A bill co-sponsored by Sen. Orrin Hatch, R-Utah, to lift manufacturing restrictions placed on the seven regional Bell companies received a blow when company officials refused to testify before a Senate panel Tuesday.
Sen. Howard M. Metzenbaum, D-Ohio, said the baby Bells' refusal to send representatives reached "a new low in industry conduct." Metzenbaum is chairman of the Senate Judiciary Subcommittee on Antitrust.The baby Bells, which would be the major beneficiary if the bill is passed, did send a lawyer, Stephen Shapiro, who agreed with Metzenbaum. "They (Bell) have made a serious blunder," said Shapiro. "Whoever advised them not to appear made a serious mistake."
However, Hatch defended Bell representatives for not showing in a statement at the beginning of the committee briefing. "These are complicated antitrust matters," he said, explaining that the lawyer they sent is better informed to speak about such legalistic matters.
If enacted, the bill would discontinue the ban that was set on Bell in a 1984 court-consent decree, which broke up the Bell System.
Proponents of the bill, including Hatch, the Department of Justice, the Department of Commerce and the FCC, say the ban on Bell has caused a lag in the advance of technology.
"This ban is inhibiting the development of new services by telephone companies. . .. The seven regional Bell operating companies have, to an important extent, been forbidden from competing in many of these markets," Hatch said.
He said the restrictions that were needed 10 years ago to control Bell from being a monopoly are outdated.
Even though the baby Bells didn't show, their business rival and major opponent of the bill, AT&T, did. Robert E. Allen, chairman and chief executive of AT&T, said the bill was trying to wrap a wolf in sheep's clothing.
"The bill you are considering . . . is bad legislation for consumers, for business, for the telecommunications industry and for the nation. That is about as clear as I can make my basic position," he said.
Allen added that passing the bill would be like turning back the clock.
"The Senate, and this subcommittee, finds itself in a rather rare situation. Unlike so many instances, here is an issue where you have the benefit of 20/20 hindsight," he said.
Hatch argued in his statement that concern over the Bell companies is unjustified and that "many small manufacturers, who seek to compete with AT&T and foreign companies, support (the bill)."