RUNNING A BUSINESS partly as a monopoly and partly as a competitive enterprise is very difficult. Four years ago AT&T decided that it was impossible, and, to escape from menacing antitrust litigation, broke itself up. The new and smaller AT&T stayed in the long-distance telephone business, which was becoming competitive. The seven regional operating companies -- like Bell Atlantic, which serves this area -- were left with the local phone service, which, everyone agreed, is inherently a monopoly.
But then the regional companies began to reach out toward new businesses, and the question arose again: Can they be reconciled with monopoly operations? Judge Harold H. Greene, who presided over the original divestiture of AT&T, continues to have jurisdiction over these issues. In a characteristically careful and sophisticated decision last week, he relaxed the restrictions on the regional companies -- but not nearly as much as they had wanted.
Some of the regionals wanted to dive into the long-distance business in competition with their former parent, and into equipment manufacturing. Judge Greene remembered that it was AT&T's unsuccessful attempts to play by one set of rules in those fields and by another in its monopoly businesses that led to its antitrust troubles. Wisely, he resisted the Justice Department's argument that everything has changed since 1984.
But he has allowed the regionals to go into new areas of technology such as video service that allows you to call up information on a screen attached to your phone. Readers of this page need to be aware that the newspaper industry thinks it has an interest here, since some newspapers have been experimenting with video information services delivered by phone lines. Newspapers have argued that phone companies should not be permitted to run their own information services, in competition with outsiders, while they also control the circuits that connect these services with the customer. Judge Greene told the phone companies that they could carry video services but not originate them.
There's been some angry huffing and puffing in Congress to the effect that Judge Greene is setting the country's basic telecommunications policy in these decisions. That's true, and it's essentially because Congress hasn't done its own job. Whenever it tries to legislate in this area, the bills are promptly overloaded with attempts to protect all sorts of companies large and small and to mandate low bills for everybody. Ideally, Congress ought to take over the fundamental decisions being worked out in court. But Congress is so deeply divided on them and so sharply at odds with the administration that the chance of coherent legislation remains remote. It's peculiar to have a federal judge guiding the evolution of the telephone industry, but until Congress can pull itself together, the present arrangement isn't working at all badly.