Telecom Reform Bill Lurches Forward

President Clinton and the long distance firms are trying to reshape the Senate and House bills, now heading for a joint conference in September

The great congressional telecom reform has lurched forward again, simultaneously raising the prospect of a presidential veto and the likelihood of final success.

The House passed its bill 305 to 117 on Aug. 4, setting the stage for a joint conference with the Senate to hammer out a final bill. But the House bill also rejected several demands from the White House, including demands for tight controls on cable TV prices and expansion of the Baby Bells.

The House version must be reconciled with the Senate telecom plan, S. 652, during a joint conference scheduled for September.

There's something for nearly every industry group in the House bill, numbered H.R. 1155. Only the long distance companies have come out in open opposition, launching a fierce media barrage when measures they sought were killed after behind-the-scenes discussion between Baby Bell lobbyists and deregulation-minded Republicans.

The gaps between the Senate and House bills are numerous, but bridgeable, say observers.

Internet censorship: The Senate version seeks to outlaw all obscene or lewd material on the Internet, and to hold online companies liable when they are involved. The House version bars the Federal Communications Commission from regulating the Internet, but also seeks to jail people who send porn to minors. "I would be very, very surprised if we came out of the joint conference with nothing," said Cathy Cleaver, an lobbyist with the Washington-based Family Research Council, which supports stringent anti-porn rules.

Long distance competition: Both bills delay the Bells' entry into long distance until they start sharing their local networks with competitors. But the Senate version requires the Bells to set up a long distance subsidiary, while the House version requires the subsidiary for only 18 months.

Local phone competition: Both bills say the Bells have to share their local networks with competitors under FCC oversight. But the House bill allows the Bells to drop the network-sharing once a rival network is established.

Cable TV rates: The bills differ in detail, but both retain price controls on basic cable TV service, and lift them on enhanced cable TV service and on small cable TV companies. The deregulation efforts are partly intended to help the cable companies raise revenues to compete against the Bells.

But President Bill Clinton threatened Aug. 1 to veto the final reform measure if it contained elements he cited as objectionable. These include:

-Allowing a company to buy as many radio stations as it wished.

-Allowing a company to own newspapers, television stations and cable companies in the same cities.

-Denying the Justice Department a significant role in deciding whether a Baby Bell could enter the long distance market.

-Making it too easy for cable companies and local phone companies to merge, reducing the prospects for local competition.

-Deregulate cable TV rates without first ensuring competition.

Only two of Clinton's demands made it into the House bill. Rep. Edward Markey, D-Mass., won a vote that bars a single company from owning TV stations with an audience greater than 35 percent of the nation's households. The original bill set the limit at 50 percent of U.S. households. Markey also pushed through a measure that requires televisions be equipped with computer chips that can help consumers and parents screen out violent or objectionable programs.

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