An attempt by the nation's telephone companies to persuade Congress to limit competition in the telecommunications industry has resulted in a multi-million-dollar lobbying war.
At stake is the control of a rapidly growing, $35.3 billion-a-year telecommunications market in the United States.
Also at stake, according to the phone companies' competitors, is the right of consumers to purchase the telephone equipment best suited to their needs. Currently, most consumers rent their equipment - home telephones and private branch exchanges for example - from the phone companies.
The competitors find that appalling. They point out that the basic home telephone costs about $25 aunit, but that most consumers pay the phone companies at least twice that amount each year in rental fees.
The phone companies, led by AT&T, contend they are not in the business of selling telphone equipment. They say they are selling a vital service. And the emergence of what they call "unregulated competition" is a major threat to the integrity of that service, they say.
The conflict began last year, when American Telephone & Telegraph Co. and representatives of the nation's 1,600 independent telephone companies went to Capitol Hill with a bill designed to overturn Federal Communications Commission rulings allowing increased competition in the industry.
Since then, AT&T (the Bell telephone system) alone has spent $2,568,674 to "secure the passage" of what the company and its allies call the consumer communications reform act, according to FCC records.
A commission official said it is not known exactly how much the independent phone companies have spent in working for the bill because most of them operate outside FCC jurisdiction and were not asked to comply with a special commission request to file lobbying costs.
Only companies regulated by the commission -interstate carriers - were asked to file such reports.
But financial statements filed by the largest independent - General Telephone and Electronics, which partly comes under FCC oversight - show expenditures of $84,241.78 in support of the bill. Also, the U.S. Independent Telephone Association, the trade group representing the independents, says it spent nearly $85,000 since last year in working for passage of the legislation.
The phone companies major opponents include a host of mostly new and small firms who manufacture home and business phone equipment, and others - including giant electronic interests - who provide private long-distance message and computer services via their own microwave or satellite transmitters.
The private producers of telephone-equipment are members of the so-called "interconnect" industry and are not regulated by the FCC.
However, the trade association representing 230 of the estimated 400 "interconnects" - the North American Telephone Association - so far puts its cost of fighting the bill at $100,000. NATA officials claim they currently are operating on a $1 million budget, about 70 per cent of which is being used to represent its companies in a series to represent its companies in a series of antitrust court actions against AT&T.
The "specialized common carriers" - the competitors providing the private long-distance message and computer services - are subject to commission oversight. According to FCC records, these firms have spent $527,899 in the last year working against what they disparagingly call the "Bell bill."
The legislation is now under consideration by the House and Senate sub-committees on communications. No one on the Hill expects the proposal to be passed as written. In all likelihood, say persons familiar with the bill, it probably will be subsumed in attempts to rewrite the entire Communications Act, of 1934, which established the FCC.
On the surface, it appears that the opponents of the "established telephone industry" - as AT&T and the independents are called - are out-weighed in the struggle to determine the future of telecommunications in the United States. AT&T and the independents control 99.5 per cent of the total telecommunications market - with Ma Bell holding about 83 per cent of the industry pie.
In terms of dollars in 1975, that meant AT&T and the independents took $35.2 billion of the $35.3 billion in annual telecommunications revenues. The phone companies' competitors got $194 million, according to the 1976 report by the FCC Common Carrier Bureau.
Standing behind the small "interconnect" and "specialized common carrier" companies are giants like International Telephone and Telegraph, International Business Machines and RCA Corp., all of whom are interested in getting a significant part of the burgeoning telecommunications market.
The combatants are spending money for consultants, lawyers, public relations, "employee education," grass-roots campaigns, postage and frequent visits to Capitol Hill in a fight to determine whether the century-old AT&T has a right to extend its near-manopoly to new areas of telecommunications, or whether the market should be shared by the aggressive newcomers - many of whom have only been around since 1968.
"The 'Bell bill' is first, last and always a political fight," said John P. Guttenberg Jr., a consultant to the Ad Hoe Committee for Competitive Telecommunications, the lobby group for the specialized carriers.
"The regulatory, financial, economic and market questions raised by the bill are very important. But at the hub of all this is a bonafide political issue that will be dealt with in political terms," Guttenberg said.
In brief, the bill would strip the FCC of its authority to certify telephone equipment and give that authority to the states. Each state would then have the option of allowing a new company to enter the phone equipment market in its jurisdiction or to commit the existing phone company - usually Bell or one of the independents - to be the sole supplier of such equipment.
In the area of private-line services, the measure would force competitors to prove they can provide services not already provided by Bell or the independents.
Neutral observers of the legislation agree that the bill - introduced last year and reintroduced this year by Rep. Teno Roncalio (D-Wyo.) - would drive new competitors out of the telecommunications market and close the door to future competition.
Even Bell officials admit that may be the effect. But they argue vigorously that that is not their intent.
The intent, says John W. Gray Jr., an assistant vice president of AT&T, is to prevent newcomers from "skimming the cream off the top" of the lucrative long-distance market, which provides the revenues Bell claims it uses to subsidize "low" home telephone rates.