The House member who has legislative responsibility for monitoring the telephone industry said yesterday he is studying proposals to make significant changes in the terms of the government's antitrust settlement with American Telephone & Telegraph Co.
Rep. Timothy Wirth (D-Colo.), chairman of a House telecommunications subcommittee, said in an interview after hearings on the proposed pact that Congress must act on a set of significant issues concerning potential AT&T internal cross-subsidies, the authority of the new local telephone companies and ratemaking issues.
In addition, Wirth said that AT&T has been inconsistent in suggesting Monday to a Senate member that a portion of the settlement dealing with revenues from advertising in Yellow Pages could be modified to aid local services although other sections could not be changed.
"On the one hand, they are saying we can modify the settlement agreement related to Yellow Pages," Wirth said. "They are saying when it's convenient to modify the settlement, we'll modify it, but where it isn't convenient, we won't modify it."
Wirth suggested that without congressional action, rates could double or triple. He said he wanted to "carefully review" whether the new operating companies, limited to offering local telepone service, needed expanded authority to maintain financial viability.
Under the Jan. 8 agreement between the Justice Department and AT&T, which must be approved by a federal judge, AT&T has agreed to spin off 22 local telephone companies worth about $80 billion.
During House hearings yesterday, members of Wirth's panel expressed the strongest concern about the settlement yet to surface on Capitol Hill. From both political parties, members specifically cited the possibility of massive local rate increases as evidence of the need for legislation to combat that prospect.
As in Senate testimony Monday, AT&T Chairman Charles Brown said that local rates are likely to rise each year by 10 percent from a national average basic rate of $10 a month.
But that did not quell the congressional fears and criticism. Most vocal was Rep. Ronald Mottl (D-Ohio) who warned of the "mass rape" of American consumers without congressional action. "It's frightening to think of the horror stories we might be hearing from the local operating companies in the next couple of years as they soberly tell us how they'll go out of business without a doubling or tripling of rates," Mottl said.
In other developments yesterday, the American Newspaper Publishers Association said in a statement that under the AT&T settlement the "free flow" of information over Bell System long-distance lines "could be impaired" under the pact's terms. A provision in legislation sponsored by Wirth bars AT&T from controlling or providing most types of information over its long-distance network.