TELECOMMUNICATIONS BILL PASSES HOUSE BREAKS UP REGULATORY BARRIERS IN TV, CABLE, BROADCASTING INDUSTRIES

The House approved a landmark overhaul of the United States'antiquated telecommunications laws Friday that would freecompetition in the telephone, cable and broadcasting industries andmandates new technology allowing parents to block violent andsexual programming on their television sets.

The bill was approved 305-117 after five hours of sometimesheated debate that resulted in substantial changes to the finalbill, but leaving so many differences with the Senate version ofthe bill that a whole new political battle is looming over acompromise.

At stake is the blueprint for the future of the U.S.communications industry, breaking down the regulatory barriers thathave kept telephone, cable and television as distinct industriesunder separate and limited ownership for four decades.

"Technology is so far ahead of regulators and courts that wecan't hold it back," said Pacific Telesis Group Chairman Phillip J.Quigley. "If it finally becomes law, this legislation will cementthe United States' position as the acknowledged leader in the newage of global information."

Under the sweeping House document that runs roughly 200 pagesof fine print, the concentration of ownership of everything fromradio stations to advertising billboards would begin to rise.

Anticipation of the reform is a key ingredient in themultibillion dollar wave of mergers sweeping through the broadcastindustry, just one example of the profound economic effects of thelegislation.

Supporters of the measure say the changes eventually will bringgreater diversity to the entertainment and news market, as well aslower prices, but op ponents castigate the bill for allowing major corporations toincrease their power over both the content of what the Americanpublic consumes and the prices in the marketplace.

The winners Friday appeared to be local telephone companies andcable television providers, while the losers were long-distancetelephone companies. Major broadcasting corporations were bloodiedin several battles, but overall came out with the right tosignificantly increase their ownership concentration of thetelevision market.

The bill's key features would:

Drop limits on the number of radio and television stations asingle corporation could own, and raise from to 30 percent from 25percent the share of the U.S. television audience those stationscould reach. Broadcasters had hoped for a 50 percent share. Alllimits on radio ownership would be dropped.

Loosen cross-ownership restrictions, which since the 1950s haveset limits on how many media outlets a single company can controlin one market. Under the proposed law, a single company now couldown a newspaper, two television stations and unlimited radiostations in the same market.

Permit local telephone companies to offer long-distanceservice, opening up the $70 billion long distance market to theBaby Bells and GTE. Long-distance companies lost their effort toforce the local carriers to prove conclusively that competitionexists in their local service markets before entering thelong-distance market.

Encourage computer on-line services and the Internet to controlpornography, but not allow the Federal Communications Commission toregulate content, as did the Senate. The provision, offered throughan amendment by Rep. Christopher Cox, R-Calif., passed by a nearunanimous margin.

Drop federal price regulation of cable television rates,adopted in 1992 as cable rate increases became a nationalcontroversy, but leave intact local controls.

Require the television industry to adopt a system, known as thev-chip, which would allow parents to block out objectionabletelevision programs based on a rating issued by agovernment-mandated panel.

The sweeping reforms are underpinned by new technologies thathave rendered much of the nation's existing telecommunications lawobsolete.

Within hours of passage of the measure, major corporations andconsumer groups began waging a new battle to shape the finaloutcome of the reform measure, which will be hammered out nextmonth in a conference committee.

President Clinton also called for major changes, declining tosay whether he is willing to sign either the House or Senateversions. Earlier this week, Clinton vowed to veto the House billas it then stood, but he said Friday that his signature depends onthe final conference version.