wdegnan@f39.n382.z1.fidonet.org (William Degnan) (01/11/90)
john@zygot.ati.com (John Higdon) writes: >What would stop a Pacific Telesis supply arm >from buying, for instance, Northern Telecom DMS100s at a steal of a >price (quantity, someone sleeping with someone, whatever) then turning >around and selling those switches to Pac*Bell at full list? And then >when it comes time to compute rate-of-return for Pac*Bell they show >exhorbitant costs for their CO equipment, reflecting a lower apparent >rate-of-return. But Pacific Telesis made the profit at its other >subsidiary, *totally at the expense of Pac*Bell's ratepayers*. Back to >my question: What would stop them? Nothing. They do it all the time. >Now that the PUC isn't watching them anymore, it will be even easier >to get away with it. John, don't you think you're just a little paranoid? Nahhhhhh. From the MDF (Main Distribution Frame) Echo on Fidonet: 053/061 09 Jan 90 19:18:04 From: News Desk @ 382/39 To: All Subj: Cross-subsidization? Us? Nahhhhh. NYNEX AUDIT -- When Nynex ... set up a subsidiary to buy supplies for them, the idea was to save money: The purchasing unit could buy in volume, and the savings would be passed on to customers. From the start, regulators worried that it wouldn't work that way. Because profits of the purchasing unit wouldn't be regulated, Nynex might be tempted to have this unit charge the phone companies inflated prices. ... It was a temptation Nynex apparently couldn't resist. A year-long federal audit has concluded that ... Nynex has overcharged its own companies this way to the tune of $120 million. The FCC ... may act against Nynex as early as this week. ... The complex web of intramural transactions at Nynex ... reminds regulators of the cozy ties that AT&T's Western Electric unit had with the Bell operating companies, a relationship that helped prompt the breakup of AT&T. Since the breakup, such relationships have become increasingly common with the ... Baby Bells. ... New York Times, A1. =============================================== "Just 'cause you're paranoid, doesn't mean they ain't out to getcha." Regards, Bill Disclaimer: Contents do not constitute "advice" unless we are on the clock William Degnan | wdegnan@mcimail.com !wdegnan@at&tmail.com Communications Network Solutions | William.Degnan@telenet.com P.O. Box 9530, Austin, TX 78766 | voice: 512 323-9383 William Degnan -- via The Q Continuum (FidoNet Node 1:382/31) UUCP: ...!rpp386!tqc!39!wdegnan ARPA: wdegnan@f39.n382.z1.FIDONET.ORG