[Congressional Record Volume 140, Number 84 (Tuesday, June 28, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 28, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
            ANTITRUST AND COMMUNICATIONS REFORM ACT OF 1994

  Mr. BROOKS. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 3626) to supersede the Modification of Final Judgment 
entered August 24, 1982, in the antitrust action styled United States 
v. Western Electric, Civil Action No. 82-0192, U.S. District Court for 
the District of Columbia; to amend the Communications Act of 1934 to 
regulate the manufacturing of Bell operating companies, and for other 
purposes, as amended.
  The Clerk read as follows:

                               H.R. 3626

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLES; TABLE OF CONTENTS.

       (a) Short Title of This Act.--This Act may be cited as the 
     ``Antitrust and Communications Reform Act of 1994''.
       (b) Short Title of Title I of This Act.--Title I of this 
     Act may be cited as the ``Antitrust Reform Act of 1994''.
       (c) Table of Contents.--

Sec. 1. Short titles; table of contents.

      TITLE I--SUPERSESSION OF THE MODIFICATION OF FINAL JUDGMENT

Sec. 101. Authorization for Bell operating company to enter competitive 
              lines of business.
Sec. 102. Authorization as prerequisite.
Sec. 103. Limitations on manufacturing and providing equipment.
Sec. 104. Anticompetitive tying arrangements.
Sec. 105. Enforcement.
Sec. 106. Definitions.
Sec. 107. Relationship to other laws.
Sec. 108. Required regulatory actions.

 TITLE II--REGULATION OF MANUFACTURING, ALARM SERVICES, AND ELECTRONIC 
                 PUBLISHING BY BELL OPERATING COMPANIES

Sec. 201. Regulation of manufacturing by Bell operating companies.
Sec. 202. Regulation of entry into alarm monitoring services.
Sec. 203. Regulation of electronic publishing.
Sec. 204. Privacy of customer information.
Sec. 205. Telemessaging services.
Sec. 206. Enhanced services safeguards.

         TITLE III--FEDERAL COMMUNICATIONS COMMISSION RESOURCES

Sec. 301. Authorization of appropriations.
      TITLE I--SUPERSESSION OF THE MODIFICATION OF FINAL JUDGMENT

     SEC. 101. AUTHORIZATION FOR BELL OPERATING COMPANY TO ENTER 
                   COMPETITIVE LINES OF BUSINESS.

       (a) Application.--
       (1) In general.--After the applicable date specified in 
     paragraph (2), a Bell operating company may apply to the 
     Attorney General and the Federal Communications Commission 
     for authorization, notwithstanding the Modification of Final 
     Judgment--
       (A) to provide alarm monitoring services, or
       (B) to provide interexchange telecommunications services.

     The application shall describe with particularity the nature 
     and scope of the activity, and of each product market or 
     service market, and each geographic market, for which 
     authorization is sought.
       (2) Applicable dates.--For purposes of paragraph (1), the 
     applicable date after which a Bell operating company may 
     apply for authorization shall be--
       (A) the date of the enactment of this Act, with respect to 
     providing interexchange telecommunications services, and
       (B) the date that occurs 66 months after the date of the 
     enactment of this Act, with respect to providing alarm 
     monitoring services.
       (3) Interagency notification.--Whenever the Attorney 
     General or the Federal Communications Commission receives an 
     application made under paragraph (1), the recipient of the 
     application shall notify the other of such receipt.
       (4) Publication.--Not later than 10 days after receiving an 
     application made under paragraph (1), the Attorney General 
     and the Federal Communications Commission jointly shall 
     publish the application in the Federal Register.
       (b) Separate Determinations by the Attorney General and the 
     Federal Communications Commission.--
       (1) Comment period.--Not later than 45 days after an 
     application is published under subsection (a)(4), interested 
     persons may submit written comments to the Attorney General, 
     to the Federal Communications Commission, or to both 
     regarding the application. Submitted comments shall be 
     available to the public.
       (2) Interagency consultation.--Before making their 
     respective determinations under paragraph (3), the Attorney 
     General and the Federal Communications Commission shall 
     consult with each other regarding the application involved.
       (3) Determinations.--(A) After the time for comment under 
     paragraph (1) has expired, but not later than 180 days after 
     receiving an application made under subsection (a)(1), the 
     Attorney General and the Federal Communications Commission 
     each shall issue separately a written determination, on the 
     record after an opportunity for a hearing, with respect to 
     granting the authorization for which the Bell operating 
     company has applied.
       (B) Such determination shall be based on a preponderence of 
     the evidence.
       (C) Any person who would be threatened with loss or damage 
     as a result of the approval of the authorization requested 
     shall be permitted to participate as a party in the 
     proceeding on which the determination is based.
       (D)(i) The Attorney General shall approve the granting of 
     the authorization requested in the application only to the 
     extent that the Attorney General finds that there is no 
     substantial possibility that such company or its affiliates 
     could use monopoly power to impede competition in the market 
     such company seeks to enter. The Attorney General shall deny 
     the remainder of the requested authorization.
       (ii) The Federal Communications Commission shall approve 
     the granting of the requested authorization only to the 
     extent that the Commission finds that granting the requested 
     authorization is consistent with the public interest, 
     convenience, and necessity. The Commission shall deny the 
     remainder of the requested authorization.
       (iii) Notwithstanding clauses (i) and (ii), not later than 
     180 days after the date of the enactment of this Act, the 
     Attorney General and the Federal Communications Commission 
     shall each prescribe regulations to establish procedures and 
     criteria for the expedited determination and approval of 
     applications for authorization to provide interexchange 
     telecommunications services (other than services described in 
     section 102(c)) that are incidental to the provision of 
     another service which the Bell operating company may lawfully 
     provide. Before prescribing such regulations, the Attorney 
     General and the Commission shall consult with respect to such 
     regulations, including consultation for the purpose of 
     avoiding unnecessary inconsistencies in such regulations.
       (E) In making its determination under subparagraph (D)(ii) 
     regarding the public interest, convenience, and necessity, 
     the Commission shall take into account--
       (i) the probability that granting the requested 
     authorization will secure reduced rates for consumers of the 
     services that are the subject of the application, especially 
     residential subscribers,
       (ii) whether granting the requested authorization will 
     result in increases in rates for consumers of exchange 
     service,
       (iii) the extent to which granting the requested 
     authorization will expedite the delivery of new services and 
     products to consumers,
       (iv) the extent to which the Commission's regulations, or 
     other laws or regulations, will preclude the applicant from 
     engaging in predatory pricing or other anticompetitive 
     economic practices with respect to the services that are the 
     subject of the application,
       (v) the extent to which granting the requested 
     authorization will permit collusive acts or practices between 
     or among Bell operating companies that are not affiliates of 
     each other,
       (vi) whether granting the requested authorization will 
     result, directly or indirectly, in increasing concentration 
     among providers of the service that is the subject of the 
     application to such an extent that consumers will not be 
     protected from rates that are unjust or unreasonable or that 
     are unjustly or unreasonably discriminatory, and
       (vii) in the case of an application to provide alarm 
     monitoring services, whether the Commission has the 
     capability to enforce effectively the regulations established 
     pursuant to section 230 of the Communications Act of 1934 as 
     added by this Act.
       (F) A determination that approves the granting of any part 
     of a requested authorization shall describe with 
     particularity the nature and scope of the activity, and of 
     each product market or service market, and each geographic 
     market, to which approval applies.
       (4) Publication.--Not later than 10 days after issuing a 
     determination under paragraph (3), the Attorney General or 
     the Federal Communications Commission, as the case may be, 
     shall publish in the Federal Register a brief description of 
     the determination.
       (5) Finality.--A determination made under paragraph (3) 
     shall be final unless a civil action with respect to such 
     determination is timely commenced under subsection (c)(1).
       (6) Authorization granted.--A requested authorization is 
     granted to the extent that--
       (A)(i) both the Attorney General and the Federal 
     Communications Commission approve under paragraph (3) the 
     granting of the authorization, and
       (ii) neither of their approvals is vacated or reversed as a 
     result of judicial review authorized by subsection (c), or
       (B) as a result of such judicial review of either or both 
     determinations, both the Attorney General and the Federal 
     Communications Commission approve the granting of the 
     requested authorization.
       (c) Judicial Review.--
       (1) Commencement of action.--Not later than 45 days after a 
     determination by the Attorney General or the Federal 
     Communications Commission is published under subsection 
     (b)(4), the Bell operating company that applied to the 
     Attorney General and the Federal Communications Commission 
     under subsection (a), or any person who would be threatened 
     with loss or damage as a result of the determination 
     regarding such company's engaging in the activity described 
     in such company's application, may commence an action in the 
     United States Court of Appeals for the District of Columbia 
     Circuit against the Attorney General or the Federal 
     Communications Commission, as the case may be, for judicial 
     review of the determination regarding the application.
       (2) Certification of record.--As part of the answer to the 
     complaint, the Attorney General or the Federal Communications 
     Commission, as the case may be, shall file in such court a 
     certified copy of the record upon which the determination is 
     based.
       (3) Consolidation of actions.--The court shall consolidate 
     for judicial review all actions commenced under this 
     subsection with respect to the application.
       (4) Judgment.--(A) The court shall enter a judgment after 
     reviewing the determination in accordance with section 706 of 
     title 5 of the United States Code.
       (B) A judgment--
       (i) affirming any part of the determination that approves 
     granting all or part of the requested authorization, or
       (ii) reversing any part of the determination that denies 
     all or part of the requested authorization,

     shall describe with particularity the nature and scope of the 
     activity, and of each product market or service market, and 
     each geographic market, to which the affirmance or reversal 
     applies.

     SEC. 102. AUTHORIZATION AS PREREQUISITE.

       (a) Prerequisite.--Until a Bell operating company is so 
     authorized in accordance with section 101, it shall be 
     unlawful for such company, directly or through an affiliated 
     enterprise, to engage in an activity described in section 
     101(a)(1).
       (b) General Exceptions.--Except with respect to providing 
     alarm monitoring services, subsection (a) shall not prohibit 
     a Bell operating company from engaging, at any time after the 
     date of the enactment of this Act--
       (1) in any activity as authorized by an order entered by 
     the United States District Court for the District of Columbia 
     pursuant to section VII or VIII(C) of the Modification of 
     Final Judgment, if--
       (A) such order was entered on or before the date of the 
     enactment of this Act, or
       (B) a request for such authorization was pending before 
     such court on the date of the enactment of this Act,
       (2) in providing intrastate interexchange 
     telecommunications services if--
       (A) after the date of the enactment of this Act, the State 
     involved approves or authorizes such company to provide such 
     services, after taking into account the potential effects of 
     such approval or authorization on competition and the public 
     interest,
       (B) not less than 90 days before such company offers to 
     provide such services, such company gives notice to the 
     public and the Attorney General that such approval or 
     authorization has been granted by such State, and appoints an 
     agent for the purpose of receiving service of process,
       (C) the Attorney General--
       (i) fails to commence a civil action in accordance with 
     subsection (d), not later than 90 days after the Attorney 
     General receives the notice described in subparagraph (B), to 
     enjoin such company from providing such services, or
       (ii) so commences such civil action but--

       (I) fails to obtain an injunction from the district court 
     involved enjoining such company from providing such services, 
     or
       (II) such injunction issued by such court is vacated on 
     appeal, and

       (D) the Bell operating company is required by regulations 
     prescribed by the Federal Communications Commission and such 
     State, for the services subject to their respective 
     jurisdictions, to pay a nondiscriminatory access charge to 
     the local exchange carrier (including itself) that provides 
     the Bell operating company with telephone exchange access, 
     and
       (3) in providing interexchange telecommunications services 
     through resale of telecommunications services purchased from 
     a person who is not an affiliated enterprise of such company 
     if--
       (A) such interexchange telecommunications services involve 
     only telecommunications that originate in a State in which, 
     on the date of the enactment of this Act, such company 
     provided wireline telephone exchange services,
       (B) such State has approved or authorized persons that are 
     not affiliated enterprises of such company to provide 
     intraexchange toll telecommunications services in such a 
     manner that customers in such State have the ability to route 
     automatically, without the use of any access code, their 
     intraexchange toll telecommunications to the 
     telecommunications services provider of the customer's 
     designation from among 2 or more telecommunications services 
     providers (including such company),
       (C) after the date of the enactment of this Act and not 
     less than 90 days before such company offers to provide such 
     interexchange telecommunications services, such company gives 
     notice to the public and the Attorney General that such 
     approval or authorization has been granted by such State, and
       (D) the Attorney General--
       (i) fails to commence a civil action in accordance with 
     subsection (d), not later than 90 days after the Attorney 
     General receives the notice described in subparagraph (C), to 
     enjoin such company from providing such services, or
       (ii) so commences such civil action but--

       (I) fails to obtain an injunction from the district court 
     involved enjoining such company from providing such services, 
     or
       (II) such injunction issued by such court is vacated on 
     appeal.

       (c) Exceptions for Incidental Services.--Subsection (a) 
     shall not prohibit a Bell operating company, at any time 
     after the date of the enactment of this Act, from providing 
     interexchange telecommunications services for the purpose 
     of--
       (1)(A) providing audio programming, video programming, or 
     other programming services to subscribers to such services of 
     such company,
       (B) providing the capability for interaction by such 
     subscribers to select or respond to such audio programming, 
     video programming, or other programming services, or
       (C) providing to distributors audio programming or video 
     programming that such company owns, controls, or is licensed 
     by the copyright owner of such programming, or by an assignee 
     of such owner, to distribute,
       (2) providing a telecommunications service, using the 
     transmission facilities of a cable system that is an 
     affiliate of such company, between exchange areas within a 
     cable system franchise area in which such company is not, on 
     the date of the enactment of this Act, a provider of wireline 
     telephone exchange service,
       (3) providing commercial mobile services in accordance with 
     section 332(c) of the Communications Act of 1934 (47 U.S.C. 
     332(c)) and with the regulations prescribed by the Commission 
     pursuant to paragraph (7) of such section,
       (4) providing a service that permits a customer that is 
     located in one exchange area to retrieve stored information 
     from, or file information for storage in, information storage 
     facilities of such company that are located in another 
     exchange area,
       (5) providing signaling information used in connection with 
     the provision of exchange services to a local exchange 
     carrier that, together with any affiliated local exchange 
     carriers, has aggregate annual revenues of less than 
     $100,000,000, or
       (6) providing network control signaling information to, and 
     receiving such signaling information from, interexchange 
     carriers at any location within the area in which such 
     company provides exchange services or exchange access.
       (d) Civil Action.--(1) For the purpose of paragraph (2) or 
     (3) of subsection (b), the Attorney General shall commence a 
     civil action, not later than 90 days after receiving the 
     notice required by paragraph (2)(B) or (3)(C) of such 
     subsection, respectively, to enjoin such company from 
     providing interexchange telecommunications services pursuant 
     to such paragraph if the Attorney General determines that the 
     standard specified in the first sentence of section 
     101(b)(3)(D)(i) is not satisfied with respect to providing 
     such interexchange telecommunications services.
       (2) With respect to a civil action commenced for the 
     purpose of paragraph (2) or (3) of subsection (b), venue 
     shall lie in any district court of the United States in the 
     State that granted the approval or authorization referred to 
     in such paragraph.
       (3) If the Attorney General does not commence a civil 
     action in accordance with paragraph (1) before the expiration 
     of the 90-day period beginning on the date the Attorney 
     General receives such notice, the Attorney General shall 
     publish in the Federal Register a brief statement that the 
     Attorney General has determined not to commence such civil 
     action.

     SEC. 103. LIMITATIONS ON MANUFACTURING AND PROVIDING 
                   EQUIPMENT.

       (a) Absolute Limitation.--Until the expiration of the 1-
     year period beginning on the date of the enactment of this 
     Act, it shall be unlawful for a Bell operating company, 
     directly or through an affiliated enterprise, to manufacture 
     or provide telecommunications equipment, or to manufacture 
     customer premises equipment.
       (b) Qualified Limitation.--
       (1) Required conditions.--After the expiration of the 1-
     year period beginning on the date of the enactment of this 
     Act, it shall be lawful for a Bell operating company, 
     directly or through an affiliated enterprise, to manufacture 
     or provide telecommunications equipment, or to manufacture 
     customer premises equipment, to the extent described in a 
     notification to the Attorney General that meets the 
     requirements of paragraph (2) and only if--
       (A) such company submits to the Attorney General, at any 
     time after the date of the enactment of this Act, the 
     notification described in paragraph (2) and such additional 
     material and information described in such paragraph as the 
     Attorney General may request, and complies with the waiting 
     period specified in paragraph (3), and
       (B)(i) the waiting period specified in paragraph (3) 
     expires without the commencement of a civil action by the 
     Attorney General in accordance with paragraph (4) to enjoin 
     such company from engaging in the activity described in such 
     notification, or
       (ii) before the expiration of such waiting period, the 
     Attorney General notifies such company in writing that the 
     Attorney General does not intend to commence such a civil 
     action with respect to such activity.
       (2) Notification.--The notification required by paragraph 
     (1) shall be in such form and shall contain such documentary 
     material and information relevant to the proposed activity as 
     is necessary and appropriate for the Attorney General to 
     determine whether there is no substantial possibility that 
     such company or its affiliates could use monopoly power to 
     impede competition in the market such company seeks to enter 
     for such activity.
       (3) Waiting period.--The waiting period referred to in 
     paragraph (1) is the 1-year period beginning on the date the 
     notification required by such paragraph is received by the 
     Attorney General.
       (4) Civil action.--Not later than 1 year after receiving a 
     notification required by paragraph (1), the Attorney General 
     may commence a civil action in an appropriate district court 
     of the United States to enjoin the Bell operating company 
     from engaging in the activity described in such notification, 
     if the Attorney General determines that there is a 
     substantial possibility that such company or its affiliates 
     could use monopoly power to impede competition in the market 
     it seeks to enter with respect to such activity.
       (c) Exception for Previously Authorized Activities.--
     Subsections (a) and (b) shall not prohibit a Bell operating 
     company from engaging, at any time after the date of the 
     enactment of this Act, in any activity as authorized by an 
     order entered by the United States District Court for the 
     District of Columbia pursuant to section VII or VIII(C) of 
     the Modification of Final Judgment, if--
       (1) such order was entered on or before the date of the 
     enactment of this Act, or
       (2) a request for such authorization was pending before 
     such court on the date of the enactment of this Act.

     SEC. 104. ANTICOMPETITIVE TYING ARRANGEMENTS.

       A Bell operating company with monopoly power in any 
     exchange service market shall not tie (directly or 
     indirectly) in any relevant market the sale of any product or 
     service to the provision of any telecommunications service, 
     if the effect of such tying may be to substantially lessen 
     competition, or to tend to create a monopoly, in any line of 
     commerce.

     SEC. 105. ENFORCEMENT.

       (a) Equitable Powers of United States Attorneys.--It shall 
     be the duty of the several United States attorneys, under the 
     direction of the Attorney General, to institute proceedings 
     in equity in their respective districts to prevent and 
     restrain violations of this title.
       (b) Criminal Liability.--Whoever knowingly engages or 
     knowingly attempts to engage in an activity that is 
     prohibited by section 102, 103, or 104 shall be guilty of a 
     felony, and on conviction thereof, shall be punished to the 
     same extent as a person is punished upon conviction of a 
     violation of section 1 of the Sherman Act (15 U.S.C. 1).
       (c) Private Right of Action.--Any person who is injured in 
     its business or property by reason of a violation of this 
     title--
       (1) may bring a civil action in any district court of the 
     United States in the district in which the defendant resides 
     or is found or has an agent, without respect to the amount in 
     controversy, and
       (2) shall recover threefold the damages sustained, and the 
     cost of suit (including a reasonable attorney's fee).

     The court may award under this section, pursuant to a motion 
     by such person promptly made, simple interest on actual 
     damages for the period beginning on the date of service of 
     such person's pleading setting forth a claim under this title 
     and ending on the date of judgment, or for any shorter period 
     therein, if the court finds that the award of such interest 
     for such period is just in the circumstances.
       (d) Private Injunctive Relief.--Any person shall be 
     entitled to sue for and have injunctive relief, in any court 
     of the United States having jurisdiction over the parties, 
     against threatened loss or damage by a violation of this 
     title, when and under the same conditions and principles as 
     injunctive relief is available under section 16 of the 
     Clayton Act (15 U.S.C. 26). In any action under this 
     subsection in which the plaintiff substantially prevails, the 
     court shall award the cost of suit, including a reasonable 
     attorney's fee, to such plaintiff.
       (e) Jurisdiction.--(1) Subject to paragraph (2), the courts 
     of the United States shall have exclusive jurisdiction to 
     make determinations with respect to a duty, claim, or right 
     arising under this title, other than determinations 
     authorized to be made by the Attorney General and the Federal 
     Communications Commission under section 101(b)(3).
       (2) The United States Court of Appeals for the District of 
     Columbia shall have exclusive jurisdiction to review 
     determinations made under section 101(b)(3).
       (3) No action commenced to assert or enforce a duty, claim, 
     or right arising under this title shall be stayed pending any 
     such determination by the Attorney General or the Federal 
     Communications Commission.
       (f) Subpoenas.--In an action commenced under this title, a 
     subpoena requiring the attendance of a witness at a hearing 
     or a trial may be served at any place within the United 
     States.
       (g) Applicability of Other Laws to Enforcement of This 
     Title.--
       (1) Section 5 of the clayton act.--Section 5 of the Clayton 
     Act (15 U.S.C. 16) shall apply with respect to actions under 
     this section brought by or on behalf of the United States.
       (2) Antitrust civil process act.--Section 2(a) of the 
     Antitrust Civil Process Act (15 U.S.C. 1311(a)) is amended--
       (A) in paragraph (1) by striking ``and'' at the end,
       (B) in paragraph (2) by striking the period at the end and 
     inserting ``and'', and
       (C) by adding at the end the following:
       ``(3) title I of the Antitrust and Communications Reform 
     Act of 1994.''.

     SEC. 106. DEFINITIONS.

       For purposes of this title:
       (1) Affiliate.--The term ``affiliate'' means a person that 
     (directly or indirectly) owns or controls, is owned or 
     controlled by, or is under common ownership or control with, 
     another person. For purposes of this paragraph, to own refers 
     to owning an equity interest (or the equivalent thereof) of 
     more than 50 percent.
       (2) Alarm monitoring service.--The term ``alarm monitoring 
     service'' means a service that uses a device located at a 
     residence, place of business, or other fixed premises--
       (A) to receive signals from other devices located at or 
     about such premises regarding a possible threat at such 
     premises to life, safety, or property, from burglary, fire, 
     vandalism, bodily injury, or other emergency, and
       (B) to transmit a signal regarding such threat by means of 
     transmission facilities of a Bell operating company or one of 
     its affiliates to a remote monitoring center to alert a 
     person at such center of the need to inform the customer or 
     another person or police, fire, rescue, security, or public 
     safety personnel of such threat,

     but does not include a service that uses a medical monitoring 
     device attached to an individual for the automatic 
     surveillance of an ongoing medical condition.
       (3) Antitrust laws.--The term ``antitrust laws'' has the 
     meaning given it in subsection (a) of the first section of 
     the Clayton Act (15 U.S.C. 12(a)), except that such term 
     includes the Act of June 19, 1936 (49 Stat. 1526; 15 U.S.C. 
     13 et seq.), commonly known as the Robinson Patman Act, and 
     section 5 of the Federal Trade Commission Act (15 U.S.C. 45) 
     to the extent that such section 5 applies to unfair methods 
     of competition.
       (4) Audio programming.--The term ``audio programming'' 
     means programming provided by, or generally considered 
     comparable to programming provided by, a radio broadcast 
     station.
       (5) Bell operating company.--The term ``Bell operating 
     company'' means--
       (A) Bell Telephone Company of Nevada, Illinois Bell 
     Telephone Company, Indiana Bell Telephone Company, 
     Incorporated, Michigan Bell Telephone Company, New England 
     Telephone and Telegraph Company, New Jersey Bell Telephone 
     Company, New York Telephone Company, U S West Communications 
     Company, South Central Bell Telephone Company, Southern Bell 
     Telephone and Telegraph Company, Southwestern Bell Telephone 
     Company, The Bell Telephone Company of Pennsylvania, The 
     Chesapeake and Potomac Telephone Company, The Chesapeake and 
     Potomac Telephone Company of Maryland, The Chesapeake and 
     Potomac Telephone Company of Virginia, The Chesapeake and 
     Potomac Telephone Company of West Virginia, The Diamond State 
     Telephone Company, The Ohio Bell Telephone Company, The 
     Pacific Telephone and Telegraph Company, or Wisconsin 
     Telephone Company,
       (B) any successor or assign of any such company, or
       (C) any affiliate of any person described in subparagraph 
     (A) or (B).
       (6) Cable system.--The term ``cable system'' has the 
     meaning given such term in section 602(7) of the 
     Communications Act of 1934 (47 U.S.C. 522(7)).
       (7) Carrier.--The term ``carrier'' has the meaning given 
     such term in section 3 of the Communications Act of 1934 (47 
     U.S.C. 153).
       (8) Commercial mobile services.--The term ``commercial 
     mobile services'' has the meaning given such term in section 
     332(d) of the Communications Act of 1934 (47 U.S.C. 332(d)).
       (9) Customer premises equipment.--The term ``customer 
     premises equipment'' means equipment employed on the premises 
     of a person (other than a carrier) to originate, route, or 
     terminate telecommunications, and includes software integral 
     to such equipment.
       (10) Exchange access.--The term ``exchange access'' means 
     exchange services provided for the purpose of originating or 
     terminating interexchange telecommunications.
       (11) Exchange area.--The term ``exchange area'' means a 
     contiguous geographic area established by a Bell operating 
     company such that no exchange area includes points within 
     more than 1 metropolitan statistical area, consolidated 
     metropolitan statistical area, or State, except as expressly 
     permitted under the Modification of Final Judgment before the 
     date of the enactment of this Act.
       (12) Exchange service.--The term ``exchange service'' means 
     a telecommunications service provided within an exchange 
     area.
       (13) Information.--Except as provided in paragraph (17), 
     the term ``information'' means knowledge or intelligence 
     represented by any form of writing, signs, signals, pictures, 
     sounds, or other symbols.
       (14) Interexchange telecommunications.--The term 
     ``interexchange telecommunications'' means telecommunications 
     between a point located in an exchange area and a point 
     located outside such exchange area.
       (15) Manufacture.--The term ``manufacture'' has the meaning 
     given such term under the Modification of Final Judgment.
       (16) Modification of final judgment.--The term 
     ``Modification of Final Judgment'' means the order entered 
     August 24, 1982, in the antitrust action styled United States 
     v. Western Electric, Civil Action No. 82-0192, in the United 
     States District Court for the District of Columbia, and 
     includes any judgment or order with respect to such action 
     entered on or after August 24, 1982.
       (17) Other programming services.--The term ``other 
     programming services'' means information (other than audio 
     programming or video programming) that the person who offers 
     a video programming service makes available to all 
     subscribers generally. For purposes of the preceding 
     sentence, the terms ``information'' and ``makes available to 
     all subscribers generally'' have the same meaning such terms 
     have under section 602(13) of the Communications Act of 1934 
     (47 U.S.C. 522(13)).
       (18) Person.--The term ``person'' has the meaning given 
     such term in subsection (a) of the first section of the 
     Clayton Act (15 U.S.C. 12(a)).
       (19) State.--The term ``State'' means any of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Commonwealth of the Northern Mariana Islands, the 
     Federated States of Micronesia, the Republic of the Marshall 
     Islands, Palau, or any territory or possession of the United 
     States.
       (20) Telecommunications.--The term ``telecommunications'' 
     means the transmission of information between points by 
     electromagnetic means.
       (21) Telecommunications equipment.--The term 
     ``telecommunications equipment'' means equipment, other than 
     customer premises equipment, used by a carrier to provide a 
     telecommunications service, and includes software integral to 
     such equipment.
       (22) Telecommunications service.--The term 
     ``telecommunications service'' means the offering for hire of 
     transmission facilities or of telecommunications by means of 
     such facilities.
       (23) Transmission facilities.--The term ``transmission 
     facilities'' means equipment (including wire, cable, 
     microwave, satellite, and fiber-optics) that transmits 
     information by electromagnetic means or that directly 
     supports such transmission, but does not include customer 
     premises equipment.
       (24) Video programming.--The term ``video programming'' has 
     the meaning given such term in section 602(19) of the 
     Communications Act of 1934 (47 U.S.C. 522(19)).

     SEC. 107. RELATIONSHIP TO OTHER LAWS.

       (a) Modification of Final Judgment.--This title shall 
     supersede the Modification of Final Judgment, except that 
     this title shall not affect--
       (1) section I of the Modification of Final Judgment, 
     relating to AT&T reorganization,
       (2) section II(A) (including appendix B) and II(B) of the 
     Modification of Final Judgment, relating to equal access and 
     nondiscrimination,
       (3) section IV(F) and IV(I) of the Modification of Final 
     Judgment, with respect to the requirements included in the 
     definitions of ``exchange access'' and ``information 
     access'',
       (4) section VIII(B) of the Modification of Final Judgment, 
     relating to printed advertising directories,
       (5) section VIII(E) of the Modification of Final Judgment, 
     relating to notice to customers of AT&T,
       (6) section VIII(F) of the Modification of Final Judgment, 
     relating to less than equal exchange access,
       (7) section VIII(G) of the Modification of Final Judgment, 
     relating to transfer of AT&T assets, including all exceptions 
     granted thereunder before the date of the enactment of this 
     Act, and
       (8) with respect to the parts of the Modification of Final 
     Judgment described in paragraphs (1) through (7)--
       (A) section III of the Modification of Final Judgment, 
     relating to applicability and effect,
       (B) section IV of the Modification of Final Judgment, 
     relating to definitions,
       (C) section V of the Modification of Final Judgment, 
     relating to compliance,
       (D) section VI of the Modification of Final Judgment, 
     relating to visitorial provisions,
       (E) section VII of the Modification of Final Judgment, 
     relating to retention of jurisdiction, and
       (F) section VIII(I) of the Modification of Final Judgment, 
     relating to the court's sua sponte authority.
       (b) Antitrust Laws.--Except as provided in section 105(g), 
     nothing in this Act shall be construed to modify, impair, or 
     supersede the applicability of any of the antitrust laws.
       (c) Federal, State, and Local Law.--(1) Except as provided 
     in paragraph (2), this title shall not be construed to 
     modify, impair, or supersede Federal, State, or local law 
     unless expressly so provided in this title.
       (2) This title shall supersede State and local law to the 
     extent that such law would impair or prevent the operation of 
     this title.
       (d) Cumulative Penalty.--Any penalty imposed, or relief 
     granted, under this title shall be in addition to, and not in 
     lieu of, any penalty or relief authorized by any other law to 
     be imposed with respect to conduct described in this title.

     SEC. 108. REQUIRED REGULATORY ACTIONS.

       (a) Regulations to Prohibit Cross-Subsidies.--Not later 
     than 180 days after the date of enactment of this Act, the 
     Federal Communications Commission shall review its 
     regulations and revise such regulations to the extent 
     necessary to prevent a Bell operating company from engaging 
     in any improper cross-subsidization in connection with any of 
     the services described in paragraphs (1) through (6) of 
     section 102(c).
       (b) Mobile Service Access.--
       (1) Amendment.--Section 332(c) of the Communications Act of 
     1934 (47 U.S.C. 332(c)) is amended by adding at the end the 
     following new paragraph:
       ``(7) Mobile services access.--Within 180 days after the 
     date of enactment of this paragraph, the Commission shall 
     review its regulations with respect to the access to 
     interexchange services provided to subscribers to commercial 
     mobile services and revise such regulations to the extent 
     necessary to protect the public interest, convenience, and 
     necessity. In revising such regulations, the Commission--
       ``(A) shall, until January 1, 1998, and may thereafter (i) 
     require that each provider of two-way commercial mobile 
     services afford its subscribers nondiscriminatory access to a 
     provider of interexchange services of the subscriber's 
     choice, and (ii) establish geographic service areas within 
     which providers of two-way commercial mobile services shall 
     be exempt from the access obligation under clause (i);
       ``(B) may establish or revise technical interconnection 
     requirements on providers of two-way commercial mobile 
     services;
       ``(C) subject to section 104 of the Antitrust and 
     Communications Reform Act of 1994, and the provisions of 
     paragraph (1) of this subsection and subparagraph (A) of this 
     paragraph and the regulations prescribed thereunder, may 
     permit (with or without conditions) or prohibit the bundling 
     of two-way commercial mobile services with interexchange 
     services; and
       ``(D) shall not, in establishing any requirement under 
     subparagraph (A), (B), or (C) establish different 
     requirements--
       ``(i) for providers of two-way commercial mobile services 
     that also are, or are affiliated with, providers of wireline 
     telephone exchange service; and
       ``(ii) for providers of two-way commercial mobile services 
     that are not, and are not affiliated with, providers of 
     wireline telephone exchange service.

     The regulations prescribed pursuant to this paragraph shall 
     supersede any inconsistent requirements imposed by the 
     Modification of Final Judgment (as such term is defined in 
     section 106 of the Antitrust and Communications Reform Act of 
     1994). Nothing in this paragraph shall affect the 
     Commission's authority to establish the terms and conditions 
     under which providers of telephone exchange services provide 
     access to the local exchange networks for commercial mobile 
     services or interexchange services.''.
       (2) Effective date conforming amendment.--Section 
     6002(c)(2)(B) of the Omnibus Budget Reconciliation Act of 
     1993 is amended by striking ``section 332(c)(6)'' and 
     inserting ``paragraphs (6) and (7) of section 332(c)''.3
 TITLE II--REGULATION OF MANUFACTURING, ALARM SERVICES, AND ELECTRONIC 
                 PUBLISHING BY BELL OPERATING COMPANIES

     SEC. 201. REGULATION OF MANUFACTURING BY BELL OPERATING 
                   COMPANIES.

       Title II of the Communications Act of 1934 (47 U.S.C. 201 
     et seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 229. REGULATION OF MANUFACTURING BY BELL OPERATING 
                   COMPANIES.

       ``(a) General Authority.--Subject to the requirements of 
     this section and the regulations prescribed thereunder, but 
     notwithstanding any restriction or obligation imposed before 
     the date of enactment of this section pursuant to the 
     Modification of Final Judgment on the lines of business in 
     which a Bell operating company may engage, a Bell operating 
     company, through an affiliate of that company, may 
     manufacture and provide telecommunications equipment and 
     manufacture customer premises equipment.
       ``(b) Separate Manufacturing Affiliate.--Any manufacturing 
     or provision authorized under subsection (a) shall be 
     conducted only through an affiliate that is separate from any 
     Bell operating company.
       ``(c) Commission Regulation of Manufacturing Affiliate.--
       ``(1) Regulations required.--The Commission shall prescribe 
     regulations to ensure that Bell operating companies and their 
     affiliates comply with the requirements of this section.
       ``(2) Books, records, accounts.--A manufacturing affiliate 
     required by subsection (b) shall--
       ``(A) maintain books, records, and accounts that are 
     separate from the books, records, and accounts of its 
     affiliated Bell operating company and that identify all 
     financial transactions between the manufacturing affiliate 
     and its affiliated Bell operating company, and
       ``(B) even if such manufacturing affiliate is not a 
     publicly held corporation, prepare financial statements which 
     are in compliance with financial reporting requirements under 
     the Federal securities laws for publicly held corporations, 
     file such statements with the Commission, and make such 
     statements available for public inspection.
       ``(3) In-kind benefits to affiliate.--Consistent with the 
     provisions of this section, neither a Bell operating company 
     nor any of its nonmanufacturing affiliates shall perform 
     sales, advertising, installation, production, or maintenance 
     operations for a manufacturing affiliate, except that--
       ``(A) a Bell operating company and its nonmanufacturing 
     affiliates may sell, advertise, install, and maintain 
     telecommunications equipment and customer premises equipment 
     after acquiring such equipment from their manufacturing 
     affiliate; and
       ``(B) institutional advertising, of a type not related to 
     specific telecommunications equipment, carried out by the 
     Bell operating company or its affiliates, shall be permitted.
       ``(4) Domestic manufacturing required.--
       ``(A) General rule.--Except as otherwise provided in this 
     paragraph, a manufacturing affiliate required by subsection 
     (b) shall conduct all of its manufacturing within the United 
     States and all component parts of customer premises equipment 
     manufactured by such affiliate, and all component parts of 
     telecommunications equipment manufactured by such affiliate, 
     shall have been manufactured within the United States.
       ``(B) Exception.--(i) Such affiliate may use component 
     parts manufactured outside the United States if--
       ``(I) such affiliate first makes a good faith effort to 
     obtain equivalent component parts manufactured within the 
     United States at reasonable prices, terms, and conditions; 
     and
       ``(II) for the aggregate of telecommunications equipment 
     and customer premises equipment manufactured and sold in the 
     United States by such affiliate, the cost of the components 
     manufactured outside the United States contained in all such 
     equipment does not exceed 40 percent of the sales revenue 
     derived in any calendar year from such equipment.
       ``(ii) Subparagraph (A) shall apply except to the extent 
     that any of its provisions are determined to be inconsistent 
     with any multilateral or bilateral agreement to which the 
     United States is a party.
       ``(C) Certification required.--Any such affiliate that uses 
     component parts manufactured outside the United States in the 
     manufacture of telecommunications equipment and customer 
     premises equipment within the United States shall--
       ``(i) certify to the Commission that a good faith effort 
     was made to obtain equivalent parts manufactured within the 
     United States at reasonable prices, terms, and conditions, 
     which certification shall be filed on a quarterly basis with 
     the Commission and list component parts, by type, 
     manufactured outside the United States; and
       ``(ii) certify to the Commission on an annual basis that 
     such affiliate complied with the requirements of subparagraph 
     (B)(ii), as adjusted in accordance with subparagraph (G).
       ``(D) Remedies for failures.--(i) If the Commission 
     determines, after reviewing the certification required in 
     subparagraph (C)(i), that such affiliate failed to make the 
     good faith effort required in subparagraph (B)(i) or, after 
     reviewing the certification required in subparagraph (C)(ii), 
     that such affiliate has exceeded the percentage specified in 
     subparagraph (B)(ii), the Commission may impose penalties or 
     forfeitures as provided for in title V of this Act.
       ``(ii) Any supplier claiming to be damaged because a 
     manufacturing affiliate failed to make the good faith effort 
     required in subparagraph (B)(i) may make complaint to the 
     Commission as provided for in section 208 of this Act, or may 
     bring suit for the recovery of actual damages for which such 
     supplier claims such affiliate may be liable under the 
     provisions of this Act in any district court of the United 
     States of competent jurisdiction.
       ``(E) Annual report.--The Commission, in consultation with 
     the Secretary of Commerce, shall, on an annual basis, 
     determine the cost of component parts manufactured outside 
     the United States contained in all telecommunications 
     equipment and customer premises equipment sold in the United 
     States as a percentage of the revenues from sales of such 
     equipment in the previous calendar year.
       ``(F) Use of intellectual property in manufacture.--
     Notwithstanding subparagraph (A), a manufacturing affiliate 
     may use intellectual property created outside the United 
     States in the manufacture of telecommunications equipment and 
     customer premises equipment in the United States. A component 
     manufactured using such intellectual property shall not be 
     treated for purposes of subparagraph (B)(ii) as a component 
     manufactured outside the United States solely on the basis of 
     the use of such intellectual property.
       ``(G) Restrictions on commission authority.--The Commission 
     may not waive or alter the requirements of this paragraph, 
     except that the Commission, on an annual basis, shall adjust 
     the percentage specified in subparagraph (B)(ii) to the 
     percentage determined by the Commission, in consultation with 
     the Secretary of Commerce, pursuant to subparagraph (E).
       ``(5) Insulation of rate payers from manufacturing 
     affiliate debt.--Any debt incurred by any such manufacturing 
     affiliate may not be issued by its affiliated Bell operating 
     company and such manufacturing affiliate shall be prohibited 
     from incurring debt in a manner that would permit a creditor, 
     on default, to have recourse to the assets of its affiliated 
     Bell operating company.
       ``(6) Relation to other affiliates.--A manufacturing 
     affiliate required by subsection (b) shall not be required to 
     operate separately from the other affiliates of its 
     affiliated Bell operating company, but if an affiliate of a 
     Bell operating company becomes affiliated with a 
     manufacturing entity, such affiliate shall be treated as a 
     manufacturing affiliate of that Bell operating company 
     (except for purposes of paragraph (3)) and shall comply with 
     the requirements of this section.
       ``(7) Availability of equipment to other carriers.--A 
     manufacturing affiliate required by subsection (b) shall make 
     available, without discrimination or preference as to price, 
     delivery, terms, or conditions, to any common carrier any 
     telecommunications equipment that is used in the provision of 
     telephone exchange service and that is manufactured by such 
     affiliate only if such purchasing carrier--
       ``(A) does not manufacture telecommunications equipment, 
     and does not have an affiliated telecommunications equipment 
     manufacturing entity; or
       ``(B) agrees to make available, to the Bell operating 
     company affiliated with such manufacturing affiliate or any 
     common carrier affiliate of such Bell operating company, any 
     telecommunications equipment that is used in the provision of 
     telephone exchange service and that is manufactured by such 
     purchasing carrier or by any entity or organization with 
     which such purchasing carrier is affiliated.
       ``(8) Sales practices of manufacturing affiliates.--
       ``(A) Prohibition of discontinuation of equipment for which 
     there is reasonable demand.--A manufacturing affiliate 
     required by subsection (b) shall not discontinue or restrict 
     sales to a common carrier of any telecommunications equipment 
     that is used in the provision of telephone exchange service 
     and that such affiliate manufactures for sale as long as 
     there is reasonable demand for the equipment by such 
     carriers; except that such sales may be discontinued or 
     restricted if such manufacturing affiliate demonstrates to 
     the Commission that it is not making a profit, under a 
     marginal cost standard implemented by the Commission by 
     regulation, on the sale of such equipment.
       ``(B) Determinations of reasonable demand.--Within 60 days 
     after receipt of an application under subparagraph (A), the 
     Commission shall reach a determination as to the existence of 
     reasonable demand for purposes of such subparagraph. In 
     making such determination the Commission shall consider--
       ``(i) whether the continued manufacture of the equipment 
     will be profitable;
       ``(ii) whether the equipment is functionally or 
     technologically obsolete;
       ``(iii) whether the components necessary to manufacture the 
     equipment continue to be available;
       ``(iv) whether alternatives to the equipment are available 
     in the market; and
       ``(v) such other factors as the Commission deems necessary 
     and proper.
       ``(9) Joint planning obligations.--Each Bell operating 
     company shall, consistent with the antitrust laws, (including 
     title I of the Antitrust and Communications Reform Act of 
     1994), engage in joint network planning and design with other 
     contiguous common carriers providing telephone exchange 
     service, but agreement with such other carriers shall not be 
     required as a prerequisite for the introduction or deployment 
     of services pursuant to such joint network planning and 
     design.
       ``(d) Information Requirements.--
       ``(1) Filing of information on protocols and technical 
     requirements.--Each Bell operating company shall, in 
     accordance with regulations prescribed by the Commission, 
     maintain and file with the Commission full and complete 
     information with respect to the protocols and technical 
     requirements for connection with and use of its telephone 
     exchange service facilities. Each such company shall report 
     promptly to the Commission any material changes or planned 
     changes to such protocols and requirements, and the schedule 
     for implementation of such changes or planned changes.
       ``(2) Filing as prerequisite to disclosure to affiliate.--A 
     Bell operating company shall not disclose to any of its 
     affiliates any information required to be filed under 
     paragraph (1) unless that information is filed promptly, as 
     required by regulation by the Commission.
       ``(3) Access by competitors to information.--The Commission 
     may prescribe such additional regulations under this 
     subsection as may be necessary to ensure that manufacturers 
     in competition with a Bell operating company's manufacturing 
     affiliate have access to the information with respect to the 
     protocols and technical requirements for connection with and 
     use of its telephone exchange service facilities required for 
     such competition that such company makes available to its 
     manufacturing affiliate.
       ``(4) Planning information.--Each Bell operating company 
     shall provide, to contiguous common carriers providing 
     telephone exchange service, timely information on the planned 
     deployment of telecommunications equipment.
       ``(e) Additional Competition Requirements.--The Commission 
     shall prescribe regulations requiring that any Bell operating 
     company which has an affiliate that engages in any 
     manufacturing authorized by subsection (a) shall--
       ``(1) provide, to other manufacturers of telecommunications 
     equipment and customer premises equipment that is 
     functionally equivalent to equipment manufactured by the Bell 
     operating company manufacturing affiliate, opportunities to 
     sell such equipment to such Bell operating company which are 
     comparable to the opportunities which such Company provides 
     to its affiliates; and
       ``(2) not subsidize its manufacturing affiliate with 
     revenues from telephone exchange service or telephone toll 
     service.
       ``(f) Collaboration Permitted.--Nothing in this section 
     (other than subsection (l)) shall be construed to limit or 
     restrict the ability of a Bell operating company and its 
     affiliates to engage in close collaboration with any 
     manufacturer of customer premises equipment or 
     telecommunications equipment during the design and 
     development of hardware, software, or combinations thereof 
     related to such equipment.
       ``(g) Accessibility Requirements.--
       ``(1) Manufacturing.--The Commission shall, within 1 year 
     after the date of enactment of this section, prescribe such 
     regulations as are necessary to ensure that 
     telecommunications equipment and customer premises equipment 
     designed, developed, and fabricated pursuant to the authority 
     granted in this section shall be accessible and usable by 
     individuals with disabilities, including individuals with 
     functional limitations of hearing, vision, movement, 
     manipulation, speech, and interpretation of information, 
     unless the costs of making the equipment accessible and 
     usable would result in an undue burden or an adverse 
     competitive impact.
       ``(2) Network services.--The Commission shall, within 1 
     year after the date of enactment of this section, prescribe 
     such regulations as are necessary to ensure that advances in 
     network services deployed by a Bell operating company shall 
     be accessible and usable by individuals whose access might 
     otherwise be impeded by a disability or functional 
     limitation, unless the costs of making the services 
     accessible and usable would result in an undue burden or 
     adverse competitive impact. Such regulations shall seek to 
     permit the use of both standard and special equipment and 
     seek to minimize the need of individuals to acquire 
     additional devices beyond those used by the general public to 
     obtain such access.
       ``(3) Compatibility.--The regulations prescribed under 
     paragraphs (1) and (2) shall require that whenever an undue 
     burden or adverse competitive impact would result from the 
     manufacturing or network services requirements in such 
     paragraphs, the manufacturing affiliate that designs, 
     develops, or fabricates the equipment or the Bell operating 
     company that deploys the network service shall ensure that 
     the equipment or network service in question is compatible 
     with existing peripheral devices or specialized customer 
     premises equipment commonly used by persons with disabilities 
     to achieve access, unless doing so would result in an undue 
     burden or adverse competitive impact.
       ``(4) Definitions.--As used in this subsection:
       ``(A) Undue burden.--The term `undue burden' means 
     significant difficulty or expense. In determining whether an 
     activity would result in an undue burden, the following 
     factors shall be considered:
       ``(i) the nature and cost of the activity;
       ``(ii) the impact on the operation of the facility involved 
     in the manufacturing of the equipment or deployment of the 
     network service;
       ``(iii) the financial resources of the manufacturing 
     affiliate in the case of manufacturing of equipment, for as 
     long as applicable regulatory rules prohibit cross-
     subsidization of equipment manufacturing with revenues from 
     regulated telecommunications service or when the 
     manufacturing activities are conducted in a separate 
     subsidiary;
       ``(iv) the financial resources of the Bell operating 
     company in the case of network services, or in the case of 
     manufacturing of equipment if applicable regulatory rules 
     permit cross-subsidization of equipment manufacturing with 
     revenues from regulated telecommunications services and the 
     manufacturing activities are not conducted in a separate 
     subsidiary; and
       ``(v) the type of operation or operations of the 
     manufacturing affiliate or Bell operating company as 
     applicable.
       ``(B) Adverse competitive impact.--In determining whether 
     the activity would result in an adverse competitive impact, 
     the following factors shall be considered:
       ``(i) whether such activity would raise the cost of the 
     equipment or network service in question beyond the level at 
     which there would be sufficient consumer demand by the 
     general population to make the equipment or network service 
     profitable; and
       ``(ii) whether such activity would, with respect to the 
     equipment or network service in question, put the 
     manufacturing affiliate or Bell operating company, as 
     applicable, at a competitive disadvantage in comparison with 
     one or more providers of one or more competing products and 
     services. This factor may only be considered so long as 
     competing manufacturers and network service providers are not 
     held to the same obligation with respect to access by persons 
     with disabilities.
       ``(C) Activity.--For the purposes of this paragraph, the 
     term `activity' includes--
       ``(i) the research, design, development, deployment, and 
     fabrication activities necessary to comply with the 
     requirements of this section; and
       ``(ii) the acquisition of the related materials and 
     equipment components.
       ``(5) Effective date.--The regulations required by this 
     subsection shall become effective 18 months after the date of 
     enactment of this section.
       ``(h) Public Network Enhancement.--A Bell operating company 
     manufacturing affiliate shall, as a part of its overall 
     research and development effort, establish a permanent 
     program for manufacturing research and development of 
     products and applications for the enhancement of the public 
     switched telephone network and to promote public access to 
     advanced telecommunications services. Such program shall 
     focus its work substantially on developing technological 
     advancements in public telephone network applications, 
     telecommunication equipment and products, and access 
     solutions to new services and technology, including access by 
     (1) public institutions, including educational and health 
     care institutions; and (2) people with disabilities and 
     functional limitations. Notwithstanding the limitations in 
     subsection (a), a Bell operating company and its affiliates 
     may engage in such a program in conjunction with a Bell 
     operating company not so affiliated or any of its affiliates. 
     The existence or establishment of such a program that is 
     jointly provided by manufacturing affiliates of Bell 
     operating companies shall satisfy the requirements of this 
     section as it pertains to all such affiliates of a Bell 
     operating company.
       ``(i) Rulemaking Required.--The Commission shall prescribe 
     regulations to implement this section within 180 days after 
     the date of enactment of this section.
       ``(j) Administration and Enforcement Authority.--
       ``(1) Commission regulatory authority.--For the purposes of 
     administering and enforcing the provisions of this section 
     and the regulations prescribed thereunder, the Commission 
     shall have the same authority, power, and functions with 
     respect to any Bell operating company or any affiliate 
     thereof as the Commission has in administering and enforcing 
     the provisions of this title with respect to any common 
     carrier subject to this Act.
       ``(2) Private actions.--Any common carrier that provides 
     telephone exchange service and that is injured by an act or 
     omission of a Bell operating company or its manufacturing 
     affiliate which violates the requirements of paragraph (7) or 
     (8) of subsection (c), or the Commission's regulations 
     implementing such paragraphs, may initiate an action in a 
     district court of the United States to recover the full 
     amount of damages sustained in consequence of any such 
     violation and obtain such orders from the court as are 
     necessary to terminate existing violations and to prevent 
     future violations; or such regulated local telephone exchange 
     carrier may seek relief from the Commission pursuant to 
     sections 206 through 209.
       ``(k) Existing Manufacturing Authority.--Nothing in this 
     section shall prohibit any Bell operating company from 
     engaging, directly or through any affiliate, in any 
     manufacturing activity in which any Bell operating company or 
     affiliate was authorized to engage on the date of enactment 
     of this section.
       ``(l) Antitrust Laws.--Nothing in this section shall be 
     construed to modify, impair, or supersede the applicability 
     of any of the antitrust laws (including title I of the 
     Antitrust and Communications Reform Act of 1994).
       ``(m) Definitions.--As used in this section:
       ``(1) The term `affiliate' means any organization or entity 
     that, directly or indirectly, owns or controls, is owned or 
     controlled by, or is under common ownership with a Bell 
     operating company. The terms `owns', `owned', and `ownership' 
     mean an equity interest of more than 10 percent.
       ``(2) The term `Bell operating company' means those 
     companies listed in appendix A of the Modification of Final 
     Judgment, and includes any successor or assign of any such 
     company, but does not include any affiliate of any such 
     company.
       ``(3) The term `customer premises equipment' means 
     equipment employed on the premises of a person (other than a 
     carrier) to originate, route, or terminate 
     telecommunications.
       ``(4) The term `manufacturing' has the same meaning as such 
     term has under the Modification of Final Judgment.
       ``(5) The term `manufacturing affiliate' means an affiliate 
     of a Bell operating company established in accordance with 
     subsection (b) of this section.
       ``(6) The term `Modification of Final Judgment' means the 
     decree entered August 24, 1982, in United States v. Western 
     Electric Civil Action No. 82-0192 (United States District 
     Court, District of Columbia), and includes any judgment or 
     order with respect to such action entered on or after August 
     24, 1982, and before the date of enactment of this section.
       ``(7) The term `telecommunications' means the transmission, 
     between or among points specified by the user, of information 
     of the user's choosing, without change in the form or content 
     of the information as sent and received, by means of an 
     electromagnetic transmission medium, including all 
     instrumentalities, facilities, apparatus, and services 
     (including the collection, storage, forwarding, switching, 
     and delivery of such information) essential to such 
     transmission.
       ``(8) The term `telecommunications equipment' means 
     equipment, other than customer premises equipment, used by a 
     carrier to provide telecommunications services, and includes 
     software integral to such equipment (including upgrades).
       ``(9) The term `telecommunications service' means the 
     offering for hire of telecommunications facilities, or of 
     telecommunications by means of such facilities.''.

     SEC. 202. REGULATION OF ENTRY INTO ALARM MONITORING SERVICES.

       (a) Amendment.--Title II of the Communications Act is 
     amended by adding at the end the following new section:

     ``SEC. 230. REGULATION OF ENTRY INTO ALARM MONITORING 
                   SERVICES.

       ``(a) Regulations Required.--The Commission shall prescribe 
     regulations--
       ``(1) to establish such requirements, limitations, or 
     conditions as are (A) necessary and appropriate in the public 
     interest with respect to the provision of alarm monitoring 
     services by Bell operating companies and their affiliates, 
     and (B) effective at such time as a Bell operating company or 
     any of its affiliates is authorized to provide alarm 
     monitoring services;
       ``(2) to prohibit Bell operating companies and their 
     affiliates, at that or any earlier time after the date of 
     enactment of this section, from recording or using in any 
     fashion the occurrence or the contents of calls received by 
     providers of alarm monitoring services for the purposes of 
     marketing such services on behalf of the Bell operating 
     company, any of its affiliates, or any other entity; and
       ``(3) to establish procedures for the receipt and review of 
     complaints concerning violations by such companies of such 
     regulations, or of any other provision of this Act or the 
     regulations thereunder, that result in material financial 
     harm to a provider of alarm monitoring services.
       ``(b) Expedited Consideration of Complaints.--The 
     procedures established under subsection (a)(3) shall ensure 
     that the Commission will make a final determination with 
     respect to any complaint described in such subsection within 
     120 days after receipt of the complaint. If the complaint 
     contains an appropriate showing that the alleged violation 
     occurred, as determined by the Commission in accordance with 
     such regulations, the Commission shall, within 60 days after 
     receipt of the complaint, issue a cease and desist order to 
     prevent the Bell operating company and its affiliates from 
     continuing to engage in such violation pending such final 
     determination.
       ``(c) Remedies.--The Commission may use any remedy 
     available under title V of this Act to terminate and punish 
     violations described in subsection (a)(2). Such remedies may 
     include, if the Commission determines that such violation was 
     willful or repeated, ordering the Bell operating company to 
     cease offering alarm monitoring services.
       ``(d) Rulemaking Schedule.--The Commission shall prescribe 
     the regulations required by subsection (a)(2) within 180 days 
     after the date of enactment of this section and shall 
     prescribe the regulations required by subsection (a)(1) and 
     (a)(3) prior to the date on which any Bell operating company 
     may commence providing alarm monitoring services pursuant to 
     title I of the Antitrust and Communication Reform Act of 
     1994.
       ``(e) Definitions.--As used in this section:
       ``(1) Bell operating company.--The term `Bell operating 
     company' has the meaning provided in subparagraphs (A) or (B) 
     of section 106(5) of the Antitrust and Communication Reform 
     Act of 1994.
       ``(2) Alarm monitoring services.--The term `alarm 
     monitoring services' has the meaning provided in section 
     106(2) of such Act.
       ``(3) Affiliate.--The term `affiliate' means a person that 
     (directly or indirectly) owns or controls, is owned or 
     controlled by, or is under common ownership or control with, 
     another person. For purposes of this paragraph, to own refers 
     to owning an equity interest (or the equivalent thereof) of 
     more than 10 percent.''.

     SEC. 203. REGULATION OF ELECTRONIC PUBLISHING.

       Title II of the Communications Act of 1934 (47 U.S.C. 201 
     et seq.) is amended by adding at the end thereof the 
     following new section:

     ``SEC. 231. REGULATION OF ELECTRONIC PUBLISHING.

       ``(a) In General.--
       ``(1) Prohibition.--A Bell operating company and any 
     affiliate shall not engage in the provision of electronic 
     publishing that is disseminated by means of such Bell 
     operating company's or any of its affiliates' basic telephone 
     service.
       ``(2) Permitted activities of separated affiliate.--Nothing 
     in this section shall prohibit a separated affiliate or 
     electronic publishing joint venture from engaging in the 
     provision of electronic publishing or any other lawful 
     service in any area.
       ``(3) Rule of construction.--Nothing in this section shall 
     prohibit a Bell operating company or affiliate from engaging 
     in the provision of any lawful service other than electronic 
     publishing in any area or from engaging in the provision of 
     electronic publishing that is not disseminated by means of 
     such Bell operating company's or any of its affiliates' basic 
     telephone service.
       ``(b) Separated Affiliate or Electronic Publishing Joint 
     Venture Requirements.--A separated affiliate or electronic 
     publishing joint venture shall--
       ``(1) maintain books, records, and accounts that are 
     separate from those of the Bell operating company and from 
     any affiliate and that record in accordance with generally 
     accepted accounting principles all transactions, whether 
     direct or indirect, with the Bell operating company;
       ``(2) not incur debt in a manner that would permit a 
     creditor upon default to have recourse to the assets of the 
     Bell operating company;
       ``(3) prepare financial statements that are not 
     consolidated with those of the Bell operating company or an 
     affiliate, provided that consolidated statements may also be 
     prepared;
       ``(4) file with the Commission annual reports in a form 
     substantially equivalent to the Form 10-K required by 
     regulations of the Securities and Exchange;
       ``(5) after 1 year from the effective date of this section, 
     not hire--
       ``(A) as corporate officers, sales and marketing management 
     personnel whose responsibilities at the separated affiliate 
     or electronic publishing joint venture will include the 
     geographic area where the Bell operating company provides 
     basic telephone service;
       ``(B) network operations personnel whose responsibilities 
     at the separated affiliate or electronic publishing joint 
     venture would require dealing directly with the Bell 
     operating company; or
       ``(C) any person who was employed by the Bell operating 
     company during the year preceding their date of hire,

     except that the requirements of this paragraph shall not 
     apply to persons subject to a collective bargaining agreement 
     that gives such persons rights to be employed by a separated 
     affiliate or electronic publishing joint venture of the Bell 
     operating company;
       ``(6) not provide any wireline telephone exchange service 
     in any telephone exchange area where a Bell operating company 
     with which it is under common ownership or control provides 
     basic telephone exchange service except on a resale basis;
       ``(7) not use the name, trademarks, or service marks of an 
     existing Bell operating company except for names, trademarks, 
     or service marks that are or were used in common with the 
     entity that owns or controls the Bell operating company;
       ``(8) have performed annually by March 31, or any other 
     date prescribed by the Commission, a compliance review--
       ``(A) that is conducted by an independent entity that is 
     subject to professional, legal, and ethical obligations for 
     the purpose of determining compliance during the preceding 
     calendar year with any provision of this section that imposes 
     a requirement on such separated affiliate or electronic 
     publishing joint venture; and
       ``(B) the results of which are maintained by the separated 
     affiliate for a period of 5 years subject to review by any 
     lawful authority;
       ``(9) within 90 days of receiving a review described in 
     paragraph (8), file a report of any exceptions and corrective 
     action with the Commission and allow any person to inspect 
     and copy such report subject to reasonable safeguards to 
     protect any proprietary information contained in such report 
     from being used for purposes other than to enforce or pursue 
     remedies under this section.
       ``(c) Bell Operating Company Requirements.--A Bell 
     operating company under common ownership or control with a 
     separated affiliate or electronic publishing joint venture 
     shall--
       ``(1) not provide a separated affiliate any facilities, 
     services, or basic telephone service information unless it 
     makes such facilities, services, or information available to 
     unaffiliated entities upon request and on the same terms and 
     conditions;
       ``(2) carry out transactions with a separated affiliate in 
     a manner equivalent to the manner that unrelated parties 
     would carry out independent transactions and not based upon 
     the affiliation;
       ``(3) carry out transactions with a separated affiliate, 
     which involve the transfer of personnel, assets, or anything 
     of value, pursuant to written contracts or tariffs that are 
     filed with the Commission and made publicly available;
       ``(4) carry out transactions with a separated affiliate in 
     a manner that is auditable in accordance with generally 
     accepted auditing standards;
       ``(5) value any assets that are transferred to a separated 
     affiliate at the greater of net book cost or fair market 
     value;
       ``(6) value any assets that are transferred to the Bell 
     operating company by its separated affiliate at the lesser of 
     net book cost or fair market value;
       ``(7) except for--
       ``(A) instances where Commission or State regulations 
     permit in-arrears payment for tariffed telecommunications 
     services; or
       ``(B) the investment by an affiliate of dividends or 
     profits derived from a Bell operating company,

     not provide debt or equity financing directly or indirectly 
     to a separated affiliate;
       ``(8) comply fully with all applicable Commission and State 
     cost allocation and other accounting rules;
       ``(9) have performed annually by March 31, or any other 
     date prescribed by the Commission, a compliance review--
       ``(A) that is conducted by an independent entity that is 
     subject to professional, legal, and ethical obligations for 
     the purpose of determining compliance during the preceding 
     calendar year with any provision of this section that imposes 
     a requirement on such Bell operating company; and
       ``(B) the results of which are maintained by the Bell 
     operating company for a period of 5 years subject to review 
     by any lawful authority;
       ``(10) within 90 days of receiving a review described in 
     paragraph (9), file a report of any exceptions and corrective 
     action with the Commission and allow any person to inspect 
     and copy such report subject to reasonable safeguards to 
     protect any proprietary information contained in such report 
     from being used for purposes other than to enforce or pursue 
     remedies under this section;
       ``(11) if it provides facilities or services for 
     telecommunication, transmission, billing and collection, or 
     physical collocation to any electronic publisher, including a 
     separated affiliate, for use with or in connection with the 
     provision of electronic publishing that is disseminated by 
     means of such Bell operating company's or any of its 
     affiliates' basic telephone service, provide to all other 
     electronic publishers the same type of facilities and 
     services on request, on the same terms and conditions or as 
     required by the Commission or a State, and unbundled and 
     individually tariffed to the smallest extent that is 
     technically feasible and economically reasonable to provide;
       ``(12) provide network access and interconnections for 
     basic telephone service to electronic publishers at any 
     technically feasible and economically reasonable point within 
     the Bell operating company's network and at just and 
     reasonable rates that are tariffed (so long as rates for such 
     services are subject to regulation) and that are not higher 
     on a per-unit basis than those charged for such services to 
     any other electronic publisher or any separated affiliate 
     engaged in electronic publishing;
       ``(13) if prices for network access and interconnection for 
     basic telephone service are no longer subject to regulation, 
     provide electronic publishers such services on the same terms 
     and conditions as a separated affiliate receives such 
     services;
       ``(14) if any basic telephone service used by electronic 
     publishers ceases to require a tariff, provide electronic 
     publishers with such service on the same terms and conditions 
     as a separated affiliate receives such service;
       ``(15) provide reasonable advance notification at the same 
     time and on the same terms to all affected electronic 
     publishers of information if such information is within any 
     one or more of the following categories:
       ``(A) such information is necessary for the transmission or 
     routing of information by an interconnected electronic 
     publisher;
       ``(B) such information is necessary to ensure the 
     interoperability of an electronic publisher's and the Bell 
     operating company's networks; or
       ``(C) such information concerns changes in basic telephone 
     service network design and technical standards which may 
     affect the provision of electronic publishing;
       ``(16) not directly or indirectly provide anything of 
     monetary value to a separated affiliate unless in exchange 
     for consideration at least equal to the greater of its net 
     book cost or fair market value, except the investment by an 
     affiliate of dividends or profits derived from a Bell 
     operating company;
       ``(17) not discriminate in the presentation or provision of 
     any gateway for electronic publishing services or any 
     electronic directory of information services, which is 
     provided over such Bell operating company's basic telephone 
     service;
       ``(18) have no directors, officers, or employees in common 
     with a separated affiliate;
       ``(19) not own any property in common with a separated 
     affiliate;
       ``(20) not perform hiring or training of personnel 
     performed on behalf of a separated affiliate;
       ``(21) not perform the purchasing, installation, or 
     maintenance of equipment on behalf of a separated affiliate, 
     except for telephone service that it provides under tariff or 
     contract subject to the provisions of this section; and
       ``(22) not perform research and development on behalf of a 
     separated affiliate.
       ``(d) Customer Proprietary Network Information.--Consistent 
     with section 232 of this Act, a Bell operating company or any 
     affiliate shall not provide to any electronic publisher, 
     including a separated affiliate or electronic publishing 
     joint venture, customer proprietary network information for 
     use with or in connection with the provision of electronic 
     publishing that is disseminated by means of such Bell 
     operating company's or any of its affiliates' basic telephone 
     service that is not made available by the Bell operating 
     company or affiliate to all electronic publishers on the same 
     terms and conditions.
       ``(e) Compliance With Safeguards.--No Bell operating 
     company or affiliate thereof (including a separated 
     affiliate) shall act in concert with another Bell operating 
     company or any other entity in order to knowingly and 
     willfully violate or evade the requirements of this section.
       ``(f) Telephone Operating Company Dividends.--Nothing in 
     this section shall prohibit an affiliate from investing 
     dividends derived from a Bell operating company in its 
     separated affiliate, and subsections (i) and (j) of this 
     section shall not apply to any such investment.
       ``(g) Joint Marketing.--Except as provided in subsection 
     (h)--
       ``(1) a Bell operating company shall not carry out any 
     promotion, marketing, sales, or advertising for or in 
     conjunction with a separated affiliate; and
       ``(2) a Bell operating company shall not carry out any 
     promotion, marketing, sales, or advertising for or in 
     conjunction with an affiliate that is related to the 
     provision of electronic publishing.
       ``(h) Permissible Joint Activities.--
       ``(1) Joint telemarketing.--A Bell operating company may 
     provide inbound telemarketing or referral services related to 
     the provision of electronic publishing for a separated 
     affiliate, electronic publishing joint venture, affiliate, or 
     unaffiliated electronic publisher, provided that if such 
     services are provided to a separated affiliate, electronic 
     publishing joint venture, or affiliate, such services shall 
     be made available to all electronic publishers on request, on 
     nondiscriminatory terms, at compensatory prices, and subject 
     to regulations of the Commission to ensure that the Bell 
     operating company's method of providing telemarketing or 
     referral and its price structure do not competitively 
     disadvantage any electronic publishers regardless of size, 
     including those which do not use the Bell operating company's 
     telemarketing services.
       ``(2) Teaming arrangements.--A Bell operating company may 
     engage in nondiscriminatory teaming or business arrangements 
     to engage in electronic publishing with any separated 
     affiliate or with any other electronic publisher provided 
     that the Bell operating company only provides facilities, 
     services, and basic telephone service information as 
     authorized by this section and provided that the Bell 
     operating company does not own such teaming or business 
     arrangement.
       ``(3) Electronic publishing joint ventures.--A Bell 
     operating company or affiliate may participate on a 
     nonexclusive basis in electronic publishing joint ventures 
     with entities that are not any Bell operating company, 
     affiliate, or separated affiliate to provide electronic 
     publishing services, provided that the Bell operating company 
     or affiliate has not more than a 50 percent direct or 
     indirect equity interest (or the equivalent thereof) or the 
     right to more than 50 percent of the gross revenues under a 
     revenue sharing or royalty agreement in any electronic 
     publishing joint venture. Officers and employees of a Bell 
     operating company or affiliate participating in an electronic 
     publishing joint venture may not have more than 50 percent of 
     the voting control over the electronic publishing joint 
     venture. In the case of joint ventures with small, local 
     electronic publishers, the Commission for good cause shown 
     may authorize the Bell operating company or affiliate to have 
     a larger equity interest, revenue share, or voting control 
     but not to exceed 80 percent. A Bell operating company 
     participating in an electronic publishing joint venture may 
     provide promotion, marketing, sales, or advertising personnel 
     and services to such joint venture.
       ``(i) Transactions Related to the Provision of Electronic 
     Publishing Between a Telephone Operating Company and any 
     Affiliate.--
       ``(1) Records of transactions.--Any provision of 
     facilities, services, or basic telephone service information, 
     or any transfer of assets, personnel, or anything of 
     commercial or competitive value, from a Bell operating 
     company to any affiliate related to the provision of 
     electronic publishing shall be--
       ``(A) recorded in the books and records of each entity;
       ``(B) auditable in accordance with generally accepted 
     auditing standards; and
       ``(C) pursuant to written contracts or tariffs filed with 
     the Commission or a State and made publicly available.
       ``(2) Valuation of transfers.--Any transfer of assets 
     directly related to the provision of electronic publishing 
     from a Bell operating company to an affiliate shall be valued 
     at the greater of net book cost or fair market value. Any 
     transfer of assets related to the provision of electronic 
     publishing from an affiliate to the Bell operating company 
     shall be valued at the lesser of net book cost or fair market 
     value.
       ``(3) Prohibition of evasions.--A Bell operating company 
     shall not provide directly or indirectly to a separated 
     affiliate any facilities, services, or basic telephone 
     service information related to the provision of electronic 
     publishing that are not made available to unaffiliated 
     companies on the same terms and conditions.
       ``(j) Transactions Related to the Provision of Electronic 
     Publishing Between an Affiliate and a Separated Affiliate.--
       ``(1) Records of transactions.--Any facilities, services, 
     or basic telephone service information provided or any 
     assets, personnel, or anything of commercial or competitive 
     value transferred, from a Bell operating company to any 
     affiliate as described in subsection (i) and then provided or 
     transferred to a separated affiliate shall be--
       ``(A) recorded in the books and records of each entity;
       ``(B) auditable in accordance with generally accepted 
     auditing standards; and
       ``(C) pursuant to written contracts or tariffs filed with 
     the Commission or a State and made publicly available.
       ``(2) Valuation of transfers.--Any transfer of assets 
     directly related to the provision of electronic publishing 
     from a Bell operating company to any affiliate as described 
     in subsection (i) and then transferred to a separated 
     affiliate shall be valued at the greater of net book cost or 
     fair market value. Any transfer of assets related to the 
     provision of electronic publishing from a separated affiliate 
     to any affiliate and then transferred to the Bell operating 
     company as described in subsection (i) shall be valued at the 
     lesser of net book cost or fair market value.
       ``(3) Prohibition of evasions.--An affiliate shall not 
     provide directly or indirectly to a separated affiliate any 
     facilities, services, or basic telephone service information 
     related to the provision of electronic publishing that are 
     not made available to unaffiliated companies on the same 
     terms and conditions.
       ``(k) Other Electronic Publishers.--Except as provided in 
     subsection (h)(3)--
       ``(1) A Bell operating company shall not have any officers, 
     employees, property, or facilities in common with any entity 
     whose principal business is publishing of which a part is 
     electronic publishing.
       ``(2) No officer or employee of a Bell operating company 
     shall serve as a director of any entity whose principal 
     business is publishing of which a part is electronic 
     publishing.
       ``(3) For the purposes of paragraphs (1) and (2), a Bell 
     operating company or an affiliate that owns an electronic 
     publishing joint venture shall not be deemed to be engaged in 
     the electronic publishing business solely because of such 
     ownership.
       ``(4) A Bell operating company shall not carry out--
       ``(A) any marketing or sales for any entity that engages in 
     electronic publishing; or
       ``(B) any hiring of personnel, purchasing, or production,

     for any entity that engages in electronic publishing.
       ``(5) The Bell operating company shall not provide any 
     facilities, services, or basic telephone service information 
     to any entity that engages in electronic publishing, for use 
     with or in connection with the provision of electronic 
     publishing that is disseminated by means of such Bell 
     operating company's or any of its affiliates' basic telephone 
     service, unless equivalent facilities, services, or 
     information are made available on equivalent terms and 
     conditions to all.
       ``(l) Transition.--Any electronic publishing service being 
     offered to the public by a Bell operating company or 
     affiliate on the date of enactment of this section shall have 
     one year from such date of enactment to comply with the 
     requirements of this section.
       ``(m) Sunset.--The provisions of this section shall not 
     apply to conduct occurring after June 30, 2000.
       ``(n) Private Right of Action.--
       ``(1) Damages.--Any person claiming that any act or 
     practice of any Bell operating company, affiliate, or 
     separated affiliate constitutes a violation of this section 
     may file a complaint with the Commission or bring suit as 
     provided in section 207 of this Act, and such Bell operating 
     company, affiliate, or separated affiliate shall 
     be liable as provided in section 206 of this Act; except that 
     damages may not be awarded for a violation that is discovered 
     by a compliance review as required by subsection (b)(8) or 
     (c)(9) of this section and corrected within 90 days.
       ``(2) Cease and desist orders.--In addition to the 
     provisions of paragraph (1), any person claiming that any act 
     or practice of any Bell operating company, affiliate, or 
     separated affiliate constitutes a violation of this section 
     may make application to the Commission for an order to cease 
     and desist such violation or may make application in any 
     district court of the United States of competent jurisdiction 
     for an order enjoining such acts or practices or for an order 
     compelling compliance with such requirement.
       ``(o) Antitrust Laws.--Nothing in this section shall be 
     construed to modify, impair, or supersede the applicability 
     of any of the antitrust laws (including title I of the 
     Antitrust and Communications Reform Act of 1994).
       ``(p) Equal Employment Opportunities.--Any Bell operating 
     company, and any affiliate or joint venture or other business 
     partner of a Bell operating company, that is engaged in the 
     provision of electronic publishing shall be subject to the 
     provisions of section 634 of this Act, except that the 
     Commission shall prescribe by regulation appropriate job 
     classifications in lieu of the job classifications in 
     subsection (d)(3)(A) of such section.
       ``(q) Definitions.--As used in this section--
       ``(1) The term `affiliate' means any entity that, directly 
     or indirectly, owns or controls, is owned or controlled by, 
     or is under common ownership or control with, a Bell 
     operating company. Such term shall not include a separated 
     affiliate.
       ``(2) The term `basic telephone service' means any wireline 
     telephone exchange service, or wireline telephone exchange 
     facility, provided by a Bell operating company in a telephone 
     exchange area, except--
       ``(A) a competitive wireline telephone exchange service 
     provided in a telephone exchange area where another entity 
     provides a wireline telephone exchange service that was 
     provided on January 1, 1984, and
       ``(B) a commercial mobile service provided by an affiliate 
     that is required by the Commission to be a corporate entity 
     separate from the Bell operating company.
       ``(3) The term `basic telephone service information' means 
     network and customer information of a Bell operating company 
     and other information acquired by a Bell operating company as 
     a result of its engaging in the provision of basic telephone 
     service.
       ``(4) The term `control' has the meaning that it has in 17 
     C.F.R. 240.12b-2, the regulations promulgated by the 
     Securities and Exchange Commission pursuant to the Securities 
     Exchange Act of 1934 (15 U.S.C. 78a et seq.) or any successor 
     provision to such section.
       ``(5)(A) The term `electronic publishing' means the 
     dissemination, provision, publication, or sale to an 
     unaffiliated entity or person, using a Bell operating 
     company's basic telephone service, of--
       ``(i) news,
       ``(ii) entertainment (other than interactive games),
       ``(iii) business, financial, legal, consumer, or credit 
     material;
       ``(iv) editorials;
       ``(v) columns;
       ``(vi) sports reporting;
       ``(vii) features;
       ``(viii) advertising;
       ``(ix) photos or images;
       ``(x) archival or research material;
       ``(xi) legal notices or public records;
       ``(xii) scientific, educational, instructional, technical, 
     professional, trade, or other literary materials; or
       ``(xiii) other like or similar information.
       ``(B) The term `electronic publishing' shall not include 
     the following network services:
       ``(i) Information access, as that term is defined by the 
     Modification of Final Judgment.
       ``(ii) The transmission of information as a common carrier.
       ``(iii) The transmission of information as part of a 
     gateway to an information service that does not involve the 
     generation or alteration of the content of information, 
     including data transmission, address translation, protocol 
     conversion, billing management, introductory information 
     content, and navigational systems that enable users to access 
     electronic publishing services, which do not affect the 
     presentation of such electronic publishing services to users.
       ``(iv) Voice storage and retrieval services, including 
     voice messaging and electronic mail services.
       ``(v) Level 2 gateway services as those services are 
     defined by the Commission's Second Report and Order, 
     Recommendation to Congress and Second Further Notice of 
     Proposed Rulemaking in CC Docket No. 87-266 dated August 14, 
     1992.
       ``(vi) Data processing services that do not involve the 
     generation or alteration of the content of information.
       ``(vii) Transaction processing systems that do not involve 
     the generation or alteration of the content of information.
       ``(viii) Electronic billing or advertising of a Bell 
     operating company's regulated telecommunications services.
       ``(ix) Language translation.
       ``(x) Conversion of data from one format to another.
       ``(xi) The provision of information necessary for the 
     management, control, or operation of a telephone company 
     telecommunications system.
       ``(xii) The provision of directory assistance that provides 
     names, addresses, and telephone numbers and does not include 
     advertising.
       ``(xiii) Caller identification services.
       ``(xiv) Repair and provisioning databases for telephone 
     company operations.
       ``(xv) Credit card and billing validation for telephone 
     company operations.
       ``(xvi) 911-E and other emergency assistance databases.
       ``(xvii) Any other network service of a type that is like 
     or similar to these network services and that does not 
     involve the generation or alteration of the content of 
     information.
       ``(xviii) Any upgrades to these network services that do 
     not involve the generation or alteration of the content of 
     information.
       ``(C) The term `electronic publishing' also shall not 
     include--
       ``(i) full motion video entertainment on demand; and
       ``(ii) video programming as defined in section 602 of the 
     Communications Act of 1934.
       ``(6) The term `electronic publishing joint venture' means 
     a joint venture owned by a Bell operating company or 
     affiliate that engages in the provision of electronic 
     publishing which is disseminated by means of such Bell 
     operating company's or any of its affiliates' basic telephone 
     service.
       ``(7) The term `entity' means any organization, and 
     includes corporations, partnerships, sole proprietorships, 
     associations, and joint ventures.
       ``(8) The term `inbound telemarketing' means the marketing 
     of property, goods, or services by telephone to a customer or 
     potential customer who initiated the call.
       ``(9) The term `own' with respect to an entity means to 
     have a direct or indirect equity interest (or the equivalent 
     thereof) of more than 10 percent of an entity, or the right 
     to more than 10 percent of the gross revenues of an entity 
     under a revenue sharing or royalty agreement.
       ``(10) The term `separated affiliate' means a corporation 
     under common ownership or control with a Bell operating 
     company that does not own or control a Bell operating company 
     and is not owned or controlled by a Bell operating company 
     and that engages in the provision of electronic publishing 
     which is disseminated by means of such Bell operating 
     company's or any of its affiliates' basic telephone service.
       ``(11) The term `Bell operating company' means the 
     corporations subject to the Modification of Final Judgment 
     and listed in Appendix A thereof, or any entity owned or 
     controlled by such corporation, or any successor or assign of 
     such corporation, but does not include an electronic 
     publishing joint venture owned by such corporation or 
     entity.''.

     SEC. 204. PRIVACY OF CUSTOMER INFORMATION.

       (a) Privacy of Customer Proprietary Network Information.--
       (1) Amendment.--Title II of the Communications Act of 1934 
     is amended by adding at the end the following new section:

     ``SEC. 232. PRIVACY OF CUSTOMER PROPRIETARY NETWORK 
                   INFORMATION.

       ``(a) Duty To Provide Subscriber List Information.--
     Notwithstanding subsections (b), (c), and (d), a carrier that 
     provides subscriber list information to any affiliated or 
     unaffiliated service provider or person shall provide 
     subscriber list information on a timely and unbundled basis, 
     under nondiscriminatory and reasonable rates, terms, and 
     conditions, to any person upon request.
       ``(b) Privacy Requirements for Common Carriers.--A 
     carrier--
       ``(1) shall not, except as required by law or with the 
     approval of the customer to which the information relates--
       ``(A) use customer proprietary network information in the 
     provision of any service except to the extent necessary (i) 
     in the provision of common carrier communications services, 
     (ii) in the provision of a service necessary to or used in 
     the provision of common carrier communications services, 
     including the publishing of directories, or (iii) to continue 
     to provide a particular information service that the carrier 
     provided as of March 15, 1994, to persons who were customers 
     of such service on that date;
       ``(B) use customer proprietary network information in the 
     identification or solicitation of potential customers for any 
     service other than the service from which such information is 
     derived;
       ``(C) use customer proprietary network information in the 
     provision of customer premises equipment; or
       ``(D) disclose customer proprietary network information to 
     any person except to the extent necessary to permit such 
     person to provide services or products that are used in and 
     necessary to the provision by such carrier of the services 
     described in subparagraph (A);
       ``(2) shall disclose customer proprietary network 
     information, upon affirmative written request by the 
     customer, to any person designated by the customer;
       ``(3) shall, whenever such carrier provides any aggregate 
     information, notify the Commission of the availability of 
     such aggregate information and shall provide such aggregate 
     information on reasonable terms and conditions to any other 
     service or equipment provider upon reasonable request 
     therefor; and
       ``(4) except for disclosures permitted by paragraph (1)(D), 
     shall not unreasonably discriminate between affiliated and 
     unaffiliated service or equipment providers in providing 
     access to, or in the use and disclosure of, individual and 
     aggregate information made available consistent with this 
     subsection.
       ``(c) Rule of Construction.--This section shall not be 
     construed to prohibit the use or disclosure of customer 
     proprietary network information as necessary--
       ``(1) to render, bill, and collect for the services 
     identified in subparagraph (A);
       ``(2) to render, bill, and collect for any other service 
     that the customer has requested;
       ``(3) to protect the rights or property of the carrier;
       ``(4) to protect users of any of those services and other 
     carriers from fraudulent, abusive, or unlawful use of or 
     subscription to such service; or
       ``(5) to provide any inbound telemarketing, referral, or 
     administrative services to the customer for the duration of 
     the call if such call was initiated by the customer and the 
     customer approves of the use of such information to provide 
     such service.
       ``(d) Exemption Permitted.--The Commission may, by rule, 
     exempt from the requirements of subsection (b) carriers that 
     have, together with any affiliated carriers, in the aggregate 
     nationwide, fewer than 500,000 access lines installed if the 
     Commission determines that such exemption is in the public 
     interest or if compliance with the requirements would impose 
     an undue economic burden on the carrier.
       ``(e) Regulations.--The Commission shall prescribe 
     regulations to carry out this section within 1 year after the 
     date of its enactment.
       ``(f) Definition of Aggregate Information.--For purposes of 
     this section, the term `aggregate information' means 
     collective data that relates to a group or category of 
     services or customers, from which individual customer 
     identities and characteristics have been removed.''.
       (2) Conforming amendment.--Section 3 of the Communications 
     Act of 1934 (47 U.S.C. 153) is amended by adding at the end 
     the following:
       ``(gg) `Customer proprietary network information' means--
       ``(1) information which relates to the quantity, technical 
     configuration, type, destination, and amount of use of 
     telephone exchange service or telephone toll service 
     subscribed to by any customer of a carrier, and is made 
     available to the carrier by the customer solely by virtue of 
     the carrier-customer relationship;
       ``(2) information contained in the bills pertaining to 
     telephone exchange service or telephone toll service received 
     by a customer of a carrier; and
       ``(3) such other information concerning the customer as is 
     available to the local exchange carrier by virtue of the 
     customer's use of the carrier's telephone exchange service or 
     interexchange telephone services, and specified as within the 
     definition of such term by such rules as the Commission shall 
     prescribe consistent with the public interest;
     except that such term does not include subscriber list 
     information.
       ``(hh) `Subscriber list information' means any 
     information--
       ``(1) identifying the listed names of subscribers of a 
     carrier and such subscribers' telephone numbers, addresses, 
     or primary advertising classifications, or any combination of 
     such listed names, numbers, addresses, or classifications; 
     and
       ``(2) that the carrier or an affiliate has published or 
     accepted for future publication.''.
       (b) Impact of Converging Communications Technologies on 
     Consumer Privacy.--
       (1) Proceeding required.--Within one year after the date of 
     enactment of this Act, the Commission shall commence a 
     proceeding--
       (A) to examine the impact of the integration into 
     interconnected communications networks of wireless telephone, 
     cable, satellite, and other technologies on the privacy 
     rights and remedies of the consumers of those technologies;
       (B) to examine the impact that the globalization of such 
     integrated communications networks has on the international 
     dissemination of consumer information and the privacy rights 
     and remedies to protect consumers;
       (C) to propose changes in the Commission's regulations to 
     ensure that the effect on consumer privacy rights is 
     considered in the introduction of new telecommunications 
     services and that the protection of such privacy rights is 
     incorporated as necessary in the design of such services or 
     the rules regulating such services;
       (D) to propose changes in the Commission's regulations as 
     necessary to correct any defects identified pursuant to 
     subparagraph (A) in such rights and remedies; and
       (E) to prepare recommendations to the Congress for any 
     legislative changes required to correct such defects.
       (2) Subjects for examination.--In conducting the 
     examination required by paragraph (1), the Commission shall 
     determine whether consumers are able, and, if not, the 
     methods by which consumers may be enabled--
       (A) to have knowledge that consumer information is being 
     collected about them through their utilization of various 
     communications technologies;
       (B) to have notice that such information could be used, or 
     is intended to be used, by the entity collecting the data for 
     reasons unrelated to the original communications, or that 
     such information could be sold (or is intended to be sold) to 
     other companies or entities; and
       (C) to stop the reuse or sale of that information.
       (3) Schedule for commission responses.--The Commission 
     shall, within 18 months after the date of enactment of this 
     Act--
       (A) complete any rulemaking required to revise Commission 
     regulations to correct defects in such regulations identified 
     pursuant to paragraph (1); and
       (B) submit to the Congress a report containing the 
     recommendations required by paragraph (1)(C).

     SEC. 205. TELEMESSAGING SERVICES.

       Title II of the Communications Act of 1934 (47 U.S.C. 201 
     et seq.) is amended by adding at the end thereof the 
     following new section:

     ``SEC. 233. TELEMESSAGING SERVICES.

       ``(a) Nondiscrimination.--A common carrier engaged in the 
     provision of telemessaging services shall--
       ``(1) provide nonaffiliated entities, upon reasonable 
     request, with the network services it provides to its own 
     telemessaging operations, on nondiscriminatory terms and 
     conditions; and
       ``(2) not subsidize its telemessaging services with 
     revenues from telephone exchange service.
       ``(b) Expedited Consideration of Complaints.--The 
     Commission shall establish procedures for the receipt and 
     review of complaints concerning violations of subsection (a) 
     or the regulations thereunder that result in material 
     financial harm to a provider of telemessaging service. Such 
     procedures shall ensure that the Commission will make a final 
     determination with respect to any such complaint within 120 
     days after receipt of the complaint. If the complaint 
     contains an appropriate showing that the alleged violation 
     occurred, as determined by the Commission in accordance with 
     such regulations, the Commission shall, within 60 days after 
     receipt of the complaint, order the common carrier and its 
     affiliates to cease engaging in such violation pending such 
     final determination.
       ``(c) Definitions.--As used in this section, the term 
     `telemessaging services' means voice mail and voice storage 
     and retrieval services provided over telephone lines for 
     telemessaging customers and any live operator services used 
     to answer, record, transcribe, and relay messages (other than 
     telecommunications relay services) from incoming telephone 
     calls on behalf of the telemessaging customers (other than 
     any service incidental to directory assistance).''.

     SEC. 206. ENHANCED SERVICES SAFEGUARDS.

       Within 60 days after the date of the enactment of this Act, 
     the Commission shall initiate a proceeding to reconsider its 
     decision in the Report and Order In the Matter of Computer 
     III Remand Proceedings, CC Docket No. 90-623, released 
     December 20, 1993, relieving the Bell operating companies of 
     the obligation to provide enhanced services through fully 
     separate affiliates. Within 180 days after the date of the 
     enactment of this Act, the Commission shall, to the extent it 
     determines necessary or appropriate in the public interest, 
     adopt regulations prescribing the structural or nonstructural 
     safeguards, or both, with which local exchange carriers shall 
     comply when providing enhanced services.
         TITLE III--FEDERAL COMMUNICATIONS COMMISSION RESOURCES

     SEC. 301. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--In addition to any other sums authorized 
     by law, there are authorized to be appropriated to the 
     Federal Communications Commission such sums as may be 
     necessary to carry out this Act and the amendments made by 
     this Act.
       (b) Effect on Fees.--For purposes of section 9(b)(2) of the 
     Communications Act of 1934 (47 U.S.C 159(b)(2)), additional 
     amounts appropriated pursuant to subsection (a) shall be 
     construed to be changes in the amounts appropriated for the 
     performance of activities described in section 9(a) of such 
     Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas [Mr. Brooks] will be recognized for 20 minutes, and the gentleman 
from New York [Mr. Fish] will be recognized for 20 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. BROOKS. Mr. Speaker, I yield 10 minutes to the gentleman from 
Michigan [Mr. Dingell], and, Mr. Speaker, I ask unanimous consent that 
the gentleman from Michigan may control that time and yield blocks of 
that time to other Members.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. FISH. Mr. Speaker, I yield 10 minutes of my time to the gentleman 
from California [Mr. Moorhead], and I ask unanimous consent that the 
gentleman from California be permitted to yield blocks of such time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. BROOKS. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. BROOKS asked and was given permission to revise and extend his 
remarks.)
  Mr. BROOKS. Mr. Speaker, I am delighted to call up H.R. 3626, 
landmark telecommunications legislation, standing side-by-side with my 
good friend Chairman John Dingell. It is beyond understatement to say 
that bringing up a unified version of this type of legislation under 
suspension of the rules was not an easy achievement. As everyone in 
this Chamber well knows, both of us had originally approached the 
process from almost diametrically opposed philosophical points of view 
about the proper role of antitrust and regulatory oversight.
  But during the past year and a half, we were able--working together--
to fashion a bill that blended the strength and flexibility of 
fundamental antitrust principles with the need for public interest 
regulatory oversight. The result, I believe, is a delicate yet durable 
balance to ensure well into the next century a vibrant 
telecommunications industry, which must remain a strategic asset in 
this Nation's world economic position.
  This is a far cry from last Congress when there was a fragmented 
policy orientation in the courts, throughout the enforcement agencies 
and, yes, even in the Halls of Congress. As we stand here today, the 
naysayers all across this fine city are in profound disbelief. Where 
once there was immovable jurisdictional gridlock, we are now moving 
with the momentum of a bipartisan consensus regarding this vital sector 
of the economy, perhaps for the first time in 60 years.
  However, let us not forget for a moment where we were even as 
recently as the beginning of the 102d Congress. At that time, 
piecemeal, fragmented--and frankly, one-sided--solutions were being 
offered up as legislation for various interests in the 
telecommunications industry. If ever there was a prescription for 
disaster for this highly strategic U.S. industry, it was to follow the 
path of such narrow-sided proposals. I came to the decision that a 
comprehensive approach to maintaining a competitive and diverse 
industry was needed and that Congress must take responsibility for 
doing so.
  In doing so, I cautioned that my decision to move a comprehensive 
piece of legislation was in no way to be construed as a referendum on 
the handling of the AT&T consent decree case by Judge Harold Greene. It 
was my view that Judge Greene had performed splendidly in this 
function, but that events--both in the private sector as well as in the 
Congress--might well short circuit his attempt to keep a unified view 
of competition as the central determinant in decisionmaking.
  Moreover, as private business decisions continue to push the waiver 
process to the point of an overflowing court docket, there appeared a 
real possibility that delay in adjudicating these requests might become 
exacerbated to the detriment of all parties in their business planning. 
For all these reasons, I decided that it was essential that we move the 
forum from courtroom into the enforcement and regulatory agencies, 
while not abandoning the organizing principles behind the decree.
  Thus, as I approached the legislation both in the last Congress and 
in this Congress, the two principles I held as irreducible were that, 
at the end of the day, the Department of Justice must have an 
independent role in reviewing Bell entry into now-prohibited sectors of 
the market; and that in reviewing such entry, the MFJ's antitrust entry 
test, the so-called 8(c) standard, must be applied. Finally, I insisted 
on an unambiguous antitrust savings clause so that even after entry by 
the Bells into long distance, manufacturing or information services, 
the Department would have the full authority to pursue antitrust 
actions just as it would against any other industry where 
anticompetitiveness abuses might occur. I am grateful that 
these bedrock principles appear in the version of H.R. 3626 now before 
the House, and I give great credit to my good friend, Chairman John 
Dingell for recognizing the value of antitrust in this historic effort 
even as he successfully made his own case to me that public interest 
determinations should also have an important and complementary role in 
the process.
  There are many others who made achievement possible today. I want to 
especially commend the ranking member of my committee, Congressman 
Hamilton Fish, for his excellent work throughout the entire process. In 
addition, the unflagged efforts of Congressman Mike Synar, Rick 
Boucher, and John Bryant, to name just a few, helped build support for 
a reasonable and politically viable legislative product that could be 
supported in our respective committees and on the floor.
  Chairman Dingell and I were both determined to have this legislation 
come before the full House before the July 4th recess so that the other 
body would have the time and the inclination to act. We are hopeful 
that they will, and that the conference report can be sent to the 
President's desk for signature before Congress adjourns in October
  Mr. Speaker, I reserve the balance of my time.
  Mr. FISH. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. FISH asked and was given permission to revise and extend his 
remarks.)
  Mr. FISH. Mr. Speaker, I rise in support of the Antitrust and 
Communications Reform Act of 1994, H.R. 3626. This legislation 
represents the most sweeping communications reform legislation to be 
considered in this House in 60 years. It will establish the ground 
rules for telecommunications policy in our Nation as we proceed into 
the 21st century. If enacted, this measure will have much to say about 
the future health of the American economy, America's international 
competitiveness and expanded job opportunities for American workers.
  This legislation establishes a statutory framework under which the 
seven regional Bell telephone companies and their affiliates would be 
permitted to provide certain long distance services and engage in the 
manufacture of telecommunications equipment. The Bell operating 
companies are currently prohibited from entering these lines of 
business under the terms of the antitrust consent decree--the 
modification of final judgment or MFJ--which governed the breakup of 
the then-unified AT&T Bell system. That consent decree was entered into 
by AT&T and the Department of Justice in 1982 and became effective on 
January 1, 1984.
  Thus, H.R. 3626 would supersede the MFJ and establish a new policy 
framework under which the Federal Communications Commission and the 
Justice Department would administer local telephone company business 
activities. Under its terms, the Bell operating companies could apply 
immediately upon enactment for permission to enter into manufacturing 
and would be permitted to engage in manufacturing within a year after 
the date of enactment. Similarly, the Bell companies can apply 
immediately after enactment to both the FCC and the Justice Department 
to be allowed to provide long distance services. The Bells may submit 
as many applications--broad or narrow in scope--as they choose.
  The bill does not include general provisions concerning Bell company 
involvement in information services, since those MFJ-based restrictions 
were lifted by the courts in 1991. U.S. v. Western Electric Co., et. 
al., 900 F.2d 283 (D.C. Cir., 1990), cert. den. 111 S. Ct. 283 (1990); 
U.S. v. Western Electric Co., 767 F. Supp. (D.D.C., 1991). However, 
this legislation does include provisions governing Bell entry into 
alarm monitoring services, permitting Bell entry into that business 
5\1/2\ years after the date of enactment. Similarly, electronic 
publishing--which is also a subset of information services--is treated 
in title II of this legislation. Those provisions would incorporate 
into law the terms of agreements made between the regional Bell 
operating companies and the representatives of the newspaper 
publishers.
  As of the date of enactment, the Bells may apply to enter into the 
long distance business. (Sec. 101(a)(1)(B); Sec. 101(a)(2)(A).) Within 
10 days after receipt, the applications must be published in the 
Federal Register. (Sec. 101(a)(4).) Not later than 45 days after 
publication, interested persons may submit comments to either or both 
agencies. (Sec. 101(b)(1).) Consultation between the two agencies 
regarding an application is required. (Sec. 101(b)(2).) The agencies 
must issue written determinations on the applications within 180 days 
after receipt. (Sec. 101(b)(3)(A).) In deciding on the merits of the 
application, the Justice Department will apply the same competitive 
standard that is contained in section VIII(C) of the MFJ, that is ``no 
substantial possibility that such company or its affiliates could use 
monopoly power to impede competition in the market such company seeks 
to enter.'' (Sec. 101(b)(3)(D)(i).) The FCC will apply the ``public 
interest, convenience and necessity'' test contained in the 
Communications Act. (Sec. 101(b)(3)(D)(ii).) Their determinations are 
to be based on the ``preponderance of the evidence''. 
(Sec. 101(b)(3)(B).) Both agencies must approve an application for it 
to be finally approved. (Sec. 101(b)(6).)
  Not later than 45 days after the final determination (that is final 
agency action) is published, ``any person who would be threatened with 
loss or damage as a result of the determination'' may bring an action 
for judicial review in the U.S. Court of Appeals for the District of 
Columbia to challenge the agencies' approval. (Sec. 101(c)(1).) This 
standing provision is patterned directly after section 16 of the 
Clayton Act. Under the Federal antitrust laws, actual injury or 
threatened loss or damage must be shown before persons can successfully 
gain access to a Federal court to challenge a particular action as 
anticompetitive. Thus, this is intended to be an exacting standing 
provision and not all interested persons would have standing to 
challenge the agencies' determination. under this provision, court 
challenges are reserved for those that can show a genuine likelihood of 
injury--threatened loss or damage. This provision is not intended to 
encourage what could be obstructionist or strategic litigation.

  Unlike the bill (H.R. 5096) sponsored by Congressman Brooks in the 
102d Congress, there is no de novo trial on the merits of an agency 
determination. Instead, there will be an appellate review based on the 
standard contained in the Administrative Procedure Act. 5 U.S.C. 
(Sec. 706.) It should be further emphasized that determinations made by 
Justice and the FCC under section 101(b)(3) are to be considered 
finally agency decisions in the administrative law meaning of that 
term. (The use of the term ``final'' in section 101(b)(5) should not be 
taken to mean ``final agency action'' for administrative law purposes. 
Rather, it means that if no civil action is filed under subsection (c), 
these determinations are no longer subject to appeal or review.) Bell 
entry into the authorized service would be lawful while the 
determination is the subject of an appeal under section 101(c). A Bell 
operating company can continue to provide this service until such time 
as one or both of the approvals is vacated or reversed as a result of 
judicial review. (Sec. 101(b)(6)(ii).) Of course, a party could seek a 
preliminary injunction under the normal Federal civil rules, seeking to 
enjoin the provision of the authorized services pending the outcome of 
the judicial review action.
  Generally speaking, before the Bell operating companies can enter 
into the long distance business, they must follow the application 
procedure set down in section 101 of the bill. There are, however, some 
significant exceptions to this general requirement. For example, 
section 101(b)(3)(D)(iii) directs Justice and the FCC to jointly 
prescribe regulations establishing procedures for the expedited 
determination and approval of applications for proposed long-distance 
services that are incidental to the provisions of another, already 
lawful service. These incidental telecommunications services are in 
addition to those specified and authorized under section 102(c) of this 
bill.
  Also exempt from the applicant requirement is any activity authorized 
by an order entered by the U.S. District Court for the District of 
Columbia under section VII or section VIII(C) of the Modification of 
Final Judgment prior to the date of enactment, or any waiver request 
pending on the date of enactment and subsequently approved by the 
District Court. Sec. 102(b)(1).
  Further, the Bell companies are not required to apply seeking prior 
Federal authorization to offer intrastate long distance services--
services provided within the boundaries of a single state. 
(Sec. 102(b)(2)(A).) So, the Bell companies would seek to receive State 
public utility--or public service--commission approval for providing 
intrastate interexchange telecommunications services. In doing so, they 
would be made subject to FCC and State regulations which require it to 
charge itself an access fee in the same manner it charges long-distance 
companies seeking access to the local exchanges. (Sec. 102(b)(2)(D).) 
However, under the terms of subsection 102(b)(2)(B), the Department of 
Justice would be given 90 days notice by a Bell company of its intent 
to provide such intrastate long-distance telecommunications services. 
The Justice Department would then have the option to request a 
preliminary injunction in a U.S. district court within those 90 days, 
with respect to such services if it believes a Bell entry would be 
anticompetitive. (Sec. 102(b)(2)(C).) If the Department brings no such 
civil action, or fails to obtain a preliminary injunction from the 
district court, it is fully lawful for the Bell company to begin 
providing those State-authorized services.
  From the enactment of the Communications Act in 1934--until the AT&T 
consent decree took effect on January 1, 1984--all long-distance 
services within the States were regulated under the jurisdiction of the 
various state public utilities commissions [PUC's]. So, section 
102(b)(2) of H.R. 3626 merely would return to the States their 
authority over all long-distance services delivered within their 
States. It should be understood that the States currently regulate 
long-distance services provided by the Bell companies within each LATA 
(that is Local Access Transport Area). Every State has an agency that 
regulates public telephone companies. In my own State of New York it is 
known as the New York State Public Service Commission. They issue the 
``certificates of convenience and necessity'' that authorize the local 
exchange companies and long-distance carriers to do business. They 
regulate the rates charged for local and interexchange telephone 
service. They make the decisions on the tariffs filed regarding new 
services to be offered or the abandonment of any service or facility.

  It should be emphasized that this legislation directs the States to 
take ``into account the potential effects of such approval or 
authorization on competition and the public interest''. 
(Sec. 102(b)(2)(A).) Of course, as noted earlier, the Justice 
Department would give 90 days to review the State's decision and seek 
an injunction if necessary. Again, if no injunction is sought, or if 
the request for an injunction is denied by the district court, then the 
Bell company may offer these services.
  Also, the Bell companies would not be required to seek Federal pre-
approval for long distance services that are provided through so-called 
resale services. (Sec. 102(b)(3).) That is, long-distance services 
which are purchased from another entity. This exception would apply 
only to services purchased from a nonaffiliate of the Bell company and 
only in those States where ``1+ dialing'' has been ordered. 
(Sec. 102(b)(3)(B).) As with intrastate long distance, the Department 
of Justice would have 90 days to review the competitive impact of Bell 
company resale services and the opportunity to seek an injunction when 
it determines that such entry would, in fact, be anticompetitive. 
(Sec. 102(b)(3)(D).)
  Another major exception to the overall general rule requiring the 
Bell companies to apply to DOJ and FCC for permission, has to do with 
incidental services. Section 102(c) of the bill allows the Bell 
operating companies at any time after the date of enactment to provide 
interexchange telecommunications services which are deemed to be 
incidental to an otherwise lawful activity. So, for example, the bill 
identifies a number of activities to be exempt incidental services 
including, cable services and the distribution of cable programming, 
telephone service provided through cable companies outside of a Bell 
service area, interactive services, cellular telephone services, the 
transmission and retrieval of certain computer information, and the 
transmission of certain telephone network signaling information. 
(Sec. 102(c)(1)-(6).) As mentioned earlier, the bill requires the 
Justice Department and the FCC within 6 months of the date of enactment 
to establish procedures for the expedited consideration of applications 
by the Bell companies to provide other incidental long distance 
services. (Sec. 101(b)(3)(D)(iii).)
  The bill generally permits the regional Bell companies and their 
operating affiliates to manufacture equipment, beginning a year after 
enactment, unless the Justice Department acts to stop them. (Sec. 103.) 
This bill creates a 1-year waiting period, during which the Department 
would review the company's plans and determine whether there is ``no 
substantial possibility'' that the company or its affiliates could use 
monopoly power to impede competition in the market the company intends 
to enter. (Sec. 103(b)(2).) If the Department takes no action within 
that time, the company would be free to engage in the activity at the 
end of the 1 year. The Department would be permitted to shorten this 
waiting period by providing early notice to the Bell company that it 
does not intend to initiate any legal action. (Sec. 103(b)(1)(B)(ii).)
  The bill includes numerous safeguards to prevent manufacturing 
affiliates from unfairly benefiting from their affiliation with Bell 
companies and vice versa. Under the measure, Bell operating companies 
must conduct their manufacturing activities through separate affiliates 
having their own financial books, records, and accounts, and it 
generally prohibits the Bell companies from providing any in-kind 
benefits such as advertising, sales, or maintenance. (Sec. 201.) Bell 
companies would be specifically prohibited from subsidizing their 
manufacturing affiliates with telephone revenues. The measure also 
requires manufacturing affiliates to sell their products to all 
telephone companies at prices and terms equal to the prices and terms 
it sells its equipment to its parent Bell company.
  Section 201 of the bill contains a ``domestic content'' provision 
which sets down the general rule that a manufacturing affiliate must 
conduct all of its operations within the United States and that all 
component parts must also be of domestic manufacture. There is, 
however, an exception to this. Foreign manufactured component parts may 
be utilized if a good faith effort fails to secure equivalent parts 
manufactured within the United States, provided their cost does not 
exceed 40 percent of the sales revenue derived in any calendar year 
from the manufactured product. Furthermore, and most significantly, the 
general rule does not apply to the extent any of its provisions are 
determined to be inconsistent with any multilateral or bilateral 
agreement to which the United States is a party, such as a Bilateral 
Investment Treaty, the North American Free Trade Agreement, or GATT. 
This is an enlightened and fair resolution of a difficult problem--
balancing competing interests.
  Beginning 5\1/2\ years after enactment, the regional Bell companies 
and their operating affiliates are permitted to file applications to 
the Federal Government to provide alarm monitoring services. 
(Sec. 101(a)(1)(A).) As with Bell applications to provide long-distance 
services, the Justice Department and FCC would have to make separate 
determinations within 6 months whether the provisions of alarm services 
by a Bell company would impede competition or serve the public 
interest. The measure requires the FCC to issue rules regulating Bell 
company provision of alarm monitoring services, and it permits the FCC 
to penalize Bell companies that violate FCC regulations--including 
ordering a company to cease providing such services. (Sec. 202.)
  The measure establishes certain rules under which the Bell companies 
may provide electronic publishing services, including the 
dissemination, publication, or sale over telephone lines of news, 
business and financial reports, editorials, columns, sports reporting, 
features, advertising, photos or images, research material, legal 
notices and public records, and other such information. (Sec. 203.) 
These rules would expire June 30, 2000.
  Section 203 would add a new section 231 to the Communications Act of 
1934. It establishes a number of safeguards to ensure equal access to 
interconnections for all electronic publishers. Under its terms, the 
Bell companies would be permitted to provide electronic publishing 
services over their own telephone lines only if such services are 
provided through a separate affiliate or a joint venture with an 
electronic publisher. Furthermore, joint ventures between the Bell 
companies and newspaper publishers would be encouraged, and joint 
ventures between the Bells and small, local electronic publishers are 
encouraged in particular. The separate affiliates or joint ventures 
would be required to maintain their own books, records, and accounts, 
and could not engage in any joint sales, advertising, or marketing 
activities with affiliated Bell companies.
  When the House Judiciary Committee considered this matter in March, I 
offered an amendment dealing with the definition of ``electronic 
publishing.'' My concern focused on the fact that the definition in the 
bill as introduced appeared to be almost exclusively newspaper 
oriented. The problem, of course, is that a number of non-newspaper 
entities are engaged in the electronic publishing business. For 
example, the Economic and Commercial Law Subcommittee received 
testimony from the President of the West Publishing Co., who expressed 
the view that all content-based information should be included within 
this definition.
  So, I felt that the protections contained in section 203 should 
extend to a novel, textbook, or scientific journal, as well as a 
newspaper. Similarly, magazines should be covered as well as electric 
legal research tools such as Westlaw and Lexis. Consequently, the 
legislation that comes to the floor of the House contains an expanded 
definition of the term ``electronic publishing.'' For example, my 
amendment added ``legal, consumer or credit material'', ``research 
material'' and ``public records.'' In addition, it clarified that 
electronic publishing includes ``scientific, educational, 
instructional, technical, professional, trade or other literary 
materials.'' It is important to note that the term ``electronic 
publishing'' does not include any of the out-of-region activities of a 
Bell company, nor does it include wireless or cellular services, or 
cable television.
  Obviously, Mr. Speaker, this is very important legislation. If this 
bill is enacted, seven strong competitors will enter into new 
telecommunications markets, providing a broad range of additional 
products and services to their customers. This is justified because the 
boundaries between local service and long distance have blurred and, in 
some places, the local telephone exchange is no longer a monopoly. We 
need to provide the Bell companies with incentives to invest in their 
local networks. This bill replaces judicial oversight of national 
telecommunications policy with a sensible regulatory structure. At the 
same time, the legislation protects basic antitrust principles.
  Given the lateness of the session and the importance of having this 
legislation enacted this year, the committees decided to go forward 
under the expedited procedure of suspension of the rules. It is my hope 
that the other body will give this important measure serious and prompt 
consideration. I strongly urge an ``aye'' vote on the part of my 
colleagues.

                              {time}  1250

  Mr. Speaker, I reserve the balance of my time.
  Mr. DINGELL. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. DINGELL asked and was given permission to revise and extend his 
remarks.)
  Mr. DINGELL. Mr. Speaker, I want to thank my good friend, Jack 
Brooks, for yielding.
  Mr. Speaker, I rise in strong support of H.R. 3626. I urge my 
colleagues to join me in voting for this important piece of 
legislation. This legislation ends years of bitter and divisive 
wrangling between industry, between committees in the Congress and 
between individuals.
  The compromise is not the one which I would necessarily sponsor nor 
that which my dear friend from Texas, Mr. Brooks, would have sponsored. 
I want to commend him for the fine way in which he worked with me, 
express my gratitude and appreciation to him and tell the House that 
this is an extraordinary example of the cooperation that can exist 
between industries, communities, and between committees and Members of 
this body.
  The bill we bring to the House today memorializes the compromises, is 
a fair and balanced bill and deserves the support of the House.
  But I would also like to commend the distinguished and able chairman 
of the Subcommittee on Telecommunications of the Committee on Energy 
and Commerce, Mr. Markey, for his extraordinary leadership in the joint 
handling of this and the other legislation that will be before this 
body today. He has held 7 hearings, moved the bill out of the committee 
expeditiously, and saw to it that it passed our committee with an 
overwhelming vote. I commend him for his efforts.
  Equal gratitude goes to my dear friends, the ranking minority member 
of the committee, Mr. Moorhead, Mr. Fields, and Mr. Oxley, two of the 
more valuable members of this committee for whom I have great respect.
  At this time I would like to again express my thanks to my dear 
friend, Mr. Brooks, and engage in a brief colloquy with him.
  I want to clarify with my coauthor of the legislation the intent 
behind those provisions in section 102 concerning the responsibility of 
the Department of Justice if it seeks to enjoin a Bell company from 
entering into the business of intra-state interexchange 
telecommunications services after a State has granted permission to 
such company under that section.
  Does my dear friend the gentleman from Texas agree that the intent 
behind this provision is to require the Department to seek in its 
complaint when commencing a civil action not only a permanent 
injunction but also a temporary or preliminary injunctive relief if it 
desires to prevent a Bell company from offering the services authorized 
by the State?
  Mr. BROOKS. Mr. Speaker, will the gentleman yield?
  Mr. DINGELL. I yield to my friend, the gentleman from Texas.
  Mr. BROOKS. I thank the gentleman for yielding.
  Mr. Speaker, yes, the intent behind those provisions is to require 
the Attorney General to seek all customary and available forms of 
injunctive relief as provided under the Antitrust laws and under the 
Federal Rules of Civil Procedure. Such relief would include temporary 
restraining orders, preliminary injunctions, as well as permanent 
injunctions.
  Indeed, it is the usual and customary practice of the Department of 
Justice in antitrust cases seeking to enjoin anticompetitive activity 
to request preliminary as well as permanent injunctions. In 
implementing this provision, the Department will proceed in the same 
fashion under the applicable provisions of section 102 as it 
customarily does in other areas, such as merger enforcement, and will 
therefore request preliminary as well as permanent injunctions.
  Mr. DINGELL. I thank the gentleman.
  Thus, Mr. Speaker, as Chairman Brooks and I have agreed, section 102 
provides that a Bell operating company may provide intrastate 
interexchange telecommunications service that has been authorized by a 
State if the Attorney General fails to commence a civil action to 
enjoin the company from so doing or brings such a civil action but 
fails to obtain an injunction. If the Attorney General fails to seek or 
obtain temporary or preliminary injunctive relief, the Bell operating 
company can proceed to offer the service pending a trial on the merits 
in which the court would decide whether or not to issue a permanent 
injunction.
  Mr. Speaker, H.R. 3626 is one of the most important pieces of 
telecommunications legislation that I can recall coming to the House 
floor.
  Together with its companion bill offered by our dear friends, Mr. 
Markey and Mr. Fields and Mr. Oxley, it will provide a whole new and 
updated framework for the development and implementation of 
telecommunications policy. I urge my colleagues to support both of 
these important bills.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MOORHEAD. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 3626, the Antitrust and 
Communications Reform Act of 1994. This bill is critical because it 
returns important telecommunications policy authority from the courts 
to Congress where it belongs and it transfers the powers of overseeing 
the activities of the Bell operating companies from the Federal courts 
to the Federal Communications Commission and the Department of Justice.
  Since 1984, when the Bell operating companies were restricted from 
entering various lines of businesses as a result of the consent decree 
entered into in an antitrust case, the industry has undergone 
significant changes. As a result of these changes, the restrictions 
imposed by the consent decree are no longer necessary and now serve as 
barriers to real competition.
  H.R. 3626 sets out the policy standards, limitations, and procedures 
for the entry by Bell operating companies into previously restricted 
businesses, including manufacturing, alarm monitoring and long distance 
as well as the guidelines for providing information services.
  These are complicated issues which were carefully considered by the 
energy and Commerce Committee and the committee reported the bill on a 
voice vote.
  Mr. Speaker, we have all heard and spoken of the benefits the 
information superhighway will bring. H.R. 3626, together with H.R. 
3636, will lay the foundation for the construction of this highway by 
removing unnecessary regulatory barriers and allowing for competition 
to flourish.
  I am pleased to be a cosponsor of this legislation and urge my 
colleagues to support H.R. 3626.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BROOKS. Mr. Speaker, I yield myself such time as required in 
order to have a couple of colloquies with the distinguished chairman of 
the Committee on Energy and Commerce, the gentleman from Michigan [Mr. 
Dingell].
  Mr. Speaker, I would like to engage the gentleman from Michigan in a 
brief colloquy on the savings clause inserted into the so-called 
domestic content provisions of the manufacturing section of the bill as 
found in section 201. As the gentleman knows, the savings clause was 
inserted to mitigate any concerns of the Office of the U.S. Trade 
Representative that these provisions might undermine the international 
obligations of the United States with respect to bilateral and 
multilateral agreements entered into with other countries.
  Specifically, who will make the determination called for by the 
savings clause?
  Mr. DINGELL. Mr. Speaker, will the gentleman yield?
  Mr. BROOKS. I yield to the distinguished chairman.
  Mr. DINGELL. I thank the gentleman for yielding.
  Mr. Speaker, in general, the President and the U.S. Trade 
Representative have responsibility for carrying out the trade laws and 
ensuring that our actions are consistent with our international 
obligations. This language envisions that any determination is subject 
to review by Federal court.
  Mr. BROOKS. I thank the gentleman for this clarification. Mr. 
Speaker, I would like to engage the distinguished chairman of the 
Committee on Energy and Commerce in a colloquy regarding the exceptions 
for incidental services set forth in H.R. 3626.
  The bill permits a Bell operating company or an affiliate thereof to 
provide interexchange telecommunications that are incidental to its 
offering of other services, such as cable television or cellular radio. 
The exceptions for incidental interexchange services are intended to be 
narrowly construed and are not a back door for the Bell operating 
companies or their affiliates to provide interexchange 
telecommunications services or their functional equivalents without 
going through the approval procedures specified in the bill.
  Mr. DINGELL. Mr. Speaker, the gentleman from Texas is correct.
  Mr. BROOKS. In this regard, the storage-and-retrieval exception would 
not cover any service that established a direct connection between end 
users, any real time voice and data transmission, or any service that 
is the functional equivalent of or substitute for an interexchange 
telecommunications service.
  Only storage-and-retrieval services in which the customer initiates 
the storage or retrieval of information would be included under this 
exception. Thus, voice, data, or facsimile distribution services in 
which the Bell operating company or affiliate forwards customer-
supplied information to customer- or carrier-selected recipients would 
not fall within the exception. Likewise, the exception would not 
include any service in which the Bell operating company or affiliate 
searches for and connects with the intended recipient of information, 
e.g. roving or automatic forward-and-connect services, or any service 
in which the Bell operating company or affiliate automatically forwards 
stored voicemail or other information to the intended recipient. For a 
storage-and-retrieval service to qualify under this exception, the 
recipient must act affirmatively to initiate the retrieval of the 
information from the storage facility.
  Mr. DINGELL. The gentleman is correct. Storage-and-retrieval services 
that include the kinds of end-to-end capabilities you have described 
are, or could become, substitutable for interexchange 
telecommunications services. A Bell operating company or affiliate 
wishing to offer such storage-and-retrieval services could seek 
authorization to do so from the Department of Justice, the FCC, and the 
appropriate State, as the case may be.

                              {time}  1300

  Mr. BROOKS. Mr. Speaker, that is correct, and I want to thank the 
gentleman from Michigan [Mr. Dingell] for this colloquy.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FISH. Mr. Speaker, I yield 4 minutes to the gentleman from 
Wisconsin [Mr. Petri].
  Mr. PETRI. Mr. Speaker, it is hard to imagine a subject more 
consequential to the future of the American economy than that of 
regulation--or deregulation of telecommunications. The ability of 
companies in this field to compete and collaborate freely, with a 
minimum of Government second-guessing and direction, is vital to 
American leadership in high technology.
  It is also hard to imagine, therefore, any subject less fit for the 
suspension calendar than this one. The law we pass here, if we do not 
fully explore its provisions and consider its potential costs, will be 
a law operating in subordinance to that other and eternal law of this 
place--the law of unintended consequences. Have the Members so 
exhausted themselves with study and debate on the issues raised by H.R. 
3626 and H.R. 3636 that they are already prepared to put their names 
down in support of it? I do not think so.
  I know the sponsors worked hard on these bills. I know they mean well 
and feel they have done the best they can. But these bills were 
produced in their present written form only this past weekend; they are 
complicated and lengthy--almost 200 pages.
  Of much greater concern, their sweeping economic provisions appear to 
constitute what Bruce Chapman of Discovery Institute, in a Washington 
Post article yesterday, called a Rube Goldberg industrial policy--that 
is--sure to make the public as well as the business community unhappy 
before long.
  How many Members could stand up here and discuss these many 
provisions, let alone debate them?
  How many of us are prepared to be grilled about these bills by our 
constituents this fall if awkward questions are raised?
  People involved in technology often are not people involved in 
politics--until, that is, they figure out what their elected officials 
have done to them. That is beginning to happen on these bills. For 
example, the Internet is busy with conjecture about the haste with 
which this weighty subject is being addressed by the House.
  For example, on a telecom electronic roundtable called the Federal 
Information News Syndicate, Vigdor Schreibman, editor, reported the 
following yesterday:

       A number of citizens have expressed outrage that such an 
     important legislative initiative that will change the global 
     civilization would go to a vote without adequate 
     consideration of the language of the measures.* * *

  I could have told Mr. Schreibman that I personally have heard similar 
reactions--amounting to incredulity--around this building, too.
  One of the Nation's top experts on telecommunications policy, George 
Gilder, told several of us the other evening that he was appalled that 
so serious and sobering a set of measures might be adopted with so 
little understanding and discussion by this body. The results could be 
disastrous.
  Privately, many of the lobbyists on various sides of these measures 
also acknowledge that this is very seriously flawed legislation with 
the potential to backfire upon its supporters, however well-
intentioned. Remember the Cable Act of 1992, which among other 
unintended consequences is giving us higher rather than lower rates in 
many areas and knocking C-SPAN off of the sets of millions of 
Americans?
  Remember catastrophic health insurance--a different sort of topic, 
except for the common feature of an inordinate rush to passage?
  What shall we tell the mayors, county commissioners, and other local 
officials who are protesting these bills? The National League of 
Cities, the U.S. Conference of Mayors, and the National Association of 
Counties have all urged a ``no'' vote because they say that--

       The bill, as drafted, virtually gives away local authority 
     over local infrastructure, and does so without real or 
     monetary compensation to local communities.

  Maybe they are wrong, but how will we be able to explain our position 
to them if we have not even debated this bill?
  Most importantly, what about the theme of reregulation that runs 
through these bills, even while they pretend to deregulate? In a 
dynamic field like high technology, which is doubling its costs 
effectiveness every year and is seeing the entry of scores of new and 
often unexpected competitors, why is this body about to endorse a 
return to railroad era monopoly control models? I would think that any 
friend of the market economy would be very cautious about heading down 
such a path.
  Why instead do we not follow the more contemporary models of 
computers and software? In these models, it is the relative absence of 
Government controls and regulation that has allowed the United States 
to soar ahead of the whole world and has reinvigorated an otherwise 
somewhat anemic economy. Renewed monopoly is the wrong model for an 
economy where wireless communication, satellite, all optical fiber 
networks and other technologies are all coming on line to compete with 
the cable and telephone companies.
  Do we really want to kid ourselves and our constituencies into 
believing that this body--with so little discussion before and no 
debate at all--is ready to second-guess not only the market but the 
technology itself and to design a whole new, heavily regulated, and 
indirectly taxed telecommunications regime for America?
  I do not pretend to any expertise of the subject of high technology, 
but I do know something about the House of Representatives. And I think 
I know something about what the voters expect from us. They expect us 
to deliberate upon the great and weighty and historic issues of the 
time. At times like this they do not expect us to surrender our 
judgment.
  Let us have these bills properly discussed and properly debated. They 
are too important to the future of our country and its economy to be 
dispatched without such care and attention.
  Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Massachusetts [Mr. Markey], the distinguished chairman of the 
subcommittee, with thanks for having handled this bill so well.
  Mr. MARKEY. Mr. Speaker, I rise in support of H.R. 3626, the 
Antitrust and Communications Reform Act of 1994.
  This bill, which was approved unanimously by both the Subcommittee on 
Telecommunications and Finance and the full Committee on Energy and 
Commerce, coupled with H.R. 3636, the National Communications 
Competition and Information Infrastructure Act of 1994, represents the 
most comprehensive communications legislation brought to the House 
since the original Communications Act of 1934. This bill represents a 
carefully crafted compromise by the Energy and Commerce and the 
Judiciary Committees to balance the important regulatory and antitrust 
issues facing the telecommunications industry today. This compromise 
encompasses a myriad of different interests and perspectives both 
public and private--both in and out of Congress. Furthermore, this bill 
embodies countless hours of work on proper telecommunications reform by 
Congress over the last several years. The dawn of the Information Age 
has come and this bill will ensure that it is an age marked by fair 
competition and consumer protection.
  It was Samuel Morse in 1844 who raised the curtain on the Information 
Age with a telegraphic message sent from Baltimore to Washington. Morse 
was an inventor, but he had the instinct of a talk show host. With a 
series of electric blips he asked Washington this question, ``What hath 
God wrought?''
  One hundred and fifty years later, we meet on the House floor to ask 
a less cosmic, but still compelling, question. ``Whither the 
Information Age?''
  God hath wrought the most innovative, competitive, remarkable 
industry in the world today, and we in Congress have the responsibility 
for accelerating this unrivaled capacity for reinvention and growth. 
The jobs of the future, the hopes of our children for expanding 
opportunities and a better life, ride on the passage of these bills 
today.
  If we pass this bill, Congress will send its own message to the 
world, not in Morse Code, but in plain English over miles and miles of 
tiny strands of glass and digitally-compressed spectrum. We will send 
the message that America is placing its hopes and dreams in the 
ingenuity of its information entrepreneurs, and it is confident of its 
future.
  H.R. 3626 lifts many of the restrictions placed on the Bell companies 
in the so-called modified final judgment [MFJ], a consent decree struck 
between AT&T and the Justice Department in 1982. The bill frees the 
Bell operating companies to compete in businesses from which they were 
previously barred under the consent decree, after winning State and 
Federal approval. For the past 12 years a single district court has 
carried the burden of shaping the development of communications law and 
the communications industry, simply by adjudicating the AT&T consent 
decree. This bill culminates a long effort over that time to set forth 
a comprehensive national policy on how telephone companies should 
participate in the future of the communications world. Now, rather than 
place the onus of deciding the evolution of the communications industry 
in the hands of the court, the Federal Communications Commission and 
the Department of Justice will serve as the guiding legal and 
regulatory arms in determining the Bell companies' role in the 
Information Age.
  Specifically, the Antitrust and Communications Reform Act of 1994 
allows the Bell companies to enter the long distance and manufacturing 
businesses at certain junctures and sets new safeguards for their 
participation in the provision of information services.
  In the long distance market the act would allow the seven regional 
Bell operating companies to enter various long distance markets over 
time as long as permission has been granted by the Justice Department 
and the Federal Communications Commission. In particular, the Bells 
would be permitted to enter four submarkets:

  In the intrastate long distance market the bill grants authority to 
the State to regulate the provision of long distance service. Thus, a 
State would have the authority to decide whether a Bell company may 
enter the long distance business for the purpose of providing long 
distance service for calls that originate and terminate in the same 
State. The Department of Justice is granted 90 days to review any 
decision made by the State to grant service in this market.
  In the interstate long distance market, H.R. 3626 permits the Bell 
companies to petition the Department of Justice and the Federal 
Communications Commission to utilize their own networks to provide 
interstate long distance service throughout their service region. The 
Department of Justice and the Federal Communications Commission would 
have to find that there is no substantial possibility that a Bell 
company could hinder competition by offering the service in order to 
block them from doing so.
  Thirdly, the bill allows the Bell companies to petition the Justice 
Department and the FCC to provide interstate resale services 18 months 
after the date of enactment. This provision permits a Bell company to 
purchase, in bulk, and resell to subscribers on a retail basis, 
capacity on networks owned by other carriers.
  Finally, H.R. 3626 allows the Bell companies, 5 years after enactment 
of the bill, to petition the FCC and the Department of Justice to build 
and operate networks outside of their regions.
  H.R. 3626 also sets important new guidelines for the regional Bell 
operating companies' participation in the provision of information 
services. Specifically, the act contains significant safeguards in the 
industries of electronic publishing, alarm monitoring, and burglar 
alarm services.
  In providing electronic publishing services, a Bell company would 
only be permitted to engage in electronic publishing through a separate 
affiliate or joint venture. Such separate affiliates or joint ventures 
would maintain books, records, and accounts separate from its 
affiliated Bell company. Bell companies must provide to any separate 
affiliate all facilities, services, or information available to 
unaffiliated entities on the same terms and conditions. All of these 
rules would expire in 6 years.
  Most significantly, the legislation puts in place much-needed privacy 
protections for American consumers in this area by: First, prohibiting 
any common carrier from providing customer proprietary network 
information [CPNI] to any other person unless it is expressly 
permitted. And by second, developing a ``privacy bill of rights'' for 
all communications media to protect consumers whenever they use 
electronic networks. The three core principles of the privacy bill of 
rights, which the FCC will regulate with the flexibility to promulgate 
additional protections in a technology-specific manner as warranted, 
are as follows: First, consumers get knowledge that information is 
being collected about them; second consumers get notice that the 
recipient intends to reuse or sell that information; and third 
consumers have the right to say ``NO'' and curtail or prohibit such 
reuse or sale of personal information.
  While the consent decree served a necessary purpose over the last 10 
years, and the diligence of Judge Greene deserves note, it no longer 
serves the public interest at this dynamic time in the evolution of the 
communications industry. With expert agencies such as the Department of 
Justice and the Federal Communications Commission allowed to administer 
a new Federal policy, a policy which will promote competition and 
innovation while protecting consumers, America will ensure its 
preeminence in this quickly evolving telecommunications marketplace. 
The Antitrust and Communications Reform Act of 1994 will open up 
markets to help establish a competitive, fair, and ever-growing 
information infrastructure while providing necessary safeguards to 
protect competition and consumer interests. I urge all Members to join 
me in supporting this critical legislation.
  Mr. MOORHEAD. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas [Mr. Fields], the distinguished ranking member of the 
subcommittee.
  (Mr. FIELDS of Texas asked and was given permission to revise and 
extend his remarks.)
  Mr. FIELDS of Texas. Mr. Speaker, I rise in strong support of H.R. 
3626, the Antitrust and Communications Reform Act of 1994. This 
legislation removes barriers to entry imposed on the Bell Telephone 
companies as part of the 1982 court decision to divest local telephone 
service from AT&T. While those prohibitions might have made sense 10 
years ago, they increasingly have little relevance in the rapidly 
changing and evolving telecommunications landscape we see today.
  H.R. 3626, which has been sponsored by the chairman and ranking 
members of both committees that have jurisdiction over it, as well as 
the Telecommunications Subcommittee chairman and myself, sets out the 
ground rules for Bell company entry into long distance, information 
services, and telecommunications equipment manufacturing. The bill 
recognizes that the Bell companies enter these markets from a historic, 
if somewhat crumbling, position of monopoly in the local telephone 
market.
  For that reason safeguards, both structural and nonstructural, are 
necessary to ensure that the threat of discrimination and cross-
subsidies remain just that--a threat, not a reality.
  Mr. Speaker, I want to commend the primary sponsors, the gentleman 
from Michigan [Mr. Dingell], the gentleman from Texas [Mr. Brooks], the 
gentleman from New York [Mr. Fish], and the gentleman from California 
[Mr. Moorhead] for their perseverance and hard work in ensuring that 
the delicate and the careful balance needed in this legislation has 
been struck and that after our conference with the Senate that every 
segment of the industry affected by this legislation will be in a more 
competitive, a more strengthened, position, and once again I want to 
commend the sponsors of this initiative for their hard work.
  I urge all of my colleagues to support the passage of this 
legislation, and I say, particularly to my Republican colleagues, this 
is a deregulatory, procompetitive piece of legislation, a piece of 
legislation that should be supported by both sides of the aisle of this 
particular House.
  Mr. BROOKS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from California [Mr. Edwards], the ranking member of the 
Committee on the Judiciary.
  (Mr. EDWARDS of California asked and was given permission to revise 
and extend his remarks.)
  Mr. EDWARDS of California. Mr. Speaker, I rise today in support of 
the compromise version of H.R. 3626, the Antitrust and Communications 
Reform Act. I commend my chairman, Jack Brooks, and Chairman Dingell 
for their work in drafting a bill that will foster continued growth in 
the U.S. telecommunications market.
  I especially want to express my support for the provisions of H.R. 
3626 which maintain the Justice Department's authority to review all 
potential entries by the regional bell companies into the long distance 
and manufacturing markets. Since we are allowing the regional phone 
companies, which operate currently as virtual monopolies in their 
service areas, into new markets, we must have in place safeguards 
against any abuse of such market power. The Justice Department's 
antitrust expertise will be put to good use in making certain that 
consumers will always have the benefit of true competition.
  Again, I commend my fellow members of the Judiciary Committee as well 
as the members of the Energy and Commerce Committee for their work on 
this bill, and I urge my colleagues to vote for H.R. 3626.
  Mr. Speaker, the gentleman from Michigan [Mr. Bonior], referred to a 
1993 WEFA study funded by the regional Bell operating companies. This 
study purports to show dramatic job growth and other economic benefits 
if current antimonopoly rules restraining the RBOC's are lifted. Among 
the claims are 3.6 million new jobs nationally, an increase in the GDP 
of $247 billion, a reduction in the Federal budget deficit of $150 
billion, a $33 billion improvement in the U.S. balance of trade and a 
full 1 percent reduction in both the inflation rate and long-term 
interest rates over 10 years. This ``economic miracle'' includes an 
assumption of $490 billion savings for American consumers in long 
distance alone. Forecasts like these are especially incredible given 
the fact that the long distance market which the RBOC's desire to enter 
produced only $59 billion in annual revenue in 1992, the most recent 
year for which full data are available.
  My concern is that these unbelievable forecasts were developed by 
using unbelievable assumptions, which have little or no basis in fact. 
For example, BellSouth forecasts a potential BellSouth price of $.37 
for a 5 minute long distance call from Kingsport, TN, to Washington, 
DC. Comparing this hypothetical price to a price of $.99 for AT&T, they 
claim a dramatic 63 percent savings. Since the Bell companies currently 
charge AT&T approximately $.45 for local access costs, it's hard to 
understand how BellSouth could assume a charge of only $.37 for this 
call, less than their own charges.
  A general assumption in the analysis is that long distance rates 
would be reduced by 50 percent immediately upon RBOC entry. The report 
fails to explain how this would be accomplished. The long distance 
market is already competitive, with studies showing a 66 percent 
decline in real rates since 1984. Further, with local access costs 
amounting to $.45 of every long distance dollar, it is hard to imagine 
what miracles the RBOC's could perform to reduce the remaining $.55 to 
$.05. Only two possible explanations come to mind. The RBOC's could 
discriminate against long distance companies by failing to include long 
distance access costs in their own rates, or the RBOC long distance 
could be priced absurdly low with the lost revenue made up by higher 
local telephone rates.
  The RBOC's also assume that average real telecommunications service 
prices will fall by 42 percent over the 10-year period. Again, no basis 
for this assumption is established. It is also in sharp contrast to 
actual RBOC increases in local telephone rates during the past 10 
years.
  Finally, the RBOC's portray this questionable report as a finding of 
WEFA [Wharton Econometric Forecasting Associates], a leading 
international forecasting firm. In fact, WEFA, under contract, simply 
provided the RBOC's with access to its econometric computer model of 
the U.S. economy. This compute model forecasts results based 
exclusively on whatever set of assumptions is supplied. In this case, 
assumptions were supplied by the RBOC's and their consultants. The 
results, of course, are equally questionable. WEFA performed no 
independent analysis of the RBOC's assumptions.
  Mr. Speaker, a better analysis of the long distance industry was 
prepared by Stanford Prof. Robert E. Hall and his group, Applied 
Economics Partners of Menlo Park in my California district. A summary 
of that study, Long Distance: Public Benefits From Increased 
Competition, follows:

                           Executive Summary

       Important structural changes have taken place in the long-
     distance industry in the last two decades. The industry has 
     moved from a tightly regulated monopoly to active competition 
     among a number of rival firms. Key steps in the transition 
     were:
       The establishment of the legal right to compete with AT&T,
       The structural separation of local and long distance 
     accomplished by divestiture of the Bell System in 1984, and
       The requirement of equal access by local telephone 
     subscribers to alternative long-distance providers.
       Economic analysis predicts that enhanced competition will 
     drive prices down to a new, lower level. Lower prices are a 
     primary way that the public benefits from pro-competitive 
     policies. After the transition to lower prices, competition 
     delivers continuing low prices. These predictions aptly 
     describe actual events in long distance:
       Between 1985 and 1988, according to government price 
     indices, the price of long distance relative to the general 
     price level fell by 30 percent.
       Between 1988 and 1992, the price fell by about another 17 
     percent.
       The average revenue per minute earned by the three largest 
     carriers fell 63 percent relative to the general price level 
     from 1985 to 1992.
       Net of access charges paid to local telephone companies, 
     the revenue per minute of the three largest long-distance 
     carriers fell by 66 percent between 1985 and 1992 after 
     adjustment for inflation.
       Since 1989, AT&T's price for regular long-distance calls 
     has fallen by three percent per year net of access charges, 
     after adjustment for inflation.
       The transition to competition has also seen a remarkable 
     growth in the quality, variety, and technical capabilities of 
     long-distance services:
       Reductions of noise, cross-talk, echoes, and dropped calls 
     have made the usefulness of one minute of telephone 
     conversation rise at the same time that the price of that 
     minute has fallen.
       Fiber optics now carry the bulk of long-distance traffic, 
     at lower cost and higher quality than the earlier microwave 
     technology. The transmission speed of state-of-the-art fiber 
     has doubled every three or four years since fiber was 
     introduced.
       Long-distance carriers have led the way in digital 
     switching and common channel signaling.
       The long-distance industry has developed software methods 
     for providing efficient private network services for large 
     businesses, using common physical facilities.
       The industry has created innovative new types of long-
     distance service to improve the efficiency of communication 
     for consumers and businesses, large and small.
       Competition has worked in long distance because the nature 
     of the product and the technology for producing it are suited 
     to competition and because regulation has fostered conditions 
     conducive to competition:
       The success of equal access has shown that it is practical 
     and effective to give every telephone user free choice among 
     long-distance carriers.
       No customer is a captive of a long-distance carrier. If one 
     carrier provides poor service or overprices its products, the 
     customer can easily switch to another carrier.
       There are no artificial barriers to entry in long distance. 
     Although it would be expensive to reproduce an entire 
     national network of the type operated by AT&T, MCI, and 
     Sprint, that investment would pay off if there were much 
     overpricing of service by those national carriers. 
     Moreover, effective entry could occur without construction 
     of any new networks, by leasing capacity from owners of 
     subnational fiber networks and by reselling services from 
     other carriers.
       An important part of the evidence that competition has 
     worked in the long-distance market is the lack of monopoly 
     profits among the carriers. The return on assets by the three 
     largest carriers recently has been below the rate of return 
     allowed by regulators for local telephone service.
       Proposals have been made to lift the line-of-business 
     restriction and thus permit the Regional Bell Operating 
     Companies [RBOCs] to control long distance carriers. That 
     move would be harmful to long-distance customers because:
       The principle of separate ownership of local and long-
     distance service is sound as a matter of economics; it is the 
     most effective way to ensure reliable, efficient long-
     distance service and to give customers a free choice among 
     long-distance carriers.
       RBOC entry would not increase the number of long-distance 
     carriers in the long run.
       Experience has shown that regulators cannot prevent all the 
     methods that a local carrier can use to reduce the efficiency 
     of its rivals and to divert business to its own competitive 
     service, when that service is dependent on the local 
     telephone network. This danger is particularly important for 
     long distance.
       Regulation also cannot guarantee that costs for a 
     competitive business, such as long distance, are not reported 
     as costs of a related regulated monopoly business, such as 
     local service.
       Overall conclusions from this review of the structure and 
     performance of the contemporary long-distance industry are:
       The active competition made possible by divestiture in 1984 
     rapidly drove prices downward.
       Price declines have continued because of rapid productivity 
     growth and declining costs.
       Prices have declined by much more than just the decrease in 
     access charges.
       Competition has proven a highly effective policy approach 
     for the long-distance industry.
       Permitting the RBOCs to control long-distance carriers 
     would clearly be harmful. The line-of-business restriction on 
     long distance is sound policy.

  In addition, Mr. Speaker, I would note that, section 102(c)(3) 
provides for an exception to the general rule that the Bell operating 
companies may not provide interexchange telecommunications without DOJ 
and FCC approvals. This provision grants authority to provide 
incidental long distance for the purpose of providing commercial mobile 
services. Such an exception should not be viewed as a ``blank check'' 
to provide long distance telecommunications services without proper 
review and oversight. Rather, the bill is intended to authorize a 
subset of long distance telecommunications services that are in 
incidental to the provision cellular radio or other wireless services. 
Nothing in this ``incidental services'' exception should be understood 
to limit the authority under existing law of the Federal Communications 
Commission, the Department of Justice, or other appropriate body to 
regulate or condition Bell operating company provision of these 
services to protect the public interest or to prevent anticompetitive 
conduct. In particular, section 108(a) of the bill should be understood 
explicitly to authorize the Federal Communications Commission to adopt 
such appropriate conditions and safeguards. In this regard, I note that 
the Department of Justice has recently proposed some safeguards that 
should accompany Bell operating company provision of wireless long 
distance services in connection with a pending MFJ waiver request.

                              {time}  1310

  Mr. BROOKS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Texas [Mr. Washington].
  (Mr. WASHINGTON asked and was given permission to revise and extend 
his remarks.)
  Mr. WASHINGTON. Mr. Speaker, I thank the chairman of the committee 
for yielding time to me.
  I thank the gentleman and also the chairman of the Committee on 
Energy and Commerce, the gentleman from Michigan [Mr. Dingell], for 
their hard work in putting this legislation together. I am pleased to 
give the legislation my strong support.
  Mr. Speaker, I rise in support of the motion to suspend the rules and 
adopt H.R. 3626. This bill is the result of an enormous effort by 
Chairmen Jack Brooks and John Dingell. As leaders of two great 
committees of this House, on which I am privileged to serve, the 
chairmen have shown extraordinary skill and wisdom in moving this 
measure to the House floor. I urge its adoption.
  Mr. BROOKS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Oklahoma [Mr. Synar], chairman of the subcommittee.
  (Mr. SYNAR asked and was given permission to revise and extend his 
remarks.)
  Mr. SYNAR. Mr. Speaker, I rise today in support of H.R. 3626, the 
Antitrust Communications Reform Act of 1994.
  Since the Industrial Revolution, our country has benefited from the 
marriage of technology and the free market to achieve two key goals: 
First, ensuring the economic prosperity of our citizens; second, 
maximizing the quality of our citizens lives.
  I maintain that telecommunications reform, if it is to truly serve 
the public interest, must rely on three classic regulatory concepts: 
First, an across-the-board competitive entry test; second, adequate 
post-entry competitive safeguards; and third, vigorous, well-financed 
enforcement of the competitive marketplace.
  Let me state what we all know: competition works. The bill we 
ultimately adopt must give competition a proper chance to work for the 
benefit of all consumers.
  One final important note. This bill will further propel growth in the 
telecommunications industry and that means both jobs and consumer 
benefits for our Nation. That is good news for my constituents in 
Oklahoma and all Americans.
  Mr. Speaker, I rise today in support of H.R. 3626, the Antitrust 
Communications Reform Act of 1994. Since the Industrial Revolution, our 
country has benefited from the marriage of technology and the free 
market to achieve two key goals: ensuring the economic prosperity of 
our citizens while maximizing the quality of their lives. Over the last 
decade, we have witnessed the growing power of the telecommunications 
industry in our economy, to the tune of nearly $300 billion in revenue 
this year, and seen the innovative, and sometimes mind-bending 
application of this technology in our schools, libraries, hospitals, 
and homes.
  This bill will further propel our Nation's telecommunications 
progress, and it is good news for my State of Oklahoma. We estimate 
this legislation will create 3.6 million new jobs for metal, factory, 
and construction workers. Oklahoma is well-positioned, both 
geographically and with its workforce, to lead the way as a high-
technology, high-wage State in a dynamic global economy that now 
depends on information technology. I know that by the year 2000, these 
jobs will anchor communities in northeastern Oklahoma, transforming the 
job base and helping our young people to get a solid start on their 
future.
  As Congress wrestles with the challenge of overhauling our 
telecommunications policy, we must not forget the policies and 
principles that made us a world leader in this industry. For more than 
80 years, the antitrust laws have interacted with telecommunications 
regulatory policy to ensure product and service diversity and price 
competition to the benefit of consumers. The dual roles for antitrust 
law and communications law must be preserved and strengthened if we are 
to advance our Nation's telecommunications industry into the next 
century.
  I have maintained that any reform legislation, if it is to truly 
serve the public interest over time, must rest on three classic 
regulatory concepts: an across-the-board entry test, adequate 
safeguards, and vigorous enforcement. Let me address each of these in 
the context of H.R. 3626. First, I am pleased that this legislation 
acknowledges that the Department of Justice has a critical role to play 
in ensuring that the playing field is level and that competitors 
compete fairly. By applying the competitive entry test across-the-board 
to all lines of business, we have codified a tough antitrust standard 
that must be met before new markets can be opened to players that could 
use their monopoly power to their competitive advantage.
  However, I am concerned that the sequencing of the review process in 
this legislation is less than desirable if we are to guarantee that 
consumers benefit immediately competition in the local loop. Currently, 
the regional Bell operating companies' lock on the local exchange 
prohibits effective competition. We have seen instances when RBOC's 
delay competition by denying access to the switch, overcharging for the 
use of their facilities, and cross-subsidizing local service from 
monopoly revenues. This bill, while it applies the right standard to 
judge the potential impact of the regional Bell operating companies' 
entry into a market, uses that standard as a backstop instead of a 
threshold test to forestall competitive harm. I look forward to working 
on this aspect of the bill as we move through conference toward final 
passage.
  Second, I recognize that the bill contains post-entry safeguards to 
protect certain segments of the telecommunications industry from unfair 
and rapid encroachment by monopoly firms that could rapidly dominate 
the market. These safeguards, including extended waiting periods for 
certain lines of business, both separate subsidiary and separate 
affiliate requirements, restrictions on the use of Consumer Proprietary 
Network Information, certain joint activities, and teaming and business 
arrangements. However, as I expressed during hearings on this subject 
with representatives of the electronic publishing and alarm industry, 
safeguards that are deemed right and fair for specific segments of the 
industry should be applied to all. I believe Senator Hollings' bill, 
currently under review in the Senate, addresses this issue in an 
equitable manner.
  Third, I am heartened that this legislation actually includes a 
mechanism through which we can guarantee that its enforcement will be 
carried out over time. This is no small task. The FCC currently has 
only approximately 18 auditors to cover 256 audit areas. An amendment I 
successfully offered during committee consideration of H.R. 3626, 
allows the Federal Communications Commission to use its authority under 
the 1993 Omnibus Budget Reconciliation Act to collect fees for the 
express purpose of beefing up its auditing functions and cost 
allocation tracking efforts. We need to provide the Commission the 
right tools and resources to get the job done, and this amendment is 
the first step in this process.
  I would also like to say a word about the term ``affiliated 
enterprise,'' a term used in the MFJ to describe the full range of 
business relationships--including contractual relationships--that can 
create vested interests and thereby give rise to monopolistic 
temptations. I am pleased that the bill before us today follows the 
bill reported by the Judiciary Committee by incorporating this crucial 
term throughout the legislation's entry test provisions. Although the 
bill does not include a technical amendment passed unanimously by the 
full committee that would have alerted readers to the full meaning of 
the term in the statute itself, the Judiciary Committee report fully 
explains the term.
  Just as this term is not explicitly defined in the bill before us 
today, it is not explicitly defined in the MFJ. Instead, the meaning of 
this term is explained in the case law--specifically, in United States 
v. Western Electric Co., Civil Action No. 82-0192 (D.D.C. Jan. 21, 
1992), aff'd, 12 F.3d 225 (D.C. Cir. 1993).
  I am also pleased that the Attorney General's authority to enjoin 
entry into intrastate interexchange telecommunications services and the 
resale of interexchange telecommunications services as provided in 
section 102(b)(2), section 102(b)(3) and section 102(d)(1) contemplates 
the full range of injunctive authority. In order for H.R. 3626's entry 
test to properly protect telecommunications consumers, the Department 
of Justice must have available the full complement of injunctive 
remedies to ensure that there is no substantial possibility that those 
who seek to enter the long distance telephone business could use their 
monopoly power to impede competition in the markets they seek to enter. 
Any other reading of the Attorney General's injunctive authority would 
be inconsistent with the plain language of the bill, the clear intent 
of the Congress, and the traditional law enforcement role of the 
Attorney General.
  Lastly, I would like to express my disappointment about the nature of 
the debate we have had over the last 6 months on this legislation. 
While I commend the two chairmen and the ranking members for the depth 
and quality of the hearings held, I am disturbed by the lack of 
participation by Members from both sides of the aisle in the actual 
formulation of the legislation we have today. Congress can accede to 
its duty to make decisions only if we have an open, deliberative 
process that informs the final debate over the letter of the law.
  Finally, let me state what we all know: competition works. The bill 
we ultimately adopt must give competition a proper chance to work for 
the benefit of all consumers. I look forward to participating further 
in these issues as we move toward final passage of the legislation.
  Mr. FISH. Mr. Speaker, I reserve the balance of my time.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the gentleman from 
Michigan [Mr. Bonior], our distinguished majority whip.
  Mr. BONIOR. Mr. Speaker, I rise in strong support of H.R. 3626, the 
Antitrust and Communications Reform Act of 1994. I would like to 
commend the chairmen of the Judiciary and Energy and Commerce 
Committees, Mr. Brooks and Mr. Dingell, and also Mr. Fish and Mr. 
Moorhead, for delicately crafting the legislation before us today.
  Nearly 1 year ago, I submitted, to the House, a study by the Wharton 
Econometric Forecasting Associates Group predicting that 3.6 million 
new jobs would be created over the next 10 years if the manufacturing 
and long distance restrictions were lifted on the regional Bell 
companies.
  Over that period, the study found that $247 billion would be added to 
our gross domestic product. In addition, consumers would save more than 
$30 billion from reduced local and long-distance telephone rates.
  The study still makes sense today and H.R. 3626 makes complete sense 
now. Through this legislation, we can rebuild the framework to support 
America's communications needs well into the 21st century, stimulate 
the economy, create millions of high quality jobs, reassert our 
international competitiveness, and provide a strong future for our 
children.
  Mr. Speaker, H.R. 3626 is an excellent bill whose time has come. I 
urge my colleagues to vote ``yes'' on its passage.
  Mr. MOORHEAD. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Ohio [Mr. Oxley], who has been very active on this 
legislation.
  (Mr. OXLEY asked and was given permission to revise and extend his 
remarks, and to include extraneous matter.)
  Mr. OXLEY. Mr. Speaker, I rise in strong support of the Antitrust and 
Communications Reform Act of 1994. I wish to commend Chairman Dingell 
and our ranking Republican, Mr. Moorhead, for their indispensable 
leadership, and I want to thank our colleagues on the other committee 
of jurisdiction for their efforts as well.
  As Members know, the Brooks-Dingell-Fish-Moorhead bill sets the terms 
for the Bell companies' entry into long-distance service, 
manufacturing, and information services. I have sponsored legislation 
to allow the Bells to enter manufacturing in years past, and I support 
allowing Bell provision of long-distance service today. What I want to 
stress to my fellow Republicans is that this is essentially 
deregulatory legislation, and as such can only serve to expedite the 
development of the information superhighway. The concept of a more 
competitive telecommunications marketplace is one that all Republicans 
can heartily endorse.
  What I want to stress to the House and to the public at large is the 
bipartisan nature of support for this measure, as evidenced by the 
decision to place the bill on the suspension calendar. While there may 
be a few issues that I would have resolved differently--chief among 
these being the domestic manufacturing and content provisions--I am 
pleased to say that the majority has been quite open to Republican 
ideas overall.
  One example of this was the acceptance in full committee of an 
amendment I offered regarding the imputation of access charges. Today, 
long-distance carriers pay access charges to local telephone companies 
or their competitors in order to reach customers. The Oxley-Barton 
amendment will require the regional Bell companies to pay a 
nondiscriminatory access charge when providing long-distance service.
  Regarding domestic content, while I feel that these provisions are 
protectionist and I would have preferred that they be removed from the 
bill altogether, I do believe that they have been improved 
significantly following input from the U.S. Trade Representative, and I 
a hopeful that they will be further improved in the Senate and in 
conference.
  Mr. Speaker, I include with my remarks a letter on this subject from 
the U.S. Trade Representative, Ambassador Kantor, as follows:

                                    U.S. Trade Representative,

                                    Washington, DC, June 13, 1994.
     Hon. John D. Dingell,
     Chairman, Committee on Energy and Commerce.

     Hon. Jack Brooks,
     Chairman, Committee on the Judiciary, House of 
         Representatives, Washington, DC.
       Dear Chairman Dingell and Chairman Brooks: I am pleased 
     that, with the capable help of your staff, we were able to 
     address the concerns that I expressed about H.R. 3626 in my 
     letter to Chairman Dingell and Chairman Markey in February. I 
     believe that the language agreed upon will resolve the 
     difficulties presented by the domestic manufacturing and 
     content provisions in the bill and enable us to carry on with 
     our trade agenda.
       As I have repeatedly stated, that agenda includes expanding 
     job opportunities for U.S. workers by bringing down barriers 
     to U.S. exports. In the telecommunications sector, United 
     States worldwide exports increased by 24% in 1993, to a 
     record total of $9.7 billion. These exports are mainly high-
     end, sophisticated equipment in which United States companies 
     and workers are world leaders. We are making this progress 
     because of the competitiveness of U.S. companies and workers, 
     as well as though bilateral and multilateral agreements and 
     by enforcing our existing agreements.
       In this context, the acknowledgment of our international 
     obligations now included in H.R. 3626 is important for our 
     continued progress in opening foreign markets.
       Please thank your staff for their hard work in resolving 
     this issue.
           Sincerely,
                                                   Michael Kantor.

  In any case, Mr. Speaker, I do not feel that the domestic content 
conflict should be a barrier to passage of this landmark legislation, 
the most important rewrite of telecommunications law in 60 years. I 
urge all Members to support the bill.
  The SPEAKER pro tempore (Mr. Montgomery). The Chair wishes to inform 
the Members that the gentleman from Texas [Mr. Brooks] has 2\1/2\ 
minutes remaining, the gentleman from New York [Mr. Fish] has 2 minutes 
remaining, the gentleman from Michigan [Mr. Dingell] has 3 minutes 
remaining, and the gentleman from California [Mr. Moorhead] has 4 
minutes remaining.
  Mr. MOORHEAD. Mr. Speaker, I yield 1 minute to the gentleman from 
Texas [Mr. Barton].
  (Mr. BARTON of Texas asked and was given permission to revise and 
extend his remarks, and to include extraneous matter.)
  Mr. BARTON of Texas. Mr. Speaker, I rise in support of the 
substitutes to both H.R. 3626 and H.R. 3636. The 1934 Communications 
Act has served us well, but it is clearly time to make some changes. 
Technology has advanced dramatically over the past 60 years. Our 
predecessors in the 73d Congress could not have imagined the present 
state of telecommunications--pocket phones, wireless fax machines, 
electronic mail. Both substitutes to H.R. 3626 and H.R. 3636 address 
the future telecommunication needs of our Nation. Passage of these 
bills will help us build the information highway of the 21st century.
  I commend the authors of this legislation for writing law which 
delicately balances the various interests and concerns of the 
telecommunications industry. Nevertheless, I must express concern with 
provisions in H.R. 3626 requiring regional Bell operating companies 
[RBOC's] to conduct all of their manufacturing in the United States and 
use at least 60 percent domestically produced components in their 
manufacturing.
  For legislation which is generally forward looking, such domestic 
manufacturing and content restrictions are uncharacteristically 
protectionist. Concerns that the restrictions violates the terms of the 
North American Free-Trade Agreement [NAFTA] and the General Agreement 
on Tariffs and Trade [GATT] have been only slightly allayed by a waiver 
in cases where it's determined to be inconsistent with any multilateral 
or bilateral agreement to which the United States is a party. But the 
bill does not specify who or what government entity is responsible for 
determining whether or not this situation exists.
  If this provision becomes law, it is likely to be challenged in 
court, a process which could drag on for years. Our international 
competitors would use the opportunity to establish similar standards, 
thus closing the door to U.S. exports of telecommunications equipment. 
The real effect of this provision is to isolate U.S. telecommunications 
manufacturers, a dull-knife approach to international competition. I 
would hope that we can resolve this issue if not in the other body, 
then certainly in conference.
  The substitute to H.R. 3626 also takes a necessary first step toward 
addressing serious concerns about RBOC maketing practices for enhanced 
services, such as telemessaging. In addition to requiring the 
nondiscriminatory offering of telecommunications services and 
facilities associated with a carrier's telemessaging operations, these 
provisions would also prohibit cross-subsidization between telephone 
exchange service and telemessaging. It is my understanding that this 
cross-subsidization restriction would serve to prohibit the exchange of 
funds as well as valuable information between affiliated telephone and 
telemessaging operations. While I believe these provisions are a good 
start, stronger safeguards are needed to ensure a level playing field 
in the telemessaging market.
  Telemessaging bureaus provide telephone answering services to the 
American public which ensure that important and even critical 
information is relayed to medical personnel and other customers 24 
hours a day. This industry has been providing the public with, and has 
helped to develop, the latest telecommunications technology for over 50 
years. There are approximately 3,000 telemessaging service bureaus 
operating nationwide serving some 1 million customers. The majority of 
these small businesses are female-owned and employ less than 20 people.

  Stronger provisions that provide specific safeguards on the RBOCs' 
ability to joint market telemessaging and other services, to use 
customer proprietary network information, and to cross-subsidize among 
services will help ensure long-term competition in the telemessaging 
market. Such provisions are essential to permit independent providers 
of enhanced services to continue to pursue a livelihood and to allow 
small businesses to play a viable role in the creation of the Nation's 
information super highway. I appreciate the willingness of Chairman 
Dingell to work with ranking Member Moorhead and me on this issue. But 
it is my hope that as this legislation moves toward enactment there 
will be an opportunity for such stronger measures to be added.
  I wish to thank Mike Regan, of the minority staff, and David Leach of 
the Chairman's staff, for their help in reaching a level of agreement 
on the telemessaging amendment to H.R. 3626. I support H.R. 3626 and 
urge my colleagues to support it as well.
  As an original cosponsor of H.R. 3636, I strongly support its 
passage. I would simply add my thoughts regarding an amendment which 
was adopted during the full Energy and Commerce Committee markup. My 
amendment, which I offered at the request of the gentleman from 
California [Mr. Hunter] addressed the problem of signal leakage 
associated with pay-per-view cable programming, specifically adult pay-
per-view programming. Earlier this year, we were made aware of cases 
where cable subscribers who had not purchased adult pay-per-view 
programming were still receiving partially scrambled video signals and 
full audio signals over the designated channel setting. Mr. Hunter and 
I wish to ensure that both the audio and video signals for obscene or 
indecent programming are effectively and entirely blocked. H.R. 3636 
provides for such safeguards by requiring the FCC to issue new rules on 
this matter. Furthermore, the bill reinforces the 1984 Cable Act 
provision regarding blocking devices which parents can use to control 
viewing of cable service by requiring cable companies to regularly 
inform subscribers of their right to request and obtain this equipment.
  Adult programming is in many cases a profitable line of business for 
cable operators. It is, however, also programming which is offensive to 
many cable subscribers. The amendment that I have drafted and which has 
been included in this legislation allows cable operators to provide 
adult programming to those cable subscribers who desire it, but 
protects those cable subscribers who do not wish to receive adult 
programming from receiving any type of audio or video signal.
  I would like to thank Chairman Markey and his staff and ranking 
Member Fields and his staff for their assistance on the signal leakage 
language. In particular, I would like to thank Cathy Reid, of the 
minority staff, for her invaluable help in reaching a final solution to 
this issue.
  In conclusion, though I have expressed concerns regarding domestic 
content and telemessaging services in H.R. 3626, I urge its passage. I 
am pleased with the changes that have been made in H.R. 3636 with 
respect to the issue of signal leakage, particularly of adult 
programming or pornography on cable television. I urge passage of H.R. 
3636.
  Mr. DINGELL. Mr. Speaker, I yield 2 minutes to my distinguished 
friend, the gentleman from Louisiana [Mr. Tauzin], who has been 
extremely helpful in getting this legislation to the point where it is 
today.
  (Mr. TAUZIN asked and was given permission to revise and extend his 
remarks.)
  Mr. TAUZIN. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, let me remind our friends that the chairman of our 
subcommittee, the gentleman from Massachusetts [Mr. Markey], quoted Mr. 
Morse, who at the beginning of the telecommunications age in America, 
asked: ``What hath God wrought?''
  For the last 10 years the question has been: What have the Federal 
courts and Judge Green wrote? Because telecommunications policy has not 
been in the hands of the people of the United States through this 
legislative body; it has been in the hands of the Federal courts.
  This enormous effort today, remarkably coming up under suspension, by 
broad bipartisan agreement, with the remarkable work of many of our 
committees, particularly the Committee on the Judiciary and the 
Committee on Energy and Commerce, for which the two chairmen deserve 
enormous credit, is remarkable by the fact that we have come together 
and for the first time in so many years decided to return 
telecommunications policy back to the House where the people govern, 
and we are doing it in a way that opens up competition, not just across 
lines drawn on a map artificially by judges years ago. We are opening 
it up also in the local loop so that cross competition will benefit no 
one else in America no more importantly than the consumer.
  The consumer is the big winner today. The process by which we govern 
here is a big winner today. The American people are the big winner 
today when telecommunications policy is returned to this body and when 
for the first time we open up the great possibilities for the 
information super highway.
  Mr. FISH. Mr. Speaker, I yield 2 minutes to the gentleman from 
Virginia [Mr. Bliley].
  (Mr. BLILEY asked and was given permission to revise and extend his 
remarks).
  Mr. BLILEY. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Today we are considering important legislation. For too long the 
entire debate surrounding the information highway has gone on without 
congressional action. With Congress on the sidelines, we have watched 
the courts and the regulatory bodies make national policy in piecemeal 
fashion. Due in great part to the diligence of Chairmen Dingell and 
Brooks and the efforts of Messrs Fields, Markey, Moorhead, and Fish, 
Congress will no longer be on the sidelines. And that is the way it 
should be--this legislation is not just some esoteric exercise, the 
bill before us will help create jobs, determine the competitiveness of 
our economy, and to some extent is vital to our national security.
  During full committee consideration I offered an amendment that 
addressed a serious deficiency in the bill that would have allowed 
regional Bell companies to use their monopoly status in the local loop 
to disadvantage their competitors. Unfortunately, this amendment was 
defeated but I am pleased that the negotiators noted my concerns. The 
competition-based test of the MFJ for Bell company entry into all 
aspects of long distance and manufacturing incorporated into this bill 
is a giant step in the right direction. This test requires that an RBOC 
show no substantial possibility of using monopoly power to impede 
competition prior to entry. The certainty of this requirement has led 
to the emergence of over 500 long distance providers and thousands of 
small manufacturers in the United States, companies which are highly 
competitive and which, through their aggressive attempts to sell 
products and services, have generated enormous benefits for the 
American consumer.
  While these changes dramatically improve the bill I do not think that 
this bill is perfect. I think work needs to be done to close what may 
be a loophole that gives instate long distance calling to the RBOC's 
while they still have their monopoly. Also, in my view, the incidental 
services exception is overly broad and could permit an RBOC to 
construct nationwide interexchange landline and radio-based 
telecommunications networks without obtaining prior authorization. It 
is my hope that I will have the cooperation of Chairman Dingell to 
continue to address these issues as the legislation moves through the 
process.

                              {time}  1320

  Mr. BROOKS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Texas [Mr. Bryant].
  (Mr. BRYANT asked and was given permission to revise and extend his 
remarks.)
  Mr. BRYANT. Mr. Speaker, I rise in support of and to discuss the 
particularly important Department of Justice role in this compromise 
bill we are considering--H.R. 3626.
  This legislation provides that a Bell operating company may offer 
intrastate interexchange services and interexchange services through 
resale if, among other restrictions, the Attorney General either 
``fails to commence a civil action * * * to enjoin'' the Bell company 
from offering such services, or if, having brought such an action, the 
Attorney General (I) ``fails to obtain an injunction from the district 
court'' or (II) obtains an injunction but the injunction is ``vacated 
on appeal''.
  The obvious point of these parallel provisions is to ensure that if 
the Attorney General determines that a Bell company proposal to offer 
intrastate or resale interexchange services violates the strict 
antitrust standard prescribed by the bill, the Bell company cannot 
offer such services until and unless the Attorney General's injunction 
action is dismissed after a full evaluation of all pertinent evidence 
at trial or after the injunction is vacated on appeal.
  In other words, the bill requires that no Bell company can override 
the Attorney General's determination of illegality until the Attorney 
General has had her day in court, on a motion for a permanent 
injunction--after a full and thorough hearing in accordance with 
standard antitrust procedure, not a rush to judgment.
  Because courts may--and frequently do--enter permanent injunctions in 
cases where they have earlier denied motions for a preliminary 
injunction, it makes no sense to interpret the word ``injunction'' in 
this bill as referring to a preliminary injunction.
  Moreover, it is difficult to conceive of circumstances under this 
particular legislation in which the Attorney General will find it 
useful or necessary to seek preliminary or temporary relief pending the 
outcome of a trial. A Bell company's attempt to offer intrastate or 
resale interexchange services will be lawful only if (among other 
things) the Attorney General has failed to file for an injunction.
  Once the Attorney General has filed a lawsuit seeking such an 
injunction, this essential precondition will be absent, and so offering 
the prohibited service will be unlawful, until and unless the suit 
fails--after trial or on appeal. The Attorney General will not need to 
seek temporary pretrial relief from the court, because the statute 
itself makes such relief unnecessary.
  Unlike a stay, the restriction imposed by this legislation is an 
absolute bar that would render any contrary conduct by the Bell company 
unlawful--until all of the mandatory conditions spelled out for lawful 
entry into the specified service areas are met. There is no authority 
under the bill for a district court or court of appeals to relax, 
pending a final decision on the merits, the prohibition against the 
Bell company's offering of the service or services determined to be 
unlawfully anticompetitive by the Attorney General.
  Finally, there is nothing in these provisions that could be a basis 
for, and we have no intention of, divesting courts hearing cases 
brought under this measure of their traditional equitable powers. For 
example, if after trial, the Attorney General's request for a permanent 
injunction is denied, district courts, appeals courts, and even the 
Supreme Court, retain full authority to stay the order denying the 
injunction if they conclude that such a stay is warranted under the 
circumstances.
  Mr. Speaker, I rise to discuss the particularly important Department 
of Justice role in this extremely well-balanced bill we are 
considering--H.R. 3626. I also ask unanimous consent to revise and 
extend my remarks.
  Subsections 102(b)(2) and (3) of this legislation provide that a Bell 
operating company may offer intrastate interexchange services and 
interexchange services through resale if, among other restrictions, the 
Attorney General either [Subsection (i) of Sec. 102(b)(2)(C) and also 
of Sec. 102(3)(D)] ``fails to commence a civil action * * * to enjoin'' 
the Bell company from offering such services, or [Subsection (ii) of 
the above two provisions] if, having brought such an action, the 
Attorney General (I) ``fails to obtain an injunction from the district 
court'' or (II) obtains an injunction but the injunction is ``vacated 
on appeal''.
  The obvious point of these parallel provisions is to ensure that if 
the Attorney General determines that a Bell company proposal to offer 
intrastate or resale interexchange services violates the strict 
antitrust standard prescribed by the bill [Section 101(b)(3)(D)], the 
Bell Co. cannot offer such services until and unless the Attorney 
General's injunction action is dismissed after a full evaluation of all 
pertinent evidence at trial or after the injunction is vacated on 
appeal.
  In other words, the bill requires that no Bell company can override 
the Attorney General's determination of illegality until the Attorney 
General has has her--or his--day in court, on a motion for a permanent 
injunction--after a full and thorough hearing in accordance with 
standard antitrust procedure, not a rush to judgment.
  It is perfectly clear in the context of the overall provision that 
the injunction referred to in subsection (ii)(I) is precisely the same 
permanent injunction which is the objective of the suit the Attorney 
General is authorized to undertake in subsection (i)--not a mere 
temporary or preliminary order or injunction that she or he, or another 
party or court--might find appropriate as an interim measure.
  Because courts may--and frequently do--enter permanent injunctions in 
cases where they have earlier denied motions for a preliminary 
injunction, it makes no sense to interpret the word ``injunction'' in 
subsection (ii)(I) as referring to a preliminary injunction.
  Moreover, it is difficult to conceive of circumstances under this 
particular legislation in which the Attorney General will find it 
useful or necessary to seek preliminary or temporary relief pending the 
outcome of a trial. Under Sections 102(b)(2) and (3), a Bell companies' 
attempt to offer intrastate or resale interexchange services will be 
lawful only if (among other things) the Attorney General has failed to 
file for an injunction.
  Once the Attorney General has filed a lawsuit seeking such an 
injunction, this essential precondition will be absent, and so offering 
the prohibited service will be unlawful, until and unless the suite 
fails after trial or on appeal. The Attorney General will not need to 
seek temporary pretrial relief from the court, because the statute 
itself makes such relief unnecessary.
  Unlike a stay, the restriction imposed by sections 102(b) and (3) is 
an absolute bar that would render any contrary conduct by the Bell 
company unlawful--until all of the mandatory conditions spelled out by 
sections 101 and 102 for lawful entry into the specified service areas 
are met. There is no authority under the bill for a district court or 
court of appeals to relax, pending a final decision on the merits, the 
prohibition against the Bell companies' offering of the service or 
services determined to be unlawfully anticompetitive by the Attorney 
General.
  Finally, I note one additional point. There is nothing in these 
provisions that could be a basis for, and we have no intention of, 
divesting courts hearing cases brought under section 102 of their 
traditional equitable powers. For example, if after trial the Attorney 
General's request for a permanent injunction is denied, district 
courts, the court of appeals, and for that matter the Supreme Court, 
retain full authority to stay the order denying the injunction if they 
conclude that such a stay is warranted under the circumstances.
  I would call to your attention the attached letter to Energy and 
Commerce Chairman Dingell from the National Association of Attorneys 
General urging us to pass this legislation incorporating ``basic 
antitrust principles to ensure existing competition is preserved and 
that no player is permitted to use market power to tilt the playing 
field to the detriment of competition and consumers.''

         National Association of Attorneys General,
                                     Washington, DC, June 6, 1994.
     Hon. John Dingell,
     Chairman, Energy and Commerce Committee,
     U.S. House of Representatives, Washington, DC.
     RE: Telecommunications Legislation.
       Dear Chairman Dingell: The undersigned Attorneys General 
     are writing to urge you to adopt a telecommunications reform 
     package that incorporates basic antitrust principles to 
     ensure that existing competition is preserved and that no 
     player is permitted to use market power to tilt the playing 
     field to the detriment of competition and consumers. By 
     protecting competition, the anitrust laws promote efficiency, 
     innovation, low prices, better management, and greater 
     consumer choice. Additionally, we urge you to recognize the 
     strong role of the States in ensuring that their citizens 
     have universal and affordable access to the 
     telecommunications network, which is so important in this 
     information society. When antitrust principles and the state 
     role are jointly recognized in legislation, all of our 
     citizens can look forward to an advanced, efficient and 
     innovative information network.
       Telecommunications reform is a vital national and state 
     interest. Last year, the National Association of Attorneys 
     General Antitrust Committee established a Telecommunications 
     Working Group to analyze and develop policy positions, where 
     appropriate, on significant issues involving competition in 
     the telecommunications industry.
       The rapid evolution of telecommunications technology has 
     given rise to complex issues relating to competition policy 
     requiring sophisticated analysis. In general, however a 
     competitive telecommunications market at all levels--e.g., 
     long-distance service, local exchange service, equipment 
     manufacturing--would best serve the interests of our 
     citizens. It is important to clarify that this consumer 
     interest is promoted only by ``effective'' competition, i.e., 
     that there be a sufficient amount of competition to ensure 
     that prices are driven to competitive levels. Although we 
     hope that this type of competition will emerge eventually in 
     every part of the information superhighway, the reality today 
     is that local exchange markets are not yet competitive nor 
     are they likely to be in the near term.
       The emerging competition in telecommunications markets must 
     be evaluated against the backdrop of the Modification of 
     Final Judgment [``MFJ''], the court-approved agreement that 
     ended the United States Department of Justice's antitrust 
     case against American Telephone & Telegraph Company 
     [``AT&T'']. The MFJ, which went into effect in 1982, allowed 
     AT&T to compete in new markets while mandating that it divest 
     its local telephone service business. The MFJ created the 
     seven regional Bell operating companies [``RBOCs''] and 
     placed certain limits on their activities in the 
     telecommunications arena. Among other things, the RBOCs are 
     prohibited from providing long-distance and equipment 
     manufacturing services. At the same time, however, the MFJ 
     provides a process for RBOCs to obtain waivers to the lines-
     of-business restrictions contained in the decree. Under the 
     MFJ, waivers can be granted by the decree-supervising federal 
     district court when such factors as new technology and 
     emerging market forces demonstrate ``no substantial 
     possibility'' of anticompetitive conduct by the applying RBOC 
     in the market it seeks to enter.
       While the information services ``lines-of-business' 
     restriction has been lifted under this waiver process during 
     the last seven years, considerable debate and attention 
     continues to focus on whether the other lines-of-business 
     restrictions should be lifted. Some argue that the remaining 
     lines-of-business restrictions should not be removed because 
     they fear that the RCOCs will use their regulated, monopoly 
     power in the local telephone service markets to obtain an 
     unfair advantage in the more competitive long-distance 
     market. One of the major concerns in this regard is that the 
     RBOC local monopolies may ``cross-subsidize,'' that is, 
     extract unwarranted profits by overpricing long-distance 
     services. Similarly, the RBOCs could also discriminate 
     against their utility customers who are also their 
     competitors by setting unfair prices and terms for, and 
     designing technical incompatibility into, their utility 
     services. Others argue, on the other hand, the RBOC entry 
     into the long-distance market would facilitate more effective 
     competition in the long-distance market, because that market 
     is currently composed predominantly of only three facilities-
     based carriers.
       Because of these conflicting competitive concerns, we 
     believe that the existing competitive safeguards contained in 
     the MFJ should be incorporated in H.R. 3626. Under the MFJ, 
     the RBOCs are permitted to enter presently prohibited markets 
     only after showing that their monopoly control of local 
     exchange services will not permit them an unfair competitive 
     advantage in the market into which they seek to enter. As 
     William F. Baxter, President Reagan's Assistant Attorney 
     General and Stanford Law Professor, recently stated:
       ``The monopoly on local service held today by the Regional 
     Bell Operating Companies, or RBOCs, is every bit as tight as 
     the monopoly held by AT&T before the Bell breakup. 
     Legislating away the antitrust protections of the Modified 
     Final Judgment (which I negotiated on behalf of the Reagan 
     administration) while the RBOCs hold this monopoly would be a 
     setback to competition in long distance and, indeed, in a 
     large number of other ''information services'' dependent upon 
     access to the local switch. Restoration of the two-level 
     monopoly would jeopardize the introduction of advance 
     information services just when they are needed most.
       ``As I see it, Congress has but one course that will avoid 
     such abuses [e.g., cross-subsidization, discrimination] and 
     expedite the benefits of advanced information technology. It 
     should pass legislation that incorporates the competitive 
     safeguards of the Modified Final Judgment. . . . We should 
     not fall into the trap of thinking that just because local 
     competition is imaginable, it's already here. It's not.''
       In addition, the states' role in developing and 
     implementing telecommunications policy should be continued. 
     Among the strongest of state telecommunications polices is 
     that of encouraging universal service. The States must retain 
     the ability to ensure that all of its citizens, urban and 
     rural, rich and poor, continue to have access to reasonably 
     priced telephone services.
       In considering H.R. 3626 and H.R. 3636 we urge you to 
     address a number of key issues to ensure that consumers 
     benefit in the long term from the creation of this 
     information superhighway.
       Because competition in the local exchange will not be 
     introduced in every portion of the country simultaneously, 
     the legislation should empower both state and federal 
     regulators to deregulate their telephone utilities where 
     justified by the amount of competition in a particular local 
     market. We note that the current Communications Act of 1934 
     provides for shared regulatory authority. Because of the 
     central role of the states in local service regulation, 
     therefore, any preemption of state authority should be 
     approached very cautiously.
       Any legislation must preserve and promote universal 
     telephone service at fair, reasonable and affordable rates 
     and also provide a clear, broad definition of universal 
     service.
       Consistent with the MFJ, any legislation must not permit 
     RBOC entry into other markets (e.g., long distance) unless 
     the RBOCs can demonstrate that the RBOCs dominant position in 
     relevant local markets would not permit it to monopolize 
     those markets or to leverage its market power to the 
     detriment of competition in the markets to be opened. State 
     regulators should be empowered to investigate allegations of 
     RBOC cross-subsidy by RBOC competitors.
       Cross ownership of telephone companies and cable companies 
     operating within the same service area should be generally 
     prohibited, and exceptions, if allowed, should be drafted 
     narrowly to prevent the telephone companies from extending 
     their monopoly.
       No new antitrust exemptions should be created in the 
     telecommunications industry.
       There should be adequate consumer representation on the 
     proposed Federal-State Joint Board or any similar board. In 
     addition, a consumer advocate office should be created in the 
     Federal Communications Commission.
       Number portability should be mandated as soon as 
     technically feasible.
       In conclusion, while supporting your efforts to make a 
     competitive information superhighway a reality, we urge you 
     to abide by the basic competitive concepts which underlie our 
     antitrust laws and which have been instrumental in this 
     country's economic success. These competitive principles, as 
     embodied in the breakup of AT&T ten years ago, have been 
     instrumental in fostering innovation and efficiency, and 
     reducing prices in the United States telecommunications 
     field. Further, the state's role in telecommunications 
     regulation and policy should be maintained in order to ensure 
     that all citizens retain effective and affordable access to 
     telecommunications products and services. Any 
     telecommunications legislation should incorporate these 
     antitrust and state regulation principles.
       Thank you for considering our views.
           Very truly yours,
         Jimmy Evans, Attorney General of Alabama;
         Grant Woods, Attorney General of Arizona;
         Winston Bryant, Attorney General of Arkansas;
         Charles M. Oberly, III, Attorney General of Delaware:
         Vanessa Ruiz, D.C. Corporation Counsel;
         Robert A. Butterworth, Attorney General of Florida;
         Robert A. Marks, Attorney General of Hawaii;
         Ronald W. Burris, Attorney General of Illinois;

         Robert T. Stephan, Attorney General of Kansas;
         Chris Gorman, Attorney General of Kentucky;
         Richard P. Ieyoub, Attorney General of Louisiana;
         Michael E. Carpenter, Attorney General of Maine;
         J. Joseph Curran, Jr., Attorney General of Maryland;
         Scott Harshbarger, Attorney General of Massachusetts;
         Frank J. Kelley, Attorney General of Michigan;
         Hubert H. Humphrey, III, Attorney General of Minnesota;
         Jeremiah W. Nixon, Attorney General of Missouri;
         Joseph P. Mazurek, Attorney General of Montana;
         Tom Udall, Attorney General of New Mexico;
         Frankie Sue Del Papa, Attorney General of Nevada;
         G. Oliver Koppell, Attorney General of New York;
         Michael F. Easley, Attorney General of North Carolina;
         Lee Fisher, Attorney General of Ohio;
         Susan Loving, Attorney General of Oklahoma;
         Theodore R. Kulongoski, Attorney General of Oregon;
         Ernest D. Preate, Jr., Attorney General of Pennsylvania;
         Jeffrey B. Pine, Attorney General of Rhode Island;
         Dan Morales, Attorney General of Texas;
         Jan Graham, Attorney General of Utah;
         Rosalie Simmonds Ballentine, Attorney General of the 
           Virgin Islands;
         James S. Gilmore III, Attorney General of Virginia;
         James E. Doyle, Attorney General of Wisconsin; and,
         Christine O. Gregoire, Attorney General of Washington.

  Also, Mr. Chairman, I would like to comment on the separate 
subsidiary provisions for electronic publishing.
  The separate subsidiary requirement for electronic publishing is 
extremely significant. It will go a long way to ensuring that the 
regional Bell operating companies do not exploit their monopolies to 
unfairly disadvantage competitors in the electronic publishing field. 
That requirement sunsets in June of 2000. The committee believed that 
that date--June 2000--would be a reasonable estimate of when 
competition in the local loop would be sufficient so that a separate 
subsidiary requirement wouldn't be necessary. If for any reason local 
competition does not sufficiently exist at that stage, and a threat to 
competition from the monopoly power of the local exchange continues to 
exist, the FCC is free to--and should--promulgate regulations to 
continue the separate subsidiary requirement as appropriate.
  Mr. MOORHEAD. Mr. Speaker, I yield 2 minutes to the gentleman from 
Illinois [Mr. Hastert].
  (Mr. HASTERT asked and was given permission to revise and extend his 
remarks.)
  Mr. HASTERT. Mr. Speaker, this legislation represents a truly 
historic moment for the 103d Congress. H.R. 3626, the Antitrust and 
Communications Reform Act of 1994, is a sweeping rewrite of 60 years of 
telecommunications policy in the United States that will responsibly 
lead the telecommunications industry into the 21st century.
  Of particular significance, this legislation has been crafted in such 
a way--with the acquiescence and support of all major industries--both 
friends and foes--to be placed on the suspension calendar. Indeed, who 
would have believed, even as recently as 3 months ago when everyone 
seemed to be poles apart, that AT&T, MCI, Sprint, and the seven Bell 
companies would stand united in support of the provisions regarding 
Bell entry into long distance that are provided for today in H.R. 3626?
  And, who would have believed that the Bell companies and the 
newspaper publishers, as well as the burglar alarm industry, would come 
together as they have under this bill to enact good public policy?
  Indeed, this is truly historic. But, beyond that, today we have 
achieved in the House the vision that I have strived for throughout my 
tenure in elected office--first in the Illinois General Assembly and 
now as a member of the Telecommunications Subcommittee--competition 
among all entrants in the marketplace--fair and open competition 
without the burdensome regulatory restraints now in existence. When 
there is real competition, the people win.
  Mr. Speaker, H.R. 3626 represents responsible and progressive 
telecommunications policy. I rise in strong support of H.R. 3626 and 
urge my colleagues to pass it overwhelmingly.
  Mr. MOORHEAD. Mr. Speaker, I yield 1 minute to the gentleman from 
South Carolina [Mr. Ravenel].
  Mr. RAVENEL. Mr. Speaker, American consumers today want more 
competition and more choice in cable TV and video services, and they 
want that choice in competition now. Legislation was passed in 1992, 
and the Federal Communications Commission, the FCC, has tried to 
regulate the cable business since then. But many think the rates are 
still too high and the choices too skimpy
  Under these bills, cable companies can come in and rent video 
transmission facilities from the phone companies, but phone companies 
do not have reciprocal rights, namely to rent channels from the cable 
companies. It is unclear so far whether competing video services can be 
started up right now, or whether there should be some lengthy delay 
while all the various safeguards are put into place. It seems to me 
like these two bills address these problems, and I am certainly happy 
today to take a minute to endorse both the bill we are on and the 
subsequent one that will be up in just a minute.
  Mr. DINGELL. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Kansas [Mr. Slattery].
  (Mr. SLATTERY asked and was given permission to revise and extend his 
remarks.)
  Mr. SLATTERY. Mr. Speaker, I rise in strong support of this 
historically important legislation.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Washington [Mr. Kreidler].
  (Mr. KREIDLER asked and was given permission to revise and extend his 
remarks.)
  Mr. KREIDLER. Mr. Speaker, we have before us the most comprehensive 
communications legislation considered by this body since the 
Communications Act of 1934. Obviously, much has changed in the world of 
communications since then.
  Thanks to Chairman Dingell, Chairman Markey, Chairman Brooks, and 
ranking minority member Mr. Fields, the Congress is now finally able to 
catch up with those changes.
  The framework we are developing today will bring enormous benefits 
tomorrow and in the future, including: new high-skilled jobs for U.S. 
workers, exciting new services for the American public; globally 
competitive telecommunications technologies; and much needed 
competition in the telecommunications marketplace.
  I am particularly pleased by the compromise achieved in H.R. 3626 
regarding entry by the RBOC's into the long distance market. The 
revised bill does a better job of putting appropriate lines of 
authority and standards in place to enhance regulatory oversight and 
protect consumers.
  I would also like to thank Chairman Markey for accepting my amendment 
in committee to make sure that higher education institutions will have 
a voice when the FCC sets rules for public access to the information 
highway.
  In closing, Mr. Speaker, let me just say that America's future as a 
leader in telecommunications technologies and services depends on these 
bills. I urge my colleagues to support H.R. 3626 and H.R. 3636.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to my distinguished 
friend, the gentleman from Washington [Mr. Swift].
  (Mr. SWIFT asked and was given permission to revise and extend his 
remarks.)
  Mr. SWIFT. Mr. Speaker, there was a silly column in the Washington 
Post yesterday which criticized this bill for being rushed through the 
Congress. Mr. Speaker, my hair has turned gray while we have been 
rushing this bill through the Congress.
  The 1934 Communications Act was really an extraordinary piece of 
legislation that has served this country well for a very long time. But 
technology and new realities of competition have stretched it farther 
than it can go. And this legislation today I think will be seen in 
years ahead as historic as the 1934 act, as it adds to that act and 
gives it the flexibility and the elasticity it needs to serve this 
country in the new realities.
  I cannot think of two committees who could have done a better job, 
because tied up in this legislation are legitimate concerns about 
antitrust, and about anticompetitive behavior, and about predatory 
behavior, and so forth. The Committee on the Judiciary has stood tall 
on those. The Committee on Energy and Commerce has looked at the 
telecommunications policy that is so important to the economic future 
of our country, and together they have turned out a remarkable piece of 
legislation.

                              {time}  1330

  Mr. BROOKS. Mr. Speaker, to conclude the debate, I yield the balance 
of my time to the gentleman from Virginia [Mr. Boucher], a leader in 
formulating this resolution.
  (Mr. BOUCHER asked and was given permission to revise and extend his 
remarks.)
  Mr. BOUCHER. Mr. Speaker, the Antitrust Reform Act will bring much-
needed competition to the markets for long distance and for 
telecommunications equipment. As we remove the barriers to competition 
of the local telephone exchange, it is only fair that we also free the 
seven Bell operating companies to compete in the market for long 
distance and the manufacture of equipment. But more than fairness to 
these companies underlies this reform. The public deserves the benefits 
that new competition will bring to the long distance and equipment 
markets.
  As we forecast lower prices and new services arising from new 
competition, we also have confidence that anticompetitive conduct will 
not occur, as Bell companies offer their own long-distance service 
while continuing to connect other long-distance providers to their 
local exchange customers.
  That confidence arises from the carefully constructed provisions of 
the legislation that require that before Bell companies offer long 
distance, they satisfy the U.S. Department of Justice that there is no 
substantial possibility of anticompetitive harm from their entry into 
the market.
  For service within a given State, they must gain the approval of the 
State's public service commission before offering long distance 
statewide. And the U.S. Department of Justice is accorded an 
opportunity to review the State decision to ensure that other long-
distance providers receive fair access to the Bell companies' 
customers.
  These protections, Mr. Speaker, strike exactly the right balance. 
They offer to the public the benefits of increased competition in both 
the long-distance market and the manufacture of equipment, a lucrative 
market in long distance which today is dominated by three large 
carriers.
  At the same time they contain stringent safeguards to ensure that 
Bell companies not use their local networks in such a manner as to 
restrict access to their subscribers for other long-distance companies.
  Some would argue that the U.S. Department of Justice is not up to the 
job of protecting consumers in this circumstance. They would prevent 
the public from getting the benefit of added competition in long 
distance until the local exchange is fully competitive, a circumstance 
which will not arise in many parts of the Nation until well into the 
next century. The Justice Department is up to the job. We can have the 
early benefits of added long-distance competition while assuring that 
anticompetitive harm will not occur.
  Mr. Speaker, I commend the gentleman from Texas [Mr. Brooks] and the 
gentleman from Michigan [Mr. Dingell] for their thoughtful work and for 
the balance their measure contains. I am pleased to support their 
reform and urge its passage.
  Mr. BROOKS. Mr. Speaker, I yield such time as she may consume to the 
gentlewoman from Arkansas [Ms. Lambert].
  (Ms. LAMBERT asked and was given permission to revise and extend her 
remarks.)
  Ms. LAMBERT. Mr. Speaker, I rise in support of H.R. 3626. Mr. 
Speaker, I am extremely pleased to join the supporters of this 
legislation and its companion bill (H.R. 3636) to advance the 
information superhighway. I congratulate Mr. Dingell, Mr. Brooks, Mr. 
Markey, and Mr. Fields for their vision in realizing the vast 
technological opportunities that lie ahead.
  These bills are especially important for rural areas like the First 
District of Arkansas. Rural consumers will benefit from highly 
progressive technology while being protected from unreasonably high 
rates. Together, we have ensured that folks in Possum Grape, AR, will 
have access to the same telecommunications advances that are made in 
New York City.
  I would like to thank Chairman Markey for working with me to draft 
amendments to ensure that small- and medium-sized phone companies will 
receive equal footing when competing against the big guys. These 
smaller companies could have been vulnerable to ``cherry picking'' by 
large telephone carriers that have the resources and revenues which 
dwarf those of independent phone companies. ``Cherry picking'' would 
have threatened the viability of independent phone companies by taking 
away their largest customers like universities and major corporations, 
leaving high cost small business and residential customers that rely 
upon subsidies provided by larger customers to ensure universal access.

  In addition, I would like to thank Mr. Markey for working with me to 
ensure that phone rates charged in rural areas match rates charged in 
urban areas. We have helped maintain our current system under which 
long-distance providers average the costs associated with providing 
service to both rural and urban areas and charge all residents that 
same rate. For example, the rate charged from Washington, DC, to rural 
Arkansas is about the same as the rate from Washington, DC, to 
Minneapolis or West Palm Beach. Together, we have made sure that as new 
competitors enter the long-distance markets they will not be able to 
de-average their rates. We have protected customers who live in less 
populated areas.
  One additional component of these bills that will help rural areas is 
a National Newspaper Association-sponsored ARC provision. This section 
of H.R. 3626 will assure that community newspapers, including the 36 
weeklies and 11 dailies in the First Congressional District, have a 
place on the information highway. It assures them fair access, fair 
rates, and fair competition.
  Mr. Speaker, in hometowns like mine, people still look forward to 
sending their dogs out to pick up the weekly paper with pictures of 
Little League teams and church socials. Whatever form that news may 
take in the future--whether it is digital bits or bytes--it is 
essential that we make sure our community newspapers will have a place 
in the 21st century.
  With sincere respect for the bipartisan effort and years of 
negotiation that have gone into these two bills, I am proud to stand in 
support of them today.
  Mr. KING. Mr. Speaker, I rise today in support of H.R. 3626, 
legislation that would help pave the road to the information 
superhighway for all Americans, including people with disabilities.
  Mr. Speaker, people with disabilities have a particularly strong 
interest in seeing the rapid and healthy development of an information 
superhighway, since many of the benefits will directly improve their 
lives.
  H.R. 3626 will allow all players to fully compete in the 
telecommunications marketplace, which will make services available to 
all Americans to enrich their lives. This legislation contains 
provisions of particular importance to people with disabilities because 
it will enhance their participation in professional, social and 
entertainment activities, and increase their job opportunities.
  Mr. Speaker, people with disabilities have been underserved in the 
areas of telecommunications equipment and services. This legislation 
will ensure that they are no longer left out in the cold. The bill 
requires the Federal Communications Commission to prescribe regulations 
that will ensure telecommunications equipment manufactured by a Bell 
company and network services provided by Bell companies are accessible 
and usable by people with disabilities. This will be a vast improvement 
for this segment of the population.
  H.R. 3626 supports people with disabilities so I urge my colleagues 
to support this bill. Vote ``yes'' on H.R. 3626.
  Mr. RICHARDSON. Mr. Speaker, today, I rise to support H.R. 3626, even 
though I have lingering concerns about the consequences that this 
legislation will have on competition in the telecommunications industry 
and on the rates that consumers pay for phone service. H.R. 3626 
signals a fundamental shift in the way that the bulk of the 
telecommunications industry is regulated. H.R. 3626 frees the regional 
Bell companies to offer services prohibited under the terms of the 1982 
modified final judgment consent decree. I am hopeful that a flexible 
and competitive telecommunications policy will result from our work on 
H.R. 3626.
  I was pleased the committee incorporated language to hold electronic 
publishers, that enter into a joint venture with a Bell company, to the 
same EEO standards as other telecommunications entities. This is a case 
of industry parity and it is essential that we harmonize our policies, 
so that there is no mistaking congressional intent in ensuring equal 
opportunity for all Americans.
  On domestic content, I am pleased that the committee has moved to 
resolve an issue which concerned me, the administration, and our 
trading partners. I believe that we are on the right track on domestic 
content and I look forward to seeing the final version of this when it 
emerges from conference.
  I am pleased that the committee has begun to seriously address the 
problems regarding consumers and competition. I am concerned that 
consumers will end up paying the price of deregulation. I believe that 
the bill before us today goes a long way toward protecting consumers 
and ensuring a healthy competitive atmosphere. However, I remain 
concerned over the power that the regional Bell companies now wield in 
local markets and the effect deregulation will have on other market 
entrants and ultimately consumers. I look forward to working with the 
committee to thoroughly resolve these critical issues.
  Mr. Speaker, this bill reverses years of Government regulation of an 
industry that should now be freed to compete. We may wrangle over the 
details but it is critical that we pass this legislation resoundingly. 
I urge my colleagues to vote in favor of H.R. 3626.
  Mr. DeLAY. Mr. Speaker, I rise today to address the social and 
economic benefits of H.R. 3626, the Antitrust and Communications Reform 
Act. This legislation will lift restrictions on telecommunications 
services that can be offered across artificial boundaries and expedite 
investment in our telecommunications infrastructure while encouraging 
lower rates. The result is that Americans will pay less for more.
  Increased competition through deregulation accomplishes several 
important things. it spurs the creation of new technology, making the 
United States more competitive internationally. It also allows the 
marketplace to work freely, resulting in lower prices. Therefore, 
perhaps the best news about H.R. 3626 is that not only will it result 
in more choices for consumers, but it will do so at affordable prices. 
Competition will keep phone rates low and quality high, which will 
provide consumers a greater opportunity to realize the benefits of the 
information age.
  H.R. 3626's promotion of greater competition and technological 
advances will aid in the development of the information superhighway. 
Examples of such advances include an enhancement of medical services 
and procedures through telecommunications applications, as well as 
greater access to education and training materials, regardless of the 
location of the user. Telecommuting could reduce air pollution and 
traffic congestion.
  With H.R. 3626, these benefits will become more accessible to anyone 
with a telephone, bringing them fully into the information age 
marketplace. Without this bill, only a privileged few will enjoy the 
benefits of the rapidly changing telecommunications arena.
  I urge my colleagues to pass H.R. 3626 so that all consumers, not a 
select few, will be able to afford the new services available through 
enhanced technology.
  Mr. BLILEY. Mr. Speaker, I understand that there were suggestions 
earlier that the long-distance carriers supported entry by the Bell 
companies into long-distance under the conditions specified in H.R. 
3626. That is not my understanding. They did support moving the bill 
through the House. The long-distance companies have been quite clear 
and consistent, however, in saying that they support a ``no substantial 
possibility'' of anticompetitive effects test across the board in long-
distance, one that specifically incorporates an effective competition 
test in the local telephone market.
  There remain loopholes in the bill that weaken the entry test in the 
area of intrastate and resale, and potentially overboard authority to 
offer incidental long-distance services. As I said earlier, it is my 
hope that we can have Chairman Dingell's cooperation in addressing 
these problems as the bill moves through the process. Attached for the 
Record is a study by former Secretary of Labor Ray Marshall that 
outlines the potential problems.

 Building the Information Superhighway: Getting the Competition Right--
                                Summary

                           (By Ray Marshall)


                              Introduction

       The National Information Infrastructure (NII), or the 
     ``information highway,'' is at the heart of America's future; 
     it will provide the path to improved education, health care, 
     productivity, economic growth, and participation in community 
     and public affairs. Indeed, it is hard to imagine an 
     undertaking with greater significance for the quality of our 
     lives. The Clinton administration stresses the need for 
     public-private cooperation in constructing the NII. 
     Legislative proposals before Congress are driven by the goal 
     of establishing competition in communications markets. 
     Private investors governed by competitive market forces will 
     be primarily responsible for completing the construction of 
     this infrastructure, but the government would provide the 
     framework for universal access, remove antiquated regulatory 
     barriers to competitive markets, establish policies to 
     achieve and maintain competitive market conditions, and 
     provide incentives for private investment and innovation.
       While there is good reason to rely heavily on competitive 
     markets, the proposals to allow the Regional Bell Operating 
     Companies (RBOCs) to enter competitive industries before 
     local telecommunications markets are fully competitive would 
     harm competition, reduce the growth of output, employment, 
     and technological innovation; potentially cripple the NII; 
     and raise prices to consumers. The sequence of authorizing 
     competitive entry into local market, subjecting that entry to 
     a market test to determine whether effective competition can 
     develop, and then allowing RBOCs into long distance when 
     effective local competition has in fact developed, is the key 
     to consumer benefits, economic growth, and technological 
     innovation.
       This paper explores these propositions in greater depth, 
     discusses the conditions needed to ensure the proper 
     evolution to competitive markets, and suggests some of the 
     tests needed to determine whether or not competition has been 
     achieved.


                       The Importance of the NII

       There is little doubt about the importance of the NII. 
     Information technology has become an infrastructure at least 
     as important to national and personal welfare in the 
     ``Information Age'' as highways and railroads were in the 
     past. It would, moreover, be hard to think of an activity 
     with greater economic importance. As Peter Drucker observed 
     recently, ``few things stimulate economic growth as the rapid 
     development of information, whether telecommunication, 
     computer data, computer networks or entertainment media.'' 
     The development of leading-edge technology is the key to 
     economic success and national well-being in more competitive 
     knowledge-intensive national and global economies. 
     Technological progress, in turn, involves using information 
     to improve quality, productivity and flexibility--the 
     essential determinants of economic success under competitive 
     conditions. Information, in addition, improves individual, 
     business and public decision making, as well as the delivery 
     of public and private services. Telecommunications is a 
     technology driver, as well as the heart of the national 
     information infrastructure, and probably has larger 
     multiplier effects for the whole economy than any other 
     industry. Information networks consequently have become major 
     determinants of economic performance, as well as of personal 
     and national welfare.


                         Regulatory Background

       As noted, however, the health of the telecommunications 
     industry depends heavily on establishing effective 
     competition. Because they had increasing returns to scale and 
     therefore declining costs, telecommunications companies were 
     assumed to be ``natural monopolies'' throughout most of this 
     century. This changed in the early 1980s, when long distance, 
     manufacturing, and information services were separated from 
     the local telephone monopolies as part of the Modification of 
     Final Judgment (MFJ). That consent decree broke up the Bell 
     System, based on the realization that structural separation 
     was the only effective way to prevent abuse of power by the 
     telephone monopolies.
       Before the MFJ, economists and policy makers attempted, 
     without much success, to prevent the abuse of monopoly power 
     and approximate competitive outcomes for consumers through 
     regulations. Regulating ``natural'' monopolies was always 
     problematic at best, but became increasingly more difficult 
     in dynamic telecommunications markets where technological 
     change intensified the complexity and competitiveness of 
     markets, improved the information and choices available to 
     people, widened the geographic scope of markets, and 
     accelerated the pace of change.
       A particularly serious problem for regulators was that 
     these changes created a greater potential for competition in 
     some markets than others. After the MFJ, for example, the 
     RBOCs retained ``natural'' monopoly power for most local 
     exchange services because it still was inefficient for 
     several companies to duplicate ubiquitous telephone lines and 
     facilities in the same local area. Regulators therefore 
     subjected the RBOCs to rate-of-return regulation. This meant, 
     however, that these companies had both the incentive and the 
     ability to increase their profits by using their monopoly 
     control of local facilities to gain economic advantages in 
     more competitive markets (e.g., long distance, information 
     services, and equipment manufacturing). For example, the 
     RBOCs could cross-subsidize, or charge prices lower than 
     actual costs in competitive markets and make up for these 
     losses by inflating the costs they passed on to rate payers 
     in regulated markets. These practices place more efficient 
     competitors at a disadvantage, raise competitors' costs, or 
     even make it impossible for them to survive. As one 
     regulatory expert put it, what happened in connection with 
     the processes that led to the MFJ ``was the result of a 
     poisonous synergy created by. . .regulation and monopoly 
     power combined with the provision of competitive services. 
     The outcome was discrimination and cross-subsidization 
     extremely damaging to the competitive process and ultimately 
     to consumers. And, because these same conditions exist today, 
     notwithstanding divestiture, similar anti-competitive 
     activities will happen again if we let them.''\1\
---------------------------------------------------------------------------
     \1\Testimony of Philip L. Verveer before the Subcommittee on 
     Economic and Commercial Law, Committee on the Judiciary, U.S. 
     House of Representatives, January 26, 1994, p. 6.
---------------------------------------------------------------------------
       Because of the strong incentives for monopolies to abuse 
     their power, and the subtle, invisible nature of business 
     decisions, regulators and courts concluded that the only 
     solution to this problem was the structural separation of 
     monopolies, which would continue to be regulated, from 
     businesses that had greater potential for competition. This 
     was precisely the reasoning behind the MFJ.
       The problem for the courts and regulators, of course, was 
     not only to physically separate the RBOCs, whose control of 
     local telephone facilities gave them monopoly power, from 
     long distance, information services, and manufacturing, but 
     also to monitor the transition in order to prevent these 
     companies from using their residual monopoly power to stifle 
     the transition to competition.


        Obstacles to the Development of the Information Highway

       Despite the attention created by futuristic descriptions of 
     the ``superhighway'' and interactive information 
     technologies, the future is not as clear or certain as some 
     of these descriptions imply. The natural history of 
     technology suggests a tendency to exaggerate short-term 
     effects and to underestimate the long-term impacts. Since the 
     outcomes of the use of technology are determined by public 
     and private policies and actions, they are not predetermined, 
     and progress is more likely to be measured in decades than 
     years. There are many bottlenecks in these systems which must 
     be overcome. In addition, there are many important technical 
     obstacles to the construction of this infrastructure, which 
     will require the development of interconnected, easily 
     accessible networks to move unprecedented amounts of 
     information. We should note, however, that the challenges in 
     constructing the information infrastructure are probably more 
     political, financial and organizational than technical.


    Importance of Proper Sequences in the Transition to Competition

       There is little doubt that the consequences of the MFJ 
     confirmed the validity of competitive theory. There is 
     overwhelming analytical and factual evidence that competition 
     in long distance markets has been a remarkable success. In 
     many states, obsolete regulations have vanished, competition 
     has exploded as hundreds of new firms have entered the 
     market, inflation-adjusted long distance rates have dropped 
     by more than half, technological and product innovations have 
     accelerated, productivity has improved, employment has 
     expanded, and American companies have strengthened their 
     competitive position in global markets.
       There also is general agreement that constructing the NII 
     requires the transformation of local and regional 
     telecommunications markets, where competition could do for 
     these markets what it did for long distance. Today, while all 
     customers have at least three choices for long distance 
     service (and most have many more), nobody has more than one 
     choice for basic local telephone service. Clearly, moreover, 
     while technological and market changes have created the 
     potential for competition in these local markets, this 
     potential is largely prospective and these markets remain 
     over 99 percent closed to outside competition.
       The MFJ experience demonstrates, however, that the 
     transition to competition must be carefully managed in order 
     to deny the RBOCs the incentive and ability to use their 
     monopoly power to impair competition in long distance, 
     manufacturing, or other markets. Removing the MFJ restraints 
     on the RBOCs in the proper sequence is absolutely essential 
     to this transformation. It can be demonstrated that lifting 
     these restrictions prematurely would create the same problems 
     that led to the MFJ in the first place. On the other hand, 
     the sequence which insists first on authorizing competitive 
     entry along with proper standards and monitoring, followed by 
     a market test to ensure that the ensuing competition is 
     effective before allowing the RBOCs into long distance, could 
     bring the benefits of competition to local and regional 
     telecommunications markets. We would, with this sequence, 
     realize results in higher employment, output, innovation, and 
     economic efficiency. We should note, moreover, that both the 
     negative and positive changes would have economy-wide 
     multiplier effects.
       This policy prescription has been confirmed by econometric 
     evidence which shows that the proper sequence--ensuring 
     completion in local networks before removing the 
     constraints--would cause output to grow by $37 billion and 
     employment by 478,000 over ten years. By contrast, 
     prematurely lifting the MFJ restraints on the RBOCs would 
     reduce productivity by making it possible for less efficient 
     RBOC monopolies to use their monopoly power to displace more 
     efficient competitive firms, thereby increasing prices for 
     consumers and restricting output by $24.4 billion and 
     employment by 322,000 over ten years.
       Studies that purport to show that removing the MFJ 
     restraints immediately would raise output and employment are 
     based on the unrealistic assumption that monopolists would 
     increase efficiency by entering long distance markets that 
     these analysts assume are not already highly competitive. 
     This is contrary to all credible evidence and logic. Other 
     than their monopoly control over access to end users, it is 
     hard to see what advantage the RBOCs would have in 
     competitive markets. It is, therefore, much more realistic, 
     as well as more compatible with economic principles, to 
     assume that premature elimination of the MFJ restraints would 
     produce inefficiencies in local, regional, and long distance 
     markets. Ignoring the necessity for proper sequencing has 
     short and long term negative economic implications.
       In advocating premature relief for the RBOCs, some analysts 
     argue that the long distance market is not competitive 
     because AT&T still accounts for 60 percent of the market and 
     only has two major competitors, MCI and Sprint, which account 
     for an additional 27 percent. However, this argument confuses 
     market share with market power. It is possible that firms 
     with large and declining market shares might have very little 
     market power. The keys are whether there are barriers to 
     entry and whether customers have and exercise a choice to 
     change carriers. By these standards there is little doubt 
     that long distance markets are competitive today. Sixteen 
     million subscribers, an average of 44,000 people a day, 
     switched carriers during 1992.
       Unfortunately, some of the proposals before the Congress, 
     while recognizing most of what is required to achieve 
     competitive conditions, would unwisely permit immediate entry 
     by the RBOCs into state and regional long distance markets 
     without any accompanying provision for first allowing 
     competition to develop in bottleneck local markets that today 
     are virtually closed. As noted, opening competitive markets 
     to the RBOCs now would not bring competition to local and 
     regional telecommunications markets. The wrong sequencing of 
     events would allow monopolies to restrict competition instead 
     of enhancing it, thus diminishing productivity, jobs, and 
     national output. Among existing proposals, only the Hollings 
     bill pays enough attention to the proper sequence for lifting 
     the MFJ restrictions. And one of the leading proposals--the 
     Brooks-Dingell bill--while making constructive contributions 
     to the extension and preservation of competition, has some 
     perverse sequences because the RBOCs would be allowed to 
     enter long distance markets before establishing and testing 
     competition and would be allowed into markets where they have 
     the greatest market power, without adequate safeguards. It is 
     hoped that proper sequencing will be included before the 
     various bills to establish telecommunications policy become 
     law.


               Importance of Market Tests for Competition

       Proper sequencing, including markets tests for competition, 
     is required for two major reasons: (1) the local and regional 
     telecommunications monopolies have both the incentive and the 
     ability to block the transformation to competitive markets 
     and (2) it is difficult, if not practically impossible, for 
     regulators to prevent abuses by hybrid entities operating 
     simultaneously in monopolistic and competitive markets. The 
     kind of abuses that could restrict competition include 
     raising rivals' costs by delaying access to monopolized 
     lines, requiring costly forms of interconnections, 
     discriminatory pricing, and degrading technology; requiring 
     the purchase of unneeded services; and arrangements (like the 
     lack of portability of telephone numbers, and the prevention 
     of the sharing and resale of long distance services within 
     the calling area) that make it difficult for competitors to 
     enter and compete in monopolistic markets. A careful 
     examination of deregulation proposals from the RBOCs suggests 
     that these companies have come to accept such practices as 
     the only way to do business.
       A test to determine if a market is competitive would 
     prevent the continuation of these anti-competitive practices 
     and therefore would facilitate the transition to competitive 
     markets. And with regulatory constraints on the monopolistic 
     local exchange carriers, private investments needed to 
     maintain an efficient, open, flexible, responsive and 
     innovative information infrastructure would be encouraged. 
     The minimum essential preconditions of a market test for 
     competition include: removing restrictive state laws; making 
     it possible for consumers to have effective options for long 
     distance and local telephone service; implementing number 
     portability; unbundling network services in order to allow 
     consumers to select only those components they need, as well 
     as to permit providers to compete for these services; 
     establishing real cost-based pricing arrangements, including 
     the imputation of all charges to the local monopoly telephone 
     exchanges that are already being paid by competitive 
     carriers; preventing restrictions on resale and sharing; 
     establishing uniform technical and interconnect standards; 
     providing equal access to conduits and rights of way; 
     permitting separate interconnections for each unbundled 
     network service; granting alternative providers co-carrier 
     status; and explicitly identifying and fairly implementing a 
     system to allocate universal service costs.
       Conditions like these are necessary to ensure the 
     transition to adequate competition, but additional tests must 
     be applied to determine when markets have become adequately 
     competitive. In general, adequate competition exists when 
     consumers have numerous choices, when no firm has enough 
     market power to effectively raise prices without eliciting 
     supply or price responses from actual and potential rivals, 
     and when there are no artificial barriers to entry. However, 
     precise measures would clarify and give greater precision to 
     this definition, creating clear goals for RBOCs and 
     regulators, as well as clear signals for potential investors. 
     Examples of the kinds of measures that might be used to 
     determine when local markets are adequately competitive for 
     the purpose of removing the line-of-business restrictions are 
     the following, proposed by AT&T in response to Senators John 
     Danforth and Daniel Inouye:
       1. All legal, regulatory and technical barriers must have 
     been eliminated.
       2. Seventy-five percent of the customers served by RBOCs 
     can get telephone service from two or more alternative 
     additional providers.
       3. At least 30 percent of customers obtain exchange access 
     service exclusively from an alternate provider.
       While there is room for debate on the precise measures used 
     to determine when local markets have become competitive, 
     there is little doubt about the desirability of having such 
     measures.


                               conclusion

       Proper sequencing--authorizing competitive entry, followed 
     by a market test to determine whether effective local 
     competition has developed--would require a willingness to 
     change and compromise by all parties concerned, but the 
     transformation to competition would have enormous benefits 
     for the RBOCs, long distance companies, business and 
     residential consumers, regulators, and, most important, the 
     American public. With these safeguards the NII would 
     establish an advanced, unified information infrastructure, 
     unified by competitive market forces rather than ``natural 
     monopoly.'' This competitive information infrastructure 
     within the framework of fair, transparent, simplified and 
     flexible rules to prevent abuses and encourage innovations 
     and efficiency would have enormous economic, social and 
     political benefits. It is hard to think of anything more 
     important for our nation's future.
  Ms. MOLINARI. Mr. Speaker, today's question facing the House is: How 
can we improve our economic, social, and international footing, without 
spending taxpayers money, and without hurting any particular industry? 
I believe the answer is H.R. 3626.
  H.R. 3626 is a bill that makes sense, common sense and dollar cents. 
The common sense in H.R. 3626 points to advances in technology that 
will improve education, health care, transportation, business, and the 
environment. The dollar cents reveals 3.6 million new jobs with private 
industries, not taxpayers, taking the cost while also fostering a 
competitive edge in markets abroad.
  For once, in a long time, industries can agree that H.R. 3626 has 
benefits for everyone. The multimedia market will have the ability to 
expand to its fullest potential. This cannot happen until multiple 
users across the country can interact with each other. Information 
providers need and welcome the partnerships, new capital, technology, 
and mass market capabilities that would result from competition. In 
fact, one hundred of the ``Fortune 500'' companies have endorsed the 
bill because they recognize that lower telecommunication costs will 
increase their own competitiveness.
  I support the simple answer that America has been waiting for, H.R. 
3626.
  Mr. FRANKS of Connecticut. Mr. Speaker, I rise today in support for 
H.R. 3636 and H.R. 3626, legislation reported out of the Energy and 
Commerce Committee, on which I serve, and which will lead our Nation's 
telecommunications industry into the 21st century.
  These bills will promote competition and bring new goods and services 
to consumers by removing the court-imposed restrictions on the Bell 
operating companies, by opening up the local telephone system to 
competition and by permitting our telephone companies to offer cable 
television services.
  H.R. 3636 and H.R. 3626 will help our country's economy and will 
greatly assist in creating jobs for Americans. A study by the 
independent econometric forecasting firm, the WEFA Group, demonstrated 
that full competition in the telecommunications industry, including 
Bell Company relief from restrictions that currently bar them from 
certain markets and including full competition at the local level, 
would create 3.6 million new jobs in the United States over the next 10 
years in a wide variety of industries and in every State in the Union. 
In my home State of Connecticut, over 45,000 new jobs over the next 10 
years would be created in a fully competitive marketplace.
  These measures have a wide range of support from a variety of 
organizations including senior citizens groups, education associations, 
labor unions, minority interests, and small business coalitions. These 
bills reflect years of work by the House Telecommunications 
Subcommittee and contain compromises to ensure that all competitors are 
treated fairly and equally.
  I urge my colleagues to support both H.R. 3636 and H.R. 3626.
  The SPEAKER pro tempore (Mr. Montgomery). The question is on the 
motion offered by the gentleman from Texas [Mr. Brooks] that the House 
suspend the rules and pass the bill, H.R. 3626, as amended.
  The question was taken.
  Mr. PETRI. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 5 of rule I and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.
  The Chair announces that this vote will be taken after the next 
suspension.

                          ____________________