On Oct. 8, 1996 -- with the grand opening of the NYNEX Resale Center in New York City -- NYNEX began offering to resellers virtually all its retail products and services at a discount. Since then, resellers in New York have been able to buy basic local phone service and repackage and sell that service to residence and business customers. We expect to begin accepting resale orders in New England states in the first quarter of 1997.
Resale of local services is mandated by the Telecommunications Act of 1996 and state regulators. In New York, the Public Service Commission has set discount rates of 19.1% on both business and residential lines. If the reseller provides its own operator services (once that capability is available) the discount rate can increase to 21.7%.
Preparation for NYNEX's entry into the resale business began in July 1995 when we formed our Resale Services organization. That group now has more than 130 employees.
Qualified resellers include former resale customers as well as such new entrants as long-distance carriers. In New York, we currently serve 12 resellers and have resold more than 8,000 lines in the Resale Center's first three months of operation. We expect to be serving 30-50 qualified resellers within six months, and to have hundreds of thousands of resold lines by the end of 1997.
NYNEX's resale efforts are expected to satisfy one of the 14 points in the FCC's competitive checklist that would allow NYNEX's entry into long-distance markets. The electronic interfaces available to resellers -- via the Internet (through a unique graphical user interface developed by NYNEX), EDI (an industry-standard interface) or an easy-to-use NYNEX-proprietary interface -- are designed to fulfill checklist requirements.
Our electronic interfaces allow resellers easy access to NYNEX systems for purposes of pre-ordering and ordering products and services. It also provides easy on-line access to maintenance, trouble-reporting and billing systems.
NYNEX is leading the way in resale and other pro-competitive efforts. We've been working on resale processes for more than a year to make this a success. We see this as a great business opportunity. Competition will grow the market and we want other companies to partner with us for the future.
One of our key resale objectives is to be easy to do business with. We want to develop a robust wholesale business. This is also an important step toward opening NYNEX's network -- one that moves us closer to providing long-distance service within our region.
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