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 [without permission, from Computer+Software News, March 30, 1987; page 2]

         NYNEX accused of transfusing phone revenue to arm


WASHINGTON - The relationship between the Regional Bell Operating Cos. (RBOCs)
and their subsidiaries has once again burst into controversy.

This time, NYNEX is accused of diverting income from local phone revenues to
subsidize unregulated ventures, according to a new study.

NYNEX, the parent of NYNEX Business Information Systems, the 94-store pc chain,
has used "monopoly resources to enhance corporate profits and competitive
advantage," acording to the National Association of Regulatory Utility
Commissioners in a report issued last week.

"It is a difficult thing to check because we can't directly trace the pattern
of cross-subsidies," said Dick Marshall, an official with the New York PUSC.
"We think we can document that."

Critics have charged that NYNEX and the other six ex-Bell Operating Cos. have
diverted money and personnel to their subsidiaries.

Last year, the California PUC charged that PacTel was guilty of transferring
rate-payer funds to subsidiaries.

Marshall said his staff found evidence suggesting NYNEX has also violated the
divestiture rules governing its relations with NYNEX unregulated firms.
Spokesmen for both NYNEX and its subsidiaries denied the allegations. ......

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