Objections Raised to Telecom Agreement : Legislation: Some House Republicans say the compromise deal remains too regulatory. But passage still remains likely.

The drive toward passage of a sweeping measure that would deregulate the burgeoning telecommunications industry slowed Thursday as some House Republican leaders and Bell telephone officials sought last-minute changes in a bill that supporters say would bring consumers more choice and lower prices.

The objections came less then a day after a bipartisan group of congressional leaders and the Clinton administration reached an agreement on the controversial legislation, which is aimed at removing regulatory barriers that keep cable TV operators, telephone companies and long-distance carriers from freely competing in each other’s markets.

Most observers still expect the compromise agreement to gain approval from a House-Senate conference committee and eventually be signed into law. But some supporters worry that if the committee doesn’t act quickly, the fragile accord could yet be broken.

Critics of the bill--which include some of the regional Bell telephone companies, House Majority Leader Dick Armey (R-Texas) and Rep. Jack Fields (R-Texas), the chairman of the House Telecommunications Subcommittee--said the measure is still too regulatory. They say it does not go far enough to unshackle broadcasters from federal regulation or to level the playing field between telephone companies and long-distance carriers entering each others’ markets.

“US West cannot support the Committee Report without substantial changes,” said Richard D. McCormick, chairman of US West, in a letter to seven conferees with districts in the company’s Western regional service area. “We want legislation. . . . But we need legislation that gives all competitors in the marketplace a fair shot at consumers’ business.”

McCormick urged conferees to drop provisions that would bar local phone companies from jointly marketing local and long-distance services for up to a year after entering the long-distance business. US West said it was also opposed to a provision in the bill that would give the Justice Department a significant role in determining whether Baby Bells could enter the long-distance business.

Fields earlier this year embarrassed his boss, House Commerce Committee Chairman Thomas J. Bliley Jr. (R-Va.), by persuading the House to endorse a provision allowing the Baby Bells easier entry into long distance than the provision favored by Bliley--who has a large AT&T; plant in his Richmond congressional district.

But on Thursday Fields found himself on the losing end of the agreement reached Wednesday among conference committee leaders. After learning that Bliley was a party to the more regulatory test on Baby Bell long-distance entry, an angry Fields issued a statement and hopped a plane to his Houston congressional district.

“While everyone wants to reach an agreement as soon as possible, there are fundamental principles to which the House conferees are committed,” Fields said. “We are interested in a good agreement--not just any agreement.”

The last-minute division over telecommunications reform appears to stem not only from philosophical differences but also from growing partisan bickering over the budget bill, which observers say has now spilled over into telecom, transforming what has long been a nonpartisan debate into an ideological struggle.

Just before entering a room on Capitol Hill to blast the White House on the stalled budget talks, for instance, Armey paused to express similar frustration over telecom reform.

“I think they are putting together a conference report that does not have a good standing among House Republicans right now,” Armey told a group of reporters.

Minutes later, Ohio Republican John Boehner, chairman of the House GOP caucus, came out of the same budget press briefing and said that he too opposes the telecom bill because it “has become too regulatory.”

Sen. Larry Pressler (R-S.D.) announced Thursday that he believes he has enough votes in the Senate to pass the telecommunications bill as outlined in the Wednesday agreement. And independent observers say a majority of House members on the conference committee would also probably approve the measure in its current form.

But Pressler acknowledged that negotiators remain divided over the relatively minor issue of allowing electric utilities registered under the Public Utility Holding Company Act to provide telecommunications services. Some of the regional Bell companies want greater regulatory constraints placed on the utilities, but others argue that it is unfair to impose a double standard.

“The phone companies want to rig the system . . . but it’s a little late for that, don’t you think?” complained Brian Moir, a Washington lawyer who represents a coalition of business groups seeking to delay the Baby Bells’ entry into the long-distance market. “At least I can heat my house with oil, gas or propane. When it comes to getting a dial tone, I have no choice.”

Although Nynex officials continued to express support for the telecommunications bill and US West quickly criticized it, Bell Atlantic and other Baby Bell siblings reserved judgment.

The seven regional Bell companies are expected to face varying levels of local phone competition. Most experts believe that long-distance carriers will be most eager to invade California, New York and Illinois because of their big population centers and public utilities commissions oriented toward deregulation. Thus, US West and BellSouth, which cover more sparsely populated areas, are concerned that federal rules that require an active local phone competitor in a market before a Bell can enter long-distance might delay their entry into the lucrative business.

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House Republicans, industry groups seek changes in telecom agreement. D3

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Under Attack

The massive telecommunication reform bill tentatively agreed upon by congressional leaders and the White House on Wednesday night came under fire Thursday from some Republicans.

ON WEDNESDAY

“We got a breakthrough on the bill and that’s a wonderful result for industry and consumers alike.”

--Vice President Al Gore

“I think, in the end, common sense and moderation overcame” ideological zeal.

--Rep. Edward J. Markey (D-Mass.)

“The law to open up the information superhighway is now ready for enactment.”

--Sen. Ernest F. Hollings (D-S.C.)

ON THURSDAY

“There’s no deal yet.”

--Rep. Jack Fields (R-Texas)

The telecom bill is as “dead as Elvis.”

--Rep. Michael Oxley (R-Ohio)

“We’ve got too many people who don’t like too many provisions.”

--House Majority Leader Richard Armey (R-Texas)

“I just think the bill has become too regulatory.”

--Rep. John Boehner (R-Ohio)

The Telecom Tangle

The agreement reached Thursday by Congressional leaders and the White House on telecommunications reform came under attack from some House Republicans and industry groups. Here are the main points of contention:

* Electric Utilities: No agreement on the ground rules under which certain electric companies would be allowed to offer telecommunications services.

* Long-Distance: The Baby Bells, which would be permitted to offer long-distance services under the bill, are trying to change two provisions governing their entry. One bans them from joint marketing of local and long-distance for one year after entry, and the other grants the Justice Department a role in determining when they could enter that market.

* Media Concentration: Some Republican lawmakers want to remove the limits on radio station ownership as well as the statutory cap on broadcasters’ audience reach that negotiators agreed to Wednesday. They also want to liberalize ownership accounting rules.