President Carter yesterday endorsed legislative proposals that would open up the telephone and telecommunications industry, long a virtual monopoly for the American Telephone & Telegraph Co., to unprecedented competition from others in private industry.
In a message to Congress, Carter said he wants to "encourage competition and innovation, and keep telephone service affordable throughout the country."
The proposals he embraced would allow private companies to offer new services and communications equipment -- such as picture phones or long distance computer hookups -- as alternatives to Bell System services. The Federal Communications Commission recently has begun to allow some such services, but in a piecemeal fashion.
The legislative proposals also would revamp pricing policies in the industry with a goal of increasing competition and reducing costs.
Carter, however, ignored other pending legislation that would sharply deregulate the broadcasting and cable television industries.
The message was reminiscent of last year's administration support for airline deregulation. In that case, the administration chose to endorse existing legislation rather than offer legislation of its own.
"The task is to create a structure that will give consumers the benefits of competition and deregulation wherever they make sense, while keeping telephone service reliable and affordable," Carter said.
At a press conference, White House inflation adviser Alfred E. Kahn said that deregulation and the resulting competition would result in increased productivity and decreased prices for communications equipment, while presidential aide Stuart E. Eizenstat pointed to the deregulation stance as evidence of the president's continuing commitment to regulatory reform.
Carter's message was welcomed by the sponsors of active legislative proposals.
In a statement, Sens. Howard W. Cannon (D-Nev.) and Ernest Hollings (D-S.C.) said "we are especially pleased that the president shares our confidence in increased competition, our desire to maintain universality of basic telephone service, our reservation over slowness and uncertainty of regulatory actions and our preference for legislative resolution of basic issues."
Rep. Lionel Van Deerlin (D-Calif.) said he hoped "the president's message helps to put telecommunications policy where it belongs -- near the top of a crowded legislative agenda."
AT&T vice chairman James E. Olson said his company was "pleased that the administration has recognized the importance of the critical issues that confront the telecommunications industry.
"We firmly believe that legislation is needed, and we hope the president's message will encourage the communications subcommittees of the Senate and House to move ahead."
AT&T recently reversed its long-standing opposition to the deregulation proposals, which have been stalled.
While new competitors would challenge AT&T in markets such as special long-distance communications services, it is likely the Bell System would retain its legal monopoly over such basic services as local telephone exchanges.