In two unanimous decisions yesterday, the Federal Commission voted to move toward substantial deregulation of interstate data communications and telephone services.
FCC Chairman Charles Ferris described the decisions as adding up to a "watershed day"-perhaps the most significant change in agency policy affecting telephone giant American Telephone & Telegraph Co. and its competitors since telephone equipment was eliminated as a Bell System monopoly in 1968.
In the separate decisions yesterday, the FCC:
DECIDED TO GIVE AT&T and other interstate communications carries broad authority to offer computer-based and data processing services, through subsidiaries on a deregulated basis. A 1956 consent decree with the Justice Department prohibits AT&T from offering anything but regulated communications services, but yesterday's FCC action was designed to describe data services as "incidental" to communications. AT&T was given the option of offering an unregulated service or filing tariffs for agency regulation.
Proposed elimination of required rate filings by all "non-dominant" carriers-a description designed to exclude all interstate communications firms but AT&T and possibly Western Union. Currently, all firms file mountains of rate proposals and detailed statistical information to support new charges. Most of these proposals are opposed by competitors, leading to extensive FCC proceedings that delay offerings of new rates or services.
The data communications decision, affecting a multibillion-dollar market of future decades that is expected to revolutionize the transmission of information by business and govermnent, may generate considerable controversy. The FCC has been wrestling with the explosion in data communications for a decade.
In effect, AT&T would be permitted to enter a business from which it has been excluded. Some potential competitors for this market-notably International Business Machines Corp.-have argued that the telephone giant and other carriers should be permitted to compete, even if the Justice Department consent decree has to be modified. But smaller firms have sought to prevent AT&T from becoming a competitor.
The Justice Department's Antitrust Division reportedly is opposed to any entry of AT&T into computerized communications unless there is express approval as part of a settlement for its pending antitrust suit against the Bell System.
The FCC saw the old AT&T consent decree as an impediment to its procompetition, deregulation direction of recent years, and some agency officals noted yesterday that AT&T already offers nonregulated business lines that are "incidental" to communications.
By giving AT&T the option of entering data communications as a deregulated business or filing tariffs for continued FCC review, the agency apparently removed itself from the controversy that the Bell System and Justice Department still must resolve. If AT&T moves to offer data services, the Antitrust Division could challenge such action in court.
The second decision on common carrier rate filings was a proposed rule-making that the FCC asked its staff to expedite for a final decision within three or four months. It would allow such companies as MCI, Southern Pacific, Xerox and International Telephonne & Telegraph-all "non-dominant" firms in the business-to offer rates and services without previous FCC approval.
All firms but AT&T and perhaps Western Union were described as not having a market position that would bring in excess profits. Concern about "unjust rates" was said to be unrealistic. Since the FCC recently opened up the telegram business to competition, Western Union also might be eliminated as a "dominant" firm.
Proposals on Capitol Hill to rewrite the nation's communications law would accomplish some of the deregulatory moves taken yesterday by the FCC.