Sen. Robert Packwood (R-Ore.), chief sponsor of telecommunications legislation now under Senate consideration, yesterday said that he would not oppose a federal judge ordering a breakup of American Telephone & Telegraph Co. in the government's antitrust case against the Bell System.
"If the government can prove that even apart from FSAs [fully separate affiliates] that there is no way that you can have competition but for divestiture, that's their business," Packwood said. "I'm not going to stand in their way.
"If the court says, 'No, we don't think that even legislation is sufficient, that it doesn't allow enough competition, because the evidence we have is the following,' I'm not going to try to stop them if that's the conclusion they come to."
Packwood's remarks, in an interview, came as the Senate Commerce Committee he heads is on the verge of controversial legislation endorsed by the committee's leadership that permits AT&T to enter new markets through a separate subsidiary.
Although opponents of the legislation say that by endorsing the separate-subsidiary concept, the bill will undermine the Justice Department's hopes for divestiture in the antitrust suit, Packwood's remarks provide the first clear signal that the key Senate leader would not challenge such a judicial result through legislative action.
Further, Packwood, while not taking a position on the Reagan administration's consideration of proposals to drop the suit, challenged a Defense Department claim that breaking up AT&T would jeopardize national security.
"I think the Department of Defense likes dealing with monopolies or likes dealing with nationwide regulated utilities," he said. "They like dealing with an entity. If I were Lt. Gen. Packwood in charge of defense communications or procurement, I would love to deal with one entity that could give me a nationwide answer.
"I am convinced that even if you have divestiture, even if some of the Bell operating companies had to be split off in a divestiture suit, defense would not suffer," Packwood said.
The legislation changes the structure of regulation of the telephone industry and would permit AT&T to offer for the first time new services, such as electronic Yellow Pages and data-processing service in competition with the computer industry.
Packwood rejected claims by long-distance competitors of AT&T, such as MCI Communications users that the legislation is inappropriate since that business is not yet truly competitive. Packwood likened the long-distance carriers' position to "protectionist" claims of trucking and airline companies who opposed earlier deregulation efforts.
"To say that MCI and Southern Pacific are not competing in long-distance with AT&T is wrong," he said. "They are competing, and they're apparently making money. There is clearly competition in the manufacture of equipment. There is certainly competition in sending long-distance voice communications. In the areas we are going to deregulate there is clearly competition."
Packwood also said that when the committee marks up the bill as soon as next week, he hopes to have forged a compromise on what he considers the key political issue in the legislative fight -- the debate between the American Newspaper Publishers Association and AT&T about the types of services AT&T will be permitted to bring into the home.
"I'm hopeful we'll have agreement from the publishers," Packwood said, noting that he hopes to get quick committee approval for the bill next week. Packwood said that amendments to the bill, in part proposed to alleviate the concerns of the newspaper industry, will be released today.