Despite fears that it undermines the government's landmark antitrust case against American Telephone & Telegraph Co., the House Commerce Committee yesterday passed a bill designed to restructure the Bell System and deregulate, over time, the nation's $300 billion communications industry.
With considerable haste, the committee voted 34 to 7 to send to the full House legislation that would lift a 1956 consent decree between AT&T and the Justice Department and permit AT&T, the nation's largest company, to compete in fields such as the computer business that are not regulated by the Federal Communications Commission.
The legislation has the support of AT&T and other large communications companies, but is opposed by smaller computer companies, consumer groups and long-distance competitors of the Bell System. The Carter administration has endorsed a less sweeping proposal that would give the FCC broader authority to monitor AT&T behavior as the industry evolves in the free market.
AT&T spokesman Pickard Wagner called the vote "a good step toward establishing a national telecommunications policy," but also said it "raises a number of questions and imposes some serious competitive disadvantages on us."
Wagner said the company is concerned about a measure that he said would "foreclose us from developing electronic yellow pages" and said the company also is troubled over a shortened timetable set up for restructuring the Bell System.
Noting that "we will continue to workd for improvements" in the bill, Assistant Secretary of Commerce Henry Geller, the administration's top communications policy maker, said the committee is "to be strongly commended for addressing these important issues."
Nevertheless, the administration was sharply criticized by opponents of the legislation for what one of them said was "sitting on their hands" during yesterday's committee vote.
"We are deeply disappointed that the administration utterly failed to give any support to the amendments which were designed to carry out the recommendations" made in a recent letter to the committee, said Herbert Jasper, executive director of the Ad Hoc Committee for Competitive Telecommunications, a group of AT&T competitors.
Although the bill easily won House committee support, prospects for action by the Senate Commerce Committee are murky because its chairman, Howard Cannon (D-Nev.), has suggested that passage of a similar bill is unlikely this year. Senate Republicans, however, disagree.
In addition to Senate problems for the legislation, Rep. Peter Rodino (D-N.J.), chairman of the House Judiciary Committee, acted immediately after the bill was passed yesterday seeking a referral of the bill to his committee before it is taken up on the House floor. Rodino is supported by seven members of his House monopolies subcommittee.
Rodino is concerned that because the bill restructures the basic nature of AT&T, the judge hearing the case, which is expected to go to trial this fall, could be precluded from ordering structural relief as a judicial remedy. Rodino has asked that parts of the bill dealing with AT&T's structure be dropped until the trial is completed.
He made the request in a letter to House Speaker Thomas O'Neill, calling the antitrust case "one of the most important antitrust proceedings" brought by the government "in our time."
Efforts to rewrite the nation's 46-year-old communications law began in 1976, when AT&T unsuccessfully circulated legislation that critics said would have given the giant phone company virtual freedom from federal regulation.
Since that time, however, Rep. Lionel Van Deerlin (D-Calif.) has launched several attempts to revamp the Communications Act, an effort that at various times has included provisions dealing with broadcasting.
The strong opposition of educations, labor unions and other groups, forced Van Deerlin to abandon that broad effort, instead focusing his panel's work recently on the phone industry.
The bill's key sponsors, Van Deerlin and Reps. Timothy Wirth (D-Colo.) and James Broyhill (R-N.C.), were successful in defeating two measures yesterday that would have altered the bill dramatically. The key one was introduced by Rep. Edward Markey (D-Mass.), who said the bill "gives Bell 98 percent of what it wants."
Markey's amendment, which was defeated by a 26-to-16 vote, would have expanded the FCC's authority over the deregulation of the key facets of AT&T. Under the bill, the FCC has no authority to alter the structure of AT&T or the "fully separate subsidiary" the bill sets up.
The pace of the planned At&t restructuring quickened yesterday as the committee by voice vot aproved an amendment by Wirth that would force Bell to set up subsidiaries for applied research in four years, for manufacturing of subassemblies in six years and manufacture of product components within eight years.
In another key amendment offered by Rep. Phil Gramm (D-Tex.), the committee voted essentially to permit AT&T and other phone companies to set their own rates of depreciation and withdraw from their regulated revenue base money obtained from distribution of the Yellow Pages.
"Together those two admendments represent highway robbery of the American consumer," said Howard Symons of Congress Watch.
After winning a victory on Wednesday for a proposal to ban AT&T from distributing news and advertising, Katharine Graham, chairman of the Washington Post Co. and chairman of the American Newspaper Publishers Association, said the bill is one "many of us will want to enthusiastically support."
In a letter to other newspaper executives, Graham said that "if there is no legislation, a vacuum will continue to exist in this area that AT&T can attempt to exploit on a state-by-state basis."