Let's Make a Deal p.

By: George Garneau

New Jersey Press Association negotiates settlement governing phone company's efforts to become an information provider
NEW JERSEY NEWSPAPERS lost a major regulatory battle against New Jersey Bell, but won a negotiated settlement governing the phone company's future efforts to become an information provider.
On the losing end of a lobbying fight last year over Bell's plans to install a $1.5 billion fiber-optic network throughout the state and expand into the business of delivering advertising via phone lines, the New Jersey Press Association announced a deal March 23 calling for the phone company to establish a separate subsidiary company to operate any electronic information services it starts.
The agreement, subject to the expected approval of state regulators, bars cross-subsidization ? using money paid by customers of the regulated telephone monopoly to subsidize the information business.
NJPA had fought the plan ? considered the most sweeping telephone expansion and deregulation in the nation?to allow N.J. Bell to wire the state with fiber-optic cable and expand into information services.
Newspapers argued that the phone company could unfairly discriminate against competing information services?newspapers, for one?that are forced to use its phone lines.
Another argument was that ratepayers would unwittingly end up paying the bill for the phone company to compete with unregulated information providers?such as newspapers?by providing yellow pages and classified advertising electronically.
The agreement gives the state Board of Regulatory Commissioners "the power to protect both competition and ratepayers within the state," said NJPA executive director John O'Brien. He said publishers "look forward" to providing news services through the phone company.
"We really think these safeguards are just what we were looking for to allow us to compete on a level playing field with the phone company," O'Brien said. "We're very satisfied."
The state in December approved the Bell plan against the wishes of newspaper publishers and cable television operators. Negotiations began soon after.
With New Jersey a test case for telephone deregulation, the agreement was seen as a partial victory for the newspaper industry, which has spent millions of dollars lobbying Congress to ban phone companies from providing information.
Newspaper Association of America president and CEO Cathleen Black called the Jersey deal "a serious step forward in addressing the risk of anticompetitive conduct by the Bell companies" but said it fails to major issues that should be included in a national policy.
NAA wants to prohibit Bell operating companies from electronic services "until their entry into that market no longer presents a danger of anti-competitive conduct" and supports such a bill now pending in Congres.
Asked about enforcing the cross-subsidization ban, O'Brien said the BRC could monitor the Bell subsidiary through "standard accounting."