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Citation: 3 Bernard D. Reams Jr. & William H. Manz Federal Law A Legislative History of the Telecommunications of 1996 Pub. L. No. 104-104 110 Stat. 56 1996 the Communications Decency Act S7881 1997

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June 7, 1995 CONGRESSIONAL RECORD-SENATE

be conducted outside of Bosnia-in Cro-atia or Slovenia. for example.

Madam President, administration of-ficials should quit fighting amongstthemselves and begin real consulta-tions with the Congress, consultationsbased on the facts and not on wild ac-cusations or unrealistic scenarios. It istime to take sides-with the victims ofthis aggression. It is also high time forAmerica to exercise leadership and endits participation in this internationalfailure.

VETO OF RESCISSIONS BILLMr. DOLE. Madam President, I will

just say that on the resclssion3 veto by.the President today, it is highly regret-table President Clinton chose a bill

.cutting spending for the first veto. The3 16.4 billion rescissions bill would haveprovided for £9 billion-S9 billion, a lotof money in real savings-an importantdownpayment in getting our country'sfinancial house in order.

The President made a serious mis-take in judgment in vetoing this meas-ure. It would have provided funding tothe Federal Emergency ManagementAgency for disaster relief, to Oklahomafor reconstruction, and debt relief forJordan to support the peace process.money for California.

Speaker GIONGRIcH and I have pre-viously said we met the administrationmore than halfway. The Presidentasked for Jordan debt relief, we met hisrequest. The President asked for FEMAfunds for disaster relief in 40 States.and we met his request. The Presidentthreatened' to veto if striker replace-ment language was included in the bill.we took it out. We left AIDS funding.breast cancer screening, childhood Im-munization, Head Start. and other pro-grams untouched, and still we came upwith S9 billion in net real savings.

We. in the Congress, held up our endof the bargain, but President Clintonmissed a valuable opportunity-a gold-en opportunity-to join us cuttingspending.

Now. with three-quarters of the fiscalyear almost gone, we are losing the op-portunity to enact real savings thisyear. In the face of the budget deficitthat mortgages our children's future.we in the Congress win proceed to passa budget that puts us on the path tobalance by the year 2002. We owe it toour children, and we owe it to ourgrandchildren.

For the sake of-generations to come,it is time for the President to stopbeing an obstacle In the road and joinus in our responsibility to secure ourNation's economic future.

-i-s TELECOMMUNICATIONS COM-PETITION AND DEREGULATIONACTMr. LOTT. Mr. President. I ask unan-

imous consent that the Senate proceedto the immpediate consideration of cal-endar No. 45, S. 862, the telecommuni-cations bill.

The PRESIDING OFFICER (Mr. BEN-NETT). The bill will be stated by title.

The legislative clerk read as follows:A bill iS. 652) to provide for a pro-competi-

tive, deregulatory national policy frame-work designed to accelerate rapidly privatesector deployment or advanced telecommunl-cations and Information technologies andservices to all Americans by opening all Ltle.communicaotins markets to competition.and for other purposes.

The PRESIDING OFFICER. Is thereobjection to the immediate consider-ation of the bill?

There being no objection, the Senateproceeded to consider the bill.

Mr. PRESSLER. Mr. President. I riseto begin Senate floor consideration ofS. 652-the comprehensive communica-tions bill which the Committee onCommrce. Science. and Transpor-tation overwhelmingly approved latelast month on a vote of 17 to 2-TheTelecommunications Competition andDeregulation Act of 1995.

The future of America's economy andsociety is inextricably linked to theuniverse of telecomunications andcomputer technology. Telecommuni-cations and computer technology is apotent force for progress and freedom.more powerful than Gutenberg's inven-tion of the printing press five centuriesago, or Bell's telephone and Marconi'sradio in the last century.

This force has helped us reach to-day's historic turning point in Amer-ica.

The telecommuni-ations and com-puter technology of 21st-CenturyAmerica will be hair-thin strands ofglass and fiber below: the magicalcrackling of stratospheric spectrumabove: and the orbit of satellites 23,000miles beyond. With personal computersinterconnected, telephones untethered,televisions and radios reinvented, andother devices yet to be invented bring-ing digitized information to life, thetelecommunications and computertechnology unleashed by S. 652 will for-ever change our economy and society.

At stake is our ability to competeand win in an international informa-tion marketplace estimated to be over$3 trillion by the close of 'the decade-The information industry already con-stitutes one-seventh of our economy.and is growing.

As chairman of the Committee onCommerce. Science and Transpor-tation, the core of my agenda is to pro-mote creativity in telecommunicationsand computer technology by rollingback the cost and reach of government.Costly big-government laws designedfor another era restrain telecommunl-cations and computer technology fromrealizing Its full potential. My top pri-ority this year Is to modernize and lib-eralize communications law throughpassage of the bill before us today. S.652: Telecommunications Competitionand Deregulation Act of 1995.

A. THE ADVENT OF TELECOMMUNWcArONSREOULA1O0NS

Most telecommunications policy andregulation in America is based upon

S7881the New Deal era Communications Actof 1934. The 1934 Act incorporated thepremise that telephone services were anatural monopoly, whereby only a sin-gle firm could provide better servicesat a lower cost than a number of com-peting suppliers. Tight governmentcontrol over spectrum based serviceswas justified on a scarcity theory. Nei-ther theory for big government regula-tion holds true today. If it ever did.

The 1934 Act was intended to ensurethat AT&T and other monopoly tele-phone companies did not abuse theirmonopoly power. However, regulatoryprotection from competition also en-sured that AT&T would remain a gov-ernment-sanctioned monopoly. In ex-change for this government-sanctionedmonopoly. AT&T was to provide uni-versal service. AT&T retained its gov-ernment-sanctioned monopoly untilantitrust enforcement broke up theBell System and transferred the mo-nopoly over local services to the BellOperating Companies.

The Communications Act has becomethe cornerstone of communications lawin the United States. The 1934 Act es-tablished the Federal CommunicationsCommission, and granted it regulatorypower over communications by wire,radio, telephone, and cable within theUnited States. The Act also chargedthe Federal Communications Commis-sion with the responsibility of main-talning. for all the people of the UnitedStates. a rapid, efficient, Nationwideand worldwide wire and radio commu-nications service with adequate facili-ties and reasonable charges.

Prior to 1934, communications regu-lation had come under the jurisdictionof three separate Federal agencies.Radio stations were licensed and regu-lated by the Federal Radio Commis-sion: the Interstate Commerce Com-mission had jurisdiction over tele-phone. telegraph, and wireless commoncarriers; and the Postmaster Generalhad certain jurisdiction over the com-panies that provided these services. Asthe number of communications provid-ers in the United States grew. Congressdetermined that a commission withunified jurisdiction would serve theAmerican people more effectively.

The 1934 Communications Act com-bined the powers that the InterstateCommerce Commission and the FederalRadio Commission then exercised overcommunications under a single. Inde-pendent Federal agency.

The Communications Act of 1934 wasbased, in part, on the Interstate Com-merce Act of 1888. For example, the re-quirement for approval of constructionor extension of lines for railroads wastaken directly from the ICC Act. Priorto 1934. wire communications were reg-ulated by the same set of laws that reg-ulated the railroads. Radio commu-nicatlons were regulated under the 1927Federal Radio Act. In 1934. the FederalCommunications Commission was cre-ated to oversee both the wireline com-munications and radio communica-tions.

HeinOnline -- 3 Bernard D. Reams, Jr. & William H. Manz, Federal Telecommunications Law: A Legislative History of the Telecommunications Act of1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) including the Communications Decency Act S7881 1997

S 7882 CONGRESSIONAL RECORD - SENATEThe telecommunications industry

today Is a dynamic and Innovative In-dustry, with new technology being In-troduced on daily basis. The tele-communications industry, however, Isregulated under a set of laws that areantiquated and never designed to han-dle the challenges of today's industry.

Telecommunications laws and regu-lations are not able to adequately takeinto account the advent of tele-communications competition, and. In-deed. have slowed the Introduction ofcompetition into many segments of theIndustry. These laws did not con-template the development of fiber op-tics, the microchip, digital compres-sion, and the explosion of wireless serv-ices. It is time to revise and amend the1934 act to fit the new and future com-petitive telecommunications industry.

S. THE MODIFICATION OF FINAL JUDOMENTSince 1984, the Bell operating compa-

nies have been restricted from enteringvarious lines of businesses as a resultof the consent decree entered in theantitrust case. United States versusWestern Electric.

The consent decree, commonly re-ferred to as the modification of finaljudgment, or the MFJ. places the U.S.District Court for the District of Co-lumbia and Judge Harold Greene as theadministrator of the decree, and estab-lishes a procedure by which the Belloperating companies can obtain waiv-ers from the decree's restrictions.

Recent years have seen a prolifera-tion of legislative and judicial actionto change the provisions of the originalconsent decree that divested AmericanTelephone and Telegraph of its localexchange service and created the re-gional Bell operating companies. Cur-rently prohibited from providing longdistance service, manufacturing tele-communications equipment, and, upuntil July 1991. providing informationservices, the Bell operating companiesand others have long advocated openentry into these new lines of business,contending that such action would in-vlgorate the telecommunications mar-ketplace.

In opposition, certain consumer orga-nizations, electronic publishers, longdistance carriers, the Justice Depart-ment. and other industry groups overthe past few years have opposed entryon the grounds that the courts shouldadminister an antitrust consent decreeand that so long as the Bell operatingcompanies face little or no competitionin their core business of providing localtelephone service, they should not bepermitted to enter competitive lines ofbusiness.

During the Past 10 years a number ofwaivers 'have been granted, but theprocess has slowed In recent years.More fundamentally, the judicial proc-ess is necessarily limited: the districtcourts constitutional role is simply toapply the law and administer the de-cree. and not make informed policy de-cisions about how communications lawand the communications and computerindustry should develop.

Moreover. given the vulnerability ofthe telephone industry to selective.cherry-picking competition, It is likelythat the limited nature of today's com-petition will have a significant effecton the industry's revenues in general.and on local telephone rates in particu-lar.

Consequently, although the consentdecree served a useful purpose ini-tially, it no longer serves the public in-terest at this dynamic time in the eval-uation of the communications and in-formation industry. In place of a proc-ess that subjects the communicationsindustry to the terms of a consent de-cree entered 12 years ago and adminis-tered by a single district court, theCongress will reassert its proper policyrole and administer a new Federal pol-icy designed to promote competition,innovation, and protect consumers.

Prior to the implementation of theMFJ in 1984, as noted previously, AT&Twas the monopoly telecommunicationsprovider in the United States. AT&T'sLong Lines Department provided longdistance telephone service to virtuallyeveryone in the country. AT&T main-tained owership of the 22 Bell operatingcompanies, which provided local tele-phone service on a monopoly basis toapproximately 85 percent of the popu-lation

In addition, AT&T owned WesternElectric, which manufactured almostall the equipment needed for the oper-ation of the telephone network. AT&Talso owned Bell Telephone Labora-tories. Bell Labs, which conducted themost extensive research Involving hightechnologies and telecommunicationsof any industrial research center in theworld.

The roots of the MFJ go back over100 years. In 1882, Bell Telephone, thepredecessor of AT&T, designated West-ern Electric Co. as the exclusive manu-facturer of its patented telecommuni-cations equipment. During the early1900's Bell Telephone maintained a ma-jority interest in Western Electric; by1925 it had 100 percent owership of thecompany.

By that same year. Bell Telephoneestablished Bell Telephone Labora-tories to conduct its research and de-velopment. The Bell system's rapid ex-pansion triggered interest from the De-partment of Justice and the InterstateCommerce Commission-which thenhad jurisdiction over interstate tele-phone service-for possible antitrustviolations.

Following other antitrust action, in1974, the Department of Justice filed anantitrust suit against AT&T. The suitclaimed that AT&T mlsused its Bellsystem monopoly of the local exchangenetwork to restrict competition in themanufacturing of telecommunicationsequipment, and in the market forinterchange service through refusal toprovide competitors with interconnec-tion to the local networks and, there-fore, access to end customers. Afteryears of litigation, the case was settledIn 1982 with- entry of a modification of

June 7, 1995final Judgment by Judge HaroldGreene. which was negotiated by AT&Tand the Justice Department.

The debate about the proper role ofthe Bell operating companies in thecommunications Industry has oftenovershadowed the larger question ofwhich government bodies should be es-tablishing national telecommuni-cations policy. Courts make rulings, asthey should, solely on the narrow ques-tions confronting them. Consequently,courts do not and cannot ensure thatbroader concerns about sound eco-nomic goals are fully considered.

As a result of these concerns, whichhave been fueled by a period ofglobalization and Intense internationalcompetition In the telecommuni-cations industry, I believe, and thecommittee believes that we in Con-gress as the expert in the oversight ofthe telecommunications industry,should have authority to manage theseissues In order to develop tele-communications and information pol-icy In a coordinated manner.

At this juncture in the evolution ofthe communications Industry the Con-gress should be the locus of authorityon questions Involving telecommuni-cations competition, deregulation andconsumer protection. We have the abil-ity to see a more complete spectrum ofissues, as compared to the narrow viewof discrete issues which a court and theDepartment to Justice necessarilytakes in the context of litigation.Moreover, we can consider broad policygoals in establishing and administeringtelecommunications policy.

C. REGULATroY LAGWhile America is still the world's

leader in information technology, weare no longer in the position of beingunchallenged. Historically we were aneconomic and technological Gulliverstanding astride a world of competitiveLilliputians. But that's just not trueany longer. America-especially we inthe American legislative and regu-latory system-must respond and re-spond now.

At a minimum, government shouldtry to avoid doing harm. Unfortu-nately, government and regulatorshave a rather sorry history of slowingthe introduction of new technologiesand competition. The examples of thisregulatory lag are numerous and alltoo common. Regulatory lag means wedon't get investment stimulus thatcompetition and new entry spur and,more importantly, the public is deniednew service and product options.

1. Competition in customer premisesequipment:

Competition and open entry firstcame to telecommunications with re-spect to customer premises equipment(CPE). This competition, however, wasinitially resisted by the FCC. For manyyears. AT&T prohibited customers oranyone else from connecting any equip-ment to its telephone network or totelephones themselves that AT&T didnot supply. Bell tariffs forbade all for-eign attachments-meaing equipment


June 7, 1995 CONGRESSIONAL RECORD- SENATE

not provided by Bell itself. Unfortu-nately, regulators endorsed this anti.Competitive practice for almost 70years.

Through prodding from the Federalcourts. the commission eventually al-lowed devices deemed not injurious tothe telephone network to be connectedto the network. This was only after thecourts conferred on subscribers theright to use their telephones in a waythat had private benefits without beingpublicly detrimental

It took the Commission more than adecade to extend the new law to in-clude equipment that was connectedelectronically, not just physically, tothe network. The Commission limitedrestrictions on interconnection to pro-tecting the network from harm. Thedetails of equipment Interconnectionwere not fully implemented until thecommission adopted part 68 of its rulesin 1975. nearly 20 years after the origi-nal court determination so that car-riers themselves would be free to com-pete on equal terms in the open mar-ket.

2. Competition in long distance serv-Ices:

The commission was equally slow inauthorizing interexchange-or long dis-tance-competition. In the 1940s. longdistance service was provided exclu-sively over wires, and the same basiceconomics that seemed to precludecompetition in local service appliedequally to long distance service. Thedevelopment of microwave and sat-ellite technologies radically changedthat picture, making competition bothpractical and Inevitable. The first few.faltering steps In the direction of acompetitive marketplace, were takenby the commission in 1959 but it wasn'tuntil 1980 that the commission for-mally adopted an open entry policy forall Interstate services.

Competition in the Interexchangemarket developed slowly as the com-mission gradually and incrementallyresponded to changes in market pres-sures, technology, and consumer de-mand for new and varied long distanceservices. Microwave relay technology.developed by Bell Laboratories duringWorld War II. prompted the beginningof IXC competition by offering a via-ble. less expensive alternative toAT&Ts existing wlreilne facilities fortransmitting long distance commu-nications.

The commission first permittedentry of non-AT&T services for provi-sion of private services. In 1959. theFCC. finding a need for private servicesand foreseeing no risk of harm to es-tablished services, authorized certainprivate companies to provide micro-wave services and to establish privatemicrowave networks for their own in-ternal use. Although described as anarrow, limited decision, the AbOve 890decision prompted a flood of applica-tlons from private organizations seek-ing authorization to establish privatemicrowave long-distance networks. It

also brought pressure for entry intoother fields.

MCI applied to the FCC for authorityto provide private, non-switched com-munications service between St. Louisand Chicago. This service still did notinvolve interconnection with AT&T'spublic network. In 1969, the commis-sion approved MCI's limited point-to-point system, saying it was designed tomeet the interoffice and interplantcommunications needs of small busi-nesses. Again, however, the decisionwas narrow.

The commission was concerned aboutpermitting unregulated carriers to en-gage in creamskimming. and it gen-erally still adhered strongly to the phi-losophy that the public network shouldremain a regulated monopoly. None-theless, it prompted a deluge of appli-cations seeking authorization of simi-lar microwave facilities, reflecting apublic demand for competitive alter-natives.

A few years later, the commissionformalized a policy of allowing entry ofnew carriers into the private line. orSpecialized Common Carrier (SCC).field to provide alternatives to certaininterstate transmission services tradi-tionally offered only by the telephonecompany. The commission did not.however, define the scope of services itwas opening up to competition, a mat-ter that would prove troublesome aspressures for increased competitionrose.

Although each time emphasizing thelimited nature of its decision, the com-mission had. over the course of 2 dec-ades. continued to approve the entry ofnew providers of telephone services.albiet at times reluctantly and withprodding by the courts, and only inprovision of private line services.

When it came to permitting directcompetition with AT&Ts publicswitched long distance service, theCommission's reluctance hardened.MCI had eventually obtained approvalfor its private line offerings, but whenit later proposed new switched servicein direct competition with AT&T'sMTS services, the FCC refused ap-proval.

In doing so, the Commission reiter-ated that its Specialized Common Car-rier decision was meant to allow entryonly into private line service and notinto direct competition with the publicnetwork. The Court of Appeals, how-ever. reversed the commission's failureto approve MCI's proposed offering, re-jecting the commission's argumentthat its Specialized Common Carrierdecision authorized only private lineservices.

After Execunet 1, the commissionstill refused to order AT&T to inter.connect with MCI. The Court of Ap-peals, in Execunet I. then explicitlymandated interconnect, emphasizingthat Specialized Common Carrier was abroad decision to permit competitionin the long distance market and thatsuch competition necessarily required

87883AT&Tl to provide physical interconnec-tion to the public network.

The Execunet decisions opened vir-tually all interstate IXC markets tocompetition. In response to this newjudicially imposed reality, the FCClowered entry barriers, eliminatedrules prohibiting sharing of heavy use.bulk rate circuits, and directed AT&Tto permit the resale and sharing ofthese circuits by competitors.

During this same era, the commis-sion approved interstate packet-switched communications network of-ferings that introduced value-addednetworks which resold data processingfunctions through basic private linecircuits, and unlimited resale andshared use of private line services andfacilities. Tariff restrictions againstthe resale and shared use of publicswitched long distance services wereremoved in 1980. Since this time. theFCC has strongly supported the growthof competition.

The resulting competition has hadwell documented public benefits ofgreat scale and scope.

3. Enhanced Services:The MFJ Consent Decree's informa-

tion services restriction required theBell Companies to seek waivers for theprovision of voice answering services,electronic mail. videotext, electronicversions of Yellow Pages directories,E911 emergency service, and directoryassistance services provided to cus-tomers of nonassociated independenttelephone companies.

The restriction on the provision ofvoice mail services was lifted in thelate 1990's. In the first 2 years of RSOCparticipation, the voice mail equip-ment market grew threefold and pricesdeclined dramatically. Between 1988(when the RBOCs were permittedentry) and 1989. the market for voicemail services grew by 40 percent, withtotal revenues rising from $452 millionto S65 million.

Prices have also fallen. For example.telephone companies today charges aslittle as S5 per month for its residentialvoice messaging service. Similar serv-ices in 1987 cost 2 to 10 times more.Output has risen. The U.S. market forvoice mail and voice response equip-ment increased from =300 million in1988 to over $900 million in 1989. Thenumber of voice message mailboxes in-creased from 5.3 million in 1987 to 7.7million in 1988 to 11.6 million in 1989.4. Spectrum Allocation:The introduction of both FM radio

and television was sigi'ficantly de-layed by years of FCC equivocationover which bands would be assigned towhich uses. Equally egregious delayspreceded the introduction of cellulartelephone service.

FM Radio. FM radio technology wasinvented in 1933, but did not receivewidespread use until the 1960s. Lack ofFCC support contributed to FM's lackof popularity. One glaring example oc-curred in 1945. By 1915. 500.000 FM re-ceivers had been built but were all ren-dered aieiess when :he FC decidod to


S 7884 cOmove FM channels to a different spec-trurn band. FM languished for so longthat the inventor of FM eventuallycommitted suicide in despair.

TV. The modern television was devel-oped in the 1930s and exhibited by RCAin 1939, but the FCC took 2 more yearsto adopt initial standards. It was thendiscovered that channel allocation wasinadequate, and the FCC froze all appli-cations for TV licenses for 4 years,until 1952. In the year after the freezealone, the number of stations tripled.It took another 10 years before regula-tions for UHF/VHF frequencies were 11-nalized.

Cellular. In 1947 Bell Labs developedthe concept of cellular communica-lions and by 1962. AT&T had developedan experimental cellular system. Ittook another 15 years for regulation tocatch up with the new technology; in1977 the FCC finally granted IllinoisBell's application to construct a devel-opmental celluar system in Chicago.The FCC took 8 years to finalize theboundaries of cellular service areas.The delay cost the cellular industry anestimated £86 billion.

5. Out of Region Competition by BellCompanies:

The Department of Justice, with theconcurrence of Judge Greene, origi-nally held that the MFJ consent decreeforbade the RBOCs from providingservices outside their own regions. TheD.C. Circuit however overruled themboth and found that the BOCs are notrestricted to providing service onlywithin their home territories; they arefree to offer intraLATA services any-where in the country. The RBOCe nowcompete heavily against one another incellular service. The provision of otherlocal services, however, is impeded bythe Interexchange restriction, whichthe Department and the decree courthave so far refused to lift even outsidethe service areas of the individualRBOCs.

6. Bell Company Manufacturing:In June 1991. outages in 5 states and

the District of Columbia forced BellAtlantic and other Bell companies towork closely with a switch manufac-turer to determine the cause of theoutages and prevent their recurrence.The Department of Justice told BellAtlantic that, notwithstanding theemergency. Bell Atlantic could notwork with the manufacturer without awaiver of the decree's manufacturingrestriction. On July 9, 1991, JudgeGreene ordered a hearing with Bell At-lantic. the Department of Justice.AT&T. and MCI and granted the waiveron July 10. 1991.

7. Cable Networks:The FCC-at the behest of broad-

casters-crppled and almost killedcable television, by means of a numberof regulatory restrictions such anti-si-phoning rules. The commission's statedjustification for restricting cable wasthat It did not want to jeopardize thebasic structure of over-the-air tele-vision.

8. Video Dialtone:

NGRESSIONAL RECORD-SENATE

By defining video dialtone service ascommon carriage, not broadcast, theFCC has successfully preempted a raftof State cable regulation and franchisefees. It has also subjected these serv-ices to a raft of regulations. Telephonecompanies have been invited to providea basic platform that delivers videoprogramming and basic adjunct serv-ices to end users, under Federal, com-mon-carrier tariff.

Video dlaltone providers must offersufficient capacity to serve multiplevideo programmers; they must makeprovision for increased programmer de-mand for transmission services overtime; and they must offer their basicplatform services on a nondiscrim-inatory basis. The dial tone moniker ismisleading; the video connections arestrictly between the telco central of-fice and customers. But the number ofprograms offered from a video dialtcneserver can be expanded indefinitely.The commission has attempted tomaintain strict separation between theprovision of video dialtone conduit, andprovision of the programming itself.Video dialtone as defined by the com-mission is plainly more like telephonecarriage than like cable or broadcast-ing.

9. Direct Broadcast Satellite:When the FCC first considered licens-

ing Direct Broadcast Satellite service(DBS) in the early 1980s. the NationalAssociate of Broadcasters raised thespecter of siphoning. DBS would resultin the loss of service to minorities.rural areas, and special audiences bysiphoning programming. fragmentingaudiences, and reducing advertisingsupport. It would rob free local tele-vision service of advertising revenues.UHF stations would be especiallythreatened. The cable television indus-try joined in the assault on DBS by de-nying access to programming. Theservice has only recently become avail-able.

10. Computer and Software:AT&T-which invented the transistor

and in the 1960s and 1970s developedsome of the most powerful computers-was barred for years (by the 1956 anti-trust consent decree) from competingin the computer market against IBM.The upshot was that IBM completelydominated computing for many years.AT&T had also developed the Unix op-erating system around which theInternet was built--it couldn't com-mercialize that aggressively either.Now Microsoft is being accused of mo-nopolizing the industry with the MS-DOS and Windows alternatives.

11. Delay In RBOCC Information andInter-LATA Services Relief;

In 1987, the Justice Department rec-ommended the removal of the informa-tion services restriction on the RBOCs.This was not opposed by AT&T. In Sep-tember of 1987. Judge Greene permittedthe RBOCs to enter non-telecommuni-cations businesses without obtaining awaiver, but did not lift the informationservices ban.

On April 3, 1990. the U.S. Court of Ap-peals for the District of Columbia re-

June 7, 1995manded Judge Greene's decision tocontinue the ban on RBOC informationservices. Eventually. on July 25. 1991.Judge Greene relented and permittedRBOCs to provide information services.RBOCs were finally granted the rightto provide information services morethan 4 years after the Justice Depart-ment recommended that the restric-tion be removed.

There have been numerous examplesof egregious delays in granting evennon-controversial decree waivers. Forexample. Bell Atlantic sought a waiverin 1985 to allow it to serve Cecil Coun-ty. Maryland as part of its Philadel-phia cellular system. Bell Atlantic sub-mitted another waiver to provide cel-lular service to 3 New Jersey countiesthrough its Philadelphia-W:i'rngtonsystem on October 24, 1986.

These waivers were necessary to theprovision of uninterrupted cellularservice between Washington and NewYork. Judge Greene finally granted thesecond waiver on February 2, 1989. al-most two-and-a-half years after it warfiled and the Cecil County waiver wasnot approved until 1991. nearly 5 yearafter it was first sought.

RBOCs have filed more than 200 MFJwaivers that Judge Greene has ruledon. These waiver requests first go tothe Department of Justice, and thenmove to Judge Greene. Unfortunately,the waiver process is also very timeconsuming. The average age of anRBOC waiver- request pending beforethe Department of Justice is about 2years old.

Once the Justice Department passesthe waiver on to Judge Greene. it takesapproximately 2 years before JudgeGreene rules on It. This has made theaverage waiver process more than 4years to work its way through the sys-tem.

D. THE NEW COMPErrVE LANDSCAPEThe competitive landscape is chang-

ing. and, if Congress does not act tooverhaul the telecommunications legallandscape, consumers will once againbe denied benefits of competition andnew technology. Wireless services haveexploded since the Bell System break-up. Wireless counted less than 100.000customers at that time.

Today. there are more than 25 mil-lion cellular subscribers. Additionally.companies just spent more than $7.7billion for the major trading area PCSlicenses. There Is obviously a marketfor more wireless communications.Cable has more than doubled its sub-scriber base since the MFJ.

For local telephone services. Statessuch as New York, nlinois. and Califor-nia, have been leading the way in open-ing the local market to competition.Competitive access providers did noteven exist at the time of the MFJ.Today, CAP's are in 72 cities, and havebuilt 133 competing networks. Rapidchanges in technology have brokendown the natural monopoly Congressbased the 1934 act on. Competition isstill slow to fully develop in someareas, and in some markets.


June 7, 1995 CONGRESSIONAL RECORD- SENATEHistory teaches us that, under exist-

ing law. the FCC and the courts havenot been able to respond to market andtechnology changes In an expeditiousmanner. This delay prevents theconsumer from gaining the benefits ofcompetition. such as lower rates, bet-ter services, and deployment of newand better technologies.

The courts. FCC and Justice Depart-ment have been micro-managing thegrowth of competition in the tele-communications industry. That is whythe committee believes It is incumbentupon Congress to exercise its rightfulauthority in this area, and pass legisla-

-tion that will open the entire tele-communications industry to full com-petition. Without legislation, it may beyears. or decades, before America sees

-the benefits of a truly open and com-petitive telecommunications industry.

Meanwhile our foreign competitors:are moving ahead aggressively. InGreat Britain, cable-telco competitionIs growing rapidly. The major cableplayers In the UK are. in fact. Amer-ican telco and cable companies. Pricesfor telephony provided over cable linesare 10 to 15 percent lower than thatprovided over British Telecoms net-work. Here in the United States bycontrast, the combination of the 1984cable-telco prohibition and entry bar-riers into the local telephone marketprevent such competition from devel-oping.

In Japan the government Is providingInterest free loans to cover 30 percentof the Investment* for Japan'sbroadband optical fiber network. Alsoplanned are favorable tax measures foroptical fiber and related investments.Meanwhile in the United States whenAmerican companies say they'll investtheir own money in new networks, thegovernment at beth the Federal andState level visits endless regulatoryhassle on the proponents.

L IMPORTANCE OF TELECOeMnICATIONS TOECONOMIC oROWTH

At the heart our actions in the 104thCongress is private sector economicgrowth and private sector jobs throughless Government regulation. Toachieve our goal, we need increasedcapital Investment.

Telecommunications Is an especiallyimportant sector to spur investmentbecause It provides a big multiplier ef-fect. The Japanese Government has es-timated that for each dollar-or yen-invested in telecommunications, youget 3 dollars' worth of economicgrwth-a- real telecom kicker.

America's edge has always been ourgrasp of technology. Today. tele-communications and computers are atthe cutting edge. Americans todayhave the broadest choice and bestPrices for these information economyproducts and services In the world.

For instance, 98 percent of Americanhomes have television and radio, 94percent a telephone. Close to 80 percenthave a VCR, while 66 percent subscribeto cable TV-98 percent have the op-tion. We are rapidly approaching 40

percent of homes with PC's and 36 per-cent with video games. Multimedia andCD-ROM sales are flourishing.

The Internet and computer on-lineservices are reaching millions of Amer-icans. DBS has been successfullylaunched with 150 channels of digitalvideo and audio programming services.A vibrant new wireless communica-tions industry is growing with cel-lular-25 million subscribers-and pag-ing-20 million users-soon to be joinedby Enhanced Specialized Mobile Radio.Global Satellite Systems, and PersonalCommunications Services.

First. Digitization and industry con-vergence meet--Regulatory apartheid:

Telecommunications policy in Amer-ica. under the 1934 CommunicationsAct. has long been based on the nowfaulty premise that information trans-mitted over wires could be easily dis-tinguished from information transmit-ted over the air. Different regulatoryregimes were erected around these dif-ferent information media.

This scheme might best be describedas "regulatory apartheid-each tech-nology had its own native homeland.These once neat separations and dis-tinctions between the media no longermake sense.

The explanation for the rapid conver-gence of previously distinct media lieswith digitization. Digitization allowsall media to become tanslatable intoeach other. As Congress' Office of Tech-nology Assessment stated in a recentstudy: "A movie, phone call. letter, ormagazine article may be sent digitallyvia phone line, coaxial cable, fiber-optic cable, microwave, satellite, thebroadcast air, or a physical storage me-dium such as tape or disk."

The same technological phenomenonto eweep.the computer industry duringthe 1980's is now sweeping the tele-communications industry-we canlearn valuable lessons from the experi-ence in the computer industry.

Second. Computers and phones:By the early 1980's. AT&T and IBM

were two of the largest and more pow-qrful companies in the world. On Janu-ary 8. 182, the Federal Governmentchose two different destinies for themammoth companies. The Governmentagreed to dismiss its case against IBM;by contrast, AT&T would be divested,freed from all antitrust quarantinesand so permitted to enter the computerbusiness.

At the time, Intel was already over adecade old. Apple was growing fast.And IBM had Just Introduced a brand-new machine. based on an Intelmicroprocessor. Big Blue's new ma-chin-its personal computer-wassmall and beige. Three weeks after thebreak-up of AT&T was complete, inJanuary 1984. Steve Jobs stepped outon the podium at the annual stockhold-ers' meeting of Apple Computer andunveiled the new Macintosh.

The impact of unfettered competi-tion has devastated IBM. The onlythriving parts of Its hardware businesstoday are at the bottom end, where Big

S 7885Blue's small beige machines have beenopen, standardized, and widely copiedfrom the day they were Introduced. Be-tween 1985 and 1992. IBM shed 100.000employees. BM's stock, worth $176 ashare in 1987, collapsed to $52 by year'send 1992. In 1992, the New York Timeswould announce "The End of I.B.M.'sOvershadowing. Role." "IBM's prob-lems," the Times noted, "are due to Itsfailure to realize that its core business.mainframe computers. had been sup-planted by cheap, networked PC's andfaster networked workstations." In adesperate scramble for survival. IBM isbreaking itself into autonomous unitsand spinning off some of its more suc-cessful divisions. IBM Itself is only oneof many first-tier vendors of PC'stoday, with a market share of 8 per-cent.

The Impact on the computer indus-try. however, has been intense com-petition spawning rapid technologicaladvancement. A $5.000 PC in 1990--fea-turing Intel's 80486 running at 25 MHz-had the processing power of a V50,000minicomputer in the mid-1980's, and amillion-dollar mainframe of the 1970's.Five years later, that same 05.000 PC Istwo generations out of date--with athird new generation on the horizon.Systems with nearly twice the process-ing power of that 1990 system-usingIntel's 486DX2-68 chip--are availablefor under 31.500. and Intel runs adver-tisements encouraging owners of thesechips to upgrade to newer ones. Sys-tems with more than twice the process-ing power of that system-featuringIntel's 120 MHz Pentium chip--are nowavailable, most for under $5.000. Intel Is'currently promising faster and fasteriterations of its Pentium chip&-run-ning at 133 and 150 MHz-before It re-leases commercial versions of its next-generation PS, which promises to movethe price-performance curve astonish-ingly farther out than today. The com-puter Industry is still firmly In thegrip of Moore's Law, which holds thatthe number of transistors that can beplaced on a microchip-a rough esti-mator of the power of the chip-dou-bles every 18 months.

The upshot Is that consumers canpurchase systems with four times thepower of the 1O0's mainframes at one-fiftieth of the price. Put another way.systems today have over 200 times thevalue of systems in 1984. By contrast.long-distance calls today representonly twice the value of long-distancecalls in 1984. Had price-performancegains of the same magnitude occurredin the long-distance market since 1984,the results would have been equallystunning. For example, in 1984. a 10minute call at day rates between NewYork and Los Angeles cost a little lessthan S5, today it costs S2.50. Had com-petition and technological advances de-veloped in the long distance market asit did in the computer market, thatsame call would cost less than 3 cents.Alternatively, a 10 minute call fromNew York to Japan-cost roughly S17in 1984 and 314 today. Had long-distance


S7886service advanced as rapidly as the per-sonal computer industry, that callwould cost less than 9 cents.

Third. Lessons learned:Yet as the United States stands at

this critical crossroads-the dawn of anew era in high technology, entertain-ment, information and telecommuni-cations-America continues to operateunder an antiquated regulatory regime.Our current regulatory scheme inAmerica simply does not take manydramatic technological changes intoaccount.

Progress is being stymied by a mo-rass of regulatory barriers which bal-kanize the telecommunications indus-try into protective enclaves. We needto devise a new national policy frame-work-a new regulatory paradigm fortelecommunications-which accommo-dates and accelerates technologicalchange and innovation.

The very same digitization phenome-non supports the prospect of competi-tion by telephone companies andagainst telephone companies, by cablecompanies and against cable compa-nies, by long distance companies andagainst long distance companies. In-cumbents on opposite sides of the tra-ditional regulatory apartheid schemehave quite different views about whichkind of competition should come first.

If Congress cannot come to gripewith digitization and convergence, theprivate sector cannot be expected towait. Indeed. the multifaceted dealsand alliances of the last several yearsindicates that industry is not waiting.

Look at a short list of some of thesedeals:

US West/rime Warner. The world'slargest entertainment company, andsecond ranking cable company,teaming up with the RBOC for thewestern United States.

AT&T/McCaw. The biggest long dis-tance and equipment maker joiningwith the biggest cellular carrier. Thatcame on the heels of AT&T acquiringone of the biggest computer compa-nies--NCR.

SprintCable Alliance. The third larg-est long distance company-and onlycompany with local, long distance andwireless capability-joining cable'sTCI. Comcast, Cox, and Continental toform an alliance to provide a nation-wide wireless communications serv-Ice-and the prospect for JoiningSprint's broadband long distance lineswith cable's high capacity local facili-ties.

Microsoft. There has been an almostendless series of strategic alliancesbeing struck between Microsoft, theworld's largest computer software com-pany, and companies in numerous in-formation and telecommunicationsbusinesses for the purpose of deliveringinteractive services.

HDTV Grand Alliance. The compa-nies teaming up to bring HDTlV toAmerica include AT&T-the largesttelecom equipment maker--General In-strument-the largest cable TV equip-ment maker-and Phllipas-the world'slargest TV set maker.

CONGRESSIONAL RECORD- SENATEIn addition, layered on top of these

and many other deals and alliances isthe globalization phenomenon-abreakdown of geographic barriers: allthe RBOC's have foreign investments;British Telecom and MCI in partner-ship; Sprint planning the same withFrance Telecom and DeutscheTelecom; AT&T also working withSingapore Telecom. Cable & Wireless'sHong Kong Telephone. and the Nether-lands Telecom.

We can no longer keep trying to fiteverything into the old traditional reg-ulatory boxes-unless we want to incurunacceptable economic costs, competi-tiveness losses, and deny Americanconsumers access to the latest prod-ucts and services.

Since becoming chairman of the com-mittee I have been actively workingwith leaders in the telecommuni-cations and information industry to re-form this outmoded and antiquated.regulatory apartheid system in orderto make exciting new information,telecommunications and entertain-ment services available for America.

It is time for American policymnakersto meet this new challenge much theway an earlier generation respondedwhen the Russians launched Sputnik.The response must be rooted in theAmerican tradition of free enterprise,de-regulation. competition, and openmarkets-to let technology follow orcreate new markets, rather than Gov-ernment micromanaging and stuntingdevelopments in telecommunicationsand information technology.

By reforming U.S. telecommuni-cations policy we in Congress have anunparalleled opportunity to unleash adigital, multimedia technology revolu-tion in America. By freeing Americantechnological know-how, we .can pro-vide Americans with immediate accessto and manipulation of a bounty of en-tertainment, informational, edu-cational. and health care applicationsand services.

Passing S. 652. The Telecommuni-cations Competition and DeregulationAct of 1995, will have profound implica-tions for America's economic and so-cial welfare well into the 21st Century.

Fourth. Universal service:An additional, but often overlooked.

reason for immediately moving for-ward with S. 652 and telecommuni-cations regulatory reform concerns theproblems affecting the centerpiece ofAmerican communications policy-maintaining universal voice telephoneservice at reasonable and affordableprices.

The explicit subsidies--those ofknown magnitude and direction--canand should be maintained. These arethe "'Universal Service Fund." the"Link-Up America" program, and oth-ers the FCC made part of the overallaccess charge system.

The implicit--or hidden-subsidiesare much more at risk. The presentscheme cannot be maintained whennew technology is changing so rapidiyand customers are provided with anever-increasing buffet of choices. This

June 7, 1995implicit subsidy scheme must be re-formed and fixed. We cannot afford towait any longer to start. that reformprocess.

F. WHAT 5. 52 DOES: CHIEF REFORM FEATURES

First. Universal telephone service:The need to preserve widely available

and reasonably priced telephone serv-ice is one of the fundamental concernsaddressed in The TelecommunicationsCompetition and Deregulation Act of1995. The legislation as reported re-quires all telecommunications carriers

to contribute to the support of univer-sal service. Only telecommunicationscarriers designated by the FCC or aState as "essential telecommuni-cations carriers" are eligible to receivesupport payments.

The bill directs the FCC to Institute

and refer to a Federal-State joint boarda proceeding to recommend rules toImplement universal service and to es-tablish a minimum definition of uni-versal service. A State may add to thedefinition for its local needs.

Second. Local telephone competition:The Telecommunications Competi-

tion and Deregulation Act of 1995 re-forms the regulatory process to allowcompetition for local telephone serviceby cable companies, long distance com-panies, electric companies, and otherentities.

Upon enactment the legislation pre-empts all State and local barriers tocompeting with the telephone compa-nies. In addition It requires local ex-change carriers [LEC's] having marketpower to negotiate, in good faith,interconnection agreements for accessto unbundled network features andfunctions at reasonable and non-discriminatory rates. This would allowother parties to provide competitivelocal telephone service through inter-

connection with the LEC's facilities.The bill establishes minimum stand-ards relating to types of Interconnec-tion that a LEC with market powermust agree to provide if requested, in-cluding: unbundled access to networkfunctions and services, unbunded ac-cess to facilities and information, nec-essary for transmission, routing, and

interoperability of both carriers' net-works. interconnection at any techno-logically feasible point, access to poles,ducts, conduits and rights-of-way, tele-phone number portability, and local di-aling parity.

As an assurance that the parties ne-gotiate in good faith, either party mayask the State to arbitrate any dif-ferences, and the State must reviewand approve any intercounection agree-ment.

The bill requires that a Bell companyuse a separate subsidiary to provide

certain information services, equip-ment manufacturing, in-regioninterLATA services authorized by the

FCC, and alarm monitoring. In addi-tion a Bell company may not market asubsidiary's service until the Bell com-

pany is authorized by the FCC to pro-vide in-region InterLATA services.


June 7, 1995 CONGRESSIONAL RECORD-SENATES. 652 also ensures that regulations

applicable to the telecommunicationsindustry remain current and necessaryin light of changes in the industry.Fiint. the legislation permits the FCCto forbear from regulating carrierswhen forbearance is in the public inter-est. This will allow the FCC to reducethe regulatory burdens on a carrierwhen competition develops, or whenthe FCC determines that relaxed regu-lation Is in the public interest. Second,the bill requires a Federal-State jointboard to periodically review the uni-vereal service policies. Third, the FCC.with respect to its regulations underthe 1934 act. and a Federal-State jointboard with respect to State regula-tions. are required in odd-numberedyears beginning in 1997 to review allregulations issued under the act orState laws applicable to telecommuni-cations services. The FCC and jointboard are to determine whether anysuch regulation Is no longer in the pub-lic interest as a result of competition.

The bill modifies the foreign owner-ship restrictions of section 310 of the1934 act. if the FCC determines that theapplicable foreign government providesequivalent market opportunities toU.S. citizens and entities.

The bill also requires that equipmentmanufacturers and telecommuni-cations service providers ensure thattelecommunications equipment andservices are accessible and usable byindividuals with disabilities, if readilyachievable, a standard found in theAmericans with Disabilities Act.

Third. Long distance relief for theBell companies:

The Telecommunications Competi-tion and Deregulation Act of 1995 es-tablishes a process under which the re-gional Bell companies may apply tothe FCC to enter the long distance orinterLATA market. Since the 1984breakup of AT&T. the Bell companieshave been prohibited from providingservices between geographical areasknown as LATAs. [Local Access andTransport Areas]. The legislationreasserts congressional authority overBell company provision of long dis-tance and restores the FCC authorityto set communications policy overthese issues. The Attorney General hasa consulting role.

The reported bi lrequires Bell localcompanies and other LEC's havingmarket power to open and unbundletheir local networks, to increase thelikelihood that competition will de-velop for local telephone service. Its0 sets forth a competitive checklist

of unbuondling and interconnection re-quirements.

If a Bell company satisfies the com-petitive checklist, the FCC is author-ited to permit the Bell company to pro-vide interLATA services originating inareas where it provides wireline localtelephone service. if the FCC also findsthat Bell company provision of suchinterLATA service is In the public in-terest. Out-of-region interLATA serv-

ices may be provided by Bell companiesupon enactment.S. 652 allows the Bell companies to

provide InterLATA services in connec-tion with the provision of certain otherservices immediately, with safeguardsto ensure that the Bell companies donot use this authority to provide other-wise prohibited interLATA services.For example the reported bill requiresa Bell company to lease facilities fromexisting long distance companies if Ituses interLATA service in the provi-sion of wireless services and certain in-formation services.

Finally, the bill requires a Bell com-pany providing in-region interLATAservice authorized by the FCC to use aseparate subsidiary for such services.

Fourth. Manufacturing authority forthe Bell companies:

The judicial consent decree that gov-erned the breakup of AT&T in 1184, theMFJ. also prohibited the Bell compa-nies from manufacturing telephonesand telephone equipment. The AT&Tbreakup Itself, the globalization of thecommunications equipment market.the concentration of equipment suppli-ers, the increasing foreign penetrationof the U.S. market, and the continueddispersal of equipment consumptionhave greatly diminished any potentialmarket power of the Bell companiesover the equipment market.

The bill permits a Bell company toengage in manufacturing of tele-communications equipment once theFCC authorizes the Bell company toprovide interLATA services. A Bellcompany can engage in equipment re-search and design activities upon en-actment.

In conducting Its manufacturing ac-tivities, a Bell company must complywith the following safeguards:V A separate manufacturing affiliate.

Requirements for establishing stand-ards and certifying equipment.

Protections for small telephone com-padies-a Bell manufacturing affiliatemust make its equipment available toother telephlone companies without dis-crimination or self-preference as toprice delivery, terms, or conditions.

Fifth. Cable competition, videodialtone and direct-to-home satelliteservices:

The bill permits telephone companiesto compete against local cable compa-nies upon enactment, although until Iyear after enactment the FCC would berequired to approve Bell company plansto construct facilities for common car-rier video dialtone operations. The billalso removes at enactment all State orlocal barriers to cable companies pro-viding telecommunications services,without additional franchise require-ments.

The reported bill does not requiretelephone companies to obtain a localfranchise for video services as long asthey employ a video dialtone systemthat is operated on a common carrierbasis, that is. open to all programmers.If a telephone company provides serv-tce over a cabla system-that is. a sys-

S 7887tem not open to all programmers-thetelephone company will be treated as acable operator under title VI of the 1934act.

Whether a telephone company uses avideo dialtone network or a cable sys-tem, it must comply with the samemust-carry requirements for localbroadcast stations that currently applyto cable companies. A separate subsidi-ary is not required for a Bell companycarrying or providing video* program-ming over a common carrier platformif the company provides nondiscrim-inatory access and does not cross-sub-sidize its video operations.

The bill maintains rate regulationfor the basic tier of programmingwhere the cable operator does not faceeffective competition--defined as theprovision of video services by a localtelephone company or 15 percent pene-tration by another muitichannel videoprovider. The bill minimizes regulationof expanded tier services.

Specifically the bill eliminates theability of a single subscriber to initiateat the FCC a rate complaint proceedingconcerning expanded tier services. Inaddition, the FCC may only find ratesfor expanded tier service unreasonable,and subject to regulation, if the ratessubstantially exceed the national aver-age rates for comparable cable pro-gramming services.

States may impose sales taxes on di-rect-to-home satellite services thatprovide services to subscribers in theState. The right of State and local au-thorities to impose other taxes on dl-rect-to-home satellite services is lim-ited by the bill.

Sixth. Entry by registered utilitiesinto telecommunications:

Under current law. gas and electricutility holding companies that are notregistered may provide telecommuni-cation services to consumers. Theredoes not appear to be sufficient Jus-tiflcation to continue to preclude reg-istered utility holding companies fromproviding this sam- x.ompetition.

The bill provideb tnat affiliates ofregistered public utility holding com-panies may engage in the provision oftelecommunications services, notwith-standing the Public Utility HoldingCompany Act of 1935. The affiliate en-gaged in providing telecommunicationsmust keep separate books and records.and the States are authorized to re-quire independent audits on an annualbasis.

Seventh. Alarm services:The bill prohibits a Bell company

from providing alarm monitoring serv-ices. Beginning 3 years after enact-ment. a Bell company may providesuch services if it has received author-ization from the FCC to provide in-re-gion interLATA service. The bill re-quires the FCC to establish rules gov-erning Bell company provision ofalarm monitoring services. A Bell com-pany that was in the alarm servicebusiness as of December 31. 1994 is al-lowed to continue providing that serv-ice. as long as certain conditions aremet.


8 888lighth: Spectrum flexibility and re-

ulgiotr reform for broadcastersIf the FCC permit& a broadcast tele-

vision licensee to provide advanced tel-evision services, the bill requires theFCC to adopt rules to permit suchbroadcasters flexibility to use the ad-vanced television spectrum for ancil-lary and supplementary services, If thelicensee provides to the public at leastone free advanced television programservice. The FCC is authorized to col-lect an annual fee from the broadcasterIf the broadcaster offers ancillary orsupplementary services for a fee to sub-scribers.

A single broadcast licensee is per-mitted to reach 35 percent of the na-tional audience, up from the current 25percent. Moreover. the FCC is requiredto review all of its ownership rules bi-ennially. Broadcast license terms arelengthened for television licenses from5 to 10 years and for radio licenses from7 to 10 years. Finally, new broadcast li-cense renewal procedures are estab-lished.

Ninth. Obscenity and other wrongfuluses of telecommunications:

The decency provisions In the re-ported bill modernize the protectionsin the 1934 act against obscene, lewd.'indecent, and harassing use of a tele-phone. The decency provisions increasethe penalties for obscene, harassing.and wrongful utilization of tele-communications facilities, protectfamilies from uninvited cable progran-moing which is unsuitable for children.and give cable operators authority torefuse to transmit programs or por-tions of programs on public or leasedaccess channels which contain obscen-ity, indecency, or nudity.

The bill provides defenses to compa-nies that merely provide transmissionservices, navigational tools for theInternet, or intermediate storage forcustomers moving material from onelocation to another. It also allows anon-line service to defend itself in courtby showing a good-faith effort to lockout adult material and to providewarnings about adult material before itis downloaded.

0. THE DEREGULATORY NATURE OF S. NO

Ronald Reagan once joked-in themidst of a debate over the budget--thatthe only reason Our Lord was able tocreate the World in 6 days was that hedidn't have to contend with the embed-ded base.

I have been wrestling with the com-munications issues since I came toCongress. We all have. This has becomethe congressional equivalent of Chair-man Mao's famous "Long March."

Nothing in the field is easy. We aredealing with basic services-telephone.TV. and cable TV-that touch virtuallyevery American family. We are dealingwith massive investment-more thanhalf a trillion dollars. We are dealingwith industries which provide almosttwo million American Jobs. We aredealing with high-tech enterprises thatare critical to the future of the Amer-

CONGRESSIONAL RECORD- SENATEicen economy, and our global competi-tiveness.

The stakes ae high for everyone.And It is the sheer number of issuesand concerns that accounts for thecomplexity of any legislation.

First. A major step forward:But let me talk briefly about some of

the major steps forward which are en-visioned In this bill.

When the former head of the Na-tional Telecommunications & Informa-tion Administration testified beforethe Senate. he commented that, "Ev-erything in the world is compared towhat."

Well, virtually all of the bills whichthe Senate or the House has dealt withover the past generation took the con-cept of regulated monopoly as a given.

Whether we are talking about Con-gressman Lionel Van Deerlin's bill.H.R. 1315 in the House in the 1970's; orSenator PACKWOOD'S effort back in1981-8. 898: All of these bills assumedthat monopoly, like the poor, would al-ways be with us.

Second. A paradigm shift:My bill changes that. Instead of con-

ceding that concern, this bill:Removes virtually all legal barriers

to competition in all communicationsmarkets-local exchange, long dis-tance, wireless, cable, and manufactur-ing.

It establishes a process that will re-quire continuing Justification for rulesand regulations each 2 years. Every 2years, in other words, all the rules andregulations will be on the table. If theydon't make sense, there is a process es-tablished to terminate them.

It restores full responsibility to Con-gress and the FCC for regulating com-munications. Under the bill that theHouse passed last spring, for example,you would have still had a substantial,continuing Involvement in communica-tions policy on the part of the JusticeDepartment and the Federal courts.This bill brings the troops home.

Third. Genuinely deregulatory:I understand the concerns that some

of my colleagues have raised. SenatorMcCAlN has raised the question ofwhether this bill is deregulatoryenough. Senator PACKWOOD has asked ifwe could not speed up the transition tofull, unregulated competition. Theseare valid concerns.

But let me highlight some of the de-regulatory steps which this bill makespossible now.

First, it will make it possible for theFCC immediately to forebear from eco-nomically regulating each and everycompetitive long-distance operator.The Federal courts have ruled that theFCC cannot deregulate. This bill solvesthat problem and makes deregulationlegal and desirable.

Second, this bill envisions removinga whole chunk of unnecessary cabletelevision price controls now. We leavethe power to control basic servicecharges, until local video markets aremore competitive. But the authority toregulate the nonbasic services, the ex-

June 7, 1995panded tiers, s peeled back. That rep-resents a major step toward deregula-tion and more reliance on competitivemarkets.

Third. this bill contains a competi-tive checklist for determining Bell Co.entry into currently prohibited mar-kets like long distance and manufac-turing. After Bell companies satisfy allthe requirements, the FCC must, in ef-fect. certify compliance by making apublic interest determination.

This is not--contrary to somd allega-tions-more regulation. At least one ofthe Beli companies-NYNEX--canprobably fulfill all the checklist's re-quirementa very soon, because Stateregulators have already required thatcompany to make the most of the nec-essary changes in the way it does busi-ness. The bill also explicitly says thatthe competitive checklist cannot be ex-panded.

So, if you read all the provisions inthe bill in context, you will see thatthere simply is no broad grant of dis-cretion to the Federal or State regu-lators here. We have essentially spelledout the recipe for competition, and it isincumbent on them to follow it.

Fourth.-Future orientation:Let me mention another critical as-

pect of this bill. it is future oriented.Too many of the earlier measures

were focused on the status quo. Whatthey basically did was rearrange exist-Ing markets and services. The 1984 and1992 Cable Television Acts, for in-stance, did not take stepa to encouragecompetition, it kept in place all the re-strictions on telephone company andbroadcast competition. Moreover, the1984 Cable Act also maintained exclu-sive franchising for cable television.

This bill essentially seeks to changethat focus. We assumed that cable tele-vision might become an effective com-petitor to local phone companies, forinstance, so we sought to get rid of anyregulations that would block that. Wealso assumed that local phone compa-nies might be effective cable cometi-tore, so we tried to get rid of restric-tions on that kind of competition.

In the case of broadcasting, we recog-nized that this important industry isgoing to need much more flexibility tocompete effectively in tomorrow's mul-tichannel world. So, we will allowbroadcasters to offer more than justpictures and sound as well as multiplechannels of pictures and sound. if theyso choose. Under this bill, they willhave the flexibility they need to com-pete in evolving markets.

Fifth. Safeguarding core values:This bill is aggressively deregula-

tory. It seeks to achieve genuine, long-term reductions in the level and Inten-sity of Federal, State and local govern-mental involvement in telecommuni-cations.

But this bill is also responsibly de-regulatory. When it comes to main-taining universal access to tele-communications services, for instance,it does that, It establishes a processthat will make sure that rural and


June 7, 1995small-town America doesn't get left inthe lurch.

This bill also maintins significantFederal oversight. Telecommuni-cations, remember,. isn't like trucking.or railroads, or airline transportation.The services we are talking about hereare marketed and consumed directly bythe public.

This bill seeks to advance core val-ues. I know that the Exon Amend-ment-which places limits on obsceneand indecent computer communica-tlons-has sparked controversy. Allthat amendment actually does is applyto computer communications the sameguidelines and limitations which al-ready apply to telephone communica-tions.

Sixth. Further responsibility:This bill also recognizes the fact that

deregulation is always a gradual, tran-sitional process-and that Congress hasthe responsibility to stay involved.

All of us know that good legislationis only one facet of the overall deregu-latory process. Other requirements arecareful scrutiny of budgets, of appoint-ments to the FCC and other agencies,and effective Congressional oversight.No one should try to fool themselvesinto believing that we can get away onthe cheap. We can't.

If we are serious about deregulatingthis marketplace and-more impor-tantly-expanding the range of com-petitive choices available to the Amer-loan public. Congress is going to haveto stay a central player.

Seventh. Summary of affirmative as-pects:

Let me summarize. then, what I seeas very positive, affirmative aspects ofthis bill:

First, It dispenses with the old gov-ernment-sanctioned monopoly modeland replaces it with a process of openaccess which will lead to more com-petition across-the-board, In every partof the communications business. Itflattens all regulatory barriers to mar-ket entry in all telecommunicationsmarkets. The more open access takeshold, the less other government inter-vention is needed to protect competi-tion. Open access is the principle estab-lishing a fair method to move localphone monopolies and the oligopolisticlong distance industry into full com-petition with one another. Completionof the steps on the pro-competitivechecklist will give both the long dis-tance firms and the local telephonecompanies confidence that neither sideis gaming the system. .

Second, it eliminates a number of un-necessary rules and regulations now-by giving the FCC the discretion toforebear from regulating competitivecommunications services, by removingunneeded, high-tier, cable price con-trols.

Third, It establishes a process forcontinuing attic-to-basement review ofall regulations on a 2 year cycle.

Fourth. It seeks to create an environ-ment that Is more conducive to morenew services and more competitors-by

CONGRESSIONAL RECORD- SENATE

allowing broadcasters and cable opera-tors. for instance, greater competitiveflexibility, and giving local and longdistance phone companies morechances to compete as well.

Fifth, it terminates the involvementof the Justice Department and the Fed-eral courts in the making of nationaltelecommunications policy.

Sixth. the bill emphasizes effectivecompetition while also safeguardingcore values, such as universal serv!ceaccess and limitations on indecency:and.

Finally, it maintains the responsibil-ity of Congress to continue to workthrough the budget, oversight, and con-firmation processes to move this criti-cal sector toward full competition andderegulation.

H. BEErS OF . s2In General. Competition and deregu-

lation in telecommunications as a re-sult of the Pressler Bill means:

Lower prices for local, cellular, andlong distance phone service, and lowercable television prices, too.

More and less costly business andconsumer electronics to make U.S.business more competitive and Amer-ican citizens better informed.

Expanded customer options, as busi-ness is spurred to bring new technologyto the marketplace faster. In additionto more choices for long distance, cel-lular, broadcast, and other serviceswhere competition already exists, com-petition and choice in local phone andcable services will be introduced.

High technology jobs with a futurefor more Americans, economic growth.and continued U.S. leadership in thiscritical field. The President's Councilof Economic Advisors estimates thatderegulating telecommunications lawswill create 1.4 million new jobs In theservices sector of the economy alone bythe year 2003. In a Bell Company fund-ed study, WEFA concluded that tele-communications deregulation wouldcause the U.S. economy to grow 0.5 per-cent faster on average over the next 10years, creating 3.4 million new jobs bythe year 2005, and generating a cumu-lative increase of $1.8 trillion in realGDP. Finally, George Gilder has esti-mated 32 trillion in additional eco-nomic activity with the Pressler Bill.

More exports of high-value products.and greater success on the part of U.S.-based telecommunications equipment$10.25 billion, and services $3.3 billion.companies as well as computer equip-ment 329.2 billion, companies as theyleverage their domestic gains to makemore sales overseas.

In Media. Competition and deregula-tion in electronic media includingbroadcasting, cable, and satellite serv-ices means:

More Networks and Channels. In theearly 1970s, there were three nationalTV networks and virtually no cablesystems. Today, there are 6 nationalTV networks, plus 10.000 cable TV sys-tems serving 65 percent of Americanhomes--96% have the cable option-with DBS now offering digital service

S 7889to millions more. The average Amer-ican family now has access to some 30video channel choices. Much more is onthe way Lf the Pressler Bill is enactedinto law.

More News and Public Affairs. Cablederegulation-spurred by satellite com-munications deregulation-made morenews and public affairs programmingavailable. CNN. C-SPAN. and ESPN areprime examples. Local all news chan-nels and local C-SPAN-oriented pro-gramming is on its way if deregulationoccurs.

More Jobs. Relaxing broadcast rulesand regulations--spurred by the growthof cable TV-made it possible for some300 new TV and 2.00 new radio outletsto emerge. This created 10,000 new jobsin broadcasting.

Small town and rural America par-ity. Satellites and cable TV servicemeans small town and rural Americanscommand nearly the same mediachoices only big city residents once en-joyed. This democratization hasspurred public awareness of nationaland international events-as well asencouraged fuller participation in thepolitical process.

Political shift. Satellites, cable, talkradio, and C-SPAN, which were a spe-cific result of deregulation and com-petition in communications, wereprime ingredients to last year's land-mark national political shift. Furtherdecentralization of media controlthrough deregulation will acceleratethis democratization phenomenon.

In telephone service. Competitionand deregulation In the telephone busi-ness means:

Lower prices. Deregulation of phoneequipment resulting In faster deploy-ment of advanced equipment has madeit possible to reduce local phone ratesby $4 billion since 1987. More long dis-tance competition has meant nearlyS20 billion in price cuts since 1987. Vir-tually all Americans now have farmore choices in phone equipment andlong distance service-ad with thePressler Bill will see choices in localphone services.

New options. Sixty million Americanfamilies now have cordless phones.Twenty-five million now have cellularphones. Fifty million have answeringmachines. Twenty million have pagers.Deregulation has allowed technologyto evolve to meet the demands of an in-creasingly mobile society.

Special benefits. Cellular phoneshave helped millions of Americanwomen feel safer and more secure.They have made it possible to drivesafely under even the most severeweather conditions, because now helpcan be called.

Computer services. Competition andderegulation in telecommunicationswill speed the deployment of the so-called information superhighway. Cur-rently, 40 percent of American homeshave a personal computer. Computersare ubiquitous for American business.There is one school computer for everynine students. Competition and deregu-lation will mean new communications


CONGRESSIONAL RECORD- SENATEfacilities that will magnify the powerof these computers.

International competitiveness. Tele-communications is a prime leveragetechnology. Competition and deregula-tion expands business access to thisnew technology. That makes Americanbusiness more competitive globally.Deregulation also spurs U.S. produc-tion and export of high value-addedproducts like computers, advancedtelephone switches, mobile radios, andfiber optics. Each dollar invested intelecommunications results in $3 ofeconomic growth.

For agriculture. For agriculture.competition and deregulation in com-munications means:

Efficiency. Farms today are the mosttechnology-intensive small businesses.American farmers will be able to har-ness computer, communications, andsatellite technology to stay the world'smost efficient lowest cost food produc-ers.

Integration with the national com-munity. Communications advanceshelp integrate the farm communitywith Americans nationwide. Farm fam-ilies will have the same news. publicaffairs, and entertainment choicesnearly any American does.

Distance learning/telemedicine.Schools in small town and rural areaswill be able to offer the same schoolingoptions as those in the suburbs andmajor cities. Telemedicine systemswill improve the quality of health careavailable in small town and ruralAmerica. especially for the homebound elderly in our society.

More jobs. Deregulation means moremodern communications systems ascosts drop for small town and ruralareas which, in turn. help these areasattract and retain businesses and jobs.Communications deregulation In Ne-braska meant thousands of new jobs forthe State. Deregulation in North Da-kota did the same-one of the coun-try's biggest travel agencies now oper-ate out of Linder and employs severalhundred local people.

For Government. For Governmentagencies, competition and deregu'ationIn telecommunications means:

Better service, With voice mail,smart phone services-for example. torenew your library book, press I. fac-simile, and electronic mail, Federal,State and local agencies will be able toprovide the public better service.

Reduced cost. Technology throughderegulation and competition alsohelps Government curb costs. Tax-payers thus get better service withouthaving to pay more. The right-sizing ofGovernment agencies is made possible.

Responsiveness. Using all the latestcommunications technologies. Govern-ment offices will be able to greatly ex-pand their constituent services, includ-ing here on Capitol Hill.

For business. For business, competi-tion and deregulation in telecommuni-cations means:

No geographical disadvantage. Theability to locate businesses away from

center cities, and to allow many work-ers. especially working mothers, totelecommute thus reducing urban traf-fic congestion, pollution problems, andeasing child care problems.

Expanding markets. Fax. 800-num-hers. United Parcel, and Federal Ex-press have made it possible for even thesmallest companies today to competeon a state-wide, regional, national, andeven international scale.

Working smarter. Satellite networks,computerized point-of-sale terminals--cash registers-and computerized in-ventory systems often linked directlyto suppliers make it possible for U.S.retailers and other businesses to stayvery competitive without being over-stocked or understocked. Technologywhich will be made more availablethrough deregulation has also allowedstores to operate in once remote areas.Wal-Mart has become America largestretailer, despite its largely rural ori-gins, chiefly because the company wasable to harness the best in contem-porary communications.

For educators. For educators, com-petition and deregulation in tele-communications means:

Greater parity. Students in smalltown and rural America, and in innercities, will be able to access the sameinformation and instructional re-sources only wealthy suburban dis-tricts have. Advanced math, science.and foreign language courses thatmany schools could not offer pre-viously are available through tele-communications. This reduces thepressures to close or consolidate smalltown and rural schools and other insti-tutions, which helps communitiesmaintain their unique local character.

Lower costs. Competition lowers thecost of telecommunications equipmentand services. This makes it possible forschools to adopt communications tech-niques without needing to expandbudgets and local taxes.

For law enforcement. For law en-forcement, competition and deregula-tion in telecommunications means:

Efficiencies. Communications equip-ment prices will continue to fall. Po-lice will be able to afford to buy onboard computers, advancedradiocommunications, and other high-tech systems. This magnifies the effec-tiveness of law enforcement budgets.

Better coordination. Advanced com-munications and computer systemswill result in far better coordinationamong Federal. State. and local lawenforcement agencies. Nationwidecriminal records, drunk driving, stolencar, and other checks can be under-taken quickly and cheaply. This meanslaw breakers will face a higher risk ofapprehension, which means a strongerdeterrent against crime.

Personal security. Advanced com-puter and communications technologyplace home security systems withinreach of more and more American fam-illes. Easier access to cellular phoneswill help Americans stay safer and feelmore secure. At the same time. these

telecommunications and informationtechnologies help police, fire depart-ment and emergency medical servicesdrastically reduce response times. Inthe case of emergency medical servicesfar better on-the-spot service will beprovided.

For South Dakota and other smallcity and rural areas:

The bill is designed to rapidly accel-erate private sector development of ad-vanced telecommunications and infor-mation technologies and services to allAmericans by opening all tele-communications markets to competi-tion.

Recent series of television commer-cials have shown people sending faxesfrom the beach, having meetings viacomputer with people in a foreigncountry, using , their computer tosearch for theater tickets and a host ofother services that soon will be avail-able. My bill would make those serv-ices available even sooner by removingrestrictive regulations.

A person living in Brandon couldwork at a job in Minneapolis or Chi-cago, students in Lemmon would beable to take classes from teachers inOmaha. and doctors in Freeman couldconsult with specialists at the MayoClinic. Telecommunications can bringnew economic growth, education,health care and other opportunities toSouth Dakota.

Competition in the information andcommunications industries meansmore choices for people in South Da-kota. It will also mean lower costs anda greater array of services and tech-nologies. For instance, competing forcustotmers will compel companies tooffer more advanced services like callerID or local connections to on-line serv-ices such as Prodigy and America On-Line.

It hasn't been that long since Ma Bellwas everyone's source for local phoneservice, long-distance service, andphone equipment. Now there are over400 long-distance companies and peoplecan buy phone equipment at any de-partment or discount store. Under mybill. eventually people would be able tochoose from more than one local phoneservice or cable television operator.

This new competition also shouldlead to economic developmen: opportu-nities in South Dakota. People will beable to locate businesses in towns likeGroton and Humboldt and serve cus-tomers in Hong Kong or New YorkCity. We are entering an exciting era. Iwant to spur growth and bring new op-portunities to South Dakota and every-where in America.

J. cONCLUSIONS. 652 is legislation providing for the

most comprehensive deregulation inthe history of the telecommunicationsindustry.

Enacting this bill means ending regu-latory apartheid. Under the Commu-nications Act of 1934 and the Federaljudiciary's Modification of Final Judg-ment. sectors of the communicationsindustry are forcibly separated and

S 7890 June 7, 1995


June 7,1995 CONGRESSIONAL RECORD-SENATEsegregated. This created Government-imposed and sanctioned monopolymodels for the telecommunicationssector.

S. 652 tears down all the segregationbarriers to competition and ends themonopoly model for telecommuni-cations. It opens up unprecedented newfreedom for access, affordability, flexi-bility. and creativity in telecommuni-cations and information products andservices.

Passing S. 652 will hasten the arrivalof a powerful network of two-waybroadband communications links forhomes, schools, and small and largebusinesses. For my home State ofSouth Dakota. and other States awayfrom the big population centers, thisreform bill will make the Internet andother computer communications moreeasily accessible and affordable.

Local phone companies, long-dis-tance phone companies, cable TV sys-tems. broadcasters, wireless and sat-ellite communications entities, andelectric utility companies all will gainfreedom to compete with one anotherin the communications business.

S. 652 is not only a deregulation bill.it is a procompetitive bill. There is animportant distinction. The 1984 CableAct; for instance, deregulated rates forthe cable industry but explicitly keptintact the barriers keeping telephone,electric companies, broadcasters, andothers from competing for cable TVservice. Keeping the monopoly modelin place while lifting the lid on pricesled directly to a backlash and reregula-tlion In the Cable Act of 1992.

This reform law will open the doorfor billions of dollars of new invest-ment and growth. The United States isthe world leader in telecommuni-cations products, software, and serv-ices. Still, we labor under self-defeat-ing limits on our ability to grow athome and compete abroad. Most for-eign countries retaliate for the strictU.S. limits on foreign investment. Thiskeeps us out of markets where wewould have the natural competitive ad-vantage and leaves them open to ourcompetitors. Telecommunications in-novation and productivity is flourish-ing in such countries as the UnitedKingdom, which has eliminated manybarriers to foreign investment. Thenew legislation will lift limits on for-eign investment in U.S. common car-rier enterprises on a fair, reciprocalbasis.

To maintain our world leadership po-sition we need new legislation. S. 652will improve international competi-tiveness markedly by expanding ex-ports. In 1994. according to the Depart-ment of Commerce. telecommuni-cations services-local exchange, longdistance, International, cellular andmobile radio, satellite, and data com-murications--accounted for S3.3 billionin exports. Telecommunications equip-ment-switching and transmissionequipment; telephones; facsimile ma-chines; radio and TV broadcastingndtnmnw, fixed and mobile radio sys-

tems; cellular radio telephones; radiotransmitters, transceivers and receiv-ers; fiber optics equipment: satellitecommunicatioth systems: closed-cir-cuit and cable TV equipment--ac-counted for $10.25 billion in exports. Fi-nally, computer equipment accountedfor $29.2 billion in exports. With thisnew legislation, telecommunicationsand computer equipment and serviceswill be America's No. 1 export sector,S. 652 will spur economic growth. cre-

ate new jobs, and substantially in-crease productivity. As noted earlier.each dollar invested in telecommuni-cations results in 3 dollars' worth ofeconomic growth. The Clinton'Core ad-ministration estimates that with tele-communications deregulation the tele-communications and information sec-tor of the economy would double itsshare of the GDP by 2003 and employ-ment would rise from 3.6 million todayto 5 million by 2002. The WEFA Group,in a Bell Company funded study, statedthat with telecommunications deregu-lation 3.4 million jobs would be createdin the next 10 years. In addition, theGDP would be approximately 1300 bil-lion higher, and consumers would saveapproximately $550 billion. Finally,George Gilder recently testified beforethe Senate Commerce Committee thatif telecommunications deregulationlike that contemplated in S. 652 doesnot take place, America will lose up to$2 trillion in new economic activity inthe 1990s.S. 652 will also assist in delivering

better quality of life through more effi-cient provision of educational, healthcare and other social services. Distancelearning and telemedicine applicationsare especially important in rural andsmall city areas of America. With theadvent of digital wireless technologiesthe cost of providing service will belowered tenfold thus closing the gapbetween the costs of serving urban andrural areas.

If we in Congress do our job right, bypassing this legislation, we have thepotential to be America's new high-tech pioneers--an opportunity to ex-plore the new American frontier ofhigh-tech telecommunications andcomputers that will be unleashedthrough bold free enterprise, de-regu-latory, procompetitive, open entrypolicies. By taking a balanced ap-proach which doesn't favor any Indus-try segment over any other., we willFirst. stimulate economic growth, jobs,and capital investment; second, helpAmerican competitiveness; third, mini-mize transitional inequities and dis-locations; and fourth, actually dosomething very good for universal serv-ice goals.

Mr. President, on March 28. the Com-mittee on Commerce. Science. andTransportation voted 17 to 2 to reportS. 652. the Telecommunications Com-petition and Deregulation Act of 1995.

Telecommunications policy usuallyrates attention on the business pages.not as a front-page story. Still. for theaverage American family, legislation

S7891to reform regulations of our telephone.cable, and broadcasting industries issurely one of the most important mat-ters the 104th Congress will consider.

OPEN. OcBERAr" PROCESSMr. President. this reform legislation

was years in the making. It is thehandiwork of numerous Senators fromboth parties, who have shared a com-mon recognition that our laws are out-dated and anticompetitive.

The recent hearing process which In-formed the Commerce Committee andled-tn development of S. 652 began inFebruary 1994. During 1994 and 1995 theCommerce Committee held 14 days ofhearings on telecommunications re-form. The committee heard testimonyfrom 109 witnesses during this process.The overwhelming message we receivedwas that Americans want urgent ac-tion to open up our Nation's tele-communications markets.

At the beginning of the 104th Con-gress, on January 31 of this year. I cir-culated a discussion draft of a tele-communications deregulation billwhich reflected ideas from all the Re-publican members of the CommerceCommittee. I invited the comments ofranking Democratic member HOLLINGSand other Democratic members. In just2 weeks time, Senator HOLLINoS pre-sented a comprehensive response. Hehas been a tremendous ally in this ef-fort. as have many of my colleagues onthe committee.

Senator HOLLINGS and I and Demo-cratic and Republican members of thecommittee, together with the majorityand minority leaders, then engaged inan open. deliberate, productive processof discussion and negotiation.

Mr. President. it ts accurate to saythat staff from both parties haveworked night after night, weekendafter weekend, with scarcely any res-pite, 'since before Christmas on thisbill.

Mr. President, just as It won over-whelming bipartisan support in com-mittee. S. 652 deserves passage by astrong bipartisan vote here on the floorof the Senate.

When I travel around my State ofSouth Dakota and see the craving fordistance learning, for telemedicine. forbetter access to the Internet and theother networks taking shape to im-prove our productivity and quality oflife, it helps me understand the needfor this legislation, the need to workand fight for this reform.

Mr. President, the obstacles forprogress in telecommunications arenot technical.. They are political. Wehave it in our power to tear those ob-stacles down. S. 652 does a substantialpart of the job of tearing them alldown.arESTOFiNO CONGRESSIONAL SESPONSIBILrTY

S. 652 returns responsibility for com-munications policy t¢, Congress aftetyears of micromanagement by thecourts. This bill will terminate Judicia!control of telecommunications poli-y.in particular. Federsl Judge Harold


S 7892Greene's "Modification of Final Judg-ment " regime which has governed th-telephone business since the breakup ofAT&T in 1984.

When the courts control policy, theyare restricted to narrow consider-ations. Congress, on the other band.takes into account a whole range ofeconomic and social implications in es-tablishing a national policy frame-work. S. 652 provides such an approachto telecomnunications reform.

Piecemeal policymaking by thecourts severely delays productive eco-nomic activity. The average waiverprocess before the Department of Jus-tIce and the court takes an average of4 to 5 years to complete. Such delayscause uncertainty in markets and sig-nfficantly reduce investment in tele-communications, an increasingly vitalsector of our economy.

PROFOUNDLY PR0-CO.NSLMEROur electronic media are in a cre-

ative tumult known as the digital revo-lution. New technology is erasing olddistinctions between cable TV, tele-phone service, broadcasting, audio andvideo recording, and interactive per-sonai computers. In many instances,the only thing standing in the way ofconsumers and businesses enjoyingcheaper and more flexible tele-communications services are outdatedlaws and regulations.

Mr. President. S. 652 is profoundlyproconsuner. The bill breaks up mo-nopolies-that's proconsumer. The billsweeps away burdensome regulations.This will lower consumer costs-that'sproconsumer.

The bill opens up world investmentmarkets for the U.S. telecommuni-cations business. The impact will bemore jobs, new services, lower costs-that's proconsumer.

Mr. President, American consumersand businesses want to enjoy the fullbenefits of the digital revolution. Theywant more communicating power,more services, more openings, andlower prices. They want wide-opencompetition.

It is possible for Americans to haveall of these. The obstacles in their wayare not technical. We have the mostpowerful economy, the most advancedtechnological base in the world. Theobstacles are political.

The Information industry alreadyconstitutes one-seventh of the U.S.economy. Worldwide, the informationmarketplace is projected to exceed 93trillion by the close of the decade. To-day's Federal laws prevent differentmedia from competing in one another'smarkets, although they have the tech-nical ability to do so.

The regional Bell operating compa-nies are protected with monopoly sta-tus in the local residential phone serv-ice markets. But they are barred frommanufacturing phone equipment, offer-ing long-distance service, or competingin a cable video market. Cable compa-ies, though technically capable, areforbidden to offer competing phoneservice.

CONGRESSIONAL RECORD- SENATEThe status quo preserves monopolies

and keeps American consumers fromaccess to an array of products and serv-ice options. The existing system of law,regulation, and court decrees, holdsback the American telecommuni.cations industry from its full potentialto compete in world markets.

S. 652 would change all this. It wouldbring about the most fundamentaloverhaul of communications policy inmore than 60 years. It will break up themonopolies and increase competition.S. 652 immediately lifts regulationsbarring local telephone companies'entry into cable service and cable'sentry into the local phone business.

It allows electric utilities to offerservice in both the phone and cablemarkets, and provides fair, effective,and rapid means to make certain thatlocal Bell companies abandon allvestiges of monopoly. Then it allowsthose companies into the long-distanceand phone equipment manufacturingmarkets.

This bill ends decades of protection-ism in the telephone investment mar-kets. This will help assure access tocapital to build the Nation's next gen-eration informational networking..

On a reciprocal basis, it will giveAmericans more freedom to profit bymaking major investments in the tele-communications projects of growingmarkets abroad. For households andbusiness in my home State of SouthDakota and all around the Nation. S.652 means lower prices for local, cel-lular, and long-distance phone serviceand lower cable television prices, too.The new competition also will spurcompanies to bring new technology andservices to the marketplace faster.

Phone customers would be assuredthe same number of digits and thesame listing in directory assistanceand the white pages, whether theychoose the local Bell company or a newcompetitor. What is more. phone num-bers will be portable. A customer willkeep the same number even if he or shemoves among phone companies to getbetter prices.

S. 652 promotes competition in cablemarkets while protecting consumersfrom surges in rates. The outcome. Ifully expect for consumers, perhaps assoon as a year from enactment of thebill. is plentiful competition and lowrates without Federal controls.

Freeing business from overregulationIs creative and it is proconsumer.There was heavy skepticism 15 yearsago about deregulating natural gasprices. but look at the results. I re-member I was in the House of Rep-resentatives in those days and every-body said if we deregulate natural gas.prices are going to soar. They did not.They went down. Natural gas prices arelower than ever.

Now consider how dramatic the dif-ference in proconsumer advances havebeen between an unregulated part ofthe information sector-personal com-puters--compared with the heavily-reg-ulated telephone sector.

June 7, 1995The personal computer success story

is especially important in my State ofSouth Dakota. Because a firm that wasa tiny start-up in South Dakota a fewyears ago, Gateway 2000, is now amajor player in personal computermarkets. It is one of the quality lead-ers in home computing products.

Computer industry entrepreneurswere free to gamble on the personalcomputer. No Federal or State regu-lator told them what they could andcould not build, what specificationsthey had to meet. what markets to tar-get. Market competition was fierce.Technological progress was breath-taking.

By 1990, the upstart personal com-puter industry was selling for S5.00 acomputer with as much processingpower as a $250,000 minicomputer of themid-1980's, more than that of a million-dollar mainframe of the 1970's. Nowpersonal computers with more thantwice the processing power are avail-able for $1,500.

The upshot, in terms of price andpower, is that today's computer sys-tems have over 200 times the value ofsystems in 1994. Even with the historicbreakup of the AT&T long-distancemonopoly, the telephone business hasremained heavily regulated, and con-sumers have gained value. In 1984. a 10-minute call from New York to Los An-geles cost $5. Today it cost 12.50. Itshould cost less, and will cost less.

If competition and technological ad-vances have developed In the long-dis-tance market, as they had in the com-puter market over the same period.that same phone call would cost lessthan 3 cents today, rather than $2.50.Three cents.The regulatory status quo needs

shaking up. That is what S. 652 woulddo. It would do less for big existingcompanies than for the businesses andservices that are still waiting to be cre-ated. and many of those will be smallbusinesses. Most important, it wouldhelp bring about an explosion of newjob opportunities and services for theAmerican people.

Let me take just a moment to de-scribe in detail the key reforms in S.652. First, universal telephone service,the need to preserve widely availableand reasonably priced services Is a fun-damental concern addressed In S. 652.The bill preserves universal service,improves it. and makes it cost less.

It requires all telecommunicationscarriers to contribute to the support ofuniversal service. Only telecommuni-cation carriers dedignated by the FCCor a State as "essential teleconununi-cation carriers" are eligible to receivesupport payments. The bill directs theFCC to institute and refer to a Federal-State joint board, a proceeding to rec-ommend rules to implement universalservice and to establish a minimumdefinition of universal service. A Statemay add to the definition for its localneeds.

Mr. President, to smaller cities andrural communities and others who de-pend upon universal service nothing is


June 7, 1995 CONGRESSIONAL RECORD - SENATEchanced. They continue to enjoy af-fordable access to phone service as be-fore. The most important impact of S.652 is structural and management re-form in universal service that will savethe American taxpayers 33 billion overthe next 5 years. I think that Is impor-tant to say. The universal service ofthis will cost less in these years.

For local telephone competition. S.652 gives a green light to local tele-phone competition. The bill breaks upthe old monopoly system for localphone service. All Federal barriers tocompetition will be removed, and allState and local barriers will be pre-empted. Cable companies, long-dis-tance companies, electric companiesand other entities will gain a chance tooffer lower prices and better service forlocal phone service.

Upon enactment, the legislation pre-empts all State and local barriers tocompeting with the telephone compa-nies. In addition, it requires local ex-change carriers having market powersto negotiate, in good faith, inter-connection agreements for access tounbundled network features and func-tions that reasonable and nondiscrim-inatory rates.

This allows other parties to providecompetitive service through • inter-connection with the LEC's facilities.The bill establishes minimum stand-ards relating to types of interconnec-tion that an LEC with market powermust agree to provide if requested, in-cluding the following. Unbundied ac-oess to network functions and services;unbundled accese to facilities and in-formation; necessary for transmission.routing, and Interoperability of bothcarriers' networks; interconnection atany technological feasible point; accessof polls, ducts, conduits, and rights ofway; telephone number portability; andlocal dialing parity.

As an assurance that the parties ne-gotiate in good faith, either party mayask the State to arbitrate any dif-ferences, and the State must reviewand approve any Interconnection agree-ment.

There is long distance and manufac-turing relief for the Bell companies.The Telecommunications Competitionand Deregulation Act of 1995 estab-lishes a process under which the re-gional. Bell companies may apply tothe FCC to enter the long-distancemarket. Since the 194 breakup ofAT&T. the Bell companies have beenprohibited from providing long-dis-tance service. 5. 662 reasserts congres-sional authority over Bell companyprovision of long distance and restoresthe FCC authority to set communica-tion policy over those issues. The At-torney Oeneral has a consulting role.

The bill requires Bell local compa-nies and other LEO'e with marketingpower to open and unbundle their localnetworks to Increase the likelihoodthat competition will develop for localtelephone service.

It sets forth a competitive checklistof unbundling and interconnection re-

quirements. If a Bell company satisfiesthe checklist, the FCC is authorized topermit the Bell company to long-dis-tance service if this is found to be inthe public interest.

Once a Bell company has met thechecklist requirements, it also will beallowed to enter the markets for manu-facturing phone equipment.

In conducting its manufacturing ac-tivities, a Bell company must complywith the following safeguards:

A separate manufacturing affiliate;Requirements for establishing stand-

ards and certifying equipment;Protections for small telephone com-

panies. A Bell manufacturing affiliatemust make its equipment available toother telephone companies without dis-crimination or self-preference as toprice delivery, terms, or conditions.

This bill also opens international in-vestment markets.

S. 652 lifts limits on foreign owner-ship of U.S. common carriers. The billestablishes a reciprocity formulawhereby a foreign national or foreign-owned company would be able to investmore than the current 25 percent limitin a U.S. telephone company if Amer-ican citizens or firms enjoyed com-parable opportunities. This wouldallow increased Investment In and bythe U.S. telecommunications industry.which enjoys worldwide comparativeadvantage.

Finally, in the area of cable competi-tion. the bill permits telephone compa-nies to compete against local cablecompanies upon. enactment. althoughuntil 1 year after enactment the FCCwould be required to approve Bell com-pany plans to construct facilities forcommon carrier "video dialtone" oper-ations. The bill also removes at enact-ment all State or local barriers tocable companies providing tele-communications services, without ad-ditional franchise requirements.

The bill maintains rate regulationfor the basic tier of programmingwhere the cable operator does not face"effective comletition." defined as theprovision of video services by a localtelephone company or 15 percent pene-tration by another multichannel videoprovider. The bill minimizes regulationof expanded tier services. Specificallythe bill eliminates the ability of a sin-gle subscriber to Initiate at the FCC arate complaint proceeding concerningexpanded tier serviceb. In addition, theFCC may only find rates for expandedtier service unreasonable, and subjectto regulation, if the rates substantiallyexceed the national average rates forcomparable cable programming serv-ices.

In the area of spectrum flexibilityand regulatory reform for broadcasters.if the FCC permits a broadcast tele-vision licensee to provide advanced tel-evision services, the bill requires theFCC to adopt rules to permit suchbroadcasters flexibility to use the ad-vanced television spectrum for ancil-lary and supplementary services, If thelicensee provides to the public at least

S7893one free advanced television programservice. The FCC is authorized to col-lect an annual fee from the broadcasterif the broadcaster offers ancillary orsupplementary services for a fee to sub-scribers.

A single broadcast licensee is per-mitted to reach 35 percent of the na-tional audience, up from the current 25percent. Moreover, the FCC is requiredto review all of its ownership rules bi-ennially. Broadcast license terms arelengthened for television licenses from5 to 10 years and for radio licenses from7 to 10 years. Finally, new broadcast li-cense renewal procedures are estab-lished.

Entry by registered utilities Intotelecommunications is allowed.

Under current law, gas and electricutility holding companies that are notregistered may provide telecommuni-cation services to consumers. Theredoes not appear to be sufficient jus-tification to continue to preclude reg-istered utility holding companies fromproviding this same competition. Thebill provides that affiliates of reg-istered public utility holding compa-nies may engage in the provision oftelecommunications services, notwith-standing the Public Utility HoldingCompany Act of 1935. The affiliate en-gaged in providing telecommunicationsmust keep separate books and records.and the States are authorized to re-quire independent audits on an annualbasis.

ALARM ERvIcESBeginning 3 years after enactment, a

Bell company may provide such serv-ices if it has 'received authorizationfrom the FCC to provide in-regioninterLATA service. The bill requiresthe FCC to establish rules governingBell company provision of alarm mon-itoring services. A Bell company thatwas in the alarm service business as ofDecember 31. 1994 is allowed to con-tinue providing that service, as long ascertain conditions are met.

Finally. continuous review and re-duction of regulation.

The bill also ensures that regulationsapplicable to the telecommunicationsIndustry remain current and necessaryIn light of changes in the industry.First, the legislation permits the FCCto forbear from regulating carrierswhen forbearance Is in the public inter-est. This will allow the FCC to reducethe regulatory burdens on a carrierwhen competition develops. or whenthe FCC determines that relaxed regu-lation is in the public interest.

Second, the bill requires a Federal-State Joint Board to periodically re-view the universal service policies.

Third. the FCC. with respect to itsregulations under the 1934 act, and aFederal-State Joint Board with respectto State regulations, are required Inodd-numbered years beginning in 1997to review all regulations Issued underthe act or State laws applicable to tele-communications services. The FCC andJoint Beard are to determine whetherany such regulation Is no longer in the


S 7894public interest as a result of competi-tion.

In short. Mr. President, this bill pro-motes deregulation as far as It logi-cally should go. It provides a kind of"sunset" process for all regulationswhich the bill does not abolish imme-diately.

I welcome the coming debate andvote on S. 62. 1 urge my colleagues toreassert congressional responsibilityfor telecommunications policy.

Let me say, In summary and In con-clusion, Mr. President, what we aretrying to do here is to get everyoneinto everyone else's business. The eco-nomic apartheid that has been a part oftelecommunications since the act of1934 should be brought to an end.

I believe the passage of this billwould be like the Oklahoma land rush.the going off of the gun. because pres-ently a lot of Investment in the UnitedStates Is paralyzed because we do nothave a roadmap for the next 5. 10, or 15years until we get into the wirelessage.

What is happening is that many ofour companies are investing in Europeor abroad because they are prohibitedfrom manufacturing or doing some-thing here. As a result, American jobsare being lost.

This particular bill. if we can pass It.will provide a roadmap which business-men and Investors will be able to In-vest in and make an explosion of newdevices, an explosion of new jobs, andwill help our country a great deal.

I think It will help consumers by low-ering prices and providing more de-vices, and It will also help labor by pro-viding more Jobs of the type that weneed in our country.

I wish to pay tribute again to Sen-ator HOLLINOS and his staff and all theSenators on the committee who haveworked so hard-and Senators In thisChamber. I have spoken to all 10 Sen-ators at some point on this bill and ithas been a long time getting It up. Ihope we can proceed through today andtomorrow.

The PRESIDING OFFICER. The Sen-ator from South Carolina.

Mr. HOLLINGS. Mr. President. as thecommunications bill, S. 652. comes upfor consideration, my first urge is oneof gratitude. I want to thank the ma-jority leader and minority leader fortheir leadership in calling up this billand, of course. I particularly want tothank the chairman of our committeewho has been outstanding In workingall day long in getting this bill to thefloor.

Senator Iorr on the majority sideand Senator INOUYE, who was thechairman of our Communications Sub-committee, now the ranking member,have been working around the clock. Ofcourse, particular thanks goes, again,for our staff members. I thank thechairman's staff-Paddy Link. KatieKing. and Donald McLellan. On mystaff particular gratitude must go toKevin Curtin, John Windhausen, andKevin Joseph for all their efforts.

CONGRESSIONAL RECORD- SENATEWe do not extend such thanks cas-

ually. This effort started in the fall of193, and every Friday morning wewould meet with the Bell companies,the regional Bell operating companies.Every Tuesday morning the staffswould meet again with the competinginterests of long distance and all theother industry interests. We have con-tinued those meetings right up to thisafternoon. We have been working,meeting, reconciling, trying our dead-level best to bring a complicated meas-ure up to the modern age of tele-communications.

To this Senator. they have all donean outstanding job. So it Is not a cas-ual "thanks," but It is one that is verygenuine and sincere. We thank them allfor their cooperation and understand-ing.

As this bill is called up. It is good tonote and emphasize that the CommerceCommittee reported it by a vote of 17to 2 on March 23. It is a product ofmonths and months of considerationand discussion by the committee andby Senators all involved. In the lastCongress, Senators INOUYE. Danforth.and I sponsored S. 1822, which was ap-proved at that time by the CommerceCommittee by a vote 18 to 2.

The comnittee held 31 hours of testi-mony, 11 days of hearings, and heardfrom 86-plus witnesses. In this Con-gres, the committee on S. 652 has held3 days of hearings on telecommuni-cations reform, heard from a number ofwitnesses representing a broad varietyof interests.

S. 652 achieves a very, very impor-tant objective. Most important of allthe objectives was the requirement ofuniversal telephone service that wouldbe available and affordable and contin-ued to be outstanding. We have the fin-est communications services in theworld.

This Senator went through the expe-rience of airline deregulation. Andtruth is truth, and facts are facts. Donot come and tell me how airline de-regulation is working. All of the air-lines have just about gone broke. And Ican tell you from paying just to gofrom Charleston to Washington andWashington to Charleston and back. itis just an inordinate 600 and some odddollars. What has happened is 85 per-cent of America is subsidizing some 15percent for the long haul. They talkabout market forces, market forces.We had a good arrangement on the reg-ulated airline service, and we havecome full circle now with regulatingforeign airlines and KLM taking overNorthwest. British Air coming in onUSAir, and all the rest being savedwhile we proudly stand up as politi-clans blowing hot and hard how won-derful airline deregulation Is working.That Is hooey.

I wanted to make sure that we didnot fall in and mess up In this particu-lar one with the wonderful tele-communications service that we havehad. This bill promotes competition Inthe telecommunications market and

Jwe 7, 1995restores regulatory authority over theindustry to the Federal Communica-tions Commission. That administrativeentity has also been outstanding Intheir rendering of decisions and movingfbrward as best they could with thetechnological developments. But thecompetition of the communicationsand regular telephonic service and longdistance evolved into a beck of a mo-nopoly that we could not deregulate. Iwas on the teams that worked all dur-Ing the 1970's and the early 1980's. Fi-nally, the Department of Justice hadto bust it up. We found out that theywere so strong politically and filnan-cially that they could cancel out anyand everybody. Senator DOLE on themajority side, this Senator on the mi-nority side, all during the 1980's triedto get it back to the FCC. and we wereblocked. This Senate passed the manu-facturing bill to allow the Bell compa-nies to get into manufacturing, passedby a vote of 74, bipartisan, and it wasblocked over on the House side.

So the difficulty has really been Intrying to get It from Judge Greeneback into the administrative bodywhere the people's decisions and poli-cIes are made by the Congress, admin-istered by the Federal CommunicationsCommission. but blocked by the indus-try Itself time and time again.

Let me also mention Judge Greenewho has done an outstanding job. Iwant to make note that It was just an-nounced that Judge Greene will entersenior status this August. I just couldnot give him enough kudos in the wayhe has handled this, almost a one-manadministrative responsibility for over10 years now in his deliberate approachto the needs of the public by maintain-ing at the same time universal service.

The basic thrust of this bill is clear.Competition is the beat regulator ofthe marketplace. But until that com-petition exists, until the markets areopened, monopoly-provided servicesmust not be able to exploit-the monop-oly power to the consumers' disadvan-tage. Competitors are ready and will-Ing to enter the new markets as soonas they are opened. Competition isspurred by S. 652's provisions, specify-Ing criteria for entry into the variousmarkets.

For example, on a broad scale, cablecompanies will provide telephone serv-ice; telephone companies will offervideo services, as pointed out by ourdistinguished chairman; and telephonecompanies will, in addition, provide tothe consumers the continued universalservice; the consumers will be able topurchase local telephone service fromseveral competitors; electric utilitycompanies will offer telecommuni-cations services; the regional Bell oper-ating companies will engage in manu-facturing activities. All of these par-ticipants will foster competition witheach other and create Jobs along theway. Of course, long distance will enterthe local exchange, and as the local ex-change is opened, the regional Bell op-erating companies will enter into long


June 7, 1995 CONGRESSIONAL RECORD- SENATEdistance. So we are really moving veryexpeditiously Into the competitivemarket.

We should not attempt to micro-manage the marketplace. Rather. wemust set the rules In a way that neu-tralizes any party's inherent marketpower so that robust and fair competi-tion can ensue. This is Congress' re-sponsibility.

o this bill transfers jurisdictionover the modified final.judgment fromthe courts to the Federal Communica-tions Commission. Judge Greene, as Imentioned, has been overseeing thatmodified final judgment in an out-standing fashion. He was doing yeo-man's work in attempting to ensurethat monopolies do not abuse thatmarket power. Now it is time for theCongress to reassert its responsibilitiesin this area.

Let me address some of the specificareas of importance. The need to pro-tect advanced universal service is onefundamental concern of the committeein reporting S. 652. Universal servicemust be guaranteed, the world's besttelephone system must continue togrow and develop, and we must ensurethe widest availability of telephoneservice. Under this bill. all tele-communications carriers must contrib-ute to their universal service fund. AFederal-State joint board will defineuniversal service. This definition willevolve. It is a flexible requirement--arequirement. I should say rather, offlexibility so that the definition willevolve over time as technologieschange so that consumers have accessto the best possible services.

Special provisions in the legislationaddress universal service in rural areasto guarantee that harm to universalservice is avoided there. One of themoet contentious issues in this wholediscussion has been when the regionalBell operating companies should be al-lowed to enter the long distance mar-ket.

Under section VII(C) of the modifiedfinal judgment consented to buy all theRBOC's and attested to in the hearingsthat we have had on this bill, as agroup the test has been whether theRBOC's seeking entry into long die-tance could have a substantial possibil-ity of impeding competition In thatlong distance market which it seeks toenter.

Last year. S. 1822 contained a re-quirement that the Department of Jus-tice utilize this test in considering anyapplication for the regional Bell oper-ating companies' entry into long dis-tance. in addition, the FCC was to uti-lize a public interest test for consider-ing any such application. This was anapproach to which the regional Bell op-erating companies agreed during thelast Congress. This year. earlier draftprovisions, however, set a date certainfor entry by the RBOC's into the longdistance market.

So after all the hearings and muchdiscussion and negotiation, we deter-mined that this "lf-dereating approach

of a calendar ruling there would be noconsideration of the competitive cir-cumstances In the marketplace.

So S. 652 specifies that the FCC mayapprove any application to providelong distance if it finds, one, that theRBOC has fully implemented theunbundiing features specified in thecompetitive checklist in the new sec-tion 255 of the Federal Communica-tions Act of 1934; two. the RBOC willprovide long distance using a separatesubsidiary; and, three, application Isconsistent with the public interest.convenience, and necessity.

Mr. President. when I mentioned thatsection 255 is a new section under theCommunications Act, I should say of1934. It is good to point out that wehave used the original Communica-tions Act of 1934, as amended, for thesimple reason that over the 60 plusyears we now have a complex body oflaw. special rulings. interpretations oflegal expressions and requirements bythe courts. We are now tasked with thejob of trying to bring competition to aregulatory structure based on a monop-oly and open up the marketplace.

I remember in an earlier debate wehad this year it was brought out that60.000 lawyers are registered to practicebefore the District of Columbia bar,59.000 of whom are probably membersof the federal communications bar.That is why you will see every effort tochange every little word and analyzeevery phrase. So we have really had adifficult task trying to break up themonopoly of the local telephone com-panies and to open the market so com-petition could ensue and yet it is themonopoly that has provided us withthe universal service we all enjoy. Wedo not want to penalize or jeopardize inany sense the regional Bell operatingcompanies that have been doing anoutstanding job because there Is noshortcut there. If you penalize themand put them into an uncompetitiveposition, then, of course, your rates arebound to go up.

So S. 652 is a balanced bill. The pub-lic interest test is fundamental to mysupport for the legislation. In makingthis public interest evaluation, theFCC is instructed to consult with theDepartment of Justice which may fur-nish the Federal CommunicationsCommission with advice on the appll-cation using whatever standard it findsappropriate. including antitrust analy-sis under the Clayton and ShermanActs and also section VIII(C) under theModified Final Judgment.

Mr. President, this is great leap fromthe actual and demonstrable competi-tion test originally proposed in S. 1822from the last Congress. While I wouldprefer a more active Department ofJustice role, and an explicit referencein the statute to the section VUI(C)test. I support the provisions of S. 652because the FCC will have the benefitof the Department of Juetice viewsprior to making any decision. The De-partment of Justice may well decide tobase its decision on whether there Is a

S7895substantial possibility that the re-gional Bell operating company will Im-pds Competition through use of Itomonopoly power or any other standardunder the antitrust law. The report accompanying this bill makes it clear.

I might emphasize at this particularpoint the leadership that already thisyear has been given by the antitrust di-vision, by the Department of Justiceand the outstanding director, AssistantAttorney General. Ms. Anne Bingaman.She has obtained what we as politi-clans have been trying over 4 years toget together, and that is about a monthago on national TV there appeared theregional Bell operating company.Ameritech. the long distance companyAT&T. the Department of Justice andthe Consumer Federation of America.all four entities important to the en-tire process agreeing on the steps ofunbundling. dialing parity, access.interconnection, all of these things allironed out that in the technologicalworld of communications we have de-bated back and forth over these manyyears. They have gotten together. They"are going into Grand Rapids and Chi-cago, and, of course, the RBOC is get-ting into long distance.

And so while we politicians on thefloor of the Senate will be debating inthe next few days, no doubt it shouldbe mentioned that the Department ofJustice. under the leadership of Ms.Anne Bingaman. has already gottenthe parties together. I am convincedthat their consent decree now beforeJudge Greene will be affirmed.

S. 662 requires that an RBOC mustprovide long distance using a subsidi-ary separate from itself to avoid anycross-subsidization between local andlong-distance rates. These and othersafeguards in the bill should preventagainst RBOC abuses in the long-dis-tance market.

The committee-approved bill also in-cludes some deregulation rates forcable television. The Democratic pro-posal at the beginning of the year didnot suggest any such deregulation be-cause from 1986 to 1992 cable rates hadrisen three times faster than the rateof inflation, so that the Congress backin 1992 overwhelmingly imposed rateregulation and new service standardson the cable operators.

We passed the 1992 Cable Act largelyin response to the complaints fromconsumers that rates had soared be-yond reason and service was poor. Thebill actually became law with the bi-partisan vote to override PresidentBush's veto.

Now, since the 1992 act was adopted.the cable industry has experienced sig-nificant growth. Subscribership is up.stock values in cable companies haverisen dramatically, and debt financingby the cable industry rose in 1994 by al-moet $4 billion over the 1993 levels. Butthe Consumer Federation of Americaestimates that $3 billion has been savedfor American consumers through therate reaulation that has been put into


87896 Ccplace. Yet some in the industry main-tain that cable regulation produces un-certainty in financial markets and thatcable operators will need to be able torespond to Dew "competitors throughadditional revenues.

S. 662. therefore, changes the stand-ard of regulation for the upper tiers ofcable programming. It makes nochanges In the regulation of the basictier. Under the bill. a rate for the uppertier cannot be found to be unreasonableunless it substantially exceeds the na-tional average rate for comparablecable programming.

This standard will allow cable opera-tore greater regulatory flexibility forthe upper tiers. The bill retains theFCC's authority to regulate excessiverates charged to the upper tiers.

In addition, the bill changes the deft-nition of effective competition in the1992 act to allow cable rates to be de-regulated as soon as the telephonecompany begins to offer competingcable services in the franchise area.Once consumers have a choice amongentities offering cable service, the needfor regulation no longer exists.

S. 652 increases the ability of any en-tity Including television networks toown more broadcast stations. Today,the FCC rules allow an entity to ownbroadcast stations that reach no morethan 25 percent of the Nation's popu-lation. This limit was imposed out ofconcern that broadcast stations wouldbe owned by a few individuals, and thatconcentration would not be beneficialto our local communities or yield thebenefits that result from the expres-sion of diverse points of view. S. 662would increase that level to 38 percent.

Any modification in the nationalownership cap is Important because oflocalism concerns. Local television sta-tions provide vitally important serv-Ices in our communities. Because localprogramming informs our citizensabout natural disasters, brings news oflocal events, and provides other com-munity-building benefits, we cannot af-ford to undermine this valuable localresource.

Earlier drafts of the legislationwould have eliminated many of theFCC regulatory limits on the broadcastindustry. By contrast. S. 1822. as ap-proved by the Commerce Committeelast year. required the FCC to conducta proceeding to review the desirabilityof changing these rules. I think the billwith 35 percent permeation is an ac-ceptable compromise between those po-sitions.

In addition, the bill repeals a prohibi-tion on cable broadcastcrossownership. S. 652 makes no changein the other broadcast ownership rulessuch as the duopoly rule or the one-in-the-marketplace rule. Rather, the FCCis instructed to review these rulesevery 2 years, and they can change itupon review.

This comprehensive bill strikes a bal-ance between competition and regula-tion. New markets will be open. com-petitors will begin to offer services.

)NGRESSIONAL RECORD-SENATE

consumers will be better served by hav-ing choices among providers and serv-Ices.

I urge my colleagues to support thebill. I myself would have gone furtherin several areas covered by the legisla-tion. but I have seen that any one sec-tor of the telecommunications industrycan stop this bill and checkmate theothers, as I have stated before. Tele-communications reform is too impor-tant to let this opportunity go by.

Finally. Mr. President, it should beemphasized that here is one industrythat suffered from deregulation. Youcannot approach this problem in S. 662as we bring it into the technologicalage without thinking back to 1912 whenDavid Sarnoff was a clerk in Wana-maker's store and the sinking of theTitanic was occurring. They raced himup to the roof of Wanamaker's. He setup his wireless, made radio contactwith the sinking ship and contactedrescue vessels, directing not only someof the rescue effort but the names ofsurvivors, working almost 72 hoursaround the clock.

Everyone then got a wireless. Therewas not any regulation. And by 1924,when Herbert Hoover was the Sec-retary of Commerce, all of those wire-less operators came rushing to the Sec-retary of Commerce and said. "Furheaven's sake, we have nothing butjamming." The radio broadcasters, whohave a tremendous interest in this S.652, went begging to be regulated. Sothey were in the act of 1927 andbrought into that age then with the1934 act.

So those who are now talking aboutgetting rid of the Government and. in-cidentally, by the way, we can savemoney by getting rid of the FCC. oughtto stop, look and listen. They have tohave a sense of history. We can get ridof total deregulation, jamming eachother and all that sort of thing, but,after all. the public airways belong tothe public, on the one hand, and theyneed a modicum of administration, onthe other hand, for this finest, finest ofcommunications systems In the entireworld.

Let us not talk about the FCC cost-ing money. They are the entity thisyear that already by auction hasbrought in $7 billion to the FederalGovernment. If you can find any otherbureau, commission, administration.department of Government or other-wise that has reaped 7 billion bucks. Iwould like to find it.

We have the money to administer allof these things and bring it Into a de-regulatory, competitive position, but ithas to be done in an orderly fashion,and everycone connected and workingon this understands that. So let us notstart talking about getting rid of theFCC and act like you are doing some-thing sensible.

I thank my colleagues and yield thefloor.

Mr. GORTON addressed the Chair.The PRESIDING OFFICER. The Sen-

ator from Washington.

June 7, 1995Mr. OOR rON. Mr. President. it may

well be that the two distinguishedsouthern managers of this bill, theSenators from South Dakota andSouth Carolina, may never have Imag-ined that this day would come. This Isprobably the first occasion on which athorough philosophical change in di-rection in communications law hasbeen debated on the floor of the U.S.Senate since the Communications Actof 1294. some 61 years ago.

In 1934. of course, communicationswas via old-fashioned dial or operator-assisted telephone through radio sta-tions and through Western Union tele-grams. The technological situation ofthe time called for monopoly commu-nications systems and the necessity ofregulation of those systems in the pub-lic Interest to see that prices were nottoo high.

Today, of course, technology is so to-tally and completely different that anentirely different regime is needed.Perhaps the greatest difficulty Inbringing this day on which we startthis debate to pass has been the factthat in each long set of hearings in theSenate Commerce Committee over ayear or more, each tentative set of con-clusions on the pert of these two Sen-stre, and others, by the time thoseconclusions had been reached, the tech-nology has gone beyond those conclu-sions.

So there seems to be a broad agree-ment across both parties and many po-litical philosophies that there shouldbe a large degree of deregulation as apart of any bill, based on the propo-sition that we cannot tell how muchthe technology will change In the next6 months, much less the next 10 years,and that we should accommodate Itwithout constantly trying to regulateit through some form of statutory lan-guage. That is the philosophy of thisbill, a philosophy of competition ratherthan of regulated monopoly.

It has been a difficult process and itis likely to be a difficult process forthe next 3 or 4 days.

So rather than repeat anything thatthe two leaders in this debate havesaid. I would simply like to say fromthe perspective of this Senator. as amember of the Commerce Committee.there have been three guiding prin-ciples in dealing with the many con-flicte among groups who would like toprovide communication services, andthose three guiding principles are, ofcourse, deregulation, competition andthe Interests of the consumers, theusers of these various services.

Mr. President, there are a number ofareas covered by this bill in whichthose three interests lead to the sameconclusion: Deregulation will promotecompetition, competition will promotethe consumer interest.

Those parts of the bill probably willnot be the subject of much discussionduring the course of this debate. Theyhave been worked out. But the threeconsiderations are at least slightly dif-ferent and move in slightly different


June 7, 1995directions. Because of the nature of thecommunications Industry, which stillincludes huge regulated monopolies, atotal and complete deregulation atleast carries with it the risk not ofcompetition but of an unregulated mo-nopoly substituting Itself for a regu-lated monopoly. So there must be a de-gree of caution in the speed and thecompleteness of any kind of deregula-tion.

Almost always, it seems to me, Mr.President, that competition is in theconsumer interest, though ironicallyMany of the so-called organizedconsumer groups have little faith incompetition and in the free market andbelieve in various forms of state social-Ism and want in many respects moreregulation. I believe. Mr. President.that those so-called consumer rep-resentatives rarely represent the ac-tual consumer interest.

So an we go through this debate overparticular proposed amendments dur-ing the course of the next week, itseems to me we all have to attempt tojudge them on the basis of those threeprinciples: Are they deregulatory innature in a constructive fashion that isconsistent with the march of new tech-nologies? Do they promote competi-tion? And are they in the consumer in-terest?

Mr. President, there is only one othermajor point that I want to make atthis time, and that is that of all of theproposals with which I have had to dealin my career in the Senate. this is per-haps the most important for the futureof our economy. Perhaps as much as 20percent of our economy is connectedwith communications in some respector another. And, of course, the lobby-ing, the attempt to influence all of uson the part of people who are in thecommunications business or wish to bein the communications business isfierce, is overwhelming in nature. Atthe same time. the actual consumers ofthese goods. our constituents, who arenot in the business, are almost totallysilent.

I have hardly gotten a handful oftelephone calls or letters from ordinarycitizens about this bill. It is too big. Itis too complicated. It is about the fu-ture. It is very difficult to come upwith an intelligent opinion off the topof one's head on some of the particularcontroversial areas in it. And so it isup to us to weigh the consumer inter-est as we work our way through thislegislation, along with those featuresthat will lead to competition. gen-erally speaking, through deregulation.

My observation is that the largecompanies and groups which are al-ready in the communications businessdo sincerely favor competition. But.generally speaking, they would like tocreate a competitive atmosphere inwhich they are at least even, and per-haps have a little bit of an advantage.And so the mythical even playing fieldIn something to which all give lip-service but each defines in a differentf ahion.

CONGRESSIONAL RECORD - SENATE

Now, the new companies, the entre-preneurs, those who are just beginningin the field. or wish to get in the field,simply want it opened up. They wantto be able to compete, where todaythey cannot. Few of them are largeenough to demand some kind of specialprivileges or another. And we need toencourage both.

We need to encourage the continuedinvestment in this new technology onthe part of those companies that havebeen in the business literally forever.We cannot lose their expertise and thattremendous Investment. We need to seeto it that those large companies areable to compete against one another inthe consumer interest. At the sametime. we also need to see to it that theniche companies, the new companies.the people with bright new ideas, areable to get into this business and ifthey are tremendously successful, be-come large companies ans well.

So. Mr. President. we search for de-regulation, we search for competition.and we search for the consumer inter-ests. I think we all do so sincerely, de-termined that we need to make majorchanges, and perhaps with a degree ofhumility, that we do not know what isgoing to happen tomorrow, and we wishto craft an outline which will allow to-morrow to take place without our hav-ing crushed it by unanticipated con-sequences to the actions we take here.

I want to close by congratulatingboth of my colleagues, the Senatorfrom South Dakota and also the Sen-ator from South Carolina, who hasspent a major part of his career in thisfield and who now has. I think, the en-viable task of attempting to managethis legislation wisely and successfullyto a conclusion that will benefit all ofthe American people.

Mr. DOLE addressed the Chair.The PRESIDING OFFICER. The ma-

jority leader is recognized.Mr. DOLE. First. I thank and con-

gratulate the chairman and the rank-ing member of the committee, SenatorPRESSLER and Senator HOLLINGS. Wehave been promising week after weekthat this bill was coming to the floor.I do not believe it now that it is on thefloor and pending. I have every expec-tation, with their management skills.that we can probably finish this bill byFriday noon. If that is the case, weprobably would not have any votes onMonday-if that is an incentive foranybody. We might have debate onsome other bill but no votes on Mon-day. So if we can consider those incen-tive programs a we go along, it will behelpful. But it is a very importantpiece of legislation. It is probably themost important bill we have consideredall year, no doubt about it. It will cre-ate jobs, opportunity, all of the thingswe have talked about. I have listenedto both managers' opening statements.

Mr. President, some may consider S.652 to be the end of a long, long, proc-ess. And no doubt about it, tele-communications deregulation legisla-tion has been an idea debated around

81897here for nearly a decade. In fact. I firstintroduced telecommunications de-regulation legislation in 1988.

But rather than seeing this bill as anend to the process, I see it as a begin-ning: A beginning of a new era of lead-ership for the telecommunications In-dustry and for America.

And one person who deserves a gooddeal of credit for making this new eraa reality is Senator PRESSLER. As allMembers know, this is a tough, com-plex, and often contentious issue. AndSenator PRESSLER and Senator HOL-LINGS have done an outstanding job atbringing the competing interests to-gether-or as close together as pos-sible.

Senator HOLLINGS was the chairmanand came very close last year to get-ting a bill. This year, under the chair-manship of Senator PRESSLER. we areon the floor with the bill. We have notpassed it yet, but my understanding isthat there is a lot of bipartisan sup-port. It is not a partisan measure. aDemocrat or Republican partisan fight.So we ought to be able to complete itquickly, because they have done anoutstanding job of bringing the com-peting interests as close together aspossible.

Mr. President. leadership in tele-communications, whether it was in-venting the telegraph or the microchip.han been an American tradition. Andwe will continue that tradition withpassage of this bill.

As I have said before, telecom reformwill be the real jobs stimulus packageof this decade.

Building the necessary infrastructurewill require thousands of private sectorjobs. And that is just the beginning.Millions more will be created becauseinformation will become more acces-sible. Jobs that will make Americamore efficient, more productive, andultimately more piowerful.

Looking back on Congress' trackrecord, a casual observer would thinkthat we have a grudge against the com-munications industry. Fortunately.this image is changing and Republicansare glad to see that traditional "pro-regulators" are finally coming aroundto our competitive way of thinking.

We must develop a flexible policythat will accommodate the explosion ofnew technology. That policy, of course.is promoting competition. It is irre-sponsible to think we can do anythingmore.

No one knows the benefits of free andopen competition better than the com-puter and semi-conductor industries.Just take a look at a few of the playersin the U.S. communications industry.

Last year. the computer industryearned revenues close to 9380 billion.Two things are amazing about that fig-are. First, it is twice the telephone in-dustry's revenues. And second, reve-nues from the personal computer in-dustry, which for all intents and pur-poses was non-existent in 1980, accountfor almost half of that figure. In otherwords, revenues in personal computers


87898have grown an much In 14 years as theentire telephone industry did in 100.

It io not too difficult to figure outthat the computer industry benefittedfrom fierce competition and minimalgovernment regulation. Phone compa-nies did not.

Cable TV also exploded after it wasde-regulated in 1984. At that time, itsrevenues were $7.8 billion and it em-ployed 67,381 persons. Past-forward to1992. Revenues tripled and employmentnumbers Jumped to 108.280. While thesenumbers are also good. I would suggestthat the cable TV industry would havedone much better if it had faced com-petition. More importantly, I wouldalso suggest that there would not havebeen the abuses which prompted Con-gress to enact re-regulation in 1992.

My point In simple: competition, notregulation, has the best record for cre-ating new Jobs, spurring new innova-tion, and creating new wealth.

Mr. President. America is at thecross roads, and Congress must make achoice. A touch choice, as we all know.But I believe that If we ask the rightquestion, we will get the right Answer.As I see It. we must ask ourselves."who will decide the communicationslndunstry'e future."

I say we allow the real technical ex-parts to decide. And I am not. talkingabout government bureaucrats. In-stead, we should look to the experts inthe field, the entrepreneurs, the engi-neer. and the Innovators. It seems tome that they will do a far better job forour country if big government leavesthem alone.

I, for one, cannot allow governmentto become the biggest player in thetelecommunications industry. Toomuch is at stake. It is nonsense togamble away millions of new jobs. It isnonsense to gamble away America'sability to compete, and win, around theworld. And it is nonsense to gambleaway the spoils that the informationage will bring.

To get there, I have worked with thecommittee to develop a comprehensivederegulatory amendment that touchesall sectors of the communications in-dustry. It is my understanding that themanagers are not quite ready to acceptit now.

I have a list describing each provi-sion that I will insert in the RECORD atthe end of my remarks, but for now. Iwill just highlight a few of the provi-sions.

First, deregulate small cable TV sys-teens. This has bipartisan support. Al-though views differ on deregulating theentire cable TV industry, most of uscan agree that rural and small systemsneed rate relief in order to survive.This provision gets it done.

Second. force the Federal Commu-nications Commission to eliminateoutdated regulations, and do so in atimely manner. Currently. there is noguarantee that the Commission willever act on requeste that it forbear onregulations. Under this amendment.the Commission must respond within

CONGRESSIONAL RECORD-SENATE90-days-60 more can be added if theissue requires additional scrutiny.Most importantly, It must provide awritten determination to justify its ac-tions.

Third. eliminate the number of TVstations that any one entity can own.Currently, the limit is capped at 12.This amendment removes that cap. Iwant to point out. however, that thisamendment does not, I repeat, does notincrease the percentage of nationalviewerehip beyond the 35 percent thatis included in the chairman's mark.

The amendment also eliminates thenumber of radio stations one can own.unless the Commnission finds that issu-ing or transferring a license will harmcompetition.

The measure also privatizes or elimi-nates a number of FCC functions. TheCommission deserves credit for makingthese suggestions that comprise thisprovision. In other words they camefrom the FCC.

I could go on at length, but I believeI have given my colleagues a flavor ofwhat this amendment is about. I knowthe managere and members of theirstaffs are well acquainted with it.

This amendment does represent thehard work of many Members, obviouslyMembers on both sides of the aisle.Senator BURNS has been working onthis for a couple years, Senator CRAIG,Senator PACKWOOD, Senator MCCAN onour side, just to name a few, and, ofcourse, Senator PRESSLER and SenatorHOLLINGS.

It does not matter how long we workon it, if we cannot get it accepted, Itdoes not make any difference. We hopeat the appropriate time that it can beaccepted. I hope that we will continueon the procompetitive. deregulatorycourse that we have taken in a biparti-san way, and in only that way will weensure that today Is beginning a newrenaissance for America.

Mr. President, I ask that a summaryof the deregulation package be printedIn the RECORD following my statement.

There being no objection, the mate-rial was ordered to be printed In theRECORD. as follows:

StIMMARY OF DERSEULATION PACKAGE

Transfers Judge Green's MFJ iconsoent de-cree) to the FCC.

Eliminates GTE's consent decree.Adopts definition to restrict expansion of

universal service so that it does not spiralot of control.Greater deregulation for small cable '.

As the bill stands now. small cable can'ttake advantage of any rate deregulation be-cause of the way their systems are set-up. Totake care of them. the deregulatory amend-ment would completely eliminate rate regu-lation for cable operators who serve lessthan 35.000 in one franchise area. and do notserve more than 1% of all subscribers nation-wide (650,000 subscribers). Obviously, this Is apretty broad definition of a "small" cablecompany.

Increase the Commission's ability to for-bear on regulation.

Establish a petition driven process to forcethe commission to forbear on regulationwithin a 90-day period. If the Commissiondos not act, or extend period by an addi-

June 7, 1995tional SD days. the petition shall be deemedgranted. If petition is rejected, it must bewith & written explanation. In ehort, it willforce the commission to justify any and allof its regulations.

Eliminate the number of TV stations anyone entity can own.

Force the Commission to change its rulesso that any entity can reach up to 35% ofAmericans with TV broadcast systems (thecurrent cap Is at 25%).

Eliminate the number of radio stationsany one entity can own. unless It wouldharm competition.

Have FCC consider eliminating rate regu-lation in long distance market.

Regulatory relief. Speed up FCC action forphone companies by making any revisedcharge that reduces rates effective 7 daysafter It Is filed with commission. ate in-creases will be effective 15 days after submis-sion. To block such changes, FCC must jus-tify its actions.

Eliminate arcane requirement that phonecompanies must File any line extension withCommission. As it stands now, companieshave to got the commnsion to approve anyline extension which often takes more than ayear.

Phone companies will only have to file costallocation manuals on a yearly basis.

Eliminate the following FCC functions: Re.peal setting of Depreciation rates: HaveCommission subcontract out Its audit func-tions; Simplify coordination between Fedoand States; Privatize Ship radio Inspections;Perm t Commission to waive constructionpermits for broadcast stations ns long s li-cense application Is submitted 10 days afterconstruction is completed.

Alo terminate broadcast licenses if a sta-tion Is silent for more that 12 consecutivemooths. Subcontract out testing and certifl-cation of equipment Permit operation of do-mestic ship and aircraft radios without li-cense. Eliminate FCC jurisdiction over gov-ernment owned radio stations. Eliminateburdensome paperwork Involved in AmateurRadio examination. Streamline non-broad-cast radio licenses renewals.

•AoENDMENr NO. 155Mr. DOLE. Mr. President, I send my

amendment to the desk and ask for itsimmediate consideration.

The PRESIDING OFFICER. Theclerk will report.

The bill clerk read as follows:

The Senator from Kansas [Mr. DOLE) pro-poses an amendment numbered 1211.

Mr. DOLE. Mr. President. I ask unan-

imous consent further reading be dis-pensed with.

The PRESIDING OFFICER. Withoutobjection. It Is so ordered.

The amendment is as follows:(c) TRANoFER OF MFJ.-After the date of

enactment of this Act, the Commission shalladminister any provision of the Modificationof Final Judgment not overridden or super-seded by this Act. The District Court for theDistrict of Columbia shall have no furtherjurisdiction over any provision of the Modi-fication of Final Judgment administered bythe Commission under this Act or the Com-munications Act of 1934. The Commissionmay, consistent with this Act (and theamendments made by this Act), modify anyprovision of the Modification of Final Judg-ment that it administere.(d) GTE CONSENr DECREE.-This Act shall

supersede the provisions of the Final Judg-ment entered in United States v. GTE Corp.,No. 83-1298 (D.C. D.C.). and such Final Judg-ment shall not be enforced after the effectivedate of this Act.


June 7, 1995 CONGRESSIONAL RECORD- SENATEOn page 40. line 9. strike "to enable them"

and insert sehich are determined by theCommission to be essential In order forAmericans".

On page 40. beginning on line 11. strike'Nation. At a minimum. universal serviceshall inclade any telecommunications serv-ices that" and Insert "Nation. and which".

On page 70. between lines 21 and 22. Insertthe following:(b) ORZAT DEREGULATION FOR SMALLER

CABLE COMPANIEs.-Section 823 (47 U.S.C.543) Is amended by adding at the end thereofthe following:

.(m) SPECIAL RULES FOR SM1ALL COMPA-NrO.-

"l IN OENERAL.-Subeection (a). (hi. or (c)does not apply to a small cable operator withrespect to-

:(A) cable programming services. or'(Si a basIc service tier that was the only

service tier subiect to regulation as of De-

cember 31. 1994.in any franchise area in which that operatorserves 35.000 or fewer subscribers."(2) DEFINrON OF SMALL CABLE OPERA-

TOR.-For purposes of this subsection, theterm 'mall cable operator' means a cableoperator that, directly or through an affili-ate. serves In the aggregate fewer than 1 per-cent of all subscribers In the United Statesand does not, directly or through an allill-ate, own or control a daily newspaper or atier I local exchange carrier.".On page 70. line 2. strike "(b)" and insert

(C)".On page 71. line 3, strike "(c)" and Insert

"(d)".On page 79. strike lines 7 through 11 and In-

sert the foliowin.(1) IN ENERAL.-The Commission shall

modify Its rules for multiple ownership setforth in 47 CFt 73.35M by-(A) eliminating the restrictions on the

number of television stations owned underaubdivisions (e)(l (if) and (ill): and(S) changing the percentage set forth In

subdivision (eX2Xll) fto 2 percent to 35percent.(2) RADIO OWNRaSMP.-The Commission

shall modify Its roles set forth In 47 CYR73.35M by eliminating any provisions limit-ing the number of AM or FM broadcast sta-tions which may be owned or Cntrolled byone entity either nationally or In a particu-lar market. The CommissIon may refuse toapprove the transfer of issuance of an AM orFM broadcast license to a particular entityif It finds that the entity would thereby ob-tain an undue concentration of control orwould thereby harm competition. Nothing Inthis section shall require or prevent theCommission from modifying ite rules con-tained in 47 CFR 73.3555(c) governing theOwnership of both a radio and televisionbroadcast stations in the same market.

On page 79. line 12, strike "(2)" and Insert"(3)".

On page 79. line 18, strike "(3)" and Insert"(4)".

On Pag 79. line 21. strike "(4)" and Insert"is5)"-

On Page ?9, line 2, strike "Imodification re-quired by pLragraph (1)" and insert "modl-fications required by paragraphs (I) and (2)".

On page 116, between lines 2 and 3. insertthe following:

(b) DOmIANr INTSznXCHAxOz CARRIs.-The Commission. within 273 days after thedate of enactment of this Act, shall completea proceedIng to consider modifying Its rulesfor determining which carriers shall be clas-sified as "dominant carriers" and to considerexcluding all Interexchange telecommunl-cations carriers from some or all of the re-qulrements associated with such claslfica.tion to the extent that such carriers providetnterexchang telecommunications service.

On page 116. line 3. strike "'(b)" and Insert.'(-Y".

On page 117. line I, strike "(C" and Insert"(d).

On page 117. line 22. strike REGULATIONS." and Insert "REGULATIONS, ELIMI-NATION OF UNNECESSARY REGULATIONSAND FUNCTIONS."

On page 117. line 23, Insert "a) BIENNIALREVIEW.-" before "Part".

On page 118. between lines 20 and 21. Insertthe following:

(b) ELIMINATION OF UNNECESSARY COMMIS-SION REGULATIONS AND FUNCTIONS.-

(1) REPEAL SErNo OF DEPRECIATIONRATES.-The first sentence of section 220(b)(47 U.S.C. 220(b)) Is amended by striking"shall prescribe for such carriers" and in-serting "may prescribe, for such carriers asit determines to be appropriate.".

(2) USE OF INDEPENDENT AUDITORS.-Secton220(c) (47 U.S.C. 220(c)) is amended by addingat the end thereof the following: "rhe Com-mission may obtain the services of any per-son licensed to provide public accountingservices under the law of any State to assistwith. or conduct, audits under this section.While so employed or engaged In conductingan audit for the Commission under this sec-tion. any such person shall have the powersgranted the Commission under this sub-section and shall be subject to subsection (f)In the same manner as If that person were anemployee of the Commission.".

(3) SEMPLICATION OF FEDERAL-STATE Cc-ORDINATION PROCESS.-The Commission shallsimplify and expedite the Federal-State co-ordination process under section 410 of theCommunications Act of 194.

(4) PRIVATIZATION OF SHIP RADIO INSPEV-TIONS.-Secton 302 (47 U.S.C. 385) o amendedby adding at the end thereof the following:"In accordance with such other provisions oflaw as apply to government contracts, theCommission may enter Into contracts withany person for the purpose of carrying outsuch Inspections and certifying compliancewith those requirements, and may, as pet ofany such contract, allow any such person to,amept reimbursement from the license hold-er for travel and expense costs of any em-ployee conducting and inspection or certifi-cation.".

(5) MODIFICATION OF CONSTRUCTION PERMITREQIREMEN.-Sectlon 319(d) (47 U.S.C.319(d)) t0 amended by striking the third sen-tence and Inserting the following: '"The Com-mision may waive the requirement for aconstruction permit with respect to a broad-casting station In circuinstances in which itdeems prior approval to be unnecessary. Inthose circumstances, a broadcaster shall fileany related license application within 10days after completing construction.".

() LIMITATION ON SILENT STATION AUTHOR-IZATIONS.-Section 312 (47 U.S.C. 312) isamended by adding at the end the following:

"(g) If a broadcasting station falls totransmit broadcast signals for any consecu-tive 12-month period, then the station li-cense granted for the operation of thatbroadcast station expires at the end of thatperiod, notwithstanding any provision, term.or condition of the license to the contrary.".

(7) EXPEDITINO INSTRUCTIONAL TELEVISIONFIXED SERVICE PROCESSINO.-The Commissionshall delegate. under section S(c) of the Coin-munications Act of 194. the conduct of rou-tine instructional television fixed servicecases to Its staff for consideration and finalaction.

(8) DELEGATION OF EQUIPMENT TESTING ANDCERTIFICATION TO PRIVATE LABORATORIES.-Section SM (47 U.S.C. 302) Is amended by add-Ing at the end the following:

"(0) The Commlsslon may-"(1) authorize the use of private organiza-

tions for testing and certifying the compli-

S 7899ance of devices or home electronic equip-ment and systems With regulations promul.gated under this section;

"(2) accept as prima facie evidence of suchcompliance the certification by any such or-ganization; and

"(31 establish such qualifications andstandards as It deems appropriate for suchprivate Organizations. testing, and certifi.cation.".

(9) MAKING LICENSE MODIFICATIONa UNI-FORM.-Section 303f) (47 U.S.C. 303(f) Isamended by striking "unless, after a publicbearing." and Inserting "unless".

(10i PERMF OPERATION OF DOMESTIC SHIPAND AIRCRAFT RADIOS WITHOUT LICENSE.-Sec-tion 207(e) (47 U.S.C. 307(e)) Is amended by-

(A) striking "serVice and the citizens bandradio service" In paragraph (1) and inserting--service. citizens band radio service, domes-tic ship radio service, domestic aircraft radioservice, and personal radio service"; and(B) striking "service' and 'citizens band

radio service' in paragraph (3) and insertIng"service'. 'citizens band radio service. 'do-mestic ship radio service. 'domestic aircraftradio service', and 'personal radio service'".

(Il) EXPEDITED LICENSINO FOR FIXED MICRO-WAVE SERVICE.-Section 309(b)(2) (47 U.S.C.309(b)(2) is amended by striking subpara-graph (A) and redesignating subparagraphs(iB) through (G) as (A) through (F). respec-tively.

(121 ELIMINATE FCC JUR1'DICTION OVER GOV-ERNMENT-OWNED SHIP RADIO STATIONS.-

(A) Section 305 (47 U.S.C. 35) In amendedby striking subeectio (h) and redesignatingsubsections (c) and (d) s (b) and (c). respec-tively.

(B) Section 382(2) (47 U.S.C. 382(2)) Isamended by striking "except a vessel of theUnited States Maritime Administration. theInland and Coasetwise Waterways Service, orthe Panama Canal Company.".

(13) MODIFICATION OF AMATEUR RADIO EXAM-INATION PROCEDURES.-

(A) Section 4(XHXN) (47 U.S.C. 41f(4XB))is amended by striking "transleaslons, or inthe preparation or distribution of any publi-cation used In preparation for obtainingamateur station operator licenses." and In-serting "transmission".

(B) The Commission shall modify Its rolesgoverning the amateur radio examinationprocess by eliminating burdensome recordmaintenance and annual financial certifi-cation requirements.

(14) STREAMLINE NON-BROADCAST RADIO LI-CENSE RENEwALS.-The Commission shallmodify Its roles under section 309 of theCommunications Act of 1934 (47 U.S.C. 310)relating to renewal of nonbroadcast radio li-censes so as to streamline or eliminate com-parative renewal hearings where such bear-ings are unnecessary or unduly burdensome.

On page 117. between lines 21 and 22. Insertthe following:

(d) STREAMLINED PROCEDURES FOR CHANGESIN CHARGES, CLASSIFICATIONS. R GULATIONS,OR PRACTICES.-

(A) Section 204(a) (47 U.S.C. 20()) Isamended-

(I) by striking "12 months" the first placeIt Appears In paragraph (2)(A) and Inserting"5 months";

(Ill by striking "effective," and all thatfollows In paragraph (2)(A) and Inserting "ef-fective."; and1ll) by adding at the end thereof the fol-

lowing"(3) A local exchange carrier may file with

the Commission a new or revised charge.classification, regulation, or practice an astreamlined basis. Any such charge, classi-fication. regulation, or practice shall bedeemed lawful and shall be effective 7 days(In the case of a reduction In rates) or I3days (in the casS of an Increase in rates)


S 7900 coafter the date on which It Is filed with theCommission unless the Commission takesaction under paragraph (i1 before the end ofthat 7-day or 15-day period, as Is appro-priate."

(B) Section 0(b) (41 U.S.C. 208b)) isamended-

(I) by striking "12 months" the first placeit appears in paragraph (I) and inserting "5months*: and

(II) by striking "filed." and all that followsin paragraph I) and inserting "filed.".

(2) EXTENSIONS OF LINES "rNDER SECTION n4:ARMIS sEPOkTS.-Notwlthstandlng sectlon305. the Comminsion shall permit any localexchange carrier-

(A) to be exempt from the requirements ofsection 214 of the Communications Act of1934 for the extension of any line; and

(S) to fle cost ailocstion manuals andARMIS reports annually, to the extent suchcarrier Is required to file such manuals or re-ports.

(3) FOREBEARANC AUTHORYrr NOT LIM-rrn.-Nothing in this subsection shall beconstrued to limit the authority of the Com-mission or a State to waive, modify, or for-bear from applying any of the requirementsto which reference is made In paragraph (1)under any other provision of this Act orother law.

On page 118, line 20. strike the cloningquotation marks ifid the second period.

On page 118. between lines 20 and 21, Insertthe following:

"(c CLASSIFICATION OF CARRIERS.-Inclassifying carriers according to 47 CFR 32.11and in establishing reporting requirementspursuant to 47 CFR part 43 and 47 CPR 64.903.the Commission shall adjust the revenue re-quirements to account for Inflation as of therelease date of the Commission's Report andOrder in CC Docket No. 91-141, and annuallythereafter. This subsection shall take effecton the date of enactment of the Tele-communications Act of 1995.".

On page 119. line 4. strike "may" and insert"shall".

On page 120, between lines 3 and 4. insertthe following:

"(C) END OF REGULAT70N PROCE5.-Aaytelecommunications carrier. or class of tele-communlcations carriers, may submit a peti-tion to the Commission requesting that theCommission exercise the authority grantedunder this section with respect to that car-rier or those carriers, or any service offeredby that carrier or carriers. Any such petitionshall be deemed granted if the Commissiondoes not deny the petition for failure to meetthe requiremente for forbearance under sub-section (a) within 90 days after the Commis-sion receives It. unless the 90-day period isextended by the Commission. The Commis-sion may extend the initial 30-day period byan additional 60 days If the Commission findsthat an extension Is necessary to meet therequirements of subsection 4a). The Commis-sion may grant or deny a petition in wholeor in Dart and shall explain Its decision Inwriting.

On page 120. line 4. strike "(c)" and Insert"(dl".

Mr. DOLE. Mr. President, I ask unan-imous consent that the amendment belaid aside.

Mr. KERREY. Reserving the right toobject, Mr. President, I am not object-Ing to having It laid aside. I am here toinquire what the procedure is going tobe. The Senator is offering an amend-ment and Is not going do debate it herethis evening? It will be laid aside?

NGRESSIONAL RECORD-SENATEI have not seen this copy. The Sen-

ator is not proposing it be accepted atthis moment?

Mr. DOLE. I think the managers maybe ready to accept it by tomorrowmorning.

Mr. HOLLINGS. If the Senator willyield. That Is correct. In fact, about 2hours ago we had it worked out, butthere is some further Interest on ourside that we have yet to clear. The dis-tingulshed minority leader has anotheramendment that he wanted to presentat the same time. and I think we canwork that out.

That is the idea, to temporarily layit aside and move on. -

Mr. KERREY. I will not object, but Iwill inform the manager of this billthat I will not give unanimous consentto this being accepted until I have readIt and signed off on it.

Mr. DOLE. I have obviously no prob-lem with that. In fact, I can give theSenator from Nebraska a summary ofit. too. I thank my colleague.

The PRESIDING OFFICER. Withoutobjection, the amendment is set aside.

Mr. PRESSLER. I thought we hadthis agreed to this afternoon, hut Iguess the minority leader has some-thing he would like to add or change.But I would like to inquire of the ma-jority leader if we cannot get agree-ment tonight.

Shall we make this one of the votesat 8:30 or 9 o'clock in the morning?

Mr. DOLE. If It is acceptable, I donot need a vote. I do not want to penal-ize anybody.

Mr. KERREY. Is the Senator askingto set a time for a vote?

Mr. DOLE. Not on this amendment. Iwill wait until the Senator from Ne-braska Indicates he has had a chance tolook at it.

Mr. STEVENS. Mr. President. I dothink that everyone should be awarethat the bill we are considering is larg-er in its Impact on the national econ-omy than the health care reform meas-ure we considered last year.

This bill. In a conservative way, willimpact more than one-third of theeconomy of the United States.

It is a bill that is designed to transi-tion from the 1934 Communications Actto a period sometime, hopefully.around the turn of the century whenwe will have deregulated telecommuni-cations because of the competitionthat we this bill will instill and guar-antee.

Now, the bill will put the commu-nications policy of the United Statesback where it belongs, in the hands ofthe elected representatives and thePresident. and will take it out of thecourts. By setting rules for entry intolong distance by the Bell operatingcompanies, I think we bring to a closean over-10-year policy-making periodby the U.S. courts.

This bill will open the local tele-phone market to competition. It willbring competition and new services toall parts of the United States.

It is not a permanent piece of legisla-tion, in my judgment. This is not a bill

June 7, 1995that will replace, totally, the 1934 act.It does. however, by deregulating theIndustry with appropriate safeguards,set the stages for a new era in theUnited States.

I want to call the attention of theSenate to a provision that is verymeaningful to my area, the universalservice provision. This is a conceptthat, through the existing interstaterate pool, has brought telephone serv-ice to all parts of this Nation, includ-ing remote villages In Alaska andthroughout the Nation wherever youare.

The concept Is preserved in this billin a new manner. It opens up the localmarket to competition while still pre-serving the concept of universal serv.ice. It does so by taking advantage ofnew technologies which are Intended toreduce the cost of all services, includ-ing universal service.

In fact, I find it Interesting that theCongressional Budget Office has saidthat this bill will reduce the cost ofuniversal service from the existing sys-tem by at least $3 billion over the next5 years.

Now, tumbling technology, as I callit, makes terrestrial distances irrele-vant. By using modern technologies.the people In Egiagik and Unalakleetand Shlshmaref, places many peoplehave never heard of, can be involved instock markets in New York. explorethe Library of Congress, and be con-nected with overseas sources of infor-mation. Allowing cable companies toprovide phones and phone companies toprovide cable, this bill will spur com-petition and reduce costs to the Na.tion.

There are so many new technologiescoming along. Mr. President, it ismind-boggling. There are many provi-sions in this bill that are aimed at de-regulating the industry so those newtechnologies may compete.

It is my hope that the Senate willrecognize this bill for what it is. It is acredit, as the distinguished leader hassaid, to Senator PRESSLER, the chair-man of our committee, and to SenatorHOLLINOS, the former chairman of ourcommittee. It Is a bill of monstrousscope that has substantial bIpartisansupport.

Had we had a similar approach to theproblems of health care reform in thelast Congress, we would have had thatproblem at least partially solved.

To the credit of these two Senators.this is not a bill that attempts to solveall of the problems of the tele-communications industry for the fu-ture. It is a bill that opens the door tothe future and. in my judgment. it isone that it is absolutely essential bepassed.

I am told that George Gilder of theDiscovery Institute in Seattle, whom Iconsider to be one of the real thinkersof this country, has told us that notpassing this bill will cost the UnitedStates $2 trillion in lost opportunitiesin the next 5 years alone.

I happen to pay attention to Mr.Gilder because he wrote an article the


June 7, 1995 Co:other day which answered some re-marks that I made about universalservice. I do feel in the days ahead thethinking that this man is doing willhave a great deal to do with guidingthe Nation into that ultimate systemthat I foresee coming on after the turnof the century.

Just In terms of the broad band radioconcept that Is coming along and howit will replace substantial portions oftelecommunications now

" carried by

wire or fiber Optic cable or through sat-ellites, that concept alone is going tocatch us by surprise if we do not knowwhat is happening. But at least weknow it will happen. We are not tryingto regulate that by this bill. We are nottrying to prevent it by this bill. We areopening the door so new competitiveaspects will come into our communica-tions policy in the United States.

This morning I Introduced a bill thatI said I would offer as an amendment tothis bill if the opportunity presenteditself. I have discussed it now with thetwo managers of the bill. I would liketo offer now an amendment.

First let me describe what it is. It isan amendment that will expand theFCC's authority to use auctions to ax-sign licensee for the use of radio spec-trum. The members of our committeewill know that for two Congresses I ar-gued that we should implement auc-tions to replace the old lottery systemthat was giving windfall profits tomany and denying others access to op-portunities that would start new busi-nesses.

Under the old system, the lotteries,there was no commitment to use thisspectrum but it was held as sort of anitem that other people might bid onwhen they were willing to pay enoughmoney to the person who was luckyenough to win the lottery. The personwho got the license had no intent touse it. Now, with a bidding process,competitive bidding, we have broughtthe use of the spectrum to the pointwhere people who want it pay what isnecessary to get its use.

The Congressional Budget Office, as Isaid before, has estimated that theamendment I offer will raise $4.5 bil-lion in the next 5 years. That is nec-essary for a strange reason. The Con-gresslonal Budget Office also estimatedthat the universal service provisions inthis bill will require private industryand private purchasers to pay $7.1 bil-lion over the next 5 years into this sys-tem, which was the interstate rate pooland now will become the fund for thepayment of the universal service provi-sions of this bill.

I remind the Senate that the univer-sal service system contained in thisbill would result in a reduction of $3billion from what continuation of theexisting system will cost in the next 5ybars. But notwithstanding that thisbill will reduce the costa of the existingsystem we know, in order to avoid aBudget Act point of order on technicalgrounds, must offset the finding of theCongIessional Budget Office that this

NGRESSIONAL RECORD-SENATErequirement of the private sector topay $7.1 billion into the pool-less thanbefore but they still must pay it in--that this private payment must be off-set under our congreseional budgetprocess.

That sort of boggles my mind too.Mr. President, but it is a requirementand I respect the Budget Act concept.Therefore I offer this amendment. Itwill extend the auction authority untilthe year 2D0. That is all that is nec-essary to comply with the Budget Act.5 years. It will bring in a minimum es-timate. as I said. of $4.5 billion.

We have already received, under theauction amendment that I offered 2years ago. almost $10 billion. It wasnew money, the kind of money thatwas never received by the Governmentbefore.

Under my amendment tonight, theFCC would have the authority to usespectrum auctions for all mutually ex-clusive applications for initial licensesor construction permits except for li-censes for public safety radio servicesor for advanced television services, ifthe advanced television licenses aregiven to existing broadcast licensees asa replacement for their existing broad-cast licenses.

This means that market mechanismswill help determine who can make themost efficient use of spectrum thatwill become available. I believe, again,that is the best way to deal with thefuture.

My amendment does not change thebasic safeguards Congress put in theoriginal spectrum auction legislationafter I offered it several years ago. Theexpanded authority will apply only tonew license applications. It will notapply to renewals. And the FCC maystill not consider potential revenue inmaking the decision as to which typeof service new spectrum should be usedfor. The revenue only becomes a factorin determining who gets the license touse the spectrum for any particularpurpose.

The bill I introduced this morning,which is the same as this amendment,would also provide authority for Fed-eral agencies to accept reimbursementfrom private parties for the cost of re-locating to a new frequency. This willallow private industry to pay to moveGovernment users off valuable fre-quencies by relocating the Governmentstation to a less valuable frequency atno cost to the taxpayer, but an in-crease to the Treasury.

The amendment builds on what hasbeen a very successful beginning. Sincethe existing spectrum auction author-ity was enacted in 1993, as I have said.the FCC has raised in excess of $9 bil-lion. almost $10 billion now, for theFederal Treasury in just four auctions.

I du hope the Senate will support theamendment.

I ask unanimous consent that Sen-ator DOLE'S amendment be set aside forthe time being and I be allowed to sub-mit the amendment.

Mr. KERREY. Reserving the right toobject.

87901The PRESIDING OFFICER (Mr.

SANTORUM). Senator DOLE'S amend-ment has been set aside. The Senatordoes have a right to offer an amend-ment.

Mr. KERREY. But I object.The PRESIDING OFFICER. Is the

Senator sending his amendment to thedesk?

Mr. STEVENS. Did the Senator ob-Ject to my request to set aside SenatorDOLE'S amendment?

The PRESIDING OFFICER. SenatorDOLE'S amendment has been set aside.There is no need for a unanimous-con-sent request.

AMENDMENT NO. 1254(Purpose: To extend the authority of the

Federsi Communications Commission touse auctions for the allocation of radiospectrum frequencies for commercial use.to provide for private sector reimburse.ment or Federal governmentai user coststo vacate commercially valuable spectrum,and for other purposes)Mr. STEVENS. Mr. President, I send

an amendment to the desk and ask forits immediate consideration.


The legislative clerk read as follows:The Senator from Alaska [Mr. STEVENS)

proposes as amendment numbered 1256.Mr. STEVENS. Mr. President. I ask

unanimous consent that reading of theamendment be dispensed with.

The PRESIDING OFFICER. Withoutobjection, it is so ordered.

The amendment is as follows:At the appropriate place in the bill insert

the following:sEC . SPECrauM AUCTIONS,(a) FINDINS.-Tbe Congress finds that-(1) the National Telecommunications and

Information Administration of the Depart-ment of Commerce recently submitted to theCongress a report entitled "U.S. NationalSpectrum Requirements" as required by sec.tion 113 of the National Telecommunicationsand Information Administration Organita-tion Act (47 U.SC. 923);(2) based on the best available information

the report concludes that an additional 179megahertz of spectrum will be needed withinthe next ten years to meet the expected de-mand for land mobile and mobile satelliteradio services such as cellular telephoneservice, paging servlcps, personal commu-nication services. and low earth orbiting set-ellite communications systems;(3) a farther 85 megahertz of additional

spectrum, for a total of 264 megahertz. Isneeded if the United States is to fully imple-ment the Intelligent Transportation Systemcurrently under development by the Depart-ment of Transportation;(4) as required by Part B of the National

Telecommunicatlons and Information Ad-m nistration Organization Act (47 U.S.C. 92:et seq.) the Federal Government will transfer235 megahertz of spectrum from exclusivegovernment use to non-governmental ormixed governmental and non-governmentaluse between 1994 and 2004:(51 the Spectrum Reallocation Final R,.

port submitted to Congress under section 113of the National Telecommunications and In-formation Administration Organization Actby the National Telecommunications and In.formation Administration states that. of theM5 megahertz of spectrum identified forreallocatJon from governmental to non-gov-ernmental or mixed use- .


S 7902(A) 50 megahertz has already been reallo.

cated for exclusive non-govermental use.(B1 45 megahertz will be reallocated In 1995

ror both exclusive non-governmental andmixed governmental and non-governmentaluse.

(C) 25 megahertz will be reallocated In 1997for exclusive non-governmental use,(D) 70 megahertz will be reallocated In 1999

for both exclusive non-governmental andmixed governmental and non-governmentaluse. and

(E) the final 45 megahertz will be reallo-cated for mixed governmental and non-gov-ernmental use by 20f4

(9) the 165 megahertz of spectrum that arenot yet reallocated, combined with 90 mega-hertz that the Federal CommunicationsCommission Is currently holding in reservefor emerging technologies, are less than thebest estimates of projected spectrum needSin the United States:

(7) the authority of the Federal Commu-nications Commission to assign radio spec-trum frequencies using an auction processexpires on September 30. 1999:

(8) a significant portion of the reallocatedspectrum will not yet be assigned to non-governmental users before that authority ex-pires;

(9) the transfer of Federal governmentalusers from certain valuable radio frequenciesto other reserved frequencies could be expe-dited If Federal governmental users are per-mitted to accept reimbursement for reloca-tion costs from non-governmental users; and

(101 non-governmental reimbursement ofFederal governmental users relocation costs

ould allow the market to determine themost efficient use of the available spectrum.(h) EXTENSION AND EXPANSION OF AUCTION

AtiHoRrITY.-Section 3090) (47 U.S.C. 3090))is amended-(l) by striking paragraph (i) and inserting

in lieu thereof the following:.(I) GENERAL ATriORITY.--If mutually ex-

clusive applications or requests are acceptedfor any Initial license or constructlon permitwhich will involve a use of the electro-magnetic spectrum, then the Commissionshall grant such license or permit to a quali-fled applicant through a system of competi-tive bidding that meets the requirements ofthis subsection. The competitive bidding au-thority granted by this subsection shall notapply to licenses or construction permits !a-sued by the Commission for public safetyradio services or for licenses or constructionpermits for new terrestrial digital televisionservices assigned by the Commission to ex-isting terrestrial broadcast licensees to re-place their current television licenses.";(2) by striking paragraph (2) and renumber-

log paragraphs (3) through 13) as (2) through(121. respectively; and(3) by striking "1998" In paragraph (10). as

renumbered, and inserting in lieu thereof

(e) REIMBURSEMENT OF FEDERAL RELOCA-T:O5 CoST.-Section 113 of the NationalTelecommunications and Information Ad-ministration Act (47 US.C. 93) Is amendedby adding at the end the following new sub-sections:

I (f) RELOCATION OF FEDERAL GoVERNM-rNTST'TIONS.-

"'li LN GENRAL.-In order to expedite theefflcient use of the electromagnetic spec-trum and notwithstanding section 33021b) oftitle 31, United States Code, any Federal en-tity which operates a Federal Governmentstation may accept reimbursement from anyperson for the costs incurred by such Federalentity for any modification, replacement, orreissuance of equipment, facilities, operatingmanuals, regulations, or other expenses in-curred hy that entity in relocating the oper-ations of its Federal Government station or

CONGRESSIONAL RECORD- SENATEstations from one or more radio spectrumfrequencies to any other frequency or fre-quencies. Any such reimbursement shall bedeposited in the account of such Federal en-tity in the Treasury of the United States,Funds deposited according to this sectionshall be available, without appropriation orfiscal year limitation, only for the oper-ations of the Federal entity for which suchfunds were deposited under this section.

"(2) PROCESS FOR RELOCATION.-Any personseeking to relocate a Federal Governmentstation that has been assigned a frequencywithin a band allocated for mixed Federaland non-Federal use may submit a petitionfor such relocation to NTIA. The NTIA shalllimit the Federal Government station's oper-ating license to secondary status when thefollowing requirements are met-

"(A) the person seeking relocation of theFederal Government station has guaranteedreimbursement through money or in-kindPayment of all relocation costs incurred bythe Federal entity, including all engineering.equipment, site acquisition and construc-tion, and regulatory fee rats;

-(B) the person seeking relocation com-pletes all activities necessary for implement-ing the relocation, including construction ofreplacement facilities (if necessary and ap-propriate) and identifying and obtaining onthe Federal entity's behalf new frequenciesfor use by the relocated Federal Governmentstation (where such station is not relocatingto spectrum reserved exclusively for Federaluse): and

-(C) any necessary replacement facilities.equipment modifications, or other changeshave been implemented and tested to ensurethat the Federal Government station is ableto successfully accomplish its purposes.

"(3) R Tior TO R.CLAiM.-Uf within one yearafter the relocation the Federal Governmentstation demonstrates to the Commissionthat the new facilities or spectrum are notcomparable to the facilities or spectrumfrom which the Federal Government stationwas relocated, the person seeking such relo-cation must take reasonable stepe to remedyany defects or reimburse the Federal entityfor the costs of returning the Federal Gov-ernment station to the spectrum from whichsuch station was relocated.

"(g) FEDERAL ACTION TO EXPEDITE SPEC-TRUM TR.ANSFER,.-AnY Federal Governmentstation which operates on electromagneticspectrum that has been identified forreallocation for mixed Federal and non-Fed-eral use in the Spectrum Reallocation FinalReport shall, to the maximum extent prac-ticable through the use of the authoritygranted under subsection () and any otherapplicable provision of law, take action torelocate its spectrum use to other fre-quencies that are reserved for Federal use orto consolidate its spectrum use with otherFederal Government stations in a mannerthat maximizes the spectrum available fornon-Federal use. Notwithstanding the t:me-table contained in the SpectrumReallocation Final Report, the Presidentshall seek to im-plement the reallocation ofthe 1710 to 1755 megahertz frequency band byJanuary I. 2000. Subsection (cl(4 of this sec-tion shall not apply to the extent that a non-Federal user seeks to relocate or relocates aFederal power agency under subsection (f).

"(hi DEFINiTOS.-For purposes of this sre-tion-

"i1) FEDERAL EN-tm.-The term 'Federalentity' means any Department, agency, orother element of the Federal governmentthat utilizes radio frequency spectrum in theconduct of its authorized activities, includ-ing a Federal power agency.

"(2) SPEcTRUM REALLOCATION FINAL RE-PORT.-The term 'Spectrum ReallocationFinal Report' means the report submitted by

June 7, 1995the Secretary to the President and Congrensin compliance with the requirements of sub-sectli la).".(d) REALLOCATION OF ADDrrToNAL SPEC-

mUNo.-The Secretary of Commerce shall.within 9 months after the date of enactmentof this Act, prepare and submit to the Presi-dent and the Congress a report and timetablerecommending the reallocation of the threefrequency bands (225-400 megahertz, 3625,7Wmegahertz, and 5950-5925 megaherts) thatwere discussed but not recommended forreallocation in the Spectrum ReallocationFinal Report under section 113(a) of the Na-tional Telecommunications and InformationAdministration Organization Act. The Sec-retary shall consult with the Federal Com-munications Commission and other Federalagencies in the preparation of the report.and shall provide notice and an opportunityfor public comment before submitting the re-port and timetable required by this section.

Mr. STEVENS. Mr. President, I un-derstand the Senator from South Da-kota, the distinguished chairman.wishes to offer an amendment to this.I understand that Suggestion came inafter we originally drafted the amend-ment I have offered.

I yield to him at this time if hewants to offer an amendment to myamendment.A.MENDMNE2f NO. i7 TO AMENDMENT NO. 12

(Purpose: To provide for broadcast auxiliaryspectrum relocation)

Mr. PRESSLER. Mr. President. Isend a second-degree amendment to theamendment proposed by the Senatorfrom Alaska to the desk and ask for itsimmediate consideration.


The legislative clerk read as follows:

The Senator from South Dakota (Mr.PRESSLER] proposes an amendment num-bred 1257 to Amendment No. 1256.

Mr. PRESSLER. Mr. President. I askunanimous consent that reading of theamendment be dispensed with.


The amendment is as follows:At the end of the matter proposed to be in-

serted, insert the following(e) BOARDCAST AUXILIART SPECTRUM RELO-

CATION.-(1) ALLOCATION OF SPECTRUM OR BROAD-

CAST AUXILIARY USES.-Within one year afterthe date of enactment of this Act, the Com-mission shall allocate the i63&-4M05 mega-hertz band transferred to the Commissionunder section 113(b) of the National Tele-communications and Information Adminis-tration Organization Act (47 U.S.C. 93=)0)for broadcast auxiliary uses.(21 MANDATORY RELOCATiOS OF BROADCAST

AUXILIARY usEs.-Within 7 years after thedate of enactment of this Act. all licensees ofbroadcast auxiliary spectrum in the 2025-2075megahertz band shall relocate into spectrumallocated by the Commission under pae-graph (i The Commission shall assiign andgrant licenses for use of the spectrum allo-cated under paragraph (1)-

(A) In a manner sufficient to permit timelycompletion of relocation; and(B) without using a competitive bidding

process.(3) ASSIGNING RECOVERED sPEcTRu.--Wilth-

in 5 years after the date of enactment of thisAct, the Commission shall allocate the spec-trum recovered in the 205-2075 megahertzband under paragraph (21 for use by new li-censees for commercial mobile services or


June 7, 1995 CONGRESSIONAL RECORD- SENATEother similar services after the relocation ofbroadcast auxiiiary licenoess, and shall as-sign such licenses by competitive bidding.

Mr. PRESSLER. Mr. President. thissecond-degree amendment would add anew subsection to the underlyingamendment. The new subsection woulddirect the FCC to allocate a 50 mega-hertz block of spectrum in the 4gigahertz band for use by broadcastauxiliary services within 1 year of theenactment of the bill. In-addition, thisamendment would require that allbroadcast auxiliary service licenseescurrently using a S0 megahertz block ofspectrum in the 2 gigahertz band relo-cate their activities to the 4 gigahertzband within 7 years of the date this billis enacted.

Finally. this amendment requires theFCC to auction the vacated spectrumin the 2 gigahertz band for use by com-mercial mobile services like cellularPCS within 5 years of the date of en-actment.

By moving broadcast auxiliary serv-ice licensees, who do not pay the spec-tsfum they are using, to another lessvaluable frequency, we will makeavailable some very valuable spectrumfor auction.

The Congressional Budget Office esti-mates that the auction of the 50 mega-hertz block of 2 gigahertz spectrumwill bring at least S3.8 billion to theFederal Treasury.

Combined with the underlyingamendment by the Senator from Alas-ka. this would raise more than $1.1 bil-lion that is needed to offset the univer-sal services provisions of this bill.

As the Senator from Alaska lastpointed out-I commend him--this Is atechnical budget problem. The univer-sal service provisions in this bill actu-ally saves S3 billion over what would bepaid if the existing system is left un-changed. However, with these amend-mente we meet the letter of the BudgetAct.

I urge my colleagues to support theadoption of my amendment and the un-derlying amendment by the Senatorfrom Alaska.

If It is appropriate. I would urge theadoption-

Mr. KERREY. Reserving the right toobject. Mr. President.

Mr. PRESSLER. Mr. President. wecould go into a quorum call or yield toour colleague from Montana who hasbeen waiting to speak.

Mr. BURNS addressed the Chair.,The PRESIDING OFFICER. The Sen-

ator from Montana.-Mr. BURNS. I do not wish to speak

on this amendment. Might I ask apoint of order? Could It be set aside.and I proceed with my opening state-ment because no time was given foropening statements?

Mr. President. I will continue on as ifspeaking on this amendment.

This Is sort of a special day to me be-cause the former chairman of the fullcommittee, Senator INOUYE. and I.when I first came here 6 years ago. hadquite a time as we started I think to

react to some of the things happeningin the industry. We thought probablywe were ahead of the curve in settingsome kind of policy that would reflectthe future. We thought we were aheadof the curve. Now we are behind thecurve because technology as it is beingdeveloped in this area is far outpacingthe regulatory environment in which itfinds itself.

I can remember that day when westarted to make amendments and theformer chairman was very graciousthat day. There were some peoplearound, and I was just a freshman Sen-ator offering some ideas that I thoughtwere important in the telecommuni-cations industry. understanding thatthere have been three inventions whichhave happened in my lifetime thathave changed this world forever. It haschanged it so that we cannot go backand do things the old way anymore.Those three inventions were the tran-sistor, the silicon chip and the jet en-gine. Think what they have done to ourlife and our world. We can be anywhereelse in the world, from Washington,DC, in 12 hours. We can talk and re-celve and interact both in video and invoice with anybody anywhere else inthe world in 5 seconds. Sadly, we candestroy any other society on this Earthwithin 20 minutes. That is what thesethree inventions have done. They havetightened down our world where com-paratively speaking it has been the sizeof this building in which we stand downto the size of a basketball. Now we arein a global society, a global economy.and we just cannot go back.

We will amend the CommunicationsAct of 1934. That is some 60 years agobefore any of these Inventions weremade. So basically what we are doingis we are driving digital. compresseddigital, vehicles now within a law thatregulates a horse-and-buggy type ofsituation. So we are here and startingout this great debate on changing anissue that will affect each and everyone of us.

Make no mistake about it. This is avery. very important piece of legisla-tion. I want to give kudos to our chair-man and ranking member and theirstaffs because they have spent manyhours in developing this bill withstrong bipartisan support.

This bill was not drafted to satisfybusiness plans of major communica-tions providers. It was drafted to bene-fit communications users, and commu-nications users are solidly behind thisbill for a number of reasons. Numberone, they think it will bring downrates. So do 1. They know it will bringadvanced services. So do I. Perhapsmore importantly, they know it willbring them more choices in tele-cornncations.

I recently saw a survey that Illus-trates why one important group-smallAmerican business owners-want andneed communications reform. In Mon-tana. over 98 percent of all businessesare classified as small businesses. Thesurvey of 4.600 small business owners.

S 7903which was sponsored by the NationalFederation of Independent Business.found that almost two-thirds of thesmall business owners surveyed wantto be able to get long-distance tele-phone service from their local tele-phone company; and. 54 percent wantto be able to choose local service fromtheir long-distance company.

A full 86 percent of these small busi-ness owners want one-stop shopping fortelecommunications services. Two-thirds of them want to be able tochoose one provider that can give themboth local and long-distance telephoneservice presented in either way.

Of course, lower rates are very im-portant to business owners. We all lookfor a way to do things more economi-cally. to make our business more prof-itable, to open more economic opportu-nities and job opportunities for thosefolks who live in our local neighbor-hoods. But breaking down outdatedbarriers to competition that are pre-venting some local telephone compa-nies from providing long-distance serv-ice and long-distance companies fromproviding local service will also bringsomething else that small businesseswant-that is called convenience.Small businesses do not have the timenor the resources to juggle separatevendors with separate marketing ar-rangements and separate billing forlong-distance and local services, cableTV teleconferencing and, yes, evenInternet. They want to be able tochoose one reliable and affordable com-pany that can bring them all of theseservices; and when they have the tele-communications problem they want tobe able to get on the phone and call onecompany that is qualified to handleevery aspect of their communicationsneeds and their networks.

At first, deregulation will createcompetition by allowing companies tocross over and compete in new businessareas. If we do this right, however.very soon the gray lines that now sepa-rate telecommunications businesseswill be gone. There will be seamlessnetworks of vertically integrated com-munIcations providers competing headto head, tooth and nail to win the con-sumers' communications dollar. Thosedollars are very big dollars. As a result.small businesses will be able to chooseone company that can provide all theircommunications services--or they willbe able to continue buying their tele-communications services piecemealfrom multiple providers if they sochoose. Either way, their decision willbe based on who has the most afford-able and most advanced services.

A full 92 percent of the small busi-nesses owners questioned in this smallbusiness survey said that the telephoneis central to their business. I do notdoubt this. I know plenty of small busi-nesses throughout my home state ofMontana that rely heavily on the tele-phone to keep their business--mom andpop catalog shops that sell Montanabuckskin jackets to the rest of thecountry or small cattle ranches that


S7904 COuse cable TV and telecommunicationsto get future prices and negotiate withthe slaughterhouses. And I do not knowmany small businesses today that func-tion well without a personal computerand a fax machine.

How many people looked at a fax ma-chine 10 years ago and said, "Who inthe world would ever want to use oneof those things?" I will bet you cannotwalk into an office and many homesthat do not have a fax machine today.

Technology is truly a thrilling thingas it propels us towards the next cen-tury. This bill will give small businessthat one-stop shopping that they want.

So we have a chance to bury out-dated restrictions that were created foranother era more than 60 years ago, re-strictions that draw arbitrary lines be-tween telecommunications providersthat Just do not make sense anymore.A lot of these anticompetitive. bureau-cratic rules are only good to preservemarket share for established providers.But protecting markets and maintain-ing the status quo is not going to helpbring lower rates and advanced servicesto small businesses and consumers inMontana or anywhere else,

I fought very hard to ensure thatsmall business participated in the in-formation age. Whether it is smallnewspapers, small cable operators wehave In Montana, or the small businessof radio, these businesses are the back-bone of communications in Montana.

I have sought to include non-discrimination safeguards for smallnewspapers so that small informationproviders, especially in rural areas,will be able to purchase certain ele-ments of a common carrier service of-fering on the smallest per unit basisthat is technically feasible.

In addition, small cable operators,when freed from regulatory restraintsin past legislation, will provide perhapsour best opportunity for telecommuni-cations services in many of our Na-tion's rural areas.

They all the time talk about the in-formation highway, that glass high-way. Everybody says: When are yougoing to build it? I am not real surethat it is not already there.

It is already there. All we have to dois take off some restrictions so that itcan be used. And there is a ramp on itand there is a ramp off of it. That Iswhat we have to make sure of in thislegislation.

Finally, I had deep concerns that oneof the Nation's most important tele-communications small business indus-tries, radlo-I am familiar with radio-was being passed over in the effort toderegulate information providers.Radio ownership decisions need to bemade by operators and investors, notthe Federal Government. That is whywe need to eliminate the remainingcape on national and local radio owner-ship.

Nationally, there are more than11.000 radio stations providing serviceto every city, town, and rural commu-nity in the United States. Presently.

NGRESSIONAL RECORD-SENATEno one can control more than 40 sta-tions, 20 AM and 20 FM stations. Clear-ly, the radio market is so incrediblyvast and diverse that there will be nopossibility that any one entity couldcontrol enough stations to be able toexert any market power over either ad-vertisers or radio programmers.

At the local level, while the FederalCommunications Commission severalyears ago modified its duopoly rules topermit limited combinations of sta-tions in the same service, in the samemarket, there are still stringent limitson the ability of radio operators togrow in their markets. Further, FCCrules permit only very restricted or nocombinations in smaller markets.These restrictions handcuff broad-casters and prevent them from provid-ing the best possible service to listen-ers in all of our States.

So, Mr. President, this will be land-mark legislation. It is legislation thatwe worked on ever since the first daywe stepped into the Senate, because Ihappen to believe it is key to distancelearning; it is the key to telemedicine;it Is key to the future of those Statesthat are remote and must be in contactwith the rest of the world.

I appreciate the work of my goodfriend, the Senator from Alaska, andhow he fights very hard because no onehas cities and towns and villages thatare more remote from the rest of theworld than he has. And he understandsthat. Nobody understands that in thisbody more than he does. Now, we havesome vastness in Montana but it doesnot compare in any way with the Stateof Alaska.

So as we move this debate forward, Ihope that we will keep an open mindand really keep our eye on the ball be-cause we have within our grasp theability now to turn loose a giant in oureconomic world and provide services topeople who have never had those serv-ices before.

Mr. President, I thank you and Iyield the floor.

Mr. HOLLINGS addressed the Chair.The PRESIDING OFFICER. The Sen-

ator from South Carolina.Mr. HOLLINGS. Mr. President, I un-

derstand momentarily my distin-guished colleague from Nebraska wantsto be heard on the amendment.

I would be prepared, at the conclu-sion of his remarks, to urge adoption ofthe Pressler amendment to the Stevensamendment and thereupon urge adop-tion of the Stevens amendment itself.

The Senator from Montana, who is aprofessional auctioneer, should under-stand that the daddy rabbit ofauctioneering is the Senator fromAlaska. He has already made $7 billionfor us, and this amendment here isgoing to make up another $7 billion toget us by a budget point of order.

But let me, In saying that, acknowl-edge the hard work and leadership thatthe Senator from Montana has given.Since his very initiation on the Com-merce Committee itself, he has been aleader; he has been interested; he has

June 7, 1995been contributing; and he has been atremendous help in bringing this bill tothe floor.

Mr. BURNS. If the Senator will yield.I thank the Senator for those kindwords. And if I can possibly get the jobof auctionserng the spectrum, I prob-ably would vacate this chair which Iam standing in front of.

Mr. HOLLINGS. I am going to leadon that one myself.

I yield the floor.Mr. KERREY addressed the Chair.The PRESIDING OFFICER. The Sen-

ator from Nebraska.Mr. KERREY. Mr. President, I have

reviewed the amendment that the dis-tinguished Senator from Alaska is of-fering, and as I understand it, what itdoes is it offsets an adverse score thatthis bill has received from the Congres-sional Budget Office. CBO has said thisbill, in particular the universal servicefund, is going to cost $7 billion over thenext 5 years. Even though that is $3 bil-lion less than what the current univer-sal service fund does. there is the needto come up with $7 billion to avoid abudget point of order.

Now, I point out that under the budg-et resolution that was passed, whenwas that. 1 weeks, 2 weeks ago, I be-lieve that the Commerce Committee isgoing to be looking at having to rec-oncile $=0 billion, $30 billion anyway, soyou are going to have your hands full.The committee will be trying to comeup with money to try to get within therecommendations of that budget reso-lution.

What this amendment does. it comesup with that $7.1 billion in the follow-ing fashion. It extends the spectrumactions that are scheduled to expire in1998 for another 2 years, generating $4.5billion according to CBO. and then Itdoes something that is of particular in-terest, I believe. Mr. President--andmany people would ordinarily opposethis but they are not-and that is thebroadcasters have today assigned a 2-gigahert spectrum in order to do aux-iliary services. When they are goingout in the field and they are doingsome broadcasting out in the field.they use that 2-gigahertz spectrum.

This amendment would transfer thatover a 7-year period from 2 gigahertz to4 gigahertz, and then. that 2-gigahertzspectrum would be auctioned off, gen-erating an estimated $3.8 billion overthe 5-year period.

Under normal circumstances, the Na-tional Association of Broadcasterswould probably oppose this. but thereare other things in this bill that theylike, so they are not going to oppose it.I believe that the distinguished Sen-ator from Alaska has made a goodamendment that will in fact cover the$7.1 billion. And so, therefore, Mr.President. I will not object to thisbeing accepted by unanimous consent.

Mr. STEVENS addressed the Chair.The PRESIDING OFFICER. The Sen-

ator from Alaska.Mr. STEVENS. The Senator from Ne-

braska has demonstrated how he is a


June 7, 1995 CONGRESSIONAL RECORD- SENATEquick study. He is right. I would addone thing. I think the National Asso-ciation of Broadcasters are going towant some additional spectrum beyondwhat is in this bill. We will work thatout. But.this has been scored, and wewill work that out with them as we goforward to make sure that we under-stand the problem.

The simple problem is that this billcould not go forward unless we withinits terms meet the scoring problemthat the -Senator from Nebraska hasoutlined.

Agaln.'I point out we are not, how-ever, by this bill spending money foruniversal service. But the budget proc-ess now makes us account for thosemoneys we must be paid by the privatesector pursuant to a mandate, andsince we are continuing a mandate,partially reducing it somewhat for uni-versal service, it will cost less than theold universal service, we now must off-set it.

I think it is responsible on the partof the Government to do that becausethere-is always the possibility some fu-ture Congress might decide not to man-date that service but require the Gov-ernment to pay it.

So we have, in effect, met the chal-lenge of the Budget Act and. in doingso, we will actually, within this period,raise the additional moneys which I be-lieve will be utilized in offsetting otherbudget problems as we go along. I donot believe that will be required by anyaction of the Congress In the future tocharge the cost of universal service tothe taxpayers.

Again. in my judgment, universalservice is required so someone whocomes up to my State who wants tocall home literally can do it, or wantsto bring up a computer and be attachedto data services can make that inter-section with the telecommunicationssystem of our country.

I believe sincerely in universal serv-ices because without the universalservices, the villages and towns of ourrural areas would be still in probablythe early part of the 20th if not the19th century while we all go into the21st, If they are not to be left in the po-sition where they are without employ-ment because they cannot attachthemselves to this new telecommuni-cations miracle of the United States.then I think they will be a burden onthe rest of the country.

My friend George Gilder believes thatin the future, the computer will re-place, in effect, the networks becausethe networks will become. in effect, agigantic computer network rather thanjust a television network. He tells usthat what is going to happen is that weare going to have access through thecomputer industry to interconnect•America's schools and colleges in trulya new worldwide web of glass and air.

If people want to think about it.there is no way we can afford to havethis bill stopped by a budget point oforder. That is the reason for ouramendments. I join in urging adoptionof these amendment.

Mr. PRESSLER. I urge the adoptionof the amendment.

Mr. HOLLINGS. First, adoption ofthe Pressler amendment. If there is nofurther debate, I urge the adoption ofthe Pressler amendment.

VOTE ON ANDMDMENT NO. 125The PRESIDING OFFICER. If there

is no further debate, the question oc-curs on agreeing to the second-degreeamendment No. 1257 offered by the Sen-ator from South Dakota, SenatorPRESSLER.

The amendment (No. 1257) was agreedto.

Mr. HOLLINGS. I urge adoption ofthe Stevens amendment, as amendedby the Pressler amendment.

VOTE ON AMENDMENT NO. 12

The PRESIDING OFFICER. If thereis no further debate on the Stevensamendment No. 1256. as amended, thequestion is on agreeing to the amend-ment.

The amendment (No. 1256). as amend-ed, was agreed to.

Mr. PRESSLER. Mr. President, Imove to reconsider the vote by whichthe amendment was agreed to.

Mr. STEVENS. I move to lay thatmotion on the table.

The motion to lay on the table wasagreed to.

Mr. STEVENS. Mr. President, I wishto thank the managers of the bill andthose patient with us. "I thought it wasessential first to proceed with theseamendments. Otherwise, we would bewasting our time if a budget point oforder had the effect of pulling the billdown. I thank all concerned.

Mr. LOTT. Mr. President. I inquirewhat the parliamentary situation is?Are we back now to making openingstatements at this point?

The PRESIDING OFFICER. Openingstatements are appropriate at thistime.

Mr. LOTT. Mr. President, I do wantto rise in support of this legislationand make an opening statement. Iwould like to begin, as others have al-ready done, by congratulating andcommending the distinguished Senatorfrom South Dakota for the hard workthat he has put into this legislation. Ofcourse, many members of the commit-tee have been working on this legisla-tion for several months. As the distin-guished former chairman said earlier.way back in 1993 there was a lot ofwork going on on legislation that ledto this moment.

But I know from personal experienceand observation that the chairman ofthe Commerce. Science. and Transpor-tation Committee, Senator PRESLER,said immediately after the election in1994 that this is an issue that is goingto be given high priority, a great dealof his attention and we were going towork together to find solutions to theproblems that had prevented its consid-eration last year and earlier. He madea commitment also to make It a bipar-tisan effort. So that is why we are here,because the chairman of the committeegave this such high priority and he has

87905worked diligently to resolve problemsthat bad been delaying this legislation.

I just want to acknowledge that factat the very beginning of this debate.We have a long way to go. but I knownow we have started down the path to-ward passing this legislation. I think itis a tremendous undertaking.

This is big legislation. It is impor-tant legislation. It involves a signifi-cant part of the overall economy inthis country. It is going to create jobs.It is going to raise revenue because Itis going to be such a dynamic explosivefield. We are fixing to unleash thebounds that have been holding backthis competition and advancementsand this development. I think that noother segment of the economy in thenext 10 years will be more dynamic andmore exciting than that of tele-communications.

I also want to commend the distin-guished Senator from South Carolinawho is working at this very moment toresolve potential problems on this leg-islation, but Senator HOLLNGS workedso hard last year to bring about thepassage of the bill through the Com-merce. Science. and TransportationCommittee. It did not come to consid-eration. partially because we just ranout of time.

But Senator HOLLINOS again thisyear has shown a commitment to getlegislation developed that we can pass.He is the major reason we are going tohave bipartisan legislation. We shouldhave more legislation like this In theSenate. This is really the first bill ofthe year of major import that I believewill pass by an overwhelming biparti-san vote. So many of our issues havebeen considered in a partisan way, havebeen delayed with amendments. Wehave had filibusters; 50 amendments onthe budget resolution. But in this case,we will have a chance to develop a billthat can be bipartisan and also a billthat will pass this body first instead ofthe other body of Congress. That is noinsignificant accomplishment.

Senator INoUYE certainly has alsobeen very interested In telecommuni-cations. He worked on it last year andhas been helpful this year.

The indomitable Senator STEVENSfrom Alaska is always there. When thedebate gets hot and heavy. SenatorSTEVENS from Alaska will always riseto the occasion, as he has on this bill.

I have one other recognition before Iget into my comments. I want to rec-ognize the staff members who havedone great work, hard work. It hasbeen laborious, tedious, and they havesolved so many problems through thegreat efforts of Paddy Link. and myown staff assistant Chip Pickering.clearly one of the brightest young menI have known in my life. We would notbe here without their help.

Let me begin with a quote from testi-mony before the committee earlier. Itbegins with a quote from a Senatorfrom Washington State, Senator Mag-nuson, who served with great distinc-tion on the Commerce, Science, and


87906Transportation Committee. He put Itvery aptly when he said in this particu-lar area of legislation "each Industryseeks a fair advantage over its rivals."

And then quoting the witness thatwas before the committee:

Each industry wants prompt relief so thatit can enter the otherm' fields, but at thesamne time wants to avoid the pain of newcompetition In Its own field by tactics thatwill delay that competition a long as pea-sible. It is, therefore, up to the Congress tomake the tough calls and, In effect, cut theGordian knot.

That is what we are trying to do withthis legislation, cut the Gordian knotthat has held this dynamic field of theeconomy back now for several years.

As unbelievable as It sounds, theCommunications Act of 1934 passed Inthe era of the Ednl. and it 1o still thecurrent law of the land. That act nowgoverns, In fact. constrains the mostdynamic sector of the U.S. economy-telecommunications. Just as the EdAselbecame a symbol of all that is out-dated. so is the 1934 CommunicationsAct. That act is based on old tech-nology and. consequently, on an out-dated. rlgd-monopoly-baed-regu-latory model. Boy, that sounds bad, butthat Is what we have today. It is timewe changed that.

That system cannot accommodatethe rapidly developing capabilities ofnew technologies and advanced net-works. Instead, it acts to restrict com-petition, Innovation, and investment.

Under that framework. markets areallocated, not won, by the sweat ofcompetition. Currently monopolies,ollgopolles or, at best, limited competi-tion exist in local long distance andcable markets. More than 40 of our 50States prohibit any entrepreneur orcompetitor from offering--even offer-ing-local telephone service.

The 1984 consent decree which brokeup AT&T continues to restrict the Belloperating companies from offering longdistance or manufacturing.

We should have fixed that long ago.It would have created jobs and wouldhave been positive for the economy.

Current law prohibits cable compa-nies and telephone companies fromcompeting in each other's markets.They are willing to do that. They wantto do that. Why should we not let themdo that?

Another 1934 law, the Public UtilityHolding Company Act, PUHCA, pre-vents registered electric utilities fromusing their infrastructure and net-works to offer telecommunication serv-ices to the 49 million American homesthat they serve. All of these restric-tions and regulations and allocationsare truly the equivalent of an "Edsel"in the space and information age. Inthe case of'utilities, they are alreadywired, hooked up. They have the capa-bility to offer all kinds of services. Yet.they are told. no, you cannot do that.Why? There is no good explanation orjustification for It--especially if we dothis legislation in a way that is fair,open, and allows competition for all.

CONGRESSIONAL RECORD-SENATE

In stark contrast, the Teleconuni-cations Competition and DeregulationAct of 199--this bill-will move tele-communications Into the 21st centuryand will finally leave the era of theEdsel behind. S. 652 will achieve thisthrough full competition, open net-works, and deregulation. That is whatthis bill is all about. That Is what wesay we we want. Senators stand up andsay it day in and day out, about allkinds of situations. Well. in this bill. inthis area, that Is what we would do.

This bill provides a framework whereentrepreneurs and free enterprise willmake the information superhighway areality, not just a conversation piece.As a result, tremendous benefits andapplications will flow to our economy.to education, and health care. Indus-tries will benefit from expanding mar-kete and opportunities, and consumerswill benefit from lower prices in theirlocal, long distance, manufacturing,and cable services.

If one hears the protest of the var-ious industries, it is not because thebill Is too regulatory; no. just the oppo-site is true. It is because this bill re-moves all of the protection and marketallocations that made their respectivebusinesses safe and secure from the rig-ors of vigorous competition.

Under S. 652. all State and local bar-riers to local competition are removedupon enactment. An immediate processfor removing line of business restric-tions on the Bells Is put In place. More-over. the Bell companies are given thefreedom to immediately compete out ofregion and provide a broad range ofservices and applications known sIncidentals. These include lucrativemarkets in audio, video, cable, cel-lular. wireless, information services.and signaling.

The 1934 PUECA Is amended to allowregistered electric utilities to join withall other utilities in providing tele-communication services, providing theconsumer with smart homes, as well assmart highways.

Upon enactment, telephone and cablecompanies are allowed to compete.Current restrictions baring telephonecable entry are eliminated.

As the telephonelcable restriction isremoved. S. 652, rightfully, loosens andremoves cable regulation. For cable toconvert and compete in the telephonearea. it will be freed from the regu-latory burdens that limit investmentand capital capability, which has beena problem In recent years for the cableindustry.

The restrictions placed on broad-casters, also during a bygone era, be-fore cable, wireless cable, and advancednetworks, would be reformed.

Ownership restrictions on broadcastTV are raised. An amendment remov-ing restrictions on radio ownership willbe adopted, and this is one we haveworked hard on, and we have broadsupport now for. The FCC is grantedthe authority to allow broadcasters tomove toward advanced, digital TV andto use excess spectrum, created by

June 7, 1995

technological advance, for broad com-mercial purposes. Broadcast licenseprocedures are reformed and stream-lined.

S. 652, again. moving in from thecommunications policy of the past.goes from a protectionist policy to oneappropriate for the global economy andtechnology of the 21st century. The billpromotes investment and growth byopening U.S. telecommunications mar-kets on a fair and reciprocal basis.

In short, S. 652 constructs a frame-work where everybody can compete ev-erywhere in everything. It limits therole of Government and increases therole of the market. It moves from themonopoly policies of the 1930B to themarket policy of the future.

Toward that end, the removal of allbarriers to and restrictions from com-petition is extremely important, and itis the primary objective, and I believe.the accomplishment of this legislation.thanks to the efforts of ChairmanPRESSLER and the former chairman,Senator HOLLINOS of South Carolina.

In addressing the local and long dis-tance issues, creating an open accessand sound interconnection policy wasthe key objective, and it was not easyto come up with a solution that wecould get most people to be con-fortable with. It is critical to recognizethe reason why all of these barriers, re-strictions, and regulations exist in thefirst place-the so-called bottleneck.Opening the local network removes thebottleneck and ensures that all com-petitors will have equal and universalaccess to all consumers. Such accessguarantees full and, I believe, fair com-petition.

The open access policy makes it pos-sible for us to move to full, free-mar-ket competition in local and long dis-tance services, avoid antitrust dangers.and dismantle old regulatory frame-work.

In fact, the Heritage Foundationmakes the following statement andpoints to the open access interconnec-tion policy:

Policymakers of a more conservative orfree market orientation should not fearthis open access policy. In fact, they shouldfavor it for three reasons:

First, there Is a rich, common law historythat supports the open access philosophy.

They cite railroad and telegraph pol-icy in America and common law tradi-tion dating all the way back to theRoman Empire.

Second. open access works to eliminateany unfair competitive advantages accruedby companies that have benefited from Gov-ernmentprovlded monopolies.

Third, open access removes the need forother regulations because the market be-comes more competitive if everyone is onequal footing.

It is the only way to address eco-nomic deregulation where a bottleneckdistribution system exists. It in thesame policy which allows marketforces, instead of regulation, to workin the case of long distance, railroads,and In the oil and natural gas pipelinedistribution system.


June 7, 1995 CONGRESSIONAL RECORD-SENATEIt is those examples of deregulation

to which we should look. not to modelsof deregulation where no bottleneckexists, such as airline or trucking.

Open networks will provide small andmid-sized competitors the opportunityto flourish alongside telecommuni-cation giants. In the long distance in-dustry, similar requirements made itpossible for over 400 small and medium-sized companies to develop and com-pete with AT&T over the pat 10 years.

One of the better examples of this isa former high school basketball coachfrom a small town in Mississippi by thename of Bernie Ebbers. Opening re-quirements such as interconnection.equal access, and resale made it pos-sible for this entrepreneur to build asmall long distance company into thefourth largest in the country-LDDS.It is incredible what has been accom-plished by. this anlltown man by giv-ing him an opportunity to get in thereand compete, and boy did he ever and ishe having an impact.

Having used the example of a smalllong distance entrepreneur, it Is alsoimportant to point out what happenedover the past 10 years to the formermonopolist. AT&T. Although AT&Tlost significant market share, it hasseen the long distance market that ithas greatly expand, and its revenuescontinue with strong, healthy growth.

AT&rs current revenues, with 60percent share in.the long distance mar-ket. as opposed to what was 100 per-cent, are now higher than in 1984. Thesame dynamic will occur In the localand other markets. Opportunities andmarkets will expand for all partici-pants, as long as they are effective andefficient in the competitive environ-ment.

It is this free market model whichled me to conclude that all of the com-panies in my State and region and, infact. In the country, will benefit fromthis legislation. I believe that marketsand opportunities will expand for BellSouth and LDDS. both of which arevery important in my_ State of Mis-sissippi, and other long distance com-panies, including electric utilities--Southern Company and Entergy in mypart of the United States, and cablecompanies and broadcasters will havenew opportunities to grow and expand.

A competitive model will create abigger pie for all the providers, butmore importantly, it is the consumersand the overall economy of my region,and I believe the whole country, thatwill beneflt from this legislation.

For consumers and competitors, theopen access requirements will do fortelecommunications what the Inter-state Highway System has done for theshipment Of tangible goods and themovement of people and ensure that allcompetitors will have a way to delivergoods and services to anyone anywhereon the information superhighway.

Other requirements. such as numberof portability and dialing parity areJust common sense. procompetitive,and fair. A consumer does not want to

have to dial more digits or accesscodes, and if required to do so. theywill be less likely and probably notswitch to the competitive provider.History shows that dialing parity inlong distance services and 1-800 servicegreatly enhanced competition--or thelack of dialing parity serves as an ef-fective barrier to that competition.

Likewise. a small business or residen-tial consumer will not switch to thecompetitor if It meant the loss of his orher current number. They will not doit. The disruption to a business or indi-vidual or family is too great. That iswhy we had to deal with this issue inthis legislation, although there was alot of opposition to it.

Another key element of S. 652 iseliminating monopoly-based regula-tions and putting in place a mechanismto remove those regulations.

The bill eliminates rate-of-returnregulation, a regulatory model whichcannot logically exist in a competitiveenvironment created by this legisla-tion. States are encouraged to move tomore flexible and competitive models.

S. 652 requires the FCC to forbear orto eliminate any past or current regu-lation requirement which would nolonger make sense in this market baseof competition. There will be a bian-nual regulatory review in this legisla-tion that would recommend the elimi-.nation, modification, or other neededregulatory reform in the future.

Mr. President. in closing, I think it istime to adopt this communicationspolicy for the future. It provides theright framework, it removes all bar-riers and restrictions to free marketcompetition, innovation, and increasedInvestment.

With the passage of this legislationour economy will grow a lot faster. Wehave had tremendous estimates of thekind of economic impact this legisla-tion will have in the billions of dollars.More Jobs will be created, applicationsin education and health care will ex-pand more quickly, and the quality oflife will improve in both rural andurban areas.

It is time to move beyond the cultureof timidity where the companies andpolitical leaders, regulators, and thecourts resist needed reform, fear com-petition. and opt for the security andinferiority of the status quo.

We know that is what the electionwas about last year. change in the sta-tus quo. Boy, this bill will do that. It istime to trade in the Edsel and passtelecommunications legislation thatwill move us truly into the future.

I do want to note that I think thatthe center that holds this legislationtogether is the part that deals with theentry test. Wherl the local Bell compa-nies get Into long distance and they getinto the local unbundled market, wehave a delicate balance there.

Are they totally happy? No. theywould like a fair advantage in eachcase. but we have been able to cobbletogether this important balance, and Ithink it is one that we should support.

S7907I believe that we will be able to getthis legislation through.

In conclusion, Mr. President, I askunanimous consent to have printed inthe RCOOD information specificallyciting the impact that this legislationcan have in my home State of Mis-sissippi.

There being no objection, the mate-rial was ordered to be printed in theRECORD, as follows:

WHAT DOES IT MEAN FOR MISSISSIPPI?Mississippi Is home to some or the Nation's

new leaders In every segment of tele.communications.

Mississippi Is prospering and benefittingfrom the contributions made by the largestand fastest growing regional company. SellSouth.

LDDS. a Jackson. MS company. is thefourth largest long distance company in theNation and an expanding international force.It is a true American success story.

M-TEL. another Jackson based company.is a dynamic entrepreneurial and leading na-tional company in wireless paging service.

A dynamic culture of young entrepreneursIn cellular services is thriving throughoutthe State.

Parent companies to Mississippi Power andMississippi Power and Light. Estergy andSouthern Company. are pioneer companiesPromoting utility participation in tele-communications and advanced networks.They will pave the way for smart homes andhighways in our Stats.

Cable companies of all sizes have deployedthroughout Misslssippi into virtually everysmall town.

Wireless cable services have exploded Inboth rural and urban areas of my State.

MIssissippi. In cooperation with NationalAeronautical and Space Administration. ourleading educational institutions and SouthCentral Bell. has deployed an advanced ot-work which connsolc schools, universities.Federal facilities, super computers and na-tional data bases. It is an educational andhigh tech model for the future and the Na-tion.

It is in my home State of Mississippi thatI have seen and experienced the benefit ofthe communications revolution. I know whatit means to the economy and quality of lifefor my State. It means the creation of hightech lobs. attracting new industry, and pro-moting and connecting Mississippi to the Na-tion's best educational opportuni ties.

As a Senator from a Slate which has be-come a leading telecommunications center. Icome to this debate with the conviction thatthis legislation will serve Mississippi's. theNation's. consumers' and competitors' bestinterest.

S. 652 promotes and accelerates the corn-munication revolution by tearing down allbarriers and restrictions preventing the ben-efits of free market competition.

Mississippi's economy, with telecommuni-cations serving as a key catalyst. Is growingand expanding. This legislation will furtherfuel Its growth.

Under S. 652, Mississippi companies willhave new opportunities and expanded mar-kets as well as the challenges of competi-tion. South central Bell will be able to ex-pand into long distance. cable, manufactur-Ing and other services.

LDDS. cable companies. Southern Com-pany. Entergy. and numerous other comps-aies will be able. for the first time, to begincompeting for local service and combininglocal, long distance and cable services.

With S. 652. Mississippi's TV and radiobroadcasters will see old restrictions re-moved or raised which have stifled growthand new business.


s 7908Small cable operators in Mississippi who

have struggled under the regulatory burdenof the 1992 Cable Act, will see regulatory re-lief. Once again, Msissippi cable operatorswill be able to expand and deploy new serv-ices. regain financial stability and prepare tocompete In new markets.

The competition among all participantswill spur Innovation. products, advanced net-works and lower prices for the benefit of Mis-elsuippi's consumers and Industries.

I want Mississippi to continue s a na.tional leader in telecommunications. S. 652will help achieve that objective.

For the Nation's future. S. 652 is one of themost significant pieces of economic legisla-tion we will consider.

The President's Council of Economic Advi-soe estimates the telecommunications de-regulation will create 1.4 million new jobs bythe year 20i.

A study by the WEFA group, funded by theBell Companies. projects 3.4 million jobs bythe year 2005 and 0.5 percent greater annualeconomic growth over the next 10 years.

In addition, the committee heard testi-mony that the Pressler bill will lead to anadditional $2 trillion In economic activity.

The communications sector, more thanany other, will shape our future economy aswell s our civic and community life. Thisbill is the right policy to maximize the bene-fite this sector of our economy can deliver.

I urge my colleagues to support this legis-lation. It is time for Congress. not the courtsor bureaucracies, to establish the commu-nications policy for the 21st century.

Mr. 1OT. Mr. President. I yield thefloor.

Mr. PRESSLER. I thank the Senatorfrom Mislsaippi for his terrific con-tribution. Chip Pickering has been inevery step of the way. This would notbe happening without your great lead-erhip. I personally thank you very.very much.

Mr. President. I am sending to thedesk a managers' amendment which Iam cosponsoring with Senator HOt-LiNos. This amendment, which hasbeen cleared on'both sides of the aisle.makes a number of technical andminor changes in the bill that havebeen worked out since the bill was re-ported by the Commerce Committee.

I ask unanimous consent that whenadopted, the text be treated as originaltext for purposes of further amend-ment.

At this point I would like to send themanagers' amendment to the desk.

Mr. LAUTENBERG. Mr. President,reserving the right to object. I com-mend the managers of the bill thus far.I know they are anxious to conclude aperiod of a lot of hard work and havingstruggled through many discussionsand agreements to get this behind.

The reason that I raise the possibil-ity of an objection is because, in theprocess of developing the managers'amendment, it was determined that amajor research company based in NewJersey but doing work throughout thiscountry, a company that has offeredmany innovative ideas in this period ofnew technology in communication,would be prohibited as a result of thepresent managers' statement from en-gaging in manufacture, even though itis the public declaration that they in-tend to be free of the regional Bell

CONGRESSIONAL RECORD- SENATEcompanies ownership. There they are, acompany trying to engage in a com-petitive practice.

I had a discussion with two goodfriends, Senator HOLLINGS on theDemocratic side and Senator PRESSLERon the Republican side, to see if therewas any way that we could defer action-on this tonight so we might discuss thecompetitive environment tomorrowmorning.

Apparently, it is the belief of themanagers that this bill has gonethrough so much labor and so manydelicate steps that to further delaythat might be injurious to the success,ultimately, of passing this bill.

So while I will not object, I wouldask the managers whether or not I canhave their support for a discussion of aproposal to enable the competitivecharacter of the field to be expandedalthough it is lacking in the statementof the managers.

Mr. PRESSLER. I want to commendmy friend from New Jersey. SenatorLAu'rENBERO. I know he is an experi-enced businessman. and I know there issome controversy about Bellcore. It ismy belief that if Bellcore is sold andout there competing, it should be ableto compete without restriction.

That is based on the information Ihave at this moment. I know there is agreat controversy about manufactur-ing. because about 99 percent of manu-facturing many new devises is re-search.

It seems to me that the Senator hasraised a very good point. As I under-stand It. in the managers' amendment.we have taken this section out so wewill be able to entertain a colloquy, orindeed an amendment.

I have begged several Senators tocome tonight to offer amendments. Wehave all these strong feelings and wewould like to get a vote on somethingtomorrow morning at 9 o'clock. As Igaze about. I do not see any amend-ments cropping forth. We welcomeamendments.

I want to thank the Senator fromNew Jersey for raising this. becausebased on the information I have, I tendto agree with what I think his positionis. I think he has raised a good point. Ifwe could still adopt the managers'amendment, that Is not, as I under-stand it. in there. We have taken outanything that there is controversyabout.

Mr. HOLLINGS. Mr. President. firstlet me thank, as our chairman has verydutifully done, the distinguished pre-siding officer, the Senator from Mis-sissippi, Senator LoT', for the 2 yearsthat we worked on S. 1822. The Senatorhas been an outstanding leader on S.652 and his staff Chip Pickering hasdone exceptional bipartisan work. Wenever would have gotten this far. thisbalance that has been emphasized, hadit not been for Senator LOTS's leader-ship. I want to thank my distinguishedcolleague from New Jersey for his atti-tude and approach to this. What hap-pens, I have two lists in my hands. The

June 7, 1995list of possible arendments in my lefthand axe those amendments that arenot agreed to, that we could not getconsent on from the colleagues and thestaffs on all sides. Objections have beenheard. We had a list of those thingsthat we thought were peripheral mat-ters like "Replace subsidiary with af-filiate where it appears," number 2.-The FCC may modify the modifiedfinal judgment with decrees once theyare transferred to the FCC," and ondown the list. These are things thatboth sides have agreed to.

Unfortunately, other distinguishedMembers of the Senate, and particu-larly on our committee of Commerce.have objected to the provision dealingwith Bellcore. As I understand it, asthe distinguished Senator from NewJersey points out-they are very com-petitive. Heavens knows, they producedthe technology. If you had to measurein percentage of communications, Iwould say 90 percent of it has been pro-duced In the Senator from New Jer-sey's home State there at Bellcore.

So I am disposed to help in any wayI can the Senator from New Jersey. Itis not within my power to do so be-cause I have, like I say, in my left handthose amendments that are not agreedto. And the Bellcore amendment wouldhave to be on that particular list.

They are not agreed to. There are atleast three Senators on the committeewho have so notified' us. And if anySenator notified me right now on anyof the other Items in the managers'amendment I would object for them ifthey could not even be hers. Thatwould be my duty as a manager of thebill, because every Senator has to berespected.

I have the highest respect for theSenator from New Jersey. I will do ev-erything possible I can to help himwith his amendment.

Mr. LAUTENBERO. With that state-ment, if the Senator will yield, Mr.President, I have no objection to goingforward.

The PRESIDING OFFICER. Withoutobjection, the several unanimous con-sent requests are agreed to.

Mr. KERREY. Reserving the right toobject, is this just a unanimous con-sent to read the amendment?

Mr. HOLLINGS. We have to read theamendment.

AMENDMENT NO. Me(Purpose: To make minor, technical. and

other changes in the reported bill)The PRESIDING OFFICER. The

clerk will report.The legislative clerk read as follows:The Senator from South Dakota (Mr.

PRESLER] for himself and Mr. HOLLIGS pro-poses an amendment numbered 1258.

Mr. PRESSLER. Mr. President. I askunanimous consent that reading of theamendment be dispensed with.


(The text of the amendment is print-ed in today's RECORD under "Amend-mente Submitted.")


CONGRESSIONAL RECORD- SENATEMr. KERREY. Reserving the right to

object, Mr. President. what are wedoing here?The PRESIDING OFFICER. The Sen-

ator from South Dakota just asked theamendments be considered as read.

Mr. PRESSLER. I am asking unani-mous consent to adopt the managers'amendments, which I have sent to thedesk, and which have been cleared onboth sides of the aisle.

Mr. HOLLINGS. Is that cleared withthe distinguished Senator?. Mr. KERREY. I have great respectfor the Senators from South Carolinaand South Dakota, but I have not readthe amendment. It was just brought tome. It is 40-some pages long and I un-derstand there is lots in it. I cannot. Iobject.

The PRESIDING OFFICER. Objec-tion is heard.

Is there debate on the amendment?Mr. PRESSLER. I suggest the ab-

sence of a quorum.Mr. KERREY. Mr. President. I ask

unanimous consent to withhold the re-quest for the quorum call.

The PRESIDING OFFICER. Is thereobjection?

The Senator from Nebraska seeksrecognition? The Senator from Ne-braska.

Mr. KERREY. Mr. President. I knowthere is some confusion. I see my frieLdfrom South Carolina and South Dakotwas well. I have a great deal of respectfor them. I take a great deal of interestin this legislation. They have beenkind to allow a member of my staff tosit in on lots of the deliberation.

But I want my colleagues to under-stand there is a lot in this bill that isnot very well understood. I declarestraight out I will not vote for this billin Its current form. I am here becauseI see great promise In telecommuni-cations. I see great promise. in fact, inderegulating the telecommunicationsindustry and using competition to reg-ulate as opposed to having Governmentmandates and so forth do the job.

But in 1986 I signed a deregulationbill. I may be, for all I know, the onlyMember of Congress who can come tothe floor and say "I signed a deregula-tion bill for telecommunications." AndI know that deregulation does notmean competition. You can have de-regulation and have no competition.

I call upon my colleagues who won--der about the impact of their votes.There Is a great deal of concern about,for example, the budget resolution wetook up. "Gee, what is this going to doto me? Is it going to be difficult to ex-plain at home? There are lote of thingsIn there that might become unpopularand am I going to pay for voting yes onthe budget resolution?-

We have lots of issues that are ex-tremely controversial. This Is a lotmore controversial than meets the eye.I ask my colleagues who are consider-ing voting yes for this and want tomove it through quickly to recall whatlife was like in 1984 when Mr. Baxter.from the Department of Justice. signed

a consent decree divesting AT&T of theBell operating companies, filing thatdecree with the Federal court here inWashington, DC.

I remember I was Governor of Ne-braska at the time and I can tell you,you could have selected a thousandpeople at random and asked them thisquestion: Would you like Congress toput the Sell companies back together?Do you like what Baxter and JudgeGreene did?

And of the thousand people I will bet998 people would have said "Reverse it.Put it back together. We do not likethe confusion that we have. We do notlike trying to figure out all this stuff."It was not popular. Do not let anybodybe misled by this. This is going to cre-ate considerable confusion in the earlyyears. You are not likely to be greetedby a round of applause by households,consumers, who have not been con-sulted about this legislation.

This Is not a Contract With America.Most of the things that we have takenup In this Senate have been carefullypolled and researched to determinewhether or not they are popular. I haveheard, whether it is the balanced budg-et amendment or the budget resolutionor term limits, all sorts of otherthings, people come down to the floorand say, "In November the people ofthe United States of America spokeand here Is what they meant." I haveheard speaker after speaker say that.And In many cases I agreed with them,because I ran In November of 1994.

But I did not have a single citizen,when I was out campaigning, come upto me and say:."Boy, make sure whenyou go back, If you get reelected, if yougo back and represent us. make sureyou go back there and deregulate thephone companies. Make sure you goback there and deregulate the cable in-dustry. Make sure. Bob, make sure, ifyou get back there, get rid of the own-ership restrictions on television sta-tions. on radio stations. Because thatis what I want. I am really excitedabout all this stuff. I really think thereIs a lot in this for me. That is what Iwant. That is the sort of thing I wouldlike to have you go back there and do."

The American people have not beenpolled on this one. The distinguishedmajority leader came down and saidthere is bipartisan support. It is not aDemocratic issue. It Is not a Repub-lican issue. He Is quite right. It is not.This is an issue that has been discussedat length and I discussed it at lengthwith many corporations that want tobe deregulated. They want to be de-regulated. In many cases they areright.

But if you listen to the rhetoric, justthis far, you would think tiat the cur-rent regulation is holding back thetelecommunications industry to suchan extent that we have lousy telephoneservice, that we have noncompetitiveIndustries. You would think Americawas somehow backwards compared toall the rest of the world. That s nottrue.

If you look at the OECD examina-tions of our industries, telecommuni-cations, Including the telephone com-panies, are among the most competi-tive in the world and among the mostproductive in the world.

It does not mean, because a companyis regulated, that it is not productiveor that it is not competitive or thatsomehow it is going to produce an un-satisfactory thing for the Americanpeople.

I am telling my colleagues a lot ofpeople will come down here and say."It must be good. There is a lot of bi-partisan support for it." Walk up tothe desk, check out a lot of theseamendments, see which way people arevoting-this one is going to be remem-bered. This vote is a big vote. In myState I have about a million house-holds. If you talk telecommunications

.to those households they do not talkfaxes. They are not thinking about en-hanced digital processing and all thatstuff. They are saying, "What is mvdial tone going to cost me? What is mycable going to cost me?" That is whatthey talk about.

I think we need to come down to thirfloor and ask ourselves a question.What Is this bill going to do for thosehouseholds? What is It going to do forthe consumer? I hear people say it isgoing to create lots of new jobs. In thecourse of this debate we are going tocome down and examine the question:Who has been creating the jobs?

(Mr. LOTT assumed the chair).Mr. KERREY. Where are the Jobs

going? One of the things I hear frompeople, an awful lot of telecommuni-cations Industry people working for thetelecommunications company, is sub-stantial downsizing. I say, "Do youwant to deregulate? Are you going doget more jobs?" They say, "I do notknow. You know. It has not been work-tig too good thus far."

I am down here to talk about whatthis is going to do for the many house-holds, and for the American consumers.I look forward to the debate. There ismuch in this legislation that I support.I believe in many cases deregulationwill produce a competitive environ-ment that will benefit the Americanconsumer, and that will benefit theAmerican household. But let no one bemistaken. When we pass this piece oflegislation in the Senate and go to con-ference with the House, and get finalpassage in the early days. do not ex-pect to have the people who vote foryou say you were right. "Boy, thisthing has really worked." It may take9 or 10 years. which is what happenedwith divestiture. It took us a good 10years before people began to say, "Waita minute. This is working. Competitionis bringing the price down. The qualityis going up. This appears to be in factgenerating something beneficial tome.".

So I would like to get a little fun-damental hers. I very often, as I amsure the distingushed Presiding Offi-cer does and other Members do. get

June 7, 1995 87909


CONGRESSIONAL RECORD- SENATEasked. "What is it that you do? Whatdo you in Washington, DC?" Do I justcome down to the floor and givespeeches? Do I just answer my tele-phone and answer letters and do con-stituent service for the people are hav-ing trouble with the IRS. the EPA. orvarious other agencies of the govern-ment? Yes. I try to explain to them Iam involved with writing laws. That iswhat we do here. We write laws; andthat the laws matter. I am not a law-yer.

I very often wonder whether or notone of the most important things law-yers do is write the laws that are sodarned confusing we have to hire themin order to tell us what is in them. Butthe longer I am on the job, the longerI am on the job of being in politics andbeing a politician, the law is becomingmore important to me. I see that theyare alive. They have an impact on peo-ple, and they make a difference.

This bill has about 144 pages In it.Every single word is important. Everysingle phrase here Is going to affectsomething. We all know it. We havethem coming into the office saying weare concerned about this particularphrase, we are concerned about thisparticular paragraph. I have heard italready referenced-some of the agree-ments have been difficult to get. Theyhave been difficult to get because everytime you do something somebody says."'Gee. That is going to affect me in anadverse way."

The distinguished Senator from Alas-ka had an amendment earlier that paidfor the cost of the universal service.and one of the things that he did-I be-lieve he is quite right--the NationalAssociation of Broadcasters is going toobject. There are going to be peoplewho say, "I do not like where you gotthe money." Everything we do in thislegislation we know affects one inter-est group or another. But it is alsogoing to affect more than almost any-thing we have discussed thus far thisyear: Indeed. perhaps for a long. longtime. every single American household.

If you have a telephone in yourhome, it is going to affect you. If youhave a cable line running into yourhousehold, this bill is going to affectyou.

I just aid to citizens out there whoare wondering about what the mumbojumbo is about. you are going to heara lot. You had better pay attention be-cause. if you have a telephone, and youif you have a cable line coming intoyour household, you had better pay at-tention to this legislation because it isgoing to have a big impact upon you.You are going to hear a lot of peoplecoming down saying this is going to begood for you. You did not ask for it.You did not say. "By gosh. Let uschange this law." You did not ask forthis thing. But we have figured out thisis going to be good for you. And makeno mistake about it. We have reallypaid careful attention to this legisla-tion. We know exactly what it is goingto do.

Mr. President, I believe that theAmerican people deserve as a con-sequence of the impact of this legisla-tion a good and healthy and lengthydebate.

I heard the distinguished occupant ofthe Chair earlier say he hopes thisthing does not degenerate into a fili-buster. I do not intend to filibuster thisthing. I point out with great respect tothe Senator from Mississippi that 1822would have passed last year if it hadnot been filibustered and slowed up andtied up by people who said we do notwant this thing to go. This would havebeen law last year I believe. I do notknow if the Senator from South Caro-lina can confirm that.

I do not want to tie this thing upwith filibusters and delays. I intend.when there is a manager's amendmentor incidental amendment, to examinethe language because the language isimportant. It is going to have an effecton people.

I say, again for emphasis, that I be-lieve this vote is going to be a lot morecontroversial the further away you getfrom it than people suspect today. Oneof the things about laws that citizensneed to understand is that very often itis about power. That is to say, who hasthe power?

I joined with. again the distinguishedSenator from South Carolina, In votingagainst tort reform bill a little earlierbecause in my judgment that wasabout power. That was about saying tothe citizens of this country you aregetting swept away saying the triallawyers are making life miserable foryou. Just ask yourself this question:You get hurt out there, you have aproblem out there. Who Is going to helpyou? Is congress going to help you? Areyou going to call up your Congressmenand say. "I am getting abused by thephone and cable companies. I do notlike what is going on out there. Do youthink Congress is going to rush to yourdefense? Do you think it will be pos-sible for you to get the agencies of theFederal Government to rally to yourcause? And you probably do not evenhave enough money to buy an airplaneticket to come back here, and if youcame back here you will not knowwhere to go.

This is about power. And regulationsare in place to protect the interests ofthe people. That is what they are therefor. Let us deregulate.

I have a little case going on rightnow in Omaha, NE, that illustrateswhat I am talking about. We have aplant in Nebraska which employees acouple of hundred people. Unfortu-nately. the company processes lead.and they put a lot of lead in the air andwater. And it has been determined-and no one disputes it-that lead dam-ages newborn babies without dispute.We do not have leaded gasoline anylonger because we have decided that isthe case. We have a Clean Air Act, wehave a Clean Water Act. This companyhas been out of compliance for over 15years.

Guess how we aen going to resolve it?Do you think we resolved it because aU.S. Senator intervened on their be-half? Do you think the Congress cameto the rescue? Do you think it was theadministrative branch? No, sir. A cou-ple of citizens filed a suit in court. Itwas the judiciary. It was the right of acitizen to go to court and say, "Thiscompany is not obeying the law of theland. I am going to insist that theyobey the law of the land."

Mr. President. make no mistakeabout it. This piece of legislation Isabout who controls the airways, whocontrols your telephone, who controlsthe information? It is about power.

I hear a lot of people say, "Well, weought to get the government out ofthat." Let us have a debate about whatthe government should or should notdo on behalf of the citizens. I am pre-pared to do that. I think it is a healthydebate. Let us not presume it is quiteso easy as Just saying competition isthe best regulator, which I heard threeor four or five times. Competition doesnot give us clean air. Competition doesnot give us clean water. Competitionwould not likely make every single fac-tory in the workplace in America safe.Maybe somebody wants to come downhere and say that is the case.

I get 1,000 Americans who say, "Youtell me." Do you trust the corporation?You have a corporation out there thatis desperately worried about theirquarterly profits. They are worriedabout bottom line. They have theshareholders Out there to perform for,and they have to make a decision.They have 1.000 people working forthem, and have been working for themlet us say 30 years: 30.100 man andwoman hours in that corporation. Theyhave to make a decision to lay allthousand of them off. and give them nofringe benefits, no severance pay. noretirement. All of those things add costto the corporation.

I ask my Americans. Do you trustthat corporation? Do you think thatcorporation is going do say "No. Ithink it is right and decent; I do notcare what the stock holders say. whatWall Street says; I am going to ignoreall of those people up in New YorkCity; I do not care what they say: I amgoing to do the right thing: I am goingto give you severance pay. I am goingto provide you with your health care.and take care of that retirement bene-fit because I care about you, you are ahuman being; I am not going to treatyou like trash?"

I do not believe many Americans aregoing to say that is likely to be thecase. If a company is a mom and popshop. owned by an individual whichowns 100 percent of the stock, thatmight be different. But when that com-pany CEO worries about the value ofits share, that companies CEO doesthings differently. They have to. I donot say they are doing the wrong thing.I do not blame them for doing that.But please do not come and say thatthe market Is going to get the job

87910 June 7, 1995


June 7, 1995done. The market rewards people thatproduce. The market rewards a muchdifferent set of values than the valuesthat I have just described with thesethousand families.

So again . the next thing I say to citi-zens who are wondering about these 144pages and all of the amendments thatwill be offered, it ie about power andpower over your lives, power to deliveryou information, power to give you aphone service, power to give you videoInformation, power to give you thethings that you say that you want.

For your information, a lot of peoplewho are coming down here saying getthe government out of that are verystrongly supportive of unfortunately atitle offered by the senior Senator fromNebraska, title 4. which said we need tohave a lot more government involve-ment when it comes to regulating.

I understand there is going to besome amendment to make even tough-er penalties. That is popular. That onewe all know. People are fed up with ob-scenity and they are fed up with thestuff they see on television and theywant us to do something about it. Andtitle IV attempts to do that. I hope weare a bit careful, to say the least, withtitle IV, but title V is more Govern-ment, it is not less. Title V is thestatement by Members of Congressthat says the market does not workwhen it comes to obscenity.

Do some people want to come hereand tell me it does? Does somebodywant to come down here and say themarket is the best regulator of obscen-.ity? I do not think so. I do not thinkthere is going to be a single Membercome down here tand say just let themarket take care of it; we do not carewhat kids are getting over theInternet. We do not care what is com-ing into homes.

No. In that Instance the market goesout the window. In that instance wesay TimeiWarner is putting out slime.We have to regulate them in some fash-ion.

So. Mr. President, again. I have agreat deal of respect and appreciationfor the managers of this bill. They havedone an awful lot of work on it. I do in-tend to catefully examine the amend-ments that are offered. I do believethat increased competition can beenormously beneficial. I believe that itcan, properly done, result in lowerprices, higher quality service. peortico-larly, as I said. if it is done In a fashionthat lets everybody compete.

Again. I do not underestimate thedifficulty of this. I am going to have alot of explaining to do to my citizensto tell them why this is good for thembecause in the early days when theyget competition they are going to getconfused. And in the early days theymay even get some price increases.They may find themselves paying high-er telephone service. They may findthemselves paying higher cable. We donot know. We are saying let the mar-ket set the price, in general, once youget to the final end of this thing. Let

CONGRESSIONAL RECORD- SENATEthe cost determine what people aregoing to pay. We have a very smallamount of subsidy in the universalservice fund. We have an education pro-vision that some people are going tocome down here and try to strike, say-ing the market ought to have takencare of that. After having given speech-es saying this is good for health care,this is good for education, they do noteven want to have that provision inthis piece of legislation.

I have many problems with this bill.Mr. President. I do believe the Depart-ment of Justice needs a role in this. Ido not think consultation is enough. Iwould cite as case No. 1 why consulta-tion is not enough, the very thing thatMembers will use when they are sayingthat competition works, and that isMr. Baxter and Judge Greene gettingtogether, the Department of Justicegetting together with a Federal judgeand putting together a consent decree.

It was the Department of Justice. Itwas the Department of Justice thatgave us the competitive environment.It was not the Federal CommuncationsCommission. I am not calling for in-creased authority, increased power, butI want them to do more than consult.They understand competition. TheAntitrust Division of the Departmentof Justice understands where and whencompetition is, and they are about theonly ones in this town that. at least bymy measurement, are out there fight-ing to make sure that that market-place in fact is working.

I have serious problems saying thattelephone companies can acquire cablecompanies inside of their area imme-diately.

Mr. President. I believe we have tohave two lines coming into the home. Ibelieve you have to have-if it is goingto be fiber or some kind of combinationof coax and fiber, I do not know what itis going to be. but I want two linescoming into my home.

I have heard people talk an awful lotabout competition, and I have heard allthe companies coming in saying theywant a competitive environment. Thisis one thing I know. Competition to memeans I have choice. Again, this idea ofchoice is a two-edged sword. You aregoing to have a lot of households outthere that are not going to be terriblypleased with this new choice they have,and they are not going to be terriblyhappy when they see what that choicemight do.

We have to be prepared to stay withthis thing. To my mind, choice meansif a company does not give me what Iwant. I can take my business some-place else. Competition means to me Ican go wherever I want and get theservice I want. And I believe in manyways this bill does just that.

The requirements of unbundling, ofdialing parity, the requirements thatare in this legislation in title I, in myjudgment, provide a good basis for usto have a competitive environment. Al-lowing the phone companies to go outand buy cable inside their own area,

S7911Mr. President, is going to restrict com-petition immediately. We are not goingto have the local cable company andthe phone company competing becausethe phone company is going to have anincentive to buy them. If they buythem. it ends that competition.

I am prepared to hear argumentsabout that, but I think allowing thiscable-Bellcore ownership in the localarea does precisely the opposite ofwhat this bill intends to do.

The other objections and problemsthat I have with the bill I will comelater to the floor and try. to address. Isee the Senator from Pennsylvania isdown here. I suspect that he wants tomake a statement. I just wanted tostand up at this point in time and sayto the Senator from South Dakota andthe Senator from South Carolina I donot intend to stand down here and stopthis piece of legislation from being en-acted. But I do intend to stand downhere and examine every amendmentthat is proposed and make sure it is anamendment that I agree to for all thereasons I cited earlier.

The consumers of this country, thehouseholds of this country have notbeen consulted. We are presuming thatit is going to be good'for them becausewe have talked to American corpora-tions and they are saying it is going tobe good for them. They are saying thisis going to be good for consumers. Thecorporations are saying it Is going tobe good for those households. They aresaying it is good because they are get-ting more jobs, higher service, betterquality, and lower prices.

That is what they are saying. It isnot coming from households. This isnot coming from the people of theUnited States of America. whether it isthe people of South Dakota. the peopleof Nebraska. South Carolina. Mis-sissippi, or Pennsylvania. We believethat we have something here that isgoing to be good for them, but theyhave not come to us and said: Please dothis because we think this needs to bedone.

So I again will have many opportuni-ties to stand and talk, and I look for-ward to what I hope will be a straight-forward and healthy and honest debate.something that I hope does produce afinal change in the 1934 Communica-tions Act which I think does need to bechanged. But at the end of the day Iwish to be able to say to the consumersof Nebraska that this is going to begood for you. I wish to able to say toevery household in Nebraska you aregoing to get benefits from it and theseare the benefits that I believe are goingto occur.

At this stage of the game. Mr. Presi-dent. I cannot support this legislationfor the reasons cited, and I look for-ward to engaging in what I said I hopewill be a constructive debate.

Mr. PRESSLER addressed the Chair.The PRESIDING OFFICER. The Sen-

ator from South Dakota.Mr. PRESSLER. I thank the Senator

from Nebraska for his statement. In


S 7912 CONGRESSIONAL RECORD- SENATE June 7, 1995fact, the other day I cited him. when I tect electric utility ratepayers and PETITIONS AND MEMORIALSwas on a national program of State leg- stockholders from bearing the costs of The following petitions and memori-islators and they asked, in terms of a diversifIcation by registered holding als were laid before the Senate andmodel of a State to deregulate. what companies into telecommunications were referred or ordered to lie on themight It be. And I suggested the work activities. table as indicated:of BaB KERREY of Nebraska when he It requires the Federal Communica- POM-146. A petition from a citizen of thewas Governor. I observed his work in tions Commission, the Federal Energy State of Indiana relative to taxes; to thederegulating telecommunications in Regulatory Commission, and the state Committee on the Judiciary.that State, and I certainly look for- regulators to monitor the activities POM-147. A resolution adopted by the

Board of Nepresentatives, Otsego County.ward tO his insights, and practices of both the subsidiaries New York relative to local government re-We have worked on a bipartisan basis and the parent holding companies that sources; to the Committee on the Judiciary.

on this bill. In fact. all the Democrats engage in telecommunications activi- POM-148. A resolution adopted by theon the Commerce Committee voted for ties in order to ensure that utility con- Council of the City of Alexandria, Virginiathe bill. Senator HOLLINIos did a good sumers pay only what they get. relative to the flag to the Committee on theJob. I visited with and delivered a copy o Judiciary.of the original draft bill to each of the example, my provision would en- POM-149. A concurrent resolution adopted

Democrats on the Commerce Commit- sure that telecoenmunications-related by the Legislature of the State of Arizona; toee. activities are conducted in a separate the Committee on the Judiciary.Two Republicans on the committee subsidiary of the holding company. It "SENAT CONCURRENT RESOUTION 1015

voted against the bill. Eight Repub- would also provide the States with the "Whereas, the people of the State of Ari-licans on the committee voted for it. appropriate regulatory. investigatory, nuns believe that state legislatures should be

This is a bipartisan bill. All the Demo- and enforcement authority to protect provided with a method of offering amend-ments to the Constitution of the United

crat on the committee voted for It. I utility consumers. To this effect. it States: Therefore be itthink that is a very important point, would require the States to approve "Reolved by the Senate of the State of Arn-

THE PUBIC TILITY HOLDING COMIPANY ACT any rate increases by thoae utility one, the House of Repre.entatives concurring:PROvISIONB companies that have a telecommuni- "I. That the Congress of the United States

Mr. D'AMATO. Mr. President, today I cations subsidiary. As a result, the propose to the people of the United States anrise to speak about certain provisions States can examine the proposed rate amendment to the Constitution of the Unit-

ed States to amend the Constitution of thein S. 662, the Telecommunications increase t m s t is justified United States as followsCompetition and Deregulation Act of and that utility customers are not sub- "ARniCLE V-AMENDMENT OF THE1995. sidizng the holding company's tele- cONsTtoN

This bill contains provisions that communications-related costs. "The Congress, whenever two thirds ofwould significantly alter the Public The Banking Committee has con- both Houses shall deem it necessary, shallUtility Holding Company Act of 1935 suited the SEC as well as industry and propose Amendments to this Constitution,(PUHCA). The PUHCA was originally consumer representatives in crafting or. on the Application of the Legislatures ofenacted OD yew's ago to simplify the this provision to make sure appro- two thirds of the several States, shall call aenace yConvention for proposing Amendments.utility holding company structure and priate safeguards will allow the holding which, In either Case, shall be valid to all In-ensure that consumers were protected companies to diversify without nega- tents and Purpoes. as Part of this Constito-from unfair rate increases. At that tive consequences to utility customers. tion. when ratified by the Legilatures Oftime, there were many industry abuses We have struck a reasonable balance, three fourths of the several States. or byinvolving the pyramida corporate As a conferee on the Telecommuni- Conventions in three fourths thereof, as thestructures of holding companies which cations Competition and Deregulation one or the other Mode of Ratifncation may begreatly increased the speculative na- Act of 1995, 1 will be in a position to proposed by the Congress; Provided that no

eof securities issuances, led to mar- make certain that this balance is pre- Amendment which may be made prior to thetore of seurities ances, led to cap- aerer Year One thousand eight hundred and eightket manipulation, and inflated the cap- served, shall in any Manner affect the first andital structure. The abuses in the Indus- At the same time. I would add that fourth Clauses in the Ninth Section of thetry made it nearly impossible for the the Banking Committee intends to ex- first Article; and that no States. without itsStates to adequately protect utility amine the continuing need for the Consent shall be deprived of its equal Suf-ratepayers. Pfrage In the Senate.Thpe .P C iidPUtCA once the Securities and Ex- "Whenever three-fourths of the legisla-The PUHCA limited the types of change Commission releases its report tures of the States deem it necessary, they

businesses that holding companies and recommendations on repeal or re- shall propose amendments to this Constitu-could acquire to utility related serv- form of the Act. tion. These proposed amendments are validIces. As reported out of the Commerce I would like to thank Senator PRES for all intents and purses two years afterCommittee. Sections 102 and 206 of the these amendments arse submitted to Congress"Telecommunications Competition and SLEt, Senator LOTT. Senator BUMPERS. unless both Houses of Congress by a two-Deregulation Act" would permit diver- Senator SARBANES. and their staffs for thirds vote disapprove the proposed amend-sificatlon of registered holding compa- e. ments within two years after their submis-effication~ ~ ~ ~ ~ ofw reitrdhligcmasion.nies into the telecommunications busi- "2. That the Secretary of State of theness---without SEC approval or any State of Arizona transmit copies of this Con-other conditions. Allowing holding MESSAGES FROM THE PRESIDENT current Resolution to the President of thecompanies to diversify away from their United States the President of the Unitedtraditional core utility operations is a Messages from the President of the States Senate, the Speaker of the Uniteddeparture from the basis principles un- United States were communicated to States House of Representatives, the Presi-derlying the 1935 Act. the Senate by Mr. Thomas, one Of his dent of the Senate and the Speaker of the

Mr. President, my primary concern secretaries. House of Representatives of each state's leg-with these sections of the "Tele- islature of the United States of America. and

the Arizona Congressional Delegation."communications Competition and De- POM-lS0. A concurrent resolution adoptedregulation Act" is that losses resulting EXECUTIVE MESSAGES REFERRED by the Legislature of the State of Arizona; tofrom the subsidiaries telecommuni- the Committee on the Judiciary.cations activities could be passed on to As in executive session the Presiding "SENATE CONCURaENT REsOUTION 1006public utility customers in the form of Officer laid before the Senate messages "Be it resolved by the Senate of the Statehigher utility rates, from the President of the United of Arizona. the House of Representatives

I would like to commend Senator States submitting sundry nominations concurring:PRESSLER and Senator Lorr for includ- which were referred to the Committee "1. The following Declaration of Sov-Ing my provision-which addresses on Finance. ereignty is adopted:

"Secion :these concerns-in the manager's (The nominations received today are "A. We. the legislature of the State of Ar-amendment, My provision puts in place printed at the end of the Senate pro- Eons. hereby reaffirm the sovereignty of thethe proper consumer safeguards to pro- ceedings.) states and of the people.


Document No. 16

HeinOnline -- 3 Bernard D. Reams, Jr. & William H. Manz, Federal Telecommunications Law: A Legislative History of the Telecommunications Act of1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) including the Communications Decency Act [xvi] 1997

HeinOnline -- 3 Bernard D. Reams, Jr. & William H. Manz, Federal Telecommunications Law: A Legislative History of the Telecommunications Act of1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) including the Communications Decency Act [xvii] 1997

INTENTIONALBLANK

HeinOnline -- 3 Bernard D. Reams, Jr. & William H. Manz, Federal Telecommunications Law: A Legislative History of the Telecommunications Act of1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) including the Communications Decency Act [xviii] 1997

Documents

(,1 2 1/,1( · +121/,1(Citation: 3 Bernard D. Reams Jr. & William H. Manz Federal Law A Legislative History of the Telecommunications of 1996 Pub. L. No. 104-104 110 Stat. 56 1996