Telco Legislation That Newspapers Can Live With p.

By: Debra Gersh Hernandez IT HAS BEEN a long time coming, but newspaper industry executives said there finally is telco legislation they can live with.
A major concern of newspapers has been regional Bell operating company provision of information services. Under the Modified Final Judgment that set the rules of the AT&T breakup, the RBOCs were not allowed to offer such services. However, recent court decisions, appealed all the way to the U.S. Supreme Court, lifted those restraints.
Seeking some source of regulation of these services, newspaper lobbyists turned not only to Congress but also the RBOCs, hoping to strike a deal both could live with.
They have come to an agreement, which is reflected in pending legislation, although it often is referred to as a "delicate balance."
Two telco bills are pending in the House: H.R. 3626, the Antitrust and Communications Reform Act of 1993, and H.R. 3636, the National Communications Competition and Information Infrastructure Act of 1993. A Senate bill recently has been introduced by Sen. Ernest Hollings (D-S.C.), and a hearing is slated later in February.
The House Energy and Commerce Committee's Subcommittee on Tele-communications and Finance, chaired by Rep. Edward Markey (D-Mass.) who co-sponsored H.R. 3636, and the House Judiciary Committee's Subcommittee on Economic and Commercial Law, chaired by Rep. Jack Brooks (D-Texas), a co-sponsor of H.R. 3626, hosted a series of hearings on the bills.
Testifying before Markey's committee were Frank Bennack Jr., president and CEO of Hearst Corp., on behalf of the Newspaper Association of America, and R. Jack Fishman, president of Lakeway Publishers Inc., Morristown, Tenn., for the National Newspaper Association. Both men spoke about electronic publishing issues addressed in H.R. 3626. Bennack also testified before Brooks' committee two days later.
"With a view toward achieving an optimum blend of safeguards and market participation, we began a dialogue last year with the Bell companies and Congress," Bennack told both subcommittees.
"After prolonged and difficult negotiations, NAA believes that the majority of our concerns have been addressed in the compromise which is reflected in . . . H.R. 3626.
"In a perfect world, the bar against the Bells would not have been dropped or these safeguards would have been put in place before then," Bennack said. "But, as everyone knows, we don't live in a perfect world."
Describing the bill's requirement that the Bells only offer electronic publishing services through a separate affiliate, Bennack noted, "This separation will make it more difficult for the RBOCs to engage in discrimination or cross subsidy and much easier for any violations to be detected and corrected."
He also pointed out that the bill "specifically encourages teaming arrangements and nonexclusive joint ventures between the RBOCs and electronic publishers. These ventures remain subject to an array of safeguards to prevent abuses yet allow significant flexibility in business arrangements.
"It is particularly to be noted that the bill contains special provisions to make it easier for small, local electronic publishers to elect to participate in joint ventures with the RBOCs," Bennack added.
Though the bill provides safeguards for smaller community newspapers, these papers still are concerned that they might become "road kill" on the information highway and they suggested additions to H.R. 3626 to protect their interests further.
Fishman told Markey's subcommittee that localism provisions ? requiring certain amounts of local news and information ? are "essential to the survival of small community newspapers."
Noting the efforts of community papers in voice technology and N11 services, Fishman said these publishers "barely got our engines revved up before we ran into problems."
"The first problem is also the last: the folks who build the highway don't have us in mind," he said, adding, "We cannot easily get the telephone companies to turn their attention to us."
One particular problem encountered by Fishman's newspaper was that because of volume, people in a small community can end up paying considerably higher rates for N11 calls than those in metropolitan areas.
He asked Congress to design rules regarding access, rates and competition with localism in mind.
The NNA's suggested localism addition is in three parts: "A finding of the importance of local news and information; a requirement for equal access for local information providers; and a direction to the rate regulators that material disparities in the unit prices charged in our more rural areas compared to large metropolitan areas must be avoided," Fishman explained.
"We urge the committee to accept our support of the larger safeguard goals of this bill with the full awareness that without our additions, local information providers will not be truly protected," he said.
A number of RBOCs and newspaper companies already have formed partnerships for electronic publishing, noted Bell Atlantic Corp. president James Cullen, who said his company supports H.R. 3626. Bell Atlantic does not believe that separate subsidiary requirements or waiting periods for RBOC entry into electronic publishing are necessary, but it "will not oppose their inclusion in the bill."
Calling it "not the bill we would have written," Cullen recognized the "very delicate balance struck" in its drafting. "A balance that I can tell you from first-hand experience was not easily reached with respect to electronic publishing," he testified.
Cullen did ask the subcommittee, however, to include immediate relief from incidental long-distance information services restrictions, to allow the company to serve an entire state, for example, rather than breaking the area down for separate servers.
?( Frank Bennack Jr. [ Photo]