NEWS ANALYSIS : Regulators Slow to Catch Up With New Technology : Telecommunications: Bell Atlantic and TCI need federal approval to merge. But outdated rules may leave the government overmatched for the fight.

Just days after they announced the biggest communications merger in history, Bell Atlantic Corp. and Tele-Communications Inc. officials steeled themselves for a looming regulatory fight that will last months and stretch from the nation’s capital to cable franchise authorities in at least 1,600 communities.

But the fight may be one-sided.

As part of the burgeoning telecommunications industry, the two companies hold big speed and size advantages over understaffed regulators who already have their hands full implementing new cable regulations and keeping abreast of new technologies such as wireless telephone services.

And Bell Atlantic--whose political action committee is among the industry’s biggest campaign donors, giving politicians about $300,000 from 1991 to 1992--has broad experience keeping federal, state and local officials at bay.

“The Bell Atlantic and TCI merger is further proof that the communications marketplace is moving much faster than legislation or regulation can possibly comprehend,” said Ameritech Vice Chairman Louis J. Rutigliano. “Not only are current policies hopelessly outdated, but, in addition, any attempt to propose new laws and regulation that micro-manage this industry is doomed to failure because no one can predict what this industry will look like tomorrow, much less in five years.”

Indeed, the rapid convergence of computers, video and telephone services is fast outstripping a regulatory framework set up more than half a century ago.

“The government is five years behind the marketplace and falling more and more behind,” said Thomas W. Cohen, a communications consultant and former senior counsel to the Senate commerce, science and transportation subcommittee.

The problems of an antiquated regulatory structure are exacerbated by White House delays in appointing new regulators. The Federal Communications Commission has only three of its five commissioner posts filled. A second agency that will examine the merger, the Federal Trade Commission, is still dominated by Bush Administration holdovers.

Indeed, the latest regulatory faceoff comes at a crucial juncture for telecommunications. Experts say the ability of the fast-growing industry to compete globally will hinge on the ability of policy makers to effectively regulate without thwarting innovation and competition.

“For years we’ve been talking about the convergence of the telecommunications,” said Mark S. Fowler, a Washington lawyer who served as chairman of the Federal Communications Commission in the 1980s. “Well, here you have the first major convergence of real companies with real products to test that theory.”

The process will officially begin during the next two months, when Bell Atlantic and TCI are expected to apply for the transfer of dozens of radio, microwave and satellite licenses.

As officials of TCI and Bell Atlantic began poring over each other’s books this week to determine what specific waivers and approvals the deal will require, they began formulating their strategy to deal with regulators.

What has emerged, officials say, is a more activist lobbying stance than in the old monopoly days of telecommunications when, as Nynex executive and former U.S. Rep. Thomas J. Tauke (R-Iowa) recently remarked, telephone companies “approached the government from the perspective that you keep your head down; you don’t make waves.”

Bell Atlantic officials say they have already met with key Capitol Hill lawmakers and state officials and are finding a receptive audience.

“The overall approach is to share information; by sharing information with the government, officials become more familiar with the transaction,” said Aubrey Sarvis, vice president of federal relations for Bell Atlantic. Although Sarvis said some officials are worried about the impact of the merger on cable and telephone customers, he claimed that “most of the response has been very positive.”

Nevertheless, the two companies face some powerful opposition.

Sen. Howard M. Metzenbaum (D-Ohio), chairman of the Senate antitrust subcommittee, who is considering legislation that would block the deal, proclaimed: “There isn’t a scintilla of good that can come to American consumers by reason of this merger. It is anti-competitive, anti-consumer and anti-free enterprise.”

Despite what ultimately may prove a good deal of saber-rattling, many industry lawyers, analysts and even some government bureaucrats believe that TCI and Bell Atlantic are likely to prevail in their bid to merge. They say the deal does not contravene traditional antitrust rules or FCC public interest standards.

“If the paperwork is in order, they’ll get taken care of pretty quickly,” said Bill Johnson, head of the FCC’s mass media bureau, which will review parts of the merger. “But if there is public opposition . . . or if someone raises a significant issue with us, we are required to hold hearings and look into it.”

Besides Congress, the FCC and the FTC, the companies will need either direct approval or at least the acquiescence of the Justice Department and U.S. District Judge Harold H. Greene, who is overseeing a 1984 consent decree that bars any Bell telephone company from the long distance telephone business. That ban will be a key issue in the merger because Bell Atlantic has vowed to offer phone service through TCI’s cable franchises, most of which are outside of Bell Atlantic’s local telephone service area.

For many Bells, Greene and continued Congressional inaction on key telecommunications issues are the two most vexing obstacles they face.

Greene has been reluctant to change the original terms of the consent decree despite repeated prodding from telephone companies. The Bells’ only major victory came two years ago, after they appealed the consent decree’s ban on their offering of information services over their phone networks. A federal appellate court ordered Greene to lift the restriction.

“Judge Greene has been a greater source of frustration than the FCC because at least the FCC has taken some incremental steps,” said Laura Ford, a vice president at US West. “And the Congress, which is the only body that can overrule Judge Greene, has shown no inclination to act.”

Some Bells complain that with the exception of the cable regulation bill last year and additional cable legislation in 1984, Congress has passed no significant legislation involving telecommunications public policy in more than a decade--despite the exploding technology that threatens to make existing policies meaningless.

“You would think these developments we’ve seen recently would force Congress to deal with this industry,” said David Markey, Bell South’s vice president of regulatory affairs. “But in the end, what motivates Congress to do anything is politics. . . . Congress will look at cable TV rate complaints before the policy implications of Baby Bells merging with cable companies because that is what politics is all about and that’s what the average legislator can deal with.”

Shiver reported from Washington and Lazzareschi from Los Angeles.