BY MARK SILK
Mark Silk is an editorial writer and columnist for The Atlanta Constitution.

In one of the great power conflicts of the information age, newspaper publishers, in alliance with broadcast and cable TV operators, are going head to head with the seven giant regional Bell Telephone operating companies -- the RBOCs (rhymes with tarbox). It is corporate trench warfare at its litigious best, conducted not only in congress, the courts, and the Federal Communications Commission, but also, increasingly, before every state public service commission in the land. At stake are billions of dollars and the future of American telecommunications. And among the potential casualties is the honored, if not always observed, journalistic principle of separation of church and state -- the independence of the editorial side from the corporate side.

So what's the casus belli?

In the 1982 Modified Final Judgment that determined the 1984 breakup of AT&T, U.S. District Judge Harold H. Greene prohibited the newly minted RBOCs, with their monopolistic control over local telephone service, were in a position to overwhelm any competition in these areas. Although Judge Greene has since relaxed the prohibitions in certain ways, they remain fundamentally intact.

The focus of concern for publishers and their allies is the restriction on information services. As defined by Greene, these range from electronic yellow pages to video transmission. They also include electronic mail and billboard services, which enable private citizens to communicate with each other.

After the AT&T breakup, the growth of information services proceeded at a rapid pace. Since the business of newspaper companies is information, it was only natural that some of the larger companies should try to find places beyond the pages of their newspapers to sell it. Dow Jones now makes more money on its business-related information services that it does on The Wall Street Journal. Ownership of several major electronic databases has made Knight-Ridder a major player as well.

For newspapers the immediate issue is consumer advertising. Whether through a form of voice mail or by way of personal computers and screen-equipped phones, electronic yellow pages could become a formidable advertising medium. Callers might electronically select a given product or retail outlet and receive up-to-the-minute information on pricing and product availability. Today, in printed form, yellow pages are an $ 8 billion annual business; in tomorrow's electronic form they could be worth much more. Newspaper publishers worry about the effect on classified advertising, which constituted roughly 40 percent (or $ 12 billion worth) of newspaper ad revenues in 1989. Short-term as they are, classified ads could easily be incorporated into continually updated electronic yellow pages.

Video is farther down the road. If allowed to compete in the cable business, the RBOCs could not only become the major conduit for all television but could ultimately run away with the video rental industry. That's because, in the RBOCs' hoped-for telefuture, the miracle of two-way switched video will allow you to call up at will the movie or TV show of your choice. The ultimate RBOC dream is to make all telecommunications available to homes and businesses through a single wire -- their wire. But this will require replacing the nation's copper telephone wiring with high-capacity fiber-optic cable. As an internal BellSouth memo of a few years ago put it, "The Guy Who Gets Fiber To The House First Owns The House." A fiber telecommunications network, universally accessible on a common-carrier basis, might be a fine thing. Even now, the Japanese government is investing billions to put one of its own in place. But who is going to pay for installing ours? The RBOCs contend they must be allowed into lucrative information-service businesses if it is to be worth their while to make what could be a $ 900 billion investment themselves. THE ANPA VS. THE RBOCS The American Newspaper Publishers Association opposes RBOC entry on antitrust grounds, arguing that the phone companies can use their control of the switches over which electronic information flows to take unfair advantage of the competition, for example by assembling information on potential customers' telephone-usage patterns. (The ANPA is prepared to let the RBOCs enter into information services, but only outside of local service regions, where they don't control the switches, and only when adequate regulatory safeguards are in place.) Besides insisting that regulatory safeguards can prevent any abuse of powder, the RBOCs contend that being prevented from communicating on their lines constitutes prior restraint on their freedom of speech. This is a complicated question on which the country's principal guardian of the First Amendment, the American Civil Liberties Union, has not yet taken a position. But even assuming that the restriction is constitutional, there is something unseemly about newspapers opposing someone else's ability to communicate because of predicted harm to their own commercial interests.

A year ago, the RBOCs won a significant victory when the District of Columbia's Circuit Court of Appeals ordered Judge Greene to reconsider the information-services restriction. The court, acting at the behest of both the RBOCs and the Justice Department, instructed the judge to use a public interest standard as well as an antitrust one to decide whether to permit RBOC entry. Those who support lifting the law say it's reasonable to expect the judge to relax the restriction somewhat, though less than the RBOCs would want.

Meanwhile, Representative Edward Markey of Massachusetts has promised to introduce his long-promised bill that would ease the judge's restrictions on information services and manufacturing. A draft circulated last year would have let the RBOCs into information services other than cable TV outside their local service regions. It would also permit in-region electronic yellow pages without classified ads. That goes too far for the ANPA.

But a Markey bill will probably not be put on the table until Judge Greene has ruled, which could mean not until after the summer recess. And, as the failure of cable reregulation showed last session, Congress has a hard time dealing with anything in the telecommunications field, where any action is certain to upset some powerful interests. Cable reregulation is back again this year, as is Senator Ernest Hollings's bill that seeks to lift Judge Greene's manufacturing restrictions. There is every expectation that these issues are going to be before Congress for some time. COVERING A TOUCHY SUBJECT

For a newspaper, the underlying ethical challenge is clear: to provide fair treatment of an issue that intimately touches its business interests and those of the newspaper industry as a whole. This means, on the news pages, assuring evenhanded reporting and giving the issue coverage commensurate with its importance. Coverage of telecommunications in general-circulation newspapers has been spotty at best.

Far trickier than news coverage is the expression of editorial opinion. Over the past few years, only a handful of newspapers have pronounced editorially on the issues stemming from the Modified Final Judgment. Among those that have, support for removing the information-services restriction has been tendered only by The Wall Street Journal, which back in 1987 declared, "Those of us who believe the public is served by free economic competition have to believe that letting everyone compete will speed the delivery of increasingly diverse information services to a more widespread audience." This position, clearly at odds with the interest of Dow Jones, has not been reiterated since.

If some publishers believe national telecommunications policy is an inside-the-Beltway affair too remote to concern themselves with, they are deluding themselves. That's because, thanks to recent court decisions, issues are increasingly likely to be decided at the state level.

In June 1990, the Ninth Circuit Court of Appeals overturned the FCC's so-called Computer III regulations, which stated that RBOCs do not need to establish separate subsidiaries in order to provide enhanced services such as voice mail. Building on a 1986 Supreme Court decision limiting the FCC's authority to set depreciation rates, the court held that the agency could not simply preempt state regulatory powers. Unless it were otherwise impossible to accomplish federal telecommunications goals, the states retained their rights to establish procedures to prevent the RBOCs from competing unfairly. As a result, more and more newspaper companies are likely to involve themselves in state telecommunications regulation; and newspapers themselves will be confronted with covering ongoing regulatory matters to which their company is party. In this regard, Georgia provides an example of a situation in which many editorial page editors may soon find themselves. COX GETS INTO THE RBOCS FRAY

Cox Enterprises, the owner of The Atlanta Journal and Constitution, is the seventh-largest cable operator in the country, including one Georgia franchise. It also owns television and radio stations, and has gotten a leg up on the video business by acquiring a host of Blockbuster Video store franchises. In addition, Cox has aggressively gotten into the electronic-service business, both in audiotext (weather, stock information, and movie reviews) and video-text (classifieds, wire services, and the newspaper itself).

Cox entered Georgia's telephone regulation process a year ago, following controversy over a new depreciation schedule submitted for approval to the state Public Service Commission by the Southern Bell Telephone Company, a subsidiary of the South's RBOC, BellSouth. In its letter requesting accelerated depreciation on a range of plants and equipment, Southern Bell implied that the new schedule had previously been approved by the FCC. In fact, the FCC had specifically rejected the proposed rates on copper wire as excessively generous to the company. (Depreciating its copper wire more quickly would enable Southern Bell to replace it that much more cheaply with fiber-optic cable. This would hasten the day it could supply its customers with video -- a matter of no small concern to the cable television industry.)

The editorial board of The Atlanta Constitution learned of the letter through its own sources and the newspaper attacked Southern Bell for misrepresentation in an editorial that appeared the morning the Public Service Commission was due to take up the matter. Independently (though the phone company hardly thought so), Cox chairman James Cox Kennedy had a letter protesting Southern Bell's behavior delivered to the public service commissioners that same morning.

This was not the first time the Constitution had criticized Southern Bell, but it marked a clear departure for Cox. The company now decided formally to intervene in Southern Bell's regulatory affairs, first in a newly scheduled depreciation hearing and then in a comprehensive rate case (in which the depreciation issues were ultimately included). Articles began appearing in local periodicals about the Cox-Bell feud.

Southern Bell protested its treatment by the newspaper in letters to the editor. In May 1990, a letter from its vice-president for Georgia, Carl Swearingen, stated, "The Cox conglomerate continues to use the power of its editorial privileges to serve the political and economic advantages of its subsidiary companies. While this may serve the Cox organization well, it most certainly will delay the delivery of information-age technology to all Georgians."

In fact, Cox had not been ordering up editorials. Moreover, whenever a question of corporate self-interest arose, the editorial would point it out. But disclosing the corporate interest while taking the corporation's side did not demonstrate editorial independence either. The test of church-state separation was whether there could be a divergence between the editorial line and the corporate one.

In Southern Bell's 1990 rate case, the state Public Service Commission reduced telephone rates by $ 180 million but did give the company significantly accelerated depreciation on its copper wire. Bell appealed the ruling in court and, in due course, negotiated an out-of-court settlement with the PSC staff that reduced the judgment to $ 149 million while keeping accelerated depreciation rates. Cox, which stood to benefit so long as lengthy court proceedings kept Southern Bell from claiming its accelerated depreciation, opposed the settlement. Despite this, the Constitution ended up taking the position that telephone ratepayers would be best served if the PSC agreed to the $ 149 million deal. While corporate executives never find it easy to acknowledge that the public interest may not be identical to their company's, this has come particularly hard to newspaper publishers, accustomed as they are to consider themselves tribunes of the people. And these days, beset with declining readership and ad linage, they see before them an uncertain future even without RBOCs threatening their revenue streams. What could be more in the public interest than for publishers to do everything in their power to protect newspapers' profitability?

For their part, the RBOCs believe that the force is with them, that the power of technology and the deregulatory spirit of the age will eventually cut them loose from Judge Greene's trammels. WHERE DOES THE PUBLIC INTEREST LIE?

So far, the least active participant in the telecommunications debate has been the public at large, which except for expressing unhappiness with local cable TV rates appears to be largely oblivious to what is going on. Where, in fact, does the public interest lie? This year, the American Civil Liberties Union has established an information-technology project to try to find out.

"The ACLU traditionally is sympathetic to the claims that all should be able to speak," says Jerry Berman, the director of the project. "But we are concerned about what kinds of safeguards are in places so everyone can have nondiscriminatory access.

"We think this is the most fundamental First Amendment issue of the twenty-first century," he adds. "We're talking about the future of speech."

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