Study Slams Telecom Reform Legislation : Consumers: Group representing large phone customers releases findings asserting that rates would rise. Bill’s supporters dispute the conclusion.

A group representing 500 corporate telephone users opposed to the sweeping telecommunications reform bill pending in Congress unveiled a study Wednesday asserting that Americans will pay $100 more a year than they should for each telephone line if the bill passes.

The release of the study by the Washington-based International Communications Assn. came as consumer groups gathered in San Francisco and in the nation’s capital to support President Clinton’s recent objections to the controversial measure.

“Under this legislation, California consumers will pay more than they should for basic telephone and cable service,” Nettie Hoge, executive director of Toward Utility Rate Normalization, said at a San Francisco news conference attended by officials of the American Assn. of Retired Persons and four other consumer groups.

“Our purpose is to urge President Clinton to veto the Communications Act of 1995 unless it is significantly improved in conference committee, where it sits right now,” Hoge said.

However, supporters of the measure, including powerful House Speaker Newt Gingrich (R-Ga.), the cable industry and the seven regional Bell operating companies, contend the legislation would create thousands of jobs by breaking up the local telephone monopoly and letting cable operators, local phone companies and long-distance carriers compete in one another’s markets.

“I have absolutely no idea where their numbers are coming from,” Nynex spokeswoman Jamie Depew said of the study. “They seem to be saying that competition is going to increase prices. But if you look at electronics and the personal computer industry, competition has decreased prices, not increased prices.”

Nevertheless, the study is expected to turn up the heat on an already simmering debate over reform of the nation’s 60-year-old telecommunications laws.

The debate, once overshadowed by Medicare and budget issues and confined to Capitol Hill insiders, grew more public last week when Clinton sent congressional leaders a letter expressing his opposition and urging Congress to change the bill to “protect consumers from unjustified rate increases for cable and telephone services.”

The 28-page telephone rate study released by the ICA--which represents the University of Nebraska and dozens of computer, automobile and agribusiness concerns--compares current telephone rate regulation with proposed rules and forecasts that the legislation would deliver little savings because it would take years for actual local phone competition to develop and force prices down.

“If the proposed legislation passes in its current form,” according to the study conducted by Hatfield Associates Inc., “consumers will not see the benefits, even though their dollars are being used to pay for the network modernization that is making large productivity gains possible for local telephone companies.”

In arriving at its $100-a-year figure, the Boulder, Colo.-based research firm measured the difference between current local phone company revenue and the revenues phone companies theoretically would generate if their prices were set at the lower rates made possible through computerization, lower interest rates and better phone switches. The study estimates that difference at $14 billion per year, or $100 for each residential and business phone line.

“The significance of the study is that we’ve finally been able to quantify the impact of the provisions of the bill that deal with rates,” said Brian Moir, a Washington lawyer and lobbyist who represents the ICA. “It confirms our suspicions that . . . consumers will be gouged.”

But Donald Vial, a former president of the California Public Utility Commission, expressed concern that the study will only serve to bog down telecom reform and delay any savings for consumers.

“We should be looking forward to the way market forces are going to develop and deploy these [communications networks] more efficiently,” Vial said.