Panel OKs cable, phone provisions

August 12, 1994|By New York Times News Service

WASHINGTON -- After negotiating at least a temporary cease-fire between feuding industry groups, the Senate Commerce Committee overwhelmingly approved a sweeping bill yesterday to rewrite the 60-year-old communications law.

If enacted, the legislation would allow local phone and cable TV companies to enter each other's businesses, and it would gradually free the seven "Baby Bell" companies to offer long-distance service.

After weeks of arduous negotiations, the Commerce Committee approved the measure by a vote of 18-2, a margin that greatly increases the likelihood that Congress will enact such a measure in September.

Yesterday's vote became possible after Sen. Ernest F. Hollings, a South Carolina Democrat who is chairman of the Senate committee and principal sponsor of the Senate bill, and Sen. John C. Danforth, R-Mo., brokered a bitter dispute between the Bell companies and long-distance carriers like AT&T Corp. and MCI.

Local phone companies had threatened to oppose several provisions, particularly ones that would not allow them to enter -- the cable TV market as quickly as they want.

The Bell companies have insisted that they be allowed to provide long-distance service, from which they have been barred by the antitrust consent decree that broke up the Bell System in 1984, as part of a deal to open their monopolies to new competitors.

The long-distance industry argued that the local companies should be kept out until they faced real competition in their own markets.

Mr. Hollings agreed to give up a requirement that the Bell companies first face "actual and demonstrable competition" before entering long-distance. In its place, he inserted conditions that would make it easier for new entrants to compete in local telephone service.

But, final passage is hardly assured. Any substantial opposition could still kill the measure.

The outcome of the fight will have an enormous impact on the billions of dollars now being invested in telecommunications networks.

Local phone and cable television companies are racing to build high-speed two-way communication networks, while computer, software and entertainment companies are rushing to develop products for them.

Maryland is on the front lines of the battle: The Public Service Commission has given MFS Intelenet Inc. the go-ahead to

compete for business customers with Bell Atlantic-Maryland, and considering Southwestern Bell Corp.'s application to serve residential users in Montgomery County. Bell Atlantic, has plans to offer video service in the Baltimore area and Montgomery County.

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