Telephone bills are likely to rise by 50 percent after implementation of the settlement of the government's antitrust suit against American Telephone & Telegraph Co., Rep. Timothy Wirth (D-Colo.) said yesterday.
But Wirth, chairman of the House telecommunications subcommittee, told a news conference that the settlement ultimately would help consumers if it is accompanied by telecommunications legislation. Congressional action is made easier in light of the pact, he added.
"It is clear that the settlement does not obviate the need for legislation," Wirth said. "Indeed, the agreement makes the early passage of legislation critical."
Wirth said it is unlikely that local telephone rates would double or triple even without congressional action, but said that a series of problems, most of them difficulties with telephone regulation that existed before the settlement, made legislative action imperative.
Last week AT&T and the Justice Department announced an agreement that ends a government antitrust suit against the company. The Bell System agreed to split off 22 local operating companies in exchange for an end to the litigation.
Wirth would not endorse the settlement, but said it is "workable" if his bill is enacted. He said it is unlikely that Congress would move to overturn the action.
According to a study by Wirth's subcommittee staff, the settlement will result in a loss of $12.6 billion in annual local telephone service revenues to the new local companies. The drop in revenues comes from the loss to local companies of long-distance facilities, customer equipment and the yellow pages -- revenues which will instead be in the hands of the remaining AT&T.
Wirth had planned to begin consideration early next month of legislation he introduced last year. The bill sets out specific procedures for determining the fees long-distance companies pay local phone firms for the right to use the local telephone network. The legislation also would establish a National Telecommunications Fund to maintain and "underwrite" the cost of providing local service, the subcommittee said.
Wirth repeatedly jabbed at a bill passed 90 to 4 by the Senate and sponsored by the Republican leadership of the Commerce Committee. A number of the issues, such as the procedures for determining the payments submitted for long-distance hookups are left to the Federal Communications Commission under the Senate legislation.
Wirth said the subcommittee will begin considering the issues with a hearing on the settlement Jan. 26. AT&T Chairman Charles Brown will testify and the Senate Judiciary Committee is planning hearings on the settlement the same day.
In a related development, AT&T said it will raise between $4.5 billion and $5 billion in 1982 through bond and stock sales, down from $6.6 billion in outside financing last year. AT&T said the reduction would be due primarily to new depreciation tax regulations that will lead to greater generation of cash internally.
AT&T plans to spend about $19 billion on capital construction projects this year. The four Washington-based Chesapeake & Potomac Telephone Cos. account for $1 billion of the total.