By Mike Mills
Washington Post Staff Writer
Friday, February 2 1996; Page A15

The telecommunications bill that Congress and the White House are poised to enact would have far-reaching effects on American consumers. Here are answers to some common questions.

We've been hearing about this bill for years. What exactly does it do?

It would junk a regulatory system that dates to the Communications Act of 1934, when Franklin D. Roosevelt was president, radio was king and telephone systems were considered natural monopolies. It also would void much of the 1982 consent decree that broke up the AT&T monopoly and bars local phone companies from entering new businesses such as long-distance.

The mind-set of the old regime was control and protection. The new legislation says anything goes: Any company is free to enter any other's business.

Does that mean my cable TV rates will go up?

Consumer groups contend that rates probably will increase $5 to $7 per month at that point.

But the bill's sponsors and the cable industry say letting more competition into the now largely monopolized cable TV business ultimately will lead to lower rates.

What about my telephone rates?

Large-scale competition in providing local telephone service to homes, the telecommunications industry's other big monopoly, is at least three to five years off, many analysts say. It most likely would come first from long-distance carriers such as AT&T Corp., MCI Communications Corp. and Sprint Corp., which would simply buy wholesale local phone service and sell it to end customers under their own brand names. Later, competition likely would come from cable operators and cellular carriers. If and when that happens, rates may decline.

Long-distance prices also might fall as the country's seven Bell companies enter that market.

Will the bill lead to more consumer choices?

Much depends on how much consolidation occurs among the companies that provide the services. By allowing new companies into what are now essentially protected businesses, the bill could expand choices and drive prices down. But it also would allow major companies to form alliances and buy each other, which could diminish choices.

For example, telephone and cable companies in communities of 50,000 people or fewer could buy each other out (they cannot at present), meaning that small-market monopolies in phone and cable service could continue. And broadcast networks would be able to own more television stations nationwide.

How would it regulate sexual material on-line?

It would be a federal crime, punishable by fines of as much as $100,000 and prison sentences, to "knowingly" transmit to minors material deemed "indecent" on on-line services. Indecency is defined in the bill as any communication "that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards, sexual or excretory activities or organs."

Proponents say this will remove a lot of smutty material that is now openly accessible to anyone with an on-line account, including children. Critics call the provision censorship and say it could have a chilling effect on free speech. The Supreme Court is the likely venue to settle this issue.

And the bill addresses violence on TV too?

It wouldn't reduce it, but it would try to give parents means to shield children from it. Television set manufacturers would be required to install a small microchip in each set with a 13-inch diagonal screen or larger that is sold in the United States. By listening for ratings signals to be broadcast by TV stations and cable systems, the chip would allow set owners to block any programs that a ratings committee identifies as containing violent, sexual or indecent content.

There are to be different levels of ratings, allowing parents to pick and choose what level they want in their house. Nothing in the bill requires broadcasters to cooperate with the plan, though the FCC would be required to set up an industry and community advisory committee to rate the programs if the industry fails to do so.