An open war broke out yesterday between American Telephone & Telegraph Co. and the nation's newspaper and broadcasting industries as a House committee moved closer to voting on controversial legislation to restructure the nation's telecommunications industry.
At issue in the battle between AT&T, the nation's largest company, and the news-gathering industries is the role AT&T is to play in accumulating and distributing information as the Bell System moves into an unregulated enviroment.
At the same time, however, Senate prospects for enactment of communication legislation took a dramatic turn for the worse yesterday as the Democtratic leaders of the Senate Commerce Committee began a effort to drop the whole issue from the panel's legislative agenda.
According to informed sources, two key sponsers of the Senate telecommunications legislation, Sen. Howard Cannon (D-Nev.), chairman of the Senate Commerce Committee, and Sen. Ernest Hollings (D-S.C.), chairman of the communications subcommittee, approached two of the measure's sponsers, Sens. Robert Packwood (R-Ore.) and Barry Goldwater (R-Ariz.), seeking to delay the legislation.
In a letter to Packwood and Goldwater, Cannon and Hollings, noting controversey about the telephone sections of the bill, said that "comprehensive hearings" are needed to explore the issues. Citing "scheduling difficulties," Cannon said the decision makes Senate passage of communications legislation "unlikely during this Congress."
Packwood immediately rejected the request. "I don't beleive we should scuttle the communications reform bill," Packwood wrote, saying he is "convinced" the legislation can be passed and sent to the White House before Congress adjourns in the fall.
The controversey came to the forefront after last week's announcement that Rep. Timothy Wirth (D-Col.), after negotiations with the American Newspaper Publishers Association, this week would introduce an amendment to the bill that would bar AT&T from offering mass-media services.
But AT&T has reacted bitterly to the proposal, claiming in a memo distributed to members of the House Commerce Committee that the amendment "would not only keep inno- vative services from the marketplace, but it would create further statutory restraints on the corportation's exercise of its rights of free speech."
AT&T went on to say that the "only purpose of such an amendment is to project publishers from competition, particularly in classified advertising."
Pickard Wagner, an AT&T spokesman, went even further. "What they're trying to do with this is tear out our tongues," Wagner said yesterday."This raises a serious questions about our freedom of speech."
The ANPA, the leading newspaper trade association, reacted immediately, saying that the amendment actually would permit AT&T to expand its information-related businesses. "It only continues restrictions where there is a substantial danger to the free flow of information presented by AT&T's market dominance over certain facilities," the ANPA said in a memo responding to the AT&T charge.
CBS Inc. joined in support of the ANPA and the Wirth amendment in a letter yesterday to Wirth from William Lilley, vice president of CBS Inc. l"We agree that the only way to encourage entry by others in the provision of information services is to limit AT&T to originating information like directory listings and time and weather," Lilley wrote.
Meanwhile, The House Commerce Committee yesterday took a step toward acting on the restructuring legislation by voting to cut off much of the intense debate on the bill by noon Thursday.
Acting on a procedural motion by Rep. Albert Gore (D-Tenn.), the committee agreed to the limit by a 17-to10 vote, but permitted additional arguments of 10 minutes each on any amendments submitted to the committee by noon today.
The action was designed to encourage speedy action on the highly controversial bill before Congress recesses at the end of the week for the Democratic National Convention.
Rep. Lionel Van Deerlin (D-Calif.), chairman of the communications subcommittee and a principal author of the bill, has said that unless the full committee acts this week, the effort is in serious trouble.
The legislation would deregualte many facets of the telephone industry over time. It effectively would fit the provisions of a 1956 consent decree between the government and AT&T that prevents the phone industry giant from competing in unregulated markets.
Further, the legislation would set up a 10-year restructuring of the Bell System and require AT&T to set up a fully separate subsidary to offer new services.