Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, July 6, 1994 TAG: 9407060038
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Four of the nation's largest telephone companies plan to file a suit today seeking to abolish legal restrictions on the products and services they may provide consumers.
The Baby Bells have been trying to get Congress to do away with the restrictions for years. While Congress is the closest it has ever been to doing this, through sweeping telecommunications reform legislation, passage this year is not certain.
``There's no guarantee that Congress will act, so we owe it to our shareholders to pursue all avenues,'' Nynex's top lobbyist, Thomas Tauke, said Tuesday.
The parties in the suit are Bell Atlantic Corp., BellSouth, Nynex Corp. and Southwestern Bell Corp., phone company executives said.
Tauke said the suit complements the phone companies' legislative efforts. But other telecommunications executives said it is an attempt to hedge bets should reform legislation not be enacted this year.
The suit, to be filed in U.S. District Court in Washington, challenges the continued usefulness of a consent decree that broke up the Bell System in 1984, said phone company executives.
The decree bars the phone companies from engaging in some businesses, including providing long-distance service and manufacturing telecommunications equipment.
The crux of the companies' argument is that technology and the telecommunications marketplace have dramatically changed since 1984. As a result, the consent decree is no longer necessary, executives said.
It could take years for the court to issue a ruling, lawyers on both sides of the issue said.
Affidavits from leading academics contained in the suit seek to prove that ``The consent decree is discouraging, rather than encouraging competition in the telecommunications marketplace,'' Tauke said.
Among the academics' findings is that consumers have paid between $38 billion and $58 billion more than they should have for long-distance service over the last 10 years due to lack of competition and inefficiencies on the part of long-distance companies, said a phone company executive who spoke on condition of anonymity.
The suit comes at a time when telephone and cable companies are racing to build a collection of advanced telecommunications networks, known as the information superhighway. These networks will carry voice, video and data in two directions at the same time.
by CNB