White House Lashes Out at Telecom Bill : Legislation: Clinton's letter to Senate ally is strongest indication yet that his objections to reform proposals run deep.


Publicly raising the specter of a presidential veto of a far-reaching telecommunications reform bill, President Clinton has released a letter attacking provisions of the measure and said it must be significantly changed to win his support.

In a two-page letter to the ranking Democrat on the Senate Commerce Committee, Sen. Ernest F. Hollings of South Carolina, Clinton said he fears that the current bill--now pending before a House-Senate conference committee--would raise telephone and cable prices, result in too much media concentration and would not give the government a sufficient oversight role to curb abusive business practices.

The bill--which lawmakers predict would create thousands of new jobs--would break up the local phone monopoly and let cable operators, local telephone companies and long-distance carriers compete in one another's markets.

"I believe that the legislation should protect and promote diversity of ownership and opinions in the mass media, should protect consumers from unjustified rate increases for cable and telephone services, and, in particular, should include a test specifically designed to ensure that the Bell [regional telephone] companies entering into long-distance markets will not impede competition," Clinton said in the letter, dated Thursday.

Clinton said he remains concerned that neither the House nor Senate version of the bill provides "a meaningful role for the Department of Justice in safeguarding competition."

Clinton also telephoned Hollings on Wednesday to enlist his support to change the bill. Hollings is seen as Clinton's closest ally on telecommunications reform in the Senate. Republicans are generally united behind rapid deregulation, and thus Clinton may face a tough fight.

Top White House officials could not be reached for comment over the weekend, and an aide to Hollings could not comment on the senator's response.

But industry observers said the letter to Hollings, first reported Saturday in the New York Times, appears aimed at countering speculation that the President would not take an active role in trying to shape new telecommunications legislation and that the White House is only concerned with a few provisions in the bill.

"We think the President is right on," said Brian R. Moir, a Washington lawyer and lobbyist who represents a coalition of business groups seeking to delay the Baby Bells' entry into long-distance until there is actual local phone competition. "These are the concerns of the bulk of the people who are affected by this legislation. The President's timing was appropriate."

Clinton's letter came only days after congressional leaders named a 45-member conference committee that will reconcile the House and Senate bills. The committee has begun shaping a final bill, and aides to two conference committee members said last week that they expect that the committee will conclude its work by the end of next month.

In recent months, both Clinton and Vice President Al Gore have hinted there might be a veto of the legislation, but Clinton's letter to Hollings is the strongest indication yet that the President's objections to the legislation are deep-seated and that major changes are needed to address his concerns.

"I don't think anyone thought the White House would raise such strong concerns at this juncture," said a former Senate aide who now represents Bell phone companies.

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