July 5, 1995

NYNEX CONTACT: Media Relations, (212) 395-0500

NYNEX Accepts Incentive Regulation Plan in New York

NYNEX today announced that it will accept a seven-year plan that will eliminate rate-of-return regulation and provide increased pricing flexibility.

The plan, which the New York State Public Service Commission offered the company on June 1, will also freeze or reduce basic exchange rates and reduce other rates by $100 million in the first 12 months.

NYNEX Chairman Ivan Seidenberg said, "This is a historic plan for a company that will be 100 years old in New York next year. Approval of this plan will mean that NYNEX will be operating under incentive regulation in more than 95 percent of its service territory in the Northeast. NYNEX enters a new era in its history with confidence because, with these regulatory plans in place, we will have significantly more flexibility to price, package and introduce services. Going forward, we will create more value for NYNEX customers and NYNEX shareholders."

Specific terms of the plan, including the effective date, are subject to PSC approval on July 28.

Consumer benefits and rate reductions include the elimination of Touch-tone charges, a freeze until the year 2002 on prices for home and business Message Rate service and on the charge for a local call, reductions in Flat Rate charges affecting nearly 1 million residence customers, and reductions in toll and inter-region calling charges.

NYNEX will also reduce access charges that are paid by long-distance companies to compensate NYNEX for use of its network. In addition, NYNEX will further open its markets to competition. By March 1996, NYNEX will have introduced simplified dialing for consumers who wish to use competing companies for toll and inter-region calls.

The plan also calls for ever-increasing service quality targets, with a schedule of customer rebates should NYNEX fail to meet these requirements.

Negotiations and public hearings on this plan have lasted more than three years. In September 1994, NYNEX and 16 other parties representing government, industry, labor and consumers reached a settlement to change the way the company was regulated in New York. On June 1, 1995, PSC commissioners modified this negotiated settlement and, in an order issued June 16, gave NYNEX until July 3 to accept or reject those modifications.

NYNEX is a global communications and media company that provides a full range of services in the northeastern United States and high-growth markets around the world, including the United Kingdom, Thailand, Gibraltar, Greece, Indonesia, the Philippines, Poland, Slovakia and the Czech Republic.

The Corporation is a leader in the telecommunications, wireless communications, cable television, directory publishing and entertainment and information services.

FAX copies of recent NYNEX news releases are available free of charge, 24 hours a day. Call 1-800-331-1214 and an automated system will provide instructions.

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