Controlling the Superhighway : Telecommunications: Administration presents plan to preempt local authority to ensure that all players are treated alike.

In a controversial new proposal, the Clinton Administration said Thursday that it wants to preempt local authority over the so-called information superhighway by broadening the federal role in overseeing technology providers such as cable TV and telephone companies.

In an 11-page “white paper” that fleshes out the Administration’s previous call for more competition in the burgeoning telecommunications industry, Commerce Secretary Ronald H. Brown and other officials called for amending the 60-year-old Communications Act of 1934 to do away with the present disparate treatment of common carriers and cable operators.

The Administration’s proposal, outlined at a Thursday morning briefing at the Commerce Department, would extend exclusive federal jurisdiction over companies that offer both cable and telephone services or other two-way, broad-band digital communications services.

Currently, telephone companies are regulated as so-called common carriers by both state and federal regulators. By contrast, cable TV operators have no obligation under federal or state law to provide unfettered access to anyone with the means to pay.

In casting a wider federal regulatory net, the Administration hopes to bring about one of its key Information Age goals: universal access for all Americans to emerging new technologies such as interactive television, shop-at-home services and educational and business data banks.

As big companies like US West, Bell Atlantic, TCI and Time Warner rush to modernize the nation’s electronic information highway, the Administration also hopes to ensure that the information can travel seamlessly to and from homes, libraries, schools, businesses and government--creating an easily accessible information highway rather than a proprietary one suitable only for specialized use.

Brown said the Administration’s goal is a reform package “that is both pro-business and pro-consumer.” He added that the Administration is hoping to get its proposals attached to existing legislation before Congress rather than offer its own package.

But he acknowledged that the proposal could “make states profoundly unhappy” and stressed that the Administration is flexible. He described the white paper as “part of an ongoing dialogue with Congress.”

The Administration’s proposal, however, drew complaints from some rural and consumer groups that said they fear that any restriction on local regulation would have the unintended effect of creating a class of information have-nots by tying the arms of local watchdogs.

“We get concerned when anybody talks about taking too much authority from the states,” said Bradley Stillman, legislative director for the Consumer Federation of America in Washington. “These are the folks who understand what’s going on in their specific jurisdictions--not federal regulators like the FCC.”

Before the sweeping changes can take place, however, federal lawmakers will have to decide when and how to eliminate the restrictions that keep cable TV firms, local phone companies and long-distance carriers from competing in each others’ markets.

The white paper expresses support for several proposals now pending in Congress.

One, by Rep. Edward J. Markey (D-Mass.), would allow cable and phone companies to enter each others’ markets and require them to open their networks to use by competitors. However, the Administration wants the timetable for open competition accelerated to two from five years.

The Administration also backs a measure by Rep. John D. Dingell (D-Mich.) that would allow Bell companies to manufacture telephone equipment and enter the lucrative long-distance market after five years.

On Thursday, Rep. Rich Boucher (D-Va.) introduced yet another initiative that would allow electric utilities to compete with the cable television and telephone industries.

Administration officials said their proposed changes would neither restrict intrastate phone rate regulation by locales nor the authority of states and municipalities to collect billions of dollars in telecommunications franchise fees and other levies.

The Administration’s proposal preserves a regulatory role for locales. States would continue to regulate rates for companies that continue to operate the way they always have, as simply cable or telephone firms. And federal authority would supersede state rules “only where needed to meet national goals of promoting competition and liberal interconnection and access.”

But the progress of the legislation will be closely watched by skeptics.

Ronald Binz, chairman of the telecommunications committee of the National Assn. of State Utility Consumer Advocates, said his group may seek an amendment to restrict “any federal preemption that’s broader than it needs to be.”

Clinton’s Proposal

The Clinton Administration’s proposed rewrite of the regulatory framework to make way for the information superhighway encourages:

Local telecommunications competition: Require all carriers to provide connections to their local switching stations with other providers of telecommunications and information services.

Universal service: Encourage telecommunications companies to connect to the emerging information highway “all of the classrooms, libraries, hospitals and clinics in the United States” by the year 2000.

New rules: Eliminate within two years cable-telephone cross-ownership rules to permit telephone companies and cable operators to compete in “providing a full range of video, voice and data services,” faster than contemplated by bills before Congress.

More federal control: Amend the Communications Act of 1934 to allow the federal government, almost exclusively, to regulate the “rates, terms and conditions” of advanced new communications services such as interactive TV and other two-way, broad band digital communications services.

Source: Commerce Dept.