FCC Votes to Let AT&T;, Regionals Offer Array of Services
The Federal Communications Commission, in a major ruling, voted Thursday to help clear the way for AT&T; and the former Bell System companies to offer their customers an array of new services from voice messages to home burglar alarms.
By a unanimous decision, the commission eliminated a controversial requirement that the local Bell telephone companies establish separate subsidiaries to offer new information services.
The telephone companies have complained that separate subsidiaries were too costly to operate and stymied innovation. With the commission’s ruling, the telephone companies would be able to incorporate these technological advances into their computerized telephone networks.
FCC Chairman Mark S. Fowler said the decision would “push out the frontiers of competition in telecommunication in the United States.”
Fowler also predicted that consumers could expect to see a “significant” decrease in their local telephone rates as the companies spread their operating costs over more services.
While removing the separate-subsidiary restriction, however, the commission said it would require the telephone companies to use new accounting programs and follow other safeguards to ensure that no new service is subsidized by revenue from basic telephone rates.
FCC officials and telephone industry executives cautioned that few new services will be available to consumers in the near future because of other restrictions on those services included in the federal decree that broke up AT&T; two years ago.
The federal judge who oversees the decree would first have to agree to the changes.
The FCC action, however, is certain to add momentum to the push for changes on Capitol Hill, where 150 members have endorsed legislation to eliminate the decree’s restrictions on information services as well the ability of the companies to manufacture telephone equipment.
The Bell telephone companies, reorganized into seven independent regional companies by the divestiture and increasingly anxious to provide new computerized information services, applauded the commission ruling.
Ivan G. Seidenberg, vice president of New York-based Nynex, said the commission recognized that such regulatory safeguards “are no longer appropriate in today’s high-technology and competitive telecommunications environment.”
Pacific Telesis, the parent company of Pacific Bell, called the action “an important first step in bringing more services to the marketplace and in keeping those services affordable.”
“We’re extremely pleased,” Mary T. Hallisy, a spokesman for the company, said of the FCC ruling. She added, however, that there is little that Pacific Telesis can offer to consumers until the court-approved divestiture decree is modified.
Pacific Bell, among others, has wanted to offer voice mail, a service where callers could leave a verbal message, forward messages to others or delay the time when the message would be delivered.
Other potential new services include home burglar and fire alarms, a health service that could monitor a sleeping person’s heart and services that could monitor heat or electricity use away from home.
The commission became increasingly involved in this area as computer technology began to merge with telephones. In 1980, the FCC required the telephone companies to keep their basic regulated telephone business structurally separate from any “enhanced services"--those offered over transmission lines using computers--and prevent telephone revenue from being used to subsidize the new businesses.
With the 1984 divestiture of AT&T;, the regional telephone companies were required to keep their telephone businesses separate from the myriad other activities--from mobile telephone service to real estate--that they have been allowed to enter.
Last year, in a proceeding officially known as Computer III, the commission agreed to review the separate-subsidiary policy because of myriad technological changes, increased competition and the breakup of AT&T.;
As part of the plan approved Thursday, the FCC said the companies must file by February, 1988, their master plans for how they would offer new services, including provisions to assure that competitors would have the same access to their telephone networks to offer these new services. In the interim, they can apply to the FCC for approval of individual services.
The commission also asked for public comments on several unresolved issues, including whether allowing different kinds of computers to talk to each other should continue to be considered as a new service and whether other large independent telephone companies should be subject to these new safeguards.