Development of a variety of new technologies has created a vital telecommunications business. But much of the industry still is dominated by a few major concerns, leaving the public with a small number of options, according to a congressional study published yesterday.
Further, the report, prepared by the majority staff of the House telecommunications subcommittee and endorsed by Chairman Timothy Wirth (D-Colo.), said federal regulatory and congressional policies have paid little attention to questions raised by media concentration.
Heralded by subcommittee officials and others as one of the most comprehensive reviews of competition in the industry ever undertaken, the new study is the product of 11 days of hearings, responses to hundreds of questionnaires and many meetings with experts.
Stating that the "economic wellbeing of our nation will be increasingly dependent on telecommunications," the report urged that the nation set as a national policy goal "a fully competitive" market in products and services as different as telephone receivers and satellite communications.
But competition in most of those communications fields--such as radio, network television, cable television, telephone equipment and long-distance telephone service--is still in its infancy, the subcommittee staff said.
Release of the report comes at a time when Wirth and his subcommittee are under increasing pressure to take up legislation in a number of fields, particularly a massive rewrite of the Communications Act of 1934. The Senate overwhelmingly passed such a bill last month to expand powers of American Telephone & Telegraph Co. and deregulating facets of the industry. Wirth has pledged to introduce a bill before the end of the year.
Reaction to the report was mixed. Rep. James Collins (R-Tex.), the subcommitte's ranking minority member, called it "flawed," particularly in the broadcasting sections. He said information markets already are competitive across the country.
The National Citizens Committee for Broadcasting called the report's assessement of the telephone industry a "breath of fresh air" but criticized the Wirth staff for "largely ignoring" First Amendment questions and social issues raised by new technology.
Wirth has said repeatedly that his legislation will focus on the report's three major themes: the importance of the concerns of telecommunications users, the need for diverse sources of information and building a congressional mandate for competitive communications industries.
But this report breaks sharply with a number of premises behind that action in suggesting that for a number of key fields deregulation is inappropriate so long as those markets are dominated by AT&T.
The premise that deregulation in most communications fields neither will add to the options for telecommunications users nor lower their costs also led the subcommittee staff to charge that the Federal Communications Commission has protected consumers inadequately and failed to spur competition, particularly in broadcasting. The report concluded:
* Despite the growth of companies (such as MCI Communications Corp. and Southern Pacific Communications Corp.) plus statements by top AT&T officials that the Long-distance communications industry is fiercely competitive, it "is not fully competitive today and cannot expected to be within the near future."
The study found that AT&T still controls more than 96.3 percent of the $32 billion intercity long-distance traffic, with MCI, for example, getting only 0.77 percent of the market.
* The deregulation of radio stations in large markets is appropriate because of the abundance of radio stations that offer a variety of programming.