A New Era in Telecommunications?

The Senate passed a sweeping overhaul of the nation’s 61-year-old telecommunications laws Thursday. A similar measure is expected to be voted on next month in the House. Both bills are designed to remove regulations and spur competition among local and long-distance telephone companies and cable TV operators. But significant differences between the two versions remain and must be resolved before a final bill is sent to President Clinton.

Both Bills Would:

* Allow the regional Bell telephone companies to enter the long-distance industry and manufacture equipment, provided certain requirements are met.

* Allow long-distance companies and cable companies to enter the local phone business and allow phone companies to offer cable TV service.

* Roll back price regulations on cable.

* Allow electric utilities to offer phone service.

The Senate Bill

The Senate bill has some elements that are not in the House version, including provisions that would:

* Make it illegal to transmit indecent words or pictures over computer networks.

* Require the television industry to introduce a ratings system in which consumers could electronically block programs containing sex or violence.

* Loosen rules on media concentration by eliminating restrictions on the number of TV and radio stations a company could own. Bar firms from owning stations collectively serving more than 35% of the population, compared to 20% today. Liberalize foreign-ownership restrictions.

Key Differences

There are also crucial differences in the details of the two bills:

* In a victory for the regional Bell companies, the Senate bill requires the Federal Communications Commission to approve a Baby Bell’s application to offer long-distance service after a dozen or so conditions are met. The House bill, on the other hand, allows the Bells into long-distance 18 months after enactment, but only if there are robust competitors in their local markets. In addition, a bill passed by the House Judiciary Committee calls for a Justice Department review of local phone competition.

* In a victory for the cable industry, the Senate bill would immediately abolish federal regulation of small cable systems and deregulate systems with more than 600,000 subscribers 15 months after enactment. The House bill, by contrast, would allow the Federal Communications Commission to continue regulating basic cable rates, though rates for enhanced programming would be regulated only if they exceeded a national average.