American Telephone & Telegraph Co. yesterday announced plans to mount a massive, nationwide lobbying campaign by its employes and stockholders to defeat legislative efforts to alter its antitrust settlement with the Reagan administration.
Announcement of the campaign came as the House telecommunications subcommittee unanimously approved legislation to impose stricter terms on the communications giant than required by the antitrust settlement. Several key provisions of the bill were only made public four days ago.
AT&T Vice Chairman James E. Olson accused the subcommittee of trying to "stampede through Congress" a piece of legislation that threatens significant disruptions in the nation's telephone service as well as serious financial and competitive problems for the Bell System. The legislation, being pushed by Rep. Timothy E. Wirth (D-Colo.), the subcommittee chairman, "is a bad bill," Olson said.
To counter the legislation, Olson said the company would mount the first massive lobbying effort in its 100-year history, spending perhaps as much as $2 million to mobilize its 3 million shareholders and 1 million employes to defeat the measure.
"For us to sit idly by, in the face of a well-orchestrated campaign to railroad an ill-timed, ill-conceived piece of legislation would, in my judgment, be the height of management irresponsibility," Olson said at a press conference held only hours after the legislation was approved by the subcommittee. Wirth and his subcommittee aides immediately denounced Olson's charges. "It seems to me that the unanimous 15-0 vote this morning demonstrates that the members of Congress who have the responsibility to objectively weigh the facts understand that this legislation is in the best interest of consumers, employes, shareholders and the local operating companies," Wirth said. "The legislation represents a fair balance among all interests," Wirth added.
"In no way can our action be construed as railroading," a subcommittee aide added. "The legislation has been in the works for almost a year, with extensive hearings and ongoing meetings with subcommittee members."
The legislation, as approved by the subcommittee after 75 minutes of debate, would in some respects closely follow the outlines of the antitrust settlement AT&T signed with the Reagan administration on Jan. 8. As the settlement does, the legislation would require AT&T to spin off its 22 local operating companies.
But beyond that, the legislation would tighten restrictions for AT&T's long-distance network, which currently and under the settlement operates as a division of AT&T. Under the legislation, this network would have to be placed in a fully separated subsidiary. However, by a 9-to-5 vote yesterday, the subcommittee agreed to delete a provision that would have required that 10 percent of this subsidiary's shares be held by investors outside AT&T.
The measure also would give local operating companies greater opportunities to enter the more lucrative parts of the telecommunications business than the settlement allows by permitting the local companies to continue offering yellow-page services and selling telephone equipment. At the same time, it would change the implementation of the divestiture plan to give the officials of the newly divested companies greater say in the division of assets and debt.
"Despite its purposed intent, the bill would not help Bell operating companies," Olson charged yesterday. What's more, he added, its restrictions on the long-distance network and a variety of other services AT&T wants to offer, including electronic publishing systems, would place the Bell System at a severe competitive disadvantage, Olson charged. Although AT&T has not dropped its desires for legislation to update the 48-year-old Communications Act, Olson said this legislation was the wrong approach.
AT&T officials acknowledged that their lobbying campaign is to counter a strong lobbying effort in support of the legislation by the National Coalition for Fair Rates and Competition, a newly formed group comprised of consumer groups and several of AT&T competitors, including International Telephone & Telegraph, Southern Pacific Corp. and Rolm Corp.