The Federal Communications Commission's toughest policy challenge in 1986 will be defining "enhanced" services that local phone companies can and cannot offer, agency staff members say.
As everyone from entrepreneurs to major corporations seeks to exploit the merging of computers and communications by providing services from data networks to phone-based security alarms, the regional Bell operating companies want a piece of the action, too.
However, a thicket of FCC rules intended to separate the regulated telephone business and unregulated computer business effectively bar the Bell operating companies from offering these computer/communications services.
American Telephone and Telegraph Corp. is prohibited from offering data-processing services through anything but a separate subsidiary.
The Justice Department also prohibits the baby Bells from manufacturing or providing long-distance service. When the Bell companies want to start a new line of business, they must ask permission of U.S. District Court Judge Harold H. Greene, who presided over the breakup of the Bell System. They must also provide those services through a separate subsidiary.
Allowing the phone companies to provide the services will benefit consumers, according to Albert Halprin, chief of the common carrier bureau.
"This is the first time we have the opportunity to answer the question 'What serves the public best?' " he said. "What is absolutely essential is to stimulate the use of the local network. We need to make it have more value to customers. Now the local loop sits idle 90 percent of the time."
Consumers will see the benefits of such new services as storage of medical histories in the telephone network and network-based call forwarding, he said.
With network-based call forwarding, a consumer could have a phone call forwarded anywhere in the United States. Consumers will be able to take calls selectively by using a display that shows the number of the calling party when the phone rings, or by distinctive ringing, he said.
Other services might include computerized White or Yellow pages and computerized shopping through a local phone company.
But what will local phone companies do when Sears Roebuck & Co., for instance, wants to provide home shopping over the telephone network? And what about the dangers of monopoly rate-payer financing of new competitive ventures?
"It raises competitive questions . . . about not giving access to your network to others that want to provide the services," one FCC source said. "If we allow the Bell operating companies to offer bells and whistles, will they do it . . . in a predatory way?" The agency also has to "make sure they are not using revenues from rate payers to subsidize competitive ventures," the source said.
The Justice Department's plans to study restrictions placed on the Bell companies also must "dovetail" with any FCC plan to deregulate the services, he said.
Last week, Douglas H. Ginsburg, assistant attorney general in charge of the antitrust division, said, "The telecommunications system cannot . . . be static." But concerns about anticompetitive behaviour and subsidy of new services by monopoly customers must be addressed first, he said.
The Justice Department has recommended an "open architecture" strategy, whereby local phone companies will be allowed into information businesses only if they provide competitors the same connections to the telephone network.
Award Winners . . . Chairman Mark S. Fowler has been named first recipient of the Clarence Darrow Award by the Broadcast Pioneers Library. The award, given for Fowler's "championship of freedom of speech," was presented by Attorney General Edwin Meese III last week.
Also last week, President Reagan presented James C. McKinney, chief of the FCC's mass media bureau, a 1985 Presidental Rank Award of Distinguished Executives. The award, given to a group of career federal managers each year for "sustained extraordinary accomplishment," includes a $20,000 payment.