Negotiations over the wording of a draft bill that would allow American Telephone & Telegraph Co. to branch out of the telephone business are deadlocked, as far as one of the negotiators is concerned.

Rep. Timothy Wirth (D-Colo.), has written to the legislation's author, Rep. Lionel Van Deerlin (D-Calif.), chairman of the House Communications subcommittee, to complain that he and staff members have been unable to agree on language to limit AT&T's powers.

"We have run into a stone wall someplace," Wirth said yesterday in an interview.

"These protections are extraordinarily important. This is not a simple misunderstanding. It appears as if the principal concern of some people is for the dominant carrier (AT&T)."

In the letter, dated March 6, Wirth said that efforts to write the controversial part of the bill, which deals with links between AT&T and subsidiaries like Western Electric, have all but collapsed, despite an apparent subcommittee agreement on the thrust of the measure.

The subcommittee had "agreed that it would be unfair and anticompetitive for AT&T to be able to use its enormous market shares from its regulated network to reduce competition," Wirth wrote.

Wirth's letter comes at a critical time in the House effort to get the bill through the Commerece Committee. AT&T, which had played a low-key role, now is encouraging customers and employes to lobby their representatives, urging speedy passage, and Charles L. Brown, Bell System chairman, urged "prompt development" of such legislation last week in AT&T's annual report to shareholders.

Under a 1956 consent decree with the government, the Bell System was barred from entering unregulated fields, such as data processing. Modification of that decree is at the center of the controversy, and protections against the intermingling of Bell's subsidiares are vital to the bill's fate.

Wirth said in his letter that the agreement on language, reached by subcommittee members in January when they moved the bill to the full committee, seemed intact until Feb. 12, when "various industry representatives strongly attacked" a staff draft.

A second version was called too complex, and staff discussions "now appear deadlocked," he told Van Deerlin.

Wirth is know to consider competitive protections essential to changing the decree against the Bell System.