[Congressional Record Volume 141, Number 93 (Thursday, June 8, 1995)]
[Senate]
[Pages S7972-S8018]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


        THE TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT

  The Senate continued with the consideration of the bill.


                           Amendment No. 1262

  The PRESIDING OFFICER. Is there further debate on amendment No. 1262?
  The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, as we know, the distinguished Senator 
from West Virginia, Senator Rockefeller, on the Commerce Committee, has 
been the lead Senator on our side, and the distinguished Senator from 
Maine, Senator Snowe, on the majority side of the Commerce Committee 
with respect to the public entities. They did not realize this 
amendment was coming up and they are on their way to the floor.
  My friend from Arizona got some quick figures and questioned the 
figures I had given relative to the air fares. So let me once again 
state that the USAir fare from National to Charleston round trip is 
$628. United from Dulles round trip to Charleston is $628. There is a 
Continental flight at $608 round trip from National.
  With respect to USAir going down to Miami, we talked about flying 500 
miles further and of course the 500 miles coming back, 1,000-mile 
difference. There is a USAir $658 round trip to National, and if you 
walk up to the counter, there is a special of $478 for the 10 seats 
available that the clerk at the counter can give at that reduced rate.
  Perhaps that is what was the case with respect to the quoted figure 
of going from Dulles to Charleston, D.C. to Charleston, the $249 fare 
round [[Page S7973]] trip--that was the 21-day advance, nonrefundable 
fare under USAir.
  In my investigation, though, it did prove salutary that I found out 
the Government fare to fly out from Washington to Charleston is $192, 
but the Government fare all the way out to Phoenix is $135. So we found 
out, in the airline industry, who the chairman is of the subcommittee 
on air travel.
  I am going to get my office to call and see if I cannot persuade the 
Senator from Arizona to get me a little bit better consideration on 
this Government rate. They go 1,000 miles further, I say to the senior 
Senator, the President pro tempore of the Senate, 1,000 miles further 
and they get it $47 cheaper than you and me.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I thank the Senator from South Carolina 
for his additional information. The fact is, there are still one-way 
tickets available for $249. And the fact is, the number of departures 
from Washington, D.C., to South Carolina since deregulation has gone up 
16 percent. The number of available seats since deregulation from 
Washington, D.C., to South Carolina has gone up 50 percent since 
deregulation. The President's Council of Economic Advisers has said 
that consumers have saved $100 billion since the airline industry 
deregulated.
  I would also point out to the Senator from South Carolina, who is so 
enamored of the trip from Washington, D.C., to Phoenix, if I choose to 
leave from National Airport there is no direct flight. It has to stop 
someplace in between because of the arbitrary barrier to the markets 
imposed by the so-called perimeter rule, which was imposed by the 
former Speaker of the other body, Mr. Wright, which happens to reach 
the western edge of the tarmac at Dallas-Fort Worth Airport.
  So, as one who commutes back and forth every weekend and has done so, 
now--this is the 13th year--I can assure the Senator from South 
Carolina I am in favor of far more deregulation. What the Senator from 
South Carolina calls distance market is what is called the free market. 
It is called supply and demand. When there are enough people who 
utilize a service the price of that service goes down.
  It is a strange thing we find out when the free market works. If 
enough people want to use a certain service, and the cost of that 
service is divided up amongst more people, then the cost goes down. I 
am sure the Senator from South Carolina can appreciate that phenomenon. 
It has happened in the airline industry and the trucking industry and 
every other industry that we have deregulated. I am very sorry we are 
not going to see that in the telecommunications industry, because we 
have basically a bill that is more reregulatory than deregulatory.
  But as I said earlier, I look forward to the opportunity of extended 
debate on the issue of airline deregulation with my friend from South 
Carolina, who obviously feels very strongly on the issue and has a lot 
of knowledge and experience. But I would remind him, the issue before 
us today is telecommunications deregulation, although I always enjoy a 
spirited exchange with my dear friend from South Carolina.
  I thank him and yield the floor.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, quickly because the Senator from West 
Virginia is here, the number of flights has gone up in the context of 
the population and travel. It certainly has not gone up in the context 
of service and price.
  With respect to the service, now, those direct flights that I had are 
gone. I know it. I know it severely. I spend more time in Charlotte, 
NC, than I do in my hometown of Charleston.
  I told Harvey Gantt, when he was mayor, I was going to run against 
him and run for mayor of Charlotte because I am beginning to know more 
people in Charlotte than I do in Charleston. With respect to price, 
obviously some time back, it was a round trip, $64. That is what I used 
to pay. It is now up to $628. Inflation could quadruple the price but 
not go all the way up to $628.
  The price has gone up and I am subsidizing those long hauls. Eighty-
five percent of the medium- and small-size towns in West Virginia and 
in South Carolina are subsidizing the long hauls out to the west coast 
and Phoenix, Los Angeles and the rest, because the airlines make money 
on those things. Because that is where, under the economy of distance 
and the airline fuel costs and the crew and everything else, nonstop, 
they can make the money. And we have to subsidize it.
  The service has gone down, and the airlines are broke, and the 
Europeans are taking them over and we are thanking them for taking them 
over.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Mr. President, there are times when I wish I had 
never offered an amendment in the Commerce Committee having to do with 
perimeters for flights, 1,250 miles, because the doing of that and the 
winning of that in the Commerce Committee has, I think, fundamentally 
angered my very good friend, the distinguished Senator from Arizona. I 
think it has caused a whole series of things to happen as a result. The 
hearing with respect to United Airlines, a hearing with respect to--
well, no other hearings, but then I think this amendment. I think he 
was very deeply disturbed by that.
  I just want to say one thing. As I walked in the door over there I 
heard him mention that $100 billion had been saved in terms of cost of 
deregulation of airlines. I want to inform the Senator from Arizona 
that--sure, a lot of that must have been saved in West Virginia. 
Because you do not get to West Virginia now by jet airplane. Yes, there 
are one or two. Corporations have theirs. But when I go it is by 
propeller. I remember when we had American and Eastern and United, and 
they came in regularly into our airports. That was years and years ago.
  Within two or three months of deregulation it was gone. I am talking 
about this amendment when I am talking about airlines; that is what 
happens when the free market is allowed to entirely set what the rules 
of the game will be.
  West Virginia has suffered substantially. West Virginia has suffered 
profoundly because of deregulation of airlines which is glorified by 
the Senator from Arizona and which is very deeply hurtful to the 
livelihoods of the people of the State of West Virginia who have to 
move to other States, often, because there is not enough work because 
businesses have to be able to count on reliable air service and they do 
not want it to be some small propeller plane where your chin is resting 
on your knees--as is the case in the seated position of the junior 
Senator from West Virginia.
  It is incredibly important, not just to West Virginia but to every 
single State that has any part of it which is rural, that the amendment 
of the Senator from Arizona be defeated and be defeated soundly. We are 
dealing with some very, very fundamental principles here.
  For example, as we build on this information superhighway we must 
include an on-ramp for students and adults to ensure that every 
American has the opportunity to plug in and be part of this technology.
  The bill before us, ably shepherded through by Senator Hollings and 
Senator Pressler, includes this amendment. I think this amendment--I 
said this a couple of times in the last few days--I think it is so 
important that this language stay that schools, elementary schools, 
secondary schools, no matter where they are, be included as part of the 
information process, that they be wired up, that public libraries be 
included as part of this process, which in many cases in rural areas 
and other areas they may not be and will not be, because, like airline 
deregulation, you go where the population is.
  And, terribly important particularly for rural areas, that the 
telemedicine be available through rural health centers and through 
rural hospitals. And they will not be if the amendment of the Senator 
from Arizona prevails. They will not be because the market will not 
allocate the resources to make that available. I am as certain of that 
as I am of having to take a propeller airplane whenever I go to West 
Virginia. In fact, the only time that I do not take a propeller 
airplane when I go to West Virginia is if I go to Pittsburgh first. And 
the principle is exactly the same. The market will seek out where it is 
profitable to go as they are deregulated, as we will do and we will do 
[[Page S7974]] with my full support in this bill, but where it is not 
profitable for them to go they will not go.
  I want every Senator from every one of the 50 States--I do not care 
if it is New York State, which is thought of as being urban but has an 
enormous rural section, that people who live in Binghamton, NY, or 
Oneida or other places outside of that, they are not going to get 
service. Their elementary and secondary schools, their rural hospitals, 
their rural health clinics are not going to get service. They are not 
going to be wired up. They are not going to be part of this information 
highway. It is not going to happen because the market will make other 
choices.
  As a result of that, I have said what I think is probably a hyperbole 
in listening to myself say it, but I find believing myself saying it so 
compelling that I need to say it on the floor of the Senate, that if 
this language is allowed to stay in the bill and, thus, if the 
amendment of the Senator from Arizona is defeated, this Senator as an 
individual junior Senator from West Virginia will probably have done 
more in one series of paragraphs of sentences in a bill to help his 
State than anything he has done in his public career.
  I feel so strongly about that amendment. The amendment to strike this 
language is so wrong. It is so wrong for rural America. It is so wrong 
for places that cannot defend themselves. It is so wrong for choices 
that will be made by the marketplace to avoid elementary schools, 
secondary schools, libraries, rural health clinics, and rural 
hospitals. If you are not there with the technology, you might as well 
not be there.
  If you are a kid, if we want to create in this country a first-tier 
and a second-tier society--and I am not talking about rich and poor in 
financial terms. I am talking about even more important terms; that is, 
having a future. If you want to have a two-class society in this 
country, those who know and those who do not, then you vote with the 
Senator from Arizona because that is what you will have. You will have 
people that go on-line, with America-On-Line, that can search and have 
their home pager and do all kinds of things, and they will make 15 
percent more in salaries than people that do not have those abilities; 
probably 30 percent more.
  I remind you that in the computer business, the productivity, the 
technology, has been doubling for the last 30 years every 18 months.
  So what are these rural schools, what are these rural hospitals to do 
when they are not wired up? I cannot imagine anything that affects the 
future of this Senator's State, of the State of the Senator from North 
Dakota or the Senator from Nebraska in a more fundamental way in terms 
of its young people finding a chance to take their place in America as 
citizens with possibilities and pride and confidence than how this 
amendment is disposed of.
  Senator Pressler and Senator Hollings have worked together and have 
kept this as a part of the bill. They deserve praise for that.
  I want to share one story. Then I will sit down and yield to the 
others. I will have more to say about my home State of West Virginia 
and this amendment, which I feel is just--I feel so strongly that it 
has to be defeated for the sake not just of my State, but of every 
State, the rural and the out-of-the-way parts of every State. Let me 
share one story about West Virginia. It has to do with the West 
Virginia Library Commission, which is a very aggressive group. They 
have very aggressively worked for years to develop the network, and 
they recently won a Federal grant to provide computers for over 150 
libraries in our State.
  Our State commission is currently investing in that equipment and 
training for every library to be linked to the internet. But each 
library must pay for its own telecommunication link, and they cannot. 
My wife Sharon and I have our farm in Pocahontas County. That is one of 
those little public libraries--when I was a Governor I was there--a 
little octagonal building that uses solar ray because they cannot 
afford the fuel. And it is interesting to use solar panels in that part 
of the State because the sun does not shine that often. It rains 45 
inches every of year. There is no way they can possibly match.
  So that is taking the students of Pocahontas County, WV, and 
condemning them to second-class citizenship in terms of going into a 
library or the adults who want to improve themselves through library 
services. They are struggling financially. They cannot match. They 
cannot pay what they would be required to pay.
  We have something in this law called ``public interest.'' If there is 
ever a case of public interest, it is that people who are born in poor 
circumstances, in rich circumstances, in rural areas, in urban areas, 
or somewhere in between on either of those fronts have an equal chance 
in terms of the education system and the computer system and the health 
system of this country.
  No, we did not pass health care last year. Maybe we bit off too much. 
But here is something we can bite off which will really help. It is 
called telemedicine. It will only affect those parts of the State which 
are rural, and they will never get it unless the amendment of the 
Senator from Arizona is defeated and defeated soundly.
  Our part of the bill on this is not intended to give something away 
for nothing. It merely assures financially strapped public institutions 
like libraries and schools will get affordable rates for access.
  There are many others who want to speak. I will speak more on this 
subject. But I say again that the defeat of this amendment, I think, is 
central to the bill. I think it is central to the future of the young 
people and adults of my State. I have rarely felt so strongly about 
anything in my public life.
  I yield the floor.
  Mr. ASHCROFT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. ASHCROFT. Mr. President, I rise in support of the amendment.
  Some provisions of the legislation I believe are not necessary would 
promote bureaucratic intervention and intermeddling in the system. I 
believe the provisions of the legislation which will provide for 
subsidies and will provide for special privileges for certain entities 
is unnecessary.
  I believe that the suggestion that this is similar to the airline 
industry is misleading and counterproductive. The truth of the matter 
is that technology is going to change dramatically the impact of 
distances as it relates to the transmission of data and information. If 
you are bouncing information off the satellite, it does not matter 
whether you are in a rural area or in an urban area. It does not matter 
whether you are in a remote area or an approximate area. They are all 
equally accessible in that respect.
  So to speak about the airline industry and the amount of traffic that 
is generated to one area, and that that traffic somehow does not 
justify a lower cost to that area like it does another area ignores the 
fact that the transmission of data, especially the wireless 
transmission of data, simply really does not have costs related to the 
location of the receiver of the data.
  The data can be transmitted or received via satellite regardless of 
the location. So I do not think it is particularly instructive to try 
to get bogged down in the debate over airline deregulation here. We are 
talking about a different technology. And arguments which are locked 
into the technology of the past are based on ideas like the airline 
technology and what it takes to transmit a passenger instead of 
transmitting data, those are misleading arguments.
  The provision which is, I think, noble in its objective to try to 
help us have educational institutions with good access and health 
institutions with good access would require a costly accounting 
procedure and intermeddling by governmental entities to try to 
determine what would be ``reasonable rates'' or what would be 
``incremental costs.''
  If we say that elementary schools, secondary schools, libraries--and, 
incidentally, that is not public libraries in the legislation. The word 
``libraries'' is used without reference to whether it is public or 
private--if we say that they are entitled to special rates for the 
transmission of data or communications which they would choose to 
transmit or provide, it seems to me that we have set up a provision 
which requires governmental rate setting, governmental cost accounting, 
and massive and significant intervention of the Government in this 
process. And if those rates are established by the Government at less 
than the full cost of [[Page S7975]] the proceeding, that means 
everyone else who uses the system is going to be subsidizing the 
overall cost of these institutions and these entities.
  Much has been made of the rural setting and the fact that it might be 
a lot more expensive according to some that in order to have provision 
of telecommunications to rural settings----
  Mr. PRESSLER. If my friend will yield for a unanimous-consent 
request, it will take 30 seconds.
  Mr. ASHCROFT. I will be happy to yield.
  Mr. PRESSLER. Mr. President, there has been agreement on both sides 
for a vote on the McCain amendment at 3:30 today and that the time 
between now and then be equally divided--I do not intend to use mine; I 
will give it to anyone who wants it--in the usual form with no 
amendments in order to the amendment.
  Mr. KERREY. Reserving the right to object.
  Ms. SNOWE. Reserving the right to object.
  The PRESIDING OFFICER. There was no unanimous-consent request made at 
this point. There was an explanation.
  Mr. PRESSLER. I ask unanimous consent that the vote occur on the 
McCain amendment at 3:30 today.
  Mr. ROCKEFELLER. Reserving the right to object.
  The PRESIDING OFFICER. Is there objection?
  Mr. KERREY. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. ASHCROFT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. ASHCROFT. I thank the Chair.
  In order for some groups to have a specially reduced rate of 
services, other groups will have to pay and subsidize that rate for 
service. Now, whether those services are laudable or important or 
necessary or would not otherwise be available is debatable. There seems 
to be the thought that a lot of rural hospitals exist now without 
telecommunications access. I have been to many rural hospitals during 
the last year. I actually worked in several rural hospitals. They all 
have a number of the kinds of transmission devices that were very 
important to transmitting and receiving the kinds of things that would 
be involved in telecommunications. All of them had cable television, 
coaxial access, and the like.
  The point I would make here is that on page 132 of the bill, at lines 
19 through 22, it provides that the rates would be affordable and not 
higher than incremental costs.
  This places the Government in a position of having to try to 
ascertain what affordable rates are, having arguments about what 
incremental costs are, and injects the Government back in the process 
of regulation at the micro level. I think it is counterproductive. I 
pointed out that it not only applies to schools, elementary and 
secondary, but it applies to libraries, and it does not mean that it is 
only public libraries. The statute just says ``libraries.''
  I wonder if you might literally have a library that became an 
electronic library. It could be commercial in nature but it could 
provide information on the telecommunications highways but demand the 
right to do so at subsidized rates merely because it is mentioned in 
this section.
  It occurs to me that the promise of telecommunications deregulation 
means that access to new service, both digital and wireless, is going 
to be available to individuals around the country and institutions 
around the country. It also occurs to me that as that access is 
available and becomes cheaper as a result of the proliferation of 
services--and it is estimated that our costs in telecommunications will 
go down very substantially--a bureaucracy to start setting rates and to 
regulate the rates and to provide special subsidies for one part of our 
society as opposed to another is not only unnecessary but is 
counterproductive.
  So I stand in support of the fact that the marketplace will do a good 
job of providing service. And I just elevate for your consideration 
something of what has happened in terms of cellular phones. Some have 
indicated that because there are rural areas there would not be 
cellular phones. My State, which has substantial rural area, is covered 
with cellular phones. Virtually every part of the State is accessible 
to them. And I was charmed the other day, when meeting with some 
cellular phone operators, to find that one of the rural cellular 
operators includes in the package that is offered free long-distance 
phones so that if you pay for time on your cellular telephone, you can 
call anywhere you want to in the United States of America at the same 
rate you can call the next phone.
  This is sort of the prejudice that they are alleging, I 
suppose, is going to ruin us if we do not have this 
micromanagement in the telecom- munications 
industry.
  That is not prejudice at all. That is just the fact that 
entrepreneurs are at work in rural America as well as they are in urban 
America, and as a matter of fact in rural America sometimes 
telecommunications services are substantially enhanced and can even be 
at a competitive advantage, comparably stronger, offered with a more 
attractive array of advantages and features, than they would in the 
urban setting.
  It is with that in mind I think this amendment is well taken, that I 
think it is unnecessary to set rates and to have micromanagement and 
special privileges and subsidies built into this bill at a time when 
telecommunications is going to be more and more available as a result 
of technology, when the rates will be going down as a result of a 
proliferation of providers and services. And for us to single out a few 
groups, some of them inordinately narrow, perhaps providing additional 
advantages to public schools as opposed to private schools, some of 
them inordinately broad, providing this subsidy to all libraries, 
however they may be defined or constituted, it seems to me this section 
would be a section without which we could do well. And for that reason 
I support the amendment as proposed by the Senator from Arizona.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER (Mr. Coats). The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I grew up in North Dakota, in a town of 
about 300 people. I graduated in a high school class of 9. It is always 
interesting to come to the Senate floor and listen to folks who talk to 
us about the marketplace and competition and the advantages of this 
free market system as the allocator of goods and services. Frankly, in 
my hometown, a small town 50 to 60 miles from the nearest big town, 
which was 12,000 people, we did not receive a lot of the marketplace 
advantages that big cities have. And we did not complain a lot about 
it. We had a lot of other advantages living in a small town. We did not 
have a theater in Regent, ND. I guess you have a theater in big towns.
  I do not come to the floor of the Senate suggesting somehow from a 
public policy standpoint we need to have theaters in my hometown or in 
small towns in order to enjoy the arts. We missed out on a lot of the 
advantages that the market system brings to big communities because the 
market system works in search of revenue and income and profits.
  The market system works when competition is developed around a 
circumstance where competitors can provide a service or sell a product 
and make money. Where are they going to do that? They are going to do 
that where people live because the more people, the bigger the market, 
the more potential for profit.
  That is the way the market system works. We understand that. All of 
us have likely studied Adam Smith, who talked about the cloak of the 
invisible hand in the market place. Adam Smith would be rolling over in 
his grave these days because he preached these things before there was 
the modern convenience of the corporation --the artificial person that 
is born, lives, and never dies. Adam Smith actually talked about the 
marketplace and the cloak of the invisible hand when we had people who 
participated in the marketplace who lived and then died.
  But, in today's marketplace, the corporations dominate and they do 
not die.
  It is a different life and a different time. So Adam Smith, I 
suppose, would adapt.
  It is useful, I think, to talk about this issue of deregulation and 
the issue of airlines, even on this amendment. The Senator from South 
Carolina was, [[Page S7976]] I think, still addressing the core subject 
when he talked about deregulation of airlines on this amendment, 
because this amendment really provides an opportunity for people to see 
competing visions of what we ought to be doing.
  Some stand up and say, ``It doesn't matter what it is.'' It does not 
matter if it is communications, health care, transportation. It does 
not matter what it is, let the market system decide who gets served, 
when they get served, and how they get served.
  I am glad we had folks in Congress who did not believe that back in 
the thirties when they decided how to move some electricity around to 
provide advantages in this country and nobody in the world wanted to 
serve the farms in rural America because it was too expensive. If you 
had one customer for every 2 miles, you are not going to run a line out 
there and try to serve a farm because it is not profitable. The result, 
if you lived out in the country, is you did not turn on a light switch 
because you did not have electricity.
  Congress said there are some things universal in nature, some things 
everybody ought to enjoy the advantage of in this country. Electricity 
was one. So enough people in Congress felt differently than those who 
propose this amendment, and said, ``Well, we understand the 
marketplace, we understand competition, but we understand also there 
are some universal needs one of which is electricity.'' Therefore, they 
constructed an REA Program and brought electricity to farms, 
electrified rural America, and unleashed productivity never dreamed of 
before.
  That would never have happened if we worshiped at the altar of the 
marketplace and said rural America will get electricity as soon as the 
utility companies decide to run a line out there. When will that be? 
Never.
  The Senator from South Carolina, as he stood and spoke about this 
amendment, talked about airline deregulation. Airline deregulation had 
at its roots the notion of let the marketplace decide who gets air 
service, at what price, and what convenience in this country.
  We know what has happened with airline deregulation despite all the 
little statistics and charts people keep bringing to my attention. If 
you live in rural America and you access airline service, you have less 
choice and higher prices. It is a plain fact. If you live in Chicago, 
God bless you, then you have more choice and lower prices. That is just 
the way it works. There is no denying it. All the data in the world 
demonstrate that is the case.
  ``Oh,'' some will say, ``gee, there are more little flights here and 
there.'' Yes, there are little propeller airplanes running around. The 
fact is the minute a regional jet carrier tries to start out, one of 
the large carriers tries to squash them like a bug and do it 
successfully. I think it is interesting what is happening in the 
airline industry is the big have gotten bigger, the big carriers have 
gotten much, much bigger by merging and absorbing little carriers.
  Those on the other side of the aisle who preach competition and who 
talk about the virtues of the marketplace never stand up and say, 
``Wait a second, when the big get bigger and you concentrate more power 
in the hands of the few, you have less competition.'' In other words, 
those who bring these amendments to the Senate floor talk about the 
virtues of the marketplace, preach about competition but they do not 
practice it. If they practiced competition, they would care about 
ending up with only four or five very large airlines who have absorbed 
all the regional carriers. You do not hear that. You never hear from 
the folks who talk about competition, what we need to do to keep 
competitive and what we need to do to fight monopolistic tendencies.
  In the airline deregulation issue, it was decided that the Department 
of Transportation shall make judgments about whether a merger is in the 
public interest or not, and the Justice Department shall be consulted.
  Mr. President, do you know what has happened? What has happened is a 
merger is proposed by a large carrier buying up a smaller carrier and 
it goes to the Department of Transportation. The Department of 
Transportation raises its hands and says, ``Hosanna, this is just fine, 
we have no problem.'' The Department of Justice says, ``No, this is not 
in the public interest,'' but the Department of Transportation approves 
it anyway.
  That brings me to the telecommunications bill. We have the same 
problem. They say, ``Let's defang the Department of Justice and let the 
Federal Communications Commission decide when the regional Bells should 
be allowed to enter into long distance. What is the competitive test, 
when does competition exist and when does it not, regarding local and 
long distance services.''
  Same old thing. We apparently have not learned with respect to 
airline deregulation and giving the Department of Transportation the 
authority and rendering the Department of Justice to a consultative 
role.
  Some of us will offer amendments on the role of the Justice 
Department, which I hope the Senate will accept. If we are going to 
stand here preaching competition on the floor of the Senate, let us all 
practice the virtues of competition. Let us nurture the benefits of 
competition by deciding that we want competition in a real way to exist 
in this country.
  I do not understand sometimes those who say there is no other 
interest we have except having the marketplace and the potential 
profits dictate who gets what in this country. There are apparently no 
other influences or interests they have in terms of what advantages 
Americans should enjoy, what kind of things are universal in nature--
transportation, communications, and others.
  I recall a book written by Upton Sinclair as a result of research he 
did at the turn of the century. I do not want to ruin anybody's dinner, 
but Upton Sinclair is the person who toured the meat packing plants and 
discovered the scandal of the rats in the meat packing plants. 
Producers put arsenic on slices of bread and placed them around the 
meat packing plant so the rats would eat the arsenic and die. The rats 
died and they shove the bread and the rats in the hole with the meat, 
and they produce the mystery sausage. That is what America was eating.
  Upton Sinclair said this is what is going on. Then America rose up 
and said, ``We don't want to eat that.'' The barons of industry 
producing meat laced with rat poisons and rats apparently going down 
the same chutes were pursuing profits but not very interested in the 
health of our country.
  So Congress said maybe we ought to inspect meat. Maybe those folks 
who say the free-market system should not be interrupted are prepared 
at this point to say, ``Let's not inspect meat because we are 
inconveniencing the folks who run the meat packing plants.'' Maybe we 
should not inspect airlines for safety because we inconvenience the 
airlines.
  I have heard some disciples--not anybody in the Congress--but I have 
heard the free market advocates and some of the theorists suggest if 
people are putting out bad infant formula, babies will die and people 
will realize that the company is selling bad infant formula. Pretty 
soon, consumers will not buy any more infant formula and the company 
will go bankrupt. So the penalty for killing babies is bankruptcy.
  Maybe the same theory is on airline safety. You do not have a 
Government role on airline safety. If the airline is not safe, if they 
do not have their own internal safety mechanism, planes crash and 
people will say, ``We won't fly that airline anymore, and, therefore, 
the market system is a self-regulatory system, so we do not want to 
worry about airline safety,'' they would say. ``We don't have to worry 
about meat inspection,'' they would say. ``Those are all inconveniences 
to the market system. Let's let the income stream of the market system 
and competitive forces determine who does what in this country.''
  I have taken a long tour to get back to the central point. I 
recognize that. This is a perfect place for us to talk about the 
differences between us and them, and by them I am talking about those 
who stand and say there is not a public good that is involved here when 
you single out libraries or hospitals in rural areas with respect to 
rates charged and the buildup of infrastructure of the actual 
communications industry. They say, ``No, that's meddling, that's 
tinkering.'' We have heard all these voices before. They say the market 
system will work, and if the market system does not get these services 
to those rural areas, to those hospitals, [[Page S7977]] to those 
schools, those libraries, then tough luck, it was not meant to be.
  I would appreciate it, if anybody is keeping score, if they would put 
me down as a meddler, at least a tinkerer. Maybe someone who believes 
that it is worthy as we build up the infrastructure of 
telecommunications to have some on-ramps and some off-ramps, yes, even 
in the smallest portions of this country,
 even in rural towns, even at small libraries, even in rural hospitals. 
If we do not believe that, as far as I am concerned, I do not want to 
participate in building it. Is that selfish? Probably. But I come from 
a part of the country where they crossed with wagon trains, years and 
years ago, to get where they were going, and they understood back then 
the concept of moving together. You did not move wagon trains ahead 
unless all the wagons were ready. You do not move ahead by leaving some 
behind. That is part of the focus of this debate, I believe.

  This can be a remarkable opportunity for our country by seeing the 
explosion, the breathtaking new technology in telecommunications that 
improves our lives. But it can also be the development of a system of 
communications, producing services and products that leaves out a 
significant portion of our population if it is not done properly.
  I hope that as we go through this debate, we will expose over and 
over again the basic conflict between the two theories expressed on 
this floor--one by some who say let the market system allocate and 
decide and do not meddle and worry about whether folks in the rural 
areas are beneficiaries of this breathtaking new technology. And others 
of us say, no, this is something of a more universal need and a more 
universal nature, and we want all of America to benefit from it.
  That is what this amendment is about, I suppose, and why I oppose it. 
I think it contravenes that basic need that we have in this country to 
make sure all Americans benefit from the potential good that comes from 
this new telecommunications industry.
  So, Mr. President, I would like to make one additional point. I know 
that the chairman of the committee and the ranking member are very 
anxious to move forward. We have a vote ordered now or one that is 
about to be ordered. Is there a vote pending at this point?
  Mr. PRESSLER. No. We are working on an agreement.
  Mr. DORGAN. I understood earlier this week that the antiterrorism 
legislation should be moved quickly, and I cooperated with that. It was 
important to do that. The majority leader was absolutely correct. But I 
do not think there is a compelling need to suggest that we ought to be 
dealing with hundreds of billions of dollars in American industry and 
the rules for the telecommunications industry and be worrying about 
whether we get 20 or 30 minutes to fully debate something that is going 
to have a profound impact on our country. Let us take some time on 
these amendments and explore them thoroughly, and let us have good 
debate and substantial debate, and then let us make judgments.
  But there is no reason, in my judgment, to believe that we have to 
finish this bill by 6 o'clock tonight or 9 o'clock tonight or 10 
o'clock tomorrow. This bill ought to take whatever time it needs for us 
to devote our best energies and intellect to make sure this is the 
right thing for our country.
  Mr. President, I yield the floor.
  Ms. SNOWE addressed the Chair.
  The PRESIDING OFFICER (Mr. Coverdell). The Senator from Maine.
  Ms. SNOWE. Mr. President, I rise in very strong opposition to the 
amendment that has been offered by Senator McCain. It certainly is 
disturbing to think that some Members in this body cannot accept a 
provision that will provide affordable access to rural schools, 
libraries, and health care providers, given that we have become part of 
the information age, and this issue is absolutely critical to our 
Nation's future.
  The Senator from Arizona has offered an amendment that will strike 
the provision that was offered by Senator Rockefeller, Senator Exon, 
Senator Kerrey, and myself in the Commerce Committee which requires 
telecommunications carriers, upon a bona fide request, to provide 
important telecommunications services to schools and libraries and 
rural health care providers.
  This principle of affordable access is not a new concept. The 
universal service concept has been embodied in our national 
telecommunications policy since 1934, to ensure that all parts of 
America had access to the telephone. It was important to ensure that 
all Americans had access to the essential service at the time, 
telephone service.
  But universal service needs to be updated, and in fact, the bill 
recognizes that universal service is an evolving concept. The bill 
presently ensures universal service for telemedicine, and educational 
services, which I believe will make a difference, not only for America 
and its ability to compete with other countries, but also for 
individuals in preparing themselves for the work force of tomorrow, 
which we know will be constantly changing. And ensuring that our 
Nation's children gain access to the important technologies of the 
future will make a significant difference in the standard of living 
they and their families will enjoy for years to come. That is what this 
amendment is all about.
  The Senator from Arizona, Senator McCain, is offering an amendment to 
strike this language. His amendment will result in a nation of 
technology haves and have-nots, and that is not an outcome that I am 
willing to accept.
  I do not believe that we in Congress should pass a new 
telecommunications policy--I might add, the first revision of the 
Communications Act since 1934--which divides our Nation between the 
telecommunications haves and the have-nots. Many of the 
telecommunications providers are going to reap enormous gains from this 
legislation. Most will, and some will not. But the point is, in 
deregulating the telecommunications industry, we must make sure that we 
do not deny important areas of our country affordable access to 
telecommunications services.
  We know the densely populated urban areas will benefit from 
deregulation. They will have the benefit of all of the advances in 
technology for today and tomorrow and thereafter. But what about the 
rural areas? We know now that telecommunications services are far more 
expensive in rural areas than they are in urban areas, for example, 
access to Internet costs more in rural areas because the Internet nodes 
of access often are not in local calling areas, meaning that rural 
consumers must pay toll rates.
  What is going to happen now? If we do not guarantee some affordable 
access to telecommunications services in rural schools, libraries, and 
health care centers, where are they going to be tomorrow? Where will 
our Nation be? It is in our national interest to ensure that these 
areas are part of the information superhighway.
  If we want young people to be familiar with technology and to have it 
become second nature to them, to understand that it is their future, I 
cannot understand why we would support Senator McCain's amendment, 
which would take out the one provision that provides enormous public 
gain for all of America.
  Look at telemedicine. It is the here and now and it is the wave of 
the future. I have talked to many rural health care centers in my State 
of Maine. They need affordable access to telemedicine. They need the 
help so that they can provide the same kind of services and health care 
for their rural constituents as enjoyed by residents of more densely 
populated areas.
  I received a letter recently from Eastern Maine Health Care Services, 
which is located in a rural area of the State. They write:

       In the past several months, a network of hospitals have 
     begun to collaborate in our region of Maine. One of the 
     outstanding issues within that group is the need to use 
     telemedicine as a tool for providing cost-effective quality 
     health care from the smallest to the largest towns in our 
     region. Telemedicine in our region is defined as the 
     transmission of data --voice, image, and video--over 
     distance. We have come across many obstacles in this 
     endeavor, but one of the greatest obstacles is the 
     transmission of these media over the present 
     telecommunications lines at an affordable cost. Many of the 
     hospitals and health centers in our service area have 
     extremely limited funds.
  I thank the Senator, the chairman of our committee, Mr. Pressler, for 
including important refinements to this language in the managers' 
amendment. I know that there are some, such as the sponsor of the 
amendment to strike this language, who believe that the 
[[Page S7978]] marketplace should be free of regulations and that 
somehow, someway, affordable telecommunications will be available for 
everybody at affordable rates.
  Other Senators have mentioned here on the floor today, as an example 
of deregulation and the impact that it has had on many rural parts of 
our country, the impact of airline deregulation. I can certainly speak 
firsthand to that, as far as how it has affected the State of Maine. It 
certainly has denied us the kind of airline service I would have 
thought might have developed from deregulation, and it simply has not 
happened.
  Many of the areas that at one time had the benefits of airline 
service--and I might add jet service--do not even have the benefits of 
commercial airline service.
  Our largest city in the State of Maine, Portland, ME, is losing jet 
service as a result of deregulation. That is occurring this year.
  Since we have had deregulation--this is about 17 years ago --the 
situation has gotten worse. It has not improved in the rural areas of 
our country. That is a fact.
  I can speak to it firsthand because I use those airlines every week. 
We have commuter services. We do not have jet service for the most 
part, anymore, in the State of Maine. Most of the areas, like Presque 
Isle and Portland, that used to have jet service do not have the 
benefits of commercial airline service.
  So that is why I cannot understand why we want to apply the same 
notion here when it comes to telecommunication services. What will 
happen to the rural area? Who will make sure that our schools, 
libraries and health care centers are going to have the benefits of our 
national information infrastructure, if we do not provide for that in 
this legislation?
  House Speaker Newt Gingrich said ``If our country doesn't figure out 
a way to bring the information age to the country's poor, we are buying 
ourselves a 21st century of enormous domestic pain.'' He said, 
``Somehow there has to be a missionary spirit in America that says to 
the poor kid, the Internet is for you, the information is for you.''
  Well, that is exactly right. But I think that we have an obligation 
as a Nation to ensure that our young people have affordable access to 
this kind of service.
  The National Center for Education Statistics reports--and I think it 
is interesting to note these statistics because I think it proves the 
point--that 35 percent of public schools have access to the internet, 
but only 3 percent of all instructional rooms, classrooms, labs, and 
media centers in public schools are connected to the internet.
  Of the 35 percent of the schools with access, 36 percent cited 
telecommunication rates as a barrier to maximizing the use of their 
telecommunication capabilities.
  Some would suggest that the Snowe-Rockefeller-Kerrey amendment is 
opening a Pandora's box, a new array of entitlements for schools, 
libraries and hospitals. No, it is not.
  As I said earlier in my remarks, universal service provisions for 
residential consumers existed in the bill prior to the adoption of this 
amendment, to this legislation, in the committee.
  Those provisions guaranteed access to essential telecommunication 
services for residential consumers. Our amendment simply provides that 
assurance for key institutions in rural areas. Our objective is to 
ensure that rural areas are on an equal footing in terms of schools, 
libraries, and health care facilities in urban areas.
  I should also mention the fact that we have worked with some of the 
Bell telephone companies to address their concerns. We made some 
changes in the language, to address their concerns about incremental 
costs language. The revised language ensures affordable access to 
educational services for schools and libraries, and discounts will be 
determined, as for residential consumers, by the joint board in 
conjunction with the FCC and the states. The discount must be an amount 
necessary to ensure affordable access to use the telecommunications 
services for educational services.
  Some have suggested that these discounts would be wasted on some 
communities with poor schools, low literacy rates, high levels of 
unemployment, or other social problems. I disagree. This language will 
open doors, not close them. Those communities stand to gain enormously 
from the telecommunication network. It will open up a whole new world 
to these communities. Senator McCain's amendment will deny those gains, 
benefits, and opportunities for troubled areas.
  We do not know what the future will be all about. We do not have a 
crystal ball. We do know, however, that technology and the information 
age is going to be very much part of our future, I think in ways which 
we cannot now fully anticipate or appreciate even today.
  This is the first time we have addressed telecommunication policies, 
I mentioned, since 1934. There probably will be years and decades 
before we come back to this issue as a Nation and as an institution.
  How can we seek to deprive some areas of the country of the knowledge 
that they need in order to thrive and to develop, and to be productive 
for the future, for their future and this country's future?
  Knowledge is power. To cut some areas off from the information 
superhighway is not only denying them the future that they deserve, but 
it is denying the kind of future this country deserves, because their 
future is going to affect America's future.
  I hope that the Senate will reject this amendment of Senator McCain 
to strike out our universal service language, which, I might add, is 
not a new concept. In fact, it is interesting to note that the Commerce 
Committee in the last Congress approved a bill by a vote of 18 to 2 
which contained adopted similar language on this very issue, extending 
the universal service concept to these key institutions, schools, 
libraries and rural health care facilities. Last year's bill went even 
further than this year's bill--it contained universal service discounts 
for museums and zoos and so on.
  We narrowed our language to ensure that we were just addressing the 
needs of key entities that are so important to the development of this 
Nation.
  Funding is a major barrier to access, it is the one that is most 
often cited in the acquisition of users of advanced telecommunications 
in public schools.
  Smaller schools, with enrollments of less than 300, are less likely 
to be on the internet than schools with larger enrollment sizes. Only 
30 percent of the small schools reported having internet access, while 
58 percent of schools with enrollments of 1,000 or more reported having 
internet access.
  So we know that there is a gap between the high expectations of an 
increasingly technologically-driven society and the inability of most 
schools, particularly rural schools, to prepare students adequately for 
the high-technology future.
  Almost 90 percent of K through 12 classrooms lack even basic access 
to telephone service. Telephone lines are used to hook up modems to the 
internet. When classrooms do have phone lines, schools are typically 
charged at the corporate rate for service. Schools and libraries in 
rural areas often pay more for access to information services because 
the information service providers are not located in the local calling 
regions, meaning they have to make long-distance calls.
  A recent study conducted by the U.S. National Commission on Libraries 
and Information Science found that 21 percent of public libraries had 
internet connections. Only 12.8 percent provide public access 
terminals. Internet connections were 77 percent for public libraries 
serving a population base of more than 1 million, but declined to 13.3 
percent for libraries serving fewer than 5,000. Maine, I might add, has 
a population of 1.2 million. The largest city representing Maine has no 
more than 80,000 people.
  I hope that Members of this body would understand the importance and 
the value of maintaining the language that we have included in this 
legislation. It is so important to our future and to our children's 
future. It is fundamental that we, as a Nation, assure that all areas 
in America have access to essential telecommunication services for the 
future.
  I, for one, will not vote to deprive schools and libraries and 
hospitals of the affordable telecommunication services that they need 
and require. [[Page S7979]] 
  I hope that Members of this body will vote to defeat Senator McCain's 
amendment. His amendment will go a long ways toward denying the 
important opportunities that we should afford our young people. No 
matter where they live in America, everyone should be entitled to have 
access to the information superhighway which will be so much a part of 
our future. So I urge Members of this body to defeat the McCain 
amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Chair recognizes the Senator from New 
Mexico.
  Mr. BINGAMAN. Mr. President, I want to speak just briefly on this 
amendment that Senator McCain has offered to strike out section 310 of 
the telecommunications bill and indicate my strong opposition to that 
effort. The provision which he is intending to strike was added by the 
Senator from Maine in the committee markup with the help of the Senator 
from West Virginia and I know with the urging of the Senators from 
Nebraska and others. I think the provision that was adopted in 
committee is an excellent provision and one we need to keep in the 
bill.
  I became interested in this set of issues because of the needs in my 
own State of New Mexico to provide telecommunications services to rural 
schools in particular, but also to rural hospitals and to rural 
libraries. In our State, we have one model program which came to my 
attention several years ago, and that is at the Clovis Community 
College on the east side of New Mexico. It is a 2-year school. They 
began a pilot project several years ago to provide instruction from 
that community college into nine of our rural high schools in that part 
of the State. We still have, today, in this school year which is just 
now ending, classes taught at the community college that students in 
those small, rural high schools are able to access in their own 
classrooms. That has been a very successful project and it is a model 
for what we ought to be doing throughout my State and throughout this 
entire country.
  However, we are not able to do it throughout my State and throughout 
this entire country because of the enormous cost of taking advantage of 
telecommunications services. What is needed is special provisions, 
special rates so that educational services can be provided to schools 
at reasonable cost; and can be provided to rural hospitals and rural 
libraries at reasonable cost.
  I am persuaded that technology can either be a great boon to mankind 
and to the people in this country in coming years, or it can prove to 
be a great divider of our people. Either it will help us all to pull 
ourselves up and realize the opportunity that is present in this 
country, or it will further divide the rich from the poor, the urban 
from the rural, the ``haves'' from the ``have nots.''
  The provision that the Senator from Maine proposed in committee, 
which is now in the bill and which we need to keep in the bill, goes a 
long way toward helping us ensure that technology brings us together 
instead of dividing us. I do think it is essential that we take some 
action in this area as a public policy matter. You cannot leave 
everything up to the free market system.
  I heard the Senator from North Dakota speaking, Senator Dorgan, 
earlier this afternoon. He was pointing out that left to its own 
devices, the free market system will provide technological opportunity 
and new technology and benefits to those who can pay the bill. We want 
that to happen. But we also want some access to that technology for 
those who may not be able to pay as much and that is what this 
provision is intended to do.
  There is another example in my State which I just would allude to 
because it is a very small example but perhaps one that people can 
understand. There is a small community in New Mexico called Santa Rosa, 
which is east of Albuquerque on our Interstate 40. That is the 
community that you have to go to if you live in Guadalupe County and 
you want to go to high school. You have to travel to Santa Rosa.
  North of Santa Rosa about 60 miles is the much smaller community of 
Anton Chico. If you live in Anton Chico you have school right there up 
through the elementary level, and then you have to get on a bus and 
travel 60 miles each way to go to high school.
  What the school district there in Guadalupe County has done very 
effectively, is use telecommunications to provide instruction from the 
Santa Rosa schools to a classroom in Anton Chico, for those students 
who wish to continue past the eighth grade and take instruction in the 
ninth grade without having to travel all the way to Santa Rosa.
  This has allowed them to keep students in that school for that extra 
year, and in many cases keep those students involved in education long 
enough that they will stay in school through twelfth grade.
  This is dealing with a very, very real problem we have in New Mexico 
of students dropping out. They drop out for a variety of reasons, but 
one of the reasons that students drop out in some of the rural parts of 
our State is because of the physical problems of getting to the high 
school that they need to attend each day.
  Modern telecommunications services can help us to solve this problem. 
One of the great opportunities that we have as a country, as we try to 
improve our educational system, is to take proper advantage of new 
technology to keep students interested, to help students raise the 
standards that they are achieving in school, and to eliminate the 
difference that exists between the quality of instruction in urban 
schools and that of rural schools.
  In order that technology is successful or is able to help us in this 
regard, we need to deal with the problem of the cost of using that 
technology. This provision allows that. I hope very much we will keep 
it in the bill. It is one of the better provisions in this 
telecommunications bill and I think it would be a very sad day if the 
Senate were to agree to strike this part of the bill.
  I compliment the Senator from Maine, the Senator from West Virginia, 
the Senators from Nebraska, and others who have worked hard to get this 
provision in the committee-reported bill. I urge my colleagues to keep 
it in there and to defeat the McCain amendment when it comes to a vote.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Chair recognizes the Senator from West 
Virginia.
  Mr. ROCKEFELLER. Mr. President, I want to try to give a sense of a 
little bit of the overview of this, and do it within a relatively short 
amount of time. I want to also say that there have been some very 
constructive conversations that have been taking place, which reflect 
themselves in the managers' amendment.
  For example, there was a very constructive conversation yesterday 
afternoon involving the Senator from Maine, the Senator from Nebraska, 
Senator Kerrey, myself, and others with, for example, Bell Atlantic, 
which represents my State, Ameritech, NYNEX. We were able to reach 
accommodation in a very constructive, positive way, in ways which are 
reflected in the managers' amendment. So I do not want people to think 
this is kind of a pitched battle only. There have been some people who 
have been trying to do some good work on this, on both the corporate 
and senatorial side.
  I have to say we have heard some absolutely amazing statements from 
the Senator from Arizona and some of his allies. Make no mistake about 
what they are trying to do. They are trying to say to all of these 
telecommunications giants: Go ahead and charge exorbitant rates on the 
backs of America's schools and libraries and rural health institutions, 
and keep those community institutions off the ramps of learning and 
telemedicine. Or go ahead, in the alternative, and milk schools and 
libraries for as much money as you can get.
  I can fly, under airline deregulation, from Huntington, WV, to 
Washington, DC, in 1 hour. But it is cheaper to fly from Washington, 
DC, to Los Angeles. I think you understand the point. Where people 
think they can put it to you and they are in a profitmaking business 
and they do not have a sense of corporate responsibility or a broader 
picture, as some that I have mentioned do have, they will do it. And 
they have done it. And it hurts.
  We should reject that kind of thinking out of hand in this Chamber. 
Private telecommunications companies [[Page S7980]] are being given an 
open ticket in this bill to get into new businesses, exciting 
businesses, important businesses, making all kinds of profits and 
reaping incredible dividends. And I do not object to that. I do not 
object to that. I think what we are looking at is an extraordinary 
excitement.
  I had dinner with the President of a computer company last night--
with six of them, in fact. He said within a very few years any citizen 
of the world will be able to talk with any other citizen of the world 
directly, through e-mail or some such, based upon the name of the 
person, the service that the person provides, be it a business or a 
location. There will be worldwide direct person-to-person communication 
in as fast a time and with as much clarity as you pick up your local 
telephone to dial your mother-in-law.
  All we are doing in our provision is to say, in return for this 
explosion of excitement and opportunity and profits, which create, 
indeed, more opportunity for all of that growth, for all of those 
profits that you will now be able to get your hands on, make sure that 
you bring libraries, schools, and hospitals along with you. That is 
called a fair deal.
  Mr. President, let us be clear about what the Senator from Arizona is 
trying to do also with this amendment. This amendment strikes a dagger 
into the heart of Main Street U.S.A. Just about every issue associated 
with the telecommunications industry sounds incredibly complicated and 
confusing. As soon as you start talking about it, the jargon and the 
terms are from a world of their own--cyberspace, internet, on-line, you 
name it.
  The Snowe-Rockefeller-Exon-Kerrey amendment in this bill--and the one 
that the Senator from Arizona wants to strip from this bill--has an 
extremely simple, basic mission. It is the way to make absolutely sure 
that America's schools, elementary and secondary, libraries and rural 
health care institutions are part of this information superhighway that 
is unfolding before our eyes. I do not think anyone is confused about 
what we mean when we say that schools, libraries, and rural hospitals 
should be one of this country's and this body's highest priorities. 
Without a doubt, I can say that is how the people of West Virginia 
feel--that our schools, our libraries, and our rural hospitals and 
clinics are a lifeline that we hold most dear. And that is true for all 
States.
  The provision in this bill, and the one being attacked by the McCain 
amendment, which we hope loses, designates these vital institutions--
again, schools, libraries, rural health facilities, and hospitals--as 
community users and then requires communications companies to charge 
this category of community user affordable rates for universal service. 
Through this part of the bill, we guarantee that America's children and 
library users and health care providers in rural communities can take 
advantage of the exciting range of technologies that are in fact the 
new roads, the new interstates, to education and lifesaving medical 
information.
  I applaud the Senator from Maine, Olympia Snowe, for her work in 
incorporating this provision into the telecommunications bill. It is 
her amendment. Together we presented this idea to our colleagues in the 
Commerce Committee, and her commitment to this idea helped win the day 
when we had the vote on our provision. Both Senators from Nebraska, 
Senators Kerrey and Exon, have been stalwart partners in this work. 
This provision, section 3010 of the bill, is a major reason to enact 
telecommunications reform. Looking at it from my State's perspective, 
it is the major reason. This is a historic chance to ensure that 
schools, libraries, and rural health care providers will acquire 
affordable access to advanced communications services, not only now but 
in the future, and all kinds of possibilities that we can only begin to 
imagine today.
  The telecommunications bill before us, carefully crafted by Senators 
Hollings and Pressler, presents us with an opportunity that will not 
come again. It is time to unleash an industry into the realm of 
competition, innovation, job creation, product creation and profit. But 
in return, Mr. President, we should make sure that the most basic 
institutions of our community and our society can hitch a ride onto 
this great journey.
  Once a few of the kinks and other parts of this bill are worked out--
by that I mean things that are being worked on by the leadership as I 
talk--the passage of this bill will be good news for business, good 
news for workers and consumers, and good news for our country as a 
whole. And it will be great news for our basic institutions, the 
institutions through which all of us have to pass in order to achieve 
adulthood--schools, libraries, in this case rural health facilities--
because they know they will not be left behind. If the McCain amendment 
passes, they will be left behind. If it is defeated, those schools, 
libraries, and rural health facilities will not be left behind.
  The Senator from Arizona thinks this is a part of the bill that can 
be amputated or weakened. If that is what he thinks, let me be very, 
very clear about what that means to schools, libraries, and rural 
health institutions. You are telling the organizations that are the 
bedrock of America that they will just have to stay on the back roads 
of communications. The organizations with the big money and clout can 
speed their way onto that information superhighway as fast as they 
want. But the institutions that educate our children and our adults, 
that serve Americans with the keys to knowledge, that treat and cure 
the people of rural communities will have to settle for the back road.
  Mr. President, I do not want anybody to be at all unclear about this. 
One of the things that we have learned in the Commerce Committee and in 
our own conversations is, if we think the world has begun to change in 
terms of telecommunications up until this point, we have not seen 
anything yet. Remember, I said a moment ago that every 18 months the 
capacity of computers has doubled for the last 30 years. That is going 
to speed up. So what we are talking about now is going to be far 
greater in the future. Therefore, what we deprive people of now will 
hurt much more in the future than we can possibly imagine.
  Our provision in the bill says to these institutions that they will 
have their place on the modern roads of telecommunications--schools, 
libraries, rural health clinics, and hospitals.
  We intend to open the new worlds of knowledge and learning and 
education to all Americans, rich and poor, rural and urban. Browsing a 
Presidential library, reviewing the collections of the Smithsonian, 
studying science or finding new information on the treatment of an 
illness are becoming available to all Americans through new 
technologies in their homes or at their schools, libraries and rural 
hospitals. And our provision, the one that the Senator from Arizona 
wants to strike, is designed to make sure that these links do get made 
to our children and citizens.
  Mr. President, our provision is targeted. It promises affordable 
rates to institutions that are the heart and soul of the communities of 
the United States of America, and we all know it. Our provision deals 
with the new realities and opportunities that face schools and 
libraries and rural health institutions in the towns and States that we 
all represent--every single one of us--rural or urban.
  We hear a lot about the explosion of computers in America's homes. 
But let us keep in mind that a lot of families cannot afford their own 
computers and equipment for their children.
  They cannot afford that. This Senator can. Some other Senators here 
can. Most people cannot. We are talking, Mr. President, about thousands 
of dollars that many, many families in my State of West Virginia and 
elsewhere simply do not have for this kind of purchase. The Presiding 
Officer may be aware that in 1994, for the first time, the purchase of 
personal computers surpassed the sale of television sets in this 
country. The Presiding Officer may be aware that those who are on 
Internet are now 30 million, and that that number is growing at 10 
percent per month, but it is not growing in Welch, WV. It is not 
growing in Alderson, WV, and it is not growing in the Presiding 
Officer's rural areas and some of his urban areas because the people do 
not have the capacity to get on line to join up with that information 
highway. [[Page S7981]] 
  Schools and libraries are the institutions that serve our communities 
and that serve our children, no matter what. That is why we want to 
make sure that these institutions can count on affordable rates to get 
on line, to tap into telecommunications services and to bring in the 
learning and the information from distant places for our children and 
adults and other users to learn from.
  No matter where one lives, we want every citizen to have a chance to 
go to the local library and visit a world of information available as a 
result of these new technologies.
  I am very sorry to hear some talk of different ways to achieve our 
basic goal. Let us face it. Some communications companies do not want 
to be forced to offer rates to even the most basic institutions serving 
our communities. But let me be clear. Our approach is the simplest way 
to achieve the simplest goal I believe that all of us support--
affordable access to communications that these community institutions 
in fact do need. The Snowe-Rockefeller-Exon-Kerrey part of this bill 
provides the way to ensure that elementary and secondary schools and 
libraries have access to essential universal telecommunications 
services, which will be defined, incidentally, by the universal service 
board described in this bill, at rates that are affordable. The 
affordable rate will be determined by the FCC and the State commission, 
depending upon whether you are talking interstate or intrastate.
  What does this mean for thousands of elementary and secondary schools 
in America? A 1995 study by the National Center for Education 
Statistics discovered, to my shock, that only 3 percent of classrooms 
in public schools in America were connected to something called 
Internet, which is the whole future, a large part of the future--only 3 
percent. Why? One reason has to be the lack of funds to even buy the 
equipment.
  But another reason, which becomes more serious as schools do scrape 
together the money for the one-time expense of buying equipment, is 
their inability to pay excessive rates to hook into those services. It 
is one thing to have the computer on the table or the desk. It is 
another to have that hooked up to the wall and then through that wall 
to the other wall. That is expensive.
  Look at the study of the U.S. National Commission on Libraries. They 
found that 21 percent of public libraries are connected to the 
Internet. And I thought that was pretty good news. But that figure then 
suddenly drops to 13 percent when it comes to public libraries in rural 
areas and small communities.
  Why does it drop? Because there are libraries that do not have the 
money and will not have the money to pay commercial rates to be on-
line. And therefore you just count them out of it.
  I described in Pocahontas County--and I see my senior colleague from 
West Virginia here--the small, octagonal library that was barely 
scraped together, the only library in the county. It is one of the 
largest counties east of the Mississippi and it has about 7,000 people 
in it. And we scraped together the money to put that octagonal building 
up, all made of wood and put solar panels on the outside because fuel 
is expensive.
  Now, of course, there is a problem; it rains 45 inches every year in 
Pocahontas County so the solar panels do not work, so they have to 
spend money on fuel. But that is typical of a rural community, of a 
library trying to make it. And then you ask them on top of that to have 
to pay money to hook up to these information systems. It cannot work 
and it will not work, and it is not fair to those people. Why is 
somebody born in a big city any better than somebody born in a small 
rural area? The answer is he or she is not. But I refuse to be a part 
of creating a two-tier society. We appear to be on our way to doing 
that in other ways. I do not want it to be done in terms of the ability 
to learn and to grow.
  In West Virginia, our schools are determined, by hook or crook, to 
get computers into every one of our 900 elementary and secondary 
schools because our Governor has made it a priority and so has our Bell 
Atlantic company. They have made a special project of West Virginia. 
Classrooms in 50 different places already can connect to Internet. But 
this is not the way most of it works, Mr. President. This is a special 
set of circumstances.
  Let us be clear. If the schools of West Virginia cannot count on 
affordable rates--and that is what this part of the bill is about--many 
of them are never going to be a part of the world that 
telecommunications offers regardless of what they have.
  Teachers in West Virginia cannot wait to use these computers, Mr. 
President, and their links to distant places. They are excited about 
it. It transforms them as it transforms us as we get into the business 
of learning computers. They want to get into libraries. They want to 
get into colleges, to courses on every topic imaginable, to art 
collections, to whatever for their students.
 They have come before the Commerce Committee and boasted about what 
they can do for their children in schools when they have computers.

  Think of what this means for children of small schools in remote 
towns in West Virginia or South Dakota or Alaska or South Carolina or 
Maine. Through their computers, students can take a language class that 
is being given in Texas, visit a museum's collection on Fifth Avenue in 
New York, communicate with a computer pen pal in Asia or Russia or 
South America, and explore the jungles and the rivers and the plains of 
distant places to learn about science and biology and nature. 
Extraordinary opportunities, if it will be provided for them.
  Most classrooms in America still look the same as they did 60 years 
ago when we wrote the first telecommunications act. They have chalk and 
blackboards, desks and chairs. Yet, with the tools of our modern-day 
office, how can we possibly expect our children to become productive, 
informed, innovative contributors to the economy out there, beyond the 
schools, when they learn with a blackboard and they do not have a 
computer? It will not work. If our children are to use technology 
thoughtfully and appropriately, they must have access to it in their 
formative years.
  Our bill also has a special provision to guarantee access to the 
health care providers in rural communities, like rural hospitals and 
clinics, by promising them universal telecommunications services at 
rates reasonably comparable to the rates charged urban health care 
providers, language carefully worked out.
  Why do we single out our health care providers in rural areas? Why do 
we do that? Because their remoteness makes it far more likely that they 
cannot afford the cost of telecommunications that are now being used to 
save lives and help train health care professionals and provide other 
critical services. Most of this is known as telemedicine. It is the 
wave of the future. It is what is going to hold down the cost of health 
care.
  My own home State of West Virginia is a pioneer, as Senator Byrd well 
knows, in the frontier of telemedicine. Our mountaineer doctor 
television program that we are struggling as best as we can to make 
work has created a network using interactive video and other 
telecommunications services that hooks up two of our academic health 
centers to our large teaching hospitals, two veterans hospitals--two 
veterans hospitals are involved in this--and six hospitals in rural 
areas, all hooked up and linked together through this network. Senior 
medical professors and practitioners are guiding and training 
physicians at hospitals hundreds of miles away.
  Just about a week ago, a resident in one of West Virginia's rural 
hospitals was confronted with a broken neck. He had never treated this 
resident, obviously, and had never treated a broken neck before. Thanks 
to that mountaineer doctor program, called telemedicine, the chief of 
emergency medicine at West Virginia University helped that resident 
through the steps of stabilizing that patient and preparing a transfer 
of that patient to a more sophisticated medical facility.
  Through this telecommunications network, West Virginia's chief of 
neurology helped a medical student and primary care doctor in a Grant 
County hospital determine if a Medicare patient was suffering from Lou 
Gehrig's disease. This consultation by interactive video saved that 
patient a brutal [[Page S7982]] 140-mile trip, allowed him to remain 
comfortable in his own community's rural hospital, and saved Medicare 
about $2,500 in extra costs. Examples like this go on and on and on 
just in West Virginia.
  I know from listening to statements made by Majority Leader Dole, by 
the chairman of our committee, Senator Pressler, and my good friend, 
the Senator from Montana, Senator Burns, that they are among many in 
this body who know all too well what telemedicine means to their 
States. Talk about being rural, you better talk about Montana, as well 
as West Virginia and Maine.
  Again, the Snowe-Rockefeller part of this bill simply ensures that 
these institutions can count on affordable rates to take advantage of 
telemedicine and other unfolding communications technologies. 
Affordable telemedicine will allow patients in rural America to receive 
in their own communities the care they need. They will not have to 
suffer the costs and the hardship of travel, and they will be able to 
receive care at their local hospital, thus helping to preserve that 
hospital.
  The Snowe-Rockefeller language is an economic development tool and it 
is an empowerment vehicle. It ensures that our children will become 
productive members in a world that is growing more technological and 
competitive every single hour. It ensures that our citizens in rural 
America will be able to stay in their communities and receive quality 
health care. It ensures that we will not create information haves and 
have-nots in our country.
  I will close, Mr. President, and I apologize to my colleagues for the 
length of what I have said, but I wanted to lay this out. One of our 
colleagues who is opposed to this bill and who supports the McCain 
amendment, which I hope will be defeated or tabled, said on this floor 
earlier that rural hospitals and rural clinics already have access to 
affordable rates. That is absolutely without any merit or basis in 
truth whatsoever. The lack of adequate telecommunications 
infrastructure is a major barrier to the development of telemedicine 
and those systems in our rural communities.
  Let not that statement get by. Rural areas have the equivalent of a 
dirt road when it comes to telecommunications. When Texas implemented 
one of the very first telemedicine projects in the country, they found 
that people still had party lines in west Texas--party lines. They had 
to install dedicated T-1 lines at very significant costs because T-1 
lines are powerful instruments. Basic startup costs are coming down, 
but according to all the experts in this field, transmission costs must 
be lowered to make telemedicine economically feasible.
  The small rural hospital in West Virginia was told that it would cost 
$4,300 a month to hook up with a major, larger hospital for 
administrative and quality assurance support. They decided they could 
not afford the technology, and so they did not do it. And there you 
have it.
  The University of Arizona, not a small rural hospital, established 
the Arizona international telemedicine internetwork in 1993. They used 
straight telephone lines and they used compression to transmit static 
images. They say cost is a barrier to upgrading.
 According to them, their carrier--in this case U.S. West--has been 
inflexible in making any sort of cost concessions.

  Mr. President, I have said what I want. There are many others on the 
floor who want to speak. I was determined to try and give a broad 
overlay of what the Hollings-Pressler bill does, and I have done my 
best to do so.
  I yield the floor.
  Mr. ROBB addressed the Chair.
  The PRESIDING OFFICER. The Senator from Virginia is recognized.
  Mr. ROBB. Mr. President, I rise today in support of the language that 
was passed by the committee, which my friend, the Senator from Arizona, 
is proposing that we strike. I would like to speak to that part of the 
bill that makes advanced telecommunications more affordable to public 
schools and libraries.
  During the consideration of the telecommunications bill last year, I 
offered legislation very similar to the language that we are 
considering today, to ensure that every school and classroom in the 
United States has access to telecommunications and information 
technologies. I proposed an educational telecommunications and 
technology fund to support elementary and secondary school access to 
the information superhighway.
  Regrettably, last year's telecommunications bill was not taken up by 
the full Senate before adjournment. The provision in the bill before 
us, introduced by Senators Snowe, Rockefeller, and Kerrey of Nebraska, 
will make advanced telecommunications connections more affordable for 
schools and libraries. Specifically, the provision allows elementary 
and secondary schools, as well as libraries, to receive 
telecommunications services for educational purposes at an affordable 
rate.
  Currently, schools all over the country, including those in my own 
State of Virginia, are forced to pay business rates for access to the 
information superhighway. That means that schools are subsidizing 
residential customers. Without more affordable rates, schools, by the 
thousands, will not have adequate, and, in some cases, not have any 
access to the Internet. As a result, too many American children will be 
left by the wayside.
  For those of our colleagues that have any doubts about the value of 
electronic communications in the classroom, I challenge them to sit 
down at a computer with Internet access and surf. They will be visiting 
one of the most up-to-date and fastest growing libraries in the world. 
You can chat with experts from across the globe. You can set up the 
video link with teachers at distant schools using a small camera 
costing as little as $100. You can share data or results in a joint 
research effort spanning continents. You can take an electronic tour of 
the White House, or visit the so-called web page of a Member of 
Congress. I have such a page, and many of our colleagues have those, 
Mr. President. You can even see images of molecules or galaxies. The 
possibilities are endless.
  In discussions with school administrators, it becomes clear that 
students are fascinated by the Internet. Students that might otherwise 
be indifferent are eagerly pursuing new subjects and sharing their 
newfound knowledge with the global community of students.
  Simply put, Mr. President, the child with access will be at a 
distinct advantage and better prepared for future employment. And those 
without access are simply going to be left behind.
  We cannot afford to let our school systems slip behind those of our 
leading competitors when the technology is at our fingertips--the 
technology that was pioneered here in the United States.
  Mr. President, I urge our colleagues to support the most cost-
effective education we can offer our Nation's children. I urge my 
colleagues to support the Snowe-Rockefeller-Kerrey provision and oppose 
the amendment offered by my friend from Arizona.
  Mr. President, I yield the floor.
  Mr. McCAIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. McCAIN. Mr. President, I see my friend from West Virginia, 
Senator Byrd, on the floor. I will be brief, I say to my colleague. I 
know he has been waiting for some time.
  I just have a couple of comments to make. Our States have done a lot 
in this area. I know that, for example, some of the States in the South 
have done things.
  This describes that in the State of Alabama, there is pending 
approval within the next few days where the Educational Network Service 
will offer DS-1 and 56-KBP service for any educational institution at a 
discount rate.
  In Florida, there is legislation waiting signature, where the LEC's 
are required to provide advanced communication services to eligible 
facilities, including public universities, community colleges, area 
technical centers, public schools, libraries, and teaching hospitals.
  In Georgia, the Public Service Commission approved the Southern Bell 
reduced rate telephone service for schools, called the Classroom 
Communication Service.
  In the State of Kentucky, the State government provides high-volume 
discount access to schools, hospitals, libraries, and government 
agencies.
  In Louisiana, all schools in Orleans Parish receive an additional 33-
percent [[Page S7983]] discount, and public and parochial schools pay 
residential rates as opposed to business rates.
  Mississippi has two special pricing arrangements targeted toward 
education in the classroom communications services, distance learning, 
and transport services.
  South Carolina has somewhat the same thing.
  Tennessee has in-classroom computer access service, distance 
learning, video transport service, et cetera.
  Mr. President, the fact is that nearly every State in America has 
some kind of accommodation for this. I am appreciative of the fact that 
the Senator from West Virginia may not share my view about the role of 
the Federal Government versus the role of the State government, but the 
fact is that the State governments, who I think are much better attuned 
and much more cognizant of the needs of their respective States, are 
doing these kinds of things. To my view, this is vitiating the 
requirement for, again, another unfunded mandate, which this is.
  Mr. President, I heard the Senator from West Virginia, who makes some 
very emotional arguments that there are some libraries that will never 
be able to afford a computer, or some hospitals. Who are they, Mr. 
President? So to cure the problem we are just going to give a blanket 
agreement to wealthy, private schools, wealthy hospitals, wealthy 
libraries. There is no means testing. If the Senator from West Virginia 
and the Senator from Maine had, in any way, brought in some kind of 
provision for means testing as to who needs it and who does not before 
we proposed this unfunded mandate, I would have been much more open to 
some compromise or agreement on it. I am sorry that virtually all 
schools, all hospitals and libraries are going to receive this.
  Mr. President, I think we are being a little discriminating in our 
morality here. I would like to see the Disabled American Veterans have 
this same kind of facility. They are people who have fought and served 
and sacrificed. Do they deserve something? I do not see them included. 
What about the Veterans of Foreign Wars and the Salvation Army? They 
are organizations I have admired enormously. They get all of their 
funds from contributions, at least about 95 percent of them.
  What is it that makes us discriminate with these institutions and not 
with others? I understand that--and I was not told this directly by the 
Senator from Maine--she intends to make a motion to table this 
amendment. If this amendment is tabled, then I may have an amendment 
expanding this to other needy and deserving Americans and groups of 
Americans that also may be as equally as deserving as private schools 
are, for example, or as wealthy hospitals are, or the Getty Library.
  So I think that the flaw here, Mr. President, is who are we really 
trying to help, and who are we not? It seems to me that there are many 
who are deserving of our help who are not included in here, and there 
are many who are not who are included. I would like to see us be much 
more discriminating.
  I believe the whole thrust of the American people is that they 
believe local government is best. I would like to see the States be 
able to continue what they are doing and tailor what is best for their 
respective communities and localities and counties and cities and 
towns, rather than the Congress acting in a far more sweeping and all-
encompassing fashion.
  Mr. President, I yield the floor.
  Mr. BYRD. Mr. President, I thank the Chair.
  I rise in strong support for the provision authored by my 
distinguished colleague from the State of West Virginia, Mr. 
Rockefeller. I oppose the attempt to remove it from the bill.
  It has long been an axiom in the development of America that rural 
America be provided basic telephone services, under the concept of 
universal service. Universal service is, again, a central part of the 
bill before us. Mr. Rockefeller's amendment, together with the 
distinguished Senator from Maine, Ms. Snowe, attempts to ensure that 
our schools, our libraries, our health care facilities have access to 
the best that is available across our country for the well being of our 
children, our elderly, our rural dwellers at affordable rates. This 
amendment allows a child in Beckley, WV, to access the Library of 
Congress to enhance his education, allows the provision of medicine 
from the best facilities in America to be available to health care 
providers in communities which cannot afford to have all facilities 
available at their fingertips. It is a mechanism to enhance standards 
throughout the country. It is a force enhancer, a multiplier, an 
advanced bootstrap for rural America at reasonable cost.
  I have, for the last several years, supported funding for medical 
doctor's television, so that experts in universities can conference 
with doctors in rural remote areas so that they have the best that 
medicine has to offer in the State. The Rockefeller provision extends 
this concept for all citizens to have access to the best that is 
available across the country. This is the fruit of the technological 
and telecommunication revolution that is meaningful, that makes sense, 
and will build human capabilities and infrastructure in our land.
  I commend my colleague for this provision. It is a builder of 
communities throughout our land, a benefit that our technological 
progress gives us as a society. I support the provision, and urge my 
colleagues to defeat the amendment.
  I yield the floor.
  Ms. SNOWE. Mr. President, I just want to address a couple of points 
that have been raised by Senator McCain because I think it is important 
to address his comments with respect to what would be provided, and to 
whom, under the manager's amendment that was incorporated in the 
legislation which Senator McCain seeks to strike.
  I cannot think what would be more in the public's interest than 
schools, libraries, and hospitals. As I said earlier, in the last 
Congress, the Committee, on a nearly unanimous vote, sought to provide 
universal service to zoos, aquariums, and museums. We do not include 
those entities under this language because we think we should strictly 
limit it to very essential institutions, schools, libraries, and rural 
hospitals.
  Universal service happens to be a national priority. That is what 
this issue is all about. Senator McCain said leave it to the States. 
States are involved, in the sense that there is a joint board in this 
legislation that will help determine the rates for the communities 
under the universal service provision.
  But this happens to be a national priority, a national issue, and it 
is too important just to leave it to the States on an ad hoc basis and 
say whatever happens, happens. The States are certainly doing their 
best. They understand the importance of this issue, and have been very 
innovative and progressive. But they cannot do it alone. Presently, 
there is a disparity between the States.
  We all recognize how important the information age is to the future 
of this country and to individuals and to families. It is so important, 
and therefore I think it requires a national policy and should be 
established as a national priority. Certainly, universal service can be 
supplemented by the States. The fact is, they cannot do it alone.
  This is a major telecommunications policy. If that was not the case, 
we would not be here discussing today the amendment before the Senate.
  But it is an important telecommunications policy. It is essential 
that we establish some parameters to universal service. There may be a 
day when it will not be required. But right now, we need a transition 
with respect to telecommunications. That is why the universal service 
language becomes an imperative.
  We have to recognize the changes that have evolved and will continue 
to evolve over time. We have to anticipate the needs of America. I 
cannot think of entities with a greater need to affordable 
telecommunications services than schools, libraries, and rural 
hospitals. I never would have expected anybody to have questioned that.
  The language in the bill extends the idea, included in the 
Communications Act of 1934, of universal service. That is all we are 
saying, with the language in the bill, sponsored by myself and Senator 
Rockefeller and Senator Kerrey and Senator Exon and adopted by 
committee. The language simply extends universal service to schools, 
libraries, and rural hospitals.
  Under the language, essential telecommunication providers will get 
reimbursements. They can recoup the [[Page S7984]] discounts given to 
these public entities from the universal service fund.
  In the case of schools and libraries, the discount is an amount 
necessary to ensure affordable access to telecommunications services 
for educational purposes. This is a modification we made in the 
managers' amendment that was offered last night.
  By changing the basis for the discount from incremental cost to an 
amount necessary to ensure an affordable rate, the Federal-State joint 
board in conjunction with the FCC and the States have some flexibility 
to target discounts based on a community's ability to pay.
  The discounts will not be indiscriminate, as the Senator from Arizona 
suggested in his previous remarks. There will be some parameters, 
because we do not have an unlimited fund.
  There have been a number of letters from supporters of the language 
in the bill that various Senators have received. I would like to quote 
from a couple of them. I think it gives everyone an idea of the 
importance of this issue. One letter that I will quote from is from an 
education technology specialist.
  She writes to one Senator, and I received a copy of this letter:

       Two key issues for rural States like ours are affordable 
     and equitable access. Cost is the barrier cited. A recent 
     survey shows only 3 percent of the Nation's classrooms have 
     access to Internet or use information services for 
     instructional services. Preferential rates for school and 
     libraries at cost would be a step toward eliminating this 
     barrier. As a Nation and as a State, we must recognize the 
     need for improvement in our educational system and seize the 
     opportunities offered by technology and telecommunications. 
     The dream of access, equity, and excellence for all Americans 
     for life means acting now to ensure these essential elements 
     for better education, bound in decisions currently under 
     consideration. We urge you to make certain the voices of K 
     through 12 educators are heard and their needs addressed in 
     the drafting and passage of this legislation.

  In another letter:

       I hope that Members of Congress will stop and consider the 
     impact that schools and libraries had upon their lives. Then, 
     if they will project what these entities can provide when 
     they are equipped with appropriate connectivity, we can begin 
     to understand the quality of true education our young people 
     will possess that will equip them for bright futures. With 
     your help, thousands of young lives will be able to 
     experience the rush that comes with free exploration of 
     knowledge sources.

  And then we received a list of different associations that are 
supporting this legislation, again, I think, expressing the thought 
that this legislation and this provision is so important to the future 
of this country. The organizations are part of a coalition supporting 
affordable telecommunications access for our Nation's schools and 
libraries, and there are a number of different associations. I am not 
going to read them all, but I ask unanimous consent to have them 
printed in the Record, Mr. President.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 Support Affordable Telecommunications Access for our Nation's Schools 
                             and Libraries

       Supported by a coalition including:
       American Association of Community Colleges.
       American Association of School Administrators.
       American Association of School Librarians, a division of 
     the American Library Association.
       American Council on Education.
       American Federation of Teachers.
       American Library Association.
       American Psychological Association.
       Association for Advancement of Computing in Education.
       Association for Educational Communications and Technology.
       Association for Supervision and Curriculum Development.
       Center for Media Education.
       Coalition of Adult Education Organizations.
       Consortium for School Networking.
       Council for American Private Education.
       Council for Educational Development and Research.
       Council of Chief State School Officers.
       Council of the Great City Schools.
       Council of Urban Boards of Education.
       Educational Testing Service.
       Instructional Telecommunications Council.
       International Society for Technology in Education.
       International Telecomputing Consortium.
       National Association for Family and Community Education.
       National Association of Elementary School Principals.
       National Association of Secondary School Principals.
       National Association of State Boards of Education.
       National Education Association.
       National School Boards Association.
       Organizations Concerned about Rural Education.
       Public Broadcasting Service.
       Software Publishers Association.
       The Global Village Schools Institute.
       The National PTA.
       Triangle Coalition for Science and Technology Ecucation.
       United States Distance Learning Association.

  Ms. SNOWE. For example, the American Association of Community 
Colleges, the American Association of School Administrators, American 
Association of School Librarians, American Council on Education, 
American Federation of Teachers, American Library Association, the 
American Psychological Association, the Council of Urban Boards of 
Education, the Educational Testing Service, the National Association 
for Family and Community Education, National Association of Elementary 
School Principals, the National Association of Secondary School 
Principals, the National Association of State Boards of Education, the 
National Education Association, the National School Boards Association, 
the National PTA, the United States Distance Learning Association.
  That gives you an idea of the cross-section of organizations and 
associations across America that support this language. Even I was 
surprised at the extent to which the language that we incorporated in 
this legislation received such strong and widespread support.
  The FCC Chair, Reed Hundt, recently stated:

       There are thousands of buildings in this country with 
     millions of people in them who have no telephones, no cable 
     television, and no reasonable prospect of broadband services. 
     They are called schools.

  This all goes to show how important this issue is. I hope that 
Members of this Senate will oppose the McCain amendment and will 
continue to support the provision that is incorporated in the managers' 
amendment and in the underlying legislation that was supported by 
members of the Commerce Committee--not a unanimous vote but a broad 
vote--because this is so important to the future of this country.
  Mr. President, I move to table the McCain amendment. Mr. President, I 
ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The clerk will call the roll.
  Several Senators addressed the Chair.
  Mr. HOLLINGS. Mr. President, I wanted to suggest the absence of a 
quorum. The distinguished Senator from Nebraska who cosponsored the 
amendment has not had a chance to be heard.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll to ascertain the 
presence of a quorum.
  The legislative clerk proceeded to call the roll.
  Ms. SNOWE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection.
  Mr. PRESSLER. Reserving the right to object. I will not object.
  The PRESIDING OFFICER. You cannot reserve the right to object to 
calling off the quorum.
  Mr. PRESSLER. I withdraw my request.
  Ms. SNOWE. Mr. President, I ask unanimous consent to withdraw my 
tabling motion and to vitiate the yeas and nays.
  Mr. PRESSLER. Reserving the right to object, and I will not object. 
Senators are doing different things. We are trying to give a little 
advanced notice when these votes will occur. I am not trying to cut 
anybody off or anything of that sort. I am wondering if we could vote--
I ask the Senator from Nebraska when he would suggest we have a vote.
  Mr. KERREY. I appreciate that. What I would propose is that I make my 
statement. We have been led to believe there are a couple of other 
people who would like to speak, but if they do not make it down to the 
floor by that [[Page S7985]] time, we might be able to set a time 
relatively quickly after I get done talking. I just do not know whether 
there will be other Members actually getting down, having said they are 
coming.
  Senator McCain asked earlier. I said it could be 6 or it could be 8. 
I think we pretty well heard most of the arguments on this particular 
proposal.
  The PRESIDING OFFICER. Is there objection to the request of the 
Senator from Maine to vitiate the yeas and nays and withdraw her motion 
to table?
  Hearing none, it is so ordered.
  The Senator from South Dakota.
  Mr. PRESSLER. Mr. President, I ask unanimous consent for an agreement 
to vote at 5:15. Or would that be objected to?
  Mr. KERREY. I object to that.
  The PRESIDING OFFICER. Objection is heard.
  Mr. KERREY. Mr. President, I say to----
  The PRESIDING OFFICER. Does the Senator from Nebraska seek the floor?
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. You run a tight ship, Mr. President.
  I say to the Senator from South Dakota, I am not trying to 
unreasonably object. I am uncertain as to how much longer is a 
reasonable time.
  I myself would be surprised if I am going to talk for 30 minutes, and 
if no one comes down here at that particular time, between now and the 
time that I stop I think we can put a time on this pretty quickly.
  Mr. President, again I hope colleagues understand that this bill is 
being asked for largely by American companies and corporations that 
would like to do things, lines of business they currently cannot do. I 
have heard colleagues after I have said that say, no, we have lots of 
people in our State who really understand and would like to have this.
  That may be the case indeed. On this particular section there are 
quite a few people who understand the potential and positive impacts. 
Indeed, I would argue that--perhaps somebody has a countervailing 
argument--but I would argue, of all the sections, this section has more 
Americans excited about what might happen if this proposal were to 
become law. There has been more straight grassroots citizen support for 
this section of the bill than any other section of the bill.
  We have heard from companies, we have heard from a whole range of 
people. The Senator from Arizona raises some valid and interesting 
points. I do not dispute all the points he raised.
  But one of the points that is raised, dealing with K-12 education, 
where we have the largest amount of support, the distinguished Senator 
from Maine earlier read off a list of organizations that are in 
support. I will not go through all these again: American Association of 
School Administrators, the American Federation of Teachers, the 
National Education Association, school boards, and other people who 
understand that, if you leave the status quo in place, these schools 
are going to get further and further behind. That really is a given. It 
is not going to go away.
  When the distinguished Senator from Arizona comes and says there is 
lots of progress being made out there, it is true there is progress 
being made. But colleagues should not be taken in by that argument 
because this law takes away the incentives that schools have used to 
get State public service commissions to negotiate for them. That is 
what has been going on.
  What has been going on in Georgia and other States is that they have 
negotiated and given the regional Bell operating company the right to 
price differently in exchange for connecting the schools. They did not 
do it for eleemosynary reasons or as a consequence of saying we can 
give away a little of our cash flow.
 They did it to get something in return.

  Mr. President, this legislation goes into every State public service 
commission, and says you shall allow price cap regulation. There is no 
more incentive for an RBOC to negotiate the sort of things we have seen 
happen in State after State after State.
  So understand that the reason that section 310 is needed in this 
legislation--and it is contained significantly, I point out to 
colleagues, in the title III portion that calls for the end to 
regulation--is because in other sections of the bill, we take away the 
very incentives that have been used to get the progress that we have 
been seeing in other States.
  So do not come to the mistaken conclusion that if this title is 
stricken you are going to continue to see the kinds of progress that we 
have seen in States. You will not see it. It will stop.
  I would like to make a point and talk a little about why we need 
this. Again, I understand there are lots of other areas of concern--
libraries, hospitals, and so forth. My No. 1, 2, and 3 concern is the 
educational environment. The question is why is it important? Is there 
a sense of urgency attached? Is there any reason for us to be excited 
about this? Is there any reason to believe that the promise of this 
technology will be different than the promise that lots of us heard 40 
years ago when people were saying we are going to put this television 
set in your home. They bring a television set into your room, into your 
home. Television was going to be a great learning technology. We are 
going to learn more. That was the idea. In some cases, with children's 
educational television, we have seen some improvement in test scores. 
But for many of us adults, we hold I think the correct conclusion that 
television has produced a distraction, larger and larger volumes of 
time being consumed with young people watching television, not doing 
homework, not doing the work required in school, and as a consequence, 
people say maybe this technology is just another one of those items, 
just another promise to do something, another easy solution to the 
difficult work of education.
  Mr. President, this technology is different. Computer technology is 
much different than we have seen in other educational applications, in 
other technology applications. We can cite research. You can use 
anecdotes. You can talk about any measurement you want out in your 
local community. But computer technology, particularly when it is 
network and particularly when there is access to a database outside of 
the school, particularly when the network concludes a connection 
between the home and the school itself, there are advances in 
mathematics, impressively so. There are advances in reading, almost 
counterintuitive for those of us who have seen this technology. How can 
you possibly learn to read and write better? But there are improvements 
in test scores in both areas when the technology is available to young 
people.
  The fact of the matter is this technology does offer substantial hope 
to do something for public education that a lot of us have begun to 
believe--we are wondering whether anything is going to work. We are 
wondering whether anything is in fact going to do something to turn 
around what we see as decline in test scores in many significant areas.
  I note that the National Assessment of Educational Performance not 
long ago said that high school seniors, a full third, cannot read at 
the basic level; that approximately a third can read at the proficiency 
level or above, down 10 percent from 2 years ago. You cannot graduate 
from high school anymore--and half of our young people will graduate 
and go right into the work force and are not able to read and write, 
and do multistep mathematics, to be able to think in creative, in 
complex ways, and expect to earn very much in the workplace. It may 
have been true when most of us went to high school and graduated that 
you could do that, but not anymore. Today you have to know more. You 
use that computer in the workplace, and you have to know a lot more 
besides the sorts of things that were required when I got out of high 
school in 1961.
  Mr. President, there is an urgency attached to this section. That is 
what I am trying to describe to my colleagues. Not only is there a 
demand for it. Not only in this case do we have people in the community 
saying: Senator Kerrey, this is one where I know it is going to help. I 
am not certain about all the rest, and I am a little bit nervous about 
what is going to rate telephone or cable. I do not know about all this 
promise about new jobs. I have some stats I am going to talk about 
later when I talk about this promise of employment. An awful lot of 
people [[Page S7986]] were turned out onto the bricks as a consequence 
of technology. They get a little nervous when I tell them there are 
going to be a lot of jobs. They do not know about all of that. They say 
to me, I know because I have seen computer technology work in my home. 
I have seen it work in the school. I know it can work. We are trying to 
network it inside our school buildings. We are trying to make progress 
there.
  What are we up against? We are up against a number of things. The 
people are saying to me and with schools that I have worked, that the 
principle among those things is that if you want to fund it, you have 
to fund it out of property or sales and income taxes.
  I am going to get to a subject that will probably put my colleagues 
to sleep because I talk about it perhaps too much; that is, how we fund 
not just education, but how we fund other things that we try, other 
services that we try to provide to our people. In the State of 
Nebraska, we have about 275,000 people in the K through 12 environment. 
We have 275,000 people over the age of 65. We spend $1.3 billion on 
that K through 12 environment, and $4.5 billion on people over 65. Now, 
the source of revenue for retirement and health care is payroll taxes. 
It is relatively easy to get that from people in the work force; 
apparently about 16 percent of total wages. The source of revenue for 
the schools is property, sales, and income tax.
  The incremental cost expenditures from the schools will be $50 
million against the $1.3 billion base. On that retirement and health 
care data, the differential is going to be close to $500 million. The 
reason the cost increase is so low is that the people at the local 
level are saying: We are fed up with property tax increases, and we are 
not very excited about sales and income tax increases, either. And our 
schools get squeezed.
  I had a rather unpleasant encounter with an educational organization 
that said this is not going to be a big deal because it is only going 
to address the cost to the schools, about 16 percent, and phone 
activity is not a problem, and affordable dial tone is not a problem. 
It is a problem. It is true that States have been able to negotiate 
with the public service commissions. But that only affects interLATA 
costs. It does not affect long distance calls, and it does not let 
these kids get on line and access databases in long distance education. 
It does not provide the kind of high-speed activity these schools need.
  We are not asking for a bailout. Schools are still going to have to 
put a ton of money in software, a ton of money in hardware. They are 
going to still have to make a good-faith effort and contribution in 
order to make this work. This is not a subsidy that is unreasonable. It 
is a subsidy that is not only quite reasonable but it is a savings. If 
we do not provide it, we are going to lose a tremendous opportunity to 
bring education technology to our children and give them, I think, a 
learning tool that can enable them to increase math, increase reading, 
increase verbal scores. I have seen it work. I have looked, as I said, 
at research data. I have seen anecdotal evidence, as well. It in fact 
gets the job done.
  Mr. President, one of the arguments again that we hear a lot, or at 
least I have heard a lot--I am not sure how much it applies to this 
particular amendment; perhaps it does, perhaps it does not; I believe 
it does--is that we are giving special attention to a particular group 
of people, and that they do not deserve the special attention. I am not 
really talking about the comments of the Senator from Arizona. I heard 
comments made by others. Why would we want to single out one particular 
group? We have 100,000 school buildings in the public school system, 
16,000 school districts out there, 45 million students, government-run 
operations, pure and simple, and we have to figure out some way to help 
them out.
  But what very often is annoying to me is the argument--and I have 
heard it from the business sector, mostly; it is made by businesses who 
have been given special protection, who have been given a monopoly 
franchise, and now are complaining when we give somebody else special 
attention. It is not like the RBOC. It is not a mom-and-pop started in 
Charleston, SC. This is a regulated monopoly. It is not like they 
started from scratch or something. It is with tremendous cash flow, and 
tremendous resources.
  I am prepared to let them compete. I am prepared to provide 
deregulation to them so they can get out there and go head to head. I 
think there will be benefits from it.
  But please spare me when it comes to trying to help 45 million school 
children with this argument that I am giving them special attention. 
For god's sake. You would not even exist were it not for a franchise 
granted to you by the people of the United States of America. At least, 
that is how I see it. I would be very interested to hear, and I asked 
earlier if the Senator from South Carolina would be willing to give his 
own description of that.
  It seems to me that when a regional Bell operating company--I have 
good friends, at least I used to have good friends in that particular 
sector--when they come and say why would you want to provide special 
attention to these schools like this, it seems to me that I am 
deserving of saying to them, well, did we not give you a special 
franchise? Did we not give you a special right to do business in a 
monopoly way? And did we not keep all the internet competition away so 
that you could do all this stuff over the years?
  Am I missing something, I ask my friend from South Carolina?
  Mr. HOLLINGS. If the distinguished Senator will yield, I think he is 
right on target with respect to the regional Bell operating companies. 
They are not just a guaranteed monopoly but a guaranteed return on 
investment.
  But they used to have a percentage return of profit, and they did not 
like that because they found, quite to the point, if they could get 
what they said, pay caps, the actual size and operation growing, 
minimizing, of course, the general cost of operation, and superimpose 
on that downsizing, which is firing, to me, the employees--and 
everybody thinks this is a wonderful thing, that everybody is 
downsizing, but that is what they are doing, and so they are increasing 
their return on investment but more particularly what they call the 
operating cash flow margin. That is the principal measure of the 
financial worth of a company by Wall Street and the financial 
community.
  Specifically, I say to the Senator, I have a chart--I swore I was not 
going to use charts, but I am going to have to get this one blown up 
for the Senator because I have the operating cash flow margin by 
industries from computers to chemicals, household products, autos, 
trucks, alcoholic beverages, long-distance companies, the soft drink 
industry, semiconductors, railroads, drug industry, electric utilities, 
petroleum-producing corporations, and, of course, the regional Bell 
operating companies.
  This is a small sort of chart. We will have it enlarged. But you can 
see right at the bottom edge, in the lowest so-called operating cash 
flow margin of 10.3 percent is computers. Come right on up midway, 19 
percent for the long-distance companies, and for the regional Bell 
operating companies it is 46 percent. It is above all the others.
  If you want to get to the actual return, you would find in Standard & 
Poor's in a composite of the top 1,000 corporations in America, their 
average would be 10.4 percent, but the regional Bell operating 
companies is 16.6 percent.
  Now, if you want to go then up to their cash flow margin, as they 
call it, that would be 46 percent rather than the average of 34.1. If 
you go up to the actual operating income margin, it is 26 percent with 
the U.S. average of 10 percent.
  But they tell me in the financial community, if the Senator will give 
me just a second more, it is not only the 46 percent, but we had it in 
those hearings that the RBOC's had a cash flow of about $5.5 billion. 
They paid some $600 million in taxes, Mr. President. I think the 
distinguished Presiding Officer was there when this was brought out. Of 
the $5.5 billion in cash flow, $600 million was in taxes, $1.6 billion 
was paid to keep Wall Street happy--that was the dividends--which left 
them $1.7 billion to invest.
  Excuse me. That $1.7 billion they reinvested in upgrading the 
equipment and optic fibers and everything else of that kind. It left 
them $1.6 billion in their back pocket so they could walk 
[[Page S7987]] into any bank: I have $1.6 billion in my back pocket, 
and I would like to make a loan.
  Well, heavens above, what financial power. And they wanted to know a 
little while ago why we had to have the public interest test included 
in this thing. With that $1.6 billion in their back pocket, they are 
already into New Zealand. They are putting in communication links 
between Moscow and Tokyo. That is these telecommunications companies. 
They are in Hungary.
  I landed last year, I say to the Senator, in Buenos Aires, and the 
Ambassador came out and met me in the car. As we were driving into 
town--this is Ambassador Cheek, an Arkansas native--he turned to me, 
and he said: Well, our section is doing good.
  I said, how is that?
  He said Bell South here operates--I think they have about 14 to 16 
million in Buenos Aires, and Bell South runs the local telephone, and 
they are getting a tremendous return on their investment. I know they 
are into Mexico and everything else.
  I commend them. I do not know of a better operating company in my own 
sort of hometown, Bell South and Southern Bell. But they should not 
come here--and I do not think, frankly, these companies are coming.
  I find it, I say to the Senator, as a result more or less of pollster 
politics. You go to run for Congress and the Senate, and the first 
thing you do is you get a poll and the poll gets you five to seven hot-
button items. Crime, everybody is against crime. Taxes, everybody is 
against taxes. Jobs, everybody is for jobs. It is a jambalaya of the 
same nonsense, where you have the contract.
  One thing, this communications bill, you know what, is not in the 
contract. And you know why? Because this communications bill is going 
to do something. You can take that 10-point contract, it is all 
process. It is all procedure. It is all pap. It is all line-item veto, 
term limits, paper shuffling or whatever--unfunded mandates, balanced 
budget constitutional amendment. It is all process, making sure you do 
not do anything but what the pollster tells you to hit and identify. Do 
not ever be for or against. Identify with the problems but do nothing 
about them.
  Here we are trying to do something about them and you know what they 
come up with? They take the very responsibility they have fundamentally 
for education, for the schools, for the libraries, for the nonprofit 
health care, community health service, rural health centers and 
everything else and talk against them, using expressions like 
``micromanagement, meddling, bureaucracy'' and everything else, like 
somehow something was wrong with that.
  I thought that is what we were here for. If we are not here for the 
community health centers, who is? If we are not here for the schools, 
where are they going--all private schools with vouchers and people with 
money running around butting into each other? We are going the way of 
England. We are getting two levels of society now. Those with jobs are 
making 20 percent less today than what they were making 20 years ago.
  And the census figures, I say to the Senator--I will yield right 
now--will show that in the age group 17 to 24, 73 percent of that age 
group cannot find a job or they cannot find a job outside of poverty. 
And here the people's representatives are coming here and talking 
against the people's institutions because the pollsters tell them to do 
that. It is a sort of an ideological bent: Get rid of the REA, a 
magnificent entity; get rid of public communications that is doing some 
good. And they tell you, yes, you know, public broadcasting--sure, it 
can make a profit. We can sell those VHF channels like gangbusters, and 
they can put on some more of the giggle shows or whatever you call 
them. You turn them on and there is some little wise kid about this 
high and the grownups tottering around, the wise kid makes the smart 
remark and everybody goes ``hee-hee-hee'' and that is all you get 
unless you have public television.
  So I think that the distinguished Senator is getting right to one of 
the most valuable discourses I have seen because you have seen the 
rural Senators come with the metropolitan areas saying since we have 
the satellite and you can beam down into the rural area as well as down 
into the urbanized megacity you do not need these things--you do not 
need schools; you do not need hospitals; you do not need libraries 
anymore. And if you do, let the market forces operate them.
  Mr. KERREY. I appreciate that. In fact, I am sure people will be 
interested--and I believe there is a lot of promise of jobs, by the 
way, in changing our regulation and going more to competition.
  But do not count on the jobs coming from the companies that are 
typically coming up here on Capitol Hill urging us to do one thing or 
another. I have some interesting facts in that regard.
  Regional Bell operating companies in 1984 in the United States of 
America employed 556,561 people. In 1993, that was down to 395,639. 
They dropped over 160,000 employees in that period--160,000 employees 
in approximately 10 years. The LEC's/Independents went from 180,000 
down to 140,000. So now you are down 200,000 employees over that period 
of time.
  The cellular industries everybody talks about really added a whole 
bunch of employees. They have added 40,000. So now you are back to a 
net loss of 160,000. So you hear from the RBOC's, LEC's and you hear 
from cellulars. They are talking about jobs saved. I am down 160,000 
thus far. Are you going to keep going in that direction and give me 
more of the same?
  The broadcast industry has gone from 170,000 down to 150,000, so 
another 20,000. Now I am up to 180,000 jobs. I bet you an awful lot of 
those people did not get jobs that paid the same as they previously 
had.
  In cable television, you see increased employment in cable 
television, 67,000 or so up to about 109,000. So you are still about 
150,000 jobs or so down.
  We have the computer industry that we talk about an awful lot, a 
surprising number. I heard--I cannot remember who it was--a colleague 
come down and talked about we ought to do it like the computer industry 
has done. For your information, the computer industry in 1985 employed 
542,000 Americans. Guess how many employees in 1993? 400,000 employees, 
down 150,000. When you are at home in your hometown meetings and they 
say to you, ``Senator, what is this telecommunications deregulation 
bill going to do for me?'' and you say, ``Jobs,'' you better be 
prepared to say where those jobs are going to come from. You better be 
prepared to answer that person who says, ``Thus far, technology has not 
been all that kind. I used to make $40,000 a year and now I am down to 
$15,000. How is that working for me?''
  I hope that this particular attempt to strike this section will be 
rejected.
  As I said earlier, the reasons I would cite are the following: One, 
it is about the only hope we have, I believe, of improving the quality 
of education both in the home and in the school. It is working. It is 
working out there.
  Secondly, if you believe that the progress that is being made out 
there in the States right now is exciting, understand that the language 
in other sections of the bill takes away the incentives the RBOC's have 
had to do those things. It truly does. There is no disputing that. In 
every single State--every single State--where this kind of effort has 
been made, it has been made in exchange for regulatory relief, 
particularly going from rate-based rate of return to price caps. The 
premier example is in the State of Georgia, but it is not alone.
  Finally, Mr. President, this well-meaning attempt to strike this 
section should be tabled because this is one of the few pieces of this 
legislation where, indeed, we are hearing from our citizens, where, 
indeed, we are hearing from mothers and dads and the PTA, the PTO that 
are coming to us and saying, ``This one is going to work. We're trying 
to figure out how to make computers work in our school. We are up 
against the property tax lid, we are up against sales and income. We 
are trying to figure out how to do it, and this is going to give us a 
little help.''
  Do not believe it is a giveaway. These schools are going to make a 
maintenance effort on top of that. They have to. They have to spend a 
lot of money on software and hardware. This is just a little bit of 
help asked for by the companies that, indeed, can afford to do it given 
what this legislation allows [[Page S7988]] them to do, given what this 
legislation provides for them.
  Mr. President, I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER (Mr. Inhofe). The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, one note on commending our distinguished 
colleagues. The Senator from Maine, the Senator from West Virginia, and 
the Senator from Nebraska have joined together on this amendment and 
given leadership.
  It should be noted that when we started, easily 4 years ago, the then 
distinguished Senator from Tennessee, Al Gore, was the one who 
paraphrased the ``information superhighway.'' Part and parcel of his 
drive for the information superhighway was just this: education, 
hospitals, libraries, public entities and public interest groups that 
we had even expanded in the original treatment some 4 years ago in our 
Committee of Commerce. Vice President Al Gore has to be credited with 
this part of the information superhighway.
  We had at our hearings this year the Secretary of Education, 
Secretary Riley, come forward and testify on this particular score 
outlining the various uses and needs of this particular consideration 
by the public to go ahead and take entities that are on a nonprofit 
basis--public schools are not for profit, not-for-profit hospitals, 
libraries and otherwise--and give them consideration, which is just 
like the universal service fund, to get the communications facilities 
out into the rural or sparsely settled areas.
  So I commend Senator Snowe, Senator Rockefeller, and Senator Kerrey, 
but I particularly wanted the record to show that the Vice President of 
the United States has been the leader on this information superhighway, 
and particularly the educational, health and library facilities to be 
afforded these particular services at a reduced rate.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. JEFFORDS. Mr. President, I rise in opposition to the McCain 
amendment. I want to commend the previous speakers who have emphasized 
very eloquently what this will do for the critical areas, especially of 
education. I am, as my colleagues know, the chairman of the Senate 
Subcommittee on Education. I have just completed a number of trips 
around this country visiting the schools in the urban areas of this 
Nation, from Baltimore to New York to Detroit to Washington, DC, as 
well as Los Angeles and San Diego. I have also examined the statistics 
of where our schools are at this particular point in our history when 
it is so essential and so important that we improve our educational 
system to be competitive in the world that awaits us out there and the 
markets that are necessary for this Nation to expand its economy.
  The number one problem we see is the ability of our schools to be 
able to take advantage of the wonders that can come about through the 
information age. As I talk with them and travel with them, there is no 
question but that one of the most critical and important barriers they 
have to being able to participate in a meaningful way by the 
utilization of computer technology to provide the education through the 
software that would be made available and the opportunities that come 
through that is the inability to have affordable telephone 
communications. Without that, there is no hope that they will be able 
to make the kind of leap that we have asked them to make, for, as you 
know, we have passed Goals 2000, strongly indicating that we must by 
that time improve substantially the education of our young people.
  I have been through my charts. I have gone through them many times, 
and I will many more times, to try to let everybody know the serious 
problems we are having.
  First, I pointed out over and over again, when you compare our young 
people in the younger groups with competitor nations across this world, 
those nations which we would be competing with and gradually losing our 
competitive edge, we are last--last--in math and science among 14 of 
those nations.
  Most probably, the most devastating statistic that we have facing us 
is the knowledge that 55 percent of our young people now that go 
through the school system come out functionally illiterate, because if 
you are not going to college, we do not worry about you. They are going 
to be the skilled work force of tomorrow in America. But if we do not 
furnish them the tools in schools and are not able to provide the kind 
of software that is out there and the ability to bring them up to speed 
on skills and on education, math, reading and all, we will not make it.
  This is the best and biggest step forward we can make, by ensuring 
that there will be access to telephone lines.
  Let me give you an example of how bad off it is. About 3 percent of 
our schools in this Nation right now have access to internet or outside 
communications for the utilization of the information age. When I go 
around to cities, I say, ``I want to see your best and your worst.'' I 
have seen the best, and I have seen what they can do with the 
information age. I have seen so many young people sitting there with 
eyes lit up and looking at fantastic software and learning well above 
the capacity that we have ever had before.
  Do you know how many of those schools there are in this Nation? Maybe 
1 percent. Then I said, ``I want to go to the worst that you have.'' I 
remember very vividly in the city of New York going down to a school on 
the lower east side. We went in there, and I think it was an old 
factory building. There were six floors that you have to walk up and 
down. I said, ``Let me see what you have to offer your young people.'' 
She showed me four computers. I said, ``How old are these?'' She said, 
``I think they were from the 1970's.'' I asked, ``What kind of software 
do you have?'' She said, ``Let me show you.'' It was something I had 
seen back in the mid-1970's. But she said, ``I am excited. We just got 
a grant for $250 to upgrade our software.''
  Well, anybody that knows anything about computers and software knows 
what you are going to get for $250 is not going to do much for anybody. 
I saw similar things in Los Angeles and San Diego. I saw the best and 
the worst.
  This one provision in the bill will do as much as we can do for 
education as anything else--the dimensions of what it will cost in 
these schools to be able to bring the communications in without this 
kind of help is devastating. For instance, there is $300 million in 
backlog of repairs and renovations needed in the city of Washington in 
order to upgrade structure to do the things that are needed to be done. 
It is $100 billion nationwide. But if you can afford to get the phone 
lines in and give them a reasonable rate, then we have an opportunity 
to take advantage of that tremendous software that is out there. I have 
seen systems which are imaginative and wonderful. But it will not work 
unless there is access to it. The only way we can start making that 
access--and we need to worry about the ability to have power to run 
these and other things that go along with it. But if do you not have 
the phone access, you will not get there.
  So I urge very strongly, if you believe as I do that education is so 
critical and important to the future of this Nation, the one best thing 
you can do right now is to vote against the McCain amendment and make 
sure the provisions are in here to assist our country, to be able to 
elevate our educational system on a fast track instead of the slow, 
slow snailpace process we are undergoing now.
  I yield the floor.
  Mr. BURNS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BURNS. Mr. President, I rise in support of the McCain amendment. 
I guess when I first came to the Senate and I took a look at my State--
long distances, sparsely populated--nobody has made more speeches on 
education, telemedicine, and all of those good things that can happen 
through wide-band, broadband telecommunications.
  Once we start down the road of preferential treatment, there is no 
end to it, and that technology will not be deployed at any price. That 
is the reason that we are doing this piece of legislation, to give some 
people incentive to deploy new technologies. If there is a way that we 
can serve education and telemedicine in rural areas, it will be done. 
It is being done in my State. For [[Page S7989]] the first time, we 
have school boards that are setting aside money now for equipment and 
software and, yes, charges in order to accommodate it, to give some 
people incentive to deploy it.
  What this does as a result is create a whole new class of 
preferential telecommunications service entitlements for a diversity of 
groups. I have no disagreement with my colleague with regard to the 
contribution which advanced telecommunications can make to society, 
especially in rural America. My home State of Montana is one of those 
rural areas in the country. I have worked very hard to make sure that 
we have this new technology. But we have to find ways to be 
entrepreneurial and allow some competition into it to make it work. You 
know what? It works in an area where telephone companies and those 
companies that work outside of the regulatory environment--country 
telephones, REA's, people who have an interest in community that makes 
it available to their schools because they know what the investment is 
in that school and what it is worth to that community.
  They can do that because they do not have to go to a PUC and explain 
why they are doing it for a school or why they are doing it for a rural 
hospital. The RBOC's are inside that regulatory, and what we are trying 
to do is relieve ourselves of them so they can do some special things. 
This new technology is not going to go out there, and we are not going 
to tell Government to force it out there. It is not going to make it 
friendlier or cheaper for preferential users.
  When the heavy hand of Government reaches out to mandate that 
business prevent preferential rates to certain groups, business is not 
going to be the one who pays. You know who will pay for it? Consumers 
pay for it. That is what we have lost here a little bit --that the 
paying public of every telephone will pay for this preferential 
treatment. You can almost call that double taxation, because they are 
also paying school taxes and also probably to some of the hospitals for 
some of the work they are doing there. We just tend to forget. Make no 
mistake about it, businesses will pass along such costs to consumers 
through higher rates--the same consumers that will be looking for lower 
costs and more services once this legislation passes.
  So philosophically, section 310 takes a mandated approach that moves 
exactly in the opposite direction from the entire legislation, and it 
is an approach that is really tough to support. It defies logic on 
preferential treatment. You just cannot simply ignore the future impact 
this will have on the consumers in Montana, and they will come at a 
higher cost--a higher cost--if this legislation passes with this 
section intact.
  Whenever there are a lot of people who want to get into that 
universal service and they want to use it for themselves, keeping in 
mind that the integrity of universal service is in question now because 
of preferential treatment, the Senator from Nebraska is 90 percent 
right. He understands what it did for Nebraska. I understand what it is 
doing in Montana. But it takes dollars in order to get that technology 
out there. If the Federal Government wants to step up to the plate and 
get some money out there, that is fine and dandy. I would support some 
of that for infrastructure inside the schools.
  But we are going in exactly the wrong direction. It is a great 
thought. It has probably broad support because you always find more 
people who want something for nothing than you do people who want 
nothing for something. And that is just exactly the wrong direction. 
The marketplace is already moving in the right direction. It does not 
need this legislation in some areas
 to provide more service and more technology. But that progress could 
be stymied through mandates from this Government and--probably the Wall 
Street Journal was right this morning--placing more mandates. Every 
time we have a mandate, somebody pays. And it will be the consumers of 
this country who will pay for it, because this does not get out there 
for nothing.

  I think it is a wrong approach. I say to my colleagues, if they are 
serious about building a national health and education infrastructure 
through telecommunications, this is the wrong direction to go, because 
with competition in the marketplace we will find somebody that will 
provide the services a little bit cheaper maybe than the next guy to do 
business in an area where there is a high volume of business as there 
is in education and health care provision in rural areas.
  I ask my colleagues to support the McCain amendment.
  I yield the floor.
  Mr. KERREY. Before the Senator from Montana leaves, I appreciate the 
statement. I must say, Mr. President, I appreciate very much that 
Senator from Montana included a couple sections of language in this 
legislation on my behalf, section 304. It does deal with education. We 
added elementary and secondary schools for advanced telecommunications 
incentives. That is the connection. That is the fiber that would go to 
the school. It does not cover affordable rates and does not get some of 
the other things section 10 does, but last year when S. 1822 passed, 
the vote was 18-2. The Senator from Oregon, Senator Packwood, and the 
Senator from Arizona, Senator McCain, voted against it, but last year 
section 104 that the Senator from Montana supported did provide 
preferential rates.
  Section 104 says the purpose of this provision--a new provision of 
the 1934 act to provide for public access actually much broader than 
what 310 does: disseminate noncommercial, educational, cultural, civic, 
and charitable, so the public has access to telecommunications 
network--the purpose of this provision is to ensure that these entities 
may be able to obtain, at preferential rates, advance services and 
functionalities for all their communication needs.
  The chairman of the committee voted for it last year--last year's 
ranking member, this year's chairman. All members of the committee, not 
just Republicans, but all members of the committee, voted for that last 
year with the exception of the Senator from Arizona and the Senator 
from Oregon.
  I know there is a good explanation as to what happened between last 
year and this, but last year, preferential rates were part of the bill, 
and this year they are some kind of a slippery slope.
  Mr. BURNS. To reply to the Senator from Nebraska, had it been part of 
this bill out of committee--that is the only place I voted for, was out 
of committee. I would probably have voted for it again to get it out of 
the committee to get it to come to the floor of the U.S. Senate in 
order to move this legislation along.
  Mr. KERREY. The Senator has included S. 1822, some special comments 
that indicate which provisions of S. 1822 he did not particularly like, 
and I have read that and I do not find any objection to providing the 
preferential rates to the various institutions.
  My focus is the K-through-12 institutions.
  Mr. BURNS. I say to the Senator that was a year ago, and I would have 
voted to get it out of committee.
  Once we look at who will pay for it and who will pick it up, 
somewhere in this mix we have lost the consumer. That is where it is 
going to come. It will come in the form of higher rates for everybody.
  I say if we do not do that, then the deployment of the technology 
will be slower to happen. That is where I am coming from.
  Mr. KERREY. Those Members concerned about higher rates, I point out 
that the managers' amendment, that I am quite sure will be accepted, 
has some changes that allows for universal funding to be used to 
provide these preferential rates, which avoids the necessity for any 
kind of concern for rate increase.
  Again, I close briefly, the Senator from Maine was kind earlier to 
vitiate a tabling motion. I am prepared to end this in this debate.
  I say in summary, for me, we are making progress out there right now 
in States precisely because we have an opportunity to negotiate with 
telephone companies because they are trying to move from a rate-based 
system of regulation to a price cap system. This legislation takes away 
that leverage by saying that all States will move to price cap 
regulation. The progress we see being made out there will stop.
  This piece of legislation with section 310 intact, this particular 
section intact, will give every single Member [[Page S7990]] who votes 
to retain this section in there, I guarantee, an awful lot of pride. I 
promise, from personal experience and visiting schools that are using 
computer technology, those schools that use this provision--and they 
will, there will be very few schools that do not find themselves saying 
this is a way to leverage the purchase of computers, the purchase of 
software, to begin to use the technology for math scores, reading 
scores, and writing scores--all the things that have been frustrating, 
as citizens, will allow Members to get quite excited.
  I hope that Members will not support this well-intentioned motion to 
strike the section and allow section 310 to remain in S. 652. I yield 
the floor.
  Ms. SNOWE. Mr. President, just a few final points that I think are 
important to make in response to one of the previous speakers, Senator 
Burns.
  First of all, the language that has been incorporated in the 
legislation before the Senate that was offered by Senator Rockefeller, 
Senator Kerrey, Senator Exon, and myself in committee extended the 
already existing universal service provisions within the legislation. 
Universal service has been a fundamental part of our telecommunication 
policy, and rightly continues to be part of our telecommunication 
policy before this Senate.
  We extended the provisions to include schools, libraries, and 
hospitals because we think it is in the public interest. It is in our 
national interest.
  Furthermore, I think it is important to note that this ultimately 
will save money. When we talk about the deregulation of the 
telecommunication industry, which is what this legislation is all 
about, many providers will reap enormous benefits as a result of the 
goal of this legislation. We want to make sure that the rural areas 
also reap benefits, that they are not removed from affordable access to 
the technological growth and development of the information 
superhighway. It will save money through telemedicine. Making sure 
schools have access will ultimately increase the economic growth of 
this country. This language is a wise investment that will ultimately 
save money.
  In talking to rural health care centers and hospitals, they point out 
that through telemedicine they could communicate with some of the 
specialists, without transporting the patient or going to another 
hospital in order to get those services. They can do it through 
telemedicine.
  Access may be there to some citizens, in a limited fashion in some 
rural health care centers, as Senator Burns mentions. It is not 
pervasive, and certainly not in my State.
  Without this language in the bill, then rural areas will not reap the 
full benefits of the information age because it will be more 
economically feasible for carriers to provide those services in densely 
populated areas, in urban areas--not in the rural areas of our country.
  We have to ensure that there is a minimal threshold of affordable 
access to telecommunications services to our schools and our libraries 
and rural hospitals. We cannot make it more basic than that.
  Finally, I would like to note that three of the Bell telephone 
companies support our provisions. We refined our language to conform to 
some of their concerns. NYNEX, Ameritech, and Bell Atlantic do not 
oppose these provisions.
  I hope Members of this body will defeat the McCain amendment, which 
would strike the language that we have incorporated in the legislation 
before the Senate. I move to table the McCain amendment, and I ask for 
the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. LOTT. I announce that the Senator from New York [Mr. D'Amato], 
the Senator from North Carolina [Mr. Helms], the Senator from Alaska 
[Mr. Murkowski], the Senator from Alabama [Mr. Shelby], and the Senator 
from Alaska [Mr. Stevens] are necessarily absent.
  Mr. FORD. I announce that the Senator from Delaware [Mr. Biden] is 
necessarily absent.
  The PRESIDING OFFICER (Mr. Bennett). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 58, nays 36, as follows:

                      [Rollcall Vote No. 244 Leg.]

                                YEAS--58

     Akaka
     Baucus
     Bingaman
     Bond
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Byrd
     Campbell
     Chafee
     Cochran
     Cohen
     Conrad
     Daschle
     DeWine
     Dodd
     Domenici
     Dorgan
     Exon
     Feingold
     Feinstein
     Ford
     Glenn
     Graham
     Harkin
     Hatfield
     Hollings
     Inouye
     Jeffords
     Johnston
     Kassebaum
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Nunn
     Pell
     Pryor
     Reid
     Robb
     Rockefeller
     Sarbanes
     Simon
     Simpson
     Snowe
     Specter
     Thomas
     Wellstone

                                NAYS--36

     Abraham
     Ashcroft
     Bennett
     Brown
     Burns
     Coats
     Coverdell
     Craig
     Dole
     Faircloth
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Heflin
     Hutchison
     Inhofe
     Kempthorne
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Nickles
     Packwood
     Pressler
     Roth
     Santorum
     Smith
     Thompson
     Thurmond
     Warner

                             NOT VOTING--6

     Biden
     D'Amato
     Helms
     Murkowski
     Shelby
     Stevens
  So the motion to lay on the table the amendment (No. 1262) was agreed 
to.
  Mr. FORD. Mr. President, I move to reconsider the vote.
  Mr. INOUYE. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. JEFFORDS. Mr. President, I note that a quorum is not present.
  The PRESIDING OFFICER. The Senator suggests the absence of a quorum. 
The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. PRESSLER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRESSLER. Mr. President, I hope Senators will bring up their 
amendments. We are ready for amendments. As far as I am concerned, I 
would like to go deep into the night, but maybe others disagree.
  I have been trying all afternoon to get the voting speeded up. We are 
ready for the next amendment, as far as I am concerned. I do not know 
if anybody has an amendment ready. And I have been seeking time 
agreements. But we can really move much faster. We could theoretically 
finish this bill tonight if we really get going. So I would appreciate 
Members' support in moving this forward. We are ready for amendments. 
Senator Hollings and I ready for any amendments.
  Mr. DOLE. Mr. President, I have talked with both managers of the bill 
to see what we could do to accommodate our colleagues who have 
commitments for the next couple of hours. But then you have colleagues 
who have commitments tomorrow morning. I am not certain we can 
accommodate everybody. But the key is to get an amendment laid down 
that will take a couple of hours.
  I think the Senator from South Carolina may be prepared to offer his 
amendment.
  Mr. THURMOND. Not yet.
  Mr. DOLE. He is in doubt.
  There is the managers' amendment that still has not been adopted, and 
the amendment by this Senator, and then the amendment by Senator 
Daschle.
  Mr. HOLLINGS. We are trying to work those out. We will work those out 
if we can get another amendment up and relieve our colleagues here.
  Mr. DOLE. I have given a copy of my amendment to Senator Kerrey 
because I know his concern with the bill. If we need to furnish any 
additional information, we will be happy to do so. But we do need to 
get an amendment here.
  Do we have a list of amendments?
  Mr. PRESSLER. If the leader will yield, we invite any amendments. But 
we are prepared to go to third reading very soon if Members do not 
bring up their amendments.
[[Page S7991]]

  Mr. DOLE. As I understand, the Senator from Maine, Mr. Cohen, is 
prepared to offer an amendment which will take approximately 1\1/2\ 
hours. I am not sure how much the people in opposition might want.
  Mr. PRESSLER. As I understand, Senator Thurmond will have an 
amendment and Senator Dorgan. Those are the only outstanding amendments 
that I know of.
  Will someone correct me if that is not true?
  We have the Cohen amendment and we have the Thurmond amendment and 
the Dorgan amendment coming up. That is all that I know of.
  Mr. DOLE. The Senator from Maine is prepared to enter into a time 
agreement of 1 hour and 30 minutes equally divided, if that is all 
right with the Senator from South Carolina.
  Mr. HOLLINGS. Yes.
  Mr. DOLE. May we make that request?
  The PRESIDING OFFICER. Is there objection?
  Mr. KERREY. Reserving the right to object, Mr. President, I suggest 
the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KERREY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY. Mr. President, I have no objection to the unanimous 
consent to set a time for this debate.
  The PRESIDING OFFICER. Is there further objection?
  Without objection, it is so ordered.
  Mr. COHEN. Mr. President, reserving the right to object----
  Mr. DOLE. No second-degree amendments in order.
  The PRESIDING OFFICER. The Senator from Maine.
  Mr. KERREY. Mr. President, may we have order in the Chamber?
  The PRESIDING OFFICER. The Senator from Maine.
  Mr. COHEN. Mr. President, as I understand it, we have agreed to an 
hour and a half equally divided, expecting a vote no later than--I 
would say what--a quarter of 8?
  Mr. PRESSLER. That is correct.
  Mr. COHEN. If it can occur sooner, can Senators be on notice that if 
time is yielded back we will vote prior to that time?
  Mr. PRESSLER. For the convenience of Members, perhaps we can agree it 
will be an hour and a half. It does not make any difference to me. I am 
for voting as soon as possible.
  Mr. COHEN. A 7:30 vote.
  Mr. PRESSLER. And we will divide the time equally.
  Mr. COHEN. I ask unanimous consent that there be no second-degree 
amendments.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1263

 (Purpose: To provide for the competitive availability of addressable 
                            converter boxes)

  Mr. COHEN. 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 Maine [Mr. Cohen], for himself and Ms. 
     Snowe, proposes an amendment numbered 1263.

  Mr. COHEN. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       On page 8, between lines 12 and 13, insert the following:
       (15) When devices for achieving access to 
     telecommunications systems have been available directly to 
     consumers on a competitive basis, consumers have enjoyed 
     expanded choice, lower prices, and increased innovation.
       (16) When recognizing the legitimate interest of 
     multichannel video programming distributors to ensure the 
     delivery of services to authorized recipients only, 
     addressable converter boxes should be available to consumers 
     on a competitive basis. The private sector has the expertise 
     to develop and adopt standards that will ensure competition 
     of these devices. When the private sector fails to develop 
     and adopt such standards, the Federal government may play a 
     role by taking transitional actions to ensure competition.
       On page 82, between lines 4 and 5, insert the following:

     SEC. 208. COMPETITIVE AVAILABILITY OF CONVERTER BOXES.

       Part III of title VI (47 U.S.C. 521 et seq.) is amended by 
     inserting after section 624A the following:

     ``SEC. 624B. COMPETITIVE AVAILABILITY OF CONVERTER BOXES.

       ``(a) Availability.--The Commission shall, after notice and 
     opportunity for public comment, adopt regulations to ensure 
     the competitive availability of addressable converter boxes 
     to subscribers of services of multichannel video programming 
     distributors from manufacturers, retailers, and other vendors 
     that are not telecommunications carriers and not affiliated 
     with providers of telecommunications service. Such 
     regulations shall take into account--
       ``(1) the needs of owners and distributors of video 
     programming and information services to ensure system and 
     signal security and prevent theft of the programming or 
     services; and
       ``(2) the need to ensure the further deployment of new 
     technology relating to converter boxes.
       ``(b) Termination of Regulations.--The regulations adopted 
     pursuant to this section shall provide for the termination of 
     such regulations when the Commission determines that there 
     exists a competitive market for multichannel video 
     programming services and addressable converter boxes among 
     manufacturers, retailers, and other vendors that are not 
     telecommunications carriers and not affiliated with providers 
     of telecommunications service.''.

  Mr. COHEN. Mr. President, I rise this evening, along with Senator 
Snowe, to offer an amendment that is a pro-consumer amendment. It is a 
pro-competition amendment that is focused on one narrow area of 
telecommunications that I truly believe needs more competition.
  Basically, what we have is a situation in which cable companies will 
offer their cable service and offer the so-called set-top boxes, a 
cable box essentially, that you need to rent in order to carry the 
cable signal.
  Obviously, cable companies are in the business to sell their signals 
and their programming, and they want to protect the integrity of that 
signal and that programming. I think that is not an unreasonable 
request. It is one that we ought to protect.
  The difficulty, however, is that there is little, if any, competition 
in the set-top box market. As a matter of fact, what you have is an 
essential monopoly that has been granted to the cable companies.
  We had a situation in Maine a short time ago where one company 
increased the monthly charge by almost $3, just for the privilege of 
renting a box in order to carry signals that subscribers were already 
carrying. A furor erupted over that.
  There is no real way to deal with this situation other than 
introducing competition. What I am seeking to do by this amendment is 
to allow the FCC the authority to call upon the private sector to 
develop a standard that would say, ``Here is the technology whereby we 
can protect our signals but also allow for competition in the 
manufacture and distribution of these set-top boxes.''
  If we go back historically, we look at what happened to telephone 
companies. Decades ago, telephone companies would say, ``You have to 
rent our telephone. If you don't rent our telephone, you don't get any 
telephone service.''
  Of course, times have changed. We now can walk into Circuit City, 
Radio Shack, Best Buy, or any of the supermalls, and we can find 20 or 
30 different types of telephones. The signal has been protected. We can 
plug the telephone into the wall. We still have to pay the Bell 
companies, AT&T, MCI or whoever is carrying the signal. But the signal 
is protected.
  As a result of competition, we have a wide variety of choices in 
other markets--VCR's, television sets, computers, video game players, 
and stereo systems. In these markets, we have competition. What this 
amendment seeks to do is introduce competition into the set-top box 
market.
  Mr. President, I really believe that those who are opposed to this 
amendment--I have seen a letter circulated--argue that somehow this 
amendment represents more regulation. Those who argue against this 
amendment are for monopoly, not for more competition.
  What we seek to do is to allow the FCC to call upon the private 
sector to develop the standards, and those would come--they should 
come--in a reasonably short period of time. We can do it today with 
analog technology. I am told that digital technology is moving along 
very rapidly. For example, one [[Page S7992]] could take a credit card, 
or something that looks like a credit card, and the cable company that 
is sending the signal would have their code on that card. You could not 
receive the programming without inserting that card into the set-top 
box.
  That is something that is not too far away on the horizon. It may not 
even be necessary to have a set-top box the way technology is running 
today. But even if we are dealing with analog technology, competition 
can exist in the manufacture and distribution of the boxes, just as we 
have competition in the manufacture and distribution of telephones 
today.
  So for those reasons, I am submitting the legislation. I am hoping 
that the Members of the Senate will agree that if we are trying to 
stimulate more competition, give consumers more choices at lower 
prices--which, after all, is the goal of this legislation--then it 
should be accepted.
  I understand there are several States where these set-top boxes are 
manufactured, and the manufacturers like being able to go to the cable 
companies and say, ``Here, buy our box.'' If I were they, I would enjoy 
that as well.
  But if we are really talking about competition and giving consumers 
greater choices and lower prices, there is absolutely no reason why 
this amendment should not be accepted by the overwhelming majority of 
those people who are supporting deregulation, who are supporting this 
telecommunications revolution, and who want to see more competition.
  With that in mind, Mr. President, there may be others on our side. I 
know Senator Snowe is here, and she is a chief cosponsor of the 
legislation. It is something that is long overdue. The problem we have 
today is there is no free market. If we were back 30 years ago in the 
telephone industry, we would still have the old black phone and still 
be paying rent to AT&T. If we had this information superhighway, we 
would say basically you cannot own a car, you have to rent one of our 
cars.
  What this amendment says is we are going to give the consumer the 
opportunity to buy set-top boxes from any source they choose and, at 
the same time, allow for the protection of the signal by the cable 
company that is sending it forth. I believe this represents a 
reasonable approach.
  By the way, there were questions raised about my earlier legislation 
(S. 664) on this issue. Was I really trying to bring in the computer 
industry? The answer is no. Was I trying to bring in the cellular phone 
industry? Again, the answer is no. To address the concerns of these 
industries, our current amendment focuses on the lack of a competitive 
market for cable boxes. We have excluded cellular telephone 
communications. We have excluded anything relating to computers. The 
legislation is designed solely for set-top boxes. We have no desire or 
intent to regulate cellular phone or other telecommunications markets.
  I urge those who are now advocating competition in order to give 
consumers lower prices and more choice to support the amendment.
  I reserve the remainder of my time.
  Ms. SNOWE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. SNOWE. Mr. President, I rise in strong support of the amendment 
offered by my distinguished colleague from Maine, Senator Cohen, and I 
join in cosponsorship of this legislation to ensure that set-top boxes 
are competitively available. I commend him for offering this 
legislation because I think in the context of the legislation before us 
today, this becomes a very important issue.
  Currently, as Senator Cohen has noted, consumers have absolutely no 
choice with respect to set-top boxes. They are forced to rent them from 
cable companies, often as a requirement to receiving cable signals.
  This issue was highlighted recently when a cable operator in Maine 
planned to scramble signals and require their customers to rent set-top 
boxes at a predetermined price.
  This obviously did not go over very well because it did not offer a 
choice to the consumers. Rather, they were required to rent set-top 
boxes for an additional fee added to their cable costs in order to 
unscramble the cable signal.
  Fortunately, the issue was resolved, but I think it underscores an 
important point, the need to ensure that consumers seeking to access 
cable services have options. This amendment would allow consumers to 
purchase the set-top box from a local retail store, or to lease or 
purchase a box from their cable provider. They would be able to choose 
boxes that will work with their own television set and continue 
receiving the cable programming channels to which they have subscribed.
  When set-top boxes are available in a competitive market, consumers 
will benefit from lower prices, increased flexibility, and a higher 
quality product. Competition will ensure technological innovation in 
set-top boxes, as companies compete to provide a better product at 
lower prices.
  I recognize that as companies try to provide consumers with new and 
changing technological features, there are bound to be growing pains. 
In the case of the State of Maine cable provider, the requirement to 
rent set-top boxes was intended to provide consumers with added 
flexibility through addressable programming--but instead it limited 
consumer choices because it required them to rent the set-top boxes and 
bear the additional cost, even if they wanted to receive the same 
services. I do not think that is a mandate, nor is it a price, that 
consumers should be forced to bear. I think certainly we should 
encourage competition, and I think this amendment does this.
  This amendment requires the FCC to assure that set-top boxes used by 
consumers to access cable programming are available in a competitive 
market. This amendment also continues to recognize the legitimate 
interest of cable operators in ensuring the delivery of cable services 
only to those consumers which have paid for them.
  Present technology, however, can ensure the integrity and safety of 
cable operators' signals without requiring delivery of set-top boxes 
only through the cable company.
  In fact, the Electronic Industries Association has developed a draft 
standard for security cards, similar to credit cards, that could be 
inserted into set-top boxes by cable companies to protect their system, 
while allowing consumers to use a commercially-sold set-top box.
  I think it is important to mention this issue because I know that 
cable companies were concerned about providing safeguards for their own 
signals. And this legislation provides for that, takes that into 
account. Under the amendment the FCC has the responsibility and 
obligation to consider the legitimate needs of owners and distributors 
of cable programming to ensure system and signal security, and to 
prevent theft of programming or services.
  It is interesting to look back on telephones prior to the 
deregulatory environment, specifically, think back to 1978--to give an 
example of how much costs have dramatically changed in telephone 
services, back in 1978, it cost $8.10 a month to rent a touch-tone 
telephone from AT&T--a noncompetitive rental that would cost about 
$18.60 in 1994 dollars, plus the touch-tone and extension fees. As you 
know, the AT&T monopoly was broken up back in 1984. With that decision, 
the non-competitive telephone rental market was concluded.
  In today's competitive market, a similar phone can be purchased for 
less than twenty dollars--about the same cost as a monthly rental from 
AT&T would have cost in today's dollars. In 1983, it cost $3.03 to rent 
a standard black telephone--$4.63 in 1994 dollars. Later that same 
year, when AT&T customers were allowed to buy the phones already in 
their homes, the very same phone could be purchased for $19.95.
  We have learned that competition did not threaten the security of the 
phone networks, and consumers benefited from technological innovations, 
lower prices, and expanded choice. So I think that a ``yes'' vote on 
Senator Cohen's amendment will bring competition to the market for set-
top boxes, I think, benefiting consumers all across America. I think 
the case has been made absolutely clear. I urge a ``yes'' vote for 
consumer choice and improved competition.
  I yield the floor, Mr. President.
  Mr. PRESSLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Dakota is recognized.
  [[Page S7993]]
  
  Mr. PRESSLER. Mr. President, I must rise in opposition to this 
amendment. But I do want to praise Senator Cohen, Senator Snowe, and 
others who have worked on this, and who have done a good job of trying 
to find a solution.
  I know that the intention of the amendment is to permit unbundling of 
cable boxes so that vendors other than cable companies can offer them.
  While it is a good concept, the amendment is faulty.
  Consumers should be able to obtain their set top boxes from vendors 
other than their cable provider. However, urging the FCC to step in to 
find a solution may not be the right way to proceed.
  This amendment is drafted in such a way that I cannot imagine the FCC 
reacting in any other way but to try to issue standards governing set 
top boxes.
  Standards should be set by industry. And, I understand that there has 
been difficulty in getting cooperation from industry in establishing 
standards. A uniform standard would make it easy for vendors and 
manufacturers who wish to get into the business. However, there is no 
uniform standard among the nation's cable operators.
  Cable is going to have to change. Competition will force change. DBS 
has licensed several satellite dish providers, and the cost of DBS will 
continue to decline. The percentage of DBS will increase, and cable 
will have to compete to keep its customers.
  There simply is no need for Congress to mandate further FCC studies 
or regulations on the subject of set-top boxes. The proposed amendment 
on set-top boxes is not sound for a number of reasons, including: The 
retail sale of cable descramblers could increase cable theft; increased 
cable theft will raise costs for cable systems and customers; 
widespread cable theft will surely discourage increased investment in 
cable programming and cable distribution facilities.
  The proposed amendment is premised on the following four myths:
  Myth 1: Cable boxes are no longer necessary to secure video 
programming.
  Myth 2: The use of new digital technologies with replaceable ``smart 
cards'' will solve cable's security concerns.
  Myth 3: Cable boxes are like telephones.
  Myth 4: Retail availability of cable boxes will reduce prices to 
consumers.
  Decoder boxes in homes are the only viable form of security for video 
service. While there are other ways to secure a program service, all of 
the known techniques have problems that make them useful only in 
limited circumstances. For example, negative traps cannot be used with 
multiple pay services without interfering with the signal quality of 
other programs delivered. Interdiction technology is costly and not 
totally reliable.
  Since cable theft raises the cost of doing business for cable systems 
and, ultimately, cable consumers, product security is essential to the 
economic well-being of cable operators, cable consumers, and program 
networks. In addition, product security is vital for continued 
investment in cable programming and cable distribution systems.
  Theft of cable service is a multi-billion dollar problem today. The 
retail sale of cable descramblers and would increase cable signal theft 
significantly. A person with a desire to modify cable boxes would be 
able to purchase any number of them at retail, modify them to illegally 
receive encrypted services, and then resell them to others at whatever 
cost the market would bear.
  Signals protected by digital techniques are not immune to attack. The 
security of other television services that have depended on digital 
techniques and smart cards have been quickly compromised. Indeed, such 
security systems used by program providers in Europe were broken within 
months of their deployment.
  Proponents of set-top box legislation argue that even if system 
security is breached, the smart card can be changed. The problem for 
both consumers and cable operators is the expense of such a scheme: 
Smart cards cost $30-$40 apiece. Sending out new cards to all customers 
every time signal security is breached would become a prohibitive 
recurring cost.
  Telephone architecture and cable architecture are radically 
different. The telephone instrument itself does not grant consumers 
access to the services being sold by the telephone company. The 
telephone set is merely the instrument that consumers need to use the 
network. Access to telephone services is provided by a line that 
connects consumers to the telephone company's central office. In order 
to prevent consumers from using a service, such as dial tone, the 
telephone industry physically disconnects the consumer's wire at the 
central office.
 Consumers cannot steal the service.

  Cable companies, however, must protect their services at the 
consumer's home, since the signals of all program services are present 
at all times in the cable system's distribution system.
  Cable operators scramble or encrypt program signals to prevent their 
unauthorized reception. Access to the encrypted product which is 
present in every home is given only to consumers who have purchased it 
by providing a set-top box containing the appropriate descrambling 
circuitry.
  Even telephone companies entering the video-delivery business have 
recognized that the most efficient way to deliver a video to consumers 
is to replicate cable television architecture, and they are deploying 
that approach in their new distribution networks.
  Current law requires cable operators to provide decoders and 
descramblers to consumers at cost. S. 652 does not change existing law. 
The retail cost of a descrambler is 10 times higher than the annual 
rental fee consumers now pay.
  Cable companies deploy new set-top technology every 5 to 7 years. 
This obsolescence cost is far less for a consumer paying an annual 
rental fee based on actual cost than for consumers at retail.
  Cable companies utilize different scrambling technologies from market 
to market, requiring cable boxes to be franchise specific. Consumers 
moving from one franchise area to another pay far less by renting their 
set-top equipment than by purchasing new boxes at retail.
  For all the reasons I have mentioned, we do not need to place yet 
another requirement on this industry, particularly one which harms both 
paying customers and cable operators.
  Therefore, I oppose the amendment.
  Mr. COHEN. Mr. President, let me take this opportunity to add a few 
comments.
  First, let me add my distinguished colleague, Senator Thurmond, as a 
cosponsor to the amendment.
  Let me try to respond briefly to the comments that have been made. It 
seems to me these are the very same arguments that AT&T made 30 years 
ago: ``If you do not allow us to control the phone, we will lose our 
signal. We will have people who will be getting access to our telephone 
service without paying for it.''
  The objective of this amendment is to make sure the FCC calls upon 
the private sector to develop the standard that will protect the cable 
signal. I do not want to see the cable companies lose the benefit of 
programming and the costs of doing business by having people engage in 
thievery. What we want to do is make sure that they are, in fact, 
protected. That is precisely the wording and the intent of the language 
of the amendment.
  The Senator from South Dakota said competition will force change. But 
that is the problem. There is no competition in the set-top box market; 
there is a monopoly. We want to have competition. We want to force 
change. We want to have 10 different types of boxes or whatever other 
devices might be developed in the future, and not grant a monopoly to 
any one of the cable companies.
  Yes, competition does force change. We have seen it in virtually 
every aspect of our lives, from the telephones, the VCR, to the 
computers, to everything. We go to Circuit City, Radio Shack, any of 
these major malls, and we see an absolute abundance of electronic 
devices by virtue of having a free market.
  There is no free market today with set-top boxes. Take, for example, 
one cable company in Arlington, VA. Here is what they say in their 
``Policies and Procedures'':

       Please remember . . . that channel selector boxes with 
     descrambling capability can only [[Page S7994]] be obtained 
     from Cable TV Arlington. In fact, should you see 
     advertisements for cable equipment that have descramblers in 
     them (so-called ``pirate boxes'' or ``black boxes'') you 
     should understand these devices are illegal to sell or to 
     use, unless authorized by CTA [Cable TV Arlington]. Because 
     of the need to protect our scrambled services, Cable TV 
     Arlington will not authorize the use of any descrambler not 
     provided by CTA. CTA does not recommend purchasing channel 
     selector boxes from other sources.

  Companies say ``Rent our boxes.'' People cannot buy them.
  If you have more competition, you obviously will have greater 
consumer choice. You will have more manufacturers. You will have 
diversity. You will have quality, as well.
  Our amendment has a security provision, and for those who are 
concerned about whether the FCC is now going to interject itself and 
take over, we have also added a sunset provision. I do not want to see 
the FCC have long-range regulatory authority. But we are talking about 
breaking up the monopoly by saying the FCC shall go to the private 
sector, give them enough time to develop a standard, and if they do not 
develop a standard, propose a temporary standard. And it is temporary 
under this legislation as drafted.
  Who supports this, Mr. President? Well, I have a letter here from the 
Information Technology Industry Council [ITI]. I will have it printed 
for the Record.
  We also have the support of the Cellular Telecommunications Industry 
Association [CTIA]. They were originally concerned with the bundling 
provision in my earlier legislation. Because of this concern, I deleted 
the bundling provision in the amendment. So they are now in support and 
do not oppose the amendment.
  Who is opposed to it? Obviously, the cable companies are opposed to 
it. They are the ones who are saying no; we like having this monopoly. 
We want to control the boxes. We want to rent them. We do not have to 
worry about competition. We do not have to worry about it at all.
  The companies, obviously, who manufacture the boxes like going to a 
couple of cable companies and saying, ``Here is our product.'' They do 
not want to be forced to engage in competition for the manufacture of 
these devices, be they boxes or some other type of device that the 
future will show us.
  I think we have also addressed the issue of security. We have 
addressed the issue of limited FCC regulatory power by saying it is 
only temporary. The core of this amendment is more competition, lower 
prices, better quality, and more choice.
  Mr. President, I make these comments on behalf of many of my 
colleagues who have served on the Judiciary Committee, as well. Perhaps 
they will be coming to the floor before debate is concluded.
  The notion that somehow we have to be concerned that if we allow any 
competition, this will actually increase the theft of cable signals, I 
think is precisely the same argument that was made by the telephone 
industry 30 years ago.
  I think we have come a long way since then by virtue of competition. 
The consumer certainly has benefited. I think that this is precisely 
what needs to be done with this area of telecommunications that is now 
controlled by monopolies.
  I reserve the balance of my time.
  Mr. President, I ask unanimous consent to have printed in the Record 
the material previously mentioned.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                            Information Technology


                                             Industry Council,

                                                     June 8, 1995.
     Hon. William S. Cohen,
     U.S. Senate,
     Washington, DC 20510.
       Dear Bill: ITI, the Information Technology Industry 
     Council, supports your amendment to S. 652 that would enhance 
     the competitive availability of equipment used to access 
     multichannel video programming services. Competitive markets 
     for these devices, like the one in which the computer 
     industry has thrived, will benefit consumers and industry 
     alike.
       ITI represents the leading U.S. providers of information 
     technology products and services. Our members had worldwide 
     revenue of $227 billion in 1994 and employ more than one 
     million people in the United States. It is our member 
     companies that are providing much of the hardware, software, 
     and services that are making the ``information superhighway'' 
     a reality.
       We have been working with Kelly Metcalf of your staff over 
     the last several weeks and believe that, as modified, the 
     proposed amendment will improve consumer choice and stimulate 
     competition and innovation in the market for the converter 
     boxes and other devices that consumers will use to access 
     video and other services provided by video programmers. This 
     will ensure that consumers of multichannel video services--
     whether provided by cable systems, direct broadcast 
     satellite, video dialtone networks, or other means--will be 
     able to purchase equipment necessary to receive programming 
     and services separately from the video services. This will 
     allow independent manufacturers and retailers, who have no 
     relationship to the service provider, to offer such equipment 
     directly to consumers.
       We appreciate your leadership and your willingness to work 
     with us to address our concerns on earlier versions of the 
     amendment.
           Sincerely,
                                                     Rhett Dawson,
     President.
                                                                    ____

                                       Cellular Telecommunications


                                         Industry Association,

                                     Washington, DC, June 8, 1995.
     Hon. William S. Cohen,
     U.S. Senator,
     Washington, DC.
       Dear Senator Cohen: The wireless industry, through CTIA, 
     has worked closely with you and your very capable 
     professional staff regarding concerns of the commercial 
     mobile service industry about restrictions and regulations 
     being considered which would affect the industry's 
     competitive and highly diverse marketing and distribution 
     channels for mobile telecommunications equipment and 
     services.
       We are pleased that the amendment which you have offered 
     does not affect the commercial mobile radio services 
     equipment market, nor impose additional regulatory 
     restrictions which would slow or deter the current ability of 
     existing and new CMRS competitors, as well as retailers and 
     manufacturers, to aggressively market mobile equipment and 
     services to consumers from numerous outlets, including 
     national, regional and local retailers, specialty stores and 
     dealer stores.
       The wireless industry appreciates the concerns that you 
     have expressed about some aspects of the telecommunications 
     equipment marketplace and we thank you for narrowing the 
     scope of your amendment to address those legitimate concerns.
           Very truly yours,
                                                Thomas E. Wheeler,
                                                    President/CEO.

  Mr. KERREY. Mr. President, I would like 10 minutes to speak in favor 
of the Cohen amendment.
  Mr. COHEN. I yield 10 minutes to the Senator from Nebraska.
  Mr. KERREY. Mr. President, I have viewed the amendment and the 
company documents and listened to the Senator from Maine. I must say, 
he is entirely consistent with what this legislation, at its best, 
proves in a couple of ways. We will have the opportunity to discuss and 
debate this later.
  It says that if consumers have a competitive choice--and by that, I 
mean that if I do not like what I got, I go someplace else.
  The distinguished occupant of the chair has been in business and 
understands what choice is. If you have a product that your customer 
wants to buy, your customer buys it. If you do not, if the price or 
quality is wrong, he goes somewhere else. And in that kind of 
environment it tends to focus the mind. It tends to say to you, ``I 
better figure it out and give that customer the right price.''
  The customer says to me, ``I do not like black, I like blue, and if 
you do not give me blue, I will go down the road here where they are 
manufacturing it in blue.'' That is the kind of competitive choice that 
produces the kind of quality and the kind of choices that in fact we 
have seen in other sectors of our economy and that we are trying to do 
with this particular piece of legislation.
  I understand the opposition to it. I understand certain sectors of 
the industry are worried about what is going to happen in a competitive 
environment. But let us not say to our citizens, as we are going 
through this debate as we are, that we are going to try to use 
competition to give you something that you currently do not have right 
now and then kind of pull back, which is what we would do if we do not 
accept this amendment, in my judgment.
  I understand there are some concerns about what sort of impact this 
might have upon rural cable or smaller cable operators. I am prepared 
to surface that kind of concern. We just did that, in fact, with the 
Snowe-Rockefeller amendment in education. [[Page S7995]] 
  If you have a particular problem where somebody is not able to 
survive, if you can make a good case where there ought to be some 
direct subsidy to enable them to survive, let us do it. But let us not 
take the entire sector, this piece of the electronics market, and shut 
down development of it, which in my judgment we are about to do unless 
we allow competitive choice to occur as we again are trying to produce 
a piece of legislation that pretends to be in favor of competition as a 
way to make the U.S. economy and this sector of our economy not only 
more productive but satisfy the needs of the consumers at the other 
end.
  As I said in some earlier comments--and I will try not to run beyond 
my 10 minutes; you can hammer me down when I have gotten to the end 
point--on previous occasions, this piece of legislation we are 
considering, S. 652, is not a small bill. It is a big bill. It is going 
to have a major impact on every household in America.
  From my experience with the divestiture in 1984, I remember for the 
first 2 or 3 years people were not happy. They were upset. They did not 
like all the choice. They were confused about it. We have to make sure, 
if there is a philosophy here that we believe will produce lower prices 
and higher quality, we have to be sure we will stick with it. But if we 
do not stick with it, what is going to happen is you are going to 
continue to have artificial separations that make it difficult for 
those entrepreneurs to come to our households and say, ``I am prepared 
to sell you a packaged service. Here is my price and what I will give 
you. And if you do not like it, there are lots of other people who will 
come here and try to nail down your business.''
  That is the environment we are trying to create, and if we do not 
create it, consumers will say to us, our citizens will say to us as 
consumers, that we have gotten a good deal out of this thing. It has 
been good for us.
  If we preserve any sort of monopoly out of concern, ``I am not sure 
what is going to happen here, maybe I better hedge my bet a little 
bit,'' it seems to me we are going to find ourselves wondering why we 
supported this legislation.
  I make it clear, even with this amendment adopted, I need to have 
some additional changes in this before this bill is going to get my 
support. But this particular amendment is entirely consistent with what 
I think this legislation needs to do before we enact it.
  Mr. LEAHY. Mr. President, I join as a cosponsor of this amendment and 
commend my colleagues for their leadership. Just last year, Senator 
Thurmond and I proposed an amendment along the same lines to promote 
consumer availability of converter boxes. We were delighted when our 
colleagues from Maine took up the fight and previously noted our 
support when they appeared before the Antitrust Subcommittee earlier 
this year.
  This amendment seeks to encourage consumer options and competition. 
It uses regulatory authority only as a last resort when competition is 
not working, when consumer choice is not available, and where the 
private sector and the marketplace fail to develop standards that 
ensure competition. It is, of course, our hope that this regulatory 
authority never need be exercised.
  Mr. HELMS. Mr. President, the pending amendment requires the Federal 
Government to jump in and set standards for technology and this will 
have a chilling effect on new technologies. Not only that it will 
compromise the security devices used in cable TV that enable parents to 
protect their children from indecent and violent programming on 
television. Allowing the FCC to set standards for technologies will 
have an adverse impact on new technologies being developed.
  Mr. President, in order to protect their services, cable television 
operators have used increasingly sophisticated and cost-effective 
methods to secure that signals against theft. Current technology does 
this by including the security devices in a converter placed on or near 
the television set.
  Security for these programs is essential for parents who wish to 
protect their children from the deluge of violent and explicitly sexual 
material so regrettably abundant on many cable channels. If the FCC, 
for whatever reason, sets a weak or easily compromised standard, it 
will be much easier for our children to gain access to trashy and 
violent programming.
  Let me state for the record a few examples of the type programs to 
which children may gain access: HBO's program (called ``Real Sex'') in 
which a former porn state describes sexual acts and how men can dress 
like women: and the Playboy Channel, the X-rated movies on pay-per-view 
channels, and the violent R-rated movies.
  Concerns over the lack of security are very real: the cable 
television industry is already experiencing a significant level of 
theft of service-approaching 15 percent in the largest systems. This 
cost cable operators and owners of intellectual property an estimated 
$4.7 billion per year. Satellite television was victim to theft of 
service rates in the late 1980's which approached 65 percent of the 
market.
  This amendment would turn over to Federal bureaucrats the 
responsibility for making the determination as to how much security is 
adequate. That determination will be binding on owners of intellectual 
property and network providers. This obviously is unacceptable.
  The Federal Government should not be charged with setting the 
standards for technology. Standard setting for technology belongs in 
the hands of those in the private sector who have the expertise and the 
incentive to protect intellectual property.
  A national and uniform security standard actually facilities theft by 
giving criminals a single target; it also stifles the necessary 
innovation for security to stay ahead of high-technology hackers.
  Mr. President, I am unalterably persuaded that property owners, and 
those acting for them, should have the right and responsibility to 
determine the level and method of security appropriate for their needs. 
That is clearly an economic business decision--not a matter for 
bureaucrats determination.
  We must let new technologies develop to preserve security, experience 
the development of increased retail availability of equipment and avoid 
the consequences of the law of unintended results that usually 
accompanies regulation.
  The Cohen amendment should be rejected.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. Mr. President, I wonder if the Senator from Maine would 
allow us, within the unanimous consent agreement, to go to the 
managers' amendment that we have worked out and we wish to have agreed 
to. We are not going to change anything here. This will take about 5 
minutes at the most.
  Mr. COHEN. I have no objection.
  Mr. PRESSLER. For the information of everybody, we will stick with 
the 7:30 vote. There is no change. There are more amendments to this 
and other speakers are welcome to come to the floor.
  Mr. FORD. Mr. President, could the Senator refrain for just a moment?
  It is all right, Mr. President.
  Mr. COHEN. I assume it will take about 5 minutes after the time?
  Mr. PRESSLER. Yes. It will take no more than 5 minutes.
  Mr. HOLLINGS. Mr. President, this is a managers' amendment. We worked 
it out on both sides and we think this is a good use of time. We have 
been looking for the opportunity. We cleared it with those Senators. I 
yield.
  Mr. PRESSLER. Mr. President, I ask unanimous consent to set aside the 
Cohen amendment for no more than 5 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                   Modification to Amendment No. 1258

  Mr. PRESSLER. Mr. President, I call for the regular order with 
respect to amendment No. 1258. This is a modification of the managers' 
amendment.
  I send to the desk a modification of our amendment, the amendment of 
Senator Hollings and I, and ask the amendment be modified accordingly.
  The PRESIDING OFFICER. The amendment is so modified.
  The modification is as follows:

       On page 7 of the amendment, beginning with line 22, strike 
     through line 4 on page 8 of the amendment and insert the 
     following:
       ``(1) Registered public utility holding company.--A 
     registered company may provide telecommunications services 
     only [[Page S7996]] through a separate subsidiary company 
     that is not a public utility company.
       ``(2) Other utility companies.--Each State shall determine 
     whether a holding company subject to its jurisdiction--
       ``(A) that is not a registered holding company, and
       ``(B) that provides telecommunications service,

     is required to provide that service through a separate 
     subsidiary company.
       ``(3) Savings provision.--Nothing in this subsection or the 
     Telecommunications Act of 1995 prohibits a public utility 
     company from engaging in any activity in which it is legally 
     engaged on the date of enactment of the Telecommunications 
     Act of 1995; provided it complies with the terms of any 
     applicable authorizations.
       ``(4) Definitions.--For purposes of this subsection, the 
     terms `public utility company', `associate company', `holding 
     company', `subsidiary company', `registered holding company', 
     and `State commission' have the same meaning as they have in 
     section 2 of the Public Utility Holding Company Act of 
     1935.''.
       On page 8 of the amendment, between lines 5 and 6, insert 
     the following:
       On page 36, line 13, strike ``within 9 months'' and insert 
     ``not later than one year''.
       On page 18 of the amendment, between lines 10 and 11, 
     insert the following:
       On page 74, line 1, strike ``(2) SEC jurisdiction 
     limited.--'' and insert ``(2) Removal of SEC jurisdiction.--
     ''.
       On page 18 of the amendment line 12, before the period 
     insert the following: ``and insert `to grant any 
     authorization'''.
       On page 18 of the amendment, between lines 17 and 18, 
     insert the following:
       On page 74, line 12, strike ``contracts.'' and insert 
     ``contracts, and any authority over audits or access to books 
     and records.''.
       On page 19 of the amendment, between lines 3 and 4, insert 
     the following:
       (4) Commission rules.--The Commission shall consider and 
     adopt, as necessary, rules to protect the customers of a 
     public utility company that is a subsidiary company of a 
     registered holding company against potential detriment from 
     the telecommunications activities of any other subsidiary of 
     such registered holding company.
       On page 22 of the amendment, beginning with ``The'' on line 
     23, strike through line 24.
       On page 13 of the amendment strike lines 14 through 17 and 
     insert the following: ``is amended by adding at the end the 
     following:''
       On page 13 of the amendment, line 25, insert closing 
     quotation marks and a period at the end.
       On page 14 of the amendment, strike lines 1 through 3.
       On page 9 of the amendment, line 24, strike ``120 days'' 
     and insert ``180 days''.
       On page 7 of the amendment, line 9, before the period 
     insert ``so long as the costs are appropriately allocated''.

  Mr. PRESSLER. Mr. President, these modifications represent minor and 
technical changes in the public utility company provisions, preserve 
current law regarding the sunset provision of section 628 of the 
Communications Act of 1934, and extend the period for certain market 
opportunity determinations from 120 days to 180 days.
  Mr. President, following the remarks of my colleague, I urge the 
adoption of the amendment.
  Mr. HOLLINGS. Mr. President, it has been cleared on this side. I join 
the Senator from South Dakota.
  THE PRESIDING OFFICER. If there be no further debate, the question is 
on agreeing to the amendment.
  The amendment (No. 1258), as modified, was agreed to.
  Mr. HOLLINGS. Mr. President, I move to reconsider the vote.
  Mr. PRESSLER. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. PRESSLER. Mr. President, I ask unanimous consent the amendments 
included in the managers' amendment be treated as original text for 
purposes of further amendment during the consideration of the bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY. This manager's amendment allows the FCC to modify those 
provisions of the modified final judgment (MFJ) that are not overridden 
or superseded by the bill. Does this provision of the Manager's 
amendment allow the FCC to change the provisions regarding the entry of 
the Bell operating companies into long distance or manufacturing?
  Mr. PRESSLER. No. The amendment is intended, to allow the FCC to 
modify those provisions of the MFJ that this legislation would not 
modify or supersede.
  Mr. KERREY. The manager's amendment changes the definition of 
``telecommunications service'' by deleting a sentence concerning the 
transmission of information services and cable services. My question is 
whether the deletion of this sentence will affect the scope of many of 
the bill's substantive provisions.
  For example, section 254(a) preempts State entry restrictions on the 
provision of ``telecommunications services.'' Does the new definition 
mean that States would be allowed to restrict entry into the business 
of transporting information services?
  Section 254(b) ensures that States can preserve universal service for 
``telecommunications services.'' Does the new definition mean that 
States could not preserve universal service for the transmission of any 
information services?
  The bill provides detailed requirements that must be satisfied before 
the Bell companies may offer interLATA ``telecommunications services.'' 
Does the deletion of that sentence mean that the Bell companies may 
provide interLATA transmission of information services without 
complying with the requirements of this legislation?
  Mr. PRESSLER. The answer to each of those questions is ``no''.

       The deletion of this sentence is intended to clarify that 
     the carriers of broadcast and cable services are not intended 
     to be classified as common carriers under the Communication 
     Act to the extent they provide broadcast services or cable 
     services.
                           Amendment No. 1263

  Mr. PRESSLER. Mr. President, I now move to go back to the Cohen 
amendment. I say to Senators, a vote has been set for 7:30. Any 
Senators wishing to speak on this amendment or on the bill, I invite 
them to the floor, if that is agreeable with the Senator from Maine.
  I do have some closing, about 5 minutes of closing remarks on the 
Cohen amendment, but I will hold those over for a bit.
  Mr. FORD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. FORD. Who controls the time in opposition?
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. Mr. President, I yield as much time as the Senator from 
Kentucky wishes.
  Mr. FORD. I do not want very much. I rise more in being inquisitive 
here rather than being in opposition to the amendment.
  I understand what my friend from Nebraska says about competition. You 
come in the front door with a piece of equipment and you offer it for a 
certain price and if that is a little too high, there is always 
somebody else who will knock on the door and sell you something 
different.
  Not many people go out in rural areas and drive 5 miles from customer 
to customer. They like to stay in town where you have houses and lots 
and there are 15 customers on one block rather than two customers in 15 
miles.
  My rural cable people are very concerned about this particular 
amendment, and I will tell you why. One, they are not sure what this 
will do to the small cable operator who would have maybe 250 or 500 
customers, maybe 1,000, in a rural area. Will they be able to 
accommodate? Can they get the accommodation? Will they be able to carry 
things that will not be unscrambled through the boxes? Of course, our 
friend who promotes this amendment says everything is protected; there 
are temporary rules. Temporary rules that go into permanent rules? How 
soon will that be done? I have a lot of concern for the little people, 
particularly in rural areas.
  There must be something special from all these technology groups. 
They must make the boxes and they want to manufacture them and sell 
them. I do not blame them.
  I hate for me to be the vehicle to help them sell their products. I 
think they ought to be competitive, and if they have a better product, 
they can sell to the cable companies, if that is what is in it. But I 
am going to be concerned about my rural area and, somehow, I think if 
we could have a short study period here, perhaps we could eliminate 
their fears. Because, if the small rural cable operator cannot make it 
and then he has a financial problem and he is being pressured by the 
larger cable companies to buy him out, we find there will be less and 
less competition in the cable community than there is now out there. 
And the struggling small cable operator, I think, is 
[[Page S7997]] getting in trouble more and more all the time. They are 
not concerned; they are frightened.
  They are not concerned; they are frightened. When you talk to them 
about having to borrow money to enlarge to try to keep up with the new 
technology and with the new rules, all of that, it becomes almost 
unbearable weight; to hire lawyers, to do all these things, and the 
expense is just almost unbearable weight.
  I hope that Senators will look at this and have a study. I do not 
want a long study. I just want somebody to look at it and to convince 
the small cable operators that this is a good thing for them, that they 
will not be hurt, that they will be able to have--not many small 
communities have Radio Shacks. They may have a Wal-Mart about 15 or 20 
miles away they can drive to, but they are not going to have a Radio 
Shack or Electric Avenue or all of these things right close by.
  So, Mr. President, I am expressing some frustration as it relates to 
what we do to the small operator, the small entrepreneur. Let us put 
his life into it. And he is still struggling to be in competition with 
the major that is knocking on his door every day saying, ``You cannot 
make it fellow. Let us take it over.''
  I would want the Senator from Maine, if he could--he is a smart 
individual and is a good word merchant--if there might be some way that 
we could have a short period of study that would maybe just apply to 
small cable operators and not major ones. I hear they are going to have 
a credit card. Just stick it in the box, punch it, and you get your 
program. Not many out in the rural areas are going to have a box you 
can put a credit card in, punch it, pull it out, and you will get 
certain programs. It will be very difficult for them to do.
  I am here trying to protect the small operator in my rural 
constituency, and I hope I will not have to oppose this amendment. I 
hope we can have some sort of a study as it relates to really finding 
out whether all of these things are possible, all of these things are 
doable, this competition is going to be out there, and that everything 
is going to be great. If you can convince my small operators or me, I 
would be more than willing to be an advocate of this amendment. But I 
was always brought up believing when in doubt, do not. I am in doubt 
about what this does to my small cable operators.
  Mr. President, I hope that we will give serious consideration to a 
study. I do not want a long one, but at least a period of time to be 
sure that my small cable operators will not be damaged in their 
operation and that their financial future will not be jeopardized 
because of this.
  To go back to Abraham Lincoln, who said, ``When progress is made 
somebody gets hurt.'' That is when Abraham Lincoln was defending the 
railroads against the barge and ferry operators when trying to build a 
bridge across the Missouri River. The railroad won and it hurt the 
ferry operators and the barge operators. So Mr. Lincoln said, ``When 
progress is made somebody gets hurt.''
  I am trying to prevent the hurt here. I have not been convinced that 
this will not hurt my small operators.
  I yield the floor. I thank the Senator for giving the time.
  Mr. PRESSLER. Mr. President, I think the goal of the Senator from 
Maine is very laudable, and I also believe we have to jog a little the 
cable industry to set a standard because they have been very slow to do 
so. I think the cable industry needs to get the message that we want 
better action from them in setting the standards. But when I get to 
boiling down to my concern about this amendment, it is that it says, 
``The commission shall, after notice and opportunity for public 
comment, adopt regulations to ensure the competitive availability of * 
* * convertible boxes, subscribers, and services of multi-channel video 
programs and distributors from manufacturers,'' et cetera. The part 
that worries me is that the ``commission shall adopt regulations.''
  I am concerned that this might lock technology in. I fear it may be 
likely that the industry will not adopt a common standard in a timely 
fashion, thus involving potential standard setting by the FCC. The 
standards created by a Government entity may result in technology being 
locked in place which could result in stifling innovation. If the 
computer industry had been subject to a similar legislative mandate 
when interoperability was a real problem for early users of personal 
computers, I doubt our industry would be as competitive as it is today. 
After all, what is the top box but a small computer. If we have a 
standard developed by the FCC for these boxes, I think we will not have 
the future improvements and innovations that could occur if we simply 
leave the standard setting to the industry.
  I cite the innovations that we have had in computers where there has 
not been a standard set by Government and innovation has gone forward 
very quickly. On the other hand, I would jawbone the cable industry 
very much to set a private standard so there could be more competitors.
  Mr. President, this concludes my remarks on this particular 
amendment. I am sure there are other speakers. We have from now until 
7:30, depending on Senators coming to the floor, but we are open for 
opening statements or statements on this or any other part of the bill.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. PRESSLER. I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. KERREY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY. Mr. President, the Senator from North Carolina is getting 
ready to speak.
  I yield the floor.
  Mr. FAIRCLOTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mr. FAIRCLOTH. Thank you, Mr. President.
  Mr. President, in the June 2, 1995 edition of the Washington Times, 
there appeared a front page article which was another reminder of the 
serious problem of theft of intellectual property. The article makes 
reference to the extraordinary efforts to which signal thieves have 
gone to steal programming carried by cable television systems, such as 
movies and special programs. They obtain cable television converters, 
normally through illegal means, modify them to compromise the security, 
and then sell them to either knowing or unwitting consumers so that 
they can steal the programming.
  Indeed, in a recent article reported in the February 20, 1995 edition 
of MultiChannel News that these signal thieves are increasingly 
resorting to armed robbery to obtain these boxes.
  Mr. President, as both articles point out, this theft is a crime. It 
is viewed very seriously by Federal law enforcement officials because, 
left unchecked, such theft could undermine our national 
telecommunications networks. Let us not forget that, in the late 
1980's, theft of satellite service almost destroyed that industry.
  Mr. President, given the high value placed on this equipment by these 
thieves, I am very concerned about the amendment offered by the 
distinguished Senator from Maine, to make such equipment available at 
retail. Aside from the fact that the proposal would put the FCC right 
in the middle of setting standards and designing equipment for advanced 
digital technologies, this proposal fails to adequately address the 
problem of these signal thieves.
  The current situation is that the limited numbers of warehouses where 
these cable television security boxes are kept are a major target for 
these signal
 thieves. Here you have a situation where the equipment is considered 
so valuable that signal thieves are risking armed robbery to obtain it. 
Can you imagine how much worse the situation would become if that 
equipment were widely available at retail? Under these circumstances, 
it would become virtually impossible to keep it out of the hands of 
signal thieves.

  Let us not forget that these thieves are not stealing these security 
boxes so that they can display them on their fireplace mantles. They 
are using them to steal programming. The more easily 
[[Page S7998]] they can be obtained, particularly in quantities, the 
faster and cheaper it is for these signal thieves to mass produce 
modified boxes to steal programming.
  Mr. President, I sympathize with the goal of the Cohen amendment. But 
I think that the approach taken is fatally flawed. It rests on the 
assumption that the Government can know that some security technique, 
like smart cards, can be used to facilitate retail sale. I do not know 
that to be true. Not even the experts at the FCC can know that to be 
true.
  Yet the principle which underlies the amendment is that the 
Government can and will make the determination as to how much security 
is adequate. That determination will become binding on owners of 
intellectual property and network providers. This is not acceptable.
  I believe that property owners and those acting for them should have 
the right to determine the level and method of security appropriate for 
their needs. That is an appropriate, economic business decision and not 
a matter for Government determination.
  Moreover, it is entirely consistent with the deregulatory goals of 
this legislation that the chairman has consistently and clearly 
advocated during the debate on the underlying legislation and this 
amendment in particular.
  This amendment is not proconsumer but it is proregulation. Therefore, 
I strongly urge that the pending amendment be defeated.
  Mr. President, I yield the floor.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER (Mr. Santorum). The Senator from Nebraska.
  Mr. COHEN. Mr. President, how much time remains?
  The PRESIDING OFFICER. Fifteen minutes. The other side has 13 minutes 
54 seconds.
  Mr. COHEN. This side has?
  The PRESIDING OFFICER. Fifteen minutes.
  Mr. COHEN. How much time does the Senator need?
  Mr. KERREY. I was actually going to ask the managers--I do not know--
if the opponents to this amendment were going to use all 13 minutes?
  Mr. HOLLINGS. No. The opponents have used time. Go right ahead.
  Mr. KERREY. Did the Senator want to respond?
  Mr. COHEN. I am just curious; the Senator is going to speak for the 
amendment or against it?
  Mr. KERREY. I am still speaking for the amendment.
  Mr. COHEN. All right. The Senator wants me to give him some time 
then.
  Mr. KERREY. I wish to speak more generally about the bill.
  Mr. HOLLINGS. I yield sufficient time to the Senator from Nebraska.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. I thank very much the Senator from South Carolina.
  Mr. President, this amendment is important, but I say to the Senators 
who will be perhaps watching, or the staffs who will be over the next 
30 minutes trying to figure out OK, what is going to happen next? Where 
are we in this piece of legislation? Remember, there are 9 sectors of 
the telecommunications industry, all directed to approximately 100 
million American households. That is where they do business. They are 
selling to commercial customers as well, but they are focused on those 
households, and that is where we are going to hear whether this 
legislation is successful or not. That is where, a year from now, a 
year and a half, 2 years from now, you are going to hear people say, 
you know, this really did work. You were telling us it was going to 
work. It did work.
  Nine sectors. I will run through them briefly again. Broadcasting is 
the big one, cable is one, telephone is one, Hollywood and music 
recording--that is music and the images--publishing is one, computers 
is one, consumer electronics, which is the subject of this particular 
amendment, wireless is one, and satellite is one.
  All nine of them, Mr. President, represent hundreds of billions of 
dollars' worth of sales into the American household on a constant 
basis. They are making judgments about what to purchase and what to 
buy. What has happened is that the technology has changed so that it is 
possible now for people to buy in a package, and what we are trying to 
do is give them real competitive choice.
  It is going to be traumatic. What we need to do is to say what is 
more important to us, the trauma faced by those consumers, those 
citizens in the households, or the trauma of businesses as they face 
competition for the first time in their business lives?
  Mr. President, not only does this amendment need to be adopted, but 
we need to change the underlying bill so that the Department of 
Justice, which has been the prime mover in this--I know that many of my 
colleagues on the other side of the aisle think the Department of 
Justice should be left out, with just a consultant role, if necessary. 
I really urge you to think about that. That is going to be the next 
order of business. The DOJ, the Department of Justice, is the one that 
started this in motion in 1948, in a consent decree, with the 
Department of Justice action against AT&T. That is what produced the 
competitive environment in long distance.
  If you hook the Department of Justice of that Republican 
administration to another Republican administration to a Democrat 
administration, they have consistently been the best advocates in this 
Nation's Capital for competition. They are the ones that said: Look, I 
know you want to own all the market. I understand what you are trying 
to do. But you cannot. We have to keep this competitive because not 
only will consumers benefit, but the economy will benefit as well.
  I understand people said oh, no, that is not going to work. I have 
talked to the companies about this. I know why they do not like it.
  The Department of Justice needs to be more than just a consultant in 
this thing. Otherwise, I tell you, Mr. President, my colleagues, I 
think you are going to regret this vote. You are not going to get the 
kind of vigorous competition that is needed in all of these sectors, in 
a package fashion, that is going to have our consumers say I was paying 
$120 a month for all of my information, all these things taken 
together, all nine of them, and now I am paying $80. This is terrific. 
This is working.
  Disregard, if possible, the companies that are coming in and saying, 
gee, I do not want to do it that way because this is going to be a 
better way.
  Think about those consumers in the households. Think about those 
individual families in the households. This amendment is going to look 
a lot better, the DOJ role is going to look a lot better under those 
circumstances.
  I suggest, Mr. President, that another particular portion of this 
legislation that says a local telephone company can buy a local cable 
company, we cannot allow that in the local area, because then you are 
only going to get one line to 75 percent of the homes.
  So I hope as we go through this thing colleagues will see that there 
is an intent with this legislation to produce a competitive environment 
about which, if we do it, the citizens we represent will say this did 
work; we are glad you provided that for us.
  It is not completely unregulated. It is not completely unfettered 
competition. The structure here that we are trying to produce allows 
competition to satisfy not just a public interest that we understand is 
still present but also a consumer interest.
  So once again I understand very much the concern raised by the 
distinguished Senator from Kentucky and perhaps there is some 
accommodation that can be made in the area of a study. I do not know. I 
certainly would not necessarily object to that, if the distinguished 
Senator from Maine could work it out. But I think we have to really 
make sure we understand that if competition is something we are going 
to use to reduce prices and increase quality, then we have to turn back 
some folks who are going to be coming to us, and I really think the 
toughest one of all is going to be the Department of Justice role. And 
I understand people are digging in on it, but I hope you do not dig in 
too much because you are the one who is going to have to live by this 
vote. You are the one who is going to have to explain whether this 
works or not.
  I would not be on the floor all day today and last night not feeling 
very strongly as I do. Unless we get this thing right, we are going to 
live to regret it.
[[Page S7999]]

  Mr. FORD. Will the Senator yield for a question?
  Mr. KERREY. I will be pleased to yield.
  Mr. FORD. After this amendment passes, how long does the Senator 
think it would take the companies to go to China and have these boxes 
made for practically nothing and come back over here and flood the area 
with them?
  Mr. KERREY. There is no question the distinguished Senator from 
Kentucky is raising a very legitimate concern. When we lift the 
restrictions on manufacturing in general, which we are doing in here--
and we heard earlier the distinguished Senator from Arizona coming down 
and saying that we finally got out of this domestic content stuff in 
there. That was there out of a concern we try to keep some of this 
manufacturing business in the United States. There is no question that 
is a legitimate concern.
  Mr. FORD. Not only, would I say to my friend, is my concern for the 
small cable operator. I would encourage those who are promoting this 
amendment to give us an opportunity to study it. All of a sudden we get 
this amendment out on the floor and people have an opportunity maybe to 
study it for a short period of time. Competition is great, but 
competition putting out a lot of cable operators, small entrepreneurs 
struggling for a long time, does not set very well with me, and I am 
sure it does not set very well with the Senator from Nebraska.
  Mr. KERREY. I am not the sponsor of the amendment. The distinguished 
Senator from Maine is. However, he would decide in that regard. I 
certainly would have no objection to what the Senator proposes.
  I yield the floor.
  Mr. COHEN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maine.
  Mr. COHEN. Mr. President, I ask unanimous consent that Senator 
Hutchison and Senator Leahy be added as cosponsors.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COHEN. Mr. President, I will respond briefly to the comments of 
the Senator from Kentucky.
  He mentioned that he is from a rural State. So am I. I do not know 
what the population of his State is, but we have little over 1 million 
people in the State of Maine. I used to be the mayor of the third 
largest city in Maine--38,000 people. So we have a rural population in 
my State as well.
  I doubt very much whether there are many States--no matter how 
rural--that do not have a Radio Shack or a Wal-Mart or a Sam's or some 
other major type of outlet in their States. That really is not the 
issue. If you live in a rural area and you do not have a Wal-Mart, 
Sam's, Circuit City, or Radio Shack, what you do is just keep renting 
your box from your cable company.
  That is all you have to do. You have a choice. You do not have to buy 
anything. You can continue to pay the rent for the box. Your small 
cable company rents the box to you, and you continue to pay the rent. 
If you get unhappy with it, you may decide you want to make the trip 12 
miles to buy another converter box.
  What I am saying is consumers cannot take that signal of the cable 
company and steal that signal by virtue of having access to the box. 
That was the purpose of having the private sector develop a standard 
whereby cable operators protect their signal.
  What the FCC does is turn to the private sector, just as they did 
with the phone jack. The standard for the telephone jack was developed 
by the private industry.
  That is what we are talking about here. If you are talking about 
theft, what do we tell Hewlett-Packard, Compaq, or IBM or any of the 
other major computer developers and manufacturers today? You know 
something, we have a big problem--hacking. We have hackers all over the 
country, all over the world. They can get into the computers at the 
Pentagon.
  The Senator from South Carolina knows about this. All the people who 
are here, the Senator from Kentucky and all of you, have had access to 
information. They can gain access to the computers in the Pentagon.
  What do we do? Shut down the computers? We said, ``No, let's do 
better. We have to develop better standards for protecting the signals, 
protecting the technology.'' That is what is going on in the private 
sector today. We all have been briefed on what is going on in the 
private sector, the kind of standards designed to prevent hackers from 
getting access.
  What is the largest growing market today? The direct satellite 
television. Do you think people are putting millions or billions of 
dollars into developing direct satellite television if they are worried 
that they cannot protect their signals?
  That is what is going on. The industry will develop the equipment to 
protect the signals. Why are you going to give cable companies, not 
mom-and-pop cable companies, major cable companies the opportunity to 
run a monopoly? For the small rural State that may have only one cable 
company and no marts where consumers can go to purchase a set-top box, 
there will be no problem. Consumers will just keep renting that same 
box.
  Mr. President, the Senator from South Dakota said that what we really 
have to do is jawbone the industry. The difficulty is the jawbone is 
not connected to the hip bone. They are not walking, they are not 
running, they are not doing anything.
  What they are doing is holding on to a monopoly, and they are saying, 
``Take our box or don't get any signal, period.'' What we are saying is 
here is an opportunity to put competition into the business so that 
people have a choice with lower prices and the cable company still 
protects its signal.
  Mr. President, that is why the Consumer Federation of America and the 
Consumers Union endorse this particular amendment. It is why ITI 
supports the amendment. They also support it because they see this as 
an opportunity to get more competition in the field that we are 
supposed to be trying to get competition in--telecommunications.
  I want to say to the Senator from Kentucky, I represent a small 
State, too. I have small cable companies. They are not particularly 
concerned they are going to be put out of business. Their signal is 
protected--maybe not well enough from somebody stealing the boxes. But 
the private sector will develop a standard to protect the signals.
  The FCC can adopt the standard, as they have with the telephone jack, 
to allow any individual to go into any store--rural, urban, big mall, 
little shop--to buy a telephone, to buy a VCR, to buy a computer, to 
buy an organizer. A standard ought to apply to the set-top box as well. 
That is what this amendment is designed to do, to allow the private 
sector to get into the business of lowering the prices for consumers so 
they do not have the consumer at the mercy of the cable operator 
saying, ``Take this box or else you get no signal. Rent this box or 
rent this telephone; you can't buy your own.''
  What we are saying is let us give the consumer a choice to buy a set-
top box or rent one, whether you live in an urban or rural State. I 
reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. Mr. President, we have approximately 15 minutes until 
the next rollcall vote. I believe all speakers have concluded. I urge 
Senators who wish to make statements on the bill to come to the floor.
  Mr. FORD. Mr. President, will the distinguished Senator from Maine 
answer a question for me, just one?
  Mr. COHEN. If I can.
  The PRESIDING OFFICER. Who yields time to the Senator from Kentucky?
  Mr. PRESSLER. I yield time.
  The PRESIDING OFFICER. The Senator from South Dakota yields time to 
the Senator from Kentucky.
  Mr. FORD. Am I correct in that if the television set is cable ready, 
you do not need the box?
  Mr. COHEN. That is correct.
  Mr. FORD. So most television sets are becoming cable ready. They may 
not go up to 98--they may be 60-some-odd, most of them. So, 
technically, the box is not used on a cable-ready television.
  Mr. COHEN. Right. Many, many homes, as you know, in the rural areas 
do not necessarily have the cable-ready type of television.
[[Page S8000]]

  Mr. FORD. As I recall, and the Senator might agree with me, we would 
allow only one charge under the cable bill, no matter how many TV sets 
you might have in your home. They used to charge you for each one, now 
they charge for one.
  Mr. COHEN. I correct myself. You may still need a set-top box, even 
though you have a cable-ready television set. That is what happened in 
southern Maine recently where a major company as a matter of fact, 
said, ``This box you have to rent. Even though you are currently 
getting our signal, this is something we are going to now prepare for 
the future in terms of interactive television and you must now rent 
this box, in order to get the signal you were getting previously 
through your television sets.''
  Mr. FORD. I wanted to clear up one thing with my friend from Maine. 
Time Warner withdrew that, and they no longer do that.
  Mr. COHEN. They withdrew it only after great protest was raised, 
precisely the problem when you have a company who can come in and say, 
``The signal you are getting now you have to pay more for it. Now it is 
roughly $3 more and you are going to get just precisely the same thing 
you were getting before.''
  Mr. FORD. That is no longer being done.
  Mr. COHEN. It does not prevent any other company in any other State 
from doing precisely the same thing.
  Mr. FORD. I understand that, Mr. President, and I say to my friend, 
with cable ready, I do not believe you need the box. I think he agrees 
with me that basically that is true.
  Mr. COHEN. No, because the--
  Mr. FORD. I am not sure the cable company can still scramble on a 
cable-ready. You cannot get HBO--it is scrambled--unless you pay for it 
and then they release that. The box is almost a moot question in some 
respects. But I still have the same concern I had earlier about the 
small cable operator.
  You have a rural State; I have a rural State. I remember the 
satellite dishes we put up, about $3,000 apiece, and then you had to go 
to the cable company and get it turned on. There are a lot of things 
going on. But progress has been made.
  Now FCC is not going to help build anything. They are not going to 
mandate anything, I understand, but you are going to set standards. I 
agree with the chairman, when you set standards, you limit the 
technology in a great many places, because as long as they meet the 
standards, they do not have to be competitive.
  We have 8 or 9 minutes we can have some debate with.
   But it is awfully hard for me to agree that the box is a problem, 
except in cases where the television set is not cable-ready. I believe 
what the Senator from North Carolina said a few minutes ago--it is 
setting up for a lot of theft as it relates to intellectual property.

  I hope this amendment will be defeated. But better than that, I wish 
the Senator from Maine would let us study it and convince us and be 
sure when he comes forward with this, that we all understand it. It 
could be a 3-month study, 6-month study, a 1-year study, or whatever it 
might be, so that we can come back and that study will be available, 
and then we can go forward with legislation and we can probably give 
better instructions to the FCC.
  I thank the Senator for his courtesy.
  Mr. COHEN. I thank the Senator for raising the issue. It highlights 
the nature of the problem whereby one company can suddenly come in and 
decide it wants to give you a different type of service and you must 
rent this box in order to get what you are already paying for. Sure, 
there was an outcry, an outrage expressed by consumers. They were told 
to relax, this is for the future. We are preparing you for interactive 
television. They got interactive alright with the consuming public, and 
they were forced to take it down.
  The FCC is not in the business to try and stifle developments. As a 
matter of fact, can we argue today that as a result of the standards 
developed by the private sector and incorporated by the FCC, that 
technology has been stifled in the telephone industry? I do not think 
so.
  We are seeing tremendous progress being made. I point out to the 
Senator from Kentucky that while some people might get hurt, a whole 
lot of people get helped when you make progress. We are trying to help 
millions of people in this country acquire the technology cheaper and 
with greater choice, and hopefully with greater quality. That is the 
purpose of the amendment. So the telephone industry is a good example 
of what can take place with the set-top box market.
  I might point out that on page three of the amendment, it indicates, 
``Such regulations shall take into account the needs of owners and 
distributors of video programming and information services to ensure 
system and signal security and prevent theft of the programming or 
services; and, secondly, the need to ensure the further deployment of 
new technology relating to converter boxes.''
  I say to those who are arguing that this is being raised to stifle 
technology, it is just the opposite. Those against this amendment want 
to stifle competition. Those who vote for this amendment will vote for 
the Consumer Federation of America and the Consumers Union.
  When the vote comes at 7:30, those people here that are concerned 
about getting more choice to the public, getting better quality, and 
getting more competition will vote to support the amendment.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. PRESSLER. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. COHEN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COHEN. Mr. President, just before our time expires, I want to 
indicate that this amendment certainly is not a partisan issue, as you 
can see from the debate that has taken place, with the Senator from 
Nebraska joining the Senator from Maine, and others who have expressed 
support for this amendment.
  I also point out that in the other body, Congressman Bliley, the 
chairman of the House Commerce Committee, and also Congressman Markey, 
the ranking member on the House Telecommunications Subcommittee, have 
endorsed the legislation and, in fact, have reported it out of the 
committee. So the legislation is bipartisan in the House. I hope the 
bipartisan support for this amendment will be reflected in the vote 
here this evening.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. PRESSLER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRESSLER. Mr. President, an up or down vote has been agreed to.
  I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays are ordered.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
1263 offered by the Senator from Maine [Mr. Cohen].
  The yeas and nays have been ordered.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. MACK (when his name was called). Present.
  Mr. LOTT. I announce that the Senator from Texas [Mr. Gramm], the 
Senator from Arizona [Mr. McCain], the Senator from Alabama [Mr. 
Shelby], and the Senator from Arkansas [Mr. Stevens] are necessarily 
absent.
  Mr. FORD. I announce that the Senator from Delaware [Mr. Biden] is 
necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 30, nays 64, as follows:

                      [Rollcall Vote No. 245 Leg.]

                                YEAS--30

     Ashcroft
     Boxer
     Bradley
     Bumpers
     Byrd
     Chafee
     Cohen
     Feingold
     Feinstein
     Glenn
     Graham
     Hatfield
     Hutchison
     Jeffords
     Kassebaum [[Page S8001]] 
     Kerrey
     Lautenberg
     Leahy
     Levin
     Lieberman
     Moseley-Braun
     Pell
     Rockefeller
     Roth
     Simon
     Simpson
     Snowe
     Thompson
     Thurmond
     Wellstone

                                NAYS--64

     Abraham
     Akaka
     Baucus
     Bennett
     Bingaman
     Bond
     Breaux
     Brown
     Bryan
     Burns
     Campbell
     Coats
     Cochran
     Conrad
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Exon
     Faircloth
     Ford
     Frist
     Gorton
     Grams
     Grassley
     Gregg
     Harkin
     Hatch
     Heflin
     Helms
     Hollings
     Inhofe
     Inouye
     Johnston
     Kempthorne
     Kennedy
     Kerry
     Kohl
     Kyl
     Lott
     Lugar
     McConnell
     Mikulski
     Moynihan
     Murkowski
     Murray
     Nickles
     Nunn
     Packwood
     Pressler
     Pryor
     Reid
     Robb
     Santorum
     Sarbanes
     Smith
     Specter
     Thomas
     Warner

                        ANSWERED ``PRESENT''--1

       
     Mack
       

                             NOT VOTING--5

     Biden
     Gramm
     McCain
     Shelby
     Stevens
  So the amendment (No. 1263) was rejected.
  Mr. HOLLINGS. Mr. President, I move to reconsider the vote by which 
the motion was rejected.
  Mr. PRESSLER. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. PRESSLER. Mr. President, I hope the Senator from North Dakota 
will bring his amendment forth.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, my understanding is the pending business 
is the Dole amendment. I ask unanimous consent that the Dole amendment 
be set aside so that I might offer an amendment.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.


                           Amendment No. 1264

 (Purpose: To require Department of Justice approval for Regional Bell 
          Operating Company entry into long distance services)

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

       The Senator from North Dakota [Mr. Dorgan], for himself, 
     Mr. Simon, Mr. Kerrey, Mr. Reid, and Mr. Leahy, proposes an 
     amendment numbered 1264.

  The amendment is as follows:

       On page 82, line 23, beginning with the word ``after'', 
     delete all that follows through the words ``services'' on 
     line 2, page 83 and insert therein the following: ``to the 
     extent approved by the Commission and the Attorney General''.
       On page 88, line 17, after the word ``Commission'', add the 
     words ``and Attorney General''.
       On page 89, beginning with the word ``before'' on line 9, 
     strike all that follows through line 15.
       On page 90, line 10, replace ``(3)'' with ``(C)''; after 
     the word ``Commission'' on line 17, add the words ``or 
     Attorney General''; and after the word ``Commission'' on line 
     19, add the words ``and Attorney General''.
       On page 90, after line 13, add the following paragraphs:
       ``(4) Determination by attorney general.--
       ``(A) Determination.--Not later than 90 days after 
     receiving an application made under paragraph (1), the 
     Attorney General shall issue a written determination with 
     respect to the authorization for which a Bell operating 
     company or its subsidiary or affiliate has applied. In making 
     such determination, the Attorney General shall review the 
     whole record.
       ``(B) Approval.--The Attorney General shall approve the 
     authorization requested in any application submitted under 
     paragraph (1) only to the extent that the Attorney General 
     finds that there is no substantial possibility that such 
     company or its subsidiaries or its affiliates could use 
     monopoly power in a telephone exchange or exchange access 
     service market to impede competition in the interLATA 
     telecommunications service market such company or its 
     subsidiary or affiliate seeks to enter. The Attorney General 
     shall deny the remainder of the requested authorization.''
       ``(C) Publication.--Not later than 10 days after issuing a 
     determination under paragraph (4), the Attorney General shall 
     publish the determination in the Federal Register.''
       On page 91, line 1, after the word ``Commission'' add the 
     words ``or the Attorney General''.
                Amendment No. 1265 to Amendment No. 1264

  (Purpose: To provide for the review by the Attorney General of the 
    United States of the entry of the Bell operating companies into 
      interexchange telecommunications and manufacturing markets)

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

       The Senator from South Carolina [Mr. Thurmond], for 
     himself, Mr. D'Amato and Mr. DeWine, proposes an amendment 
     numbered 1265 to amendment No. 1264.

  Mr. THURMOND. 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:

       On page 82, line 23, strike ``after'' and all that follows 
     through ``services,'' on page 83, line 2, and insert in lieu 
     thereof ``to the extent approved by the Commission and the 
     Attorney General of the United States,''.
       On page 88, line 17, insert ``and the Attorney General'' 
     after ``Commission''.
       On page 89, line 3, insert ``and Attorney General'' after 
     ``Commission''.
       On page 89, line 6, strike ``shall'' and insert ``and the 
     Attorney General shall each''.
       On page 89, line 9, strike ``Before'' and all that follows 
     through page 89, line 15.
       On page 89, line 16, insert ``by commission'' after 
     ``Approval''.
       On page 90, between lines 9 and 10, insert the following:
       ``(C) Approval by attorney general.--The Attorney General 
     may only approve the authorization requested in an 
     application submitted under paragraph (1) if the Attorney 
     General finds that the effect of such authorization will not 
     substantially lessen competition, or tend to create a 
     monopoly in any line of commerce in any section of the 
     country. The Attorney General may approve all or part of the 
     request. If the Attorney General does not approve an 
     application under this subparagraph, the Attorney General 
     shall state the basis for the denial of the application.''.
       On page 90, line 12, strike ``shall'' and insert in lieu 
     thereof ``and the Attorney General shall each''.
       On page 90, line 17, insert ``or the Attorney General'' 
     after ``Commission''.
       On page 90, line 19, insert ``and the Attorney General'' 
     after ``Commission''.
       On page 91, line 1, insert ``or the Attorney General'' 
     before ``for judicial review''.
       On page 99, line 15, strike out ``Commission authorizes'' 
     and insert in lieu thereof ``Commission and the Attorney 
     General authorize''.
       On page 99, line 18, insert ``and the Attorney General'' 
     after ``Commission''.
       On page 90, line 6, after ``necessity'', insert: ``In 
     making its determination whether the requested authorization 
     is consistent with the public interest, convenience, and 
     necessity, the Commission shall not consider the effect of 
     such authorization on competition in any market for which 
     authorization is sought.''

  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DOLE. Mr. President, will the Senator yield?
  Mr. DORGAN. I am happy to yield.
  Mr. DOLE. Is there a time agreement on this amendment?
  Mr. HOLLINGS. Not yet, no.
  Mr. DOLE. Would there be a possibility of having a time agreement?
  Mr. DORGAN. I would not agree to a time agreement at this point. This 
is one of these major issues on this bill. I think that we have an 
amendment in the second degree. I think this will have to be explored 
at some length.
  Mr. HOLLINGS. Could we agree to debate it tonight and vote first 
thing tomorrow?
  Mr. DORGAN. I would not agree to that time agreement.
  Mr. PRESSLER. If my colleague will yield, if we could debate all this 
evening, and have a vote at 9 in the morning, would that be agreeable?
  Mr. DORGAN. My point is, I do not want to agree to a time agreement 
on these issues. We have two amendments on the Department of Justice's 
role here. This is I think one of the central issues in this bill. If 
you are suggesting that we ought to now, in the next few hours, debate 
when a number of Members will probably not be here and have a vote in 
the morning, I do not think that there is an urgency on this bill to 
move to a vote on one of the central issues in this bill by 9 o'clock 
in the morning. So I would not agree to a time agreement at this point.
  Mr. PRESSLER. If my colleague will yield, we could debate until 
midnight or beyond, and Members who wish to speak could speak tonight 
and vote at 9 in the morning. Everybody could speak who wants to speak 
this evening.
  Mr. DORGAN. I would respond that I do not at this point propose to 
accept a time agreement. I think what we ought to do is have the debate 
and see [[Page S8002]] which of our colleagues wish to weigh in on 
these issues. This is, as I said, one of the central issues in this 
bill. I think at least from my observations there are many Members on 
both sides who will want to be heard, and many of them want to be heard 
at some length on these two amendments. I think it is premature to be 
seeking a time agreement.
  Mr. DOLE. Will the Senator yield? But we are prepared to debate it at 
some length tonight; is that correct?
  Mr. DORGAN. Oh, yes.
  Mr. DOLE. There will be no more votes tonight. We will try to see 
what happens in the next couple of hours. It is a very important 
amendment, and it is central to the debate. I do not have any quarrel 
with the amendment of the Senator from North Dakota nor the Senator 
from South Carolina. I am not trying to crowd anyone. I want my other 
colleagues to know what they can expect.
  So I think it is safe to say, if it is all right with the Democratic 
leader, there will be no more votes tonight. We will take another look 
at it at 10 o'clock, 11, whatever, whoever is still here.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota has the floor.
  Mr. DORGAN. Mr. President, as Members know, I offered the amendment 
and the amendment has been second-degreed by an amendment offered by 
Senator Thurmond, and we will, I expect, debate the merits of both 
amendments at this point.
  As I indicated to the majority leader, this is, I think, one of the 
central issues in the telecommunications bill that the Senate must 
consider.
  When I spoke this afternoon on this legislation, I talked about the 
breathtaking changes in our country especially in the area of 
telecommunications, technology, the building of the information 
superhighway. I also talked about what telecommunications technology 
means to the people in this country and our future.
  I must say that the people in the private sector in our country have 
been investing money, and taking risks. I commend them for that. The 
risk-taking entrepreneurs, I think have brought enormous fruits of 
accomplishment to our country. Their advances in technology will 
improve life in our country in many, many ways. It creates jobs; it 
provides entertainment. It does many, many things that are important 
for our country.
  The question of how we develop the information superhighway, who 
benefits from it and what are the rules in a competitive economy we are 
now confronting.
  The industry, dealing with 1930's laws that were originally 
established in telecommunications, has been out developing its own 
course largely because there have not been guidelines established by 
Congress. The Senator from South Dakota and the Senator from South 
Carolina now bring to the floor a piece of legislation that says let us 
update the 1930's laws and let us talk about the guidelines, what are 
the conditions of competition. And this legislation, I think, has a lot 
to commend it to the Members of the Senate.
  So I have supported the legislation out of the Commerce Committee but 
have indicated that I feel there are some problems with the 
legislation, one of which is the role of the Justice Department in 
establishing the criteria for when competition exists with respect to 
local service carriers and when those local service carriers, namely, 
the regional Bells, can go out and engage in long distance competition.
  The Commerce Committee passed a telecommunications bill last year, 
and a bill was passed by the entire House of Representatives, that 
included provisions with respect to the tests that should be met before 
the Bell systems should go out and begin to compete in long distance.
  That test was very simple. It's called the VIII(c) test. VIII(c) 
provides a test for the Department of Justice to perform its assigned 
and accustomed role to determine when there is competition in local 
service and when then the Bell systems will be allowed to go out and 
compete in long distance service.
  VIII(c) existed last year in the telecommunications bill that was 
passed in the House and the Senate Commerce Committee. All of a sudden 
this year that test vanishes. That's why I propose in my amendment to 
establish the VII(c) test.
  Some say, gee, that is a radical requirement, an VIII(c) test for the 
Justice Department. So radical, it is exactly what the House passed 
last year, so radical it is exactly what the Senate Commerce Committee 
passed last year. It is not radical at all. It is exactly what the 
Justice Department role should be in evaluating when sufficient 
competition exists in the local exchanges so that the Bell systems will 
be free to engage in long distance services.
  I wish to remind my colleagues of the experience we have had with 
airline deregulation. When we deregulated the airlines we said that the 
role of determining when sufficient competition existed and whether 
mergers should be allowed will be assumed by the Department of 
Transportation. The Department of Justice shall have a consultative 
role.
  What has happened as a result of that? Well, you have all seen what 
has happened. We have seen the large airlines in this country grow 
larger through acquisition and merger. They have bought up the regional 
carriers. So now we have fewer airlines and bigger airlines; in other 
words, less competition.
  It is interesting to me that when we have seen some of these mergers 
proposed, the Department of Transportation consults with the Department 
of Justice, and the Department of Justice says, well, we do not think 
this merger would be in the country's interest from a competitive 
standpoint; we think it would diminish competition. And then the 
Department of Transportation says, we do not care about that; we are 
going to allow the merger to occur anyway.
  That is a sample of what happens when you take the Justice Department 
out of the decision making in these areas.
  Now, we have, over a long period of time in this country, established 
the Justice Department as the referee in the issue of where and when 
sufficient competition exists with respect to questions like this. But 
this bill comes to the floor and says well, now, let us see if we can 
do something different. Let us take the Justice Department; let us clip 
their wings. Let us defang the Justice Department with respect to its 
ability to make judgments about what is in the public interest and what 
is not in the public interest in this particular area.
  I listened intently about the subject of competition. Members of the 
Senate have come to the floor of the Senate and talked about the market 
system and competition. I think the market system is a wonderful thing, 
and it has brought this country enormous benefits. It is the way this 
country has become as strong as it is--market system, free and open 
competition.
  But if you believe in the market system and competition, then you 
have to, in my judgment, stand up for these kinds of issues. You have 
to stand up for the role of the Justice Department to investigate and 
evaluate what represents antitrust, what kinds of conditions must we 
insist upon to ensure competition, because if you are not standing up 
for those kinds of things that ensure competition, in my judgment you 
are no friend of the marketplace. You are no friend of free markets. 
That is the reason I offer this amendment to the Senate tonight.
  This amendment utilizes the standard that is found in section VIII(c) 
of the modified final judgment with which most of us are familiar. This 
amendment requires the Bell systems to show there is no substantial 
possibility that it could use its monopoly power to impede competition 
in the long distance market.
  The standard I propose is well understood. It has been applied by the 
Department of Justice and the courts since 1982. The standard protects 
competition in long distance services by limiting the entry to cases 
where local monopolies have ceased to exist or the potential for abuse 
of power in local markets is absent.
  Now, under the bill as reported, as I have indicated, the Bell 
systems need only apply to the FCC to enter long distance services, and 
the FCC would use what is called a public interest standard and 
determine that the Bell systems have completed the competitive 
checklist. They might ask the Justice Department in a consultative role 
[[Page S8003]] but it will not matter, because the FCC will make the 
judgment.
  Well, the problem with that is this. The FCC is a regulatory agency 
and the Department of Justice is the agency that has had over time and 
does have the capability of evaluating the issue of competition.
  The Department of Justice is the agency with the expertise in 
protecting and promoting competition in telecommunications markets. It 
was the Department of Justice that investigated and sued to break up 
the Bell system monopoly, which resulted in making the long distance 
and manufacturing markets competitive.
  All of us understand what has resulted from that. Those areas of the 
telecommunications system that are competitive, namely, now long 
distance and manufacturing--and let me say, especially long distance--
those areas have produced enormous rewards for the consumers: lower 
prices and substantial changes in opportunity for choice. You can go to 
any one of hundreds of long distance carriers these days and find a 
wide variety of choices at competitive prices, prices much, much lower 
than consumers paid when the old monopoly system existed.
  I have indicated that we have seen what has happened with respect to 
another deregulation model, airlines. When the airline deregulation 
occurred and the opportunity to judge the competitiveness of certain 
future structures was given not to the Department of Justice, but 
instead to the Department of Transportation, we understand what 
happened. The consumer, in my judgment, has been shortchanged. Mergers 
that should not have been allowed which the Department of Justice said 
were anti-competitive were allowed by the Department of Transportation.
  If we do not change this bill, if we do not impose this VIII(c) test, 
in my judgment, we will be left in the same position with respect to 
telecommunications as we have been with the airlines, and it will not 
be a friendly position for the American consumer.
  The fact is the Department of Justice has promoted competition in the 
telecommunications industry under both Republican and Democratic 
administrations. The AT&T investigation began under the Nixon 
administration. The suit was filed under the Ford administration. It 
was pursued through the Carter administration, and it was settled 
during the Reagan administration. On a bipartisan basis, the Department 
of Justice, I think, has stood up for the interests of the American 
consumer, attempting to require and impose a competitive test.
  You have heard in discussion on the floor of the Senate that the 
breakup of the Bell system meant that long distance telephone rates 
have dropped 66 percent and the long distance competitors have 
constructed four nationwide fiber optic networks in this country, which 
is now the backbone of the information superhighway.
  If we do not include in the telecommunications legislation the kind 
of amendment I am proposing, the role that would traditionally have 
been the role for the Department of Justice will become the burden of 
enforcement for the FCC. The FCC, I think, clearly is ill-equipped to 
adequately serve that function.
  In 1987, the GAO reported that at its existing staff level, the FCC 
would be able to audit carrier cost allocations in order to protect 
ratepayers from cross-subsidization only once every 16 years, and then 
only on the major carriers.
  A 1993 GAO report found that as of 1992, the FCC staff of 14 auditors 
could, on average, cover the highest priority audit areas once every 11 
years and all audit areas once every 18 years. The GAO concluded in 
that February 1993 report that at the current staffing level, the FCC 
cannot, in the GAO's words, ``provide positive assurance that 
ratepayers are protected from cross-subsidization.''
  The only way, in my judgment, to assure that true competition is 
existing at the local level--and when that exists we free the Bell 
systems to compete in the long distance area--but the only way to 
assure that true competition exists is to look at the actual 
marketplace facts, and the place to do that, the proper place to do 
that is in the Department of Justice.
  I mentioned earlier that last year the very test that I am proposing 
today for this legislation was in the bill passed by the House of 
Representatives. That bill passed in the U.S. House with 420 votes. The 
Senate Commerce Committee passed legislation by an 18-to-2 vote, and it 
included what I now propose we add to this legislation. So it will be 
interesting to hear the cries of those who come to the floor and say, 
``Gee, this is way out of bounds, this is really radical stuff you are 
proposing.'' I want to hear the wailing of those who oppose this and 
ask them if what the House of Representatives did with 420 votes last 
year or what the Senate Commerce Committee did by an 18-to-2 vote last 
year was truly radical, or has somehow the public interest standard 
changed in 12 months? And if so, what is that change? Did the election 
last year tell us that the Department of Justice had to have its wings 
clipped with the question of whether or not there is competition before 
we decide to change the circumstances under which the Bell systems can 
compete for long distance? I do not think so.
  I think the American people expect and the American people would 
require us to believe that competition is fair competition and that 
true competition exists before we decide to allow the Bell systems to 
get involved in long distance and potentially create monopolistic 
conditions in a segment of the industry that is now highly competitive.
  I want to read some comments about last year's test, which I now 
propose in this year's bill. James Cullen, the president of Bell 
Atlantic, March 8, 1994, wrote a letter to Senator Hollings, and he 
said this about the standard I am now proposing:

       The section VIII(c) standard is the correct test for 
     whether a Bell company should be allowed to provide 
     interstate long distance services. Under this test, the 
     restrictions imposed on a Bell company shall be removed upon 
     a showing by the petitioning BOC that there is no substantial 
     possibility that it could use its monopoly power to impede 
     competition in the market it seeks to enter.

  Cullen also confirmed that the VIII(c) test was the appropriate test 
when he testified before the Senate Commerce Committee on May 12, 1994.
  The CEO of Pacific Telesis, Sam Guinn, wrote to Senator Hollings on 
March 16, 1994, stating this:

       The VIII(c) test--the ability to impede competition in the 
     market we're entering, the long distance market--is the 
     appropriate test. A test based on local competition just 
     won't work.

  William Weiss, then chairman and CEO of Ameritech, wrote to Senator 
Danforth saying:

       An entry test, based on antitrust principles, must focus on 
     conditions in the market one is seeking to enter. The 
     modified final judgment (MFJ) provides just such a test. * * 
     * The MFJ provides that the line of business restrictions, 
     including the long distance prohibition, shall be removed 
     when there is no substantial possibility that a regional 
     company could use its monopoly power to impede competition in 
     the market it seeks to enter.

  Again, that is from William Weiss, then chairman and CEO of 
Ameritech.
  In fact, Ameritech recently reached an agreement with the Justice 
Department to conduct a trial to offer long distance service from Grand 
Rapids, MI, and Chicago, IL. Under that trial, the Department of 
Justice would have to evaluate competitive conditions in the 
marketplace to determine that those conditions ensure there is ``no 
substantial possibility that commencement of the experiment could 
impede competition in interLATA service.''
  That trial not only uses the VIII(c) standard, but it also requires 
that actual competition exists prior to Ameritech offering long 
distance services.
  I had the opportunity to visit with Anne Bingaman at the Justice 
Department, who is in charge of the Antitrust Division, about this very 
agreement. It is interesting that this agreement uses the VIII(c) test.
  There are plenty of claims and there is a great deal of discussion on 
the floor about this issue, largely because it is an issue that is very 
controversial at this point.
  We have a bill before us that deals with literally hundreds of 
billions of dollars of revenue to very important segments of our 
economy, and the industry's breakdown between the long distance 
industry, the local service carriers. I understand why they would 
[[Page S8004]] use some of these things in their own self-interest. I 
am not interested in their self-interest at this point. I want the 
telecommunications industry to do well, and I want them to do well 
especially for our country.
  My interest, however, on the floor of the Senate is the public 
interest. The question is not what benefits them. The question is what 
benefits the American citizens in the longrun? What benefits our 
country? What advances our country's economic interests, our public 
interests?
  I think if we evaluate that, we will understand that imposing a 
requirement that competition exist at the local level before we 
unharness in the modified final judgment the Bell systems to go compete 
in the long distance system is in the best public interest. I know some 
make the case that is not necessary; the FCC can do it. Some make the 
case that the Justice Department role should not be such a strong role. 
But they do that, in my judgment, because they represent--or they argue 
the interests of an $80 to $100 billion enterprise out there, the 
enterprise of local service carriers who want to do something and are 
prevented from doing it now and who want to be able to unharness 
themselves with the least possible difficulties. I do not want to put 
up roadblocks. If they want to compete in long distance, they have 
every right to do it, as long as they are allowing competition in the 
local exchanges.
  The question is, how can you demonstrate that? All of us understand 
that it is easy to decide to say you are now allowing local 
competition. It is easy to create conditions in which you try to 
demonstrate that is the case, but even as you create conditions to 
demonstrate that is the case, you can suddenly create other conditions 
to make it more difficult. Everyone understands that. That is the 
danger and the dilemma.
  We are interested in this 8(c) test, in true competition. We are not 
interested in theory. We are interested in when true competition exists 
in the local exchanges, because when it exists, then there is no 
disagreement on the floor of the Senate about whether the Bells ought 
to be able to involve themselves in long distance service. Of course, 
they should.
  But the question is when it exists, and who should be the arbiter of 
that? Those who argue for a weaker standard in the Department of 
Justice, in my judgment, are making a very serious mistake. It is a 
mistake that was not made in the last session by the House of 
Representatives or by the Commerce Department. But something has 
changed. I do not think it is the facts. I think the political dynamic 
has changed in some way, and I hope that the public interest need 
prevails on this issue.
  The public interest need, in my judgment, is to have the U.S. Justice 
Department play the role they have always played on behalf of the 
American citizens--to make sure there is robust, healthy competition. 
When it exists, then we unleash the opportunities for those who now 
have monopolistic power to get involved in the long distance service. 
But until it exists, they should not be allowed to do so. Until the 
Justice Department--the Department with the experience, background and 
knowledge to make that judgment--is given full opportunity to do so by 
amending this portion of the bill, I think the American people will be 
shortchanged. I hope that we will, at this point, reject the second-
degree amendment when we get around to voting and that we will adopt 
the 8(c) standard. I expect there will be a lot of discussion between 
us in the intervening hours today, tomorrow, Monday, or whenever we 
vote on these issues. I think this will be one of the most important 
issues that we resolve on the floor of the Senate as we seek to advance 
legislation establishing new rules for the 1990's and into the next 
century in the telecommunications industry.
  Let me finish with one additional statement about this issue, and 
then I want to speak to other areas at some point later in the debate. 
There is ample discussion on the floor of the Senate about the fruits 
of competition in these areas. I come from a part of the country where 
I swear that there will not be much competition. A county of roughly 
3,000 people is not going to attract a lot of competitors. A hometown 
of 300 people is not going to be the cause of fierce competition 
between eight carriers who want to serve these 800 people. That is not 
the way competition works. Competition exists in a free market to 
maximize profits in areas where you yield maximum returns. That is in 
the affluent neighborhoods of America, in the population centers of 
America. That was true under deregulation of the airlines, and it will 
be true under deregulation of the telecommunications industry.
  That is why another part of this bill that I care very much about are 
the protections in this bill for rural America--not protections against 
competition, but protections to make sure we have the same benefits and 
opportunities in rural America for the build-out of the infrastructure 
of this telecommunications revolution, as we will see in Chicago, Los 
Angeles, New York, and elsewhere. Our citizens are no less worthy of 
the opportunities that are brought to them by this industry than 
citizens who live in the biggest cities of our country.
  I think once we establish the public interest tests of this 
legislation, we must do it not only with respect to the role of the 
Department of Justice, which is important, but also with respect to the 
issue of universal service and with respect to the issue of 
concentration of ownership in broadcast facilities. I think if we 
address those properly, and if we do our jobs the way I think people 
expect us to, I think we will have produced a good bill--good for this 
country, good for all citizens of this country regardless of where they 
live.
  With that, Mr. President, I yield the floor.
  Mr. THURMOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.
  Mr. THURMOND. Mr. President, I rise today with Senators D'Amato and 
DeWine to offer an amendment to ensure that fundamental antitrust 
principles will be applied by the Antitrust Division of the Department 
of Justice to determine when the Bell Operating Companies should be 
allowed into the long distance and manufacturing markets. My amendment 
establishes a legal standard to be applied by the Justice Department 
based on section 7 of the Clayton Act, which the Congress passed in 
1914. Under this standard, the Bell companies would be permitted to 
enter into long distance and manufacturing unless the effect of entry 
would ``substantially lessen competition, or tend to create a 
monopoly.''
  Section 7 of the Clayton Act is the well-established and well-known 
standard used nationwide to determine whether mergers and joint 
ventures--which affect the economic course of our country--are pro-
competitive or not. Indeed, we rely on this Clayton section 7 standard 
even in areas of national security, as in the recent merger of defense 
giants Lockheed and Martin Marietta. In the same way, this antitrust 
standard should be used to determine whether competition and consumers 
will be served by Bell company entry into new markets.
  As chairman of the Judiciary Committee's Antitrust, Business Rights, 
and Competition Subcommittee, I firmly believe that we must rely on the 
longstanding bipartisan principles of antitrust law in order to move as 
quickly as possible toward competition in all segments of the 
telecommunications industry, and away from regulation. Applying 
antitrust concepts is vital to ensure that free market principles will 
work to spur competition and reduce government involvement in the 
industry.
  The standard for permitting Bell company expansion from their local 
exchange markets into long distance and manufacturing may well be the 
most important antitrust question in this legislation. This issue 
results from the 1982 antitrust settlement which divided the single 
Bell system monopoly into the seven regional Bell companies, and 
limited the lines of business they could pursue. The debate centers on 
whether those seven Bell companies should be allowed into long distance 
and manufacturing markets while maintaining their current market 
position in local telephone service. The concern is that despite 
detailed rules, the Bell companies may be able to use their market 
power in local telephone service to harm competition in the long 
distance [[Page S8005]] and manufacturing markets where competition 
already exists.
  It is generally desirable to have as many competitors as possible in 
each market. I want to make clear that the Bell companies certainly 
should be allowed to enter long distance and manufacturing under 
appropriate circumstances. The question is merely when. But the Bell 
companies should not be allowed to enter without consideration of 
whether their entry will harm competition. S. 652 does not require 
antitrust analysis on this point and provides only a minimal consulting 
role for the Department of Justice.
  As drafted, S. 652 allows the Bell companies to get into the long 
distance and manufacturing markets if they meet a checklist and the FCC 
finds that entry is in the public interest. The checklist is intended 
to permit other companies to enter the Bell companies' local exchange 
markets and compete with the Bells. But the checklist does not require 
that anyone actually compete
 with the local exchange monopoly. Moreover, S. 652 appears to require 
only a single interconnection agreement between a Bell company and a 
potential competitor--no matter how small--before the Bell company can 
seek to enter long distance.

  Mr. President, I am not confident that this checklist will be 
adequate to take the place of thorough antitrust analysis. It would be 
unwise to ignore antitrust analysis. It would be unwise to ignore 
antitrust principles and risk harm to the substantial competition which 
has developed in telecommunications markets over the last dozen years 
through the application of antitrust principles.
  The Clayton section 7 standard in my amendment is much more moderate 
than the so-called ``8-C'' test from the Modification of Final Judgment 
which broke up the Bell system monopoly. It is my belief, as one long 
interested in competition and our antitrust laws, that the language 
from Clayton section 7 is the best standard to employ. This standard 
permits the flexible analysis needed to determine when the Bell 
companies should be allowed to enter into long distance and 
manufacturing markets.
  The Clayton section 7 test would permit Bell company entry into long 
distance and manufacturing unless entry would substantially lessen 
competition. Clearly, we should not permit entry which would not only 
lessen competition, but would substantially lessen competition. The 
Clayton section 7 standard is well understood and can be fairly applied 
to ensure ongoing competition in telecommunication markets. The Clayton 
standard has been applied in each merger in the telecommunication 
industry, including several large recent ones. This standard provides 
the proper incentives to the Bell companies to encourage them to open 
local monopolies to competition, rather than meeting the minimal 
requirements of a checklist.
  Let me make very clear that this Clayton section 7 standard does not 
necessarily require the Bell companies to lose any market share or even 
face actual competition in their local exchange markets. The Bell 
companies often assert that their entry into long distance and 
manufacturing would benefit competition. If this is true, they could 
enter those markets promptly under a Clayton section 7 standard, 
because competition would not be substantially lessened.
  Although the Bell companies may not support this standard, it is 
noteworthy that in the past Bell companies were less critical of the 
more stringent 8-C test. In fact, there was agreement among Bell 
companies concerning the 8-C test in the last Congress when negotiating 
over telecommunications legislation. If the higher standard of the 8-C 
test was acceptable last year, the familiar Clayton section 7 standard 
should be considered far more reasonable.
  If this antitrust analysis is to be undertaken, as I and many other 
Members believe it should, the Antitrust Division of the Department of 
Justice has the necessary background and expertise to conduct the 
analysis. The Justice Department has some 50 attorneys and other 
professionals with antitrust expertise in the telecommunications area. 
The Justice Department was responsible for the breakup of the Bell 
system monopoly which has resulted in significantly greater 
competition, and has been continually involved in the industry since 
that time.
  It would be redundant and inefficient to ignore the proven track 
record and expertise of the Justice Department and begin to develop 
such know-how in another agency. The Federal Communications Commission 
does not have expertise in antitrust law, and history shows that it is 
not desirable to attempt to develop antitrust expertise across a range 
of Federal agencies. For example, it is now recognized that the 
Department of
 Transportation did not give adequate weight to antitrust principles 
when it conducted its own antitrust analysis of airline mergers. 
Although the Justice Department had a consulting role, the 
Transportation Department disregarded the important antitrust expertise 
of the Justice Department, and approved deals which have resulted in 
excessive concentration in the airline industry, and higher prices for 
consumers. It is vital that we avoid this mistake here.

  Mr. President, these antitrust issues in the telecommunications 
legislation affect a huge sector of our economy, and impact every 
consumer and business in our Nation. The hearing by the Antitrust, 
Business Rights, and Competition Subcommittee, which I chaired last 
month, confirmed the importance of ensuring that S.  652 embraces 
antitrust principles which are adequate to encourage competition and 
benefit consumers. These principles have been tested and refined by 
more than 100 years of antitrust analysis and experience in our Nation.
  The purpose of the antitrust laws is not to favor one group over 
another, but to apply objective principles to encourage competition for 
the benefit of consumers. When antitrust principles are observed, 
competition is maximized resulting in lower prices, better services and 
products, and more innovation for the benefit of consumers and our 
Nation. If antitrust principles are ignored, however, competition is 
likely to suffer and concentration of market power in a few companies 
may lead to harm to consumers, less innovation, and the end of our 
country's leadership in telecommunications.
  Finally, I would note that despite the current claims by some, this 
important issue of Bell company entry generally has not been partisan 
in the past. In addition to the concerns of Democratic Members and the 
current Administration, Republicans have long been champions of 
applying our antitrust laws in the telecommunications field. In fact, 
the break up of the Bell system monopoly resulted from the antitrust 
investigation by the Justice Department begun during the Nixon 
Administration, from antitrust litigation brought by the Justice 
Department during the Ford Administration, and from the settlement by 
Assistant Attorney General William Baxter during the Reagan 
Administration. In fact, Mr. Baxter wrote to me last month on this 
subject, encouraging an ongoing role for the Department of Justice in 
determining when the Bell companies should get into other lines of 
business, which I included in my Antitrust Subcommittee hearing record. 
The current antitrust head at the Department of Justice asserts that 
same position.
  For all of these reasons, I urge my colleagues to support this 
amendment.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. Mr. President, I think we have come to a key part of 
this debate. As I see it, we are trying to decide whether or not the 
Department of Justice should have a regulatory role in this whole 
matter.
  Under the bill brought to the floor by Senator Hollings and me and 
others, and by the Commerce Committee, there is a checklist test at the 
FCC and there is a public interest test at the FCC. There is also 
required that the Attorney General be consulted. And he might make a 
recommendation based on the 8(c) test, or he might make a 
recommendation based on the Clayton Act, or he might make a 
recommendation on public interest standards.
  The Justice Department is not supposed to be a regulatory agency. Its 
duties are in the antitrust area. If we adopt either of these 
amendments, we are basically continuing to employ about 200 people over 
at Justice who are regulators and not people who interpret antitrust 
law. We are making the Department of Justice into a regulatory agency 
when it is supposed to be [[Page S8006]] dealing with interpretations 
of antitrust law.
  What has happened under Judge Greene's order, partially out of 
necessity, is that the Justice Department began hiring whole legions of 
people over there to administer the consent decree. For example, the 
Ameritech waiver has been cited. The Ameritech company in the Chicago 
area has been, quite rightly, allowed to do some things by the 
Department of Justice under Judge Greene's consent decree. And quite 
appropriately, because Congress has not acted.
  That is one thing about this bill. We are at least trying to get 
Congress to do this instead of the courts. But if we allow the Justice 
Department to begin regulating, it will be like in the Ameritech 
decision. I am not saying the Ameritech decision is wrong, but it shows 
how the Justice Department likes to use its people as regulators.
  That Ameritech waiver, the proposed waiver, creates a highly 
regulatory process under which Ameritech may be able to obtain 
temporary interLATA authority, but only on a resale basis and only for 
calls originating from the Illinois portion of the Chicago LATA and the 
Grand Rapids LATA in Michigan, areas that serve only 1.2 percent of the 
area's population.
  But the point is, the chief regulator in this process is the 
Department of Justice, the same Department that has frequently taken 
from 3 to 5 years to process waivers under the existing decree. So this 
means we are probably adding 3 to 5 years of regulation if we adopt the 
amendment by my friend from North Dakota. This is more Government 
regulation. This is supposed to be a deregulatory bill. We are supposed 
to be deregulating here, but we are adding another formal layer of 
regulation.
  We have already pointed out that the Ameritech decision is 
illustrative of the regulatory function of the Department of Justice. 
And they want to keep these people employed over there. They want to 
keep on being regulators. They want to be something other than what 
they are constitutionally created to be. After this bill passes, the 
Department of Justice will not have to carry out that role. That will 
save the taxpayers a lot of money; moreover, it will lessen regulation. 
Indeed, I would like someday to see the FCC substantially reduced.
  But under this amendment we are not only keeping the FCC using both 
the checklist and the public interest standard, we are also going a 
step further and saying after they get through we are going to send it 
over to Justice and do the same thing all over again with another set 
of regulators. That will take 3 to 5 years, I do not care how you slice 
it, because that is the way it has been in the past and that is the way 
the Department of Justice functions. Anything that goes over there, it 
will take 3 to 5 years to get a decision out and there is ample 
evidence to illustrate that.
  The point I made about Ameritech is that it shows the Department of 
Justice likes even to write telephone books over there. That is not the 
business they are supposed to be in. They are in the business of 
antitrust and the big picture of law.
  The Dorgan amendment would give the Department a separate, 
independent clearance in addition to the FCC's clearance for 
determining whether the Bell operating companies have complied with the 
checklist for opening their networks to their new competitors.
  Providing this authority to the Justice Department is unprecedented. 
The Antitrust Division of the Justice Department has never had 
decisionmaking authority over regulated industries or any industry. 
Justice was given a role under the modified final judgment, the consent 
decree which governed the breakup of AT&T. One of the key reasons for 
passing telecommunications legislation is once and for all to establish 
national policy, thus phasing out the MFJ.
  How is the modified final judgment administered today? The U.S. 
district court retains jurisdiction over those companies that were 
party to the MFJ. The court then asked the Justice Department Antitrust 
Division to assume postdecree duties. The Antitrust Division provides 
Judge Harold Greene of the district court with recommendations 
regarding waivers and other matters regarding the administration of the 
MFJ.
  Does the Antitrust Division have decision authority over the MFJ? No. 
The U.S. district court, in the person of Judge Greene, has sole 
decisionmaking authority over the administration of the MFJ. The 
Antitrust Division at Justice essentially acts as Judge Greene's staff 
attorneys. Obviously, those several hundred attorneys in Justice want 
to keep their jobs, and the Justice Department wants to keep that 
bureaucracy going.
  Let us review the kind of job that has been done there by those 
regulators in the Justice Department. First of all, the Justice 
Department has not conducted triennial reviews effectively, or every 3 
years, as it is supposed to. When the MFJ was instituted, Justice said 
it would conduct reviews every 3 years, known as the Triennial Review, 
to make recommendations to the court regarding the continued need for 
restrictions implemented under the MFJ. The Triennial Reviews were to 
provide parties to the MFJ with a ``benchmark'' by which to gain 
relief.
  Since 1982, only one Triennial Review has been conducted.
  Waiver requests: Justice is slow--very, very slow. Bell operating 
companies are required under the MFJ to obtain DOJ review of waiver 
requests before filing with the district court.
  In 1984, Justice disposed of 23 waiver requests with the average age 
of waivers pending at Justice being 2 months. In 1994, Justice disposed 
of 10 waiver requests with the average age of the 30 waivers pending at 
DOJ at the end of the year being approximately 30 months. That is, 
people had to wait 30 months for a decision.
  Justice review of the waiver requests takes almost as much time for 
each waiver as the time that was intended to elapse between the 
Triennial Reviews, which have not been done. One may think that many of 
these waiver requests must be controversial because they take so long 
for Justice to make a decision. This is not the case. In fact, the 
district court has approved about 96 percent of the waiver requests 
filed before it.
  So I say we should say no to a coequal Justice role in regulation.
  The Justice track record in fulfilling its obligations under the MFJ 
is poor. Why would Congress wish to give the Department an 
unprecedented role that they do not have under the existing MFJ?
  S. 652 gives Justice a role but instead of reporting to Judge Greene 
with its recommendations, the Justice Department would make its 
recommendations to the FCC, the proper authority.
  There is no reason why two federal entities should have independent 
authority over determining whether the very clear congressional policy 
has been met.


 the u.s. department of justice should not control bell co. entry into 
                           new long distance

  The U.S. Department of Justice is asking that it be given a 
``decisionmaking'' role in the process of reviewing applications for 
Bell Co. entry into long distance telephone service. A grant of such 
authority to Justice is unprecedented. It goes far beyond the 
historical responsibility of Justice, is a significant expansion of the 
Department's current authority under the MFJ; and raises constitutional 
questions of due process and separation of powers.
  First, assigning a decisionmaking role to Justice is unprecedented.
  The Antitrust Division of the U.S. Department of Justice has one 
duty: to enforce the antitrust laws, primarily the Sherman and the 
Clayton Acts.
  It has never had a decisionmaking role in connection with regulated 
industries. The Department has always been required to initiate a 
lawsuit in the event it concluded that the antitrust laws had been 
violated. It has no power to disapprove transactions or issue orders on 
its own. While the U.S. district court has used the Department of 
Justice to review requests for waivers of the MFJ, the Department has 
no independent decisionmaking authority. That authority remains with 
the courts.
  Second, decisionmaking authority should reside in the agency of 
expertise. [[Page S8007]] 
  In transportation, energy, financial services, and other regulated 
businesses, Congress has delegated decisionmaking authority for 
approval of transactions that could have competitive implications with 
the agency of expertise, and typically has directed the agency to 
consider factors broader than simply the impact upon competition in 
making its determinations. This approach has worked well. It contrasts 
with the role Justice seeks with regard to telephony.
  Third, assigning a decisionmaking role to Justice establishes a 
dangerous precedent that could be expanded to other industries.
  Telecommunications is not the only industrial sector to have a 
specific group of Justice Department Antitrust Division lawyers devoted 
to examination of its discrete competitive issues and market structure. 
The Antitrust Division has a Transportation, Energy and Agriculture 
Section, a Computers and Finance Section, a Foreign Commerce Section, 
and a Professions and Intellectual Property Section. The size of the 
staff devoted to some of these sections is roughly equivalent to that 
devoted to telecommunications.
  If the Department has special expertise in telecommunications such 
that it should be given a decisionmaking role in the regulatory 
process, does it not also have special expertise in other fields as 
well? Today's computer, financial services, transportation, energy and 
telecommunications industries are far too complex, and too important to 
our nation's economy, to elevate antitrust policy above all other 
considerations in regulatory decisions.
  Fourth, the Justice Department proposal raises constitutional 
questions of due process and separation of powers by failing to define 
an appeals process or an appropriate standard of review for agency 
determinations.
  The Justice Department, in requesting a decisionmaking role in 
reviewing Bell Co. applications for entry into long distance telephone 
service, seeks to assume for itself the role currently performed by 
U.S. District Judge Harold Greene.
 They want to keep on doing things the way they are but they are going 
to replace Judge Greene with themselves, unnecessarily so. It does so 
without defining by whom or under what standards its actions should be 
reviewed. Typically, as a prosecutorial law enforcement agency, actions 
by the Department of Justice have largely been free of judicial review. 
In this case, the Department also seeks a decisionmaking role. As a 
decisionmaker, would the Antitrust Division's determinations be subject 
to the procedural protections and administrative due process safeguards 
of the Administrative Procedure Act? What does this do to the 
Department's ability to function as a prosecutorial agency? Should one 
agency be both prosecutor and tribunal?

  Congress should reject the idea of giving the Justice Department a 
decisionmaking role in reviewing Bell Co. applications to enter the 
long distance telephone business. It is bad policy, bad procedure, and 
bad precedent.


       doj is the problem, not the entry standard for the rboc's

  The Sherman and Clayton Acts give the Justice Department ample 
authority to assure the RBOC's comply with the antitrust laws as they 
enter the long-distance business.
  I think those two acts, the Sherman and Clayton standards, have come 
to be known as very good standards. They are under the Justice 
Department's legitimate role.
  The Justice Department has never had a decisionmaking role in 
connection with regulated industries, or any other industry. The 
decisionmaking role should reside in the FCC: the agency with the 
regulatory expertise.
  The issue centers around the way the Justice Department administers 
its current responsibility under the MFJ and the length of time the 
Department takes to reach its decisions, not what, if any, standard 
should be applied to RBOC entry into the long distance business.
  The Department has consistently interpreted section VIII C of the MFJ 
to mean there must be actual and demonstrable competition, when in fact 
the section only requires that the entity entering a market not have 
the ``substantial possibility that it could use its monopoly power to 
impede competition.''
  The Justice Department has been unable to loosen its grip on the 
reins of regulation, nor handle issues in a timely fashion. In 1984 the 
average age of pending waivers was two months. In 1993, the average age 
of pending waivers was 3 years.
  The Department of Justice has one duty: to enforce the antitrust 
laws. It should not be allowed to become the police officer, judge, and 
jury for the telecommunications industry.
  So, Mr. President, in summary and in conclusion, let me say to my 
colleagues that we have worked out a bipartisan bill in the Commerce 
Committee. All Democrats voted for it and two Republicans voted 
against, and all the other Republicans voted for it in the committee. 
It is a carefully crafted bill that would be deregulatory yet would 
protect the public interest and the taxpayers. In that bill we set the 
standard. We are trying to get everybody into everybody else's 
business. We are trying to break up the economic apartheid. We are 
trying to encourage small business entry.
  If we can pass this bill, it will be like the gun going off in the 
Oklahoma land rush because investors and consumers and entrepreneurs 
will have a road map to take us into the wireless age.
  This is a transitional bill, as I see it. If we add another layer of 
regulation on this bill, if we add the Department of Justice doing the 
same thing the FCC is doing, then we are merely adding another 3 to 5 
years to any decisions. The Justice Department just does not move very 
fast. We would be giving to the Justice Department, which is supposed 
to interpret the Sherman and Clayton Acts, a regulatory role. I know 
there are about 200 lawyers over there in Justice who have been 
carrying out Judge Greene's orders. They are Judge Greene's attorneys. 
That is because Congress failed to act.
  I am not criticizing Judge Greene. I am not criticizing those 
attorneys. But in S. 652 we have set up a system and a process that is 
very fair. There is the competitive checklist, and the FCC can use the 
public interest standard. The public interest issue was voted on today 
in this body. We have tried to work these things out.
  I know there is a great nervousness between the long distance 
companies and the regional Bells. But we have reached a balance. These 
amendments would throw that balance off. But worse, they would disserve 
the public because the public wants lower cost telephones and lower 
cost cable rates. They are getting, in this amendment, more 
regulations, more delays. There would be more delays in developing new 
devices.
  The cellular phone was invented in the late fifties. But because of 
Government regulation, we did not really see much of them until about 
1985. Then the cellular phones came onto the market without much 
regulation. Now the price is coming down, and more and more people are 
buying them. Still, it took 40 years because of Government regulation.
  That is what this amendment is about. This amendment is for more 
Government regulation. We need to be deregulators. We need to be 
procompetitive.
  This is a very important amendment. I urge that we vote this 
amendment down, the underlying amendment, and any second-degree 
amendment, because this goes to the very heart of the debate in the 
Senate tonight. It is deregulation. We go on and on with layers of 
people to approve things going from one agency to another to another to 
another. We go on and on asking people to wait 3 to 5 years. We have 
people in the Justice Department who want to oversee the writing of 
yellow pages in telephone books. They are supposed to be interpreting 
the Sherman and Clayton antitrust acts. That is what the Justice 
Department is for. The FCC has another role.
  I urge when we come to this that we vote it down. It is a very 
regulatory amendment.
  I yield the floor.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Could I just yield momentarily? I think the Senator 
from North Dakota has an amendment of clarification to his amendment.


                    Amendment No. 1264, as Modified

  Mr. DORGAN. Mr. President, I send a modification to my amendment to 
the [[Page S8008]] desk, and I might tell the Senate the modification 
is to form only, not to substance. And I ask the modification be 
accepted.
  The PRESIDING OFFICER. The amendment is so modified.
  The amendment (No. 1264), as modified, is as follows:
       On page 82, line 23, beginning with the word ``after'', 
     delete all that follows through page 91, line 25, and insert 
     the following:
       ``to the extent approved by the Commission and the Attorney 
     General''.

     ``in accordance with the provisions of subsection (c);
       ``(2) interLATA telecommunications services originating in 
     any area where that company is not the dominant provider of 
     wireline telephone exchange service or exchange access 
     service in accordance with the provisions of subsection (d); 
     and
       ``(3) interLATA services that are incidental services in 
     accordance with the provisions of subsection (e).
       ``(b) Specific InterLATA Interconnection Requirements.--
       ``(1) In General.--A Bell operating company may provide 
     interLATA services in accordance with this section only if 
     that company has reached an interconnection agreement under 
     section 251 and that agreement provides, at a minimum, for 
     interconnection that meets the competitive checklist 
     requirements of paragraph (2).
       ``(2) Competitive Checklist.--Interconnection provided by a 
     Bell operating company to other telecommunications carriers 
     under section 251 shall include:
       ``(A) Nondiscriminatory access on an unbundled basis to the 
     network functions and services of the Bell operating 
     company's telecommunications network that is at least equal 
     in type, quality, and price to the access the Bell operating 
     company affords to itself or any other entity.
       ``(B) The capability to exchange telecommunications between 
     customers of the Bell operating company and the 
     telecommunications carrier seeking interconnection.
       ``(C) Nondiscriminatory access to the poles, ducts, 
     conduits, and rights-of-way owned or controlled by the Bell 
     operating company at just and reasonable rates where it has 
     the legal authority to permit such access.
       ``(D) Local loop transmission from the central office to 
     the customer's premises, unbundled from local switching or 
     other services.
       ``(E) Local transport from the trunk side of a wireline 
     local exchange carrier switch unbundled from switching or 
     other services.
       ``(F) Local switching unbundled from transport, local loop 
     transmission, or other services.
       ``(G) Nondiscriminatory access to----
       ``(i) 911 and E911 services;
       ``(ii) directory assistance services to allow the other 
     carrier's customers to obtain telephone numbers; and
       ``(iii) operator call completion services.
       ``(H) White pages directory listings for customers of the 
     other carrier's telephone exchange service.
       ``(I) Until the date by which neutral telephone number 
     administration guidelines, plan, or rules are established, 
     nondiscriminatory access to telephone numbers for assignment 
     to the other carrier's telephone exchange service customers. 
     After that date, compliance with such guidelines, plan, or 
     rules.
       ``(J) Nondiscriminatory access to databases and associated 
     signaling, including signaling links, signaling service 
     control points, and signaling service transfer points, 
     necessary for call routing and completion.
       ``(K) Until the date by which the Commission determines 
     that final telecommunications number portability is 
     technically feasible and must be made available, interim 
     telecommunications number portability through remote call 
     forwarding, direct inward dialing trunks, or other comparable 
     arrangements, with as little impairment of functioning, 
     quality, reliability, and convenience as possible. After that 
     date, full compliance with final telecommunications number 
     portability.
       ``(L) Nondiscriminatory access to whatever services or 
     information may be necessary to allow the requesting carrier 
     to implement local dialing parity in a manner that permits 
     consumers to be able to dial the same number of digits when 
     using any telecommunications carrier providing telephone 
     exchange service or exchange access service.
       ``(M) Reciprocal compensation arrangements on a 
     nondiscriminatory basis for the origination and termination 
     of telecommunications.
       ``(N) Telecommunications services and network functions 
     provided on an unbundled basis without any conditions or 
     restrictions on the resale or sharing of those services or 
     functions, including both origination and termination of 
     telecommunications services, other than reasonable conditions 
     required by the Commission or a State. For purposes of this 
     subparagraph, it is not an unreasonable condition for the 
     Commission or a State to limit the resale----
       ``(i) of services included in the definition of universal 
     service to a telecommunications carrier who intends to resell 
     that service to a category of customers different from the 
     category of customers being offered that universal service by 
     such carrier if the Commission or State orders a carrier to 
     provide the same service to different categories of customers 
     at different prices necessary to promote universal service; 
     or
       ``(ii) of subsidized universal service in a manner that 
     allows companies to charge another carrier rates which 
     reflect the actual cost of providing those services to that 
     carrier, exclusive of any universal service support received 
     for providing such services in accordance with section 
     214(d)(5)
       ``(3) Joint marketing of local and long distance 
     services.--Until a Bell operating company is authorized to 
     provide interLATA services in a telephone exchange ``area 
     where that company is the dominant provider of wireline 
     telephone exchange service or exchange access service,'', a 
     telecommunications carrier may not jointly market in such 
     telephone exchange area telephone exchange service purchased 
     from such company with interLATA services offered by that 
     telecommunications carrier.
       ``(4) Commission may not expand competitive checklist.--The 
     Commission may not, by rule or otherwise, limit or extend the 
     terms used in the competitive checklist.
       ``(c) In-Region Services.--
       ``(1) Application.--Upon the enactment of the 
     Telecommunications Act of 1995, a Bell operating company or 
     its affiliate may apply to the Commission and Attorney 
     General for authorization notwithstanding the Modification of 
     Final Judgment to provide interLATA telecommunications 
     service originating in any area where such Bell operating 
     company is the dominant provider of wireline telephone 
     exchange service or exchange access service. The application 
     shall describe with particularity the nature and scope of the 
     activity and of each product market or service market, and 
     each geographic market for which authorization is sought.
       ``(2) Determination by commission.--
       ``(A) Determination.--Not later than 90 days after 
     receiving an application under paragraph (1), the Commission 
     shall issue a written determination, on the record after a 
     hearing and opportunity for comment, granting or denying the 
     application in whole or in part.
       ``(B) Approval.--The Commission may only approve the 
     authorization requested in an application submitted under 
     paragraph (1) if it finds that--
       ``(i) the petitioning Bell operating company has fully 
     implemented the competitive checklist found in subsection 
     (b)(2); and
       ``(ii) the requested authority will be carried out in 
     accordance with the requirements of section 252,

     and if the Commission determines that the requested 
     authorization is consistent with the public interest, 
     convenience, and necessity. If the Commission does not 
     approve an application under this subparagraph, it shall 
     state the basis for its denial of the application.
       ``(C) Publication.--Not later than 10 days after issuing a 
     determination under paragraph (2), the Commission shall 
     publish in the Federal Register a brief description of the 
     determination.
       ``(4) Determination by attorney general.--
       ``(A) Determination.--Not later than 90 days after 
     receiving an application made under paragraph (1), the 
     Attorney General shall issue a written determination with 
     respect to the authorization for which a Bell operating 
     company or its subsidiary or affiliate has applied. In making 
     such determination, the Attorney General shall review the 
     whole record.
       ``(B) Approval.--The Attorney General shall approve the 
     authorization requested in any application submitted under 
     paragraph (1) only to the extent that the Attorney General 
     finds that there is no substantial possibility that such
      company or its subsidiaries or its affiliates could use 
     monopoly power in a telephone exchange or exchange access 
     service market to impede competition in the interLATA 
     telecommunications service market such company or its 
     subsidiary or affiliate seeks to enter. The Attorney 
     General shall deny the remainder of the requested 
     authorization.''
       ``(C) Publication.--Not later than 10 days after issuing a 
     determination under paragraph (4), the Attorney General shall 
     publish the determination in the Federal Register.''
       ``(4) Judicial review.--
       ``(A) Commencement of action.--Not later than 45 days after 
     a determination by the Commission or Attorney General is 
     published under paragraph (3), the Bell operating company or 
     its subsidiary or affiliate that applied to the Commission 
     and Attorney General under paragraph (1), or any person who 
     would be threatened with loss or damage as a result of the 
     determination regarding such company's engaging in the 
     activity described in its application, may commence an action 
     in any United States Court of Appeals against the Commission 
     or the Attorney General for judicial review of the 
     determination regarding the application.
       ``(B) Judgment.--
       ``(i) The Court shall enter a judgment after reviewing the 
     determination in accordance with section 706 of title 5 of 
     the United States Code.
       ``(ii) A judgment--
       ``(I) affirming any part of the determination that approves 
     granting all or part of the requested authorization, or
       ``(II) reversing any part of the determination that denies 
     all or part of the requested authorization, shall describe 
     with particularity the nature and scope of the activity, and 
     [[Page S8009]] of each product market or service market, and 
     each genographic market, to which the affirmance or reversal 
     applies.
       ``(5) Requirements relating to separate affiliate; 
     safeguards; and intralata toll dialing parity.--
       ``(A) Separate affiliate safeguards.--Other than interLATA 
     services * * *''.

  Mr. HOLLINGS. Mr. President, I am probably a good witness to settle 
this case because much of what has been referred to is what we did last 
year and the year before.
  As the Clinton administration came to office, we had the original 
hearing. I remember it well. Secretary Brown of Commerce appeared. He 
asked for the Department of Justice. I cross-examined him very 
thoroughly on that because what we were trying to do was deregulate, 
what we were trying to do is sort of give us the term in the market, 
one-stop shopping. And if there were any inadequacies in the 
administrative body, namely the Federal Communications Commission, it 
was incumbent on me, I felt, as a Senator to make sure those 
inadequacies were considered. I felt the administration felt very, very 
strongly about this. And what you do in Government in the art of the 
possible is you get a bill.
  So while I really wanted to have the one-stop shopping, I went along 
with the majority vote overwhelmingly as has been referred to. We had 
an 18 to 2 vote, and that kind of thing.
  We had the Bell companies, the Senator from North Dakota is quite 
correct, reading the 8(c) test that is a part of his amendment, and the 
amendment, of course, of the distinguished senior colleague of mine 
from South Carolina, Senator Thurmond, is whether or not it will 
substantially lessen competition. One is the no substantial possibility 
to use monopoly power to impede competition. That is once competition 
has already ensued. The Dorgan amendment.
  The Thurmond amendment is to the effect of reviewing ahead of time a 
merger, for example, to see whether it would substantially lessen 
competition.
  We begin with the fundamental that to monopolize trade is a felony, 
and these communications people are not criminals--not yet, in any 
event, and they do not belong in the Justice Department unless they 
violate the law.
  So looking at the majority vote in the art of the possible in getting 
a good communications bill passed, I was very careful.
  Number one, if all the colleagues would turn to page 8, I think it 
is, of S. 652, and you look down starting at line 20, section 7, 
``Effect on other law,'' I read this simple line:

       Except as provided in subsections (b) and (c)--

  which have to do with the MFJ and the GTE consent decrees--

       Except as provided in subsections (b) and (c), nothing in 
     this act shall be construed to modify, impair, or supersede 
     the applicability of any antitrust law.

  So let us clear the air. S. 652 says antitrust, keep all your 
experts; do all your reviews; study all your studies; make all your 
motions.
  How many years does it take? They are so proud: Well, the Justice 
Department is the one that broke up the AT&T. Well, if they wait for 
them to break up the next monopoly in a similar fashion, we will all be 
term limited. Even the senior Senator might not be here. I do not know. 
It will be long enough, I can tell you that.
  So let us get right down to it. The Antitrust Division has its 
responsibilities under Section 7 of Clayton. It has its responsibility 
with respect to the Sherman Act, whether any violations are there 
because that is how they moved with respect to AT&T.
  The thrust here is by the long distance crowd to get some more 
bureaucracy.
  That stated it in a line.
  Just like my friends, the Bell crowd, wanted to do away with the 
public trust, this long distance crowd wants to bureaucratize the 
entire thing like the end of the world is going to happen if you do not 
have the Justice Department bureaucracy and minions studying, moving, 
motioning, hearing, and everything else.
  I graduated from law school. I had a colleague I think who joined the 
Louisiana land case down there. Like the Georgia Pacific, they had the 
Louisiana pulp and paper case. It was a long --well, 13 years later, 
under the fees he got, he was retired down in Florida. And I always 
regretted that I went to trying cases in my hometown and did not get 
connected up with one of those rich antitrust motions.
  We are all spoiled. You have a wonderful Assistant Attorney General 
in charge of the Antitrust Division, Ms. Anne Bingaman, who has done an 
outstanding job with respect, for example, to the Microsoft case and 
engineering the Ameritech consent decree. You have a wonderful set of 
facts there where they were all petitioning and joining in. They were 
not enjoining. They were not motioning to estop. They were not 
appealing. And they were not getting clarifications and everything 
else, all these other motions that can be made under antitrust with 
findings and what have you.
  This was already under the Department of Justice consent decree, the 
MFJ consent decree whereby they could come in and motion the judge and 
agree on a limited market that was outlined, and you did not have to go 
into the regular antitrust bureaucracy and ritual that takes years on 
end, which they have already put in the Record, fortunately, for me.
  The Senator from North Dakota talked about starting with President 
Nixon, President Ford, President Carter, and then finally under 
President Reagan. So there is a strong feeling here that we tried to 
simplify as much as possible this proceeding.
  And under the amendment of the Senator from North Dakota about the 
8(c) test, no one knows it better than I because I did cite those 
letters and understanding and everything else of that kind. Because of 
the way 1822 was drafted year before last, it had actual and 
demonstrable competition. That just threw everything into the fan, and 
before I could get around and explain anything to the colleagues and 
everything else what we were trying to do, they just had a mindset that 
the chairman of the Commerce Committee was off on a toot and a little 
mixed up and it was not going to go anywhere. I had to agree with them; 
I was not going to go anywhere. So we sat down and over a 2-year 
period, meeting every Friday with all the Bell companies, and meeting 
every Tuesday morning with all of the long distance companies and the 
other long distance competitors in there, we then started spelling out 
as best we could that checklist of what actual and demonstrable 
competition would encompass. So we spell this out dutifully.
  I wish to read that to you because I wish to show you what actual and 
demonstrable, what 8(c) is. The idea is that we have disregarded the 
admonition that there be no substantial possibility of using monopoly 
power to impede competition.
  Well, how do you determine that? You determine that best by making a 
checklist of the unbundling, of the local exchange, the interconnection 
after it is unbundled.
 You get the dial parity. You set up a separate subsidiary and all the 
other particular items listed.

  I have a wonderful group here that is very familiar with the bill. 
They know how exactly to turn to the page and section so I can read it 
to you. But while they search for it, which is very difficult to find, 
what we did is we dutifully spelled out the 8(c) test, which is the 
amendment of the Senator from North Dakota, and thereupon put in the 
bill itself, which, again I think, is on page 89. Understand, we had 
not disregarded actual and demonstrable competition. On page 16, line 
10:

       (b) Minimum Standards.--An interconnection agreement 
     entered into under this section shall, if requested by a 
     telecommunications carrier requesting interconnection, 
     provide for--
       (1) nondiscriminatory access on an unbundled basis to the 
     network functions and services of the local exchange 
     carrier's telecommunications network software to the extent 
     defined in the implementing regulations by the Commission.
       (2) nondiscriminatory access on an unbundled basis to any 
     of the local exchange carrier's telecommunications facilities 
     and information, including databases and signaling, necessary 
     to the transmission and routing of any telephone exchange 
     service or exchange access service and the interoperability 
     of both carrier's networks;
       (3) interconnection to the local exchange carrier's 
     telecommunications facilities and services at any technically 
     feasible point within the carrier's network;
       (4) interconnection that is at least equal in type and 
     quality to and offered at a price no higher than that 
     provided by the local exchange carrier to itself or to any 
     subsidiary, [[Page S8010]] affiliate, or any other party to 
     which the carrier provides interconnection;
       (5) nondiscriminatory access to the poles, ducts, conduits 
     and rights-of-way owned or controlled by the local exchange 
     carrier at just and reasonable rates;
       (6) the local exchange carrier to take whatever action 
     under its control is necessary, as soon as is technically 
     feasible, to provide telecommunications number portability 
     and local dialing parity in a manner that.
       (A) Permits consumers to be able to dial the same number of 
     digits when using any telecommunications carrier providing 
     telephone exchange service or exchange access service in the 
     market served by the local exchange carrier;
       (B) permits all such carriers to have nondiscriminatory 
     access to telephone numbers, operator services, directory 
     assistance, and directory listing with no unreasonable 
     dialing delays; and
       (C) provides for a reasonable allocation of costs among the 
     parties to the agreement.
       (7) telecommunications services and network functions of 
     the local exchange carrier to be available--

                    Amendment No. 1265, As Modified

  Mr. THURMOND. Mr. President, I send a modification of my amendment to 
the desk.
  The PRESIDING OFFICER. The amendment will be so modified.
  The amendment (No. 1265), as modified, is as follows:

       Strike all after the first word of the pending amendment 
     and insert the following:
       (2) Section 309(d) (47 U.S.C. 309(d)) is amended by 
     inserting ``(or subsection (k) in the case of renewal of any 
     broadcast station license)'' after ``with subsection (a)'' 
     each place it appears.

       Subtitle B--Termination of Modification of Final Judgment

     SEC. 221. REMOVAL OF LONG DISTANCE RESTRICTIONS.

       (a) In General.--Part II of title II (47 U.S.C. 251 et 
     seq.), as added by this Act, is amended by inserting after 
     section 254 the following new section:

     ``SEC. 255. INTEREXCHANGE TELECOMMUNICATIONS SERVICES.

       ``(a) In General.--Notwithstanding any restriction or 
     obligation imposed before the date of enactment of the 
     Telecommunications Act of 1995 under section II(D) of the 
     Modification of Final Judgment, a Bell operating company, 
     that meets the requirements of this section may provide--
       ``(1) interLATA telecommunications services originating in 
     any region in which it is the dominant provider of wireline 
     telephone exchange service or exchange access service to the 
     extent approved by the Commission and the Attorney General of 
     the United States, in accordance with the provisions of 
     subsection (c);
       ``(2) interLATA telecommunications services originating in 
     any area where that company is not the dominant provider of 
     wireline telephone exchange service or exchange access 
     service in accordance with the provisions of subsection (d); 
     and
       ``(3) interLATA services that are incidental services in 
     accordance with the provisions of subsection (e).
       ``(b) Specific InterLATA Interconnection Requirements.--
       ``(1) In general.--A Bell operating company may provide 
     interLATA services in accordance with this action only if 
     that company has reached an interconnection agreement under 
     section 251 and that agreement provides, at a minimum, for 
     interconnection that meets the competitive checklist 
     requirements of paragraph (2).
       ``(2) Competitive checklist.--Interconnection provided by a 
     Bell operating company to other telecommunications carriers 
     under section 251 shall include:
       ``(A) Nondiscriminatory access on an unbundled basis to the 
     network functions and services of the Bell operating 
     company's telecommunications network that is at least equal 
     in type, quality, and price to the access the Bell operating 
     company affords to itself or any other entity.
       ``(B) The capability to exchange telecommunications between 
     customers of the Bell operating company and the 
     telecommunications carrier seeking interconnection.
       ``(C) Nondiscriminatory access to the poles, ducts, 
     conduits, and rights-of-way owned or controlled by the Bell 
     operating company at just and reasonable rates where it has 
     the legal authority to permit such access.
       ``(D) Local loop transmission from the central office to 
     the customer's premises, unbundled from local switching or 
     other services.
       ``(E) Local transport from the trunk side of a wireline 
     local exchange carrier switch unbundled from switching or 
     other services.
       ``(F) Local switching unbundled from transport, local loop 
     transmission, or other services.
       ``(G) Nondiscriminatory access to--
       ``(i) 911 and E911 services;
       ``(ii) directory assistance services to allow the other 
     carrier's customers to obtain telephone numbers; and
       ``(iii) operator call completion services.
       ``(H) White pages directory listings for customers of the 
     other carrier's telephone exchange service.
       ``(I) Until the date by which neutral telephone number 
     administration guidelines, plan, or rules are established, 
     nondiscriminatory access to telephone numbers for assignment 
     to the other carrier's telephone exchange service customers. 
     After that date, compliance with such guidelines, plan, or 
     rules.
       ``(J) Nondiscriminatory access to databases and associated 
     signaling, including signaling links, signaling service 
     control points, and signaling service transfer points, 
     necessary for call routing and completion.
       ``(K) Until the date by which the Commission determines 
     that final telecommunications number portability is 
     technically feasible and must be made available, interim 
     telecommunications number portability through remote call 
     forwarding, direct inward dialing trunks, or other comparable 
     arrangements, with as little impairment of functioning, 
     quality, reliability, and convenience as possible. After that 
     date, full compliance with final telecommunications number 
     portability.
       ``(L) Nondiscriminatory access to whatever services or 
     information may be necessary to allow the requesting carrier 
     to implement local dialing parity in a manner that permits 
     consumers to be able to dial the same number of digits when 
     using any telecommunications carrier providing telephone 
     exchange service or exchange access service.
       ``(M) Reciprocal compensation arrangements on a 
     nondiscriminatory basis for the origination and termination 
     of telecommunications.
       ``(N) Telecommunications services and network functions 
     provided on an unbundled basis without any conditions or 
     restrictions on the resale or sharing of those services or 
     functions, including both origination and termination of 
     telecommunications services, other than reasonable conditions 
     required by the Commission or a State. For purposes of this 
     subparagraph, it is not an unreasonable condition for the 
     Commission or a State to limit the resale--
       ``(i) of services included in the definition of universal 
     service to a telecommunications carrier who intends to resell 
     that service to a category of customers being offered that 
     universal service by such carrier if the Commission or State 
     orders a carrier to provide the same service to different 
     categories of customers at different prices necessary to 
     promote universal service; or
       ``(ii) of subsidized universal service in a manner that 
     allows companies to charge another carrier rates which 
     reflect the actual cost of providing those services to that 
     carrier, exclusive of any universal service support received 
     for providing such services in accordance with section 
     214(d)(5).
       ``(3) Joint marketing of local and long distance 
     services.--Until a Bell operating company is authorized to 
     provide interLATA services in a telephone exchange ``area 
     where that company is the dominant provider of wireline 
     telephone exchange service or exchange access service,'' a 
     telecommunications carrier may not jointly market telephone 
     exchange service in such telephone exchange area purchased 
     from such company with interLATA services offered by that 
     telecommunications carrier.
       ``(4) Commission may not expand competitive checklist.--The 
     Commission may not, by rule or otherwise, limit or extend the 
     terms used in the competitive checklist.
       ``(c) In-Region Services.--
       ``(1) Application.--Upon the enactment of the 
     Telecommunications Act of 1995, a Bell operating company or 
     its affiliate may apply to the Commission and the Attorney 
     General for authorization notwithstanding the Modification of 
     Final Judgment to provide interLATA telecommunications 
     service originating in any area where such Bell operating 
     company is the dominant provider of wireline telephone 
     exchange service or exchange access service. The application 
     shall describe with particularity the nature and scope of the 
     activity and of each product market or service market, and 
     each geographic market for which authorization is sought.
       ``(2) Determination by commission and attorney general.--
       ``(A) Determination.--Not later than 90 days after 
     receiving an application under paragraph (1), the Commission 
     and the Attorney General shall each issue a written 
     determination, on the record after a hearing and opportunity 
     for comment, granting or denying the application in whole or 
     in part.
       ``(B) Approval by commission.--The Commission may only 
     approve the authorization requested in an application 
     submitted under paragraph (1) if it finds that--
       ``(i) the petitioning Bell operating company has fully 
     implemented the competitive checklist found in subsection 
     (b)(2); and
       ``(ii) the requested authority will be carried out in 
     accordance with the requirements of section 252,

     and if the Commission determines that the requested 
     authorization is consistent with the public interest, 
     convenience, and necessity. In making its determination 
     whether the requested authorization is consistent with the 
     public interest convenience, and necessity, the Commission 
     shall not consider the antitrust effects of such 
     authorization in any market for which authorization is 
     sought. If the Commission does not approve an application 
     under this subparagraph, it shall state the basis for its 
     denial of the application.
       ``(C) Approval by attorney general.--The Attorney General 
     may only approve the authorization requested in an 
     application submitted under paragraph (1) if the Attorney 
     General finds that the effect of such authorization will not 
     substantially lessen [[Page S8011]] competition, or tend to 
     create a monopoly in any line of commerce in any section of 
     the country. The Attorney General may approve all or part of 
     the request. If the Attorney General does not approve an 
     application under this subparagraph, the Attorney General 
     shall state the basis for the denial of the application.''.
       ``(3) Publication.--Not later than 10 days after issuing a 
     determination under paragraph (2), the Commission and the 
     Attorney General shall each publish in the Federal Register a 
     brief description of the determination.
       ``(4) Judicial review.--
       ``(A) Commencement of action.--Not later than 45 days after 
     a determination by the Commission or the Attorney General is 
     published under paragraph (3), the Bell operating company or 
     its subsidiary or affiliate that applied to the Commission 
     and the Attorney General under paragraph (1), or any person 
     who would be threatened with loss or damage as a result of 
     the determination regarding such company's engaging in the 
     activity described in its application, may commence an action 
     in any United States Court of Appeals against the Commission 
     or the Attorney General for judicial review of the 
     determination regarding the application.
       ``(B) Judgment.--
       ``(i) The Court shall enter a judgment after reviewing the 
     determination in accordance with section 706 of title 5 of 
     the United States Code.
       ``(ii) A judgment--
       ``(I) affirming any part of the determination that approves 
     granting all or part of the requested authorization, or
       ``(II) reversing any part of the determination that denies 
     all or part of the requested authorization,

     shall describe with particularity the nature and scope of the 
     activity, and of each product market or service market, and 
     each geographic market, to which the affirmance or reversal 
     applies.
       ``(5) Requirements relating to separate affiliate; 
     safeguards; and intralata toll dialing parity.--
       ``(A) Separate affiliate; safeguards.--Other than interLATA 
     services au-''.
                    Amendment No. 1264, As Modified

  Mr. HOLLINGS. I thank the distinguished Senator.

       (7) telecommunications services and network functions of 
     the local exchange carrier to be available to the 
     telecommunications carrier without any unreasonable 
     conditions on the resale or sharing of those services or 
     functions, including the origination, transport, and 
     termination of such telecommunications services, other than 
     reasonable conditions required by a State; and for the 
     purposes of this paragraph, it is not an unreasonable 
     condition for a State to limit the resale--
       (A) of services included--

  I could keep on reading. I hope the colleagues will refer right on 
past page 19.
  How this was developed is powerfully interesting, Mr. President, 
because we had the lawyers. I said earlier today 60,000 lawyers are 
licensed to practice before the District of Columbia bar; 59,000 of 
them are communications lawyers, and they have all been meeting here 
for the last 2 years. They know every little motion, every little 
twist, every little word, every little turn.
  This is nothing about the Department of Justice. All of this has to 
be done by the Federal Communications Commission. Talk about expertise. 
How high and mighty and what a great aura of austerity and other things 
we have to have here for the Department of Justice. The Department of 
Justice looks out at the market and finds out if there is any 
unreasonable monopolistic practices in restraint of trade. They have a 
very broad thing. They do not look at any of these things. They would 
not be equipped to and would not know.
  When you get through having done all of this, which really ends up 
into actual and demonstrable competition, which ends up actually being 
the 8(c) test under the modified final judgment, when you have done all 
of that, there is one other catchall, and that was referred to earlier 
today in an overwhelming vote of the public interest standard. That is 
why you had it, Mr. President. For everybody's understanding, if you 
wanted to know why they were fighting to get rid of the public interest 
standard, we had the catchall in there that the public interest 
standard had to be adhered to, and that was measured by the Federal 
Communications Commission.
  Here is how that reads:

       If the commission determines the requested authorization is 
     consistent with the public interest convenience and 
     necessity. . .

  Now that is a tremendous body of law under the present and continuing 
to be 1934 Communications Act. Oh, it would be great to come and have 
the Pressler Act, the Hollings Act. We could go down in history.
  But there is a tremendous body of law under the 1934 Communications 
Act, and if we started anew with an entirely new communications act for 
our own egos around here, then we would have really messed up 60 years 
of law and decisions, res adjudicata, understandings, and we would have 
caused tremendous mischief. We would not have deregulated anybody. We 
would have thrown the information superhighway into the ditch.
  So what we did is refer back to that where it is referred as a public 
interest matter 73 times under the original 1934 act.
  The Commission, after doing all of that, has at its hand a duty 
affirmatively--you are talking about affirmative action in Washington 
these days. The affirmative action imposed upon the Federal 
Communications Commission is found on page 89 where the ``Commission 
shall consult with the Attorney General regarding the application. In 
consulting with the Commission under this subparagraph, the Attorney 
General may apply any appropriate standard.''
  Then if the colleagues would turn to page 43 of the committee report:

       Within 90 days of receiving an application, the FCC must 
     issue a written determination, after notice and opportunity 
     for a hearing on the record, granting or denying the 
     application in whole or in part. The FCC is required to 
     consult with the Attorney General regarding the application 
     during that 90-day period. The Attorney General may analyze a 
     Bell operating company application under any legal standard 
     (including the Clayton Act, Sherman Act, other antitrust 
     laws, section 8(c) of the modified final judgment, Robinson-
     Patman Act or any other antitrust standard).

  I can tell you, Mr. President, that you cannot do a better job than 
that. I have no misgivings for the wonderful vote on the good bill, 
1822. We were ready, willing and able to pass it as it was.
 I was passing it the best way we could. But on second thought, looking 
at the votes, the support, the determination of the colleagues--and 
that is what we all said in the very beginning, that this is a good 
balance, we do not disregard the public on a fundamental here. What we 
do--and it is well to be argued--is that we consider the public. If you 
go down all the particular things required, plus the public interest 
standard, if you go into the Attorney General coming in, you know that 
is going to raise a question if the Attorney General sees any 
substantial possibility of monopoly power being used to impede 
competition or the other Clayton 7 act substantially lessening 
competition.

  Either way, or any other way, under the Sherman Act, the Attorney 
General has an affirmative duty to advise, and that is right quick 
like, because they have to do it under a stated time here in our act. I 
do not know how to more deliberately go about the particular granting 
of licensing and opening up of markets, allowing the Bell operating 
companies into long distance and the long distance into the Bell 
operating companies and to let competition ensue.
  So both of these amendments--the amendment of the distinguished 
Senator from South Carolina to the second degree under the Clayton 7 
test is cared for under this S. 652. The 8(c) test of no substantial 
possibility, of impeding competition, is taken care of here. And over 
and above it all, it is stated clear on page 8 of the particular bill 
that all standards can be used by the Attorney General. The Attorney 
General has its duties. They are generally criminal duties, and we 
should not have our wonderful carriers, whether they be Bell operating 
companies, long distance companies, or any other telecommunications 
carriers, even calling over there and trying to find a Justice 
department lawyer, rather than a Federal Communication Commission 
lawyer. It is like ailments physically, when you have to get a special 
doctor. Well, you need a special lawyer for that. Once he gets into 
that and they get the billable hours and the motions and clarifications 
and everything else, you can forget about your communications company. 
It has gone down the tubes financially. We put it in there to make sure 
that the Antitrust Division of the United States Justice Department is 
not impeded in any fashion.
  ``Nothing in this act shall be construed to modify, impair, or 
supersede [[Page S8012]] the applicability of any add antitrust law.''
  Now, why do we have these amendments? The long distance crowd are 
wonderful people. I have been working with them, and I have been 
working with the Bell companies. We all say that everybody has to get 
together and we have to get this bill passed. We have to do it in a 
bipartisan fashion. It is incumbent on this Senator's judgment here at 
this particular time that this is far and away the best approach.
  So I support our distinguished chairman here in his S. 652, to 
eliminate the direct hearing process, and everything else, of going 
first to one department of Government and after you get through with 
that department of Government, come down over to the next department of 
Government, and then go through all of that list of things that I have 
listed down there and expect to get anything done.
  We are trying to get one-stop shopping here. There is no reason other 
than, yes, if you get a violator, and if you get a violator with all of 
this klieg light of attention being given to communications and the 
responsibilities to the FCC and the experts they are going to have to 
hire. They have already made $7 billion for us this year with auctions. 
So there is no shortage of money at the FCC.
  We have to make sure we have the Federal Communications Commission's 
appropriations in our subcommittee of appropriations, and we are going 
to provide a very outstanding staff, because we want to facilitate. We 
do not want the FCC coming back and saying we are overwhelmed and we 
cannot possibly get it out and we cannot do this and that. Temporarily, 
for 2, 3 years, sitting down and promulgating all of the rules, 
entertaining all of the petitions and what have you, there is going to 
be a plethora of legal proceedings looking at both the 8(c) tests and 
section 7 of the Clayton Act, and all other measures with respect to 
trying to open up and make sure that on the one hand there is 
competition, and on the other hand that any present monopoly power is 
not used to impede that competition. I do not know how you can get it 
done any better than that.
  This amendment would really just formalize both things constituting a 
requirement to get the lawyers and go up and go through one and go 
through the other, where these two can really communicate, not only by 
phone--communications, that is--but they can send a letter and give a 
formal opinion, and everything else like that, and you can bet your 
boots that the Federal Communications Commission is not going to 
disregard the advice of that Attorney General if it is a strong showing 
in its opinion that there is some substantial possibility of impeding 
competition, or that it lessens substantially competition.
  No FCC is going to get by with that. That appeal will go up, and the 
order would not go anywhere before it would be appealed up and probably 
set aside, because then it would have one division of the Government 
against the other division.
  We have smoothed it out and streamlined it. We have cut out the 
bureaucracy, and yet, we have had every particular safeguard that you 
can imagine, that the lawyers could think of that is in here, to make 
sure that it works and works properly for the public interest.
  I yield the floor.
  Mr. KERREY. Well, I must say, Mr. President, I rise with some 
trepidation. The distinguished Senator from South Carolina has made a 
very impressive legal case as to why the language in the bill, as it is 
written, is satisfactory and the distinguished Senator from South 
Dakota, prior to him, laid out a number of reasons why the amendment 
offered by the Senator from North Dakota is wrong.
  I say to my colleagues that I do not come here representing the long 
distance companies or any other companies. I come here representing the 
consumers, first of Nebraska, and then of the United States of America. 
And I hear in the arguments offered here that, first of all, this would 
be an unprecedented thing for the Justice Department to do. Well, if it 
is our fear of breaking precedent that is the problem with this 
amendment, then we should not enact this legislation. This legislation 
is unprecedented, is it not?
  I ask the distinguished Senator from South Dakota, is this 
legislation not itself unprecedented? Has the Congress of the United 
States of America ever considered a law that would take such a 
substantially regulated monopoly with such size and move it into a 
competitive environment? When have we done this before, of this size 
and magnitude?
  Mr. HOLLINGS. If the Senator will yield. AT&T.
  Mr. KERREY. The AT&T divestiture was done by the Department of 
Justice, not the Congress.
  Mr. HOLLINGS. It took 10 years. We do not want to do that.
  Mr. KERREY. My point here is, to say that what we are asking for with 
this amendment is unprecedented leads me to the question, is this 
legislation itself not unprecedented? Is not what Congress is 
considering with S. 652 unprecedented? I do not come to the floor and 
say let us not do S. 652 because it is unprecedented. I understand it 
is unprecedented.
 We are in unchartered waters. We have not done this before.

  Mr. PRESSLER. Will my friend yield?
  Mr. KERREY. I yield.
  Mr. PRESSLER. We are in unchartered waters in the sense that already 
the Department of Justice is running an industry, so to speak. That is 
without precedent in terms of Judge Greene's order, which I think was 
necessary, because Congress did not do its duty. Congress is now doing 
its duty or trying to in this bill.
  Mr. KERREY. The Senator is saying that the Congress, the fact that we 
had divestiture of AT&T in 1985 was the failure of the U.S. Congress?
  Mr. PRESSLER. In part, yes. The Congress should have acted.
  Mr. KERREY. Mr. President, I ask the Senator from South Dakota what 
would he propose Congress do?
  Mr. PRESSLER. Congress has been paralyzed and unable to make 
telecommunications policy because there are so many people in 
telecommunications who can checkmate the decision. So as 
telecommunications was modernizing, the Congress was not reacting, and 
the pressure built up to the point that Judge Greene made the decision 
that he did.
  Mr. HOLLINGS. Will the Senator yield?
  Mr. KERREY. Pleased to yield.
  Mr. HOLLINGS. We had 10 years of hearings, John Pastore of Rhode 
Island was chairman of the subcommittee, and in the late 1960's and all 
the way through the entire 1970's we had hearings.
  I got a nice compliment from Judge Greene. Minority opinions that we 
put in the committee reports, after all of our hearings, trying to 
break up AT&T. Congress was trying to do it because there were 12 
orders that were made by the Federal Communications Commission, but 
they, AT&T, was so legally powerful that they had each of the 12 orders 
into some legal snarl of one kind or another, whereby none of the 
orders were enforceable. They could not get anything done, and we could 
not deregulate.
  That is why they were accelerating the particular antitrust 
proceedings. Congress was unable to act. I am a witness to that because 
I served on that subcommittee and went to hearings ad nauseam, trying 
to do it, and we make up the reports and everything else. Finally, it 
had to be done by the Justice Department.
  It is just like the Senate passing different bills. We tried during 
the 1980's to take this from Judge Greene and put it back into the FCC 
and got nowhere. We had the manufacturing bill pass by 74 votes--
bipartisan in the Senate. It got blocked over on the House side.
  Every time we turned and tried at the congressional level we failed. 
Now we are about to succeed, I think, and I am confident we have the 
support of the distinguished Senator from Nebraska.
  Mr. KERREY. I will stipulate that I agree that Congress failed in not 
being able to resolve the various conflicts and pass legislation to 
break up AT&T in the 1980's and come up with a legislative solution.
  A failure of the Reagan administration, as well, not to be able to 
exercise sufficient leadership. I stipulate here on the floor tonight 
that it was a failure of the Reagan administration, a failure of the 
U.S. Senate in the 1980's, and a failure of the United States House of 
Representatives to be able to get this job done. [[Page S8013]] 
  Is that a fair stipulation? Am I expressing something with which the 
Senator from South Dakota would disagree?
  Mr. PRESSLER. Would my friend yield?
  Mr. KERREY. I yield.
  Mr. PRESSLER. I am not trying to score debate points, but in part, it 
was a failure of everyone and previous Congresses and administrations 
to tackle the difficult problem we were trying to tackle.
  I am not putting anybody down. This bill has been worked on by many 
Senators, and the Senator from South Carolina has shown great courage. 
His speech was one of the great speeches that I have heard in the 
Senate.
  I would say to my good friend from Nebraska, may I ask a question: Is 
there any other precedent, is there any other industry that has been 
taken over by the Justice Department and regulated and run as Judge 
Greene's decree did? Is not that unprecedented?
  Mr. KERREY. Absolutely is.
  Is there any situation, Senator, where governmental entity has 
produced so much good? Is there? Tell me the bad things that have 
happened since the consent decree was filed.
  Mr. PRESSLER. Well, I would have supported the concept of a consent 
decree.
  I think we have reached a point where Congress should take back its 
rightful role. I think that Judge Greene probably would say that. I 
have not met him. I would love to meet him some day, because he is one 
of the great people in American history in terms of what he has done. 
An industrial reconstruction that is bigger than any in history.
  I always tell students when I give speeches in my State of South 
Dakota, if they want to influence public policy, they should become a 
journalist or Federal judge first, if they really want to have sweeping 
affects. I cite Judge Greene as an example.
  But if I may say so, we are sort of debating the chicken and the egg.
  Mr. KERREY. It is not the chicken and the egg.
  Mr. PRESSLER. We have a situation that I think we have the 
responsibility to act.
  Mr. KERREY. If Congress did it in 1985, they could not have done it 
as well as the Department of Justice. The regional Bell companies at 
the time of the filing of the consent decree object to restrictions 
placed on them on manufacturing, on services, and they objected because 
they wanted to get into all the things.
  The consent decree said we will have competition. It said we will 
move from a monopoly to competition.
  This is the agency of the government that has enabled us to do that. 
The U.S. Department of Justice has done it. That is what I see. I see 
them as an agency that has produced competition, in an unprecedented 
time, once before, and now in another unprecedented time.
  In my judgment, we need them not to produce duplication, not to 
produce a duplicative process. It is a parallel process. Do you not go 
to one agency and then to another. I tend to walk through, as I see, 
the process.
  I feel odd arguing, because in S. 1822 last year, we had all this 
pretty well settled. Last year's legislation came out with a 18-2 
margin. I believe, basically, that did what the Dorgan amendment is now 
asking for.
  I point out, as well, one of the statements that was made here that 
this thing could drag on a long, long time.
  Well, the amendment tends to deal with that. I point out to my 
colleagues that there is a determination, a process, that says that the 
Attorney General, not later than 30 days after receiving an 
application, shall issue a written determination. There is a time 
certain in here of the 90 days.
  Now, maybe 90 days is too long. Maybe it ought to be somewhat 
shorter. There is an attempt made here not to lengthen the process. 
Indeed, I believe very strongly that the law as it is written without 
this amendment is an invitation for lengthy litigation.
  But most importantly, Mr. President, my fear with this, and it is a 
sincerely based fear, I do not come here pulling for the long distance 
companies, or represent one interest or another.
  I come many times in this debate to say this: We are going to vote on 
this in final passage some time in the next year. We will have a vote 
on final passage.
  Members need to understand that they will be held accountable for 
that vote. Who will hold them accountable? Who will say, ``You cast the 
right vote.'' In the early difficult days, it will be the companies who 
have taken an interest. It will be the corporations that have been in 
town talking to Senators, day in and day out since the committee began 
its work in the early part of this year, and since the committee 
started its work last year. The companies that have been in town saying 
``We like this provision, we don't like this provision,'' all the 
delicate balance that has been referenced. Either get a pat on the 
back, or a wave, or some smaller number of fingers directed in your 
direction.
  I urge my colleagues to understand that the much more important test 
of whether or not this piece of legislation is going to be something 
Senators are either proud of, or for the rest of your political 
career--perhaps shortened by this vote--Senators are explaining why 
they thought it would do something else.
  This piece of legislation either produces lower prices and higher 
quality to 100 million residential users of information services from 9 
basic industries, or anybody that votes ``aye'' on this thing has a lot 
of trouble.
  I do not care what AT&T says. I do not care what the RBOC says. I do 
not care what the cable companies say or the broadcast people say, or 
anybody else says. Out in that hallway or in your office or through the 
mailbox or through E mail or any other kind of communication, they may 
tell Senators they are doing the right thing, but the real test is 
going to come a year from now, 2 years from now, 3 years from now when 
this rubber begins to meet the road.
  The question then will be, what do the consumers say? What do the 
citizens say? Dare I mention it, what do the voters say, who have not 
asked for this piece of legislation?
  I say now for the 8th or 9th or 10th time, this is not something that 
has been driven by town hall meetings. This is not on talk radio. This 
is not something that is coming as a part of the Contract With America. 
No one has polled this. No one has reached out and said, we will do 
focus groups and find out what is going on here. This is being driven 
by legitimate corporations with a sincere desire to do something that 
current law says they cannot do.
  So we are trying to do something that is unprecedented-- 
unprecedented to take a large sector of our economy and move it from a 
monopoly status into a competitive environment.
  And if we only worry about whether or not the existing corporations 
are going to be able to get what they want, in my judgment, not only 
would the consumers be unhappy, because they do not get the competitive 
choice they need. In my judgment, as well, all the promises of jobs we 
are talking about all the time, are not going to be fulfilled.
 Because, rest assured, when jobs are created they are going to be 
created by companies that do not even exist today. New entries, like we 
saw with Microsoft, new entries like we saw with Intel--we are going to 
see new entries that are going to be creating the jobs of tomorrow. 
And, unless this legislation permits, with no reservations, competition 
at the local level, it is unlikely that either the consumers of the 
United States of America, or those people in America who are trying to 
find jobs, are going to be terribly happy with the product.

  I am going to go down a few things I have heard said here this 
evening. I do not know how much longer I will talk. I will talk a 
while. We are going to come back in tomorrow and have plenty of time to 
go through some additional matters. Let me go through some of the 
things that were referenced.
  I have heard it said this is more regulation and more delay. I am 
prepared to argue and present it is not. I am prepared to argue in fact 
that the existing legislation, unless it is changed by the Dorgan 
amendment, is going to be more regulation and more delay.
  I have heard it said the Department of Justice is going to take on 
legions of new employees. It is not true. Indeed, the much more likely 
possibility is it will be the FCC that has to take on legions of new 
employees because they are not used to doing this kind of work. 
[[Page S8014]] It is much more likely that the plethora of applications 
that come the FCC's way is going to produce an increase in that 
bureaucracy and not an increase in the Department of Justice.
  I have heard it said, and I referenced it earlier, this is going to 
create duplication. It is not. It is a concurrent process, a 
simultaneous process of application. The FCC does the work it is 
supposed to do. The Department of Justice does the work it is supposed 
to do. There is not an overlapping of permit requirement here. One 
agency has one responsibility; another has another responsibility. 
There is a time certain, as I indicated already in the amendment.
  In my judgment we have made an effort with this amendment to try to 
take into account the concerns that people have. Are we going to have 
more regulation? Is this going to create duplication? Is this going to 
mean more paperwork and delay? It will not mean more of any of those 
things. It will mean less.
  I have heard it said, as I indicated earlier, that this is an 
unprecedented intrusion by the Department of Justice into an industry. 
Mr. President, this whole venture is unprecedented. I hope colleagues 
understand that. It is an unprecedented action. It is an unprecedented 
bipartisan action, and I trust and hope this amendment will become an 
unprecedented bipartisan action as well, because, unless we improve 
this legislation with this change, those who vote ``yes'' on this bill, 
I believe sincerely and genuinely, will regret having done so.
  Mr. President, I hear that this is a dangerous precedent.
  Mr. PRESSLER. I am sorry. I have the example, if the Senator will 
yield, that he asked for earlier.
  Mr. HOLLINGS. If the Senator will yield, what we have, I say to the 
distinguished Senator, is the minority leader's amendment. When we 
called up the bill we put in the majority leader's amendment. We did 
not have a opportunity to put in the minority leader's, and we wanted 
to print it in the Record so the Members could read it.
  Will Senator temporarily yield?
  Mr. KERREY. I will.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent the pending 
amendment be set aside so I may send an amendment to the desk on behalf 
of myself and the Democratic leader, Senator Daschle.
  Without objection, it is so ordered.


                           Amendment No. 1266

  (Purpose: To clarify the requirements a Bell operating company must 
satisfy before being permitted to offer long distance services, and for 
                            other purposes)

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

       The Senator from South Carolina [Mr. Hollings], for himself 
     and Mr. Daschle, proposes an amendment numbered 1266.

  Mr. HOLLINGS. 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:
       On page 53, after line 25, insert the following:

     SEC. 107. COORDINATION FOR TELECOMMUNICATIONS NETWORK-LEVEL 
                   INTEROPERABILITY.

       (a) In General.--To promote nondiscriminatory access to 
     telecommunications networks by the broadcast number of users 
     and vendors of communications products and services through--
       (1) coordinated telecommunications network planning and 
     design by common carriers and other providers of 
     telecommunications services, and
       (20 interconnection of telecommunications networks, and of 
     devices with such networks, to ensure the ability of users 
     and information providers to seamlessly and transparently 
     transmit and receive information between and across 
     telecommunications networks,

     the Commission may participate, in a manner consistent with 
     its authority and practice prior to the date of enactment of 
     this Act, in the development by appropriate voluntary 
     industry standard-setting organizations to promote 
     telecommunications network-level interoperability.
       (b) Definition of Telecommunications Network-Level 
     Interoperability.--As used in this section, the term 
     ``telecommunications network-level interoperability'' means 
     the ability of 2 or more telecommunications networks to 
     communicate and interact in concert with each other to 
     exchange information without degeneration.
       (c) Commission's Authority Not Limited.--Nothing in this 
     section shall be construed as limiting the existing authority 
     of the Commission.
       On page 66, line 13, strike the closing quotation marks and 
     the second period.
       On page 66, between lines 13 and 14, insert the following:
       ``(6) Acquisitions; joint ventures; partnerships; joint use 
     of facilities--
       ``(A) Local exchange carriers.--No local exchange carrier 
     or any affiliate of such carrier owned by, operated by, 
     controlled by, or under common control with such carrier may 
     purchase or otherwise acquire more than a 10 percent 
     financial interest, or any management interest, in any cable 
     operator providing cable service within the local exchange 
     carrier's telephone service area.
       ``(B) Cable operators.--No cable operators or affiliate of 
     a cable operator that is owned by, operated by, controlled 
     by, or under common ownership with such cable operator may 
     purchase or otherwise acquire, directly or indirectly, more 
     than a 10 percent financial interest, or any management 
     interest, in any local exchange carrier providing telephone 
     exchange service within such cable operator's franchise area.
       ``(C) Joint venture.--A local exchange carrier and a cable 
     operator whose telephone service area and cable franchise 
     area, respectively, are in the same market may not enter into 
     any joint venture or partnership to provide video programming 
     directly to subscribers or to provide telecommunications 
     services within such market.
       ``(D) Exception.--Notwithstanding subparagraphs (A), (B), 
     and (C) of this paragraph, a local exchange carrier (with 
     respect to a cable system located in its telephone service 
     area) and a cable operator (with respect to the facilities of 
     a local exchange carrier used to provide telephone exchange 
     service in its cable franchise area) may obtain a controlling 
     interest in, management interest in, or enter into a joint 
     venture or partnership with such system or facilities to the 
     extent that such system or facilities only serve incorporated 
     or unincorporated places or territories that--
       ``(i) have fewer than 50,000 inhabitants; and
       ``(ii) are outside an urbanized area, as defined by the 
     Bureau of the Census.
       ``(E) Waiver.--The Commission may waive the restrictions of 
     subparagraph (A), (B),
      or (C) only if the Commission determines that, because of 
     the nature of the market served by the affected cable 
     system or facilities used to provide telephone exchange 
     service--
       ``(i) the incumbent cable operator or local exchange 
     carrier would be subjected to undue economic distress by the 
     enforcement of such provisions,
       ``(ii) the system of facilities would not be economically 
     viable if such provisions were enforced, or
       ``(iii) the anticompetitive effects of the proposed 
     transaction are clearly outweighed in the public interest by 
     the probable effect of the transaction in meeting the 
     convenience and needs of the community to be served.
       ``(F) Joint use.--Notwithstanding subparagraphs (A), (B), 
     (C), a telecommunications carrier may obtain within such 
     carrier's telephone service area, with the concurrence of the 
     cable operator on the rates, terms, and conditions, the use 
     of that portion of the transmission facilities of such a 
     cable system extending from the last multiuser terminal to 
     the premises of the end user in excess of the capacity that 
     the cable operator uses to provide its own cable services. A 
     cable operator that provides access to such portion of its 
     transmission facilities to one telecommunications carrier 
     shall provide nondiscriminatory access to such portion of its 
     transmission facilities to any other telecommunications 
     carrier requesting such access.
       ``(G) Savings clause.--Nothing in this paragraph affects 
     the authority of a local franchising authority (in the case 
     of the purchase or acquisition of a cable operator, or a 
     joint venture to provide cable service) or a State Commission 
     (in the case of the acquisition of a local exchange carrier, 
     or a joint venture to provide telephone exchange service) to 
     approve or disapprove a purchase, acquisition, or joint 
     venture.''.
       On page 70, line 7, strike ``services.'' and insert 
     ``services provided by cable systems other than small cable 
     systems, determined on a per-channel basis as of June 1, 
     1995, and redetermined, and adjusted if necessary, every 2 
     years thereafter.''.
       On page 70, line 21, strike ``area.'' and insert ``area, 
     but only if the video programming services offered by the 
     carrier in that area are comparable to the video programming 
     services provided by the unaffiliated cable operator in that 
     area.''.
       On page 79, before line 12, insert the following:
       (3) Local marketing agreement.--Nothing in this Act shall 
     be construed to prohibit the continuation or renewal of any 
     television local marketing agreement that is in effect on the 
     date of enactment of this Act and that is in compliance with 
     the Commission's regulations.
       On page 88, line 4, strike ``area,'' and insert ``area or 
     until 36 months have passed since the enactment of the 
     Telecommunications Act of 1995, whichever is earlier,''.
       On page 88, line 5, after ``carrier'' insert ``that serves 
     greater than 5 percent of the nation's resubscribed access 
     lines''.

  Mr. HOLLINGS. I thank the distinguished Senator from Nebraska for 
allowing us to do that. This will have [[Page S8015]] printed in the 
Record, now, this particular amendment, for the colleagues.


  Amendment No. 1264, as Modified and Amendment No. 1265, as Modified

  Mr. KERREY. Mr. President, let me go through a few more things here. 
I appreciate that. I have only a few things.
  Mr. PRESSLER. Will my friend yield? This is a fascinating dialog for 
me. I am not in any way trying to one-up or anything. But in the early 
1980's both AT&T and IBM were in the Justice Department with big 
lawsuits against them. And on the same day, January 8, 1982, the 
Federal Government chose two different destinies for those mammoth 
companies.
  It is my contention that, had we done with AT&T then what we are 
trying to do now, that is broken up the monopoly by requiring them to 
unbundle and interconnect and allow competition--in any event the 
computer industry went the other way. The computer industry--it is true 
there are winners and losers. It is true IBM has had problems and had 
spinoffs. But the computer industry, in terms of service to the 
American people, and dropping costs, moved forward much faster. In 
fact, there is a chart here that, had the telecommunications industry 
moved forward in competition as much as IBM in the computer area, the 
cost of telephones today would be about a fifth what they are, because 
the innovation and the competition, reduction in costs was much greater 
in the computer industry.
  So the Justice Department on the same day in 1982 sent the two 
industries on two different paths. They did that with AT&T because 
Congress had failed to act. We failed to do then what we are trying to 
do now, that is open up access, provide interconnection and unbundling 
to provide competition. And we would have had much more innovation in 
the telecommunications area, if you compare the two industries.
  Mr. KERREY. I say to the Senator from South Dakota, had we done that, 
had we tried to follow the model of IBM, we would have had to do a 
number of other things. We would have had to say there is no public 
purpose in having universal service to all Americans.
  Mr. PRESSLER. I am not talking about IBM, I am talking about the 
computer industry. I am talking about the computer industry.
  Mr. KERREY. But AT&T and IBM are wholly different cases. IBM is a 
company that manufactured hardware and software for the consumer and 
business industry. There is no public purpose there, in saying we have 
to make sure every single American household has a computer. Whereas 
AT&T was a monopoly created with the 1934 Communications Act, with a 
franchise and a specific instructions to achieve universal service for 
all Americans.
  So, in the one case----
  Mr. PRESSLER. If my friend will yield, I am talking about the 
computer industry, the competitiveness that is in it. It has been far 
more innovative than the telecommunications areas. I know the two 
companies are different. I am not just talking about IBM. It has been 
replaced--there have been all those things that have happened; Intel, 
Apple, and all sorts of things. I could go through them.
  But a comparison of the two technologies, how they have progressed--
compare the computer area to telecommunications, you would find that 
today a telephone call would be only a few cents, if it had advanced as 
much as the reduction in cost of personal computers. My friend asked 
for an example. That is an example.
  But, in 1982, what the Congress should have been doing----
  Mr. KERREY. I ask my friend from South Dakota, does he think it would 
have cost a couple of cents in Rapid City, SD?
  Mr. PRESSLER. Personal computers cost much, much less in Rapid City.
  Mr. KERREY. If we had taken the IBM track in 1984, does the Senator 
think it would have cost a couple of cents for phone service in South 
Dakota? I do not think so.
  Mr. PRESSLER. Personal computers cost much less in South Dakota than 
they would otherwise. You can argue this thing circuitously. You might 
have innovations. In the computer area there are so many innovations. 
We may have had telecommunications innovations that we have not had. 
You cannot argue this perfectly.
  But there is probably no part of American industry that has had more 
innovation and competition than the computer industry, and people in 
Rapid City, SD, can buy personal computers at a fraction of the cost, 
and they are much more advanced than they would have been had the 
Justice Department gone the other way.
  Mr. KERREY. The point in fact is the Justice Department put the 
pressure on IBM, caused IBM to spin off two relatively insignificant, 
at the time, inventions. One was----
  Mr. PRESSLER. I am talking about the computer.
  Mr. KERREY. The Department of Justice had a very constructive impact 
on IBM and on the U.S. economy. They had them spin off a couple of 
little things. One was an operating system called MS-DOS. And a couple 
of guys, high school or college dropouts up in Seattle, they built 
Microsoft. And Intel was the second company that got spun off, because 
the Department of Justice said we have a monopoly here. It is 
unacceptable.
  You are going to control too much of the economy. We are going to 
require some action. I understand you are using an example. I find the 
example difficult frankly on two grounds: One, in the case of IBM, you 
are dealing with a company that is different than AT&T. AT&T is a 
licensed monopoly by law created as a monopoly. The question is how do 
you go from that monopoly to something you now want to become a 
competitive industry?
  That is what I find most remarkable about the objection to this 
amendment--that if you are looking for a Federal agency with experience 
taking a monopoly situation to a competitive situation, why in heaven's 
name would we not go to the Department of Justice that has the most 
experience doing it and the most successful experience doing it? They 
have the track record. They have the personnel. Tell me where the FCC 
was in all of this. Describe to me the FCC's role either in IBM or in 
AT&T in a transition from monopoly to competition.
  Mr. PRESSLER. If my colleague will yield again, I am talking not 
specifically about IBM. But I am talking about the direction the 
computer industry took. AT&T was a Government monopoly. But my argument 
is that if we had done what we are trying to do in this bill--that is, 
require them to unbundle and interconnect, to allow for local 
competition, allow people to have access locally as this bill does, the 
whole telephone communication industry might be much more innovative 
today than it is.
  Mr. KERREY. I hear that. But one of the reasons Congress did not do 
that was when you get right down to it, it is difficult for us to say 
to a company you have to be competitive.
  I say to my friend from South Dakota that when the Cohen amendment 
came up earlier we were on the opposite sides of that issue. The Cohen 
amendment said we are going to take the set-top box industry and allow 
it to develop in a competitive fashion. There were concerns from 
smaller cable operators that it could result in some hardship to them. 
It could result in some problems for them. I understand. I think it is 
very difficult for the U.S. Congress to take a position to say to any 
industry that we are going to require you to go from a situation where 
you are not competitive, where you have been given Government 
protection of some kind, and in this particular case it is the 
telephone industry, given a franchise, given protective status, 
protected from competition, we are trying to figure out how to protect 
them from that protected status to a competitive environment, and the 
only Federal agency in town, in the people's capital in Washington, DC 
with the experience of having done it is the U.S. Department of Justice 
is given a consultative role. ``Oh, what do you think of this 
transition, Mr. Department of Justice?''
  It seems to me, odd. I do not understand. I understand why the people 
who are going from a monopoly to a competitive environment oppose this. 
I understand why they are nervous about it because they saw how 
effective the Department of Justice was the previous time they did it. 
They saw how rigorous the Department of Justice was in 
[[Page S8016]] making sure that there was competition.
  Mr. PRESSLER. If the Senator will yield, it is not true that if we 
allow the FCC to set the standard for anything, a Government standard, 
there is very little room for innovation, for new inventions, for the 
type of things that have happened in the competitive world. There are 
some winners and some losers.
  But my point about computers is that every 18 months things become 
virtually obsolete because there is so much competition. There are so 
many things going on. The average consumer has benefited from all this 
competition. They can own a personal computer, and the prices are going 
down and capacity has gone up enormously. Had we had the Government 
standards we would not have seen that type of innovation.
  That is the point I am trying to make.
  Mr. KERREY. We are not proposing a Government standard with this 
amendment, I do not believe. Maybe I misunderstand the amendment of the 
Senator from North Dakota. I do not believe so. I do not believe we are 
proposing that. I do not know if the Senator from South Dakota is 
familiar with it. I suspect the Senator is since he has been inundated 
with all of this stuff involved in this piece of legislation. There is 
an issue of interoperability.
  I introduced an interoperability bill a month or so ago, and 
immediately was approached by some people in the private sector who 
said that if the Government comes in and sets a legal de jure standard, 
what that does is it inhibits the development of the de facto 
standards, and I yielded to that argument. Indeed, I do not want the 
Government to establish in technology with the de jure standard that 
makes it difficult for the companies to go to the marketplace and say 
we are going to give what the marketplace wants and after we have given 
you what you want that becomes the standard, that becomes the new 
standard. I do not want to inhibit that at all.
  What I am concerned about, again I say for my colleagues, I am 
concerned about that the consumer who will not benefit unless there is 
competition so rigorous that I can take my business someplace else if I 
do not like what is being offered either in the way of price or 
service, not in independent lines of business, not in cable, not in 
dial tone, not in tech. But if they want to come in and sell it to me 
all put together for a lower price than I am currently paying, that is 
where I am going to get innovation and reduction in the cost of my 
current household information services. I am not going to get it if you 
preserve out of concern for what the Department of Justice is going to 
do, if you preserve a line of business differential in some artificial 
fashion. I think that is what this legislation does unless we get the 
Department of Justice with a role, an active role.
  I mean I am willing to consider any suggestions on what to do, to 
reduce any potential duplication, overlap. I am willing to consider any 
suggestions to make sure we shorten the time. We do not want to stretch 
it out. The idea is do what Justice did in 1984. You go into court. If 
you get the parties in hand, you write up a memorandum. You get in this 
case a consent decree. You walk into the judge at a Federal court, and 
you file it. All parties agree. You do not have litigation afterwards.
  You do not have any dispute to tie this thing up for a long time and 
tragically prevent the very competition that we are trying to see. I 
hope my colleagues understand that. If this thing is litigated, if I as 
an owner in a monopoly fashion have the right to deliver information 
services at the local level, and can tie this thing up in court for a 
long enough time to prevent that innovation from occurring, it is 
prevented permanently for the very reason that the Senator from South 
Dakota said, because innovation only lasts a little while and then it 
is obsolete.
  So I understand this delicate balance. I truly do. The distinguished 
chairman and the ranking Member have worked so hard on it. I understand 
that maybe it could all come apart if this amendment is agreed to. 
Members say, ``Oh, my gosh. We settled that in committee. We cannot now 
take it up again.''
  I hope that we get some reconsideration of that conclusion. If I am 
wrong, if I have reached a conclusion because I have myself diagnosed 
the scene and do not understand what is going on, come and tell me. I 
am prepared to admit. If I see that incorrectly I have assessed on 
behalf of consumers and people making certain this legislation does set 
off some innovation that results in new and higher paying jobs for the 
people of the United States of America, I do not believe that this is a 
precedent that we should fear. Indeed, I believe it is a precedent that 
we should seek based upon the success of having done it once before.
  I heard one of the comments here this evening. Well, if the Justice 
Department has specialized expertise, then maybe we would ask them to 
do this. It does have specialized expertise. That is precisely the 
point. It has specialized expertise. Let us define what we want the 
Justice Department to do based upon that specialized expertise and have 
the FCC do what it does well, based upon its specialized expertise. And 
in that kind of a situation, Mr. President, we must be able to come to 
an agreement on how to make certain that we do not end up with overlap 
and duplication and a long regulatory process that makes it difficult 
not just for the RBOC's to get into long distance, but far greater 
concern for all of us who want to make sure that our vote turns out 
right, and that consumers end up with lower prices and higher quality 
service as a consequence.
  Mr. President, I really could talk a bit longer. I do not know what 
the distinguished Senator from South Dakota has in mind for the 
evening. It looks like there is a shortage here of red-blooded American 
men and women, unfortunately, elected to this great body that want to 
talk on this wonderful issue.
  Mr. PRESSLER. I do not see colleagues nor the Chamber filled with 
people listening to my words.
  But, in very good spirit, I say to my friend from Nebraska, I have 
worked with him on his interoperability amendment. In fact, we accepted 
it. But only after insisting that a private standard be set. My 
understanding is then the Senator's original proposal had a Government 
standard set.
  Mr. KERREY. It had a voluntary Government standard, and I was willing 
to make changes and make certain that it did not become a rigid 
Government standard, this is true.
  Mr. PRESSLER. I do not care to debate it.
  Mr. KERREY. Network and network interoperability.
  Mr. PRESSLER. I welcome it and pleased to accept it, and it 
demonstrates that we are working together.
  I have said about all I am going to say today, but I do have some 
remarks for the leader at the appropriate time.
  Mr. KERREY. I will just take a few minutes and conclude for this 
evening.
  The distinguished ranking member went through the 14 part checklist 
and said that among other things this checklist--for my colleagues who 
are wondering, this is in section 221. It actually becomes section 255 
of the communications act.
  This checklist says this is what a Bell operating company, your local 
telephone company from whom you purchase your telephone service, this 
is what they have to do in order to be able to provide long distance. 
That is, they have to do all these things and present that to the FCC. 
And when they do that and meet one higher test, one additional test, 
public interest test, then they are allowed to get into long distance.
  Now, the idea here is that that 14 part checklist substitutes for 
meeting a test called no substantial possibility of interfering with 
demonstrable competition, or some such thing as that. The idea is that 
this 14 part checklist is all we need to have in order to make certain 
that we have competition.
  Now, the phone companies in their defense are a bit frustrated with 
all this because they say oh, my gosh, I have this 14 part checklist 
and now you want me to satisfy the Department of Justice. I want them 
to have a role in this thing as well. That is too much.
  Mr. President, I actually think that in these negotiations we 
sometimes sort of seize onto something and begin to feel as if it has 
to be this way and there is no better way. I say to the phone 
companies, you would be far better off if your interest is getting 
competition without litigating it, you [[Page S8017]] would be far 
better off with both of these things. You have a checklist. I know 
exactly what it is you have to do. We have gone through that exercise. 
We have said that is what you have to do to get into long distance. You 
present that to the FCC. You go through the process as Justice 
simultaneous with that and then there is no dispute. There is nobody 
that can say to you you have not satisfied what is required to make 
sure there is local competition, and for us in the Congress no risk 
that we will not have that competition, and it is the biggest risk in 
this whole deal. Fail to get that competition at the local level and 
most assuredly regret will come to your mind sometime in the not too 
distant future.
  I am going to just make one last comment and then wrap this up. One 
last thing that was said was there is a lot of money over at FCC from 
the auctions. As I understand it, in fact I know it to be the case, 
that auction money is hardly available if you are going to add staff 
over at the FCC in order to be able to handle the increased caseload, 
and there is going to be increased caseload. There is going to be 
increased pressure upon the FCC. They are going to have to hire new 
people. They do not have this expertise over there right now. They are 
going to have to hire at the FCC in order to be able to handle these 
applications, in order to be able to make those determinations. We are 
going to have to build what does not exist today in a Federal agency 
that previously has not had this kind of responsibility. And you are 
going to have to find an offset in some fashion in order to be able to 
get the job done, whereas, as I see it anyway, at the Department of 
Justice we already have those folks on the job.
  Mr. President, once again I say I hope that in the process of 
debating this, this will in the end lead to a piece of legislation I am 
able to enthusiastically support based upon my confidence that this is 
going to be good for the American consumer, this is going to be good 
for American workers that are hoping that this country will create more 
high paying jobs, that this will be good for American citizens who 
increasingly are dependent upon information in order to do a good job 
in their schools, to do a good job in their businesses, to do a good 
job in their operating rooms and various other places where Americans 
either work or play.
  I appreciate the tolerance and the assistance of the distinguished 
chairman of this committee and the ranking member who has already left.
  Mr. President, I yield the floor.
  Mr. PRESSLER. Mr. President, if I may commend my friend from Nebraska 
because I think our discussion has stimulated at least me to think a 
bit about where we are historically as we conclude this debate this 
evening.
  First of all, it is stimulating in the sense to think if we can find 
a way to help people have more products available at a lower cost that 
are useful to them in their lives, we are doing more for them than if 
we were to give them Government aid. There is a proper role for 
Government in our society. But it is my strongest feeling that if we 
can find ways through competition in the free enterprise system that 
people can have products at a lower price in abundance and innovations 
we are actually doing more for them frequently than if we give them 
grants or aid.
  For example, let us talk about senior citizens. I am a champion of 
senior citizens. We deregulated natural gas prices in the 1970's, and I 
remember I was over in the House of Representatives, and we were 
struggling with that issue. And people said, if you deregulate natural 
gas the prices are going to skyrocket and companies are going to gouge 
everybody. In fact, the prices came down and they have stayed down. If 
you want to do a senior citizen a favor, you can help the cost of 
heating their home stay low. You can help the cost of their goods to be 
lower through competition.
  Usually we think of helping senior citizens by giving them more money 
or spending taxpayers' money, and in some cases that is accurate. But 
you can also help senior citizens by providing them low cost fuel and 
low cost natural gas. And that has been done through deregulated 
natural gas prices.
  And I also say that to a lot of people in the United States the 
innovations that have occurred in the computer industry--true, there 
have been some winners and losers among the companies, but the fact is 
that people have lower cost personal computers available today through 
competition. And we never could have achieved that through Government 
regulations or Government standards. Indeed, every 18 months there is a 
complete turnover.
  I also serve on the Finance Committee, and the people in the computer 
area in Silicon Valley would like an 18-month depreciation schedule 
because their products are obsolete after 18 months. That is because 
there is so much competition and there is not a Government standard 
holding them back. The American free enterprise system allows that type 
of innovation. Every 18 months the old computer is obsolete, and we are 
moving forward and people are able to buy personal computers at a low 
cost. That is a service to people much more so than if we had a huge 
Government agency regulating and setting standards.
  I would say that through this bill if we can increase competition and 
if through this bill we can bring innovation, we will see the same kind 
of explosion of new devices and investment and services for 
telecommunications at a lower cost to consumers, just as we have seen 
in other areas of competition. But we do not have that so long as we 
have the Justice Department and the FCC running things with Government 
regulation and Government standards.
  Now, also let me say what will happen if we do not pass this bill.
  It is tough to pass this bill because different groups have 
checkmates and the White House has been opposing this bill--though they 
will not say they will veto it. But I am very sad about this 
opposition, because if we do not pass this bill, we will be failing 
again as a Congress to do what we are supposed to do.
  Had Congress, before 1982, required AT&T to unbundle and interconnect 
so they could have competition in the local markets, we would not be 
here today. We would have had an explosion of new devices in 
telecommunications, more than we have had. We would have lower costs. 
There is no reason the cost of long distance calls needs to cost what 
they do. Consumers should be paying a fourth of what they are paying 
for local and long distance service, based on what has happened to 
prices in the computer area.
  We are trying to do what we were supposed to do in 1982 in this bill, 
and we are trying to get this thing together. Yet people come to the 
floor with more regulatory amendments. This amendment that is before us 
now to put on the Department of Justice another layer of regulation is 
going to delay, delay, delay. What if computers and innovation in 
computers had to go through the Department of Justice? It takes 3 to 5 
years for them to respond even to petitions that are routine. Why do we 
want more regulations?
  If we do not pass this bill, we will be failing again. People say, 
``Well, if we don't pass this bill, we'll get another bill.'' No, we 
will not. We are coming into a Presidential election, and it will be 
over to 1997 and that is 2 more years of innovation and lower prices 
for the American people lost.
  I say to the White House, I find it very odd that the White House is 
opposing this bill, because they will not say they will veto it. I went 
over three times to see Al Gore, to get him to lead this movement, 
because it is everything he says he believes in. It is reinventing, 
privatizing, all of those things; it is the information highway.
  I have been amazed that the White House has not supported this. They 
will not say they are going to veto it.
  Every Democrat on the Commerce Committee voted for this bill. The 
Democrats in the Senate have been at the forefront of helping us to 
deregulate and move forward in telecommunications.
  I know there have not been very many bipartisan bills that have 
passed this Senate, and I will not put this on a partisan basis. I 
would give as much credit to Senator Hollings as to some of the 
Republican people and Democratic people that have served for years. But 
here we have a chance to deregulate an industry, to get everybody into 
everybody else's business. If we slip and fail, this thing will go over 
to 1997, and then we will start again, I suppose, because we are not 
going to [[Page S8018]] have a major telecommunications reform bill in 
a Presidential election year.
  I have also said that I hope that this bill passes both Houses by the 
Fourth of July. I hoped it would be signed by the President by the 
Fourth of July. That was my original goal.
  The Senate has moved on a bipartisan basis in an amazingly 
coordinated way. We had meeting after meeting every night with 
Democrats and Republicans. We met Saturdays and Sundays, Democrats and 
Republicans, shoulder to shoulder, to finally get a telecommunications 
bill. We passed it through the Senate Commerce Committee when people 
said it could not be passed. It is on the Senate floor.
  This is early June. This is one of the most complicated bills here, 
and it will affect a third of the American economy. It affects every 
home in America. And I think it is time for the White House to join us. 
They are opposing this bill. I think it is time for the Consumer 
Federation of America to join us. I hope Newt Gingrich gives this bill 
an early slot over there because it is very important. It is a 
bipartisan bill that will create jobs, and it will create the kind of 
jobs we want in this country.
  Right now, a lot of our telecommunications industry is forced to 
invest overseas because they are prohibited from doing certain things 
here. Our regional Bells cannot manufacture, they cannot do this, and 
they cannot do that. So one of my friends in my life, Dick Callahan, 
for example, president of U.S. West International, is over in London. 
He is originally from Sioux Falls. He is not in Denver and Sioux Falls 
investing, he is over in London investing U.S. money in things that the 
telecommunications companies can do there that they cannot do here. I 
would rather have the Dick Callahans of this world creating jobs in the 
United States.
  Also, this bill is a modernizing bill. We are losing jobs in some of 
our aging industries, very frankly. We read every day about how a 
certain mature industry is laying off people. I recently toured the 
Caterpillar plants in Peoria, IL, and I saw the difference in the 
assembly line where the modernized part is, where they turn out 51 
engines a day, versus the old part, where they turn out 13 engines a 
day. They make 51 engines with fewer people.
  But those people will need new jobs in new industries, and this bill 
does that. Everybody should understand that. This is a jobs bill, but 
it is not a jobs bill through Government, it is a jobs bill through 
free enterprise. If we are going to do something for people, we provide 
them more services at a cheaper level, just as with deregulating 
natural gas. We helped every senior citizen, probably more than we did 
with the COLA on Social Security, by providing them with a cheap form 
of fuel to heat their home. And that is what this bill is.
  I could go on at great length. But I would like to conclude the 
debate today by saying I think we have made good progress on this bill. 
This is a bill that some of the private newsletters said only had a 10 
percent chance in January. They said it had a 30 percent chance in 
April. But I think we are right on the cusp. We have to make progress 
with this bill. If we do not, we will be failing the American people 
and we will be failing the creation of a lot of jobs, new kinds of 
jobs, and we will be having our brightest people going overseas 
investing our telecommunications capital, as is happening.
  Mr. CAMPBELL. Mr. President, I rise today to support the 
Telecommunications Competition and Deregulation Act of 1995--S. 652.
  S. 652 will open telecommunications markets to competition which will 
benefit consumers and the American economy. It will give America the 
freedom we need to remain the world's leader in telecommunications, 
information and computer technology in the 21st century. Keeping this 
edge will enhance our competitiveness, spur domestic economic growth 
and job creation, and, most importantly, provide a better quality of 
life for our citizens.
  Mr. President, I want to make sure that these same benefits flow into 
the educational system and into our classrooms, libraries and 
hospitals.
  The communications revolution is leaving our schools behind. As 
access to telecommunications technology and information increases 
across the country, our classrooms are cut off from the information 
revolution. The National Center for Education Statistics reports that 
overall, 35 percent of public schools have access to the Internet but 
only 3 percent of classrooms in public schools are networked. Smaller 
schools in rural areas are even less likely to be on the Internet than 
schools with larger enrollment sizes.
  Mr. President, I live in a small rural town in Colorado where many 
schools lack even basic phone lines. I have seen, first-hand, how many 
rural areas were left unserved and were dependent on the Federal 
Government to finance cooperatives to bring basic telephone service to 
rural communities. Schools and libraries in rural Colorado and in rural 
America cannot afford to be left unserved and kept out of the 
information revolution.
  The Snowe-Rockefeller provision in S. 652 ensures that rural 
communities and high cost areas have access to communications and 
information technology. This provision builds on the overall universal 
service provision in S. 652 and adds the important component of 
providing schools, libraries and hospitals with affordable access to 
the Information Superhighway. In my view, it is essential to rural 
communities to keep this provision in the bill. Otherwise, rural areas 
will not benefit from technological advances in communications.
  There is a growing understanding that technology can have a 
significant positive impact on teaching and learning and can serve as a 
means for achieving educations excellence. For example, a computer 
network connected to the classroom means that every teacher and student 
has access to the world's greatest libraries. New technologies and 
tools such as e-mail and the World Wide Web will give schools greater 
access to text, audio and video-on-demand. Through telecommunications, 
students and teachers will gain access to significantly greater amounts 
of information than would otherwise be available.
  Teachers could be far more productive and innovative if they had 
access to new ideas and technologies through computer networks. Studies 
show productivity increases of as much as 30 percent when teachers are 
connected to the Information Superhighway. In essence, teachers would 
be able to exchange lesson plans, get tips from their colleagues, or 
obtain access to the Library of Congress or the National Archives for 
teaching materials. In rural areas, students can access information 
through distance learning programs where information and instruction is 
exchanged by two-way videos.
  There are many exciting technological opportunities available for our 
schools and libraries across the country. Yet, teachers simply do not 
have adequate tools to use the resources of the information revolution. 
Most teachers have not had adequate training to prepare them to use 
technology effectively in teaching. According to survey data from the 
National Education Association, an estimated 56 percent of all public 
school teachers feel they need training to use personal computers 
adequately in their classes and 72 percent need training in the use of 
on-line databases.
  Technology can even draw parents into the education process. Many 
parents do not understand how technology filters into the education 
process, and they do not understand its significance in their 
children's schooling. However, parents can have access to simple voice-
mail technology and can call into a mailbox to find out the homework 
assignment or information about a class trip. In the future, classroom 
networks could eventually extend to the home and thereby fulfill what 
educators say is their biggest unmet need: lengthening the learning day 
and involving the parents.
  Mr. President, all of the Nation's children deserve to be exposed to 
the best possible education, not just those who live in affluent areas. 
But, without a national commitment to providing affordable access to 
these emerging technologies in schools and libraries in rural areas, 
our Nation will fall far short in preparing all its citizens for the 
21st century.


                          ____________________