The fragile balance of power in the telecommunications industry may have tilted a bit more toward the powerful regional Bell phone companies after Tuesday's national elections.
Legislation that would help local phone giants such as Verizon Communications Corp. gain in areas such as broadband Internet service has been blocked by the Democratic-led Senate. And the chairman of the Federal Communications Commission, Michael K. Powell, has been restrained from pushing an aggressive deregulatory agenda that might favor the Bells because of the party split in Congress.
That equation changed with Tuesday's elections. Republicans won control of the Senate and retained their hold on the House. Democratic Sen. Ernest F. Hollings of South Carolina, chairman of the commerce committee and the most vocal critic of the FCC's Powell, will cede leadership of that committee to Republican John McCain of Arizona.
"For Michael Powell, instead of having a smart critic like Fritz Hollings questioning everything he does, it probably reduces the tension," said a Washington lobbyist for one of the regional Bell companies.
The telephone industry has been roiled by deregulation, wild swings in stock prices, the WorldCom accounting scandal and new technologies such as wireless phones and e-mail that are eroding the stationary phone's long dominance.
Lawmakers continue to examine ways to encourage greater competition and choice for consumers, but they are wary that the historic reform of the industry they charted in 1996 hasn't produced the results expected.
The four companies that are the descendants of the Bell phone monopoly retain powerful advantages in the marketplace. Verizon announced plans this week to expand further into corporate and government business now that it has won the right to bundle local and long-distance residential service in all but a handful of states, including Maryland.
During the current session of Congress, legislation that would have helped the Bells gain a greater share of the broadband Internet market was tied up in Hollings' committee. A broadband bill co-sponsored by Republican Billy Tauzin of Louisiana and Democrat John D. Dingell of Michigan was approved by the House, 273-157, but died in the Senate.
A spokesman for Tauzin said yesterday that he expects the shift to Republican control of the Senate to improve the prospects for similar legislation.
"Tauzin and McCain have a good working relationship, and we're looking forward to getting some things done which will benefit consumers and the telecommunications industry," said Ken Johnson, a spokesman for the House Energy and Commerce Committee, which Tauzin leads.
Representatives of companies that compete with the regional Bells, such as AT&T; Corp., WorldCom and smaller providers, though anxious about Tuesday's results, aren't convinced the power shift is one-sided.
Several point out that McCain is not an ideological advocate of deregulation. He has also been a critic of regional Bell Qwest Communications International Inc. in Arizona and has battled cable providers over rate increases. McCain's telecommunications adviser worked for a non-Bell company.
"The Republicans' taking control of the Senate is a positive for the Bells," said Martin L. Stern, a telecommunications attorney, but he noted that there are also changes favorable to rival companies.
Though the Bells might gain with Hollings losing control of the Commerce Committee, the Senate's new majority leader will be Trent Lott, a traditional supporter of the companies that compete with the Bells.
Perhaps another sign that telephone deregulation doesn't hew to party lines is that non-Bells said they were pleased by Rep. Robert H. Ehrlich Jr.'s gubernatorial win. Ehrlich, a Republican, is a member of Tauzin's Energy and Commerce Committee but did not support his chairman's bill.
"There are some pro-competitive Republicans and pro-Bell Democrats. Ehrlich's voting record is strongly pro-competitive. He's not the big-business Republican we have in Michael Powell," said Bret L. Mingo, CEO of Core Communications Inc., an Internet service provider in Annapolis.
"Our biggest concern is Michael Powell. Frankly, our hope is that he finds a more attractive job. Or if not that, let him mess up energy policy for a while."