Telecom Bill Inching Forward

he Senate will debate its version of the telecommunications reform bill late this month, just as the House takes up its version of the landmark deregulation legislation.

There's plenty to fight over; the various segments in the $150 billion a year telecommunications industry stand to gain or lose billions of dollars on the phrasing of paragraphs and clauses.

Even Vice President Al Gore weighed in, calling for changes to preserve price control on cable TV service, ban phone companies from buying local cable companies, and keep the Justice Department in an oversight role.

Still, the legislation was passed 17-2 in the committee, and earned the vote of South Carolina's Sen. Fritz Hollings, who saw his draft bill shot down last year by opponents of government regulation. Committee Chairman Sen. Larry Pressler says the bill can pass muster on the Senate floor despite the opposition from Gore and some Washington-based consumer groups who say it will raise consumers' cable TV bills, and pressure from some Republicans who say the bill should contain fewer regulations.

The floor debate may be delayed by disputes over a legal reform bill, which will be the first item to be debated after the Senate returns April 24 from its two-week recess.

As the Pressler legislation is being debated, the House is expected to quickly draft and vote through a rival bill proposing even further deregulation. The House bill is being prepared by Virginia's Rep. Thomas Bliley, chairman of the House Commerce Committee, and Texas Rep. Jack Fields, chairman of the committee's panel on telecommunications and finance.

Rodney Hoppe, a spokesman for the panel, said a draft bill should be introduced by May 1, and sent to the House floor for debate after a month's consideration by the committee.

Hoppe declined to discuss the contents of the House draft.

When the House completes its version of the bill, negotiators from the House and Senate will hammer out a compromise package, which will then be voted on by the House and Senate, before being sent to the White House for President Bill Clinton's signature.

The major elements of Pressler"s bill are: A mechanism to guarantee nationwide access to modern communications networks, and extra subsidies for schools, libraries and small-town hospitals. This universal access mechanism will be overseen by a federal-state joint board, but eliminates existing state and local regulation of phone services. The definition of universal access will be routinely updated by the joint board and by the states, and could eventually include full-motion video phones, says the committee report. Universal access is to be paid for by the communications companies -- not by information providers -- and perhaps by firms with their own large-scale communications networks, said the report.

The seven Baby Bells will be allowed to offer long distance services, and long distance companies will be allowed to offer local services, once the companies meet a competition-promoting checklist overseen by the Federal Communications Commission. The bill also allows the Baby Bells to manufacture communications equipment.

Phone companies will be allowed to immediately offer cable TV service, cable companies will be able to offer phone service and lift price regulations on cable TV service once competition exists in a local area. Phone companies will be allowed to buy cable companies within their home areas.

The bill permits utility companies to sell communications services via existing fiber optic networks.

The bill also allows existing broadcast companies to use their portions of the electromagnetic spectrum for other uses, such as digital communications, but they must pay the government a fee.

Foreign telecommunications companies will be permitted to buy more than 25 percent of a U.S. telecommunications company, if similar rights are granted by the country where the foreign company is located.

Lobbyists for long distance companies and the Baby Bells are now trying to amend Pressler's bill during the Senate debate.

For example, John Schneidawind, a spokesman for the Alliance for Competitive Communications, a lobbying arm of the Baby Bells, said he wants Pressler's draft to be modified to allow the Bells to keep any profits they make from cost-cutting, allowing the Bells to enter the wireless phone market immediately instead of after a one-year delay. He also wants to modify the checklist for entry into the long distance business.

Matt Wagner, a spokesman for the Competitive Long Distance Coalition, a Washington-based lobbying group for AT&ampT Co., MCI Communications Corp. and Sprint Corp., said they want Pressler's bill amended to give the Justice Department more say over when the Baby Bells should be allowed into the long distance market.

Also, Wagner said they want the checklist improved and immediate "dialing parity," so that the Baby Bells won't be able to force customers to dial extra numbers to reach a long distance link operated by AT&ampT, Sprint and MCI.

The Washington-based Information Technology Industry Council, a lobbying arm of the computer and software industries, wants Pressler's bill amended to allow citizens to receive cash subsidies or vouchers instead of guaranteed access. Also, the council wants Congress to guarantee information providers the right to network access.