Telephone giants mimic little guys

Local, long-distance companies complete for Internet market

May 05, 2001|By Andrew Ratner | Andrew Ratner,SUN STAFF

Maybe you've seen the commercial on television, from a group with a grass-roots-sounding name, "Voices for Choices."

Four gray-haired businessmen chuckle as they feast on a turkey dinner. The men are labeled to represent the nation's four largest local phone companies - Verizon Communications, SBC Communications Inc., Qwest Communications International Inc. and BellSouth Corp.

A narrator warns that they must be stopped "before the phone conglomerates do to our phones what the energy conglomerates did to electricity," as the chandelier in the scene ominously dims.

The ad might not be what you think. It is paid for by a coalition that includes the major long-distance phone companies, AT&T Corp. and WorldCom Inc.

And it isn't a populist warning so much as a move to persuade members of Congress in the biggest phone industry fight on Capitol Hill since the landmark Telecommunications Act of 1996.

The battle is over legislation that would allow the large local phone companies such as Verizon to more easily enter the $2 billion market to sell high-speed access to the Internet. Present law allows them to provide such service only after they meet certain conditions on a state-by-state basis.

Supporters of the legislation contend that it's the next logical step to deregulate telecommunications in the Internet age - a process that began in the 1950s when the federal government began investigating the monopoly of the American Telephone & Telegraph Co. and that evolved with the 1984 breakup of AT&T into smaller companies.

But long-distance providers and smaller competitors have marshaled forces with efforts such as "Voices for Choices."

Battered by price wars in long-distance rates and the stock market drop, these companies are loath to let the regional "Baby Bells" move into their turf, especially the Internet.

"Margins in long distance are through the floor, and the last thing these companies want is for the Bells to come in and offer additional competition in that market," said Martin L. Stern, a Washington attorney previously with the Federal Communications Commission.

Like the insurance industry's "Harry and Louise" commercials that helped derail the Clinton administration's health care strategy in 1994, the "turkey dinner" commercials are carrying a policy debate normally confined to Capitol Hill into the living rooms of consumers and voters.

Whether the ad blitz will sway legislators is unclear, but the spots have become a source of curiosity - and confusion - for the public.

"I don't think they're having much impact, but we've gotten lots of questions about them," said Sandra Arnette, a public relations manager in Baltimore for Verizon. "We try to explain to people that AT&T is pretty much behind the ads."

Said David A. Bolger, a spokesman for the United States Telecom Association, a trade group for the local-exchange phone carriers, including Verizon: "I think the ads are trying to put fear in the minds of people in Baltimore and elsewhere, depicting phone companies as the Evil Empire. It's hand-to-hand combat on the Hill. We've had people asking, `What is the big deal about the turkey?'"

The Voices for Choices group declined to reveal the cost of the campaign, but it said it is targeting areas that have representatives who sit on the Energy and Commerce Committee, including Maryland Reps. Robert L. Ehrlich Jr. of Baltimore County, a Republican, and Albert R. Wynn of Prince George's County, a Democrat.

"No one should think this is about special interest vs. consumer. This is special interest vs. special interest, and both sides can take care of themselves very well," said Wynn, a co-sponsor of the legislation opposed by the Voices group.

Television, radio and print ads began in Washington last winter and moved into Baltimore and other markets in recent weeks.

Voices for Choices is co-chaired by Steve Ricchetti, a former deputy chief of staff to President Bill Clinton, and Charlie Black, a Republican strategist who worked for George Bush in 1992 and George W. Bush last year. Its members include two dozen business and consumer organizations as well as AT&T and WorldCom.

The bill that the Voices coalition opposes is H.R. 1542, titled the "Internet Freedom and Broadband Deployment Act of 2001." Rep. W. J. "Billy" Tauzin, a Louisiana Republican who chairs the Energy and Commerce panel, and Rep. John D. Dingell, a Michigan Democrat, are its sponsors.

Tauzin appears determined to shepherd H.R. 1542 through his committee in the next couple of weeks. Before the 2000 election, he received $32,000 from the large regional phone companies.

The legislation's prospects became murkier this week, however, as opponents in the House Judiciary Committee said they want a chance to revise it and have offered their own versions more favorable to the Voices coalition.

Support for the Tauzin-Dingell bill is stronger in the House than in the Senate, people on both sides of the debate agreed.

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