[Congressional Record Volume 141, Number 92 (Wednesday, June 7, 1995)]
[Senate]
[Pages S7881-S7912]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


        THE TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT

  Mr. LOTT. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of calendar No. 45, S. 652, the 
telecommunications bill.
  The PRESIDING OFFICER (Mr. Bennett). The bill will be stated by 
title.
  The legislative clerk read as follows:

       A bill (S. 652) to provide for a pro-competitive, 
     deregulatory national policy framework designed to accelerate 
     rapidly private sector deployment of advanced 
     telecommunications and information technologies and services 
     to all Americans by opening all telecommunications markets to 
     competition, and for other purposes.

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the bill.
  Mr. PRESSLER. Mr. President, I rise to begin Senate floor 
consideration of S. 652--the comprehensive communications bill which 
the Committee on Commerce, Science, and Transportation overwhelmingly 
approved late last month on a vote of 17 to 2--The Telecommunications 
Competition and Deregulation Act of 1995.
  The future of America's economy and society is inextricably linked to 
the universe of telecomunications and computer technology. 
Telecommunications and computer technology is a potent force for 
progress and freedom, more powerful than Gutenberg's invention of the 
printing press five centuries ago, or Bell's telephone and Marconi's 
radio in the last century.
  This force has helped us reach today's historic turning point in 
America.
  The telecommunications and computer technology of 21st-Century 
America will be hair-thin strands of glass and fiber below; the magical 
crackling of stratospheric spectrum above; and the orbit of satellites 
23,000 miles beyond. With personal computers interconnected, telephones 
untethered, televisions and radios reinvented, and other devices yet to 
be invented bringing digitized information to life, the 
telecommunications and computer technology unleashed by S. 652 will 
forever change our economy and society.
  At stake is our ability to compete and win in an international 
information marketplace estimated to be over $3 trillion by the close 
of the decade. The information industry already constitutes one-seventh 
of our economy, and is growing.
  As chairman of the Committee on Commerce, Science and Transportation, 
the core of my agenda is to promote creativity in telecommunications 
and computer technology by rolling back the cost and reach of 
government. Costly big-government laws designed for another era 
restrain telecommunications and computer technology from realizing its 
full potential. My top priority this year is to modernize and 
liberalize communications law through passage of the bill before us 
today, S. 652: Telecommunications Competition and Deregulation Act of 
1995.


             A. The Advent of Telecommunicatons Regulations

  Most telecommunications policy and regulation in America is based 
upon the New Deal era Communications Act of 1934. The 1934 Act 
incorporated the premise that telephone services were a natural 
monopoly, whereby only a single firm could provide better services at a 
lower cost than a number of competing suppliers. Tight government 
control over spectrum based services was justified on a scarcity 
theory. Neither theory for big government regulation holds true today, 
if it ever did.
  The 1934 Act was intended to ensure that AT&T and other monopoly 
telephone companies did not abuse their monopoly power. However, 
regulatory protection from competition also ensured that AT&T would 
remain a government-sanctioned monopoly. In exchange for this 
government-sanctioned monopoly, AT&T was to provide universal service. 
AT&T retained its government-sanctioned monopoly until antitrust 
enforcement broke up the Bell System and transferred the monopoly over 
local services to the Bell Operating Companies.
  The Communications Act has become the cornerstone of communications 
law in the United States. The 1934 Act established the Federal 
Communications Commission, and granted it regulatory power over 
communications by wire, radio, telephone, and cable within the United 
States. The Act also charged the Federal Communications Commission with 
the responsibility of maintaining, for all the people of the United 
States, a rapid, efficient, Nationwide and worldwide wire and radio 
communications service with adequate facilities and reasonable charges.
  Prior to 1934, communications regulation had come under the 
jurisdiction of three separate Federal agencies. Radio stations were 
licensed and regulated by the Federal Radio Commission; the Interstate 
Commerce Commission had jurisdiction over telephone, telegraph, and 
wireless common carriers; and the Postmaster General had certain 
jurisdiction over the companies that provided these services. As the 
number of communications providers in the United States grew, Congress 
determined that a commission with unified jurisdiction would serve the 
American people more effectively.
  The 1934 Communications Act combined the powers that the Interstate 
Commerce Commission and the Federal Radio Commission then exercised 
over communications under a single, independent Federal agency.
  The Communications Act of 1934 was based, in part, on the Interstate 
Commerce Act of 1888. For example, the requirement for approval of 
construction or extension of lines for railroads was taken directly 
from the ICC Act. Prior to 1934, wire communications were regulated by 
the same set of laws that
 regulated the railroads. Radio communications were regulated under the 
1927 Federal Radio Act. In 1934, the Federal Communications Commission 
was created to oversee both the wireline communications and radio 
communications. [[Page S7882]] 

  The telecommunications industry today is a dynamic and innovative 
industry, with new technology being introduced on daily basis. The 
telecommunications industry, however, is regulated under a set of laws 
that are antiquated and never designed to handle the challenges of 
today's industry.
  Telecommunications laws and regulations are not able to adequately 
take into account the advent of telecommunications competition, and, 
indeed, have slowed the introduction of competition into many segments 
of the industry. These laws did not contemplate the development of 
fiber optics, the microchip, digital compression, and the explosion of 
wireless services. It is time to revise and amend the 1934 act to fit 
the new and future competitive telecommunications industry.


                 B. The Modification of Final Judgment

  Since 1984, the Bell operating companies have been restricted from 
entering various lines of businesses as a result of the consent decree 
entered in the antitrust case, United States versus Western Electric.
  The consent decree, commonly referred to as the modification of final 
judgment, or the MFJ, places the U.S. District Court for the District 
of Columbia and Judge Harold Greene as the administrator of the decree, 
and establishes a procedure by which the Bell operating companies can 
obtain waivers from the decree's restrictions.
  Recent years have seen a proliferation of legislative and judicial 
action to change the provisions of the original consent decree that 
divested American Telephone and Telegraph of its local exchange service 
and created the regional Bell operating companies. Currently prohibited 
from providing long distance service, manufacturing telecommunications 
equipment, and, up until July 1991, providing information services, the 
Bell operating companies and others have long advocated open entry into 
these new lines of business, contending that such action would 
invigorate the telecommunications marketplace.
  In opposition, certain consumer organizations, electronic publishers, 
long distance carriers, the Justice Department, and other industry 
groups over the past few years have opposed entry on the grounds that 
the courts should administer an antitrust consent decree and that so 
long as the Bell operating companies face little or no competition in 
their core business of providing local telephone service, they should 
not be permitted to enter competitive lines of business.
  During the past 10 years a number of waivers have been granted, but 
the process has slowed in recent years. More fundamentally, the 
judicial process is necessarily limited; the district courts 
constitutional role is simply to apply the law and administer the 
decree, and not make informed policy decisions about how communications 
law and the communications and computer industry should develop.
  Moreover, given the vulnerability of the telephone industry to 
selective, cherry-picking competition, it is likely that the limited 
nature of today's competition will have a significant effect on the 
industry's revenues in general, and on local telephone rates in 
particular.
  Consequently, although the consent decree served a useful purpose 
initially, it no longer serves the public interest at this dynamic time 
in the evaluation of the communications and information industry. In 
place of a process that subjects the communications industry to the 
terms of a consent decree entered 12 years ago and administered by a 
single district court, the Congress will reassert its proper policy 
role and administer a new Federal policy designed to promote 
competition, innovation, and protect consumers.
  Prior to the implementation of the MFJ in 1984, as noted previously, 
AT&T was the monopoly telecommunications provider in the United States. 
AT&T's Long Lines Department provided long distance telephone service 
to virtually everyone in the country. AT&T maintained owership of the 
22 Bell operating companies, which provided local telephone service on 
a monopoly basis to approximately 85 percent of the population.
  In addition, AT&T owned Western Electric, which manufactured almost 
all the equipment needed for the operation of the telephone network. 
AT&T also owned Bell Telephone Laboratories, Bell Labs, which conducted 
the most extensive research involving high technologies and 
telecommunications of any industrial research center in the world.
  The roots of the MFJ go back over 100 years. In 1882, Bell Telephone, 
the predecessor of AT&T, designated Western Electric Co. as the 
exclusive manufacturer of its patented telecommunications equipment. 
During the early 1900's Bell Telephone maintained a majority interest 
in Western Electric; by 1925 it had 100 percent owership of the 
company.
  By that same year, Bell Telephone established Bell Telephone 
Laboratories to conduct its research and development. The Bell system's 
rapid expansion triggered interest from the Department of Justice and 
the Interstate Commerce Commission--which then had jurisdiction over 
interstate telephone service--for possible
 antitrust violations.

  Following other antitrust action, in 1974, the Department of Justice 
filed an antitrust suit against AT&T. The suit claimed that AT&T 
misused its Bell system monopoly of the local exchange network to 
restrict competition in the manufacturing of telecommunications 
equipment, and in the market for interchange service through refusal to 
provide competitors with interconnection to the local networks and, 
therefore, access to end customers. After years of litigation, the case 
was settled in 1982 with entry of a modification of final judgment by 
Judge Harold Greene, which was negotiated by AT&T and the Justice 
Department.
  The debate about the proper role of the Bell operating companies in 
the communications industry has often overshadowed the larger question 
of which government bodies should be establishing national 
telecommunications policy. Courts make rulings, as they should, solely 
on the narrow questions confronting them. Consequently, courts do not 
and cannot ensure that broader concerns about sound economic goals are 
fully considered.
  As a result of these concerns, which have been fueled by a period of 
globalization and intense international competition in the 
telecommunications industry, I believe, and the committee believes that 
we in Congress as the expert in the oversight of the telecommunications 
industry, should have authority to manage these issues in order to 
develop telecommunications and information policy in a coordinated 
manner.
  At this juncture in the evolution of the communications industry the 
Congress should be the locus of authority on questions involving 
telecommunications competition, deregulation and consumer protection. 
We have the ability to see a more complete spectrum of issues, as 
compared to the narrow view of discrete issues which a court and the 
Department to Justice necessarily takes in the context of litigation. 
Moreover, we can consider broad policy goals in establishing and 
administering telecommunications policy.


                           C. Regulatory Lag

  While America is still the world's leader in information technology, 
we are no longer in the position of being unchallenged. Historically we 
were an economic and technological Gulliver standing astride a world of 
competitive Lilliputians. But that's just not true any longer. 
America--especially we in the American legislative and regulatory 
system--must respond and respond now.
  At a minimum, government should try to avoid doing harm. 
Unfortunately, government and regulators have a rather sorry history of 
slowing the introduction of new technologies and competition. The 
examples of this regulatory lag are numerous and all too common. 
Regulatory lag means we don't get investment stimulus that competition 
and new entry spur and, more importantly, the public is denied new 
service and product options.
  1. Competition in customer premises equipment:
  Competition and open entry first came to telecommunications with 
respect to customer premises equipment (CPE). This competition, 
however, was initially resisted by the FCC. For many years, AT&T 
prohibited customers or anyone else from connecting any equipment to 
its telephone network or to telephones themselves that AT&T did not 
supply. Bell tariffs forbade all foreign attachments--meaning equipment 
[[Page S7883]] not provided by Bell itself. Unfortunately, regulators 
endorsed this anti-competitive practice for almost 70 years.
  Through prodding from the Federal courts, the commission eventually 
allowed devices deemed not injurious to the telephone network to be 
connected to the network. This was only after the courts conferred on 
subscribers the right to use their telephones in a way that had private 
benefits without being publicly detrimental
  It took the Commission more than a decade to extend the new law to 
include equipment that was connected electronically, not just 
physically, to the network. The Commission limited restrictions on 
interconnection to protecting the network from harm. The details of 
equipment interconnection were not fully implemented until the 
commission adopted part 68 of its rules in 1975, nearly 20 years after 
the original court determination so that carriers themselves would be 
free to compete on equal terms in the open market.
  2. Competition in long distance services:
  The commission was equally slow in authorizing interexchange--or long 
distance--competition. In the 1940s, long distance service was provided 
exclusively over wires, and the same basic economics that seemed to 
preclude competition in local service applied equally to long distance 
service. The development of microwave and satellite technologies 
radically changed that picture, making competition both practical and 
inevitable. The first few, faltering steps in the direction of a 
competitive marketplace, were taken by the commission in 1959 but it 
wasn't until 1980 that the commission formally adopted an open entry 
policy for all interstate services.
  Competition in the interexchange market developed slowly as the 
commission gradually and incrementally responded to changes in market 
pressures, technology, and consumer demand for new and varied long 
distance services. Microwave relay technology, developed by Bell 
Laboratories during World War II, prompted the beginning of IXC 
competition by offering a viable, less expensive alternative to AT&Ts 
existing wireline facilities for transmitting long distance 
communications.
  The commission first permitted entry of non-AT&T services for 
provision of private services. In 1959, the FCC, finding a need for 
private services and foreseeing no risk of harm to established 
services, authorized certain private companies to provide microwave 
services and to establish private microwave networks for their own 
internal use. Although described as a narrow, limited decision, the 
Above 890 decision prompted a flood of applications from private 
organizations seeking authorization to establish private microwave 
long-distance networks. It also brought pressure for entry into other 
fields.
  MCI applied to the FCC for authority to provide private, non-switched 
communications service between St. Louis and Chicago. This service 
still did not involve interconnection with AT&T's public network. In 
1969, the commission approved MCI's limited point-to-point system, 
saying it was designed to meet the interoffice and interplant 
communications needs of small businesses. Again, however, the decision 
was narrow.
  The commission was concerned about permitting unregulated carriers to 
engage in creamskimming, and it generally still adhered strongly to the 
philosophy that the public network should remain a regulated monopoly. 
Nonetheless, it prompted a deluge of applications seeking authorization 
of similar microwave facilities, reflecting a public demand for 
competitive alternatives.
  A few years later, the commission formalized a policy of allowing 
entry of new carriers into the private line, or Specialized Common 
Carrier (SCC), field to provide alternatives to certain interstate 
transmission services traditionally offered only by the telephone 
company. The commission did not, however, define the scope of services 
it was opening up to competition, a matter that would prove troublesome 
as pressures for increased competition rose.
  Although each time emphasizing the limited nature of its decision, 
the commission had, over the course of 2 decades, continued to approve 
the entry of new providers of telephone services, albiet at times 
reluctantly and with prodding by the courts, and only in provision of 
private line services.
  When it came to permitting direct competition with AT&Ts public 
switched long distance service, the Commission's reluctance hardened. 
MCI had eventually obtained approval for its private line offerings, 
but when it later proposed new switched service in direct competition 
with AT&T's MTS services, the FCC refused approval.
  In doing so, the Commission reiterated that its Specialized Common 
Carrier decision was meant to allow entry only into private line 
service and not into direct competition with the public network. The 
Court of Appeals, however, reversed the commission's failure to approve 
MCI's proposed offering, rejecting the commission's argument that its 
Specialized Common Carrier decision authorized only private line 
services.
  After Execunet I, the commission still refused to order AT&T to 
interconnect with MCI. The Court of Appeals, in Execunet II, then 
explicitly mandated interconnect, emphasizing that Specialized Common 
Carrier was a broad decision to permit competition in the long distance 
market and that such competition necessarily required AT&T to provide 
physical interconnection to the public network.
  The Execunet decisions opened virtually all interstate IXC markets to 
competition. In response to this new judicially imposed reality, the 
FCC lowered entry barriers, eliminated rules prohibiting sharing of 
heavy use, bulk rate circuits, and directed AT&T to permit the resale 
and sharing of these circuits by competitors.
  During this same era, the commission approved interstate packet-
switched communications network offerings that introduced value-added 
networks which resold data processing functions through basic private 
line circuits, and unlimited resale and shared use of private line 
services and facilities. Tariff restrictions against the resale and 
shared use of public switched long distance services were removed in 
1980. Since this time, the FCC has strongly supported the growth of 
competition.
  The resulting competition has had well documented public benefits of 
great scale and scope.
  3. Enhanced Services:
  The MFJ Consent Decree's information services restriction required 
the Bell Companies to seek waivers for the provision of voice answering 
services, electronic mail, videotext, electronic versions of Yellow 
Pages directories, E911 emergency service, and directory assistance 
services provided to customers of nonassociated independent telephone 
companies.
  The restriction on the provision of voice mail services was lifted in 
the late 1980's. In the first 2 years of RBOC participation, the voice 
mail equipment market grew threefold and prices declined dramatically. 
Between 1988 (when the RBOCs were permitted entry) and 1989, the market 
for voice mail services grew by 40 percent, with total revenues rising 
from $452 million to $635 million.
  Prices have also fallen. For example, telephone companies today 
charges as little as $5 per month for its residential voice messaging 
service. Similar services in 1987 cost 2 to 10 times more. Output has 
risen. The U.S. market for voice mail and voice response equipment 
increased from $300 million in 1988 to over $900 million in 1989. The 
number of voice message mailboxes increased from 5.3 million in 1987 to 
7.7 million in 1988 to 11.6 million in 1989.
  4. Spectrum Allocation:
  The introduction of both FM radio and television was significantly 
delayed by years of FCC equivocation over which bands would be assigned 
to which uses. Equally egregious delays preceded the introduction of 
cellular telephone service.
  FM Radio. FM radio technology was invented in 1933, but did not 
receive widespread use until the 1960s. Lack of FCC support contributed 
to FM's lack of popularity. One glaring example occurred in 1945. By 
1945, 500,000 FM receivers had been built, but were all rendered 
useless when the FCC decided to [[Page S7884]] move FM channels to a 
different spectrum band. FM languished for so long that the inventor of 
FM eventually committed suicide in despair.
  TV. The modern television was developed in the 1930s and exhibited by 
RCA in 1939, but the FCC took 2 more years to adopt initial standards. 
It was then discovered that channel allocation was inadequate, and the 
FCC froze all applications for TV licenses for 4 years, until 1952. In 
the year after the freeze alone, the number of stations tripled. It 
took another 10 years before regulations for UHF/VHF frequencies were 
finalized.
  Cellular. In 1947 Bell Labs developed the concept of cellular 
communications and by 1962, AT&T had developed an experimental cellular 
system. It took another 15 years for regulation to catch up with the 
new technology; in 1977 the FCC finally granted Illinois Bell's 
application to construct a developmental celluar system in Chicago. The 
FCC took 8 years to finalize the boundaries of cellular service areas. 
The delay cost the cellular industry an estimated $86 billion.
  5. Out of Region Competition by Bell Companies:
  The Department of Justice, with the concurrence of Judge Greene, 
originally held that the MFJ consent decree forbade the RBOCs from 
providing services outside their own regions. The D.C. Circuit however 
overruled them both and found that the BOCs are not restricted to 
providing service only within their home territories; they are free to 
offer intraLATA services anywhere in the country. The RBOCs now compete 
heavily against one another in cellular service. The provision of other 
local services, however, is impeded by the interexchange restriction, 
which the Department and the decree court have so far refused to lift 
even outside the service areas of the individual RBOCs.
  6. Bell Company Manufacturing:
  In June 1991, outages in 5 states and the District of Columbia forced 
Bell Atlantic and other Bell companies to work closely with a switch 
manufacturer to determine the cause of the outages and prevent their 
recurrence. The Department of Justice told Bell Atlantic that, 
notwithstanding the emergency, Bell Atlantic could not work with the 
manufacturer without a waiver of the decree's manufacturing 
restriction. On July 9, 1991, Judge Greene ordered a hearing with Bell 
Atlantic, the Department of Justice, AT&T, and MCI and granted the 
waiver on July 10, 1991.
  7. Cable Networks:
  The FCC--at the behest of broadcasters--crippled and almost killed 
cable television, by means of a number of regulatory restrictions such 
anti-siphoning rules. The commission's stated justification for 
restricting cable was that it did not want to jeopardize the basic 
structure of over-the-air television.
  8. Video Dialtone:
  By defining video dialtone service as common carriage, not broadcast, 
the FCC has successfully preempted a raft of State cable regulation and 
franchise fees. It has also subjected these services to a raft of 
regulations. Telephone companies have been invited to provide a basic 
platform that delivers video programming and basic adjunct services to 
end users, under Federal, common-carrier tariff.
  Video dialtone providers must offer sufficient capacity to serve 
multiple video programmers; they must make provision for increased 
programmer demand for transmission services over time; and they must 
offer their basic platform services on a nondiscriminatory basis. The 
dial tone moniker is misleading; the video connections are strictly 
between the telco central office and customers. But the number of 
programs offered from a video dialtone server can be expanded 
indefinitely. The commission has attempted to maintain strict 
separation between the provision of video dialtone conduit, and 
provision of the programming itself. Video dialtone as defined by the 
commission is plainly more like telephone carriage than like cable or 
broadcasting.
  9. Direct Broadcast Satellite:
  When the FCC first considered licensing Direct Broadcast Satellite 
service (DBS) in the early 1980s, the National Associate of 
Broadcasters raised the specter of siphoning. DBS would result in the 
loss of service to minorities, rural areas, and special audiences by 
siphoning programming, fragmenting audiences, and reducing advertising 
support. It would rob free local television service of advertising 
revenues. UHF stations would be especially threatened. The cable 
television industry joined in the assault on DBS by denying access to 
programming. The service has only recently become available.
  10. Computer and Software:
  AT&T--which invented the transistor and in the 1960s and 1970s 
developed some of the most powerful computers--was barred for years (by 
the 1956 antitrust consent decree) from competing in the computer 
market against IBM. The upshot was that IBM completely dominated 
computing for many years. AT&T had also developed the Unix operating 
system around which the Internet was built--it couldn't commercialize 
that aggressively either. Now Microsoft is being accused of 
monopolizing the industry with the MS-DOS and Windows alternatives.
  11. Delay in RBOCC Information and Inter-LATA Services Relief:
  In 1987, the Justice Department recommended the removal of the 
information services restriction on the RBOCs. This was not opposed by 
AT&T. In September of 1987, Judge Greene permitted the RBOCs to enter 
non-telecommunications businesses without obtaining a waiver, but did 
not lift the information services ban.
  On April 3, 1990, the U.S. Court of Appeals for the District of 
Columbia remanded Judge Greene's decision to continue the ban on RBOC 
information services. Eventually, on July 25, 1991, Judge Greene 
relented and permitted RBOCs to provide information services. RBOCs 
were finally granted the right to provide information services more 
than 4 years after the Justice Department recommended that the 
restriction be removed.
  There have been numerous examples of egregious delays in granting 
even non-controversial decree waivers. For example, Bell Atlantic 
sought a waiver in 1985 to allow it to serve Cecil County, Maryland as 
part of its Philadelphia cellular system. Bell Atlantic submitted 
another waiver to provide cellular service to 3 New Jersey counties 
through its Philadelphia-Wilmington system on October 24, 1986.
  These waivers were necessary to the provision of uninterrupted 
cellular service between Washington and New York. Judge Greene finally 
granted the second waiver on February 2, 1989, almost two-and-a-half 
years after it was filed and the Cecil County waiver was not approved 
until 1991, nearly 5 years after it was first sought.
  RBOCs have filed more than 200 MFJ waivers that Judge Greene has 
ruled on. These waiver requests first go to the Department of Justice, 
and then move to Judge Greene. Unfortunately, the waiver process is 
also very time consuming. The average age of an RBOC waiver request 
pending before the Department of Justice is about 2\1/2\ years old.
  Once the Justice Department passes the waiver on to Judge Greene, it 
takes approximately 2 years before Judge Greene rules on it. This has 
made the average waiver process more than 4\1/2\ years to work its way 
through the system.
                    D. The New Competitive Landscape

  The competitive landscape is changing, and, if Congress does not act 
to overhaul the telecommunications legal landscape, consumers will once 
again be denied benefits of competition and new technology. Wireless 
services have exploded since the Bell System breakup. Wireless counted 
less than 100,000 customers at that time.
  Today, there are more than 25 million cellular subscribers. 
Additionally, companies just spent more than $7.7 billion for the major 
trading area PCS licenses. There is obviously a market for more 
wireless communications. Cable has more than doubled its subscriber 
base since the MFJ.
  For local telephone services, States such as New York, Illinois, and 
California, have been leading the way in opening the local market to 
competition. Competitive access providers did not even exist at the 
time of the MFJ. Today, CAP's are in 72 cities, and have built 133 
competing networks. Rapid changes in technology have broken down the 
natural monopoly Congress based the 1934 act on. Competition is still 
slow to fully develop in some areas, and in some 
markets. [[Page S7885]] 
  History teaches us that, under existing law, the FCC and the courts 
have not been able to respond to market and technology changes in an 
expeditious manner. This delay prevents the consumer from gaining the 
benefits of competition, such as lower rates, better services, and 
deployment of new and better technologies.
  The courts, FCC and Justice Department have been micro-managing the 
growth of competition in the telecommunications industry. That is why 
the committee believes it is incumbent upon Congress to exercise its 
rightful authority in this area, and pass legislation that will open 
the entire telecommunications industry to full competition. Without 
legislation, it may be years, or decades, before America sees the 
benefits of a truly open and competitive telecommunications industry.
  Meanwhile our foreign competitors are moving ahead aggressively. In 
Great Britain, cable-telco competition is growing rapidly. The major 
cable players in the UK are, in fact, American telco and cable 
companies. Prices for telephony provided over cable lines are 10 to 15 
percent lower than that provided over British Telecoms network. Here in 
the United States by contrast, the combination of the 1984 cable-telco 
prohibition and entry barriers into the local telephone market prevent 
such competition from developing.
  In Japan the government is providing interest free loans to cover 30 
percent of the investment for Japan's broadband optical fiber network. 
Also planned are favorable tax measures for optical fiber and related 
investments. Meanwhile in the United States when American companies say 
they'll invest their own money in new networks, the government at both 
the Federal and State level visits endless regulatory hassle on the 
proponents.


         e. importance of telecommunications to economic growth

  At the heart our actions in the 104th Congress is private sector 
economic growth and private sector jobs through less Government 
regulation. To achieve our goal, we need increased capital investment.
  Telecommunications is an especially important sector to spur 
investment because it provides a big multiplier effect. The Japanese 
Government has estimated that for each dollar--or yen--invested in 
telecommunications, you get 3 dollars' worth of economic growth--a real 
telecom kicker.
  America's edge has always been our grasp of technology. Today, 
telecommunications and computers are at the cutting edge. Americans 
today have the broadest choice and best prices for these information 
economy products and services in the world.
  For instance, 98 percent of American homes have television and radio, 
94 percent a telephone. Close to 80 percent have a VCR, while 65 
percent subscribe to cable TV--96 percent have the option. We are 
rapidly approaching 40 percent of homes with PC's and 36 percent with 
video games. Multimedia and CD-ROM sales are flourishing.
  The Internet and computer on-line services are reaching millions of 
Americans. DBS has been successfully launched with 150 channels of 
digital video and audio programming services. A vibrant new wireless 
communications industry is growing with cellular--25 million 
subscribers--and paging--20 million users--soon to be joined by 
Enhanced Specialized Mobile Radio, Global Satellite Systems, and 
Personal Communications Services.
  First. Digitization and industry convergence meet--Regulatory 
apartheid:
  Telecommunications policy in America, under the 1934 Communications 
Act, has long been based on the now faulty premise that information 
transmitted over wires could be easily distinguished from information 
transmitted over the air. Different regulatory regimes were erected 
around these different information media.
  This scheme might best be described as ``regulatory apartheid''--each 
technology had its own native homeland. These once neat separations and 
distinctions between the media no longer make sense.
  The explanation for the rapid convergence of previously distinct 
media lies with digitization. Digitization allows all media to become 
tanslatable into each other. As Congress' Office of Technology 
Assessment stated in a recent study: ``A movie, phone call, letter, or 
magazine article may be sent digitally via phone line, coaxial cable, 
fiber-optic cable, microwave, satellite, the broadcast air, or a 
physical storage medium such as tape or disk.''
  The same technological phenomenon to sweep the computer industry 
during the 1980's is now sweeping the telecommunications industry--we 
can learn valuable lessons from the experience in the computer 
industry.
  Second. Computers and phones:
  By the early 1980's, AT&T and IBM were two of the largest and more 
powerful companies in the world. On January 8, 1982, the Federal 
Government chose two different destinies for the mammoth companies. The 
Government agreed to dismiss its case against IBM; by contrast, AT&T 
would be divested, freed from all antitrust quarantines and so 
permitted to enter the computer business.
  At the time, Intel was already over a decade old. Apple was growing 
fast. And IBM had just introduced a brand-new machine, based on an 
Intel microprocessor. Big Blue's new machine--its personal computer--
was small and beige. Three weeks after the break-up of AT&T was 
complete, in January 1984, Steve Jobs stepped out on the podium at the 
annual stockholders' meeting of Apple Computer and unveiled the new 
Macintosh.
  The impact of unfettered competition has devastated IBM. The only 
thriving parts of its hardware business today are at the bottom end, 
where Big Blue's small beige machines have been open, standardized, and 
widely copied from the day they were introduced. Between 1985 and 1992, 
IBM shed 100,000 employees. IBM's stock, worth $176 a share in 1987, 
collapsed to $52 by
 year's end 1992. In 1992, the New York Times would announce ``The End 
of I.B.M.'s Overshadowing Role.'' ``IBM's problems,'' the Times noted, 
``are due to its failure to realize that its core business, mainframe 
computers, had been supplanted by cheap, networked PC's and faster 
networked workstations.'' In a desperate scramble for survival, IBM is 
breaking itself into autonomous units and spinning off some of its more 
successful divisions. IBM itself is only one of many first-tier vendors 
of PC's today, with a market share of 8 percent.

  The impact on the computer industry, however, has been intense 
competition spawning rapid technological advancement. A $5,000 PC in 
1990--featuring Intel's 80486 running at 25 MHz--had the processing 
power of a $250,000 minicomputer in the mid-1980's, and a million-
dollar mainframe of the 1970's. Five years later, that same $5,000 PC 
is two generations out of date--with a third new generation on the 
horizon. Systems with nearly twice the processing power of that 1990 
system--using Intel's 486DX2-66 chip--are available for under $1,500, 
and Intel runs advertisements encouraging owners of these chips to 
upgrade to newer ones. Systems with more than twice the processing 
power of that system--featuring Intel's 120 MHz Pentium chip--are now 
available, most for under $5,000. Intel is currently promising faster 
and faster iterations of its Pentium chips--running at 133 and 150 
MHz--before it releases commercial versions of its next-generation P6, 
which promises to move the price-performance curve astonishingly 
farther out than today. The computer industry is still firmly in the 
grip of Moore's Law, which holds that the number of transistors that 
can be placed on a microchip--a rough estimator of the power of the 
chip--doubles every 18 months.
  The upshot is that consumers can purchase systems with four times the 
power of the 1980's mainframes at one-fiftieth of the price. Put 
another way, systems today have over 200 times the value of systems in 
1984. By contrast, long-distance calls today represent only twice the 
value of long-distance calls in 1984. Had price-performance gains of 
the same magnitude occurred in the long-distance market since 1984, the 
results would have been equally stunning. For example, in 1984, a 10 
minute call at day rates between New York and Los Angeles cost a little 
less than $5, today it costs $2.50. Had competition and technological 
advances developed in the long distance market as it did in the 
computer market, that same call would cost less than 3 cents. 
Alternatively, a 10 minute call from New York to Japan--cost roughly 
$17 in 1984 and $14 today. Had long-distance [[Page S7886]] service 
advanced as rapidly as the personal computer industry, that call would 
cost less than 9 cents.
  Third. Lessons learned:
  Yet as the United States stands at this critical crossroads--the dawn 
of a new era in high technology, entertainment, information and 
telecommunications--America continues to operate under an antiquated 
regulatory regime. Our current regulatory scheme in America simply does 
not take many dramatic technological changes into account.
  Progress is being stymied by a morass of regulatory barriers which 
balkanize the telecommunications industry into protective enclaves. We 
need to devise a new national policy framework--a new regulatory 
paradigm for telecommunications--which accommodates and accelerates 
technological change and innovation.
  The very same digitization phenomenon supports the prospect of 
competition by telephone companies and against telephone companies, by 
cable companies and against cable companies, by long distance companies 
and against long distance companies. Incumbents on opposite sides of 
the traditional regulatory apartheid scheme have quite different views 
about which kind of competition should come first.
  If Congress cannot come to grips with digitization and convergence, 
the private sector cannot be expected to wait.
 Indeed, the multifaceted deals and alliances of the last several years 
indicates that industry is not waiting.

  Look at a short list of some of these deals:
  US West/Time Warner. The world's largest entertainment company, and 
second ranking cable company, teaming up with the RBOC for the western 
United States.
  AT&T/McCaw. The biggest long distance and equipment maker joining 
with the biggest cellular carrier. That came on the heels of AT&T 
acquiring one of the biggest computer companies--NCR.
  Sprint/Cable Alliance. The third largest long distance company--and 
only company with local, long distance and wireless capability--joining 
cable's TCI, Comcast, Cox, and Continental to form an alliance to 
provide a nationwide wireless communications service--and the prospect 
for joining Sprint's broadband long distance lines with cable's high 
capacity local facilities.
  Microsoft. There has been an almost endless series of strategic 
alliances being struck between Microsoft, the world's largest computer 
software company, and companies in numerous information and 
telecommunications businesses for the purpose of delivering interactive 
services.
  HDTV Grand Alliance. The companies teaming up to bring HDTV to 
America include AT&T--the largest telecom equipment maker--General 
Instrument--the largest cable TV equipment maker--and Phillips--the 
world's largest TV set maker.
  In addition, layered on top of these and many other deals and 
alliances is the globalization phenomenon--a breakdown of geographic 
barriers: all the RBOC's have foreign investments; British Telecom and 
MCI in partnership; Sprint planning the same with France Telecom and 
Deutsche Telecom; AT&T also working with Singapore Telecom, Cable & 
Wireless's Hong Kong Telephone, and the Netherlands Telecom.
  We can no longer keep trying to fit everything into the old 
traditional regulatory boxes--unless we want to incur unacceptable 
economic costs, competitiveness losses, and deny American consumers 
access to the latest products and services.
  Since becoming chairman of the committee I have been actively working 
with leaders in the telecommunications and information industry to 
reform this outmoded and antiquated, regulatory apartheid system in 
order to make exciting new information, telecommunications and 
entertainment services available for America.
  It is time for American policymakers to meet this new challenge much 
the way an earlier generation responded when the Russians launched 
Sputnik. The response must be rooted in the American tradition of free 
enterprise, de-regulation, competition, and open markets--to let 
technology follow or create new markets, rather than Government 
micromanaging and stunting developments in telecommunications and 
information technology.
  By reforming U.S. telecommunications policy we in Congress have an 
unparalleled opportunity to unleash a digital, multimedia technology 
revolution in America. By freeing American technological know-how, we 
can provide Americans with immediate access to and manipulation of a 
bounty of entertainment, informational, educational, and health care 
applications and services.
  Passing S. 652, The Telecommunications Competition and Deregulation 
Act of 1995, will have profound implications for America's economic and 
social welfare well into the 21st Century.
  Fourth. Universal service:
  An additional, but often overlooked, reason for immediately moving 
forward with S. 652 and telecommunications regulatory reform concerns 
the problems affecting the centerpiece of American communications 
policy--maintaining universal voice telephone service at reasonable and 
affordable prices.
  The explicit subsidies--those of known magnitude and direction--can 
and should be maintained. These are the ``Universal Service Fund,'' the 
``Link-Up America'' program, and others the FCC made part of the 
overall access charge system.
  The implicit--or hidden--subsidies are much more at risk. The present 
scheme cannot be maintained when new technology is changing so rapidly 
and customers are provided with an ever-increasing buffet of choices. 
This implicit subsidy scheme must be reformed and fixed. We cannot 
afford to wait any longer to start that reform process.


               f. what s. 652 does: chief reform features

  First. Universal telephone service:
  The need to preserve widely available and reasonably priced telephone 
service is one of the fundamental concerns addressed in The 
Telecommunications Competition and Deregulation Act of 1995. The 
legislation as reported requires all telecommunications carriers to 
contribute to the support of universal service. Only telecommunications 
carriers designated by the FCC or a State as ``essential 
telecommunications carriers'' are eligible to receive support payments.
  The bill directs the FCC to institute and refer to a Federal-State 
joint board a proceeding to recommend rules to implement universal 
service and to establish a minimum definition of universal service. A 
State may add to the definition for its local needs.
  Second. Local telephone competition:
  The Telecommunications Competition and Deregulation Act of 1995 
reforms the regulatory process to allow competition for local telephone 
service by cable companies, long distance companies, electric 
companies, and other entities.
  Upon enactment the legislation preempts all State and local barriers 
to competing with the telephone companies. In addition it requires 
local exchange carriers [LEC's] having market power to negotiate, in 
good faith, interconnection agreements for access to unbundled network 
features and functions at reasonable and nondiscriminatory rates. This 
would allow other parties to provide competitive local telephone 
service through interconnection with the LEC's facilities. The bill 
establishes minimum standards relating to types of interconnection that 
a LEC with market power must agree to provide if requested, including: 
unbundled access to network functions and services, unbundled access to 
facilities and information, necessary for transmission, routing, and 
interoperability of both carriers' networks, interconnection at any 
technologically feasible point, access to poles, ducts, conduits and 
rights-of-way, telephone number portability, and local dialing parity.
  As an assurance that the parties negotiate in good faith, either 
party may ask the State to arbitrate any differences, and the State 
must review and approve any interconnection agreement.
  The bill requires that a Bell company use a separate subsidiary to 
provide certain information services, equipment manufacturing, in-
region interLATA services authorized by the FCC, and alarm monitoring. 
In addition a Bell company may not
 market a subsidiary's service until the Bell company is authorized by 
the FCC to provide in-region interLATA services. [[Page S7887]] 

  S. 652 also ensures that regulations applicable to the 
telecommunications industry remain current and necessary in light of 
changes in the industry. First, the legislation permits the FCC to 
forbear from regulating carriers when forbearance is in the public 
interest. This will allow the FCC to reduce the regulatory burdens on a 
carrier when competition develops, or when the FCC determines that 
relaxed regulation is in the public interest. Second, the bill requires 
a Federal-State joint board to periodically review the universal 
service policies. Third, the FCC, with respect to its regulations under 
the 1934 act, and a Federal-State joint board with respect to State 
regulations, are required in odd-numbered years beginning in 1997 to 
review all regulations issued under the act or State laws applicable to 
telecommunications services. The FCC and joint board are to determine 
whether any such regulation is no longer in the public interest as a 
result of competition.
  The bill modifies the foreign ownership restrictions of section 310 
of the 1934 act, if the FCC determines that the applicable foreign 
government provides equivalent market opportunities to U.S. citizens 
and entities.
  The bill also requires that equipment manufacturers and 
telecommunications service providers ensure that telecommunications 
equipment and services are accessible and usable by individuals with 
disabilities, if readily achievable, a standard found in the Americans 
with Disabilities Act.
  Third. Long distance relief for the Bell companies:
  The Telecommunications Competition and Deregulation Act of 1995 
establishes a process under which the regional Bell companies may apply 
to the FCC to enter the long distance or interLATA market. Since the 
1984 breakup of AT&T, the Bell companies have been prohibited from 
providing services between geographical areas known as LATAs, [Local 
Access and Transport Areas]. The legislation reasserts congressional 
authority over Bell company provision of long distance and restores the 
FCC authority to set communications policy over these issues. The 
Attorney General has a consulting role.
  The reported bill requires Bell local companies and other LEC's 
having market power to open and unbundle their local networks, to 
increase the likelihood that competition will develop for local 
telephone service. It also sets forth a competitive checklist of 
unbundling and interconnection requirements.
  If a Bell company satisfies the competitive checklist, the FCC is 
authorized to permit the Bell company to provide interLATA services 
originating in areas where it provides wireline local telephone 
service, if the FCC also finds that Bell company provision of such 
interLATA service is in the public interest. Out-of-region interLATA 
services may be provided by Bell companies upon enactment.
  S. 652 allows the Bell companies to provide interLATA services in 
connection with the provision of certain other services immediately, 
with safeguards to ensure that the Bell companies do not use this 
authority to provide otherwise prohibited interLATA services. For 
example the reported bill requires a Bell company to lease facilities 
from existing long distance companies if it uses interLATA service in 
the provision of wireless services and certain information services.
  Finally, the bill requires a Bell company providing in-region 
interLATA service authorized by the FCC to use a separate subsidiary 
for such services.
  Fourth. Manufacturing authority for the Bell companies:
  The judicial consent decree that governed the breakup of AT&T in 
1984, the MFJ, also prohibited the Bell companies from manufacturing 
telephones and telephone equipment. The AT&T
 breakup itself, the globalization of the communications equipment 
market, the concentration of equipment suppliers, the increasing 
foreign penetration of the U.S. market, and the continued dispersal of 
equipment consumption have greatly diminished any potential market 
power of the Bell companies over the equipment market.

  The bill permits a Bell company to engage in manufacturing of 
telecommunications equipment once the FCC authorizes the Bell company 
to provide interLATA services. A Bell company can engage in equipment 
research and design activities upon enactment.
  In conducting its manufacturing activities, a Bell company must 
comply with the following safeguards:
  A separate manufacturing affiliate.
  Requirements for establishing standards and certifying equipment.
  Protections for small telephone companies--a Bell manufacturing 
affiliate must make its equipment available to other telephone 
companies without discrimination or self-preference as to price 
delivery, terms, or conditions.
  Fifth. Cable competition, video dialtone and direct-to-home satellite 
services:
  The bill permits telephone companies to compete against local cable 
companies upon enactment, although until 1 year after enactment the FCC 
would be required to approve Bell company plans to construct facilities 
for common carrier video dialtone operations. The bill also removes at 
enactment all State or local barriers to cable companies providing 
telecommunications services, without additional franchise requirements.
  The reported bill does not require telephone companies to obtain a 
local franchise for video services as long as they employ a video 
dialtone system that is operated on a common carrier basis, that is, 
open to all programmers. If a telephone company provides service over a 
cable system--that is, a system not open to all programmers--the 
telephone company will be treated as a cable operator under title VI of 
the 1934 act.
  Whether a telephone company uses a video dialtone network or a cable 
system, it must comply with the same must-carry requirements for local 
broadcast stations that currently apply to cable companies. A separate 
subsidiary is not required for a Bell company carrying or providing 
video programming over a common carrier platform if the company 
provides nondiscriminatory access and does not cross-subsidize its 
video operations.
  The bill maintains rate regulation for the basic tier of programming 
where the cable operator does not face effective competition--defined 
as the provision of video services by a local telephone company or 15 
percent penetration by another multichannel video provider. The bill 
minimizes regulation of expanded tier services.
  Specifically the bill eliminates the ability of a single subscriber 
to initiate at the FCC a rate complaint proceeding concerning expanded 
tier services. In addition, the FCC may only find rates for expanded 
tier service unreasonable, and subject to regulation, if the rates 
substantially exceed the national average rates for comparable cable 
programming services.
  States may impose sales taxes on direct-to-home satellite services 
that provide services to subscribers in the State. The right of State 
and local authorities to impose other taxes on direct-to-home satellite 
services is limited by the bill.
  Sixth. Entry by registered utilities into telecommunications:
  Under current law, gas and electric utility holding companies that 
are not registered may provide telecommunication services to consumers. 
There does not appear to be sufficient
 justification to continue to preclude registered utility holding 
companies from providing this same competition.

  The bill provides that affiliates of registered public utility 
holding companies may engage in the provision of telecommunications 
services, notwithstanding the Public Utility Holding Company Act of 
1935. The affiliate engaged in providing telecommunications must keep 
separate books and records, and the States are authorized to require 
independent audits on an annual basis.
  Seventh. Alarm services:
  The bill prohibits a Bell company from providing alarm monitoring 
services. Beginning 3 years after enactment, a Bell company may provide 
such services if it has received authorization from the FCC to provide 
in-region interLATA service. The bill requires the FCC to establish 
rules governing Bell company provision of alarm monitoring services. A 
Bell company that was in the alarm service business as of December 31, 
1994 is allowed to continue providing that service, as long as certain 
conditions are met. [[Page S7888]] 
  Eighth: Spectrum flexibility and regulatory reform for broadcasters:
  If the FCC permits a broadcast television licensee to provide 
advanced television services, the bill requires the FCC to adopt rules 
to permit such broadcasters flexibility to use the advanced television 
spectrum for ancillary and supplementary services, if the licensee 
provides to the public at least one free advanced television program 
service. The FCC is authorized to collect an annual fee from the 
broadcaster if the broadcaster offers ancillary or supplementary 
services for a fee to subscribers.
  A single broadcast licensee is permitted to reach 35 percent of the 
national audience, up from the current 25 percent. Moreover, the FCC is 
required to review all of its ownership rules biennially. Broadcast 
license terms are lengthened for television licenses from 5 to 10 years 
and for radio licenses from 7 to 10 years. Finally, new broadcast 
license renewal procedures are established.
  Ninth. Obscenity and other wrongful uses of telecommunications:
  The decency provisions in the reported bill modernize the protections 
in the 1934 act against obscene, lewd, indecent, and harassing use of a 
telephone. The decency provisions increase the penalties for obscene, 
harassing, and wrongful utilization of telecommunications facilities, 
protect families from uninvited cable programming which is unsuitable 
for children, and give cable operators authority to refuse to transmit 
programs or portions of programs on public or leased access channels 
which contain obscenity, indecency, or nudity.
  The bill provides defenses to companies that merely provide 
transmission services, navigational tools for the Internet, or 
intermediate storage for customers moving material from one location to 
another. It also allows an on-line service to defend itself in court by 
showing a good-faith effort to lock out adult material and to provide 
warnings about adult material before it is downloaded.


                  G. The Deregulatory Nature of S. 652

  Ronald Reagan once joked--in the midst of a debate over the budget--
that the only reason Our Lord was able to create the World in 6 days 
was that he didn't have to contend with the embedded base.
  I have been wrestling with the communications issues since I came to 
Congress. We all have. This has become the congressional equivalent of 
Chairman Mao's famous ``Long March.''
  Nothing in the field is easy. We are dealing with basic services--
telephone, TV, and cable TV--that touch virtually every American 
family. We are dealing with massive investment--more than half a 
trillion dollars. We are dealing with industries which provide almost 
two million American jobs. We are dealing with high-tech enterprises 
that are critical to the future of the American economy, and our global 
competitiveness.
  The stakes are high for everyone. And it is the sheer number of 
issues and concerns that accounts for the complexity of any 
legislation.
  First. A major step forward:
  But let me talk briefly about some of the major steps forward which 
are envisioned in this bill.
  When the former head of the National Telecommunications & Information 
Administration testified before the Senate, he commented that, 
``Everything in the world is compared to what.''
  Well, virtually all of the bills which the Senate or the House has 
dealt with over the past generation took the concept of regulated 
monopoly as a given.
  Whether we are talking about Congressman Lionel Van Deerlin's bill, 
H.R. 1315 in the House in the 1970's; or Senator Packwood's effort back 
in 1981--S. 898: All of these bills assumed that monopoly, like the 
poor, would always be with us.
  Second. A paradigm shift:
  My bill changes that. Instead of conceding that concern, this bill:
  Removes virtually all legal barriers to competition in all 
communications markets--local exchange, long distance, wireless, cable, 
and manufacturing.
  It establishes a process that will require continuing justification 
for rules and regulations each 2 years. Every 2 years, in other words, 
all the rules and regulations will be on the table. If they don't make 
sense, there is a process established to terminate them.
  It restores full responsibility to Congress and the FCC for 
regulating communications. Under the bill that the House passed last 
spring, for example, you would have still had a substantial, continuing 
involvement in communications policy on the part of the Justice 
Department and the Federal courts. This bill brings the troops home.
  Third. Genuinely deregulatory:
  I understand the concerns that some of my colleagues have raised. 
Senator McCain has raised the question of whether this bill is 
deregulatory enough. Senator Packwood has asked if we could not speed 
up the transition to full, unregulated competition. These are valid 
concerns.
  But let me highlight some of the deregulatory steps which this bill 
makes possible now.
  First, it will make it possible for the FCC immediately to forebear 
from economically regulating each and every competitive long-distance 
operator. The Federal courts have ruled that the FCC cannot deregulate. 
This bill solves that problem and makes deregulation legal and 
desirable.
  Second, this bill envisions removing a whole chunk of unnecessary 
cable television price controls now. We leave the power to control 
basic service charges, until local video markets are more competitive. 
But the authority to regulate the nonbasic services, the expanded 
tiers, is peeled back. That represents
 a major step toward deregulation and more reliance on competitive 
markets.

  Third, this bill contains a competitive checklist for determining 
Bell Co. entry into currently prohibited markets like long distance and 
manufacturing. After Bell companies satisfy all the requirements, the 
FCC must, in effect, certify compliance by making a public interest 
determination.
  This is not--contrary to some allegations--more regulation. At least 
one of the Bell companies--NYNEX--can probably fulfill all the 
checklist's requirements very soon, because State regulators have 
already required that company to make the most of the necessary changes 
in the way it does business. The bill also explicitly says that the 
competitive checklist cannot be expanded.
  So, if you read all the provisions in the bill in context, you will 
see that there simply is no broad grant of discretion to the Federal or 
State regulators here. We have essentially spelled out the recipe for 
competition, and it is incumbent on them to follow it.
  Fourth.--Future orientation:
  Let me mention another critical aspect of this bill, it is future 
oriented.
  Too many of the earlier measures were focused on the status quo. What 
they basically did was rearrange existing markets and services. The 
1984 and 1992 Cable Television Acts, for instance, did not take steps 
to encourage competition, it kept in place all the restrictions on 
telephone company and broadcast competition. Moreover, the 1984 Cable 
Act also maintained exclusive franchising for cable television.
  This bill essentially seeks to change that focus. We assumed that 
cable television might become an effective competitor to local phone 
companies, for instance, so we sought to get rid of any regulations 
that would block that. We also assumed that local phone companies might 
be effective cable competitors, so we tried to get rid of restrictions 
on that kind of competition.
  In the case of broadcasting, we recognized that this important 
industry is going to need much more flexibility to compete effectively 
in tomorrow's multichannel world. So, we will allow broadcasters to 
offer more than just pictures and sound as well as multiple channels of 
pictures and sound, if they so choose. Under this bill, they will have 
the flexibility they need to compete in evolving markets.
  Fifth. Safeguarding core values:
  This bill is aggressively deregulatory. It seeks to achieve genuine, 
long-term reductions in the level and intensity of Federal, State and 
local governmental involvement in telecommunications.
  But this bill is also responsibly deregulatory. When it comes to 
maintaining universal access to telecommunications services, for 
instance, it does that, It establishes a process that will make sure 
that rural and [[Page S7889]] small-town America doesn't get left in 
the lurch.
  This bill also maintains significant Federal oversight. 
Telecommunications, remember, isn't like trucking, or railroads, or 
airline transportation. The services we are talking about here are 
marketed and consumed directly by the public.
  This bill seeks to advance core values. I know that the Exon 
Amendment--which places limits on obscene and indecent computer 
communications--has sparked controversy. All that amendment actually 
does is apply to computer communications the same guidelines and 
limitations which already apply to telephone communications.
  Sixth. Further responsibility:
  This bill also recognizes the fact that deregulation is always a 
gradual, transitional process--and that Congress has the responsibility 
to stay involved.
  All of us know that good legislation is only one facet of the overall 
deregulatory process. Other requirements are careful scrutiny of 
budgets, of appointments to the FCC and other agencies, and effective 
Congressional oversight. No one should try to fool themselves into 
believing that we can get away on the cheap. We can't.
  If we are serious about deregulating this marketplace and--more 
importantly--expanding the range of competitive choices available to 
the American public, Congress is going to have to stay a central 
player.
  Seventh. Summary of affirmative aspects:
  Let me summarize, then, what I see as very positive, affirmative 
aspects of this bill:
  First, it dispenses with the old government-sanctioned monopoly model 
and replaces it with a process of open access which will lead to more 
competition across-the-board, in every part of the communications 
business. It flattens all regulatory barriers to market entry in all 
telecommunications markets. The more open access takes hold, the less 
other government intervention is needed to protect competition. Open 
access is the principle establishing a fair method to move local phone 
monopolies and the oligopolistic long distance industry into full 
competition with one another. Completion of the steps on the pro-
competitive checklist will give both the long distance firms and the 
local telephone companies confidence that neither side is gaming the 
system.
  Second, it eliminates a number of unnecessary rules and regulations 
now--by giving the FCC the discretion to forebear from regulating 
competitive communications services, by removing unneeded, high-tier, 
cable price controls.
  Third, it establishes a process for continuing attic-to-basement 
review of all regulations on a 2 year cycle.
  Fourth, it seeks to create an environment that is more conducive to 
more new services and more competitors--by allowing broadcasters and 
cable operators, for instance, greater competitive flexibility, and 
giving local and long distance phone companies more chances to compete 
as well.
  Fifth, it terminates the involvement of the Justice Department and 
the Federal courts in the making of national telecommunications policy.
  Sixth, the bill emphasizes effective competition while also 
safeguarding core values, such as universal service access and 
limitations on indecency; and,
  Finally, it maintains the responsibility of Congress to continue to 
work through the budget, oversight, and confirmation processes to move 
this critical sector toward full competition and deregulation.


                         h. benefits of s. 652

  In General. Competition and deregulation in telecommunications as a 
result of the Pressler Bill means:
  Lower prices for local, cellular, and long distance phone service, 
and lower cable television prices, too.
  More and less costly business and consumer electronics to make U.S. 
business more competitive and American citizens better informed.
  Expanded customer options, as business is spurred to bring new 
technology to the marketplace faster. In addition to more choices for 
long distance, cellular, broadcast, and other services where 
competition already exists, competition and choice in local phone and 
cable services will be introduced.
  High technology jobs with a future for more Americans, economic 
growth, and continued U.S. leadership in this critical field. The 
President's Council of Economic Advisors estimates that deregulating 
telecommunications laws will create 1.4 million new jobs in the 
services sector of the economy alone by the year 2003. In a Bell 
Company funded study, WEFA concluded that telecommunications 
deregulation would cause the U.S. economy to grow 0.5 percent faster on 
average over the next 10 years, creating 3.4 million new jobs by the 
year 2005, and generating a cumulative increase of $1.8 trillion in 
real GDP. Finally, George Gilder has estimated $2 trillion in 
additional economic activity with the Pressler Bill.
  More exports of high-value products, and greater success on the part 
of U.S.-based telecommunications equipment $10.25 billion, and services 
$3.3 billion, companies as well as computer equipment $29.2 billion, 
companies as they leverage their domestic gains to make more sales 
overseas.
  In Media. Competition and deregulation in electronic media including 
broadcasting, cable, and satellite services means:
  More Networks and Channels. In the early 1970s, there were three 
national TV networks and virtually no cable systems. Today, there are 6 
national TV networks, plus 10,000 cable TV systems serving 65 percent 
of American homes--96% have the cable option--with DBS now offering 
digital service to millions more. The average American family now has 
access to some 30 video channel choices. Much more is on the way if the 
Pressler Bill is enacted into law.
  More News and Public Affairs. Cable deregulation--spurred by 
satellite communications deregulation--made more news and public 
affairs programming available. CNN, C-SPAN, and ESPN are prime 
examples. Local all news channels and local C-SPAN-oriented programming 
is on its way if deregulation occurs.
  More Jobs. Relaxing broadcast rules and regulations--spurred by the 
growth of cable TV--made it possible for some 300 new TV and 2,000 new 
radio outlets to emerge. This created 10,000 new jobs in broadcasting.
  Small town and rural America parity. Satellites and cable TV service 
means small town and rural Americans command nearly the same media 
choices only big city residents once enjoyed. This democratization has 
spurred public awareness of national and international events--as well 
as encouraged fuller participation in the political process.
  Political shift. Satellites, cable, talk radio, and C-SPAN, which 
were a specific result of deregulation and competition in 
communications, were prime ingredients to last year's landmark national 
political shift. Further decentralization of media control through 
deregulation will accelerate this democratization phenomenon.
  In telephone service. Competition and deregulation in the telephone 
business means:
  Lower prices. Deregulation of phone equipment resulting in faster 
deployment of advanced equipment has made it possible to reduce local 
phone rates by $4 billion since 1987. More long distance competition 
has meant nearly $20 billion in price cuts since 1987. Virtually all 
Americans now have far more choices in phone equipment and long 
distance service--and with the Pressler Bill will see choices in local 
phone services.
  New options. Sixty million American families now have cordless 
phones. Twenty-five million now have cellular phones. Fifty million 
have answering machines. Twenty million have pagers. Deregulation has 
allowed technology to evolve to meet the demands of an increasingly 
mobile society.
  Special benefits. Cellular phones have helped millions of American 
women feel safer and more secure. They have made it possible to drive 
safely under even the most severe weather conditions, because now help 
can be called.
  Computer services. Competition and deregulation in telecommunications 
will speed the deployment of the so-called information superhighway. 
Currently, 40 percent of American homes have a personal computer. 
Computers are ubiquitous for American business. There is one school 
computer for every nine students. Competition and deregulation will 
mean new communications [[Page S7890]] facilities that will magnify the 
power of these computers.
  International competitiveness. Telecommunications is a prime leverage 
technology. Competition and deregulation expands
 business access to this new technology. That makes American business 
more competitive globally. Deregulation also spurs U.S. production and 
export of high value-added products like computers, advanced telephone 
switches, mobile radios, and fiber optics. Each dollar invested in 
telecommunications results in $3 of economic growth.

  For agriculture. For agriculture, competition and deregulation in 
communications means:
  Efficiency. Farms today are the most technology-intensive small 
businesses. American farmers will be able to harness computer, 
communications, and satellite technology to stay the world's most 
efficient lowest cost food producers.
  Integration with the national community. Communications advances help 
integrate the farm community with Americans nationwide. Farm families 
will have the same news, public affairs, and entertainment choices 
nearly any American does.
  Distance learning/telemedicine. Schools in small town and rural areas 
will be able to offer the same schooling options as those in the 
suburbs and major cities. Telemedicine systems will improve the quality 
of health care available in small town and rural America, especially 
for the home bound elderly in our society.
  More jobs. Deregulation means more modern communications systems as 
costs drop for small town and rural areas which, in turn, help these 
areas attract and retain businesses and jobs. Communications 
deregulation in Nebraska meant thousands of new jobs for the State. 
Deregulation in North Dakota did the same--one of the country's biggest 
travel agencies now operate out of Linder and employs several hundred 
local people.
  For Government. For Government agencies, competition and deregulation 
in telecommunications means:
  Better service. With voice mail, smart phone services--for example, 
to renew your library book, press 1, facsimile, and electronic mail, 
Federal, State and local agencies will be able to provide the public 
better service.
  Reduced cost. Technology through deregulation and competition also 
helps Government curb costs. Taxpayers thus get better service without 
having to pay more. The right-sizing of Government agencies is made 
possible.
  Responsiveness. Using all the latest communications technologies, 
Government offices will be able to greatly expand their constituent 
services, including here on Capitol Hill.
  For business. For business, competition and deregulation in 
telecommunications means:
  No geographical disadvantage. The ability to locate businesses away 
from center cities, and to allow many workers, especially working 
mothers, to telecommute thus reducing urban traffic congestion, 
pollution problems, and easing child care problems.
  Expanding markets. Fax, 800-numbers, United Parcel, and Federal 
Express have made it possible for even the smallest companies today to 
compete on a state-wide, regional, national, and even international 
scale.
  Working smarter. Satellite networks, computerized point-of-sale 
terminals--cash registers--and computerized inventory systems often 
linked directly to suppliers make it possible for U.S. retailers and 
other businesses to stay very competitive without being overstocked or 
understocked. Technology which will be made more available through 
deregulation has also allowed stores to operate in once remote areas. 
Wal-Mart has become America largest retailer, despite its largely rural 
origins, chiefly because the company was able to harness the best in 
contemporary communications.
  For educators. For educators, competition and deregulation in 
telecommunications means:
  Greater parity. Students in small town and rural America, and in 
inner cities, will be able to access the same information and 
instructional resources only wealthy suburban districts have. Advanced 
math, science, and foreign language courses that many schools could not 
offer previously are available through telecommunications. This reduces 
the pressures to close or consolidate small town and rural schools and 
other institutions, which helps communities maintain their unique local 
character.
  Lower costs. Competition lowers the cost of telecommunications 
equipment and services. This makes it possible for schools to adopt 
communications techniques without needing to expand budgets and local 
taxes.
  For law enforcement. For law enforcement, competition and 
deregulation in telecommunications means:
  Efficiencies. Communications equipment prices will continue to fall. 
Police will be able to afford to buy on board computers, advanced 
radiocommunications, and other high-tech systems. This magnifies the 
effectiveness of law enforcement budgets.
  Better coordination. Advanced communications and computer systems 
will result in far better coordination among Federal, State, and local 
law enforcement agencies. Nationwide criminal records, drunk driving, 
stolen car, and other checks can be undertaken quickly and cheaply. 
This means law breakers will face a higher risk of apprehension, which 
means a stronger deterrent against crime.
  Personal security. Advanced computer and communications technology 
place home security systems within reach of more and more American 
families. Easier access to cellular phones will help Americans stay 
safer and feel more secure. At the same time, these telecommunications 
and information technologies help police, fire department and emergency 
medical services drastically reduce response times. In the case of 
emergency medical services far better on-the-spot service will be 
provided.
  For South Dakota and other small city and rural areas:
  The bill is designed to rapidly accelerate private sector development 
of advanced telecommunications and information technologies and 
services to all Americans by opening all telecommunications markets to 
competition.
  Recent series of television commercials have shown people sending 
faxes from the beach, having meetings via computer with people in a 
foreign country, using their computer to search for theater tickets and 
a host of other services that soon will be available. My bill would 
make those services available even sooner by removing restrictive 
regulations.
  A person living in Brandon could work at a job in Minneapolis or 
Chicago, students in Lemmon would be able to take classes from teachers 
in Omaha, and doctors in Freeman could consult with specialists at the 
Mayo Clinic. Telecommunications can bring new economic growth, 
education, health care and other opportunities to South Dakota.
  Competition in the information and communications industries means 
more choices for people in South Dakota. It will also mean lower costs 
and a greater array of services and technologies. For instance, 
competing for customers will compel companies to offer more advanced
 services like caller ID or local connections to on-line services such 
as Prodigy and America On-Line.

  It hasn't been that long since Ma Bell was everyone's source for 
local phone service, long-distance service, and phone equipment. Now 
there are over 400 long-distance companies and people can buy phone 
equipment at any department or discount store. Under my bill, 
eventually people would be able to choose from more than one local 
phone service or cable television operator.
  This new competition also should lead to economic development 
opportunities in South Dakota. People will be able to locate businesses 
in towns like Groton and Humboldt and serve customers in Hong Kong or 
New York City. We are entering an exciting era. I want to spur growth 
and bring new opportunities to South Dakota and everywhere in America.


                             j. conclusion

  S. 652 is legislation providing for the most comprehensive 
deregulation in the history of the telecommunications industry.
  Enacting this bill means ending regulatory apartheid. Under the 
Communications Act of 1934 and the Federal judiciary's Modification of 
Final Judgment, sectors of the communications industry are forcibly 
separated and [[Page S7891]] segregated. This created Government-
imposed and sanctioned monopoly models for the telecommunications 
sector.
  S. 652 tears down all the segregation barriers to competition and 
ends the monopoly model for telecommunications. It opens up 
unprecedented new freedom for access, affordability, flexibility, and 
creativity in telecommunications and information products and services.
  Passing S. 652 will hasten the arrival of a powerful network of two-
way broadband communications links for homes, schools, and small and 
large businesses. For my home State of South Dakota, and other States 
away from the big population centers, this reform bill will make the 
Internet and other computer communications more easily accessible and 
affordable.
  Local phone companies, long-distance phone companies, cable TV 
systems, broadcasters, wireless and satellite communications entities, 
and electric utility companies all will gain freedom to compete with 
one another in the communications business.
  S. 652 is not only a deregulation bill, it is a procompetitive bill. 
There is an important distinction. The 1984 Cable Act; for instance, 
deregulated rates for the cable industry but explicitly kept intact the 
barriers keeping telephone, electric companies, broadcasters, and 
others from competing for cable TV service. Keeping the monopoly model 
in place while lifting the lid on prices led directly to a backlash and 
reregulation in the Cable Act of 1992.
  This reform law will open the door for billions of dollars of new 
investment and growth. The United States is the world leader in 
telecommunications products, software, and services. Still, we labor 
under self-defeating limits on our ability to grow at home and compete 
abroad. Most foreign countries retaliate for the strict U.S. limits on 
foreign investment. This keeps us out of markets where we would have 
the natural competitive advantage and leaves them open to our 
competitors. Telecommunications innovation and productivity is 
flourishing in such countries as the United Kingdom, which has 
eliminated many barriers to foreign investment. The new legislation 
will lift limits on foreign investment in U.S. common carrier 
enterprises on a fair, reciprocal basis.
  To maintain our world leadership position we need new legislation. S. 
652 will improve international competitiveness markedly by expanding 
exports. In 1994, according to the Department of Commerce, 
telecommunications services--local exchange, long distance, 
international, cellular and mobile radio, satellite, and data 
communications--accounted for $3.3 billion in exports. 
Telecommunications equipment--switching and transmission equipment; 
telephones; facsimile machines; radio and TV broadcasting equipment, 
fixed and mobile radio systems; cellular radio telephones; radio 
transmitters, transceivers and receivers; fiber optics equipment; 
satellite communications systems; closed-circuit and cable TV 
equipment--accounted for $10.25 billion in exports. Finally, computer 
equipment accounted for $29.2 billion in exports. With this new 
legislation, telecommunications and computer equipment and services 
will be America's No. 1 export sector.
  S. 652 will spur economic growth, create new jobs, and substantially 
increase productivity. As noted earlier, each dollar invested in 
telecommunications results in 3 dollars' worth of economic growth. The 
Clinton/Gore administration estimates that with telecommunications 
deregulation the telecommunications and information sector of the 
economy would double its share of the GDP by 2003 and employment would 
rise from 3.6 million today to 5 million by 2003. The WEFA Group, in a 
Bell Company funded study, stated that with telecommunications 
deregulation 3.4 million jobs would be created in the next 10 years. In 
addition, the GDP would be approximately $300 billion higher, and 
consumers would save approximately $550 billion. Finally, George Gilder
 recently testified before the Senate Commerce Committee that if 
telecommunications deregulation like that contemplated in S. 652 does 
not take place, America will lose up to $2 trillion in new economic 
activity in the 1990s.

  S. 652 will also assist in delivering better quality of life through 
more efficient provision of educational, health care and other social 
services. Distance learning and telemedicine applications are 
especially important in rural and small city areas of America. With the 
advent of digital wireless technologies the cost of providing service 
will be lowered tenfold thus closing the gap between the costs of 
serving urban and rural areas.
  If we in Congress do our job right, by passing this legislation, we 
have the potential to be America's new high-tech pioneers--an 
opportunity to explore the new American frontier of high-tech 
telecommunications and computers that will be unleashed through bold 
free enterprise, de-regulatory, procompetitive, open entry policies. By 
taking a balanced approach which doesn't favor any industry segment 
over any other, we will First, stimulate economic growth, jobs, and 
capital investment; second, help American competitiveness; third, 
minimize transitional inequities and dislocations; and fourth, actually 
do something very good for universal service goals.
  Mr. President, on March 28, the Committee on Commerce, Science, and 
Transportation voted 17 to 2 to report S. 652, the Telecommunications 
Competition and Deregulation Act of 1995.
  Telecommunications policy usually rates attention on the business 
pages, not as a front-page story. Still, for the average American 
family, legislation to reform regulations of our telephone, cable, and 
broadcasting industries is surely one of the most important matters the 
104th Congress will consider.


                        open, deliberate process

  Mr. President, this reform legislation was years in the making. It is 
the handiwork of numerous Senators from both parties, who have shared a 
common recognition that our laws are outdated and anticompetitive.
  The recent hearing process which informed the Commerce Committee and 
led to development of S. 652 began in February 1994. During 1994 and 
1995 the Commerce Committee held 14 days of hearings on 
telecommunications reform. The committee heard testimony from 109 
witnesses during this process. The overwhelming message we received was 
that Americans want urgent action to open up our Nation's 
telecommunications markets.
  At the beginning of the 104th Congress, on January 31 of this year, I 
circulated a discussion draft of a telecommunications deregulation bill 
which reflected ideas from all the Republican members of the Commerce 
Committee. I invited the comments of ranking Democratic member Hollings 
and other Democratic members. In just 2 weeks time, Senator Hollings 
presented a comprehensive response. He has been a tremendous ally in 
this effort, as have many of my colleagues on the committee.
  Senator Hollings and I and Democratic and Republican members of the 
committee, together with the majority and minority leaders, then 
engaged in an open, deliberate, productive process of discussion and 
negotiation.
  Mr. President, it is accurate to say that staff from both parties 
have worked night after night, weekend after weekend, with scarcely any 
respite, since before Christmas on this bill.
  Mr. President, just as it won overwhelming bipartisan support in 
committee, S. 652 deserves passage by a strong bipartisan vote here on 
the floor of the Senate.
  When I travel around my State of South Dakota and see the craving for 
distance learning, for telemedicine, for better access to the Internet 
and the other networks taking shape to improve our productivity and 
quality of life, it helps me understand the need for this legislation, 
the need to work and fight for this reform.
  Mr. President, the obstacles for progress in telecommunications are 
not technical. They are political. We have it in our power to tear 
those obstacles down. S.
 652 does a substantial part of the job of tearing them all down.


                 restoring congressional responsibility

  S. 652 returns responsibility for communications policy to Congress 
after years of micromanagement by the courts. This bill will terminate 
judicial control of telecommunications policy, in particular, Federal 
Judge Harold [[Page S7892]] Greene's ``Modification of Final Judgment'' 
regime which has governed the telephone business since the breakup of 
AT&T in 1984.
  When the courts control policy, they are restricted to narrow 
considerations. Congress, on the other hand, takes into account a whole 
range of economic and social implications in establishing a national 
policy framework. S. 652 provides such an approach to 
telecommunications reform.
  Piecemeal policymaking by the courts severely delays productive 
economic activity. The average waiver process before the Department of 
Justice and the court takes an average of 4\1/2\ to 5 years to 
complete. Such delays cause uncertainty in markets and significantly 
reduce investment in telecommunications, an increasingly vital sector 
of our economy.


                        profoundly pro-consumer

  Our electronic media are in a creative tumult known as the digital 
revolution. New technology is erasing old distinctions between cable 
TV, telephone service, broadcasting, audio and video recording, and 
interactive personal computers. In many instances, the only thing 
standing in the way of consumers and businesses enjoying cheaper and 
more flexible telecommunications services are outdated laws and 
regulations.
  Mr. President, S. 652 is profoundly proconsumer. The bill breaks up 
monopolies--that's proconsumer. The bill sweeps away burdensome 
regulations. This will lower consumer costs--that's proconsumer.
  The bill opens up world investment markets for the U.S. 
telecommunications business. The impact will be more jobs, new 
services, lower costs--that's proconsumer.
  Mr. President, American consumers and businesses want to enjoy the 
full benefits of the digital revolution. They want more communicating 
power, more services, more openings, and lower prices. They want wide-
open competition.
  It is possible for Americans to have all of these. The obstacles in 
their way are not technical. We have the most powerful economy, the 
most advanced technological base in the world. The obstacles are 
political.
  The information industry already constitutes one-seventh of the U.S. 
economy. Worldwide, the information marketplace is projected to exceed 
$3 trillion by the close of the decade. Today's Federal laws prevent 
different media from competing in one another's markets, although they 
have the technical ability to do so.
  The regional Bell operating companies are protected with monopoly 
status in the local residential phone service markets. But they are 
barred from manufacturing phone equipment, offering long-distance 
service, or competing in a cable video market. Cable companies, though 
technically capable, are forbidden to offer competing phone service.
  The status quo preserves monopolies and keeps American consumers from 
access to an array of products and service options. The existing system 
of law, regulation, and court decrees, holds back the American 
telecommunications industry from its full potential to compete in world 
markets.
  S. 652 would change all this. It would bring about the most 
fundamental overhaul of communications policy in more than 60 years. It 
will break up the monopolies and increase competition. S. 652 
immediately lifts regulations barring local telephone companies' entry 
into cable service and cable's entry into the local phone business.
  It allows electric utilities to offer service in both the phone and 
cable markets, and provides fair, effective, and rapid means to make 
certain that local Bell companies abandon all vestiges of monopoly. 
Then it allows those companies into the long-distance and phone 
equipment manufacturing markets.
  This bill ends decades of protectionism in the telephone investment 
markets. This will help assure access to capital to build the Nation's 
next generation informational networking.
  On a reciprocal basis, it will give Americans more freedom to profit 
by making major investments in the telecommunications projects of 
growing markets abroad. For households and business in my home State of 
South Dakota and all around the Nation, S. 652 means lower prices for 
local, cellular, and long-distance phone service and lower cable 
television prices, too. The new competition also will spur companies to 
bring new technology and services to the marketplace faster.
  Phone customers would be assured the same number of digits and the 
same listing in directory assistance and the white pages, whether they 
choose the local Bell company or a new competitor. What is more, phone 
numbers will be portable. A customer will keep the same number even if 
he or she moves among phone companies to get better prices.
  S. 652 promotes competition in cable markets while protecting 
consumers from surges in rates. The outcome, I fully expect for 
consumers, perhaps as soon as a year from enactment of the bill, is 
plentiful competition and low rates without Federal controls.
  Freeing business from overregulation is creative and it is 
proconsumer. There was heavy skepticism 15 years ago about deregulating 
natural gas prices, but look at the results. I remember I was in the 
House of Representatives in those days and everybody said if we 
deregulate natural gas, prices are going to soar. They did not. They 
went down. Natural gas prices are lower than ever.
  Now consider how dramatic the difference in proconsumer advances have 
been between an unregulated part of the information sector--personal 
computers--compared with the heavily-regulated telephone sector.
  The personal computer success story is especially important in my 
State of South Dakota. Because a firm that was a tiny start-up in South 
Dakota a few years ago, Gateway 2000, is now a major player in personal 
computer markets. It is one of the quality leaders in home computing 
products.
  Computer industry entrepreneurs were free to gamble on the personal 
computer. No Federal or State regulator told them what they could and 
could not build, what specifications they had to meet, what markets to 
target. Market competition was fierce. Technological progress was 
breathtaking.
  By 1990, the upstart personal computer industry was selling for 
$5,000 a computer with as much processing power as a $250,000 
minicomputer of the mid-1980's, more than that of a million-dollar 
mainframe of the 1970's. Now personal computers with more than twice 
the processing power are available for $1,500.
  The upshot, in terms of price and power, is that today's computer 
systems have over 200 times the value of systems in 1994. Even with the 
historic breakup of the AT&T long-distance monopoly, the telephone 
business has remained heavily regulated, and consumers have gained 
value. In 1984, a 10-minute call from New York to Los Angeles cost $5. 
Today it cost $2.50. It should cost less, and will cost less.
  If competition and technological advances have developed in the long-
distance market, as they had in the computer market over the same 
period, that same phone call would cost less than 3 cents today, rather 
than $2.50. Three cents.
  The regulatory status quo needs shaking up. That is what S. 652 would 
do. It would do less for big existing companies than for the businesses 
and services that are still waiting to be created, and many of those 
will be small businesses. Most important, it would help bring about an 
explosion of new job opportunities and services for the American 
people.
  Let me take just a moment to describe in detail the key reforms in S. 
652. First, universal telephone service, the need to preserve widely 
available and reasonably priced services is a fundamental concern 
addressed in S. 652. The bill preserves universal service, improves it, 
and makes it cost less.
  It requires all telecommunications carriers to contribute to the 
support of universal service. Only telecommunication carriers 
designated by the FCC or a State as ``essential telecommunication 
carriers'' are eligible to receive support payments. The bill directs 
the FCC to institute and refer to a Federal-State joint board, a 
proceeding to recommend rules to implement universal service and to 
establish a minimum definition of universal service. A State may add to 
the definition for its local needs.
  Mr. President, to smaller cities and rural communities and others who 
depend upon universal service nothing is [[Page S7893]] changed. They 
continue to enjoy affordable access to phone service as before. The 
most important impact of S. 652 is structural and management reform in 
universal service that will save the American taxpayers $3 billion over 
the next 5 years. I think that is important to say. The universal 
service of this will cost less in these years.
  For local telephone competition, S. 652 gives a green light to local 
telephone competition. The bill breaks up the old monopoly system for 
local phone service. All Federal barriers to competition will be 
removed, and all State and local barriers will be preempted. Cable 
companies, long-distance companies, electric companies and other 
entities will gain a chance to offer lower prices and better service 
for local phone service.
  Upon enactment, the legislation preempts all State and local barriers 
to competing with the telephone companies. In addition, it requires 
local exchange carriers having market powers to negotiate, in good 
faith, interconnection agreements for access to unbundled network 
features and functions that reasonable and nondiscriminatory rates.
  This allows other parties to provide competitive service through 
interconnection with the LEC's facilities. The bill establishes minimum 
standards relating to types of interconnection that an LEC with market 
power must agree to provide if requested, including the following: 
Unbundled access to network functions and services; unbundled access to 
facilities and information; necessary for transmission, routing, and 
interoperability of both carriers' networks; interconnection at any 
technological feasible point; access of polls, ducts, conduits, and 
rights of way; telephone number portability; and local dialing parity.
  As an assurance that the parties negotiate in good faith, either 
party may ask the State to arbitrate any differences, and the State 
must review and approve any interconnection agreement.
  There is long distance and manufacturing relief for the Bell 
companies. The Telecommunications Competition and Deregulation Act of 
1995 establishes a process under which the regional Bell companies may 
apply to the FCC to enter the long-distance market. Since the 1984 
breakup of AT&T, the Bell companies have been prohibited from providing 
long-distance service. S. 652 reasserts congressional authority over 
Bell company provision of long distance and restores the FCC authority 
to set communication policy over those issues. The Attorney General has 
a consulting role.
  The bill requires Bell local companies and other LEC's with marketing 
power to open and unbundle their local networks to increase the 
likelihood that competition will develop for local telephone service.
  It sets forth a competitive checklist of unbundling and 
interconnection requirements. If a Bell company satisfies the 
checklist, the FCC is authorized to permit the Bell company to long-
distance service if this is found to be in the public interest.
  Once a Bell company has met the checklist requirements, it also will 
be allowed to enter the markets for manufacturing phone equipment.
  In conducting its manufacturing activities, a Bell company must 
comply with the following safeguards:
  A separate manufacturing affiliate;
  Requirements for establishing standards and certifying equipment;
  Protections for small telephone companies. A Bell manufacturing 
affiliate must make its equipment available to other telephone 
companies without discrimination or self-preference as to price 
delivery, terms, or conditions.
  This bill also opens international investment markets.
  S. 652 lifts limits on foreign ownership of U.S. common carriers. The 
bill establishes a reciprocity formula whereby a foreign national or 
foreign-owned company would be able to invest more than the current 25 
percent limit in a U.S. telephone company if American citizens or firms 
enjoyed comparable opportunities. This would allow increased investment 
in and by the U.S. telecommunications industry, which enjoys worldwide 
comparative advantage.
  Finally, in the area of cable competition, the bill permits telephone 
companies to compete against local cable companies upon enactment, 
although until 1 year after enactment the FCC would be required to 
approve Bell company plans to construct facilities for common carrier 
``video dialtone'' operations. The bill also removes at enactment all 
State or local barriers to cable companies providing telecommunications 
services, without additional franchise requirements.
  The bill maintains rate regulation for the basic tier of programming 
where the cable operator does not face ``effective competition,'' 
defined as the provision of video services by a local telephone company 
or 15 percent penetration by another multichannel video provider. The 
bill minimizes regulation of expanded tier services. Specifically the 
bill eliminates the ability of a single subscriber to initiate at the 
FCC a rate complaint proceeding concerning expanded tier services. In 
addition, the FCC may only find rates for expanded tier service 
unreasonable, and subject to regulation,
 if the rates substantially exceed the national average rates for 
comparable cable programming services.

  In the area of spectrum flexibility and regulatory reform for 
broadcasters, if the FCC permits a broadcast television licensee to 
provide advanced television services, the bill requires the FCC to 
adopt rules to permit such broadcasters flexibility to use the advanced 
television spectrum for ancillary and supplementary services, if the 
licensee provides to the public at least one free advanced television 
program service. The FCC is authorized to collect an annual fee from 
the broadcaster if the broadcaster offers ancillary or supplementary 
services for a fee to subscribers.
  A single broadcast licensee is permitted to reach 35 percent of the 
national audience, up from the current 25 percent. Moreover, the FCC is 
required to review all of its ownership rules biennially. Broadcast 
license terms are lengthened for television licenses from 5 to 10 years 
and for radio licenses from 7 to 10 years. Finally, new broadcast 
license renewal procedures are established.
  Entry by registered utilities into telecommunications is allowed.
  Under current law, gas and electric utility holding companies that 
are not registered may provide telecommunication services to consumers. 
There does not appear to be sufficient justification to continue to 
preclude registered utility holding companies from providing this same 
competition. The bill provides that affiliates of registered public 
utility holding companies may engage in the provision of 
telecommunications services, notwithstanding the Public Utility Holding 
Company Act of 1935. The affiliate engaged in providing 
telecommunications must keep separate books and records, and the States 
are authorized to require independent audits on an annual basis.


                             alarm services

  Beginning 3 years after enactment, a Bell company may provide such 
services if it has received authorization from the FCC to provide in-
region interLATA service. The bill requires the FCC to establish rules 
governing Bell company provision of alarm monitoring services. A Bell 
company that was in the alarm service business as of December 31, 1994 
is allowed to continue providing that service, as long as certain 
conditions are met.
  Finally, continuous review and reduction of regulation.
  The bill also ensures that regulations applicable to the 
telecommunications industry remain current and necessary in light of 
changes in the industry. First, the legislation permits the FCC to 
forbear from regulating carriers when forbearance is in the public 
interest. This will allow the FCC to reduce the regulatory burdens on a 
carrier when competition develops, or when the FCC determines that 
relaxed regulation is in the public interest.
  Second, the bill requires a Federal-State Joint Board to periodically 
review the universal service policies.
  Third, the FCC, with respect to its regulations under the 1934 act, 
and a Federal-State Joint Board with respect to State regulations, are 
required in odd-numbered years beginning in 1997 to review all 
regulations issued under the act or State laws applicable to 
telecommunications services. The FCC and Joint Board are to determine 
whether any such regulation is no longer in the [[Page S7894]] public 
interest as a result of competition.
  In short, Mr. President, this bill promotes deregulation as far as it 
logically should go. It provides a kind of ``sunset'' process for all 
regulations which the bill does not abolish immediately.
  I welcome the coming debate and vote on S. 652. I urge my colleagues 
to reassert congressional responsibility for telecommunications policy.
  Let me say, in summary and in conclusion, Mr. President, what we are 
trying to do here is to get everyone into everyone else's business. The 
economic apartheid that has been a part of telecommunications since the 
act of 1934 should be brought to an end.
  I believe the passage of this bill would be like the Oklahoma land 
rush, the going off of the gun, because presently a lot of investment 
in the United States is paralyzed because we do not have a roadmap for 
the next 5, 10, or 15 years until we get into the wireless age.
  What is happening is that many of our companies are investing in 
Europe or abroad because they are prohibited from manufacturing or 
doing something here. As a result, American jobs are being lost.
  This particular bill, if we can pass it, will provide a roadmap which 
businessmen and investors will be able to invest in and make an 
explosion of new devices, an explosion of new jobs, and will help our 
country a great deal.
  I think it will help consumers by lowering prices and providing more 
devices, and it will also help labor by providing more jobs of the type 
that we need in our country.
  I wish to pay tribute again to Senator Hollings and his staff and all 
the Senators on the committee who have worked so hard--and Senators in 
this Chamber. I have spoken to all 100 Senators at some point on this 
bill and it has been a long time getting it up. I hope we can proceed 
through today and tomorrow.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, as the communications bill, S. 652, 
comes up for consideration, my first urge is one of gratitude. I want 
to thank the majority leader and minority leader for their leadership 
in calling up this bill and, of course, I particularly want to thank 
the chairman of our committee who has been outstanding in working all 
day long in getting this bill to the floor.
  Senator Lott on the majority side and Senator Inouye, who was the 
chairman of our Communications Subcommittee, now the ranking member, 
have been working around the clock. Of course, particular thanks goes, 
again, for our staff members. I thank the chairman's staff--Paddy Link, 
Katie King, and Donald McLellan. On my staff particular gratitude must 
go to Kevin Curtin, John Windhausen, and Kevin Joseph for all their 
efforts.
  We do not extend such thanks casually. This effort started in the 
fall of 1993, and every Friday morning we would meet with the Bell 
companies, the regional Bell operating companies. Every Tuesday morning 
the staffs would meet again with the competing interests of long 
distance and all the other industry interests. We have continued those 
meetings right up to this afternoon. We have been working, meeting, 
reconciling, trying our dead-level best to bring a complicated measure 
up to the modern age of telecommunications.
  To this Senator, they have all done an outstanding job. So it is not 
a casual ``thanks,'' but it is one that is very genuine and sincere. We 
thank them all for their cooperation and understanding.
  As this bill is called up, it is good to note and emphasize that the 
Commerce Committee reported it by a vote of 17 to 2 on March 23. It is 
a product of months and months of consideration and discussion by the 
committee and by Senators all involved. In the last Congress, Senators 
Inouye, Danforth, and I sponsored S. 1822, which was approved at that 
time by the Commerce Committee by a vote 18 to 2.
  The committee held 31 hours of testimony, 11 days of hearings, and 
heard from 86-plus witnesses. In this Congress, the committee on S. 652 
has held 3 days of hearings on telecommunications reform, heard from a 
number of witnesses representing a broad variety of interests.
  S. 652 achieves a very, very important objective. Most important of 
all the objectives was the requirement of universal telephone service 
that would be available and affordable and continued to be outstanding. 
We have the finest communications services in the world.
  This Senator went through the experience of airline deregulation. And 
truth is truth, and facts are facts. Do not come and tell me how 
airline deregulation is working. All of the airlines have just about 
gone broke. And I can tell you from paying just to go from Charleston 
to Washington and Washington to Charleston and back, it is just an 
inordinate 600 and some odd dollars. What has happened is 85 percent of 
America is subsidizing some 15 percent for the long haul. They talk 
about market forces, market forces. We had a good arrangement on the 
regulated airline service, and we have come full circle now with 
regulating foreign airlines and KLM taking over Northwest, British Air 
coming in on USAir, and all the rest being saved while we proudly stand 
up as politicians blowing hot and hard how wonderful airline 
deregulation is working. That is hooey.
  I wanted to make sure that we did not fall in and mess up in this 
particular one with the wonderful telecommunications service that we 
have had. This bill promotes competition in the telecommunications 
market and restores regulatory authority over the industry to the 
Federal Communications Commission. That administrative entity has also 
been outstanding in their rendering of decisions and moving forward as 
best they could with the technological developments. But the 
competition of the communications and regular telephonic service and 
long distance evolved into a heck of a monopoly that we could not 
deregulate. I was on the teams that worked all during the 1970's and 
the early 1980's. Finally, the Department of Justice had to bust it up. 
We found out that they were so strong politically and financially that 
they could cancel out any and everybody. Senator Dole on the majority 
side, this Senator on the minority side, all during the 1980's tried to 
get it back to the FCC, and we were blocked. This Senate passed the 
manufacturing bill to allow the Bell companies to get into 
manufacturing, passed by a vote of 74, bipartisan, and it was blocked 
over on the House side.
  So the difficulty has really been in trying to get it from Judge 
Greene back into the administrative body where the people's decisions 
and policies are made by the Congress, administered by the Federal 
Communications Commission, but blocked by the industry itself time and 
time again.
  Let me also mention Judge Greene who has done an outstanding job. I 
want to make note that it was just announced that Judge Greene will 
enter senior status this August. I just could not give him enough kudos 
in the way he has handled this, almost a one-man administrative 
responsibility for over 10 years now in his deliberate approach to the 
needs of the public by maintaining at the same time universal service.
  The basic thrust of this bill is clear. Competition is the best 
regulator of the marketplace. But until that competition exists, until 
the markets are opened, monopoly-provided services must not be able to 
exploit the monopoly power to the consumers' disadvantage. Competitors 
are ready and willing to enter the new markets as soon as they are 
opened. Competition is spurred by S. 652's provisions, specifying 
criteria for entry into the various markets.
  For example, on a broad scale, cable companies will provide telephone 
service; telephone companies will offer video services, as pointed out 
by our distinguished chairman; and telephone companies will, in 
addition, provide to the consumers the continued universal service; the 
consumers will be able to purchase local telephone service from several 
competitors; electric utility companies will offer telecommunications 
services; the regional Bell operating companies will engage in 
manufacturing activities. All of these participants will foster 
competition with each other and create jobs along the way. Of course, 
long distance will enter the local exchange, and as the local exchange 
is opened, the regional Bell operating companies will enter into long 
[[Page S7895]] distance. So we are really moving very expeditiously 
into the competitive market.
  We should not attempt to micro- manage the marketplace. Rather, we 
must set the rules in a way that neutralizes any party's inherent 
market power so that robust and fair competition can ensue. This is 
Congress' responsibility.
  So this bill transfers jurisdiction over the modified final judgment 
from the courts to the Federal Communications Commission. Judge Greene, 
as I mentioned, has been overseeing that modified final judgment in an 
outstanding fashion. He was doing yeoman's work in attempting to ensure 
that monopolies do not abuse that market power. Now it is time for the 
Congress to reassert its responsibilities in this area.
  Let me address some of the specific areas of importance. The need to 
protect advanced universal service is one fundamental concern of the 
committee in reporting S. 652. Universal service must be guaranteed, 
the world's best telephone system must continue to grow and develop, 
and we must ensure the widest availability of telephone service. Under 
this bill, all telecommunications carriers must contribute to their 
universal service fund. A Federal-State joint board will define 
universal service. This definition will evolve. It is a flexible 
requirement--a requirement, I should say rather, of flexibility so that 
the definition will evolve over time as technologies change so that 
consumers have access to the best possible services.
  Special provisions in the legislation address universal service in 
rural areas to guarantee that harm to universal service is avoided 
there. One of the most contentious issues in this whole discussion has 
been when the regional Bell operating companies should be allowed to 
enter the long distance market.
  Under section VII(C) of the modified final judgment consented to buy 
all the RBOC's and attested to in the hearings that we have had on this 
bill, as a group the test has been whether the RBOC's seeking entry 
into long distance could have a substantial possibility of impeding 
competition in that long distance market which it seeks to enter.
  Last year, S. 1822 contained a requirement that the Department of 
Justice utilize this test in considering any application for the 
regional Bell operating companies' entry into long distance. In 
addition, the FCC was to utilize a public interest test for considering 
any such application. This was an approach to which the regional Bell 
operating companies agreed during the last Congress. This year, earlier 
draft provisions, however, set a date certain for entry by the RBOC's 
into the long distance market.
  So after all the hearings and much discussion and negotiation, we 
determined that this self-defeating approach of a calendar ruling there 
would be no consideration of the competitive circumstances in the 
marketplace.
  So S. 652 specifies that the FCC may approve any application to 
provide long distance if it finds, one, that the RBOC has fully 
implemented the unbundling features specified in the competitive 
checklist in the new section 255 of the Federal Communications Act of 
1934;
 two, the RBOC will provide long distance using a separate subsidiary; 
and, three, application is consistent with the public interest, 
convenience, and necessity.

  Mr. President, when I mentioned that section 255 is a new section 
under the Communications Act, I should say of 1934. It is good to point 
out that we have used the original Communications Act of 1934, as 
amended, for the simple reason that over the 60 plus years we now have 
a complex body of law, special rulings, interpretations of legal 
expressions and requirements by the courts. We are now tasked with the 
job of trying to bring competition to a regulatory structure based on a 
monopoly and open up the marketplace.
  I remember in an earlier debate we had this year it was brought out 
that 60,000 lawyers are registered to practice before the District of 
Columbia bar, 59,000 of whom are probably members of the federal 
communications bar. That is why you will see every effort to change 
every little word and analyze every phrase. So we have really had a 
difficult task trying to break up the monopoly of the local telephone 
companies and to open the market so competition could ensue and yet it 
is the monopoly that has provided us with the universal service we all 
enjoy. We do not want to penalize or jeopardize in any sense the 
regional Bell operating companies that have been doing an outstanding 
job because there is no shortcut there. If you penalize them and put 
them into an uncompetitive position, then, of course, your rates are 
bound to go up.
  So S. 652 is a balanced bill. The public interest test is fundamental 
to my support for the legislation. In making this public interest 
evaluation, the FCC is instructed to consult with the Department of 
Justice which may furnish the Federal Communications Commission with 
advice on the application using whatever standard it finds appropriate, 
including antitrust analysis under the Clayton and Sherman Acts and 
also section VIII(C) under the Modified Final Judgment.
  Mr. President, this is great leap from the actual and demonstrable 
competition test originally proposed in S. 1822 from the last Congress. 
While I would prefer a more active Department of Justice role, and an 
explicit reference in the statute to the section VIII(C) test, I 
support the provisions of S. 652 because the FCC will have the benefit 
of the Department of Justice views prior to making any decision. The 
Department of Justice may well decide to base its decision on whether 
there is a substantial possibility that the regional Bell operating 
company will impede competition through use of its monopoly power or 
any other standard under the antitrust law. The report accompanying 
this bill makes it clear.
  I might emphasize at this particular point the leadership that 
already this year has been given by the antitrust division, by the 
Department of Justice and the outstanding director, Assistant Attorney 
General, Ms. Anne Bingaman. She has obtained what we as politicians 
have been trying over 4 years to get together, and that is about a 
month ago on national TV there appeared the regional Bell operating 
company, Ameritech, the long distance company AT&T, the Department of 
Justice and the Consumer Federation of America, all four entities 
important to the entire process agreeing on the steps of unbundling, 
dialing parity, access, interconnection, all of these things all ironed 
out that in the technological world of communications we have debated 
back and forth over these many years. They have gotten together. They 
are going into Grand Rapids and Chicago, and, of course, the RBOC is 
getting into long distance.
  And so while we politicians on the floor of the Senate will be 
debating in the next few days, no doubt it should be mentioned that the 
Department of Justice, under the leadership of Ms. Anne Bingaman, has 
already gotten the parties together. I am convinced that their consent 
decree now before Judge Greene will be affirmed.
  S. 652 requires that an RBOC must provide long distance using a 
subsidiary separate from itself to avoid any cross-subsidization 
between local and long-distance rates. These and other safeguards in 
the bill should prevent against RBOC abuses in the long-distance 
market.
  The committee-approved bill also includes some deregulation rates for 
cable television. The Democratic proposal at the beginning of the year 
did not suggest any such deregulation because from 1986 to 1992 cable 
rates had risen three times faster than the rate of inflation, so that 
the Congress back in 1992 overwhelmingly imposed rate regulation and 
new service standards on the cable operators.
  We passed the 1992 Cable Act largely in response to the complaints 
from consumers that rates had soared beyond reason and service was 
poor. The bill actually became law with the bipartisan vote to override 
President Bush's veto.
  Now, since the 1992 act was adopted, the cable industry has 
experienced significant growth. Subscribership is up, stock values in 
cable companies have risen dramatically, and debt financing by the 
cable industry rose in 1994 by almost $4 billion over the 1993 levels. 
But the Consumer Federation of America estimates that $3 billion has 
been saved for American consumers through the rate regulation that has 
been put into [[Page S7896]] place. Yet some in the industry maintain 
that cable regulation produces uncertainty in financial markets and 
that cable operators will need to be able to respond to new competitors 
through additional revenues.
  S. 652, therefore, changes the standard of regulation for the upper 
tiers of cable programming. It makes no changes in the regulation of 
the basic tier. Under the bill, a rate for the upper tier cannot be 
found to be unreasonable unless it substantially exceeds the national 
average rate for comparable cable programming.
  This standard will allow cable operators greater regulatory 
flexibility for the upper tiers. The bill retains the FCC's authority 
to regulate excessive rates charged to the upper tiers.
  In addition, the bill changes the definition of effective competition 
in the 1992 act to allow cable rates to be deregulated as soon as the 
telephone company begins to offer competing cable services in the 
franchise area. Once consumers have a choice among entities offering 
cable service, the need for regulation no longer exists.
  S. 652 increases the ability of any entity including television 
networks to own more broadcast stations. Today, the FCC rules allow an 
entity to own broadcast stations that reach no more than 25 percent of 
the Nation's population. This limit was imposed out of concern that 
broadcast stations would be owned by a few individuals, and that 
concentration would not be beneficial to our local communities or yield 
the benefits that result from the expression of diverse points of view. 
S. 652 would increase that level to 35 percent.
  Any modification in the national ownership cap is important because 
of localism concerns. Local television stations provide vitally 
important services in our communities. Because local programming 
informs our citizens about natural disasters, brings news of local 
events, and provides other community-building benefits, we cannot 
afford to undermine this valuable local resource.
  Earlier drafts of the legislation would have eliminated many of the 
FCC regulatory limits on the broadcast industry. By contrast, S. 1822, 
as approved by the Commerce Committee last year, required the FCC to 
conduct a proceeding to review the desirability of changing these 
rules.
 I think the bill with 35 percent permeation is an acceptable 
compromise between those positions.

  In addition, the bill repeals a prohibition on cable broadcast 
crossownership. S. 652 makes no change in the other broadcast ownership 
rules such as the duopoly rule or the one-in-the-marketplace rule. 
Rather, the FCC is instructed to review these rules every 2 years, and 
they can change it upon review.
  This comprehensive bill strikes a balance between competition and 
regulation. New markets will be open, competitors will begin to offer 
services, consumers will be better served by having choices among 
providers and services.
  I urge my colleagues to support the bill. I myself would have gone 
further in several areas covered by the legislation, but I have seen 
that any one sector of the telecommunications industry can stop this 
bill and checkmate the others, as I have stated before. 
Telecommunications reform is too important to let this opportunity go 
by.
  Finally, Mr. President, it should be emphasized that here is one 
industry that suffered from deregulation. You cannot approach this 
problem in S. 652 as we bring it into the technological age without 
thinking back to 1912 when David Sarnoff was a clerk in Wanamaker's 
store and the sinking of the Titanic was occurring. They raced him up 
to the roof of Wanamaker's. He set up his wireless, made radio contact 
with the sinking ship and contacted rescue vessels, directing not only 
some of the rescue effort but the names of survivors, working almost 72 
hours around the clock.
  Everyone then got a wireless. There was not any regulation. And by 
1924, when Herbert Hoover was the Secretary of Commerce, all of those 
wireless operators came rushing to the Secretary of Commerce and said, 
``For heaven's sake, we have nothing but jamming.'' The radio 
broadcasters, who have a tremendous interest in this S. 652, went 
begging to be regulated. So they were in the act of 1927 and brought 
into that age then with the 1934 act.
  So those who are now talking about getting rid of the Government and, 
incidentally, by the way, we can save money by getting rid of the FCC, 
ought to stop, look and listen. They have to have a sense of history. 
We can get rid of total deregulation, jamming each other and all that 
sort of thing, but, after all, the public airways belong to the public, 
on the one hand, and they need a modicum of administration, on the 
other hand, for this finest, finest of communications systems in the 
entire world.
  Let us not talk about the FCC costing money. They are the entity this 
year that already by auction has brought in $7 billion to the Federal 
Government. If you can find any other bureau, commission, 
administration, department of Government or otherwise that has reaped 7 
billion bucks, I would like to find it.
  We have the money to administer all of these things and bring it into 
a deregulatory, competitive position, but it has to be done in an 
orderly fashion, and everyone connected and working on this understands 
that. So let us not start talking about getting rid of the FCC and act 
like you are doing something sensible.
  I thank my colleagues and yield the floor.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Mr. President, it may well be that the two distinguished 
southern managers of this bill, the Senators from South Dakota and 
South Carolina, may never have imagined that this day would come. This 
is probably the first occasion on which a thorough philosophical change 
in direction in communications law has been debated on the floor of the 
U.S. Senate since the Communications Act of 1934, some 61 years ago.
  In 1934, of course, communications was via old-fashioned dial or 
operator-assisted telephone through radio stations and through Western 
Union telegrams. The technological situation of the time called for 
monopoly communications systems and the necessity of regulation of 
those systems in the public interest to see that prices were not too 
high.
  Today, of course, technology is so totally and completely different 
that an entirely different regime is needed. Perhaps the greatest 
difficulty in bringing this day on which we start this debate to pass 
has been the fact that in each long set of hearings in the Senate 
Commerce Committee over a year or more, each tentative set of 
conclusions on the part of these two Senators, and others, by the time 
those conclusions had been reached, the technology has gone beyond 
those conclusions.
  So there seems to be a broad agreement across both parties and many 
political philosophies that there should be a large degree of 
deregulation as a part of any bill, based on the proposition that we 
cannot tell how much the technology will change in the next 6 months, 
much less the next 10 years, and that we should accommodate it without 
constantly trying to regulate it through some form of statutory 
language. That is the philosophy of this bill, a philosophy of 
competition rather than of regulated monopoly.
  It has been a difficult process and it is likely to be a difficult 
process for the next 3 or 4 days.
  So rather than repeat anything that the two leaders in this debate 
have said, I would simply like to say from the perspective of this 
Senator, as a member of the Commerce Committee, there have been three 
guiding principles in dealing with the many conflicts among groups who 
would like to provide communication services, and those three guiding 
principles are, of course, deregulation, competition and the interests 
of the consumers, the users of these various services.
  Mr. President, there are a number of areas covered by this bill in 
which those three interests lead to the same conclusion: Deregulation 
will promote competition, competition will promote the consumer 
interest.
  Those parts of the bill probably will not be the subject of much 
discussion during the course of this debate. They have been worked out. 
But the three considerations are at least slightly different and move 
in slightly different [[Page S7897]] directions. Because of the nature 
of the communications industry, which still includes huge regulated 
monopolies, a total and complete deregulation at least carries with it 
the risk not of competition but of an unregulated monopoly substituting 
itself for a regulated monopoly. So there must be a degree of caution 
in the speed and the completeness of any kind of deregulation.
  Almost always, it seems to me, Mr. President, that competition is in 
the consumer interest, though ironically many of the so-called 
organized consumer groups have little faith in competition and in the 
free market and believe in various forms of state socialism and want in 
many respects more regulation. I believe, Mr. President, that those so-
called consumer representatives rarely represent the actual consumer 
interest.
  So as we go through this debate over particular proposed amendments 
during the course of the next week, it seems to me we all have to 
attempt to judge them on the basis of those three principles: Are they 
deregulatory in nature in a constructive fashion that is consistent 
with the march of new technologies? Do they promote competition? And 
are they in the consumer interest?
  Mr. President, there is only one other major point that I want to 
make at this time, and that is that of all of the proposals with which 
I have had to deal in my career in the Senate, this is perhaps the most 
important for the future of our economy. Perhaps as much as 20 percent 
of our economy is connected with communications in some respect or 
another. And, of course, the lobbying, the attempt to influence all of 
us on the part of people who are in the communications business or wish 
to be in the communications business is fierce, is overwhelming in 
nature. At the same time, the actual consumers of these goods, our 
constituents, who are not in the business, are almost totally silent.
  I have hardly gotten a handful of telephone calls or letters from 
ordinary citizens about this bill. It is too big. It is too 
complicated. It is about the future. It is very difficult to come up 
with an intelligent opinion off the top of one's head on some of the 
particular controversial areas in it. And so it is up to us to weigh 
the consumer interest as we work our way through this legislation, 
along with those features that will lead to competition, generally 
speaking, through deregulation.
  My observation is that the large companies and groups which are 
already in the communications business do sincerely favor competition. 
But, generally speaking, they would like to create a competitive 
atmosphere in which they are at least even, and perhaps have a little 
bit of an advantage. And so the mythical even playing field is 
something to which all give lipservice but each defines in a different 
fashion.
  Now, the new companies, the entrepreneurs, those who are just 
beginning in the field, or wish to get in the field, simply want it 
opened up. They want to be able to compete, where today they cannot. 
Few of them are large enough to demand some kind of special privileges 
or another. And we need to encourage both.
  We need to encourage the continued investment in this new technology 
on the part of those companies that have been in the business literally 
forever. We cannot lose their expertise and that tremendous investment. 
We need to see to it that those large companies are able to compete 
against one another in the consumer interest. At the same time, we also 
need to see to it that the niche companies, the new companies, the 
people with bright new ideas, are able to get into this business and if 
they are tremendously successful, become large companies as well.
  So, Mr. President, we search for deregulation, we search for 
competition, and we search for the consumer interests. I think we all 
do so sincerely, determined that we need to make major changes, and 
perhaps with a degree of humility, that we do not know what is going to 
happen tomorrow, and we wish to craft an outline which will allow 
tomorrow to take place without our having crushed it by unanticipated 
consequences to the actions we take here.
  I want to close by congratulating both of my colleagues, the Senator 
from South Dakota and also the Senator from South Carolina, who has 
spent a major part of his career in this field and who now has, I 
think, the enviable task of attempting to manage this legislation 
wisely and successfully to a conclusion that will benefit all of the 
American people.
  Mr. DOLE addressed the Chair.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. DOLE. First, I thank and congratulate the chairman and the 
ranking member of the committee, Senator Pressler and Senator Hollings. 
We have been promising week after week that this bill was coming to the 
floor. I do not believe it now that it is on the floor and pending. I 
have every expectation, with their management skills, that we can 
probably finish this bill by Friday noon. If that is the case, we 
probably would not have any votes on Monday--if that is an incentive 
for anybody. We might have debate on some other bill but no votes on 
Monday. So if we can consider those incentive programs as we go along, 
it will be helpful. But it is a very important piece of legislation. It 
is probably the most important bill we have considered all year, no 
doubt about it. It will create jobs, opportunity, all of the things we 
have talked about. I have listened to both managers' opening 
statements.
  Mr. President, some may consider S. 652 to be the end of a long, 
long, process. And no doubt about it, telecommunications deregulation 
legislation has been an idea debated around here for nearly a decade. 
In fact, I first introduced telecommunications deregulation legislation 
in 1986.
  But rather than seeing this bill as an end to the process, I see it 
as a beginning: A beginning of a new era of leadership for the 
telecommunications industry and for America.
  And one person who deserves a good deal of credit for making this new 
era a reality is Senator Pressler. As all Members know, this is a 
tough, complex, and often contentious issue. And Senator Pressler and 
Senator Hollings have done an outstanding job at bringing the competing 
interests together--or as close together as possible.
  Senator Hollings was the chairman and came very close last year to 
getting a bill. This year, under the chairmanship of Senator Pressler, 
we are on the floor with the bill. We have not passed it yet, but my 
understanding is that there is a lot of bipartisan support. It is not a 
partisan measure, a Democrat or Republican partisan fight. So we ought 
to be able to complete it quickly, because they have done an 
outstanding job of bringing the competing interests as close together 
as possible.
  Mr. President, leadership in telecommunications, whether it was 
inventing the telegraph or the microchip, has been an American 
tradition. And we will continue that tradition with passage of this 
bill.
  As I have said before, telecom reform will be the real jobs stimulus 
package of this decade.
  Building the necessary infrastructure will require thousands of 
private sector jobs. And that is just the beginning. Millions more will 
be created because information will become more accessible. Jobs that 
will make America more efficient, more productive, and ultimately more 
powerful.
  Looking back on Congress' track record, a casual observer would think 
that we have a grudge against the communications industry. Fortunately, 
this image is changing and Republicans are glad to see that traditional 
``pro-regulators'' are finally coming around to our competitive way of 
thinking.
  We must develop a flexible policy that will accommodate the explosion 
of new technology. That policy, of course, is promoting competition. It 
is irresponsible to think we can do anything more.
  No one knows the benefits of free and open competition better than 
the computer and semi-conductor industries. Just take a look at a few 
of the players in the U.S. communications industry.
  Last year, the computer industry earned revenues close to $360 
billion. Two things are amazing about that figure. First, it is twice 
the telephone industry's revenues. And second, revenues from the 
personal computer industry, which for all intents and purposes was non-
existent in 1980, account for almost half of that figure. In other 
words, revenues in personal computers [[Page S7898]] have grown as much 
in 14 years as the entire telephone industry did in 100.
  It is not too difficult to figure out that the computer industry 
benefitted from fierce competition and minimal government regulation. 
Phone companies did not.
  Cable TV also exploded after it was de-regulated in 1984. At that 
time, its revenues were $7.8 billion and it employed 67,381 persons. 
Fast-forward to 1992. Revenues tripled and employment numbers jumped to 
108,280. While these numbers are also good, I would suggest that the 
cable TV industry would have done much better if it had faced 
competition. More importantly, I would also suggest that there would 
not have been the abuses which prompted Congress to enact re-regulation 
in 1992.
  My point is simple: competition, not regulation, has the best record 
for creating new jobs, spurring new innovation, and creating new 
wealth.
  Mr. President, America is at the cross roads, and Congress must make 
a choice. A touch choice, as we all know. But I believe that if we ask 
the right question, we will get the right
 Answer. As I see it, we must ask ourselves, ``who will decide the 
communications industry's future.''

  I say we allow the real technical experts to decide. And I am not 
talking about government bureaucrats. Instead, we should look to the 
experts in the field, the entrepreneurs, the engineers, and the 
innovators. It seems to me that they will do a far better job for our 
country if big government leaves them alone.
  I, for one, cannot allow government to become the biggest player in 
the telecommunications industry. Too much is at stake. It is nonsense 
to gamble away millions of new jobs. It is nonsense to gamble away 
America's ability to compete, and win, around the world. And it is 
nonsense to gamble away the spoils that the information age will bring.
  To get there, I have worked with the committee to develop a 
comprehensive deregulatory amendment that touches all sectors of the 
communications industry. It is my understanding that the managers are 
not quite ready to accept it now.
  I have a list describing each provision that I will insert in the 
Record at the end of my remarks, but for now, I will just highlight a 
few of the provisions.
  First, deregulate small cable TV systems. This has bipartisan 
support. Although views differ on deregulating the entire cable TV 
industry, most of us can agree that rural and small systems need rate 
relief in order to survive. This provision gets it done.
  Second, force the Federal Communications Commission to eliminate 
outdated regulations, and do so in a timely manner. Currently, there is 
no guarantee that the Commission will ever act on requests that it 
forbear on regulations. Under this amendment, the Commission must 
respond within 90-days--60 more can be added if the issue requires 
additional scrutiny. Most importantly, it must provide a written 
determination to justify its actions.
  Third, eliminate the number of TV stations that any one entity can 
own. Currently, the limit is capped at 12. This amendment removes that 
cap. I want to point out, however, that this amendment does not, I 
repeat, does not increase the percentage of national viewership beyond 
the 35 percent that is included in the chairman's mark.
  The amendment also eliminates the number of radio stations one can 
own, unless the Commission finds that issuing or transferring a license 
will harm competition.
  The measure also privatizes or eliminates a number of FCC functions. 
The Commission deserves credit for making these suggestions that 
comprise this provision. In other words they came from the FCC.
  I could go on at length, but I believe I have given my colleagues a 
flavor of what this amendment is about.
 I know the managers and members of their staffs are well acquainted 
with it.

  This amendment does represent the hard work of many Members, 
obviously Members on both sides of the aisle. Senator Burns has been 
working on this for a couple years, Senator Craig, Senator Packwood, 
Senator McCain on our side, just to name a few, and, of course, Senator 
Pressler and Senator Hollings.
  It does not matter how long we work on it, if we cannot get it 
accepted, it does not make any difference. We hope at the appropriate 
time that it can be accepted. I hope that we will continue on the 
procompetitive, deregulatory course that we have taken in a bipartisan 
way, and in only that way will we ensure that today is beginning a new 
renaissance for America.
  Mr. President, I ask that a summary of the deregulation package be 
printed in the Record following my statement.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    Summary of Deregulation Package

       Transfers Judge Green's MFJ (consent decree) to the FCC.
       Eliminates GTE's consent decree.
       Adopts definition to restrict expansion of universal 
     service so that it does not spiral out of control.
       Greater deregulation for small cable TV. As the bill stands 
     now, small cable can't take advantage of any rate 
     deregulation because of the way their systems are set-up. To 
     take care of them, the deregulatory amendment would 
     completely eliminate rate regulation for cable operators who 
     serve less than 35,000 in one franchise area, and do not 
     serve more than 1% of all subscribers nationwide (650,000 
     subscribers). Obviously, this is a pretty broad definition of 
     a ``small'' cable company.
       Increase the Commission's ability to forbear on regulation.
       Establish a petition driven process to force the commission 
     to forbear on regulation within a 90-day period. If the 
     Commission does not act, or extend period by an additional 60 
     days, the petition shall be deemed granted. If petition is 
     rejected, it must be with a written explanation. In short, it 
     will force the commission to justify any and all of its 
     regulations.
       Eliminate the number of TV stations any one entity can own.
       Force the Commission to change its rules so that any entity 
     can reach up to 35% of Americans with TV broadcast systems 
     (the current cap is at 25%).
       Eliminate the number of radio stations any one entity can 
     own, unless it would harm competition.
       Have FCC consider eliminating rate regulation in long 
     distance market.
       Regulatory relief. Speed up FCC action for phone companies 
     by making any revised charge that reduces rates effective 7 
     days after it is filed with commission. Rate increases will 
     be effective 15 days after submission. To block such changes, 
     FCC must justify its actions.
       Eliminate arcane requirement that phone companies must File 
     any line extension with Commission. As it stands now, 
     companies have to get the commission to approve any line 
     extension which often takes more than a year.
       Phone companies will only have to file cost allocation 
     manuals on a yearly basis.
       Eliminate the following FCC functions: Repeal setting of 
     Depreciation rates; Have Commission subcontract out its audit 
     functions; Simplify coordination between Feds and States; 
     Privatize Ship radio inspections; Permit Commission to waive 
     construction permits for broadcast stations as long as 
     license application is submitted 10 days after construction 
     is completed.
       Also terminate broadcast licenses if a station is silent 
     for more that 12 consecutive months. Subcontract out testing 
     and certification of equipment. Permit operation of domestic 
     ship and aircraft radios without license. Eliminate FCC 
     jurisdiction over government owned radio stations. Eliminate 
     burdensome paperwork involved in Amateur Radio examination. 
     Streamline non-broadcast radio licenses renewals.
                           Amendment No. 1255

  Mr. DOLE. Mr. President, I send my amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Kansas [Mr. DOLE] proposes an amendment 
     numbered 1255.

  Mr. DOLE. Mr. President, I ask unanimous consent further reading be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       (c) Transfer of MFJ.--After the date of enactment of this 
     Act, the Commission shall administer any provision of the 
     Modification of Final Judgment not overridden or superseded 
     by this Act. The District Court for the District of Columbia 
     shall have no further jurisdiction over any provision of the 
     Modification of Final Judgment administered by the Commission 
     under this Act or the Communications Act of 1934. The 
     Commission may, consistent with this Act (and the amendments 
     made by this Act), modify any provision of the Modification 
     of Final Judgment that it administers.
       (d) GTE Consent Decree.--This Act shall supersede the 
     provisions of the Final Judgment entered in United States v. 
     GTE Corp., No. 83-1298 (D.C. D.C.), and such Final Judgment 
     shall not be enforced after the effective date of this 
     Act. [[Page S7899]] 
       On page 40, line 9, strike ``to enable them'' and insert 
     ``which are determined by the Commission to be essential in 
     order for Americans''.
       On page 40, beginning on line 11, strike ``Nation. At a 
     minimum, universal service shall include any 
     telecommunications services that'' and insert ``Nation, and 
     which''.
       On page 70, between lines 21 and 22, insert the following:
       (b) Greater Deregulation for Smaller Cable Companies.--
     Section 623 (47 U.S.C. 543) is amended by adding at the end 
     thereof the following:
       ``(m) Special Rules for Small Companies.--
       ``(1) In general.--Subsection (a), (b), or (c) does not 
     apply to a small cable operator with respect to--
       ``(A) cable programming services, or
       ``(B) a basic service tier that was the only service tier 
     subject to regulation as of December 31, 1994,

     in any franchise area in which that operator serves 35,000 or 
     fewer subscribers.
       ``(2) Definition of small cable operator.--For purposes of 
     this subsection, the term `small cable operator' means a 
     cable operator that, directly or through an affiliate, serves 
     in the aggregate fewer than 1 percent of all subscribers in 
     the United States and does not, directly or through an 
     affiliate, own or control a daily newspaper or a tier 1 local 
     exchange carrier.''.
       On page 70, line 22, strike ``(b)'' and insert ``(c)''.
       On page 71, line 3, strike ``(c)'' and insert ``(d)''.
       On page 79, strike lines 7 through 11 and insert the 
     following:
       (1) In general.--The Commission shall modify its rules for 
     multiple ownership set forth in 47 CFR 73.3555 by--
       (A) eliminating the restrictions on the number of 
     television stations owned under subdivisions (e)(1) (ii) and 
     (iii); and
       (B) changing the percentage set forth in subdivision 
     (e)(2)(ii) from 25 percent to 35 percent.
       (2) Radio Ownership.--The Commission shall modify its rules 
     set forth in 47 CFR 73.3555 by eliminating any provisions 
     limiting the number of AM or FM broadcast stations which may 
     be owned or controlled by one entity either nationally or in 
     a particular market. The Commission may refuse to approve the 
     transfer of issuance of an AM or FM broadcast license to a 
     particular entity if it finds that the entity would thereby 
     obtain an undue concentration of control or would thereby 
     harm competition. Nothing in this section shall require or 
     prevent the Commission from modifying its rules contained in 
     47 CFR 73.3555(c) governing the ownership of both a radio and 
     television broadcast stations in the same market.
       On page 79, line 12, strike ``(2)'' and insert ``(3)''.
       On page 79, line 18, strike ``(3)'' and insert ``(4)''.
       On page 79, line 21, strike ``(4)'' and insert ``(5)''.
       On page 79, line 22, strike ``modification required by 
     paragraph (1)'' and insert ``modifications required by 
     paragraphs (1) and (2)''.
       On page 116, between lines 2 and 3, insert the following:
       (b) Dominant Interexchange Carrier.--The Commission, within 
     270 days after the date of enactment of this Act, shall 
     complete a proceeding to consider modifying its rules for 
     determining which carriers shall be classified as ``dominant 
     carriers'' and to consider excluding all interexchange 
     telecommunications carriers from some or all of the 
     requirements associated with such classification to the 
     extent that such carriers provide interexchange 
     telecommunications service.
       On page 116, line 3, strike ``(b)'' and insert ``(c)''.
       On page 117, line 1, strike ``(c)'' and insert ``(d)''.
       On page 117, line 22, strike ``REGULATIONS.'' and insert 
     ``REGULATIONS; ELIMINATION OF UNNECESSARY REGULATIONS AND 
     FUNCTIONS.''
       On page 117, line 23, insert ``(a) Biennial Review.--'' 
     before ``Part''.
       On page 118, between lines 20 and 21, insert the following:
       (b) Elimination of Unnecessary Commission Regulations and 
     Functions.--
       (1) Repeal setting of depreciation rates.--The first 
     sentence of section 220(b) (47 U.S.C. 220(b)) is amended by 
     striking ``shall prescribe for such carriers'' and inserting 
     ``may prescribe, for such carriers as it determines to be 
     appropriate,''.
       (2) Use of independent auditors.--Section 220(c) (47 U.S.C. 
     220(c)) is amended by adding at the end thereof the 
     following: ``The Commission may obtain the services of any 
     person licensed to provide public accounting services under 
     the law of any State to assist with, or conduct, audits under 
     this section. While so employed or engaged in conducting an 
     audit for the Commission under this section, any such person 
     shall have the powers granted the Commission under this 
     subsection and shall be subject to subsection (f) in the same 
     manner as if that person were an employee of the 
     Commission.''.
       (3) Simplication of Federal-State Coordination process.--
     The Commission shall simplify and expedite the Federal-State 
     coordination process under section 410 of the Communications 
     Act of 1934.
       (4) Privatization of ship radio inspections.--Section 385 
     (47 U.S.C. 385) is amended by adding at the end thereof the 
     following: ``In accordance with such other provisions of law 
     as apply to
      government contracts, the Commission may enter into 
     contracts with any person for the purpose of carrying out 
     such inspections and certifying compliance with those 
     requirements, and may, as part of any such contract, allow 
     any such person to accept reimbursement from the license 
     holder for travel and expense costs of any employee 
     conducting and inspection or certification.''.
       (5) Modification of construction permit requirement.--
     Section 319(d) (47 U.S.C. 319(d)) is amended by striking the 
     third sentence and inserting the following: ``The Commission 
     may waive the requirement for a construction permit with 
     respect to a broadcasting station in circumstances in which 
     it deems prior approval to be unnecessary. In those 
     circumstances, a broadcaster shall file any related license 
     application within 10 days after completing construction.''.
       (6) Limitation on silent station authorizations.--Section 
     312 (47 U.S.C. 312) is amended by adding at the end the 
     following:
       ``(g) If a broadcasting station fails to transmit broadcast 
     signals for any consecutive 12-month period, then the station 
     license granted for the operation of that broadcast station 
     expires at the end of that period, notwithstanding any 
     provision, term, or condition of the license to the 
     contrary.''.
       (7) Expediting instructional television fixed service 
     processing.--The Commission shall delegate, under section 
     5(c) of the Communications Act of 1934, the conduct of 
     routine instructional television fixed service cases to its 
     staff for consideration and final action.
       (8) Delegation of equipment testing and certification to 
     private laboratories.--Section 302 (47 U.S.C. 302) is amended 
     by adding at the end the following:
       ``(e) The Commission may--
       ``(1) authorize the use of private organizations for 
     testing and certifying the compliance of devices or home 
     electronic equipment and systems with regulations promulgated 
     under this section;
       ``(2) accept as prima facie evidence of such compliance the 
     certification by any such organization; and
       ``(3) establish such qualifications and standards as it 
     deems appropriate for such private organizations, testing, 
     and certification.''.
       (9) Making license modification uniform.--Section 303(f) 
     (47 U.S.C. 303(f)) is amended by striking ``unless, after a 
     public hearing,'' and inserting ``unless''.
       (10) Permit operation of domestic ship and aircraft radios 
     without license.--Section 307(e) (47 U.S.C. 307(e)) is 
     amended by--
       (A) striking ``service and the citizens band radio 
     service'' in paragraph (1) and inserting ``service, citizens 
     band radio service, domestic ship radio service, domestic 
     aircraft radio service, and personal radio service''; and
       (B) striking ``service' and `citizens band radio service''' 
     in paragraph (3) and inserting ``service', `citizens band 
     radio service', `domestic ship radio service', `domestic 
     aircraft radio service', and `personal radio service'''.
       (11) Expedited licensing for fixed microwave service.--
     Section 309(b)(2) (47 U.S.C. 309(b)(2)) is amended by 
     striking subparagraph (A) and redesignating subparagraphs (B) 
     through (G) as (A) through (F), respectively.
       (12) Eliminate FCC jurisdiction over government-owned ship 
     radio stations.--
       (A) Section 305 (47 U.S.C. 305) is amended by striking 
     subsection (b) and redesignating
      subsections (c) and (d) as (b) and (c), respectively.
       (B) Section 382(2) (47 U.S.C. 382(2)) is amended by 
     striking ``except a vessel of the United States Maritime 
     Administration, the Inland and Coastwise Waterways Service, 
     or the Panama Canal Company,''.
       (13) Modification of amateur radio examination 
     procedures.--
       (A) Section 4(f)(H)(N) (47 U.S.C. 4(f)(4)(B)) is amended by 
     striking ``transmissions, or in the preparation or 
     distribution of any publication used in preparation for 
     obtaining amateur station operator licenses,'' and inserting 
     ``transmission''.
       (B) The Commission shall modify its rules governing the 
     amateur radio examination process by eliminating burdensome 
     record maintenance and annual financial certification 
     requirements.
       (14) Streamline non-broadcast radio license renewals.--The 
     Commission shall modify its rules under section 309 of the 
     Communications Act of 1934 (47 U.S.C. 309) relating to 
     renewal of nonbroadcast radio licenses so as to streamline or 
     eliminate comparative renewal hearings where such hearings 
     are unnecessary or unduly burdensome.
       On page 117, between lines 21 and 22, insert the following:
       (d) Streamlined procedures for changes in charges, 
     classifications, regulations, or practices.--
       (A) Section 204(a) (47 U.S.C. 204(a)) is amended--
       (i) by striking ``12 months'' the first place it appears in 
     paragraph (2)(A) and inserting ``5 months'';
       (ii) by striking ``effective,'' and all that follows in 
     paragraph (2)(A) and inserting ``effective.''; and
       (iii) by adding at the end thereof the following:
       ``(3) A local exchange carrier may file with the Commission 
     a new or revised charge, classification, regulation, or 
     practice on a streamlined basis. Any such charge, 
     classification, regulation, or practice shall be deemed 
     lawful and shall be effective 7 days (in the case of a 
     reduction in rates) or 15 days (in the case of an increase in 
     rates) [[Page S7900]] after the date on
      which it is filed with the Commission unless the Commission 
     takes action under paragraph (1) before the end of that 7-
     day or 15-day period, as is appropriate.''
       (B) Section 208(b) (47 U.S.C. 208(b)) is amended--
       (i) by striking ``12 months'' the first place it appears in 
     paragraph (1) and inserting ``5 months''; and
       (ii) by striking ``filed,'' and all that follows in 
     paragraph (1) and inserting ``filed.''.
       (2) Extensions of lines under section 214; ARMIS reports.--
     Notwithstanding section 305, the Commission shall permit any 
     local exchange carrier--
       (A) to be exempt from the requirements of section 214 of 
     the Communications Act of 1934 for the extension of any line; 
     and
       (B) to file cost allocation manuals and ARMIS reports 
     annually, to the extent such carrier is required to file such 
     manuals or reports.
       (3) Forebearance authority not limited.--Nothing in this 
     subsection shall be construed to limit the authority of the 
     Commission or a State to waive, modify, or forbear from 
     applying any of the requirements to which reference is made 
     in paragraph (1) under any other provision of this Act or 
     other law.
       On page 118, line 20, strike the closing quotation marks 
     and the second period.
       On page 118, between lines 20 and 21, insert the following:
       ``(c) Classification of Carriers.--In classifying carriers 
     according to 47 CFR 32.11 and in establishing reporting 
     requirements pursuant to 47 CFR part 43 and 47 CFR 64.903, 
     the Commission shall adjust the revenue requirements to 
     account for inflation as of the release date of the 
     Commission's Report and Order in CC Docket No. 91-141, and 
     annually thereafter. This subsection shall take effect on the 
     date of enactment of the Telecommunications Act of 1995.''.
       On page 119, line 4, strike ``may'' and insert ``shall''.
       On page 120, between lines 3 and 4, insert the following:
       ``(c) End of Regulation Process.--Any telecommunications 
     carrier, or class of telecommunications carriers, may submit 
     a petition to the Commission requesting that the Commission 
     exercise the authority granted under this section with 
     respect to that carrier or those carriers, or any service 
     offered by that carrier or carriers. Any such petition shall 
     be deemed granted if the Commission does not deny the 
     petition for failure to meet the requirements for forbearance 
     under subsection (a) within 90 days after the Commission 
     receives it, unless the 90-day period is extended by the 
     Commission. The Commission may extend the initial 90-day 
     period by an additional 60 days if the Commission finds that 
     an extension is necessary to meet the requirements of 
     subsection (a). The Commission may grant or deny a petition 
     in whole or in part and shall explain its decision in 
     writing.
       On page 120, line 4, strike ``(c)'' and insert ``(d)''.

  Mr. DOLE. Mr. President, I ask unanimous consent that the amendment 
be laid aside.
  Mr. KERREY. Reserving the right to object, Mr. President, I am not 
objecting to having it laid aside. I am here to inquire what the 
procedure is going to be. The Senator is offering an amendment and is 
not going do debate it here this evening? It will be laid aside?
  I have not seen this copy. The Senator is not proposing it be 
accepted at this moment?
  Mr. DOLE. I think the managers may be ready to accept it by tomorrow 
morning.
  Mr. HOLLINGS. If the Senator will yield. That is correct. In fact, 
about 2 hours ago we had it worked out, but there is some further 
interest on our side that we have yet to clear. The distinguished 
minority leader has another amendment that he wanted to present at the 
same time, and I think we can work that out.
  That is the idea, to temporarily lay it aside and move on.
  Mr. KERREY. I will not object, but I will inform the manager of this 
bill that I will not give unanimous consent to this being accepted 
until I have read it and signed off on it.
  Mr. DOLE. I have obviously no problem with that. In fact, I can give 
the Senator from Nebraska a summary of it, too. I thank my colleague.
  The PRESIDING OFFICER. Without objection, the amendment is set aside.
  Mr. PRESSLER. I thought we had this agreed to this afternoon, but I 
guess the minority leader has something he would like to add or change. 
But I would like to inquire of the majority leader if we cannot get 
agreement tonight.
  Shall we make this one of the votes at 8:30 or 9 o'clock in the 
morning?
  Mr. DOLE. If it is acceptable, I do not need a vote. I do not want to 
penalize anybody.
  Mr. KERREY. Is the Senator asking to set a time for a vote?
  Mr. DOLE. Not on this amendment. I will wait until the Senator from 
Nebraska indicates he has had a chance to look at it.
  Mr. STEVENS. Mr. President, I do think that everyone should be aware 
that the bill we are considering is larger in its impact on the 
national economy than the health care reform measure we considered last 
year.
  This bill, in a conservative way, will impact more than one-third of 
the economy of the United States.
  It is a bill that is designed to transition from the 1934 
Communications Act to a period sometime, hopefully, around the turn of 
the century when we will have deregulated telecommunications because of 
the competition that we this bill will instill and guarantee.
  Now, the bill will put the communications policy of the United States 
back where it belongs, in the hands of the elected representatives and 
the President, and will take it out of the courts. By setting rules for 
entry into long distance by the Bell operating companies, I think we 
bring to a close an over-10-year policy-making period by the U.S. 
courts.
  This bill will open the local telephone market to competition. It 
will bring competition and new services to all parts of the United 
States.
  It is not a permanent piece of legislation, in my judgment. This is 
not a bill that will replace, totally, the 1934 act. It does, however, 
by deregulating the industry with appropriate safeguards, set the 
stages for a new era in the United States.
  I want to call the attention of the Senate to a provision that is 
very meaningful to my area, the universal service provision. This is a 
concept that, through the existing interstate rate pool, has brought 
telephone service to all parts of this Nation, including remote 
villages in Alaska and throughout the Nation wherever you are.
  The concept is preserved in this bill in a new manner. It opens up 
the local market to competition while still preserving the concept of 
universal service. It does so by taking advantage of new technologies 
which are intended to reduce the cost of all services, including 
universal service.
  In fact, I find it interesting that the Congressional Budget Office 
has said that this bill will reduce the cost of universal service from 
the existing system by at least $3 billion over the next 5 years.
  Now, tumbling technology, as I call it, makes terrestrial distances 
irrelevant. By using modern technologies, the people in Egiagik and 
Unalakleet and Shishmaref, places many people have never heard of, can 
be involved in stock markets in New York, explore the Library of 
Congress, and be connected with overseas sources of information. 
Allowing cable companies to provide phones and phone companies to 
provide cable, this bill will spur competition and reduce costs to the 
Nation.
  There are so many new technologies coming along, Mr. President, it is 
mind-boggling. There are many provisions in this bill that are aimed at 
deregulating the industry so those new technologies may compete.
  It is my hope that the Senate will recognize this bill for what it 
is. It is a credit, as the distinguished leader has said, to Senator 
Pressler, the chairman of our committee, and to Senator Hollings, the 
former chairman of our committee. It is a bill of monstrous scope that 
has substantial bipartisan support.
  Had we had a similar approach to the problems of health care reform 
in the last Congress, we would have had that problem at least partially 
solved.
  To the credit of these two Senators, this is not a bill that attempts 
to solve all of the problems of the telecommunications industry for the 
future. It is a bill that opens the door to the future and, in my 
judgment, it is one that it is absolutely essential be passed.
  I am told that George Gilder of the Discovery Institute in Seattle, 
whom I consider to be one of the real thinkers of this country, has 
told us that not passing this bill will cost the United States $2 
trillion in lost opportunities in the next 5 years alone.
  I happen to pay attention to Mr. Gilder because he wrote an article 
the 
[[Page S7901]] other day which answered some remarks that I made about 
universal service. I do feel in the days ahead the thinking that this 
man is doing will have a great deal to do with guiding the Nation into 
that ultimate system that I foresee coming on after the turn of the 
century.
  Just in terms of the broad band radio concept that is coming along 
and how it will replace substantial portions of telecommunications now 
carried by wire or fiber optic cable or through satellites, that 
concept alone is going to catch us by surprise if we do not know what 
is happening. But at least we know it will happen. We are not trying to 
regulate that by this bill. We are not trying to prevent it by this 
bill. We are opening the door so new competitive aspects will come into 
our communications policy in the United States.
  This morning I introduced a bill that I said I would offer as an 
amendment to this bill if the opportunity presented itself. I have 
discussed it now with the two managers of the bill. I would like to 
offer now an amendment.
  First let me describe what it is. It is an amendment that will expand 
the FCC's authority to use auctions to assign licenses for the use of 
radio spectrum. The members of our committee will know that for two 
Congresses I argued that we should implement auctions to replace the 
old lottery system that was giving windfall profits to many and denying 
others access to opportunities that would start new businesses.
  Under the old system, the lotteries, there was no commitment to use 
this spectrum but it was held as sort of an item that other people 
might bid on when they were willing to pay enough money to the person 
who was lucky enough to win the lottery. The person who got the license 
had no intent to use it. Now, with a bidding process, competitive 
bidding, we have brought the use of the spectrum to the point where 
people who want it pay what is necessary to get its use.
  The Congressional Budget Office, as I said before, has estimated that 
the amendment I offer will raise $4.5 billion in the next 5 years. That 
is necessary for a strange reason. The Congressional Budget Office also 
estimated that the universal service provisions in this bill will 
require private industry and private purchasers to pay $7.1 billion 
over the next 5 years into this system, which was the interstate rate 
pool and now will become the fund for the payment of the universal 
service provisions of this bill.
  I remind the Senate that the universal service system contained in 
this bill would result in a reduction of $3 billion from what 
continuation of the existing system will cost in the next 5 years. But 
notwithstanding that this bill will reduce the costs of the existing 
system we know, in order to avoid a Budget Act point of order on 
technical grounds, must offset the finding of the Congressional Budget 
Office that this requirement of the private sector to pay $7.1 billion 
into the pool--less than before but they still must pay it in--that 
this private payment must be offset under our congressional budget 
process.
  That sort of boggles my mind too, Mr. President, but it is a 
requirement and I respect the Budget Act concept. Therefore I offer 
this amendment. It will extend the auction authority until the year 
2000. That is all that is necessary to comply with the Budget Act, 5 
years. It will bring in a minimum estimate, as I said, of $4.5 billion.
  We have already received, under the auction amendment that I offered 
2 years ago, almost $10 billion. It was new money, the kind of money 
that was never received by the Government before.
  Under my amendment tonight, the FCC would have the authority to use 
spectrum auctions for all mutually exclusive applications for initial 
licenses or construction permits except for licenses for public safety 
radio services or for advanced television services, if the advanced 
television licenses are given to existing broadcast licensees as a 
replacement for their existing broadcast licenses.
  This means that market mechanisms will help determine who can make 
the most efficient use of spectrum that will become available. I 
believe, again, that is the best way to deal with the future.
  My amendment does not change the basic safeguards Congress put in the 
original spectrum auction legislation after I offered it several years 
ago. The expanded authority will apply only to new license 
applications. It will not apply to renewals. And the FCC may still not 
consider potential revenue in making the decision as to which type of 
service new spectrum should be used for. The revenue only becomes a 
factor in determining who gets the license to use the spectrum for any 
particular purpose.
  The bill I introduced this morning, which is the same as this 
amendment, would also provide authority for Federal agencies to accept 
reimbursement from private parties for the cost of relocating to a new 
frequency. This will allow private industry to pay to move Government 
users off valuable frequencies by relocating the Government station to 
a less valuable frequency at no cost to the taxpayer, but an increase 
to the Treasury.
  The amendment builds on what has been a very successful beginning. 
Since the existing spectrum auction authority was enacted in 1993, as I 
have said, the FCC has raised in excess of $9 billion, almost $10 
billion now, for the Federal Treasury in just four auctions.
  I do hope the Senate will support the amendment.
  I ask unanimous consent that Senator Dole's amendment be set aside 
for the time being and I be allowed to submit the amendment.
  Mr. KERREY. Reserving the right to object.
  The PRESIDING OFFICER (Mr. Santorum). Senator Dole's amendment has 
been set aside. The Senator does have a right to offer an amendment.
  Mr. KERREY. But I object.
  The PRESIDING OFFICER. Is the Senator sending his amendment to the 
desk?
  Mr. STEVENS. Did the Senator object to my request to set aside 
Senator Dole's amendment?
  The PRESIDING OFFICER. Senator Dole's amendment has been set aside. 
There is no need for a unanimous-consent request.


                           Amendment No. 1256

    (Purpose: To extend the authority of the Federal Communications 
    Commission to use auctions for the allocation of radio spectrum 
     frequencies for commercial use, to provide for private sector 
reimbursement of Federal governmental user costs to vacate commercially 
               valuable spectrum, and for other purposes)

  Mr. STEVENS. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Alaska [Mr. Stevens] proposes an amendment 
     numbered 1256.

  Mr. STEVENS. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place in the bill insert the following:

     SEC.   . SPECTRUM AUCTIONS.

       (a) Findings.--The Congress finds that--
       (1) the National Telecommunications and Information 
     Administration of the Department of Commerce recently 
     submitted to the Congress a report entitled ``U.S. National 
     Spectrum Requirements'' as required by section 113 of the 
     National Telecommunications and Information Administration 
     Organization Act (47 U.S.C. 923);
       (2) based on the best available information the report 
     concludes that an additional 179 megahertz of spectrum will 
     be needed within the next ten years to meet the expected 
     demand for land mobile and mobile satellite radio services 
     such as cellular telephone service, paging services, personal 
     communication services, and low earth orbiting satellite 
     communications systems;
       (3) a further 85 megahertz of additional spectrum, for a 
     total of 264 megahertz, is needed if the United States is to 
     fully implement the Intelligent Transportation System 
     currently under development by the Department of 
     Transportation;
       (4) as required by Part B of the National 
     Telecommunications and Information Administration 
     Organization Act (47 U.S.C. 921 et seq.) the Federal 
     Government will transfer 235 megahertz of spectrum from 
     exclusive government use to non-governmental or mixed 
     governmental and non-governmental use between 1994 and 2004;
       (5) the Spectrum Reallocation Final Report submitted to 
     Congress under section 113 of the National Telecommunications 
     and Information Administration Organization Act by the 
     National Telecommunications and Information Administration 
     states that, of the 235 megahertz of spectrum identified for 
     reallocation from governmental to non-governmental or mixed 
     use-- [[Page S7902]] 
       (A) 50 megahertz has already been reallocated for exclusive 
     non-governmental use,
       (B) 45 megahertz will be reallocated in 1995 for both 
     exclusive non-governmental and mixed governmental and non-
     governmental use,
       (C) 25 megahertz will be reallocated in 1997 for exclusive 
     non-governmental use,
       (D) 70 megahertz will be reallocated in 1999 for both 
     exclusive non-governmental and mixed governmental and non-
     governmental use, and
       (E) the final 45 megahertz will be reallocated for mixed 
     governmental and non-governmental use by 2004;
       (6) the 165 megahertz of spectrum that are not yet 
     reallocated, combined with 80 megahertz that the Federal 
     Communications Commission is currently holding in reserve for 
     emerging technologies, are less than the best estimates of 
     projected spectrum needs in the United States;
       (7) the authority of the Federal Communications Commission 
     to assign radio spectrum frequencies using an auction process 
     expires on September 30, 1998;
       (8) a significant portion of the reallocated spectrum will 
     not yet be assigned to non-governmental users before that 
     authority expires;
       (9) the transfer of Federal governmental users from certain 
     valuable radio frequencies to other reserved frequencies 
     could be expedited if Federal governmental users are 
     permitted to accept reimbursement for relocation costs from 
     non-governmental users; and
       (10) non-governmental reimbursement of Federal governmental 
     users relocation costs would allow the market to determine 
     the most efficient use of the available spectrum.
       (b) Extension and Expansion of Auction Authority.--Section 
     309(j) (47 U.S.C. 309(j)) is amended--
       (1) by striking paragraph (1) and inserting in lieu thereof 
     the following:
       ``(1) General authority.--If mutually exclusive 
     applications or requests are accepted for any initial license 
     or construction permit which will involve a use of the 
     electromagnetic spectrum, then the Commission shall grant 
     such license or permit to a qualified applicant through a 
     system of competitive bidding that meets the requirements of 
     this subsection. The competitive bidding authority granted by 
     this subsection shall not apply to licenses or construction 
     permits issued by the Commission for public safety radio 
     services or for licenses or construction permits for new 
     terrestrial digital television services assigned by the 
     Commission to existing terrestrial broadcast licensees to 
     replace their current television licenses.'';
       (2) by striking paragraph (2) and renumbering paragraphs 
     (3) through (13) as (2) through (12), respectively; and
       (3) by striking ``1998'' in paragraph (10), as renumbered, 
     and inserting in lieu thereof ``2000''.
       (c) Reimbursement of Federal Relocation Costs.--Section 113 
     of the National Telecommunications and Information 
     Administration Act (47 U.S.C. 923) is amended by adding at 
     the end the following new subsections:
       ``(f) Relocation of Federal Government Stations.--
       ``(1) In general.--In order to expedite the efficient use 
     of the electromagnetic spectrum and notwithstanding section 
     3302(b) of title 31, United States Code, any Federal entity 
     which operates a Federal Government station may accept 
     reimbursement from any person for the costs incurred by such 
     Federal entity for any modification, replacement, or 
     reissuance of equipment, facilities, operating manuals, 
     regulations, or other expenses incurred by that entity in 
     relocating the operations of its Federal Government station 
     or stations from one or more radio spectrum frequencies to 
     any other frequency or frequencies. Any such reimbursement 
     shall be deposited in the account of such Federal entity in 
     the Treasury of the United States. Funds deposited according 
     to this section shall be available, without appropriation or 
     fiscal year limitation, only for the operations of the 
     Federal entity for which such funds were deposited under this 
     section.
       ``(2) Process for relocation.--Any person seeking to 
     relocate a Federal Government station that has been assigned 
     a frequency within a band allocated for mixed Federal and 
     non-Federal use may submit a petition for such relocation to 
     NTIA. The NTIA shall limit the Federal Government station's 
     operating license to secondary status when the following 
     requirements are met--
       ``(A) the person seeking relocation of the Federal 
     Government station has guaranteed reimbursement through money 
     or in-kind payment of all relocation costs incurred by the 
     Federal entity, including all engineering, equipment, site 
     acquisition and construction, and regulatory fee costs;
       ``(B) the person seeking relocation completes all 
     activities necessary for implementing the relocation, 
     including construction of replacement facilities (if 
     necessary and appropriate) and identifying and obtaining on 
     the Federal entity's behalf new frequencies for use by the 
     relocated Federal Government station (where such station is 
     not relocating to spectrum reserved exclusively for Federal 
     use); and
       ``(C) any necessary replacement facilities, equipment 
     modifications, or other changes have been implemented and 
     tested to ensure that the Federal Government station is able 
     to successfully accomplish its purposes.
       ``(3) Right to reclaim.--If within one year after the 
     relocation the Federal Government station demonstrates to the 
     Commission that the new facilities or spectrum are not 
     comparable to the facilities or spectrum from which the 
     Federal Government station was relocated, the person seeking 
     such relocation must take reasonable steps to remedy any 
     defects or reimburse the Federal entity for the costs of 
     returning the Federal Government station to the spectrum from 
     which such station was relocated.
       ``(g) Federal Action to Expedite Spectrum Transfer.--Any 
     Federal Government station which operates on electromagnetic 
     spectrum that has been identified for reallocation for mixed 
     Federal and non-Federal use in the Spectrum Reallocation 
     Final Report shall, to the maximum extent practicable through 
     the use of the authority granted under subsection (f) and any 
     other applicable provision of law, take action to relocate 
     its spectrum use to other frequencies that are reserved for 
     Federal use or to consolidate its spectrum use with other 
     Federal Government stations in a manner that maximizes the 
     spectrum available for non-Federal use. Notwithstanding the 
     timetable contained in the Spectrum Reallocation Final 
     Report, the President shall seek to implement the 
     reallocation of the 1710 to 1755 megahertz frequency band by 
     January 1, 2000. Subsection (c)(4) of this section shall not 
     apply to the extent that a non-Federal user seeks to relocate 
     or relocates a Federal power agency under subsection (f).
       ``(h) Definitions.--For purposes of this section--
       ``(1) Federal entity.--The term `Federal entity' means any 
     Department, agency, or other element of the Federal 
     government that utilizes radio frequency spectrum in the 
     conduct of its authorized activities, including a Federal 
     power agency.
       ``(2) Spectrum Reallocation Final Report.--The term 
     `Spectrum Reallocation Final Report' means the report 
     submitted by the Secretary to the President and Congress in 
     compliance with the requirements of subsection (a).''.
       (d) Reallocation of Additional Spectrum.--The Secretary of 
     Commerce shall, within 9 months after the date of enactment 
     of this Act, prepare and submit to the President and the 
     Congress a report and timetable recommending the reallocation 
     of the three frequency bands (225-400 megahertz, 3625-3650 
     megahertz, and 5850-5925 megahertz) that were discussed but 
     not recommended for reallocation in the Spectrum Reallocation 
     Final Report under section 113(a) of the National 
     Telecommunications and Information Administration 
     Organization Act. The Secretary shall consult with the 
     Federal Communications Commission and other Federal agencies 
     in the preparation of the report, and shall provide notice 
     and an opportunity for public comment before submitting the 
     report and timetable required by this section.
  Mr. STEVENS. Mr. President, I understand the Senator from South 
Dakota, the distinguished chairman, wishes to offer an amendment to 
this. I understand that suggestion came in after we originally drafted 
the amendment I have offered.
  I yield to him at this time if he wants to offer an amendment to my 
amendment.


                Amendment No. 1257 to Amendment No. 1256

   (Purpose: To provide for broadcast auxiliary spectrum relocation)

  Mr. PRESSLER. Mr. President, I send a second-degree amendment to the 
amendment proposed by the Senator from Alaska to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:


       The Senator from South Dakota [Mr. Pressler] proposes an 
     amendment numbered 1257 to Amendment No. 1256.

  Mr. PRESSLER. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       At the end of the matter proposed to be inserted, insert 
     the following:
       (e) Boardcast Auxiliary Spectrum Relocation.--
       (1) Allocation of spectrum for broadcast auxiliary uses.--
     Within one year after the date of enactment of this Act, the 
     Commission shall allocate the 4635-4685 megahertz band 
     transferred to the Commission under section 113(b) of the 
     National Telecommunications and Information Administration 
     Organization Act (47 U.S.C. 923(b)) for broadcast auxiliary 
     uses.
       (2) Mandatory relocation of broadcast auxiliary uses.--
     Within 7 years after the date of enactment of this Act, all 
     licensees of broadcast auxiliary spectrum in the 2025-2075 
     megahertz band shall relocate into spectrum allocated by the 
     Commission under paragraph (1). The Commission shall assign 
     and grant licenses for use of the spectrum allocated under 
     paragraph (1)--
       (A) in a manner sufficient to permit timely completion of 
     relocation; and
       (B) without using a competitive bidding process.
       (3) Assigning recovered spectrum.--Within 5 years after the 
     date of enactment of this Act, the Commission shall allocate 
     the spectrum recovered in the 2025-2075 megahertz band under 
     paragraph (2) for use by new licensees for commercial mobile 
     services or [[Page S7903]] other similar services after the 
     relocation of broadcast auxiliary licensees, and shall assign 
     such licenses by competitive bidding.

  Mr. PRESSLER. Mr. President, this second-degree amendment would add a 
new subsection to the underlying amendment. The new subsection would 
direct the FCC to allocate a 50 megahertz block of spectrum in the 4 
gigahertz band for use by broadcast auxiliary services within 1 year of 
the enactment of the bill. In addition, this amendment would require 
that all broadcast auxiliary service licensees currently using a 50 
megahertz block of spectrum in the 2 gigahertz band relocate their 
activities to the 4 gigahertz band within 7 years of the date this bill 
is enacted.
  Finally, this amendment requires the FCC to auction the vacated 
spectrum in the 2 gigahertz band for use by commercial mobile services 
like cellular PCS within 5 years of the date of enactment.
  By moving broadcast auxiliary service licensees, who do not pay the 
spectrum they are using, to another less valuable frequency, we will 
make available some very valuable spectrum for auction.
  The Congressional Budget Office estimates that the auction of the 50 
megahertz block of 2 gigahertz spectrum will bring at least $3.8 
billion to the Federal Treasury.
  Combined with the underlying amendment by the Senator from Alaska, 
this would raise more than $7.1 billion that is needed to offset the 
universal services provisions of this bill.
  As the Senator from Alaska last pointed out--I commend him--this is a 
technical budget problem. The universal service provisions in this bill 
actually saves $3 billion over what would be paid if the existing 
system is left unchanged. However, with these amendments we meet the 
letter of the Budget Act.
  I urge my colleagues to support the adoption of my amendment and the 
underlying amendment by the Senator from Alaska.
  If it is appropriate, I would urge the adoption----
  Mr. KERREY. Reserving the right to object, Mr. President.
  Mr. PRESSLER. Mr. President, we could go into a quorum call or yield 
to our colleague from Montana who has been waiting to speak.
  Mr. BURNS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BURNS. I do not wish to speak on this amendment. Might I ask a 
point of order? Could it be set aside, and I proceed with my opening 
statement because no time was given for opening statements?
  Mr. President, I will continue on as if speaking on this amendment.
  This is sort of a special day to me because the former chairman of 
the full committee, Senator Inouye, and I, when I first came here 6 
years ago, had quite a time as we started I think to react to some of 
the things happening in the industry. We thought probably we were ahead 
of the curve in setting some kind of policy that would reflect the 
future. We thought we were ahead of the curve. Now we are behind the 
curve because technology as it is being developed in this area is far 
outpacing the regulatory environment in which it finds itself.
  I can remember that day when we started to make amendments and the 
former chairman was very gracious that day. There were some people 
around, and I was just a freshman Senator offering some ideas that I 
thought were important in the telecommunications industry, 
understanding that there have been three inventions which have happened 
in my lifetime that have changed this world forever. It has changed it 
so that we cannot go back and do things the old way anymore. Those 
three inventions were the transistor, the silicon chip and the jet 
engine. Think what they have done to our life and our world. We can be 
anywhere else in the world, from Washington, DC, in 12 hours. We can 
talk and receive and interact both in video and in voice with anybody 
anywhere else in the world in 5 seconds. Sadly, we can destroy any 
other society on this Earth within 20 minutes. That is what these three 
inventions have done. They have tightened down our world where 
comparatively speaking it has been the size of this building in which 
we stand down to the size of a basketball. Now we are in a global 
society, a global economy, and we just cannot go back.
  We will amend the Communications Act of 1934. That is some 60 years 
ago before any of these inventions were made. So basically what we are 
doing is we are driving digital, compressed digital, vehicles now 
within a law that regulates a horse-and-buggy type of situation. So we 
are here and starting out this great debate on changing an issue that 
will affect each and every one of us.
  Make no mistake about it. This is a very, very important piece of 
legislation. I want to give kudos to our chairman and ranking member 
and their staffs because they have spent many hours in developing this 
bill with strong bipartisan support.
  This bill was not drafted to satisfy business plans of major 
communications providers. It was drafted to benefit communications 
users, and communications users are solidly behind this bill for a 
number of reasons. Number one, they think it will bring down rates. So 
do I. They know it will bring advanced services. So do I. Perhaps more 
importantly, they know it will bring them more choices in 
telecommunications.
  I recently saw a survey that illustrates why one important group--
small American business owners--want and need communications reform. In 
Montana, over 98 percent of all businesses are classified as small 
businesses. The survey of 4,600 small business owners, which was 
sponsored by the National Federation of Independent Business, found 
that almost two-thirds of the small business owners surveyed want to be 
able to get long-distance telephone service from their local telephone 
company; and, 54 percent want to be able to choose local service from 
their long-distance company.
  A full 86 percent of these small business owners want one-stop 
shopping for telecommunications services. Two-thirds of them want to be 
able to choose one provider that can give them both local and long-
distance telephone service presented in either way.
  Of course, lower rates are very important to business owners. We all 
look for a way to do things more economically, to make our business 
more profitable, to open more economic opportunities and job 
opportunities for those folks who live in our local neighborhoods. But 
breaking down outdated barriers to competition that are preventing some 
local telephone companies from providing long-distance service and 
long-distance companies from providing local service will also bring 
something else that small businesses want--that is called convenience. 
Small businesses do not have the time nor the resources to juggle 
separate vendors with separate marketing arrangements and separate 
billing for long-distance and local services, cable TV teleconferencing 
and, yes, even internet. They want to be able to choose one reliable 
and affordable company that can bring them all of these services; and 
when they have the telecommunications problem they want to be able to 
get on the phone and call one company that is qualified to handle every 
aspect of their communications needs and their networks.
  At first, deregulation will create competition by allowing companies 
to cross over and compete in new business areas. If we do this right, 
however, very soon the gray lines that now separate telecommunications 
businesses will be gone. There will be seamless networks of vertically 
integrated communications providers competing head to head, tooth and 
nail to win the consumers' communications dollar. Those dollars are 
very big dollars. As a result, small businesses will be able to choose 
one company that can provide all their communications services--or they 
will be able to continue buying their telecommunications services 
piecemeal from multiple providers if they so choose. Either way, their 
decision will be based on who has the most affordable and most advanced 
services.
  A full 92 percent of the small businesses owners questioned in this 
small business survey said that the telephone is central to their 
business. I do not doubt this. I know plenty of small businesses 
throughout my home state of Montana that rely heavily on the telephone 
to keep their business--mom and pop catalog shops that sell Montana 
buckskin jackets to the rest of the country or small cattle ranches 
that [[Page S7904]] use cable TV and telecommunications to get future 
prices and negotiate with the slaughterhouses. And I do not know many 
small businesses today that function well without a personal computer 
and a fax machine.
  How many people looked at a fax machine 10 years ago and said, ``Who 
in the world would ever want to use one of those things?'' I will bet 
you cannot walk into an office and many homes that do not have a fax 
machine today.
  Technology is truly a thrilling thing as it propels us towards the 
next century. This bill will give small business that one-stop shopping 
that they want.
  So we have a chance to bury outdated restrictions that were created 
for another era more than 60 years ago, restrictions that draw 
arbitrary lines between telecommunications providers that just do not 
make sense anymore. A lot of these anticompetitive, bureaucratic rules 
are only good to preserve market share for established providers. But 
protecting markets and maintaining the status quo is not going to help 
bring lower rates and advanced services to small businesses and 
consumers in Montana or anywhere else.
  I fought very hard to ensure that small business participated in the 
information age. Whether it is small newspapers, small cable operators 
we have in Montana, or the small business of radio, these businesses 
are the backbone of communications in Montana.
  I have sought to include nondiscrimination safeguards for small 
newspapers so that small information providers, especially in rural 
areas, will be able to purchase certain elements of a common carrier 
service offering on the smallest per unit basis that is technically 
feasible.
  In addition, small cable operators, when freed from regulatory 
restraints in past legislation, will provide perhaps our best 
opportunity for telecommunications services in many of our Nation's 
rural areas.
  They all the time talk about the information highway, that glass 
highway. Everybody says: When are you going to build it? I am not real 
sure that it is not already there.
  It is already there. All we have to do is take off some restrictions 
so that it can be used. And there is a ramp on it and there is a ramp 
off of it. That is what we have to make sure of in this legislation.
  Finally, I had deep concerns that one of the Nation's most important 
telecommunications small business industries, radio--I am familiar with 
radio--was being passed over in the effort to deregulate information 
providers. Radio ownership decisions need to be made by operators and 
investors, not the Federal Government. That is why we need to eliminate 
the remaining caps on national and local radio ownership.
  Nationally, there are more than 11,000 radio stations providing 
service to every city, town, and rural community in the United States. 
Presently, no one can control more than 40 stations, 20 AM and 20 FM 
stations. Clearly, the radio market is so incredibly vast and diverse 
that there will be no possibility that any one entity could control 
enough stations to be able to exert any market power over either 
advertisers or radio programmers.
  At the local level, while the Federal Communications Commission 
several years ago modified its duopoly rules to permit limited 
combinations of stations in the same service, in the same market, there 
are still stringent limits on the ability of radio operators to grow in 
their markets. Further, FCC rules permit only very restricted or no 
combinations in smaller markets. These restrictions handcuff 
broadcasters and prevent them from providing the best possible service 
to listeners in all of our States.
  So, Mr. President, this will be landmark legislation. It is 
legislation that we worked on ever since the first day we stepped into 
the Senate, because I happen to believe it is key to distance learning; 
it is the key to telemedicine; it is key to the future of those States 
that are remote and must be in contact with the rest of the world.
  I appreciate the work of my good friend, the Senator from Alaska, and 
how he fights very hard because no one has cities and towns and 
villages that are more remote from the rest of the world than he has. 
And he understands that. Nobody understands that in this body more than 
he does. Now, we have some vastness in Montana but it does not compare 
in any way with the State of Alaska.
  So as we move this debate forward, I hope that we will keep an open 
mind and really keep our eye on the ball because we have within our 
grasp the ability now to turn loose a giant in our economic world and 
provide services to people who have never had those services before.
  Mr. President, I thank you and I yield the floor.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, I understand momentarily my 
distinguished colleague from Nebraska wants to be heard on the 
amendment.
  I would be prepared, at the conclusion of his remarks, to urge 
adoption of the Pressler amendment to the Stevens amendment and 
thereupon urge adoption of the Stevens amendment itself.
  The Senator from Montana, who is a professional auctioneer, should 
understand that the daddy rabbit of auctioneering is the Senator from 
Alaska. He has already made $7 billion for us, and this amendment here 
is going to make up another $7 billion to get us by a budget point of 
order.
  But let me, in saying that, acknowledge the hard work and leadership 
that the Senator from Montana has given. Since his very initiation on 
the Commerce Committee itself, he has been a leader; he has been 
interested; he has been contributing; and he has been a tremendous help 
in bringing this bill to the floor.
  Mr. BURNS. If the Senator will yield, I thank the Senator for those 
kind words. And if I can possibly get the job of auctioneering the 
spectrum, I probably would vacate this chair which I am standing in 
front of.
  Mr. HOLLINGS. I am going to lead on that one myself.
  I yield the floor.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, I have reviewed the amendment that the 
distinguished Senator from Alaska is offering, and as I understand it, 
what it does is it offsets an adverse score that this bill has received 
from the Congressional Budget Office. CBO has said this bill, in 
particular the universal service fund, is going to cost $7 billion over 
the next 5 years. Even though that is $3 billion less than what the 
current universal service fund does, there is the need to come up with 
$7 billion to avoid a budget point of order.
  Now, I point out that under the budget resolution that was passed, 
when was that, 1\1/2\ weeks, 2 weeks ago, I believe that the Commerce 
Committee is going to be looking at having to reconcile $20 billion, 
$30 billion anyway, so you are going to have your hands full. The 
committee will be trying to come up with money to try to get within the 
recommendations of that budget resolution.
  What this amendment does, it comes up with that $7.1 billion in the 
following fashion. It extends the spectrum actions that are scheduled 
to expire in 1998 for another 2 years, generating $4.5 billion 
according to CBO, and then it does something that is of particular 
interest, I believe, Mr. President--and many people would ordinarily 
oppose this but they are not--and that is the broadcasters have today 
assigned a 2-gigahertz spectrum in order to do auxiliary services. When 
they are going out in the field and they are doing some broadcasting 
out in the field, they use that 2-gigahertz spectrum.
  This amendment would transfer that over a 7-year period from 2 
gigahertz to 4 gigahertz, and then that 2-gigahertz spectrum would be 
auctioned off, generating an estimated $3.8 billion over the 5-year 
period.
  Under normal circumstances, the National Association of Broadcasters 
would probably oppose this, but there are other things in this bill 
that they like, so they are not going to oppose it. I believe that the 
distinguished Senator from Alaska has made a good amendment that will 
in fact cover the $7.1 billion. And so, therefore, Mr. President, I 
will not object to this being accepted by unanimous consent.
  Mr. STEVENS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. STEVENS. The Senator from Nebraska has demonstrated how he is a 
[[Page S7905]] quick study. He is right. I would add one thing. I think 
the National Association of Broadcasters are going to want some 
additional spectrum beyond what is in this bill. We will work that out. 
But this has been scored, and we will work that out with them as we go 
forward to make sure that we understand the problem.
  The simple problem is that this bill could not go forward unless we 
within its terms meet the scoring problem that the Senator from 
Nebraska has outlined.
  Again, I point out we are not, however, by this bill spending money 
for universal service. But the budget process now makes us account for 
those moneys we must be paid by the private sector pursuant to a 
mandate, and since we are continuing a mandate, partially reducing it 
somewhat for universal service, it will cost less than the old 
universal service, we now must offset it.
  I think it is responsible on the part of the Government to do that 
because there is always the possibility some future Congress might 
decide not to mandate that service but require the Government to pay 
it.
  So we have, in effect, met the challenge of the Budget Act and, in 
doing so, we will actually, within this period, raise the additional 
moneys which I believe will be utilized in offsetting other budget 
problems as we go along. I do not believe that will be required by any 
action of the Congress in the future to charge the cost of universal 
service to the taxpayers.
  Again, in my judgment, universal service is required so someone who 
comes up to my State who wants to call home literally can do it, or 
wants to bring up a computer and be attached to data services can make 
that intersection with the telecommunications system of our country.
  I believe sincerely in universal services because without the 
universal services, the villages and towns of our rural areas would be 
still in probably the early part of the 20th if not the 19th century 
while we all go into the 21st. If they are not to be left in the 
position where they are without employment because they cannot attach 
themselves to this new telecommunications miracle of the United States, 
then I think they will be a burden on the rest of the country.
  My friend George Gilder believes that in the future, the computer 
will replace, in effect, the networks because the networks will become, 
in effect, a gigantic computer network rather than just a television 
network. He tells us that what is going to happen is that we are going 
to have access through the computer industry to interconnect America's 
schools and colleges in truly a new worldwide web of glass and air.
  If people want to think about it, there is no way we can afford to 
have this bill stopped by a budget point of order. That is the reason 
for our amendments. I join in urging adoption of these amendments.
  Mr. PRESSLER. I urge the adoption of the amendment.
  Mr. HOLLINGS. First, adoption of the Pressler amendment. If there is 
no further debate, I urge the adoption of the Pressler amendment.
                 Vote on Amendment No. 1257 as amended

  The PRESIDING OFFICER. If there is no further debate, the question 
occurs on agreeing to the second-degree amendment No. 1257 offered by 
the Senator from South Dakota, Senator Pressler.
  The amendment (No. 1257) was agreed to.
  Mr. HOLLINGS. I urge adoption of the Stevens amendment, as amended by 
the Pressler amendment.


                       Vote on Amendment No. 1256

  The PRESIDING OFFICER. If there is no further debate on the Stevens 
amendment No. 1256, as amended, the question is on agreeing to the 
amendment.
  The amendment (No. 1256), as amended, was agreed to.
  Mr. PRESSLER. Mr. President, I move to reconsider the vote by which 
the amendment was agreed to.
  Mr. STEVENS. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. STEVENS. Mr. President, I wish to thank the managers of the bill 
and those patient with us. I thought it was essential first to proceed 
with these amendments. Otherwise, we would be wasting our time if a 
budget point of order had the effect of pulling the bill down. I thank 
all concerned.
  Mr. LOTT. Mr. President, I inquire what the parliamentary situation 
is? Are we back now to making opening statements at this point?
  The PRESIDING OFFICER. Opening statements are appropriate at this 
time.
  Mr. LOTT. Mr. President, I do want to rise in support of this 
legislation and make an opening statement. I would like to begin, as 
others have already done, by congratulating and commending the 
distinguished Senator from South Dakota for the hard work that he has 
put into this legislation. Of course, many members of the committee 
have been working on this legislation for several months. As the 
distinguished former chairman said earlier, way back in 1993 there was 
a lot of work going on on legislation that led to this moment.
  But I know from personal experience and observation that the chairman 
of the Commerce, Science, and Transportation Committee, Senator 
Pressler, said immediately after the election in 1994 that this is an 
issue that is going to be given high priority, a great deal of his 
attention and we were going to work together to find solutions to the 
problems that had prevented its consideration last year and earlier. He 
made a commitment also to make it a bipartisan effort. So that is why 
we are here, because the chairman of the committee gave this such high 
priority and he has worked diligently to resolve problems that had been 
delaying this legislation.
  I just want to acknowledge that fact at the very beginning of this 
debate. We have a long way to go, but I know now we have started down 
the path toward passing this legislation. I think it is a tremendous 
undertaking.
  This is big legislation. It is important legislation. It involves a 
significant part of the overall economy in this country. It is going to 
create jobs. It is going to raise revenue because it is going to be 
such a dynamic explosive field. We are fixing to unleash the bounds 
that have been holding back this competition and advancements and this 
development. I think that no other segment of the economy in the next 
10 years will be more dynamic and more exciting than that of 
telecommunications.
  I also want to commend the distinguished Senator from South Carolina 
who is working at this very moment to resolve potential problems on 
this legislation, but Senator Hollings worked so hard last year to 
bring about the passage of the bill through the Commerce, Science, and 
Transportation Committee. It did not come to consideration, partially 
because we just ran out of time.
  But Senator Hollings again this year has shown a commitment to get 
legislation developed that we can pass. He is the major reason we are 
going to have bipartisan legislation. We should have more legislation 
like this in the Senate. This is really the first bill of the year of 
major import that I believe will pass by an overwhelming bipartisan 
vote. So many of our issues have been considered in a partisan way, 
have been delayed with amendments. We have had filibusters; 50 
amendments on the budget resolution. But in this case, we will have a 
chance to develop a bill that can be bipartisan and also a bill that 
will pass this body first instead of the other body of Congress. That 
is no insignificant accomplishment.
  Senator Inouye certainly has also been very interested in 
telecommunications. He worked on it last year and has been helpful this 
year.
  The indomitable Senator Stevens from Alaska is always there. When the 
debate gets hot and heavy, Senator Stevens from Alaska will always rise 
to the occasion, as he has on this bill.
  I have one other recognition before I get into my comments. I want to 
recognize the staff members who have done great work, hard work. It has 
been laborious, tedious, and they have solved so many problems through 
the great efforts of Paddy Link, and my own staff assistant Chip 
Pickering, clearly one of the brightest young men I have known in my 
life. We would not be here without their help.
  Let me begin with a quote from testimony before the committee 
earlier. It begins with a quote from a Senator from Washington State, 
Senator Magnuson, who served with great distinction on the Commerce, 
Science, and [[Page S7906]] Transportation Committee. He put it very 
aptly when he said in this particular area of legislation ``each 
industry seeks a fair advantage over its rivals.''
  And then quoting the witness that was before the committee:

       Each industry wants prompt relief so that it can enter the 
     others' fields, but at the same time wants to avoid the pain 
     of new competition in its own field by tactics that will 
     delay that competition as long as possible. It is, therefore, 
     up to the Congress to make the tough calls and, in effect, 
     cut the Gordian knot.

  That is what we are trying to do with this legislation, cut the 
Gordian knot that has held this dynamic field of the economy back now 
for several years.
  As unbelievable as it sounds, the Communications Act of 1934 passed 
in the era of the Edsel, and it is still the current law of the land. 
That act now governs, in fact, constrains the most dynamic sector of 
the U.S. economy--telecommunications. Just as the Edsel became a symbol 
of all that is outdated, so is the 1934 Communications Act. That act is 
based on old technology and, consequently, on an outdated, rigid-
monopoly-based-regulatory model. Boy, that sounds bad, but that is what 
we have today. It is time we changed that.
  That system cannot accommodate the rapidly developing capabilities of 
new technologies and advanced networks. Instead, it acts to restrict 
competition, innovation, and investment.
  Under that framework, markets are allocated, not won, by the sweat of 
competition. Currently monopolies, oligopolies or, at best, limited 
competition exist in local long distance and cable markets.
 More than 40 of our 50 States prohibit any entrepreneur or competitor 
from offering--even offering--local telephone service.

  The 1984 consent decree which broke up AT&T continues to restrict the 
Bell operating companies from offering long distance or manufacturing.
  We should have fixed that long ago. It would have created jobs and 
would have been positive for the economy.
  Current law prohibits cable companies and telephone companies from 
competing in each other's markets. They are willing to do that. They 
want to do that. Why should we not let them do that?
  Another 1934 law, the Public Utility Holding Company Act, PUHCA, 
prevents registered electric utilities from using their infrastructure 
and networks to offer telecommunication services to the 49 million 
American homes that they serve. All of these restrictions and 
regulations and allocations are truly the equivalent of an ``Edsel'' in 
the space and information age. In the case of utilities, they are 
already wired, hooked up. They have the capability to offer all kinds 
of services. Yet, they are told, no, you cannot do that. Why? There is 
no good explanation or justification for it--especially if we do this 
legislation in a way that is fair, open, and allows competition for 
all.
  In stark contrast, the Telecommunications Competition and 
Deregulation Act of 1995--this bill--will move telecommunications into 
the 21st century and will finally leave the era of the Edsel behind. S. 
652 will achieve this through full competition, open networks, and 
deregulation. That is what this bill is all about. That is what we say 
we we want. Senators stand up and say it day in and day out, about all 
kinds of situations. Well, in this bill, in this area, that is what we 
would do.
  This bill provides a framework where entrepreneurs and free 
enterprise will make the information superhighway a reality, not just a 
conversation piece. As a result, tremendous benefits and applications 
will flow to our economy, to education, and health care. Industries 
will benefit from expanding markets and opportunities, and consumers 
will benefit from lower prices in their local, long distance, 
manufacturing, and cable services.
  If one hears the protest of the various industries, it is not because 
the bill is too regulatory; no, just the opposite is true. It is 
because this bill removes all of the protection and market allocations 
that made their respective businesses safe and secure from the rigors 
of vigorous competition.
  Under S. 652, all State and local barriers to local competition are 
removed upon enactment. An immediate process for removing line of 
business restrictions on the Bells is put in place. Moreover, the Bell 
companies are given the freedom to immediately compete out of region 
and provide a broad range of services and applications known as 
incidentals. These include lucrative markets in audio, video, cable, 
cellular, wireless, information services, and signaling.
  The 1934 PUHCA is amended to allow registered electric utilities to 
join with all other utilities in providing telecommunication services, 
providing the consumer with smart homes, as well as smart highways.
  Upon enactment, telephone and cable companies are allowed to compete. 
Current restrictions barring telephone cable entry are eliminated.
  As the telephone/cable restriction is removed, S. 652, rightfully, 
loosens and removes cable regulation. For cable to convert and compete 
in the telephone area, it will be freed from the regulatory burdens 
that limit investment and capital capability, which has been a problem 
in recent years for the cable industry.
  The restrictions placed on broadcasters, also during a bygone era, 
before cable, wireless cable, and advanced networks, would be reformed.
  Ownership restrictions on broadcast TV are raised. An amendment 
removing restrictions on radio ownership will be adopted, and this is 
one we have worked hard on, and we have broad support now for. The FCC 
is granted the authority to allow broadcasters to move toward advanced, 
digital TV and to use excess spectrum, created by technological 
advance, for broad commercial purposes. Broadcast license procedures 
are reformed and streamlined.
  S. 652, again, moving in from the communications policy of the past, 
goes from a protectionist policy to one appropriate for the global 
economy and technology of the 21st century. The bill promotes 
investment and growth by opening U.S. telecommunications markets on a 
fair and reciprocal basis.
  In short, S. 652 constructs a framework where everybody can compete 
everywhere in everything. It limits the role of Government and 
increases the role of the market. It moves from the monopoly policies 
of the 1930s to the market policy of the future.
  Toward that end, the removal of all barriers to and restrictions from 
competition is extremely important, and it is the primary objective, 
and I believe, the accomplishment of this legislation, thanks to the 
efforts of Chairman Pressler and the former chairman, Senator Hollings 
of South Carolina.
  In addressing the local and long distance issues, creating an open 
access and sound interconnection policy was the key objective, and it 
was not easy to come up with a solution that we could get most people 
to be comfortable with. It is critical to recognize the reason why all 
of these barriers, restrictions, and regulations exist in the first 
place--the so-called bottleneck. Opening the local network removes the 
bottleneck and ensures that all competitors will have equal and 
universal access to all consumers. Such access guarantees full and, I 
believe, fair competition.
  The open access policy makes it possible for us to move to full, 
free-market competition in local and long distance services, avoid 
antitrust dangers, and dismantle old regulatory framework.
  In fact, the Heritage Foundation makes the following statement and 
points to the open access interconnection policy:

       Policymakers of a more conservative or free market 
     orientation should not fear this open access 
     policy. In fact, they should favor it for three 
     reasons:
       First, there is a rich, common law history that supports 
     the open access philosophy.

  They cite railroad and telegraph policy in America and common law 
tradition dating all the way back to the Roman Empire.

       Second, open access works to eliminate any unfair 
     competitive advantages accrued by companies that have 
     benefited from Government-provided monopolies.
       Third, open access removes the need for other regulations 
     because the market becomes more competitive if everyone is on 
     equal footing.

  It is the only way to address economic deregulation where a 
bottleneck distribution system exists. It is the same policy which 
allows market forces, instead of regulation, to work in the case of 
long distance, railroads, and in the oil and natural gas pipeline 
distribution system. [[Page S7907]] 
  It is those examples of deregulation to which we should look, not to 
models of deregulation where no bottleneck exists, such as airline or 
trucking.
  Open networks will provide small and mid-sized competitors the 
opportunity to flourish alongside telecommunication giants. In the long 
distance industry, similar requirements made it possible for over 400 
small and medium-sized companies to develop and compete with AT&T over 
the past 10 years.
  One of the better examples of this is a former high school basketball 
coach from a small town in Mississippi by the name of Bernie Ebbers. 
Opening requirements such as interconnection, equal access, and resale 
made it possible for this entrepreneur to build a small long distance 
company into the fourth largest in the country--LDDS. It is incredible 
what has been accomplished by this smalltown man by giving him an 
opportunity to get in there and compete, and boy did he ever and is he 
having an impact.
  Having used the example of a small long distance entrepreneur, it is 
also important to point out what happened over the past 10 years to the 
former monopolist, AT&T. Although AT&T lost significant market share, 
it has seen the long distance market that it has greatly expand, and 
its revenues continue with strong, healthy growth.
  AT&T's current revenues, with 60 percent share in the long distance 
market, as opposed to what was 100 percent, are now higher than in 
1984. The same dynamic will occur in the local and other markets. 
Opportunities and markets will expand for all participants, as long as 
they are effective and efficient in the competitive environment.
  It is this free market model which led me to conclude that all of the 
companies in my State and region and, in fact, in the country, will 
benefit from this legislation. I believe that markets and opportunities 
will expand for Bell South and LDDS, both of which are very important 
in my State of Mississippi, and other long distance companies, 
including electric utilities--Southern Company and Entergy in my part 
of the United States, and cable companies and broadcasters will have 
new opportunities to grow and expand.
  A competitive model will create a bigger pie for all the providers, 
but more importantly, it is the consumers and the overall economy of my 
region, and I believe the whole country, that will benefit from this 
legislation.
  For consumers and competitors, the open access requirements will do 
for telecommunications what the Interstate Highway System has done for 
the shipment of tangible goods and the movement of people and ensure 
that all competitors will have a way to deliver goods and services to 
anyone anywhere on the information superhighway.
  Other requirements, such as number of portability and dialing parity 
are just common sense, procompetitive, and fair. A consumer does not 
want to have to dial more digits or access codes, and if required to do 
so, they will be less likely and probably not switch to the competitive 
provider. History shows that dialing parity in long distance services 
and 1-800 service greatly enhanced competition--or the lack of dialing 
parity serves as an effective barrier to that competition.
  Likewise, a small business or residential consumer will not switch to 
the competitor if it meant the loss of his or her current number. They 
will not do it. The disruption to a business or individual or family is 
too great. That is why we had to deal with this issue in this 
legislation, although there was a lot of opposition to it.
  Another key element of S. 652 is eliminating monopoly-based 
regulations and putting in place a mechanism to remove those 
regulations.
  The bill eliminates rate-of-return regulation, a regulatory model 
which cannot logically exist in a competitive environment created by 
this legislation. States are encouraged to move to more flexible and 
competitive models.
  S. 652 requires the FCC to forbear or to eliminate any past or 
current regulation requirement which would no longer make sense in this 
market base of competition. There will be a biannual regulatory review 
in this legislation that would recommend the elimination, modification, 
or other needed regulatory reform in the future.
  Mr. President, in closing, I think it is time to adopt this 
communications policy for the future. It provides the right framework, 
it removes all barriers and restrictions to free market competition, 
innovation, and increased investment.
  With the passage of this legislation our economy will grow a lot 
faster. We have had tremendous estimates of the kind of economic impact 
this legislation will have in the billions of dollars. More jobs will 
be created, applications in education and health care will expand more 
quickly, and the quality of life will improve in both rural and urban 
areas.
  It is time to move beyond the culture of timidity where the companies 
and political leaders, regulators, and the courts resist needed reform, 
fear competition, and opt for the security and inferiority of the 
status quo.
  We know that is what the election was about last year, change in the 
status quo. Boy, this bill will do that. It is time to trade in the 
Edsel and pass telecommunications legislation that will move us truly 
into the future.
  I do want to note that I think that the center that holds this 
legislation together is the part that deals with the entry test. When 
the local Bell companies get into long distance and they get into the 
local unbundled market, we have a delicate balance there.
  Are they totally happy? No, they would like a fair advantage in each 
case, but we have been able to cobble together this important balance, 
and I think it is one that we should support. I believe that we will be 
able to get this legislation through.
  In conclusion, Mr. President, I ask unanimous consent to have printed 
in the Record information specifically citing the impact that this 
legislation can have in my home State of Mississippi.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   What Does it Mean for Mississippi?

       Mississippi is home to some of the Nation's new leaders in 
     every segment of telecommunications.
       Mississippi is prospering and benefitting from the 
     contributions made by the largest and fastest growing 
     regional company, Bell South.
       LDDS, a Jackson, MS company, is the fourth largest long 
     distance company in the Nation and an expanding international 
     force. It is a true American success story.
       M-TEL, another Jackson based company, is a dynamic 
     entrepreneurial and leading national company in wireless 
     paging service.
       A dynamic culture of young entrepreneurs in cellular 
     services is thriving throughout the State.
       Parent companies to Mississippi Power and Mississippi Power 
     and Light, Entergy and Southern Company, are pioneer 
     companies promoting utility participation in 
     telecommunications and advanced networks. They will pave the 
     way for smart homes and highways in our State.
       Cable companies of all sizes have deployed throughout 
     Mississippi into virtually every small town.
       Wireless cable services have exploded in both rural and 
     urban areas of my State.
       Mississippi, in cooperation with National Aeronautical and 
     Space Administration, our leading educational institutions 
     and South Central Bell, has deployed an advanced network 
     which connects schools, universities, Federal facilities, 
     super computers and national data bases. It is an educational 
     and high tech model for the future and the Nation.
       It is in my home State of Mississippi that I have seen and 
     experienced the benefits of the communications revolution. I 
     know what it means to the economy and quality of life for my 
     State. It means the creation of high tech jobs, attracting 
     new industry, and promoting and connecting Mississippi to the 
     Nation's best educational opportunities.
       As a Senator from a State which has become a leading 
     telecommunications center, I come to this debate with the 
     conviction that this legislation will serve Mississippi's, 
     the Nation's, consumers' and competitors' best interest.
       S. 652 promotes and accelerates the communication 
     revolution by tearing down all barriers and restrictions 
     preventing the benefits of free market competition.
       Mississippi's economy, with telecommunications serving as a 
     key catalyst, is growing and expanding. This legislation will 
     further fuel its growth.
       Under S. 652, Mississippi companies will have new 
     opportunities and expanded markets as well as the challenges 
     of competition. South central Bell will be able to expand 
     into long distance, cable, manufacturing and other services.
       LDDS, cable companies, Southern Company, Entergy, and 
     numerous other companies will be able, for the first time, to 
     begin competing for local service and combining local, long 
     distance and cable services.
       With S. 652, Mississippi's TV and radio broadcasters will 
     see old restrictions removed or raised which have stifled 
     growth and new business. [[Page S7908]] 
       Small cable operators in Mississippi who have struggled 
     under the regulatory burden of the 1992 Cable Act, will see 
     regulatory relief. Once again, Mississippi cable operators 
     will be able to expand and deploy new services, regain 
     financial stability and prepare to compete in new markets.
       The competition among all participants will spur 
     innovation, products, advanced networks and lower prices for 
     the benefit of Mississippi's consumers and industries.
       I want Mississippi to continue as a national leader in 
     telecommunications. S. 652 will help achieve that objective.
       For the Nation's future, S. 652 is one of the most 
     significant pieces of economic legislation we will consider.
       The President's Council of Economic Advisors estimates the 
     telecommunications deregulation will create 1.4 million new 
     jobs by the year 2003.
       A study by the WEFA group, funded by the Bell Companies, 
     projects 3.4 million jobs by the year 2005 and 0.5 percent 
     greater annual economic growth over the next 10 years.
       In addition, the committee heard testimony that the 
     Pressler bill will lead to an additional $2 trillion in 
     economic activity.
       The communications sector, more than any other, will shape 
     our future economy as well as our civic and community life. 
     This bill is the right policy to maximize the benefits this 
     sector of our economy can deliver.
       I urge my colleagues to support this legislation. It is 
     time for Congress, not the courts or bureaucracies, to 
     establish the communications policy for the 21st century.

  Mr. LOTT. Mr. President, I yield the floor.
  Mr. PRESSLER. I thank the Senator from Mississippi for his terrific 
contribution. Chip Pickering has been in every step of the way. This 
would not be happening without your great leadership. I personally 
thank you very, very much.
  Mr. President, I am sending to the desk a managers' amendment which I 
am cosponsoring with Senator Hollings. This amendment, which has been 
cleared on both sides of the aisle, makes a number of technical and 
minor changes in the bill that have been worked out since the bill was 
reported by the Commerce Committee.
  I ask unanimous consent that when adopted, the text be treated as 
original text for purposes of further amendment.
  At this point I would like to send the managers' amendment to the 
desk.
  Mr. LAUTENBERG. Mr. President, reserving the right to object, I 
commend the managers of the bill thus far. I know they are anxious to 
conclude a period of a lot of hard work and having struggled through 
many discussions and agreements to get this behind.
  The reason that I raise the possibility of an objection is because, 
in the process of developing the managers' amendment, it was determined 
that a major research company based in New Jersey but doing work 
throughout this country, a company that has offered many innovative 
ideas in this period of new technology in communication, would be 
prohibited as a result of the present managers' statement from engaging 
in manufacture, even though it is the public declaration that they 
intend to be free of the regional Bell companies ownership. There they 
are, a company trying to engage in a competitive practice.
  I had a discussion with two good friends, Senator Hollings on the 
Democratic side and Senator Pressler on the Republican side, to see if 
there was any way that we could defer action on this tonight so we 
might discuss the competitive environment tomorrow morning.
  Apparently, it is the belief of the managers that this bill has gone 
through so much labor and so many delicate steps that to further delay 
that might be injurious to the success, ultimately, of passing this 
bill.
  So while I will not object, I would ask the managers whether or not I 
can have their support for a discussion of a proposal to enable the 
competitive character of the field to be expanded although it is 
lacking in the statement of the managers.
  Mr. PRESSLER. I want to commend my friend from New Jersey, Senator 
Lautenberg. I know he is an experienced businessman, and I know there 
is some controversy about Bellcore. It is my belief that if Bellcore is 
sold and out there competing, it should be able to compete without 
restriction.
  That is based on the information I have at this moment. I know there 
is a great controversy about manufacturing, because about 99 percent of 
manufacturing many new devises is research.
  It seems to me that the Senator has raised a very good point. As I 
understand it, in the managers' amendment, we have taken this section 
out so we will be able to entertain a colloquy, or indeed an amendment.
  I have begged several Senators to come tonight to offer amendments. 
We have all these strong feelings and we would like to get a vote on 
something tomorrow morning at 9 o'clock. As I gaze about, I do not see 
any amendments cropping forth. We welcome amendments.
  I want to thank the Senator from New Jersey for raising this, because 
based on the information I have, I tend to agree with what I think his 
position is. I think he has raised a good point. If we could still 
adopt the managers' amendment, that is not, as I understand it, in 
there. We have taken out anything that there is controversy about.
  Mr. HOLLINGS. Mr. President, first let me thank, as our chairman has 
very dutifully done, the distinguished presiding officer, the Senator 
from Mississippi, Senator Lott, for the 2 years that we worked on S. 
1822. The Senator has been an outstanding leader on S. 652 and his 
staff Chip Pickering has done exceptional bipartisan work. We never 
would have gotten this far, this balance that has been emphasized, had 
it not been for Senator Lott's leadership.
 I want to thank my distinguished colleague from New Jersey for his 
attitude and approach to this. What happens, I have two lists in my 
hands. The list of possible amendments in my left hand are those 
amendments that are not agreed to, that we could not get consent on 
from the colleagues and the staffs on all sides. Objections have been 
heard. We had a list of those things that we thought were peripheral 
matters like ``Replace subsidiary with affiliate where it appears,'' 
number 2, ``The FCC may modify the modified final judgment with decrees 
once they are transferred to the FCC,'' and on down the list. These are 
things that both sides have agreed to.

  Unfortunately, other distinguished Members of the Senate, and 
particularly on our committee of Commerce, have objected to the 
provision dealing with Bellcore. As I understand it, as the 
distinguished Senator from New Jersey points out--they are very 
competitive. Heavens knows, they produced the technology. If you had to 
measure in percentage of communications, I would say 90 percent of it 
has been produced in the Senator from New Jersey's home State there at 
Bellcore.
  So I am disposed to help in any way I can the Senator from New 
Jersey. It is not within my power to do so because I have, like I say, 
in my left hand those amendments that are not agreed to. And the 
Bellcore amendment would have to be on that particular list.
  They are not agreed to. There are at least three Senators on the 
committee who have so notified us. And if any Senator notified me right 
now on any of the other items in the managers' amendment I would object 
for them if they could not even be here. That would be my duty as a 
manager of the bill, because every Senator has to be respected.
  I have the highest respect for the Senator from New Jersey. I will do 
everything possible I can to help him with his amendment.
  Mr. LAUTENBERG. With that statement, if the Senator will yield, Mr. 
President, I have no objection to going forward.
  The PRESIDING OFFICER. Without objection, the several unanimous 
consent requests are agreed to.
  Mr. KERREY. Reserving the right to object, is this just a unanimous 
consent to read the amendment?
  Mr. HOLLINGS. We have to read the amendment.


                           Amendment No. 1258

 (Purpose: To make minor, technical, and other changes in the reported 
                                 bill)

  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from South Dakota [Mr. Pressler] for himself 
     and Mr. Hollings proposes an amendment numbered 1258.

  Mr. PRESSLER. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
[[Page S7909]]

  Mr. KERREY. Reserving the right to object, Mr. President, what are we 
doing here?
  The PRESIDING OFFICER. The Senator from South Dakota just asked the 
amendments be considered as read.
  Mr. PRESSLER. I am asking unanimous consent to adopt the managers' 
amendments, which I have sent to the desk, and which have been cleared 
on both sides of the aisle.
  Mr. HOLLINGS. Is that cleared with the distinguished Senator?
  Mr. KERREY. I have great respect for the Senators from South Carolina 
and South Dakota, but I have not read the amendment. It was just 
brought to me. It is 40-some pages long and I understand there is lots 
in it. I cannot. I object.
  The PRESIDING OFFICER. Objection is heard.
  Is there debate on the amendment?
  Mr. PRESSLER. I suggest the absence of a quorum.
  Mr. KERREY. Mr. President, I ask unanimous consent to withhold the 
request for the quorum call.
  The PRESIDING OFFICER. Is there objection?
  The Senator from Nebraska seeks recognition? The Senator from 
Nebraska.
  Mr. KERREY. Mr. President, I know there is some confusion. I see my 
friend from South Carolina and South Dakota as well. I have a great 
deal of respect for them. I take a great deal of interest in this 
legislation. They have been kind to allow a member of my staff to sit 
in on lots of the deliberation.
  But I want my colleagues to understand there is a lot in this bill 
that is not very well understood. I declare straight out I will not 
vote for this bill in its current form. I am here because I see great 
promise in telecommunications. I see great promise, in fact, in 
deregulating the telecommunications industry and using competition to 
regulate as opposed to having Government mandates and so forth do the 
job.
  But in 1986 I signed a deregulation bill. I may be, for all I know, 
the only Member of Congress who can come to the floor and say ``I 
signed a deregulation bill for telecommunications.'' And I know that 
deregulation does not mean competition. You can have deregulation and 
have no competition.
  I call upon my colleagues who wonder about the impact of their votes. 
There is a great deal of concern about, for example, the budget 
resolution we took up. ``Gee, what is this going to do to me? Is it 
going to be difficult to explain at home? There are lots of things in 
there that might become unpopular and am I going to pay for voting yes 
on the budget resolution?"
  We have lots of issues that are extremely controversial. This is a 
lot more controversial than meets the eye. I ask my colleagues who are 
considering voting yes for this and want to move it through quickly to 
recall what life was like in 1984 when Mr. Baxter, from the Department 
of Justice, signed a consent decree divesting AT&T of the Bell 
operating companies, filing that decree with the Federal court here in 
Washington, DC.
  I remember I was Governor of Nebraska at the time and I can tell you, 
you could have selected a thousand people at random and asked them this 
question: Would you like Congress to put the Bell companies back 
together? Do you like what Baxter and Judge Greene did?
  And of the thousand people I will bet 998 people would have said 
``Reverse it. Put it back together. We do not like the confusion that 
we have. We do not like trying to figure out all this stuff.'' It was 
not popular. Do not let anybody be misled by this. This is going to 
create considerable confusion in the early years. You are not likely to 
be greeted by a round of applause by households, consumers, who have 
not been consulted about this legislation.
  This is not a Contract With America. Most of the things that we have 
taken up in this Senate have been carefully polled and researched to 
determine whether or not they are popular. I have heard, whether it is 
the balanced budget amendment or the budget resolution or term limits, 
all sorts of other things, people come down to the floor and say, ``In 
November the people of the United States of America spoke and here is 
what they meant.'' I have heard speaker after speaker say that. And in 
many cases I agreed with them, because I ran in November of 1994.
  But I did not have a single citizen, when I was out campaigning, come 
up to me and say: ``Boy, make sure when you go back, if you get 
reelected, if you go back and represent us, make sure you go back there 
and deregulate the phone companies. Make sure you go back there and 
deregulate the cable industry. Make sure. Bob, make sure, if you get 
back there, get rid of the ownership restrictions on television 
stations, on radio stations. Because that is what I want. I am really 
excited about all this stuff. I really think there is a lot in this for 
me. That is what I want. That is the sort of thing I would like to have 
you go back there and do.''
  The American people have not been polled on this one. The 
distinguished majority leader came down and said there is bipartisan 
support. It is not a Democratic issue. It is not a Republican issue. He 
is quite right. It is not. This is an issue that has been discussed at 
length and I discussed it at length with many corporations that want to 
be deregulated. They want to be deregulated. In many cases they are 
right.
  But if you listen to the rhetoric, just this far, you would think 
that the current regulation is holding back the telecommunications 
industry to such an extent that we have lousy telephone service, that 
we have noncompetitive industries. You would think America was somehow 
backwards compared to all the rest of the world. That is not true.
  If you look at the OECD examinations of our industries, 
telecommunications, including the telephone companies, are among the 
most competitive in the world and among the most productive in the 
world.
  It does not mean, because a company is regulated, that it is not 
productive or that it is not competitive or that somehow it is going to 
produce an unsatisfactory thing for the American people.
  I am telling my colleagues a lot of people will come down here and 
say, ``It must be good. There is a lot of bipartisan support for it.'' 
Walk up to the desk, check out a lot of these amendments, see which way 
people are voting--this one is going to be remembered. This vote is a 
big vote. In my State I have about a million households. If you talk 
telecommunications to those households they do not talk faxes. They are 
not thinking about enhanced digital processing and all that stuff. They 
are saying, ``What is my dial tone going to cost me? What is my cable 
going to cost me?'' That is what they talk about.
  I think we need to come down to this floor and ask ourselves a 
question. What is this bill going to do for those households? What is 
it going to do for the consumer? I hear people say it is going to 
create lots of new jobs. In the course of this debate we are going to 
come down and examine the question: Who has been creating the jobs?
  (Mr. LOTT assumed the chair).
  Mr. KERREY. Where are the jobs going? One of the things I hear from 
people, an awful lot of telecommunications industry people working for 
the telecommunications company, is substantial downsizing. I say, ``Do 
you want to deregulate? Are you going do get more jobs?'' They say, ``I 
do not know. You know. It has not been working too good thus far.''
  I am down here to talk about what this is going to do for the many 
households, and for the American consumers. I look forward to the 
debate. There is much in this legislation that I support. I believe in 
many cases deregulation will produce a competitive environment that 
will benefit the American consumer, and that will benefit the American 
household. But let no one be mistaken. When we pass this piece of 
legislation in the Senate and go to conference with the House, and get 
final passage in the early days, do not expect to have the people who 
vote for you say you were right. ``Boy, this thing has really worked.'' 
It may take 9 or 10 years, which is what happened with divestiture. It 
took us a good 10 years before people began to say, ``Wait a minute. 
This is working. Competition is bringing the price down. The quality is 
going up. This appears to be in fact generating something beneficial to 
me.''
  So I would like to get a little fundamental here. I very often, as I 
am sure the distinguished Presiding Officer does and other Members do, 
get [[Page S7910]] asked, ``What is it that you do? What do you in 
Washington, DC?'' Do I just come down to the floor and give speeches? 
Do I just answer my telephone and answer letters and do constituent 
service for the people are having trouble with the IRS, the EPA, or 
various other agencies of the government? Yes. I try to explain to them 
I am involved with writing laws. That is what we do here. We write 
laws; and that the laws matter. I am not a lawyer.
  I very often wonder whether or not one of the most important things 
lawyers do is write the laws that are so darned confusing we have to 
hire them in order to tell us what is in them. But the longer I am on 
the job, the longer I am on the job of being in politics and being a 
politician, the law is becoming more important to me. I see that they 
are alive. They have an impact on people, and they make a difference.
  This bill has about 144 pages in it. Every single word is important. 
Every single phrase here is going to affect something. We all know it. 
We have them coming into the office saying we are concerned about this 
particular phrase, we are concerned about this particular paragraph. I 
have heard it already referenced--some of the agreements have been 
difficult to get. They have been difficult to get because every time 
you do something somebody says, ``Gee. That is going to affect me in an 
adverse way.''
  The distinguished Senator from Alaska had an amendment earlier that 
paid for the cost of the universal service, and one of the things that 
he did--I believe he is quite right--the National Association of 
Broadcasters is going to object. There are going to be people who say, 
``I do not like where you got the money.'' Everything we do in this 
legislation we know affects one interest group or another. But it is 
also going to affect more than almost anything we have discussed thus 
far this year; Indeed, perhaps for a long, long time, every single 
American household.
  If you have a telephone in your home, it is going to affect you. If 
you have a cable line running into your household, this bill is going 
to affect you.
  I just said to citizens out there who are wondering about what the 
mumbo jumbo is about, you are going to hear a lot. You had better pay 
attention because, if you have a telephone, and you if you have a cable 
line coming into your household, you had better pay attention to this 
legislation because it is going to have a big impact upon you. You are 
going to hear a lot of people coming down saying this is going to be 
good for you. You did not ask for it. You did not say, ``By gosh. Let 
us change this law.'' You did not ask for this thing. But we have 
figured out this is going to be good for you. And make no mistake about 
it. We have really paid careful attention to this legislation. We know 
exactly what it is going to do.
  Mr. President, I believe that the American people deserve as a 
consequence of the impact of this legislation a good and healthy and 
lengthy debate.
  I heard the distinguished occupant of the Chair earlier say he hopes 
this thing does not degenerate into a filibuster. I do not intend to 
filibuster this thing. I point out with great respect to the Senator 
from Mississippi that 1822 would have passed last year if it had not 
been filibustered and slowed up and tied up by people who said we do 
not want this thing to go. This would have been law last year I 
believe. I do not know if the Senator from South Carolina can confirm 
that.
  I do not want to tie this thing up with filibusters and delays. I 
intend, when there is a manager's amendment or incidental amendment, to 
examine the language because the language is important. It is going to 
have an effect on people.
  I say, again for emphasis, that I believe this vote is going to be a 
lot more controversial the further away you get from it than people 
suspect today. One of the things about laws that citizens need to 
understand is that very often it is about power. That is to say, who 
has the power?
  I joined with, again the distinguished Senator from South Carolina, 
in voting against tort reform bill a little earlier because in my 
judgment that was about power. That was about saying to the citizens of 
this country you are getting swept away saying the trial lawyers are 
making life miserable for you. Just ask yourself this question: You get 
hurt out there, you have a problem out there. Who is going to help you? 
Is congress going to help you? Are you going to call up your 
Congressmen and say, ``I am getting abused by the phone and cable 
companies. I do not like what is going on out there. Do you think 
Congress is going to rush to your defense? Do you think it will be 
possible for you to get the agencies of the Federal Government to rally 
to your cause? And you probably do not even have enough money to buy an 
airplane ticket to come back here, and if you came back here you will 
not know where to go.
  This is about power. And regulations are in place to protect the 
interests of the people. That is what they are there for. Let us 
deregulate.
  I have a little case going on right now in Omaha, NE, that 
illustrates what I am talking about. We have a plant in Nebraska which 
employees a couple of hundred people. Unfortunately, the company 
processes lead, and they put a lot of lead in the air and water. And it 
has been determined--and no one disputes it--that lead damages newborn 
babies without dispute. We do not have leaded gasoline any longer 
because we have decided that is the case. We have a Clean Air Act, we 
have a Clean Water Act. This company has been out of compliance for 
over 15 years.
  Guess how we are going to resolve it? Do you think we resolved it 
because a U.S. Senator intervened on their behalf? Do you think the 
Congress came to the rescue? Do you think it was the administrative 
branch? No, sir. A couple of citizens filed a suit in court. It was the 
judiciary. It was the right of a citizen to go to court and say, ``This 
company is not obeying the law of the land. I am going to insist that 
they obey the law of the land.''
  Mr. President, make no mistake about it. This piece of legislation is 
about who controls the airways, who controls your telephone, who 
controls the information? It is about power.
  I hear a lot of people say, ``Well, we ought to get the government 
out of that.'' Let us have a debate about what the government should or 
should not do on behalf of the citizens. I am prepared to do that. I 
think it is a healthy debate. Let us not presume it is quite so easy as 
just saying competition is the best regulator, which I heard three or 
four or five times. Competition does not give us clean air. Competition 
does not give us clean water. Competition would not likely make every 
single factory in the workplace in America safe. Maybe somebody wants 
to come down here and say that is the case.
  I get 1,000 Americans who say, ``You tell me.'' Do you trust the 
corporation? You have a corporation out there that is desperately 
worried about their quarterly profits. They are worried about bottom 
line. They have the shareholders out there to perform for, and they 
have to make a decision. They have 1,000 people working for them, and 
have been working for them let us say 30 years; 30,000 man and woman 
hours in that corporation. They have to make a decision to lay all 
thousand of them off, and give them no fringe benefits, no severance 
pay, no retirement. All of those things add cost to the corporation.
  I ask my Americans. Do you trust that corporation? Do you think that 
corporation is going do say ``No. I think it is right and decent; I do 
not care what the stock holders say, what Wall Street says; I am going 
to ignore all of those people up in New York City; I do not care what 
they say; I am going to do the right thing; I am going to give you 
severance pay; I am going to provide you with your health care, and 
take care of that retirement benefit because I care about you; you are 
a human being; I am not going to treat you like trash?''
  I do not believe many Americans are going to say that is likely to be 
the case. If a company is a mom and pop shop, owned by an individual 
which owns 100 percent of the stock, that might be different. But when 
that company CEO worries about the value of its share, that companies 
CEO does things differently. They have to. I do not say they are doing 
the wrong thing. I do not blame them for doing that. But please do not 
come and say that the market is going to get the job 
[[Page S7911]] done. The market rewards people that produce. The market 
rewards a much different set of values than the values that I have just 
described with these thousand families.
  So again, the next thing I say to citizens who are wondering about 
these 144 pages and all of the amendments that will be offered, it is 
about power and power over your lives, power to deliver you 
information, power to give you a phone service, power to give you video 
information, power to give you the things that you say that you want.
  For your information, a lot of people who are coming down here saying 
get the government out of that are very strongly supportive of 
unfortunately a title offered by the senior Senator from Nebraska, 
title 4, which said we need to have a lot more government involvement 
when it comes to regulating.
  I understand there is going to be some amendment to make even tougher 
penalties. That is popular. That one we all know. People are fed up 
with obscenity and they are fed up with the stuff they see on 
television and they want us to do something about it. And title IV 
attempts to do that. I hope we are a bit careful, to say the least, 
with title IV, but title IV is more Government, it is not less. Title 
IV is the statement by Members of Congress that says the market does 
not work when it comes to obscenity.
  Do some people want to come here and tell me it does? Does somebody 
want to come down here and say the market is the best regulator of 
obscenity? I do not think so. I do not think there is going to be a 
single Member come down here and say just let the market take care of 
it; we do not care what kids are getting over the Internet. We do not 
care what is coming into homes.
  No. In that instance the market goes out the window. In that instance 
we say Time/Warner is putting out slime. We have to regulate them in 
some fashion.
  So, Mr. President, again, I have a great deal of respect and 
appreciation for the managers of this bill. They have done an awful lot 
of work on it. I do intend to carefully examine the amendments that are 
offered. I do believe that increased competition can be enormously 
beneficial. I believe that it can, properly done, result in lower 
prices, higher quality service, particularly, as I said, if it is done 
in a fashion that lets everybody compete.
  Again, I do not underestimate the difficulty of this. I am going to 
have a lot of explaining to do to my citizens to tell them why this is 
good for them because in the early days when they get competition they 
are going to get confused. And in the early days they may even get some 
price increases. They may find themselves paying higher telephone 
service. They may find themselves paying higher cable. We do not know. 
We are saying let the market set the price, in general, once you get to 
the final end of this thing. Let the cost determine what people are 
going to pay. We have a very small amount of subsidy in the universal 
service fund. We have an education provision that some people are going 
to come down here and try to strike, saying the market ought to have 
taken care of that. After having given speeches saying this is good for 
health care, this is good for education, they do not even want to have 
that provision in this piece of legislation.
  I have many problems with this bill, Mr. President. I do believe the 
Department of Justice needs a role in this. I do not think consultation 
is enough. I would cite as case No. 1 why consultation is not enough, 
the very thing that Members will use when they are saying that 
competition works, and that is Mr. Baxter and Judge Greene getting 
together, the Department of Justice getting together with a Federal 
judge and putting together a consent decree.
  It was the Department of Justice. It was the Department of Justice 
that gave us the competitive environment. It was not the Federal 
Communcations Commission. I am not calling for increased authority, 
increased power, but I want them to do more than consult. They 
understand competition. The Antitrust Division of the Department of 
Justice understands where and when competition is, and they are about 
the only ones in this town that, at least by my measurement, are out 
there fighting to make sure that that marketplace in fact is working.
  I have serious problems saying that telephone companies can acquire 
cable companies inside of their area immediately.
  Mr. President, I believe we have to have two lines coming into the 
home. I believe you have to have--if it is going to be fiber or some 
kind of combination of coax and fiber, I do not know what it is going 
to be, but I want two lines coming into my home.
  I have heard people talk an awful lot about competition, and I have 
heard all the companies coming in saying they want a competitive 
environment. This is one thing I know. Competition to me means I have 
choice. Again, this idea of choice is a two-edged sword. You are going 
to have a lot of households out there that are not going to be terribly 
pleased with this new choice they have, and they are not going to be 
terribly happy when they see what that choice might do.
  We have to be prepared to stay with this thing. To my mind, choice 
means if a company does not give me what I want, I can take my business 
someplace else. Competition means to me I can go wherever I want and 
get the service I want. And I believe in many ways this bill does just 
that.
  The requirements of unbundling, of dialing parity, the requirements 
that are in this legislation in title I, in my judgment, provide a good 
basis for us to have a competitive environment. Allowing the phone 
companies to go out and buy cable inside their own area, Mr. President, 
is going to restrict competition immediately. We are not going to have 
the local cable company and the phone company competing because the 
phone company is going to have an incentive to buy them. If they buy 
them, it ends that competition.
  I am prepared to hear arguments about that, but I think allowing this 
cable-Bellcore ownership in the local area does precisely the opposite 
of what this bill intends to do.
  The other objections and problems that I have with the bill I will 
come later to the floor and try to address. I see the Senator from 
Pennsylvania is down here. I suspect that he wants to make a statement. 
I just wanted to stand up at this point in time and say to the Senator 
from South Dakota and the Senator from South Carolina I do not intend 
to stand down here and stop this piece of legislation from being 
enacted. But I do intend to stand down here and examine every amendment 
that is proposed and make sure it is an amendment that I agree to for 
all the reasons I cited earlier.
  The consumers of this country, the households of this country have 
not been consulted. We are presuming that it is going to be good for 
them because we have talked to American corporations and they are 
saying it is going to be good for them. They are saying this is going 
to be good for consumers. The corporations are saying it is going to be 
good for those households. They are saying it is good because they are 
getting more jobs, higher service, better quality, and lower prices.
  That is what they are saying. It is not coming from households. This 
is not coming from the people of the United States of America, whether 
it is the people of South Dakota, the people of Nebraska, South 
Carolina, Mississippi, or Pennsylvania. We believe that we have 
something here that is going to be good for them, but they have not 
come to us and said: Please do this because we think this needs to be 
done.
  So I again will have many opportunities to stand and talk, and I look 
forward to what I hope will be a straightforward and healthy and honest 
debate, something that I hope does produce a final change in the 1934 
Communications Act which I think does need to be changed. But at the 
end of the day I wish to be able to say to the consumers of Nebraska 
that this is going to be good for you. I wish to able to say to every 
household in Nebraska you are going to get benefits from it and these 
are the benefits that I believe are going to occur.
  At this stage of the game, Mr. President, I cannot support this 
legislation for the reasons cited, and I look forward to engaging in 
what I said I hope will be a constructive debate.
  Mr. PRESSLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. I thank the Senator from Nebraska for his statement. In 
[[Page S7912]] fact, the other day I cited him, when I was on a 
national program of State legislators and they asked, in terms of a 
model of a State to deregulate, what might it be. And I suggested the 
work of Bob Kerrey of Nebraska when he was Governor. I observed his 
work in deregulating telecommunications in that State, and I certainly 
look forward to his insights.
  We have worked on a bipartisan basis on this bill. In fact, all the 
Democrats on the Commerce Committee voted for the bill. Senator 
Hollings did a good job. I visited with and delivered a copy of the 
original draft bill to each of the Democrats on the Commerce Committee.
  Two Republicans on the committee voted against the bill. Eight 
Republicans on the committee voted for it. This is a bipartisan bill. 
All the Democrats on the committee voted for it. I think that is a very 
important point.
           the public utility holding company act provisions

  Mr. D'AMATO. Mr. President, today I rise to speak about certain 
provisions in S. 652, the Telecommunications Competition and 
Deregulation Act of 1995.
  This bill contains provisions that would significantly alter the 
Public Utility Holding Company Act of 1935 (PUHCA). The PUHCA was 
originally enacted 60 years ago to simplify the utility holding company 
structure and ensure that consumers were protected from unfair rate 
increases. At that time, there were many industry abuses involving the 
pyramidal corporate structures of holding companies which greatly 
increased the speculative nature of securities issuances, led to market 
manipulation, and inflated the capital structure. The abuses in the 
industry made it nearly impossible for the States to adequately protect 
utility ratepayers.
  The PUHCA limited the types of businesses that holding companies 
could acquire to utility related services. As reported out of the 
Commerce Committee, Sections 102 and 206 of the ``Telecommunications 
Competition and Deregulation Act'' would permit diversification of 
registered holding companies into the telecommunications business--
without SEC approval or any other conditions. Allowing holding 
companies to diversify away from their traditional core utility 
operations is a departure from the basis principles underlying the 1935 
Act.
  Mr. President, my primary concern with these sections of the 
``Telecommunications Competition and Deregulation Act'' is that losses 
resulting from the subsidiaries telecommunications activities could be 
passed on to public utility customers in the form of higher utility 
rates.
  I would like to commend Senator Pressler and Senator Lott for 
including my provision--which addresses these concerns--in the 
manager's amendment. My provision puts in place the proper consumer 
safeguards to protect electric utility ratepayers and stockholders from 
bearing the costs of diversification by registered holding companies 
into telecommunications activities.
  It requires the Federal Communications Commission, the Federal Energy 
Regulatory Commission, and the State regulators to monitor the 
activities and practices of both the subsidiaries and the parent 
holding companies that engage in telecommunications activities in order 
to ensure that utility consumers pay only what they get.
  For example, my provision would ensure that telecommunications-
related activities are conducted in a separate subsidiary of the 
holding company. It would also provide the States with the appropriate 
regulatory, investigatory, and enforcement authority to protect utility 
consumers. To this effect, it would require the States to approve any 
rate increases by those utility companies that have a 
telecommunications subsidiary. As a result, the States can examine the 
proposed rate increase to make sure it is justified and that utility 
customers are not subsidizing the holding company's telecommunications-
related costs.
  The Banking Committee has consulted the SEC as well as industry and 
consumer representatives in crafting this provision to make sure 
appropriate safeguards will allow the holding companies to diversify 
without negative consequences to utility customers. We have struck a 
reasonable balance. As a conferee on the Telecommunications Competition 
and Deregulation Act of 1995, I will be in a position to make certain 
that this balance is preserved.
  At the same time, I would add that the Banking Committee intends to 
examine the continuing need for the PUHCA once the Securities and 
Exchange Commission releases its report and recommendations on repeal 
or reform of the Act.
  I would like to thank Senator Pressler, Senator Lott, Senator 
Bumpers, Senator Sarbanes, and their staffs for their cooperation on 
this issue.


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