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TELECOMMUNICATIONS LEGISLATION MAY TAKE CENTER STAGE THIS FALL

WASHINGTON-Congress will attempt to pass telecommunications reform and digital wiretap legislation this fall, and lawmakers also plan to put the Federal Communications Commission’s auction program under the microscope before adjourning the 103rd session next month.

With any luck, telecommunications reform legislation could hit the Senate floor this week. In fact, telecommunications legislation may grab center stage now that Congress and the Clinton administration have abandoned hope of passing a major health care reform bill this year.

But it will take more than luck to get a sweeping overhaul of the 1934 Communications Act out of the Democratic-controlled Congress, given the complexity, controversy and limited number of days left on the legislative calendar.

Moreover, the Democratic leadership still wants to salvage a modest health care measure before lawmakers depart to campaign for midterm elections that historically have gone particularly bad for the party of unpopular presidents, like Bill Clinton.

The House passed telecommunications reform bills in late June, and last month the Senate Commerce Committee approved companion legislation penned by Chairman Ernest Hollings, D-S.C., that is destined for a bitter floor fight-if it makes it that far.

The legislation would enable telephone and cable television companies to compete in each other’s business, and let the seven regional Bell telephone firms enter the manufacturing and long-distance markets. Fighting between regional Bells and long-distance telephone companies has been fierce.

While the legislation is an all-consuming interest of the telecommunications industry, it’s not as if Congress is without other pressing business. “Health care is the X factor that no one can account for,” said a spokesman for the Senate Commerce Committee.

“I would say we are optimistic (about telecommunications reform) because of the bipartisan vote in the committee,” he noted, referring to the measure’s 18-2 passage.

However, Mark Buse, an aide to Sen. John McCain, R-Ariz., said his boss voted against the Holling’s bill because it is too regulatory. “You would see a much more deregulatory bill come out of committee,” predicted Buse, if the legislation dies and were to be taken up next year by a Republican-controlled Congress.

But telecommunications reform is at least on the legislative radar screen in the waning weeks of Congress. “The telecommunications bill is one of the bills that Senator Mitchell would like to complete this fall,” said an aide to retiring Senate Majority Leader George Mitchell, D-Maine.

For the wireless telecommunications industry, the legislation is a mixed bag with huge stakes. The legislation is the ticket for regional Bell telephone companies to offer long-distance wireless service. That would mean stiffer competition for McCaw Cellular Communications Inc., GTE Corp. and other cellular carriers that do not face geographic service restrictions.

The 1982 consent that broke up AT&T Corp. forbid the seven, spun-off regional Bell firms from entering the manufacturing, long-distance and information services businesses. Bells won entry into the latter market through litigation, and are fighting on all fronts-Congress, federal court and in the media-to get the remaining restrictions lifted.

Besides having to rule on whether to vacate the 1982 decree that he approved, U.S. District Judge Harold Greene must render a final judgment on another consent decree-this one crafted by the Justice Department to permit the proposed $12.6 billion merger between AT&T and McCaw to fly.

For the cellular, specialized mobile radio and personal communications services sectors, House telecommunications reform legislation would exempt wireless operators from many common carrier regulations. Some industry leaders say burdensome regulations, largely intended for monopoly telephone companies, will hurt wireless competition.

The Senate bill does not offer regulatory relief for commercial mobile service providers, although cellular resellers prefer it over the House version because it would require cellular operators to offer interconnection on an unbundled, nondiscriminatory basis.

Elsewhere, the House Energy & Commerce Committee is expected to make a bid for jurisdiction of digital wiretap legislation pending in House and Senate Judiciary committees.

Because of the bill’s major impact on common carriers, Energy and Commerce Committee Chairman John Dingell, D-Mich., believes his panel should exercise oversight after the bill leaves Texas Congressman Jack Brook’s House Judiciary committee. House Telecommunications Subcommittee Chairman Edward Markey, D-Mass., held a hearing on the digital wiretap bill last week.

On Sept. 29, House Budget Committee Chairman Martin Sabo, D-Minn., will examine the FCC’s auction process. “So far, I think they’ve done a very good job,” said Eileen Baumgartner, chief of staff to the panel.

But she said Sabo wants to hear from FCC members about the agency’s experience to date with auctions, including treatment of women, minorities, small businesses and rural telephone companies.

Sabo is one of the lawmakers who joined Dingell in sponsoring a bill to require PCS pioneers to pay for licenses awarded for wireless innovation. That measure is expected to be rolled into legislation implementing the new General Agreement on Tariffs and Trade being offered by the White House to Congress shortly.

Vice President Gore has called for an overhaul of the FCC’s pioneer’s preference program.

The administration also is close to taking a position on the proposed privatization of the International Maritime Satellite Organization, which wants to compete against U.S. mobile satellite companies, and the International Telecommunications Satellite Organization.

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