Over the protests of consumer groups and long-distance companies, a Senate panel is expected today to approve a bill that would unshackle the burgeoning telecommunications industry and allow cable TV concerns, local phone service providers and long-distance carriers to invade one another's markets.
The Senate Commerce Committee is expected to approve a sweeping 125-page reform measure that would also deregulate most Americans' monthly cable TV bills and loosen restrictions on the number of radio and TV outlets any one broadcasting company could own.
The bill would also allow the regional Bell companies to enter the $10-billion-a-year burglar alarm business 18 months earlier than specified under previous proposals.
Passage of the telecom reform bill would be a major victory for the powerful Baby Bells, which had lobbied furiously to be allowed to enter into the $60-billion-a-year long-distance market and the $20-billion-a-year cable TV field.
A more restrictive telecom bill fizzled last September when bickering between long-distance carriers and the Baby Bells prompted Sen. Ernest F. Hollings (D-S.C.) to pull the plug.
Prospects for full adoption of the latest bill are unclear. A compromise must be worked out with any telecom reform measure approved by the House. Drastic cable TV and broadcast deregulation could face strong opposition from Democrats, but industry observers say a checklist of preconditions concerning local phone competition included in the Senate bill enjoys strong bipartisan support in Congress.
Senate staffers were meeting into the night Wednesday and were said to still be considering key changes to the provisions affecting cable TV operators and broadcasters. Anticipation over the measure is so high that 40 people were lined up outside the Capitol Wednesday to stay overnight to reserve seats for officials who wanted to get seats for today's committee vote.
Industry officials believe much of the draft bill--including the contentious issue of how quickly local phone monopolies should be allowed to enter the long-distance business--would remain intact.
"Right now I see many of the major forces coming together to move a bill; I think it's finally going to happen this time," said a jubilant Aubrey Sarvis, head of federal regulations for Bell Atlantic.
"We are nearing the end of what I believe will prove a very fruitful process of bipartisan work for a new law on telecommunications," said Sen. Larry Pressler (R-S.D.), chairman of the Senate Commerce Committee.
Reform of the exploding telecommunications industry has been a major policy goal of the Clinton Administration, which believes as many as a million new jobs could be created over the next decade if current restrictions are lifted. But there have been huge differences over how to go about lifting them.
Consumer groups and the long-distance industry fear the Baby Bells will use their monopoly power to stifle competition unless federal regulators ensure that local phone markets are fully competitive before the seven Baby Bells--who have access to the calling records of nearly every American--are allowed to enter long distance.
But the local phone companies want lawmakers to simply set a date after which they will be allowed to fully compete for long-distance calls.
An earlier draft of Pressler's bill called for doing just that, but the current bill requires local phone companies to meet a 12-point checklist that requires them to, among other things, enter into good-faith negotiations to provide local interconnection on a 'non-discriminatory" basis and permit phone consumers to keep their numbers when switching from one local carrier to another.
Consumer groups and long-distance officials, however, say the checklist is no improvement over Pressler's old bill.
"Beneath the veneer of competition there are caveats and exceptions that are so vast they will not only preserve (the local phone) monopoly, they will augment it," said Gene Kimmelman, head of Consumers Union, the consumer advocacy group that publishes Consumer Reports magazine.