2 Groups Rip Cable Role for Phone Firms

Allowing local phone companies to provide cable television and computerized information services could stifle development of the unfolding information age while depriving low-income, disabled, elderly and rural customers of services they need, a coalition of consumer groups argued Thursday.

A report prepared for the Consumer Federation of America and the American Assn. of Retired Persons disputes phone company arguments that federal rules and regulations should be eased to let them become the single electronic doorway into households--carrying not only conversations and computer data but new video information services and cable television as well.

The report marks an opening shot in what many observers believe will develop into a major political and consumer battle. The seven regional Bell telephone companies, which include San Francisco-based Pacific Telesis, are prodding Congress to free them from restrictions of the agreement that broke up the old Bell System and from strictures in the 1984 Cable Act that prevent them from owning cable TV systems.

Congress is expected to consider removing the restrictions this year.

But the consumer report argues against “centralizing” information power in huge, computerized switches owned by local phone companies instead of maintaining a “decentralized” system in which they serve as conduits for phone and computer services. The report claimed that a centralized, single-wire system would inflate, not reduce, costs; stifle entrepreneurial innovation, and benefit chiefly those best able to pay higher prices. One result would be to create information “have-nots,” including low-income people, the elderly and rural residents, the report claimed.

A Bell Atlantic spokesman disputed the validity of the report’s “either-or” depiction.