Congress Nears Communications Law Overhaul

Overcoming a decade of division on how to overhaul the nation’s antiquated telecommunications laws, congressional leaders and the White House tentatively agreed Wednesday on a sweeping measure that will eliminate many of the regulations governing the communication industry and eventually create more choices and lower prices for consumers.

The agreement is expected to pave the way for a vote today on the measure by the 45-member House-Senate telecommunications conference committee. It must then be voted on by both houses and signed by the president--but most observers now expect Congress and the White House will quickly approve a conference committee agreement.

“We got a breakthrough on the bill and that’s a wonderful result for industry and consumers alike,” Vice President Al Gore said in an interview Wednesday night. “It’s a textbook example of how the White House and Congress can work across party lines for a . . . centrist piece of legislation.”

The breakthrough came when negotiators reached agreement on the issue of media concentration. The Clinton administration and other Democrats had objected to a sweeping relaxation of media ownership restrictions, saying it would harm democratic discourse and limit public access to the media.

The measure tentatively agreed upon is aimed at spurring competition among local and long distance telephone companies, cable operators and other providers of communications services. Supporters say unshackling the $500-billion-a-year telecommunications industries will create jobs and lead to a plethora of new services, such as advanced wireless communications technologies, interactive television, electronic shopping and home banking services.

Gene Kimmelman, co-director of the Washington office of Consumers Union and a critic of some proposed versions of the bill, said Wednesday’s agreement was “generally a good deal for consumers.”

Telecommunications reform would have a particularly broad impact in California, home to Silicon Valley and the nation’s No. 1 cable and telephone markets.

“The potential for our state is enormous,” said Rep. Anna G. Eshoo (D-Atherton). “We are the home to the highest of technologies. There’s a great deal of research and development in our state” for the communication industries.

In the short term, though, the main result of the bill’s passage would be to set off a wave of mergers and acquisitions as cash-rich communications giants seek quick entry into newly opened markets. Critics fear that consumers could face higher prices for some phone and cable services during the transition to a fully competitive market.

The bill would also impose a highly controversial new regulation on the burgeoning world of computer communications by making it a crime--punishable by a fine of up to $100,000 and two years in prison--to transmit “indecent” material over computer networks unless steps were taken to keep it out of the hands of children. And the TV industry is concerned about a provision that would require TV manufacturers to install a special chip that would enable parents to block violent or sexually explicit programming.

Congress has been struggling for more than 10 years to overhaul the Communications Act of 1934, but previous efforts had foundered on the conflicting interests of the many powerful groups involved. Last year, a telecommunications bill cleared the House and was poised for a Senate vote, only to die in the face of last-minute opposition from the “Baby Bell” telephone companies.

Familiar battles--especially one over the conditions under which the Baby Bells would be able to enter the long-distance market--plagued this year’s legislative effort as well. The sheer breadth and complexity of the issues, combined with the financial muscle of the industry interests involved, often made it appear that an agreement would be impossible--even after largely similar bills were passed by both houses of Congress.

House and Senate conferees, in consultation with Clinton administration officials, finally reached a tentative agreement on the long-distance issue last week. And late Wednesday, in a last-ditch effort to settle the remaining disagreements and produce a bill before the holidays, Sens. Ernest F. Hollings (D-S.C.), Larry Pressler (R-S.D.) and Reps. John D. Dingell (D-Mich.) and Thomas J. Bliley Jr. (R-Va.), met and hammered out an agreement on the media concentration issue.

In the end, one source close to the talks said, opponents began to appreciate the impact an unduly concentrated media might have on their own political fortunes and access to the airwaves.

“I think in the end, common sense and moderation overcame” ideological zeal, said Rep. Edward J. Markey (D-Mass.).

Still, none of the principals of the meeting were available for comment and it remained uncertain whether significant opposition would emerge among lawmakers or industry groups.

Sens. John F. Kerry (D-Mass.) and Byron L. Dorgan (D-N.D.) in recent days reportedly had threatened to block a bill before Wednesday night’s agreement was disclosed. But many industry officials expressed optimism about the accord, though they declined to speak publicly about the measure until they had seen the fine print.

Congressional staffers worked into the night Wednesday to draft the bill’s final language so that it would be ready for lawmakers today. Legislative experts say lawmakers could agree to waive certain rules to put the bill on the fast track for a vote before the Christmas break. But some were doubtful that such quick action could occur.

“I learned not to declare winners until they turn the scoreboard off,” Bill McCloskey, spokesman for BellSouth Corp., told the Associated Press.

“People would really prefer to see this reduced to writing first,” added Andrew Schwartzman, director of Media Access Project, a group active in legal issues. “In this kind of situation any senator can throw a monkey wrench into the process, but if Hollings is saying ‘yes,’ most of the Democrats are not going to fight this.”

The Baby Bells, which are desperate to get into the long-distance business as soon as possible, got much of what they wanted in the bill, but they gave up some ground in the final negotiations.

Under the current proposal, the views of the Justice Department will be given “substantial weight” by federal regulators in determining whether local phone companies face enough competition in their own markets to compete in the long-distance market. The Baby Bells were fiercely opposed to any Justice Department role.

Still, the overall criteria for local market competition are considered loose enough that they would allow relatively quick Baby Bell entry into long distance.

On media concentration, the conferees agreed to a 35% cap on the share of American households one broadcasting company could reach. However, the bill would repeal the statutory ban on media cross-ownership between newspaper, cable and broadcasting stations, opting instead to allow the Federal Communications Commission to rule on the acceptability of such combinations on a case-by-case basis. And the lobbying efforts of media mogul Rupert Murdoch, whose News Corp. holding company is seeking to expand its broadcasting ownership interests, were rebuffed as the committee agreed to allow the FCC to close a loophole in the way it accounts for ownership. Murdoch and others had tried to expand their reach beyond the 12 stations they are now allowed to own.

On the Internet “indecency” issue, the conference report will apparently embrace the language that the House conferees narrowly approved earlier this month, which would establish an “indecency” standard prohibiting online display or transmission to minors of “any material that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards, sexual or excretory activities or organs.”

Civil liberties groups and online service providers had argued for a less overarching provision that would have covered material “harmful to minors” but excluded material with literary, artistic, political or scientific value.

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