[Congressional Record Volume 141, Number 95 (Monday, June 12, 1995)]
[Senate]
[Pages S8134-S8176]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


        THE TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
resume consideration of S. 652, which the clerk will report.
  The legislative clerk read as follows:

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

  The Senate resumed consideration of the bill.

       Pending:
       Dorgan modified amendment No. 1264, to require Department 
     of Justice approval for regional Bell operating company entry 
     into long distance services, based on the VIII(c) standard.
       Thurmond modified amendment No. 1265 (to amendment No. 
     1264), to provide for the review by the Attorney General of 
     the United States of the entry of the Bell operating 
     companies into interexchange telecommunications and 
     manufacturing markets.

  Mr. PRESSLER. Mr. President, we are returning to the 
telecommunications bill. I urge all Senators to come to the floor with 
their statements and amendments.
  We have made good progress on the bill. We have many challenges ahead 
to meet.
  As I have said frequently, this bill will allow all parts of the 
telecommunications industry to get into each other's business and allow 
new small businesses to get into the telecommunications area. It will 
open up our local telephone markets for the first time to competition. 
It will allow our long distance companies to get into local and vice 
versa.
  It will move toward the deregulation of cable by encouraging 
competition from DBS, direct broadcast satellite television, and by 
giving the regional Bells video dial opportunity. There will be three 
or four competitors in each market,
 which should and will make cable prices much lower. It will mean lower 
cost telephone services, lower telephone rates and lower long distance 
rates for the average American.

  Many years ago, when I was in the House, we had some great debates 
over the deregulation of natural gas, and people said if we deregulate 
natural gas, prices will skyrocket. They did not. They have come down 
and there is competition and natural gas prices are lower than they 
have ever been.
  We can do our senior citizens and others a favor by getting lower 
prices through competition. That is what this bill will do.
  This bill will also lift some regulation in the broadcast area. It 
will allow some of our utilities to do things they have not done before 
in telecommunications. It covers a broad spectrum of American life.
  It is a very important bill. It is a bill we need to pass. The bill 
we have before us is not perfect in anyone's eyes. It is a good bill, 
and each Senator would write it slightly differently. Indeed, every 
Senator has had the opportunity to participate in the writing of this 
bill. It has been a long process that we held before the markup in the 
Commerce, Science, and Transportation Committee.
  We held meeting after meeting for probably 90 days as well as meeting 
on Saturdays and Sundays, with Senators and staffs being invited who 
wished to participate. We came to the Commerce Committee with this bill 
and received all except two votes. We are very proud of the bipartisan 
effort that we have made and that will remain bipartisan.
  I want to pay tribute to my colleague, Senator Hollings, who has done 
such an outstanding job, and to all the Republicans and Democrats who 
have worked hard on this bill.
  This bill will provide a roadmap for us into the wireless age. It 
will provide a roadmap for investors to invest in creative and 
competitive enterprises. It will also help consumers because it will 
mean more services at lower prices. If we look at what has happened in 
the computer industry, every 18 months their equipment is virtually 
obsolete, there is so much competition and so much innovation. I would 
like to see the same thing in the telecommunications area, and I think 
we can see that in the next 10 years if we pass this bill.
  We still have a long way to go. We have to pass the bill in the 
Senate and in the House, we have to have a conference, and the 
President has to be able to sign it. I hope the White House will help 
us out.
  I began this process by going to the White House with a copy of the 
chairman's discussion draft and talking to Al Gore, trying to get his 
support. We hope the White House will be supportive of this process, 
because, if we can pass this bill, I frequently say, it will be like 
the Oklahoma land rush for the American consumers. Right now, many of 
our telecommunications areas are in economic apartheid; they are 
limited just to one group. If we could get them deregulated and 
competing, there would be an explosion of new investment, an explosion 
of new services, and a explosion of opportunities and employment.
  Presently, many of our largest telecommunications companies have to 
invest abroad if they want to manufacture, for example, because the 
regional Bells are prohibited. Others invest abroad because they cannot 
get into other areas. This will let everybody into everybody else's 
business. It will allow competition, as it should.
  In the future, whether it is 5 or 10 or 15 years from now, we will be 
in the wireless era. That may well be an opportunity for even more 
competition because presently you have to unbundle or interconnect with 
someone else's wires to get access to local telephone service, for 
example. But we hope that is changed and will be changed by this bill.
  I know there are many amendments pending, and I hope Senators will 
bring their amendments to the floor this afternoon. I plead with 
Senators to allow us to have some time agreements at some point so we 
can debate these amendments on both sides. It is not my intention to 
discourage any Senator from offering an amendment. We are working with 
staff, trying to get time [[Page S8135]] agreements on some of these 
amendments so we can move forward.
  I have asked Senator Dole and Senator Daschle for their cooperation 
in finishing this bill, and I think it is very, very important. As has 
been pointed out repeatedly, this bill will affect every household in 
America. If we fail to act this year, it will fall over to 1997 because 
next year, being a Presidential year, such a controversial bill 
probably will not be able to pass.
  This is one of the most controversial and complicated bills to come 
to the Senate floor. I think we are on the way to passing it. But we 
will need the cooperation of all Senators. I have frequently said this 
is not the sort of bill that any one Senator can take credit for, or 
the lead. It takes every Senator. We all have to be involved. Because 
in the telecommunications field, any one group can checkmate, almost, 
the progress of a bill. We hope that does not happen.
  It is very important. It will affect a third of our economy. It will 
create jobs. As we read in the newspapers about some of our mature, 
aging industries, as they lay people off, we need to have new, creative 
areas to create jobs. We have done that in the computer industry. We 
have done it in some of our other growth industries. This will make us 
competitive internationally also. It will affect our exports and our 
balance of payments.
  This bill also includes reciprocity for investors from abroad so we 
treat them as they treat us. The public interest review by the FCC is 
preserved.
  So, I urge Senators, come to the floor and offer amendments. I ask 
respectfully that we be able to get some time agreements on some of 
these controversial amendments that will be coming. It is not our 
intention to shut anybody off. We want people to have their vote. But 
we must proceed.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Frist). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                    Amendment No. 1265, as Modified

  Mr. DORGAN. Mr. President, the matter pending before the Senate is 
now a second-degree amendment by Senator Strom Thurmond to a first-
degree amendment that I offered last week dealing with the issue of the 
role of the Justice Department in the telecommunications legislation.
  I would like to describe where we are and how we reached this point, 
and why I think this set of amendments is an important discussion for 
the Senate.
  First of all, the Senator from South Dakota, Senator Pressler, 
described a few moments ago the importance of this bill for virtually 
every American. There is no doubt about that. The issue of 
communications and telecommunications is one that will affect every 
single American. You cannot escape the impact of this legislation. We 
have seen an explosion of technology, an explosion in communications in 
this country in computers, telephones, cable, and broadcast, and we are 
seeing capabilities in this country today for every American, no matter 
where they live, that were only dreamed of several years ago.
  The question before the Senate is what kind of rules shall exist for 
the competition between various types of communication in our country? 
The last set of rules was a set of rules in 1934 established to try to 
govern the circumstances of operations in the communications industry 
in which we had a regulated monopoly. Phone service was a monopoly. Of 
course, we did not have computers then, we did not have cable 
television then, but we had phone service. Communications back then was 
a regulated monopoly.
  Now, in 1995, we are moving toward a deregulated set of circumstances 
in the telecommunications industry. The question is how do we structure 
the rules so that you get deregulation with fair competition and at the 
same time have the buildup of the infrastructure so that communications 
is not something that exists only where you have affluent neighborhoods 
or high concentrations of people.
  Many of us believe that the issue of communications is universal. It 
does not matter how big a town you live in or where you live in this 
country. Your ability to use a telephone or use a computer or access 
any number of devices in the telecommunications industry and be a part 
of the information superhighway--your interest and your need for that--
is just as intense and important if you come from a town of 300 people 
in southwestern North Dakota as it is if you live in downtown Manhattan 
in New York City.
  So many of us feel as we deregulate we must make sure there are 
safeguards in this legislation so that the buildup of the 
infrastructure, so the building of the information superhighway, 
reaches, yes, even the rural areas of our country.
  As we do that we understand that there is a fundamental tension 
between deregulation and the search for profits and opportunities by 
companies who will go to the densely populated areas of our country and 
the need to try to provide the same kind of service and the same 
capabilities in rural areas in our country. That is the purpose of this 
legislation, at least as far as I am concerned.
  Some see this legislation simply as opening the door and unlocking 
the forces of competition. That is part of it. I understand that. I 
accept that. I think competition can provide enormous benefits for our 
country. I happen to think that the Bell operating companies are good 
companies. I met a couple of CEO's of Bell operating companies in 
recent months who have come to my office. I am most impressed. They are 
good companies with good growth and plans for the future that are 
interesting and stimulating.
  I also happen to think that we have long-distance carriers in this 
country that are new, vibrant, and growing, and do a lot of interesting 
things. In the long-distance area, of course, we have had competition. 
As a result of that competition with hundreds of providers of long-
distance services fighting for the consumer's dollar, we have seen a 
substantial decrease in the rates for long distance service.
  We have not seen a similar circumstance in local service, and this 
bill will lead to a similar circumstance, some say, in local service, 
where we open local service to competition.
  Well, when we do that, when we open local service exchanges to 
competition, then the Bell operating systems will want to go out and 
compete in the long distance market, and this piece of legislation sets 
the conditions under which that will be possible.
  Now, Senator Thurmond and I introduced amendments which said the 
question of when real competition exists and when the baby Bells or the 
Bell operating companies shall be permitted to go off and compete in 
the long distance arena, that is a very critical area in this bill 
because if the Bells are free to go compete in long distance before 
there is true competition in the rural areas, you have the makings of a 
real mess and the makings not of deregulation and not of unleashing the 
forces of competition for the benefit of the consumer, but instead you 
have the prospect of once again establishing monopoly forces in the 
marketplace.
  So it is very important to have the right kind of ingredient in this 
legislation that serves the interest of competition, when you are 
opening the door to have the Bell operating companies move into the 
long distance service.
  Both Senator Thurmond and I have offered amendments that describe a 
role for the Justice Department in those determinations. The 
legislation that came out of the Commerce Committee had a role for the 
Justice Department that was simply consultative. In other words, the 
FCC, the Federal Communications Commission, would essentially make the 
determination of the public interest standards with their checklist 
about when certain conditions were met and when the Bells would be 
moving into long distance service and when there was real competition 
in the local exchanges. And the Justice Department was simply 
consultative.
  We have had some experience on deregulation with respect to 
consulting the Justice Department. I remember that we deregulated the 
airline industry and what we had in the airline industry was with 
respect to mergers and [[Page S8136]] acquisitions the Department of 
Transportation would provide its approval and the Justice Department 
would be consulted.
  Well, what has happened since the deregulation of the airline 
industry is pretty clear. What is happening is we now have five or six 
very large airline carriers in this country that have bought up their 
competition and they are getting bigger. Why? Because that is the way 
the market system works if it is not checked with respect to 
competition and what we will have is competition among four or five or 
six behemoths in this country in the airline industry.
  Now, the Department of Justice on a number of occasions said, well, 
we do not think this acquisition makes sense. That is our judgment. The 
Department of Transportation says it does not matter; we are going to 
allow it to proceed anyway.
  So we have seen some experience with having the Department of Justice 
in a consultative state, and frankly I think it does not work in this 
area of deregulation. I want the Department of Justice to have a full 
role with respect to its antitrust activities and its ability to 
evaluate when these kinds of activities are in the public interest. I 
do not want the Department of Justice to become a set of human brake 
pads so that you have a bunch of lawyers down there who simply put 
their foot in the door and say we are not going to make any decisions; 
we are not going to let anything happen. I do not want the Department 
of Justice to be a brake, but I do want the Department of Justice to be 
a full participant and a full partner in this judgment about what is in 
the public interest: when does competition really exist? When do you 
potentially threaten a now competitive set of circumstances with the 
potential for concentration that diminishes competition?
  So that was the point of my amendment. My amendment used a standard, 
the VIII(c) standard it is called, and would give the Justice 
Department a role in those circumstances with a time requirement by 
which they must act. And Senator Thurmond, feeling I think the same 
way, that the Justice Department should have a role, introduced an 
amendment but his amendment uses a different standard, the Clayton 7 
standard.
  We have worked over the weekend, and Senator Thurmond, I understand, 
will be coming to the floor in the next half-hour or hour. I believe he 
is at the White House for a meeting. But we have worked over the 
weekend with Senator Thurmond and have reached agreement on a 
modification of his amendment which provides some language that I have 
suggested and retains the core standard in his amendment, and that is 
an approach I think both of us support, both of us think advances the 
interests that we are attempting to advance with our amendments, and I 
hope when Senator Thurmond comes to the floor and modifies his 
amendment and discusses it, we would be able to move forward.
  It will be a common amendment that both of us will support. We have 
been working since late last week and worked through the weekend on it, 
and I think it does advance the interests both of us attempted or 
wanted to advance with respect to the role of the Department of 
Justice.
  When Senator Thurmond does come to the floor and offers such a 
modification, I know the managers want to proceed to set a vote on an 
amendment of this type, and I have no objection to that at all. I know 
the majority leader has indicated that we would not have record votes 
today before 5 o'clock. On the question of whether a vote is set on 
this evening or first thing tomorrow morning, I would be happy to work 
with Senator Thurmond and with the chairman of the Commerce Committee, 
the majority leader, the ranking member, and others. It seems to me 
that is something we can work out in the coming hours. I think there is 
really not much need to spend a great deal more time.
  There are a number of others who want to discuss this subject this 
afternoon, and we certainly need to allow time for that. The Senator 
from Nebraska, Senator Kerrey, who has been intensely interested in 
this subject and been active and involved in the discussions about it I 
know also will be interested in the conditions under which a vote is 
held.
  I think this is one of the most important amendments we will be 
voting on dealing with this legislation. Frankly, there are not many 
people who even understand it very much. I understand that this is not 
a very sexy issue; it does not generate a lot of public interest. It is 
not something that is easily understood. It is not something, the 
impact of which will be readily known even as we vote on this 
legislation, but I am convinced that as we tackle the changing of the 
rules for an industry that is one of the largest industries in this 
country and as we talk about where we move in the future with that 
industry, if we do not provide for the public interest by establishing 
more than a consultative role for the Department of Justice to assure 
that the forces of competition exist, then I think we will not have 
done a service with this legislation.
  I know this will likely be a close vote, but I do hope that those who 
study this issue and who really want to deregulate but to retain as we 
deregulate the safeguards of making certain that competition exists in 
real form and that the American people have the benefits and bear the 
fruit of that competition, I think they will want to vote with Senator 
Thurmond, myself, Senator Kerrey, and many others who feel very 
strongly about the role of the Department of Justice in providing us 
those guarantees.
  Mr. President, with that I yield the floor.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, I rise again to discuss this bill and to 
discuss the amendment offered by the Senator from North Dakota, as well 
as the amendment offered by the senior Senator from South Carolina, to 
give the Department of Justice a role in what is essentially an 
amendment of the 1934 Communications Act which will again move us in 
the direction, further in the direction of competition, further in the 
direction of deregulation than the modified consent decree which was 
filed in August 1982 has done over the past 13 years.
  The central question I think for colleagues as they consider this 
amendment ought to be whether or not the Department of Justice can 
perform a role in promoting competition. Indeed, I believe that the 
Department of Justice is the only agency in Washington, DC, with any 
experience or any demonstrable success at moving us from a monopoly 
situation, in this case in the communications industry, to a 
competitive arena.
  Let me point out, I appreciate very much what the chairman and the 
ranking member have done thus far. I believe there had been a number of 
significant victories that have occurred thus far in the debate 
important to identify because we have taken a bit more time than was 
originally anticipated, but I think it has been time well spent.
  First, we were successful in defeating an effort to strike the 
language that the chairman and the ranking member made certain was in 
the bill that gives preferential rates to education, libraries, and to 
health care facilities. It is very important, particularly in the area 
of K-12 education, that we provide those preferential rates.
  I know some will argue it runs at odds with what we are trying to do. 
Indeed, I must confess, it essentially does run, in many ways, at odds. 
The problem is our schools, particularly in the K-12 environment, are 
not market operations, they are government operations. If we do not 
carve out and provide a special opportunity for them to get access, it 
is highly unlikely they are going to be able to take advantage of the 
communications revolution that I think this legislation is apt to set 
off, at least accelerate. And if they do not take advantage of it, our 
test scores are not going to be affected by technology. The capacity of 
our students to do well and prepare themselves either for the work 
force or college will be significantly diminished. That was a big 
victory in beating back an effort to strike that language, essentially 
what would amount to the new section 264 under the 1934 Communications 
Act.
  Second, there was an effort to strike what has been described as the 
public interest, necessity, and convenience [[Page S8137]] test. This 
is a longstanding test that has been applied by the Federal 
Communications Commission to determine how it is that we regulate. It 
seems like it is a relatively small effort, but it is a very large 
victory for American consumers, and I appreciate my colleagues' support 
in keeping that language in here.
  In the managers' amendment offered earlier, the managers changed the 
regulations as it affects in-area acquisition of cable, which I think 
is going to be terribly important to maintain a competitive 
environment. Personally, I believe strongly, at least in the short 
term, unless households have two lines coming in--a telephone line and 
a cable line--it is not likely that you are going to get that kind of 
competitive situation. This in-area acquisition amendment was an 
extremely important amendment to get attached.
  There was a joint marketing provision for small companies that was 
added. I appreciate very much that being added. I believe that promotes 
competition and allows the smaller entities--I say again for emphasis, 
that is likely to be where the jobs are going to be created subsequent 
to this legislation--it allows smaller companies to do joint marketing. 
It is a very important procompetitive change that was made in the bill.
  The legislation has very strong language making sure the system is 
interoperable, though it does not establish, as I think it should 
establish, the Government's role in setting de jure--that is, legal 
standards. The markets should be in a de facto way establishing those 
standards. Nonetheless, the legislation directs the FCC to put 
interoperability very high on the agenda and has a mechanism for making 
sure we have interoperability in the system. It is a very important 
procompetitive step and a very significant victory, in my judgment.
  The bill already had very good rural provisions in there. The 
managers' amendment, as well as Senator Dole's and Senator Daschle's 
amendment, strengthened the protection for rural communities, and we 
have thus far been successful at preserving the universal service fund.
  The distinguished Senator from Alaska--I believe it was the first 
amendment placed on the bill--made certain there would not be any 
budget point of order by placing an amendment on here that provided the 
money that CBO says we are going to need to pay for this universal 
service fund. Even though the bill results in a $3 billion reduction in 
the cost of the universal fund, CBO, in their own mysterious ways, came 
up with the $7 billion mark, and the Senator from Alaska changed the 
bill to provide the money to get that done.
  Mr. President, this is a very difficult piece of legislation because 
it is difficult to try to assess what the impact is going to be, what 
will it do for the households, the voters, the consumers in your 
district and your State. It is undoubtedly a question that more and 
more Members, I hope, are beginning to ask and attempt to answer. It is 
not an easy question to answer.
  The chairman and the ranking member of the committee have attempted 
to draft legislation that would move us very carefully from a monopoly 
situation to a competitive situation. The question, though, is, Will 
competition produce something that makes my consumers happier? Will my 
taxpaying citizens 1 year, 2, 3, 4, 5 years from now say, as I believe 
they do in a number of other areas, including the watershed divestiture 
that occurred starting in 1982, This has been good for me. I have 
gotten a reduction in price, I have gotten an increase in quality 
coming as a consequence, Senator Kerrey, of a piece of legislation you 
voted for way back there in 1995.
  The bill is divided up into three sections. It attempts to describe 
in general terms what it is that we are trying to do. It is important, 
I think, for all of us to try to examine each one of these little words 
inside of 146 pages, now a bit longer as a consequence of amendments 
that have been attached, because each one of them could potentially be 
the tripwire that sets off an explosion at home. Each one of them could 
at the same time add unnecessary regulation, for all we know. We are 
attempting to balance the need to move to a competitive environment 
with the need to preserve some regulation in order to make certain that 
this transition is smooth.
  The first section is one that will have an impact immediately. What 
will happen is you will see companies--I would guess mostly long 
distance companies, although it could be any number of other 
companies--coming into the local area asking permission to 
interconnect, asking permission from the local telephone company to 
interconnect and begin to provide local telephone service.
  The company basically controls that. There is a checklist in there, 
but the company basically controls the flow of that decision. There is 
no Department of Justice role there. The FCC is involved in that 
decision. There are enforcement mechanisms in there. That is where the 
universal service description is maintained. There are separate 
subsidiary requirements to protect against cross-subsidization that 
might make it difficult for competition to occur. There is language in 
there--I do not know how you describe it--that allows foreign companies 
to come in and buy American telecommunications companies, but only if 
their nations reciprocate by changing their laws. It has a snap-back 
provision. If their countries do not change their laws, they would not 
be allowed to come in and make investments in local or any other 
telecommunications carriers.
  There is language in there--very important language in there--for 
infrastructure sharing. But in that first section perhaps most 
important is a checklist that says here are the sorts of things that 
have to occur in order to provide that interconnection, in order to 
give that interconnection opportunity, for, as I said, it is either 
going to be a long distance company consumers are likely to see or it 
could be some company you never have seen before that tries to come in 
and provides local competition.
  These requirements, in what would become section 251, are different 
than the interconnection requirements that you find in title II. Title 
I is called transition and competition. Title II is the removal of the 
barriers to competition. There are two subtitles there. The biggest one 
is a lengthy description of how we are going to try to remove the 
barriers to entry. There are lots of important detail in that 
particular section.
  The new section 255 is the one that we are addressing with the 
Department of Justice role. That is where you have a checklist. If your 
local phone company wants to get into long distance, they then go to 
the Federal Communications Commission and present evidence that they 
are allowing local competition.
  As I said, it is significantly different than the language in 251. I 
for one have not been able to determine whether 255 preempts 251, 
whether the checklist in 251 is preempted in short by the language of 
255. I suspect it is an important question that I have not been able to 
answer to my own satisfaction.
  Nonetheless, the company then comes and says, ``I met the checklist 
required in the language.'' There is a consultative role for the 
Department of Justice, and the Federal Communications Commission has a 
prescribed period of time in which it has to make a decision about 
whether or not to let that company get into interLATA or basically get 
into long distance service.
  Mr. President, the Department of Justice has a longstanding role in 
our lives in making sure, with its Antitrust Division, that we have 
competitive marketplaces,
 not just in telecommunications but in every other area of economic 
life. The larger a business gets and the more of the market a business 
controls, the more likely it is, the more chances and opportunities 
there are for that business to say, we are going to disregard what the 
consumer wants, we do not really care what the consumer wants because, 
frankly, we control so much now of the market that we do not really 
have to discover what the consumer is willing to pay. We will tell the 
consumer what they are going to go pay because we control such a large 
share of the marketplace. There really is no competitive choice.

  Well, that is the way it is for most local telephone companies. There 
is some local competition but not significant local competition. It is 
also true for many cable companies. They have been given a monopoly 
franchise, and [[Page S8138]] there is not much competitive choice. 
That is why we are suggesting with this language--whether it is the 
Thurmond language or the Dorgan language--a stronger role for the 
Department of Justice in making certain that we do have a competitive 
environment before that permission is granted to get into long-distance 
service.
  That is the carrot that is being offered. We say to the local company 
you can either negotiate to provide interconnection, or you can provide 
the interconnection requirements that are in 251. Or if you want to 
present that you have done all of that, we have a separate section that 
says you come and present that to the FCC, but the Department of 
Justice is engaged in a consultative way. We are saying with this 
amendment--and again whether it is the VIII(c) test of Senator Dorgan 
or the Clayton test of Senator Thurmond, it is very important to 
describe the roles of both of these regulatory agencies and set a time 
certain for the approval so you do not get into the problem of 
unnecessary delay and duplication of bureaucratic oversight.
  Mr. President, the Department of Justice was instrumental in 
shattering the Bell system's monopoly grip on long-distance and 
equipment manufacturing markets in bringing competition to those 
markets. Colleagues, again, are wondering why the Department of Justice 
should be given a role. The reason is that they are the ones with the 
most experience, the ones that have the capacity to make this thing 
happen. Competition has resulted as a consequence of the MFJ that was 
filed in August 1982, and that competition has made possible the 
communications revolution that is changing the lives of all Americans.
  The telecommunications legislation should take advantage of the 
Department of Justice's profound expertise in telecommunications 
competition to ensure that deregulation leads to real competition, not 
unfettered monopoly. Again, the potential for monopoly is already 
there. Since we are beginning with a monopoly situation, the potential 
for a monopoly situation adverse to the consumer would produce a very 
unhappy consumer, taxpayer, and citizen out there. And we are, with our 
amendment, suggesting that the best way to ensure that that does not 
happen is to provide the Department of Justice with what fairly, I 
think, is described as a limited role in assisting the Federal 
Communications Commission in making a decision about whether or not to 
allow a local company to get into long-distance, and whether or not the 
company has, in short, provided a competitive opportunity at the local 
level--because that is the question.
  The question is whether or not to grant long-distance competitive 
opportunity, and that question is answered by determining whether or 
not there is competition at the local level. The bill, as I said, has 
two sets of tests, one in section 251, that could occur almost 
immediately, and 255, which is the question at hand, when a company is 
trying to prove that they have local competition by providing the 14-
point checklist, as required by this legislation to the FCC.
  The Department of Justice has effectively enforced the antitrust laws 
in the telecommunications industry on a completely bipartisan and 
nonpartisan basis throughout this century. It sued the Bell system in 
1913 and in 1949. Both times the Department of Justice succeeded in 
obtaining consent decrees and sought to protect competition. But that 
allowed AT&T to continue participating in local, long-distance, and 
equipment manufacturing markets.
  In the mid-1960's, Mr. President, it filed comments with the FCC 
arguing that the Bell system should not be allowed to use its local 
telephone monopoly to force consumers to buy their telephone sets from 
it. Although the FCC agreed that customers had the right to choose 
among competitors, the Bell system succeeded in using its local 
monopoly bottleneck to impose such burdensome conditions on the 
interconnection of competitors' equipment to the local network that 
evidence of those conditions was an important part of the 
monopolization case that the Justice Department then presented in 1981. 
Open competition in so-called customer premises equipment did not 
become a reality until after the breakup of the Bell system in 1984.
  The Department of Justice, Mr. President, initiated its third major 
investigation of the Bell system in 1969 during the Nixon 
administration. In 1974, during the Ford administration, the Department 
filed its historic suit against AT&T charging that the vertically 
integrated Bell system illegally used its monopoly control over local 
telephone service to thwart competition in long-distance and equipment 
manufacturing. Over the course of the next 7 years, through the end of 
the Ford administration and into the Carter administration, the 
Department litigated the case vigorously, filing and organizing the 
complex evidence that showed how the Bell system used the local 
monopoly to hurt competition in other markets. In January 1981, at the 
beginning of the Reagan administration, trial of the case began.
  The Department of Justice offered in court almost 100 witnesses and 
thousands of documents as it systematically laid out the facts that 
demonstrated how the Bell system unlawfully used the local monopoly 
bottleneck to hurt competition in other markets.
  In negotiations to settle the case, President Reagan's Assistant 
Attorney General, E. William Baxter, insisted that the only way to 
protect competition in the long-distance and equipment markets was to 
separate those markets structurally from the local telephone 
bottleneck. Unless the local monopolist was prevented from 
participating in other markets, it would always have the incentive and 
ability to hurt competition in those markets. At first, the Bell system 
refused even to consider such a settlement. After hearing the 
Government's case, and presenting about 90 percent of its own case, 250 
witnesses, and tens of thousands of pages of documents, the Bell system 
relented and agreed to settle the case based on a consent decree that 
dismantled the vertical monopoly. After it was approved by Judge Harold 
Greene, the modification of final judgment--which is referred to often 
as the MFJ--required the Bell systems to split itself into AT&T and the 
seven regional Bell operating companies now called the Bell companies. 
AT&T retained the long-distance and manufacturing operations. The Bell 
companies, independent of each other and of AT&T, retained monopolies 
over local telephone service in vast geographic expanses, subject to 
the requirement that AT&T, along with competitors, have equal 
nondiscriminatory access to customers through the local networks.
  The key point of the MFJ was that it removed the Bell companies' 
incentive to use the local monopoly to hurt competition in long-
distance and equipment manufacturing by prohibiting them from entering 
these markets. By the same token, AT&T no longer had the ability to 
hurt its competitors in those markets because it no longer controlled 
the local monopoly. The restrictions on the Bell company grew directly 
out of the fact noted by Judge Greene that ``the key to the Bell 
system's power to impede competition has been its control of local 
telephone markets.''
  Section VIII(c) of the MFJ--modified final judgment--the language 
that is in the Dorgan amendment provides that the line of business 
restrictions can be waived if a regional Bell operating company shows 
that there is no substantial possibility that it could use its monopoly 
power to impede competition in the market it seeks to enter.
  Removing the restrictions under any other circumstances would give 
the local telephone company the incentive and ability to recreate the 
vertical monopoly that the Department of Justice and many others worked 
so long and hard to dismantle.
  Since the entry of the MFJ in 1982, the Department has assisted Judge 
Greene in administering its terms--in Republican and Democratic 
administrations alike. It has been dedicated to ensuring that the line 
of business restrictions hinder the RBOC's only to the extent necessary 
for protecting competition in other markets.
  The Department has supported waiver of the restrictions when it has 
concluded that Bell companies' entry into other markets presented no 
substantial possibility of impeding competition in those markets. The 
Department now has over 50 professionals--lawyers, economists, and 
paralegals--who are [[Page S8139]] dedicated and experienced in 
telecommunications competition issues, and who understand the complex 
markets and technologies involved.
  The Department, therefore, is uniquely positioned to assess what is 
actually happening in the market and whether there is a danger that 
entry by the Bell companies could impede competition. That is exactly 
the task that has been performed since the entry of the MFJ over a 
decade ago.
  Mr. President, the competition long-distance and equipment 
manufacturing unleashed by the MFJ has benefited the United States of 
America and its citizens and consumers enormously. MCI, Sprint, and 
hundreds of smaller carriers buy from AT&T to provide long-distance 
service.
  Prices have dropped and quality has improved, with the result that 
Americans are talking to each other via long-distance more than ever 
before. Americans have not been shy about exercising the right to 
choose that the MFJ guaranteed.
  The New York Times reported that 25 million people changed their 
long-distance carrier in 1994. In an article, ``No Holds Barred for 
Long Distance Call,'' Edmond Andrews, the New York Times, January 21, 
1995, describes the competition that exists in long-distance, and 
describes who was benefiting from that competition.
  Similarly, businesses and consumers enjoy lower prices, more choice, 
better quality, and communications equipment, as competition has eroded 
AT&T's power in that market and forced it to compete for customers.
  Mr. President, that is at the heart of what this legislation is 
attempting to do: Force existing monopolies to compete for customers. 
If that competition occurs, the competition for your business--you as a 
customer--will force the company to pay more attention to quality, 
giving not just the quality that you want but give you competitive 
price, knowing that if either the quality or the price are not what you 
like, you will see a competitive alternative.
  These benefits stem directly from the strict separation of the local 
monopoly from other markets. Although it now appears possible that the 
local markets can be opened up to competition, they are not natural 
monopolies any longer. Removing the separation between the local 
markets and other markets without ensuring that the Bell companies 
cannot use the local monopoly to hurt competition and long-distance 
could squander the gains of the past decade.
  The expense of the Bell system in the years before the MFJ, when it 
frustrated consumer choice and actual competition, long after 
competition and long-distance service and communications equipment 
became technologically and economically feasible, counsels against 
allowing the Bell companies into other markets before determining, 
based on actual marketplace facts, the effect it will have on the 
market.
  Again, there are two places in this legislation that I call to my 
colleagues' attention who are trying to figure out what to do with this 
legislation, whether to support this amendment. There are two sections 
in this legislation that talk about interconnection. The first will be 
the new section 255 of the 1934 Communications Act, and the second, the 
one we are talking about now, the interconnection requirements prior to 
getting into long-distance that are described in the new section 255.
  The fundamental goal for all should be to allow the Bell companies 
into any market they choose to enter as soon as such entry does not 
threaten to impede competition in the other markets.
  That is the success that we have had to date, Mr. President. By 
ensuring that there is competition, the consumer has benefited, and it 
has been the Justice Department that has managed that effort.
  The simple fact, however, is that telecommunications networks are so 
complex that the RBOC's ability to frustrate viable competition exceeds 
the ability of legislators and regulators to specify the steps 
necessary for opening local markets.
  As was the integrated Bell system before the MFJ, the Bell companies 
today are in a position to ensure that every step forward is 
accomplished by a step backward, preserving their local monopoly as 
they race into long-distance with the advantage of the monopoly still 
intact.
  The way to overcome this ability of the RBOC to thwart the open local 
markets is to give them a positive incentive to cooperate in the 
development of competition. The RBOC's will have such incentives when 
the specified steps for opening the local markets are supplemented by a 
process that ensures analysis of actual marketplace facts before the 
RBOC's are allowed to enter long-distance. That is what both the Dorgan 
amendment and the Thurmond amendment attempt to do.
  As I said, Mr. President, we have been through this bill a number of 
times, and there are places in this bill where I believe the Bell 
companies make a good case. We may have regulatory requirements that 
are unnecessary that may, in fact, impede the development of 
competition.
  I am prepared to entertain discussion of regulation that is still 
required in this bill that may, in fact, impede competition, that may 
provide an unnecessary burden for the regional Bell operating companies 
unnecessarily, at least that they cannot be defended in what they 
provide for the American consumers.
  Both the chairman and the ranking member of the committee, as they 
have said on many occasions on this floor, are attempting to create a 
structure where we can, first of all, begin the process of competition, 
initiate competition at the local level, then move to end many of the 
barriers that currently exist to entry into these markets and finally, 
in section 3, come to an era of substantial deregulation where price 
will be determined by competition, not by regulatory fiat.
  The Department of Justice role in promoting competition has been 
historically not only bipartisan but also nonpartisan. As I indicated 
earlier, the antitrust investigation against the Bell system was 
initiated in the Nixon administration.
  The antitrust case against the Bell system was filed in 1974 in the 
Ford administration. Litigation continued through the Carter 
administration, into the Reagan administration. The case was settled by 
requiring divestiture during the Reagan administration. The Department 
of Justice assisted Judge Greene administering the consent decree 
throughout the Bush and the Clinton administrations.
  The decisionmaking process of the Department of Justice has not been 
a partisan issue. It was approved last year by the House, with over 420 
votes. It was approved last year by the Senate Commerce Committee by an 
18-to-2 vote and supported by President Reagan's Assistant Attorney 
General for antitrust, Prof. William Bater, Judge Robert Bork, a letter 
from a bipartisan group, and a former member of the House of 
Representatives, Vin Weber, in a piece he wrote in the Washington 
Times.
  The role for the Department of Justice is not being suggested as a 
consequence of concern for one sector of the economy or the other. It 
is the suggestion--recommended change in this law--based both upon what 
politicians themselves have concluded in the past was necessary, as 
well, mostly based upon evidence at hand of the Justice Department's 
capacity to manage what will be an unprecedented transition from a 
regulated monopoly situation to a competitive environment.
  It seems to me, Mr. President, quite appropriate to be calling upon 
the Justice Department to once again do more than be a consultant in 
this matter, much more than just in the end, during the 90-day period 
during which the FCC will make its determination.
  It is better to have a parallel process going on with the Justice 
Department, where they will be making determinations as to whether or 
not competition exists; again, whether it is the VIII(c) test of no 
substantial standard possible, or the Clayton test, which I will get to 
later.
  The Justice Department is the agency that understands the markets, 
that knows whether or not there is competition, and it is the agency 
that I believe we need to turn to if we are concerned about what kind 
of response it is going to be from our consumers, our taxpayers, and 
voters.
  Procedures for the Bell operating company's entry into long-distance 
over the Dorgan or Thurmond amendment does not represent unnecessary 
duplication. The idea that we will get a [[Page S8140]] lengthy 
process, in fact, is just the opposite of what will occur without this 
amendment.
  What happens is the Bell operating company would file an application 
for entry into long-distance. The Justice Department and the FCC would 
review and proceed simultaneously. The Bell operating company would 
have an answer within 90 days after application, in accordance with a 
date certain, established by Congress. This procedure is fast. It takes 
90 days.
  The standard for the Justice Department review will be clear, again, 
whether it is Clayton or VIII(c). The test has been litigated many, 
many times in the past. It is not a difficult standard for the Justice 
Department to apply in either case, in either the Dorgan or the 
Thurmond case. The procedure will reduce litigation, will reduce the 
likelihood of subsequent antitrust suits.
  Mr. President, I will get into that later, but one of the things, if 
Senators are concerned about what this will do after a person votes 
``aye,'' what final passage will do, what changing the law will do, one 
question to answer is, Is this process going to take a long time? Is it 
going to be slow? Can the existing companies in here sort of drag this 
thing out for a long period of time?
  One of the reasons we need a Department of Justice role is to reduce 
the possibility of litigation, to reduce the opportunity to drag this 
thing out in the courts, and to increase the date when real competition 
will begin to produce benefits for the consumer.
  Mr. President, the VIII(c) test is pretty well established. I want to 
talk now about what the language of the Thurmond amendment does. I 
believe that it is likely to be that test which we will be 
deliberating, that Members will have to decide whether or not they 
approve or want the Clayton standard.
  First of all, the Clayton Act was passed in 1914 and it was passed to 
prevent mergers that may substantially lessen competition or create a 
monopoly. That standard has been applied to every industry, not just to 
telecommunications. It is applied to mergers with critical national 
importance such as defense industry mergers like Martin Marietta and 
Lockheed, applied to mergers in other high-technology industries, 
software industries, the recent case of Microsoft and Intuit, applied 
to mergers, long distance mergers in the telecommunications industry 
like AT&T-McCaw and British Telecom-MCI mergers.
  The standard is a known quantity. It is a known quantity and it has 
been developed through 80 years of litigation under that standard.
  If the Bell operating companies want to enter into long distance by 
buying a long distance company, this is the standard that would be 
applied. It is logical to apply the same standard if they want to enter 
long distance in other ways under the unique circumstances of this bill 
superseding an antitrust consent decree with the intention of creating 
competition.
  The Thurmond amendment, the Clayton language, makes entry dependent 
on passing the Clayton Act test. This test is normally applied to 
mergers that would be applied to the RBOC's, even in the absence of 
this amendment, if they propose to acquire a long distance company. The 
Clayton Act test would apply to RBOC entry unless the effect of such 
entry may be substantially to lessen competition or to tend to create 
monopoly.
  This is exactly what we want. We want an agency that is experienced 
with measuring that question engaged in the process of saying to the 
American people, if you pass that test, there is no substantial 
possibility to lessen competition or create a monopoly. We see a 
competitive marketplace there, and we give permission and a date 
certain, a time certain. That should remove any doubt about whether or 
not this thing is going to be dragged on for a long period of time.
  Under such a standard, the Department of Justice would consider 
whether allowing an RBOC, that is a local telephone company, to provide 
long distance service would give it the ability and incentive to use 
its monopoly power in local exchange services substantially to lessen 
competition in the long distance market and raise prices for consumers.
  At the end of the game, that is what we are talking about. If you 
have a monopoly, you have the possibility of raising prices regardless 
of what the consumers want. You can ignore the consumer if you control 
a large enough portion of the market share. What we want to make sure 
is you have competition. With that competition, whether it is coming 
from below or coming from above, regardless of where it is coming from, 
give that consumer choice in the household and the consumer will 
benefit as a consequence of lower prices and higher quality.
  The RBOC's could meet such a test and be allowed to enter the long 
distance market in any one of three ways.
  First, if competition has developed in local exchange services so 
there is no longer a local monopoly that could be used substantially to 
lessen competition in long distance, or second, if, even absent local 
competition, safeguards or other constraints would prevent the RBOC's 
from using their local monopoly to substantially lessen competition in 
long distance. A very important point, Mr. President. It may be that 
local competition does not develop immediately. We should not say to a 
RBOC, you cannot get into long distance under that circumstance. The 
Department of Justice has experience in making sure that the negative 
impacts of lack of competition do not occur at the local level, thus 
actually saying to a Bell operating company, here is a way for you to 
get into long distance interLATA businesses even faster than what might 
otherwise be possible.
  Third, if some one combination of alternatives to the telephone 
company local exchange services, safeguards, and other factors should 
prevent the telephone company from substantially lessening competition 
in long distance service. More competition would require fewer 
safeguards, and obviously the opposite is the case as well. Fewer 
safeguards will be likely. As we get competition in these local 
markets, we are going to need less and less and less.
  In several acts in the telecommunications industry, the Department of 
Justice has carefully considered the competitive risk of allowing firms 
that dominate a market to enter into a closely related market through 
mergers and joint ventures. Based on the facts of those particular 
cases, the Department of Justice concluded that under certain market 
conditions it is not necessary to prohibit entry by a provider of local 
exchange services into long distance services. But the Department of 
Justice has required structural separation and other safeguards in the 
anticompetitive areas to protect the public interest in competition, 
for example the GTE's 1983 acquisition of Sprint; again the AT&T-McCaw 
merger and the British Telecom-MCI joint venture.
  Mr. President, I would like to now try to give Members--I see the 
distinguished Senator from Vermont is here.
  Mr. LEAHY. Mr. President, I would like to speak on the amendment, but 
I do not want to interrupt the distinguished Senator from Nebraska. I 
enjoyed listening to him, but if he did want to take a break, I would 
be happy to express some views on this.
  Mr. KERREY. Mr. President, let me shorten this by a couple of 
sections here and then regain the floor at a later time since this 
debate probably will be going on for some time before we actually vote.
  One of the questions, again, I know I have asked myself that I think 
it is important to answer is whether or not giving the Department of 
Justice a decisionmaking role in this is going to cost the taxpayers 
more money. Many have argued against this and implied it is going to 
increase taxpayer requirements, it is going to result in more and more 
litigation. The ominous thought of more litigation and more taxpayer 
cost sort of hangs over the argument.
  But a Department of Justice role would avoid complex and expensive 
antitrust suits in the future by making sure that competition is 
safeguarded in the first instance. These suits would consume resources 
better spent on competing to offer American businesses and consumers 
lower prices and higher quality. I can, and will at a later time, go 
through many examples where that in fact is the case.
  If you go back and look at the situation prior to the filing of the 
MFJ by the Department of Justice, that is exactly what was happening. 
It has also [[Page S8141]] happened since that time during the years 
that these suits would be litigated. The American economy would suffer 
from the effects of lessened competition and higher prices. Before the 
MFJ broke up the Bell system, there were dozens of private antitrust 
suits against the system ongoing in courts across the country at any 
given time. AT&T's 1977 annual report said that some 40-such private 
suits were then pending against it. Asking for more of those suits 
would be a giant step backward.
  Mr. President, I say with respect that without either the Thurmond or 
Dorgan language here, that is precisely what we are doing. We are 
inviting suits in the absence of the Department of Justice moving at 
the same pace, the same 90-day period. It is not an additional 90 days, 
not an additional 180 days. During the same 90-day period during which 
the FCC is examining the merits of the application, determining whether 
or not the intersection requirements of section 25(a) have been 
satisfied, during that same 90-day period the Department of Justice 
would be doing an analysis of whether or not competition exists at the 
local level or whether or not the negative impacts of monopoly were not 
likely to risk higher prices for the consumer at the local level.
  At the end of the 90-day period, just as would occur at the Federal 
Communications Commission, the Department of Justice would have to make 
its ruling. You have a simultaneous process.
  I say to my colleagues, if you are trying to reduce bureaucracy, if 
you are trying to reduce the potential for lawsuit, then either the 
Dorgan or the Thurmond amendment is something you must be for.
  The opponents of the Thurmond and Dorgan amendments argue that all we 
need to do is allow the Department of Justice to bring lawsuits after 
competition has been harmed. They never explain how an after-the-fact 
antitrust case will solve the problem. It took 10 years of litigation 
to resolve the Government's case against AT&T. Years of litigation is 
not a solution.
  That is a problem we should avoid. Again, either the Dorgan or the 
Thurmond language--either the no substantial possibility language of 
VIII(c) or the well-litigated 80-year test of Clayton--would suffice, 
in my judgment, to make certain we avoid the kind of litigation that I 
believe both the chairman and ranking member and other advocates of not 
having the Department of Justice in here are trying to avoid.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. LEAHY. Mr. President, I favor the Dorgan amendment, and I wish to 
commend Senator Dorgan and Senator Thurmond for what they have done. I 
believe, and I have stated before, here and in the Judiciary Committee, 
that we have to allow the Department of Justice, our most expert 
competition agency, to play a more significant role, not just 
consulting, in deciding whether a Bell company entry into long distance 
or manufacturing threatens competition in those markets.
  Go back to the 1982 consent decree that broke up Ma Bell and 
separated the Bell companies from AT&T. That took 10 years to litigate 
and conclude. The decree, the modified final judgment, took all these 
years of antitrust litigation, required a restructuring of the market, 
and led to significant consumer confusion.
  Rather than relegate the Justice Department to a consulting role, if 
we design a proper role for that expert agency up front, we can avoid 
this kind of costly and time-consuming litigation from happening again. 
Let us handle it right from the start and not come in after the fact 
when the cure can sometimes create a new set of problems.
  What this bill does, unless amended, is say, ``We hope the checklist 
of unbundling and interconnection requirements works to unlock the 
local loop to competition.'' We all hope that. But what if it does not 
work? What if the checklist is not long enough to ensure that the local 
monopoly power of the Bell companies is broken and competition can 
develop?
  If the checklist does not work, under the bill the Justice Department 
has to clean up the mess. They have to clean it up after the fact, 
instead of having any say before the fact--after the Bell company has 
already gotten into long distance and used its monopoly power to stifle 
potential competitors who need the Bell companies' pipeline to our 
homes and businesses.
  The cleanup after the fact could take years of litigation, just as 
the prior case that ended with the MFJ took years. The cleanup may 
require a restructuring of companies, just as the prior case against Ma 
Bell resulted in spinning off AT&T from the Bell companies. Then, of 
course, the cleanup could well confuse consumers. I well recall the 
press and the outrage in the public when they questioned the wisdom of 
what Judge Greene did in 1982 and whether the breakup would hurt the 
public and our telephone service.
  We have the opportunity to avoid the mess.
  As former appellate judge, Robert Bork, recently pointed out, without 
a Justice Department role in applying a ``standard with teeth,'' 
allowing the Bell companies into long-distance service and equipment 
manufacturing, taking the course envisioned by this bill ``would result 
in even more litigation and regulatory disputes than there were prior 
to the decree.''
  We are sometimes accused of passing a lawyers relief act in some of 
these pieces of legislation which we consider. This bill, if passed 
without the amendment, would certainly be a bonanza for lawyers and 
economists as regulatory disputes proliferated before State and Federal 
agencies and lawsuits were filed charging discrimination, theft of 
intellectual property and predation in violation of section 2 of the 
Sherman Act. I think Judge Bork is right on this.
  We should minimize this litigation quagmire by having the Justice 
Department, with its 25 years of expertise, look at the competitive 
impact of Bell company entry into the long-distance and manufacturing 
markets.
  The MFJ left the Bell companies with local exchange monopolies, which 
persist today. To protect consumers, those Bell company monopolies are 
regulated. Line-of-business restrictions were imposed on the Bell 
companies. This was to make sure they did not use their controlling 
monopoly over the local phone service and the pipeline to the home to 
harm consumers or to gain unfair advantage over the competitors in the 
long-distance, manufacturing, and information services markets. Any of 
those regulations could be removed upon a showing by the Bell company 
that there is no substantial possibility that it could use its monopoly 
power to impede competition in the particular market it is seeking to 
enter. This is the so-called VIII(c) test.
  The test has been tried, and it actually works. The Bell companies, 
of course, have their own reasons to believe VIII(c) is overregulatory. 
But they have been able to satisfy the test in the past and get into 
information and other services, and do so without harming consumers.
  The MFJ's VIII(c) test is not even as strong as another test to which 
one Bell company agreed in March of this year. Ameritech reached a 
landmark agreement with the Justice Department, and they agreed to an 
actual competition test. We ought to look at that. Ameritech thought 
this was an appropriate test for a temporary trial waiver of the long-
distance restriction. We are not talking about anything temporary here 
in this bill, but legislation with a far greater degree of permanence.
  In discussions in which I have been involved, our colleagues are 
working out the differences so the Thurmond-Dorgan amendment can 
protect competition. I think that is important because the amendment 
provides a certainty that the Bell companies claim they want.
  Having the Justice Department apply the Clayton Act test that is 
going to be outlined in the amendment, I believe, would complement the 
competitive checklist in the bill. The Justice Department would make 
sure that, in addition to the checklist being met and the Bell 
companies having taken the basic steps necessary to permit local 
competition to develop, in fact, those steps are working.
  The bottom line is that with the existing monopoly hold that the 
Bells still have on local exchanges, the Department of Justice should 
review the competitive impact of Bell company entry into long distance. 
Otherwise, the choices that consumers have in [[Page S8142]] services 
provided over their phoneline may go down, but the prices they pay for 
those services may go up. We should make sure that this legislation 
does not produce that kind of result.
  Let us have a competitive environment in telecommunications and take 
steps to deregulate.
  Mr. President, we have had remarkable changes in telecommunications 
just in the years that I have been here in the Senate. I have seen 
changes from competition which has brought down prices of long 
distance.
  We have witnessed competition that we did not use to see, which now 
allows anyone who wants to go and buy equipment off the shelf--
equipment for everything from teleconferencing to video conferencing, 
that we were told by the telephone companies, when they had a complete 
monopoly, was not available--to do so. It was available in every other 
country. It just was not available in the United States. Once we 
started to get some real competition, all of a sudden it started 
showing up here.
  We do conference calls from home. We have automatic dialing in our 
equipment. We have speaker phones. We own our equipment. We do not have 
to go to one telephone company to buy it or rent it month by month 
anymore. It was competition that did that.
  Rather than encouraging monopolies, we should ensure the competition 
that will help all of us.
  I use the Internet all the time. I will be speaking about an aspect 
of that a little later on. But I use the Internet all the time. I do 
town meetings on the Internet. I have a home page. My State uses it. I 
have one petition that involves legislation of mine which got 10,000 or 
20,000 names and electronic letters from all over the country in a 
matter of days.
  These are the things that we did not have just a few years ago. They 
are extremely important to all of us. I know the distinguished 
Presiding Officer uses the Internet. We have various services now that 
provide access to it. We should be encouraging that kind of thing.
  Can you imagine, Mr. President, had the Internet, for example, been 
controlled by just one source, one company, one gatekeeper? Does 
anybody believe it would have advanced as far as it has, even with its 
problems? Some parts of it have worked very well, and some parts do not 
work very well. It would not have happened, had we not had openness and 
competition.
  By the same token, do you think any one of us who have in-the-home 
telephones and can program numbers into it and have automatic dialing 
or speaker phones or call forwarding built into our phones would have 
them without competition? That is what this is all about.
  I commend the Senator from North Dakota and the senior Senator from 
South Carolina and all others who have worked on this important 
amendment. I am glad I have had a chance to work with them. I think we 
are going to have a decent solution and a good compromise in the 
amendment.
  With that, Mr. President, I do not know who else may be seeking the 
floor, so I am going to yield the floor in just a moment.
  I see the Senator from Nebraska on his feet. I will yield the floor.
  Mr. KERREY. Mr. President, again, the question for colleagues is 
whether or not the Department of Justice can perform a role that would 
be useful, that would enable us, 50 years from now, to say we have, as 
again the chairman and ranking member have attempted to do in this 
legislation, created a structure under which we will go from a monopoly 
situation at the local level to a competitive environment for all 
telecommunications services.
  One of the statements that is very often made is that, well, there 
have been lengthy delays. You will hear people say there are a lot of 
delays over at the Department of Justice. A triennial review that was 
required has not been done, or, well, the SEC can do it just as well; 
they will just hire some more people over here in this area and they 
should be able to handle it very well.
  Mr. President, what I would like to do is cite a couple of instances 
to give you an example, and they illustrate the kinds of things that 
are going to occur, the kinds of questions that are going to be raised 
when businesses try to do things that the current law prevents them 
from doing. Basically, that is what we are talking about here. 
Telecommunications corporations that are prevented from doing something 
will be allowed to do it with this legislation.
  It is not just the common carriers, by the way. We are allowing cable 
companies to price differently. We are deregulating them substantially. 
We are changing the laws for broadcast ownership. There are lots of 
changes in this bill besides just having to do with common carriers, 
but it is the common carriers we are dealing with in this particular 
amendment.
  The case of GTE is very instructive, Mr. President. In this case, 
what you had was a company, GTE, with a local exchange monopoly in 
markets that were scattered around the country, and Sprint, a long 
distance company, recently established. What the Department of Justice 
did was to write up and get both parties to agree to a consent decree 
that was filed in court that prevents further litigation requiring 
separate subsidiaries and equal access for other long distance 
companies to make sure that GTE customers would have the benefits of 
long distance competition. The Department of Justice ensured that there 
was competition. They promoted and allowed the businesses to merge, in 
this case GTE and Sprint.
  One of the things this bill does is it sets aside that consent 
decree. I believe it was in one of Senator Dole's amendments earlier. 
So now this original consent decree that was filed on behalf of a 
merger and on behalf of consumers to make sure that you still have 
competition at the local and at the long distance level.
  An even more difficult one was the merger of AT&T and McCaw that my 
colleagues might recall happened, I guess, about a year ago now in 
1994. AT&T, obviously, by far the largest of the long distance 
carriers, was attempting to acquire initially, I think, 50 percent, 
eventually 100 percent of the larger cellular provider, providing not 
just long distance but local telephone service as well. There was 
vertical integration involving two companies with substantial market 
power. AT&T was dominant in both long distance and manufacturing of 
cellular equipment used by McCaw's competitors. The question was 
whether or not by acquiring McCaw, AT&T was going to restrict 
competition from competitors who were buying equipment that AT&T was 
manufacturing. McCaw, on the other hand, has only one competitor in 
each of the markets it has been given by the Federal Communications 
Commission.
  So what happened? The Department of Justice intervenes. They work 
with both companies. They negotiate between both companies. They 
declare what it is they are going to be filing, and they file a consent 
decree which required separation and nondiscrimination safeguards so 
that McCaw customers will have equal access to long distance carriers 
and cannot be required to buy long distance from AT&T, and cellular 
rivals to McCaw that want to use cellular equipment will continue to 
have access to necessary product and will be free from interference of 
AT&T should they wish to change suppliers. AT&T and McCaw will not 
misuse confidential information obtained from AT&T equipment customers 
or McCaw equipment suppliers.
  Those are the kinds of questions, Mr. President, that will occur on 
an increasingly frequent basis. Who knows? There may be hundreds of 
these applications that are going to fall into the lap of the Federal 
Communications Commission solely unless, again, either the VIII(c) test 
of the Senator from North Dakota or the Clayton test of the Senator 
from South Carolina is adopted and the Department of Justice is given a 
parallel, simultaneous role; not a new role, a historic role; not an 
unprecedented role but a role consistent with the unprecedented nature 
of this legislation itself.
  The third example that I would cite was a very complicated one 
involving a foreign company, British Telecom, that had proposed to 
acquire a 20-percent stake in MCI.
  Here again the question was that you were dealing with a company with 
substantial vertical integration, with substantial market power, and 
once again the Department of Justice comes in and says, well, here is 
what we are [[Page S8143]] going to do. We are going to put a consent 
decree together establishing separation together with nondiscrimination 
safeguards so that public disclosure of rates, public disclosure of 
terms and conditions under which MCI and the joint venture gain access 
to BT's network is required.
  Second, British Telecom is barred from providing the joint venture 
with proprietary information about their American competitor.
  Again, Mr. President, I do not expect my colleagues, I do expect 
myself, to understand exactly what all this means but what it 
establishes is that the Department of Justice has experience in making 
certain there is a competitive environment so that neither the 
providers nor the consumers who are out there trying either to sell or 
to buy are affected in an adverse way as a consequence of mergers, as a 
consequence of new lines of business that are developed as we lower the 
barriers to entry, as we decrease the regulatory burden and increase 
the extent to which competition is going to be used to determine our 
prices and quality of our goods.
  Now, as to the question of whether or not the Department of Justice 
has failed to fulfill its obligation to review the need for continuing 
the MFJ's line of business restriction--that is a statement that is 
made relatively frequently--well, I think this criticism is not 
terribly valid. There was a triennial review that was done in 1987, 3 
years after the breakup of the Bell system, but the suggestion that 
because there has been only one triennial review, there has not been a 
constant review, I think that suggestion does not stand up in the face 
of the evidence of what Judge Greene has been instructing the 
Department of Justice to do, it does not stand up in the face of the 
enormous volume of waiver applications that has been coming up and what 
has been effectively a de facto situation of constant reviewing of the 
line of business restrictions, and it does not stand up in the face of 
the current review leading to recommendations on line of business 
restrictions.
  Experience demonstrated that triennial reviews by the Department of 
Justice were not necessary to achieve the intended goal of ensuring 
review of the need for the MFJ's line of business restrictions. Judge 
Greene himself explained why DOJ should have complete discretion as to 
whether or when to file additional triennial reviews. In his language:

       The Court and the Department envisioned a comprehensive 
     review every 3 years interspersed with occasional waiver 
     requests. What has occurred, however, is the process of 
     almost continuous review generated by an incessant stream of 
     regional company motions and requests dealing with all 
     aspects of the line of business restrictions.
  Let me read that again for emphasis, Mr. President, because those who 
very often criticize the Department of Justice for not doing a 
sufficient amount of review are the very companies that have created a 
constant review as a result of their application for waiver and the 
motions that they are filing in Judge Greene's court.
  The original intent was for triennial review, Mr. President, because 
the court and the Department envisioned a comprehensive review every 3 
years, kind of quiet period of time, interspersed with an occasional 
waiver request.
  So when the consent decree was filed originally breaking up AT&T, the 
idea was, ``Well, we will get a few waiver requests here and an 
occasional motion, but it will not be very often. Because there are not 
very many waivers or motions, we will do a triennial review.''
  The situation was just the opposite: Constant motions, constant 
waiver applications and, thus, no need for a triennial review and, 
thus, it does not stand up to criticize the Department of Justice and 
say, ``See, don't give them a role in this matter because they didn't 
do what they were originally supposed to do.''
  They did not do what they were originally supposed to do because 
circumstances developed precisely the opposite of what both Judge 
Greene and the Department expected to have happen in 1981 and 1982 when 
this decree was being negotiated between AT&T and the U.S. people 
through the U.S. Department of Justice.
  Judge Greene further explained why he did not require further 
triennial reviews. He said, with the stream of waiver requests, he 
``repeatedly considered broad issues regarding information services, 
manufacturing and even long distance.''
  Mr. President, basically he is saying that though this thing did not 
develop as was expected--long periods of quiet time interrupted by 
triennial reviews--the waivers and the motions have enabled us to 
constantly review the line of business restrictions and determine 
whether modifications need to be made.
  The judge also explained that ``as soon as there is a change, real or 
imaginary in the industry or other markets, motions are filed and all 
aspects of the issue are reviewed in dozens of briefs.''
  These observations are still valid. In the life of the MFJ, Bell 
companies have filed an average of one waiver every 2 weeks. In fact, 
what amounts to a triennial review is underway right now as the Justice 
Department investigates a motion to vacate the entire decree pursued by 
three Bell operating companies. This investigation will culminate with 
a report to Judge Greene in the next few months, and that report will 
be a comprehensive review of the need for continuing the line of 
business restrictions. It is likely the recommendations that are going 
to be made at that time will support most, if not all, of the changes 
that are being recommended in this legislation.
  Let me talk about this purported delay. You hear, ``Well, the 
Department of Justice takes a long time; this waiver process takes a 
long time.'' Typically what is done is a statistical analysis is used 
of the average age of pending MFJ waivers; that is to say, the request 
for waiver of the consent decree. There was a consent decree filed in 
the court. Judge Greene is administering that consent degree on behalf 
of American consumers who benefited enormously as a result of that 
Department of Justice action and what Judge Greene has done.
  The statistical analysis, in my judgment, is a red herring. This 
argument that is used against DOJ decisionmaking is that you will see 
an unnecessary delay as a consequence of this statistical analysis, to 
back up the assertion this analysis purports to show that a Department 
of Justice role will cause a long period of time for decisions to be 
made.
  Again, two things argue against that. One is what I will get to here 
in a minute. The other is in the language of the amendment, either as 
modified by the Senator from South Carolina or as originally contained 
in Senator Dorgan's amendment. It is a review process that takes place 
simultaneous in the Department of Justice and in the Federal 
Communications Commission. Both have a date certain of 90 days. Only 
with the Department of Justice role, in my judgment, are you going to 
limit it to 90 days. Without that Department of Justice role, I stand 
here and predict you are going to have substantial litigation and the 
very delay we all seek to avoid.
  Congress can and should require the Department of Justice to make 
this determination by a date certain. It is as simple as that. That is 
what the amendment does. That is what either one of these amendments, 
in fact, would accomplish.
  The amendments guarantee the Bell companies will get an answer on 
long distance entry by a date certain. The legislation will replace the 
waiver procedure with specific deadlines. You eliminate the waiver 
procedures included in the 214 waiver procedures that are in current 
law under the 1934 Communications Act. The Department of Justice review 
cannot possibly slow Bell company entry into long distance unless such 
entry would be harmful to competition and, thus, undesirable for 
American consumers and businesses.
  Under that situation, you want the Department of Justice to slow it 
down if, in their reasoned judgment, based upon the experience that 
they have had, it is going to restrict competition. They are the ones 
with the experience. You do not want this process to end if the 
Department of Justice, before granting permission, interprets the 
proposal to mean less choice, less competition, because in a monopoly 
situation, with all the other things that we are doing with this 
legislation, you are unquestionably going to get increased prices and 
marginal, if any, improvement in quality. [[Page S8144]] 
  Entry will be permitted to occur as quickly as possible, consistent 
with the appropriate entry tests that have been established by Congress 
in this legislation.
  But there is a follow-on question, which is, does the MFJ waiver 
process show that the Department of Justice has been a barrier to 
greater competition by unnecessarily delaying waiver requests that are 
eventually approved? No, the users of that argument imply the 
Department of Justice review of waiver request has been worthless 
because the Department of Justice has supported and the district court 
has approved some 95 percent of those requests.
  Mr. President, that examination, that figure of 95 percent does not 
tell all the story. A typical pattern is for one or more of the Bell 
companies to file an overbroad waiver request seeking relief that could 
not possibly be consistent with section VIII(c) of the MFJ. These 
unreasonable requests evoke extensive public concern and comment. The 
Department of Justice then has two choices: Recommend denial when the 
request is made, which would be relatively quick, or work with the Bell 
company or companies to fix the request so that it satisfies the 
requirements for approval.
  Fixing the request is harder and takes much longer than just saying 
no. But the Department of Justice has committed itself to this harder 
course because it believes that the cause of competition is better 
served by taking the time to negotiate a reasonable request than by 
merely opposing an unreasonable request itself.
  Of the waivers approved by the courts in 1993-1994 that were not mere 
copies of other waivers, fully 60 percent were the product of 
negotiations between the Department of Justice and the Bell companies 
that resulted in a modification of the original waiver request. That is 
the bottom line analysis, Mr. President: Fully 60 percent with the 
product negotiations between DOJ and the Bell companies that resulted 
in a modification of the original waiver request. Thus, the approval 
rate to which opponents refer is, in large part, a testament to DOJ 
success in preserving competition while working to minimize the burden 
of MFJ's line of business restrictions.
  Another argument that is very often thrown up in this debate is that 
you are seeing an increase in the age of pending waiver applications. 
The timetables for waivers under the present court-administered consent 
decree is irrelevant. The Thurmond and Dorgan amendments require that 
the Department of Justice render its determination no later than 90 
days after receiving an application for long distance entry.
  So, to refer to the current delays and say, here is the problem and 
this is going to be perpetuated by either the Thurmond or the Dorgan 
amendment is wrong, Mr. President. These amendments specify 90 days of 
parallel processing during which both the FCC and the Department of 
Justice will consider an application by a local telephone company to 
get into long distance service.
  Mr. President, there is, by the way, some reasons why these waiver 
requests are pending with the Department of Justice and why they have 
increased since the early years of the MFJ. I would like to go through 
one or two of them. But, again, I am actually offering some examples of 
why the Department of Justice is more competent than they might appear, 
if this is your only method of evaluation.
  I am not offering these to try to persuade any colleagues that this 
is why you should trust that the process is not going to take very 
long. The amendment itself says 90 days. There is a date certain in the 
amendment. Do not worry about this dragging on forever, the law does 
not allow it.
  Well, again, opponents have compared and taken to resolve waiver 
requests in the early years of the modified final judgment and the time 
taken more recently and asserted from the Department of Justice fails 
to deal with requests in a timely manner. But this comparison is 
simplistic and ignores fundamental changes in the character of waiver 
requests. It is worth noting that when you compare the age of waivers 
in 1984 to the age of waivers in 1994, it is not surprising that the 
average age of waivers in 1984 would be low, since they could not even 
be requested before that year. Why would they not be low then? A filed 
waiver application in 1984 is a year old. It is understandable and 
logical and indeed would be surprising if the opposite was the case if 
these waivers would not age the longer the consent decree is in place.
  More recent waiver requests require more time, as well, to evaluate 
for several additional reasons. I think it needs to be understood. They 
are not illegitimate reasons. If they are not legitimate fines, that is 
fine. But do not come and say merely that we have one single statistic 
that shows in 1984 here is the age of the waiver application, and in 
1994, here is the age of the waiver application and say, see, that 
justifies the conclusion that the Department of Justice should not be 
given a role.
  Again, there are two reasons why that argument does not stand up. One 
is a fact I will isolate it in a minute. The other is that both the 
Thurmond and Dorgan amendment say a 90-day time certain. The recent 
waiver requests, however, deal almost entirely with lifting the MFJ's 
core business restrictions--that is, inter-exchange, information 
services, manufacturing--while early request waivers were primarily for 
the local company entry into the nontelecommunications business--a much 
easier waiver to grant. When you get into the core business 
application, the waivers are more difficult to grant and assess and 
thus take more time to either approve or to deny. They also evoke more 
public concern and comments. It is a tough deal when a person comes up 
and says, ``A company has applied for a waiver, and I do not like it.''
  One of the reasons the Department of Justice has taken longer is that 
you have an increase in the numbers of public comments and expressions 
of concern. For example, of waivers filed with the Department of 
Justice in 1993 and 1994, the Department receives nearly six times as 
many comments per waiver as in the 1984 to 1992 period. So just in the 
last 2 years, you have had a substantial increase in the number of 
public concerns and comments which are made on the waiver applications 
that are put to the Department of Justice. The recent waiver 
applications present broader and more complex issues. A number of 
waivers still considered pending are actually subsumed within broader 
requests that have already been addressed by the Department of Justice.
  Despite these challenges, the Department of Justice succeeded in 
speeding up the waiver review process. In 1994, DOJ disposed of 43 
percent more waiver requests than in 1993, while the average age of 
pending waivers decreased by 17 percent. So if you are looking for how 
they are doing over there, the 900 or so employees in the Antitrust 
Division of the Department of Justice who have the responsibility for 
assessing concentration in the meat packing industry and concentration 
in all other industries--they have the responsibility for antitrust 
action in all sectors of the U.S. economy, these 900 employees--if you 
are looking for facts as to how well they are doing, I urge my 
colleagues to look at the progress they have made from 1993 to 1994. 
Look at the complexity of the cases, and look beyond merely an 
examination that says from 1984 to 1994 in the cases the age of the 
waiver applications has been lessened. For all kinds of reasons, it is 
understandable, and it does not indicate that the Department of Justice 
is incompetent or unqualified. If that does not persuade you, look at 
the language of the Dorgan amendment and the Thurmond amendment, 
because they remove all possibility of this thing being delayed for a 
long period of time by putting a 90-day time certain, a date certain in 
the law.
  Mr. President, the Department of Justice is the agency with the 
expertise in the competition and telecommunications markets. The 
Department of Justice has had an unwavering focus on the protection and 
promotion of competition. All facts support that conclusion. No facts 
that I have heard support the conclusion that the Department of Justice 
does not have the capacity to assist the people of the United States of 
America, as we the Congress attempt to move this local 
[[Page S8145]] monopoly into a competitive environment. They have 
promoted competition in telecommunications on a nonpartisan and 
bipartisan basis throughout this entire century.
  The Department of Justice has deepened its expertise in 
telecommunications competition over the past quarter century by 
investigating the Bell system's monopoly, suing to break up the 
monopoly, and allow competition in long-distance and equipment markets 
to flourish, and in assisting the Federal district court in 
administering the modification of final judgment, the consent decree 
that dismantled AT&T. The benefits to the Nation from the Department's 
role in promoting competition have been more jobs, more exports, 
greater innovation, and more products available to businesses and 
consumers at lower prices than at any time in our history.
  I see that the Senator from South Carolina is here.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.


                Amendment No. 1265, As Further Modified

  Mr. THURMOND. Mr. President, I have a modification at the desk.
  The PRESIDING OFFICER. The Senator has the right to modify his 
amendment.
  The amendment is so modified.
  The amendment (No. 1265), as further modified, is as follows:

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

       Subtitle B--Termination of Modification of Final Judgment

     SEC. 221. REMOVAL OF LONG DISTANCE RESTRICTIONS.

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

     ``SEC. 255. INTEREXCHANGE TELECOMMUNICATIONS SERVICES.

       ``(a) In General.--Notwithstanding any restriction or 
     obligation imposed before the date of enactment of the 
     Telecommunications Act of 1995 under section II(D) of the 
     Modification of Final Judgment, a Bell operating company, or 
     any subsidiary or affiliate of a Bell operating company, that 
     meets the requirements of this section may provide--
       ``(1) interLATA telecommunications services originating in 
     any region in which it is the dominant provider of wireline 
     telephone exchange service or exchange access service to the 
     extent approved by the Commission and the Attorney General of 
     the United States, in accordance with the provisions of 
     subsection (c);
       ``(2) interLATA telecommunications services originating in 
     any area where that company is not the dominant provider of 
     wireless telephone exchange service or exchange access 
     service in accordance with the provisions of subsection (d); 
     and
       ``(3) interLATA services that are incidental services in 
     accordance with the provisions of subsection (e).
       ``(b) Specific InterLATA Interconnection Requirements.--
       ``(1) In general.--A Bell operating company may provide 
     interLATA services in accordance with this section only if 
     that company has reached an interconnection agreement under 
     section 251 and that agreement provides, at a minimum, for 
     interconnection that meets the competitive checklist 
     requirements of paragraph (2).
       ``(2) Competitive checklist.--Interconnection provided by a 
     Bell operating company to other telecommunications carriers 
     under section 251 shall include:
       ``(A) Nondiscriminatory access on an unbundled basis to the 
     network functions and services of the Bell operating 
     company's telecommunications network that is at least equal 
     in type, quality, and price to the access the Bell operating 
     company affords to itself or any other entity.
       ``(B) The capability to exchange telecommunications between 
     customers of the Bell operating company and the 
     telecommunications carrier seeking interconnection.
       ``(C) Nondiscriminatory access to the poles, ducts, 
     conduits, and rights-of-way owned or controlled by the Bell 
     operating company at just and reasonable rates where it has 
     the legal authority to permit such access.
       ``(D) Local loop transmission from the central office to 
     the customer's premises, unbundled from local switching or 
     other services.
       ``(E) Local transport from the trunk side of a wireline 
     local exchange carrier switch unbundled from switching or 
     other services.
       ``(F) Local switching unbundled from transport, local loop 
     transmission, or other services.
       ``(G) Nondiscriminatory access to--
       ``(i) 911 and E911 services;
       ``(ii) directory assistance services to allow the other 
     carrier's customers to obtain telephone numbers; and
       ``(iii) operator call completion services.
       ``(H) White pages directory listings for customers of the 
     other carrier's telephone exchange service.
       ``(I) Until the date by which neutral telephone number 
     administration guidelines, plan, or rules are established, 
     nondiscriminatory access to telephone numbers for assignment 
     to the other carrier's telephone exchange service customers. 
     After that date, compliance with such guidelines, plan, or 
     rules.
       ``(J) Nondiscriminatory access to databases and associated 
     signaling, including signaling links, signaling service 
     control points, and signaling service transfer points, 
     necessary for call routing and completion.
       ``(K) Until the date by which the Commission determines 
     that final telecommunications number portability is 
     technically feasible and must be made available, interim 
     telecommunications number portability through remote call 
     forwarding, direct inward dialing trunks, or other comparable 
     arrangements, with as little impairment of functioning, 
     quality, reliability, and convenience as possible. After that 
     date, full compliance with final telecommunications number 
     portability.
       ``(L) Nondiscriminatory access to whatever services or 
     information may be necessary to allow the requesting carrier 
     to implement local dialing parity in a manner that permits 
     consumers to be able to dial the same number of digits when 
     using any telecommunications carrier providing telephone 
     exchange service or exchange access service.
       ``(M) Reciprocal compensation arrangements on a 
     nondiscriminatory basis for the origination and termination 
     of telecommunications.
       ``(N) Telecommunications services and network functions 
     provided on an unbundled basis without any conditions or 
     restrictions on the resale or sharing of those services or 
     functions, including both origination and termination of 
     telecommunications services, other than reasonable conditions 
     required by the Commission or a State. For purposes of this 
     subparagraph, it is not an unreasonable condition for the 
     Commission or a State to limit the resale--
       ``(i) of services included in the definition of universal 
     service to a telecommunications carrier who intends to resell 
     that service to a category of customers different from the 
     category of customers being offered that universal service by 
     such carrier if the Commission or State orders a carrier to 
     provide the same service to different categories of customers 
     at different prices necessary to promote universal service; 
     or
       ``(ii) of subsidized universal service in a manner that 
     allows companies to charge another carrier rates which 
     reflect the actual cost of providing those services to that 
     carrier, exclusive of any universal service support received 
     for providing such services in accordance with section 
     214(d)(5).
       ``(3) Joint marketing of local and long distance 
     services.--Until a Bell operating company is authorized to 
     provide interLATA services in a telephone exchange area where 
     that company is the dominant provider of wireline telephone 
     exchange service or exchange access service, a 
     telecommunications carrier may not jointly market in such 
     telephone exchange area telephone exchange service purchased 
     from such company with interLATA services offered by that 
     telecommunications carrier.
       ``(4) Commission may not expand competitive checklist.--The 
     Commission may not, by rule or otherwise, limit or extend the 
     terms used in the competitive checklist.
       ``(c) In-Region Services.--
       ``(1) Application.--Upon the enactment of the 
     Telecommunications Act of 1995, a Bell operating company or 
     its affiliate may apply to the Commission and the Attorney 
     General for authorization notwithstanding the Modification of 
     Final Judgment to provide interLATA telecommunications 
     service originating in any area where such Bell operating 
     company is the dominant provider of wireline telephone 
     exchange service or exchange access service. The application 
     shall describe with particularity the nature and scope of the 
     activity and of each product market or
      service market, and each geographic market for which 
     authorization is sought.
       ``(2) Determation by commission and attorney general.--
       ``(A) Determination.--Not later than 90 days after 
     receiving an application under paragraph (1), the Commission 
     and the Attorney General shall each issue a written 
     determination, on the record after a hearing and opportunity 
     for comment, granting or denying the application in whole or 
     in part.
       ``(B) Approval by commission.--The Commission may only 
     approve the authorization requested in an application 
     submitted under paragraph (1) if it--
       ``(i) finds that the petitioning Bell operating company has 
     fully implemented the competitive checklist found in 
     subsection (b)(2);
       ``(ii) finds that the requested authority will be carried 
     out in accordance with the requirements of section 252; and
       ``(iii) determines that the requested authorization is 
     consistent with the public interest, convenience, and 
     necessity. In making its determination whether the requested 
     authorization is consistent with the public interest, 
     convenience, and necessity, the Commission shall not consider 
     the antitrust effects of such authorization in any market for 
     which authorization is sought. Nothing in this subsection 
     shall limit the authority of the Commission under any other 
     section.
       If the Commission does not approve an application under 
     this subparagraph, it shall [[Page S8146]] state the basis 
     for its denial of the application.
       ``(C) Approval by attorney general.--The Attorney General 
     may only approve the authorization requested in an 
     application submitted under paragraph (1) if the Attorney 
     General finds that the effect of such authorization will not 
     substantially lessen competition, or tend to create a 
     monopoly in any line of commerce in any section of the 
     country. The Attorney General may approve all or part of the 
     request. If the Attorney General does not approve an 
     application under this subparagraph, the Attorney General 
     shall state the basis for the denial of the application.
       ``(3) Publication.--Not later than 10 days after issuing a 
     determination under paragraph (2), the Commission and the 
     Attorney General shall each publish in the Federal Register a 
     brief description of the determination.
       ``(4) Judicial review.--
       ``(A) Commenmcement of action.--Not later than 45 days 
     after a determination by the Commission or the Attorney 
     General is published under paragraph (3), the Bell operating 
     company or its subsidiary or affiliate that applied to the 
     Commission and the Attorney General under paragraph (1), or 
     any person who would be threatened with loss or damage as a 
     result of the determination regarding such company's engaging 
     in the activity described in its application, may commence an 
     action in any United States Court of Appeals against the 
     Commission or the Attorney General for judicial review of the 
     determination regarding the application.
       ``(B) Judgment.--
       ``(i) The Court shall enter a judgment after reviewing the 
     determination in accordance with section 706 of title 5 of 
     the United States Code.
       ``(ii) A judgment--
       ``(I) affirming any part of the determination that approves 
     granting all or part of the requested authorization, or
       ``(II) reversing any part of the determination that denies 
     all or part of the requested authorization,

     shall describe with particularity the nature and scope of the 
     activity, and of each product market or service market, and 
     each geographic market, to which the affirmance or reversal 
     applies.
       ``(5) Requirements relating to separate affiliate; 
     safeguards; and intralata toll dialing parity.--
       ``(A) Separate affiliate; safeguards.--Other than interLATA 
     services au-''.
  Mr. THURMOND. Mr. President, I rise today in support of the Thurmond-
D'Amato-DeWine-Inhofe amendment which will protect competition and 
consumers by providing that antitrust principles will be applied by the 
Department of Justice in determining when the Bell operating companies 
should be allowed to enter long distance.
  I wish to explain a modification which I have made to this amendment. 
With this modification, which clarifies the separate roles of the FCC 
and the Department of Justice, Senator Dorgan has agreed to support my 
second degree amendment and not to seek a vote on the Dorgan first-
degree amendment. I have appreciated working with Senator Dorgan, 
Senator Leahy, and their staffs, and wish to thank them for their 
cooperation and assistance in this important matter.
  The second degree amendment that I introduced last Thursday contained 
language to ensure that there is no duplication of functions between 
the Department of Justice and the FCC. This was accomplished in the 
amendment by limiting the public interest analysis of the FCC so that 
the Commission shall not consider the antitrust effects of entry. 
Analysis of the antitrust effects of Bell entry into long distance 
should only be conducted by the Department of Justice, the antitrust 
agency with great expertise and specialization in analyzing 
competition.
  The modification that I have made today clarifies that this 
restriction of the FCC applies only to FCC's public interest analysis 
of Bell entry into long distance. This clarifies the FCC public 
interest in a way that is entirely consistent with the original goals 
and purposes of my amendment and ensures that there is no duplication 
of functions. Although the FCC may appropriately consider competition 
in other aspects of its analysis, this specialized antitrust analysis 
prior to Bell company entry is to be conducted solely by the Department 
of Justice.
  Under my modified amendment, the antitrust standard applied by the 
Justice Department remains the Clayton section 7 standard. The standard 
is whether Bell company entry would substantially lessen competition or 
tend to create a monopoly. This is the standard applied to every merger 
and acquisition in order to determine whether companies can expand or 
move into
 new lines of business. That is the issue that requires analysis before 
Bell companies enter long distance markets.

  One issue I wish to emphasize is that my amendment is necessary to 
reduce duplication in the telecommunications legislation. Currently, S. 
652 provides that the FCC will conduct a public interest analysis of 
Bell entry into long distance, with consultation by the Department of 
Justice. This results in both agencies being involved in antitrust 
analysis, which is wasteful and inefficient. The Department of 
Justice--and not the FCC--has developed special expertise and 
specialization in antitrust analysis during the past 60 years.
  I would also note that the language we are using from section 7 of 
the Clayton Act also appears in section 2 and section 3 of the Clayton 
Act. These sections deal with price discrimination and exclusive 
dealing arrangements which may harm consumers by inhibiting competition 
in the marketplace. Thus, not only is this standard familiar because of 
the experience and case law under section 7 of the Clayton Act, but 
also because of sections 2 and 3.
  We all strongly support competition. We all support competition 
replacing regulation. The question is how to make sure competition 
exists, and whether competition is achieved by a fixed list of rules or 
by flexible antitrust analysis.
  Mr. President, the bottom lime is whether we believe the antitrust 
laws are the means by which we protect competition or not. It is that 
simple. If we believe in the antitrust laws--which have protected free 
enterprise for over 100 years--then we should pass the Thurmond - 
D'Amato - DeWine - Inhofe amendment.
  For all of these reasons, I urge my colleagues to support this 
amendment.
  Mr. President, I ask unanimous consent to add Senator Dorgan as a 
cosponsor of my second-degree amendment, as modified. Additionally, I 
ask unanimous consent to add Senator Kohl as a cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY. Mr. President, I ask unanimous consent that I be added as 
a cosponsor to the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                         Privilege of the Floor

  Mr. HOLLINGS. Mr. President, I ask unanimous consent that Laura 
Philips, a fellow in the office of Senator Lieberman, be permitted 
privilege of the floor during consideration of the bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRESSLER. Mr. President, I would like to respond to some of the 
remarks made here today, in part, to say that we already do have 
antitrust laws that will continue to exist.
  We have the Sherman Antitrust, the Clayton Act, and the Hart-Scott-
Rodino Act, which will remain in full application.
  I would like to go through the regulatory safeguards that already 
exist in S. 652, to break up local Bell monopolies without a new 
Department of Justice bottleneck.
  It is my strongest feeling that having the Department involved as a 
decisionmaker here is a mistake. The Department is already involved. 
The Department can be a party to any case on appeal from the FCC. Under 
the Hobbs Civil Appeals Act, it involved the Department as an 
independent party in all FCC appeals.
  The point is, the Department has an antitrust role. It has a role as 
an independent party in all FCC appeals. It can use the Sherman 
antitrust standard or it can use the Clayton, or indeed the Hart-Scott-
Rodino can be used when there is an application for a merger.
  Now, we already have several safeguards in the process. We do not 
need bureaucracy. Having the Department do the same thing, basically, 
that the FCC is already doing is a mistake. I might say that even if 
they do it, it will take them a long time.
  My friends have said we will put a time certain. The legislation 
already requires the Department to try to act within 30 days. That is a 
requirement that is already on them.
  Presently, the appeals last up to 3 or 4 years. I have a chart. I 
will show how long the appeals last. They already have a 30-day 
requirement that they have not been meeting. [[Page S8147]] 
  I want to go through some of the regulatory safeguards in this bill. 
First of all, the State certifies compliance with market requirements. 
The State has to act on this. That is a safeguard. That is a check.
  Second, the FCC affirms public interest. That is also public 
interest, convenience, and necessity.
  That means that the FCC can look at this from the traditional public 
interest, convenience, and necessity standpoint. We had a discussion 
about that here on the floor of the Senate. There was an effort to 
repeal that by some Members of the Senate who feel that the public 
interest gives the FCC too much latitude, too much power.
  Next, the FCC certifies compliance and requests a 14-point checklist. 
The FCC has to go through a 14-point checklist to certify that the 
regional Bells have acted. I have the 14 points on another chart. I 
will go through that.
  The Bell companies comply with separate subsidiary requirement. They 
must have a separate subsidiary in a certain period of time in many 
areas. Nondiscrimination requirement. They cannot give all the business 
to one long distance or one subsidiary. They have to act in a 
nondiscriminatory way.
  There is a cross-subsidization ban.
  Fifth, FCC allows the Department full participation in all its 
proceedings. The Department of Justice will be there as the FCC 
proceeds. Indeed, the bill, as written, gives the Justice Department a 
role.
  Next, the Bells must comply with existing FCC rules in rigorous 
annual audits; elaborate cost accounting; computer-assisted reporting, 
and special pricing rules.
  Seventh, there will remain the full application of the Sherman 
Antitrust, the Clayton Act, and the Hart-Scott-Rodino Act. This is very 
important.
  It is not as though, if we defeat the Dorgan-Thurmond amendments, 
that the Justice Department will have no role. They will have a very 
active role as they have had in the past. I think that that is 
something to remember. Again, the Hobbs Civil Appeals Act lets the 
Department of Justice participate as an independent party in all FCC 
appeals.
  Let me go over here to the competitive checklist, if I may. This is 
S. 652's measure to assure breakup of local Bell monopolies.
  First, access to network functions and services. The interconnect 
requirement is on the checklist. I think everybody in the Chamber has 
been in on drawing up this checklist. It is a checklist that the FCC 
will have to go through before a Bell company is certified that it has 
met the requirements. This is a definite checklist. It is something 
that we have worked on around here since January in meetings every 
night and on Saturdays and Sundays.
  Next, capability to exchange telecommunications between Bell 
customers and competitors' customers;
  Third, access to poles, ducts, conduits, and rights of way;
  Fourth, local loop transmission unbundled from switching;
  Fifth, local transport from trunk side unbundled from switch;
  Sixth, local switching unbundled. These are the so-called unbundling 
portions of it, whereby a company will have to open up and unbundle its 
codes so that competitors can come in. It is only once they form a 
small telephone company that there is interconnection and unbundling 
available.
  Next, access to 911 and enhanced 911, directory assistance and 
operator call completion service;
  Next is the white pages directory listing;
  Next is access to telephone number assignment;
  Tenth, access to data bases and network signaling;
  Eleventh, interim number portability;
  Twelfth, local dialing parity;
  Thirteenth, reciprocal compensation;
  Fourteenth, resale of local service to competitors.
  Mr. President, this is the competitive checklist, the 14 points that 
must be met first of all to be certified by the FCC. Then we also have 
the so-called public interest requirement. We also have State 
certification.
  What I am saying is, here we have a carefully crafted bill that 
already requires much review, and what is being proposed in the 
Thurmond and Dorgan amendments is that, when we finish all this with 
the State and the FCC, then we go over to the Justice Department and 
start all over again with another decisionmaker.
  The Justice Department is not supposed to be a decisionmaker in this 
sense. The Justice Department is not a regulatory agency. It has become 
one under Judge Greene's rules, but those attorneys theoretically 
respond to Judge Greene from the district court. They have gotten in 
the habit over there of having several hundred lawyers who are 
basically regulators. As, for example, in the Ameritech case, they are 
even approving phone books and things of that sort over at the 
Department of Justice.
  The Department of Justice is supposed to deal with antitrust issues 
and the Sherman Act and the Clayton Act and go act as an independent 
party under the Hobbs Appeals Act. They are supposed to be lawyers 
bringing cases and lawyers giving interpretations and antitrust rulings 
and so forth.
  What the Justice Department, like so many departments in Washington, 
wants to do is become a regulator, to have a permanent staff of people 
who regulate and make decisions. That is supposed to be done over at 
the FCC.
  So I say to my friends who propose this change that, if they want 
another standard of regulation, let us do it at the FCC where it is 
supposed to be. Why go over here to the Department of Justice--which 
has its role, which has its traditional role, and a good role, let me 
say.
  We have read a lot in the paper about the Hart-Scott-Rodino rulings 
of this year and the Clayton Act standard, which is in the proposal of 
Senator Thurmond. And, of course, the Sherman Antitrust Act, which 
started all this, in Judge Greene's decision. The point is the 
Department of Justice already has a role and will have a role without 
adding another layer of bureaucracy.
  The Dorgan-Thurmond amendment or variations thereof, is the opposite 
of proconsumer legislation. Consumers want wide open competition. They 
want lower costs. They want more and better services, and they want 
these without delay.
  The Department of Justice, in carrying out the MFJ, is now averaging 
nearly 3 years. I believe I have here a list of small charts which show 
the average time, ``Average Age Of Waivers Pending Before the District 
Court.'' In 1993 it is 1,600 days, is the average age of the waivers. 
That is how long it takes to get a decision out of the Department of 
Justice, 1,600 days.
  The ``Waivers Disposed Of Through the District Court,'' that is 
through the Justice Department, has declined in 1993. It reached a 
height in 1986 but they are doing less, even slower, even more slowly.
  The average age of waivers pending before the Department of Justice 
year-end is 1,200 days. This is in a Department that in present law 
says it will endeavor to get these done within 30 days. They have 
completely ignored that.
  Next we come to ``Waivers Disposed Of By DOJ.'' It has dropped to an 
all-time low in 1993 for some reason.
  The point I am making--requests filed with the DOJ hit an all time 
low in 1992, again in 1993--is people have given up. If they have to 
wait 3 years or more, it is too frustrating, too futile. I think that 
is something we should think about very carefully before we add another 
layer of bureaucracy.
  I know my colleagues have the best intentions here, but I have a 
chart showing the ``Average Age of Waivers Before the District Court 
Year-end.'' It started in 1985. They were supposed to get theirs, in 
the law, done within 30 days. They were supposed to get the work done 
within 30 days. In 1985 it took them an average of about 100 days to 
get the waivers issued. In 1986 it was up to about 200 days.
  Anyway, to make a long story short, if you file a waiver before the 
Department of Justice today you will wait, on the average, nearly 1,500 
days, about 4 years. That is why they dropped so much.
  I say to my colleagues, do we want this extra layer of bureaucracy? 
Or do we really want to open up competition?
  I would say it is a great mistake. We are doing all these checklists. 
We are doing public interest. We are having [[Page S8148]] the States 
be involved. All this has to happen first. This is a formidable task. 
We are probably talking about delaying competition 3 years at least if 
this amendment passes in any form.
  The way the bureaucracy works around this town--I have been around 
here awhile watching it--it will probably be more than that before we 
are through. We are probably talking about a 3- to 5-year delay.
  Some of my colleagues have talked about a LeMans start--that is, just 
start right now, in terms of competition. We would let everybody 
compete. There are some problems of unbundling or interconnecting with 
that, but there are Members of this body, indeed we had two members in 
the Commerce Committee who voted against this bill who felt strongly 
about an immediate start. There is much merit to that.
  But the bill we came up with is a balance between those two. The bill 
we came up with allows States to certify, then the FCC to go through a 
14-point checklist, then the FCC to go through the public interest 
test, then competition would begin under our bill.
  But under the proposal of my colleagues here today on the Senate 
floor, the Dorgan-Thurmond proposal, after we finished all that process 
and went through all those approvals and went through that checklist, 
then we would go over to the Justice Department and start all over 
again with some more regulators and they would go through yet more 
tests. It would take more time.
  What we have here is a lawyer's dream, a lawyer's paradise.
  Mr. KERREY. Will the Senator from South Dakota yield on that?
  Mr. PRESSLER. I will, just as soon as I am finished. I am almost 
finished.
  What we have here is a lawyer's paradise if this passes. It will mean 
the piece of regulation we have before us, which is deregulatory, will 
become in part regulatory. We are trying to simplify, to have less 
Government making approvals. This amendment would mean we would need a 
whole other layer of people making the same approvals. It is more 
regulation, in my judgment.
  Let me also say that we had quite a debate in the Commerce Committee 
and here on the floor on this matter of public interest, convenience, 
and necessity. There are many in the think tanks in town who would be 
described as on the conservative side of things who think we should not 
have the standard of public interest, convenience, and necessity 
because, they said, that is more bureaucracy, it lets the FCC have too 
much power.
  This Chamber and the Commerce Committee had votes on that and it was 
determined to leave it in, but a lot of people think that is too much 
regulation. These companies are going to have to go through all the 
checklists, the public interest test, State approval, they are going to 
have to go through all that. Then my friends want them to go on over to 
the Justice Department with their lawyers and start all over again. We 
should not allow that. That is my point.
  Mr. KERREY. Will the Senator from South Dakota yield?
  Mr. PRESSLER. Yes, I will yield.
  Mr. KERREY. The Senator twice has said an applicant must go to the 
FCC, go through all that, and then they have to go to the Department of 
Justice. Will the Senator from South Dakota agree the language of the 
amendment calls for simultaneous application? It does not call for 
consecutive application, where you go to one and then have to go to 
another. You do not get approval at FCC and then get approval at the 
Department of Justice.
  The Senator twice said that you get your approval at the FCC. Then 
you have to go to another agency. Does the Senator allow that the 
Thurmond-Dorgan amendment calls for a simultaneous process?
  Mr. PRESSLER. If my friend will allow me, the Senators' amendment 
would require that they go to two places, first of all, for sure. There 
is no debate about that. You have to go to two places.
  Mr. KERREY. The question I am asking----
  Mr. PRESSLER. Let me answer the question.
  Mr. KERREY. The question is, is there simultaneous application?
  Mr. PRESSLER. I do not yield the floor.
  The PRESIDING OFFICER (Mr. Brown). The Senator from South Dakota has 
the floor.
  Mr. PRESSLER. I would like to answer that question, if I may.
  First of all, the amendment would require the applicant to go to two 
places; actually more than that. You have to go to the State, to the 
FCC, and the Justice Department. It is true that the Senator says 
simultaneous. But, as a practical matter, most people are not going to 
hire some lawyers. They are going to see if they meet the public 
interest test and the checklist first before they go to the Justice 
Department, as a practical matter. But, even miraculously, if they 
could do both simultaneously----
  Mr. KERREY. I do not give----
  Mr. PRESSLER. I will not yield until I complete answering the 
question.
  The point is, you clearly would have to go to two places. One, you 
have to go to the State and the FCC. Under this amendment, then, you 
would have to go to Justice. Even if you could miraculously get all of 
this done simultaneously, if you had three sets of lawyers, you go to 
the State. Before the FCC could really act, they would have to see the 
State thing. The fellows over at Justice, I guarantee you, would want 
to see what the guys at the State and the FCC did.
  Let us say, if you had enough lawyers, they could miraculously do it 
all on the same day, and that each agency plus the Justice Department 
will not delay things for 3 years, you would still have the situation 
that you could need three sets of lawyers. As a practical matter, most 
people, if the State is not going to approve, they will not spend the 
money to go on to the FCC and go on to the Justice Department. The 
point is, if my friend will yield, he has to admit that there is one 
extra place you have to go. There is clearly one more place. You have 
to go to the Justice Department.
  Mr. KERREY. I am pleased to yield.
  The Senator keeps saying miraculously, and three sets of lawyers. I 
just do not think the facts support that. I do not think the facts 
support that is what a company would do, have to hire a whole separate 
set of lawyers or, being a miracle, that there would be simultaneous 
application. The application process is different at the Department of 
Justice because the Department of Justice is the agency that has the 
experience of determining whether or not there is competition. They are 
the ones with the experience. The FCC does not have that experience. 
Indeed, the checklist the Senator is referring to is the placement for 
the VII(c) test. The Senator voted for an VII(c) test last year. Last 
year, the Senator from South Dakota was quite willing to have 
simultaneous application then because the Department of Justice had a 
ruling with an VII(c) test involved.
  Mr. PRESSLER. I yielded for a question. What is the question?
  The PRESIDING OFFICER. The Senator from South Dakota has the floor.
  Mr. PRESSLER. I will be glad to yield for a question.
  Mr. DORGAN. Mr. President, I would like to ask the Senator from South 
Dakota if he is almost finished. Senator Thurmond has offered a 
modification, which has been accepted as a second-degree amendment. I 
would like to describe the circumstances of the bipartisan support for 
that modification which is the second-degree amendment to my amendment. 
So when the Senator is finished, I would like to do that.
  Mr. PRESSLER. I will quickly wrap up in deference to the Senator from 
North Dakota. I have a few more things. In fact, I am trying to keep 
things moving along. So I will yield the floor so the Senator can do it 
right now.
  I hope other Senators who have amendments will bring them to the 
floor so we can get some amendments stacked up. We are trying to move 
this. I will demonstrate an eagerness to move things forward by 
yielding the floor right now.
  Mr. DORGAN. Mr. President, it was not my intention to ask the Senator 
from South Dakota to discontinue if he was not finished. I appreciate 
very much his courtesy. Again, I think he and the Senator from South 
Carolina have done a real service in bringing this legislation to the 
floor, and while we disagree on parts of it, disagree strongly on this 
part of it, I, nonetheless, admire the work that both managers have 
done. [[Page S8149]] 
  But let me describe where we are. We worked over the weekend with 
Senator Thurmond and his staff, and Senator Kerrey and his staff were 
apprised. We now have an agreement. Senator Thurmond's second-degree 
amendment was modified a half hour or so ago. That modification 
includes some additional language that was agreed to this weekend so 
that we retain the standard proposed by Senator Thurmond in his second 
degree. We add some additional language that we wanted to be included, 
and it now represents in my judgment a satisfactory resolution on the 
question of the role of the Justice Department. I, therefore, will be 
supportive by voting yes on a motion that is offered in the second 
degree. It represents something that Senator Thurmond, myself, Senator 
Kerrey, and others agree with and think will advance the interests of 
this bill.
  Mr. President, while I am on my feet, I ask unanimous consent that 
Senator Leahy be added as a cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, I heard the description by the Senator 
from South Dakota. With all due respect, I disagree very strongly with 
the description. We are not attempting to establish new barriers. In 
fact, it is quite the opposite. Just exactly the opposite is happening 
here. We intended to, and with this amendment describe the different 
roles for the Federal Communications Commission and the Department of 
Justice. We have specifically created the circumstance where there is 
no overlap. That was the entire purpose of what we have done over the 
weekend with this amendment.
  So there is no overlap. We are not talking about creating a level of 
complexity that will be a lawyers' relief act. In fact, the only relief 
the lawyers in this country will get is if this is not in the bill. If 
we do not include in the bill a role in the Justice Department, I 
guarantee you that we will have an ocean of litigation on this question 
forever.
  So if one is interested in life and making lawyers happy, one would I 
suppose vote against this because it will result in an ocean of 
litigation. We have very carefully--and I think in a considered way 
with Republicans and Democrats--crafted something that says here is the 
role for the Federal Communications Commission, here is the role for 
the Department of Justice, and they do not overlap but they are both 
essential roles. And they are both important, in any judgment, in 
making sure that as we move this forward, we do in fact have 
competition.
  I am probably the last one expected to stand here and extol the 
virtues of lawyers down at the Justice Department involved in the 
antitrust business. In the House of Representatives, I went to the 
floor I suppose half a dozen times over the decade of the 1980's, 
threatening to put the pictures of lawyers down at DOJ on the side of 
milk cartons, because my notion was we were paying 900 or some 
attorneys involved in antitrust activity who essentially had vanished. 
They were not doing anything. So my assumption was they disappeared and 
that we ought to find them someplace. That was under the old scheme of 
a Department of Justice that really could not find any activity that 
they felt threatened the free market system. Any merger was just fine. 
Any hostile takeover was terrific. They became more like cheerleaders 
for concentration in the marketplace than they were the guardians of 
public interest with respect to competition and those who were fighting 
against antitrust activities.
  If you care about the marketplace, then you care about what is called 
a free market, and a free market in which competition is a robust, 
dynamic force that serves the interests of the consumers. A free market 
requires a little care and attention on our part.
  You can have your pockets picked in an economy like ours if you do 
not have free markets. How do people pick your pockets? The influence 
that can pick your pockets in a marketplace like ours is when you have 
concentrations, so much so that enterprises can actually fix their 
prices, represent anticompetitive behavior, do things in a way to 
extract money from the consumers in a manner that protects themselves 
protects the enterprises from the whims of competition. Those things 
are not healthy. We have been through periods in our country where we 
had some trust busters that had to break up the cartels and trusts. 
Free market systems work only when there is a free market, only when 
there is competition.
  Our whole point about this legislation is we want there to be 
competition. We believe competition is good. Ancillary to that, as I 
also believe in my home county where you do not have very many people, 
there is not going to be much competition. So I ought to make sure that 
we provide some basic protections for those areas of the country where 
competition is not going to be the allocator of resources and services. 
Notwithstanding that, in much of our country, you will have robust 
competition. But the potential exists in a very substantial way for 
some to use market advantage to restrict competition. That is why we 
want to find in this amendment a mechanism by which we provide 
guarantees, and we provide assurances for the consumers in our country. 
That is what we are attempting to do.
  So I understand, if I were one participant in this battle for the 
consumers' dollar in the telecommunications industry, I might say, 
``Gee, it is a real inconvenience for you all to be suggesting that the 
Department of Justice ought to have any more of a role than a 
consultative role.''
  This is not about inconvenience. This is about protecting the public 
interest and protecting the market system to make sure we have a free 
market with competitive forces.
  Mr. PRESSLER. Will my friend yield for a question?
  Mr. DORGAN. I would be happy to yield.
  Mr. PRESSLER. Indeed, I have enjoyed working with my friend on so 
many issues, and we do have occasional disagreement. This is one of 
them. Let me ask a question.
  Would this amendment require the Administrative Procedures Act to be 
applied in Justice Department procedures? What I am getting at here is 
the procedures at the FCC would be under the Administrative Procedures 
Act so there is an open process. There are ex parte rules. The Justice 
Department has rules over there that are prosecutorial, and they do not 
have to be open; they do not have to meet all of the same requirements 
that an administrative agency does. What is the status of the 
Administrative Procedures Act regarding this amendment?
  Mr. DORGAN. I do not know the specific answer to the Senator's 
question except to say that the amendment that we have now modified 
establishes a Clayton 7 test which is a test below the VIII(c) test 
that we had in my underlying amendment, which, I might say, the Senator 
from South Dakota and others voted for last year as it moved out of the 
Commerce Committee. To whatever extent the procedure followed last year 
with respect to VIII(c), which is a higher threshold which would have 
been required, I would suggest that same procedure is now required in 
the Justice Department except that we have agreed with a somewhat lower 
standard.
  We do not agree, however, with a notion that the Justice Department 
ought to be dealt out of this altogether, reserving only a consultative 
role for the Justice Department.
  I understand the question. I will try to get an answer with respect 
to the Administrative Procedures Act I believe the Senator asked about.
  Mr. PRESSLER. Yes. We have to resolve the Administrative Procedures 
Act matter or clarify it to the Senate. The Justice Department, being a 
prosecutorial branch of our Government, can operate in secret or does 
not have to follow the administrative procedures rules. Therefore when 
you file a waiver--presently when a telephone company files for a 
waiver--they do not have the same rights to know what is going on or ex 
parte rules or rules of openness that one has with an agency such as 
the FCC.
  And under the 14-point checklist that we have and under the public 
interest rules at FCC, they have to follow the administrative 
procedures. This provides openness and and protects the rights of 
parties. But when they go over to the Justice Department--and it was 
one problem we had with the VIII(c) test very frankly--there is not 
that openness. The Justice Department does not have to have open 
meetings [[Page S8150]] and hearings. It does not have to have ex parte 
rules. Your rights over there are less than they are when you are 
before an agency that has the Administrative Procedures Act.
  I think this goes to the core of the debate here on the Senate floor. 
The Justice Department is a different sort of an agency. It is a 
cabinet agency that does not have to be under the Administrative 
Procedures Act. It can prosecute people. It interprets the antitrust 
laws. It interprets the Sherman Act and the Clayton Act and the Hart-
Scott-Rodino Act, and it does a good job in those areas.
  I might say that the present Assistant Attorney General, a fine 
woman, has done a great job, in my opinion, on Hart-Scott-Rodino, and 
she has done a great job in administering this huge group of lawyers 
over there who are regulators presently under the MFJ. And I suppose 
that somebody fears they are going to have to let all their lawyers go, 
somewhere between 200 and 900 lawyers, and I do not know where they are 
going to go. Maybe that is the problem.
  Seriously, on a serious note, the Department of Justice wants to keep 
on being a regulator without being under the Administrative Procedures 
Act. And that is a problem. When you get over to the Justice 
Department--first of all, under the Dorgan amendment, you go to the FCC 
and you have openness. You can have an open hearing. If one of the 
commissioners talks to somebody even at a reception about this case, he 
has to file a report of it and give equal time to somebody else. But 
you go over here to the Justice Department, you are not under the 
Administrative Procedures Act. They can operate in secret if they want 
to. They are a prosecutorial agency. They can operate without the ex 
parte rules.
  I think that is a very important thing. Constitutionally, I do not 
think you should be able to apply all of the aspects of the 
Administrative Procedures Act to the Justice Department. They have a 
different role in the nature of our Government. They have a different 
mission to carry out. Now, every agency would like to have several 
rooms full of lawyers who are regulators. And, indeed, if you look in 
the present Ameritech case, the Department of Justice had regulators 
checking on the validity of telephone books, to see whether they fit 
into the rules. They have regulators checking into the validity of 
Yellow Pages. This is in the Department of Justice, where we hold up 
the hand of the balance of justice.
  This has nothing to do with the balance of justice. This belongs in 
the regulatory agency that we spend so much money on, the FCC. So that 
is I think a very core point here in the nature of this debate.
  I am going to yield any further time. I will just conclude by saying, 
because we have to get this debate moving, I challenge my friend from 
North Dakota to name another area of commerce where the Department of 
Justice has a decisionmaking role. This is trying to give the 
Department of Justice a decisionmaking role.
  And the answer to that question, which I will get, is none, not 
another single area--not transportation, not aviation, not financial 
services or any other area. Why telecom, which is an important area? 
Why are they putting them over in the Department of Justice? It is 
going to take a thousand regulators at least to carry out the Dorgan 
amendment. And we have this job done twice already, once at the State 
level and once at the FCC. I hope when we get into the wireless age I 
will still be around here offering a bill to eliminate the regulation 
that we have, but that may be 10 years down the road.
  In any event, this is a bad concept, from the Administrative 
Procedures Act to the decisionmaking role.
  I yield the floor.
  Mr. DORGAN. Mr. President, I just disagree with the Senator from 
South Dakota. We are not talking about a regulatory role for the 
Department of Justice. We must be talking about a couple different 
pieces of legislation. We are not talking about putting Justice into a 
regulatory environment, the Justice Department, although I would admit 
that the term ``justice'' itself is a useful term for us to use as we 
discuss this because this is not about some mom and pop businesses 
having to confront the Justice Department. The real pawns in this 
debate are the American people, the consumers who are going to have to 
pay the bill for whatever communications services they purchase.
  We would hope, all of us in this Chamber would hope they can go to a 
marketplace that is a free, open, competitive marketplace and purchase 
those services, even in the local exchanges. And the question for the 
Justice Department is the question of when is there competition and 
under what conditions this competition exists in the local exchanges, 
because then the regional Bell operating companies will be able to go 
out and compete in long distance service.
  However, we are not suggesting the role of the Justice Department be 
a regulatory role. I think somehow the Senator and others are mistaken 
about that. I do think, though, that when one makes the point we have 
crafted an amendment that attempts to set up competing forces here that 
represent dual obstacles for an applicant is just wrong. It is not the 
way it is written. It is not what the amendment is about. And it is not 
what we are trying to do.
  We are saying the absence of a substantive Justice role in this 
telecommunications bill we think has the potential of cheating the 
American people.
  Mr. KERREY. Will the Senator from North Dakota yield?
  Mr. DORGAN. Let me yield the floor.
  Mr. KERREY. Just for a question.
  Mr. DORGAN. I will be happy to yield.
  Mr. KERREY. The Senator from South Dakota asked and then raised in 
the following series of arguments against, after having asserted that 
the Department of Justice has a different role and function, which it 
unquestionably does--it has been managing the movement from a monopoly 
to a competitive environment. Why should it not be different? Of 
course, it is different. As to the Yellow Pages case, it is a very 
important anticompetitive case, very important anticompetitive case.
  Mr. DORGAN. Let me yield the floor to the Senator from Nebraska, if 
that is sufficient.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. KERREY. Mr. President, I thank the Senator. I am sorry for the 
long warmup to the question. I appreciate the yielding of the floor.
  As to the question the Senator from South Dakota is asking, the 
language of 652 on page 89 appears to be--and I ask my colleague if he 
reads it the same way--on line 7, it says:

       The commission shall issue a written determination . . .

  And here is the language that triggers the administrative procedures 
that the Senator was asking whether or not would exist. As I understand 
it, case law says this is the language that you need in order to 
trigger the very administrative review that the Senator is for. The 
language is:

       . . . on the record after a hearing and opportunity for 
     comment.

  I think it is a legitimate concern. I think the question that is 
being raised by the Senator from South Dakota is quite legitimate.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The senior Senator from Nebraska.
  Mr. PRESSLER. Mr. President, if I could just answer that question.
  The PRESIDING OFFICER. Will the Senator from Nebraska yield?
  Mr. EXON. I yield.
  Mr. PRESSLER. On page 89, ``determination by the Commission,'' that 
is the Administrative Procedures Act applied to the Federal 
Communications Commission. My point is that it does not apply in 
Department of Justice proceedings.
  The PRESIDING OFFICER. The Senator from Nebraska has the floor.
  Mr. EXON. I thank the Chair.
  Mr. President, I stand by the committee-reported bill's compromise on 
the role of the U.S. Department of Justice. As one of the architects of 
the Justice Department's advisory role compromise, I believe that this 
compromise delicately balances provisions that hold together very well 
under even the most dedicated scrutiny. The survival of the Federal 
Communications Commission public interest standard is a testament to 
that fact.
  As a lesson in the art of compromise, the role of the Department of 
Justice is an example of how Congress should work together. Chairman 
Pressler [[Page S8151]] presented a draft on behalf of his Republican 
colleagues which embraced a day certain for Bell entry into long 
distance, no role for the Department of Justice in the long distance 
decisionmaking, and no savings clause to preserve antitrust authority.
  Our ranking member, Senator Hollings, presented a draft on behalf of 
the Democrats which held equally firm to the position of no date 
certain, a separate decisionmaking role for the Department of Justice, 
and a full preservation of antitrust authority over the 
telecommunications issue.
  What I am explaining is that a lot of thought and compromise and 
discussions and ``-cussions'' have taken place with regard to this very 
important matter. I happen to feel that the Commerce Committee, on 
which I have served for 17 years, since I have been here, has done 
itself proud on this particular issue. We have, I think, by compromise, 
by understanding, by persuasion convinced all that the Department of 
Justice, indeed, has a role to play.
  What we are talking about and debating today--and I think the debate 
is very worthwhile--is how much authority, how far can the Justice 
Department go in this area. I happen to believe that while this, like 
most other bills and most other amendments that we adopt from time to 
time, is not perfect, we are not certain how it is going to work out. 
But we are certain in that this issue has been debated very, very 
thoroughly, and I believe that we have something that makes a great 
deal of sense. I hope we will hold to the committee position.
  Following months of consultation, negotiations and bipartisan 
compromise, the committee recommended to the full Senate a bill which 
preserves an advisory role for the Department and certainly, without 
any question, preserves what I think was a necessary addition, making 
sure that the antitrust authority is maintained in the Department of 
Justice where I think it rightfully belongs.
  The compromise did not include a day certain for Bell entry into long 
distance, but it did include a certain procedure for entry that I think 
is important. It is a compromise, and I think it will work. It is a 
compromise which is balanced. It is a compromise which presented a win-
win proposition as best we could for both sides. I certainly think that 
Chairman Pressler and ranking Democratic member Hollings should be 
complimented for reaching out to each other and the Democratic and 
Republican sides of the aisle to come up with something that I think is 
something that could be best described as providing a lot of wisdom.
  I have been somewhat proud in the role of breaking the logjam between 
Democrats and Republicans on this particular critical issue, and 
certainly I appreciate the fact that there are others in this debate, 
including my friend and colleague from Nebraska, who have made some 
excellent points with regard to the debate that has taken place on this 
vital issue.
  At the heart of this debate is the appropriate role for independent 
regulatory agencies, of which the Federal Communications Commission is 
an important one. It is often said that these agencies are a half-step 
among the legislative, judicial and executive branches of Government. 
We should keep it that way, I suggest. It has not been my experience 
that the Justice Department has always been the hallmark of cooperation 
or understanding of the needs of the public at large. The Senate 
Commerce Committee has a unique relationship with all of the entities 
involved in these decisions. I have found over the years that Congress 
has a much easier time working to implement policy with the independent 
regulatory agencies than it often does with the executive branch and, 
specifically, in many instances, with the judicial branch.
  The central purpose of this telecommunications reform bill is for the 
Congress, the representatives of the people, to regain control of 
telecommunications policy. It is ironic that the Justice Department and 
Judge Greene removed telecommunications policy from the congressional 
domain, and now here is a move to shift that control back to the world 
of the unelected, which I think the suggested amendment would do.
  Make no mistake, the Department of Justice will have a key role in 
telecommunications policy. Its expertise will not be wasted, and there 
is a great amount of expertise within the Justice Department on this 
and other things with regard to communications. Nothing in this 
legislation repeals the antitrust statutes, and I debated and cited 
instances of that on Friday last. This legislation specifically 
requires that the Department consult with the Federal Communications 
Commission.
  The bottom line is there should be one rule book and one referee. The 
preservation of the public interest test assures that the Federal 
Communications Commission will give the Department's advice the most 
serious of consideration, as I think, by and large, history will prove 
they have done in the past.
  At this time of reinventing Government, there is added merit to 
avoiding duplication from shopping around, looking to different 
agencies of Government to get relief.
  To my colleagues who have expressed shock at the recent attacks on 
the Federal Communications Commission and the irresponsible suggestion 
that the Federal Communications Commission should be abolished, I 
suggest now is an appropriate time to stand up and show confidence in 
the independent judgment of that important agency.
  Mr. President, I hope that the Senate will follow the well-thought-
out and, I think, well-compromised and well-done effort on the measure 
that we have been debating now for some time.
  Thank you, Mr. President. I yield the floor.
  Mr. BREAUX. Mr. President, I congratulate the distinguished Senator 
from Nebraska for what I think has been a very articulate statement 
about his opposition to the pending amendment and why it is not 
necessary.
  I wonder, as we have these debates on the floor, about how difficult 
it must be for all of our colleagues who have not sat through weeks and 
months and, in fact, years of hearings as a member of the Senate 
Commerce Committee discussing the very complicated telecommunications 
bills and language and amendments. I know that, as a member of that 
committee since I have been in the Senate, it is incredibly complicated 
to me. We use acronyms and talk about so many different agencies and 
about long distance versus RBOC's. It is very complicated for all of 
us, including those of us on the committee. I can just imagine how 
complicated it is for a Member not on the committee to come to the 
floor and be immersed in the telecommunications debate, trying to 
figure out what is right and wrong, and trying to understand a little 
bit about the history of this legislation, knowing that something 
happened several years back when we had the Department of Justice 
involved in breaking up the AT&T operations into separate operating 
companies known as the regional Bell companies. And we see that we are 
constantly being bombarded by all of the telecommunications suppliers 
in this country advertising about their services being better than 
somebody else's services; you will save a penny here or a penny there 
if you pick us over somebody else. All of this is truly very 
complicated. I guess there is no way to get around that, because what 
we are talking about is multibillion-dollar industries.
  What I said at a hearing one time when we talked about one side wants 
to do this and the other side wants to do that, was, ``Who is right?'' 
I summarized by saying it is like all of these companies were coming 
before the committee and saying: I want in yours but you stay out of 
mine. Long distance companies were saying: I want to do local service 
but you cannot do long distance service. And the local Bell companies 
were saying: Well, I want to do long distance service, but I do not 
want you to come do local service. Hence, the summary of the situation 
being: I want in yours but stay out of mine.
  I think the committee is to be congratulated for coming up with a 
scenario whereby we favor competition. We are going to say that the 
marketplace, when properly allowed to do so, can be the best regulator 
for the benefit of the consumer. The problem is, we have not had a 
telecommunications bill really since 1934. For all of our colleagues 
not on the committee, the reason why the judges have been involved in 
setting telecommunications policy in this country is because we in the 
[[Page S8152]] Congress have really not substantially written a 
telecommunications bill for the 1990's. The telecommunications bill 
that we operate under was written in 1934. Does anyone doubt the 
technology increases we have had since 1934? We have had 60 years of 
technological developments, and we are still being guided by an act 
written in 1934. You wonder why we have problems in this industry and 
you wonder why the Department of Justice has had to use not a 
telecommunications statute but an antitrust statute to help set 
telecommunications policy for the 1990's.
  The reason why it is not being handled very well in many cases is the 
fact that the law they are applying has nothing to do with 
telecommunications. It has to do with antitrust. The breakup of the 
Bell companies was not based on telecommunications policy set by this 
Congress. It was based on antitrust laws that were concerned about the 
size and monopolistic practices of companies in this country. 
Therefore, all of that was achieved in sort of a haphazard fashion. We 
have a Federal Judge, who, to his undying credit, has done a heroic job 
in trying to set policy for the telecommunications industry--Judge 
Greene here in Washington. He has had to do all of that because we have 
not done our jobs. We have never tried to come up with policy that 
makes sense for the nineties and the years thereafter.
  I congratulate the chairman, Senator Pressler, and the ranking 
member, Senator Hollings, for their long contribution in trying to come 
up with a bill that balances those interests, that says to the billion-
dollar companies on this side and the billion-dollar companies on that 
side that we, for the first time, are going to create an atmosphere in 
this country that allows the marketplace to work and fashion what is 
good for the consumers and good for technology development and for the 
companies that provide telecommunications services. That is what this 
bill tries to do.
  There are those who are going to argue that we cannot change the way 
we have been doing business because that is the way we have been doing 
business. We are not going to make any changes in the roles of the 
various agencies in Government because, well, that is what they have 
been doing since 1934.
  I think we have to understand that, with this legislation, we are 
calling for fundamental changes in the telecommunications business. We 
are going back to allowing people to be able to compete, and there will 
be losers and there will be winners among the companies. But I think 
that the competition that we will provide will make sure that consumers 
are the ultimate winners in what we do with this legislation. I think 
it is very, very important. The role of the Department of Justice--and 
I have a great deal of respect for the junior Senator from Nebraska, 
Senator Kerrey, for his comments. I understand the points they make, 
saying that the Department of Justice needs to be involved in order to 
protect consumers and make sure nobody does things to other people and 
other companies that they should not. I understand that. But that was 
appropriate when the old system existed. I suggest that that is not 
appropriate under the new system.
  Let me give examples of why I think the Department of Justice --which 
is sort of the policeman or the cop when it comes to looking at various 
industries in this country--should not be, in this case, the policeman, 
cop, judge, jury, and everything rolled into one. It will still have a 
role under the chairman's legislation. Their role will be to enforce 
the antitrust laws of this country. Nothing changes in that. No one can 
say that this bill somehow guts the Department of Justice's role in 
enforcing antitrust laws, because it makes no changes in that. They 
will still look at the whole array of communications companies and 
apply the antitrust laws of this country to make sure that they are 
being held up to the standard that the Department of Justice says they 
should be held to.
  But what is different is that they will not be the agency that 
regulates telecommunications in their day-to-day activity. They will 
enforce antitrust laws, yes, but they will not have to be an agency 
that sits back and says to all these industries, please come to us and 
ask if you can provide telecommunications service. Please come to the 
Department of Justice building and file some more applications which 
may take 2, 3 years to get filled out because fundamentally the system 
is being changed. That is the big point that I think needs to be 
understood by all of our colleagues who are not on the committee--that 
this legislation of Senator Pressler and Senator Hollings and the 
majority of the committee fundamentally changes the way 
telecommunications policy is going to be carried out.
  Therefore, under the old system when you needed the Department of 
Justice to enforce the law using antitrust laws, it is no longer 
necessary, because we have a new document, a new set of rules and 
regulations, as to how this industry is going to work in this country. 
The old way was defective. It was written in 1934. Like I said, you had 
to go back and find antitrust laws to come in and protect the interests 
of consumers because we did not have the plan, a bill, a document that 
made sense. This bill makes sense, and this is the new rule book. It 
says that the Department of Justice's role will be to make sure that 
antitrust laws are not violated.
  Let me give some examples. When you have competition and when you 
have deregulation, then you do not have the same role for the 
Department of Justice, and that is what we are following in this 
legislation here today. I will give you an example with regard to the 
airline industry. The airline industry is regulated by the Federal 
Aviation Administration. They look at questions about safety and make 
sure that airlines are doing what they are supposed to do to make sure 
that they are economically sound before they come in and start 
servicing a particular area. When they do that, they do it in a manner 
that is safe to the consuming public. There is competition and there 
are prices, and what have you. When you want to start an airline, you 
do not have to go to the Department of Justice and ask, ``Can I do 
it?'' You do not go to them for a permit to run an airline in a 
particular area. Now, if they become involved in antitrust violations, 
then the Department of Justice can get in right away and say, ``Shut 
this down; it is in violation of the antitrust laws of this country.''
  The airline industry, however, does not have to go and beg to the 
Department, ``Please approve and give us a permit to serve a particular 
area.'' That has changed.
  Why has it changed? Because they have been deregulated. Now 
competition is how they operate. As long as they do it within the 
boundaries of antitrust laws, DOJ is not involved in that endeavor, the 
FAA is, the Federal Aviation Administration.
  Let me give another example; that is, the trucking industry. When I 
served in the other body for 14 years, I was on the Transportation 
Committee. We worked the Department of Transportation, dealing with the 
trucking industry. I was there during decontrol and deregulation of the 
trucking industry. A carrier today, when they want to operate, goes not 
to the Department of Justice to get approval. They go to the Interstate 
Commerce Commission and get a license to serve a particular area.
  They look at the financial condition of the company. Can they 
operate? They look at the soundness of that company. In terms of its 
equipment, can they operate safely? Do they have enough equipment to do 
what they are supposed to do? And then they are granted permission to 
go out and serve areas--by the Interstate Commerce Commission.
  They do not go to the Department to say ``Please let us be a trucking 
company.'' The Department still has the enforcement rights of the 
Sherman Antitrust Act. Of course, if they violate that act, the 
Department of Justice can come in and shut them down.
  Now, the two examples I gave, I think, are apropos to the situation 
we have with the telecommunications industry. We have fundamentally 
changed how, with this legislation, how they will operate.
  We are going to allow long distance companies, which in the past have 
been prevented from providing local service, to provide local service. 
There will be more people providing local service. It just will not be 
the regional Bells. There can be MCI, Sprint, AT&T, and a 
[[Page S8153]] whole array of new companies providing local service.
  Guess what? In return, we will allow local companies, principally the 
regional Bells, to be able to provide long distance service. There is 
going to be competition both in long distance and there will be 
competition in local service.
  Therefore, it is the committee's opinion, and I think, wisely 
reached, that we have a different set of procedures and rules that are 
going to work.
  That is why the committee said there is a different role for some of 
the agencies in Government, that they are not needed to do what they 
used to do because there is a different setup in the competition of 
providing telecommunications service.
  What some of the Federal agencies want, we have new players, a whole 
new system, but we still want to play by the old rules. We have sort of 
a paternalistic attitude by some of the Federal agencies that say, 
``Well we used do that. You mean you are going to change it? We can't 
do it anymore?''
  Yes, because we have fundamentally changed how business is going to 
operate in the telecommunications business.
  This committee, I think, has done a terrific job in trying to say to, 
for instance, the Bell companies, what they have to do to allow 
competition to come into the local market.
  There are pages of this bill that spell it out. It is a very 
extensive, very detailed list of what all the Bell companies have to do 
to allow their competitors to be able to come in and compete.
  This is extraordinary in the sense of telling private industry that 
this is what they have to do in order to let the competitors come in 
and try to beat your economic brains out. It is there on page 823, 
called a competitive checklist. It says a Bell company may provide long 
distance service if, first, they go through all of these things that 
they do, to allow the long distance companies to provide local service.
  It is kind of almost a jump-start. You can get in my business when I 
can get into your business. But I will do everything I have to let you 
into my business, because we used to be a bottleneck; we used to be a 
monopoly; we used to control everything.
  Now, this legislation says you will not control much of anything. You 
will have to allow for nondiscriminatory access on an unbundled basis 
to the network functions and services of the Bell operating companies 
network that is at least equal in type, quality, and price to the 
access Bell operating company affords to itself.
  That is pretty long. It says we will let you do anything with our 
network that we do with our network that we built. It says, second, the 
capability to exchange telecommunications between customers of the Bell 
operating companies and the telecommunications carrier seeking 
interconnection. So they have to be able to exchange communications 
between the Bell's customers. That is, we are giving you our customers 
and you can talk to them. Go for it.
  Next, nondiscriminatory access to poles, ducts, conduits, and right 
of ways owned or controlled by the Bell operating company. That is a 
very significant requirement that not only are we inviting you to come 
in and compete with us, but we will give you access to all of our 
equipment--telephone poles, the conduits, the right of ways.
  You got it; you want it, come on in, you can use it, provide local 
service, talk to our customers, use our networks, because we want you 
to have access to our business. In addition, they say that local loop 
transmission from the central office to the customer's premises, 
unbundled from local switching or other services; and next, local 
transport from the trunk side of local exchange carrier switch, 
unbundled from switching or other services.
  Finally, local switching unbundled from transport, local loop 
transmission, or other services.
  All that is very complicated, but what it essentially says is that 
Bell operating company has to do all of these things, give permission 
to all your competitors to come in and use your equipment, use all of 
these things so you can compete for local customers, but in return for 
that we are going to start providing interLATA service or long distance 
services.
  Legislation says the Commission shall consult with the Attorney 
General regarding that application. The Attorney General may apply any 
appropriate approval or any appropriate standard that they desire under 
their rules and regulations.
  The Commission must find that the requested authorization is 
consistent with the public interest, convenience, and necessity.
  Mr. President, I think that pretty well spells out what this bill is 
trying to do in terms of long distance versus local service. It spells 
out why I think the committee has crafted a very good proposition, one 
that protects the interests of the consumer.
  The FCC deals with this issue like the ICC deals with transportation, 
and like the FAA deals with aviation. When we changed the rules in 
those industries by deregulation and bringing about greater 
competition, of course, the role of the Department was changed, as 
well. Like those other industries, those industries that do not have to 
go to DOJ to get approval or to let them say no to an application, that 
is not their role. Their role is to look at criminal violations, 
violations of the Sherman Antitrust Act. And all the other criminal 
rules that the Department has the authority to use when there are 
potential violations of the antitrust statutes are not affected at all.
  What is affected is that we are putting into the FCC the proper role 
that it should have, like we have in these other areas.
  If we look at the history of the Department in trying to approve all 
of these mergers, the time that they have taken to give a ruling has 
increased from an average pending application of 2 months in 1984 to 3 
years in 1993.
  No wonder we have problems making the bureaucracy work, and I suggest 
that that is a very good example.
  In addition to having a Federal Communications Commission, we have 
public service commissions in all 50 States plus the District of 
Columbia which appropriately and properly will be involved in 
communication and telecommunication policies and issues, as they have 
been in the past.
  Mr. President, I ask that all of our colleagues who are trying to 
figure out what is the proper answer to this very complicated process 
that we are involved in will just look at the history of where we have 
been, the fact that the committee has crafted a very balanced bill.
  There were differing opinions in our committee as to what the proper 
role should be. I think after debate, we reported this bill out with a 
vote of 18 to 2. I think it is very clear that both Democrats and 
Republicans agree that this is by far the best approach. I would 
recommend it to my colleagues in the Congress.
  Mr. PRESSLER. Mr. President, I received word that the leadership 
would like this matter to be voted on at about 6 o'clock, for the 
notification of all Senators. That would give Members 2 hours.
  I shall have more remarks, but I will yield to other Senators. Those 
Senators wishing to speak on the Dorgan amendment should bring their 
speeches to the floor.
  The PRESIDING OFFICER (Mr. Grams). The Senator from Nebraska is 
recognized.
  Mr. KERREY. Mr. President, I inform the Senator from South Dakota, I 
object to the time of 6 o'clock. We should talk about it.
  Mr. PRESSLER. Why would my friend object? We debated Friday afternoon 
and today. We are trying to move this process along.
  Mr. KERREY. I understand we are trying to move the process along. It 
is not so much that I have an interest in debating this all night long. 
It is that there have been requests from a number of people who 
indicated they prefer to stack votes and vote tomorrow morning. I am 
obliged to tell you I think that is not an unreasonable request.
  Mr. PRESSLER. I am a great admirer of my friend and I plead with the 
Senator, we must move forward. I received word that there are many who 
would like to vote at 6. We will have to resolve it, perhaps in a 
private conversation. But for purposes of other Senators in their 
offices, it is our intention to try to put this to a vote at 6 this 
evening. [[Page S8154]] 
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.
  Mr. HOLLINGS. Mr. President, let me join in the desire of our 
chairman here to get a vote this evening. When we broke on Friday the 
understanding was we would vote at 5 o'clock, perhaps. Not specifically 
on this amendment. We would have votes. This is the amendment that is 
up. We discussed it some, actually, on Thursday; all day Friday. This 
has been a crucial amendment.
  I guess the world is not going to end if we put it over to tomorrow 
morning for this particular Senator. But you could not call a vote at 6 
o'clock, or 7 o'clock, or this evening at all, unreasonable. Because we 
have debated. We look for the Members to come and join in.
  In fact, it has been debated on the telephone all weekend long. 
Because the pressure has been on. As a result, now, the Senator from 
North Dakota and the senior Senator from South Carolina have gotten 
together on the one amendment to get the best vote, I take it, possible 
on this particular issue.
  With respect to the issue, Mr. President, I hearken back to the 
hearings we had over a year ago. We commenced with the Secretary of 
Commerce, Secretary Ron Brown. The reason I refer to this is we are 
constantly being admonished: Wait a minute, you voted for this last 
year. Wait a minute, you voted for this last year.
  I wish I could be as charming as the distinguished Senator from 
Illinois, the former minority leader--momentarily I think he may have 
been majority leader but he was mostly minority leader, Senator Everett 
Dirksen. And he said--I think he was quoting Emerson, ``Consistency is 
the hobgoblin of little minds.''
  So, yes, the Senator from South Carolina voted for this last year. 
However, the Senator from South Carolina, and referring to Secretary 
Brown's appearance in February of last year--I refer on page 40:

       Secretary Brown. Well, I certainly respect that view, 
     Senator Danforth, and the one expressed by the Chairman. It 
     is our view that VIII(c), administered by the Department of 
     Justice, which has a good deal of experience, as the Chairman 
     points out, would achieve the purposes of the committee and 
     achieve the purposes of S. 1822. That is the only difference 
     we have. We have the same goal.

  Mind you me, S. 1822 did not have the Department of Justice as a 
checkoff at all when I introduced S. 1822, after much discussion with 
many of the Members.
  ``The Chairman,'' as I was acting chairman at that particular time:

       You are suggesting that this be administered by the FCC and 
     the Department of Justice?
       Secretary Brown. That is correct, Senator.
       The Chairman. Well, that is the basic difference, then. You 
     want two entities to start administering communications.

  Going on over two or three pages at the bottom of page 43, because 
here we have at the present time the law with respect to 
telecommunications is unchanged, as respects the Department of Justice. 
Section 2 of the Sherman Antitrust Act is untouched, absolutely 
untouched.
  Let me emphasize that. That is where the so-called Department of 
Justice got all of this wonderful experience that we keep hearing 
about. They have all of the experience over the years and they have the 
marketing expertise and what have you. So, on page 8 of the bill, if 
you follow now, on 8 of the bill down at the bottom on section 7,

       Effect On Other Law . . . nothing in this Act shall be 
     construed to modify, impair, or supersede the applicability 
     of any antitrust law.

  Mr. President, you cannot say it more clearly than that. I elaborated 
on it in the committee report and I turn to page 43 wherein:

       The FCC is required to consult with the Attorney General 
     regarding the application during that 90 day period. The 
     Attorney General may analyze a Bell operating company 
     application under any legal standard (including the Clayton 
     Act, Sherman Act, other antitrust laws, section VIII(c) the 
     [modified final judgment], the Robinson-Patman Act, or any 
     other standard).

  You see, that had not changed and is not changed by S. 652. So what 
we were trying to do, and as I pointed out as we started out on S. 
1822, was to cut out the duplication, and certainly not give authority 
for regulation to the Department of Justice. The Department of Justice 
is a law enforcement department. In fact, under Sherman, Section 2 of 
the Sherman Antitrust Act, are civil and criminal penalties. I said 
when we started on this last week the telephone companies were not a 
bunch of criminals and there was not any reason to start getting them--
yes, there is a difference. My distinguished colleague from Nebraska 
says get a different lawyer. You bet your boots you get a different set 
of lawyers. It is just like going to a doctor for a broken arm, on the 
one hand, and going to a doctor, on the other hand, for diabetes. They 
do not know anything in broken arms about diabetes, and diabetes cannot 
set any broken arms.
  Similarly, in the legal profession, if you are going before 
antitrust, I can tell you now as I have had to face antitrust lawyers 
and this particular attorney was not expert, I had to go up to 
VanSeiss, in New York, for a solid week seminar, because we did not 
have any particular antitrust lawyers in Charleston, SC, at the time 
that were willing to take this case. I told the prospective client, I 
said, ``Wait a minute I am not an antitrust lawyer. I am not steeped in 
that particular discipline.''
  I had met VanSeiss and he had a seminar, and we buddied off, my law 
partner and myself, for a week's seminar and came back and figured we 
learned enough not only to defend but to prevail. But that is another 
story.
  But I can tell you from hard experience, the answer is ``yes.'' You 
do not get the same lawyers before the FCC, necessarily, and the same 
lawyers before Justice and the Criminal Division of section 2 of the 
Sherman Antitrust Act.
  The Clayton Act, in all fairness to the amendment of the Senator from 
South Carolina, Senator Thurmond, that deals strictly with civil 
penalties, with the matter of measuring whether there is excessive 
competition that could lead to extensive--not competition but 
monopolistic practices.
  But in any event, let me refer back to page 43 of the hearing 
committee record so everybody who is interested about how we change--
you are going to tell how change comes about. The chairman, which was 
Senator Hollings, said, and I quote:

       Well, let me just comment on the matter about antitrust 
     because I did discuss with Anne Bingaman this particular bill 
     before it was introduced. And I made it known to her that, 
     and she well knows I recommended her for the position of 
     Assistant Attorney General in charge of the Antitrust 
     Division. She is a breath of fresh air. I am the 
     appropriations chairman of the Antitrust Division of the 
     Justice Department. I have been dealing with the moneys for 
     this Antitrust Division of the Justice Department for 
     numerous years, and I can tell you categorically we are way 
     behind the curve in this particular field. And she has got 
     more . . . grace . . . the FCC has its responsibility. On 
     that basis, trying to eliminate lawyering, trying to 
     eliminate the delays, trying to simplify the procedure, we 
     really do not need more of a role for the Department of 
     Justice other than consultation. Well, there is an egregious 
     situation of monopolization . . . they do consult, and we put 
     that in there. But otherwise we did not want to get into 
     Justice and get into the Judiciary Committee and get bogged 
     down.

  That is exactly where we had intended, as I said at the very 
beginning, the one-stop shopping. But the White House disagreed, and 
the Justice Department disagreed, and numerous Senators disagreed, and 
the task of a chairman of a committee is to get the best product you 
possibly can so long as you do not do injury to the overall goal of 
deregulation and fostering competition.
  So I went on in the bill S. 1822. But those who continually say, 
``Well, you voted, you voted--last year. You should be admonished.'' 
Rather than admonishing me, my original intent as the chairman of the 
committee was to do just as Senator Pressler has provided in S. 652. So 
in S. 652 we provided the one-stop shopping at the Federal 
Communications Commission. The Department of Justice is totally 
unhindered and unaffected with respect to their antitrust 
responsibilities and authority. There is no question about that. No one 
has raised that question. They are seeking in the amendment additional 
authority and responsibility, which I think very positively confuses 
the situation and constitutes a bad amendment.
  Why do I say that? I say that for this language here in the Thurmond-
Dorgan amendment. It says the ``FCC, in making its determination 
whether the requested authorization is consistent [[Page S8155]] with 
the public interest, convenience and necessity, the Commission shall 
not consider''--listen to this--``the Commission shall not consider the 
antitrust effects of such authorization in any market for which 
authorization is sought.''
  I am your lawyer. You have a communications company. You come to the 
lawyer and say, ``Lawyer, tell me. What about this thing?'' I say, 
``Well, it says it should not have any authority at the FCC over any 
antitrust section of marketing, in any market for which authorization 
is sought. However, we know marketing forces and we know forces of 
competition. And we know measuring market competition. You have an 
affirmative action responsibility empowered in the FCC by S. 652.'' I 
say, ``It is the present law,'' or the law as my client would come to 
me. And I say, ``They have to do all of this unbundling, dialing 
parity, interconnection, number portability.'' And I list all of these 
particular things. ``You have the public interest section in here about 
marketing. Yet, you have a section in there that says you cannot touch 
the marketing thing if they reflect antitrust. Well, marketing 
competition, antitrust marketing competition, could be, as we lawyers 
say, the mime shows, or the same thing.''
  I can tell you here and now you have a bad amendment where they are 
jockeying around to get Justice into this and mess it up. I can tell 
you, leave the Justice Department Antitrust Division, leave section 2 
of Sherman antitrust, leave section 7 of the Clayton Act, leave all of 
those things as they are. S. 652 does. But do not come wandering down 
the road with dual committee jurisdiction, dual jurisdiction, two types 
of attorneys, and everything else. And about the time, if you were 
going at the same time and think you are making progress now with 
respect to the Federal Communications Commission, after, say, two or 
three hearings, some antitrust lawyer gives out a release, saying, 
``Well, we are concerned about the XYZ communications company getting 
into this section 2 of the Antitrust Division,'' it will stop. Boom. It 
goes right straight on down because you have the criminal department of 
the Justice Department, the law enforcement department, it is not 
regulatory, the public is confused, the market is confused, the 
Congress is confused. It is a bad, bad amendment. And let us not talk 
about where the expertise is.
  I want to relate to the function now of the Federal Communications 
Commission. The Federal Communications Commission for year on end was 
to maintain a monopoly. They were there to protect AT&T and its 
monopolistic Bell companies. Today, we are supposed to protect the 
RBOC's in a general sense. That has been the primary function in the 
Federal Communications Commission. But getting in the 1960's, due to 
the pressure of Congress, the market and the evolving technology, in 
1969 the Federal Communications Commission separated out the equipment 
from services somewhat as was later done with the modified final 
judgment in AT&T. We began to sort of measure competition and market 
forces.
  Then in 1971, the Federal Communications Commission allowed 
competition for long distance services. Then in 1980, for the computer 
industry to get in, they provided competition for information services. 
That is the computer services and information. Then in 1990, the 
Federal Communications Commission approved video dial tone in 
competition for the cable companies, which, in short, allowed the 
telephone companies to get into the cable business.
  Most recently, last week--I will get that decision because we have it 
all lined out here--I think this is powerfully interesting, the Federal 
Communications Commission was taken to the Circuit Court of Appeals for 
the District of Columbia in the case of the Warner Entertainment Co., 
petitioners, versus the Federal Communications Commission.
  I wish you could read the lawyers. They are talking about lawyers. 
This is what we are trying to do. Look. They have three pages of 
lawyers in this thing; three, four pages, lawyers upon lawyers upon 
lawyers. I could interest the U.S. Senate no end about the lawyers for 
Warner Entertainment Co., for the Cable Television Association, Inc., 
for petitioners from the city of Austin and Dayton and King County, WA; 
Miami Valley Cable; Montgomery County, MD; St. Louis, MO, and the 
lawyers for the Cable Telecommunications Co.; Larry Tribe, and 
everybody else for Bell Atlantic, and on and on.
  You talk about not getting lawyers in the Justice Department. There 
are lawyers coming out of my ears in one decision. Guess what the court 
said in this decision.

       With respect to rate regulation, Congress determined that 
     local governments should be permitted to regulate only the 
     basic service rates of those cable systems that are not 
     subject to effective competition.

  Yes. Measuring market forces, measuring market competition. You have 
heard all afternoon, ``Wait a minute now. The Department of Justice is 
the expert on measuring market competition. The FCC over here is with 
megahertz, some kind of radio technicians and TV aerial boys. They do 
not know anything about marketing competition.'' That is absolute 
nonsense.
  Here is the most recent decision on measuring market competition 
saying that they did an outstanding job. The Federal Communications 
Commission struck an appropriate balance between the competing 
interests of the cable companies and their subscribers in violation 
neither of the 1992 Cable Act nor of the Administrative Procedures Act.
 It is listed as one of the FCC's most significant legal victories 
because it is stated here--and it is the best wording I thought--that 
not only the Government--I will have to read that part. I wanted to 
refer to it. But they did an outstanding job in substance, take my 
word, and we will put the decision in the Record.

  The Federal Communications Commission did an outstanding job in 
measuring competition--that is everybody in the world about measuring 
market competition.
  I think it is highly significant that we do not start dividing the 
roles in your mind. The role of the Justice Department and the 
Antitrust Division is law enforcement, antitrust law enforcement, under 
2 of Sherman, civil and criminal, civil and criminal penalties. I can 
tell you here and now that is the fundamental basis of the modified 
final judgment. That is untouched by S. 652.
  What is suggested by the amendment is that we want to start 
superimposing a whole new series of hearings. About the time you think 
you can get through the FCC, here is the Congress that has come to town 
and said we are going to reregulate, we are going to let market forces 
operate but, oh, by the way, we are going to put the law enforcement 
into the regulatory and have two regulatory bodies. Here we are getting 
rid of the ICC because other than railroad mergers it has become 
deregulated--and the trucking industry. Here we have done away in a 
general sense with the Civil Aeronautics Board. Mergers, that is under 
the Justice Department, but under regular routes and approvals and 
gates and slots and safety we have the Department of Transportation and 
the Federal Aviation Administration. In communications, we have the 
Federal Communications Commission and they have talent coming out of 
their ears over there on measuring market competition.
  So the section 7 of Clayton under the Thurmond amendment of trying to 
determine substantially lessening competition is another market measure 
that the FCC has to make. That is why we wrote this bill this way. We 
are trying to get market competition. And we certainly do not want 
another division of government coming in. At one time they had it 
written so you had the Federal Trade Commission because under section 7 
of Clayton you have both the Federal Trade Commission and the Justice 
Department.
  And for a while, reading this thing, they had the Federal Trade 
Commission, the Justice Department, and the Federal Communications 
Commission, and then refer it to Congress and let them have a hearing 
and the Congress will say let us get a commission and study like we 
have done with Medicare. Come on.
  Let us kill this amendment here once and for all and do not act like 
it is anything other than what it is. We have not affected the 
fundamental responsibility and authority of the Department of Justice. 
The amendment is a [[Page S8156]] jerry-built amendment of two 
interested Senators trying to get the Judiciary Committee on the Senate 
and House side with a say-so. They had a similar move over there. They 
have not reconciled it over on the House side. But it is bureaucracy at 
its worst. That is why you cannot come to the Government and you need a 
Senator to go through and lead you through here and lead you through 
there and everything else of that kind. Let us just get the one place, 
the one-stop shopping and say come in and here is what you have to 
prove and here is the entity that has the expertise and they will have 
it. And we will have the money for them. They made 7 billion bucks the 
other day in an auction so we have plenty of money at the Federal 
Communications Commission to do this unbundling, dial parity, 
nonportability, interconnection, public interest standard, measuring 
market forces and its competitive nature.
  We have all that and let us put it in one place. Let the lawyers get 
this in one place. Let them get a formative decision. And if at any 
time the Justice Department finds, as they did against AT&T in the 
1970's, and they started in and they went with the antitrust procedures 
and everything else of that kind on law enforcement enforcing the 
antitrust laws, fine business.
  I admire the Justice Department, particularly the Antitrust Division, 
particularly Assistant Attorney General, Ms. Bingaman, who has been in 
charge. She has done wonderful things with Microsoft and many of the 
other cases, and she has plenty of work to do without adding more on 
now to have another regulatory commission or body resolved into the 
Antitrust Division of the Department of Justice and come in, walking 
down the same street, measuring market forces and everything else. 
There is no separation, as they say, where we have the technology and 
the technicians and the experts with respect to megahertz and TV towers 
and radio frequencies and all of these other things, whereas they 
measure the market.
  On the contrary, the FCC has not only measured the market but 
measured it most successfully according to the circuit court of appeals 
just last week. I think we ought not to come in particularly with this 
phrase in here, where here we have the FCC with responsibility and they 
come in with the phrase that is devastating. It says here--people do 
not study these amendments that you have to read.
  Look at that amendment. I hope they can get a picture of that thing. 
You need a civil engineer and a compass, not just a lawyer. But it says 
here:

       In making its determination whether the requested 
     authorization is consistent with the public interest, 
     convenience and necessity, the Federal Communications 
     Commission shall not consider the antitrust effects of such 
     authorization in any market for which authorization . . .

  Well, the antitrust affects all within the marketing measurements 
that we have in here with the unbundling and the checklist and 
everything else, plus the public interest. So how in the world can they 
do half a haircut at one department and another half a haircut at 
another department and call this good law? It is a terrible amendment 
and it ought to be killed.
  Mr. ASHCROFT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. ASHCROFT. Mr. President, I rise in strong opposition to this 
amendment.
  I recommend that my colleagues in the Senate carefully consider the 
implications of this effort to grant an unprecedented role to the 
Department of Justice. I happen to have the privilege of serving in the 
U.S. Senate now, but I once had the responsibility of being attorney 
general for the State of Missouri. I hope that my comments as an 
enforcement officer of an antitrust unit carry extra weight as we 
examine these very important issues.
  We have heard the word ``power'' used often in this debate. On 
Thursday morning in summarizing this bill, S. 652, one Senator said, 
``It is about power, Mr. President, power to do what they want to do.''
  I see it differently, Mr. President. Let us make no mistake about it, 
this bill is about change. This is a bill which allows us to look at 
the future and embrace it. This bill will allow us to look at the 
technology and opportunity and creativity of the future and take 
advantage of it. This amendment is about power, and this amendment 
would layer bureaucracies in the face of change.
  Those individuals who want to set another layer of bureaucracy on the 
communications industry and upon the technology, creativity and 
innovation, those who would sponsor this kind of an amendment that 
would place lawyer after lawyer of the Justice Department in this mix, 
are individuals who have gone to the precipice of the future. They have 
looked into the future, and they are running back in fear, running for 
the old ways of saying that we need Government to protect us from the 
system of competition.
  The truth of the matter is, nothing could be further from the truth. 
For what we have seen not only in the cellular area, where we have had 
competition, but in the long distance area, where we have had 
increasing competition, is that we do not need protection from the 
competition. Certainly not multiple governmental bureaucracy 
protection. We need to let competition help us to have the lower rates 
in local telephones which we have found in the long distance area. We 
need competition to provide for us the benefits, as in the area of 
cellular phones, which competition has been very valuable to us in 
improving our opportunity for service. So competition is what will help 
us, and competition in the context of regulation under the Federal 
Communications Commission, but not with the needless layering of 
bureaucratic regulation by the Justice Department.
  George Gilder is an individual whose name has already been mentioned 
in several of the conversations in the debate, particularly by the 
Senator from Alaska. Before publishing his more recent volumes about 
computers, microcosms, and telecosms, Mr. Gilder wrote:

       In every economy, there is one crucial and definitive 
     conflict. This is not the split between capitalists and 
     workers, technocrats and humanists, government and business, 
     liberals and conservatives, or the rich and poor. All of 
     these divisions are partial and distorted reflections of the 
     deeper conflict: The struggle between past and future . . .

  The truth of the matter is, we are confronted again by a struggle 
between the past and the future, between the existing configurations of 
industries and the industries that may someday replace them.
  Gilder goes on to say:

       It is a conflict between established factories, 
     technologies, formations of capital, and the ventures that 
     may soon make them worthless--ventures that today may not 
     even exist; that today may flicker only as ideas, or tiny 
     companies, or obscure research projects, or fierce but 
     penniless ambitions; that today are unidentifiable and 
     incalculable from above, but which, in time, in a progressing 
     economy, must rise up if growth is to occur.

  I believe that is the division we see today. It is the division 
between those who want to protect us from the future and from those who 
want to capitalize on the future. It is a division that divides the 
people who want to embrace the past and those who want to accelerate 
the future to bring the benefits of the communication age to the 
American people and to protect the capacity of the American worker to 
continue to provide the very best, the foremost, the cutting edge of 
communications technology to the technology industry worldwide.
  Mr. President, George Gilder wrote in 1981 about the division of the 
past and the future, but I believe we are unlikely to find any better 
explanation for the intense activities surrounding this bill. Both in 
Commerce Committee sessions and on the floor, one Senator after another 
has testified to the extraordinary attention given this single piece of 
legislation. Most Senators imply what the Senator from Arizona said in 
his opening remarks last week that never before has there been such 
intense and continued and high-priced lobbying. I imagine that the two 
managers must have felt the urge last Wednesday evening to stand up and 
say, ``Mr. President, I rise to bring S. 652 kicking and screaming to 
the floor of the Senate.''
  These two Senators, along with other senior Senators on the Commerce 
Committee, have fought the telecommunications battles longer than I 
have even been aware of them, and the counsel of experience rings 
through their testimony. This is no ordinary bill. The stakes are 
higher than any of us can [[Page S8157]] quantify. This bill is 
fundamentally about change. As Mr. Gilder told us 15 years ago, change 
is always the definitive conflict.
  So, Mr. President, with these thoughts in mind, I want to focus on 
the amendment we are now considering, the compromise between Senator 
Dorgan of North Dakota and Senator Thurmond of South Carolina. Unlike 
the bill in general, this amendment is not about change in our world, 
but about power in our Government. It is about the power to choose the 
winners and the losers in our economy, to stand above the marketplace 
and to play gatekeeper.
  I think it is important for us to resist that temptation, to resist 
the idea that Government should somehow choose the winners, choose the 
losers; that the pollution of politics would possibly infect those who 
would succeed and those who would fail. Let us have a level playing 
field, let us have a clear competition, let us let the marketplace make 
those decisions.
  The purpose of this amendment is to stand between the marketplace and 
the people. It is to play gatekeeper. The purpose of the amendment is 
to hand to the U.S. Department of Justice unprecedented power in 
shaping the future of the telecommunications of America. This is not a 
light matter. This is not a matter of no consequence. This is an 
unprecedented power that Congress has never before granted to anyone.
  Supporters of this amendment have been asked to give us a precedent 
for their proposal, but they have not provided one. As we have learned 
from the debate last week, the precedent is not to be found in the MFJ 
decree. Justice only has an advisory role in the court action of Judge 
Greene, the same role that is reserved and preserved in this bill in 
its current form.
  It is not in our best interest to elevate or escalate that role. I 
will not get into the entire argument here; however, it is worth 
mentioning that a very insightful colloquy took place on this floor 
last Thursday night. I encourage all Senators to read the outstanding 
arguments presented by the two managers, the Senator from South Dakota 
and the Senator from South Carolina. This issue should have been put to 
rest that evening. But proponents of the amendment press ahead, 
ignoring the experience of those Senators most able to judge whether or 
not balance has been reached in this bill.
  Senator Hollings stood up and admitted he is a good witness to settle 
this case. I wish the other Senators would accept this.
  I do wish to briefly comment on a specific argument that was 
suggested Thursday night that handing the Justice Department 
unprecedented authority is somehow justified because we are passing 
unprecedented legislation. Throughout this debate, that particular 
argument has been advanced by a Senator, and that Senator has advised 
this body to proceed with caution on such a monumental piece of 
legislation. We should instead have caution before putting the Justice 
Department and its lawyers into a historic role of replacing Congress 
as the Nation's policymaker.
  The transition from monopoly to competition requires great care. 
Indeed, it requires clearly defined parameters. For this reason, we 
have developed a substantial checklist. It is in the legislation. It is 
here in specific detail. The checklist requires safeguards, so we put 
safeguards into the bill. Some have suggested that it requires 
experienced counsel, so we provide for an advisory role by the 
antitrust experts at the Department of Justice.
  Let me emphasize this final point about the advisory role. We provide 
for an advisory role by antitrust experts, as the Department of 
Justice. Contrast this to what the others are saying. Some Senators 
believe that the lawyers at the Justice Department are the only experts 
in competition in this country. I quote from a statement made last 
Wednesday evening.

       Lawyers from the Justice Department understand competition. 
     The Antitrust Division of DOJ understands where and when 
     competition is, and they are about the only ones in this town 
     that, at least by my measurement, are out there fighting to 
     make sure the marketplace is in fact working.

  That argument was made on the floor of this Senate. Mr. President, I 
find this statement hard to believe. If the Justice Department is the 
only entity in this town, or in America, that is fighting to make sure 
that the marketplace really works, why do we not hand over 
micromanagement of the entire economy to them? You could extend the 
logic of this amendment from the telecommunications industry--it is an 
important industry--if you have to have the Justice Department 
micromanaging that part of Government, why not apply it to all other 
commercial industries? Why not start with all of the other departments 
within the Antitrust Division--transportation, energy, agriculture, 
computers, finance, foreign commerce, professions, intellectual 
property--take the professions divisions. Do we hear the call from 
Congress to regulate lawyers from entering different types of practice? 
Can you imagine the uproar if Congress proposed to have the Department 
of Justice determine when each law firm could practice different types 
of law? Well, we do not have to imagine what they are proposing here. 
What they propose is to single out the most dynamic economic sector of 
the American economy, the sector undergoing the most rapid and dramatic 
change, the sector in which we have perhaps the most dramatic 
competitive advantage in a marketplace--a productive competitive 
marketplace, the world marketplace--and they want to add the ingredient 
of governmental cement to the process. We do not need to freeze and to 
repress the developments in our industry, we need to energize them, and 
having the Federal Communications Commission there is enough 
regulation, particularly when you have the Justice Department with its 
ability to be advice givers in antitrust.
  Then we are told that we should not fear more governmental 
involvement in the private sector. This is not some ``big 
bureaucracy,'' one Senator said. They only have 800 lawyers over there 
at the Antitrust Division. Imagine that, Mr. President. We are trying 
to convince the American people that a group of 800 Government 
attorneys are going to be helpful in providing productivity and 
competitiveness for our telecommunications industry. In fact, we tell 
the people that if these 800 lawyers do not help us by picking the 
economic winners and losers, then the fastest growing industry will 
fail and rain unknown harm on American consumers.
  Well, let us consider, stop and take a look at some of the decisions 
we have made in this bill that were influenced by the present policies 
of those 800 lawyers at the Department of Justice. Let us see if their 
past performance leaves us with nothing to worry about. Take the GTE 
consent decree. In 1982, GTE purchased a company called Sprint. The 
Department thought that these two companies getting together providing 
local and long distance services could be dangerous to competition, so 
they said that GTE, before the acquisition of Sprint could take place, 
would have to agree to a consent decree, with which the company 
complied. With that consent decree, 10 years later, in place, GTE had 
disposed of all the Sprint assets, and had divested itself of the 
entire acquisition. But the Justice Department refused to lift the 
decree.
  By 1992, GTE was essentially the same company that had existed before 
it had purchased Sprint when it had operated without the oversight of 
the Justice Department and its army of lawyers. But was the Justice 
Department willing to relinquish its control over a private business 
once the bureaucracy had worked its fingers into the situation? 
Obviously not.
  The Justice Department would not lift the decree, and has not lifted 
the decree to this very day, in spite of the fact that the acquisition 
of Sprint was the reason for the decree, and the divestiture of Sprint 
happened years ago. And GTE has returned to the kind of company it was 
prior to the acquisition. This issue of Sprint was a high priority for 
me during the course of drafting this bill. If Justice was not prepared 
to act properly on this matter, then I felt Congress should not 
reassert the authority of the Justice Department. I am happy to say 
that having passed the majority leader's deregulation amendment last 
week, the Senate has finally removed GTE from the micromanaging 
influences of the Department of Justice. [[Page S8158]] 
  Please note, Mr. President, that the GTE consent decree was lifted by 
Congress--or will be lifted by Congress, not by 800 of the so-called I-
am-here-to-help-you friendly lawyers at the Justice Department.
  In a case similar to the GTE case, a company called AirTouch has been 
relieved of its restrictions by this bill. This was a cellular carrier, 
once a subsidiary of PacTel. It has been an independent, publicly 
traded company since April 1994. Again, Justice would not remove the 
MFJ restrictions that were reserved for Bell companies. Again, Congress 
lifts the restrictions in this bill.
  It might be interesting to add here that after AirTouch submitted an 
opinion at Justice stating its position that it was no longer bound by 
the MFJ, a competitor in the long distance market filed a letter 
opposing MFJ relief for the cellular carrier. We cannot say for certain 
whether pressure from a long distance carrier played any role in the 
inaction of Justice--their failure to relieve AirTouch of the 
restrictions. We can say for certain that this is the exact type of 
legal and political pressure that will be finding its way into an 
inhibition of the productivity and competitiveness of the 
telecommunications industry if we layer bureaucracy upon bureaucracy, 
intermeddling, and seeking to micromanage what the marketplace can 
properly regulate. We can say for certain that we do not want this type 
of legal and political pressure, which would be intensified to a degree 
beyond comprehension if Justice is put in the position of deciding MFJ 
relief for all Bell companies.
  I am not saying, by any means, that 800 friendly lawyers at Justice 
do not know what they are doing. I am sure that they are experts in 
antitrust matters. Again, this amendment does not ask them to 
investigate antitrust. It authorizes them to implement congressional 
policy.
  The question is whether this is the proper role of Justice. I think 
the answer is clear, and I think the answer is resounding. I think the 
answer is simple. I think it is time for the Congress to make that 
answer unmistakable. The answer is no. Let Justice continue its role as 
a prosecutor of the Sherman and Clayton Acts.
  Let us consider another example in the cellular phone industry. As we 
all know, several years ago in every city and town, two licenses were 
granted for providers of cellular phone service. In each of the seven 
Bell service areas, the incumbent Bell company was granted one of the 
two licenses. But the playing field was not even. One of the great 
advantages of cellular is its independence of the traditional landline 
and wire infrastructure. Cellular operators are not subject to the 
limitation of the LATA boundaries. They are, by definition, mobile 
phone systems. This allows some cellular companies to offer creative 
price discounts to their customers. I say some companies are allowed to 
offer these creative price discounts, because others are not. In each 
service area, some carriers can offer customers one price for all 
calls, whether they are local or long distance.
 Some carriers cannot. The law says so.

  The Department did not act to change this policy. A combination of 
court decisions and the Department's inaction has left Bell cellular 
affiliates unnecessarily restricted to its wireline boundaries, while 
non-Bell competitors enjoy the complete benefits and flexibility that 
the wireless world presents.
  In fact, an interesting case developed that led to an incredible 
situation in Arizona. The non-Bell cellular carrier could offer the 
entire State in Arizona as a local call. The Bell affiliate could not, 
bound by the rules that govern wire transmissions. When the non-Bell 
operator sold its license to another Bell affiliate, that Bell 
affiliate, having purchased the cellular company, could no longer offer 
the entire State as a local call. Even though it was not even operating 
as a cellular carrier in its own landline region, the Bell affiliate 
operating in another part of the country had to respond to criterion 
that governed, according to the Department, its own operation in the 
area of the landline.
  So on one day, the cellular customer in Flagstaff could call Tucson 
for the price of a local call. Because the company that he was using 
was bought by a Bell company, the next day they were charged long 
distance rates.
  Now, the customers in Arizona were denied substantial savings because 
of the Department policy. It is that simple. That kind of officious 
intermeddling, micromanagement is counterproductive, distorting 
competition rather than promoting competition, and costs consumers 
benefits.
  The Department did not move aggressively to end this disparity. It is 
still undecided now on how to proceed.
  Making the decision is one of the tough things. The marketplace makes 
decisions efficiently and effectively. I believe competition also 
rewards those who make the right decision in the marketplace.
  The Department is not the group which, in the words of one Senator 
``is out there fighting to make sure that the marketplace really 
works'' in that sense. The Department in Arizona and other cases like 
we just mentioned really stood between the benefits and the marketplace 
and the consumer. The Department denied Americans the opportunity to 
benefit from competition that we all believe brings out the best in 
each of us and the best in industry.
  Mr. President, once again, Congress must act to correct this 
senseless policy. Parity had to be reinstated, and Congress had a 
choice. Either we lift all restrictions on cellular carriers so that 
there be a level playing field, allowing cellular phone operators and 
proprietors of cellular companies, saying any call you make is like a 
local call. Or we could extend the artificial restrictions to all 
carriers.
  Now, the bill that we have here lifts those restrictions. This bill 
lifts all restrictions on the cellular industry and allows the cellular 
provider to say: Go ahead, make a long distance call for the same price 
a local call.
  Congress acts in its proper role, and the FCC is instructed to 
implement that policy.
  Supporters of this bill have expected the delicate balance contained 
in the bill to be severely tested. The first test was on the definition 
of public interest. There are many who think that 14 criteria are 
enough, and that should do it.
  There was a balance struck in the development of this bill. That 
balance was that we would protect the public interest by adding a 
definition including the public interest.
  I must admit, Mr. President, I find merit with the arguments of the 
Senator from Arizona, [Mr. McCain], among the cosponsors of the 
amendment that sought to take that public interest out of the bill.
  I am uncomfortable with the breadth of the term ``public interest,'' 
and I would otherwise prefer that we leave as little room for 
subjective analysis as possible; that the Congress, representatives of 
the people, actually specify the policy, and that policy be carried out 
by the FCC.
  But the managers called for a balance and they vowed to defend the 
balance. They are to be commended for defending that balance. I cannot 
think of two Senators who would better understand this matter than the 
two Senators who bring this bill to the floor. They may have brought it 
here kicking and screaming. This has been a hard bill to put together. 
They deserve our support in maintaining this balance.
  This amendment is one of the most serious assaults on the bill's 
balance. A vote in favor of this amendment would not only destroy the 
balance of the bill, it would destroy the reason for having the bill, 
and that is to promote more competition and to extricate from this 
arena the heavy hand of Government.
  The idea that when we look into the face of the future, we are so 
gripped with fear, we not only have to have regulation, but we have to 
have layered regulation, is an idea that we need to reject.
  Let me leave a few final observations. The committee has heard from 
over 30 entities with a direct involvement in this legislation. Senator 
Hollings, to his credit, went through the entire list last week.
  Sure, it involved some big companies engaged in big battles. We even 
have present monopolies battling against former monopolies. The Baby 
Bells are battling against AT&T, Mama Bell.
  But the American people know who has the biggest monopoly of all. The 
biggest monopoly of all is the monopoly of Government. The biggest 
battle [[Page S8159]] of this bill is not between the Baby Bells and 
Mama Bell, and the long distance companies and the local exchange 
carriers; the biggest battle is found right here in this amendment. It 
is between the Congress and the Department. It is a battle over who 
sets policy in this country.
  I received a copy of a letter sent to Chairman Pressler by Henry 
Geller, former communications policy advisor under President Reagan, 
who also happened to testify at one of the committee hearings. If the 
chairman has not already done so, and if the Senator from South Dakota 
does not mind, I would like to submit the entire letter for the Record. 
I ask unanimous consent that the letter be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                      Henry Geller, Communications
                                Fellow, The Markle Foundation,

                                     Washington, DC, June 7, 1995.
     Senator Larry Pressler,
     Chairman, Senate Commerce Committee, Russell Senate Office 
         Bldg., Washington, DC.
       Mr. Chairman: We are disinterested parties who have 
     participated in the legislative process leading to S. 652. We 
     address here the question of the appropriate role for the 
     Department of Justice on the issue of entry by the divested 
     Bell Operating Companies (BOCs) into the interexchange (IX) 
     long distance and manufacturing markets. We urge that it 
     would be an inappropriate and seriously flawed process to 
     give Justice a decisional role.
       The Department and the antitrust court were necessary to 
     effect the break-up of AT&T. But that court, using the 
     Department as its ``staff'', is now engaged in essentially 
     regulatory activity--namely, the terms and timing of full 
     entry by the BOCs into all sectors of telecommunications. The 
     FCC, as the expert agency with centralized authority in the 
     telecom sphere, is engaged in the same area, but under an 
     antiquated law.
       A main thrust of the pending legislative effort is to 
     remove the antitrust court from the regulatory policy making 
     process and to have the important policy guidelines set by 
     the Congress and implemented by the established Congressional 
     delegatees in this field, the FCC and the State commissions 
     (with the FCC steering and the States rowing). That is the 
     sound approach of S. 652.
       Justice, however, argues strongly that it should continue 
     to have a decisional role on the two remaining MFJ issues--IX 
     and manufacturing--and should apply an antitrust standard to 
     these issues. But that makes no sense at all. If these 
     matters are to be settled under antitrust law, there is no 
     reason to remove the antitrust court or the appellate court--
     to, in effect, leave the ``staff'' as the decisional point in 
     the antitrust field. The whole point of the legislative 
     exercise is to end the antitrust chapter and in its place to 
     substitute Congressional guidelines implemented by the 
     traditional regulatory scheme. Stated differently, with the 
     antitrust court removed, what is left is a regulatory scheme. 
     Justice's role is to prosecute antitrust cases--not to be a 
     regulatory agency duplicating the FCC, so that there will now 
     be two regulatory agencies.
       This is not a new position for us. In a 1989 Report to the 
     Benton Foundation on the Federal regulatory structure for 
     telecom, the same analysis and conclusion--that this is a 
     ``cockamamie policy arrangement''--are set out in the context 
     of the then contentious issue of BOC entry into the 
     information services. The pertinent discussion is attached as 
     an appendix. We particularly recommend perusal of the 1988 
     statement of Assistant Attorney General Charles Rule, who was 
     then in charge of the Antitrust Division in the Reagan 
     Administration.
       The Department asserts that it has developed considerable 
     expertise on the issues involved. Of course it has. It can 
     fully bring that expertise to bear in submissions to the FCC. 
     As a party respondent in any appeal from an FCC decision, it 
     can make known its position to the appellate court (and 
     indeed it can appeal in its own right). It can participate 
     fully in any oversight proceedings of the Congress. Finally, 
     it continues to have broad authority under the antitrust laws 
     to prosecute anti-competitive conduct that it regards as 
     violative of those laws.
       The Department's expertise is thus not lost at all. What is 
     to be avoided is for the Congress to establish two regulatory 
     agencies at the Federal level to deal with the regulatory 
     problems of BOC entry into the IX manufacturing fields. Such 
     duplication constitutes bureaucratic layering that the 
     Congress and indeed, the Administration should avoid.
       The Administration, perhaps unconsciously, may be motivated 
     by what is a common phenomenon in this town--protection of 
     ``turf.'' There is no question as to what is motivating the 
     opposition of private opponents of BOC entry. The more hoops 
     the BOCs have to jump through--the more decisional hurdles 
     for them, the more chance there is of delaying their entry 
     and thus delaying having to face their competition. We do not 
     blame the opponents for this effort: As the late Senator 
     Magnuson wisely said, ``All each industry seeks is a fair 
     advantage over its rivals.''
       But if the Administration for reasons of ``turf'' has lost 
     its way, it is all the more reason for Congress to adhere to 
     sound process. We hope, therefore, that S. 652 follows the 
     appropriate procedure now set forth in the bill.
       Thank you for your consideration of our views on this 
     important issue.
           Sincerely yours,
                                                      Henry Geller
                                           (For Barbara O'Connor).

  Mr. ASHCROFT. I would like to share the key point expressed:

       A main thrust of the pending legislative effort is to 
     remove the antitrust court from the regulatory policymaking 
     process and to have important policy guidelines set by the 
     Congress and implemented by the established congressional 
     delegates in this field, the FCC and the State commissions. . 
     . . That is the sound approach of S. 652.

  In closing, what is the role of Congress, if not to set policy? Mr. 
Geller goes on to ask the same question I asked today. He put it this 
way:

       If these matters are to be settled under antitrust law, 
     then why are we passing this legislation? One Senator keeps 
     mentioning the length of this bill. Well, we could reduce 
     these 140 pages down to one simple paragraph and let the 
     Justice Department take over from there. But that is not what 
     we want to do, nor is that what we ought to do. That is not 
     to be the case because the role of Justice is to prosecute 
     cases, not to manage or micromanage industry. Congress has 
     the role of setting national policy. These two roles are 
     fundamentally different, and I know which one I expect to 
     fulfill on behalf of the people of Missouri. I will not vote 
     to transfer policymaking to the Department of Justice, and I 
     encourage the Senate to reject this amendment.

  Mr. President, in closing, I offer an observation: We are debating 
fundamental differences in attitudes. Some Senators say the competition 
is not the best regulator. I say the American people are the best 
regulator. Some Senators have looked into the future and they recoil in 
fear. They argue that the American people are afraid of the future, 
that they are begging for Government to protect them from the unknown.
  I have more faith in the American people. That faith springs from my 
belief that the enterprising spirit of our people will reap 
immeasurable benefits in our country, especially in this exciting 
industry.
  We do not wait for a busload of citizens to march into our office and 
demand this bill. We should pass this bill because Congress must also 
let the people have the benefits of the 21st century. We should pass 
this bill because this bill will provide a basis for our 
competitiveness and productivity, and the growth of this industry is 
vital to our future, and the benefits will go to every citizen in 
America.
  Mr. Dole addressed the Chair.
  The PRESIDING OFFICER. The majority leader.
  Mr. DOLE. Mr. President, I have been discussing the situation with 
the Senator from Nebraska, Senator Kerrey. As I understand it, he would 
be willing--I do not want to cut anybody off. This is an important 
amendment, as I said on Thursday and again on Friday. If we could agree 
that we could take up other amendments and then move to table the 
Kerrey amendment, say at noon tomorrow, would that be satisfactory to 
the Senator from Nebraska?
  Mr. KERREY. That would be satisfactory. I have no objection to that. 
It is the Dorgan-Thurmond amendment.
  Mr. DOLE. Dorgan-Thurmond, excuse me. I know the Senator from 
Nebraska has an interest in it. I would have to check with both Senator 
Dorgan and Senator Thurmond to see if we could get that agreement so at 
noon the Senator from South Dakota, Senator Pressler, could move to 
table. That would satisfy the Senator from Nebraska.
  I think Senator Bumpers is prepared to come to the floor to offer an 
amendment and maybe Senator Leahy. I am advised that may be an 
amendment that would take a considerable amount of time.
  As I look at the list of amendments, there are 24 amendments that are 
pending. Maybe there are some that will be accepted. I only see one 
here noted that would be accepted.
  That would indicate we still have a number of amendments to deal with 
in addition to the major amendment offered by Senators Dorgan and 
Thurmond. I hope we could complete action on this bill tomorrow evening 
so we could start on welfare reform on Wednesday.
  I know the managers are prepared. I have just been advised by the 
chairman [[Page S8160]] of the committee he is prepared to stay here 
all night if necessary. So I urge my colleagues on both sides, I looked 
down the list. There are Democrats and Republicans who have amendments. 
We are open for business. We will have votes this evening. I think most 
everybody has been able to return from their States, and I hope we can 
dispose of some of these amendments tonight.
  I notice an amendment by Senators Exon, Leahy, and Coats, a 
bipartisan amendment. I do not know what it is; something on pay 
phones, foreign ownership, red lining, burglar alarm. Senator Leahy has 
another amendment. Senator Feinstein has three amendments.
  So there are a number of amendments on each side. If I could just ask 
my colleagues to cooperate with both Senator Hollings and Senator 
Press- ler.
  As soon as we get clearance, then, I will ask consent that at noon 
tomorrow the Senator from South Dakota be recognized to table the 
Dorgan-Thurmond amendment.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER (Mr. DeWine). The Senator from Nebraska.
  Mr. KERREY. I know the Senator from Montana is on the floor, and I 
will be here for a while longer. I just want to respond. There were 
actually three speakers previously who opposed this amendment and said 
many things. The distinguished Senator from Missouri did not cite me by 
name, but he quoted me generously during his own presentation, and 
every quote he opposed.
  Let me begin. One of the strongest arguments the distinguished 
Senator from Missouri and others have made is that you cannot trust the 
Department of Justice. You should not involve them with this. They do 
not have a role.
  I, last week, made a mistake in assessing the Department of Justice. 
I said they have approximately 800 lawyers because I was informed that 
in 1982, when the consent decree was filed, that is approximately how 
many people were down there. That is true, 860 --about 800 actually, in 
1982. But today there are 323 lawyers and 686 total employees, total 
staff at the Antitrust Division at the Department of Justice. It is a 
very small agency.
  This bill is about power. I do not walk, as the Senator from Missouri 
implied, to the precipice of change and be afraid of change. I am not 
afraid of this bill other than what it might do if we do not have the 
agency that has not only current responsibility but experience in 
managing what this bill describes we are going to do. This bill says we 
are going to move from a monopoly to a competitive environment. That is 
what it attempts to do. We are going to move from a monopoly in local 
telephone service in a market--no free market down there, folks. This 
is not a little mom and pop shop that started in business 10 years ago 
now with local telephone service. They were given a monopoly franchise.
  If the people of the United States of America are trying to figure 
out who do I trust in this deal, it was not the peoples' Congress in 
1982 that busted up the monopoly, that gave them a competitive 
environment in long distance, that managed that transition from 
monopoly to competition that is cited over and over and over by people 
who come down here to the floor. It was not the U.S. Congress. It was 
the Justice Department. A Reagan appointee goes to the court and files 
a consent decree with AT&T, and that is what this is all about.
  To set this thing up as ``you are either for the devil or for the 
angels'' sort of an argument does not, it seems to me, lead to a very 
constructive argument. The question really is how are we going to 
manage this? How are we going to manage this transition now? We have 
decided. There is very little argument. I do not think there is a 
single Member of this body, maybe there is, maybe there is somebody who 
believes we ought to preserve the monopoly at the local level. I do 
not. The Senator from Missouri acts like that is the argument here: 
Choose the market or choose a regulatory environment. Have the 
Government tell you what to do or let the market tell you. That is 
nonsense, baloney. That is not the argument here. That is not the 
question that needs to be answered.
  If you believe you want to preserve the local monopoly and keep it 
the way it is, fine. I do not hear anybody or have not heard anybody 
yet argue that is what ought to occur. I caution Members that when we 
move from that monopoly to a competitive environment, there is going to 
be trauma, there is going to be real trauma, and we better make sure we 
get this thing right because it is not the demand for change we are 
talking about here and that I am an advocate for. The demand for change 
is not coming from townhall meetings. It is not coming from citizens in 
Missouri or citizens in Nebraska or citizens in Ohio who are saying, 
``I am unhappy with local telephone service, I am unhappy with my cable 
service, I am unhappy with broadcast, except for some of the things 
having been raised having to do with obscenity and violence and that 
sort of thing.'' That does come from town hall meetings. But as far as, 
``Do I want a monopoly or do I want to deregulate?'' That is hardly a 
debate going on out there on Main Street.
  We have made a reasoned judgment based upon input from a variety of 
different people that we can go to a competitive marketplace in local 
service. These arguments have a way of turning it around every now and 
then. In 1986, a couple of years after the consent decree was fully in 
place and the divestiture had occurred, I supported legislation in the 
Nebraska Legislature to deregulate the telephone companies on the 
question of pricing. I tried to get them to change the law. The 
legislature changed the law to allow competition at the local level and 
was told--indeed I was rolled at the time, not told--I was told and 
rolled we were not going to do that. Technology would not allow 
competition. That was the argument in 1986. So I lost that battle.
  We deregulated on price but we did not deregulate to produce a 
competitive environment because we were told the technology would not 
allow it. And lest anybody think I have walked to the precipice and am 
fearful of embracing change, as was suggested earlier, in 1986 I asked 
and was given the authority to be the lead Governor for 
telecommunications for the National Governors' Association. We reached 
a conclusion--I had a little task force --that we ought to, in an 
expeditious fashion, eliminate the restrictions that were currently in 
place in the modified final judgment. I thought we had the votes. It 
was one of those deals where you were sure you had all the votes, did 
all the calling and everything. We had a meeting, annual meeting, in 
South Carolina in 1986. I was sure I had that thing won. That year I 
got rolled by AT&T. They came to that deal and said: Oh, no, if you 
loosen the restrictions and you have competition, all these things--
they did, like many of the speakers have said--here are the horrible, 
terrible things that are going to happen. Here are all the bad. Jobs 
are going to go down the toilet, things are going to explode and be 
bad. And we lost. We got rolled in 1986 trying to change that policy.
  So I understand that there is a lot of active interest in whether or 
not the Department of Justice should have a role. Earlier, the Senator 
from Missouri said, ``I am a former Attorney General and I have 
experience doing this.'' And he said ``I hope I am listened to.''
  Mr. President, I ask unanimous consent a letter from 24 State 
attorneys general be printed as part of the Record at this point.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                               State of Wisconsin,


                                        Department of Justice,

                                        Madison, WI, June 2, 1995.
       Dear Member of Congress/Senate: The undersigned state 
     attorneys general would like to address several 
     telecommunications deregulation bills that are now pending in 
     Congress. One of the objectives in any such legislation must 
     be the promotion of deregulation that fosters competition 
     while at the same time protecting consumers from 
     anticompetitive practices.
       In our opinion, our citizens will be able to look forward 
     to an advanced, efficient, and innovative information network 
     only if such legislation incorporates basic antitrust 
     principles and recognizes the essential role of the states in 
     ensuring that citizens have universal and affordable access 
     to the telecommunications network. The antitrust laws ensure 
     competition and promote efficiency, innovation, low prices, 
     better management, and greater consumer choice. If 
     telecommunications reform legislation includes a strong 
     commitment to antitrust [[Page S8161]] principles, then the 
     legislation can help preserve existing competition and 
     prevent parties from using market power to tilt the playing 
     field to the detriment of competition and consumers.
       Each of the bills pending in Congress would lift the court-
     ordered restrictions that are currently in place on the 
     Regional Bell Operating Companies (RBOCs). After sufficient 
     competition exists in their local service areas, the bills 
     would allow RBOCs to enter the fields of long distance 
     services and equipment manufacturing. These provisions raise 
     a number of antitrust concerns. Therefore, telecommunications 
     deregulation legislation should include the following 
     features:
       First, the United States Department of Justice should have 
     a meaningful role in determining, in advance, whether 
     competition at the local level is sufficient to allow an RBOC 
     to enter the long distance services and equipment 
     manufacturing markets for a particular region. The Department 
     of Justice has unmatched experience and expertise in 
     evaluating competition in the telecommunications field. Such 
     a role is vital regardless of whether Congress adopts a 
     ``competitive checklist'' or ``modified final judgment 
     safeguard'' approach to evaluating competition in local 
     markets.
       Second, legislation should continue to prohibit mergers of 
     cable and telephone companies in the same service area. Such 
     a prohibition is essential because local cable companies are 
     the likely competitors of telephone companies. Permitting 
     such mergers raises the possibility of a ``one-wire world,'' 
     with only successful antitrust litigation to prevent it. 
     Congress should narrowly draft any exceptions to this general 
     prohibition.
       Third, Congress should not preempt the states from ordering 
     1+intraLATA dialing parity in appropriate cases, including 
     cases where the incumbent RBOC has yet to receive permission 
     to enter the interLATA long distance market. With a mere flip 
     of a switch, the RBOCs can immediately offer ``one-stop 
     shopping'' (both local and long distance services). New 
     entrants, however, may take some time before they can offer 
     such services, and only after they incur significant capital 
     expenses will they be able to develop such capabilities.
       In conclusion, we urge you to support telecommunications 
     reform legislation that incorporates provisions that would 
     maintain an important decision-making role for the Department 
     of Justice; preserve the existing prohibition against mergers 
     of telephone companies and cable television companies located 
     in the same service areas; and protect the states' ability to 
     order 1+intraLATA dialing parity in appropriate cases.
       Thank you for considering our views.
           Very truly yours,
         Tom Udall, Attorney General of New Mexico; Grant Woods, 
           Attorney General of Arizona; James E. Doyle, Attorney 
           General of Wisconsin; Winston Bryant, Attorney General 
           of Arkansas; Richard Blumenthal, Attorney General of 
           Connecticut; Garland Pinkston, Jr., Acting Corporation 
           Counsel of the District of Columbia; Calvin E. 
           Holloway, Sr., Attorney General of Guam; Tom Miller, 
           Attorney General of Iowa; Chris Gorman, Attorney 
           General of Kentucky; M. Jane Brady, Attorney General of 
           Delaware; Robert A. Butterworth, Attorney General of 
           Florida; Jim Ryan, Attorney General of Illinois; Carla 
           J. Stovall, Attorney General of Kansas; Scott 
           Harshbarger, Attorney General of Massachusetts; Hubert 
           H. Humphrey III, Attorney General of Minnesota; Joseph 
           P. Mazurek, Attorney General of Montana; Drew 
           Edmondson, Attorney General of Oklahoma; Jan Graham, 
           Attorney General of Utah; Christine O. Gregoire, 
           Attorney General of Washington; Jeremiah W. Nixon, 
           Attorney General of Missouri; Heidi Heitkamp, Attorney 
           General of North Dakota; Charles W. Burson, Attorney 
           General of Tennessee; Jeffrey L. Amestoy, Attorney 
           General of Vermont; Darrell V. McGraw, Jr., Attorney 
           General of West Virginia.

  Mr. KERREY. Mr. President, with some assist from my drugstore eye 
glasses, let me read one paragraph from it. It says, ``The United 
States Department of Justice should have a meaningful role in 
determining, in advance--not after the fact--whether competition at the 
local level is sufficient to allow an RBOC to enter the long distance 
services and equipment manufacturing markets for a particular region.''
  Understand we are not just talking about the interLATA long distance. 
We are also talking about removing the restrictions on manufacturing.
  So the question is, ``Do you have some competition at the local 
level?"
  If you have it, it will allow you to get into previously restricted 
areas.

       The Department of Justice has unmatched experience and 
     expertise in evaluating competition in the telecommunications 
     field. Such a role is vital regardless of whether Congress 
     adopts a ``competitive checklist'' or ``modified final 
     judgment safeguard'' approach to evaluating competition in 
     local markets.

  Mr. President, I really do not believe this is one of those 
amendments that ought to be characterized as a choice between picking 
the ``dreaded Government regulators who are going to micromanage 
everything in your life'' or choosing the market. But what we are 
attempting to do in good faith is answer the question, ``How do we 
manage this thing?'' This is an unprecedented change, unprecedented 
that Congress is going to attempt to manage. We have reached the 
decision, I believe a majority of us have, that we should use 
competition in the local market, competition in manufacturing, 
competition in services, competition in switching, not to regulate but 
to determine what is the best service, what is the best piece of 
equipment, what is the best switching offered out there. Let 
competition determine that. We have been successful in long distance. 
We grow confidence based upon success. We can do it at the local level 
and in manufacturing. We are about at the edge of enacting legislation 
to do that.
  The question before us is, ``Should we give the Department of Justice 
more than a consultative role?"
  I would like to offer a couple of things. Earlier the Senator from 
South Dakota I believe had a question having to do with administrative 
law with the Department of Justice, a very good question. I will try to 
restate the question--I do not know if I will get it right--the 
question was with the Federal Communications Commission, we have an 
open process. You have an administrative law that governs hearings and 
so forth. It has to be open. Then the Senator from South Dakota asked--
at that time it was the Senator from North Dakota on the floor--would 
the Department of Justice have that same kind of law apply to it? The 
amendment specifically inserts on the page that the Senator from South 
Dakota referenced on page 89, and it refers to the determination by the 
Commission and the Attorney General. They would issue a written 
determination on the record--after hearings and the opportunity for a 
commitment. So the language that we discussed earlier, I say to the 
distinguished chairman of the committee, does not just refer to the 
Commission. It also refers to the Department of Justice.
  Second, I say it again for emphasis, we are not talking lawyering or 
a new bureaucracy. It is a parallel process. You apply specifically 
what one does, and what the other one does. You ask the guy that has 
the experience. We are trying to figure out. Do we have the competitive 
market, perhaps in a perfect fashion? You are looking for the person 
that got the job done before this, the person you ought to call on in 
the agency, a very small agency I point out, again to attempt to manage 
this transition again.
  Then one of the questions that comes up says, ``Well, we did not do 
this with airlines, we did not do this with trucking, and we should 
not, therefore, do this with telecommunications.'' Telecommunications 
is by many people's estimate one-half of the U.S. economy directly or 
indirectly. It is a big part of the economy, probably two or three 
times the size of the entire health care industry which was of great 
concern to us during our debate in 1993-1994. At least that is what has 
been represented to me. It leads directly to the manufacturing and the 
production of goods and services, or indirectly the information 
industry is now roughly half the U.S. economy. Not all of these are 
regulated. Many of these are unregulated businesses. We are talking 
about in any event managing a substantial amount of the U.S. economy; 
that is to say, not managing it. We are managing from a monopoly 
situation trying to transfer the control of the decisions away from 
regulators so that the marketplace is making those decisions. The 
reference earlier was that airline and trucking 
[[Page S8162]] would be a good example to use and based upon the 
success of airline and trucking deregulation we should not have a DOJ 
role.
  However, Mr. President, I look at a couple of incidents.

       From 1985 to 1989, during the transition from airline 
     regulation to competition, the Department of Transportation 
     (DOT) had the authority to approve airline mergers, subject 
     to advice from DOJ. In 1986, DOT approved two mergers over 
     DOJ's vigorous objections: Northwest Airlines' deal with its 
     main rival in Minneapolis, Republic, and TWA's acquisition of 
     its main competitor in St. Louis, Ozark. DOJ advised DOT that 
     each transaction would sharply reduce competition for air 
     travel into and out of the affected city. DOT rejected this 
     advice, concluding that the deals would not result in a 
     substantial reduction of competition in any market.
       Unfortunately, DOT--with little expertise in assessing 
     competition--was wrong. Just as DOJ predicted, the 
     transactions resulted in higher air fares and less choice for 
     travelers at the Minneapolis and St. Louis hubs. In fact, a 
     study by the General Accounting Office found that TWA's air 
     fares at St. Louis shot up at two to three times the rate of 
     all other air fares in the wake of the merger.
       The Department of Transportation now concedes that 
     assigning the job of making competitive assessments to it, 
     instead of DOJ, ``was not a success.''

  Mr. President, we are not talking about an assignment of 
responsibility here that is heavily bureaucratized. We are talking 
about a question that we ought to be able to assess, particularly given 
the fact that I believe it is the case that an awful lot of us are 
going to be held accountable for this vote. Those of us who are 
advocates of deregulation are attempting to answer the question, ``How 
do we do this in a fashion so that our consumers get the benefit of 
lower prices and higher quality that comes at a competitive 
environment?'' We want to make sure that, as you move from a monopoly 
to a competitive environment, the consumers indeed benefit from that 
transition.
  DOJ still has the role. It is not enough. DOJ has the role after the 
fact, not prior to the decision being made. The Antitrust Division is 
not doing the same thing as the FCC. It is not duplication, as has been 
alleged.
  As to the delays, I can go through that argument. I have gone through 
it once before. If you examine the detail of why there has been delay, 
I think the presentation of the charts going up to the right, in fact, 
fall on their face.
  The Department of Justice is not asking to be a regulator in this 
thing. I am not coming to the floor because I am concerned about the 
Department of Justice. I am not on the Judiciary Committee. I am on the 
Agriculture Committee, the Appropriations Committee, and the 
Intelligence Committee. I am not trying to figure out how to give some 
additional authority. They are not asking for regulatory authority. 
They are merely asking, and I think correctly so in this case, for some 
additional authority as we try to move from a regulated sector at the 
local level, at the local loop, and regulated sector in manufacturing 
as well to a competitive environment. If we get it right, we will end 
up being rewarded right along with the consumers with the praise as a 
consequence.
  Mr. President, I believe again that the 146 pages that we are about 
to vote on, whatever it is, relatively soon, we will be voting on final 
passage, I presume, is one of the most important pieces of legislation 
that I have had the opportunity to be a part of in my entire political 
career.
  I really want, as I have done before, to pay tribute to the Senator 
from South Dakota and the Senator from South Carolina both who have 
pushed on this thing. Leadership in the majority changed in November 
1994. That change did not result in the stopping of this legislation. 
These two men have worked very, very closely together. They have worked 
to try to come up with a reasonable solution. I think they have made a 
good-faith effort.
  I think this amendment improves the legislation. It does not repeal 
the legislation. It improves the legislation. The risk that we will be 
taking in giving the Department of Justice this role is relatively 
small given the risk of not giving them this role, in my opinion. If it 
turns out that things get slowed down and the wheels of progress start 
to grind, we can always reverse it. We are literally in uncharted 
waters. To my knowledge this has never been done before with a sector 
of the economy as large as this and which is growing. We are trying to 
figure out how to go where we have not gone before. This bill does not 
deregulate in a massive fashion.
 It is a structured for the movement from a monopoly situation to a 
competitive situation.

  I hope that this amendment can continue to be argued in a 
straightforward fashion, as the ranking Democrat and the chairman of 
this committee have thus far. I hope, in fact, that it is adopted. I 
believe it will improve the legislation. I believe the compromise 
worked out between the distinguished Senator from North Dakota and the 
distinguished Senator from South Carolina, though it lowers the test, 
does not remove the strength from the amendment which is to keep the 
Department of Justice, the agency that has demonstrated its capacity to 
get the job done, involved in this process.
  Mr. President, I yield the floor.
  Mr. DOLE. Mr. President, I now ask unanimous consent that the pending 
Dorgan-Thurmond amendment be laid aside until 12 noon Tuesday and at 12 
noon Senator Pressler be recognized to make a motion to table the 
amendment.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. DOLE. I thank the Senator from Nebraska. I think this will work. 
He may want to reserve some of that time before noon for final 
argument, maybe from 11 to 12 to be equally divided between--so you 
would have 1 hour of debate before the motion to table. So from 11 to 
12 noon, unless there is objection, will be an hour equally divided on 
that amendment.
  Mr. HOLLINGS. Right.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. DOLE. The time will be allotted by the managers or their 
designees.
  Mr. HOLLINGS. Right.
  Mr. DOLE. So now we are down to real business if we can get some 
other amendments over here.
  Mr. PRESSLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. Mr. President, I might review these checklists here.
  Mr. President, earlier today, I pointed out the system that we have 
set up that really explains this bill, how you get into other people's 
business under this bill, how we really do not need a Justice 
Department review.
  First of all, the first thing that happens under the bill that we 
worked out in the Commerce Committee between Senator Hollings and 
myself and other members--with all the other Members of the Senate 
invited to participate--the first thing is that the State certifies 
compliance with market-opening requirements. So the States are involved 
first of all.
  Next, the FCC affirms the public interest and convenience and 
necessity. That is another test. We debated that here on the Senate 
floor and in the Commerce Committee. Some of the conservative 
publications in town said we should eliminate public interest, but we 
decided not to. So that is another test.
  The next step is that the FCC certifies compliance with the 14-point 
checklist. I have a chart of the checklist over here, to prove there is 
competition. This is in place of the VIII(c) test. This says the 
regional Bells have opened up their markets.
  Next, the Bells must comply with a separate subsidiary requirement, 
that is, the Bell companies, to have a separate subsidiary, for at 
least a period of 5 years.
  Next, they have to meet the nondiscrimination requirement. They 
cannot give all their business to one subsidiary or stack it so the 
subsidiary is not a subsidiary.
  Next, there is a cross-subsidization ban which the Bells must comply 
with.
  Now, during all the time that this is going on, the FCC allows the 
Department of Justice full participation in all its proceedings. In 
fact, under the Hobbs Civil Appeals Act, the Department of Justice is 
an independent party in all FCC appeals. That is, if something happens 
here that the company is not satisfied with the FCC, they can appeal 
and the Justice Department can be their partner. So the Justice 
Department is involved in our bill as an active participant.
  Now, also the Bells must comply with existing FCC rules in rigorous 
annual audits, elaborate cost accounting, [[Page S8163]] computer 
assisted reporting, and special pricing rules.
  Meanwhile, when all this is going on, you still have the full 
application of the Sherman Antitrust Act, the Clayton Act, and the 
Hart-Scott-Rodino Act. So still the Justice Department is involved. 
There is sort of an implication here that if we do not give the 
Department of Justice an administrative decisionmaking role they are 
not involved. They are very much involved. They are very involved in 
antitrust laws, but they are still involved in full participation in 
all the proceedings, and they are involved in the Hobbs Civil Appeals 
Act. The Department of Justice can be an independent party in all FCC 
appeals.
  In addition to all this, the FCC must confer with the Attorney 
General and the Attorney General can recommend an VIII(c) test or a 
Clayton standard or a public interest standard, those three things.
  So I would like to point out that we already have a lot of 
conditions. By the time you go through all of this, it is going to cost 
a company and the taxpayers a lot of money, and it is going to require 
a lot of tests--14 tests--public interest test, the Justice Department, 
the separate subsidiaries. It goes on and on and on. So there is plenty 
of regulation and plenty of review in the proper regulatory agency.
  Now, a part of this is the so-called competitive checklist. This is 
the heart of the compromise that was reached. Some of the conservative 
magazines and some of the Senators wanted a so-called LeMans start 
where you set a certain date and everybody competes. The problem in 
telecommunications is you cannot get on everybody's wire; you have to 
use the other guy's wires and interconnections and unbundling of his 
system before you can compete.
  So we decided, after weeks of meetings--and all Senators were invited 
to these meetings, and their staffs--to develop the checklist. I must 
commend the Senator from Nebraska and his staff because they were 
present and helped write this bill. But so did several other Senators, 
Democrats and Republicans. This bill has been around a long time. It is 
the product of all 100 Senators' work.
  But in any event, the competitive checklist was developed, and at the 
FCC the companies come before the FCC and the FCC goes through this 
checklist, hopefully very quickly, and this replaces the market test, 
the VIII(c) or replaces the Clayton 7 Act or it replaces some other 
types of tests. But this is the test.
  First of all, access to network functions and services. That means 
interconnect. It means that the Bell company has to open up its wires. 
I went down to the big wire station of Bell Atlantic here in Washington 
to see all those wires. They have to open them up. That is what 
interconnect means. Let us say you and I wanted to form a local 
telephone company. We would be able to get into the wires of the 
regional Bell. That is interconnection.
  The second checklist item that the FCC uses before certifying is 
capability to exchange telecommunications between Bell customers and 
competitors' customers.
  Third, there has to be provided access to poles, ducts, conduits, and 
rights of way.
  Fourth, local loop transmission unbundled from switching. These next 
three are unbundling. That is, again, the company has to open up its 
systems, unbundle so somebody else can get in. I guess this has been 
compared to if you are making pizza and somebody else delivers your 
pizza. It probably would not be in such good shape. But we are 
requiring in these unbundlings that the other person, the competitor 
with the Bells, is treated well. When he gets into the regional Bell's 
wires, he does not get a buzz tone or be told to wait 3 minutes or a 
tape recording saying his call will be handled when it becomes 
convenient. The competitors will be given quality treatment.
  Unbundling. That is Nos. 5, 6, and 7. Local transport from trunk 
sites unbundled from switch. Local switching unbundled. And No. 4, the 
loop transmission unbundled from switching. These three are the so-
called unbundling tests.
  Then No. seven is access to 911 and enhanced 911. Enhanced 911 is 
where you just push one button for an emergency. Also access is 
required for directory assistance and operator call completion 
services. That is an important one in many cases. Next is white pages 
directory listing being available at a reasonable price.
  The ninth test is access to telephone number assignment; tenth, 
access to databases and network signaling, important if you are going 
to compete and get into the market; eleventh, interim number 
portability; twelfth, local dialing parity; thirteenth, reciprocal 
compensation; and fourteenth, resale of local service to competitors.
  What I am saying is we have a competitive checklist, which is the 
basis for getting into the local telephone business. So we are trying 
to get everybody into everybody else's business here. These are the 
portions of requirements that the FCC certifies.
  What the Dorgan-Thurmond amendment suggests is that after we finish 
all this, we then go over to the Justice Department for yet another 
test, though it is not a regulatory agency. We then ask the Justice 
Department to give their approval under the Clayton 7 standard, which 
is another standard.
  So if you survived in your State, if you met the competitive 
checklist, if you have met the public-interest test, if you have met 
the subsidiary test, and if you have met the nondiscrimination test and 
the cross-subsidization test, when you get through all of that, then 
you have to go over to the Justice Department.
  We are told this will only take 90 days; we are going to put a 90-day 
requirement on it. Even taking 90 days is another delay. Some say you 
can do this simultaneously. As a practical matter, you cannot. You have 
to get through your State, you have to get through the FCC, and now we 
are over here at the Justice Department. We do not need this additional 
review. That is more regulation. That is what we are trying to avoid.
  It is true, in the past, there have been suggestions for VIII(c), but 
we have come up with this checklist to replace it, which is quicker and 
covers all the subjects and has been agreed to by everybody. So we have 
a bill that finally has crafted a balance between the long distances 
and the Bells. We are now ready to go into business, but if the Dorgan-
Thurmond amendment is adopted, no, wait a minute, we have another layer 
of bureaucracy.
  What is wrong with giving the Justice Department this authority? 
There are a number of things wrong with it. First of all, the Justice 
Department's enabling statute does not say that it is a regulatory 
agency. The Antitrust Division's enabling statute does not say that it 
is a regulatory agency.
  The Justice Department got into regulation the first time with Judge 
Greene's consent in 1982. They have several lawyers over there who 
carry out, administer the MFJ. That was unprecedented, but it came 
about. They are working for Judge Greene, not the Attorney General, and 
that is an important thing. They carry out Judge Greene's orders, a 
district court order.
  But our friends would have us make the Justice Department for the 
first time in history by law a regulatory agency. There is no other 
area in commerce that this is true. It is not true in aviation, it is 
not true in transportation, it is not true in railroads. Originally, 
the ICC was created in about 1887. The FCC was patterned on it in 1934. 
Both agencies were intended to be the regulatory agencies. There is 
talk of abolishing the ICC. There is talk when we get into the wireless 
age of substantially reducing FCC, or that perhaps we will not need the 
FCC. I do not know about that. That is another debate for a later time.
  But this bill will take us into transition from the wired age to the 
wireless. We are in the last stages of the wired communications age. I 
think it will last 10 years. Some people think 15; others think it will 
last about 5. But this bill will provide us with competition and 
deregulation in the last stages of the wired telecommunications era.
  But to give the Justice Department a regulatory role at this time 
would be a step backward. That is regulation. That is another layer of 
regulation. Everybody here, even my good friend Al Gore, talks about 
deregulating and privatizing. Here it is. Here is our chance. 
[[Page S8164]] 
  So I think that debating whether or not to have a Justice role on 
this particular part of this bill is very important.
  Let me say that in all aspects of this bill, we are trying to 
deregulate, whether it is letting the utilities into telecommunications 
with safeguards, moving toward deregulation of cable with safeguards, 
getting the Bell companies manufacturing and letting them get into 
other areas, such as cable, letting the long distance people into the 
local market, de- regulating the broadcasters--this is a vast bill. It 
deregulates almost everything.
  But if we adopt this amendment, we are going back to a major layer of 
regulation regarding the Bell companies in long distance. I cannot 
conceive of why we would do that. Our consumers have an interest in 
deregulation and competition. They are protected by the FCC with the 
public interest necessity and convenience standard. They are also 
protected by the checklist and by other safeguards. If the FCC appeals, 
the Justice Department can join independently on that appeal. So there 
is already heavy Justice Department involvement.
  So I say to my friends that we really need to decide if we are 
deregulating or if we are shuffling along with more regulation. If we 
allow the Dorgan-Thurmond amendment to be adopted, we would be delaying 
competition at least 2 or 3 years. My friends say, ``Oh, it will only 
take the Justice Department 90 days to get this done.'' That is not 
true. They already have a 30-day requirement on them, and they are 
taking as much as 3 years to get something done over there.
  I see some other Senators on the floor. If anybody else would like to 
speak, because I am going to be here all night, if necessary, I will 
yield the floor to anyone who wishes to speak.
  Mr. KERREY. I would like to speak in response.
  Mr. DOLE. Can I just change the consent?
  The PRESIDING OFFICER. The majority leader.


              Modification of Unanimous-Consent Agreement

  Mr. DOLE. Mr. President, earlier I asked that the Senator from South 
Dakota be recognized at 12 o'clock to move to table. I modify that part 
of the agreement and ask unanimous consent that he be recognized at 
12:30 tomorrow to make a motion to table the Dorgan-Thurmond amendment, 
and that the hour for debate be from 11:30 to 12:30 instead of 11 to 
12.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. DOLE. I might indicate, this is made to accommodate a number of 
Senators, Vietnam veterans, who have a special event that does not end 
until about 12:15, as I understand.
  Before the Senator from Nebraska speaks, let me say that it is my 
understanding that there will be a vote fairly soon, as soon as Senator 
Feinstein comes to the floor. She has an amendment with Senator Lott. 
It should not take much debate.
  So I tell my colleagues, or members of their staff, there probably 
will be a vote in the next 45 minutes.
  I am now advised she cannot be here until about 6:30. Let me think 
about that, and I will say something after the Senator from Nebraska 
speaks.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, we have been debating this particular 
amendment, although in its current incarnation just about 4 or 5 hours, 
but we have been debating the overall role of the Justice Department 
for a couple of days now.
  I am beginning to learn that in debate--I had not noticed it used 
quite so often--but one of the devices that one uses in debate is you 
set up a straw-man and you say, ``Do you want that strawman?'' And you 
say, ``No, I don't want that strawman,'' and then you knock it down 
with your argument.
  The strawman in this argument is to say that this amendment would 
require the poor old phone company, little old mom-and-pop phone 
company, to go through all this burdensome procedure before the Federal 
Communications Commission and then go over to the Department of Justice 
and that we are setting up a whole new level of bureaucracy.
  It is not true. That is not what is going on. It is a simultaneous 
process. The idea that somehow it is not going to occur simultaneously 
is an idea that is sold, but I do not believe is an effective sale. The 
question is not do you want the Department of Justice to regulate--we 
are not asking for regulatory authority--the question before the body 
is, do you want, as you proceed to a competitive environment--when
 you get right down to the application, the FCC will be making a 
judgment, just as the Department of Transportation did, as referenced 
earlier, when TWA tries to acquire Ozark, or when Republic is the 
target of Northwest Airlines. In the deregulation of the airline 
industry, we did not give the Department of Justice the authority to 
say we do not approve of it. We do not think there is competition. We 
do not think there will be competitive choice. We think this will 
decrease that.

  That is the question before us is not do you want the Department of 
Justice, in an unprecedented fashion, to regulate, but do you want the 
Department of Justice to have a role more than ``What do you think?'' 
The Department of Justice, under this amendment, would have a role to 
say, ``There is not competition at the local level, and we do not 
believe this application should be approved.'' That is the question 
before us.
  We are going from a monopoly to a competitive environment. We are not 
citing enormous power in a conspiratorial fashion. With or without this 
amendment, I say to my colleagues, there is substantial deregulation. 
Without this amendment, if this fails, your cable company can still 
price its premium service without being regulated. With or without this 
amendment, Rupert Murdoch can still acquire 50 percent of the 
television stations in a local area. With or without this amendment, 
you have companies out there that will be doing things they were 
previously prevented from doing. This bill will deregulate without this 
amendment.
  So this is not a question before the body that you have to answer, 
such as, ``Do I want to deregulate, or do I want to continue the 
current regulatory structure?'' We are going to deregulate either way.
  The question before the body is, do you want the Department of 
Justice, with a date-certain requirement, involved not just, ``Oh, what 
do you think about this proposed''--I almost said merger. But that is 
what it becomes. One of the ironies is, if a local telephone company 
acquires or merges with a local cable company, the Department of 
Justice has to approve it. Nobody suggests that is undue regulatory 
authority. Effectively, when you go from a monopoly with a local 
franchise into long distance, it is effectively the same thing. The 
question before us is: Do you want the Department of Justice to say we 
do not think there is competition?
  Now, very instructive for Members, as you try to reach that decision, 
I think, would be to go through either one of the checklists. There are 
two, by the way. In section 251, there is a checklist that says here is 
what a local company has to do, if a long distance or another carrier--
and my vision for competition, by the way, again, is that you get 
competitive choice not for the existing line of businesses, but you get 
it for a package of information services. So it is likely to come, this 
desire to compete at the local level, and the competition and the 
desire is just as likely to come from a medium-sized entrepreneur that 
wants to deliver information services to a resident in Cleveland, or 
Omaha, or wherever. That is apt to happen.
  In section 251 there is a checklist, as well, that says here is what 
you have to do. It is a pretty tough checklist. In fact, it may be 
tougher than in 255. In 255, you have a checklist that says this is 
what you have to do if you want to do interLATA, or long distance 
service. If you are a local telephone company, this is what you have to 
do. Well, I do not doubt--and indeed I know--that the committee spent a 
long time putting this checklist together. There are 14 things. But 
read them. Read them and then ask yourself the question: Does this mean 
I have competition? Does this mean I have competitive choice at the 
local level? For the consumer a competitive choice means that if they 
do not like the business [[Page S8165]] that is offering to sell them 
something, they can shop it someplace else. That is a competitive 
choice. Competitive choice means that business person that is selling 
you something has to make sure that the price and quality and all of 
the other terms and circumstances of the sale are what you want, or you 
take your business someplace else. That is what a competitive choice 
provides a consumer.
  Well, I do not know if this 14-point checklist gets that job done. 
Maybe it does. Maybe it does. I do not know. Again, it is a very 
impressive checklist. Members ought to read it. Ask yourselves what 
does it mean if I have ``nondiscriminatory access on an unbundled basis 
to the network functions and services of the Bell operating company's 
telecommunications network that is at least equal in type, quality, and 
price to the access the Bell operating company affords to itself or any 
other entity.''
  That would appear to mean that you have a competitive opportunity. I 
do not know. The real test of competition is going to occur when the 
consumer says, ``I have competitive choice,'' and when that person in 
the neighborhood says, ``I do not like my service. I do not like this. 
The price is too high. The quality is not what I want. I am going to 
take it someplace else.'' You do not have that today with local 
telephone and cable.
  We are trying to move from that monopoly situation to a competitive 
situation, and we are merely saying with this amendment: Ask the 
Department of Justice--not giving them regulatory control in some sort 
of dark and mysterious fashion, but ask the agency that, on a regular, 
routine basis, is charged with a responsibility of assessing whether or 
not you have competition. If you do not think they can do it, look at 
their success in this industry.
  Again, it was not Congress in 1982 that stood up to AT&T. Congress 
did not stand up to AT&T and say we have had enough of this monopoly, 
our consumers and citizens are complaining; we are going to pass 
legislation and divest you. Congress did not do that. The people's 
Congress did not respond to that and pass legislation. It was the 
Department of Justice that filed a suit against them originally, and 
eventually, as a consequence of AT&T believing they would win the suit, 
write up a consent decree and file it with the judge.
  I hope that colleagues understand that this amendment is not offered 
as a consequence of our desire to continue regulation. As I said, we 
are deregulating telecommunications with or without this amendment. So 
the choice is not do I favor deregulation. With or without this 
amendment, you will have deregulation. I hope my colleagues do not fall 
into the illusion that this is a choice between, do I want another 
layer of bureaucracy, or do I want to prolong the process? If there is 
a specific objection to the language of this bill that implies there 
might be an unreasonable delay or might layer on bureaucracies, bring 
it. We have made modifications already in the amendment. I do not want 
to layer on excessive bureaucracy.
  I urge my colleagues to go back and look at airline deregulation, in 
particular, not with the purpose of trying to revisit and reargue that 
thorny, old problem, but to look at what happened to the Department of 
Transportation, which was making the decisions, and the Department of 
Justice was merely in a consultative role. They merely said, ``We 
advise against them,'' rather than being in a position where the 
companies understand that they do have the ability to say there is 
competition, thus, let us go forward, or say there is no competition, 
do not allow it to go forward.
  I yield the floor.
  Mr. GORTON. Mr. President, as one of the members of the Commerce 
Committee, who reached the decision to balance this legislation in the 
fashion that it appears here on the floor, and also as a Senator who 
has great respect for the views of the Senator from Nebraska, I must 
say that I find myself unpersuaded by his case--unpersuaded on a number 
of grounds.
  First, it is not necessary to bandy about the word ``bureaucracy'' to 
understand that the fundamental nature of this amendment is to 
substitute a required approval on the part of two very distinct Federal 
agencies
 with two very distinct roles for a single such determination, before a 
regional Bell operating company can go in to the long distance 
business.

  Now, Mr. President, there is no question but that the entry of a 
regional Bell operating company in the long distance business will be 
competitive in nature. The long distance business is highly competitive 
at the present time. Not just with that handful of large companies 
which constantly advertise in the newspapers and on television, but by 
dozens, if not hundreds, of smaller companies, as well.
  Now, it is true that those companies presently in the long distance 
business, naturally enough, fear the entry of the Bell operating 
companies into their business. They make the case--not entirely 
persuasively, but not entirely unpersuasively, either--that allowing 
the Bell operating companies into that business may give those Bells an 
unfair competitive advantage.
  It is in order to meet that argument, Mr. President--not the argument 
about local service, but the argument about long distance service--that 
this bill says to the Bell operating companies, ``No, you cannot start 
competing in that very competitive business unless and until your own 
system is open to those who want to provide competition where 
competition in large measure does not exist right now, in the local 
exchange service.''
  It is to assure that companies now providing long distance service or 
cable television service or simply seeking to get into the long 
exchange business, are able to do so that the various conditions--some 
of which have been referred to by the Senator from Nebraska--are 
included in the bill.
  The goal of the bill, Mr. President, is to create added competition 
in both telephone fields, in both long distance and in the local 
exchange.
  Any additional requirement which slows down that process on both 
sides of the equations, seems, to this Senator, to be undesirable.
  So what the bill does is to set up a set of 14 reasonably objective 
conditions that must be met by the regional Bell operating companies to 
open up their local exchange before they could get into the long 
distance business and provide competition and, one hopes, lower prices.
  The committee was not absolutely satisfied any more than the Senator 
from Nebraska is absolutely satisfied that the simple mechanical 
meeting of those 14 conditions would, under all circumstances, be 
sufficient to open up the local exchange.
  So it added the public interest convenience and necessity condition, 
requiring the Federal Communications Commission, which almost from time 
immemorial, has been the Government entity and agency with expertise in 
this field, to determine in the broadest possible sense that the 
requested authorization was consistent with the public interest, 
convenience, and necessity. A test which has been a test utilized by 
that Commission ever since or almost ever since its creation.
  Mr. President, in adding the Department to this mix directly as a 
regulatory rather than as an advisory entity, the amendment, it seems 
to me, creates the worst situation, worse then abolishing the FCC and 
having this done only by the FCC, worse than leaving it the way it is 
in the bill at the present time.
  Because, Mr. President, the Attorney General expressly has advisory 
authority to the Federal Communications Commission in this connection.
  I suspect that in most cases, the Attorney General goes to the 
Commission and says, ``This is a terrible idea, to let this Bell into 
the long distance business.'' We think it is going to, somehow or 
another, create a tremendous monopoly.
  I strongly suspect that the FCC will listen to and abide by that 
advice unless, in its own greater expertise in the communications 
business, it feels that the Attorney General is flatout wrong, just 
does not know very much about this particular subject.
  The sponsors of the amendment, in their desire to have two different 
entities involved in this business, have really created a most curious 
division of authority.
  Where, in the bill as it stands without this amendment, the authority 
of the Federal Communications Commission in dealing with a 
determination of [[Page S8166]] public interest, convenience, and 
necessity, is essentially unlimited, this amendment deprives the 
Commission of the ability to consider the effects of the authorization 
in any market for which the authorization is sought, with respect to 
antitrust matters.
  Mr. President, it is very likely that may be the centerpiece of what 
the FCC would base its determination of public interest, convenience, 
and necessity on under normal circumstances.
  This mention of public interest, convenience, and necessity is carved 
out in order to be given to the antitrust division of the Office of the 
Attorney General. In other words, the FCC is really going to no longer 
be able to consider all of the elements which go into a determination 
that authorization is in the public interest, convenience, and 
necessity.
  Just last week, Mr. President, in balancing this bill, we turned down 
an amendment which would have stricken that authority. We did not feel, 
a majority of the Members did not feel, any more than a majority in the 
committee felt, that we could absolutely and under all circumstances 
rely on the 14 categories.
  So now, in the interests of speaking out on antitrust matters, the 
sponsors of this amendment were normally thought to be on this side of 
the debate, while those who sponsored last week's amendment were on 
that side, and the committee in the middle, are doing much of the work 
that the sponsors of last week's amendment sought to do themselves and 
were rejected in that course of action by, I believe, all of the 
sponsors and most of the supporters of this amendment.
  So, to recapitulate, this proposal deprives the Federal 
Communications Commission of authority it ought to have in order to 
give a new kind of authority to the Attorney General of the United 
States, a kind of authority that the Attorney General does not have at 
the present time.
  I want to go back. The Attorney General in this bill is to be 
consulted by the Federal Communications Commission, and in this bill 
the Attorney General is not deprived of any of the authority of that 
office with respect to monopolization or the enforcement of the 
antitrust laws. Just as it can stop a merger, if it finds that the 
ultimate impact of such authority is to create a monopoly, it may bring 
the same kind of litigation that it brought that resulted in the 
breakup of the old AT&T. But one further matter, as that is brought up 
as something which took place through the Department of Justice, not 
through the Congress, the Department of Justice did not determine to 
sue AT&T to break up that monopoly in 90 days. And here in this bill 
the Attorney General is given only 90 days to make this determination, 
not of something that has happened in the past--which is fairly easy to 
determine--but something that might possibly happen in the future. I do 
not believe that the authority given the Attorney General in this bill 
can effectively be used in a period of time like that. It is clear that 
we now have two different Federal entities under this amendment having 
authority over the grant of this authorization based on two quite 
different sets of tests and that, apparently, they will not relate to 
one another.
  Finally, it is clear to this Senator, at least, that it is more 
likely than not that this added authority, this two entities of the 
Federal Government rather than one, is likely to slow down the creation 
of competition, certainly in long distance, and very unlikely to speed 
it up in connection with the local telephone market.
  So, I would summarize by saying I do not believe the committee on 
which I serve and on which this structure was worked out by the careful 
work of the chairman and the ranking Democratic member, and for that 
matter almost all the members of the committee, is some kind of jerry-
built political compromise. It is the result of careful and sober 
thought as to what was the best system available for reaching two 
goals: one, the creation of competition in the most rapid possible 
fashion, both in long distance and in the local exchange; and at the 
same time the prevention of monopoly and the service of the public 
interest.
  So, my own summary is that the bill, as it stands, is greatly 
superior, from the perspective of the public interest and competition 
and consumers, than it would have been had the McCain amendment been 
adopted last week striking the public interest section and, equally, 
than it will be if this amendment is adopted putting two different 
entities of the Federal Government into the same mix, artificially 
divorcing them from one another, frustrating the traditional role of 
the Federal Communications Commission and, in my view, frustrating the 
development of new technology and of competition.
  For those reasons I trust when the distinguished chairman of the 
Commerce Committee moves to table this amendment tomorrow, that his 
motion will be successful.
  Mr. PRESSLER. If my friend will yield for a question? Let me say, in 
the context of this, I hope the Senator from California will offer her 
amendment. The leader has asked that there be a vote--if that is 
agreeable to everybody--at about 6:30 on the Feinstein-Lott amendment. 
But I would like to, just in concluding, commend the Senator from 
Washington, a former State attorney general. There is one question, if 
he could make a response before, hopefully, the Senator from California 
will speak on the floor, and that is the extraordinary, unprecedented 
decisionmaking role for the Department of Justice that is proposed in 
the Dorgan-Thurmond amendment.
  As a former State attorney general, has he ever seen a proposal where 
the Justice Department would become the decisionmaker, a regulatory 
decisionmaker? I guess this question goes to the heart of 
the division of powers in our Government.
  Mr. GORTON. I do not believe I have. I would hate to make a totally 
generalized statement on that, but certainly I would say not in the 
memory of my experience as State attorney general nor did I find the 
Department of Justice have such authority.
  I yield the floor.
  Mrs. FEINSTEIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. FEINSTEIN. Mr. President, I have actually two amendments, one 
involving the cities and a preemption clause in the bill, and the 
second is an amendment I would like to send to the desk right now.


                           Amendment No. 1269

  (Purpose: To provide for the full scrambling on multichannel video 
            services of sexually explicit adult programming)

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

       The Senator from California [Mrs. Feinstein] for herself 
     and Mr. Lott, proposes an amendment numbered 1269.

  Mrs. FEINSTEIN. 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 145, below line 23, add the following:

     SEC. 407A. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO 
                   SERVICE PROGRAMMING.

       (a) Requirement.--Part IV of title VI (47 U.S.C. 551 et 
     seq.), as amended by this Act, is further amended by adding 
     at the end the following:
     ``SEC. 641. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO 
                   SERVICE PROGRAMMING.

       (a) Requirement.--In providing sexually explicit adult 
     programming or other programming that is indecent and harmful 
     to children on any channel of its service primarily dedicated 
     to sexually-oriented programming, a multichannel video 
     programming distributor shall fully scramble or otherwise 
     fully block the video and audio portion of such channel so 
     that one not a subscriber to such channel or programming does 
     not receive it.
       (b) Implementation.--Until a multichannel video programming 
     distributor complies with the requirement set forth in 
     subsection (a), the distributor shall limit the access of 
     children to the programming referred to in that subsection by 
     not providing such programming during the hours of the day 
     (as determined by the Commission) when a significant number 
     of children are likely to view it.
       (c) Definition.--As used in this section, the term 
     ``scramble'' means to rearrange the content of the signal of 
     the programming so that audio and video portion of the 
     programming cannot be received by persons unauthorized to 
     receive the programming.'' [[Page S8167]] 
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect 30 days after the date of the enactment of 
     this Act.

  Mr. PRESSLER. Will my friend yield?
  Mrs. FEINSTEIN. I certainly will.
  Mr. PRESSLER. Mr. President, I ask unanimous consent a vote occur on 
the Feinstein and Lott amendment at 6:30 this evening and the time 
between now and 6:30 be equally divided in the usual form.
  I might say I am going to yield as much of my time to the Senator 
from California as she wishes. And I ask unanimous consent no second-
degree amendments be in order to the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from California.
  Mrs. FEINSTEIN. I thank the Senator from South Dakota and I thank the 
Chair.
  Mr. President, on behalf of myself and Senator Lott I offer this 
amendment, which is a rather simple and direct amendment. It concerns 
the proliferation of adult video programming that is easily accessible 
for children to view. It is a commonsense amendment and it is simple. 
It would require multichannel video programmers, such as cable 
operators, to fully scramble or otherwise block sexually explicit adult 
programming unless a subscriber specifically requests such programming.
  The full blocking requirement would apply to those channels primarily 
dedicated to adult sexually oriented programming, such as the Playboy 
and Spice channels. Until these channels are fully blocked, cable 
operators would have to restrict their broadcasts to certain times of 
the day when children are least likely to view it, such as at night.
  Last year I learned that in many households across America, adult 
programming was being broadcast around-the-clock on certain primarily 
sexually orientated channels, with only partial audio and video 
scrambling.
  This issue first came to my attention when a local city councilman in 
Poway, CA, a suburb of San Diego, wrote to me about the problem in his 
community. He said that in San Diego County, partially scrambled video 
pornography--replete with unscrambled and sexually explicit audio--was 
being automatically transmitted to more than 320,000 cable television 
subscribers.
  Unfortunately, many subscribers and parents were unaware of these 
transmissions until they or their children accidentally discovered the 
programming. In San Diego County, for example, the partially scrambled 
pornography signal was broadcast only one channel away from a network 
broadcasting cartoons and was easily accessible for children to view.
  Parents would come home after work only to find their children 
sitting in front of the television watching or listening to the 
adult's-only channel, a channel that many parents did not even know 
existed. In Poway, the city councilman's young son learned about the 
adult's-only channel at school, where the easily accessible programming 
was a hot topic among children.
  This is not an isolated program.Until just a few months ago, the 
local cable company here in Washington also automatically transmitted 
partially scrambled video pornography--replete with unscrambled and 
sexually explicit audio--to all of its subscribers.
  To their credit, some local cable companies are taking voluntary 
steps to address this problem. For example, in San Diego, one local 
cable company restricted the times when such programming was broadcast. 
In Washington, the local cable company eventually fully blocked the 
programming so both the video and audio portions of the signal are now 
undistinguishable.
  However, numerous other cable services across the country are still 
transmitting similar adult video and audio programming that is not 
sufficiently scrambled, with many subscribers and parents unaware of 
its contents. And, with the emerging information superhighway and other 
forms of video programming now or soon to be available, such sexually 
elicit adult programming will be even more prevalent.
  The problem is that there are no uniform laws or regulations that 
govern such sexually explicit adult programming on cable television. 
Currently, adult programming varies from community to community, as 
does the amount and effectiveness of scrambling on each local cable 
system. Right now, it is up to the local cable operator to regulate 
itself. This is like the fox guarding the hen house.
  Following complaints from myself and other officials--and the threat 
of legislation--the National Cable Television Association recognized 
that this was indeed a problem and adopted voluntary guidelines that 
local cable operators can follow. The California Cable Television 
Association also adopted similar guidelines.
  However, the voluntary guidelines simply recommend that local cable 
operators ``block the audio and video portions of unwanted sexually-
oriented premium channels at no cost to the customer, upon request.'' 
While this is a somewhat commendable effort on the part of industry, I 
do not believe that it goes far enough.
  First, the guidelines are only voluntary and simply recommended that 
local cable operators take action. There is no guarantee that such 
blocking will be provided and no enforcement mechanism.
  Second, the guidelines put the burden of action on the subscriber, 
not the cable company, by requiring a subscriber to specifically 
request the blocking of indecent programming. As I stated earlier, many 
subscribers do not even know that such programming exists, only to 
discover their children watching and listening to adults-only channels.
  I do not believe that sexually explicit adult programming should 
automatically be broadcast into a program subscriber's home. On the 
contrary, I believe that sexually explicit adult programming should be 
automatically blocked, unless a program subscriber specifically 
requests the programming.
  The amendment I am proposing today is similar to language approved by 
the Commerce Committee last year as part of S. 1822 and contained in 
Senator Exon's bill, the Communications Decency Act of 1995. It would 
require that all sexually explicit adult programming be fully scrambled 
unless requested by a subscriber.
  This amendment does not prohibit or out-right block indecent or 
sexually explicit programming. Anyone requesting such programming is 
entitled to receive it, as long as it is not obscene, which is not 
protected by the first amendment. The amendment, however, protects 
children by prohibiting sexually explicit programming to those 
individuals who have not specifically requested such programming.
  The cable television industry, in meetings over the past year or so 
with my staff, have expressed their opposition to this amendment, 
citing technological and fiscal concerns. The bottom line, however, is 
that fully scrambling both the audio and video portion of a cable 
program is technologically feasible. In fact, several cable operators 
have already instituted such blocking, such as here in Washington. With 
regard to their fiscal concerns, I have never been given any 
information from the industry to document what the actual costs to 
cable operators would be.
  This amendment gives the industry flexibility in implementing the 
requirement to fully scramble all sexually explicit adult programming.
  Until a cable operator or other multichannel video programming 
distributor is in full compliance, access to such programming will be 
limited to protect children from the sexually explicit material. The 
programming will be prohibited from those times of the day--to be 
determined by the FCC--when a significant number of children are likely 
to view it, such as during the mid and late morning, afternoon, and 
early evening.
  So, the amendment leaves it up to the local cable operator on how and 
when to come into full compliance. Some cable operators, for example, 
are already in full compliance. For those operators that are not in 
full compliance, children will be still be protected until the adult 
programming can be fully scrambled or otherwise blocked.
  This amendment also does not become effective until 30 days after 
enactment, so cable operators will have plenty of time to either fully 
block the programming, or restrict access to certain times of the day.
  While I realize that some cable operators may incur costs in 
implementing [[Page S8168]] this amendment, I believe that the price to 
protect children from sexually explicit programming is well worth it. 
In addition, as I stated above, the amendment gives the industry 
flexibility in coming into compliance; it lets individual cable 
operators decide what costs, if any, they will incur and when they will 
incur such costs.
  It is unfortunate that this amendment is necessary. One would have 
hoped that cable operators and other multichannel video programming 
distributors would have automatically fully blocked or scrambled 
sexually explicit adult programming or, at a minimum, restricted the 
programming to certain times of the day.
  But, industry has only taken baby steps to address this problem 
through voluntary policies that simply recommend action. The end result 
is that numerous cable operators across the country are still 
automatically broadcasting sexually explicit adult programming into 
households across America, regardless of whether parents want this or 
subscribers want it.
  So I believe the provision is both necessary, timely, will be 
helpful, and will disadvantage no one. I urge my colleagues to support 
this commonsense amendment.
  I ask unanimous consent that a CRS analysis of this amendment as it 
relates to the first amendment, which is in support of the amendment of 
Senator Lott and myself, and some recent court decisions, be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                   Congressional Research Service,


                                      The Library of Congress,

                                     Washington, DC, June 9, 1995.
     To: Hon. Dianne Feinstein, Attention: Robert Mestman.
     From: American Law Division.
     Subject: Indecent Programming on Cable Television.
       This memorandum is furnished in response to your request 
     for a brief analysis of the constitutionality of your 
     proposal to limit ``sexually explicit adult programming or 
     other programming that is indecent and harmful to children on 
     any channel . . . primarily dedicated to sexually-oriented 
     programming.'' Subsection (a) of the proposal provides that 
     ``a multichannel video programming distributor shall fully 
     scramble or otherwise fully block the video and audio 
     portions of such channel so that one not a subscriber to such 
     channel or programming does not receive [such programming].'' 
     Subsection (b) of the proposal states that, until a 
     distributor complies with subsection (a), it shall not 
     provide ``such programming during the hours of the day (as 
     determined by the [Federal Communications] Commission) when 
     children are likely to view it.''
       The First Amendment prohibits Congress from abridging the 
     freedom of speech, and the Supreme Court has held that speech 
     on cable television has full First Amendment protection.\1\ 
     ``The Government may, however, regulate the content of 
     constitutionally protected speech in order to promote a 
     compelling interest if it chooses the least restrictive means 
     to further the articulated interest.''\2\ In the case in 
     which this quotation appears, the Supreme Court struck down a 
     federal statute that banned dial-a-porn ``[b]ecause the 
     statute's denial of adult access to telephone messages which 
     are indecent but not obscene far exceeds that which is 
     necessary to limit the access of minors to such messages . . 
     . .''\3\ The Court in this case also reiterated that ``the 
     government may not `reduce the adult population . . . to . . 
     . only what is fit for children.'''\4\
     Footnotes at end at article.
       Subsection (a) of your proposal would apparently be 
     constitutional, under the reasoning of this week's decision 
     in Alliance for Community Media v. Federal Communications 
     Commission.\6\ The court of appeals in this case upheld the 
     constitutionality of provisions of the Cable Television 
     Consumer Protection and Competition Act of 1992, Public Law 
     102-385, including section 10(b), 47 U.S.C. Sec. 532(j), 
     which requires the FCC to prescribe rules requiring cable 
     operators who have not voluntarily prohibited indecent 
     programming under Sec. 532(h) to place such programs on a 
     separate channel and to block the channel until the 
     subscriber, in writing, requests unblocking. This statute 
     applies only to programming on leased access channels, but 
     otherwise it does essentially the same thing your proposal 
     would do. It requires a separate channel for indecent 
     programming, and it requires blocking until the subscriber 
     requests unblocking. Your proposal would apply to ``any 
     channel * * * primarily dedicated to sexually-oriented 
     programming'' (in effect, to a separate channel), and would 
     require blocking to non-subscribers (in effect, until they 
     request the channel).\6\
       The reason that the court of appeals upheld Sec. 532(j) 
     despite the First Amendment's prohibiting Congress from 
     abridging the freedom of speech is that it found that the 
     government has a compelling interest in protecting the 
     physical and psychological well-being of minors, and that the 
     method Congress chose in Sec. 532(j) was the least 
     restrictive means available to meet this compelling interest. 
     The same analysis apparently would find subsection (a) of 
     your proposal constitutional.
       Subsection (b) of your proposal would give distributors an 
     alternative to the subsection (a): instead of blocking they 
     could not provide ``such programming during the hours of the 
     day (as determined by the Commission) when children are 
     likely to view it.'' To the extent that it is not 
     technologically feasible for distributors to comply with 
     subsection (a) immediately, they will be forced to comply 
     with subsection (b) until they are able to comply with 
     subsection (a). Therefore, subsection (b) should be viewed as 
     a requirement that must be consistent with the First 
     Amendment.
       In Federal Communications Commission v. Pacifica 
     Foundation, the FCC had taken action against a radio station 
     for broadcasting a recording of George Carlin's ``Filthy 
     Words'' monologue at 2 p.m., and the station had claimed 
     First Amendment protection.\7\ The Supreme Court upheld the 
     power of the FCC under 18 U.S.C. Sec. 1464 ``to regulate a 
     radio broadcast that is indecent but not obscene.''\8\ 
     However, the Court emphasized the narrowness of its holding:
       The Commission's decision rested entirely on a nuisance 
     rationale under which context is all-important. The concept 
     requires consideration of a host of variables. The time of 
     day was emphasized by the Commission. . . .\9\
       Furthermore, the Commission ``never intended to place an 
     absolute prohibition on the broadcast of this type of 
     language, but rather sought to channel it to times of day 
     when children most likely would not be exposed to it.''\10\
       In 1992, Congress enacted Public Law 102-356, section 16 of 
     which required the FCC, within 180 days of enactment, to 
     promulgate regulations that prohibit broadcasting of indecent 
     programming on radio and television from 6 a.m. to midnight, 
     except for public radio and television stations that go off 
     the air at or before midnight, which may broadcast such 
     material beginning at 10 p.m.\11\ This statute was 
     challenged, and, in Action for Children's Television v. 
     Federal Communications Commission (ACT III), a three-judge 
     panel of the U.S. Court of Appeals declared it 
     unconstitutional.\12\ The full court of appeals agreed to 
     decide the case, but a decision has not yet been issued.
       Even with this uncertainty, it is clear from the Supreme 
     Court's decision in Pacifica, supra, that the time in which 
     indecent programming is proscribed must be limited. In ACT 
     III, the three-judge panel held that the ban was ``not 
     narrowly tailored to meet constitutional standards.''\13\ It 
     found ``that the government did not properly weight viewers' 
     and listeners' First Amendment rights when balancing the 
     competing interests in determining the widest safe harbor 
     period consistent with the protection of children.''\14\ 
     Furthermore, the government did not demonstrate that its 
     ``interest in shielding children from indecent broadcasts 
     automatically outweigh the child's own First Amendment rights 
     . . . .''\15\ The court directed the FCC to ``redetermin[e], 
     after a full and fair bearing, . . . the times at which 
     indecent material may be broadcast . . . .''\16\
       Similarly, in a previous decision by a three-judge panel on 
     a 6 a.m. to midnight ban on indecent programming, the D.C. 
     Circuit held ``that the FCC failed to adduce evidence or 
     cause, particularly in view of the first amendment interest 
     involved, sufficient to support its hours restraint.''\17\ 
     The court of appeals considered the evidence that the FCC had 
     cited to justify its action against the nighttime 
     broadcasters, and found it ``insubstantial,'' and found the 
     FCC's findings ``more ritual than real.''\18\ The court of 
     appeals concluded ``that, in view of the curtailment of 
     broadcaster freedom and adult listener choice that channeling 
     entails, the Commission failed to consider fairly and fully 
     what time lines should be drawn.''\19\
       Assuming that the full court of appeals applies these 
     principles, it appears that the phrase in subsection (b) of 
     your proposal ``during hours of the day (as determined by the 
     Commission) when children are likely to view it'' may be 
     overboard. This is because some children seem likely to be 
     watching television at all hours of the day (and night), and 
     it would apparently be unconstitutional to ban indecent 
     programming around the clock. To be constitutional, your 
     proposal might have to be changed to prohibit such 
     programming only during hours when the ratio of children to 
     adults watching television is significantly high. This, 
     again, is because ``the government may not `reduce the adult 
     population . . . to . . . only what is fit for 
     children.'''\20\
       Please let us know if we may provide additional assistance.
                                                      Henry Cohen,
                                             Legislative Attorney.


                               footnotes

     \1\Turner Broadcasting System, Inc v. Federal Communications 
     Commission, 114 St. Ct. 2445 (1994).
     \2\Sable Communications of California, Inc. v. Federal 
     Communications Commission, 493 U.S. 115, 126 (1989).
     \3\Id. at 131.
     \4\Id. at 128.
     \5\1995 WL 331052 (D.C. Cir. June 6, 1995) (en banc). This 
     decision overturned a November 23, 1993 decision of a three-
     judge panel that found the statute 
     unconstitutional. [[Page S8169]] 
     \6\As you indicated in our phone conversation, three channels 
     are now often only partially blocked to non-subscribers.
     \7\438 U.S. 726 (1978).
     \8\Id. at 729. The Court stated that, to be indecent, a 
     broadcast need not have prurient appeal; ``the normal 
     definition of `indecent' merely refers to nonconformance with 
     accepted standards of morality.'' Id. at 740. The FCC holds 
     that the concept ``is intimately connected with the exposure 
     of children to language that describes, in terms patently 
     offensive as measured by contemporary community standards for 
     the broadcast medium, sexual or excretory activities and 
     organs, at times of the day when there is a reasonable risk 
     that the children may be in the audience.'' Id. at 732.
     \9\Id. at 750.
     \10\Id. at 733 (quoting FCC).
     \11\47 U.S.C. Sec. 303 note; 138 Cong. Rec. S7308 (daily ed. 
     June 2, 1992), S7423-7424 (daily ed. June 3, 1992).
     \12\11 F.3d 170 (D.C. Cir. 1993), vacated and rehearing en 
     banc granted, 15 F.3d 186 (D.C. 1994). This was a companion 
     case to the decision cited in note 5, supra.
     \13\Id. at 177
     \14\Id.
     \15\Id. at 180.
     \16\Id. at 183.
     \17\Action for Children's Television v. Federal 
     Communications Commission (ACT I), 852 F.2d 1332, 1335 (D.C. 
     Cir 1988) (opinion by Judge, now Supreme Court Justice, Ruth 
     Bader Ginsberg).
     \18\Id. at 1341.
     \19\Id.
     \20\Sable, supra note 2, at 128.

  Mrs. FEINSTEIN. I yield the floor. I thank the Chair.
  Mr. LOTT. Mr. President, I am very pleased to join the distinguished 
Senator from California, Senator Feinstein, in cosponsoring this 
amendment. It is an amendment that I think is needed. It is one that 
will complete the effort that is being made by a number of groups and a 
number of people that are very much concerned about sexually explicit 
programming on our televisions.
  But I do not want to exaggerate what this amendment will do. It 
simply requires cable operators to fully scramble sexually explicit 
programming if someone has not subscribed for such programming.
  Cable systems, in many cases, are not fully scrambling the audio and 
video of their adult programs. The pictures fades in and out. You can 
hear the audio. Clearly, that is not what should be done if the person 
purchasing these services has not subscribed to have that type of 
programming. It should be fully scrambled. I think we do need this 
amendment for many reasons. Today, the cable systems across the country 
are sending uninvited, sexually explicit and pornographic programming 
into the homes. I want to emphasize that not all cable operators are 
doing that, but there are too many that are doing it.
  Children are being exposed to these obscene and harmful programs, and 
the Nation has been shocked to learn just in the last month of the rape 
of a 6-year-old by a 10-year-old and an 8-year-old.
  Studies and exposes are showing young people, elementary-age 
children, are acting out the behavior they are seeing in this type of 
programming. Teachers and parents are becoming alarmed by the effect of 
such programming. It is time that we do something about it. We have 
expressed for over a year our concerns about this matter. We made calls 
to the industry. Yet in many instances, they have not adequately taken 
action to safeguard the children. It is an example in my opinion of 
where we need more corporate responsibility. But since we have not 
gotten that yet, we need this amendment.
  In the amendment, the critical definition is this:
  The term ``scramble'' means to rearrange the content of the signal, 
of the programming so that the audio and video portion of the 
programming cannot be received by persons unauthorized to received the 
programming.
  I think that sums it up. I think it is a very simple amendment, but I 
do think it is one that should be added to this very important bill. 
And it will be well received by a lot of people who are concerned by 
what we have seen in the past months in the cable programming of this 
type of material.
  So I yield the floor, Mr. President, at this time unless there are 
any other Senators wishing speak on this particular amendment.
  Could I inquire, Mr. President, about the parliamentary procedure. 
Has there already been an agreed to vote at 6:30?
  The PRESIDING OFFICER. The vote will occur at 6:30.
  Who yields time?
  Mr. HOLLINGS. Mr. President, I ask for the yeas and nays on the 
Feinstein amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. PRESSLER. Mr. President, I ask unanimous consent that tomorrow 
the second Feinstein amendment, which will be offered tonight, be voted 
on at 9:30--Mr. President, I think we better proceed with the vote. I 
withdraw my request.
  The PRESIDING OFFICER. The request is withdrawn.
  The question is on agreeing to amendment No. 1269, offered by the 
Senator from California [Mrs. Feinstein]. The yeas and nays have been 
ordered. The clerk will call the roll.
  The bill clerk called the roll.
  Mr. MACK (when his name was called). Present.
  Mr. LOTT. I announce that the Senator from Arizona [Mr. McCain], the 
Senator from Pennsylvania [Mr. Santorum], the Senator from Pennsylvania 
[Mr. Specter], and the Senator from Virginia [Mr. Warner], are 
necessarily absent.
  Mr. FORD. I announce that the Senator from New Jersey [Mr. Bradley], 
the Senator from Iowa [Mr. Harkin], the Senator from Massachusetts [Mr. 
Kennedy], and the Senator from Georgia [Mr. Nunn], are necessarily 
absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 91, nays 0, as follows:

                      [Rollcall Vote No. 249 Leg.]

                                YEAS--91

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

                        ANSWERED ``PRESENT''--1

       
     Mack
       

                             NOT VOTING--8

     Bradley
     Harkin
     Kennedy
     McCain
     Nunn
     Santorum
     Specter
     Warner
  So the amendment (No. 1269) was agreed to.
  Mr. PRESSLER. Mr. President, I urge those Senators who have 
amendments to bring them to the floor. We are trying to get a final 
list.
  I have been asked by Senator Dole, with the concurrence of Senator 
Hollings, to file a cloture motion. I urge all Senators to come to the 
floor with amendments they might have, or Senators who wish to speak. 
We will be here as late tonight as any Member wants to speak on this 
bill or offer amendments.
  We will try to stack the votes. I know there is an event tomorrow 
morning, and the Les Aspin ceremony. There is the one vote that has 
been ordered on the Dorgan-Thurmond amendment at 12:30, after 1 hour of 
debate. We will be taking other amendments in the morning. We want to 
move this bill forward.
  Mr. HOLLINGS. Mr. President, on the adoption of the Feinstein 
amendment, I move to reconsider the vote.
  Mrs. FEINSTEIN. Mr. President, I move to lay that motion on the 
table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HOLLINGS. Let me join in the remarks of the distinguished Senator 
from South Dakota with respect to amendments. We killed the day looking 
for amendments. We started on this bill last Wednesday.
  I have been in the vanguard of opposing cloture, but I would have to 
support it in this particular instance because we cannot get amendments 
drawn and presented and voted upon. So a day passes by and everybody 
talks about how they would like to get out early and do these other 
things. [[Page S8170]] 
  This is the Senate's business. We hope that we can move along now 
expeditiously on this side of the aisle. If there are any amendments, 
we do appreciate the Senator from California, ready and willing and 
able to present the next amendment. Beyond that, I hope we can get some 
other amendments.
  I yield the floor.


                           Amendment No. 1270

    (Purpose: To strike the authority of the Federal Communications 
    Commission to preempt State or local regulations that establish 
   barriers to entry for interstate or intrastate telecommunications 
                               services)

  Mrs. FEINSTEIN. Mr. President, on behalf of Senator Kempthorne and 
myself, I send an amendment to the desk and ask for its immediate 
consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from California [Mrs. Feinstein], for herself 
     and Mr. Kempthorne, proposes an amendment numbered 1270.

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

       On page 55, strike out line 4 and all that follows through 
     page 55, line 12.

  Mrs. FEINSTEIN. Mr. President, I come to the floor today joined by 
our colleague, Senator Kempthorne, to offer this amendment on behalf of 
a broad coalition of State and local governments. Since announcing my 
intention to proceed with this amendment, I have received letters of 
support from hundreds of cities across the country, including the 
States of Arizona, Colorado, Florida, Illinois, Indiana, California, 
Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, 
Missouri, Nebraska, North Carolina, Oregon, Ohio, Texas, and 
Washington.
  This amendment is supported by the National Governors' Association, 
the National Association of Counties, the National Conference of State 
Legislatures, the National League of Cities, and the U.S. Conference of 
Mayors, to name a few.
  Mr. President, as a former mayor, I fully understand why Governors, 
mayors, city councils, and county boards of supervisors question 
allowing the Federal Communications Commission to second-guess 
decisions made at State and local government levels.
  On one hand, the bill before the Senate gives cities and States the 
right to levy fair and reasonable fees and to control their rights of 
way; with the other hand, this bill, as it presently stands, takes 
these protections away.
  The way in which it does so is found in section 201, which creates a 
new section 254(d) of the Cable Act, and provides sweeping preemption 
authority. The preemption gives any communications company the right, 
if they disagree with a law or regulation put forward by a State, 
county, or a city, to appeal that to the FCC.
  That means that cities will have to send delegations of city 
attorneys to Washington to go before a panel of telecommunications 
specialist at the FCC, on what may be very broad question of State or 
local government rights.
  In reality, this preemption provision is an unfunded mandate because 
it will create major new costs for cities and for States. I hope to 
explain why. I know my colleague, the Senator from Idaho, will do that 
as well.
  A cable company would, and most likely will, appeal any local 
decision it does not like to the telecommunications experts at the 
Federal Communications Commission.
  The city attorney of San Francisco advises that, in San Francisco, 
city laws provide that all street excavations must comply with local 
laws tailored to the specifics of the local communities, including the 
geography, the density of development, the age of public streets, their 
width, what other plumbing is under the street, the kind of surfacing 
the street has, et cetera.
  The city attorney anticipates that whenever application of routine, 
local requirements interfere with the schedule or convenience of a 
telecommunications supplier, subsection (d), the provision we hope to 
strike, would authorize a cable company to seek FCC preemption. Any 
time they did not like the time and location of excavation to preserve 
effective traffic flow or to prevent hazardous road conditions, or 
minimize noise impacts, they could appeal to the FCC.
  If they did not like an order to relocate facilities to accommodate a 
public improvement project, like the installation, repair, or 
replacement of water, sewer, our public transportation facilities, they 
would appeal.
  If they did not like a requirement to utilize trenches owned by the 
city or another utility in order to avoid repeated excavation of 
heavily traveled streets, they would appeal.
  If they did not like being required to place their facilities 
underground rather than overhead, consistent with the requirements 
imposed on other utilities, they could appeal.
  If they were required to pay fees prior to installing any facility to 
cover the costs of reviewing plans and inspecting excavation work, they 
could appeal.
  If they did not like being asked to pay fees to recover an 
appropriate share of increased street repair and paving costs that 
result from repeated excavation, they would appeal.
  If they did not like the particular kinds of excavation equipment or 
techniques that a city mandate that they use, they could appeal.
  If they did not like the indemnification, they could appeal.
  The city attorney is right, that preemption would severely undermine 
local governments' ability to apply locally tailored requirements on a 
uniform basis.
  Small cities are placed at risk and oppose the preemption because 
small cities are often financially strapped. As the city attorney of 
Redondo Beach, a suburb of Los Angeles writes, every time there is an 
appeal, they would have to find funds to come back to Washington to 
fight an appeal at the FCC.
  Recently, the engineering design center at San Francisco State 
University, conducted an interesting study for San Francisco on the 
impact of street cuts on public roads. The expected life and value of 
public roads and streets directly correlates with the number of cuts 
into the road.
  Although this is rather dull and esoteric to some, the study reveals 
that streets with three to nine utility cuts are expected to require 
resurfacing every 18 years, a 30-percent reduction in service life, 
relative to streets with less than three cuts. The more road cuts, the 
steeper the decline in value of the public's asset will be. Streets 
with more than nine cuts are expected to require resurfacing every 13 
years, a 50-percent reduction in the service life of streets with less 
than three cuts.
  An even more dramatic decline in a street's useful life is found on 
heavily traveled arterial streets with heavy wheel traffic. For those 
streets, the anticipated useful life declines even more rapidly, from 
26 years for streets with fewer than three cuts to 17 years for streets 
with three to nine cuts, a 35-percent reduction, to 12 years for 
streets with more than nine cuts, a 54-percent reduction.
  What does this mean? It means that financially struggling cities and 
counties will undoubtedly be forced to include in franchise fees, 
charges to allow the recovery of the additional maintenance 
requirements that constantly cutting into streets requires. The 
exemption means that every time a cable operator does not like it, the 
Washington staff of the cable operator is going to file a complaint 
with the FCC and the city has to send a delegation back to fight that 
complaint. It should not be this way. Cities should have control over 
their streets. Counties should have control over their roads. States 
should have control over their highways.
  The right-of-way is the most valuable real estate the public owns. 
State, city, and county investments in right-of-way infrastructure was 
$86 billion in 1993 alone. Of the $86 billion, more than $22 billion 
represents the cost of maintaining these existing roadways. These State 
and local governments are entitled to be able to protect the public's 
investment in infrastructure. Exempting communication providers from 
paying the full costs they impose on State and local governments for 
the use of public right-of-way creates a subsidy to be paid for by 
taxpayers and other businesses that have no exemptions.
   [[Page S8171]] I would also like to point out the preemption will 
change the outcome in some of the dispute between communication 
companies and cities and States. The FCC is the Nation's 
telecommunications experts. But they do not have the broad experience 
and concerns a mayor, a city council, a board of supervisors, or a 
Governor would have in negotiating and weighing a cable agreement and 
setting a cable fee.
  If the preemption provision remains, a city would be forced to 
challenge the FCC ruling to gain a fair hearing in Federal court.
  This is important because presently they can go directly to their 
local Federal court. Under the preemption, a city, State, or county 
government would have to come to the Federal court in Washington after 
an appeal to the FCC.
  A city appealing an adverse ruling by the FCC would appear before the 
D.C. Federal Appeals Court rather than in the Federal district court of 
the locality involved. Further, the Federal court will evaluate a very 
different legal question--whether the FCC abused their discretion in 
reaching its determination. The preemption will force small cities to 
defend themselves in Washington, and many will be just unable to afford 
the cost.
  By contrast, if no preemption exists, the cable company may challenge 
the city or State action directly to the Federal court in the locality 
and the court will review whether the city or State acted reasonably 
under the circumstances.
  Edward Perez, assistant city attorney for Los Angeles, states this 
will be a very difficult standard to reverse, if they have to come to 
Washington. On matters involving communication issues, courts are 
likely to require a tough, heightened scrutiny standard for matters 
involving first amendment rights involving freedom of speech. Courts 
are likely to defer to the FCC judgment.
  The FCC proceeding and its appeal in Washington will be very 
different from the Federal court action in a locality. Both the city 
and the communications company are more likely to be able to develop a 
more complete and thorough record if the proceeding is before the local 
Federal court rather than before a Government body in Washington.
  We also believe the FCC lacks the expertise to address cities' 
concerns. As I said, if you have a city that is complicated in 
topography, that is very hilly, that is very old, that has very narrow 
streets, where the surfacing may be fragile, where there are earthquake 
problems, you are going to have different requirements on a cable 
entity constantly opening and recutting the streets. The fees should be 
able to reflect these regional and local distinctions.
  Mr. President, this stack of letters opposing the preemption includes 
virtually every California city and virtually every major city in every 
State.
  What the cities and the States tell us they want us to give local 
governments the opportunity for home rule on questions affecting their 
public rights-of-way. If the cable company does not like it, the cable 
company can go to court in that jurisdiction. By deleting the 
preemption, we can increase fairness, minimize cost to cities, 
counties, and States, and prevent an unfunded mandate.
  If the preemption remains in this bill, it creates a major unfunded 
mandate for cities, for counties, and for States. I hope this body will 
sustain the cities and the counties and the States, and strike the 
preemption.
  So I ask unanimous consent to have a number of letters printed in the 
Record.
  There being no objections, the letters were ordered to be printed in 
the Record, as follows:

                                  Office of the City Attorney,

                                   Los Angeles, CA, June 12, 1995.
     Re S. 652, Section 245(d) Preemption.
     Mr. Kevin Cronin,
     Office of Senator Diane Feinstein,
     Senate Hart Office Building, Washington, DC.
       Dear Mr. Cronin: You asked for our thoughts regarding S. 
     652, Sec. 254(d), which would create broad preemption rights 
     in the FCC with respect to actions taken by local 
     governments. Specifically, you are interested as to how 
     section 254(d) could frustrate the ability of local 
     government to manage its rights of way as Congress believes 
     Local Government should (See Sec. 254(c)) and how it could 
     prevent Local Government from imposing competitively neutral 
     requirements on telecommunications providers to preserve and 
     advance Universal Service, protect the public safety and 
     welfare and to ensure the continued quality of 
     telecommunications services and safeguard the rights of 
     consumers. (See Sec. 254(b)).
       Section 254(d) would permit the Federal Communications 
     Commission (``FCC'') to preempt local government:
       ``(d) preemption.--If, after notice and an opportunity for 
     public comment, the Commission determined that a State or 
     local government has permitted or imposed any statute, 
     regulation, or legal requirement that violates or is 
     inconsistent with this section, the Commission shall 
     immediately preempt the enforcement of such statute, 
     regulation, or legal requirement to the extent necessary to 
     correct such violation or inconsistency.''
       Section 254(d) reposes sweeping review powers in the FCC 
     and in effect converts a federal administrative agency into a 
     federal administrative Court. The FCC literally would have 
     the power to review any local government action it wishes 
     (either sua
      sponte or at the request of the industry.) The undesirable 
     consequence of this result will be that a federal agency--
     with personnel who do not answer directly to public--will 
     be dictating in fine detail what rules local government 
     and their citizens in distant places shall have to follow. 
     The FCC would be given plenary power to decide what 
     actions of local government are ``inconsistent with'' the 
     very broad provisions in the bill and, without further 
     review, to decide to nullify or preempt such governmental 
     actions. That is unprecedented and for reaching authority 
     for a federal agency to have over local government.
       The FCC does have an important role to play in the scheme 
     of things. It has a professional staff with proven expertise 
     in telecommunications matters such as technical requirements. 
     Moreover, issues that transcend state borders need the FCC as 
     the overseer in order to ensure consistency and fairness 
     between the states. On the other hand, the FCC is not in the 
     best position to know what is best for citizens at the local 
     level regarding local issues. An example of a singularly 
     local issue, historically recognized by Congress and the 
     Courts, is the local government's right to manage the public 
     right-of-way (See Section 254(c)). Federal officials do not 
     have an adequate understanding of local issues nor do they 
     have the staff, either in size or proficiency, to resolve 
     local issues about every city in this country. Local 
     Governments and the local courts (entities which are 
     knowledgeable about local issues) should be the forum for 
     resolution of local issues.
       An important point that needs to be explicated to Congress 
     is the procedural problems associated with the FCC resolving 
     local issues in Washington. First is the obvious problem. 
     Most citizens, community groups and cities do not have the 
     financial wherewithal to litigate before a federal agency 
     located in Washington. Even if an action of the FCC is 
     reviewed by the Courts, that also would occur in the 
     Washington D.C. Circuit miles away. Section 254(d) does 
     contain due process language and such a provision may meet 
     the technical requirements of the U.S. Constitution. However, 
     the provision ``If, after notice and an opportunity for 
     public comments * * *'' provides little solace for local 
     governments and its citizens. The FCC all too often provides 
     too little time to respond to its rules and rulemaking 
     proceedings for anyone other than the expensive FCC Bar. It 
     is impractical for local people to respond in a timely 
     fashion and FCC preemption consequently precludes the voice 
     of those most effected.
       Second, as a general rule the courts pay great difference 
     to administrative agencies that are created for specific 
     purposes.
      There is no argument with that proposition because of the 
     proven expertise of federal agencies in matters properly 
     within their purview. However, a serious problem is 
     created when a federal administrative agency is given 
     power over issues where it has little expertise, such as 
     the management of local rights-of-way. This is largely so 
     because of the legal standards for review of 
     administrative decisions. Generally, a decision will stand 
     unless the agency has abused its discretion or has 
     exceeded its authority.
       Again, for matters properly within an agency's purview 
     there is no quarrel. However, the sweeping review powers that 
     Section 254(d) places in the FCC would in essence permit the 
     FCC to preempt any statute, regulation, or legal requirement 
     that it believes is inconsistent with the Section 254(a) of 
     the Act. This awesome power clearly belongs with the Courts 
     and not distant administrative staffers. As written, it will 
     be extremely difficult for a court to find that the FCC has 
     exceeded its authority. Consequently, with regard to this 
     standard its decisions may in effect be unreviewable.
       Equally troublesome is the abuse of discretion standard 
     applied to federal agency actions. Practitioners in 
     administrative law know all too well that the courts will 
     uphold administrative decisions the vast majority of the 
     time. A reversal occurs only when there is a clear abuse of 
     discretion, a condition infrequently found by the Courts.
       The bottom line becomes very clear to local governments, 
     such as Los Angeles, and its citizens. Control regarding 
     telecommunications and zoning issues will be exercised by 
     federal officials three thousand miles away. Individuals who 
     know little or nothing about local interests. the important 
     everyday decisions that should be made by local officials and 
     that should be reviewable by local [[Page S8172]] courts, 
     will be made by faceless names in Washington.
       In addition, because if the procedural structure of the 
     FCC, the normal right to cross-examine witnesses and their 
     testimony is not present. The right to comment and reply to 
     another interested party's comments theorically permits the 
     FCC to make a fair and impartial judgment. However, the 
     comments are not under oath and the testimony that is filed 
     under penalty of perjury is never is reality tested for truth 
     and accuracy. The practical effect is that anybody may say 
     anything they wish with impunity. The decisionmakers, 
     therefore, may be misled into believing erroneous ``facts''. 
     This view is not intended to suggest that the courts are the 
     answer for all issues. There exist some practical problems 
     with the courts; they may be too slow and they may lack
      the technical expertise. However, Section 254(d) appears to 
     effectively eliminate the courts because of the absence of 
     any real or effective review of FCC decisions. Senate Bill 
     652 must be amended to leave local issues to local 
     government and thereby permit local citizens, local 
     governments and local courts to be active participants in 
     the resolution of local issues.
       Finally, the industry has clearly captured the decision 
     making of officials at the FCC. In recent years the voice of 
     local governments and its citizens have been routinely 
     rejected by the FCC and the industry appears to have a 
     lopsided influence.
       We recommend that Section 254(d) be eliminated in its 
     entirety. If that is accomplished, violations of S. 652 will 
     be decided in the forum properly equipped to do so--the local 
     Federal Courts.
       As an additional note, we wish to comment that section (a) 
     of S. 652 also represents a serious and significant invasion 
     of local government authority over local interests. Most any 
     action taken by local government in this area can be 
     construed as having ``the effect of prohibiting'' an entity 
     from providing telecommunications services. Surely more 
     precise wording can be developed which would not so 
     significantly erode the power of local government over local 
     matters. Please advise if you would like further comment 
     regarding this section.
       If I can be of further assistance, please do not hesitate 
     to call on me.
           Very truly yours,
                                                  Edward J. Perez,
     Assistant City Attorney.
                                                                    ____

                                          Office of City Attorney,


                             City and County of San Francisco,

                                                    June 12, 1995.
     Re Telecommunications Competition and Deregulation Act.
     Hon. Dianne Feinstein,
     U.S. Senate, Washington, DC.
       Dear Senator Feinstein: I am writing to commend you for 
     sponsoring an amendment to the telecommunications bill to 
     preserve local control over the public rights of way. It is 
     critical to local governments that subsection (d) of proposed 
     47 U.S.C. Section 254, which would authorize the FCC to 
     preempt state and local authority, be deleted from the bill.
       In San Francisco, as in other cities, we welcome the 
     prospect of new telecommunications providers making expanded 
     services available on a competitive basis. However, 
     deregulation only increases the importance of local control 
     over our streets because it brings many new companies seeking 
     to install facilities in our streets.
       City laws now require all street excavators--including 
     telecommunications providers--to comply with 
     nondiscriminatory local laws designed to preserve the public 
     health and safety and minimize the costs to the public of 
     repeated street excavation. Throughout the country, such 
     local laws are tailored to the specific characteristics of 
     each local community, including local geography, density of 
     development and the age of public streets and facilities. The 
     language of subsection (d) would severely undermine local 
     government ability to apply such locally tailored 
     requirements on a uniform basis.
       Whenever application of routine local requirements 
     interferes with the schedule or convenience of a 
     telecommunications supplier, subsection (d) would authorize 
     the company to seek FCC preemption. To identify just a few 
     examples, my colleague city attorneys and I will have to send 
     an attorney off to Washington every time a telecommunications 
     company challenges our authority to:
       (1) Regulate the time or location of excavation to preserve 
     effective traffic flow, prevent hazardous road conditions, or 
     minimize noise impacts;
       (2) Require a company to relocate its facilities to 
     accommodate a public improvement project, like the 
     installation, repair or replacement of water, sewer or public 
     transportation facilities;
       (3) Require a company to place facilities in joint trenches 
     owned by the City or another utility company in order to 
     avoid repeated excavation of heavily traveled streets;
       (4) Require a company to place its facilities underground, 
     rather than overhead, consistent with the requirements 
     imposed on other utility companies;
       (5) Require a company to pay fees prior to installing any 
     facilities to cover the costs of reviewing plans and 
     inspecting excavation work;
       (6) Require a company to pay fees to recover an appropriate 
     share of the increased street repair and paving costs that 
     result from repeated excavation;
       (7) Require a company to use particular kinds of excavation 
     equipment or techniques suited to local circumstances to 
     minimize the risk of major public health and safety hazards;
       (8) Enforce local zoning regulations; and
       (9) Require a company to indemnify the City against any 
     claims of injury arising from the company's excavation.
       All of the requirements described above are routinely 
     imposed by local governments in exercise of our 
     responsibility to manage the public rights of way. Granting 
     special favors to telecommunications suppliers, compared for 
     example to other utility companies, will undermine the 
     uniformity of local law and could dramatically increase the 
     costs to local taxpayers of maintaining public streets.
       In these times, when the federal government is asking state 
     and local governments to take on many additional duties, the 
     FCC should not be empowered to interfere in this area of 
     classic local authority. This is especially true because, for 
     many cities, the FCC is a remote, costly and burdensome arena 
     in which to resolve disputes. The courts are well-suited to 
     resolve any disputes that may arise from the ``Removal of 
     Barriers to Entry'' language of Section 254 without placing 
     heavy burdens on local governments.
       I appreciate the leadership you have shown on this 
     difficult issue. Please let me know if I can offer any 
     further assistance with your efforts on behalf of cities.
           Very truly yours,
                                                  Louise H. Renne,
                                                    City Attorney.

  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. KEMPTHORNE. Mr. President, I am honored to join my friend from 
California, Senator Feinstein, in this amendment. This is not the first 
time we have teamed up together. I think perhaps our background as both 
being former mayors has allowed us to bring to this position some 
perspective to help us realize, with regard to local and State 
governments, how this Federal-State-local partnership really ought to 
be ordered.
  The Senator from California was very helpful when we brought forward 
the bill, the Unfunded Mandates Reform Act of 1995, which the majority 
leader had designated Senate bill 1, and which allowed me to team up 
with the Senator from Ohio, John Glenn. In March of this year, as you 
know, Mr. President, that unfunded mandates legislation was signed into 
law.
  Part of that new law in essence says that Federal agencies must 
develop a process to enable elected and other officials of State, 
local, and tribal units of government to provide input when Federal 
agencies are developing regulations.
  The conference report of that legislation passed overwhelmingly. In 
the Senate it was 91 to 9. In the House it was 394 to 28.
  An overwhelming majority said in essence enough is enough, that the 
Federal Government must reestablish a partnership with local 
government. It is very straightforward. This movement toward local 
empowerment has consistently been expressed in the legislative reform 
occurring in both Houses of Congress. But I feel, as I think the 
Senator from California feels, that this provision in this 
telecommunications bill is causing a slippage back to our old habits. 
What we have before us in section 254 of the bill before us is a 
reversal of the positive progress that we have been making.
  As the Senator from California pointed out, in subsection (d) the 
committee has added broad and ambiguous FCC preemption language that 
states, if the FCC ``determines that a State or local government has 
permitted or imposed any statute, regulation, or legal requirement that 
violates or is inconsistent with this section, the FCC shall 
immediately preempt the enforcement of such statute, regulation, or 
legal requirement to the extent necessary to correct such violation or 
inconsistency.''
  We are going to give this power to the FCC over the jurisdictions of 
the local communities and the State governments. This is a disturbing 
directive that instructs the Federal Commission to invalidate duly 
adopted State laws and local ordinances that the independent Commission 
may deem inappropriate. This preemption would be generated by a 
commission that in a majority of cases would be thousands of miles away 
from the local government jurisdiction that would be affected by their 
decision.
  I know of no one in local government who objects to the language 
which ensures nondiscriminatory access to the [[Page S8173]] public 
right of way. But what they do vigorously object to is that this 
proposed FCC preemption does not allow them the prerogative to manage 
their right of way in a manner that they deem to be appropriate and in 
the best interest of their community.
  If I may, Mr. President, let me give you an example. When I was the 
mayor of Boise, ID, we had a particular project that on the main 
street, on Idaho Street, from store front to store front, we took 
everything out 3 feet below the surface and we put in brand new 
utilities. I think it was something like 11 different utilities all 
being coordinated, put in at the same time, then building it back up, 
new sidewalks, curbs, gutters, paving of the main street. I will tell 
you, Mr. President, that there is no way in the world that the FCC, 
3,000 miles away, could have coordinated that.
  I think one of the things that you hear so often if you are in local 
government or if you tune into the radio talk shows, is when a new 
street has been paved, within 6 months you see crews out there cutting 
into that new pavement, and they are putting in a new utility. That is 
expensive, and it is unnecessary if you can coordinate things. Surely, 
we do not think that an independent commission in Washington, DC, is 
going to be able to better coordinate that than the local government in 
San Francisco or the local government in Boise, ID. It just does not 
happen.
  This proposed preemption is based on two assumptions. First, that it 
is the role of the Federal Government to tell others what to do; 
second, that local units of government are not capable or responsible 
enough to make the right decisions. I reject both of those 
presumptions.
  Like the Senator from California, with the hands-on experience that 
she has had at the local government level, we realize that Federal 
solutions do not always meet local problems. You have to take into 
account the local conditions and the local innovations. These Federal 
solutions have not worked in the past. They are not working now. They 
will not work in the future.
  So why would we step back with all of the progress that we have been 
making this congressional session in reordering the partnership between 
the Federal, the State and the local governments in a working 
partnership?
  This language which introduces expanded FCC jurisdiction into the 
local decisionmaking process is ill-conceived, and it should not be 
included in the final language of this important legislation. Our 
amendment would strike the offending subsection in its entirety. This 
would leave control of local right of way matters with local elected 
officials, which is exactly where it belongs.
  The goal of Congress in regulatory reform should be to remove 
existing Federal roadblocks that limit productivity and creativity and 
innovation. We should legislate in a manner that enhances Federal-local 
intergovernmental partnerships for mutually beneficial results. We 
should not be guilty of imposing new, unnecessary bureaucratic hurdles 
as has been done in this case.
  So, again, I am so proud to join the Senator from California in this 
effort. We make a good team. This is a worthy effort to team up with 
because this present preemption needs to be removed from the 
telecommunications bill.
  I yield the floor, Mr. President.
  Mrs. FEINSTEIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. FEINSTEIN. Mr. President, I would like to thank the Senator from 
Idaho for those excellent remarks. I think he hit the nail on the head 
with respect to the rights of local government, and the way in which 
this Congress is moving. This preemption sets all of our progress 
regarding the relationship between Federal and local government back, 
and hurts cities, counties, and States in the process.
  So I want the Senator to know how much I enjoy working with him on 
this. I thank him very much.
  Mr. PRESSLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. Mr. President, I reluctantly rise in opposition to this 
amendment from two of my most respected colleagues in the Senate. The 
issue addressed in this amendment goes to the very heart of S. 652, 
eliminating barriers to market entry.
  In the case of section 254, which I have here in front of me, 
entitled ``Removal of Barriers to Entry,'' we do preempt any State or 
local regulation or statute or State or local legal requirement that 
may prohibit or have the effect of prohibiting the ability of any 
entity to provide telecommunications services.
  The actual authority granted to the FCC in subsection (d) is critical 
to ensuring that State and local authorities do not get in a way that 
precludes or has the effect of precluding new entry by firms providing 
new telecommunications services. At the same time, make no mistake 
about it, the authority granted in subsections (b) and (c) to the State 
and local authorities respectively in turn protect them. For example, 
in subsection (c) it says, ``Nothing in this section affects the 
authority of local government to manage the public rights of way.''
  Mr. President, this is a particularly difficult problem because all 
of us want to leave authority with State and local government. But this 
is a deregulatory bill to allow companies to enter and to compete 
without barriers. If this section were allowed to fall, it could mean 
that certain requirements would be placed on companies, such as public 
service projects or certain types of payments of one sort or another 
for a local universal service, or whatever. We are trying to deregulate 
the telecommunications markets in the United States. I know it sounds 
great to say let every city and municipality have a virtual veto power 
over what is occurring in their area.
  Now, it is my strongest feeling that sections (b) and (c) to the 
State and local authorities, respectively, are more than sufficient to 
deal in a fair-handed and balanced manner with legitimate concerns of 
State and local authority. Sections (b) and (c) take into account State 
and local government authority, (b) says:

       State Regulatory Authority. Nothing in this section shall 
     affect the ability of a State to impose, on a competitively 
     neutral basis and consistent with section 253, requirements 
     necessary to preserve and advance universal service, protect 
     the public safety and welfare, ensure the continued quality 
     of telecommunications services and safeguard the rights of 
     consumers.

  Section (c):

       Local Government Authority. Nothing in this section affects 
     the authority of a local government to manage the public 
     rights of way or to require fair and reasonable compensation 
     from telecommunications providers, on a competitively neutral 
     and nondiscriminatory basis, for use of public rights of way 
     on a nondiscriminatory basis if the compensation required is 
     publicly disclosed by such Government.

  Now, the preemption clause (d) reads as follows:

       If, after notice and an opportunity for public comment, the 
     Commission determines that a State or local government has 
     permitted or imposed any statute, regulation, or legal 
     requirement that violates or is inconsistent with this 
     section, the Commission shall immediately preempt the 
     enforcement of such statute, regulation, or legal requirement 
     to the extent necessary to correct such violation or 
     inconsistency.

  The intent therefore is to leave protected State regulatory 
authority, to leave protected local government authority, but there 
have to be some cases of preemption or a certain city could impose a 
requirement of some sort or another that would be very anticompetitive, 
and that is where we come out.
  I have joined in a lot of efforts here to ensure that our State and 
local authority be preserved. And I understand there will possibly be a 
second-degree amendment. We have worked closely with Senator Hutchison 
and the city, county, and State officials to achieve this balance. That 
is where the committee came out.
  I feel very strongly that it is a fair balance. It takes into account 
State regulatory authority, takes into account local government 
authority. But it also recognizes the need to open up markets, the 
removal of barriers to entry. In many cases these do become barriers to 
entry, barriers to competition.
  So I rise in reluctant opposition to the amendment.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  [[Page S8174]]
  
  Mr. HOLLINGS. Mr. President, you have to be sure of foot to be 
opposing two distinguished former mayors. The Senator from California 
is the former mayor of San Francisco, and the distinguished Senator 
from Idaho is a former mayor of Boise. Both had outstanding records.
  But let me suggest that what they have read into the preemption 
section is a requirement and an idea that just does not exist at all. I 
will have to agree with them in a flash that the Federal Communications 
Commission has no idea of coordinating, as the Senator from Idaho has 
outlined, the digging up in front of all of the sidewalks and stores 
and everything else, putting in the regular necessary conduit, 
refirming the soil and the sidewalks again in front. We have no idea of 
the FCC doing it.
  Let us tell you how this comes about. Section 254 is the removal of 
the barriers to entry, and that is exactly the intent of the Congress, 
and it says no Government in Washington should, well, vote against it. 
But I think the two distinguished Senators are not objecting to the 
removal of the barriers to entry. What we are trying to do is say, now, 
let the games begin, and we do not want the States and the local folks 
prohibiting or having any effect of prohibiting the ability of any 
entity to enter interstate or intrastate telecommunications services. 
When we provided that, the States necessarily came and said, wait a 
minute, that sounds good, but we have the responsibilities over the 
public safety and welfare. We have a responsibility along with you with 
respect to universal service.
  So what about that? How are we going to do our job with that 
overencompassing general section (a) that you have there. So we said, 
well, right to the point: ``Nothing in this section shall affect the 
ability of a State to impose on a competitively neutral basis''--those 
are the key words there, the States on a competitively neutral basis, 
consistent with opening it up--``requirements necessary.''
  We did not want and had no idea of taking away that basic 
responsibility for protecting the public safety and welfare and also 
providing and advancing universal service. So that was written in at 
the request of the States, and they like it. The mayors came, as you 
well indicate, and they said we have our rights of way and we have to 
control--and every mayor must control the rights of way.
  So then we wrote in there:

       Nothing shall affect the authority of a local government to 
     manage the public rights of way or to acquire fair and 
     reasonable compensation . . . on a competitively neutral and 
     nondiscriminatory basis.

  ``Competitively neutral and nondiscriminatory basis.'' Then we said 
finally, indeed, if they do not do it on a competitively neutral or 
nondiscriminatory basis, we want the FCC to come in there in an 
injunction. We do not want a district court here interpreting here and 
a district court in this hometown and a Federal court in that hometown 
and another Federal court with a plethora of interpretations and 
different rulings and everything else. We are trying to get uniformity, 
understanding, open competition in interstate telecommunications--and 
intrastate, of course, telecommunications.
  Now, that was the intent and that is how it is written. And if our 
distinguished colleagues have a better way to write it, we would be 
glad and we are open for any suggestion. But somewhere, sometime in 
this law when you say categorically you are going to remove all the 
barriers to entry, we went, I say to the Senator, with the experience 
of the cable TV. I sat around this town--I was in an advantaged section 
up near the cathedral. I had the cable TV service, but two-thirds of 
the city of Washington here did not have it for years on end because we 
know how these councils work. We know how in many a city the cable 
folks took care of just a couple of influential councilmen, and they 
would not give service or could give service or run up the price and 
everything else of that kind.
  We have had experience here with the mayors coming and asking us. And 
this is the response. That particular section (c) is in response to the 
request of the mayors. If they do not do that, if they put it, not in a 
competitively neutral basis or if they put it in a discriminatory 
basis, then who is to enjoin? And we say the FCC should start it. Let 
us not go through the Administrative Procedures Act. Let us not go 
through every individual.
  Yes, we want those mayors and all to come here and everybody to 
understand rules are rules and we are going to play by the rules and 
the rules protect those mayors to develop, to administer, to 
coordinate. I agree 100 percent, I say to the Senator from Idaho, that 
the FCC has never performed the job of a city mayor. But they shall and 
must perform this job here of removing the barriers to entry. And if we 
do not have them doing it, then I will yield the floor and listen to 
what suggestion they have. But do not overread the preemption section 
to other than centralizing the authority and responsibility in the FCC 
to make sure, like they have in administering all the other rules 
relative to communications here and all the other entities involved in 
telecommunications, they have that authority to make sure while the 
cities got their rights of way, while the States have got their public 
welfare and public interest sections to administer, that it is done on 
a nondiscriminatory basis.
  Mr. KEMPTHORNE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. KEMPTHORNE. Mr. President, I would like to respond to my two 
friends, the floor managers of this bill, and then I know the Senator 
from California would also like to respond.
  They referenced, of course, section 254, which is removal of barriers 
to entry. That is the section and that is the key. They stated it:

       That no State, local statute or regulation or other State 
     or local legal requirement may prohibit or have the effect of 
     prohibiting the ability of any entity to provide any 
     interstate or intrastate telecommunications services.

  Period. Period. And nothing in this amendment alters that at all. We 
affirm that. It is my impression, Mr. President, that when it is 
referenced that section (b), State regulatory authority, yes, the 
States feel that that language is good; and section (c), local 
government authority, yes, mayors had something to do with the writing 
of that language. They feel good about that. But the problem is, then 
you go on to section (d) which, it is my understanding, came very late 
in the process. In section (d), there is this line that says: ``The 
Commission shall immediately preempt * * *''
  We see this so many times with Federal legislation: On the one hand, 
we give but, on the other hand, we take it away. In section (b) and 
section (c) we give, but, by golly, we have section (d) that then says 
that this Commission will immediately preempt. That is the problem. We 
are not saying that we should not be held accountable to this. That is 
why there is no language in this amendment to alter the opening 
statement of section 254. No problem. It is section (d) that then comes 
right along and, after everything has been said, preempts and pulls the 
plug, and that is wrong. We should not do this to our local and State 
partners. It is absolutely wrong.
  I yield the floor.
  Mrs. FEINSTEIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. FEINSTEIN. Mr. President, my colleague from Idaho took the words 
right out of my mouth. I think he is exactly right in his 
interpretation of this section. The barrier for entry is clearly done 
away with by this section. Nothing Senator Kempthorne or I would do 
would change that. What we do change, however, is simply delete the 
ability of a remote technical commission to overturn a city decision 
and create an enormous hassle for cities all across this Nation.
  I would like to just give you the exact wording of what the city 
attorney of Los Angeles said this section does. He says:

       It proposes sweeping review powers for the FCC and, in 
     effect, converts a Federal administrative agency into a 
     Federal administrative court. The FCC literally would have 
     the power to review any local government action it wishes, 
     either on its own or at the request of the industry.
       A Federal agency, with personnel who do not directly 
     respond to the public, will be dictating in fine detail what 
     rules local government and their citizens across the country 
     shall have to follow. The FCC would be [[Page S8175]] given 
     plenary power to decide what actions of local government are 
     ``inconsistent with'' the very broad provisions in the bill 
     and, without further review, hold the authority to nullify or 
     preempt state and local governmental actions. That is an 
     unprecedented and far-reaching authority for a Federal agency 
     to have over local government.

  I could not agree more. Senator Kempthorne and I were both mayors at 
one time and we both understand that every city has different needs 
when it comes to cable television.
  I remember as the mayor of San Francisco when Viacom came into the 
city. It wired just the affluent sections of the city. It refused to 
wire the poorer areas of the city. Unless local government had the 
right to require that kind of wiring, it was not going to be done at 
all. That is just one small area with which I think everyone can 
identify.
  But when it comes to the rights-of-way and what is under city 
streets, the city must be in the position to set rules and regulations 
by which its street can be cut. This preemption gives the FCC the right 
to simply waive any local rulemaking and say that is not going to be 
the case. It gives the FCC the right to waive any local fee and say, 
``That's not the way it is going to be.''
  That is why countless cities and counties across the country, not 
just one or two, but virtually all of the big organizations, including 
the League of Cities, the national Governors, local officials and 
others, say, ``Don't do this.'' If a cable company has a problem with 
anything we in local government do, let them go to court. Let a court 
in our jurisdiction settle the issue. I think that is the right way to 
go. For the life of me, I have a hard time understanding why people 
would want to preempt these local decisions with the technical, far-
removed FCC agency.
  So I think Senator Kempthorne has well outlined the situation. I 
think we have made our case.
  I thank the Chair.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, the distinguished colleague from Idaho 
said ``came so late in the process.'' I want to correct that thought. I 
am referring back over a year ago to a bill with 19 cosponsors, this 
same language:

       * * * the Commission determines that a State or local 
     government has permitted or imposed any statute, regulation, 
     or legal requirement that violates or is inconsistent with 
     this subsection, the Commission shall immediately preempt the 
     enforcement of such statute, regulation, or legal requirement 
     to the extent necessary to correct such violation or 
     inconsistency.

  It did not come late in the process. We have been working with mayors 
and we have several former mayors who were cosponsors. That was S. 
1822. So this is S. 652, which is, of course, over a year subsequent 
thereto.
  Is it the language that is inconsistent with this subsection? Is that 
the bothersome part? It sort of bothers this Senator. I think if you 
are going to violate your authority with respect to being neutral and 
nondiscriminatory and you have to have somewhere this authority, in the 
entity of the FCC, to do it rather than the courts, each with a 
plethora of different interpretations and law, I would think if we 
could take that, maybe that would satisfy the distinguished Senator 
from California and the Senator from Idaho.
  I yield the floor. I make that as a suggestion.
  Mr. KEMPTHORNE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. KEMPTHORNE. Mr. President, I appreciate the good efforts of the 
Senator from South Carolina, because I have always found him to be a 
gentleman whom I can work with and we can find areas on which we can 
see some common ground.
  With regard to my comment that it came late in the process, this may 
be a concept that had been discussed quite a bit, but the mayors that 
the Senator from South Carolina referenced, it was local officials who 
told me that this particular language of (d) was not in the draft 
bill's language, it was not part of the draft bill when it came out. 
And it was really after Senator Hutchison from Texas, who raised this 
issue, had section (c) added that (d) then came back.
  I do not know, it may have been something that has been discussed for 
some months, but as far as putting it in the bill, it was not there.
  The other point then about how do we deal with this, again, Senator 
Feinstein and I are in absolute agreement that with respect to this 
whole issue of removal of barriers to entry, if there are problems, if 
a cable company is getting a bad deal and being put off by a local 
government, they can go to court, but they go to court in that area, 
they do not have to come to Washington, DC.
  The avenue for remedy already exists, so why do we then say, again, 
everyone must come to Washington, DC?
  That is expensive. I think it is unnecessary and these cable 
companies, if there had been particular problems and there is a trend, 
they can establish a precedence in the court, and I think the local 
communities are going to realize if there is something wrong, they will 
not do it again because they will lose in court. I think the spirit in 
which Senator Feinstein and I have joined in this is on behalf of State 
and local governments, that they are going to own up to their 
responsibilities. Let us not make them come to Washington, DC, and not 
make every one of them subject to the FCC in Washington, DC.
  I yield the floor.
  Mr. PRESSLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. Mr. President, I wanted to speak very briefly on this. 
I know our whip is here with some business.
  First of all, I think we have to put this in context. As Senator 
Hollings has pointed out, this section has been the result of hours and 
days of negotiations with city officials. It was in S. 1822 last year, 
and it is here. I think we have to take a step back and look at some of 
the cable deals and problems that have occurred in our cities. The 
cities have granted exclusive franchises in some cases and are not 
allowing competition. They have required certain programming be put on 
and other requirements on those companies.
  Our States have granted, in the telephone area, certain exclusive 
franchises, not allowing competition. And the point is, if we are 
having deregulation here, removal of barriers to entry, we have to take 
this step. I think that is very important for us to considerate this 
point.
  Now, section 254 goes to the very heart of this bill, because removal 
of barriers to entry is what we are trying to accomplish with this 
bill. We preempt any State or local regulation or statute or State or 
local legal requirement that may prohibit or have the effect of 
prohibiting the ability of any entity to provide telecommunications 
services.
  The authority granted to the FCC in subsection (d) is critical if we 
are going to open those markets, because a lot of States and cities and 
local governments may well engage in certain practices that encourage a 
monopoly or that demand certain things from the business trying to do 
business. That would not be in the public interest.
  At the same time, make no mistake about it, Mr. President, the 
authority granted in subsection (b) and (c) to the State and local 
authorities, respectively, are more than sufficient to deal in a 
fairhanded and balanced manner with legitimate concerns of State and 
local authority. These were negotiated out with State and local 
authorities.
  We have worked closely with Senator Hutchison and the city, county, 
and State officials to strike a balance. We have gone to great pains 
and length to deal with concerns of the cities, counties, and State 
governments that are legitimately raised. We dealt with the concerns in 
subsection (b) and (c), while at the same time setting up a procedure 
to preempt where local and State officials act in an anticompetitive 
way, by taking action which prohibits, or the effect of prohibiting, 
entry by new firms in providing telecommunications services.
  Now, the real problem created by the amendment offered by my friends, 
Senators Feinstein and Kempthorne, is that the very certainty which we 
are trying to establish with this legislation is put at risk. 
Certainty. A company has to go out and wonder if that local city or 
State will put some requirement on it to provide some kind of 
programming, or even to do something in [[Page S8176]] the city to 
provide some service, or if it will grant an exclusive monopoly. What 
we are trying to get are barriers to entry, and we are reserving to the 
State and local governments certain authorities. So the certainty we 
are looking for we have taken away--no guarantee that entry barriers 
will be toppled and no guarantee of uniformity across the country.
  The committee has dealt with federalism concerns throughout this 
legislation. Let me say that this debate goes to the heart of a 
technical detail of federalism and the Federal Government's 
relationship to State and local government. It is one of the most 
complicated areas of this bill. Believe me, it is hard to strike a 
balance. But if we strike this out, it gives every city in the country 
the right to put up barriers to entry. It lets every State have the 
right to have a monopoly unless they can extract something for the 
State in one way or another. I would not blame cities and States. If we 
do that, it goes to the very heart of this bill.
  Now, I take a back seat to no one in advocating federalism 
principles. I like much power in the State and local government. It 
must be balanced with our other goal--removing the anticompetitive 
restrictions at the local level which restrict competition. Exclusive 
franchising in the cable and telephone markets is the very way that 
established monopolies in the past.
  So, to conclude my statements on this, I understand that there may be 
a possible second-degree amendment to this tomorrow that would deal 
with the language on line 8 on page 55, ``preemption,'' which would 
deal with the words, or is consistent with. But I am not certain that 
that second degree will be offered.
  In any event, to conclude, this particular section of the bill goes 
to the heart of dealing with the federalism issue. Are we going to 
allow the cities and the State to put up barriers of entry to 
telecommunications firms? In the past, we have done so, with cable 
television. We have allowed cities not only to add a franchise fee, but 
also to require certain programming, and sometimes the companies do 
something else for the city as an incentive.
  In telephones, we have allowed our States to set up a monopoly in the 
State and sometimes to collect certain things or to put certain 
requirements on. In this bill, S. 652, we are trying to deregulate, 
open up markets, and we are trying to let that fresh air of competition 
come forward. If our companies and our investors have the uncertainty 
of not knowing what every city will do, of not knowing what every State 
will do and each State legislature and each city council may change, 
the companies will be in the position of having to endlessly lobby city 
officials and State officials on these issues--not only that, at any 
time certainty is taken out.
  This bill, S. 652--if we pass it--will provide a clear roadmap with 
certainty for competition. It will create an explosion of a new 
investment in telecommunications and new jobs and new techniques. And 
it will help consumers with lower telephone rates and lower cable 
rates. It has been carefully crafted and worked out in close to 90 
nights of meetings, and on Saturdays and Sundays, plus last year, a 
whole year, plus a lot of Senators' input. I know it sounds good to 
give the power to the city and the State, and I am usually for that. In 
this case, we reserve powers to the city and State, but we very firmly 
say that the barrier to entry must be removed.
  Mr. President, I wish to point out that I think there may be a 
second-degree amendment to this tomorrow at some point. I want to give 
Senators notice of that. There may not be. But I rise in opposition to 
the amendment.
  Mr. LOTT. Mr. President, I do have some business to conduct, 
including the closing statement. At this juncture, I would like to do a 
couple of things, and if the Senator from Nebraska wants to make a 
statement, I will withhold on the closing unanimous consent.


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