Congressional concern over the impact of the closing of the antitrust cases against American Telephone & Telegraph Co. and International Business Machines Corp. intensified yesterday as one key Senate leader raised the possibility that Congress could overturn the AT&T action.
Sen. Robert Packwood (R-Ore.), chairman of the Commerce Committee, said yesterday that the settlement removes the prospect of long-distance fees subsidizing local telephone rates. The settlement would force AT&T to divest its local telephone companies.
"If you want to continue to subsidize rural and residential rates, you'll have to have legislation," Packwood said. "I want to continue the subsidy."
But Packwood, primary sponsor of the telecomunications legislation, which the Senate passed by a 90-to-4 vote late last year, said that if the committee stays with "the bill as it is, negates the consent agreement, because we did not have divestiture in the bill."
Packwood's committee is planning hearings on the settlement, possibly as soon as next week, when Congress returns from a holiday recess. In addition, a House telecommunications subcommittee, chaired by Rep. Timothy Wirth (D-Colo.), is planning hearings on the AT&T matter in two weeks.
Wirth, in an interview, said his subcommittee, which soon will begin consideration of a bill he in troduced with an eye toward a vote this summer, said "urgent concerns" about possible rate increases the settlement might bring about should speed action.
With the settlement, there is "an even greater need for legislation than we've ever had before." Wirth said he is particularly concerned about eliminating subsidies that keep local rates low and the possibility of the new AT&T having the power to cross-subsidize its competitive ventures. "There has to be a clear line between regulated long-distance service and the Western Electric Co.," Wirth said.
Assistant Commerce Secretary Bernard Wunder, agreeing that Congress should take some action, said in an interview that "there is still a need for Congress to look at the access charges" long-distance carriers pay to local phone companies. Wunder said the settlement also "raises anew the questions of how much can be deregulated."
Finally, Rep. Peter Rodino (D-N.J.), chairman of the Judiciary Committee, yesterday announced that he will call William Baxter, assistant attorney general for antitrust, to testify before a subcommittee on monopolies on Jan. 28 in light of Rodino's concern about the proceedures involved in ending the two cases.
On Friday, Baxter announced that he was dropping the 13-year-old antitrust case against IBM, just after releasing details of a settlement in which the government agreed to dismiss its antitrust case against AT&T. In exchange, AT&T agreed to sell off 22 local operating companies.
Rodino said he was concerned that the mechanics of the AT&T settlement appeared to avoid the Tunney Act, which requires that consent agreements be put on the record for public comment before being formally adopted. The case was dismissed and the new settlement was filed as a consent decree before a federal judge in New Jersey responsible for monitoring a 1956 decree between the Bell System and the Justice Department.