The Reagan administration, unable to resolve internal conflicts on communications legislation, cancelled plans to testify yesterday before a Senate committee, prompting the panel's Republican leaders to criticize the Justice Department and the White House for the cancellation.
"This is not a bill we sprung on them Friday," complained Sen. Robert Packwood (R-Ore.), Commerce Committee Chairman.
The cancellation of testimony by Commerce Department Secretary Malcolm Baldridge and U.S. Trade Representative William Brock, announced to the committee's staff late Monday, came as administration officials attempted to reach a consensus on the controversial legislation, which among other things would permit American Telephone & Telegraph Co. to enter new fields.
"I am less than pleased with the administration at the moment," Packwood said. "They have not resolved their internal conflicts with the Justice Department. The rest of the administration is prepared to go. I don't acknowledge the logic [of the Justice Department position] at all. I will be very irate" if the administration does not annouce a position on the bill during later hearings, he added.
But the main stumbling block appears to be the Justice Department, which is suing to force a breakup of AT&T, along with the assistant attorney general for antitrust, William Baxter, who is handling the department's communications policy because Attorney General William French Smith and Deputy Attorney General Edward Schmults have removed themselves from AT&T matters because of ties to AT&T during their years in private law practice.
In essence, the Antitrust Division has complained loudly within the administration that the legislation does not address the Justice Department's contentions that AT&T's behavior in controlling the bulk of local and long-distance telephone services and long-distance communications systems is a bar to competition, sources said. "The bill simply does not solve that problem," said one source familiar with the Justice Department viewpoint.
Nevertheless, the Justice Department appears on the verge of losing the internal debate, as sources said that David Stockman, director of the Office of Management and Budget, has assured Packwood that the administration generally will endorse the bill at hearings later this month.
Packwood also complained about the lobbying on the bill, which involves computer, publishing and other communications industry concerns, charging that those interests -- parties he refused to name -- have been claiming, for instance, that "residential rates are going to go up tremendously, newspapers are going to be driven out of business." Packwood said AT&T "has been using fewer scare tactics" than its antagonists.
"I have no intention of turning the communications policy of the country over to AT&T," Packwood said, responding to the critics. Sen. Barry Goldater (R-Ariz.) also criticized the lobbying surrounding the bill, saying that in his 30-year congressional career he had never seen such "outlandish efforts" to affect legislation.
The Repubican-sponsored legislation, however, won the general support of Mark Fowler, the new chairman of the Federal Communications Commission. In carefully worded testimony, Fowler said he and other FCC members support the underlying deregulatory thrust of the bill, and without specifically criticizing the Senate effort, he suggested that the FCC should be given the power to monitor the proposed changes in the structure of the industry.
The Reagan team's problems are reminiscent of efforts last year by the Carter administration, which also was divided over communications policy along the same lines. Similar legislation was stalled last year in the House after the House Judiciary Committee blocked the bill, and such a scenario is possible this year if the Senate Judiciary Committee, which is seeking a referral of the legislation, raises similar concerns.