The government's top communications officials urged Congress yesterday to hold off enacting any broad telecommunications legislation to accompany the government's settlement with American Telephone & Telegraph Co. until the landmark divestiture plan is implemented.
The president's chief communications adviser, Assistant Commerce Secretary Bernard J. Wunder, and members of the Federal Communications Commission told a House subcommittee that they strongly oppose the legislation being considered by the committee as premature.
"We believe that comprehensive legislation" such as the measure being considered by the House subcommittee on telecommunications, consumer protection and finance "should not be enacted pending the completion of the court proceedings surrounding the proposed settlement that are now under way," Wunder said.
"The most prudent course of action for Congress at this time is to wait until the dust settles" before it considers further restrictions on AT&T's structure or changes in the settlement to give the local operating companies greater freedom, Wunder added.
However, he and the FCC officials said they would not oppose narrow legislation, independent of the settlement, to guarantee stable telephone rates and to increase the FCC's jurisdiction over long-distance rates to give it authority over intrastate long-distance calls, which now are regulated by state utility commissions.
The administration's refusal to endorse more sweeping legislation, however, drew criticism from subcommitee members.
"If we wait until all issues are resolved," it may be too late to help consumers or the local operating companies, charged subcommittee Chairman Timothy Wirth (D-Colo.), who said he is concerned that the settlement could lead to sharp increases in local rates, particularly if local operating companies are barred from offering any competitive services.
The settlement requires AT&T to divest itself of the operations of its 22 local operating companies. In turn, AT&T would be allowed to enter any business field, including computer processing and other unregulated areas it has been barred from entering. However, the divested companies would be limited to providing only regulated local phone service.