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Senate Approves Communications Deregulation Bill Backers Say Measure Enhances Competition, Cleans Up Internet

The Senate on Thursday broke a decade-long impasse over telecommunications reform and approved a sweeping measure that lawmakers said will spur competition and profoundly affect every American who watches TV, accesses a computer on-line service or talks on the telephone.

After a week of emotional debate that touched on everything from curbing indecency in cyberspace to preventing possible rate-gouging by cable operators, the Senate voted 81-18 for a heavily amended bill that would let local phone companies, long-distance companies and cable-television companies compete in one another’s markets.

The plan, the first major rewrite of the communications laws since the passage of the Communications Act of 1934, would also allow large broadcasters to buy more radio and TV properties, strip away the cable rate regulations imposed just three years ago and allow electric utility companies to offer telephone service.

And it addresses what has suddenly become one of the hottest issues in Washington: sex and violence in the media and in cyberspace. The bill imposes severe restrictions on the transmission of indecent material over on-line computer networks, and would require the television industry to develop a ratings system and an electronic blocking scheme to enable parents to prevent their children from viewing objectionable TV programs.

“America’s telephone customers and television viewers are the big winners,” said Sen. Larry Pressler, R-S.D., author of the legislation.

Critics of the legislation, however, say the big winners are the media and communications companies that have since 1985 spent nearly $40 million lobbying on communications issues. Television broadcasters, cable television companies and local telephone companies were all delighted with Thursday’s vote, while many consumer advocates denounced the bill.

The Senate measure must still be reconciled with a companion bill that is expected to pass the House next month. While the broad lines of the two bills are similar, the House measure contains nothing on obscenity or media ownership, and handles some key phone regulation issues differently.

The White House, while favorable in principle to telecommunications deregulation, has opposed key aspects of the Senate bill. “The administration’s position on the final legislation will depend on the extent to which the administration’s concerns have been addressed satisfactorily,” the White House said in a statement Thursday.

Reform of the $400 billion telecommunications industry has sparked little public debate through more than 10 years of gestation. Though the legislation promises to have a profound impact on the way Americans work and communicate, the effects are mostly indirect and longterm, and many of the issues involved are arcane.

Industry lobbyists, however, have been aggressively following - and shaping - the legislation for years. Winter and spring hearings on telecom reform on Capitol Hill played to standing-room-only audiences of lobbyists and industry executives who paid companies up to $1,000 a day to hire people to stand in line to secure them a seat in hearing rooms.

This full court press was all-too-effective, some lawmakers say.

“Rather than being a contract with America, this legislation looks like a contract with corporations,” said Sen. Robert Kerrey, D-Neb. “We worried too much about liberating businesses and not enough about liberating people.”

Supporters of the bill say it constitutes a long-overdue overhaul of a hodgepodge of laws and regulations that are hamstringing one of the United States’ most dynamic industries. By overthrowing the legal agreement governing the break-up of the old Bell System, which bars the regional Bell telephone companies from offering longdistance service and manufacturing equipment, lawmakers say they are creating strong new competitors, and that will in turn assure more innovation and lower prices.

Overriding local laws and allowing new competitors into the local phone and cable television businesses, the legislation’s supporters say, will accomplish the same thing. Rolling back cable rates, rather than costing consumers money, will assure that cable companies can invest in new programming.

And the restrictions on indecency in cyberspace are simply a way to ensure that the information superhighway does not become a playground of pornographers, say the bill’s advocates.

Industry officials on Thursday generally expressed approval the Senate measure, although many said they would seek further changes in the House or when the two bills are reconciled in conference.

However, the Clinton administration was unhappy with the bill, complaining that it deregulates the telephone and cable industries before adequate competition can develop to keep prices low. The White House also said it wants stronger universal access protections and opposes opening up U.S. telecommunications markets to investments by foreign corporations because of national security concerns.

Although administration officials didn’t threaten a veto, speculation was rampant among consumers groups that Clinton might take that step if no changes are made to the measure.

xxxx Win some, lose some Winners and losers under the Senate’s overhaul of telecommunications laws: Winners Bell Companies. They get to provide long-distance and cable services and make telecommunications equipment. Cable companies: They get to provide local phone service and their rates are deregulated. Electric utilities. The nation’s largest electric and gas utilities get to provide telecommunications services, including cable and phone service. Broadcasters. National ownership caps on radio and TV are lifted. ABC, CBS, NBC and Fox gain most on the TV side. Losers Long-distance companies. The big companies - AT&T;, MCI and Sprint - won’t be hurt as much as several hundred small long-distance companies. Broadcast affiliates. Local stations fear the lifting of national ownership caps on the networks will weaken their negotiating position with the networks.


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