Telecommunications Bill Signed But Comes Under Immediate Fire Law Permits Giant Mergers, Higher Rates, More Competition

A consumer group charged Thursday that 10 major phone companies attempted to shape a sweeping new telecommunications law by making $1.5 million in political contributions at crucial points in the bill’s progress through Congress last year.

The influence-buying charges by Common Cause, a Washington-based advocacy organization, fed the controversy that erupted almost immediately after President Clinton had signed the telecommunications bill into law Thursday.

The legislation, which rewrites basic rules for telephones, cable and broadcast TV and computer networks, was praised as a spur to economic growth by Clinton, business leaders and members of both political parties.

But critics fear that in undoing the old rules, what’s really being unleashed are mega-corporations which will dominate communications in United States while new rules in the law infringe on free speech.

The American Civil Liberties Union sued immediately after the signing, claiming segments of the law are unconstitutional restrictions on the First Amendment. A huge protest in cyberspace also was launched by a group of free-speech organizations.

Even before the signing, abortion-rights advocates were in federal court in New York, seeking an injunction to bar enforcement of one provision that appears to limit on-line speech about abortion.

The $1.5 million in donations to the national committees of both major parties - so-called “soft money” - constitutes a “transparent effort to buy influence and affect legislative outcomes,” said Common Cause Executive Vice President Don Simon.

The phone companies’ donations between July and December of last year were two to four times as large as the contributions the companies made in the same six-month period in 1994, Common Cause said.

The consumer group said that based on records filed with the Federal Election Commission, the three major long-distance companies - AT&T, MCI and Sprint gave a total of more than $900,000 in the last six months of 1995. The seven Baby Bells - NYNEX, Bell Atlantic, Ameritech, BellSouth, Pacific Telesis, SBC Communications and US West - gave a total of more than $500,000 in the same period.

More importantly, said Common Cause, large contributions from the long-distance companies came within days of key compromises reached on the bill. One contribution cited was a $190,000 donation by AT&T to the Democratic National Committee one day after the conference committee had approved the final bill with changes favored by the administration.

A spokesman for AT&T denied the contributions were linked to the telecommunications bill. He said the money already had been pledged to help the political parties with their 1996 conventions and AT&T gave the same amount, $200,000, to both the Republican and Democratic parties.

A spokeswoman for Vice President Al Gore pointed to the “nearly unanimous bipartisan support” for the bill in Congress and said the charges “don’t hold water.”

Those interested in the telecommunications bill also appeared to be an important source of funds for individual members of Congress last year.

Sen. Larry Pressler, R-S.D., chairman of the Senate Commerce Committee that oversaw rewriting of the telecommunications law, received at least $83,000 in contributions from an array of interested givers.

Overall, major telecommunications political action committees distributed $3.7 million on Capitol Hill in 1995, largely to leaders and lawmakers on key committees, The Associated Press reported.

By far the largest giver was AT&T, which handed out $824,162. The regional Bell telephone companies also were generous, led by Ameritech with $410,366.

Clinton signed the communications bill in a ceremony at the Library of Congress, first with a 1956 fountain pen that was used to seal the law creating the Interstate highway system and then with a 1996 electronic stylus that made the signing the first to be visible on the Internet’s World Wide Web.

“Today, with the stroke of a pen, our laws will catch up with our future,” he said.

The legislation sets the stage for mergers of giant media conglomerates, allows cable TV and phone prices to rise and restricts the sending of “indecent” material over computer networks. And it places a huge burden on an underfunded Federal Communications Commission, which has only six months to write a huge new stack of regulations.

Also contained in the law’s 300 pages are provisions permitting increased competition in providing local and long-distance phone service, cable TV and on-line information delivery. Companies that formerly could offer only one or two services now may compete in any number of markets, potentially offering consumers a choice of several companies to provide all of their telecommunications services.

Much of the nation’s telecommunications industry applauded the result, praising it as a huge boost to businesses that, with sales of $700 billion, now account for about one-sixth of the U.S. economy.