Panel OKs Bill Restricting ‘Baby Bell’ Spinoffs

A House subcommittee approved a bill Thursday that would slow efforts by the seven “Baby Bell” telephone companies to provide information electronically, manufacture telecommunications equipment and offer long-distance service.

The Bell companies are bitterly opposed to the legislation. It is supported by the newspaper industry and some consumer advocacy groups.

Bush Administration officials say they’ll ask the President to veto it.

Rep. Jack Brooks (D-Tex.), who sponsored the measure, said it is needed to prevent monopolistic abuses that led to the breakup of AT&T.; Essentially, the bill puts into law the terms of the breakup agreement.

Brooks chairs the House Judiciary subcommittee on economic and commercial law, which approved his bill 10 to 6, and the full committee that now must vote on it.

The breakup agreement worked out with federal Judge Harold Greene specifically forbade the regional companies from entering the three areas of business, but Greene eased the conditions last fall and gave the go-ahead for entry into information services. As a result, consumers with home computers can now dial up Yellow Page listings in many areas.

“We don’t believe Congress will vote to shut down services already being used by thousands of customers and soon to be available to millions,” said R. L. Mickey McGuire, BellSouth executive vice president.

The newspaper industry, however, is backing Brooks’ effort because millions of dollars in classified advertising could be lost if Americans start using the phone service instead of the newspaper.

The newspapers have also been experimenting with electronic publishing, through which news is delivered via telephone. They argue that since the phone companies control the phone lines, they would have an anti-competitive advantage if they started a similar service.