% of its staff—by 1996. These reductions were coordinated with unions to lessen the impact of layoffs. That same year saw Ivan Seidenberg appointed president and COO in February; he advanced to chairman and CEO by November. In September 1994, NYNEX sold its DPI software business to IBM. Legal decisions also allowed NYNEX to provide television programming via its network infrastructure.
In May 1995, regulatory changes in New York State deregulated NYNEX's pricing framework to foster competition. In exchange, NYNEX pledged to lower residential and commercial telephone rates within New York by $375 million by the year 1999.
International assets
During the 1990s, NYNEX broadened its international footprint with operations based in Brussels, Gibraltar, the Philippines, and the United Kingdom. In March 1993, NYNEX Cablecomms UK acquired Pactel Cable U.K. Ltd from Pacific Telesis. This business offered cable television and telephone services across various UK locations such as Waterlooville, Baguley, Shoreham-by-Sea, Leatherhead, and Antrim.
NYNEX Cablecomms proceeded with an initial public offering in June 1995. In 1996, its UK holdings merged with Mercury Communications—a subsidiary of Cable & Wireless—and cable operators Vidéotron and Bell Cablemedia to establish Cable & Wireless Communications.
The cable assets under Cable & Wireless were sold to NTL in July 1999; this transaction was finalized by May 2000. Subsequently, NTL merged with Telewest in March 2006 forming NTL:Telewest, which was rebranded as Virgin Media in February 2007.
Merger with Bell Atlantic
After two years of discussions, NYNEX and Bell Atlantic revealed their intention to merge in April 1996. The agreement stipulated that Raymond W. Smith would continue as chairman and CEO of Bell Atlantic, while Seidenberg would take on the roles of vice chairman, president, and COO, with plans for him to succeed Smith as CEO and chairman upon his retirement. To bypass the need for Congressional approval, the arrangement was restructured in June, transitioning from a merger to Bell Atlantic acquiring NYNEX.
The merger was completed on August 14, 1997, becoming the second-largest corporate consolidation in the United States at that time. Although Bell Atlantic remained the surviving company, the headquarters relocated from Philadelphia to New York City, where NYNEX was based. This consolidation prompted a notable exit of several senior NYNEX executives as Bell Atlantic centralized its leadership.
Following the merger, Bell Atlantic initiated a marketing campaign aimed at educating NYNEX customers about the new brand identity. In April 2000, Bell Atlantic announced its acquisition of GTE, which culminated on June 30 with the formation of Verizon Communications—a major telecommunications entity with enhanced global reach and market presence.
Criticism
NYNEX consistently struggled with service quality issues attributed to New York City's dense population, high demand for fax and internet connections, challenging physical infrastructure, and recurrent copper wire theft. The company also faced network degradation and substantial workforce reductions that impeded its capacity to satisfy increasing customer needs. Among the seven regional Bell operating companies, the FCC ranked NYNEX lowest in customer satisfaction in 1993.
During the fourth quarter of 1994, customers in New York City experienced 99,145 service interruptions, while repair crews failed to keep 61,500 appointments—reflecting a 30% rise in missed repairs and a 40% increase in outages lasting over 24 hours compared to the prior year. Complaints escalated by 107%. In 1995, New York proposed a recovery plan aimed at enhancing customer service; however, skepticism remained regarding its effectiveness and the uneven implementation of rate reductions.
In August 1996, New York State withheld $4.1 million in regulated fees due to NYNEX's failure to meet service standards mandated by the public utility commission. Later that year, the Public Service Commission levied fines totaling $62.3 million after NYNEX missed several customer service targets, underscoring mounting regulatory scrutiny over its operational performance.
See also
- Western Electric
- FairPoint Communications
- William C. Ferguson
- NYNEX Arena (Manchester, United Kingdom)
External links
- www.nynex.com (Archived February 27, 1997)