The chairman of MCI Communications Corp. urged Congress yesterday to delay any action on new telecommunications legislation until the courts complete action on the antitrust settlement between American Telephone & Telegraph Co. and the Justice Department.
William McGowan said in a luncheon address at the National Press Club that any legislative action at this time would be "ill advised." He said Congress should wait until U.S. District Court Judge Harold Greene completes his review of the settlement.
Since the settlement was announced last January, there has been pressure from some segments of Congress to legislate changes beyond the terms of the settlement--changes that AT&T bitterly opposes.
McGowan said the only thing more threatening to MCI than high interest rates right now was "Congress during an election year."
Under the terms of the antitrust settlement, nothing can happen for two years, McGowan said. Therefore, Congress should not allow itself to be "panicked" into legislative action in the belief that it has to provide instant relief to the consumer, he asserted.
McGowan said predictions that local telephone rates would double or triple under the government's divestiture plan were "ridiculous." He conceded, however, that there could be a doubling or tripling in the basic monthly rates for such service.
He indicated that rural telephone users might be hurt the most under the proposed settlement, and he said Congress might want to consider some form of subsidy for these users. But any subsidy "should be done by elected representatives in the open" and not through some hidden subsidy designed by state utility regulators, he said.
Under the proposed antitrust settlement, AT&T would be forced to divest itself of local telephone service. It plans to spin off its current Bell System firms into seven independent regional companies to provide local telephone service. These companies would remain regulated. In exchange, AT&T would be allowed to compete in the growing, unregulated telecommunications markets.