House Panel OKs Bill to Limit Reach of Baby Bells

The House Judiciary Committee on Wednesday approved a bill aggressively sought by newspapers that would make it difficult for the seven regional Bell telephone companies to enter the lucrative information services, manufacturing and long-distance markets.

The measure, which faces a veto threat from President Bush, would require the Justice Department to certify that there is “no substantial possibility” that the Bells could use their monopoly to impede competition in any of the new markets. The bill also would allow competitors to intervene in federal court to prevent the Bells’ requests from being granted.

The Bell companies, including Pacific Telesis, consider those legal hurdles tantamount to blocking their entry into the new businesses.

The legislation, sponsored by Judiciary Committee Chairman Jack Brooks (D-Tex.), was approved, 24 to 9. But the bill faces an uncertain future.

It will have competition from a measure being drafted by Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee. Dingell’s bill also seeks to curb the Bells but with “regulatory safeguards,” an aide said.

The Judiciary Committee version is designed to halt gains made by the Bells in federal court and the U.S. Senate in the last year. The bill would put into law restrictions that have been enforced by U.S. District Court Judge Harold H. Greene since the Bells were created as part of the 1984 breakup of American Telephone & Telegraph Co.

Greene reluctantly removed the ban on the Bells’ entry into information services last July on orders from an appeals court. The Senate voted in June, 1991, to approve a bill that would allow the Bells to manufacture telecommunications equipment.

Much of the controversy centers on the Bells’ plans to develop new information services, including dial-up classified advertising and home shopping.

Newspapers and other potential competitors fear that the regional Bells could use their control over local phone lines to dominate the expanding information industry.