The Federal Communications Commission yesterday said it was considering whether to relax or eliminate rules requiring local phone companies to set up separate subsidiaries if they want to offer information processing services.
The rules, imposed in 1980 as a way to prevent American Telephone & Telegraph Co. from entering the computer business, "no longer appear to be contributing to the development of an effective or efficient telephone network," the agency said.
If the rules are abandoned, the phone companies will not have to set up a separate subsidiary to offer such services as central answering machine connections, wake-up calls, and lines that allow customers' computers to talk to each other.
The proposal was welcomed by AT&T, but consumer activists were skeptical of the idea because they fear phone subscribers could be forced to underwrite the other activities.
"Frankly, it is time to look at these issues," said Samuel A. Simon, director of the Telecommunications Research and Action Center. "But the big issue is assuring that consumers are protected from cross-subsidization."
"Their language indicates they want to cut down on the restrictions, and we view that as a positive step," said Herb Linnen, a spokesman for AT&T. But AT&T said it was disappointed that the commission had not acted on a request made last January that it be allowed to provide customer equipment through the same subsidiary.
"It requires us to have two sales forces, it costs us $1 billion a year, and it frustrates the customer from one-stop shopping, which the customer has with the IBM Corp. and others in the marketplace," he said.
In another action yesterday, the FCC authorized international competition to Intelsat, the global satellite consortium that has held a monopoly over the provision of international satellite services for two decades.
"Right now . . . businesses have indicated they have a strong desire for new options in customized international service so they can introduce their products to new markets," said Albert Halprin, chief of the FCC's common carrier bureau.
Nevertheless, the decision was opposed by Commissioner James H. Quello, and Commissioner Henry M. Rivera abstained. Both expressed deep concern that safeguards to ensure the economic viability of Intelsat were not in place.
The systems will be restricted to providing only private line communications and will not be allowed to channel telecommunications traffic into public networks in the United States or abroad, which is tough to police from a technical standpoint.
The systems authorized were International Satellite Inc., PanAmerican Satellite Corp. and RCA American Communications Inc. The agency denied authorization to two companies, Washington-based Orion Satellite Corp. and Cygnus Satellite Corp., pending compliance with international radio regulations within 45 days, and said it would take action on Financial Satellite Corp. at a later date.
Intelsat, the International Telecommunications Satellite Organization, is owned by 110 member countries, with the United States holding the single largest share. For years, it has provided international communications services to companies such as AT&T and Western Union. The new systems will be competing for a share of millions in revenue that Intelsat generates yearly.
The decision met with mixed reaction on Capitol Hill yesterday. Rep. Timothy E. Wirth (D-Colo.), chairman of the House subcommittee on telecommunications, consumer protection and finance, said he was "extremely gratified by the commission's action to ensure there will be competition in the international satellite arena."
But Rep. John D. Dingell (D-Mich.), chairman of the House Commerce Committee, said, "The FCC's new policy adopted today in a divided vote risks doing internationally what the AT&T divestiture has done at home."