A first step in revising the face of the nation's $300 billion telecommunications industry will take place today when a House subcommittee considers revamping the Communications Act.
The House Commerce Communications subcommittee is scheduled to mark up amendments to the 1934 law, which governs communications regulation. Although the legislation is sponsored by the subcommittee chairman, Rep. Lionel Van Deerlin (D-Calif.), the rest of the subcommittee, and the ranking members of the full Commerce Committee, its precise fate remained in doubt late yesterday.
The bill's fate is unclear because a series of amendments and other revisions totalling some 70 pages will be unveiled by Van Deerlin and the panel's staff at today's session. Those amendments, the bill's supporters say could dilute criticism from the Federal Communications Commission, and some industry and consumer groups.
Specifically, the legislation, which Van Deerlin had been revamping during a three-year effort to rewrite the nation's communications laws, modifies the federal government's consent decree with Western Electric. That document bars American Telephone & Telegraph Co. from offering a variety of nontelephone services.
The bill would permit AT&T to expand its services through a separate although not totally removed subsidiary. Some critics maintain that the bill, which has the tacit support of AT&T, simply opens an avenue for the Bell System to continue to dominate the telecommunications industry.
AT&T Vice Chairman James Olson has called the bill "probably the best piece of telecommunications legislation to be produced thus far by Congress."
Although Olson also said the bill is "far from perfect," in a talk before Bell System managers, he noted that the bill, unlike previous legislation which called for the divestiture of some parts of the AT&T empire, "moves us in a direction of a bill we can live with."
AT&T officials have consistently said they want legislation clarifying the government's regulatory policy toward the communications industry.
Legislation to revise the nation's communications statutes is also a high priority for the Carter administration. cPresident Carter in his State of the Union package released this week called passage of telecommunication regulation reform the administration's highest priority in the field.
Late yesterday, the president's chief inflation fighter, Alfred Kahn, sent the subcommittee a letter praising its progress on revamping the act and urging an early mark-up.
In a letter sent yesterday to Harley Staggers (D-W.Va.), chairman of the House Interstate and Foreign Commerce Committee, FCC Chairman Charles Ferris raised these issues and suggested that the impact of the bill might not be fully understood.
"It is essential that there be a full delineation of the bill's practical effect on AT&T's structure -- and its consequential economic impact on various telecommunications markets in which AT&T has such a dominant role," Ferris wrote, in a letter reflecting only the views of the FCC chairman.
"These organization and competitive effects are not fully apparent on the face of the bill," Ferris wrote. "They require, I believe, further explication before the final conclusions may be drawn."
Consumer Union Legislative Counsel Sharon Nelson took these questions a step further, suggesting that the bill might alter the fate of the Justice Department's massive antitrust case against AT&T. That case is expected to go to trial this fall.
In a letter to the committee, Nelson, noting the current "industry configuration," called the bill "bizarre" since it "apparently would reward AT&T for past anticompetitive conduct" by lifting the 1956 decree.
"At the same time," she wrote, "the bill would allow the Bell system to retain its vertically integrated structure -- a structure which provides internal incentives toward commission of anti-competitive, unfair or deceptive acts or practices."
The bill, which incorporates many recommendations, submitted by the Carter administration's National Telecommunications and Information Administration, curtails many facets of the government's regulatory apparatus. a
The proposal's advocates say it repeatedly stresses a reliance on the marketplace, replacing regulation with competition in intercity telecommunications markets, for example.
In addition, the terminal equipment market would be substantially deregulated as would various types of long distance data and voice services.
The Senate is also working on a communications law revision measure, although that bill is expected to be substantially different from the House measure.