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WASHINGTON, D.C. -- Consumers don't need to fear major phone and Internet disruptions from the financially embattled telecommunications industry, top executives and regulators told a Senate committee Tuesday. Still, the Federal Communications Commission wants to broaden its powers to keep things that way.

FCC Chair Michael Powell asked members of the Commerce, Science, and Transportation Committee to clarify his authority to prevent service disruptions resulting from bankrupt companies. The law requires phone companies to obtain FCC permission before stopping service, but it is unclear whether this 1934 policy applies to the Internet as well, Powell argued.

Though the FCC hasn't been helpless to stop shutdowns so far, Powell said he "can imagine a situation where there would be a problem." Some lawmakers supported Powell's request.

Executives Answer

Meanwhile, high-ranking officials from three of the largest ailing telecommunications companies testified at the hearing that their customers won't experience service disruptions. Testifying were executives of WorldCom, which filed for bankruptcy July 21; Global Crossing, which filed January 28; and Qwest Communications, which on Sunday announced it may have improperly listed more than $1 billion in assets.

The representatives of all three companies offered similar assurances that their services will not stop because of business problems.

"Qwest is fully prepared to ensure that service continues uninterrupted," said Afshin Mohebbi, president and chief operating officer.

Powell personally endorsed WorldCom. "I am an MCI WorldCom residential long-distance customer and, for what it's worth, I have no plans to change my service," he said.

However, legislators blasted the three companies for some of their recent actions. Committee members criticized the practice of giving top executives lucrative stock options and severance packages while employees lost their jobs and savings. WorldCom and Qwest executives present deferred to ongoing internal and government investigations, indicating they will take action if impropriety is found.

Congress members also grilled the companies about whether they will list stock options as expenses. This hotly contested provision was not included in the corporate reform legislation signed into law Tuesday by President George W. Bush.

WorldCom Chief Executive John Sidgmore said his company plans to list the options as expenses in the future. Global Crossing and Qwest executives said they are still considering the matter.

FCC's Wish List

Though he called service continuity the FCC's top priority for the telecom industry, Powell also asked lawmakers to again consider legislation in two other areas.

Powell renewed requests to "put some teeth" into the FCC's authority by increasing the maximum fine it can charge for a single rule breach from $120,000 to $1 million. He asked that maximum fines for repeat offenders be increased from $1.2 million to $10 million.

Also, Powell urged Congress to draft legislation "that produces the right regulatory environment for the provision of broadband services."

Powell was careful not to endorse any of the current broadband proposals in Congress. Among them is legislation proposed by Sen. Ernest Hollings (D-South Carolina), who chairs the Commerce, Science, and Transportation Committee that Powell addressed on Tuesday.

The Hollings bill would promote broadband deployment in rural and underserved areas of the country through loans and grants. It would also provide funds to digitize library and museum collections, and offer technical research grants to universities.

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