Congressional Record, Volume 141 Issue 94 (Friday, June 9, 1995)

[Congressional Record Volume 141, Number 94 (Friday, June 9, 1995)]
[Senate]
[Pages S8061-S8077]
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.
Mr. DOLE. Mr. President, let me indicate this is the first time we
have had a vote like this all year. I do not like these kinds of votes
because it punishes people who are not here for no good reason, but we
could not get an agreement to vote on an amendment and, as I understand
it, we are not going to get any time agreement on any amendment.
The managers have been doing an excellent job, I want to indicate,
both to Senator Pressler and Senator Hollings. I would like to complete
action on this bill. It is a very important bill. No one is trying to
rush it, but if we cannot get an agreement on a technical vote, I do
not know what other recourse there is but sometime today to file
cloture, have a pro forma session tomorrow, and then have a cloture
vote on Monday around 5 o'clock to see if we cannot speed up movement
of this bill.
If there is a willingness to agree to vote on the very important
amendment offered by Senator Dorgan and Senator Thurmond from South
Carolina, even at 5 o'clock on Monday, if we could agree to vote at 5
o'clock on Monday, agree to vote on the Santorum amendment here in the
next 30 minutes? Failing that, we will have no recourse. Under the
order, as I understand it, the Senator from Pennsylvania will be
recognized to offer his amendment. We can have a vote, move to table
the amendment, vote against tabling, and we can have another vote and
another vote. But we do not make any progress.
But if the Senator from Nebraska is determined, as I believe he is,
that we will not have any agreements or any votes, then we will just
have to have some procedural votes between now and 2 o'clock.
If there is any inclination on anybody's part to make any kind of
agreement, certainly I am prepared as the leader to try to accommodate
all of my colleagues, many of whom are not here today, and many of whom
would like not to be here today.
But, having said that, I yield the floor.
Several Senators addressed the Chair.
Mr. KERREY. Mr. President, if I may respond, what transpired here
this morning was we were debating the second-degree amendment offered
by the Senator from South Carolina to the underlying amendment offered
last night by the Senator from North Dakota. We had a short period of
debate last night. We came in here early this morning. We had just
begun the debate and the Senator from Pennsylvania came to the floor, I
understood with an amendment, and asked for unanimous consent to go
into morning business.
I did not, in good conscience, in good faith to a colleague, ask for
any time limitation.
Then the distinguished Senator from Pennsylvania came--and not for
the purpose of talking for a short period of time and then going to his
amendment--with a very provocative, very effective, but very
provocative political appeal against the President of the United
States, to which I responded; to which I was quite willing to respond
at an even longer time and had no opportunity. I had a very short
exchange with the Senator from Pennsylvania on that issue.
I laid his amendment aside, which I think is appropriate for me to
do. He has provoked an argument not on his amendment but on another
issue. I did not choose to do that. He chose to come to the floor and,
instead of addressing his amendment, provoked a debate on another
subject. I laid that amendment aside and began to prepare my remarks to
address the subject that he chose. [[Page S8062]]
That is what happened here this morning. As to the underlying
amendment, it is not that I am unwilling to set a time. I am not trying
to filibuster this, I truly am not. I believe the differences between,
in particular, Senator Dorgan and Senator Thurmond and myself, are not
very far and there might be possibility for an agreement here on this
particular proposal.
I heard the Senator from Arizona earlier, when he got up and made his
opening remarks on this bill. He and I are not that far apart as to
what we think the regulatory structure ought to be. I truly am trying
to improve this bill. I am not trying to stop it. I am not trying to
kill it. I am not trying to filibuster it indefinitely.
I would agree here this morning, if the Senator from Pennsylvania
wants to lay his amendment down and you want to table it, I would like
a short period of time at least to describe how I view this particular
amendment in the brief period of time I have had to look at it.
Mr. DOLE. I certainly have no objection. I am not indicating any
disagreement with the Senator from Nebraska. He has every right he
wants, and has exercised his right.
I wonder if we might agree that there would be--the Senator does not
want a vote up or down on the amendment, right? Will the Senator from
Nebraska let us vote up or down on the amendment after 30 minutes of
debate equally divided?
Mr. KERREY. What I am asking for, they came over to me earlier and
said that the distinguished majority leader was going to table, and
what I had asked for as opposed to putting us into a quorum call was
just a little bit of time to offer some comments on the amendment
itself. I do not want to agree to an up-or-down vote on it. I really
have not had time to look at the amendment that carefully, but I was
just with respect asking for a small period of time to make some
comments on the amendment.
Mr. DOLE. I am not managing the bill, but I just suggest that maybe
we vote at 11:30, and the Senator from Nebraska have half that time and
the other half would be divided----
Mr. KERREY. I say to the majority leader, I would agree not to a time
limit for an up-or-down vote, but I would definitely--I am asking if
the Senator would agree to a unanimous consent that would give me 10
minutes to comment prior to a tabling motion.
Mr. DOLE. And then if the motion to table is not successful, would
the Senator let us adopt the amendment?
Mr. KERREY. The answer is no. I say to the majority leader, I came--
the distinguished Senator from Pennsylvania gave me his amendment. I
was reading it over, and he got up and he provoked me. There is no
other way to say it. So I took his amendment and put it in a little
square thing over here called the trash can and started to make notes
to respond to what he was arguing. He was not arguing his amendment.
Mr. DOLE. I do not know anything about that. If I could suggest this,
that the Senator from Pennsylvania offer his amendment and after 20
minutes of debate, or 30 minutes of debate --the Senator from Nebraska
10 minutes, the managers or someone in opposition to the amendment, the
Senator from Pennsylvania 10 minutes--that the Senator from South
Dakota then be recognized to move to table the Santorum amendment.
Would that be satisfactory?
Mr. KERREY. That would be satisfactory.
Mr. DOLE. Is there any objection?
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
Mr. SANTORUM addressed the Chair.
The PRESIDING OFFICER. The Senator from Pennsylvania.

Amendment No. 1267

(Purpose: To permit the Bell operating companies to provide
interLATA commercial mobile services)

Mr. SANTORUM. Mr. President, I send an amendment to the desk.
The PRESIDING OFFICER. The clerk will report the amendment.
The bill clerk read as follows:

The Senator from Pennsylvania [Mr. SANTORUM] proposes an
amendment numbered 1267.

Mr. SANTORUM. 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 94, strike out line 24 and all that follows through
page 97, line 22, and insert in lieu thereof the following:
``(C) providing a service that permits a customer that is
located in one LATA to retrieve stored information from, or
file information for storage in, information storage
facilities of such company that are located in another LATA
area, so long as the customer acts affirmatively to initiate
the storage or retrieval of information, except that--
``(i) such service shall not cover any service that
establishes a direct connection between end users or any
real-time voice and data transmission,
``(ii) such service shall not include voice, data, or
facsimile distribution services in which the Bell operating
company or affiliate forwards customer-supplied information
to customer- or carrier-selected recipients,
``(iii) such service shall not include any service in which
the Bell operating company or affiliate searches for and
connects with the intended recipient of information, or any
service in which the Bell operating company or affiliate
automatically forwards stored voicemail or other information
to the intended recipient, and
``(iv) customers of such service shall not be billed a
separate charge for the interLATA telecommunications
furnished in conjunction with the provision of such service,
``(D) providing signaling information used in connection
with the provision of telephone exchange service or exchange
access service to another local exchange carrier; or
``(E) providing network control signaling information to,
and receiving such signaling information from, interexchange
carriers at any location within the area in which such
company provides telephone exchange service or exchange
access service.
``(2) Limitations.--The provisions of paragraph (1) are
intended to be narrowly construed. The transmission
facilities used by a Bell operating company or affiliate
thereof to provide interLATA telecommunications under
paragraph (1)(C) and subsection (f) shall be leased by that
company from unaffiliated entities on terms and conditions
(including price) no more favorable than those available to
the competitors of that company until that Bell operating
company receives authority to provide interLATA services
under subsection (c). The interLATA services provided under
paragraph (1)(A) are limited to those interLATA transmissions
incidental to the provision by a Bell operating company or
its affiliate of video, audio, and other programming services
that the company or its affiliate is engaged in providing to
the public. A Bell operating company may not provide
telecommunications services not described in paragraph (1)
without receiving the approvals required by subsection (c).
The provision of services authorized under this subsection by
a Bell operating company or its affiliate shall not adversely
affect telephone exchange ratepayers or competition in any
telecommunications market.
``(f) Commercial Mobile Service.--A Bell operating company
may provide interLATA commercial mobile service except where
such service is a replacement for land line telephone
exchange service for a substantial portion of the land line
telephone exchange service in a State in accordance with
section 322(c) and with the regulations prescribed by the
Commission.
``(g) Definitions.--As used in this section--

The PRESIDING OFFICER. The Senate will come to order. The Senator
from Pennsylvania has the floor.
Mr. SANTORUM. I thank the Chair.
Mr. President, I rise today to offer an amendment which clarifies the
intent of the current language in the bill regarding inter-LATA
commercial mobile services. This amendment makes only a minor change to
the bill, and my understanding is that the amendment is
noncontroversial with respect to the managers of the bill. Both
Senators Pressler and Hollings see no problem with the amendment and we
hope to get the support of the other Members of the Chamber.
Mr. President, as you know, the consent decree that broke up AT&T in
1984 divided up the territory served by the old Bell system into 160
LATA's, which are local access transport areas. The LATA boundaries
were drawn based on the then existing wire-based telephone network.
Since that time, these wireline LATA's have been applied to new
wireless services offered by the Bell companies, services such as
cellular telephone systems. This was done in spite of the fact that
there is no particular relationship between the LATA's and the wireless
area served.
As a result, the Bell operating companies have been placed at a
competitive disadvantage vis-a-vis the other wireless communications
services, because the other wireless providers are not required to
adhere to these LATA boundary restrictions.
The current piece of legislation addresses this inequity in section
255, and I wish to commend the committee for doing so. Section 255
addresses when a [[Page S8063]] Bell operating company may provide
inter-LATA telecommunications services. Subsection (e) defines when a
Bell operating company may provide inter-LATA services incidental to
providing video and audio programming, storage and retrieval services,
and commercial mobile services. The intent is to finally allow the Bell
operating companies to provide these specific services free of inter-
LATA restrictions.
However, Mr. President, I believe that with respect to commercial
mobile services, the term ``incidental'' creates an unintended
ambiguity. The non-Bell wireless providers that currently have
advantage, as I said before, will argue down the road that the inter-
LATA Bell services in any given case are not incidental to the
commercial mobile services in question. As a result, the Bell operating
companies are not guaranteed the full entry into the inter-LATA
commercial mobile services that this bill intends to provide.
The problem is very simply in the processing of a cellular phone
call, they use wire services, and so it is in fact integral to
providing the wireless services that they use a wire communications
network. So the term ``incidental'' can be used to say that they
frankly cannot do it at all and then have to fall back into their LATA
boundaries, which is not the intent of the bill.
My amendment clarifies the intent by doing two things. First, the
amendment carves out commercial mobile services from the incidental
services section.
Second, the amendment inserts this commercial mobile services
paragraph into a new subsection, subsection (f), immediately following
the incidental services section. By creating a new subsection, this
amendment removes the ambiguity of the term ``incidental'' with respect
to the commercial mobile services without affecting the other wireless
service provisions in subsection (e). As a result, this amendment makes
only a very slight change to current language, yet it guarantees a
level playing field intended for the Bell operating companies'
commercial mobile services and their competitors.
Wireless services are competitive today. There are two cellular
carriers in every locale. The FCC has allotted additional spectrum for
service providers which will compete with cellular carriers. Only Bell-
affiliated wireless carriers are subject to the LATA constraints while
all others can offer services in whatever way and configuration their
customers want. The Bell companies' lack of a comparable freedom of
flexibility puts them at this competitive disadvantage.
As I said before, the distinguished ranking member, the Senator from
South Carolina, and the chairman of the Commerce Committee have agreed
to this, and I commend their efforts in putting this provision in the
bill in the first place. This is simply a technical correction to make
the focus of the bill very clear and so it is not under litigation by
competitors down the road.
I seek the support of the Senate on this amendment.
Mr. President, I reserve the remainder of my time.
The PRESIDING OFFICER. Who yields time?
The Senators from South Dakota and Nebraska control 10 minutes.
Mr. SANTORUM addressed the Chair.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. SANTORUM. Mr. President, I will be happy to yield to the Senator
from South Dakota.
Mr. HOLLINGS. Mr. President, in just the minute yielded to me, we
have reviewed the amendment and it is an incidental. The ``incidental''
amendment is incidental. It corrects a good part of it, and on this
side we would approve the amendment.
Mr. SANTORUM. I thank the Senator from South Carolina.
The PRESIDING OFFICER. Who yields time?
Mr. PRESSLER. Mr. President, we also on this side of the aisle
support this amendment, and we have no problem with it and look forward
to working with the Senator from Pennsylvania.
The PRESIDING OFFICER. Who yields time? If nobody yields time, time
will be subtracted equally from all three sides at this point.
Mr. PRESSLER. I suggest the absence of a quorum.
The PRESIDING OFFICER. The absence of a quorum has been suggested.
The clerk will call the roll.
The assistant 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 problem, as I understand it,
with this amendment. As I see it, the Senator from Pennsylvania is
bringing a request from the Bell operating companies to clear up this
language so that the Bell operating companies will know with certainty
that their companies can get into long distance cellular service.
The ``Dear Colleague'' sent out by the Senator from Pennsylvania
explains it so far as it goes, talking about the difficulty that the
Bell operating companies are having as a consequence of an unusual
situation where the Federal Communications Commission has drawn up
LATA's that determine what the local area is. Excuse me, the Justice
Department. And the Federal Communications Commission, when they did
the cellular lotteries, used MSA's, mobile service areas.
But let us be clear on this. The idea that the Bell operating
companies that the amendment will protect have been somehow abused in
this deal is stretching it a little far, in my judgment. They were
given this cellular franchise in the local areas. They were given it.
Everyone else had to go through a lottery process, so they were given
this license to begin with. In my judgment, what the Bell operating
companies are asking the Senator from Pennsylvania to do with this
amendment is, it seems to me, quite reasonable and I will not oppose
it.
Mr. HOLLINGS. Will the Senator from Nebraska yield?
Could it be then at the conclusion of the time that we could just
have an up-or-down vote on the amendment?
Mr. KERREY. I do not object to that.
Mr. President, I am prepared to yield back the remainder of my time.
Mr. SANTORUM. Mr. President, I yield back the remainder of my time.
The PRESIDING OFFICER (Mr. Frist). The Senator from Pennsylvania
yields back the remainder of his time.
Does the Senator seek to modify the previous consent agreement?
Mr. PRESSLER. Mr. President, I believe there are no more speakers.
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, I ask for the yeas and nays on the
amendment before the Senate.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. Does the Senator wish to vitiate the motion to
table?
Mr. PRESSLER. Yes.
The PRESIDING OFFICER. Without objection, it is so ordered.
The PRESIDING OFFICER. All time is yielded back. The question is on
agreeing to the amendment. The yeas and nays have been ordered. The
clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. LOTT. I announce that the Senator from Missouri [Mr. Ashcroft],
the Senator from Georgia [Mr. Coverdell], the Senator from Texas [Mr.
Gramm], the Senator from North Carolina [Mr. Helms], the Senator from
Alabama [Mr. Shelby], the Senator from Wyoming [Mr. Simpson], the
Senator from Pennsylvania [Mr. Specter], the Senator from Alaska [Mr.
Stevens], and the Senator from Wyoming [Mr. Thomas] are necessarily
absent.
I further announce that, if present and voting, the Senator from
Wyoming [Mr. Simpson] would vote ``yea.''
Mr. FORD. I announce that the Senator from California [Mrs. Boxer],
the Senator from Massachusetts [Mr. Kennedy], and the Senator from
Georgia [Mr. Nunn] are necessarily absent.
I also announce that the Senator from Delaware [Mr. Biden] is absent
because of a funeral. [[Page S8064]]
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 83, nays 4, as follows:

[Rollcall Vote No. 247 Leg.]

YEAS--83

Abraham
Akaka
Baucus
Bennett
Bingaman
Bond
Bradley
Breaux
Brown
Bryan
Bumpers
Burns
Campbell
Chafee
Coats
Cochran
Cohen
Conrad
Craig
D'Amato
Daschle
DeWine
Dodd
Dole
Domenici
Dorgan
Exon
Faircloth
Feingold
Feinstein
Ford
Frist
Glenn
Graham
Grams
Grassley
Gregg
Harkin
Hatch
Hatfield
Heflin
Hollings
Hutchison
Inhofe
Inouye
Jeffords
Johnston
Kassebaum
Kempthorne
Kerrey
Kerry
Kohl
Kyl
Lautenberg
Leahy
Levin
Lieberman
Lott
Lugar
Mack
McCain
McConnell
Mikulski
Moseley-Braun
Moynihan
Murkowski
Nickles
Packwood
Pell
Pressler
Pryor
Robb
Rockefeller
Roth
Santorum
Sarbanes
Simon
Smith
Snowe
Thompson
Thurmond
Warner
Wellstone

NAYS--4

Byrd
Gorton
Murray
Reid

NOT VOTING--13

Ashcroft
Biden
Boxer
Coverdell
Gramm
Helms
Kennedy
Nunn
Shelby
Simpson
Specter
Stevens
Thomas
So the amendment (No. 1267) was agreed to.
Mr. DOLE. Mr. President, I call for the regular order, thereby making
the pending business amendment No. 1255.
The PRESIDING OFFICER. Regular order has been called.

Amendment No. 1255, as Modified

Mr. DOLE. I send a modification of my amendment to the desk. This has
been agreed to by the Democratic leader and the managers.
The PRESIDING OFFICER. The Senator has the right to modify the
amendment. The amendment will be so modified.
The amendment (No. 1255), as modified, is as follows:
On page 9, strike lines 4 through 12 and insert the
following:
(c) Transfer of MFJ.--After the date of enactment of this
Act, the Commission shall administer any provision of the
Modification of Final Judgment not overridden or superseded
by this Act. The District Court for the District of Columbia
shall have no further jurisdiction over any provision of the
Modification of Final Judgment administered by the Commission
under this Act or the Communications Act of 1934. The
Commission may, consistent with this Act (and the amendments
made by this Act), modify any provision of the Modification
of Final Judgment that it administers.
(d) GTE Consent Decree.--This Act shall supersede the
provisions of the Final Judgment entered in United States v.
GTE Corp., No. 83-1298 (D.C. D.C.), and such Final Judgment
shall not be enforced after the effective date of this Act.
On page 40, line 9, strike ``to enable them'' and insert
``which are determined by the Commission to be essential in
order for Americans''.
On page 40, beginning on line 11, strike ``Nation. At a
minimum, universal service shall include any
telecommunications services that'' and insert ``Nation, and
which''.
On page 70, between lines 21 and 22, insert the following:
(b) Greater Deregulation for Smaller Cable Companies.--
Section 623 (47 U.S.C. 543) is amended by adding at the end
thereof the following:
``(m) Special Rules for Small Companies.--
``(1) In general.--Subsection 9a), (b), or (c) does not
apply to a small cable operator with respect to--
``(A) cable programming services, or
``(B) a basic service tier that was the only service tier
subject to regulation as of December 31, 1994,

in any franchise area in which that operator serves 35,000 or
fewer subscribers.
``(2) Definition of small cable operator.--For purposes of
this subsection, the term `small cable operator' means a
cable operator that, directly or through an affiliate, serves
in the aggregate fewer than 1 percent of all subscribers in
the United States and does not, directly or through an
affiliate, own or control a daily newspaper or a tier 1 local
exchange carrier.''.
On page 70, line 22, strike ``(b)'' and inset ``(c)''.
On page 71, line 3, strike ``(c)'' and insert ``(d)''.
On page 79, strike lines 7 through 11 and insert the
following:
(1) In general.--The Commission shall modify its rules for
multiple ownership set forth in 47 CFR 73.3555 by--
(A) eliminating the restrictions on the number of
television stations owned under subdivisions (e)(1)(ii) and
(iii); and
(B) changing the percentage set forth in subdivision
(e)(2)(ii) from 25 percent to 35 percent.
(2) Radio Ownership.--The Commission shall modify its rules
set forth in 47 CFR 73.3555 by eliminating any provision
limiting the number of AM or FM broadcast stations which may
be owned or controlled by one entity either nationally or in
a particular market. The Commission may refuse to approve the
transfer or issuance of an AM or FM broadcast license to a
particular entity if it finds that the entity would thereby
obtain an undue concentration of control or would thereby
harm competition. Nothing in this section shall require or
prevent the Commission from modifying its rules contained in
47 CFR 73.3555(c) governing the ownership of both a radio and
television broadcast stations in the same market.
On page 79, line 12, strike ``(2)'' and insert ``(3)''.
On page 79, line 18, strike ``(3)'' and insert ``(4)''.
On page 79, line 21, strike ``(4)'' and insert ``(5)''.
On page 79, line 22, strike ``modification required by
paragraph (1)'' and insert ``modifications required by
paragraphs (1) and (2)''.
On page 117, line 22, strike ``REGULATIONS..'' and insert
``REGULATIONS; ELIMINATION OF UNNECESSARY REGULATIONS AND
FUNCTIONS.''.
On page 117, line 23, strike ``(a) Biennial Review.--''
before ``Part''.
On page 118, between lines 20 and 21, insert the following:
(b) Elimination of Unnecessary Commission Regulations and
Functions.
(1) Repeal setting of depreciation rates.--The first
sentence of section 220(b) (47 U.S.C. 220(b)) is amended by
striking ``shall prescribe for such carriers'' and inserting
``may prescribe, for such carriers as it determines to be
appropriate,''.
(2) Use of independent auditors.--Section 220(c) (47 U.S.C.
220(c)) is amended by adding at the end thereof the
following: ``The Commission may obtain the services of any
person licensed to provide public accounting services under
the law of any State to assist with, or conduct, audits under
this section. While so employed or engaged in conducting an
audit for the Commission under this section, any such person
shall have the powers granted the Commission under this
subsection and shall be subject to subsection (f) in the same
manner as if that person were an employee of the
Commission.''.
(3) Simplification of Federal-State coordination process.--
The Commission shall simplify and expedite the Federal-State
coordination process under section 410 of the Communications
Act of 1934.
(4) Privatization of ship radio inspections.--Section 385
(47 U.S.C. 385) is amended by adding at the end thereof the
following: ``In accordance with such other provisions of law
as apply to government contracts, the Commission may enter
into contracts with any person for the purpose of carrying
out such inspections and certifying compliance with those
requirements, and may, as part of any such contract, allow
any such person to accept reimbursement from the license
holder for travel and expense costs of any employee
conducting an inspection or certification.''.
(5) Modification of construction permit requirement.--
Section 319(d) (47 U.S.C. 319(d)) is amended by striking the
third sentence and inserting the following: ``The Commission
may waive the requirement for a construction permit with
respect to a broadcasting station in circumstances in which
it deems prior approval to be unnecessary. In those
circumstances, a broadcaster shall file any related license
application within 10 days after completing construction.''.
(6) Limitation on silent station authorizations.--Section
312 (47 U.S.C. 312) is amended by adding at the end the
following:
``(g) If a broadcasting station fails to transmit broadcast
signals for any consecutive 12-month period, then the station
license granted for the operation of that broadcast station
expires at the end of that period, notwithstanding any
provision, term, or condition of the license to the
contrary.''.
(7) Expediting instructional television fixed service
processing.--The Commission shall delegate, under section
5(c) of the Communications Act of 1934, the conduct of
routine instructional television fixed service cases to its
staff for consideration and final action.
(8) Delegation of equipment testing and certification to
private laboratories.--Section 302 (47 U.S.C. 302) is amended
by adding at the end the following:
``(e) The Commission may--
``(1) authorize the use of private organizations for
testing and certifying the compliance of devices or home
electronic equipment and systems with regulations promulgated
under this section;
``(2) accept as prima facie evidence of such compliance the
certification by any such organization; and
``(3) establish such qualifications and standards as it
deems appropriate for such private organizations, testing,
and certification.''.
(9) Making license modification uniform.--Section 303(f)
(47 U.S.C. 303(f)) is amended by striking ``unless, after a
public hearing,'' and inserting ``unless''.
(10) Permit operation of domestic ship and aircraft radios
without license.--Section 307(e) (47 U.S.C. 307(e)) is
amended by--
(A) striking ``service and the citizens band radio
service'' in paragraph (1) and inserting
[[Page S8065]] ``service, citizens band radio service,
domestic ship radio service, domestic aircraft radio service,
and personal radio service''; and
(B) striking ``service' and `citizens band radio
service'''in paragraph (3) and inserting ``service',
`citizens band radio service', `domestic ship radio service',
`domestic aircraft radio service', and `personal radio
service'''.
(11) Expedited licensing for fixed microwave service.--
Section 309(b)(2) (47 U.S.C. 309(b)(2)) is amended by
striking subparagraph (A) and redesignating subparagraphs (B)
through (G) as (A) through (F), respectively.
(12) Eliminate FCC Jurisdiction over government-owned ship
radio stations.--
(A) Section 305 (47 U.S.C. 305) is amended by striking
subsection (b) and redesignating subsections (c) and (d) as
(b) and (c), respectively.
(B) Section 382(2) (47 U.S.C. 382(2)) is amended by
striking ``except a vessel of the United States Maritime
Administration, the Inland and Coastwise Waterways Service,
or the Panama Canal Company,''.
(13) Modification of amateur radio examination
procedures.--
(A) Section 4(f)(H)(N) (47 U.S.C. 4(f)(4)(B)) is amended by
striking ``transmissions, or in the preparation or
distribution of any publication used in preparation for
obtaining amateur station operator licenses,'' and inserting
``transmission''.
(B) The Commission shall modify its rules governing the
amateur radio examination process by eliminating burdensome
record maintenance and annual financial certification
requirements.
(14) Streamline non-broadcast radio license renewals.--The
Commission shall modify its rules under section 309 of the
Communications Act of 1934 (47 U.S.C. 309) relating to
renewal of nonbroadcast radio licenses so as to streamline or
eliminate comparative renewal hearings where such hearings
are unnecessary or unduly burdensome.
On page 117, between lines 21 and 22, insert the following:
(d) Regulatory Relief.--
(1) Streamlined procedures for changes in charges,
classifications, regulations, or practices.--
(A) Section 204(a) (47 U.S.C. 204(a)) is amended--
(i) by striking ``12 months'' the first place it appears in
paragraph (2)(A) and inserting ``5 months'';
(ii) by striking ``effective,'' and all that follows in
paragraph (2)(A) and inserting `'effective.''; and
(iii) by adding at the end thereof the following:
``(3) A local exchange carrier may file with the Commission
a new or revised charge, classification, regulation, or
practice on a streamlined basis. Any such charge,
classification, regulation, or practice shall be deemed
lawful and shall be effective 7 days (in the case of a
reduction in rates) or 15 days (in the case of an increase in
rates) after the date on which it is filed with the
Commission unless the Commission takes action under paragraph
(1) before the end of that 7-day or 15-day period, as is
appropriate.''.
(B) Section 208(b) (47 U.S.C. 208(b)) is amended--
(i) by striking ``12 months'' the first place it appears in
paragraph (1) and inserting ``5 months''; and
(ii) by striking ``filed,'' and all that follows in
paragraph (1) and inserting ``filed.''.
(2) Extensions of lines under section 214; ARMIS reports.--
Notwithstanding section 305, the Commission shall permit any
local exchange carrier--
(A) to be exempt from the requirements of section 214 of
the Communications Act of 1934 for the extension of any line;
and
(B) to file cost allocation manuals and ARMIS reports
annually, to the extent such carrier is required to file such
manuals or reports.
(3) Forebearance authority not limited.--Nothing in this
subsection shall be construed to limit the authority of the
Commission or a State to waive, modify, or forebear from
applying any of the requirements to which reference is made
in paragraph (1) under any other provision of this Act other
law.
On page 118, line 20, strike the closing quotation marks
and the second period.
On page 118, between lines 20 and 21, insert the following:
``(c) Classification of Carriers.--In classifying carriers
according to 47 CFR 32.11 and in establishing reporting
requirements pursuant to 47 CFR part 43 and 47 CFR 64.903,
the Commission shall adjust the revenue requirements to
account for inflation as of the release date of the
Commission's Report and Order in CC Docket No. 91-141, and
annually thereafter. This subsection shall take effect on the
date of enactment of the Telecommunications Act of 1995.''.
On page 119, line 4, strike ``may'' and insert ``shall''.
On page 120, between lines 3 and 4, insert the following:
``(c) End of Regulation Process.--Any telecommunications
carrier, or class of telecommunications carriers, may submit
a petition to the Commission requesting that the Commission
exercise the authority granted under this section with
respect to that carrier or those carriers, or any service
offered by that carrier or carriers. Any such petition shall
be deemed granted if the Commission does not deny the
petition for failure to meet the requirements for
forebearance under subsection (a) within 90 days after the
Commission receives it, unless the 90-day period is extended
by the Commission. The Commission may extend the initial 90-
day period by an additional 60 days if the Commission finds
that an extension is necessary to meet the requirements of
subsection (a). The Commission may grant or deny a petition
in while or in part and shall explain its decision in
writing.
On page 120, line 4, strike ``(c) and insert ``(d)''.
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 broadest 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
(2) 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 standards-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 operator 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) 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--
``(i) places or territories that 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 or 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),
and (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
[[Page S8066]] 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:
(i) 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; or ``(ii) the antitrust laws, as described in
section 7(a) of the Telecommunications Competition and
Deregulation Act of 1995.''.
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 presubscribed access
lines''.

Mr. DASCHLE. Mr. President, Senator Hollings and I have crafted a
package of provisions designed to strike a better balance between
consumer protections and market deregulation. These safeguards are
designed to protect consumers by expanding services and keeping them
affordable.
This is accomplished in four ways.
First, it improves the cable rate regulation provisions in the bill
without compromising the important deregulatory changes that will spur
competition and provide consumers with more choices.
Specifically, the amendment improves the cable rate regulation
provision of the committee bill by strengthening the bad actor test.
Rates for the upper tiers of cable service will be found unreasonable
only if they significantly exceed the national average rate for
comparable cable service for systems other than small cable systems
determined on a per channel basis as of June 1, 1995, and adjusted
every 2 years.
Additionally, the amendment will deregulate a cable company only
after a telephone company begins to provide video programming service
comparable to the video service provided by the cable company.
Second, this amendment places reasonable limitations on the ability
of cable and telephone companies to eliminate each other as potential
competitors through buyouts and mergers, except in rural areas where
competition may not be viable. This is an important distinction to
make. While the overall goal of this legislation is to increase
competition, the universal service section and other pieces recognize
the fact that competition will not work everywhere. This is especially
true in rural areas like South Dakota.
The third important safeguard will allow small telephone companies to
jointly market local exchange service with long distance service
providers that carry less than 5 percent of the Nation's long distance
business. This will allow consumers to realize the benefits of
competition in the local telephone exchange, while preserving the
competitive balance between the RBOC's and major long distance
carriers. The amendment also will sunset the prohibition on joint
marketing after 3 years.
Finally, a provision that was originally sponsored by Senator Kerrey
from Nebraska to promote network interoperability is a part of this
package. Ensuring interoperability is an important part of building a
seamless, national information infrastructure that will support
education, business, and hospitals. This provision will not expand or
limit the FCC's current authority over standards setting.
Mr. President, nothing in this agreement precludes existing local
telephone marketing agreements from continuing. This amendment
recognizes the need to help small broadcasters continue to diversify
their broadcasts.
These steps are important not only to the successful passage of this
legislation, but also the financial security of American consumers. It
recognizes that companies need relief from burdensome Federal
regulations, but also provides a mechanism that will protect consumers
from unreasonable and unjustified rate hikes. Passage of S. 652 will
require give and take on both sides. These measures are reasonable and
prudent, and they ought to be adopted.
Mr. DOLE. I ask that the vote occur on this amendment at 12 noon and
that the time be equally divided in the usual form.
Mr. KERREY. Reserving the right to object, Mr. President, I have
not----
Mr. DOLE. This is Dole and Daschle combined.
Mr. HOLLINGS. It is the leadership amendment--Dole-Daschle amendment.
I am protecting the rights of Senator Simon just for a minute. He
wanted to be consulted on a particular section. If the Senator could
withhold the request of time.
Mr. DASCHLE. For the information of all Senators, this is the
combination of the legislation that the majority leader and I have been
working on. He has a managers' amendment. I have been working with
Senator Hollings over the course of the last several days.
Instead of having two separate amendments, we have simply combined
them. I think everyone is aware of the text of Senator Hollings' and my
amendment. We would be happy to share it with anybody. That is all we
are doing, combining them into one vote, and limiting the time to about
half an hour.
Mr. KERREY. Mr. President, I have to object until I have a chance to
look at the amendment. I have looked at both amendments separately, but
not together.
Mr. BUMPERS. Will this require a rollcall vote once we get consent?
Mr. DOLE. Not as far as I am concerned. The Senator from West
Virginia would like a rollcall vote. That would be the last vote if we
can work it out. If not, we will stay until we work it out.
Mr. DORGAN. Reserving the right to object, Mr. President.
Mr. DOLE. I withhold that request until the Senator from Nebraska has
had an opportunity to look at the request.
The PRESIDING OFFICER. The request is withdrawn.
Mr. DORGAN. If I might be recognized, I would support the request and
hope the Senator from Nebraska will, as well.
I would only say that I had intended to offer a second-degree
amendment to this on the issue of the elimination of the restrictions
on the number of television stations that can be owned.
My understanding, and I have agreed not to offer a second-degree
here, with the understanding that my right will be protected to offer
an amendment to the bill on this subject.
That also is an important issue and I want that issue debated. I will
forego a second-degree amendment so we can move this ahead. I want to
be protected on the right.
Mr. DOLE. The Senator is correct, he would have that right.
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. HOLLINGS. 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. LEAHY. Mr. President, I understand that some negotiations were
going on while we were in the quorum call.
I would like to note some of my feelings on this bill, because I will
have a number of amendments and will be joining with others on
amendments, including, for example, the amendment of the Senator from
North Dakota, on VIII(c) and others.
Mr. President, the telecommunications bill that we are considering
will have an enormous impact on multibillion-dollar cable, phone, and
broadcast industries. [[Page S8067]]
But beyond that, it also affects the pocketbooks of every one of our
constituents, and of every single American. It will affect the array of
telecommunications services available for each of us, and the choices
that we as Americans and as consumers will have.
Most of us and certainly this is true in Vermont, have no choice who
gives us cable TV service or our local phone service. Whether or not
the service is good, we are stuck with our local phone or cable
company. We do not have any choice in the matter.
And, if the price is too high, our only choice is to cut-back on
service or to drop it altogether. When I look at the telecommunications
bill, my first question is will this foster competition, because
competition will give consumers lower prices and more choices than
simply cutting back or dropping a service altogether.
I think Congress has been behind the curve in telecommunications. We
need to update our laws to take account of the blurring of the formerly
distinct separation of cable, telephone, computer, and broadcast
services, and encourage new competitors in each of these markets.
The distinguished Senator from South Carolina [Senator Hollings], I
know, worked at trying to bring out a bill to that effect last year.
Efforts have been made between the distinguished managers, the
chairman, and the ranking member this year.
The key, in my view, is providing a legal framework that promotes
competition and protects consumers.
The Government's role in the future of telecommunications must be
carefully defined. There is no question that bad regulation can stifle
the growth of industry. There are other times, however, when both the
Federal and the State agencies can foster the competition we need. And,
of course, that is particularly important if you are dealing with
monopoly industries.
Senator Thurmond, the chairman of the Antitrust Subcommittee, and I
held a hearing on this bill a few weeks ago. One witness pointed out
there are only two things standing between a monopolist and the
consumer's wallet: Competition or regulation. You need one or the
other, because if you get rid of both, the consumer may as well just
hand over his wallet.
Some of the efforts made in doing away with regulation give some of
the telecommunications giants a license to print money. They certainly
will not reduce prices--if all regulation is done away with, and there
is no competition there. What is their incentive? To lower costs? Of
course not. That is as apt to happen as a belief in the Easter bunny.
The fact is, they will raise costs.
So I have a number of questions. I hope with some amendments we can
address some concerns I have with the bill.
First, the bill would permit our local phone monopoly to buy out our
local cable monopoly so the consumers have even less choice. If you
have just one monopoly cable company and one monopoly telephone
company, and that telephone company buys out the cable company, do you
really think rates are going to go down for your cable service? Of
course not. We have not found any cable companies by themselves that
have been eager to lower rates, and they do not. Suddenly, if there is
no regulation and no possibility of competition, one company owns both
the telephone and the cable, it does not take a genius to know what
happens. The price goes up. In fact it is a new version of Willie
Sutton, go to that monopoly because ``that is where the money is.''
So, as we stand on a precipice between a new world of healthy
competition between telephone and cable companies to serve all
consumers, let us not go back to a one-wire world, where one monopoly
company does both cable and phone service.
The bill unleashes the Bell operating companies, which have monopoly
control over the phone wires going into our homes, and lets them into
the long-distance market without a formal Department of Justice
analysis. I think that is wrong and I will speak more on it a little
later on.
Then the bill takes the lid off cable rates before there is any
competition in cable service.
If we had a nationwide referendum on taking the lid off cable rates,
how do you think the American public would vote? It would be the most
resounding ``no'' vote you ever heard. Yet the special interests want
us to give a ``yes'' vote here.
Does anybody think if you have a totally unrestricted cable system--
unrestricted because there is no competition or unrestricted because
there is no regulation--that they are going to lower their rates? If
anybody believes that, I have a mountain in Vermont to sell you, a
bridge in New York to sell you, and a place called the Grand Canyon,
and I have the quit claim deeds all ready to go.
Cable rates are bound to go up. They are going to force consumers to
make the hard choice of cutting back or turning off their cable
service.
Fourth, the bill rolls back State efforts to promote competition. For
instance, 10 States require ``1-plus'' dialing for in-State, short-haul
toll calls so consumers do not have to dial cumbersome access codes for
carriers other than the local exchange carrier. The bill would preempt
these dialing parity requirements that would hurt competition in the
in-State toll market, it would hurt the consumer, and again it removes
choices of people.
Senators Simpson, Kerrey, Simon, and Feingold are working with me on
an amendment to restore State authority to require ``1-plus'' dialing.
Other provisions in the bill that should be corrected would preempt
State laws on judicial review of State regulatory commission decisions,
and prohibit use of rate of return regulation.
Last, there are provisions in this bill that threaten to chill the
flow of information and communications on the Internet. They undercut
privacy of communications for on-line communications and the ability
for the court to conduct court-authorized wiretaps for fighting crime.
Users of the Internet are very concerned.
I saw on the Internet, as I was going through it--and I know the
distinguished Presiding Officer is one who is familiar with that. I
think he and I probably spend as much time using electronic
communications as anybody here. I saw an electronic petition that was
circulated on the Internet by a coalition of civil liberties groups,
including Voters Telecommunications Watch and Center for Democracy and
Technology, because I suggested I would offer an amendment which makes
it very clear that every one of us are against kiddie porn and all
those things, but would protect the integrity of the Internet.
In just a few days here is what happened. This. This. In just about 2
weeks: 25,000 electronic petitions from all over the country, every
State in this Union, in support of my amendment. I hope Senators will
consider what people have done. And I will speak more on that and we
will have an amendment on that. But 25,000 people have already heard
and expressed their concern.
This bill does contain provisions that I heartily endorse. I commend
Senators Pressler and Hollings, and the members of the Commerce
Committee, for their attention to universal service and the special
concerns that we share for rural customers and those in small towns.
They have also attended to promoting access to networks and services by
individuals with physical disabilities, and providing incremental rates
for rural health clinics, schools and libraries. These are essential
components of an effective national information policy. Like the
Freedom of Information Act and public access channels, these concepts
will help make increasing citizen participation a reality.
Telecommunications is critical to the economic health of our country,
the education of our children, the delivery of health care services to
our citizens and our overall quality of life. The explosion of new
technologies in telecommunications has fueled many of our newest
innovations and will continue to create new opportunities, some of them
unimagined today.
Our challenge is to try to keep pace with changes in technology that
are driving changes in the marketplace. With this legislation, we are
making changes in the legal framework governing our telecommunications
industries, and we must keep our eye on making our laws more
procompetitive and proconsumer.
[[Page S8068]] What I am saying is that our country has made
enormous advances in telecommunications. But in those areas where we
have not had real competition, we have stayed behind other parts of the
world. With real competition we can not only catch up with the rest of
the world, we can be in advance of the rest of the world. Let us make
sure what we come up with here fosters real competition, gives
consumers a choice, and does not allow a few monopolists to set the
rates that all of us have to pay.
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. ROCKEFELLER. 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. ROCKEFELLER. Mr. President, I have a question to address to the
majority leader or the minority leader.
Mr. President, I would be very pleased to ask my question to the
Democratic leader, if that would be acceptable to him.
We are confronted with a situation here, the present posture, as I
understand it, is that we are going to vote on a very complex series of
aspects of this bill, and after we have voted time for debate.
What I think I have a real problem with is the fact that debate
honestly changes people's minds, a good debate. I think as a result of
the debate last night on one of our amendments a number of minds were
changed. In this case, where we are dealing with cable rates, where
there are less than 35,000 people within the system, and those would be
completely regulated, that has enormous effect. And it may be that a
lot of Senators do not know that this is in that legislation.
So the question I would have to the Democratic leader, is there
anything inherently wrong in not trying to have the vote now but have
the debate now, to try to debate this with our colleagues and then have
the vote laid over until Monday? It just strikes me that in a
democratic body having a debate after you have already cast your vote
is not the way democracy usually works.
Mr. DASCHLE. If the Senator will yield, the managers as well as the
two leaders have been working on this package for the better part of 3
or 4 days, and we have had a large number of consultations with Members
on both sides of the aisle, in an effort to better accommodate concerns
of Senators to address this managers' package as well as to address a
number of schedules that are becoming increasingly jeopardized as a
result of our delay.
We had hoped, after all of this consultation, to lay the amendment
down and have a vote, but also ensure that everyone's rights are
protected to amend the managers' package as they can amend the bill,
just as we do with any other piece of legislation, so every Member is
protected. And if there are provisions in this managers' amendment
which would be part of the bill that they would not find in their
interest, they are protected and would be encouraged to offer
amendments to address those particular aspects.
But I must say a tremendous amount of effort has been put into
accommodating everybody and to accomplish the point where we are now at
legislatively. So I would hope that we could accommodate schedules as
well as to accommodate those who have participated in this series of
negotiations to get us to this point.
Mr. DOLE. If the Senator will yield, I would be prepared, and I think
Senator Daschle, in any provision in our amendment to protect the
rights of anyone. If it takes consent, I would give consent right now
that the Senator would have the right to move to strike that section
next week if the Senator wanted more debate at that time. I certainly
do not want to take away anybody's rights, but I think what we are
trying to do is get a lot of these things we have sort of agreed on
into the package without any further delay. And then obviously I would
be willing to agree right now if the Senator wanted to offer a motion
to strike or whatever on Monday or Tuesday, we could debate it at that
time.
Mr. ROCKEFELLER. That would be entirely satisfactory with this
Senator. I thank the Chair.
Mr. DOLE. I think that would apply to Senator Daschle's provision,
too.
Mr. KERREY addressed the Chair.
The PRESIDING OFFICER. The Senator from Nebraska.
Mr. KERREY. Mr. President, I say to my colleagues, I have had,
particularly with the amendments separately, when I urged them to come
over the last couple days, particularly originally Daschle-Hollings and
then Dole separately, I had some difficulties but in combined form I
have not, and I have no difficulty in moving to a vote in an
expeditious fashion.
Mr. HOLLINGS. 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. DOLE. 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. DOLE. What is the pending business?
The PRESIDING OFFICER. The pending business is the majority leader's
amendment, as modified.
Mr. DOLE. Let me just indicate for everybody--then we will have a
vote in a minute--this is the provision, so-called Dole provision and
the so-called Daschle provision combined. I have taken out one
objection. We have indicated to Senator Rockefeller, I have also
indicated to Senator Dorgan that I would consent if they wanted to move
to strike or whatever if they had problem with a section. I thank
Senator Daschle.
Mr. DASCHLE. Senator Simon.
Mr. DOLE. Senators Simon and Lott have reached the same agreement. I
think with the Daschle amendment, if somebody had not approved, they
would have that same right?
Mr. DASCHLE. Yes.
Mr. DOLE. 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.
Mr. DOLE. This will be the last vote today.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The yeas and nays have been ordered. The clerk will call the roll.
The legislative clerk called the roll.
Mr. MACK (when his name was called). Present.
Mr. LOTT. I announce that the Senator from Missouri [Mr. Ashcroft],
the Senator from Georgia [Mr. Coverdell], the Senator from Texas [Mr.
Gramm], the Senator from North Carolina [Mr. Helms], the Senator from
Arizona [Mr. Kyl], the Senator from Alabama [Mr. Shelby], the Senator
from Wyoming [Mr. Simpson], the Senator from Pennsylvania [Mr.
Specter], the Senator from Alaska [Mr. Stevens], and the Senator from
Wyoming [Mr. Thomas] are necessarily absent.
I further announce that, if present and voting, the Senator from
Wyoming [Mr. Simpson] would vote ``yea.''
Mr. FORD. I announce that the Senator from California [Mrs. Boxer],
the Senator from Massachusetts [Mr. Kennedy], and the Senator from
Georgia [Mr. Nunn] are necessarily absent.
I also announce that the Senator from Delaware [Mr. Biden] is absent
because of a funeral.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
who desire to vote?
The result was announced--yeas 77, nays 8, as follows:

[Rollcall Vote No. 248 Leg.]

YEAS--77

Abraham
Akaka
Baucus
Bennett
Bingaman
Bond
Breaux
Brown
Bryan
Bumpers
Burns
Campbell
Chafee
Coats
Cochran
Cohen
Craig
D'Amato
Daschle
DeWine
Dodd
Dole
Domenici
Exon
Faircloth
Feingold
Feinstein
Ford
Frist
Glenn
Gorton
Graham
Grams
Grassley
Gregg
Harkin
Hatch
Hatfield
Heflin
Hollings
Hutchison
Inhofe
Inouye
Jeffords
Johnston
Kassebaum
Kempthorne
Kerrey
Kerry
Kohl
Lautenberg
Leahy
Levin
Lott
Lugar
McCain
McConnell
Mikulski
Moseley-Braun
Moynihan
Murray
Nickles
Packwood
Pell
Pressler
Pryor
Reid
Robb
Roth [[Page S8069]]
Santorum
Sarbanes
Smith
Snowe
Thompson
Thurmond
Warner
Wellstone

NAYS--8

Bradley
Byrd
Conrad
Dorgan
Lieberman
Murkowski
Rockefeller
Simon

ANSWERED ``PRESENT''--1

Mack

NOT VOTING--14

Ashcroft
Biden
Boxer
Coverdell
Gramm
Helms
Kennedy
Kyl
Nunn
Shelby
Simpson
Specter
Stevens
Thomas
So the amendment (No. 1255), as modified, was agreed to.
Mr. HARKIN addressed the Chair.
The PRESIDING OFFICER. The Senator from Iowa is recognized.
Mr. HARKIN. Mr. President, I wanted to make a couple of comments on
the amendment just adopted. I support the long-term goal of this
legislation to deregulate the telecommunications industry in this
country and to bring vigorous competition to these markets. We can all
envision the intended results in the not-too-distant future. The Bell
companies, cable companies, long distance companies, all competing at a
local level offering a wide variety of services--video, telephone,
cellular, personal communications. All of these services will be
offered in a vigorously competitive atmosphere where the companies are
bending over backward to give the best and most innovative service for
the dollar.
In the coming competitive environment after the lifting of
regulations and the modification of final judgment, a business, for
example, could call up one company and arrange for that company to
provide local telephone service as well as long distance service at one
low price, with only one vendor to deal with. But the fact is, in some
areas, including in parts of my State of Iowa, these combined services
exist now. These services are provided by smaller companies who are
able to provide all of a business' telephone services for one price.
How do these companies do that? Well, they buy the local telephone
lines in bulk and resell them at retail, just like millions of other
small businesses all over the country do. They package the local
service along with long distance service and sell them for one price.
What does the buyer get? The buyer gets the convenience and low cost of
having only one company to deal with, and they pass these savings along
to their customers.
The company fills a niche currently unfilled in the market and is
able to build capital to allow them to build the infrastructure that
they would need to break through into real competition with the local
telephone company.
In my home State of Iowa, an innovative telecommunications pioneer,
Clark McLeod, has been offering these services in Cedar Rapids and
other locations for several years. In the process, he has created
thousands of jobs and filled a need for service.
We all talk about the need for competition in the local market. But
we have to think about who that competition will come from. Do we think
that the only ones who will compete for local phone service will be the
big companies already providing telecommunications services? Is the
goal here just to allow the big cable and long distance companies to
get in and sort of duke it out with Ma Bell? Or should we not provide a
regulatory framework that will allow new companies to grow, to build
capital, and to break out into full competition?
Mr. President, I was a Member of the House when the cable business
just started getting big, when the cable industry was in its infancy.
They used to build cable systems just for the purpose of taking in a
good quality signal from over the air stations and then piping it into
homes where they could get a clearer signal rather than just getting it
over the air stations.
In other words, they took the programming from the broadcast stations
and then resold it. When they collected sufficient capital, they
started the many new cable channels. When MCI, for example, got
started, it was renting long distance lines from Ma Bell and reselling
them at discount prices.
In other words, the two large industry groups--cable and long
distance--that are expected to provide much of the competition, arose
from reselling of the services of existing large companies and doing it
in a new form. These resellers are like the acorns from which a mighty
oak might grow.
Unfortunately, one provision of this bill would have killed these
fledgling services. In a supposed effort to be fair to the Bell
companies, we would actually kill off companies that are currently
providing these joint marketing services.
The joint marketing provision of the underlying bill would have
prohibited companies from buying local service from a Bell company and
then marketing it jointly with long distance service until the Bell
company is allowed to offer long distance services.
This provision is anticompetitive and it is a job killer in my State.
It ought to be fully stricken. I have been working with the managers of
the bill to address this issue.
I am pleased to say that the leadership amendment that we just
approved would take care of the most immediate part of this problem. It
would make the ill-advised joint marketing provision apply to only
those firms with more than 5 percent of the market nationally. It would
sunset the prohibition for everyone in 3 years.
Mr. President, while I think we should strike the whole provision,
the change in this amendment is a critically important first step. It
would at least protect the many innovative smaller companies like Mr.
McLeod and the others in my State, to continue their operations and
continue to provide the services valued by so many Iowans.
Some will argue that this provision simply maintains fairness between
the Bell companies and their potential competitors. They argue that it
is unfair for the long distance companies to be able to offer a package
to sell when the Bell companies cannot.
But the fact is, this is adding a new restriction that would kill
thousands of jobs that already exist and thousands more that could be
created in the interim. Worse yet, it would deprive those companies
that want to get into the local market of their best opportunity to do
so, impeding the competition that is supposed to be the whole point of
this bill. This whole bill is about creating competition in the local
market and allowing the power of competition to help the consumers and
to expand the technology available to all. The Bell companies are
unlikely to lose a significant portion of their business to resellers
in the few years that it will take to open the local loop to
competition.
So I am very pleased that first step has been taken through a
component of the leadership amendment just adopted. I yield the floor.
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. PRESSLER. 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 want to give a little legislative
history on the majority leader and minority leader's package, if I may,
and if any Senator has pending business that they want to interrupt me
with, I will be glad to do so.
I want to praise both Senator Dole and Senator Daschle for their
leadership on the amendments we just passed which have been worked out
and negotiated over a number of weeks and days and down to the last
minute.
The package of amendments that is the Dole-Daschle package is
intended to modify a number of areas in the bill and thus improve the
bill's deregulatory nature. It ensures that certain provisional intents
usually apply the way they were meant to and provides exceptions where
necessary.
The amendments end all rate regulations on small and rural cable
companies. These companies cannot economically exist under such rate
controls and are unable to provide basic and upper-tier services.
It also eliminates restrictions on the number of TV stations, 12
twelve, owned nationwide while maintaining the 35-percent national
audience reach. It eliminates all ownership restrictions on radio, and
the FCC is granted the authority to deny additional licenses if it
thinks an entity is getting undue concentration.
It gets rid of the GTE consent decree arising from GTE's purchase of
Sprint. [[Page S8070]] GTE has sold Sprint. Therefore, the consent
decree is no longer necessary. It eliminates unnecessary regulations
and functions at the FCC. These items are noncontroversial, suggested
by the FCC. The FCC will also be required to forbear from regulating
when competition develops.
Telecommunications carriers will gain a petition process to seek
repeal of the FCC and State regulations. The amendment redefines
universal service to narrow its definitions to essential services--not
entertainment services and equipment.
Finally, the amendment will require the FCC to complete a proceeding
within 270 days, determining whether or not AT&T should continue to be
regulated as a dominance carrier in the long distance market.
Again, this amendment seeks to improve the bill's deregulatory nature
by addressing overlooked items but maintaining the bill's fundamental
structure.
Mr. President, those are some comments on the Dole-Daschle package of
amendments that we have just adopted, for purposes of legislative
history.
Mr. President, I would like to make some remarks about the upcoming
Department of Justice amendment that is being offered by my colleague
from North Dakota and, in general, the DOJ.
I will proceed with these points on the DOJ and why I feel it is not
appropriate to expand this bill to include a DOJ review.
First, DOJ proposed the line-of-business restrictions on the BOC's,
not the Court, AT&T or the Bell Companies.
Second, DOJ and the Court both recognized that the line-of-business
restrictions are anticompetitive due to the restriction on entry which
actually reduces competition.
Third, consequently, DOJ did not follow its own internal policy of
proposing a 10-year sunset, but instead promised to conduct triennial
reviews.
Fourth, AT&T and the district court accepted the line-of-business
restrictions on the basis that DOJ would conduct these triennial
reviews and the BOC's could obtain waivers from the MFJ under section
VIII(c)--the standard proposed in the Dorgan amendment.
Fifth, DOJ has abandoned its promise to conduct triennial reviews.
Sixth, DOJ fails to deal with waiver requests in a timely manner.
Seventh, yet, nearly, all requests for waivers from the line-of-
business restrictions are supported by DOJ and approved by the district
court.
Eighth, DOJ has announced new principles which must be met before it
will support relief from the MFJ, thereby signaling its rejection of
the section VIII(c) test.

the united states doj has failed to fulfill its obligations under the
modifications of final judgment

First, DOJ proposed the line-of-business restrictions on the BOC's,
not the Court, AT&T or the Bell companies.
The DOJ was the principal proponent of the line-of-business
restrictions.--United States v. Western Electric Co., 552 F. Supp. 131,
186 n.227 (D.D.C. 1982).
AT&T did not want the line-of-business restrictions imposed upon the
BOC's, but accepted them as part of the bargain to settle the antitrust
case with DOJ.

We do not want restrictions on those BOCs. That wasn't our
idea. We understand the theory, we understand why that had to
be part of the bargain, but it wasn't our idea. . . . The
last thing in the world you want to do is to impose some
further restrictions on their efficiencies, . . . [W]e should
be getting rid of restrictions. . . . They weren't our
idea.--Comments of Howard Trienens, AT&T General Counsel, FCC
En Banc Meeting (March 24, 1982).
I'm against restrictions. I'll be happy if nobody is
restricted on anything. After this divestiture occurs, let
[the BOCs] do what they want.--Comments of Howard Trienens,
AT&T General Counsel, United States v. Western Electric Co.,
Civil Action No. 82-0192, Hearing Transcript at 25210-25211
(June 29, 1982).

Second, DOJ and the Court both recognized that the line-of-business
restrictions are anticompetitive due to the restrictions on entry which
actually reduces competition.
The line-of-business restrictions ``are generally anticompetitive and
deserve the most careful scrutiny.''--Response Of The United States To
Public Comments On Proposed Modification Of Final Judgment at 56,
United States v. Western Electric Co., Civil Action No. 82-0192 (May
20, 1982).

A number of comments also expressed concern regarding the
absence of any time limit on the BOC line of business
restrictions. Some have suggested that in the absence of
limitations on the duration of the restrictions, as
technology changes, the modification will have unintended
anticompetitive consequences by needlessly restricting entry.
The Department believes that these concerns are valid. Id. at
61-62.
[S]uch restrictions deserve ``the most careful scrutiny''
to ensure both that they will have the desired effect and
that they will not actually limit competition by
unnecessarily barring a competitor from a market.--United
States v. Western Electric Co., 552 F. Supp. 131, 186 (D.D.C.
1982).
[T]he restrictions are, at least in one sense, directly
anticompetitive because they prevent a potential competitor
from entering the market. Id.
If the restrictions were to continue in effect, their sole
effect would be to limit competition by preventing the entry
of a viable competitor. Id. at 195 n.264.

Third, consequently, DOJ did not follow its own internal policy of
proposing a 10-year sunset, but instead promised to conduct triennial
reviews.
It has been DOJ Antitrust Division policy since 1979, and remains so
today, that antitrust consent decrees should have an automatic sunset
of 10 years or less. Most antitrust consent decrees contain this 10
year sunset language. The MFJ does not, and is one of the few
exceptions to this Department policy.
The DOJ Antitrust Division Manual contains ``standard language'' to
be contained in antitrust consent decrees, which states that the
``final judgment will expire on the tenth anniversary of its date of
entry or, with respect to any particular provision, on any earlier date
specified.''--U.S. Department of Justice, Antitrust Division Manual IV-
76 (2d ed. 1987).
DOJ promised AT&T and the district court that it would examine the
continuing need for the line-of-business restrictions on the third
anniversary of its entry and every 3 years thereafter.

[T]he Department intends to review carefully the continuing
need for the restrictions. In order to ensure that the Court
is fully apprised of development in this area, the Department
will undertake to make a formal report to the Court on the
continuing need for the restrictions on the third anniversary
of the date of divestiture, and every third year thereafter
so long as the restrictions remain in force.--Response Of The
United States To Public Comments On Proposed Modification Of
Final Judgment at 62, United States v. Western Electric Co.,
Civil Action No. 82-0192 (May 20, 1982).
The Department recognizes that as technology changes, the
restrictions on the BOCs may outlive their usefulness, and
indeed, become anticompetitive in effect. The Department has,
therefore, committed to a regular review of the need for the
restrictions with the intention of petitioning the Court for
their removal at the earliest possible date consistent with
technological and competitive conditions.--Brief Of The
United States In Response To The Court's Memorandum of May
25, 1982, at 31, United States v. Western Electric
Co., Civil Action No. 82-0192 (June 14, 1982).

Fourth, AT&T and the district court accepted the line-of-business
restrictions on the basis that DOJ would conduct these triennial
reviews and the BOC's could obtain waivers from the MFJ under section
VIII(C)--the standard in the Dorgan amendment.

AT&T's acceptance of the restrictions is based upon the
Department's commitment to a periodic review of
their reason-ableness . . ., and upon the BOC's
ability--independent of the Department's periodic review--to
seek the Court's removal of the restrictions (Decree,
Sec. VII).--AT&T Brief In Response To The Court's Memorandum
of May 25, 1982, United States v. Western Electric Co., Civil
Action No. 82-0192 (June 14, 1982).

The district court required that DOJ and AT&T agree to Section
VIII(C) as a condition of its approval of the MFJ.

It is probable that, over time, the Operating Companies
will lose the ability to leverage their monopoly power into
the competitive markets from which they must now be barred.
This change could occur as a result of technological
developments which eliminate the Operating Companies' local
exchange monopoly or from changes in the structures of
competitive markets. . . . the decree should therefore
contain a mechanism by which they may be removed.--United
States v. Western Electric Co., 552 F. Supp. 131, 194-195
(D.D.C. 1982).
Recognizing this fact, the Department of Justice has
undertaken to report to the Court every three years
concerning the continuing need for the restrictions imposed
by the decree. (Citation omitted.) In addition, both parties
have agreed that the restrictions may be removed over the
opposition of a party to the decree when the Court finds that
``the rationale for [the restriction] is outmoded by
technical developments.'' Id. [[Page S8071]]
Thus, a restriction will be removed upon a showing that
there is no substantial possibility that an Operating Company
could use its monopoly power to impede competition in the
relevant market.
[T]he Court will approve the proposed decree as in the
public interest provided that the parties agree to the
addition of the following new section: VIII Modifications. .
. . Id. at 225.

Fifth, DOJ has abandoned its promise to conduct triennial reviews.
DOJ conducted the first triennial review in 1987 and recommended
removal of the interexchange restriction on mobile services,
the manufacturing restriction, the information services
restriction, and the restriction against the provision of
nontelecommuni-cations products and services.--Report and
recommendations of the United States concerning the line of business
restrictions imposed on the bell operating companies by the
modification of final judgment at 56-57 (February 2, 1987); and
response of the United States to comments on its report and
recommendations concerning the line of business restrictions imposed on
the bell operating companies by the modification of final judgment at
24, 60, 95, and 135 (April 27, 1987).
In 1987, during the first triennial review, the district court only
adopted DOJ's recommendation to remove the restriction against the
provision of nontelecommunications products and services, and granted
limited information services infrastructure components.--United States
v. Western Electric Co., 673 F. Supp. 525 (D.D.C. 1987).
The court of appeals reversed and remanded the decision of the
district court to not remove the information services restriction.--
United States v. Western Electric Co., 900 F.2d 283 (D.C. Cir. 1990).
The district court removed the information services restriction on
remand.--United States v. Western Electric Co., slip op. (D.D.C. July
25, 1991).
In 1989, while the appeal from the first triennial review decision by
the district court was pending, DOJ advised the Court that it ``remains
committed to a periodic review of the decree's line of business
restrictions,'' but that it ``plans to defer the second general review
of the decree restrictions until after the court of appeals decides the
pending appeals.''--Memorandum of the United States Concerning the
second review of the line-of-business restrictions at 3 (July 3, 1989).
DOJ advised the district court that ``[f]ollowing the Court of
Appeals' decision, the Department will suggest to this Court a schedule
and procedures for the next general review consistent with that
decision.'' Id. at 3-4.
SBC, Bell Atlantic, and NYNEX sought a scheduling order which would
require DOJ to submit a second triennial review report to the district
court within 90 days after the Court of Appeals decision.
In response to DOJ's announcement that it was going to postpone the
second triennial review, the district court held that:

[It] does not endorse the Department's recommendation that
the triennial review be postponed until after the Court of
Appeals decides on currently pending appeals.
This Court has no intention of postponing any phases of its
own responsibilities under the decree because appeals have
been filed.
[W]hile the Court does not affirmatively endorse the
Department's plans, it does not impose any particular timing
requirements of its own.
[T]he Department has complete discretion on the question
whether and when to file another report, and the Court will
not attempt to interfere with the exercise of that
discretion.--United States v. Western Electric Co., slip op.
at 4-5 (July 17, 1989).

DOJ has never conducted another triennial review.
Sixth, DOJ fails to deal with waiver requests in a timely manner.
Section VII of the MFJ contemplates that waivers may be filed
directly with the District Court.
Section VII provides, in part, that:

Jurisdiction is retained by this Court for the purpose of
enabling. . . a BOC to apply to this Court at any time for
such further orders or directions as may be necessary or
appropriate for the construction or carrying out of this
Modification of Final Judgment, for the modification of any
of the provisions thereof, . . . .

However, in 1984, the district court announced that it would consider
waiver requests for removal of the line-of-business restrictions only
after review by DOJ.--United States v. Western Electric Co., 592 F.
Supp. 846, 873-874 (D.D.C. 1984).
This procedure of requiring the BOCs to obtain DOJ review of waiver
requests before filing them with the district court has given DOJ the
ability to, in effect, deny relief from the line-of-business
restrictions through inordinate delays.

In 1984, DOJ disposed of 23 waiver requests, with the
average age of waivers pending at DOJ at the end of the year
being approximately 2 months;
In 1992, DOJ disposed of 9 waiver requests, with the
average age of waivers pending at DOJ at the end of the year
being approximately 30 months;
In 1993, DOJ disposed of 7 waiver requests, with the
average age of waivers pending at DOJ at the end of the year
being approximately 36 months;
In 1994, DOJ disposed of 10 waiver requests, with the
average age of waivers pending at DOJ at the end of the year
being approximately 30 months;

On average, DOJ now takes almost as much time to consider a single
waiver request as was intended to elapse between the comprehensive
triennial reviews it promised, but has failed, to conduct.
Seventh, yet, nearly all requests for waivers from the line-of-
business restrictions are supported by DOJ and approved by the district
court.
DOJ has acted on 266 waiver requests and opposed relief in only 6
cases. In all others, DOJ supported relief either in whole or in part.
Of the same 266 waiver requests, the district court has approved 249
in their entirety and 5 in part. Only 6 were denied and 6 were pending
as of the end of 1993.--Affidavit of Paul H. Rubin at para.para.8 and
10, submitted in support of the Motion of Bell Atlantic Corp. BellSouth
Corp. NYNEX Corp. and Southwestern Bell Corp. to vacate the decree,
United States v. Western Electric Co., Civil Action No. 82-0192 (filed
July 6, 1994).
The district court has approved the vast majority--96 percent--of the
waiver requests submitted to it.
Eighth, DOJ has announced ``new principles''--as part of the
Ameritech agreement--which must be met before it will support relief
from the MFJ, Thereby signaling its rejection of the section VIII(C)
test.
Section VIII(C) of the MFJ provides that:

the restrictions imposed upon the separated BOCs by virtue
of section II(D) 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.

Section VIII(C) assumes that a local exchange monopoly will continue
to exist, but nevertheless provides the BOC's with a basis for relief.
Under Section VIII(C), the only issue is whether there is a
``substantial possibility'' that a BOC can use its local exchange
monopoly to ``impede competition''.

[U]nless the entering BOC will have the ability to raise
prices or restrict output in the market it seeks to enter,
there can be no substantial possibility that it could use its
monopoly power to ``impede competition''.--United States v.
Western Electric Co., 900 F.2d 283, 295-296 (D.C. Cir. 1990).

According to the court of appeals,

. . . the importance of the word ``substantial'' should not
be minimized. The ultimate burden under Section VIII(C)
remains on the petitioning BOC, but the requirement that the
possibility of using its monopoly power to impede competition
be ``substantial'' relieves the BOC of the essentially
impossible task of proving that there is absolutely no way
for it to use its monopoly power to impede competition. Id.
at 296.

According to the DOJ,

a BOC cannot impede competition in a given market unless it
has market power--the ability to restrict output and/or raise
prices. Id.
Whatever it means to ``leverage'' one's monopoly power, the
DOJ is surely correct that no damage to competition--through
``leverage'' or otherwise--can occur unless the BOCs can
exercise market power. Id.

Under Section VIII(C), the state of competition or lack thereof in
the local exchange is irrelevant.

And while there may be some complexities in defining
precise boundaries of the relevant market, one thing that is
clear from section VIII(C) is that it is the ``market [the
BOC] seeks to enter'' that matters, and not the local
exchange market. Id.

On February 28, 1995, Assistant Attorney General Anne K. Bingaman
gave an address to The National Press Club entitled ``Promoting
Competition In Telecommunications'' (Bingaman Address) wherein she set
forth new principles that would establish a basis for DOJ support for
removal of the line-of-business restrictions.

[[Page S8072]]

Until Congress enacts reform legislation, we are prepared
to recommend to Judge Greene that the Court move forward
under the MFJ when three basic principles are satisfied:
First, steps to foster the emergency of local competition
must be taken.
Second, the effectiveness of these steps must be tested by
actual marketplace facts--by the state of competition.
Third, RBOC participation in other markets initially must
be accompanied by appropriate safeguards.'' Bingaman Address
at 12-13.

On March 2, 1995, David Turetsky, Senior Counsel to AAG Bingaman,
gave an interview to Charles Jayco of KMOX Radio in St. Louis, MO,
wherein he indicated that DOJ would recommend relief from the long
distance [interexchange] restriction in court if the states take steps
to foster local competition and choice is really available to
consumers.

There is recognition that there is great need for
competition, real competition in local telephone service and
for that matter, cable television service, too. . . . The way
we hope to get there, in the local market, is first of all,
national legislation. . . . But this week we said that we
have to do what we can with the tools we have in the
Antitrust Division of the Department of Justice to try to
foster local competition without national legislation. We
can't wait. So really what we have done is announced that
we're going to try to find a way to move forward. The first
part of what we're trying to do is really up to the states.
If they take steps to foster local competition and if we can
test the steps they've taken to see that there are some
actual marketplace facts that indicate that choice is really
available for consumers, then what we'll do is we'll go to
court, which we can do now, and recommend that local phone
company be able to also compete in the long distance market,
something they're not able to do today.--KMOX Newsmakers
Broadcast Transcript at 2 (March 2, 1995).

DOJ's adoption of this new and different standard for removal of the
line-of-business restrictions is inconsistent with the section VIII(C)
test and inconsistent with the court of appeals' articulation of what
the BOC's must demonstrate under section VIII(C) to obtain relief from
the line-of-business restrictions.
In other words, DOJ has announced that it will not follow the law of
the MFJ and apply the section VIII(C) test to BOC requests for relief
from the line-of-business restrictions.
Mr. President, I yield the floor.
The PRESIDING OFFICER. Who seeks recognition?
Mr. INOUYE. I suggest the absence of a quorum, Mr. President.
The PRESIDING OFFICER. 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, last night we had what I thought was a
very stimulating debate on what makes technology move. And I pointed
out that sometimes Government regulation is appropriate but in the
computer industry there were no standards and there was no Government
regulation and the computer industry moved forward very quickly.
I am very stimulated by discussions of what makes technology move
forward, what kind of research really results in things moving forward.
competition in the computer and telephone industries: a comparison

By the early 1980's, AT&T and IBM were two of the largest and most
powerful companies in the world. Both had been embroiled in antitrust
litigation with the Department of Justice for over a decade.
Both the AT&T and IBM suits had focused on interconnection and
bundling practices. The Government's complaint against IBM charged the
company with ``[m]aintain[ing] pricing policies, including the quoting
of a single price for hardware, software and related support,'' which
``discriminated among customers'' and ``limited the development and
scope of activities of an independent software and computer support
industry * * *.'' IBM was charged with monopolizing both the general
marked for electronic digital computer systems, and the submarkets of
peripherals and other computer add-ons. The company had allegedly
``[e]ngaged in various pricing and marketing practices'' in order ``to
restrain its competitors from entering, remaining or expanding'' in the
general computer market, and its submarkets. IBM had allegedly pursued
policies that maintained a ``lease-oriented environment so as to raise
the barriers to entry or expansion.'' IBM, in short, was allegedly
refusing access to its closed, proprietary hardware systems, to stymie
competition.
The Government's initial complaint against AT&T alleged very similar
practices, centering on discriminatory interconnection of other
providers of equipment and services, policies that centered on leasing
rather than outright sales, and obstruction of competitive equipment
providers through maintenance of proprietary standards. AT&T, in short,
was allegedly refusing access to its hardware and network, to stymie
competition.
The Government at first proposed similar remedies in the two cases.
IBM was to offer and price separately its computer systems, peripheral
equipment, and software and support services. The Government suggested
a possible need for structural reorganization as well: it invited the
court to grant further relief ``by way of divorcement, divestiture and
reorganization with respect to the business and properties of the
defendant [IBM] as the Court may consider necessary or appropriate * *
*''
On January 8, 1982, the Federal Government resolved both cases--but
in fundamentally different ways. The Government simply dismissed the
case against IBM. It hoped to achieve its objectives in the computer
industry through the consent decree that it signed with AT&T. AT&T was
broken up, but was freed from the antitrust quarantines imposed upon it
by a previous antitrust decree entered in 1956, and so permitted to
enter the computer business to challenge IBM.

emergence of competition: computers

By the time the Government had decided not to pursue its case against
IBM, Intel was already over a decade old. Apple was growing fast. And
IBM had just introduced a brand-new machine, based on an Intel
microprocessor. Big Blue's new machine--its ``personal computer''--was
small and beige. Three weeks after the break-up of AT&T was complete,
in January 1984, Steve Jobs stepped out on the podium at the annual
stockholders' meeting of Apple Computer and unveiled the new Macintosh.
The Government's decision to allow competition, not regulation to
guide the computer market, paid off handsomely. As the Department of
Commerce has noted, ``[c]ontinuously declining computer prices,
steadily rising performance, and increasingly sophisticated uses have
all stimulated domestic sales and exports.'' The Electronic Industries
Association has reached a similar conclusion:

Pushed by intense competition among PC suppliers, greater
use of commodity-based mass marketing channels, and increased
focus on the more price-sensitive buyers in homes, schools
and small businesses, vendors continued to slash list prices,
cut dealer margins, and introduce low-cost lines aimed at the
consumer and home markets.

The impact of this unfettered competition has had its effect on IBM.
IBM's market share, measured against overall industry revenues, had
fallen to 20 percent by 1993. It has, however, recovered from the
initial shock and is now holding its own against other competitors.
IBM's stock, which had dropped to $41 a share by mid-1993 is now back
near $100. In an attempt to shift its focus from mainframes to the PC
market, IBM has introduced its OS/2 Warp operating system, which is
fighting against Microsoft's Windows operating system.
It is important to note that while the industry moved from virtual
monopoly to full competition, domestic manufacturers maintained their
dominant position in the world market where they continue to account
for some 75 percent of all computer hardware sales. United States based
firms also dominate the world market for software.

emergence of competition: telephony

Long Distance: In contrast, the markets for products and services
provided by the predivestiture AT&T have languished. After an initial
postdivestiture drop, AT&T's share of the overall interexchange market
is now holding steady at about 60 percent even though AT&T charges
higher prices than its rivals for comparable service. The combined
market share of AT&T, MCI, and Sprint remains at 94 percent, down only
5 percent since divestiture. [[Page S8073]]
Price competition has also not maintained pace with the computer
industry. MCI and Sprint have brought their prices up to AT&T's since
divestiture, and the three major carriers' prices now move almost
monolithically. Long-distance prices actually fell faster before
divestiture, when access charges are considered.
Equipment: AT&T has lost significant share in the market for
telecommunications equipment. In the market for central office
switching equipment, all market share lost by AT&T since divestiture
has been gained by Canada's Northern Telecom. Foreign producers
accounted for about one-fifth of U.S. switch sales in 1982, but they
had more than half of the market 10 years later. Between them AT&T and
Northern Telecom still controlled some 87 percent of sales in 1992,
precisely the same combined share they held in 1982.
In the market for CPE, the vacuum created by AT&T's breakup and the
line-of-business restrictions was filled by large foreign
manufacturers. The Commerce Department has determined that ``[t]here is
very little U.S. production of commodity-type [CPE] products, such as
telephone sets, telephone answering machines and facsimile machines''
and that the country's trade deficit in CPE was approximately $3
billion in 1992.

comparative market performance
Price: Nowhere is difference between the IBM and AT&T approaches more
apparent than in improvements in price performance ratios. A $5,000 PC
in 1990--featuring a 486 microprocessor running at 25 MHz--had the
processing power of a $250,000 minicomputer in the mid 1980's, and a
million-dollar mainframe of the 1970's. Five years later, that same
$5,000 PC is two generations out of date--with a third new generation
on the horizon. Systems with nearly twice the processing power of that
1990 system--using a 486DX2--66 chip--are available for under $1,500
and advertisements are run which encourage owners of these chips to
upgrade to newer ones. Systems with more than twice the processing
power of that system--featuring a 120 MHZ Pentium chip--are now
available, most for under $5,000.
The upshot is that consumers can purchase systems with four times the
power of 1980's mainframes at one-fiftieth of the price. Put another
way, systems today have over 200 times the value of systems in 1984. By
contrast, longdistance calls today represent only twice the value of
long-distance calls in 1984. Had price-performance gains of the same
magnitude occurred in the long-distance market since 1984, the results
would have been equally stunning. For example, in 1984, a 10-minute
call at day rates between New York and Los Angeles cost a little less
than $7, in 1994 dollars. Today it costs $2.50. Had competition and
technological advances developed in the long distance market as it did
in the computer market, that same would cost less than 5 cents.
Alternatively, a 10-minute call from New York to Japan cost roughly $25
in 1984, again in 1994 dollars, and $14 today. Had long-distance
service advanced as rapidly as the personal computer industry, that
call would cost less than 13 cents.

This same formula can be applied to all telecommunications markets.
The price of a PBX, measured on a per-line basis and adjusted for
inflation, has fallen by about half since 1984, from about $1,000 to a
little over $500. Price and performance gains on par with the computer
industry's would have brought that per-line price down to less than $4.
Inflation adjusted per-line prices for central office switches went
from $330 in 1984 to $165 today. Improvements in Central Office switch
value comparable to that seen in PC's would have lowered that figure
below $2. A typical telephone cost about $50 in 1985 and $25 today, but
had CPE followed the trend in the PC industry, essentially the same
functionality might cost under a dollar today.
Open Networks: Central to the Government's case against both
companies was their attempts to maintain closed systems. Yet in
scarcely a decade after the Government dismissed its suit against IBM,
99 percent of all computing power migrated out of the mainframe and on
to dispersed, desktop machines. Driven entirely by market forces, IBM
has since extensively unbundled its products and services. IBM has spun
off its printer and keyboard division, Lexmark, and has entered into
numerous joint ventures with former rivals. ``The idea of open
systems--that computers should easily share things and basically behave
like friends--is what everyone is aiming for,'' IBM's advertising now
declares. During that same time period, regulators and industry
participants have been struggling to define the same types of
interfaces.
Jobs: One measure of relative market health is growth in the number
of employees. In 1980 there were a little more than 300,000 Americans
employed in the computer industry while more than a million were
engaged in the provision of telephone products and services. By 1993
computer products and services accounted for more than 1.2 million, a
four-fold increase. At the same time, the number of telephone employees
had dropped to less than 900,000.

conclusion

In 1982, the Department of Justice was prosecuting two cases, one
against AT&T and another against IBM. The theories of the two cases
were virtually identical. The Government, however, chose to break up
AT&T and prohibit its local companies from participating in the markets
for long distance service and telecommunications equipment. At the same
time, it chose to drop its suit against IBM and allow market forces to
shape the computer industry. These two very different approaches have
yielded very different results. Today AT&T remains dominant in the
market for long distance services. In the market for telecommunications
equipment, AT&T has seen erosion of its position, but almost all the
new entry has been by foreign firms. IBM, by contrast, is now only the
fourth largest personal computer manufacturer. The computer market is
flourishing, domestic jobs are growing fast, and U.S. computers set the
standard worldwide. These results confirm that in a rapidly developing
market, competition will yield better results than will regulation and
embargo.
Mr. President, I would like to summarize my statement by saying that
I think all of us here have worked together on a bipartisan basis. We
have some disagreements on some amendments to come, but I am sure we
will work them out. I very much respect everyone's point of view, and I
respect the need to debate these. And I welcome Senators to come to the
floor to make their statements and to offer their amendments, for that
matter.
It is my strongest feeling that the bill we worked out in the
Commerce Committee--and we had input from a number of sources. Indeed,
we have had meetings since January on this, and we invited other
Senators who are not on the Commerce Committee to participate. I
believe the very able staffer of my friend from Nebraska--and I wish to
praise Carol Ann Bischoff. I had intended to praise her in my closing
statement. It is not unusual to praise a staffer, but she did a great
job. She was in many of the meetings, and we appreciate that very much.
So what I am saying is a number of people have worked on this
legislation. I am not criticizing anyone for raising questions here. We
will continue to work on it.
We did have meetings every night from about January on, including
Saturdays and Sundays, for interested Senators, and we think that we
have crafted a good bill. I want to praise Senator Hollings and Senator
Inouye, all the Democrats and Republicans on the committee and off the
committee who participated.
But we worked out this delicate balance on this bill, which provides
for an FCC review. It provides for a checklist. It also has the public
interest, convenience and necessity standard. We feel that going on to
a Justice Department review would be duplicative.
But in any event, let me state the need to pass this bill. This bill
will provide a road map for the next 15 years or 10 years or however
long it takes to get into the wireless age. It will provide a basis for
investment and for jobs, and it will be something like the Oklahoma
land rush because right now our telecommunications sectors are an
apartheid, an economic apartheid. They each have an economic sector.
This bill is intended to get into everybody else's business, but also
it takes off certain restrictions on our domestic companies that they
spend their money in Europe. [[Page S8074]]
So I hope we can pass it, and I wish to commend everybody for
participating. We have tried to run as open a process as possible.
Senator Hollings and I have invited everybody to meetings. His staff
has done an outstanding job and our staff on the Commerce Committee has
done an outstanding job. We welcome amendments. We welcome digesting
this further. I thank everybody for their participation.
I yield the floor.
Mr. KERREY addressed the Chair.
The PRESIDING OFFICER (Mr. Grams). The Senator from Nebraska is
recognized.
Mr. KERREY. Mr. President, I would like to take a few minutes and
describe what was in the Hollings-Daschle amendment that was adopted
earlier and describe why we believe it is important to have these
things included in the bill.
Before I do, I would like to once again compliment and respond to the
comments just made by the distinguished chairman of the Commerce
Committee, the Senator from South Dakota.
Mr. President, what we are about to do in this legislation is without
precedent. There is no legislative precedent for taking this large a
sector of the economy. It is true we have deregulated other sectors of
the economy but nothing that touches nearly half of all the U.S.
economy, either directly or indirectly. It is a mammoth part of the
economy.
Make no mistake about it, while it may be true that some Americans do
not fly, and some Americans do not use a truck, every single American
will be touched by this piece of legislation. If you have a telephone
line coming into your home, if you watch broadcast television, if you
buy records, if you have cable service, if you use any consumer
electronics, if you have a computer, if you have any contact at all
with information industries or services, this bill will have an impact
on you--a substantial impact on you.
I say this to my colleagues who are wondering why this is important.
There will be precious little interest, I suspect, in this legislation,
or a relatively small amount of interest in this legislation, while we
are debating it as perhaps in the first 30 or 60 days after it is
enacted.
For those who wonder what this bill will do, I urge you to go back
and examine the 1984, 1985, 1986 period and try and reach back and test
the waters to see what consumers and citizens were saying the last time
we attempted to move from a monopoly to a competitive environment.
At that time, the Department of Justice managed that transition. That
is why the role for the Department of Justice is so important. That is
why the Dorgan amendment and the Thurmond amendment are so critical.
The Department of Justice does have expertise in doing this. It is not
duplicative. It is not additional bureaucracy, Mr. President.
Those who say that and who believe that is true should look at the
long run. It requires a process to go forward simultaneously with the
Department of Justice and with the FCC. In the Department of Justice,
there is a 90-day time certain. That is not duplicative. That does not
require people to go through a long, lengthy process. Indeed, I will
predict with great confidence that if this bill is passed without--
without--the DOJ language in there, what will happen is we will have
extensive litigation, because the 14-part test that is required before
a regional Bell operating company can get into long-distance service,
before your local telephone company can do long-distance telephone
service, has not been litigated. There is no precedent. There is no
court history that can be referenced with clarity so that people
understand what is going on. And it will be litigated.
I understand the delicate balance argument. I understand what the
committee had to do. I understand what the committee had to try to
balance in order to get this out. Indeed, it is the sole responsibility
and credit of the senior Senator from Nebraska, Senator Exon, that the
compromise that gives DOJ a consultative role was added by the
committee prior to it being voted out.
Nonetheless, I say over and over and over, do not underestimate the
difficulty this vote is going to produce for you unless the most
experienced manager of taking a monopoly to a competitive environment
has more involvement than just consultation. If you are uncomfortable
with the bureaucracy argument, there are fewer than 900 employees over
in antitrust at the Department of Justice. If the language troubles you
in some fashion and you think we need to make certain that time certain
is held to, that it is not delayed for a long period of time, come and
argue for changes in that.
Second, the distinguished Senator from South Dakota lays out the
differences in results with the Justice Department's action with IBM in
the early 1980's--about 1982--and the action taken by the Justice
Department in 1984.
I say to my colleagues, this makes the case for Justice involvement.
They had a success in both cases. It is a completely different
situation, however, when you are talking about a monopoly that has been
created by law to perform a public service of providing telephone
service to all American households.
The goal of the 1934 act says universal service and, indeed, as early
as 20 years ago universal service had been attained, but it is a
franchise, a monopoly franchise granted first to AT&T and second, after
divestiture, to the regional Bell operating companies, and no one
should suffer the belief that somehow these companies are not earning
relatively high rates of return on equity. Their P&L's are quite
impressive. Their performance has been quite impressive. We are not
receiving complaints from citizens of this country who come back from
Europe or Asia or South America or Australia or Africa saying, ``Gosh,
I wish I had as good a service as I got when I was outside the United
States.'' We have exceptional service. We have high-quality service. We
have high- and well-performing corporations that are providing that
service.
So we are going to be asked by our people, the citizens who are not,
in the main, asking for us to deregulate these industries, these
companies, why we did this thing. It is fair to say, I think, this is a
contract with America's corporations who are currently not allowed to
do many things that this law will allow them to do. Corporations are
saying to us, ``Please let us do these things, because if you do, trust
us, things are going to get better.'' But if they do not get better,
Mr. President, it will be our vote and we, as Members of this body,
will be responsible for it.
I hope the Senate will seriously consider next week when we vote on
the Dorgan and the Thurmond amendments--my hope is we can bring the two
amendments close enough together that we will have a vote on a single
amendment--my hope is that my colleagues will look at this seriously
and say this may be the only safety valve that I have on behalf of the
consumers, the citizens, the voters of the State which I represent.
Mr. President, I was actually going to do this next week. I will
start to do a little of this now.
This is the annual report of one of the companies. You hear people
say--I heard it already in this debate--``Gee, the Government is
sitting like a big animal in the middle of the road preventing this
gold rush to occur, this stampede of innovation, this creation of new
jobs.''
Look at the job creation over the last 10 years created by the
regional Bell operating companies, created by AT&T and other long-
distance providers, created by the computer industry. The computer
industry surprisingly has laid off 150,000 people over the last 9
years. Look at the existing industries that are coming and talking to
us saying they need this change and you do not see much in the way of
job creation. You do not see much in the way of job creation, indeed,
with the exception of cellular and cable. The job growth has been going
downward to the right.
So do not expect in your home States to be greeted by a round of
applause that you are going to create jobs in the areas where you are
currently being asked or lobbied to support one provision or another,
with a few notable exceptions.
This is Southwestern Bell. The headline reads: ``Southwestern Bell
builds value, your $100 investment has grown to $173 in 10 years and
we're ready for another decade of growth.'' [[Page S8075]]
I have a whole stack of them. I suppose I will have a chance next
week. I am sure somebody is going to come to the floor and talk about
how we are blocking these companies; it is difficult for them to do
well. Their P&L's are very impressive. They outperform most
manufacturing businesses in America. They are doing quite well.
As I said, I do not object to many of the deregulatory efforts. I do
not object to cutting the regulation. I am the only Member of Congress
to have signed a deregulation bill. But I do not want the presumption
that we need to deregulate be that these companies are really
underperforming against other corporations in America or that somehow
Congress has denied them a fair shake in the marketplace.
Mr. President, let me now go through the package of amendments that
we took up earlier.
The Hollings-Daschle amendment was a package of provisions that
attempted to strike a better balance between consumer protection and
market deregulation. These were safeguards which were designed to
protect consumers by expanding services and keeping them affordable.
The first amendment improved the cable rate regulation provision of
the committee bill by strengthening what was known as the bad actor
test. Rates for the upper tiers of cable service will now only be found
unreasonable if they significantly exceed the national average rate for
comparable cable service for systems other than small cable systems
determined on a per channel basis as of June 1, 1995.
It sounds arcane. It was significant. By excluding the small cable
system, we raised the bar a bit--and I think quite appropriately so--to
protect American consumers.
In addition, the amendment will deregulate a cable company only after
a telephone company begins to provide video programming service that is
comparable; not just a single channel, but comparable to the video
service provided by the cable company.
A second amendment also prohibited buyouts in joint ventures by
telephone companies and cable companies, except in areas below 50,000
and in a nonurbanized areas or if the FCC waives the provision.
This places reasonable limitations on the ability of cable and
telephone companies to eliminate each other as potential competitors
through buyouts and mergers, except in rural areas where competition
may not be viable. This change improves the bill.

I must tell you that I am still very much concerned about the
potential for a telephone company to buy out a local cable company.
Again, you can imagine your own household, where you have a telephone
line coming in, a cable line coming in, and those two pipes give you
the potential for a competitive environment. That environment is going
to be substantially reduced if you allow that kind of acquisition which
will reduce you from two to one line.
The Hollings-Daschle amendment will also allow small competitors to
the telephone companies to jointly market local and long distance
service, but not AT&T, MCI, and Sprint. It amends the provision on
joint marketing to allow carriers with under 5 percent of the Nation's
prescribers to engage in joint marketing and to sunset the prohibition
on joint marketing after 3 years. With the earlier provision, this is
something I have taken a particular interest in, as many colleagues
have as well. It is unquestionably a procompetitive action.
I urge, again, upon my colleagues the idea that if we are going to
have a competitive environment, the competition is going to come from
start-up companies who are going to end up like Intel, having a
microprocessor 12 years ago and now with tremendous market value, and a
tremendous market net worth as a consequence of them having an idea,
actually spun off from IBM, that they developed over that period of
time. That is where the jobs are going to be created. They are going to
be created from new competitors, not from the established businesses.
We do not want to be unfair to established businesses, but what this
change allows is for the smaller entrepreneurial companies to jointly
market and, as a consequence, have a better chance of surviving in that
market.
The amendment will allow consumers to realize the benefits of
competition in the local telephone exchange, while preserving the
competitive balance between the regional Bell operating companies and
the major long distance carriers. The provision also promotes network
interoperability by all communications carriers. This is a provision I
was also personally involved in, having introduced legislation to this
effect some months ago. This is an important part of building a
seamless national information infrastructure that will enhance
education, business, and health care providers.
This amendment would not expand or limit the FCC's current authority
over standards setting. I emphasize that last part because, as
originally introduced--and this is one of the dangers of these kinds of
law-making efforts--it did in fact establish what are called de jure
standards, a legal standard thus preventing de facto standards.
What is happening across the board in networking, in transmission, in
hardware, in information services, in content, in the market sitting
out there, businesses are out there and individuals are out there
saying: These are my needs, this is what I need to get done; here is
point A and here is point B. This is the kind of network requirements
that I have, and the engineers and the innovators are coming up with
new solutions constantly.
Thus, though it is terribly important for us to have interoperability
in this network, particularly the network-to-network, and the ability
to come on line anyplace you are, it is terribly important to have
that. This legislation, I think, strikes a very good balance between
that need and the comparable need to avoid establishing a standard that
would restrict and constrict the development of technology itself.
Nothing in this amendment, Mr. President, precludes existing local
telephone marketing agreements from continuing in effects. Many small
broadcasters like the programming to fill an entire broadcast day, and
consequently they often lease their facilities to other programmers.
These are called local marketing agreements. This amendment I
referenced earlier recognizes this need and will help small
broadcasters continue to diversify their products.
Mr. President, as with the amendment offered by the majority leader,
the amendment that was agreed to earlier, that was approved earlier on
a rollcall vote, and offered by the distinguished Democratic leader and
the distinguished ranking Democratic member of the Commerce Committee,
comes to this law and says we are concerned about consumers, we are
concerned about those individual families living in households, we are
concerned about that small entrepreneur, that start up company that
nobody even knows about today. We want to make sure that we give them a
full and fair opportunity.
Mr. President, we are probably at a point where it is not worthwhile
to continue this exchange. It looks to me like it might be the Senator
from South Dakota and I alone sitting here all afternoon talking to one
another. That would not necessarily be very constructive. Thus, I look
forward to continuing the debate next week on the Department of Justice
amendment offered by the Senator from North Dakota and the second-
degree amendment offered by the senior Senator from South Carolina.
I yield the floor.
Mr. PRESSLER addressed the Chair.
The PRESIDING OFFICER. The chair states that when the majority leader
modified his amendment, that subsumed the underlying Daschle amendment.
That is for the information of the Senate.
The Senator from South Dakota.
Mr. PRESSLER. I say to my friend, the Senator from Nebraska, that my
mother is watching in Sioux Falls. She might appreciate it if we can
just talk all afternoon, but I think other than her, there might be
some boredom.
I did want to praise Senator Inouye for his leadership and
willingness on the GTE consent decree. I thank the Senator very much.
Mr. President, I will go a bit further to describe in more detail
some of the things in the Dole package this morning. I think all this
was worked out in Dole-Daschle and others, including myself as a
cosponsor.
In that package, the
current law does not recognize the uncertainty and disproportionate
burdens rate regulation [[Page S8076]] imposes on small cable
companies. Without relief, many small cable companies will be unable to
rebuild and upgrade their systems; moreover, they may be unable to
survive or compete in the telecommunications marketplace.

Small cable companies must spread high fixed costs over a small
subscriber base, making it difficult to rebuild and upgrade facilities,
to obtain a return on investment, and to service debt. At the same
time, small cable companies typically incur a higher cost of capital
than the industry as a whole.
The current regulatory scheme has required small cable companies to
devote a substantial amount of their operating budgets to legal and
accounting expenses simply to understand and comply with the complex
regulations spawned by the Cable Act of 1992.
Rate regulations imposed on these companies have depressed their
revenues and caused uncertainty in the financial sector, exacerbating
the difficulty such companies have in attracting financing. The
uncertainty caused by the threat of regulation alone has discouraged
the banking community from extending financing to small cable
companies. Without such financing, small cable companies will be unable
to position themselves to meet competition, or in many cases, to stay
in the cable business.
At the same time, small cable companies have been particularly hard-
hit by the competitive challenges of direct broadcast satellite [DBS],
which has become one of the fastest introductions ever of a new
consumer electronics product since its launch in 1994. DBS services,
which are expected to serve 2.2 million subscribers by the end of this
year, deliver virtually every program network offered on cable,
including movies, sports, and dozens of channels of pay-per-view
movies.
Small cable companies need immediate rate relief in order to access
the capital necessary to compete and to continue to provide services to
customers. Consequently, telecommunications reform legislation should
exempt small cable companies from rate regulation.
radio ownership

The financial health and competitive viability of the Nation's radio
industry is in our hands.
We all agree that the telecommunications legislation we are
considering today is about competition, and not picking winners and
losers. And we also agree that this legislation goes a long way toward
giving cable, satellite, and the phone companies the freedoms they need
to compete, but we now need to agree to extend these same freedoms to
the over 11,000 radio broadcasters in this country.
No other audio service provider, be they cable, satellites, or
telcos, has the multiple ownership restrictions that radio has. The
language we are offering today eliminates these outdated radio-only
rules. It is imperative that we in the Congress end this discrimination
against radio sooner by adopting this language, rather than wait for
the bureaucracy to come around to it later, as this legislation as
currently drafted, would have it.
Immediate action is critical because the FCC is on the verge of
authorizing digital satellite radio service, whereby 60 new radio
signals will broadcast in every market in the United States. This
satellite service will be mobile and available in automobiles, homes,
and businesses. Also, cable already provides 30 channels of digital
radio broadcasting in markets across the United States under a single
operator. Obviously, an incredible diversity of voices has been
achieved, with even more competition to radio quickly making its way
down the information superhighway.
Yet let us not lose sight of the fact that all of these welcome new
voices are also aggressive competitors for radio's listeners and
advertisers. And unlike radio, these competitors are not burdened with
radio's multiple ownership restrictions, nor do they have the same
public service obligations are radio broadcasters.
Our Nation's radio broadcasters have a strong tradition of providing
the American people with universal and free information services. In a
telecommunications environment increasingly dominated by subscription
services and pay-per-view, it is essential that we not foreclose the
future of free, over-the-air radio by restricting ownership options.
For radio, serving the public interest and competing are not mutually
exclusive, they are complementary. So it is left up to us to empower
radio so it can grow strong well into the next century, and continue to
serve our communities as it has done so well for the past 70 years.
The last is perhaps the most important, relief from ownership rules
works. In the early and mid-1980's, the FCC issued hundreds of new
radio licenses and the market became oversaturated with radio stations
without sufficient advertising revenue to support the increase.
However, in 1992, the FCC granted limited relief in radio ownership
restrictions. After many years of financial losses, suddenly radio
became an attractive area for investment, and alarmingly, multiyear
stations going off the air was arrested.
The economies of scale kicked in, stations gained financial strength
in consolidation, and competing for advertising improved.
Allow me to cite some statistics. In 1993, a year after the new
limits took effect, the dollar volume of FM-only transactions almost
tripled, to $743.5 million, while group sales grew 44 percent.
In 1994, sale prices of single FM stations rose 12.7 percent from
1993's $743.5 million to $838 million.
From 1993 to 1994, the total volume of AM station sales shot up 84
percent, totaling $132 million.
There is every reason to believe that all of these positive trends
will continue and flourish if we remove radio's outmoded multiple
ownership restrictions.
Clearly, maintaining local and national radio ownership limits in the
face of tomorrow's competitive environment is not only unfair but is a
major step backward.
Mr. President, I might say a word about the GTE consent decree. The
GTE consent decree arose from the 1982 acquisition of Southern Pacific
Communications Co., the forerunner of Sprint, and Southern Pacific
Satellite Company, Spacenet.
The Justice Department, as part of its statutory Hart-Scott-Rodino
review of the proposed acquisition, negotiated a consent decree based
on section 7 of the Clayton Act.
Unrelated to the acquisition, the suit also claimed GTE's provision
of information services created a substantial profitability,
monopolizing the market in violation of section 2 of the Sherman Act.
This portion was removed in 1991.
GTE was not found to have violated any antitrust statute. They
voluntarily accepted the consent decree in December 1994, allowing the
company to proceed with acquisition.
The primary restrictions of the decree are: Structural separation
between GTE's telephone operating companies and Sprint; and GTE's
telephone operating companies are prohibited from providing or joint
marketing interLATA long distance companies.
The GTE consent decree should be vacated through the pending
telecommunications reform legislation for three reasons: First, GTE no
longer owns the Sprint or Spacenet assets that gave rise to the
original suit. The Sprint assets were disposed of completely in 1992.
Spacenet assets were sold to General Electric in late 1994.
The GTE consent decree is not related to the modified final judgment.
The 1982 court order that resolved the AT&T antitrust case and broke up
the Bell system restricts the regional Bell operating companies from
entering the long distance and manufacturing businesses.
GTE is the only non-Bell telephone company with such cumbersome
proceedings. These procedures resulted in higher costs and hamper GTE's
ability to compete.
GTE also filed a motion with Judge Harold Greene in the U.S. district
court to have the court vacate the GTE consent decree.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. PRESSLER. 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. DOLE. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
[[Page S8077]]

Mr. DOLE. Mr. President, what is the pending business?
The PRESIDING OFFICER. The pending business is the telecommunications
bill.

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