The debate about the future structure of the nation's telecommunications industry shifted to the House of Representatives yesterday as a key subcommittee chairman introduced legislation to permit American Telephone & Telegraph Co. to enter new markets, but under potentially tougher guidelines than those approved by the Senate.
Rep. Timothy Wirth (D-Colo.), chairman of the House subcommittee on telecommunications, consumer protection and finance, introduced the legislation, pledging hearings in February, mark-up in March and passage before the close of the current congressional session. Most subcommittee members generally endorse the bill, Wirth said.
Asserting that the bill is not "deregulation for its own sake," Wirth said his legislation approaches revamping of the industry's structure and regulation from the "perspective of the user, not the provider," and emphasized that it focuses on ratepayers.
Wirth said he is extremely concerned about rising telephone rates and noted that there is "considerable alarm" among state regulators, citizens and business groups that rates are going up "very dramatically," and that telephone users "must be protected."
There was little immediate reaction from industry representatives, although a number of communications sources praised Wirth for the thoroughness of the legislation. An AT&T spokesman said, however, that the company is "glad that legislation has finally been introduced in the House" and said AT&T "does not agree with some" provisions of the bill that are "troublesome." The company has argued that its unregulated subsidiaries should be able to compete on essentially the same terms as other concerns.
The American Newspaper Publishers Association, however, endorsed the legislation in light of its adoption of a provision that bars AT&T from providing information for distribution over its telephone lines.
The House Commerce Committee is likely to be the site of a vigorous lobbying campaign by telephone, computer, news and other communications industry interests. Since the Senate already has passed its bill, endorsing a general thrust toward deregulation, opponents of the bill such as manufacturers and long-distance concerns are likely to press for firm controls over AT&T as it moves into new fields.
Like its Senate counterpart, which easily passed that body two months ago, Wirth's legislation would lift the provisions of a 1956 consent decree between the government and American Telephone & Telegraph Co. and permit AT&T to compete in unregulated fields such as the computer business.
However, the bill would stiffen the grounds under which AT&T could enter these markets. The legislation offers AT&T a choice upon enactment of setting up one or more limited subsidiaries offering new services or setting up a "general separate subsidiary."
Under the first plan, AT&T would be barred from joint ventures with its offshoot. The limited subsidiary also would be barred from owning transmission lines, a key piece of the Senate plan.
On the other hand, the general subsidiary could own transmission facilities and is considered a separate entity for purposes of antitrust enforcement. This firm, in effect, would be a competitor with AT&T.
AT&T also is barred from offering electronic publishing services over its own lines, the latest version of a proposal endorsed by the Senate that it designed to ensure diversity of information coming into the home.
The bill mirrors many of the conclusions of an industry study prepared by the subcommittee's staff recently suggesting that it is unwise to deregulate telecommunications markets until there is adequate competition and that, in fact, few fields--including long distance and telephone equipment--are truly competitive. Thus carriers without market power, such as long-distance competitors of AT&T, would be deregulated under the Wirth plan.
The bill would require AT&T to purchase up to 30 percent of its equipment from outside suppliers, and telephone companies also are barred from offering cable television services.