Subject: Testimony of James Cullen, President, Bell Atlantic, 03-02-94


                    SENATE COMMERCE COMMITTEE

                  STATEMENT OF JAMES G. CULLEN ON
                 S.1822: COMMUNICATIONS ACT OF 1994

                            March 2, 1994



     Good morning, Mr. Chairman and members of the
Committee. My name is James G. Cullen, and I am President
of the Bell Atlantic Corporation.  I want to thank you
for giving me the opportunity to testify on S.1822.

     As requested, I will focus my testimony today on the
Electronic Publishing and Information Services provision
of your bill.  Before commenting specifically on the
bill's components, I would like to briefly review the
history surrounding these issues.

     It's important to remember that the provision of
information services was never a part of the government's
original antitrust case against AT&T.  There were no
allegations of "bad acts" at any point.  In fact, the
information services prohibition in the AT&T consent
decree was added by the Justice Department strictly as a
precautionary measure.

     That measure proved to be unnecessary, and when the
Bell companies asked the court to remove the ban in 1987,
DOJ supported the action and AT&T did not oppose it. 
With all parties to the decree in agreement, the Court of
Appeals lifted the ban in 1991, and the Bell companies
have been providing information services on an
unrestricted, unlimited basis since that time.  Indeed,
it has grown into a flourishing market.  The companies
represented by my fellow panelists are just a few of the
success stories in this growing market segment.

      Given that history, let me comment on the origins
of the electronic publishing provisions contained in this
bill.  Recognizing the special problems faced by the
newspaper industry in transitioning from print to
electronic media, Bell Atlantic took a leadership role in
negotiating agreements with the Newspaper Publishers
Associations in New Jersey and Pennsylvania.  
     
     With this as a starting point, our two industries
came together to negotiate safeguards that could be
applied to all RBOCs.  Most of the safeguards to which we
agreed are in this bill and represent a delicate balance. 
Since I was personally involved in this, I can tell you
that perhaps the key element in our success was that all
aspects of this agreement were described in tangible,
specific and concrete terms.  Everyone understood what
was covered by the agreement and how the rules would
work.

    One of my concerns today is that in a number of very
important areas provisions of S. 1822 go beyond the
balance that was struck.  While a number of these changes
in language may seem relatively minor, they are really
very important because they create huge uncertainties. 
Indeed, the definition of electronic publishing itself
has been significantly expanded and become so open-ended
that it completely alters the terms that the publishers
and RBOCs worked so hard to craft.

    Let me give you another example.  Somehow, the term
"entertainment" has been added to the definition of
electronic publishing services.  Now each of us in this
room today probably has a different definition of
entertainment.  "Entertainment" could be Sega/Genesis
videogames.  It could include interactive MTV service. 
Who knows what it includes?

     There are other such examples that I will be happy
to submit for the record.  But my point is that with all
these changes this bill upsets the balance that was
previously struck and creates uncertainty where there was
once certainty.

      These electronic publishing agreements were tough
to achieve.  They address key public policy concerns.  If
such agreements, which have been painstakingly
negotiated, are now to become only the starting point for
piling on even more restrictions, this will have a
chilling effect on future efforts by industries to try
and work out their differences.  I urge this committee
not to undo the progress we have made to date.           

      I am also concerned that this bill, rather than
provide incentives for deployment, will actually deter
and delay the deployment of information services.  Let me
give you just one concrete example.  S. 1822 contains a
section dealing with gateway services.  The bill appears
to say that a telecommunications company cannot offer any
gateway services unless it offers such services
simultaneously to all the subscribers in a state.

      Technology, economics and market demand make such a
requirement unrealistic.  Again, with your permission we
would just like to work with your staff on possible
language changes in the gateway services section.

      Finally, Mr. Chairman, I am concerned about the
absence of incidental interLATA relief for the delivery
of information services.  The only sensible way to
provide information services is to deploy one computer
system to serve multiple LATAS.  But under today's MFJ
rules, we must duplicate these expensive computers in
each LATA.

      But if S. 1822 were to provide this incidental
interLATA relief for information services, it would allow
companies like Bell Atlantic to expand affordable and
accessible information services to customers in both
rural and urban areas.            

     Again, Mr. Chairman, thank you for allowing me to
share the viewpoints of the seven Regional Bell operating
Companies on the information services and electronic
publishing provisions in S. 1822.  I look forward to
working with you and your staff on further details of the
bill.