Telecom Reform: A Long Way From Coming Into Focus : Legislation: The gap between House and Senate versions of the bill is wide. But Wall Street is happy already.

WASHINGTON — Though investors and other observers were quick to handicap winners and losers Friday a day after Senate passage of a telecom reform bill, veterans of the long struggle to overhaul the nation’s 61-year-old communications laws say the die is not yet cast.

For starters, there were so many amendments added in the waning hours of debate on the bill--more than 20--that many lobbyists, legislative aides and others said they are not even clear on all the details of the measure. What’s more, some controversial provisions, particularly a new anti-smut law aimed at curbing indecency on the Internet, seem certain to face legal challenge.

But the biggest unknown is whether Capitol Hill lawmakers can bridge the gap between the Senate measure and two House bills that differ significantly on some of the most controversial and fundamental issues of telecommunications reform.

A bill passed in May by the House Commerce Committee--considered likely to form the basis of the House’s final legislation--says nothing about cybersmut, and it imposes substantially more stringent restrictions on the Bell operating companies’ entry into the long-distance market than the Senate bill. A bill approved by the House Judiciary Committee gives the Justice Department a major role in policing competition in the telecommunications industry, something the Senate rejected.

“There are major issues to be resolved,” said William A. Signer, a lobbyist for the burglar alarm industry, which won a provision in the Senate bill keeping the Bell telephone companies out of its $10-billion-a-year business for four years. “I think you have a resolution in the House that is dramatically different than the one in the Senate, and so what you are looking at is a big conference battle.”

Disinterested observers would never know that such division still exists, given the harmony that followed the Senate’s lopsided 81-18 vote. And investors drove many telephone and cable stocks higher Friday in the belief that legislation will bring higher prices for services and increased investment in new technologies.

Most of the regional Bell company stocks rose, and suppliers of cable and telecommunications gear were up strongly. Cable equipment vendor General Instrument, for example, rose $3.625 to $37.125, while DSC Communications, a manufacturer of phone switches, jumped $2.375 to $43.25. In addition to allowing local and long-distance telephone companies and cable companies into one another’s businesses and curbing smut in cyberspace, the Senate bill would allow large broadcasters to buy more radio and TV properties, strip away the cable rate regulations imposed by Congress just three years ago and allow electric utility companies to offer telephone service.

Though the White House said Thursday that it opposes the Senate bill, a veto of the measure appeared unlikely Friday given the margin of Senate approval and the risk that telecom reform may not happen at all if delayed yet again. As a result, many lobbyists Friday braced to do battle in the House and in the eventual House-Senate conference to make their imprint on the final reform. The House is expected to take up the issue next month.

“There are a lot of battles to be fought,” said Jim Seeley, a lobbyist for the City of Los Angeles. “You’re not safe until the final measure has been pinned down. You have to stay vigilant.”

Denizens of the Internet found that out this week as the Senate, bowing to recent public concern about sex and violence in cyberspace, approved an amendment that would prohibit the transmission of indecent material over the Internet and restrict children’s access to on-line computer services.

The action came despite the presentation by Sen. Patrick J. Leahy (D-Vt.) of petitions containing e-mail messages from more than 35,000 Americans who opposed the measure.

“I think what the Internet community has to do on issues like this is that they have to spend some time off of the Internet and get more directly involved,” said Jamie Love, director of the Taxpayers Assets Project, a Washington nonprofit group active on computer issues. “They have to make phone calls and send faxes.”