Second Round of Telco Hearings p. 23

By: Debra Gersh

Second Round of Telco Hearings p. 23

Regional Bell operating companies testify before Congress
PHONE COMPANIES, electronic publishers and others presented their views during a second round of hearings on a massive telecommunications bill before the Senate recently.
Newspaper-industry representatives weighed in on the legislation, the Telecommunications Infrastructure Act of 1993 (S.1086), at a first round of hearings July 14 (E&P, July 31, P. 11).
The latest witnesses to appear before the Senate Committee on Commerce, Science and Transportation's Communication Subcommittee included representatives of AT&T, regional Bell operating companies (RBOCs), other telecommunications providers, electronic publishers, and state and city officials.
Representing the seven RBOCs was William L. Weiss, chairman and CEO of Ameritech Corp., who argued that "the solution currently proposed by S.1086 will damage the long-term goal of quality, affordable service by placing the Bell companies at a severe competitive disadvantage . . . .
"The vision of the legislation is futuristic but its solution, which relies on market distinctions that no longer exist, is a relic of the past," Weiss said. "By imposing considerable new competitive risks on the regional companies without giving us the opportunity to compete, S.1086 will have an effect precisely opposite that intended by the sponsors."
He said, "The regional companies ask only for the opportunity to compete on equal footing in long distance, cable and other markets from which we are currently barred. We are not asking for special privileges or wholesale deregulation in the businesses. We only want the chance to compete fully."
Among the businesses that the RBOCs would like to enter is information services, an area of particular concern to newspapers.
The bill would require RBOCs to use separate subsidiaries if they offer information services, would provide safeguards against cross-subsidization, would give customers the right to determine who would have access to information about their use of the network and would prohibit states from regulating information services.
"The regional companies' ability to offer information services has been exhaustively litigated in the district and appellate courts," Weiss noted. "The regional companies have been offering information services on an unrestricted basis since the ban was removed in 1991. The speculative fears of domination and monopolization made by opponents of relief have not come to pass. The market is working, and we urge the subcommittee not to tamper with it."
Addressing the First Amendment and accessibility of Open Platform Systems, Mitchell D. Kapor, chairman of the Electronic Frontier Foundation, said, "Federal policy-makers should not put themselves in the position of mandating a particular technology or of anointing a particular industry as the infrastructure provider of choice.
"Rather," he said, "Congress should concentrate on ensuring that basic information and communications needs are met and on creating conditions for fair competition which protect consumers and providers alike."
West Publishing Co., which publishes a variety of legal materials electronically, and members of the Electronic Publishers Group are concerned about the local bottleneck threat to their business, West Publishing president Vance K. Opperman said.
Because the "care that must be taken in moving from a monopoly environment to a competitive environment cannot be overstated," Opperman said, West and the EPG "believe that a separate subsidiary requirement ? such as that contained in . . . S.1086 ? is absolutely essential."
While the Consumer Federation of America agrees with the goals of the bill, legislative director Gene Kimmelman said the group "cannot support this legislation unless it is amended with a specific, comprehensive definition of universal telephone service, cost-allocation rules that preserve the declining-price tradition of local phone service and more specific competitive safeguards."
"Unless opening the telecommunications market to more competition, including local phone company provision of cable-television service, involves continued real-price reductions for local phone service along with broader choices for information-age services, consumers may have more to lose than gain from a restructuring of the telephone industry," Kimmelman testified.
Opposing the bill was the Communications Workers of America, whose secretary-treasurer Barbara J. Easterling called it "premature" and said it "will not lead to a truly competitive marketplace . . . . As presently drafted, we oppose S.1086 as another incomplete approach toward establishing a telecommunications policy."
Further, the CWA does "not believe it is the job of government to promote competition, as some favoring S.1086 have publicly stated," Easterling testified.
Also testifying at the hearing were Robert E. Allen, AT&T chairman and chief executive officer; David A. Duke, vice chairman, Corning Inc., Corning, N.Y.; William J. Ray, superintendent, Glasgow Electric Plant Board, Glasgow, Ky.; Gary E. Lasher, president and CEO, Eastern TeleLogics Corp., and chairman of the board, Association for Local Telecommunications Services, King of Prussia, Pa.; Paula Smith Preston, vice president of administration, Hello Inc., Richmond, Va.; Dean J. Miller, commissioner, Idaho Public Utilities Commission, Boise, and chairman, National Association of Regulatory Utility Commissioners; and William F. Squadron, commissioner, Department of Telecommunications and Energy, City of New York, on behalf of the National Association of Telecommunications Officers and Advisers.