
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, March 20, 1991                   TAG: 9103200099
SECTION: BUSINESS                    PAGE: A-11   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

SENATE GETS BILL LETTING BABY BELLS ENTER PHONE EQUIPMENT BUSINESS

The Senate Commerce Committee on Tuesday approved a bill that would allow the regional Bell telephone companies to manufacture telephone equipment for the first time.

The bill, advanced to the Senate floor on an 18-1 vote, would allow the companies to make equipment themselves or enter joint manufacturing agreements with other companies, as long as that manufacturing was done in the United States.

If the bill becomes law, the big loser will be American Telephone & Telegraph, once the parent company of the regional Bells.

The 1982 court decree under which the regional companies were spun off from AT&T forbids them from making telecommunications equipment and bars them from several other businesses, including interstate long-distance.

Sen. Ted Stevens, R-Alaska, said the bill would restore legislative control over the telecommunications industry. He said U.S. District Judge Harold Greene, who presided over the AT&T breakup and who has overseen compliance with the court decree, "has ruled as a single czar over the telecommunications industry in this country" since 1982.

Commerce Committee Chairman Ernest Hollings, a South Carolina Democrat and sponsor of the bill, has criticized AT&T for moving some of its factory operations out of the United States. The company shifted most of its home telephone production to Singapore, where labor costs are much lower.

The regional Bells welcomed the vote. "It certainly is an important step," said Bill McCloskey, a Washington-based spokesman for BellSouth of Atlanta, the largest of the regionals.

The Consumer Federation of America denounced the committee action. Gene Kimmelman, legislative director, said the proposal could allow the regional companies to increase profits at affiliated manufacturing companies by buying equipment from them at inflated prices, recovering the excess costs through local phone bills.

"The bill does nothing to keep the Bell companies from pulling off this kind of shenanigan," he said.

by CNB