It is highly unlikely that Congress will enact a new telecommunications law in light of a settlement of the government's antitrust case against American Telephone & Telegraph Co., the chief counsel of the Senate Commerce Committee predicted today.
The official, William Diefenderfer, said legislation introduced by Rep. Timothy Wirth (D-Colo.) and now before a House telecommunications subcommittee is "anticompetitive" and "would be unacceptable to the Senate."
Diefenderfer's remarks represented the first public comments from a Senate official on Wirth's bill and escalated a brewing controversy over communications legislation between the Senate Commerce Committee headed by Sen. Robert Packwood (R-Ore.), and the House panel headed by Wirth.
"The prognosis is that there will be no bill," Diefenderfer told a seminar here sponsored by First Boston Research. The House has "delayed and delayed" and is likely to "put off until next session" legislative action on telecommunications, waiting until "the consent decree is flushed out," Diefenderfer said.
Under Packwood's leadership, the Senate passed telecommunications legislation by 90 to 4 last fall. That bill, like the House version, permits AT&T to enter new markets, but leaves much of the monitoring of the industry up to federal regulators.
The House bill sets tougher limits on the Bell System, barring AT&T from using its long-distance network to distribute data it generates.
Diefenderfer's pessimistic view of the legislative situation contrasted with that of several other panelists. Charles Wohlstetter, chairman of Continental Telephone Co., the third-largest firm in the industry, said that the consent decree leaves open so many questions "that you're going to have legislation pretty quickly."
The group was discussing the consequences of the dismissal of the antitrust case, a move the two sides agreed to in exchange for AT&T's divestiture of 22 local telephone companies. The government also agreed to lift the restrictions of a 1956 decree between the government and the company that barred the Bell System from entering unregulated fields such as the computer business.
Panel members, including MCI Communications Corp. Chairman William McGowan and Philip Verveer, a Washington attorney and former Justice Department chief lawyer on the AT&T case, generally agreed that claims that the settlement will result in substantial increases in residential phone rates were exaggerated.
The commentators also agreed that the decree is likely to go through intense scrutiny during a review process before U.S. District Court Judge Harold H. Greene.
In Washington today, the Justice Department and AT&T filed letters alerting Greene to last week's actions that transferred jurisdiction over the settlement from a court in Newark to the court in D.C. Both parties said that move should guarantee full hearings on whether the settlement is in the public interest, as Greene demanded last week.