Plan would throw open telecommunications

December 16, 1993|By Los Angeles Times

In a plan that would throw the telecommunications business wide open to competition, the Clinton administration wants to sweep away many of the restrictions preventing cable television outlets, phone companies and long-distance carriers from invading each others' markets.

The Clinton plan, to be outlined next week by Vice President Al Gore and then embodied in legislation, would let regional phone companies into the video business, let cable companies provide a dial tone and allow aggressive competitors like MCI Communications Corp. to do both.

A source close to the White House said the administration's plan would discourage proprietary communications networks in favor of an open system connecting everyone and accessible to all. The model would be today's phone system, allowing anyone to call anyone, rather than the cable system, which offers mainly top-down communications.

The administration also hopes to bring services even to those who cannot afford it -- perhaps through a new telecommunications levy, or by setting up industry-funded public "information kiosks" for those unable to afford regular phone service.

The planned Clinton initiative would be the most important attack yet on the regulatory bulwark surrounding telecommunications, a system already under pressure from powerful new technologies and aggressive companies such as BellSouth Corp., which this week became the sixth Baby Bell to file suit for the right to provide cable TV services in its own service area.

Indeed, Mr. Clinton's initiative comes as the seven regional Bell companies have joined forces to prepare a unified lawsuit that they hope will demolish the elaborate structure of competition-constraining rules created by U.S. District Judge Harold Greene in 1982 when he issued his now-famous order to break up American Telephone & Telegraph.

Any of these initiatives, if successful, would remove some major barriers to the creation of the information highway President Clinton has vowed to bring about. For consumers, increased competition would probably accelerate the arrival of a host of new services based on interactive television, including education, shopping and entertainment on demand. For business, it will mean an array of new opportunities, as well as the end of the monopolies so many telecommunications firms have enjoyed for so long.

Mr. Gore is expected to outline the administration's telecommunications policy in a speech to the National Press Club in Washington. He will likely follow up next month with a speech introducing the bill in the House.

"It's a key initiative for the administration," says Eli Noam, a telecommunications expert at Columbia University.

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