[Congressional Record Volume 141, Number 96 (Tuesday, June 13, 1995)]
[Senate]
[Pages S8206-S8225]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT

  The PRESIDING OFFICER (Mr. DeWine). Under the previous order, the 
Senate will now resume consideration of S. 652, the telecommunications 
bill, which the clerk will report.
  The assistant legislative clerk read as follows:

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

  The Senate resumed consideration of the bill.

       Pending:
       (1) 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.
       (2) 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.
       Subsequently, the amendment was modified further.
       (3) Feinstein-Kempthorne amendment No. 1270, 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.

  Mr. PRESSLER. Mr. President, I believe the Senator from Mississippi 
is waiting to speak, and I have some business to take care of, which we 
are going to make some corrections on. I urge all my colleagues to 
bring their amendments to the floor. We are trying to move this bill 
forward. We are trying to get agreement on a lot of the amendments, and 
we are working feverishly on several amendments that we hope we can get 
agreements on. Those Senators who wish to speak or offer amendments, I 
hope they will bring them to the floor.
  We do have the vote on the underlying Dorgan amendment at 12:30 p.m. 
and we will be looking forward to having several stacked votes later in 
the afternoon.
  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Mississippi.


                    Amendment No. 1265, as Modified

  Mr. LOTT. Mr. President, I rise to speak in opposition to the Dorgan-
Thurmond amendment that would put the Department of Justice into the 
middle of this telecommunications entry question. This issue really is 
being pushed primarily by the Department of Justice but, of course, a 
number of long distance companies are very much interested in it, and 
they are asking that the Justice Department be given a decisionmaking 
role in the process of reviewing applications for the Bell company 
entry into the long distance telephone service.
  A grant of that type of authority to the Justice Department, in my 
opinion, is unprecedented. It goes far beyond the historical 
responsibility of Justice. It is a significant expansion of the 
Department's current authority under the MFJ, and it raises 
constitutional questions of due process and separation of powers. In 
short, I think it is a bad idea.
  Who among us thinks that after all the other things that we have put 
in this telecommunications bill that we should have one more extremely 
high hurdle, and that is the Antitrust Division of the Justice 
Department, which would clearly complicate and certainly delay the very 
delicately balanced entry arrangement that is included in this bill, 
and that is the purpose of the amendment. It is one more dilatory 
hurdle that should not be included.
  The Antitrust Division of the Justice Department has one duty, and 
that is to enforce the antitrust laws, primarily the Sherman and 
Clayton Acts. It has never had a decisionmaking role in connection with 
regulated industries. The Department has always been required to 
initiate a lawsuit in the event it concluded that the antitrust laws 
had been violated. It has no power to disapprove transactions or issue 
orders on its own.
  While the U.S. district court has used the Department of Justice to 
review requests for waivers of the MFJ, the Department has no 
independent decisionmaking authority. That authority remains with the 
courts. In transportation, in energy, in financial services and other 
regulated businesses, Congress has delegated decisionmaking authority 
for approval of transactions that could have competitive implications 
with the agency of expertise; in this case, the FCC.
  The Congress has typically directed the agency to consider factors 
broader than simply the impact upon competition in making 
determinations. This approach has worked well. Why do we want to change 
it? It contrasts with the role Justice seeks with regard to 
telecommunications and the telephone entry. Telecommunications is not 
the only industrial sector to have a specific group at the Justice 
Department. It has antitrust activity in a transportation, energy and 
agriculture section, a computers and finance section, a foreign 
commerce section and a professions and intellectual property section.
  The size of the staff devoted to some of these sections is roughly 
equivalent to that devoted to telecommunications and, I might add, it 
is too many in every case. If we want to do a favor to the American 
people, we should move half the lawyers in the Justice Department out 
of the city and put them out in the real world where they belong, 
working in the U.S. attorneys' offices fighting real crime. But, no, we 
have them piled up over in these various sections and, in many cases, 
in my opinion, not being helpful; in fact, being harmful.
  If the Department has special expertise in telecommunications such 
that it should be given a decisionmaking role in the regulatory 
process, does it not also have a special expertise in other fields as 
well? Today's computer, financial services, transportation, energy and 
telecommunications industries are far too complex and too important to 
our Nation's economy to elevate antitrust policy above all other 
considerations in regulatory decisions.
  The Justice Department, in requesting a decisionmaking role in 
reviewing Bell company applications, for entry into long distance 
telephone service, seeks to assume for itself the role currently 
performed by U.S. District [[Page S8207]] Judge Harold Greene. It does 
so without defining by whom and under what standards its actions should 
be reviewed.
  Typically, as a prosecutorial law enforcement agency, actions by the 
Department of Justice have largely been free of judicial review. In 
this case, the Department also seeks a decisionmaking role. As a 
decisionmaker, would the Antitrust Division's determinations be subject 
to the procedural protections and administrative due process safeguards 
of the Administrative Procedures Act? I do not know what the answer is 
to that question, but it is an important one.
  What does this do to the Department's ability to function as a 
prosecutorial agency? Should one agency be both prosecutor and 
tribunal? That is what they are trying to do here. This is a power 
grab. We should not do this. Congress should reject the idea of giving 
the Justice Department a decisionmaking role in reviewing Bell company 
applications to enter the long distance telephone business. It is bad 
policy, bad procedure and clearly a bad precedent.
  Mr. President, as Senator Exon of Nebraska very eloquently explained 
last Friday--I believe it was in the afternoon--Congress has passed 
many deregulation measures--airlines, trucking, railroads, buses, 
natural gas, banking, and finance. None of those measures was given 
executive department coequal status with regulators. What the Justice 
Department is seeking here is essentially a front-line role with ad hoc 
veto powers. Justice would be converted from a law enforcement to a 
regulatory agency, and it should not be. They would end up focusing 
chiefly on just this sector of the economy. We just do not need to 
create the equivalent of a whole new bureaucracy and regulatory agency 
just for telecommunications.
  Let us look at the nearly two dozen existing safeguards that are 
already contemplated and required by this bill. Some people say, ``Wait 
a minute, you were looking at some things like this last year,'' the 
VIII(c) test. That was a year ago, and it did not get through. It is a 
different world. The committee has continued to work with all parties 
involved, the experts in the field, and we have laboriously come up 
with what I think is an understandable and fair process to open up 
these telephone markets.
  First of all, a comprehensive, competitive checklist with 14 separate 
compliance points, including interconnection, unbundling, number 
portability. That is the heart of what we would do in the entry test.
  It also has the requirement that State regulators certify compliance. 
There is the requirement that the Federal Communications Commission 
make an affirmative public interest finding. We have already fought 
this battle. We had an amendment to knock out the public interest 
requirements and, quite frankly, that was a tough one for me. I really 
understand that there is some ambiguity and some concern about what is 
this public interest test. But we have the hurdle of the checklist, we 
have the State regulators and we also have the public interest test. So 
that is three hurdles already.
  There is the requirement that the Bell companies comply with separate 
subsidiary requirements. We want some protections, some firewalls, if 
you will. So there would be this separate subsidiary requirement. There 
is the requirement that the FCC allow for full public comment and 
participation, including full participation by the Antitrust Division 
of the Justice Department and all of its various proceedings. They are 
not excluded, they have a consultative role. They will be involved, but 
they just are not going to be a regulator under this interest test.
  There is the requirement that the Bell companies comply with all 
existing FCC rules and regulations that are already on the books, 
including annual attestation, which is very rigorous in its auditing 
procedures; second, an elaborate cost-accounting manual and procedure; 
computer assisted reporting and analysis systems; and all of the 
existing tariff and pricing rules. There is also still the full 
participation of the Sherman Antitrust Act and the Clayton Act 
regarding mergers.
  There is the full application of the Hart-Scott-Rodino 
Prenotification Act, which requires Justice clearance of most 
acquisitions. So Justice will be involved under the Hart-Scott-Rodino 
Act. Also the full application of the Hobbs Civil Appeals Act of the 
Communications Act, which makes the Antitrust Division automatically an 
independent party in every FCC common carrier and rulemaking appeal.
  The approach in this bill was hammered out in the most bipartisan 
possible way, with great effort by the distinguished chairman and the 
distinguished ranking member, and it involved give and take. It was not 
easy. I think the thing that makes me realize it is probably the best 
test we can probably have is that nobody is perfectly happy with it. 
Everybody is a little unhappy with it, showing to me that it is 
probably fair. After all, as I said in my opening speech on this 
subject, what we are dealing with here is an effort by everybody to get 
just a fair advantage. Everybody just wants a little edge on the other 
one. We have tried to say, no, we are going to have a clear 
understanding here. Here is the checklist, the public interest tests, 
and all these FCC and Justice Department involvements. This is fair to 
both sides. And now they want to add one more long jump to the 
process--to put the Justice Department in a regulatory role. Big 
mistake. This has strong support on both sides of the aisle. It is not 
partisan whatsoever.
  Let us use our common sense here. You know, that is a unique thing. 
Let us try to apply some common sense to this law and what we are 
trying to accomplish. Let us go with the Commerce Committee experts who 
drafted this bipartisan legislation. There are more than enough 
safeguards already in this bill and in existing law. Congress is also 
going to move this slowly. These changes will not happen overnight. It 
will take a while. And we will find some points that probably need to 
be addressed later on. We can still do that.
  If any competitive challenges arise because the Antitrust Division is 
not allowed to convert itself into a telecommunications regulatory 
agency, then Congress can come back and revisit the issue. We are not 
finishing this once and for all.
  I just want to say that of all the bad ideas I have seen around here 
this year, the idea that we come in here and put the Justice Department 
in a regulatory role is the worst one I have seen. It attacks the core, 
the center of this bill. We have addressed the questions of 
broadcasting and cable and fairness in radio, television, as well as 
the Bells and the long distance companies. This is a broad, massive 
bill. But the core of it all is the entry test. If we pull that thread 
loose, this whole thing comes undone.
  Also, I want to say that I am convinced that the leaders of this 
committee will continue to move it forward in good faith. If we find 
there are some problems, or if we find when we get into conference that 
the House has a better idea on some of these things, there will be give 
and take. But this is the critical amendment.
  I urge my colleagues to vote against the Dorgan amendment, vote to 
table the Dorgan amendment, and do not be confused by the Thurmond 
second-degree amendment, because it is a smaller version of the Dorgan 
amendment. It is the old camel nose under the tent. We should not start 
down that trail at this point.
  Mr. HOLLINGS. If the Senator will yield. The distinguished Senator 
from Mississippi is really analyzing in a most cogent fashion what 
discourages this Senator even further. I wondered if the Senator from 
Mississippi agrees that it will not only bring in the Department of 
Justice in a regulatory fashion and responsibility, but they actually 
eliminate the Federal Communications Commission measuring of market 
competition. Listening to the language: ``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.''
  So when they say antitrust, that means competitive effects. They lock 
out the word on competition, but that is the intent. You can see how it 
has been drawn. ``* * * shall not consider the * * * effects of such 
authorization'' on competition.

[[Page S8208]]

  So they insert the word ``antitrust'' and do not put in 
``competition''. But that is the intent. So where you have the most 
recent and leading decision here, the U.S. Court of Appeals in Warner 
versus Federal Communications Commission, where they stated right to 
the point, ``The Commission struck an appropriate balance between the 
competing interests of the cable companies and their subscribers,'' 
giving the good government award to the FCC on measuring market 
competition.
  You see, the thrust of this amendment, where they get this idea, is 
that somehow the expertise is over in the Department of Justice, and 
none whatever, no experience or track record whatever in the Federal 
Communications Commission, which is totally false. They have been doing 
it. I listed numerous competitive initiatives by the FCC in the past 10 
years. And right to the point here, when we told them, look, in 
regulating the cable TV folks, find out whether or not effective 
competition has developed within the market. Once the market is 
permeated with effective competition, no longer is regulation 
necessary.
  So my question is not just the matter of putting the nose of the 
camel under the tent, he is putting the whole blooming camel in and 
crowds out the FCC. It said, look, we do not want the FCC measuring 
competition and the market. ``Shall not.'' Now, say I am a 
communications lawyer, so I read that and I say, the FCC is doing it, 
but the law says, by the Congress, you have this betwixt and between. 
It is really confusion. Do you not see it a danger to the fundamental 
authority and responsibility of the FCC?
  Mr. LOTT. Absolutely, I think you put your finger right on it. In 
that amendment, they not only want to add Justice Department, they want 
to supplant the FCC role here. And that, to me, again, as I have said 
in my remarks, is unprecedented. I think that the FCC clearly is an 
agency where the expertise exists. We have tried to make this bill as 
deregulatory and competitive as possible. But as we move toward this 
more competitive arena, we must have some process to look and see that 
the requirements of the bill have been met. The FCC is the one that 
should do that, not the Justice Department. So I thank the former 
chairman for his comments in this regard.
  Mr. PRESSLER. If my friend will yield for a question, my question is, 
does this go to the very nature of the role of the Justice Department?
  It is my understanding that the enabling act that created the 
Department of Justice, and the enabling legislation that created the 
Antitrust Subdivision of the Department of Justice, has them as the 
enforcer of antitrust law, and the Justice Department is the enforcer 
of law. They have a prosecutorial capability. And under the 
Administrative Procedures Act, if you go before the FCC, you have 
certain rights. The FCC has to be open. The FCC gives certain ex parte 
rights. The Justice Department can operate in secret because it is a 
prosecutorial agency. The Administrative Procedures Act does not fully 
apply. So the nature of the two agencies is different.
  But, for the first time, under the Dorgan amendment, we would be 
creating a regulatory role, permanently. Granted, the district court 
judge, Judge Greene, made a regulatory role for some Justice Department 
lawyers who actually worked for him, by his orders. But this would be 
the first time as far as our research can find, that the Justice 
Department has been given a permanent regulatory decisionmaking role. 
So does not this go to the very nature of the division of power to the 
very nature of the Justice Department?
  Mr. LOTT. I think it clearly does. I think it clearly is 
unprecedented. It would give this regulatory authority to an agency 
that has not been and should not be a regulatory agency. I think there 
is clearly a conflict here.
  For those who do feel like the Justice Department must be involved, 
for those on the Judiciary Committee that worry about this sort of 
thing--and I am not one of them, thank goodness, I want to emphasize--
this does not take away the existing law.
  The Justice Department will have a consultant role. They will have 
rights under the antitrust laws. The Sherman Act will still be in 
place, as the Clayton Act will be in place, the Administrative 
Procedures Act will be in place, the Hobbs will be applicable and the 
Hart-Scott-Rodino will be in place. All will be there.
  The Justice Department will be able to perform its normal role that 
it performs in all other areas where we have moved toward deregulation. 
That is what their role should be. Not this new added power.
  Just in conclusion, Mr. President, I urge, again, our colleagues to 
support the chairman's motion to table the Dorgan amendment. That will 
occur at 12:30.
  Mr. PRESSLER. If I could ask a quick question of my colleague. The 
Justice Department, under the Hobbs Appeal Act, any time somebody goes 
to the FCC and they get a decision that they do not like and they 
appeal it, the Justice Department can be a party to that right now and 
under our legislation. So the Justice Department is a very active 
participant in every FCC case.
  In fact, our legislation requires consultation between the FCC and 
the Attorney General. But aside from that, is it not true that they 
have an active, aggressive role in what they are supposed to be, the 
legal agency of the Government, under the Hobbs Act in appeals so they 
can be involved as an independent party in every appeal? And just the 
threat of that would be very great, would it not?
  Mr. LOTT. Certainly that threat would be very great.
  Here is my question beyond what the Senator is saying. How would the 
Antitrust Division of the Justice Department handle that Hobbs Civil 
Appeals Act appeal by the Antitrust Division?
  They are automatically an independent party. However, under this 
amendment, they will have already ruled in a regulatory way. How will 
they do that? How can you rule in a regulatory decision and then be an 
independent party under the Hobbs Civil Appeals Act? Would they be 
acting against themselves? I do not see how we make that work.
  I thank my colleague on the committee for the question. I yield the 
floor.
  Mr. PRESSLER. Mr. President, I want to take a few minutes, and if 
other Senators wish to speak, I will yield immediately. If other 
Senators wish to come to the floor to offer amendments or to speak, I 
will eagerly yield. We are trying to move this bill forward.
  I know there are some events this morning that have detained some 
Senators, and there is the Les Aspin memorial service this afternoon 
that will detain some of our Members.
  We are trying to move the tortuous Senate process forward at a faster 
rate.
  I want to take a few minutes to discuss yet another example of why 
the Justice Department should not be given the burden to carry out the 
intent of the amendment offered by Senator Dorgan.
  I have previously established a clear, unequivocal record. DOJ does 
not act in a timely manner. Last night I had several charts here 
showing how the Department, although it was asked to do things within a 
30-day period, has dragged things out over 3 years or more.
  Additionally and importantly, the Department cannot be trusted to 
enforce the standard of review. Currently, the DOJ and the court, under 
the MFJ, are to apply an VIII(c) test. That is also the standard in the 
Dorgan amendment. The recent Ameritech plan changes the VIII(c) test.
  Now, the Department has announced a plan to delay new competition in 
long distance until the Department's blueprint for local telephone 
markets has been implemented. The plan is styled as an agreement with 
Ameritech.
  According to the New York Times, the announcement on Monday is 
clearly timed to coincide with events in Congress. Perhaps most 
important from a political standpoint, the Justice Department wants to 
preserve an important role in determining when the Bells should win 
freedom--this, according to an article by Edmund Andrews in the New 
York Times, April 2, 1995.
  I think that goes to the heart of it. The Justice Department is 
trying to preserve a role here. For the first time in my years up here, 
I see a major Department seeking and demanding a role and lobbying for 
it. That troubles me a great deal.
  [[Page S8209]] Despite its length and complexity, many key details of 
the blueprint await further Department review and approval. This is the 
Ameritech agreement. The Department has rushed the announcement prior 
to the completion of the period for public comments on the plan in an 
effort to derail legislation pending in Congress that would limit the 
Department's role in regulating the telecommunications industry.
  I see a colleague has arrived. I will yield to any Senator who has an 
amendment or a speech. We are trying to move this bill forward. I am 
delighted to yield the floor.
  Mr. McCAIN. I will have an amendment in a minute to bring to the 
floor. I am very pleased that the Senator from South Dakota, the 
distinguished chairman of the committee, solicits a speech from me. It 
is not very often. It must be an ample indication of the boredom that 
has set in here on the floor.
  While I am waiting to propose the amendment, I would like to 
reiterate my appreciation for the enormous effort expended by the 
chairman of the committee who has done just a superhuman job of trying 
to shepherd this extremely complex and difficult piece of legislation 
through this body.
  Again, I want to thank him for all of the cooperation and courtesy 
that he has shown me and other Members of this body as we have gone 
through this effort. I hope that there is light at the end of the 
tunnel, to borrow an old Vietnam phrase, that we are nearing the end of 
the consideration of this very important legislation.
  Mr. President, I ask unanimous consent that the pending amendment be 
set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1276

    (Purpose: To require a voucher system to provide for payment of 
                           universal service)

  Mr. McCAIN. 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 Arizona, [Mr. McCain], proposes an 
     amendment numbered 1276.

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

       On page 43, strike out line 2 and insert in lieu thereof 
     the following: Act.
       ``(k) Transition to Alternative Support System.--
     Notwithstanding any other provision of this Act, beginning 2 
     years after the date of the enactment the Telecommunications 
     Act of 1995, support payments for universal service under 
     this Act shall occur in accordance with the provisions of 
     subsection (l) rather than any other provisions of this Act.
       ``(l) Voucher System.--
       ``(1) In general.--Not later than 2 years after the date of 
     the enactment of the Telecommunications Act of 1995, the 
     Commission shall prescribe regulations to provide for the 
     payment of support payments for universal service through a 
     voucher system under this subsection.
       ``(2) Individuals eligible to make payments by voucher.--
     Payment of support payments for universal service by voucher 
     under this subsection may be made only by individuals--
       ``(A) who are customers of telecommunications carriers 
     described in paragraph (3); and
       ``(B) whose income in the preceding year was an amount 
     equal to or less than the amount equal to 200 percent of the 
     poverty level for that year.
       ``(3) Carriers eligible to receive vouchers.--
     Telecommunications carriers eligible to receive support 
     payments for universal service by voucher under this 
     subsection are telecommunications carriers designated as 
     essential telecommunications carriers in accordance with 
     subsection (f).
       ``(4) Vouchers.--
       ``(A) In general.--The Commission shall provide in the 
     regulations under this subsection for the distribution to 
     individuals described in paragraph (2) of vouchers that may 
     be used by such individuals as payment for telecommunications 
     services received by such individuals from telecommunications 
     carriers described in paragraph (3).
       ``(B) Value of vouchers.--The Commission shall determine 
     the value of vouchers distributed under this paragraph.
       ``(C) Use of vouchers.--Individuals to whom vouchers are 
     distributed under this paragraph may utilize such vouchers as 
     payment for the charges for telecommunications services that 
     are imposed on such persons by telecommunications carriers 
     referred to in subparagraph (A).
       ``(D) Acceptance of vouchers.--Each telecommunications 
     carrier referred to in subparagraph (A) shall accept vouchers 
     under this paragraph as payment for charges for 
     telecommunications services that are imposed by the 
     telecommunications carrier on individuals described in 
     paragraph (2).
       ``(E) Reimbursement.--The Commission shall, upon submittal 
     of vouchers by a telecommunications carrier, reimburse the 
     telecommunications carrier in an amount equal to the value of 
     the vouchers submitted. Amounts necessary for reimbursements 
     under this subparagraph shall be derived from contributions 
     for universal support under subsection (c).''.
  Mr. McCAIN. Mr. President, at the outset, I have no illusions about 
the ability to adopt this amendment. I do not think it will be adopted. 
I do, however, think that it is a defining issue in how we view the 
role of Government and the role of our regulatory bodies.
  In an attempt to deregulate telecommunications in America, and I 
think it is a defining issue very frankly, in whether we want to 
continue the complex, myriad, incomprehensible method that we are using 
today to try to attempt to provide access by all Americans to 
telecommunications facility.
  Right now, I do not know of anyone who knows how we subsidize, 
exactly, people who are in need of the basic telecommunications 
services in this country. This amendment would make it very clear and 
very simple. It would be the provision of vouchers for those who need 
those services. It would replace the current telecommunications subsidy 
scheme.
  Mr. President, both the current system and that envisioned by the 
pending legislation mandates subsidy flows from company to company. As 
one former council to the FCC stated, ``From one rich person to another 
rich person.''
  This amendment would fundamentally change that system.
  Sixty-one years ago, the Congress passed the Communications Act of 
1934. The Act mandated that every American, regardless of where they 
lived, receive basic telephone service at approximately the same rate. 
Therefore, individuals whether they live in urban America or rural 
America would pay the same rate for telephone service, regardless of 
disparities in cost of supplying such service.
  This concept of urban-rural equality known as ``universal service'' 
was predicated on the agrarian/rural based demographics of our Nation 
at that time. Poorer rural areas required urban subsidies to meet the 
goal of universal service. However, demographics have changed since 
1934. Today, the majority of Americans now live in urban settings. 
Telecommunications subsidy schemes, however, have not changed and the 
urban poor are being unfairly forced to pay for telephone service for 
those who can much better afford it.
  It is simply not fair for those living at the poverty level in the 
inner city to have to pay for telephone service to the ultra wealthy 
with second homes in places such as Telluride, Vail, Martha's Vineyard, 
and the Boulders Resort Area of Arizona.
  It is time for a fresh look. As we debate communications law reform, 
we must step back and ask who is paying for what services. The answer 
is that those who live in urban areas, as envisioned in 1934, are 
subsidizing telephone services for those who live in rural areas.
  The belief that a universal service subsidy mechanism designed in the 
1930's is relevant today and must continue is preposterous. Not only 
does it unfairly punish lower income, inner city Americans, but it 
discourages future competition in the local loop.
  Vigorous competition with its many benefits to the consumer will only 
flourish in a free market environment in which entrepreneurs believe 
they can enter a line of business and make a profit. However, since the 
current telephone subsidy scheme
 gives all benefits to the incumbent company, the question arises: What 
smart businessman or women would want to compete against the entrenched 
existing company? The answer is none. Thus, if we truly believe in 
competition for telephone services, we should advocate an end to 
subsidies.

  We should consider a phase out of existing cross-subsidy mechanisms, 
including long-distance access charges, subsidization of residential 
rates by business rates, subsidization of rural rates by urban rates, 
and other rate [[Page S8210]] averaging mechanisms in order to ensure 
that market prices accurately reflect the true cost of providing 
service. Eliminating these barriers to the free market will enhance 
competition and experience has proven that competition causes prices to 
fall and improves customer service. When as many subsidies as possible 
are eliminated, when free market economics has substantially replaced 
depression-era subsidies, the universal service goal that is contained 
in existing law could be achieved by instituting a means-tested voucher 
system to ensure that everyone has the ability to receive telephone 
service.
  Under a voucher system, any household, regardless of where they live, 
who earns under 200 percent of the poverty level would be eligible for 
telephone vouchers. Recipients could use the vouchers to pay for any 
local telephone service they desired, including cellular or in the near 
future, satellite communications systems such as PCS. The States, not 
the Federal Government should administer the voucher system because 
they can best respond to local priorities and needs.
  Vouchers could be reclaimed for dollars by local telephone companies 
chosen by the consumer to provide service. Therefore, the economic 
viability of companies who have benefits from the current subsidy 
scheme will only be in jeopardy if their customers decide they no 
longer like their current phone company and seek a new provider, in 
other words free-market economics at work.
  Mr. President, I recognize that a voucher system may not be 
immediately embraced by small rural telephone companies. They are happy 
with the status quo that ensures them a steady revenue stream. A 
voucher system does not recognize incumbency, it recognizes merit.
  Reality tells us that the elimination of subsidies and the creation 
of a voucher system would not only empower individuals but would 
encourage telephone companies to compete more for local business. A 
voucher system is still a subsidy, but it is a much more benign subsidy 
then the anticompetitive one which currently exists.
  Although the food stamp program is not embraced by all, it is 
important to note that we do not send money directly to the local 
Safeway, telling them to bag a government proscribed list
 of groceries, and then to deliver them to everyone in a certain 
neighborhood, regardless of income. However, that is precisely what we 
do with local telephone service. There is simply no logic in today's 
society for continuation of the current subsidy mechanisms.

  Last, it is important to note that while 99 percent of Americans have 
purchased televisions without the benefit of a subsidy, only 93 percent 
of all households have telephones. Perhaps due to the empowerment of 
individuals that a voucher system would perpetuate, as many American 
will have telephones as have televisions.
  Mr. President, this amendment is a radical change from the status 
quo, and therefore I am under no allusion that it will pass today. I do 
believe it lays the groundwork for the future and should be supported 
by the Senate.
  There have been a number of interesting articles written about the 
voucher system and the present system. One of them was in the Wall 
Street Journal last January 20. It is by Mr. Adam Thierer, who is an 
analyst with the Heritage Foundation in Washington.
  I would like to quote from some of this article, because I think it 
frames the issue pretty well. It begins by saying:
       Republicans in Congress will soon introduce deregulatory 
     legislation that could revolutionize the way America's 
     telecommunications sector works. An outline of the proposed 
     legislation in the Senate reveals that Republicans plan to 
     eliminate remaining barriers to market entry * * * the 
     Republican plan at least starts off on the right foot.
       Yet it is evident from the outline that Republicans are no 
     different from Democrats when it comes to the Holy Grail of 
     telecommunications--universal service. The GOP lawmaker's 
     plan for universal service may place everything else they 
     hope to accomplish at risk.
       The desire to create a ubiquitous telecommunications system 
     is indeed noble. The problem is that, by mandating universal 
     telephone service, policy makers effectively required that a 
     monopolistic system be developed to deliver service to all. 
     That meant devising a crazy-quilt of internal industry taxes 
     that force low-cost providers to cross-subsidize high-cost 
     providers. Hence, billions of dollars of subsidies now flow 
     from long-distance to local providers, from businesses to 
     residences, and from urban to rural users.
       But, despite these bountiful subsidies, roughly one 
     American out of every 17 still does not have a telephone in 
     his home.
     

                           *   *   *   *   *
       Worse yet, by arbitrarily averaging rates across the 
     nation, policy makers have unintentionally created a 
     remarkably regressive tax. Hence, a poor single mother on 
     welfare in the inner city is often paying artificially high 
     rates to help subsidize service to wealthy families who live 
     in nearby rural areas. There is nothing equitable about a 
     system that arbitrarily assesses billions of dollars of 
     internal industry taxes on consumers while failing to provide 
     service to all.
       Yet policy makers continue to support the current cross-
     subsidy taxes in the mistaken belief that they encourage 
     ever-increasing subscribership levels. Economists David 
     Kaserman and John Mayo have appropriately labeled this belief 
     a ``fairy tale,'' since no causal relationship exists between 
     subsidies and subscribership levels. In fact, the exact 
     opposite is the case. The 1980s saw decreased subsidies and 
     increased subscribership levels.
     

                           *   *   *   *   *
       If a free-market approach is unpalatable, Republicans 
     should consider means-tested telecom vouchers. State and 
     local governments, not the feds, could simply offer poor 
     residents a voucher to purchase service from a provider of 
     their choice. Make no mistake, this is still a subsidy, but 
     at least it is one that will not discourage competitive 
     entry. It would be funded through general tax revenues, to 
     encourage legislators to target the subsidy as narrowly as 
     possible.
       One GOP staffer recently told me this approach is ``ahead 
     of its time.'' In fact, this idea is somewhat behind the 
     times, but it is still the only solution that could co-exist 
     with a competitive marketplace. Free markets, open access, 
     and consumer choice are the better guarantors of innovative 
     goods, lower prices, and true universal service. If policy 
     makers instead continue to place faith in the fairy tale of 
     mandated universal service, they will still be discussing how 
     to create a competitive marketplace at the turn of the 
     century.

  I am afraid that Mr. Thierer's prediction is, unfortunately, all too 
true. On January 11, 1995, in the Investors Business Daily, there was 
an article that I think has some interesting facts in it.

       About 6% of all American homes are still without 
     telephones. But the U.S. Census Bureau reports 99% own 
     radios, 98% have televisions and 75% video cassette 
     recorders--a technology barely 20 years old.
       Discounting the implied subsidies of free airwaves for 
     broadcasters, radios and TVs haven't been bolstered by 
     anything like the complex web of subsidies and regulations 
     created over the years to foster universal telephone service.
       Several federal agencies manage about $1 billion in 
     payments made by big phone companies and put in the pockets 
     of small ones. But the phone companies themselves set aside 
     and transfer funds, as required by federal rules, to 
     subsidize service to the needy and rural communities.
       These subsidies, which total billions of dollars, come from 
     three sources: business users, long distance calls and urban 
     customers, including residential. They are used to 
     artificially reduce the cost of serving rural areas, and to 
     provide below-cost service to poorer households.
       But analysts say the administrators of universal service 
     funds, whether at federal agencies or in phone companies, do 
     little to assess the need for assistance. And rate averaging, 
     used by large phone companies, often forces the poorest 
     inner-city households to subsidize rural service for even the 
     richest gentlemen farmers and jet-setting skiers.
       ``The telecommunications welfare state has been a 
     disaster,'' asserted Heritage Foundation analyst Adam Thierer 
     in a study published recently. ``The regulatory model of the 
     past six decades has failed.''
       In a study released Jan. 5, for instance, Wayne Leighton of 
     the Center for Market Processes in Fairfax, Va., and Citizens 
     for a Sound Economy in Washington, describes how the tiny 
     resort community of Bretton Woods, N.H., received $22,153 in 
     subsidies last year, because its remote location on the 
     shoulders of the White Mountains makes it a ``high-cost'' 
     area to serve. That equates to $82 for each of the 
     community's 269 phone lines--many of which serve luxury 
     hotels.
       ``High-cost is not the same as high need,'' Leighton said.
       ``Indeed,'' Leighton added, ``poor inner-city residents 
     rarely benefit from these programs, since their telephone 
     companies spread costs over a great many users. . . . The 
     result is subsidies often help middle- and upper-class 
     subscribers lower their monthly phone bills.''
       The giant regional telephone monopolies, which want to be 
     allowed to compete with long-distance and cable television 
     companies in those markets, say universal service subsidies 
     cost about $20 billion a year.
       Leighton, citing a study by the Telecommunications 
     Industries Analysis Project, estimates the net transfer from 
     urban customers to rural at $9.3 billion a year.

[[Page S8211]]

                               who pays?

       ``A lot of money can be pulled from an urban area, without 
     regarding who it's being pulled from,'' noted Heritage's 
     Thierer.
       To see the effects of subsidies, compare the annual average 
     household cost for telephone service in rural and urban 
     areas. According to a Federal Communications Commission study 
     published in July 1994, the average ``rural'' household spent 
     $549 in 1990, while in big cities like New York, Chicago and 
     Los Angeles, the comparable figures were $770, $660 and $748, 
     respectively.
       Interestingly, a majority of the residents in all three of 
     these major cities are either black or Hispanic. In other 
     major cities with large minority populations, like Detroit, 
     Atlanta, Washington and Houston, the pattern is similar--all 
     had substantially higher average household phone bills than 
     did rural households.

  I do not understand how we defend a system that charges higher rates 
for some of the poorest people in America and minorities. We are having 
a great debate and we are going to continue to have a great debate over 
affirmative action. But it seems to me that at least we ought to cure 
what is clearly reverse affirmation actions.

       Consider just the poorest Americans, who presumably would 
     qualify for subsidized rates as low as $6 a month. The fact 
     that only 73% of households with annual incomes of less than 
     $5,000 had phones in 1993 again suggests that the subsidies 
     do not reach their intended targets.

  Let me point out again that 73 percent of households in America with 
annual incomes of less than $5,000 had phones in 1993.

       * * * But by one government estimate, 91% of all ``poor'' 
     households owned color televisions by 1990.
       The FCC data also show that between 1984 and 1992, 
     America's black households on average spent between 12% and 
     23% more on phone services each month than did white 
     households.
       And according to 1990 census data, 68% of all blacks lived 
     in the nation's 75 largest urban areas--traditionally the 
     source of most phone company revenues.
       Broken down by race, 77% of white households in the poorest 
     segment had phones, while just 65% of blacks did. In the next 
     highest income group, from $5,000 to $7,499, the percentages 
     rose to 86% of whites and 78% of blacks.
       The sole reason telecommunications is not as competitive as 
     these other high-technology sectors is that, unlike them, it 
     is not governed primarily by consumer choice.

                           *   *   *   *   *

       ``There are other options,'' Thierer observed, ``but we're 
     just so scared about letting go of the past.''
       But so much has changed, critics of the current system 
     point out that a wealth of new technologies makes the old 
     ways completely obsolete. Today, cable television, electric 
     power and wireless systems can all compete with telephone 
     networks.
       Free-market reformers could grow more optimistic, if they 
     listen to House Speaker Newt Gingrich, R-Ga. In recent 
     testimony to the House Ways and Means Committee, Gingrich 
     suggested new policies should reflect thinking ``beyond the 
     norm.''

  Mr. President, I am first to admit that a system of vouchers would be 
clearly beyond the norm.
  Mr. President, I received a study called ``Local Competition and 
Universal Service, New Solutions and Old Myths.''
  The mechanism that they propose to address any such ``market 
failure'' would be:

       . . . an explicit, market-compatible subsidy system with 
     three primary components. (1) universal service subsidies 
     should be provided directly to end users, (2) all subsidies 
     must be clearly defined and designed to terminate over time, 
     and (3) all funding must be raised explicitly as a telephone 
     subsidy.

  On the issue of furnishing the subsidy to end users:

       There are numerous advantages to this approach. Combined 
     with means testing, it would ensure that only those customers 
     in need of a subsidy would receive money. Therefore, to 
     minimize market interference, subsidies should be provided 
     directly to the end users--in the form of telephone stamps--
     who are the intended beneficiaries of the subsidy. This is a 
     three-step process: identify end users who cannot afford 
     service; calculate the differential between what they can 
     afford and the price of service; then provide an appropriate 
     amount of subsidy directly to the consumer. Carefully 
     tailored means testing should minimize any abuse of the 
     program.
       This approach reduces marketplace interference by 
     permitting the customers to choose how they spend their 
     ``telephone stamps.'' For example, some urban customers might 
     choose among competitively-priced alternatives such as 
     cellular or PCS service rather than ordinary wireline service 
     as better suiting their multiple-job lifestyles, while still 
     being available for use at home. Rural residents individually 
     might also prefer a wireless to a wired service, or might 
     collectively for their region obtain bids from multiple 
     providers of multiple technologies.
       And this mechanism of distributing funds directly to end 
     users also avoids the pre-selection of a particular provider. 
     Since customers can spend their ``telephone stamps'' as they 
     wish, they will choose the technology and provider who best 
     matches their needs and budget. It may be that in some 
     locations, only one provider makes service available; in that 
     case that provider will receive all the subsidy money, but by 
     operation of the marketplace rather than by regulatory fiat. 
     But it may also be that the availability of the pool of money 
     represented by the sum of all the ``telephone stamps'' acts 
     as an incentive to draw alternative providers and alternative 
     technologies into the area.

  The most difficult problem facing direct user subsidization is the 
design of an appropriately tailored mechanism for distribution which 
will take many forms such as tax breaks, telephone stamps, or service 
credits. These credits should be awarded on a needs basis as determined 
through some more means testing, perhaps by tying it to other means-
tested assistance programs in the State; that is, anyone who qualifies 
for any program on the State's list of means-tested programs also 
qualifies for a preset level of telephone assistance set to enable them 
to obtain basic telephone access.
  There would be no need to create a separate bureaucracy. Similarly, 
the State agency that currently issues assistance, such as food stamps, 
can also issue the telephone stamps. The consumer could use the 
equivalent telephone stamps to purchase network service capability if 
they want by mailing in the stamps with their bill.
  As competition drives down the price of technological alternatives, 
consumers could choose from an expanding array of network alternatives. 
This would allow customers to maximize the use of the network by 
placing at their disposal the technology best suited to their means, 
lifestyles, and location. The providers cash in telephone stamps just 
as grocery stores do with food stamps.
  Mr. President, universal service historically has been the subject of 
more assumptions than studies and discussions of the issue and have 
generated more heat than light.
  The presumptions of the past have governed the debate for far too 
long. Rethinking these assumptions clears the way and focuses the 
discussion on the issues that face telecommunications today. The issue 
today is not the creation of universal service but its preservation. 
Services are available today to most Americans. The remaining issue is 
service activation and affordability. Open competition among fully 
inoperative networks for local service priced at its true cost, 
combined with our proposed explicit and targeted approach to any 
necessary subsidies, is the best way to maintain universal service 
while bringing the benefits of a competitive marketplace to all 
telephone customers.
  Mr. President, I ask for the yeas and nays on this amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  The yeas and nays have been requested. Is there a sufficient second? 
There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. McCAIN. Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who seeks recognition?
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Mr. President, what is the pending business?
  The PRESIDING OFFICER. The pending business is the McCain amendment, 
which is No. 1276.
  Mr. GORTON. Mr. President, I ask unanimous consent that we return to 
the Feinstein-Kempthorne amendment.
  Mr. McCAIN. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. McCAIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. I just proposed an amendment. I had anticipated that we 
would debate the amendment and vote on it at an appropriate time.
  Mr. GORTON. I hope that the Senator will not object. The Senate has 
almost completed its debate on a Feinstein-Kempthorne amendment which 
was proposed last night. I have a second-degree amendment for that 
which I would like to get in so that the body [[Page S8212]] will 
understand exactly what it is going to be voting on on that issue.
  Mr. McCAIN. Let me say to my friend, I was over in a hearing. The 
request was to come over and propose amendments because amendments were 
needed in the Chamber. I then left the hearing. I came over here with 
my amendment, asked that the pending amendment be set aside at the 
request of the distinguished chairman, proposed the amendment, and 
fully anticipated debate and a vote on that amendment.
  Mr. PRESSLER. If my colleague will yield, we are going to 
accommodate. The problem, I am told this morning, is that one of our 
Members is at a Vietnam veterans ceremony. We are going to try to stack 
the votes, if we could have the vote at 4 o'clock. That is what the 
leadership tells me, they are going to try to stack votes; that we have 
votes after the Les Aspin memorial service this afternoon.
  I did not create these things, but that is the situation we are in.
  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington has the floor.
  Mr. McCAIN. Who has the floor, Mr. President?
  The PRESIDING OFFICER. The Senator from Washington has the floor.
  Mr. GORTON. I made a unanimous consent request and the Senator from 
Arizona objected.
  Mr. McCAIN. I object.
  Mr. GORTON. I would like to continue with the consideration of the 
amendment.
  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. LOTT. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. GORTON. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GORTON. Mr. President, I ask unanimous consent that we return to 
the Feinstein-Kempthorne amendment.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.


                Amendment No. 1277 to Amendment No. 1270

    (Purpose: To limit, rather than strike, the preemption language)

  Mr. GORTON. Mr. President, I send a second-degree amendment to the 
Feinstein-Kempthorne amendment to the desk and ask for its 
consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Washington [Mr. Gorton] proposes an 
     amendment numbered 1277 to amendment No. 1270.
       In the matter proposed to be stricken, strike ``or is 
     inconsistent with this section, the Commission shall 
     promptly'' and insert ``subsection (a) or (b), the Commission 
     shall''.

  Mr. GORTON. Mr. President, last night, our distinguished colleagues 
from California and Idaho proposed an amendment with respect to a 
section entitled ``Removal of Barriers to Entry.'' That section in toto 
says that the States and local communities cannot impose State or local 
requirements that may prohibit or have the effect of prohibiting the 
ability of any entity to provide any interstate or intrastate 
telecommunications services.
  Mr. President, that, of course, is a very, very broad prohibition 
against State and local activities. And so thereafter there follow two 
subsections that attempt to carve out reasonable exemptions to that 
State and local authority. One has to do specifically with 
telecommunications providers themselves and speaks in the general term 
of allowing States 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, 
which are, of course, the precise goals of this Federal statute itself.
  However, the third exception is ``Local Government Authority.'' That 
local government authority relates to the right of local governments to 
manage public rights-of-way, require fair and reasonable compensation 
to telecommunications providers, the use of public rights-of-way on a 
nondiscriminatory basis, and so on.
  Then the final subsection is a preemptive subsection, Mr. President, 
and it reads:

       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.

  Now, our two distinguished colleagues said that that preemption was 
much too broad, that its effect would be to say to a major 
telecommunications provider or utility all you have to do, if the city 
of San Francisco or the city of Boise attempts to tell you what hours 
you can dig in the city streets or how much noise you can make or how 
you have to reimburse the city for the damage to its public rights-of-
way, that all that the utility would have to do would be to appeal to 
the Federal Communications Commission in Washington, DC, and thereby 
remove what is primarily a local question and make a Federal question 
out of it which had to be decided in Washington, DC, by the Federal 
Communications Commission. And so the Feinstein-Kempthorne amendment 
strikes this entire preemption section.
  Now, the Senator from California I think very properly tells us what 
the impact of that will be. It does not impact the substance of the 
first three subsections of this section at all, but it does shift the 
forum in which a question about those three subsections is decided. 
Instead of being the Federal Communications Commission with an appeal 
to a Federal court here in the District of Columbia, those 
controversies will be decided by the various district courts of the 
United States from one part of this country across to every other 
single one.
  Now, Mr. President, in the view of this Senator, there is real 
justification in the argument for both sides of this question. The 
argument in favor of the section as it has been reported by the 
Commerce Committee is that we are talking about the promotion of 
competition. We are talking about a nationwide telecommunications 
system.
  There ought to be one center place where these questions are 
appropriately decided by one Federal entity which recognizes the impact 
of these rules from one part of the country to another and one Federal 
court of appeals.
  On the other hand, the localism argument that cities, counties, local 
communities should control the use of their own streets and should not 
be required to come to Washington, DC, to defend a permit action for 
digging up a street, for improving or building a new utility also has 
great force and effect, Mr. President. I think it is a persuasive 
argument.
  So in order to try to balance the general authority of a single 
Federal Communications Commission against the specific authority of 
local communities, I have offered a second-degree amendment to the 
Feinstein-Kempthorne amendment. I hope that the sponsors of the 
amendment will consider it to be a friendly one.
  More often than not in this body, second-degree amendments are 
designed to totally subvert first-degree amendments to move in a 
completely different direction, sometimes to save Members from 
embarrassing votes. This is not such a case.
  I have read the arguments that were made by the two Senators who 
sponsored the first-degree amendment. I agree with them, but almost 
without exception, their arguments speak about the control by cities 
and other local communities over their own rights of way, an area in 
which their authority should clearly be preserved, a field in which 
they should not be required to have to come to Washington, DC, in order 
to defend their local permitting or ordinance-setting actions.
  I agree with those two Senators in that respect, but I do not agree 
that we should sweep away all of the preemption from an entire section, 
which is entitled ``Removal of Barriers to Entry''; that fundamental 
removal to those barriers, an action by a State or a city which says 
only one telephone company can operate in a given field, for example, 
or only one cable system can operate in a given field, should not be 
exempted from a preemption and from a national policy set by the 
Federal Communications Commission. [[Page S8213]] 
  So this amendment does two things, both significant. The first is 
that it narrows the preemption by striking the phrase ``is inconsistent 
with'' so that it now allows for a preemption only for a requirement 
that violates the section. And second, it changes it by limiting the 
preemption section to the first two subsections of new section 254; 
that is, the general statement and the State control over utilities.
  There is no preemption, even if my second-degree amendment is 
adopted, Mr. President, for subsection (c) which is entitled, ``Local 
Government Authority,'' and which is the subsection which preserves to 
local governments control over their public rights of way. It accepts 
the proposition from those two Senators that these local powers should 
be retained locally, that any challenge to them take place in the 
Federal district court in that locality and that the Federal 
Communications Commission not be able to preempt such actions.
  So I hope that it is a way out of the dilemma in which we find 
ourselves, the preservation of that local authority without subverting 
what ought to be nationwide authority. It will be a while, I think, 
before this comes to a vote. I commend this middle ground to both the 
managers of the bill and the sponsors of the amendment. I hope that 
they will accept it.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER (Mr. Frist). The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the pending 
amendment be set aside so that I may offer another amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1278

 (Purpose: To provide for Federal Communications Commission review of 
              television broadcast ownership restrictions)

  Mr. DORGAN. Mr. President, I have an amendment at the desk. I offer a 
first-degree amendment on the issue of broadcast ownership 
restrictions.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from North Dakota [Mr. Dorgan], for himself, 
     Mr. Helms and Mr. Kerrey, proposes an amendment numbered 
     1278.

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

       Strike paragraph (1) of subsection (b) of Section (207) and 
     insert in lieu thereof the following:
       ``(b) Review and Modification of Broadcast Rules.--The 
     Commission shall:
       ``(1) modify or remove such national and local ownership 
     rules on radio and television broadcasters as are necessary 
     to ensure that broadcasters are able to compete fairly with 
     other media providers while ensuring that the public receives 
     information from a diversity of media sources and localism 
     and service in the public interest is protected, taking into 
     consideration the economic dominance of providers in a market 
     and
       ``(2) review the ownership restriction in section 
     613(a)(1).''

  Mr. DORGAN. Mr. President, I am scheduled to testify before a base 
closing hearing in the Cannon Building in a matter of minutes, so I 
must leave the floor. I did want to offer this first-degree amendment. 
It would essentially eliminate two provisions, the provisions in the 
underlying bill that now abolish the current ownership restrictions on 
television stations.
  We currently have a 12-station ownership limitation on television 
stations and a 25-percent-of-the-national-audience cap. I believe we 
ought to restore that and provide the authority to the FCC to make 
those determinations. I think it makes no sense to include in this bill 
a provision that simply withdraws those restrictions on ownership.
  This bill talks about competition. If we allow this to continue in 
this bill, we will see a greater concentration of television ownership 
in this country, and we will end up with a half a dozen companies 
controlling virtually all the television stations in America. I do not 
think anybody can honestly disagree that that is the result of the 
provision in the underlying bill.
  I think we ought to restore the 12-station limit and the 25-percent-
national-audience cap and give the FCC the authority to make its own 
judgment and evaluate what kind of competition exists and what is in 
the public interest with respect to this competition. This provision 
makes no sense at all in the underlying bill.
  I will ask for the yeas and nays at an appropriate point. I must 
leave to testify before the Base Closing Commission, and then I will 
return to debate this legislation. My understanding is the Senator from 
Nebraska, Senator Kerrey, wants to speak on this. I am pleased he will 
do so while I am absent from the Chamber.
  Mr. KERREY. Mr. President, I ask unanimous consent to be added as a 
cosponsor of this amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY. Mr. President, before the Senator from North Dakota 
leaves, it is my intent, unless he objects now, after making my 
comments to ask for the yeas and nays on this amendment, unless the 
Senator will object to my asking at the end of my remarks.
  Mr. DORGAN. I believe Senator Helms wants to speak on it and probably 
Senator Simon as well. The Senator can ask for the yeas and nays, sure.
  Mr. KERREY. Mr. President, first, let me say that the central point 
of this whole legislation has been that we are trying to create a 
regulatory environment where competition can produce lower prices and 
higher quality service for the American consumer. The service that is 
being sold is information. Unlike many other commodities that we buy--
natural gas, for example, transportation, and so forth--this is a very 
unusual commodity that we are buying, information, although maybe 
commodity is not exactly the precise words like you are buying hardware 
and other sorts of things.
  It really is an issue of giving power to somebody to control to a 
very great extent the information that we get.
  You say, ``Well, I have community standards in place.'' That is true, 
the FCC does have control over community standards, and there are lots 
of other regulatory determinations that could be made by the FCC, but 
it is the power to broadcast, the power to publish, the power to 
transmit information.
 It is the word, Mr. President. Unlike other commodities, I have only 
24 hours in the day in which I can process this information, in which I 
can either listen to the radio or watch television or read a newspaper, 
or go on-line, or call my kids, or listen to my kids, or engage in some 
manner, shape, or form in purchasing or using the information services 
or equipment that this $800 to $900 billion industry is out there 
manufacturing and producing and trying to get me to buy. So I have 24 
hours a day. That is all anybody has.

  What we have, over the years, understood is that the person who 
controls that information very often controls a great deal more than 
just the right to sell to you. The person who controls the right to own 
a station, radio or television, or who controls the newspaper, who 
controls some other information source, they are in control of much 
more than just the right to sell you some product. In fact, rarely--I 
am not sure I can even cite an owner that does not respect that they 
have more than just a fiduciary responsibility to shareholders. They 
understand that they have a responsibility that is larger than that.
  This amendment, I believe, maintains what we have traditionally done, 
and that is to say you can get all the competition you want with 12 
stations and all the competition you want with 25 percent--25 percent 
ownership in a service area. That has worked. Again, I have not heard 
consumers come to me on this one and say, gee, could you lift the 
ownership restrictions because we are not getting the kind of quality 
service we want, and we believe that if we have 35 percent ownership of 
our television and radio stations in a service area, that that will 
improve the quality of our product, and if we concentrate this industry 
even more, we are going to get improved quality of product.
  I believe that the amendment before us illustrates this issue that I 
have been raising a time or two on the floor, which is that at stake 
here is the power of a business or an individual to do something--the 
power of an individual or a corporation, mostly, to do something that 
they are currently prohibited from doing. A corporation that 
[[Page S8214]] owns radio or television stations currently has certain 
restrictions placed on them, and the bill, as currently described, 
would lift a number of those restrictions.
  Mr. President, I ask unanimous consent that an article in this 
morning's Washington Post by Tom Shales be printed in the Record at 
this time.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, June 13, 1995]

                       Fat Cat Broadcast Bonanza

                            (By Tom Shales)

       It's happening again. Congress is going ever so slightly 
     insane. The telecommunications deregulation bill now being 
     debated in the Senate, with a vote expected today or 
     tomorrow, is a monstrosity. In the guise of encouraging 
     competition, it will help create huge new concentrations of 
     media power.
       There's something for everybody in the package, with the 
     notable exception of you and me. Broadcasters, cablecasters, 
     telephone companies and gigantic media conglomerates all get 
     fabulous prizes. Congress is parceling out the future among 
     the communications superpowers, which stand to get more super 
     and more powerful, and certainly more profitable, as a 
     result.
       Limits on multiple ownership would be eased by the bill, so 
     that any individual owner could control stations serving up 
     to 35 percent of the country (50 percent in the even crazier 
     House version), versus 25 percent now. There would be no 
     limit on the number of radio stations owned. Cable and phone 
     companies could merge in municipalities with populations up 
     to 50,000.
       Broadcast licenses of local TV stations would be extended 
     from a five-year to a 10-year term and would be even more 
     easily renewed than they are now. It would become nearly 
     impossible for angry civic groups or individuals to challenge 
     the licenses of even the most irresponsible broadcasters.
       In addition, the rate controls that were imposed on the 
     cable industry in 1992, and have saved consumers $3 billion 
     in the years since, would be abolished, so that your local 
     cable company could hike those rates right back up again.
       Sen. Bob Dole (R-Kan.), majority leader and presidential 
     candidate, is trying to ram the legislation through as 
     quickly as possible. Tomorrow he wants to take up the issue 
     of welfare reform, which is rather ironic considering that 
     his deregulation efforts amount to a bounteous welfare 
     program for the very, very, very rich.
       Dole made news recently when he took Time Warner Co. to 
     task for releasing violent movies and rap records with 
     incendiary lyrics. His little tirade was a sham and a smoke 
     screen. Measures Dole supports would enable corporate giants 
     such as Time Warner to grow exponentially.
       ``Here's the hypocrisy,'' says media activist Andrew Jay 
     Schwartzman. ``Bob Dole sits there on `Meet the Press' and 
     says, yes, he got $23,000 from Time Warner in campaign 
     contributions, and that just proves he can't be bought.'' He 
     criticizes Time Warner's corporate responsibility and acts 
     like he's being tough on them, but it's in a way that won't 
     affect their bottom line at all.
       ``Meanwhile he is rushing to the floor with a bill that 
     will deregulate cable rates and expedite the entry of cable 
     into local telephone service, and no company is pressing 
     harder for this bill than--guess who--Time Warner.''
       Schwartzman, executive director of the Media Access 
     Project, says that the legislation does a lot of ``awful 
     things'' but that the worst may be opening the doors to ``a 
     huge consolidation of broadcast ownership, so that four, 
     five, six or seven companies could own virtually all the 
     television stations in the United States.''
       Gene Kimmelman, co-director of Consumers Union, calls the 
     legislation ``deregulatory gobbledygook'' and says it would 
     remove virtually every obstacle to concentration of ownership 
     in mass media. The deregulation of cable rates with no 
     competition to cable firmly in place is ``just a travesty,'' 
     Kimmelman says, and allowing more joint ventures and mergers 
     among media giants is ``the most illogical policy decision 
     you could make if you want a competitive marketplace.''
       The legislation would also hand over a new chunk of the 
     broadcast spectrum to commercial broadcasters to do with, and 
     profit from, as they please. Digital compression of broadcast 
     signals will soon make more signal space available, space 
     that Schwartzman refers to as ``beachfront property.'' Before 
     it even exists, Congress wants to give it away.
       Broadcasters could use the additional channels for pay TV 
     or home shopping channels or anything else that might fatten 
     their bank accounts.
       There's more. Those politicians who are always saying they 
     want to get the government off our backs don't mind letting 
     it into our homes. Senators have been rushing forth with 
     amendments designed to censor content, whether on cable TV or 
     in the cyberspace of the Internet. The provisions would 
     probably be struck down by courts as antithetical to the 
     First Amendment anyway, but legislators know how well it 
     plays back home when they attack ``indecency'' on the House 
     or Senate floor.
       Late yesterday Sens. Dianne Feinstein (D-Calif.) and Trent 
     Lott (R-Miss.) called for an amendment requiring cablecasters 
     to ``scramble'' the signals of adults-only channels offering 
     sexually explicit programming. The signals already are 
     scrambled, and you have to request them and pay for them to 
     get them. Not enough, Feinstein and Lott said; they must be 
     scrambled more.
       The amendment passed 91-0.
       It's a mad, mad, mad, mad world.
       An amendment expected to be introduced today would require 
     that the infamous V-chip be installed in all new television 
     sets, and that networks and stations be forced to encode 
     their broadcasts in compliance. The V-chip would allow 
     parents to prevent violent programs from being seen on their 
     TV sets. Of course, they could turn them off, or switch to 
     another channel, but that's so much trouble. Why not have Big 
     Brother do it for you?
       The telecommunications legislation is being sponsored in 
     the Senate by Commerce Committee Chairman Larry Pressler (R-
     S.D.), whose initial proposal was that all limits on multiple 
     ownership be dropped. Even his supporters laughed at that 
     one.
       Dole is the one who's ramrodding the legislation through, 
     and it's apparently part of an overall Republican plan for 
     American media, and most parts of the plan are bad. They 
     include defunding and essentially destroying public 
     television, one of the few wee alternatives to commercial 
     broadcasting and its junkiness, and even, in the Newt 
     Gingrich wing of the party, abolishing the Federal 
     Communications Commission, put in place decades ago to 
     safeguard the public's ``interest, convenience and 
     necessity.''
       It's the interest, convenience and necessity of media 
     magnates that appears to be the sole priority now. ``The big 
     loser in all this, of course, is the public,'' wrote media 
     expert Ken Auletta in a recent New Yorker piece about the 
     lavishness of media contributions to politicians. The 
     communications industry is the sixth-largest PAC giver, 
     Auletta noted.
       Viacom, a huge media conglomerate, had plans to sponsor a 
     big fund-raising breakfast for Pressler this month, Auletta 
     reported, but the plans were dropped once Auletta started 
     making inquiries: ``Asked through a spokeswoman about the 
     propriety of a committee chairman's shopping for money from 
     industries he regulated, Pressler declined to respond.''
       The perfect future envisioned by the Republicans and some 
     conservative Democrats seems to consist of media ownership in 
     very few hands, but hands that hold tight rein over the 
     political content of reporting and entertainment programming. 
     Gingrich recently appeared before an assemblage of mass media 
     CEOs at a dinner sponsored by the right-wing Heritage 
     Foundation and reportedly got loud approval when he griped 
     about the oh-so-rough treatment he and fellow conservatives 
     allegedly get from the press.
       Reuven Frank, former president of NBC News, wrote about 
     that meeting, and other troubling developments, in his column 
     for the New Leader. ``It is daily becoming more obvious that 
     the biggest threat to a free press and the circulation of 
     ideas,'' Frank wrote, ``is the steady absorption of 
     newspapers, television networks and other vehicles of 
     information into enormous corporations that know how to turn 
     knowledge into profit--but are not equally committed to 
     inquiry or debate or to the First Amendment.''
       The further to the right media magnates are, the more 
     kindly Congress is likely to regard them. Most dramatic and, 
     indeed, obnoxious case in point: Rupert Murdoch, the fox 
     mogul whom Frank calls ``today's most powerful international 
     media baron.'' The Australian-born Murdoch has consistently 
     received gentle, kid-glove, look-the-other-way treatment from 
     Congress and even the regulatory agencies. When the FCC got 
     brave not long ago and tried to sanction Murdoch for 
     allegedly deceiving the commission about where he got the 
     money to buy six TV stations in 1986, loud voices in Congress 
     cried foul.
       These included Reps. Jack Fields (R-Tex.) and Mike Oxley 
     (R-Ohio). Daily Variety's headline for the story: ``GOP 
     Lawmakers Stand by Murdoch.'' They always do. Indeed, Oxley 
     was behind a movement to lift entirely the ban on foreign 
     ownership of U.S. television and radio stations. He wanted 
     that to be part of the House bill, but by some miracle, this 
     is one cockamamie scheme that got quashed.
       Murdoch, of course, is the man who wanted to give Gingrich 
     a $4.5 million advance to write a book called ``To Renew 
     America,'' until a public outcry forced the House speaker to 
     turn it down. He is still writing the book for Murdoch's 
     HarperCollins publishing company. The huge advance was 
     announced last winter, not long after Murdoch had paid a very 
     friendly visit to Gingrich on the Hill to whine about his 
     foreign ownership problems, with the FCC.
       Everyone knows that America is on the edge of vast 
     uncharted territory where telecommunications is concerned. 
     We've all read about the 500-channel universe and the entry 
     of telephone companies into the cable business and some sort 
     of linking up between home computers and home entertainment 
     centers. In Senate debate on the deregulation bill last week, 
     senators invoked images of the Gold Rush and the Oklahoma 
     land rush in their visions of this future.
       But this gold rush is apparently open only to those already 
     rolling in gold, and the land is available only to those who 
     are already big landowners--to a small private club 
     [[Page S8215]] whose members are all enormously wealthy and 
     well connected and, by and large, politically conservative. 
     It isn't very encouraging. In fact, it's enough to make you 
     think that the future is already over. Ah, well. It was nice 
     while it lasted.

  Mr. KERREY. The headline of this article says, ``Fat Cat Broadcast 
Bonanza.''
  I admit that is a useful headline for me to make my point, but listen 
to the argument here.

       Limits on multiple ownership would be eased by the bill, so 
     that any individual owner could control stations serving up 
     to 35 percent of the country . . .

  The House, by the way, goes to 50 percent versus the 25 percent now.

       There would be no limit on the number of radio stations 
     owned. Cable and phone companies could merge in 
     municipalities with populations up to 50,000.
       Broadcast licenses of local TV stations would be extended 
     from a 5-year to a 10-year term and would be even more easily 
     renewed than they are now. It would become nearly impossible 
     for angry civic groups or individuals to challenge the 
     licenses of even the most irresponsible broadcasters.
       In addition, the rate controls that were imposed on the 
     cable industry in 1992, and have saved consumers $3 billion 
     in the years since, would be abolished, so that your local 
     cable company could hike those rates right back up again.

  Mr. President, I believe that those, like myself, who want a 
competitive environment in telecommunications, who want to support a 
bill that moves us from a monopoly at the local level to a competitive 
environment, who believe that you can get benefits from competition, 
that consumers, taxpayers, and citizens, will say, Senator, I am glad 
you voted for that bill. I believe we can get that kind of competition 
without changing the ownership rules for our broadcasters. I just do 
not see a compelling reason for it. I do not see, indeed, increased 
competition. I think an argument can be made, in fact, that it is 
moving in the wrong direction, much more toward a concentration and 
less competition, and thus I support the Dorgan amendment before us 
now.
  I yield the floor.
  Mr. PRESSLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. Mr. President, I wish to continue the speech that I 
began regarding the standard of review in the Justice Department. If 
other Senators wish to offer amendments--I see that my colleague from 
Missouri has arrived. If he wishes to speak, I will yield the floor.
  Mr. ASHCROFT. Thank you. I would be pleased to speak, but I would 
like to gather my thoughts.
  Mr. PRESSLER. I ask unanimous consent that the speech I am giving 
will continue at the point I broke off to yield to other Senators.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                    Amendment No. 1265, as Modified

  Mr. PRESSLER. Mr. President, I am speaking about the role of the 
Department of Justice. The Department of Justice seems to be seeking a 
regulatory role, which is unnecessary in this bill--a role that the FCC 
plays. When we table the Dorgan-Thurmond amendment at 12:30, it will be 
because of some of the problems. I am citing the Ameritech experience, 
and I cited an article in the New York Times that said that it appears 
that the Justice Department is determined to win a permanent role in 
determining when the Bells should win freedom.
  Ameritech may have thought that it had no choice but to accept the 
deal that was offered. But the Department's ability to force its will 
upon one company does not render the so-called Ameritech plan a model 
for the industry. Indeed the plan simply highlights that the 1982 AT&T 
consent decree has broken down. It is time to return regulation of 
telephone markets to Congress, the FCC, and the States.
  The Ameritech plan, which was agreed to about 2 months ago, has been 
touted as opening markets, both local and long distance, to increased 
competition. What it is, in fact, is a sketchy proposal for a complete 
restructuring of how local telephone service is provided and billed. If 
it is ever implemented, it will bring about a massive shift of power 
from State and Federal regulators and the decreeing court to the 
Department of Justice. At the very least, the plan would compel local 
telephone companies to change to usage-sensitive billing of the kind 
that Ameritech has already implemented in Chicago. In other words, all 
residential subscribers would end up paying a flat up-front fee for 
every local call they make, plus additional measured charges for every 
minute of local usage. Ameritech has been filing tariffs since 1992 to 
move in this direction. Those tariffs have been accepted in Illinois 
but nowhere else.
  Most States and most residential consumers will find this repudiation 
of price-averaging and universal service wholly unacceptable. What the 
Department hopes to do is to force these other States, against their 
better judgment, to go along with its sketchy proposal as the price of 
ensuring that their local telephone companies are able to provide a 
full range of services. While the plan may or may not be workable in 
parts of Ameritech's service area, it would upset the fundamental 
regulatory schemes of most States if applied more broadly, leading to 
dramatically higher prices for many residential customers.
  Moreover, even after implementing the mandates of the Department, 
Ameritech will not get long distance relief until the Department of 
Justice, in its discretion, decides it should. Thus, the Department of 
Justice will become the Federal regulator, State regulator, and judge, 
all rolled into one.
  For some reason, that seems to be what the Department of Justice 
wants. It wants to take on this regulating role, which is not in its 
enabling statute. Its enabling statute is that it is supposed to be an 
enforcer of law. It is no small wonder the Department favors the plan 
and strongly favors a similar role under the proposed amendment before 
us today. Yet, it is the Department itself that is the greatest 
obstacle to progress under the current decree, and the least capable of 
taking on such regulatory responsibilities. All requests for waivers of 
the decree must be processed by the Department before they are 
presented to the district court. The Department has proven completely 
incapable of performing that function. Delays of 3 to 5 years in the 
processing of even simple waivers are commonplace. Yet, the Department 
is now trying for greatly increased powers and vastly expanded 
responsibilities.
  The Department's new plan, in fact, constitutes a repudiation of the 
basic tests for relief contained in the AT&T consent decree. Instead of 
simply demonstrating to the court that it cannot impede competition in 
the market it seeks to enter--which is all the decree requires--
Ameritech must first implement a series of changes in its local 
telephone operations, all of which are outside of the scope of the 
decree.
  This is a betrayal of the bargain reached in 1982.
  The Department, in attempting to take on the roles of State public 
utility commission, FCC, and decree court, is guilty of gross 
overreaching. It is also playing into the hands of those who hope to 
kill the legislation and further delay the opening of 
telecommunications markets to genuine competition.
  It also clearly demonstrates that debate over this amendment is not 
about the appropriate standard for review, but whether any DOJ role is 
appropriate given the poor track record at Justice.
  Now, the proposed order is a blueprint for additional proposed 
orders. The order that the Department is proposing for Judge Greene's 
signature is a long, rambling, and almost impenetrable legal document. 
It is also not self-effectuating.
  Even if Judge Greene signed the order today, nothing would happen. 
Ameritech would not be permitted to enter any interexchange market. 
There is no deadline for when it comes.
  The order demands many further layers of review by the Department and 
permits the possibility of Bell having long distance at uncertain 
future dates at two areas that serve 1.2 percent of the population. The 
order is 39 pages long and contains 50 main paragraphs.
  This decree, the Ameritech decree, is twice as long as the consent 
decree that broke up the old Bell system in 1984. That is a reflection 
of lawyers at work, I suppose.
  The proposed order is being described as one that will permit a Bell 
company to enter the long distance market. The order contains no such 
permission. It [[Page S8216]] does not grant Ameritech the right to 
provide interexchange services in the temporary waiver territory.
  All the order itself achieves is a wholesale transfer of power from 
Judge Greene to the Department of Justice. If the order is entered, it 
will be up to the Department in the exercise of its discretion to 
determine when, if ever, Ameritech will be allowed to provide long 
distance service in any market.
  The order has this effect because key conditions on Ameritech's entry 
are undefinable, indeed, so vague as to be undefinable, because the 
order asked the district court simply to let the Department declare 
when the conditions have been met.
  Paragraph 9, for example, states that Ameritech shall not offer 
interexchange telecommunications pursuant to this order until the 
Department has approved the offering of such telecommunications 
pursuant to the standard set forth in paragraph 11.
  Paragraph 11, however, simply describes an open-ended process of 
further review. Among other things, the order empowers the Department 
to hire experts to review Ameritech's future proposals and declares 
Ameritech must pay for them. The Department, it appears, expects to 
spend not only time but significant sums of money in evaluating 
Ameritech's proposals when they are finally put forward.
  The order also allows the Department, in its sole discretion, to 
condition relief upon any other terms that may be appropriate. When and 
if some Ameritech plan is ultimately approved and put into effect, the 
Department retains authority to terminate at will by sending a letter 
to Ameritech telling them to stop. Ameritech will be permitted to 
petition Judge Greene for review, a right it already has today.
  The proposed order is reflective of nothing so much as the 
Department's desire to micromanage all aspects of the 
telecommunications industry.
  It seems inconceivable that Judge Greene will approve or could 
lawfully approve such a wholesale transfer of power from his courtroom 
to the Department's Assistant Attorney General for antitrust. Under 
both the standard provisions of district court jurisdiction and express 
jurisdictional terms, the divestiture decree, the Bell companies are 
entitled to timely district court review of motions for relief from the 
line-of-business restrictions.
  A district court has a general duty under the Federal rules of civil 
procedure to entertain motions of parties and rule on them in an 
orderly and timely fashion. This is clearly a serious and important 
responsibility, particularly in a case such as this one that has 
remained under the district court's jurisdiction for 21 years. It is 
not a duty that can be delegated to anyone else.
  I see my friend from Missouri is prepared to speak. I yield the 
floor.
  Mr. ASHCROFT. Mr. President, I rise to oppose the amendment which 
would place the Department in the process of authorizing the entry by 
the Bell operating companies into the long distance markets.
  Senate bill 652, which was the study result of much activity in 
committee and a long period of investigation, places the responsibility 
for making that judgment in the FCC. It is important to understand what 
the Federal Communication Commission is, how it is composed, why it is 
the appropriate agency to make those kinds of decisions.
  The Federal Communications Commission is a quasi-judicial body not 
affected by politics. Appointees are appointed for an extended period. 
There are longer periods of appointments than the President's term is. 
It is designed to be insulated from politics, to make professional 
judgments that are technical and appropriate to the field that the 
Federal Communications Commission oversees, and is technically 
competent and expert in the area of communications.
  The amendment which we are considering now and upon which the Senate 
of the United States will act at 12:30 today is an amendment which 
would have the Department come in and second-guess the judgment of the 
Federal Communications Commission by adding a Department-consent 
requirement before these companies could move on to compete and extend 
and enhance the competition in the long-distance market.
  I do not believe that kind of layering of the bureaucracies, I do not 
believe that kind of additional Federal and governmental involvement, 
would promote competition.
  As a matter of fact, that kind of bureaucratic involvement very 
frequently does the opposite of promoting competition. The more 
bureaucracy that is involved, frequently the more difficult it is for 
enterprises to have the kind of flexibility that we really want 
enterprise to have to be competitive in an international marketplace 
which demands higher and higher levels of productivity.
  Now, the bill as presented to this body by the committee, S. 652, is 
very clear about the way it expects the decision to be made regarding 
the entry of these competitors into the long-distance marketplace. As a 
matter of fact, it says to the FCC that there is a list, a specific 
recipe of conditions, that have to be met. In addition to the 14 or so 
conditions that are listed in the bill, there is another interest that 
is charged to the FCC that they must consider. It is the public 
interest.
  Here what we have in the bill is a governmental body, a quasi-
judicial body, the regulatory commission called the FCC, the Federal 
Communications Commission. The Congress in this body is telling them 
specifically to make the decision based on these criteria and adds to 
the 14 criteria the public interest.
  Now, that ought to be enough governmental involvement to assure that 
we make good decisions and the right decisions. However, the amendment 
which is now being considered would add the Department in a totally new 
and different and unprecedented role for the Department, one in which 
they have not been involved before. The Department would be asked to 
implement a supervisory authority here and to make a final decision 
about whether these companies could enter the long-distance competitive 
marketplace.
  That final decision is something they have never exercised before. 
Even under the court orders relating to the divestiture from AT&T of 
the Bell companies and setting up the Bell operating companies around 
the country, the regional Bell companies, the Department did not have 
final authority. The Department went before a judicial decisionmaker 
and advocated a position.
  Now, the Department should not be given a decisionmaking authority in 
this matter because the decisionmaking authority is given to the FCC. 
The Department should be given an advisory role just like it has an 
advisory or advocacy role in the current situation.
  One important thing to remember is that Senate bill 652 does, in 
fact, provide for an advisory role for the Department. The FCC, in 
making its final determination about whether or not it will release the 
regional Bell operating companies to participate in the competition of 
the long-distance markets, the FCC is directed to consult with and to 
seek the advice of the Justice Department.
 But, it would be unprecedented for us to move beyond that traditional 
role of the Justice Department to ask the Justice Department to be 
making final decisions. Because, as a matter of fact, that has never 
been its role in any previous situation and should not be its role now. 
The FCC is that Commission that is a quasi-judicial body that can make 
those decisions, is trained to make them, is expert in the 
communications industry, and ought to be the final authority.

  So it is pretty clear to me, and I believe it ought to be clear to 
the U.S. Senate, that the FCC should retain that final authority and 
that the Department of Justice be maintained in its advisory authority 
that the bill, S. 652, provides. The amendment which would enhance the 
advisory authority is unnecessary and would be counterproductive.
  The PRESIDING OFFICER. The Senator should be advised that we have 
controlled debate beginning at the hour of 11:30.
  Under the previous order, the hour of 11:30 having arrived, the 
Senate will now resume consideration of the Dorgan and Thurmond 
amendments, with 1 hour equally divided prior to a motion to table.
  Mr. PRESSLER. Parliamentary inquiry, who controls the time?
  The PRESIDING OFFICER. The time is controlled by the two managers of 
the bill.
[[Page S8217]]

  Mr. ASHCROFT. Mr. President, I ask unanimous consent for an 
additional 5 minutes to speak as in morning business.
  The PRESIDING OFFICER. Is there objection?
  Mr. PRESSLER. Mr. President, I believe under the unanimous-consent 
agreement I will have to yield 5 minutes off the amendment's time, from 
what I understand of the parliamentary situation. I am prepared to 
yield 5 minutes, but I make it clear I will reserve the last 15 minutes 
for managers of the bill to speak. I believe we should reserve about 15 
minutes for Senators Dorgan and Thurmond to speak, if they come to the 
floor.
  So I yield 5 minutes to my friend from Missouri.
  Mr. ASHCROFT. In that event, I withdraw my request for unanimous 
consent to speak as in morning business and ask the Chair to inform me 
when 5 minutes has expired.
  The PRESIDING OFFICER. The Senator from Missouri is recognized.
  Mr. ASHCROFT. Mr. President, there has been quite a bit of debate on 
this issue. It has been suggested that those of us who oppose the 
Department of Justice having a special and unprecedented role of final 
decisionmaking in this arena do not trust the Department of Justice.
  We trust the Department of Justice. But we trust it to maintain its 
traditional role. We trust it to be a law enforcement agency and an 
advisor as it relates to legality and propriety of measures that relate 
to the law. But we do not trust it to do something totally new, 
something different, nor do we trust it to second-guess an 
administrative agency that has expertise in this area, the Federal 
Communications Commission.
  So, this is not a question about whether the Department of Justice 
will have a role. That question was laid to rest long ago. The FCC is 
required to consult, according to the language of the bill, with the 
Attorney General regarding the application during the 90-day period. 
The Attorney General may analyze a Bell operating company's application 
under any legal standard, including the Clayton Act, the Sherman Act, 
and other antitrust laws, and those standards of the Clayton Act and 
the Sherman Act are the kinds of standards that are suggested by the 
amendment.
  The difference between the bill, this bill, and the amendment which 
is proposed, is whether or not the Justice Department would have final 
decisionmaking authority. All of its ability to advise and to argue and 
to participate by virtue of supplying its views are preserved and 
protected under this bill. But to say the Department of Justice has 
separate veto authority over the agency of expertise here would be to 
inject the Department of Justice at a policymaking level never before 
provided for the Department of Justice, not only in this arena but in 
other arenas as well.
  I just suggest that we do not need to change the character of the 
Justice Department from an enforcement arena and prosecutorial arena to 
a policy-making arena. The policy should be judged by the Congress of 
the United States and the policy is set forth clearly here, in the kind 
of guidelines that we would seek to suggest for the Federal 
Communications Commission. This amendment will make a mandate of the 
advisory role of the Department of Justice, a mandated final 
decisionmaking role, and it will provide for confusion with two Federal 
agencies seeking to make final decisions instead of one.
  The Federal Communications Commission is a professional, quasi-
judicial organization with 5-year terms. The Department of Justice is 
an appointed position, appointed by the President of the United States. 
It has all the benefits of political involvement and has the drawbacks 
of political involvement. I do not believe we want political decisions 
to be made, the influence or contamination of politics to find their 
way into this particular set of decisions.
  I believe it is important for us to reject this overlapping, doubling 
up of enforcement at the Federal level, the duplication of 
decisionmaking. The professional, trained, expert Federal 
Communications Commission can make this decision with the advice of the 
Department of Justice. For us to try to have redundant and duplicative 
Federal control here is for us to reject the promise of the future. 
Some look into the future and shrink back in fear. I think this is a 
great opportunity.
  In closing, I would say I do not think the competitors of the United 
States, as they are working on a framework for operations for 
telecommunications, are going to be thinking about how many layers of 
regulation they can place on top of this industry. I do not think they 
are going to think about how much duplicative and redundant control, or 
whether they are going to convert what had otherwise been law 
enforcement agencies into policymaking agencies and to have a tug of 
war between two agencies of the Federal Government which would stymie 
expansion and development and growth in the industry.
  I think our competitors around the world are going to try to seize 
and regain the advantage that America currently has in 
telecommunications. For us to add the Department of Justice, not as an 
adviser--that is already in the bill--but as a final decisionmaker to 
compete with another agency trained to get this job done would be 
unwise.
  So I urge the rejection of the amendment which would make the 
Department of Justice a final decisionmaker in this matter.
  The PRESIDING OFFICER. The time of the Senator has expired. Who 
yields time?
  Mr. HOLLINGS. Mr. President, as I understand it, time is divided 
between the two managers. I take it on this side we would manage the 30 
minutes for the proponents. In no way do I propose this amendment. I 
hope to kill it. But I yield such time as the Senator wishes.
  Mr. KERREY. I appreciate the kindness.
  I can read the handwriting on the wall, Mr. President. The majority 
leader opposes this amendment, the Democratic leader opposes it, the 
Democratic whip, the Republican whip, the manager of the bill, the 
Republican chairman, the Democratic ranking member--all oppose this 
amendment.
  So what I find interesting is the hyperbole that gets layered upon 
the argument against that the Department of Justice is overreaching, 
that they are incompetent. That is an argument that I just heard the 
Senator from South Dakota use against the Department to demonstrate 
that they are incompetent. It takes a long time, 1,500 days I heard 
from the Senator from South Dakota say.
  Let me give my colleagues an example of the reason it takes a long 
time. Maybe the Senator from South Dakota thinks the Department of 
Justice should have this waiver. In 1994, Southwestern Bell and three 
other RBOC's filed a request to vacate the final modified judgment to 
simply completely eliminate its restrictions without replacing those 
restrictions with any consumer safeguard, with any requirement such as 
those contained in S. 652. That was the waiver application. The Senator 
from South Dakota and the Senator from Missouri talk about all this 
overreaching regulation. Perhaps they would like to have the Department 
of Justice approve this waiver, get it out of the way in a hurry.
  Is that what the Senator from South Dakota has been arguing for when 
he talks about delays? Is this the sort of thing he wants them to 
approve? Let us not come to the floor and talk about 1,500-day delays. 
It is being delayed because of this kind of thing. Nobody, I do not 
believe anybody; maybe there is; maybe someone down here says what we 
should have had was the Department of Justice approving this kind of 
waiver. Then S. 652 would not be necessary. Maybe that is the feeling 
here, we do not want any consumer protection. We do not care if there 
is local competition. Forget the checklist. Forget the VIII(c) test, 
and all that nonsense. Let these guys go out and have at it, take their 
monopoly and run with it, and use the power in any fashion they want.
  I do not think so. I think the structure of this bill implies that we 
are concerned about this monopoly power and that we want some restraint 
as we move to a competitive environment. And the Department of Justice 
has been attempting to measure that as [[Page S8218]] they evaluate 
these waivers. My colleagues will come down and say, ``Oh, no. Another 
layer of bureaucracy.''
  Let us not repeat the mistakes of the past. I call my colleagues' 
attention to the last major deregulation action in airlines when the 
Department of Justice again was given a consultative role. They 
basically had the opportunity to file a brief. They would just as well 
write their opinion on the wall of a bathroom for all the impact it 
has.
  Now we have in this case the airlines being deregulated. Now comes 
TWA and a hub in St. Louis wanting to acquire Ozark Airlines. The 
Department of Transportation gets the application as the FCC would in 
this case. Now we have Northwest Airlines trying to acquire Republic 
Airlines in the hub serving Minneapolis. The Department of Justice 
said: In our opinion, you will get less competition. That is our 
opinion. That is all the law allows, just an expression of their 
opinion. They vigorously, in fact, said you are going to get less 
competition. The Department of Transportation says your opinion is as 
good as anybody else's. We ignore it. Guess what? There is less 
competition and higher prices in both of those hubs as a consequence of 
those actions.
  We are not talking about another layer of regulation. The Department 
of Justice is not asking to intervene and get involved in something 
about which they know nothing.
  We are asking with this amendment, which is obviously going to get 
defeated--the opponents of this deal are lined up, in effect. We have 
been working long and hard, and are likely to get 40 votes for this 
thing. But I will stand here and predict that the Department of Justice 
is going to issue an opinion on an action taken by a local telephone 
company that the consumers are going to get less competition, not more. 
They are going to get less competition. They are going to file an 
opinion. That opinion will be ignored by the FCC, and Members will be 
up here saying, ``Gee, that was not quite what we had in mind.''
  So we are not asking for increased regulatory authority. Please do 
not talk about the delays unless you are prepared to identify a 
specific waiver that you think should be approved. Let us talk about 
the waiver. I alert my colleagues that we will have an opportunity on 
additional amendments to revisit this issue.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. PRESSLER. Mr. President, I yield 5 minutes to my friend from 
Montana.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BURNS. Mr. President, I thank the managers of the bill, and I 
also thank the chairman of the full Commerce Committee, who has really 
done a marvelous job, along with the ranking member and former 
chairman, Senator Hollings.
  We are not newcomers to this issue. I do not doubt for a minute the 
dedication that the Senator from Nebraska has in modernizing 
telecommunications, because we have been on panels together and we have 
been to different places together, and understand in his State, where 
distance learning and telemedicine is becoming very, very important, 
and also the new technology and the policy it is going to take to force 
that new technology into the rural areas. That is where our first love 
lies. I think the same could be said about South Carolina and the same 
could be said about South Dakota. But S. 652 already gives the Justice 
Department a role. It is spelled out clearly.
  It says, before making any determination:

       The Commission shall consult the Attorney General regarding 
     the application. In consulting with the Commission, the 
     Attorney General may apply any appropriate standard.

  That is the language that is in this bill. Do we start talking about 
those who have the expertise in regulating or do we talk about an 
organization that has the expertise in litigating? What is the primary 
purpose of the Department of Justice? I would say if the administration 
in their view thinks that some Federal law has been broken, they advise 
the Department of Justice to look into it. The same with the Congress. 
That is what the Department of Justice does. They are not in the 
process of rulemaking. I think that is left to the FCC and, of course, 
those of us who want to take the responsibility of setting policy where 
it should be set, here in this body, and not shirk our responsibilities 
or our duties in order to set that policy.
  The Senator from Nebraska says that there should be a larger role. 
That is what he is advocating. All we have to do is look back at the 
modified final judgment. How is it being administered today? It is 
being administered by the court, by Judge Greene, who has done an 
admirable job? Nobody can criticize Judge Greene. But the U.S. district 
court retains jurisdiction over those companies that were party to the 
MFJ. The court then asked the Justice Department, the Antitrust 
Division, to assume postdecree duties--``post,'' after it is all over, 
it is asked to do those duties. The antitrust division provides Judge 
Harold Greene of the district court with the recommendations regarding 
waivers and other matters regarding the administration of MFJ.
  Before we can do anything to deal with new technology, to force those 
new technologies and those tools out to the American people, yes, there 
have to be rules of entry. But we do not have to add layer upon layer 
of bureaucracy. If there is one thing that is being talked about around 
this town right now, it is the budget and spending. What do we spend 
our money for? It is my determination, after being here about 6 years, 
that if there is one thing that absolutely costs the taxpayers more 
money and the waste of money in Government, it is not that they are not 
doing a good job. It is called redundancy. Everybody wants to do the 
same thing. Everybody wants their finger in the same pie. Just look at 
the Department of the Interior. It is probably the greatest example. 
Every Department has a wildlife biologist. Wildlife biologists, by the 
way, are kind of like attorneys. If you get three of them together, you 
are not going to get an agreement. Everybody has a different approach.
  So basically what my position and my opinion is is that this is just 
another layer, another hoop to jump through before we finally 
deregulate. We want to be regulatory in nature and not more regulation 
or redundancy.
  Mr. President, I ask that this amendment be defeated. I thank the 
Chair.
  The PRESIDING OFFICER. The Senator from South Dakota has 18 minutes.
  Who yields time?
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that the time 
for the proponents be managed by the distinguished Senator from North 
Dakota and the Senator from South Carolina, Senator Thurmond. They are 
the proponents.
  The PRESIDING OFFICER. The Senator has the right to designate the 
manager.
  Who yields time?
  Mr. KERREY. Mr. President, will the Senator from North Dakota yield 
to me 15 seconds to correct a statement?
  Mr. DORGAN. I am happy to yield.
  Mr. KERREY. Earlier I said that the opponents of this included the 
Democratic leader. The Democratic leader is on our side. He is against 
the law in its current form, and is in support of the Dorgan-Thurmond 
amendment.
  Mr. DORGAN. Mr. President, I yield myself such time as I may consume, 
and I might say that when Senator Thurmond comes, he will want to be 
able to speak. So I will speak for 5 minutes.
  Mr. PRESSLER. Mr. President, how much time does each side have?
  The PRESIDING OFFICER. The Senator from South Dakota has 18\1/2\ 
minutes. The Senator from North Dakota has 23 minutes.
  Mr. DORGAN. Mr. President, a lot of statements have been made in this 
debate about the role of the Justice Department. Many of the statements 
that were made were surprising to me.
  Let us back up just for a moment and ask ourselves who investigated 
and sued to break up the Bell system monopoly which resulted in the 
very competition that is extolled here on the floor of the Senate as 
driving down prices in the long distance market? Who did that? It was 
the Justice Department that did that. Yet, we are confronted with the 
debate today that says, ``Gee, the Justice Department is a roadblock. 
The Justice Department is a problem. We are talking about layers 
[[Page S8219]] of bureaucracy and layers of complexity.''
  If you stand here and extol the virtues of competition in long 
distance and talk about the fact there are now over 500 companies from 
which you can choose to get long distance service and therefore lower 
prices because there is such robust competition, you must, it seems to 
me, recognize we got to that point because of the Justice Department. 
And if you recognize we got there because of the Justice Department, 
you cannot stand on this amendment and say somehow the Justice 
Department is a roadblock. I am telling you it is interesting to me to 
hear people preach about competition but then not be willing to vote 
for the things that promote the very competition they preach about.
  Competition works when you have many competitors in a competitive 
environment with the price as the mechanism for competition. 
Competition works in a free market when the market is free. But 
competition does not work when you have concentrations such that some 
can begin to control portions of the marketplace.
  Now, all we are asking in this amendment that is now a second-degree 
amendment supported by Senator Thurmond, myself, Senator DeWine, 
Senator Kerrey, and others, is that the Justice Department have a role 
to play on the issue of antitrust, on the Clayton 7 standard, and we 
have delineated the difference between the FCC role and the Justice 
role.
  Next time somebody stands up and says there is overlapping 
responsibilities, that is nonsense, total nonsense. There is not an 
overlap here. It is precisely the purpose of this amendment. So it just 
does not work to claim that this is overlap and complexity. It is not 
true. It is not the case. But you cannot preach about competition and 
then indicate that you support taking the agency out of this process 
that is the agency which evaluates competition and makes sure there is 
competition in the marketplace. It just does not square with good logic 
that if you are a friend of the free marketplace you would not support 
the things that are necessary and important to keep the marketplace 
free.
  I offered an amendment earlier, and I was not benefited by hearing 
the Senator from Nebraska speak on it. I am sure he says it was 
wonderful and eloquent, and I am sure that may well have been the case, 
but I missed it, nonetheless. It is likely he will repeat it, I am 
sure, so I will probably have the benefit of hearing it in the future. 
But I offered the amendment on broadcast ownership, and it is exactly 
the same principle as the issue of the Justice Department. Those who 
say let us have robust competition in telecommunications and then say, 
by the way, we are going to eliminate the ownership restrictions--you 
can go out and buy 85 television stations if you like; it does not 
matter to us what kind of concentration exists--well, they are no 
friend of competition. That is not being a friend of the free 
marketplace.
  I am just saying on these amendments, especially this Justice 
amendment but also, when that is done, the amendment on broadcast 
ownership, if you really believe--and I do--in the free marketplace, 
then you have to be a shepherd out here making sure that the 
marketplace remains free. There are all kinds of natural economic 
circumstances that move to attempt to impinge on the free marketplace. 
Concentration, concentration of assets and concentration of ownership 
is always, I repeat always, a circumstance where you see less 
competition and a marketplace that is less free. Concentration is, in 
my judgment, the kind of circumstance that tends to erode free markets 
and tends to undermine competition. The underlying amendment that we 
are going to discuss and vote on as the Justice Department amendment is 
simply an amendment that says when you are evaluating when there is 
competition in the local exchanges so then that the regional Bell 
operating companies are free to go compete in long distance, we want 
the Justice Department to have a role in that evaluation because they 
are the experts in antitrust. That is the issue here.
  Now, one can vote against this amendment, I suppose, and claim, well, 
this bill is a free market bill that frees the free market forces; it 
stokes the juices of competition; it is going to be wonderful for the 
American people; it is nirvana in the future.
  It is nonsense. It is all doubletalk if one does not support the 
basic tenets of keeping the free market free. And one of those basic 
tenets, in my judgment, is to make sure that the Justice Department has 
a role in this circumstance.
  So I have been involved in these discussions before, as has the 
Senator from Nebraska, and others in this Chamber about deregulation. 
``Deregulation,'' they just chant that. They ought to wear robes and 
chant it around here--deregulation, deregulation.
  So we deregulated airlines. Guess what, we deregulated the airlines. 
Wonderful. I said it before. If you are from Chicago, God bless you; 
you sure got the benefits from deregulation. If your cousin lives in 
Los Angeles, boy, you got a great deal. If you go out of O'Hare and fly 
to Los Angeles, you get dirt cheap prices. You have all kinds of 
carriers competing. That is competition. But go to Nebraska and see 
what you get from deregulation of airline service, or go to North 
Dakota and see what you get, or go to South Dakota and see what you get 
from deregulation of the airline service. It is not pretty. You do not 
have robust competition. You do not have prices, a competitive 
allocatur here. What you have is less service and higher costs.
  And in the airline deregulation, it is interesting; we have, in my 
judgment, a parallel because in airline deregulation, when we talk 
about whether airlines should be allowed to merge and whether we should 
have these concentrations, the issue was should the Department of 
Transportation allow the merger to happen. And the Department of 
Justice was asked in a consultative role.
  Well, what we see as a result of airline deregulation is that big 
airlines have gotten much, much bigger. How? They have gotten bigger by 
buying all of their regional competitors, and the Department of Justice 
in some of those cases said it is not in the public interest. And the 
Department of Transportation said tough luck; we are going to allow the 
merger anyway.
  We have experience directly on this point, and if in the rush to 
deregulation we do not have the kind of care and patience to make 
certain that the free market is free and that robust competition 
exists, we will do the consumers of this country no favor, I guarantee 
you. We will have had a lot of dialog; we will have used a lot of 
slogans; and we will have waved our hankies around talking about 
competition and all the wonderful words that have been focus grouped 
and tested, and so on, but all of them will not be worth a pile of 
refuse if we do not do the right thing to make sure that competition 
exists.
  You cannot preach competition and then be unwilling to practice it in 
terms of the safeguards that are necessary to assure that free markets 
are free, and that is the purpose of this amendment. I hope those who 
care about real competition and care about real free markets and those 
who are willing to make sure the guardians of free markets are able to 
have a role here, I hope they will come and vote yes on the Thurmond-
Dorgan second-degree amendment. I understand the motion will be to 
table, so I guess in that case I will hope that they will come and 
oppose the motion to table so that we can pass our amendment.
  Mr. President, I reserve the remainder of the time, and I understand 
Senator Thurmond will wish to access some of the time when he arrives 
in the Chamber.
  The PRESIDING OFFICER. Who yields time?
  Mr. PRESSLER. Mr. President, I ask unanimous consent that, 
notwithstanding the previous order, at 12:30 I be recognized to make a 
motion to table the Thurmond amendment 1265, as modified and, if the 
amendment is tabled, amendment 1264 be automatically withdrawn.
  The PRESIDING OFFICER. Is there objection?
  Mr. DORGAN. Mr. President, reserving the right to object, I did not 
understand the last portion of the unanimous consent request.
  Mr. PRESSLER. Amendment 1264 be automatically withdrawn. That will be 
the Senator's underlying amendment.
[[Page S8220]]

  Mr. DORGAN. The Senator is talking about if the motion to table 
prevails.
  Mr. PRESSLER. That is correct. I ask unanimous consent that 
notwithstanding the previous order, at 12:30 I be recognized to make a 
motion to table the Thurmond amendment, as modified and, if the 
amendment is tabled, amendment 1264 be automatically withdrawn.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. PRESSLER. Mr. President, this has been a long debate and many 
speakers have come to the floor on each side. I strongly believe that 
we should vote to table the Thurmond amendment because it creates a new 
role, an unprecedented, unnecessary role for the Department of Justice.
  Presently, there are many safeguards to consumers and to companies 
and to the public built into this legislation. This legislation was the 
result of meeting after meeting for over 3 months, every night and 
Saturday and Sunday among Republicans and Democrats, to come together 
to reach a bipartisan bill. We came up with a plan that the regulatory 
agency, the FCC, would be the decisionmaker while the Justice 
Department would still be involved.
  In the first step, when a company is applying, the State certifies 
compliance with a market-opening requirement. So that is a safeguard. 
Second, the FCC affirms public interest, necessity, and convenience.
  We had a vote here the other day on this floor preserving public 
interest, so the FCC can use the public interest standard.
  Third of all, the FCC certifies compliance with a 14-point checklist. 
I have the 14 points listed here in another chart. The point is that in 
the bipartisan meetings and building on the legislation of last year 
and building on efforts of many Senators--indeed, all 100 Senators were 
consulted during this process leading up to the markup in the Senate 
Commerce Committee--there was a question: Shall we use the VIII(c) 
test, which is a complicated test, or shall we use the Clayton 7 test, 
and we decided to come up with a checklist, a competitive checklist.
  Mr. DORGAN. Mr. President, will the Senator from South Dakota yield 
for one quick moment?
  Mr. PRESSLER. Yes.
  Mr. DORGAN. I shall not interrupt at length. I did want to point out 
the Senator from South Dakota is correct, an enormous amount of work 
went into the construct of the compromise. It is also true, is it not, 
that the Commerce Committee held this legislation up? The intent was to 
want to move this along quickly, and many of us were cooperative with 
that.
 But we at the committee hearing indicated that we were uncomfortable 
with several of these provisions and intended to deal with them on the 
floor of the Senate. So these issues, many of them, were raised in the 
markup of the Commerce Committee and only with the cooperation of 
Members who decided to raise the issues on the floor rather than in the 
committee was the bill able to be brought to the floor.

  (Mr. ASHCROFT assumed the Chair.)
  Mr. PRESSLER. That is correct. I welcome amendments. I welcome this 
amendment. I am giving a history of how we came to this checklist. I 
think the point I am making is that we have had a very bipartisan 
effort here, and we welcomed amendments there in the committee, and we 
welcome amendments here. Obviously, every member of every committee can 
bring something to the floor. But this checklist was worked out an a 
bipartisan basis. Before the local Bell company can be declared as 
having an open market, it has to interconnect. That is the first point. 
That is, they have to open up their wires so others can come in. They 
have to show the capability to exchange telecommunications between Bell 
customers and competitor's customers, access to poles, ducts, conduits 
and rights-of-way; the three unbundling standards, where they have to 
unbundle the system so other people can get in; access to 911 and 
enhanced 911; directory assistance and operator call completion 
services; white pages directory listing; access to telephone number 
assignment; access to data bases and network signaling; number 
portability; local dialing parity; reciprocal compensation, and the 
resale rules.
  That is a checklist that the FCC must go through to determine if the 
Bell company has opened up its business so other competitors have a 
fair opportunity to compete in the local telephone business. I have not 
heard anyone criticize this checklist. It seems to be universally 
accepted. Also, the Bells have additional requirements on them to open 
their markets. This is done at the FCC level and not Justice, and the 
Bells must comply with a separate subsidiary requirement, 
nondiscrimination requirement and a cross-subsidization ban. The FCC 
must allow the Department of Justice full participation in all of its 
proceedings. So the Department of Justice is already present without 
the Thurmond amendment.
  Now, the Bells must comply with existing FCC rules and rigorous 
annual audits, elaborate cost accounting, computer-assisted reporting, 
and special pricing rules. So there is much involvement. The Sherman 
Antitrust Act is in place. The Clayton Act is in place. The Hart-Scott-
Rodino Act is in place. So the Justice Department has plenty to do. I 
find this debate very unusual because it implies we are going to get 
the Justice Department involved. They are involved at every stage. In 
addition, under the Hobbs Civil Appeals Act, the Department of Justice 
is involved as an independent party in all FCC appeals.
  The Justice Department is involved every step of the way. If there is 
disagreement and there is an appeal, the Justice Department can be a 
party to that.
  Mr. President, the Justice Department is meant to be, under its 
enabling legislation, an enforcer of law. It is trying to become a 
Government regulation agency. Now, it did become that to some extent 
under Judge Greene's 1982 order. That order arose because Congress 
failed to act. Congress failed to do what we are trying to do now. 
Congress failed to require that the local exchanges be opened up, as 
the checklist requires. But we are doing that now in this legislation. 
We are finally doing it. Meanwhile the Department of Justice is very 
much intent, it seems, upon becoming a regulatory agency.
  I have pointed out the length of time it takes the Department of 
Justice to get these things done. Judge Greene suggested 30 days. They 
are up to almost 3 years. I know they have given this excuse or that 
excuse, but the point is that Judge Greene thought it could be done in 
30 days, originally, in 1982. A bureaucracy such as that will take a 
long time to produce a piece of paper. That will slow down the process 
and hurt consumers.
  It is my feeling that if we can pass this bill in a deregulatory 
fashion, it will cause an explosion of new investment in activities and 
devices. I frequently have compared it to the Oklahoma Land Rush--if we 
can pass it. Right now, our companies are investing overseas, and they 
are not investing here.
  People are trying to say this is anticonsumer. That is nonsense. Look 
at what happened when competition opened up the market for cellular 
phones. The price has dropped. Look at what happened when we 
deregulated natural gas. Prices have dropped. It is my opinion that a 
long distance call should cost only a few cents. It is my opinion that 
cable television rates should drop when there is more competition from 
DBS and video dial tone. If we get yet another regulatory agency 
involved, we can delay this thing 2 or 3 years. In fact, based on the 
Justice Department's performance, it will delay this whole operation 
for 2 to 3 years before we have competition and deregulation.
  This is a deregulatory, procompetitive bill. We are trying to put 
everybody into everybody else's business. Mr. President, there has been 
a lot of talk about corporate activity on these bills. There is an 
implication that the Commerce Committee bill has a lot of corporate 
input. But I say to you, read the newspapers of the last 3 weeks, and 
you will see all those full-page ads. They are paid for by 
corporations, and I admire them. They are fine corporations, members of 
the so-called Competitive Long Distance Coalition, which is headed by a 
person whom I respect very much, a former leader of this body, with 
whom I disagree on this matter. A vast amount of the corporate 
advertising in the last month has been [[Page S8221]] by corporations 
opposed to my position. I point that out because there seems to be some 
suggestion that S. 652 simply represents corporate thinking. Well, all 
the ads I have seen in the papers--the full-page ads--have been run by 
corporations that oppose my position and want the extra Justice 
Department role. That is because some corporations want to use 
Government regulation against competition. That is what is going on 
here.
  I think that we should defeat the Thurmond amendment because it is, 
as my colleague from South Carolina said, not only the camel's nose 
under the tent, it is the whole camel under the tent, so-to-speak, 
because once the Justice Department gets in, they will try to expand 
their regulatory role, as in the Ameritech case. I cited specifically 
the regulatory approach they have taken in that case. They want to have 
people over there writing telephone books--literally writing telephone 
books. They are supposed to be lawyers enforcing the antitrust laws in 
the Justice Department.
  So I hope that we defeat this amendment. I reserve the remainder of 
my time.
  Mr. THURMOND addressed the Chair.
  Mr. THURMOND. Mr. President, how much time do the proponents have?
  The PRESIDING OFFICER. The Senator from South Carolina has 13 minutes 
10 seconds.
  Mr. THURMOND. I yield 5 minutes to the distinguished Senator from 
Ohio, Senator DeWine.
  Mr. DeWINE. Mr. President, it has been argued on this floor time and 
time again that, under this bill, the Department of Justice could still 
enforce the antitrust laws. That is true. That is technically true.
  But the facts are that under the bill, the Department could still 
enforce the antitrust laws after--after--the phone companies move into 
the new markets.
  That is the problem. That is exactly the problem. It is like, Mr. 
President, enforcing the law after the fox has been allowed to guard 
the chicken coop. At that point, the damage is done. The fox has 
already eaten the chickens. We can stop the fox, but we cannot get the 
chickens back. It is too late.
  In this particular case, we would be enforcing the law after 
competition has been driven out, after choices have been eliminated. So 
while the argument is technically true, it certainly falls short and 
does not disclose the full story.
  Mr. President, we should enforce the law and ensure competition 
before competition is driven out.
  I rise today, Mr. President, in support of the Thurmond second-degree 
amendment. The goal of the bill we are considering today is to promote 
competition in the telecommunications industry. The Thurmond amendment 
is an attempt to make sure that we use the most effective means toward 
this end.
  Mr. President, the American people know when we have competition two 
good things happen: consumers have more choice, prices go down. This is 
as true in telecommunications as in any other sector of the economy.
  What we are really debating today is how best to make competition 
take root in the telecommunications industry. The question is, what 
agency is best equipped to undertake the task of policing competition 
in these markets?
  It is my belief, Mr. President, that the Thurmond amendment offers 
the most logical answer to that question.
  Under this amendment, two agencies of Government play a role. Each of 
the agencies is to play an important role, a role for which it is 
extremely well suited and in which it has a great deal of relevant 
expertise. The Federal Communications Commission sets communications 
policy. That is what the FCC does best. That is what they know how to 
do.
  Under the Thurmond amendment, that is what they will be doing. The 
Antitrust Division of the U.S. Department of Justice enforces 
competition. That is what the Justice Department does. That is what 
they will do under the Thurmond amendment. The Thurmond amendment makes 
the best possible use of each of these agencies. We do not need the FCC 
to hire a new staff of antitrust lawyers, a new layer of bureaucracy, 
to do something the Justice Department is already equipped to do. We 
need to liberate the FCC to do what it does best. That is what the 
Thurmond amendment does.
  Equally important, Mr. President, in my opinion, is what the Thurmond 
amendment does not do. It does not duplicate functions of Government. 
It is emphatically not a question of simply adding the Justice 
Department on top of the FCC. The FCC has a role. The Justice 
Department, under the Thurmond amendment, has another distinctive, 
different role, not duplicating.
  The system envisioned under the Thurmond amendment, Mr. President, 
will not cause delays in the licensing process. We have heard that time 
and time again. From the moment an application is made under the 
Thurmond amendment, both the FCC and the Justice Department will have 
exactly 90 days, according to law, to make their ruling. These 90-day 
periods will run concurrently, not sequentially.
  The Department has experience in this area. They do it for a period 
of time. The Clayton Act sets a 30-day limit. They hit that timeframe. 
Under this amendment, no layering of bureaucracies, no delays, just an 
intelligent division of labor in U.S. telecommunications policy.
  In conclusion, Mr. President, that is what the Thurmond amendment 
will accomplish. I thank the Senator from South Carolina for his bold 
leadership in this area with this specific amendment. I urge the 
adoption of the amendment.
  Mr. WELLSTONE. Mr. President, I wish to speak today in support of the 
Dorgan amendment, an amendment, I firmly believe, that is so key for 
the protection of consumers that frankly I must wonder how this bill 
got out of committee without its inclusion.
  Now Mr. President, on the substance of the amendment, I could do no 
better than to defer to the comments already made on this issue by my 
two colleagues, the distinguished Senators from Nebraska and North 
Dakota, both of whom demonstrate a penetrating understanding of this 
very difficult topic. I would, however, like to take a moment to 
address this amendment from a perspective we've only occasionally heard 
in the debate on this bill--that of telephone and cable-TV rate-payers, 
both in my State of Minnesota and across this Nation.
  I would hazard a guess that all of my colleagues would join with me 
in supporting the stated goal of this legislation: increasing 
competition in local phone service as well as cable TV. All of us 
likely agree that if competition is allowed to flourish, the biggest 
winners will be the consumers, the ratepayers, the millions of citizens 
who power the entire industry.
  But, and here's where some of my colleagues and I part company, not 
all of us are ready simply to throw our trust to the companies that 
stand to profit from deregulation. Competition doesn't just happen, 
sometimes it must be nurtured to protect consumers against monopoly 
control. The Dorgan amendment, by providing a role for the Department 
of Justice, recognizes this economic fact: this amendment is nothing 
more than a circuit breaker which will trip only if--let me repeat, 
only if--it is found that it would not be in the consumer's interest 
for a local phone company to begin to expand its service. That's all 
that it is.
  Mr. President, the need for the continuation of consumer protections 
and antitrust circuit breakers is clear. With every passing day, we see 
more integration in the telecommunications and information marketplace. 
On Sunday, Mr. President, we saw the Lotus Corp. agree to a friendly 
takeover by IBM. AT&T and McCaw Cellular will be joining forces, as 
will other companies, in preparing for this newly de-regulated 
telecommunications environment.
  This integration at the top corporate level and the market position 
of many of these companies demands that consumers be given a voice--a 
trusted voice--to speak for them in the coming years. No more trusted 
voice could be found on this subject than that of the Department of 
Justice. It was through that Department's courageous leadership that 
the old AT&T Ma Bell monopoly of old was broken apart--it was a long, 
tough fight, but this experience gained by the DOJ has been invaluable 
in guiding the breakup of the Bell system, and the development of 
competition in long distance and other services. It only makes sense 
that we allow the DOJ to put this experience to use 
[[Page S8222]] again as we move into an exciting, but potentially 
risky, new market.
  The Dorgan amendment, as modified by the Thurmond second-degree 
amendment, prescribes how this experience will be put to
 use. The amendment uses the expertise of both the FCC and the DOJ to 
their best advantage. Under the amendment, the FCC will conduct a more 
focused public interest test to review whether the Bell companies face 
competition and adequately meet the checklist of services called for in 
this bill--topics the FCC is well accustomed to dealing with. The DOJ 
will conduct an analysis to ensure that a monopoly will not be 
created--again, a task that the DOJ is particularly qualified for. In 
this way, responsibilities are clarified and redundancies between the 
FCC and the DOJ are elminated, and the consumer is protected.
  Now for those who say this is a partisan issue, or those who would 
charge that such protections are no longer needed, Mr. President I turn 
to the comments of Judge Robert Bork, a distinguished jurist and 
conservative commentator of the highest regard. Mr. President, Judge 
Bork writes:

       These restrictions [on the Bell companies] are still 
     supported by antitrust law and economic theory and should be 
     retained. The Bell companies' argument is that the decree's 
     line-of-business restrictions are relics of the 1970's, the 
     industry has changed dramatically, and the restrictions are 
     the product of outmoded thinking. To the contrary, the basic 
     facts of the industry that required the decree in the first 
     place, basically the monopolies of local service held by the 
     Bell companies, have not changed at all.

  Without this amendment, Mr. President, this bill asks the Senate to 
announce the equivalent of unilateral disarmament--the disarmament of 
the consumer. As it stands right now, this bill says: Mr. and Ms. 
Consumer, you should give up the rate protections you've had over the 
years, you should give up any Department of Justice role in this 
process, you should give up the years of antitrust experience built by 
those who slew the multitentacled AT&T monopoly in the first place. And 
what are we going to replace them with? The promise made to consumers 
by all these unregulated, multinational, multibillion-dollar 
corporations, that they will do what's in your best interest. A promise 
that the monopolies of old will behave. A promise that consumers will 
be protected, that service will be good and that rates will be 
reasonable.
  Mr. President, I don't buy it. Without this amendment, the public 
will be stripped of one of the key consumer protections they will ever 
have in the coming years--the voice of the Department of Justice.
  Mr. FEINGOLD. Mr. President, I rise in support of the amendment 
offered by Senators Thurmond and Dorgan. I applaud them for their 
leadership in the effort to provide the Department of Justice with a 
strong decisionmaking role in the approval of regional bell operating 
company entry into long-distance telephony.
  The importance of this amendment is underscored by the fact that S. 
652 terminates the modified final judgment which settled an antitrust 
case against AT&T. The MFJ provided a framework by which the regional 
bell operating companies could enter alternative lines of business. The 
Department of Justice has had an integral role in protecting consumers 
by applying the 8(c) test to the RBOC application for a waiver to enter 
into restricted lines of business. The Department of Justice has 
ensured that the RBOC's could not use their monopoly power to impinge 
upon the competition that has developed in long distance. However, S. 
652 vitiates the MFJ without providing any substantial safeguards for 
consumers.
  Had it not been for the antitrust efforts of the Department of 
Justice, which have been consistent through both Republican and 
Democratic administrations over the last 25 years, we would not have 
the competitive environment which exists today in long distance. DOJ 
has been the watchdog for consumers in telecommunications and that is 
because antitrust laws are intended to be pro-competition and pro-
consumer. I urge my colleagues to keep in mind that antitrust laws 
exist not for the benefit of the competitors but for the benefits which 
true competition yields to consumers.
  Now, as Congress is working toward deregulating telecommunications 
markets we must keep in mind that true competition will not prevail if 
one group of players hold all the cards. The power of the local 
monopoly is without equal in telecommunications markets. The advantages 
provided to them over those with lesser market power, fewer resources, 
and limited opportunities to control entry by their competitors are 
without bounds. As we speak of competition, we must keep in mind that 
competition cannot exist in markets in which one player has a 
substantially better hand than his rivals--particularly when those 
trump cards have been provided by the Federal Government in the form of 
regulated monopolies.
  The Department of Justice is the proper agency to make sure that the 
deck is not stacked against those attempting to compete fairly in the 
markets--that is to be sure that RBOC entry into long distance will not 
substantially lessen competition or tend to create a monopoly in any 
line of commerce in any section of the country. This test, as contained 
in section 7 of the Clayton Act, is one that has withstood the test of 
80 years of antitrust law. While it is not as strong as the test 
currently used by the Department of Justice which I would have 
preferred, known as the 8(c) test, it is a sound test to determine the 
appropriateness of RBOC entry into long distance.
  Mr. President, this compromise amendment offered by my colleagues 
addresses many of the concerns which have been raised by the opponents 
of a decisionmaking role for the Department of Justice. First, by 
requiring the Department of Justice to complete their review and make 
their recommendation in 90 days from receipt of the application, the 
RBOC's will be assured of an expeditious review of their request. That 
should alleviate the concerns of those who fear that DOJ will drag 
their feet and impede the advancement of competitive telecommunications 
markets. It will also provide the RBOC's with an incentive not to 
submit overly broad applications that would not likely be approved.
  Second, by narrowing slightly the breadth of the public interest test 
to be conducted by the Federal Communications Commission, the amendment 
offered by Senators Thurmond and Dorgan should also assuage the 
concerns of the RBOC's who claim that a Department of Justice would 
only duplicate the efforts of FCC.
  Mr. President, I also reject the notion that the Department of 
Justice should only become involved after the damage has been done. 
Some contend that the appropriate role of the Department of Justice is 
only to take antitrust actions against those engaging in 
anticompetitive behavior. That is, we should have more litigation tying 
up the resources of our Federal courts. I find that argument 
astonishing in a year in which so many of my colleagues are seeking 
legislation which attempt to reduce unnecessary litigation. Mr. 
President, if litigation resulting from inadequate preventative 
measures is not unnecessary litigation I don't know what types of 
lawsuits might be categorized unnecessary.
  Mr. President, I continue to support the initial amendment offered by 
my colleagues from North Dakota which would have used a stronger test 
to ensure there is no possibility that a monopolists could use its 
power to impede competition in the market it seeks to enter. However, 
the compromise they have presented is a far more appealing than S. 652 
in its current form which reverse the progress we have made toward 
greater competition in long distance over the last 25 years. The 
amendment before us employs a time-tested standard from the Clayton Act 
which should ensure that consumers are protected while RBOC's receive 
the expeditious review they seek without unnecessary duplication of the 
functions of the FCC.
  I ask unanimous consent that a letter from the Wisconsin's attorney 
general, James Doyle, supporting a decisionmaking role for the 
Department of Justice be printed in the Record.
  Mr. President, this is a sound compromise and I urge my colleagues to 
support it.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                [[Page S8223]] State of Wisconsin,


                                        Department of Justice,

                                         Madison, WI, May 3, 1995.
     Hon. Russell D. Feingold,
     U.S. Senator, Hart Senate Office Building, Washington, DC.
       Dear Senator Feingold: I understand that the antitrust 
     subcommittee of the Senate Judiciary Committee today is 
     considering S. 652, Senator Pressler's bill that would lift 
     the court-ordered restrictions that are currently in place on 
     the Regional Bell Operating Companies, allowing RBOC's to 
     enter the fields of long distance services and equipment 
     manufacturing at such time as sufficient local competition 
     exists in their service areas.
       Several antitrust issues loom large in S. 652. For one 
     thing, despite (or, perhaps, because of) its unmatched skill 
     and expertise in evaluating competition in the 
     telecommunications field, the U.S. Department of Justice is 
     given no role whatsoever under S. 652 in assessing in advance 
     whether local competition exists in each region of the 
     country sufficient to, in turn, give the go ahead to the 
     relevant RBOC to enter the markets for long distance services 
     and equipment manufacturing. Moreover, the Pressler bill 
     repeals the current restriction on cross-ownership of cable 
     and telephone companies in the same service area by 
     permitting telephone companies to buy out local cable 
     companies, their most likely competitor, thereby allowing 
     movement to a ``one-wire world'' with only antitrust 
     litigation to prevent it. In addition, the bill would preempt 
     states from ordering 1+ intraLATA dialing parity until such 
     time as an RBOC was permitted to enter the interLATA long 
     distance market.
       I am not alone in strongly opposing these features of the 
     bill. For example, a letter dated April 5, 1995, from 
     Congressman Henry Hyde, Chairman of the House Judiciary 
     Committee, to Congressman Thomas Bliley, Jr., chairman of the 
     House Committee on Commerce, stresses the need for a strong 
     role for the Antitrust Division of the U.S. Department of 
     Justice in any telecommunications legislation:
       ``[L]egislation directed at changing or replacing an 
     antitrust consent decree, needs to encompass an antitrust 
     law, competition perspective as well as a communications law, 
     regulatory perspective.
       ``[T]here will * * * have to be an evaluation of 
     marketplace conditions on a case-by-case basis. That is, the 
     actual and potential state of competition--in individual 
     states, metropolitan areas and rural areas--will have to be 
     analyzed.
       ``Using relevant factors as an administrative checklist [as 
     proposed in S. 652] makes sense, but the key will be the 
     decision-making mechanism regarding whether these conditions 
     are actually present in a particular case. This review should 
     be undertaken simultaneously by both the Justice Department 
     and FCC, with DOJ applying an antitrust standard and FCC 
     applying a communications law test. The statute should 
     contain firm deadlines for review by both agencies.
       ``DOJ is far less likely to challenge Bell entry if they 
     are involved in the decision-making process leading up to 
     Bell entry.''
       Significantly, on April 3, Ameritech, the U.S. Department 
     of Justice, AT&T, MCI and the Consumer's Union announced that 
     they had all agreed (subject, of course, to approval by Judge 
     Greene) to a waiver of the Modified Final Judgment allowing 
     two Ameritech local service areas--Chicago, Illinois, and 
     Grand Rapids, Michigan, to be used as ``test sites.'' At such 
     time as the U.S. Department of Justice determines that actual 
     competition exists in those areas, Ameritech may then enter 
     the market for long distance services originating from those 
     areas. Significantly, both of these developments--the Hyde 
     letter and the Ameritech agreement--occurred in the few days 
     immediately following the Senate Commerce Committee's March 
     31 action on S. 652.
       The April 3 agreement demonstrates that the most forward-
     thinking of the RBOC's, Ameritech (branded a ``traitor'' by 
     its fellow RBOC's, all adamantly opposed to a ``gate keeper'' 
     role for the U.S. Department of Justice), appreciates the 
     importance of a meaningful U.S. Department of Justice role in 
     the decision-making process leading to the opening of new 
     telecommunications markets.
       In my opinion, S. 652 is flawed in certain other respects, 
     not relating to competition law, and I will comment on those 
     features of the bill in due course. Because, however, S. 652 
     is before your antitrust subcommittee today, I wish to be on 
     record as opposing those features of the bill that offend 
     sound antitrust principles: the elimination of any decision-
     making role for the U.S. Department of Justice; the repeal of 
     the prohibition against mergers of telephone companies and 
     cable television companies located in the same service areas, 
     and preemption of the state's ability to order 1+ intraLATA 
     dialing party in appropriate cases.
       It is critical that federal law ensure a competitive 
     environment in telecommunications for the good of the public. 
     Responsibility for making determinations of sufficient 
     competition should remain in the hands of the Antitrust 
     Division of the U.S. Department of Justice.
           Sincerely,
                                                   James E. Doyle,
                                                 Attorney General.

  Mr. CRAIG. Mr. President, at a time when we are trying to address the 
deregulation of the telecommunications industry, to further enhance the 
role of the Department of Justice would be counterproductive.
  The Federal Communications Commission [FCC] regulates the 
communications industry. The Department of Justice [DOJ] enforces 
antitrust laws.
  The pending legislation, S. 652, supersedes the provisions of 
modification of final judgment [MFJ], that govern Bell Co. entry into 
businesses now prohibited to them. Once legislation is signed into law, 
a continued DOJ role in telecommunications policy is no longer 
necessary except in the area of enforcing the law.
  The Department of Justice does not need an ongoing regulatory role as 
part of an update of our Nation's communications policy. Actual 
regulatory oversight is not what DOJ is equipped to provide.
  DOJ's claim that ``it alone among government agencies understands 
marketplace issues as opposed to regulatory issues,'' is inaccurate. 
The FCC has a long history of reviewing and analyzing communications 
markets. Besides, S. 652 already gives the Justice Department a role 
which is clearly defined in the language of the bill.
  S. 652 states that:

       Before making any determination, the Commission shall 
     consult with the Attorney General regarding the application. 
     In consulting with the Commission, the Attorney General may 
     apply any appropriate standard.

  Dual DOJ and FCC bureaucracies to regulate the communications 
industry delays the benefits competition brings consumers. if we are 
going to strengthen the role of DOJ, why even bother trying to reform 
the 1934 act? After all, one of the main purposes for passing 
telecommunications reform legislation is to establish a national policy 
so that the MFJ can be phased out.
  Mr. President, providing this authority to the Justice Department is 
unprecedented. The Antitrust Division of the Justice Department has 
never had decision-making authority over regulated industries--or any 
industry. In addition, assigning a decision-making role to the 
Department of Justice establishes a dangerous precedent that could be 
expanded to other industries.
  Mr. President, more regulation is not what this bill needs. Again, 
dual roles for the DOJ and FCC will only delay competition. It will 
only delay the benefits of competition such as: Lower prices, new 
services, and more choice for communications services and new jobs. The 
only jobs that this amendment will provide is new jobs for lawyers at 
the Department of Justice.
  For those who may consider this necessary, let's briefly take a look 
at the job the DOJ has done in administering the MFJ. It is important 
to note that the Antitrust Division at Justice does not currently have 
decision-making authority over the MFJ. That sole authority is held in 
the U.S. District Court, in the person of Judge Harold Greene. The 
Antitrust Division essentially serves to staff Judge Greene on the MFJ, 
providing him with recommendations on waivers and other matters under 
the administration of the MFJ.
  In 1984, the average age of waiver requests pending at year end was a 
little under 2 months. By the end of 1993, the average age of pending 
waivers had grown to 3 years. Delays such as these are simply 
inconsistent with an evolving competitive market.
  In addition, the Justice Department is responsible for conducting 
reviews every 3 years, known as the triennial review, at which 
recommendations to the court are made regarding the continued need for 
restrictions implemented under the MFJ.
  These reviews were to provide the parties to the MFJ a benchmark by 
which they could gain relief.
  Mr. President, since 1982, only one triennial review has been 
conducted.
  In short, Mr. President, the Department of Justice's track record in 
fulfilling its obligations under the MFJ is poor. Therefore, I would 
question the advisability of giving the DOJ an unprecedented role, 
above and beyond what they currently have under the MFJ.
  Mr. President, S. 652 contains clear congressional policy. There is 
no reason why two Federal entities should have independent authority 
over determining whether that policy has been met. Again, let us not 
lose sight of what we are trying to achieve here. [[Page S8224]] 
  The ultimate goal of reforming the 1934 act should be to establish a 
national policy framework that will accelerate the private sector 
deployment of advanced telecommunications and information technologies 
and services to all Americans by opening all telecommunications markets 
to competition, which will create jobs, increase productivity, and 
provide better services at a lower cost to consumers.
  Mr. THURMOND. Mr. President, I yield myself such time as may be 
required.
  Mr. President, I rise today in opposition to the motion to table the 
Thurmond-D'Amato-DeWine-Inhofe second degree amendment.
  Many things have been stated in this Chamber over the last several 
days about my amendment to protect competition and consumers by 
providing that antitrust principles will be applied by the Department 
of Justice in determining when Bell operating companies should be 
allowed to enter long distance. Now that we are about to vote on a 
motion to table, it is my belief that we must focus on just three basic 
points in deciding how to proceed on this pivotal issue.
  First, the opponents of my amendment assert that I am trying to add a 
second agency into the antitrust analysis of Bell entry. In fact, just 
the opposite is true--my amendment removes an agency. S. 652 currently 
provides that the FCC shall determine the public interest in 
consultation with the Justice Department. FCC consideration of the 
public interest requires
 antitrust analysis, as indicated by the courts and reiterated by FCC 
Chairman Hundt in testimony last month before the Congress.

  As drafted, therefore, S. 652 already requires antitrust analysis by 
both the FCC and Department of Justice. My amendment will reduce this 
redundancy, by prohibiting the FCC from conducting an antitrust 
analysis when determining the public interest. Instead, the antitrust 
analysis will be conducted exclusively by the Department of Justice, 
the antitrust agency with great expertise and specialization in 
analyzing competition.
  Second, the antitrust role of the Justice Department in analyzing 
entry under my amendment is in no way unusual or inappropriate. It is 
the same analysis that the Justice Department conducts routinely in 
determining whether companies should be able to proceed into new lines 
of business through mergers and acquisitions. Even the standard--
section 7 of the Clayton Act--is identical. Considering whether entry 
will ``substantially reduce competition'' prior to any harm occurring 
is equally important here as in other section 7 cases involving a 
merger or acquisition. This process protects competition and the 
American public from harm which can be avoided.
  Mr. President, we all strongly support competition. The question we 
are resolving today is whether we will continue to rely on antitrust 
law administered by the expert agency to protect competition, as we 
have since the early part of this century. I fear that failure to 
support my amendment will harm competition, which ultimately harms our 
constituents.
  These issues are critically important, and I believe that it is 
highly desirable to have an up or down vote on my modified second 
degree amendment. For all of these reasons, I urge my colleagues to 
vote against the motion to table.
  I reserve the remainder of my time.
  How much time is remaining?
  The PRESIDING OFFICER. The Senator has 4 minutes 10 seconds 
remaining.
  Mr. PRESSLER. How much time do I have remaining?
  The PRESIDING OFFICER. The Senator from South Dakota has 6 minutes 32 
seconds.
  Mr. PRESSLER. I yield 3 minutes to the Senator from Texas.
  Mrs. HUTCHISON. Thank you, Mr. President. I appreciate so much the 
Senator from South Carolina. I hate to differ with him, but on this 
issue I do.
  The reason is because I sat on the committee and I saw how difficult 
it was to get to the goal of deregulation and to try to take the 
harassment off the businesses that we are trying to encourage to come 
into the marketplace rather than add yet another hurdle that they must 
jump before they can get into the marketplace to provide the 
competition that gives the consumers the best choices for the lowest 
prices.
  This amendment is a gutting amendment. That is why I think it is so 
important that we stick with the FCC and not add one more layer of the 
Department. We have made the decision that the FCC is the one that must 
protect the diversity of voices in the market. We have said the FCC can 
be the one that knows when there is competition at the local level so 
that we can go into long distance. It is that agency that has the 
expertise, that we have given the expertise. There is no reason to come 
in and add another layer.
  Antitrust will be taken care of if we increase competition. That is 
what this amendment will stop from happening.
  The committee labored not hours, not days, not weeks; the committee 
has labored for years to try to level the playing field among all the 
competitors that want to be in the telecommunications business. What we 
have found are some very strong competitive companies that want to jump 
into local service, to long distance service.
  We are trying to create that level playing field. We are trying to 
take the regulators out of the process so that our companies can 
compete and give consumers the best prices and the best service.
  If we stick with the committee, that is what we will have: more 
competition, easier to get into the competition. We will not put up 
more hurdles in the process. This is a deregulation bill, not a 
reregulation bill.
  That is why it is very important for my colleagues, as they look at 
these choices, to know that the committee has done the work, the 
committee has worked for years to try to create this level playing 
field.
  I have voted for the long distance companies in some instances. I 
have voted for the Bells in some instances, to try to make sure that 
that balance is there.
  The committee has struck the balance. I thank the Senators who have 
worked so hard, the distinguished chairman of the committee, the 
distinguished ranking member. On this one, I think we must stick with 
the committee that has done so much work.
  Thank you, Mr. President.
  Mr. THURMOND. Mr. President, I yield 3 minutes to the distinguished 
Senator from Nebraska.
  Mr. KERREY. Mr. President, the choice before Members on the tabling 
motion will be: Trust the 14-point checklist, basically, that the 
committee has offered as an indication; or do we want, in a parallel 
process, the Department to make a determination as to whether or not 
competition exists at the local level. That is all we are discussing 
and debating.
 I believe we want the Department of Justice to make that 
determination. I do not have the confidence in the 14-point checklist 
that others do. It is as simple as that.

  Many of the statements that have been made about what this amendment 
attempts to do have simply not been true. Many of the statements that 
have been made about what the Department of Justice is trying to 
accomplish here simply are not true. We are simply saying, with this 
amendment, to Members of Congress, the Department of Justice should 
have a determination role. They should say, ``We have determined that 
there is competition,'' or ``We have determined that there is not 
competition.''
  I will cite, in a repetitive example, two instances that ought to 
give, I think, Members of Congress a pause. The Senator from South 
Dakota gets up and says all these delays occur. I cited an application 
for a waiver of the MFJ that was made in 1994 by Southwestern Bell. I 
ask the Senator from South Dakota, did he wish that would have been 
approved in 30 days? That waiver application would strike all the MFJ 
requirements, strike all the restrictions with no determination of 
local competition whatsoever. Perhaps the Senator from South Dakota 
does not like that delay. Perhaps the Senator from South Dakota and 
other Members would like to have a situation where there is no 
determination being made by the Department of Justice. If that is the 
case, vote to table.
  But if you want the Department of Justice to have the determination 
role rather than just ``Here is our opinion about this proposal,'' then 
you have to vote for this amendment. [[Page S8225]] 
  I believe if you do vote for this amendment, you will be happy you 
did. At the end of the day you do not want to just try to make sure 
these folks are happy who are outside the hallway out here, adding up 
votes trying to figure whether this amendment is going to pass or fail. 
You want the consumers and the citizens and the taxpayers and the 
voters of your State to be happy. And the only way they are going to be 
happy, the only way they are going to say this thing works, is if we 
get real competition at the local level. With real competition at the 
local level, there will be choice and there will be decreases in price 
and increases in quality. And that is the only way in my judgment that 
S. 652 is going to produce the benefits that have been promised.
  Mr. PRESSLER. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator from South Dakota controls 3\1/2\ 
minutes.
  Mr. PRESSLER. Mr. President, I yield myself 2\1/2\ minutes. I yield 
the last minute to the Senator from Alaska.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. I conclude this by saying I love my colleague from 
South Carolina, Senator Thurmond. This appears to be a difference over 
jurisdiction. I plead with my colleagues, do vote this amendment down. 
It is a gutting amendment. It will add more bureaucracy. It goes 
against the procompetitive, deregulatory nature of the bill.
  I respect my colleague from South Carolina so much, but I see this as 
a jurisdictional difference. On this occasion I will have to vote to 
table the Thurmond amendment and continue to love the senior Senator 
from South Carolina.
  I yield to the Senator from Alaska for the last word.
  Mr. STEVENS. Mr. President, I believe this is a balanced bill we have 
here now. The Department of Justice has a statutory consultative role. 
If it has concerns, the FCC will hear those concerns. The basic thing 
about this bill is it gets the telecommunications policy out of the 
courts and out of the Department of Justice and back to the FCC to one 
area. We hope to transition sometime so we do not even have them 
involved.
  I oppose striking the public interest section because it upsets the 
balance we have worked out. It upsets the balance in favor of the wrong 
parties.
  I urge support of this motion of the chairman to table.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, how much time remains?
  The PRESIDING OFFICER. The proponents of the amendment have a minute 
and 35 seconds. The opponents of the amendment have a minute and 58 
seconds.
  Mr. THURMOND. I will use 30 seconds. The Senator can take the rest.
  Mr. DORGAN. Mr. President, if I might take just 1 minute and ask 
unanimous consent Senator Feingold be added as a cosponsor to the 
Thurmond-Dorgan second-degree amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, let me again say, those who say this 
upsets the balance, this adds layers of bureaucracy, this adds 
complexity--in my judgment, respectful judgment, they are just wrong. 
They are just wrong.
  This does not have balance unless it has balance in the public 
interest on behalf of the American consumer making certain the free 
market is free. Free market and competition are wonderful to talk about 
but you have to be stewards, it seems to me, to make sure the free 
market is free. The only way to do that is to vote for this amendment.
  So vote against tabling the Thurmond-Dorgan amendment and give the 
Justice Department the role they should have to do what should be done 
for the consumers of this country.
  Mr. President, I reserve the remainder of the time.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. THURMOND. Mr. President, I want to say to the Senate this. This 
amendment protects consumers and enhances competition. It does not gut 
this bill. That is an error. It provides for the Department of Justice 
to carry out the antitrust analysis of Bell company applications to 
enter long distance. This is the special expertise of the Department of 
Justice. My amendment limits the FCC to reviewing other areas and not 
duplicating DOJ. I am confident that this will reduce bureaucracy and 
eliminate redundancy of Government between roles of the DOJ and FCC. In 
other words, it leaves with the FCC to determine issues in which they 
have expertise. It leaves to the Justice Department determinations in 
which they have expertise. And that is the way it ought to be.
  The PRESIDING OFFICER. The Senator from South Dakota has 2 minutes--a 
minute and 58 seconds.
  Mr. PRESSLER. Mr. President, I yield the remainder of my time.
  Mr. THURMOND. Mr. President, I yield any time I have left.
  Mr. PRESSLER. Mr. President, I make a motion to table the Thurmond 
amendment, No. 1265.
  Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the motion. The 
clerk will call the roll.
  The legislative clerk called the roll.
  The result was announced--yeas 57, nays 43, as follows:
                      [Rollcall Vote No. 250 Leg.]

                                YEAS--57

     Abraham
     Ashcroft
     Baucus
     Bennett
     Biden
     Breaux
     Brown
     Bryan
     Burns
     Byrd
     Campbell
     Chafee
     Coats
     Cochran
     Coverdell
     Craig
     Dole
     Domenici
     Exon
     Faircloth
     Ford
     Frist
     Gorton
     Gramm
     Grams
     Gregg
     Hatch
     Hatfield
     Heflin
     Helms
     Hollings
     Hutchison
     Jeffords
     Johnston
     Kassebaum
     Kempthorne
     Kerry
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Moynihan
     Murkowski
     Murray
     Nickles
     Nunn
     Packwood
     Pressler
     Roth
     Santorum
     Simpson
     Smith
     Stevens
     Thomas
     Warner

                                NAYS--43

     Akaka
     Bingaman
     Bond
     Boxer
     Bradley
     Bumpers
     Cohen
     Conrad
     D'Amato
     Daschle
     DeWine
     Dodd
     Dorgan
     Feingold
     Feinstein
     Glenn
     Graham
     Grassley
     Harkin
     Inhofe
     Inouye
     Kennedy
     Kerrey
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Moseley-Braun
     Pell
     Pryor
     Reid
     Robb
     Rockefeller
     Sarbanes
     Shelby
     Simon
     Snowe
     Specter
     Thompson
     Thurmond
     Wellstone
  So the motion to lay on the table the amendment (No. 1265), as 
modified, was agreed to.
  Mr. HOLLINGS. Mr. President, I move to reconsider the vote.
  Mr. DOLE. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. THURMOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. THURMOND. Although my amendment was tabled, we will be back. It 
is very important to have an up and down vote on this amendment. I have 
filed my amendment at the desk, and it will be in order after cloture. 
We will then get to the direct vote on this important amendment.


                      Amendment No. 1264 withdrawn

  The PRESIDING OFFICER. Under the previous order, the underlying 
amendment has been withdrawn.

                          ____________________