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York Times
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October 24, 2000, Tuesday, Late Edition -
Final
SECTION: Section A; Page 1; Column
1; Business Desk
LENGTH: 1391 words
HEADLINE: Communications Lobby Puts Full-Court Press on
Congress
BYLINE: By STEPHEN LABATON
DATELINE: WASHINGTON, Oct. 23
BODY:
As Congress nears adjournment, some of the
nation's most powerful corporations have enlisted important lawmakers to tuck
provisions into spending bills that could reshape the balance of power among
telephone companies, Internet companies, broadcasters and cable operators.
The measures would relax restrictions that have made it impossible for
AT&T to expand further in the cable industry. They would save the regional
Bell companies billions paid to local carriers that some rivals and groups say
would be shifted to Internet users. And they would kill a plan to create
hundreds of new low-power FM stations for churches, schools and
community groups.
It is, of course, unknown which provisions will
survive the horse-trading, but if some are adopted, the legislation would be
among the most important for the telecommunications industry since a landmark
measure that began deregulation four years ago. While it has become a fall
tradition for special interests to extract favors from Congress in a session's
final days, some officials, consumer groups and lawmakers expressed alarm at the
unusually large number of "riders" -- narrowly focused attachments to broad
spending bills.
Lawmakers sponsoring the measures defended the practice,
saying that Congress had failed to have them adopted in other bills and that
there was a need to have the issues addressed. Although some riders have
received the support of a committee or a chamber of Congress, supporters feared
that by themselves they might be rejected by the White House, and they therefore
stand a better chance of becoming law attached to spending bills.
"One
of the reasons for accomplishing these items in riders is that they have a
chance of surviving in the end because the bills they are on may not be vetoed,"
said Representative Billy Tauzin, the Louisiana Republican who is hoping that
two measures he has supported -- killing the FM proposal and changing the Bell
access charges -- are attached to the spending bills. "As a stand-alone
proposition, they might be the subject of a veto. These are issues that begged
to get settled as rapidly as possible."
The White House has publicly
criticized two riders, saying it opposed an attempt to kill the
low-power FM plan and another that would kill Deutsche
Telekom's proposed acquisition of Voice Stream. But officials have not expressed
their views on many of the other riders.
Mr. Tauzin, likely to be the
next head of the Commerce Committee if Republicans retain control of the House,
said the process was so secretive, involving the Congressional leadership and
the leaders of the appropriations committees, that he did not even know what
riders the House and Senate negotiators planned to attach, or what they would
look like. Some officials and consumer groups criticized a legislative process
that they said leaves the public in the dark over so many important issues, and
that is so beholden to campaign contributions.
"This is the special
interest money grab," said Gene Kimmelman, co-director of the Washington office
of Consumers Union, which has waged a last-ditch effort to get the riders
killed. "It is AT&T seeking to protect its cable profits and not be forced
to divest. It's the Bell telephone companies seeking millions of dollars from
Internet providers and their customers who use the Internet. It's the
broadcasters trying to block community radio stations to enhance their dominant
position in the market. And it's cable companies seeking taxpayer support to
provide local channels in the communities that they are already supposed to
wire."
William E. Kennard, chairman of the Federal Communications
Commission, said that in his seven years at the agency, he had never seen so
many riders still in play this late in the session. "This is a process where
lots of work gets done in the dead of night in the back rooms and in many cases,
on issues that have already been resolved on the basis of a full and public
record," Mr. Kennard said. "At appropriations time, lobbyists work like ninjas,
doing their work under cover of darkness. At the end of the legislative season,
there is no time when special interest money is so powerful."
Among the
provisions is one that has been heavily pushed by AT&T to relax the cable
concentration rules that have prevented it from expansion and may force it to
sell some units next year. Congressional aides say the company has the support
of Ted Stevens, the Alaska Republican who heads the Senate Appropriations
Committee. Mr. Stevens wants to attach a rider that would ease the rules that
bar a company from owning more than 30 percent of the market.
AT&T
is the largest contributor to federal candidates and political parties in the
current election cycle, having donated more than $4.3 million, nearly two-thirds
of which has gone to Republicans, according to a study last week by the Center
for Responsive Politics.
In a strategy described last week by one
Congressional aide as "rough playground justice," the Bell regionals have
responded by saying that since AT&T is getting its pet issue taken care of,
they want theirs. They have prevailed on other lawmakers to insert a rider that
could be worth billions to them.
That rider would reduce the amount of
money they pay to the newer local exchange carriers as part of the "reciprocal
compensation" that is paid for using their equipment to terminate calls. But
those local carriers say they would have to make up the difference by raising
rates for Internet service providers, which in turn would have to raise rates
for consumers to get Internet access.
Three Baby Bells -- Verizon, SBC
Communications and BellSouth -- are among the top 25 donors to federal campaigns
and parties, having given more than $7.1 million in the last two years.
The nation's largest broadcasters, meanwhile, have proposed a measure
that would kill the F.C.C.'s plans to issue new licenses to hundreds of
low-power FM stations. The industry, led by the National
Association of Broadcasters, has maintained that the new stations will produce
signal interference that will make it more difficult for listeners to hear other
stations. Mr. Kennard and other officials say that this is a smoke screen and
that the broadcasters are simply afraid of competition. The largest broadcasters
have also been lobbying to relax the law that prevents them from controlling
more than 35 percent of the television market.
There has also been a
struggle among the lawmakers over the provision that could kill Deutsche
Telekom's acquisition of VoiceStream. The two companies have waged a costly
lobbying campaign to kill a rider introduced by Senator Ernest F. Hollings,
Democrat of South Carolina, that could unhinge the deal. Mr. Hollings has said
that since Deutsche Telekom is more than 25 percent owned by the German
government, it should not be allowed in the United States market.
Congressional aides said that the Senate majority leader, Trent Lott, an
early supporter of the Hollings rider, changed his position at the urging of
Senator Slade Gorton, Republican of Washington, Voice Stream's home state. Todd
Young, a spokesman for Mr. Gorton, said the senator shared the administration's
views that the Hollings amendment violated American trade obligations. He said
it was also important to Mr. Gorton because VoiceStream is an important
constituent.
With Mr. Gorton in a tight re-election race, VoiceStream
executives have contributed more than $100,000 to his campaign and the
Republican Party.
Senator Conrad Burns, a Montana Republican who is also
facing a stiff re-election challenge, has sponsored a rider that would benefit
satellite broadcasters in his state by providing for loan guarantees to
encourage them to expand in his state. Cable companies have also been lobbying
Congress to make the loan guarantee provision applicable to them.
Larry
Akey, a spokesman for Mr. Burns, said the issue was of overriding importance to
his constituents, who rely heavily on satellite service, and therefore it does
not matter whether the measure is approved in an appropriations bill or
elsewhere.
"Clearly it's an established avenue for important policy
changes," Mr. Akey said of the use of riders. "It's important enough for
consumers that whatever mechanism we can get to use, we'll use."
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