Death of NYNEX Business Centers

by Anonymous

On June 1, 1991 NYNEX Business Centers (NBC) sold its entire operation, assets, and customer base to rival computer reseller ComputerLand.

The five-year experiment was the most serious attempt yet by a Bell Operating Company to capture the long-predicted home and business markets for new synergistic computer/communications technology products, such as desktop computers, modems, integrated voice/data terminals, Videotext, ISDN equipment, CLASS hardware, multimedia, facsimile, cellular, and more.  In the end though, under a blanket of bureaucratic mismanagement and miscalculations, the division failed to meet its five-year profit plan and was sold to the highest bidder for $125 million in cash and ComputerLand stock, leaving some NYNEX employees either without work or with a company whose name sounds like an amusement park.

I worked for NBC (as it was referred to internally) for the last four of its five years, and I found it interesting to see the telephone giant from the inside.  NBC was a division of BISC, the Business Information Systems Corporation division (which also owns the CASE software giant AGS), which itself is part of a still larger division that controls their other "unregulated" companies such as NYNEX Mobile Telephone.

It was a confusing hierarchy of divisions and subdivisions which seemed to change as frequently as the seasons (or managers).  Although the $25 billion NYNEX Corporation has repeatedly denied allegations that it subsidized its unregulated businesses with the billions in revenues from New York Telephone, many NBC employees (including myself) felt like they were part of a huge, mysterious shell game.  In fact, NYNEX is currently under investigation by the Public Service Commission for questionable transactions between the telephone company and its subsidiaries.

For a brief history, NYNEX Business Centers was itself born out of the ashes of two other failing computer ventures.  Back in 1986, IBM's chain of retail microcomputer stores (known as IBM Product Centers) wasn't performing up to Big Blue's expectations, so they put it on the block with the stipulation that all employees be retained.  NYNEX took the bait, and also bought the failing Datago computer chain at about the same time, eventually building a distribution network employing nearly 2000 people in over 80 stores with locations in most states.  The nerve center (with an IBM 3090), headquarters, and warehousing facilities were built in Atlanta for its central location, tax laws, and its proximity to major air transport facilities.

This was barely two years after the great AT&T breakup/divestiture that allowed Bell Operating Companies (BOCs) to compete more freely and market non-telephone products and services.  At the time, NYNEX was (and still is) employing its Washington lobbyists and PR army in an attempt to convince the U.S. Justice Department to overturn the Modified Final Judgment (MFJ) that forbids the BOCs from developing, manufacturing, and marketing their own equipment, and from developing and marketing information services (such as business and consumer databases, electronic Yellow Pages, etc.).

Evidently though, the Reagan administration was having such a ball deregulating the S&L industry that they never got around to cutting the ribbon on any new parties.  So, NBC was limited to reselling only other manufacturers' products (such as IBM, Compaq, Apple, Hewlett-Packard, etc.) in a highly competitive market they never could hack.  NYNEX kept up the deregulatory fight though, urging its employees to write their legislators to deregulate BOCs in an unprecedented, self-labeled "grass roots" campaign which never bore fruit.  It's almost certain to happen eventually because there's billions of dollars at stake, but it's too late for NYNEX Business Centers.