U.S. Backs US West Long-Distance Waiver : Telecom: Justice Dept. endorses Baby Bell’s plan to offer service outside its region via cable. Federal court approval is pending.

Foreshadowing the long-anticipated entry of local telephone companies into the long-distance telephone business, US West Inc. on Wednesday won the Justice Department’s endorsement of a plan to offer long-distance service to some customers outside its region over its cable TV networks.

If approved by a federal judge, the waiver sought by Englewood, Colo.-based US West would mark the first time one of seven regional Bell telephone companies would be able to provide long-distance service outside its local area.

But analysts cautioned that it is unlikely that U.S. District Judge Harold Greene will act on the waiver request before Congress votes on pending telecommunications legislation, which would allow all Baby Bells relatively quick entry into the lucrative $70-billion long-distance market.

The seven Baby Bells--including US West, which serves a vast area spanning the Great Plains, Rocky Mountain and Pacific Northwest states--have been barred from offering long-distance service under a 1982 consent decree that broke up the AT&T; telephone monopoly.

Under the waiver, US West can offer long-distance service only to customers who buy local phone service from it. The company must also provide equal access to other long-distance phone service providers, and is limited to providing telephone service through cable TV lines operated by separate subsidiaries.

US West spokesman Steve Lang said the company has the technical capability to add phone service to its cable television system in Atlanta, which serves more than 500,000 subscribers, and may well offer local phone service through cable outlets operated by partner Time Warner Inc.

However, US West faces significant technical and legal hurdles. The obstacles include squabbles over long-term telecommunications strategy with Time Warner, whose cable outlets reach more than 7 million subscribers, as well as likely opposition from other regional Bell telephone companies.

Justice Department officials said consumers would benefit from greater phone competition if the US West plan were allowed to go forward. Long-distance giant AT&T;, which generally opposes Baby Bell entry into long-distance, joined the Justice Department in backing the plan.

“The nice thing about this experiment is that it encourages one [regional Bell] to go in and offer local phone service in competition with another” regional Bell, said Mark Rosenblum, vice president for law and public policy at AT&T.; “I’m encouraged.”

Endorsement of the long-distance waiver is the second major bid in recent months by Justice Department officials to encourage competition in the telephone industry.

In April, the department’s antitrust division backed a proposal by Chicago-based Ameritech Corp. to provide long-distance service to some customers in Illinois and Michigan on a trial basis. The Ameritech waiver is pending.