WASHINGTON (AP) -- After significant concessions to Democrats, a Senate panel approved a bill Thursday that would free telecommunications companies to provide a wider variety of services.

Consumer groups assailed the package, saying it would lead to higher cable and telephone rates and create companies that will control people's access not only to telecommunications services but also to news and entertainment.

`Explosion of services'

Supporters, including the nation's seven regional Bell companies, say it will do the opposite: lower prices, boost consumer choices and create millions of jobs.

The Senate Commerce Committee approved, 17-2, a proposal by Chairman Larry Pressler, R-S.D., who is already consulting with Senate Majority Leader Bob Dole of Kansas about when to bring the package to the floor.

Hot issues resolved

Before the hearing, Pressler and ranking committee Democrat Ernest Hollings of South Carolina reached a compromise on several hotly contested provisions in the bill, including the terms by which local and long-distance telephone companies may get into each other's businesses and cable rate deregulation.

On the long-distance part of the bill, the compromise imposes slightly tougher conditions on local phone companies entering the long-distance business and takes away a virtually guaranteed right to enter the business within three years.

The compromise also makes it easier for potential competitors to enter local telephone markets by adding provisions ensuring that access to existing local telephone networks and services is available at cost-based rates. It also gives authority over selling such services to state and federal regulatory bodies, rather than leaving it with the existing local phone company.

Long-distance companies welcomed, but were not satisfied by, the changes.

The cable compromise would maintain rate regulation on the lowest tier of service, which generally consists of broadcast signals, local-access channels and a few cable networks, until local competition develops.

And it would deregulate rates for all other program services unless a cable company's rates exceeded a national average.

Under a new test, rates could be deregulated as soon as a telephone company begins providing video service in a market served by a cable company.

``There is no good news in there for consumers,'' said Bradley Stillman, legislative director of the Consumer Federation of America. He predicted cable rates would soar.

The cable industry also opposes the compromise package, saying it scales back the price freedom it would have had under an earlier version of the Pressler bill.

Published 3/24/95 in the San Jose Mercury News.

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