Baby Bells May Market Data Services : Communications: A federal court lifts a four-year ban. Newspaper groups object.

The seven regional Bell telephone companies got the go-ahead Monday to enter the highly competitive electronic information services market when a federal appeals court effectively lifted a four-year ban against such activity.

“This ruling underscores the urgent need for legislation to protect consumers from restrictions on their choices, a drain on their pocketbook and threats to their privacy,” said Cathleen P. Black, president of the American Newspaper Publishers Assn.

“We will continue this fight, pursuing every judicial and legislative option,” she said.

The $41-billion newspaper industry was the big loser, and the regional phone companies, with an estimated $70 billion in combined annual revenues, were the big winners in the U.S. Court of Appeals ruling.

A ban against the phone companies transmitting information services such as sports scores, stock quotations and weather reports on local telephone lines had been in effect since 1987.

On July 25, U.S. District Judge Harold Greene rescinded the ban but stayed the effect of his ruling until higher courts acted on appeals. On Monday, the appellate court vacated his stay, which means that phone companies are free to enter the information market.

Washington spokesman Ronald Stowe said the decision delighted the phone companies.

“Consumers and businesses have been asking us for years to provide information services such as electronic yellow pages, but we have been unable to do so” because of the federal court’s ban, he said.

“Now, with the lifting of the stay, we take another step forward in bringing American consumers, American business and the American economy into the mainstream of the information age.”

Congressional sources said the newspaper industry apparently hoped through legislation to win a long-term delay of telephone company entry into the market. A House Energy and Commerce subcommittee on telecommunications has scheduled hearings on the issue Oct. 22-23.

Rep. Jim Cooper (D-Tenn.) planned to introduce a bill in the House on Tuesday aimed at achieving the ANPA’s goals.

Only hours before the appeals court acted, Black had told a National Press Club luncheon that the diversity of 12,000 electronic information services “will be threatened if the phone companies are allowed to control both the medium and the message.”

“To suddenly say it’s all right for the biggest monopolies in the history of the world to compete with rivals it could crush in a week is to invite a concentration of media power perhaps exceeded only in North Korea,” the ANPA president said.

Coinciding with Black’s speech was a full-page advertisement in Monday’s editions of the Washington Post telling Congress: “Don’t Baby the Bells. Keep Competition Alive.”

The ad was signed by the ANPA and several other groups, including the National Cable Television Assn., the National Newspaper Assn. and the Consumer Federation of America.

Stowe dismissed Black’s appeal as “cynical” and “a charade.”

“Newspapers have had 10 years of protection from meaningful competition in information services and apparently they’re trying to get 10 more years by keeping telephone companies out of the marketplace,” he said.

“The bottom line is that the newspapers really don’t want to be pressured to invest in electronic services,” he added. “If we get into it, they’ll have to invest.”

Black said phone companies will withhold technological advances from competitors, delay giving them new telephone features and use “predatory pricing to undercut competitors and drive them out of business.”

“The Bells have the ability--and the incentive--to make sure it’s their information service messages that reach consumers,” she said.