ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, April 23, 1996 TAG: 9604230115
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
CONSUMER GROUPS and competitors are worried by new monopolies being formed at a time when deregulation is supposed to encourage competition.
Opposition rose immediately Monday to the merger of Bell Atlantic Corp. and Nynex Corp. as competitors, unions and consumer advocates questioned the new company's power and plans.
The top executives of Bell Atlantic and Nynex took on the critics eagerly, saying the $23 billion deal would in time prove beneficial to both customers and employees. They vowed to provide better service and create more jobs than they cut.
They also said their ambitions were limited for now to the East Coast, which Bell Atlantic chief executive Ray Smith boasted was the ``most information-intensive area on the planet,'' and their existing international operations.
``We're not interested in any more merger and acquisition activity,'' said Ivan Seidenberg, Nynex chief executive officer who becomes vice chairman of the merged company, which will use the Bell Atlantic name.
Nonetheless, the Bell Atlantic-Nynex deal shapes up to be more contentious than the one announced three weeks ago by two other big local phone companies - SBC Communications Inc. and Pacific Telesis Group.
Those companies serve the two most populous states, California and Texas, and six others. But they do not serve regions that are next to each other, the way Bell Atlantic and Nynex do, making it harder to combine technical operations and cut jobs.
No sooner had the Bell Atlantic-Nynex deal been announced than competitors were questioning new monopolies being formed at a time when deregulation is supposed to be encouraging competition. Weighing in to cast a cloud over the deal were heavyweights MCI Communications Corp. and AT&T Corp.
It was MCI's insurgency in the industry that led to the breakup of the Bell System that split seven Baby Bell phone systems from AT&T in the 1980s. Now there will be five Baby Bells. And MCI and AT&T want to compete for local phone service with them.
The Bell Atlantic-Nynex merger will result in 3,000 job cuts out of the 133,000 employees they now have. Those would be in addition to about 4,000 jobs Nynex has yet to cut from a restructuring that began in 1994 and was aimed at eliminating nearly 17,000 of 76,000 jobs. Bell Atlantic has largely completed cutting 5,600 jobs, a process that began in 1994.
Most of the new cuts will be in administrative positions. Smith and Seidenberg said they hope to have new long-distance, video and Internet businesses growing sufficiently to offer jobs in those areas to employees who might be cut.
``If you look at this new territory, 45 percent of all toll calls that used to be MCI, AT&T or Sprint begin or end in the new Bell Atlantic territory,'' Smith said. ``We're going to enter that market, and we're going to do extremely well - and that means jobs.''
The Communications Workers of America said the deal should not be approved by regulators and shareholders if it results in big layoffs. But the executives said none of the jobs cut would be unionized workers, which mollified the group a bit.
``That was good to hear, but I think we'll want some firm assurances of their view on the future,'' said CWA spokesman Jeff Miller.
Some consumer groups objected on the ground that the deal violated the spirit of the telecommunication deregulation law passed two months ago.
``The public was told the new law would lead to new entrants in every market, and instead we are seeing the same old monopolies banding together to prevent competition from developing,'' said Bradley Stillman, telecommunication policy director at the Consumer Federation of America.
LENGTH: Medium: 74 lines ILLUSTRATION: PHOTO: AP. 1. A woman uses a Nynex pay telephone outside Nynexby CNBCorp.'s Manhattan office Monday morning. 2. (headshots) Smith.
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