Roll Out The Telepork BarrelMark Lewyn
When it comes to rewriting the nation's telecommunications laws, Representative Michael G. Oxley (R-Ohio) is showing his colleagues a thing or two about constituent service.
Just ask Joel S. Rudich, chief executive of Columbus-based Coaxial Communications, which serves Oxley's district. Rudich persuaded the vice- chairman of the House telecommunications subcommittee to slip in several provisions specifically designed to exempt Coaxial--which isn't mentioned by name--from a rule barring phone companies from buying cable companies in the same market. Without the provision, Rudich feared that the value of his franchise might plummet. One lobbyist calls the situation "a classic purple cow--a unique beast, describing only one situation in America."
BACKROOM LUAU. Oxley's amendment is one of a slew of special-interest provisions embedded in the telecom-reform bill that passed the House on Aug. 4. Dozens of companies have cut side deals that could give them an extra boost should the bill pass this fall. Capitol Hill wags already have a name for this high-tech largesse: "telepork"--changes that may be worth millions to their often- hidden beneficiaries. There are "certainly a lot of provisions that could squeal if you poked them," says one Senate staffer. Asks Representative W.J. Tauzin, (R-La.): "You're not surprised, are you?"
Some of the backroom deals advance public policy, the lucky companies insist, even if they may benefit only one outfit. Consider the case of AirTouch Communications, the wireless spin-off of Pacific Telesis Group. Earlier this year, the Justice Dept. ruled that AirTouch was barred from entering new businesses such as long distance. That angered antiregulatory Republicans, who argued that AirTouch was spun off in 1994 to free it from such restrictions.
So when AirTouch lobbyists asked for a special deal from the House, they found a receptive audience. While no one has claimed parentage for the amendment, the House bill frees all companies that have purchased "wireless exchange assets previously owned by a Bell operating company" from court restrictions. Of course, AirTouch is the only company in the United States that fits that description.
A special favor? Sure. But the move could help others, an AirTouch spokeswoman argues. Pacific Telesis Chairman Philip J. Quigley defends the amendment, too: "While it's targeted at AirTouch, it has broader implications."
PUBLIC WORKS? Then there's Appalachian Power Co. Representative Richard Boucher (D-Va.) insists he was trying to serve the public good when he went to bat for Appalachian, his local utility. Boucher inserted an amendment in last year's House bill that would allow Appalachian's parent company, American Electric Power Co., to enter the phone business. Boucher says his provision will benefit not only Appalachian but 13 other utilities and enhance competition in the phone business. "This is one of those rare instances where good public policy intersects with helping a constituent," he says.
Some pork could potentially split coalitions. The Bell companies are furious that one of their own, Ameritech, can get into the alarm-monitoring business while the rest face up to a six-year wait. The House and Senate bills both exempt Bells that bought alarm companies before Jan. 1, 1995. And there's only one, Ameritech, which bought Chicago-based Security Link last year.
A few special deals appear to be designed to settle old scores. Time Warner Inc. has been engaged in an eight-year battle with Liberty Cable Inc., a small wireless cable operator in New York City. Now the cable giant has figured out a way to clobber Liberty, thanks to Representative Dan Schaefer (R-Colo.), a big cable backer whose district is headquarters to Tele-Communications Inc. Time Warner won a provision that would immediately give cable operators vying for apartment-building contracts much more pricing flexibility than they now have. And nowhere are there more of such buildings--or peskier upstarts--than in New York. Time Warner declined to comment, but Liberty CEO Peter O. Price is fuming: "This is the least subtle deal on Capitol Hill in a century."
Of course, some special provisions could be squeezed out when lawmakers convene a conference on telecom legislation after Labor Day. But the betting now: Telecom reform will come with a heaping side of pork.