[Congressional Record Volume 141, Number 97 (Wednesday, June 14, 1995)]
[Senate]
[Pages S8310-S8363]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                  VOTE

  The PRESIDING OFFICER. The question now occurs, Is it the sense of 
the Senate that debate on S. 652, the telecommunications bill, shall be 
brought to a close? The yeas and nays are required. The clerk will call 
the roll.
  The legislative clerk called the roll.
  The yeas and nays resulted--yeas 89, nays 11, as follows:

[[Page S8311]]

                      [Rollcall Vote No. 259 Leg.]

                                YEAS--89

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

                                NAYS--11

     Bradley
     Bumpers
     Byrd
     Conrad
     Dorgan
     Feingold
     Kerrey
     Lautenberg
     Levin
     Simon
     Wellstone
  The PRESIDING OFFICER. Three-fifths of the Senators duly chosen and 
sworn having voted in the affirmative, the motion is agreed to.
  Mr. PRESSLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Dakota is recognized.
  Mr. PRESSLER. Mr. President, I want to thank all Senators for that 
outstanding cloture vote and to say that now in this postcloture 
period, I hope Senators will bring their amendments to the floor. We 
are ready to proceed. Senator Dole has indicated a desire of possibly 
finishing the bill today or tonight. We hope we can do that.
  I think we are on the way to passing a deregulatory, procompetitive 
telecommunications bill. I thank all Senators for their cooperation. We 
hope that Senators who have speeches or amendments will bring them to 
the floor.


                           Amendment No. 1306

(Purpose: To protect ratepayers from having to pay civil penalties for 
  violations by local exchange carriers of interconnection and other 
                                duties)

  Mr. KERREY. 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 Nebraska [Mr. Kerrey] proposes an 
     amendment numbered 1306.
       On page 107, after line 23, insert the following:
       ``(d) Payment of Civil Penalties.--No civil penalties 
     assessed against a local exchange carrier as a result of a 
     violation of this section will be charged directly or 
     indirectly to that company's ratepayers.''

  Mr. KERREY. Mr. President, I have discussed this with the managers of 
the bill, and I have a modification that I would like to get unanimous 
consent to be included which does not change the substance of the bill; 
it merely clarifies to what civil penalties it refers. It says ``civil 
penalties, damages or interests,'' as opposed to just ``civil 
penalties.''
  I ask unanimous consent that this amendment be modified in that 
fashion.
  Mr. PRESSLER. Reserving the right to object until we can get a copy 
of it over here. We are trying to be cooperative and move the process 
forward. Some of these amendments have been modified at the very last 
minute. We have a system of reading these over here, and we would like 
to get a copy of it.
  Mr. HOLLINGS. If the Senator will yield. I understand, Mr. President, 
the distinguished Senator from Nebraska has a one-line amendment. ``No 
civil penalties assessed against the local exchange carrier as a result 
of a violation of the section will be charged directly or indirectly to 
that company's ratepayers.''
  Trying that amendment on for size, let us assume I ran a public 
utility, whether it be, say, a telephone company, cellular or 
otherwise. I am running a public company and I am trying to comply. Let 
us say I am president. Unless I take the money out of my pocket, how 
else am I going to avoid paying the penalty against the company 
directly or indirectly? How do I do it? It is bound to come out one way 
or the other. My company, Hollings Communications, has been assessed a 
$5,000 fine.
  Mr. KERREY. I have an easy answer for that. For example, when the 
companies get into providing ancillary services, they will always say, 
no, this is not coming from the ratepayers, it is coming from the 
shareholders. They do this all the time. When the company is offering a 
defense of something, or when we are identifying something that we are 
concerned may be billed to the ratepayer, they will provide information 
to the FCC saying that it is being charged to the shareholders, not the 
ratepayers.
  The bill provides, in section 224, civil penalties and damages if the 
company violates the interconnection requirements. But my concern is 
that there is uncertainty as to whether these are going to be imposed, 
and even if they are, what the level is going to be. And what the 
amendment attempts to do is protect the ratepayer from having to 
shoulder the burden of any civil penalty that might end up being 
imposed, damage or interest, assessed against the local exchange 
carrier for violating the interconnection duties imposed on them by the 
legislation.
  It seems to me----
  Mr. HOLLINGS. I am willing to be educated and go along. In my mind, 
like Government, we do not have anything to give that we do not take. 
You and I have the same idea in mind. If that is what the Senator says 
and that is what they do, I am not the head of the company, but I think 
I could make it appear that the ratepayers were not paying for it. But 
come what may, I am afraid they would be.
  Mr. KERREY. What the Senator from South Carolina is saying is exactly 
right. It has always been a dispute with consumers who object to things 
a certain company is doing, as to whether or not a charge is being 
assessed to the shareholder or the ratepayer. That has always been in 
dispute. At both the FCC and the State public service commissions, they 
have attempted to answer this, and they have mechanisms that allow them 
to do this kind of separation.
  This is an attempt to protect the ratepayer in the event that the 
local exchange company is fined. As I said, there is considerable 
uncertainty. The fines are rather substantial--in some cases, a million 
dollars a day, and in one case $500 million, which could potentially be 
assessed against a local exchange company if they violated the terms 
and conditions of this new law. If you presume that a $5 million fine 
is levied against a local exchange company, it seems to me the 
ratepayer should not be penalized as a consequence of a mistake being 
made by a company that is trying to move from a monopoly situation to a 
competitive environment.
  This amendment says that, if civil penalties are imposed or damages 
or interests are imposed according to the law, we just merely make sure 
that they are not going to pass it in particular to a captive ratepayer 
that has no other option.
  Mr. HOLLINGS. Will the distinguished Senator yield?
  Mr. KERREY. I am happy to yield to the Senator.
  Mr. HOLLINGS. This could make the head of a corporation at least far 
more careful. Perhaps it could be allocated against him individually.
  I hearken back, in the past, when I was talking with the former 
distinguished Attorney General of the United States, Robert Kennedy, 
and we had the Mississippi case down at Oxford. He was asking me about 
the enforcement of these decisions of the Court.
  I met Senator Kennedy long before being Senators, otherwise we were 
very close. I said, ``You know our distinguished friend Governor 
Barnett has a building right across the street from the capital. If you 
had a $10,000 a day civil fine imposed, I think you would get his 
attention.''
  We public officials act and the public will have to pick up, but when 
we are individually responsible, that is a different thing.
  I am confident that the Attorney General Kennedy communicated that 
with Governor Barnett, and thus the admission of James Meredith to 
Oxford. The idea is a good idea. It is one I used some years back. I do 
not see any objection to it. I will have to listen to our distinguished 
chairman.
  The PRESIDING OFFICER. Is there an objection to the modification of 
the amendment?
[[Page S8312]]

  Mr. PRESSLER. Reserving the right to object, I do not think my 
colleague from South Carolina has a copy of the modified amendment with 
the handwritten changes.
  This is a problem procedurally that we have here with these 
modifications. Amendments must be modified, sometimes.
  Let me ask, this is written in longhand. I cannot see, ``damages or 
interest'' is inserted where?
  Mr. KERREY. With civil penalty damages.
  Mr. PRESSLER. It should read ``payment of civil penalties, damages or 
interest,'' and then no civil penalties?
  Mr. KERREY. That is correct, and no civil penalty damages.
  Mr. PRESSLER. ``Damages or interest, no civil penalties;'' and then 
does ``damages or interest'' occur again? We have damages and interest 
written again.
  Mr. KERREY. Mr. President, I gave the desk the only copy of the 
modification I have. I am not even able to look at my own copy.
  Mr. PRESSLER. Even the modification, I cannot tell----
  Mr. KERREY. It should be both in the heading and the text. The change 
needs to be in the heading and the text.
  Mr. PRESSLER. I think we need a clean copy.
  Mr. KERREY. Would you like block letters?
  Let me have staff work on this while I talk about the amendment.
  Mr. PRESSLER. I do not think we have an objection to the basic idea.
  Are damages and interest different from civil penalties?
  Mr. KERREY. Civil penalties is not clear. That is the interpretation 
that I was given. I was attempting to clarify this thing. I was told 
civil penalties is not clear.
  Mr. PRESSLER. Is the Senator taking ``civil penalties'' out and 
putting ``damages or interest'' in?
  Mr. KERREY. No, I am putting ``interest'' and ``damages'' in.
  Mr. PRESSLER. Let me say, generally speaking, I agree with the thrust 
of the amendment. But if we could get a clean copy of the amendment, 
this is a very confusing, the way it is written. It is confusing to me 
at least.
  Mr. KERREY. I will.
  The PRESIDING OFFICER. The Chair will ask the Senator from Nebraska 
if he would like to temporarily lay this aside?
  Mr. KERREY. Mr. President, it takes almost no time at all. I would 
like to get staff to clear this up. It is a single-line amendment. It 
should not be that difficult to have staff write this up in block 
letters.
  Mr. PRESSLER. I am not trying to be difficult.
  Mr. KERREY. I understand. I put insertions in this thing, and I need 
it written out in a single line. I do not need to lay the amendment 
aside.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KERREY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY. I ask unanimous consent that my request for modification 
of this amendment be withdrawn.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRESSLER. Mr. President, we have no problem with the amendment 
and we are prepared to accept it.
  Mr. KERREY. Mr. President, I ask unanimous consent that a 
modification of my amendment be accepted.
  The PRESIDING OFFICER. Is there objection to the modification of the 
amendment being accepted?
  Mr. KERREY. I earlier withdrew it, but I heard the Senator from South 
Dakota say----
  Mr. HOLLINGS. The Senator from South Dakota was accepting the 
amendment once the modification had been withdrawn.
  Mr. PRESSLER. That is right.
  Mr. HOLLINGS. Is that correct, Senator?
  Mr. KERREY. Let me withdraw the modification, and I would like to 
have the modification sent to the Senator from South Dakota.
  I, personally, would prefer not to have the amendment without this 
clarification. I would like to have the manager of the bill look at the 
modification before it is accepted, and I would like to talk about the 
bill or the amendment for a little while, so we can look at a clean 
copy.
  Mr. PRESSLER. We are prepared to accept the amendment as it is 
written and drafted.
  Mr. KERREY. Without modification?
  Mr. PRESSLER. Without modifications.
  Mr. KERREY. You are saying you object to modifications?
  Mr. PRESSLER. No, no, I did not say that. I thought you had withdrawn 
your modification.
  Mr. KERREY. I am withdrawing the modification so I can get the 
language clear enough so that the Senator from South Dakota can 
evaluate the modification itself. Then I can proceed and discuss the 
amendment while the modification is being sent to the Senator. I can 
redo it here so it is a cleaner copy.
  The PRESIDING OFFICER. Is there an objection to temporarily 
withdrawing the modification?
  Mr. PRESSLER. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KERREY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                    Amendment No. 1306, as Modified

  Mr. KERREY. Mr. President, I ask the modification that I have now 
reviewed with the distinguished manager of the bill be included as part 
of this amendment.
  Mr. PRESSLER. We have no problem with the amendment and we are 
prepared to accept it.
  The PRESIDING OFFICER. Without objection the amendment is so 
modified.
  The amendment, No. 1306, as modified, is as follows:

       On page 107, after line 23, insert the following:
       ``(d) Payment of Civil Penalties, Damages, or Interest.--No 
     civil penalties, damages, or interest assessed against any 
     local exchange carrier as a result of a violation referred to 
     in this section will be charged directly or indirectly to 
     that company's rate-payers.''

  The PRESIDING OFFICER. If there be no further debate, the question is 
on agreeing to the amendment.
  The amendment (No. 1306), as modified, was agreed to.
  Mr. KERREY. While I understand the Senator has some additional 
amendments--I have some other ones I would send down--let me describe a 
little bit what was in this amendment so colleagues understand how this 
bill has been modified.
  I think it is an important amendment because we are moving from a 
system of assessing rates for your local telephone service, based upon 
a rate base. That typically is calculated, presented to the public 
service commission or the public utility commission of the State, and 
the public service commission or public utility commission makes a 
determination about local telephone charges based upon that rate.
  There are a number of States that have moved to a more competitive 
type of situation. I think there are seven, eight, or nine States that 
have done so--I believe Colorado just recently passed legislation. This 
legislation, S. 652 preempts the States and says we are going to go to 
a price cap system of regulation as opposed to rate base.
  So, all 50 State public utility commissions or public service 
commissions would be required to use a price cap system under this 
legislation.
  I think it is going to be important, as you move to this widespread 
use of price cap regulation, to say very clearly, given the rather 
substantial penalties for failure to provide interconnection--and they 
are rather substantial; as I said, I believe it is $1 million a day and 
up to $5 million a day-- that you will not tap the ratepayer. I believe 
it is important, if penalties or damages get assessed, it does not get 
passed on to that individual ratepayer.
  Regulators are inevitably going to be asked by local telephone 
companies or local providers of service, as new competitors come on 
line, to adjust these caps. When they do, it is going to be very 
difficult if not impossible to exclude consideration of costs in making 
that adjustment. In making that adjustment they may not be able to 
identify and exclude penalties effectively. [[Page S8313]] This 
amendment will, as a consequence, protect ratepayers.
  Mr. President, I am proposing an amendment designed to protect 
ratepayers from having to shoulder the burden of any civil penalties, 
damages or interest assessed against local exchange carriers for 
violating the interconnection and other duties imposed on them by this 
legislation.
  Section 224 of the bill contains enforcement provisions. Under these 
provisions, a telecommunications carrier that fails to implement the 
requirements of sections 251 and 255 can be punished by a civil penalty 
of up to $1 million for each offense. A Bell company that repeatedly, 
knowingly, and without reasonable cause fails to implement an 
interconnection agreement, to live up to the agreement after 
implementing it, or to comply with the bill's separate subsidiary 
requirements can be fined up to $500 million. These penalties are 
intended to deter companies from evading their responsibilities to 
provide effective interconnection. The section also provides that 
private parties injured by such conduct can recover damages and 
interest.
  I have very serious doubts, Mr. President, about the efficacy of the 
civil penalties and the prospect of damages. I think there will be a 
lot of uncertainty as to whether sanctions will be imposed. This 
uncertainty is inherent in the nature of the interconnection 
requirements in the bill. For example, the very first duty under 
section 251 is the duty to enter into good faith negotiations with any 
telecommunications carrier requesting interconnection. The lawyers 
could litigate until kingdom come about whether a company has failed to 
negotiate in good faith.
  A similar example is found under the minimum standards of 
interconnection. The local exchange carrier must take whatever action 
under its control is necessary, as soon as it is technically feasible, 
to provide telecommunications number portability and local dialing 
parity. Now these two things--number portability and local dialing 
parity--sound a little arcane, but they are both essential to having 
any kind of meaningful local competition.
  Number portability means that customers can keep their telephone 
numbers when they switch phone companies. Quite simply, telephone 
customers--both business and residential--are not as willing to switch 
phone companies if they also have to switch phone numbers. If I'm a 
small company in Omaha, NE, I can't afford to change telephone 
companies if it means that I have to change phone numbers, even if the 
competitor offers an otherwise better deal. My customers wouldn't know 
how to get a hold of me. All my listings, stationery, and business 
cards would have to be redone.
  So new phone companies who want to compete with the established 
carrier will be at a tremendous competitive disadvantage if there is 
not number portability.
  But the local exchange carrier doesn't have to take any action until 
number portability is technically feasible. Who is going to decide that 
issue? You can bet the lawyers will have something to say about it, as 
well as platoons of experts.
  Same situation with local dialing parity. Local dialing parity means 
that a customer who subscribes to a competitor can make calls by 
dialing the same number of digits as they would if they were customers 
of the established phone company. That's a big deal. People don't like 
to dial any more numbers than they have to. Back in the days of the old 
Bell system, that was one of the ways the monopoly disadvantaged MCI 
and other long distance competitors. You had to dial access codes if 
you wanted to use MCI. That discouraged people from switching.
  So the bill says that a local exchange carrier has to provide number 
portability and local dialing parity as soon as it is technically 
feasible, or there will be penalties. Well, it could be years before 
the lawyers and the experts and the FCC and the courts figure out what 
is technically feasible. By that time, the penalties or a private 
action to recover damages may not mean too much.
  Which brings me to my next point, Mr. President. Even if penalties 
eventually are imposed, we don't know how significant the penalties 
actually would be. The bill sets upper limits on the amount of 
penalties. But it doesn't offer any assurance that a penalty would ever 
approach those figures. Actual penalties, if they are imposed at all, 
could be a fraction of the possible amount.
  A private party seeking damages would also face daunting prospects in 
proving the level of those damages, since in many cases the injured 
party might never have gotten its business going because of the very 
violation complained of. The speculative nature of damages might be a 
serious barrier to recovery for the injured party.
  This balance of uncertain high penalties or damages against the 
certain and enormous financial benefit to local exchange carriers--
especially the Bell companies--of not providing effective 
interconnection to would-be competitors suggests that the deterrence 
effect of this penalty scheme will be minimal.
  So I have my doubts, Mr. President, that this enforcement approach is 
going to provide much encouragement to local telephone monopolies to 
cooperate in opening up the local market to competition.
  But if civil penalties are imposed or damages assessed, one thing we 
need to make sure of is that they are not passed on to local 
ratepayers. That is what my amendment does, Mr. President. It states 
that--
       . . . [n]o civil penalties, damages, or interest assessed 
     against any local exchange carrier as a result of a violation 
     referred to in this section will be charged directly or 
     indirectly to that company's ratepayers.

  This amendment is necessary, because the ratepayers are captive to 
the local exchange carriers. They don't have any choice. Without this 
amendment, the carrier could just pass the penalty or damages along to 
ratepayers--who would have to pay, because of that lack of choice. And, 
in that case, the carrier would have succeeded in evading the 
requirements of the bill twice--first by not meeting its 
interconnection obligations and second by making captive ratepayers 
foot the bill for the penalty or damages.
  Moving to a price cap form of regulation will not solve this problem. 
In fact, a price cap system may increase the chances that ratepayers 
will end up paying the local exchange carrier's civil penalties and 
damage judgments if this amendment is not adopted. Under traditional 
rate of return regulation, at least, the State regulators can conduct a 
rate case and scrutinize the claim and tell the carrier, No, that's a 
penalty, you can't pass that along.
  Under price cap regulation, regulators will inevitably be asked to 
adjust the caps. And when they do adjust them, it will be impossible 
for them to exclude consideration of costs in making that adjustment. 
But in making that adjustment, they may not be able effectively to 
exclude penalties and damages from the adjustment.
  This amendment will put the burden on the local exchange carrier to 
make sure that penalties, damages and interest don't end up burdening 
ratepayers. It makes sure that the penalties penalize the local 
exchange carrier, not the captive ratepayers.
                           Amendment No. 1344

    (Purpose: To provide for the representation of consumers on the 
            Federal-State Joint Board on universal service)

  Mr. KERREY. Mr. President, I have an amendment at the desk. I ask for 
its immediate consideration. It is amendment No. 1344.
  Mr. President, there is under provision of this amendment creation of 
a new Federal-State joint board.
  The PRESIDING OFFICER. The Senator will withhold. The clerk has not 
yet reported the amendment. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nebraska [Mr. Kerrey] proposes an 
     amendment numbered 1344.
       On page 37, line 7, insert after ``service,'' the 
     following: ``In addition to the members of the Joint Board 
     required under such section 410(c), one member of the Joint 
     Board shall be an appointed utility consumer advocate of a 
     State who is nominated by a national organization of State 
     utility consumer advocates.''.

  Mr. KERREY. Mr. President, the amendment is very straightforward. It 
merely asks for a consumer advocate to be appointed to be a member of 
this joint Federal-State board.
  The PRESIDING OFFICER. Is there further debate? The Senator from 
South Dakota.
[[Page S8314]]

  Mr. PRESSLER. Mr. President, I am going to have to question this 
amendment. I want to confer here. Do we have a copy of this amendment 
here?
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HOLLINGS. Mr. President, I say to the Senator from Nebraska, as I 
understand the idea here it is to add a consumer representative to the 
joint board, which is now comprised of four State commissioners and 
three Federal commissioners. They have the general overall concern of 
consumers as well as industry.
  What you have suggested now, by the amendment, is that a consumer 
representative be added on. The industry friends, then, will say ``We 
want an industry friend.'' If there is one thing that sort the rankles 
this particular Senator--and it is not the Senator from Nebraska; 
Heavens above, I have the greatest admiration for him--but it is this 
idea of classifications around this town: middle class and lower class 
and upper class and rich class and poor.
  I represent the high, the low, the rich, the poor and all classes. I 
really look upon our public utility commission at the several States to 
be very much attuned to the interests of consumers as well as the 
industry, and similarly with respect to the FCC Members. Mr. Coelho and 
the Federal Communications Commission were just commended by the U.S. 
Circuit Court of Appeals here in the District of Columbia last week for 
the outstanding job in measuring competition in the market and how they 
balance the interests of consumers versus the needs of the industry and 
otherwise.
  So I really am not enthused about this amendment but I yield to my 
distinguished chairman.
  Mr. PRESSLER. Mr. President, I must oppose this amendment 
reluctantly. I am all for consumers. But to have a person appointed who 
is nominated by the National Organization of State Utility Consumer 
Advocates, then we would say we need a corporate advocate. We need a 
racial minority advocate. We need this and that.
  So I feel strongly this would not be an appropriate amendment. It is 
my present intention to move to table it and to ask for the yeas and 
nays. I think we would have serious problems that this would create, 
serious problems. I just do not believe in legislating, appointing one 
type or one group having access to the board.
  The PRESIDING OFFICER. Is there further debate? The Senator from 
Nebraska [Mr. Kerrey].
  Mr. KERREY. Mr. President, I acknowledge those are reasonable 
objections. I suspect the Senator from South Carolina in particular has 
had experience as a Governor. Very often a statute ends up saying you 
have to have one from this legislative district, four Republicans, 
three Democrats, or vice versa. Very often in the legislative process 
you get quite detailed in trying to narrow down or debate who is going 
to be on this board. I am not doing that.
  Indeed, this provision is in H.R. 1555. It is in the House bill. So I 
am not asking we come in and designate that you have ``x'' number of 
corporate members and this number of Democrats and this number of 
Republicans. I am merely saying there should at least be one consumer 
advocate. As I said, it is consistent with what is already in the House 
bill.
  Philosophically I am with both the Senator from South Dakota and 
South Carolina. I think any amendment that would come in and say with 
specific language here how each one of these board members have to look 
before you can appoint them would complicate the matter and not likely 
result in the kind of board that is going to be needed. I merely argue, 
with respect, that this conforms with the language of the House bill. I 
would have loved to have a situation where I was appointing boards 
where this is all I had to worry about, only appointing one consumer 
advocate as opposed to all the typical balancing requirements that are 
specified in legislation.
  The PRESIDING OFFICER. The Senator from South Carolina [Mr. 
Hollings].
  Mr. HOLLINGS. Mr. President, in the interests of all parties, as I 
understand it, should we have a motion and a rollcall ordered, I hope 
these rollcalls could be stacked beginning at 2 o'clock. We have a 
meeting of the leadership at the White House. We have Members down, 
bipartisanly, at a luncheon for the President of France, President 
Chirac.
  With that in mind, we can facilitate and move right along with any 
particular votes. I hope we can start at 2 o'clock, if the chairman 
gives us permission to do so.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. KERREY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY. Mr. President, is the current business my previous 
amendment?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. KERREY. Mr. President, I ask unanimous consent that the amendment 
be laid aside temporarily.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY. Mr. President, I have an amendment numbered 1313.


                           Amendment No. 1313

            (Purpose: Clarifies state rate-making authority)

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

       The Senator from Nebraska [Mr. Kerrey] proposes an 
     amendment numbered 1313.
       On page 116, between lines 2 and 3 insert the following:
       (D) Nothing in this section shall prohibit the Commission, 
     for interstate services, and the States, for interstate 
     services, from considering the profitability of 
     telecommunications carriers when using alternative forms of 
     regulation other than rate of return regulation (including 
     price regulation and incentive regulation) to ensure that 
     regulated rates are just and reasonable.

  Mr. PRESSLER. Mr. President, I am told by leadership that they are 
now prepared to vote. If we could lay aside this amendment and come 
back to the Kerrey amendment No. 1344, I will move to table at that 
time, if that is agreeable with my friend from Nebraska.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. I ask unanimous consent that the amendment I just sent to 
the desk be laid aside and that the previous amendment be the order of 
business. And I will speak a little bit further on that before a 
tabling motion is made.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1344

  Mr. KERREY. Mr. President, we are about to vote on a motion by the 
Senator from South Dakota to table an amendment that provides for a 
single consumer on the joint Federal-State board. This provision is in 
the House bill. I call to my colleagues' attention, who are trying to 
figure out exactly whether or not to support an amendment that will 
provide one consumer representative on this board, that it references 
the universal services section. As we move from this monopoly that has 
been established to provide universal service--understand, that is the 
purpose of the monopoly. The monopoly is put together to provide 
universal telephone service. It has gotten the job done. Now we are 
going to move from a monopoly situation to a competitive situation.
  I support changing the law to get that done. But as we make the 
transition, Members should understand that we are putting universal 
service at risk because we are basically moving over time so that these 
companies--currently monopolies, currently pricing in the vast majority 
based upon a system of rate-based rate of return--are going to move to 
a system of price caps, and eventually they are going to price based on 
cost.
  Currently, you will have situations in a metropolitan area, say 
Omaha, [[Page S8315]] NE, where residential rates are about $14 a 
month, and business rates are $30 a month. It does not cost the company 
any difference. There is no difference in running a line to a business 
and running a line to a resident. The law as set up gives the monopoly 
the authority to earn a rate of return. But it is also given the 
ability to subsidize the residential rates, to shift costs; in other 
words, so we can keep the residential rates lower than they otherwise 
might be.
  I do not know whether the rates are going to go from $14 to $18, or 
whether in a competitive environment they are going to go down. I do 
not know. We are going to allow them to price differently.
  In transition, one of the biggest questions is, How do we continue to 
provide universal service to these residential consumers? These are the 
consumers. There is already in place a Federal-State joint board.
  It is going to be entitled for 1 year at least ``Federal-State Joint 
Board on Universal Service.''
  The statute says that:

       Within one month after the date of enactment of this Act, 
     the Commission shall institute and refer to a Federal-State 
     Joint Board under section 410(c) of the Communications Act of 
     1934 a proceeding to recommend rules regarding the 
     implementation of section 253 of that Act----

  Which is the Universal Provisions Act.

     including the definition of universal service. The Joint 
     Board shall, after notice and public comment, make its 
     recommendations to the Commission no later than 9 months 
     after the date of enactment of this Act.

  In other words, this joint board is going to make the recommendations 
about universal service to the FCC.
  The FCC then:

       . . . may periodically, but no less than once every 4 
     years, institute and refer to the Joint Board a proceeding to 
     review the implementation of section 253 of that act and to 
     make new recommendations, as necessary, with respect to any 
     modifications or additions that may be needed. As part of any 
     such proceeding, the Joint Board shall review the definition 
     of, and adequacy of support for, universal service and shall 
     evaluate the extent to which universal service has been 
     protected and advanced.

  In paragraph (b), the Commission then is told to act.

       The Commission shall initiate a single proceeding to 
     implement recommendations from the initial Joint Board 
     required by subsection (a) . . .

  And then it is supposed to complete this proceeding within a year 
after the date of enactment of this act.
  So this joint board is going to be making a very important 
recommendation about how we maintain this universal service that our 
consumers, our taxpayers, ratepayers, voters out there have grown 
accustomed to.
  All this amendment does is say that the joint board should have on it 
a single consumer representative. It is something that I understand is 
a philosophical problem of specifying what each one of these members 
are going to look like and which political parties and how many 
corporations.
  This merely says one individual. It is the same language that is in 
1555, the House bill. If there is going to be a tabling motion, I urge 
my colleagues to vote against tabling. This is a proconsumer vote.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. Mr. President, I move to table the amendment, and I ask 
for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question occurs on the motion to table 
amendment 1344 offered by the Senator from Nebraska [Mr. Kerrey]. The 
yeas and nays have been ordered. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  The result was announced--yeas 55, nays 45, as follows:
                      [Rollcall Vote No. 260 Leg.]

                                YEAS--55

     Abraham
     Ashcroft
     Bennett
     Bond
     Breaux
     Brown
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Coverdell
     Craig
     D'Amato
     DeWine
     Dole
     Domenici
     Faircloth
     Ford
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Helms
     Hollings
     Hutchison
     Inhofe
     Jeffords
     Johnston
     Kassebaum
     Kempthorne
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Packwood
     Pressler
     Roth
     Santorum
     Shelby
     Simpson
     Smith
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--45

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Bradley
     Bryan
     Bumpers
     Byrd
     Cohen
     Conrad
     Daschle
     Dodd
     Dorgan
     Exon
     Feingold
     Feinstein
     Glenn
     Graham
     Harkin
     Heflin
     Inouye
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Nunn
     Pell
     Pryor
     Reid
     Robb
     Rockefeller
     Sarbanes
     Simon
     Snowe
     Specter
     Wellstone
  So the motion to table the amendment (No. 1344) was agreed to.
                           Amendment No. 1313

  The PRESIDING OFFICER. The pending question is the Kerrey amendment 
No. 1313.
  Mr. KERREY. Mr. President, this amendment would go into the bill, for 
colleagues who are checking the language out, on page 116. And it 
refers to the duty to subscriber. Well, it would add to the rate-of-
return regulation elimination. In the third title of this bill, we are 
at the end of the transition. I do not know when that is going to be--
3, 4 years, it could be sooner, depending upon the local area.
  This amendment goes after those areas where you may still have some 
monopoly constraint. We are going to move, again, for emphasis, so that 
Senators understand what this bill does. This bill preempts State 
legislatures, State Governors, regulatory commissions that say you can 
no longer have rate-based return regulation. We are going to move to a 
price cap system of regulation.
  I happen to think price cap in almost all situations can be better 
than rate-based. But there are some, Mr. President, where we could have 
trouble. This amendment tries to address those situations by saying 
that ``Nothing in this section shall prohibit the commission for 
interstate services and States for interstate services from considering 
the profitability or earnings of telecommunications carriers when using 
alternative forms of regulation other than the rate of return 
regulation.'' It does not say they have to. It says nothing in this law 
shall prohibit them from considering the profitability of the 
companies.
  Mr. President, residential and business consumer representatives and 
telecommunications competitors alike support this legislation's goal of 
encouraging effective competition in the local telephone service 
market. However, what I am calling the monopoly telephone rate 
amendment is necessary to protect ratepayers of noncompetitive 
telecommunications services from experiencing multibillion dollar rate 
increases for these services during the transition to effective local 
competition.
  State regulators--that is to say, the National Association of 
Regulatory Commissioners; consumer representatives, the American 
Association of Retired Persons, the Consumer Federation of America, 
Consumers Union, the National Association of State Utility Consumer 
Advocates, as well as business telephone users--that is to say, the 
customers of telephone companies, business users, the International 
Telecommunications Association--all are concerned about section 301 of 
this bill.
  In mandating price flexibility and prohibiting rate of return 
regulation, section 301 also prohibits State and Federal regulators 
from considering earnings when determining whether prices for 
noncompetitive services are just reasonable and affordable, while the 
FCC and many State commissions have instituted various price 
flexibility plans, typically based upon the principles of price cap 
regulation. Almost all of those plans involve some consideration of 
earnings.
  If regulators are prohibited from considering the earnings factor 
when determining the appropriateness of prices for noncompetitive 
services, then the captive ratepayers of these services will be subject 
to billions of dollars in rate increases that regulators could 
otherwise prevent.
  The monopoly telephone rates amendment does not change the bill's 
prohibition on rate-of-return regulation, but would merely allow State 
and [[Page S8316]] Federal commissions to consider earnings when 
authorizing the prices of those noncompetitive services.
  The ratepayer stake in the monopoly telephone rates amendment is 
dramatically demonstrated by reviewing the role of earnings within the 
regulatory structure for the 4-year period from 1991 to 1994. During 
that period, if the regulators of both interstate and intrastate 
operations of the local telephone companies had been prohibited from 
considering earnings when approving rates under their price cap plans, 
the excess revenue over existing authorized rate levels could have 
easily exceeded $18 billion. In other words, if S. 652 had become law 
in 1991, telephone ratepayers of noncompetitive services--and I keep 
emphasizing that where you have competition, there is no problem--but 
ratepayers in noncompetitive areas and services would have had to pay 
$18 billion more in telephone rates than they did between 1991 and 
1994. Future pocketbook hits will be even higher unless this 
legislation is amended.
 The monopoly telephone rates amendment provides a safeguard against a 
rate impact for the future.

  A recent study by Montgomery Associates, located in Massachusetts, 
estimated the rate impact over the next 4 years of S. 652, if its 
current form were enacted. Based upon an examination of regulatory and 
industry data, the study conservatively estimates that local rates 
would increase by $6 per month over the next 4 years.
  The monopoly telephone rates amendment recognizes it is highly 
appropriate that State regulators continue to have a role in 
determining the appropriate price of noncompetitive services in their 
States, and in so doing, have the discretion to consider the earnings 
of the local telephone company. Approximately 75 cents of every dollar 
consumers spend on their overall telephone bills is for calls made 
within their State. As we learned when deregulating other industries, 
the legislative goal of local telephone competition advanced in this 
legislation will not be achieved overnight. In the interim, State 
regulators and legislatures will continue to be responsible for 
ensuring quality service and fair rates for noncompetitive telephone 
services. Their hands will be tied if Congress strips them of the 
authority to even look at the company's earnings before considering the 
price level of noncompetitive services.
  At a time when the Federal Government is committed to better 
recognize the appropriate role of local government in assessing and 
protecting the citizens of its State, it makes no sense to handicap the 
States as they promote the emergence of competition in local telephone 
markets.
  As the chairman of the Vermont Public Service Board recently 
described in testimony before the Judiciary Committee on antitrust 
business rights and property rights:

       In truly competitive markets, prices are the result of the 
     forces of supply and demand and don't need to be regulated at 
     all. However, because local exchange, ancillary services, and 
     interLATA toll markets are at best partially competitive, 
     regulatory oversight is still needed and--no one expects this 
     situation to be remedied within the next 12 months.
       How are prices in these markets to be set? They necessarily 
     involve the careful consideration of each provider's rate of 
     return on noncompetitive services. A judgment about that rate 
     of return must underlie the initial determination of the 
     starting prices allowed. How else can regulators determine 
     whether the prices charged for their noncompetitive services 
     are ``just and reasonable,'' or whether excessive revenues 
     from such services will be available to subsidize competitive 
     service and keep out potential competitors?

  The monopoly telephone rates amendment, Mr. President, recognizes 
that the earnings of local telephone companies are formidable. Each of 
the 7 Baby Bells is among the Fortune Top 50, with most in or 
approaching to the Fortune Top 20 list.
  According to the most recently available statistics from the FCC, 
Statistics of Common Carriers, 1993-94 edition, those local telephone 
companies required to report their earnings to the FCC billed $90 
billion in rates for 1993 and had net earnings of more than $5 billion.
  Since the competition we strive for in this legislation will not 
become an instant reality, the monopoly telephone rates amendment 
recognizes the need to provide State and Federal officials with the 
tools necessary to ensure that the noncompetitive service of the local 
telephone companies are not priced at excessive levels. Accordingly, I 
urge my colleagues to support the monopoly telephone rates amendment.
  Mr. WELLSTONE. Mr. President, first of all, let me thank my colleague 
from Nebraska for his very eloquent and strong voice on the floor of 
the Senate for the past several days, especially in behalf of consumers 
in this country; especially in behalf of making sure there is, in fact, 
real competition.
  Mr. President, I come to the floor today to address what I consider 
the merits and the faults of what may be one of the most important 
economic development bills this session of Congress will consider, 
namely, the Telecommunications Competition and Deregulation Act.
  Mr. President, we have had some enlightening discussions and some 
solid disagreements on this bill. But this much, I think, all of my 
colleagues could agree on: The debate we have had on this bill has 
opened all our eyes to the dazzling world of possibilities provided by 
our emerging information technologies.
  It is a world that, at least from my perspective, appears to have 
virtually no limits in terms of the potential for bettering the health, 
education, and economy of the residents of my State of Minnesota.
  I can imagine workers in rural Minnesota telecommuting to and from 
work as far away as New York or Washington without ever having to leave 
their homes or families. Or schoolchildren in a distressed Minneapolis 
school district reading the latest publications at the Library of 
Congress via thin glowing fiber cables. That excites me as a teacher.
  Or rural health care providers on the Iron Range, consulting with the 
top medical researchers at the Mayo Clinic in Rochester to better treat 
their patients.
  I can imagine, Mr. President, things like these, but I do not have 
to. Already, communication miracles like these are occurring with 
greater frequency across our Nation. It is fascinating to live in such 
exciting times. I think there is a consensus among Senators on both 
sides of the aisle on this question.
  Mr. President, this bill presents the elected representatives of our 
States with a particularly exciting and at times daunting 
responsibility. How do we help dissolve the current artificially 
divided and fragmented telecommunications industry to nurture the rapid 
development of these types of communications, while ensuring that these 
services remain available, and I think the Senator from Nebraska has 
said this over and over again, and affordable to everyone in the 
Nation, not merely the most privileged and wealthy.
  How do we ensure that this bill benefits not just the multibillion-
dollar alphabet soup of corporations--IBM, MCI, AT&T, TCI, GTE, ABC, 
and the rest--but the consumers of St. Paul, and Mankato, Fergus Falls, 
and Duluth, MN. How do we guarantee, Mr. President, fairness, access, 
and affordability in the telecommunications industry?
  We have had several opportunities already. For example, last week the 
Senate, to its great credit, refused to strip away provisions to keep 
telecommunication rates low for schools and hospitals. I am proud to 
say that I and a majority of my distinguished colleagues voted to 
defend those protections.
  With that vote I believe we took a major step toward keeping our 
communication technologies affordable for future generations, as well 
as reaffirming the primacy of the consumer in this debate.
  Monday night the Senate voted to approve an amendment that I believe 
will help keep adult-oriented cable video programs away from children. 
Again, I am proud to say I cast my vote in support of a measure to 
ensure that such programming be fully scrambled before entering the 
consumer's household, giving those who know best, the parents, the 
ability to control the flow of new services into the home.
  I am saddened, however, Mr. President, that the Senate has chosen now 
to table a measure that I and many of my colleagues believe is central, 
absolutely central, to this entire debate of [[Page S8317]] competition 
and consumer protection: Providing a role for the Department of Justice 
to keep telephone monopolies from reassembling themselves.
  Mr. President, I have listened to the debate on this issue and I 
thank my colleagues for some stimulating and insightful comments on 
this subject. Some of my colleagues say that these protections, such as 
providing consumers a voice in the process through the Department of 
Justice, or other amendments that my colleague from Nebraska has 
introduced over and over again to make sure that the consumers are at 
the table and that there is a voice for consumers, some of my 
colleagues have said that this is too much, too bureaucratic, too 
inefficient to enable businesses to compete.
  I ask these same colleagues, after you remove the protections against 
huge rate increases, against monopoly, against service just for the 
privileged, what would you replace them with? Words, Mr. President. 
Promises, guarantees, reassurances that this time, although many of 
these companies have misbehaved in the past, and have been fined 
repeatedly for violating promises to protect consumers, this time the 
corporations promise to behave themselves and to conduct themselves in 
the consumer's best interest.
  Mr. President, I have said it before, and I will say it again. I do 
not buy it. I would rather put my trust in solid protections, written 
in law, to make sure that rates remain affordable, services are 
available for everyone, and no one is left behind in the stampede for 
corporate profits.
 This extends across the board: Let me make it clear that I intend to 
fight efforts to strip out of this bill any consumer protections that 
ensure affordability, fairness, and access in local and long distance 
phone service and cable TV. Unfortunately, many of the strongest 
consumer protection amendments have been defeated to date.

  I have noticed a lot of lobbyists out in the halls these days; 
lobbyists that as my colleagues know too well are just outside those 
doors. For the benefit of the Record, Mr. President, let me take a 
moment and tell America who is out there: NYNEX is out there, Mr. 
President, and so is Time-Warner, and Ameritech, and Northern Telecomm, 
Bell South and Bell Atlantic and Southwestern Bell, Sprint and General 
Electric and Gannett--they are all out there, Mr. President. It has 
been called Gucci Gulch in the past, maybe this time we should call it 
Cell-Phone Canyon. There can be no mistaking it; there are billions and 
billions and billions of dollars at stake in this bill.
  But there is something else at stake here--something much more 
important than all the billions and billions and billions of dollars. 
The fate of the American consumer is at stake here, I urge my 
colleagues to remember their needs, and their voice, in the coming 
debate and amendments.
  For this reason I support this Kerrey amendment, as I have past 
Kerrey amendments. I believe that what is lacking is where do the 
consumers fit in? Where is their voice? Where are their advocates? Do 
they get an opportunity to sit down at the table? And will, in fact, we 
have true competition as opposed to monopoly?
  I hope the Cell-Phone Canyon out there does not dominate the final 
vote on these key amendments and the final vote on this piece of 
legislation. I hope the vast majority of consumers who are not out in 
these halls are the ones who in the last analysis we listen to.
  Mr. President, I yield the floor.
  Mr. PRESSLER addressed the Chair.
  The PRESIDING OFFICER (Mr. Thomas). The Senator from South Dakota.
  Mr. PRESSLER. We are prepared to endorse this, to accept this 
amendment. Let me say to our friends that our bill has been endorsed by 
the White House Conference on Small Business--by small businessmen 
across the country--and consumers are interested in this bill. I have 
predicted that consumer prices will drop dramatically for telephone 
calls and cable television, just as they dropped when we deregulated 
natural gas, just as they dropped when cellular phones were 
deregulated.
  In any event, we are prepared to accept this amendment. Mr. 
President, I urge the adoption of the Kerrey amendment.
  The PRESIDING OFFICER. If there be no further debate, the question is 
on agreeing to the amendment.
  The amendment (No. 1313) was agreed to.
  Mr. PRESSLER. Mr. President, now the Senate is open for business. Do 
we have Senators who wish to offer amendments?
  I thank all Senators for their cooperation. Senator Kerrey has 
another one? Great. I have been waiting eagerly for his amendment.
  Mr. KERREY. Mr. President, I say to the chairman and ranking member 
of the committee, I have some amendments filed. I am not sure I am 
going to bring them all up. I filed them under the cloture rules. Some 
I am not quite sure I want to bring up. My understanding is under the 
cloture rules, each Member has an hour to talk. At some point, I am 
going to want to make a closing statement.
  I know I control some time. I just want to make sure I reserve about 
30 minutes so I can make a final statement.
  Mr. PRESSLER. If my friend would be willing, perhaps he can begin to 
state them now and if he were in the proper mood, then when an 
amendment came to the floor we could set the speech aside and hear the 
amendment?
  Mr. KERREY. That is an unusual request. I will take a different 
course. I will take the road less traveled.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Let me observe each Member should not feel 
obligated to take their hour.
  Mr. PRESSLER. I think the bill is moving very nicely. But we do have 
a number of amendments filed, I think particularly in certain areas. We 
are eager for Senators to bring their amendments. I do not see any 
Senator on the floor. We are open for business and are going to try to 
stack votes at 2 o'clock, now. Any Senator having an amendment, please 
bring it.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KERREY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1310

(Purpose: Clarifies that pricing flexibility should not have the effect 
   of shifting revenues form competitive services to noncompetitive 
                               services)

  Mr. KERREY. 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 Nebraska [Mr. Kerrey] proposes an 
     amendment numbered 1310.

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

       On page 112, at the end of line 17, insert the following 
     sentence: ``Pricing flexibility implemented pursuant to this 
     section shall be for the purpose of allowing a regulated 
     telecommunications provider to respond fairly to competition 
     by repricing services subject to competition but shall not 
     have the effect of shifting revenues from competitive 
     services to non-competitive services.''

  Mr. KERREY. Mr. President, this is a very simple amendment. Once 
again, it references title III. Title III is a section where we 
describe how we are going to end regulation. It is a section where we 
come in very directly, and make the transition to a competitive pricing 
situation.
  For citizens, consumers, taxpayers, voters and everyone else trying 
to figure out what this bill is all about, we currently allow local 
telephone companies to set prices based upon a rate-of- return 
methodology. Most of the States are set up that way. We are moving to 
price caps. States are beginning to experiment with price caps, even 
with restrictions on them.
  We are going to make a transition to a different method of pricing, 
eventually allowing the price to be set upon the cost of the service 
that is being provided. The language of title III lays out a framework 
for transition from a rate-based-rate-of-return system to a price cap 
system.
  This amendment simply adds to the description under ``in general''--a 
paragraph that makes certain that:


[[Page S8318]]

       Pricing flexibility implemented pursuant to this section 
     shall be for the purpose of allowing a regulated 
     telecommunications provider to respond fairly to competition 
     by repricing services subject to competition but shall not 
     have the effect of shifting revenues from competitive 
     services to non-competitive services.

  Mr. President, this is merely language under the general section of 
section 301, that attempts to say let us make certain that we do not 
have any language in this bill that permits the pricing and the 
shifting of revenues from a competitive situation to a noncompetitive 
situation.
  I yield the floor.
  Mr. HOLLINGS. Mr. President, looking at this amendment with respect 
to the phrasing in the purpose whereby in pricing flexibility and 
responding to competition by repricing services the intent as I 
understand it is that you not raise the noncompetitive services. When 
you say shifting revenues or raising costs, then you get into the 
concern about cost-based operations whereby I think the intent here is 
when you say shifting revenues--that is what is disturbing to this 
Senator.
  Is it the case that what the Senator is trying to say is that as you 
respond to that pricing flexibility, and you are responding to the 
repricing services competition that you do not raise competitive rates?
  Mr. KERREY. That is correct.
  Mr. HOLLINGS. I mean noncompetitive.
  Mr. KERREY. The Senator is correct; that we do not end up with 
noncompetitive rates.
  Mr. HOLLINGS. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KERREY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                    Amendment No. 1310, As Modified

  Mr. KERREY. Mr. President, I failed to ask unanimous consent to 
modify this amendment. It says page 112 and it should be page 113.
  So I ask unanimous consent for that now.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 1310), as modified, is as follows:

       On page 113, at the end of line 17, insert the following 
     sentence: ``Pricing flexibility implemented pursuant to this 
     section shall be for the purpose of allowing a regulated 
     telecommunications provider to respond fairly to competition 
     by repricing services subject to competition but shall not 
     have the effect of shifting revenues from competitive 
     services to non-competitive services.''

  Mr. KERREY. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. PRESSLER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRESSLER. Mr. President, if I may ask the author of the amendment 
a couple of questions about the amendment, as I understand it, 
``Pricing flexibility implemented pursuant to this section shall be for 
the purpose of allowing a regulated telecommunications provider to 
respond fairly to competition by repricing services subject to 
competition but shall not have the effect of shifting revenues from 
competitive services to non-competitive services.''
  Why would the Senator want to prevent a company from shifting from 
competitive services to noncompetitive? First of all, what does the 
Senator mean?
  Mr. KERREY. Generally speaking, what I am trying to do with the 
language, I say to the Senator from South Dakota, Mr. President, is to 
prevent a continuation of a pricing scheme that allows a shifting of 
revenue and in a noncompetitive environment prices to be higher than 
they otherwise would be. That is the intent.
  Mr. PRESSLER. What does the Senator consider competitive services to 
be?
  Mr. KERREY. Mr. President, I consider this to be one of the most 
important questions that should be asked repeatedly on the floor. I 
consider competitive service to mean a choice. When I as a consumer--
whether I am a business person, whether I am in my household, 
regardless of where I am--I have choice.
  I do not like the service that the company is providing. I do not 
like the price. So I am going to shift and go someplace else. I have 
alternatives to what I have right now. Right now, I have very few 
alternatives at the local level.
  It is a very important question. What will happen, I suspect, 
initially is that you are going to get competition at the higher end, 
as we currently do, in fact. We have, as the Senator knows, all kinds 
of competition coming into the local level, a relatively small percent 
of the overall pie, but we are starting to get competition at the local 
level at that higher end.
  Mr. PRESSLER. What would be an example of a problem with a company 
shifting revenues from competitive services to noncompetitive services? 
Give me an example.
  Mr. KERREY. The concern I have is that I can keep my noncompetitive 
prices higher than I otherwise would, that I could keep the prices in a 
noncompetitive environment higher. If I am a company with, let us say, 
$1 billion of cash flow a year and the law now allows me at the local 
level to meet a competitive alternative and price in order to be able 
to get the business, and now I have that business, what I am concerned 
about is shifting that revenue in a fashion that enables me to keep my 
noncompetitive prices higher than I otherwise would. That is the intent 
of the amendment.
  Mr. PRESSLER. But the way the amendment reads, it would have the 
effect of shifting revenues from competitive services to noncompetitive 
services. Was the intent of that----
  Mr. KERREY. Right. That is exactly right. Let us say I am the Acme 
Telephone Co., and I am currently given a regulatory monopoly at the 
local level. If I am the CEO of that company and I am performing for my 
shareowners, I am sitting there right now saying I have all kinds of 
companies that are coming into my local market. They are trying to get 
my high-end users. So I go to that high-end business user and say I 
will meet that price. I am now liberated in a competitive environment. 
I will meet that price.
  What I am trying to do with this language is to prevent the use of 
that kind of revenue to keep, in an artificial fashion, the price for 
that noncompetitive service higher.
  Mr. PRESSLER. Does my colleague mean shifting cost or shifting 
revenues? Because it would seem that it would be logical you were 
shifting costs.
  Mr. KERREY. I mean shifting the cost of the service, the revenue that 
would be required to be paid in that noncompetitive environment. So the 
noncompetitive guy ends up paying a higher rate as a consequence of my 
being able now to go out and say I will meet the competition; I will 
lower the price; I will give you a lower price. This amendment attempts 
to prevent the use of that revenue in a noncompetitive environment.
  Mr. PRESSLER. On this amendment, I will have to oppose it because we 
do not feel it does what the Senator seems to be saying it does. I am 
not questioning the draftsmanship. But I wonder if our staffs could 
discuss it a little bit and see if we cannot--very frankly, we cannot--
--
  Mr. KERREY. I would be pleased to.
  Mr. PRESSLER. Quite understand because we think it means you are 
trying to shift costs and also it would be very rare that a company 
would want to shift competitive services revenues to noncompetitive 
services revenues as far as we can see. But I would have to oppose this 
amendment as it is presently drafted.
  Mr. KERREY. I will be glad, Mr. President, in a quorum call to sit 
down and look at the language in here. I understand there may be some 
potential confusion over precisely what it is doing.
  I will say again for emphasis, the intent here is to make certain 
when we open up competition, we are basically saying to a company that 
right now is trying--I have heard the Senator from South Dakota talk 
about it as well, so I think we are basically on the same wavelength. 
If there is some confusion, it may be that in drafting this I have 
[[Page S8319]] created it. If the Senator is willing to identify a 
problem, I am perfectly willing to modify the amendment to make the 
language clear.
  But my intent is to create a situation where we say to a local 
company, as I think we should by the way, OK, meet the competitive 
alternative. Go ahead and price your service and meet that competitive 
alternative. I just want to make certain in a noncompetitive 
environment the revenue stream does not end up being higher as a 
consequence of liberating, allowing that competition to be met.
  Mr. PRESSLER. I would say before we go into a quorum call that we 
welcome other amendments and speeches by Senators. The Senate is open 
for business, and we will conceivably lay this aside if somebody else 
comes with an amendment. And with that I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. HELMS. 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. HELMS. Mr. President, I ask unanimous consent that it be in order 
for me to address the Senate as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HELMS. I thank the Chair.
  (The remarks of Mr. Helms pertaining to the submission of S. Res. 133 
are located in today's Record under ``Submission of Concurrent and 
Senate Resolutions.'')
  Mr. HOLLINGS. Mr. President, while it appears we do not have an 
immediate amendment, we are reconciling differences, including one on 
universal services and otherwise.
  While we are engaged in that negotiation, 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. KERREY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY. Mr. President, what is the pending business?
  The PRESIDING OFFICER. The pending business is the Kerrey amendment 
No. 1310.
  Mr. KERREY. I ask unanimous consent to withdraw amendment No. 1310.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 1310) was withdrawn.


                           Amendment No. 1307

 (Purpose: To require more than ``an'' interconnection agreement prior 
          to long distance entry by a Bell operating company)

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

       The Senator from Nebraska [Mr. Kerrey] proposes an 
     amendment numbered 1307.

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

       On page 83, strike out line 12 and all that follows through 
     line 20 and insert in lieu thereof the following:
       ``(b) Specific InterLATA Interconnection Requirements--
       ``(1) In general.--A Bell operating company may provide 
     InterLATA services in accordance with this section only if 
     that company has reached interconnection agreements under 
     section 251 with telecommunications carriers that have 
     requested interconnection for the purpose of providing 
     telephone exchange service or exchange access service, 
     including telecommunications carriers capable of providing a 
     substantial number of business and residential customers with 
     telephone exchange or exchange access service. Those 
     agreements shall provide, at a minimum, for interconnection 
     that meets the competitive checklist requirements of 
     paragraph (2).

  Mr. KERREY. Mr. President, this is an amendment to section 255 of the 
Communications Act of 1934. I discussed it with the managers of the 
bill. I will briefly describe it.
  The requirement of the current provision is an attempt to deal with 
actually section 251 as well by saying that my concern with 255 is that 
it might allow a local telephone company to get into interLATA after 
having satisfied in a very minimal fashion the interconnection 
requirement either of the competitive checklist or of 251. The 
requirement of the current provision should be satisfied as a local 
telephone company reached an interconnection agreement with only a 
single telecommunications carrier, although in many markets a 
substantial number of carriers will request interconnection. Under the 
current provision, a Bell company needs only a single entity requesting 
interconnection without regard to whether the requesting company is 
weak, undercapitalized, or lacking in other expertise or business 
planning.
  This amendment would ensure that a local telephone company which 
enters into more than one interconnection agreement, that the agreement 
includes telecommunications carriers capable of serving a substantial 
portion of the business in a residential local telephone market. 
Although it could not ensure that competition will develop, it ensures 
the interconnection agreements are reached before the long distance 
entry of the company capable of providing local services to both 
business and residential customers.
  This amendment would remedy a provision in the bill which concerns 
me, a provision which I believe is very dangerous and susceptible to 
interpretation in a manner counter to the overall intentions of S. 652. 
Under the current provision, a Bell operating company could gain entry 
into the long distance market on the basis of one interconnection 
agreement with a competitor. It would not matter whether that 
competitor was weak, undercapitalized, or lacking either 
expertise or a business plan--that one competitor could facilitate Bell 
entry into markets which at that time may, or may not, be competitive.
  One of the goals of this bill is to open the door, to provide 
incentives to facilitate local competition. Unless amended, this 
provision may counter that intended goal, in fact removing incentives 
for the Bells to reach agreement quickly with their strongest potential 
competitors. If the Bells think that they can gain entry without having 
to complete more than one agreement, we are in fact inviting them to 
game the process. Instead of helping to facilitate local competition, 
they might gain entry at a time when they still monopolize their local 
markets, perhaps both stunting the development of local competition and 
endangering the gains that have been made over the past decade in the 
increasingly competitive long distance industry.
  This amendment would clarify the current provision and move it into 
line with the bill's overall intentions by ensuring that a BOC enters 
into more than one interconnection agreement and by ensuring that those 
agreements are reached with telecommunications carriers capable of 
serving a substantial portion of the business and residential loop 
telephone markets. This clarification strengthens the incentives and 
the conditions for competition to develop.
  The requirement in the current provision could be satisfied after a 
BOC reached an interconnection agreement with only a single 
telecommunications carrier, although in many markets it is probable 
that a substantial number of carriers will request interconnection. 
Under the current provision, a BOC need reach agreement with only a 
single entity requesting interconnection, without regard to whether the 
requesting company is weak, undercapitalized, and lacking either 
expertise or a business plan.
  The amendment would ensure that a BOC enters into more than one 
interconnection agreement and that the agreements include 
telecommunications carriers capable of serving a substantial portion of 
the business and residential local telephone markets. Although this 
does not ensure that competition will develop, it does ensure that 
interconnection agreements are reached before long distance entry with 
companies capable of providing local service to a substantial number of 
both business and residential customers.
  Mr. President, it is a pretty straightforward, clarifying amendment. 
As I have said on a number of occasions, as the managers have as well, 
this piece of legislation is unprecedented. We are 
[[Page S8320]] trying to manage a transition from a current regulated 
monopoly into a competitive arena. It is very difficult to do. What we 
have established is in section 251, be it a long distance company or 
other carrier, it can be anybody who wants to get into local business, 
they can either negotiate an agreement or satisfy, I believe, 10 things 
in section 251; that is to say, the Communications Act of 1934, section 
251. Once they have satisfied those agreements--they have to satisfy 
those agreements in order to satisfy the law--251 describes what they 
have to do when somebody comes and says, ``I want to get into local 
service, I want to approach your customers.'' Section 251 says what 
they have to do.
  In addition, in 255, there is a 14-part competitive checklist before 
the local Bell company can get into interLATA to provide long distance 
service. This amendment provides language to make certain that we do 
not end up with an application occurring after having satisfied a 
minimal requirement. In other words, I have competition but it is a 
relatively small company. They really are not effective competition. 
This attempts to strengthen the competitive requirement prior to the 
FCC giving interLATA approval.
  Mr. President, I yield the floor.
  Mr. STEVENS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. STEVENS. Mr. President, may I request that the clerk read the 
current provision on line 12, most specifically the interLATA 
interconnection requirement, just the first paragraph as it appears in 
the bill as it appears now. I believe there is one change in it. I want 
to make sure that is the case.
  Mr. KERREY. Mr. President, which page are you going to read?
  Mr. STEVENS. This is page 83, which is the current specific 
requirement pertaining to section 251. I just want to see if the bill I 
have is the same as the one that is before the clerk. Are there any 
changes?
  The PRESIDING OFFICER. There have been no changes to the bill on that 
page.
  Mr. STEVENS. Mr. President, on that page is the requirement, 
specifically the interLATA interconnection requirement, which 
specifically states that a Bell operating company may provide interLATA 
services in accordance with the section only if that company has 
reached an interconnection agreement under section 251 and that 
agreement provides at a minimum for interconnection that meets the 
competitive checklist requirements of paragraph 2. Paragraph 2 is the 
competitive checklist. I am certain that the Senator from Nebraska and 
the Senators involved in this debate know what is in that checklist.
  What the Senator attempts to do with his amendment is to expand that 
agreement in a way that, in effect, as I understand his intent, will 
preclude any small company not capable of providing substantial 
coverage for both business and residential customers in the exchange 
access areas.
  Under the circumstances, what that would do is really prevent the 
transition from taking place as we envision it.
  There is no question, as the Senator from Nebraska stated, we are 
going from a period of regulation both under the courts and under the 
FCC to a new type of regulation in which this checklist is one of the 
predominant features. Under the circumstances of the bill as it stands, 
size is not material but compliance is. And it will take some time in 
the transition period for that to happen.
  This is one reason why we have opposed changes in the public interest 
section of the bill, because it may well be that in this transition 
period there is going to be several different entities trying to get 
through the gate at the same time, so to speak. And the question of 
public interest is going to weigh in terms of which of those entities 
should be approved under this section of having met with the 
requirement of the competitive checklist.
  I think the Senator's amendment narrows that group that can be at the 
gate to be reviewed by the FCC and as such it would be restrictive of 
competition in the very essence, in the beginning, and therefore we 
would oppose the Senator's amendment as changing the concept which is, 
again I read, compliance under the bill is that the agreement provides 
at a minimum for interconnection, it meets the requirements of the 
checklist, the competitive checklist. This adds to the minimum, saying, 
in effect, that you have to have size, a large enough carrier that is 
capable of providing a substantial number of business and residential 
customers within the telephone exchange or exchange access service. 
Under the circumstances, the Senator from Nebraska limits those who can 
get to the gate first. It says the only ones that can get to the gate 
first are the large carriers.
  Mr. KERREY. No.
  Mr. STEVENS. That is my contention. Until the Senator disabuses me of 
that, I intend to move to table his amendment.
  Mr. KERREY. Mr. President, let me read the language. Certainly I 
believe the language is clear on that point. I am not trying to 
preclude at all. You can still have a small carrier, a very small 
company come in and be given the interconnection requirement at the 
local level. It would be less likely to happen. This amendment does not 
say that that company is precluded. It does not use the language 
``preclude'' at all. It says interconnection for the purpose of 
providing--only if that company reaches ``interconnection agreements 
under section 251 with telecommunications carriers that have requested 
interconnection for the purpose of providing telephone exchange service 
or exchange access service, including telecommunications carriers 
capable of providing a substantial number of business and residential 
customers.''
  What it is attempting to do--and I left the language relatively 
general, in fact, because what I am trying to do, I say to the Senator 
from Alaska, what I am trying to do is to make sure--we tried earlier 
unsuccessfully. In fact, I have a couple other amendments that I do not 
believe I am going to send to the desk refighting the battle over 
whether or not the Justice Department should be the arbiter of whether 
or not there is competition.
  In S. 1822, last year's bill, what we said was that once the 
Department of Justice has determined there is local competition, the 
local company then can do long distance. That was the method by which 
we made certain that there was local competition prior to the company 
getting into long distance. That was the idea.
  Well, now what we have done is replaced the Department of Justice 
determination with a checklist so that we have this checklist and we 
have language in 251 that allows for these interconnections.
  Well, what this simply does is it tries to make sure we get a little 
more certainty of competition because the FCC does not make any 
judgment about competition other than the connection. The FCC takes the 
14-point checklist. The FCC has to certify that the checklist has been 
satisfied and that the company has reached an interconnection agreement 
under section 251 that provides at a minimum for interconnection that 
meets the competitive checklist requirements.
  I understand that it says at a minimum, and there needs to be more. 
What this attempts to do is bulk that up and describe something a bit 
more than what is required currently under 251.
  Mr. STEVENS. Mr. President, if the Senator is finished, let me state 
that as it is, as I see it and my adviser, Earl Comstock, sees it, we 
agree that the impact of this could be that a Bell operating company 
could not enter the service area, interLATA, if there was a carrier 
seeking to provide service and had met the minimum requirements of the 
checklist, the competitive checklist but was a small carrier. As a 
matter of fact, as I said, I think there could well be several small 
carriers at the gate, plus there could be a larger carrier at the gate 
and the question would be in terms of the public interest who would be 
involved in getting approval under section 251. But as a practical 
matter the Bell company cannot come in until someone provides that 
service. The Senator's amendment raises the threshold on the level of 
that service and as such will say the Bell companies cannot come in 
until there is a substantial competitor there to provide the service.
  Mr. KERREY. That is correct.
  Mr. STEVENS. I tried to explain that before but I apparently did not 
get the [[Page S8321]] communication correctly as far as the Senator 
from Nebraska is concerned. That is precisely what we are trying to 
avoid. We want to make sure that the checklist is met at a minimum and 
the public interest provision comes in at that point. The FCC might 
delay a smaller company if there is another one coming through the 
process that would provide a greater service in the area involved. I 
think that the Senator would understand that. But as a practical matter 
we do not look at size as being determinative of whether or not the 
Bell company could enter the area and provide service in the interLATA 
area.
  I will be happy to yield.
  Mr. KERREY. What the bill does not do, as I read it, is give me at 
least confidence in the 14-point checklist. What it says is--Mr. 
President, 255 is the new section. It is actually called section 221 in 
the bill, but it creates a new section 255 in the 1934 act, and it is 
called interexchange telecommunications services, but it is the point 
where we were removing the restrictions that are currently in place.
  Currently, a local company cannot do long distance. What this does is 
says here are the terms and circumstances under which it can do long 
distance.
  We fought the battle yesterday saying that I thought that the test 
that was in last year's legislation, S. 1822, and I think it was H.R. 
3626, the House bill, that the test there was the right one; it had the 
Department of Justice determine the competition, and when there is no 
substantial possibility that the monopoly could use their power to 
impede competition, have at it. Go to it. Let the Department of Justice 
make that determination.
  We lost that battle. Now what I am attempting to do is to say that 
the language, as I read the current language in the bill it sets 
specific interLATA interconnection requirements under, whatever it is, 
(b) of section 255, specific interLATA interconnection requirements. 
There are two sections, two paragraphs in there that are important. The 
first one is the general paragraph which this amendment replaces, and 
the second one is the competitive checklist.
  The current general paragraph says a Bell operating company may 
provide interLATA, do long-distance service, in accordance with this 
section only if that company has reached an interconnection agreement 
under section 251 and that agreement provides at a minimum for 
interconnection that meets the competitive checklist requirements of 
paragraph 2.
  As I read this, what I can do, if I am a Bell company, and let us say 
I have 50 people applying to go into interconnection, all I have to do 
is get one of them on line. I could have relatively stable competition. 
I just do not get into an agreement with them. I wish to get into long 
distance.
  What I am trying to do is to make sure that I have that competitive 
choice at the local level before permission is granted. And so I do not 
say in my substitute paragraph that any company is precluded from an 
interconnection agreement under section 251. It says instead that ``a 
Bell operating company may provide interLATA service in accordance with 
this section only if that company has reached''--which is in the 
language here--``only if that company has reached an interconnection 
agreement under section 251''--all that is the same as the paragraph I 
am replacing--``with telecommunications carriers.'' And here is where 
it differs: ``Telecommunications carriers that have requested 
interconnection for the purpose of providing telephone exchange service 
or exchange access service, including telecommunications carriers 
capable''--it does not say it is going to preclude anybody. It just has 
to include ``carriers capable of providing a substantial number of 
business and residential customers with telephone exchange or exchange 
access service.''
  It says these agreements shall provide at a minimum the competitive 
checklist which is also in this other language. It does not say any 
company is precluded. It does not in fact say it has to be x percent of 
the market or anything like that.
  It just says that it has to be more than a relatively small company 
that does not really provide that competitive alternative for that 
consumer, that customer, that household at the local level.
  The Senator from Alaska may still move to table. I hope not, based 
upon the language precluding a small company from still coming--a small 
company could still come and be allowed under the interconnection 
agreements of 251 to interconnect at the local level. This means I need 
a little bit more than a small company before the interLATA approval is 
granted.
  Mr. STEVENS. Mr. President, I understand the Senator's intent. I call 
his attention to the provision of subsection (g) of 251 on page 25:

       A local exchange carrier shall make available any service, 
     facility, or function provided under an interconnection 
     agreement to which it is a party to any other 
     telecommunications carrier that requests such interconnection 
     upon the same terms and conditions as those provided in the 
     agreement.

  We interpret that section to mean if there is a small carrier 
involved and it comes into the area, which means the Bell carrier can 
then enter long distance, that other carriers can come in easily; as a 
matter of fact, they would not have to comply with 251.
  The problem is that as we see it in rural areas where only a small 
carrier may seek the interconnection to provide competing local service 
in the beginning, it means that that small carrier cannot enter this 
picture until there is a larger carrier that would be able to handle 
the substantial test of the Senator's amendment. The Senator's 
amendment would require that you have a carrier capable of providing 
service to a substantial number of businesses and residential 
customers. Obviously, the small carrier cannot do that.
  One is looking at the test for the Bell companies; the other is 
looking at the test for entry. We believe the predominant issue in 
regard to 251 is that there be no requirement other than the minimum 
compliance with the competitive checklist, as provided in subparagraph 
(2) of subsection (b) that I read from section 251.
  Mr. KERREY. Mr. President, I understand the concern, but the larger 
concern, I believe, still remains, which is expressed by the findings 
in the bill and the description of the bill of what it is attempting to 
do, which is: We want to make sure we have competition before we get 
into long distance. That is the idea.
  Currently, if I am a consumer, a household in Omaha, NE, I have one 
choice. That is what I have. My telephone company wants to get into 
long distance. The intent here is before you get into long distance, 
you get some competitive choice at the local level. If all I have to do 
is sign an interconnection agreement with one small company before that 
occurs, that hardly provides the kind of competitive choice, as I 
understand the intent of the bill.
  I understand the Senator's concern about rural carriers, but I do not 
believe, at least as I read it, that the amendment precludes the 
possibility of a rural carrier, a smaller carrier interconnecting.
  Mr. STEVENS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. STEVENS. Mr. President, it is, in our judgment, that the language 
of the bill, as it stands, provides an incentive to the long-distance 
companies, who are worried about Bell companies' entry into long 
distance, to come forward and use the provisions of section 251 to 
negotiate the interconnection agreements.
  If they do not do that and a small carrier does come forward, it 
still meets the requirements of this section and, therefore, it is sort 
of an incentive to the other long distance companies to come forward 
and get involved in the negotiations regarding section 251, in our 
judgment.
  In any event, it adds a level to the threshold. It increases the 
minimum requirements that we have associated with compliance with the 
checklist and, as such, it adds another burden to future competition, 
which is something that we disagree with the Senator on.
  Mr. KERREY. Mr. President, it unquestionably asks for a minimum 
requirement. That is unquestionably true. I believe if this amendment 
were adopted, it would be a reasonable substitute for the Department of 
Justice role. It makes sure you have competition. The concern ought not 
to be for most of these companies trying to figure out whether you have 
competition; [[Page S8322]] the concern really ought to be is there a 
competitive choice: Do I have in my residence in Omaha, NE, or do I 
have in my residence in any other area a competitive choice?
  It does not insert ``no substantial possibility'' language. It does 
not insert any specific language. It just says that it has to be more 
than a single, small interconnection.
  Mr. STEVENS. Mr. President, it is not my desire to limit in any way 
the Senator's debate on this amendment.
  Mr. KERREY. I conclude my debate. Mr. President, I yield the floor.
  Mr. STEVENS. Mr. President, again I say what the Senator from 
Nebraska is looking for is something to increase the effective 
competition tests that are in this bill. The section we have been 
debating, section 255(b)(1), sets a minimum requirement for the Bell 
operating companies to enter into interLATA services. We think that is 
sufficient, in view of the requirements of the checklist itself.
  Unless the Senator wishes to make additional comments, I intend to 
move to table his amendment, but I will be happy to let him have the 
last word, if he wishes to do so.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, the last word merely is that the Senator 
from Alaska is right, I am not worried about the minimum requirement in 
255. I think it needs to be strengthened. This amendment does precisely 
that, it attempts to strengthen the requirements of 255 prior to being 
given permission for interLATA service.
  Mr. STEVENS. The Senators's definition is the difference between us.
  I move to table Kerrey amendment No. 1307, and I ask unanimous 
consent that the vote on this motion to table occur at 2:30 p.m. today 
and that there be no second-degree amendments in order to the amendment 
prior to the vote on the motion to table.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. STEVENS. 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.
  Mr. STEVENS. Mr. President, in view of the fact that there is 
approximately an hour left, I ask unanimous consent to lay this 
amendment aside until the time established for the vote on my motion to 
table, in the hope someone might come forward with another amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. STEVENS. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. STEVENS. Mr. President, how long?
  Mr. DORGAN. Ten minutes.
  Mr. STEVENS. I have no objection.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. DORGAN. I thank the Chair.
  (The remarks of Mr. Dorgan pertaining to the introduction of 
legislation are located in today's Record under ``Statements on 
Introduced Bills and Joint Resolutions.'')
  Mr. STEVENS. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. STEVENS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Abraham). Without objection, it is so 
ordered.
  Mr. STEVENS. The Senator from California has two amendments. One is 
an amendment to the other. We have no objection to the motion she is 
going to make to consolidate those amendments.
  If she wishes to take it up at this time, we would be happy to do so 
on the basis of a time agreement, 30 minutes to be divided, 20 minutes 
on the side of the proponent, 10 minutes over here, with no second-
degree or other amendments in order.
  We will have a vote on or in relation to the amendment following the 
vote on the motion to table that has already been agreed to.
  I ask unanimous consent that that be the agreement under which the 
Senator takes up this amendment.
  The PRESIDING OFFICER. Is there objection?
  Mr. LEAHY. Reserving the right to object, and I shall not object, the 
distinguished senior Senator from Nebraska and I, Mr. President, have a 
couple of amendments regarding the Internet that I think we can do in a 
relatively short period of time.
  I wonder if it might be possible for these two Senators to then 
follow the amendment we just discussed.
  Mr. STEVENS. Mr. President, I say to my friend that we have 
amendments already scheduled to come up for a vote at 2:30. It is our 
hope we will have this vote on Senator Boxer's amendment right after 
that, and we would be pleased to take up your amendments following 
that, if the Senator would like to do so.
  Mr. LEAHY. Fine.
  The PRESIDING OFFICER. Without objection, it is so ordered.


               Amendment No. 1340 and Amendment No. 1354

        (Purpose: To preserve the basic tier of cable services)

  Mrs. BOXER. Mr. President, I want to thank the Senator from Alaska 
for his courtesy he extended to this Senator and to the Senator from 
Michigan, Senator Levin.
  We are anxious to put our amendment forward. It is very 
straightforward. I ask that my amendment numbered 1340 be modified by 
my second-degree amendment, which is also at the desk, amendment No. 
1354.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. Mr. President, I ask unanimous consent that I yield 
myself, out of the 20 minutes, 7 minutes.
  Mr. President there has been a lot of debate on this bill, the 
Telecommunications Competition and Deregulation Act of 1995. A lot of 
it is quite technical. A lot of it is difficult to follow.
  I do believe that the amendment that the Senator from Michigan, 
Senator Levin, and I are proposing is quite straightforward.
  What we want to do with this amendment is to protect--protect--the 
people who currently have cable service from losing channels that they 
have grown used to that are in their basic service.
  We are very fearful that because of the changes made in this bill, 
cable companies will move certain channels out of their basic tier of 
service, and the public that has grown used to this basic service will 
now be forced to pay for these channels on a second tier.
  For example, there are many viewers that in their basic service get 
stations like CNN or TNT. What we are fearful of--if we do not pass the 
Boxer-Levin amendment--is that cable companies will jettison stations 
like CNN or TNT and tell the customers who have been receiving those 
programs in their basic service that they will have to pay extra. Now 
CNN and TNT will go into another tier, and the people who have been 
watching them will have to now pay more.
  It is very straightforward. What we are saying is, if you want to 
reduce the level of service that you currently have as a cable 
operator, you first need to get approval from the local franchise 
authority, which is usually the board of supervisors or the county 
commissioners or the city council or the mayor.
  So we are taking, I think, in this amendment, some commonsense steps. 
We are saying before the competition fully comes in, and we look 
forward to that day, before the competition really comes in, for a 
period of 3 years--we have sunsetted this at 3 years--we want to 
protect the people who rely on cable. We want to protect them so they 
do not suddenly find themselves without channels that they have grown 
to rely on and, in addition, they would have to spend more money to 
order these channels in another tier of service.
  I am very hopeful we will get broad bipartisan support for this 
amendment. Because, whether Mrs. Smith or Mr. Smith lives in Washington 
or California or Michigan or South Dakota or Ohio, wherever they may 
live, they [[Page S8323]] may be finding out that they will suddenly 
have to pay more for programming they had on their basic rate.
  Let me tell my colleagues what is going to happen to Senators. 
Whether they are from California or Michigan or South Dakota or Ohio--
wherever they are from--they are going to get the call from that senior 
citizen who has come to rely on that programming. They will say, 
``Senator, why did you not protect me? Why do I now have to pay extra 
money for CNN?'' Then, if you voted against Boxer-Levin, you will have 
to explain it. You will say, ``Well, Mrs. Smith, I thought competition 
would come in and you would not get stuck.''
  Mrs. Smith will say, ``Well, good, I will send you my bill. You pay 
it. Because you should have protected me at least in a transition 
period and I deserve that protection. By voting against the Boxer-Levin 
amendment you left me exposed to a situation where I lose programming 
and suddenly have to pay more for it.''
  Mr. President, I retain the remainder of my time and yield 7 minutes 
to my friend from Michigan, Senator Levin.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Mr. LEVIN. Mr. President, I thank my friend from California for 
taking the initiative on this bill.
  The amendment she is offering really, I believe, is intended to carry 
out the purpose of the bill. What the bill intends to do is deregulate 
the rates on upper tiers. But as part of this compromise, it is 
intended that the basic rate--the basic tier continue to be subject to 
regulation by the local franchise authority. That is the structure of 
this bill. Basic tier is going to continue to be regulated. The upper 
tiers are going to be deregulated. That, it seems to me, is quite an 
important decision on the part of the sponsors of this bill, and one 
that is a very reasonable decision.
  But the problem then becomes, since the upper tiers are deregulated, 
the cable operator who currently shows, for instance, ESPN as part of 
the basic tier and provides it as part of the basic rate would then 
have an incentive to move ESPN to a higher tier and out of the basic 
tier, unless this amendment is adopted.
  I believe the sponsors of the language in the bill would say it is 
their intent that the basic tier remain and that it remain regulated. I 
think that is the intent of this bill. But there is a loophole which we 
should close with this amendment. That loophole is that, since the 
upper tiers are deregulated and therefore price is deregulated and 
cable companies then can raise prices on upper tier, there would be an 
incentive to move channels that are currently provided as part of the 
basic cable out of basic cable into the upper tier, unless there is at 
least a period of a couple of years until competition comes in, which 
will take care of this problem.
  Competition is the answer. We all know that. The problem is there is 
going to be an interim period here, and that is why the Boxer amendment 
in its second-degree portion which is now part of the principal 
amendment has a 3-year statute of limitations on this provision. We 
recognize that competition is intended to correct this problem. But we 
also recognize it is going to be a period of time before competition 
effectively can do that.
  So, in order to avoid the, I believe, unintended consequence of 
someone who currently is given basic cable at a certain rate suddenly 
finding the channels, that were previously part of that basic cable, 
still subject to price regulation, are now shifted out of that basic 
cable into the unregulated upper tiers, this amendment is essential.
  That is the heart of it. It is a fairly straightforward amendment. It 
is a very proconsumer amendment, but it is not only proconsumer. I 
think it is also a way of our carrying out our commitment to our 
constituents. And that commitment is we are going to continue to 
regulate the basic cable. Yes, the upper tiers are going to be 
deregulated but there is not going to be a surprise.
  If you have been getting--and I emphasize ``if'' you have been 
getting--ESPN, or CNN or whatever on your basic cable, you are not 
going to find suddenly that rug is pulled out from under you, those 
channels are suddenly removed to a higher tier.
  Unless we adopt something like this we are going to find our 
constituents coming to us and saying, ``Wait a minute, I thought you 
said basic cable was going to continue to be regulated by the local 
franchising authority. That was the representation you made. The local 
franchise authority was going to continue to regulate basic cable. I 
have been watching ESPN every night and all of a sudden, ESPN is not on 
my basic cable anymore. What happened? That was supposed to continue 
regulated and now we find it is in the higher tier. My basic cable, 
which is all I get, does not have channels which I am accustomed to and 
which you folks said would continue to be regulated.''
  So I think, in order for us to carry out what is the intention of 
this bill, that it is necessary to have this transition amendment that 
the Senator from California and I are offering to the Senate. Again, it 
is a way I truly believe that carries out the intent of the sponsors of 
this bill and the basic compromise which they have reached, which is 
that we are going to continue to regulate or allow the local franchise, 
more accurately, to regulate the basic cable while we are deregulating 
the upper tiers.
  So, Mr. President, again, with the sunset provision, I think that 
would address any concerns that regulation is going to continue after 
it is needed. It is not going to be needed when competition takes over 
but there is this period we all know when competition cannot quite yet 
do the job. It has been recognized in a number of ways in this bill. 
This amendment would be, if adopted, another recognition of the reality 
that, until competition comes in, we should have an interim period 
where we are going to protect consumers against the unintended 
consequences which otherwise might occur.
  I congratulate my friend from California. This is a straightforward 
amendment. We hope the managers of the bill would accept this amendment 
but, if not, we hope the Senate then would adopt it on a bipartisan 
basis.
  I yield the remainder of my time, if I have any, and yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from California.
  Mrs. BOXER. Mr. President, would the Chair inform the Senator how 
much time she has remaining?
  The PRESIDING OFFICER. The Senator has 9 minutes.
  Mrs. BOXER. I ask the Senator from South Dakota if he is going to 
speak either in favor of or opposing the amendment of the Senator?
  Mr. PRESSLER. I will be opposing the amendment. I ask the Chair, how 
much time do I have?
  The PRESIDING OFFICER. The Senator has the 10 minutes that was 
allocated.
  Mr. PRESSLER. The parliamentary situation is that there is a vote 
scheduled at 2:30?
  The PRESIDING OFFICER. There is a vote scheduled at 2:30 p.m., 
tabling the Kerrey amendment.
  Mr. PRESSLER. Yes, I will be speaking against the amendment and I 
will offer a motion to table at some appropriate time. I could do that 
now and stack the vote, this next vote, if that would be agreeable to 
my friend?
  Mrs. BOXER. As long as the Senator from California has 9 minutes to 
complete a presentation, we have no objection and will be happy for the 
yeas and nays on the motion.
  Mr. PRESSLER. I ask unanimous-consent that it be in order at this 
time, and may I ask unanimous consent that at 2:45, at the conclusion 
of the first vote, the Senate then proceed immediately, and I will make 
a motion to table at that time, but that we continue to debate?
  Mrs. BOXER. Will the Senator repeat the unanimous-consent request?
  Mr. PRESSLER. First of all, I ask for the yeas and nays on this 
amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. PRESSLER. I ask unanimous consent that at the conclusion of the 
first vote, it be in order to move to table the Boxer-Levin amendment. 
So we can have two back-to-back votes.
  The PRESIDING OFFICER. Is there objection?
  Mrs. BOXER. I say to my friend, there is no objection. 
[[Page S8324]] 
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRESSLER. I will speak against this amendment, if I may do so 
now.
  I yield myself, Mr. President, 5 minutes.
  The PRESIDING OFFICER. The Senator may proceed.
  Mr. PRESSLER. Mr. President, I urge Senators to vote ``no'' on the 
Boxer-Levin amendment. The business of cable TV has been much debated, 
and we have settled on a bipartisan approach in the committee bill and 
it has been settled by the Dole and Daschle subsequent amendments and 
by leadership amendments. The cable TV issue should be left as it is in 
the bill.
  This amendment forbids a cable operator from taking any program 
service off basic service without approval of the local franchising 
authority. We feel strongly that would violate the spirit of the 
agreement that has been reached on a bipartisan basis regarding cable 
television pricing and cable television servicing throughout the United 
States.
  The Cable Act of 1984 specifically forbids authorities from 
specifying particular services to be carried. I am very touchy about 
giving any authority the power to pick programming or the power of the 
mayor of the city, for example, to decide what is going to be in the 
local newspaper or what columns are going to be carried, and which 
newspapers are going to operate in that city, or what comic strip 
characters are going to be allowed in that particular city, or what 
editorial writers are going to operate in that particular area.
  The Cable Act of 1984 did so to protect the first amendment. It 
specifically prohibited franchising authorities, and it did so to 
protect the first amendment right to decide what to carry. This 
amendment would take that away. It is a major reversal of longstanding 
cable policy that carefully balances the rights of cities and 
operators.
  For instance, if a cable operator wanted to replace a home shopping 
service with a news service, it could not do so without getting 
approval or, if it wanted to replace one classic movie channel with 
another, it would be forbidden unless the city agreed.
  The amendment is not needed to protect the channel location of local 
broadcasters. They cannot be removed, in any case. The cable operator 
must already carry local TV stations on the basic tier. It is not 
needed to protect access channels on basic, either. The Cable Act 
requires them to be carried on basic along with broadcast signals, and 
cities already can require these channels as a part of any franchise 
that is granted.
  This amendment would freeze certain programming lineups on smaller 
systems for no good reason except to give cities editorial power over a 
cable operator's programming.
  Mr. President, the cable agreement, or the agreements in relationship 
to pricing of cable television, have been worked out very laboriously 
in the committee, and again in the manager's amendment, and again in 
the leadership amendment. I think we have the cable thing settled down, 
or at least I hope so.
  The Boxer-Levin amendment supposedly prevents an operator from moving 
a popular service from a regulated basic tier and offering it on a less 
regulated cable programming service--CPS--tier. But most such migration 
has already occurred off the basic tier.
  The PRESIDING OFFICER. The Chair wishes to inform the Senator that he 
has used 5 minutes of the 10 minutes.
  Mr. PRESSLER. Thank you very much.
  Mrs. BOXER. Mr. President, I understand my friend has reserved 4 or 5 
minutes at this time.
  The PRESIDING OFFICER. He has 5 minutes left.
  Mrs. BOXER. I would like to at this time ask for 5 minutes so I may 
close the debate on my amendment.
  The PRESIDING OFFICER. The Senator may proceed.
  Mrs. BOXER. I appreciate that very much, Mr. President.
  I want to say to my friend from South Dakota that I thought he had a 
very thoughtful response to the Boxer-Levin amendment. But I want to 
take these issues one at a time in my hope that my colleagues are 
listening to this debate because I am putting up a warning flag to my 
colleagues that the first time a cable company moves CNN or TNT or ESPN 
off basic service, your phones are going to be lighting up. You are 
going to have to explain why you did not protect your people.
  The answer that my friend from South Dakota puts forward is one that 
I take issue with. He says we have had a bipartisan approach to the 
cable part of this bill. It has been settled. With all due respect, I 
say to my friend, it may well be that there are Senators who are not on 
the committee of jurisdiction who may have thought of the problem that 
Senators on both sides of the aisle did not think about.
  This amendment does no violence at all. I would characterize it as a 
transitional ratepayer protection amendment. Why do I say transitional? 
It only lasts for 3 years. If a cable company wants to rip off a cable 
channel that you have been watching and you have been getting in your 
basic tier, you have the ability to say to the local franchising 
authority, please, take a look at this and see if it is fair.
  I say to my friend from South Dakota, if he has a farming family in 
South Dakota and they are used to getting a certain program on their 
basic tier, and they are not extremely wealthy, and they are paying $20 
a month for their basic service, and they love the channels in their 
basic service and those channels are ripped away, then they have to pay 
another say $l5 or $10 a month for those channels they were getting. I 
say to my friend, the committee probably did not deal with that issue 
because I cannot imagine Senators want to have a situation where their 
phones are ringing off the hook.
  Look, the Boxer-Levin amendment is supported by the Consumer 
Federation of America and it is supported by the Consumers Union. And I 
am saying that for the 3 years that this bill is working its way 
through, let us protect our consumers. Let us protect our ratepayers, 
whatever State they happen to be in. It is a very simple process. It is 
a very simple amendment. Yes, when we have real competition in the 
cable industry, there will not be any need for the Boxer-Levin 
amendment. That is why we have sunsetted that amendment.
  My friend is concerned about giving local government too much power. 
On the one hand, I have my colleagues on the Republican side saying 
that is where the power ought to be; not here in Washington but with 
the local mayors, city councils, boards of commissioners, 
boards of supervisors because they are close to the people. And this 
amendment, the Boxer-Levin approach, gives them the ability to protect 
the people in their communities from being ripped off by a cable 
company, and having to pay more for something they always got in their 
basic tier.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. PRESSLER. Mr. President, I yield myself my remaining 5 minutes. 
That will give the Senator from California a chance to finish.
  Let me say that I urge my colleagues to vote ``no'' on the Boxer-
Levin amendment because we have resolved the cable television issue, we 
have achieved a good compromise and a good settlement. But let me go on 
and say that the amendment supposedly prevents an operator from moving 
a popular service in a regulated basic tier and offering it on a less 
regulated cable programming service, a CPS tier. But most such 
migration has already occurred off the basic tier. Only a few mostly 
smaller systems have large basic tiers. The Senate bill already 
provides protection against higher prices on the CPS tier should an 
operator migrate services and seek a steep rate increase. I think that 
is called the bad actor provision that is in the legislation.
  The amendment is not needed to protect the channel location of local 
broadcasters. I have already pointed out that they are already there 
and under the must-carry provisions. It is not needed to protect access 
channels on basic tier, either. The Cable Act requires them to be 
carried on basic along with broadcast signals, and cities already can 
require these channels as part of any franchise that is granted.
  The amendment freezes certain program lineups on smaller systems for 
no [[Page S8325]] good reason except it gives cities editorial power 
over a cable operator's programming.
  Let me conclude by saying that I think the Boxer-Levin amendment is 
not a good idea.
  It is a regulatory idea. This is supposed to be a deregulatory bill. 
It is said: What will the family do on the farm in South Dakota? I come 
from a farm in South Dakota. There is a direct satellite broadcasting 
competitive alternative. There is going to be a video dial competitive 
alternative. We are going to have the electric utilities able to get 
into telecommunications. If we pass this bill, there is going to be so 
much competition and so many alternative voices and sources that prices 
are going to collapse. There are going to be more services available, 
and they are going to be competitive. We do not need regulation.
  For example, if we look at what has shown up in the last few years, 
the Learning Channel, the History Channel, even ``MacNeil/Lehrer'' has 
been sold to a private company and is going to make additional public 
affairs programs for profit.
  Times are changing. There is more competition out there, more 
alternatives. The thinking of the 1950's and 1960's and 1970's and 
1980's that regulation will bring things to smaller cities and rural 
areas is not necessarily true. My State is a State of smaller cities 
and rural areas, but we will benefit greatly from the 
telecommunications revolution. This bill will help small business and 
small towns. I have with me the signatures of 500 delegates to the 
White House Conference on Small Business--meeting this week here in 
Washington--telling about how much this telecommunications bill will 
help small business. More than 500 delegates to the White House 
Conference on Small Business this week have written to President 
Clinton urging him to support our reform bill, S. 652.
  We have heard a lot in this Chamber about how corporate interests are 
influencing this, and so forth. Occurring at this moment over at the 
White House is the small business conference, and we have 500 of those 
delegates who sent a petition urging that President Clinton support 
this bill and that the Congress pass it quickly and that it not put 
more regulation in it. But this amendment is for more regulation.
  Mr. President, I will read into the Record portions of a letter to me 
from the small business owners of America:

       . . . strongly urging you to enact legislation that will 
     open all telecommunications markets to full and complete 
     competition, ensuring that all Americans enjoy the lower 
     prices and innovative services that unfettered competition 
     will produce.
       We are pleased to present you with copies of more than 500 
     letters to President Clinton from delegates to the White 
     House Conference on Small Business seeking White House 
     support for Senator Pressler's Telecommunications Competition 
     Deregulation Act, S. 652 . . .
       Of all the solutions offered, S. 652 best achieves the goal 
     of streamlined regulation, enhanced competition and consumer 
     protection. By opening the marketplace to all competitors on 
     equal terms and conditions, you will ensure vigorous 
     competition that will deliver economic growth, improve 
     services and lower prices to all Americans.
       We urge you to pass this legislation in its present form 
     and without delay.

  So they want this legislation, the small business people of America, 
and self-employed Americans. And I have heard some people talking about 
lobbyists out here. Of course there are lobbyists everywhere. They have 
the right to petition our Government. But here, signing these letters, 
we have 500 of the leading small businessmen of America gathered in 
President Clinton's offices for a conference. The small business people 
of America are for this bill. They do not support over-regulation such 
as the Boxer amendment.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mrs. BOXER. Mr. President, I yield myself the remainder of my time.
  I did not know the small business people took a stand against the 
Boxer amendment, but I have to just say this to my friend. The Consumer 
Federation of America supports it, and there are 60 million cable 
subscribers. And I say to my friend the minute a cable operator throws 
a station off of the basic tier----
  Mr. PRESSLER. If my friend will yield----
  Mrs. BOXER. I will yield on the Senator's time. I do not have enough 
time; I am sorry.
  Mr. PRESSLER. I did not specifically mean they were opposed to the 
Boxer-Levin amendment. They are for the bill and the Boxer-Levin 
amendment would change the bill. But I should not say that they are 
against the Senator's amendment specifically.
  Mrs. BOXER. I thank the Senator. I appreciate my friend clarifying 
that on his time because I have so little time. I think it is important 
not to confuse the debate. This is not about the whole bill, I say to 
my friend from South Dakota. Let us not engage in overstatement. This 
is a small provision, a small provision that deals with one issue. It 
is a transitional amendment. It says let us protect the ratepayers for 
3 years, those people who sit in their homes and pay for cable and get 
certain channels in their basic tier.
  Under this bill, a cable company--and by the way, they are not a 
``bad actor'' if they do this because it is totally allowable under the 
bill--can knock out several of those channels, put them on another tier 
and charge you for it, and you are sitting there like a chump. I hope 
you will call your Senator and ask that Senator if they voted for 
Boxer-Levin, because we will protect you. I think we are doing the 
right thing for the small business people. I think we are doing the 
right thing for the cable companies because they sometimes do not know 
what they are up against when they do this--the outrage that will 
follow.
  I am a Senator. I have served here for 3 years. I served in the House 
of Representatives for 10 years. I served on a local board of 
supervisors for 6 years, and I swear when I go to a community meeting 
now as a Senator people will raise their hand more about cable service 
than almost anything else. Oh, they are interested in Bosnia. They care 
a lot about the big global issues, of course. But nothing impacts their 
daily life more, it seems to me, than what they bring to a Senator 
regarding their cable rates and the quality of their programming.
  So I think we have a chance to stand up for the little people out 
there who look forward to these programs. And, yes, maybe we are 
stepping on a few toes of the cable people. But I am not worried about 
them. Do you know what they did, the cable companies? From 1984 to 
1992, when they were unregulated, they raised basic cable service rates 
by 40 percent. So at that time the same arguments were heard: Oh, 
competition is around the corner.
  My friend talks about satellite dishes. I say to my friend from South 
Dakota, maybe he does not know the numbers. But only one-half of 1 
percent of consumers receive digital broadacast satellite service. So 
he can talk about his people in South Dakota getting satellite service, 
but only one-half of 1 percent can afford it.
  Will they get it soon? Yes, they will get it soon. Yes, there will be 
more competition. And I applaud that. I love the thrust of the bill, 
that we are going to invite people in and have competition. But I have 
to warn my friends. Until that day that there is enough competition, 
that the satellite dishes are affordable and everyone moves into this 
business, you are going to get the calls from your consumers, whether 
they are in Kentucky or California or North Carolina, South Carolina, 
Indiana, I do not care, Michigan, whatever.
  Mr. FORD. Will the Senator yield for just 1 minute?
  Mrs. BOXER. I will be glad to yield.
  Mr. FORD. The Senator from California used the rate increase of 40 
percent. That was from GAO sending out a postcard and asking you to 
respond. And only those responded that had a very low increased rate. 
Some areas went as high as 200 percent. And I can name those to you. So 
40 percent is a low figure. And I think we ought to remember that and 
pay attention to the Senator's amendment.
  Mrs. BOXER. I thank my friend so much. It means so much to me that he 
sees there is merit in this amendment.
  Senator Levin and myself thought long and hard, and we decided it was 
important to stand up for the consumers, protect the consumers so the 
cable companies, just in this 3-year interim period, cannot pull out 
from under you a basic, important channel that you have grown used to, 
that you have paid for in your basic service, and charge you more for 
it.
  The PRESIDING OFFICER. The Senator's time has expired.
  [[Page S8326]]
  
  Mrs. BOXER. I thank my friend very much. I yield the floor at this 
time. I hope Senators will support Boxer-Levin.


                       Vote on Amendment No. 1307

  The PRESIDING OFFICER. Under the previous order, the question is on 
agreeing to the motion to lay on the table amendment No. 1307, offered 
by the Senator from Nebraska. The yeas and nays have been ordered. The 
clerk will call the roll.
  The legislative clerk called the roll.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 79, nays 21, as follows:

                      [Rollcall Vote No. 261 Leg.]

                                YEAS--79

     Abraham
     Ashcroft
     Baucus
     Bennett
     Biden
     Bond
     Breaux
     Brown
     Bryan
     Bumpers
     Burns
     Byrd
     Campbell
     Chafee
     Coats
     Cochran
     Cohen
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dole
     Domenici
     Dorgan
     Exon
     Faircloth
     Feinstein
     Ford
     Frist
     Glenn
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Harkin
     Hatch
     Hatfield
     Heflin
     Helms
     Hollings
     Hutchison
     Inhofe
     Jeffords
     Johnston
     Kassebaum
     Kempthorne
     Kennedy
     Kerry
     Kohl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Mikulski
     Moseley-Braun
     Moynihan
     Murkowski
     Nickles
     Nunn
     Packwood
     Pressler
     Pryor
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Shelby
     Simpson
     Smith
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--21

     Akaka
     Bingaman
     Boxer
     Bradley
     Conrad
     Dodd
     Feingold
     Graham
     Inouye
     Kerrey
     Kyl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Murray
     Pell
     Reid
     Robb
     Simon
     Wellstone
  So the motion to lay on the table the amendment (No. 1307) was agreed 
to.
               amendment no. 1340 and amendment no. 1354

  The PRESIDING OFFICER. The clerk will report amendments 1340 and 
1354.
  The legislative clerk read as follows:

       The Senator from California [Mrs. Boxer] and Mr. Levin 
     proposes amendments numbered 1340 and 1354 thereto.

  The amendments are as follows:

                           Amendment No. 1340

       On page 71, between lines 2 and 3, insert the following:
       (d) Preservation of Basic Tier Service.--Section 623 (47 
     U.S.C. 543) is further amended by adding at the end the 
     following:
       ``(n) Preservation of Basic Tier Service.--A cable operator 
     may not cease to furnish as part of its basic service tier 
     any programming that is part of such basic service tier on 
     January 1, 1995, unless the franchising authority for the 
     franchise area concerned approves the action.''.
                                                                    ____


                           Amendment No. 1354

       Strike all after ``(d)'' in the pending amendment and 
     insert the following:
       Preservation of Basic Tier Service.--Section 623 (47 U.S.C. 
     543) is further amended by adding at the end the following:
       ``(n) Preservation of Basic Tier Service.--A cable operator 
     may not cease to furnish as part of its basic service tier 
     any programming that is part of such basic service tier on 
     January 1, 1995, unless the franchising authority for the 
     franchise area concerned approves the action. This provision 
     shall expire three (3) years after the date of enactment.''
                    amendment no. 1340, as modified

  The PRESIDING OFFICER. Under the previous order, amendment 1340 is 
modified by the language of amendment 1354.
  The amendment (No. 1340), as modified, is as follows:

       On page 71, between lines 2 and 3, insert the following:
       (d) Preservation of Basic Tier Service.--Section 623 (47 
     U.S.C. 543) is further amended by adding at the end the 
     following:
       ``(n) Preservation of Basic Tier Service.--A cable operator 
     may not cease to furnish as part of its basic service tier 
     any programming that is part of such basic service tier on 
     January 1, 1995, unless the franchising authority for the 
     franchise area concerned approves the action. This provision 
     shall expire three (3) years after the date of enactment.''

  The PRESIDING OFFICER. The Senator from South Dakota [Mr. Pressler] 
is recognized to make a motion to table.
  Mr. PRESSLER. Mr. President, I move to table the Boxer amendment, and 
I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
lay on the table the amendment. The yeas and nays have been ordered.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. MACK (when his name was called). Present.
  Mr. LOTT. I announce that the Senator from Vermont [Mr. Jeffords] is 
necessarily absent.
  The PRESIDING OFFICER (Mr. Gregg). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 60, nays 38, as follows:

                      [Rollcall Vote No. 262 Leg.]

                                YEAS--60

     Abraham
     Ashcroft
     Baucus
     Bennett
     Bond
     Breaux
     Brown
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dole
     Domenici
     Faircloth
     Frist
     Glenn
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Heflin
     Helms
     Hollings
     Hutchison
     Inhofe
     Kassebaum
     Kempthorne
     Kerry
     Kyl
     Lott
     Lugar
     McCain
     McConnell
     Murkowski
     Nickles
     Nunn
     Packwood
     Pressler
     Reid
     Rockefeller
     Roth
     Santorum
     Shelby
     Simpson
     Smith
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--38

     Akaka
     Biden
     Bingaman
     Boxer
     Bradley
     Bryan
     Bumpers
     Byrd
     Cohen
     Conrad
     Dodd
     Dorgan
     Exon
     Feingold
     Feinstein
     Ford
     Graham
     Harkin
     Inouye
     Johnston
     Kennedy
     Kerrey
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Pell
     Pryor
     Robb
     Sarbanes
     Simon
     Snowe
     Wellstone

                        ANSWERED ``PRESENT''--1

       
     Mack
       

                             NOT VOTING--1

       
     Jeffords
       
  So the motion to lay on the table the amendment (No. 1340), as 
modified, was agreed to.
  Mr. DOLE. Mr. President, I want to urge my colleagues on both sides--
if there are any amendments on this side, too--we want to try to 
complete action on this bill today. The chairman has indicated his 
willingness to stay all night and keep the hours running. Thirty hours 
will expire tomorrow at 4 p.m. If we stay all night that would be 4 
p.m. Or, if we can get an agreement to vote final passage by 12 noon 
tomorrow, otherwise, I think we may seriously consider the first 
option--staying all night.
  I believe that most of the amendments will be tabled. I do not know 
of any serious amendments at all. Most of the amendments are on the 
other side. There are still some 50 amendments pending which is sort of 
par for the course, so far. But we hope that if people are serious 
about their amendments, they will offer them today so that we can 
dispose of this.
  The managers have been on the floor now for almost a week. They have 
done an outstanding job on both sides. They are prepared to complete 
action on this bill late, late, late tonight. I urge my colleagues. 
Maybe some amendments will be accepted. I do not know what the status 
of many of these amendments are. But it would be our intention to table 
every amendment from now on unless the managers indicate otherwise.
  We are having a Republican conference. I will make that clear to them 
that, if we are going to finish this bill, we have to have some 
discipline on this side to help table amendments for both managers of 
the bill, not just the manager on this side.
  So I urge my colleagues to finish today. If you want to agree to an 
agreement, we will have final passage no later than noon tomorrow. 
Otherwise, I will leave it up to the managers. The chairman has 
indicated to me that he prefers to stay here all night and dispose of 
amendments between now and 4 o'clock tomorrow.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Vermont is recognized.
  Mr. LEAHY. Mr. President, while the distinguished majority leader is 
on the floor, I note that many of us have been trying to work out a 
time agreement. There is cooperation on both sides of the aisle. For 
example, I am about to call up an amendment which will by 
[[Page S8327]] prearrangement have a second-degree amendment by 
Senators Exon and Coats. We will keep that on a relatively short time 
agreement, and we will wrap that one up. I will also be yielding to 
Senator Kerrey, who has an amendment which I understand is going to be 
accepted. Senator Breaux and I have been trying to work out one of the 
major issues, which I think both sides agree is a major issue that must 
be debated, an intraLATA amendment, to try to see if we can reach an 
area of agreement by which we would speed that one up.
  Mr. President, with that, I yield, if I might, to the Senator from 
Nebraska, Senator Kerrey.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, what is the pending business?
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. KERREY. Is there an amendment before the body?
  The PRESIDING OFFICER. There is no amendment pending.
                    Amendment No. 1310, as modified

(Purpose: Clarifies that pricing flexibility should not have the effect 
  of using noncompetitive services to subsidize competitive services)

  Mr. KERREY. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration, amendment 1310.
  The PRESIDING OFFICER. The clerk will report.
  Mr. KERREY. Mr. President, I ask unanimous consent to modify the 
amendment in accordance with the agreement of both managers.
  The PRESIDING OFFICER. Is there objection?
  Mr. PRESSLER. Reserving the right to object, and I will not object, I 
just want to explain to the Members of the Senate that it is unusual to 
allow an amendment in this cloture situation, but we view this as 
duplicative; we already have cross-subsidization, but we do not think 
it changes the nature of the bill, and we are prepared to accept this 
amendment.
  The PRESIDING OFFICER. Is there objection to the unanimous consent 
request? Without objection, it is so ordered. The clerk will report the 
amendment, as modified.
  The assistant legislative clerk read as follows:

       The Senator from Nebraska [Mr. Kerrey] proposes an 
     amendment numbered 1310, as modified.

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

       On page 113, at the end of line 17, insert the following 
     sentence: ``Pricing flexibility implemented pursuant to this 
     section for the purpose of allowing a regulated 
     telecommunications provider to respond to competition by 
     repricing services subject to competition shall not have the 
     effect of using noncompetitive services to subsidize 
     competitive services.''

  Mr. PRESSLER. I urge adoption of the amendment.
  The PRESIDING OFFICER. Is there further debate? If not, the question 
is on agreeing to the amendment.
  The amendment (No. 1310), as modified, was agreed to.
  Mr. EXON. Mr. President, I move to reconsider the vote.
  Mr. PRESSLER. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. LEAHY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Vermont.


                    Amendment No. 1288, as modified

(Purpose: To revise title IV of the bill and provide for a study of the 
    legal and technical means of restricting access to obscenity on 
                interactive telecommunications systems)

  Mr. LEAHY. Mr. President, I ask it be in order to call up amendment 
No. 1288.
  The PRESIDING OFFICER. The clerk will report the amendment.
  Mr. LEAHY. I will note while the clerk is getting the amendment, it 
is an amendment proposed by myself, Senators Moseley-Braun, Feingold, 
and Kerrey of Nebraska.
  The assistant legislative clerk read as follows:

       The Senator from Vermont [Mr. Leahy], for himself, Ms. 
     Moseley-Braun, Mr. Feingold, and Mr. Kerrey, proposes an 
     amendment numbered 1288.

  Mr. LEAHY. Mr. President, we are under postcloture, so I would ask 
unanimous consent that I may be allowed, on behalf of myself and the 
same cosponsors, to modify my amendment.
  The PRESIDING OFFICER. Is there objection?
  Mr. PRESSLER. Reserving the right to object and I shall not object, 
this is the modification----
  Mr. LEAHY. Modifying the amendment that is at the desk, I would tell 
the distinguished manager.
  Mr. PRESSLER. I have no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 1288), as modified, is as follows:

       On page 137, strike out line 7 and all that follows through 
     page 144, line 19, and insert in lieu thereof the following:

     SEC. 402. OBSCENE PROGRAMMING ON CABLE TELEVISION.

       Section 639 (47 U.S.C. 559) is amended by striking 
     ``$10,000'' and inserting ``$100,000''.

     SEC. 403. BROADCASTING OBSCENE LANGUAGE ON RADIO.

       Section 1464 of title 18, United States Code, is amended by 
     striking ``$10,000'' and inserting ``$100,000''.

     SEC. 404. REPORT ON MEANS OF RESTRICTING ACCESS TO UNWANTED 
                   MATERIAL IN INTERACTIVE TELECOMMUNICATIONS 
                   SYSTEMS.

       (a) Report.--Not later than 150 days after the date of the 
     enactment of this Act, the Attorney General shall submit to 
     the Committee on the Judiciary of the Senate and House of 
     Representatives a report containing--
       (1) an evaluation of the enforceability with respect to 
     interactive media of current criminal laws governing the 
     distribution of obscenity over computer networks and the 
     creation and distribution of child pornography by means of 
     computers;
       (2) an assessment of the Federal, State, and local law 
     enforcement resources that are currently available to enforce 
     such laws;
       (3) an evaluation of the technical means available--
       (A) to enable parents to exercise control over the 
     information that their children receive by interactive 
     telecommunications systems so that children may avoid 
     violent, sexually explicit, harassing, offensive, and other 
     unwanted material on such systems;
       (B) to enable other users of such systems to exercise 
     control over the commercial and noncommercial information 
     that they receive by such systems so that such users may 
     avoid violent, sexually explicit, harassing, offensive, and 
     other unwanted material on such systems; and
       (C) to promote the free flow of information, consistent 
     with the values expressed in the Constitution, in interactive 
     media; and
       (4) recommendations on means of encouraging the development 
     and deployment of technology, including computer hardware and 
     software, to enable parents and other users of interactive 
     telecommunications systems to exercise the control described 
     in subparagraphs (A) and (B) of paragraph (3).
       (b) Consultation.--In preparing the report under subsection 
     (a), the Attorney General shall consult with the Assistant 
     Secretary of Commerce for Communication and Information.
     ``SEC. 405. EXPEDITED CONGRESSIONAL REVIEW PROCEDURE.

       ``(a) Requirement of Legislative Proposal.--The report on 
     means of restricting access to unwanted material in 
     interactive telecommunications systems
      shall be accompanied by a legislative proposal in the form 
     of a bill reflecting the recommendations of the Attorney 
     General as described in the report.
       ``(b) In General.--A legislative proposal described in (a) 
     shall be introduced by the Majority Leader or his designee as 
     a bill upon submission and referred to the committees in each 
     House of Congress with jurisdiction. Such a bill may not be 
     reported before the eighth day after the date upon which it 
     was submitted to the Congress as a legislative proposal.
       ``(c) Discharge.--If the committee to which is referred a 
     bill described in subsection (a) has not reported such bill 
     at the end of 20 calendar days after the submission date 
     referred to in (b), such committee may be discharged from 
     further consideration of such bill in the Senate upon a 
     petition supported in writing by 30 Members of the Senate and 
     in the House upon a petition supported in writing by one-
     fourth of the Members duly sworn and chosen or by motion of 
     the Speaker supported by the Minority Leader, and such 
     resolution shall be placed on the appropriate calendar of the 
     House involved.
       ``(d) Floor Consideration.--
       ``(1) In general.--When the committee to which such a bill 
     is referred has reported, or when a committee is discharged 
     (under subsection (c)) from further consideration of such 
     bill, it is at any time thereafter in order (even though a 
     previous motion to the same effect has been disagreed to) for 
     a motion to proceed to the consideration of the bill. The 
     motion is not subject to amendment, or to a motion to 
     postpone, or to a motion to proceed to the consideration of 
     other business. A motion to reconsider the vote by which the 
     motion is agreed to or disagreed to shall not be in order. If 
     a motion to proceed to the consideration of the bill is 
     [[Page S8328]] agreed to, the bill shall remain the 
     unfinished business of the respective House until disposed 
     of.
       ``(2) Final passage.--Immediately following the conclusion 
     of the debate on such a bill described in subsection (a), and 
     a single quorum call at the conclusion of the debate if 
     requested in accordance with the rules of the appropriate 
     House, the vote on final passage of the bill shall occur.
       ``(3) Appeals.--Appeals from the decisions of the Chair 
     relating to the application of the rules of the Senate or the 
     House of Representatives, as the case may be, to the 
     procedure relating to a bill described in subsection (b) 
     shall be decided without debate.
       ``(e) Constitutional Authority.--This section is enacted by 
     Congress--
       ``(1) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and as such it is 
     deemed a part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a bill described in subsection 
     (b), and it supersedes other rules only to the extent that it 
     is inconsistent with such rules; and
       ``(2) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at anytime, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.

     ``SEC. 405. ADDITIONAL PROHIBITION ON BILLING FOR TOLL-FREE 
                   TELEPHONE CALLS.''
  Mr. LEAHY. Mr. President, I yield to the distinguished Senator from 
Nebraska.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. EXON. I thank my friend from Vermont and I thank the Chair.


         Amendment No. 1362 to Amendment No. 1288, as Modified

  (Purpose: To provide protections against harassment, obscenity, and 
      indecency to minors by means of telecommunications devices)

  Mr. EXON. Mr. President, I call up amendment No. 1362, which is at 
the desk, and I am introducing this on behalf of myself and Senator 
Coats.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Nebraska [Mr. Exon] for himself and Mr. 
     Coats, proposes an amendment numbered 1362 to amendment No. 
     1288, as modified.

  Mr. EXON. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  Mr. LEAHY. Reserving the right to object, and I shall not object, Mr. 
President, am I correct this is in the form of a second-degree 
amendment to my amendment?
  The PRESIDING OFFICER. The Chair is trying to determine that.
  Mr. EXON. The amendment that I am offering is a second-degree 
amendment to the Leahy amendment that is pending, am I correct?
  The PRESIDING OFFICER. This amendment is a second-degree substitute.
  Without objection, reading of the amendment is dispensed with.
  The amendment is as follows:

       In lieu of the matter to be inserted, insert the following:

     SEC.  OBSCENE OR HARASSING USE OF TELECOMMUNICATIONS 
                   FACILITIES UNDER THE COMMUNICATIONS ACT 1934.

       (a) Offenses.--Section 223 (47 U.S.C. 223) is amended--
       ``(1) by striking subsection (a) and inserting in lieu 
     thereof:
       ``(a) Whoever--
       ``(1) in the District of Columbia or in interstate or 
     foreign communications
       ``(A) by means of telecommunications device knowingly--
       ``(i) makes, creates, or solicits, and
       ``(i) initiates the transmission of,

     any comment, request, suggestion, proposal, image, or other 
     communication which is obscene, lewd, lascivious, filthy, or 
     indecent, with intent to annoy, abuse, threaten, or harass 
     another person;
       ``(B) makes a telephone call or utilizes a 
     telecommunications device, whether or not conversation or 
     communication ensures, without disclosing his identity and 
     with intent to annoy, abuse, threaten, or harass any person 
     at the called number or who receives the communications:
       ``(C) makes or causes the telephone of another repeatedly 
     or continuously to ring, with intent to harass any person at 
     the called number; or
       ``(D) makes repeated telephone calls or repeatedly 
     initiates communication with a telecommunications device, 
     during which conversation or communication ensues, solely to 
     harass any person at the called number or who receives the 
     communication;
       or
       ``(2) knowingly permits any telecommunications facility 
     under his control to be used for any activity prohibited by 
     paragraph (1) with the intent that it be used for such 
     activity,

     shall be fined not more than $100,000 or imprisoned not more 
     than two years, or both.''; and
       (2) by adding at the end the following new subsections:
       ``(d) Whoever--
       ``(1) knowingly within the United States or in foreign 
     communications with the United States by means of 
     telecommunications device makes or makes available any 
     obscene communication in any form including any comment, 
     request, suggestion, proposal, or image regardless of whether 
     the maker of such communication placed the call or initiated 
     the communications; or
       ``(2) knowingly permits any telecommunications facility 
     under such person's control to be used for an activity 
     prohibited by subsection (d)(1) with the intent that it be 
     used for such activity;

     shall be fined not more than $100,000 or imprisoned not more 
     than two years or both.
       (e) Whoever--
       ``(1) knowingly within the United States or in foreign 
     communications with the United States by means of 
     telecommunications device makes or makes available any 
     indecent communication in any form including any comment 
     request, suggestion, proposal, image, to any person under 18 
     years of age regardless of whether the maker of such 
     communication placed the call or initiated the communication; 
     or
       ``(2) knowingly permits any telecommunications facility 
     under such person's control to be used for an activity 
     prohibited by paragraph (1) with the intent that it be used 
     for such activity,

     shall be fined not more than $100,000 or imprisoned not more 
     than two years or both.
       ``(f) Defense to the subsections (a), (d), and (e),
        restrictions on access, judicial remedies respecting 
     restrictions for persons providing information services 
     and access to information services--
       ``(1) No person shall be held to have violated subsections 
     (a), (d), or (e) solely for providing access or connection to 
     or from a facility, system, or network over which that person 
     has no control, including related capabilities which are 
     incidental to providing access or connection. This subsection 
     shall not be applicable to an individual who is owned or 
     controlled by, or a conspirator with, an entity actively 
     involved in the creation, editing or knowing distribution of 
     communications which violate this section.
       ``(2) No employer shall be held liable under this section 
     for the actions of an employee or agent unless the employee's 
     or agent's conduct is within the scope of his employment or 
     agency and the employer has knowledge of, authorizes, or 
     ratifies the employee's or agent's conduct.
       ``(3) It is a defense to prosecution under subsection (a), 
     (d)(2), or (e) that a person has taken reasonable, effective 
     and appropriate actions in good faith to restrict or prevent 
     the transmission of, or access to a communication specified 
     in such subsections, or complied with procedures as the 
     Commission may prescribe in furtherance of this section. 
     Until such regulations become effective, it is a defense to 
     prosecution that the person has complied with the procedures 
     prescribed by regulation pursuant to subsection (b)(3). 
     Nothing in this subsection shall be construed to treat 
     enhanced information services as common carriage.
       ``(4) No cause of action may be brought in any court or 
     administrative agency against any person on account of any 
     activity which is not in violation of any law punishable by 
     criminal or civil penalty, which activity the person has 
     taken in good faith to implement a defense authorized under 
     this section or otherwise to restrict or prevent the 
     transmission of, or access to, a communication specified in 
     this section.
       ``(g) No State or local government may impose any liability 
     for commercial activities or actions by commercial entities 
     in connection with an activity
      or action which constitutes a violation described in 
     subsection (a)(2), (d)(2), or (e)(2) that is inconsistent 
     with the treatment of those activities or actions under 
     this section provided, however, that nothing herein shall 
     preclude any State or local government from enacting and 
     enforcing complementary oversight, liability, and 
     regulatory systems, procedures, and requirements, so long 
     as such systems, procedures, and requirements govern only 
     intrastate services and do not result in the imposition of 
     inconsistent rights, duties or obligations on the 
     provision of interstate services. Nothing in this 
     subsection shall preclude any State or local government 
     from governing conduct not covered by this section.
       ``(h) Nothing in subsection (a), (d), (e), or (f) or in the 
     defense to prosecution under (a), (d), or (e) shall be 
     construed to affect or limit the application or enforcement 
     of any other Federal law.
       ``(i) The use of the term `telecommunications device' in 
     this section shall not impose new obligations on (one-way) 
     broadcast radio or (one-way) broadcast television operators 
     licensed by the Commission or (one-way) cable service 
     registered with the Federal Communications Commission and 
     covered by obscenity and indecency provisions elsewhere in 
     this Act.
       ``(j) Within two years from the date of enactment and every 
     two years thereafter, the Commission shall report on the 
     effectiveness of this section.
     [[Page S8329]]
     
     ``SEC.   . OBSCENE PROGRAMMING ON CABLE TELEVISION.

       ``Section 639 (47 U.S.C. 559) is amended by striking 
     `$10,000' and inserting `$100,000'.

     ``SEC.   . BROADCASTING OBSCENE LANGUAGE ON RADIO.

       ``Section 1464 of Title 18, United States Code, is amended 
     by striking out `$10,000' and inserting `$100,000'.

     ``SEC.   . SEPARABILITY.

       ``(a) If any provision of this Title, including amendments 
     to this Title or the application thereof to any person or 
     circumstance is held invalid, the remainder of this Title and 
     the application of such provision to other persons or 
     circumstances shall not be affected thereby.

     ``SEC.   . ADDITIONAL PROHIBITION ON BILLING FOR TOLL-FREE 
                   TELEPHONE CALLS.''

  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. EXON. I ask in a spirit of moving things along, I think there has 
been general agreement among the principals that we could have a time 
agreement on this matter and then a vote, and I would like to ask my 
friend from Vermont if he is prepared to propose the unanimous consent 
agreement that we all had agreed to.
  Mr. LEAHY. Mr. President, if the Senator will yield, I will soon 
propose--let me just outline what I propose--we agree to have a 2-hour 
time agreement evenly divided between the Senator from Nebraska and 
myself on a second-degree amendment, with a 20-minute time agreement 
evenly divided between the Senator from Nebraska and myself on the 
underlying Leahy, et al amendment, with the understanding, of course, 
that either or both sides could yield back time.
  So with that understanding, I ask unanimous consent that there be a 
2-hour time agreement on the Exon amendment evenly divided, at the 
expiration of which or the yielding back of time there be a vote on or 
in relation to the Exon amendment, and then, if the Exon amendment is 
not adopted, we go to the underlying Leahy amendment with a 20-minute 
time agreement evenly divided, with a vote following on or in relation 
to it.
  The PRESIDING OFFICER. Is there objection?
  Mr. EXON. Merely a matter of clarification. Did I understand the 
Senator from Vermont to include that after we finish the 2 hours 
equally divided or yielded back, we would have a vote at the end of 
that time?
  Mr. LEAHY. That was part of the unanimous consent, Mr. President; on 
the understanding that if the Exon amendment was defeated, then, of 
course, we would go to the underlying Leahy amendment. If it was not, 
then obviously the underlying Leahy amendment would be moot.
  The PRESIDING OFFICER. Is there objection?
  Mr. PRESSLER. Reserving the right to object, and I shall not, perhaps 
I should----
  Mr. LEAHY. Let me add that no other amendments be in order prior to 
the disposition of these amendments under the unanimous consent 
request.
  Mr. PRESSLER. I wonder if I should not try to reserve 10 minutes of 
time within that in case some Senator, from whom we have not heard, 
feels an irrepressible urge to make a speech.
  Mr. LEAHY. Might I suggest this to the Senator from South Dakota, 
that the two managers each have 5 minutes of that time.
  Mr. PRESSLER. Fine. I do not intend to use it, but someone may feel 
an irrepressible urge to make a speech.
  Mr. LEAHY. That sometimes happens, Mr. President, in this body. It is 
rare, but it sometimes happens.
  Mr. PRESSLER. The Senator will accommodate them.
  Mr. COATS. Mr. President, I also reserve the right to object. I wish 
to just clarify that in all of that request the Senator from Indiana 
will have an opportunity to speak on the contingency that--we are 
offering this together with the Senator from Nebraska, but on the 
contingency that in the event the amendment, the Exon-Coats amendment 
is defeated, I would like to have 5 minutes or so of that time before a 
vote on the underlying amendment.
  Mr. EXON. I am happy to agree to that.
  Mr. COATS. I do not object.
  Mr. PRESSLER. I just want to be sure to protect the rights of 
Senators who may be in committee. They are having two or three markups. 
This subject is of great concern to our Nation and to a lot of Senators 
who may be in a markup at this moment who want to speak. I am sure the 
managers will work them in for 5 minutes and perhaps the Senator from 
Indiana could help allocate that time.
  Mr. COATS. It is certainly not unheard of that Senators might have an 
irrepressible urge to speak on this or any other amendment.
  Mr. PRESSLER. I have no objection.
  Mr. LEAHY. I hope as the time goes on perhaps the points will be made 
and we may be able to yield back time and not use it all.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Who yields time?
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, I wish to thank my fine colleague from 
Indiana for all the help he has been and for a lot of work we have put 
in on this. I would be glad to yield to him for whatever time he wants 
to begin debate or, if he wishes me to proceed, I will do so at this 
time.
  Mr. President, I yield myself 10 minutes.
  Mr. President, I would like to start out this debate by reading a 
prayer that was offered by the Chaplain of the Senate on Monday, June 
12, that I hope will guide us once again. It was so much on point to 
what this Senator and the Senator from Indiana and others are 
attempting to do that I think it is worthy of repetition:

       Almighty God, Lord of all life, we praise You for the 
     advancements in computerized communications that we enjoy in 
     our time. Sadly, however, there are those who are littering 
     this information superhighway with obscene, indecent, and 
     destructive pornography. Virtual but virtueless reality is 
     projected in the most twisted, sick misuse of sexuality. 
     Violent people with sexual pathology are able to stalk and 
     harass the innocent. Cyber solicitation of teenagers reveals 
     the dark side of online victimization.
       Lord, we are profoundly concerned about the impact of this 
     on our children. We have learned from careful study how 
     children can become addicted to pornography at an early age. 
     Their understanding and appreciation of Your gift of 
     sexuality can be denigrated and eventually debilitated. 
     Pornography disallowed in print and the mail is now readily 
     available to young children who learn how to use the 
     computer.
       Oh God, help us care for our children. Give us wisdom to 
     create regulations that will protect the innocent. In times 
     past, You have used the Senate to deal with problems of air 
     and water pollution, and the misuse of our natural resources. 
     Lord, give us courage to balance our reverence for freedom of 
     speech with responsibility for what is said and depicted.
       Now, guide the Senators when they consider ways of 
     controlling the pollution of computer communications and how 
     to preserve one of our greatest resources: The minds of our 
     children and the future and moral strength of our Nation. 
     Amen.

  Mr. President, that is the end of the quote of the Chaplain of the 
Senate that I referenced earlier.
  If in any American neighborhood an individual were distributing 
pornographic photos, cartoons, videos, and stories to children, or if 
someone were posting lewd photographs on lampposts and telephone poles 
for all to see, or if children were welcome to enter and browse adult 
book stores and triple X rated video arcades, there would be a public 
outrage. I suspect and I hope that most people, under those 
circumstances, would immediately call the police to arrest and charge 
any person responsible for such offenses.
  I regret to report that these very offenses are occurring everyday in 
America's electronic neighborhood. It is not right to permit this type 
of activity in your neighborhoods and it is not right to ignore such 
activities via a child's computer.
  Section 402 of the Communications Decency Act, that I have just 
offered on behalf of myself and my colleague from Indiana, Senator 
Coats, a version of that, which has been slightly amended, was approved 
by the Senate Commerce Committee and added to S. 652, the 
Telecommunications Competition and Deregulation Act that stands for a 
simple proposition; that is, the laws which already apply to obscene, 
indecent, and harassing telephone use and the use of the mails should 
also apply to computer communications. That is the heart and soul of 
our amendment.
  Not only are children being exposed to the most perverted pornography 
and inappropriate communications, but adults are also being 
electronically stalked and harassed.
  I have had the opportunity to share with several Members of the 
Senate, on [[Page S8330]] both sides of the aisle, what I refer to as 
the ``blue book.'' When I have shown this to Members on both sides of 
the aisle, there has been shock registered, obviously, on the faces of 
my colleagues, shock because few understand what is going on today with 
regard to the pollution of the Internet. I cannot and would not show 
these pictures to the Senate. I would not want our cameras to pick them 
up. But I think they probably are best described by some other material 
that has come to my attention by people who are strongly supporting our 
proposition. It says:

       Warning. Do not open until further instructions. Offensive 
     material enclosed. Keep out of reach of children.

  I hope that all of my colleagues, if they are interested, will come 
by my desk and take a look at this disgusting material, pictures of 
which were copied off the free Internet only last week, to give you an 
idea of the depravity on our children, possibly our society, that is 
being practiced on the Internet today. This is what the Coats-Exon 
amendment is trying to correct.
  Mr. President, it is no exaggeration to say that the most disgusting, 
repulsive pornography is only a few clicks away from any child with a 
computer. I am not talking just about Playboy and Penthouse magazines. 
By comparison, those magazines pale in offensiveness with the other 
things that are readily available. I am talking about the most 
hardcore, perverse types of pornography, photos, and stories featuring 
torture, child abuse, and bestiality.
  These images and stories and conversations are all available in 
public spaces free of charge. If nothing is done now, the pornographers 
may become the primary beneficiary of the information revolution.
  I am the first to admit that solutions to this problem are not easy 
ones. It requires careful balance which protects legitimate use of this 
exciting new technology, respects the Constitution and, most 
importantly, provides the maximum protection possible for America's 
families and America's children.
  After months of discussion, negotiations, and research, I am pleased 
to offer the Exon-Coats refinement of the Communications Decency Act 
provisions included in the committee-reported bill. This modification 
represents a carefully balanced response to growing concerns about 
inappropriate use of telecommunications technologies.
  In committee, the decency provisions were refined to clarify and to 
focus on wrongdoers and to avoid imposing vicarious liability on 
innocent information service and Internet access providers who simply 
act as the mailmen, if you will, for computer messages. The 
modification now before the Senate further clarifies that the proposed 
legislation does not breach constitutionally protected speech between 
consenting adults nor interfere with legitimate privacy rights. The 
revision also provides strong protection for children.
  Mr. President, these revisions also make it certain that provisions 
of the Communications Decency Act in no way adversely affect the well-
litigated dial-a-porn statutes generally referred to as 47 U.S.C. 223 
(b) and (c).
  The Communications Decency Act is not a panacea. What the legislation 
will do is give law enforcement new tools to prosecute those who would 
use the computer to make the equivalent of obscene telephone calls, to 
prosecute electronic stalkers who terrorize their victims, to clamp 
down on the electronic distributors of obscene materials, and to 
enhance the chances of prosecution of those who would provide 
pornography to children via the computer.
  Parents, teachers and law enforcement should not be lulled into a 
false sense of security. Their vigilance will still be required even 
after this much-needed legislation is enacted into law. New voice, 
video, data and imaging options will soon enter every home or be 
available to America's children and neighborhood schools and libraries. 
This information revolution will give Americans unprecedented 
opportunities to enrich their lives, gain knowledge, and enhance their 
productivity.
  This legislation attempts to make the information superhighway a 
little bit safer for families and children to travel. The time to act 
is now. Delay only serves those who would endanger the Nation's 
children and those who use the new technology to distribute obscene 
materials or use the secrecy of the computer medium to harass others.
  I urge my colleagues to stand up for families and children and vote 
for the Communications Decency Act. Let us put politics aside and work 
together to protect the children.
  I yield the floor.
  Mr. LEAHY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Vermont is recognized.
  Mr. LEAHY. Mr. President, I yield myself whatever time I may consume.
  Nobody in here would disagree with the fact that we want to keep 
hardcore pornography away from our children. I am the proud parent of 
three children, and the proud father-in-law of three others. I cherish 
the time when those children were growing up.
  I had the advantage of growing up in a family where we learned to 
read at an early age. My parents had published a weekly newspaper when 
I was a child and owned a printing business throughout the time I was 
growing up until my adult life when they retired.
  They read to us as children and encouraged our reading. By the time I 
was 4 years old, I was reading books actively. By the time I finished 
third grade, I had read all of Dickens and most of Robert Louis 
Stevenson. I say that not to brag but because it happened with the 
encouragement of my parents. They guided me; they encouraged me to read 
and to read a good deal. They knew that, periodically, I might read 
something that they probably wished I would not, but they got me to 
read and read and read. It helped me through college, it helped me 
through law school, it helped me through my days as a district 
attorney, and it certainly helped me become a U.S. Senator.
  I also use Internet. I do town meetings on the Internet. I correspond 
with people around the world with the Internet. I call up information I 
need and plan trips to other countries. I call up information and maps, 
and so on. I find it is a most marvelous tool. Somebody raised the 
question about something in Australia the other day, and I could click 
into the Internet and pull up something from a country thousands of 
miles away, instantaneously.
  Now, I have not seen the things on the Internet--I do not doubt that 
they are there--that the Senator from Nebraska speaks of. I am six-
foot-four, and I looked over the shoulders of a huddle of Senators 
going through the blue book of the Senator from Nebraska. I saw one 
page of it, but I do not care to see that kind of filth. I also know 
that I use the Internet probably more than most, and I have not been 
able to find some of these things. But I do not question that they are 
there. I do worry about the universal revulsion for that kind of 
pornography--I assume it is universal in this body--and that we not 
unnecessarily destroy in reaction what has been one of the most 
remarkable technological advances, certainly in my lifetime--the 
Internet.
  It has grown as well as it has, as remarkably as it has, primarily 
because it has not had a whole lot of people restricting it, regulating 
it, and touching it and saying, do not do that or do this or the other 
thing. Can you imagine if it had been set up as a Government entity and 
we all voted on these regulations for it? We would probably be able to 
correspond electrically with our next-door neighbor, if we ran a wire 
back and forth, and that would be it. Had we had the Government 
involved every step of the way and had us engaged in micromanaging it 
every step of the way, we would not have the Internet that we have 
today.
  I think there is a better way to reach the goal that the Senator from 
Nebraska and I share. The goal is--and I yield to nobody in this body--
to keep really filthy material out of the hands of children.
  Maybe we can do it the same way my parents did. They guided me when 
we read. We have software that can allow parents to know what their 
children see on the Internet. Maybe some day we will accept the fact 
that there is some responsibility on the part of parents, not on the 
part of the U.S. Congress to tell children exactly what they should do 
and read and see and talk about as they are growing up. Maybe mothers 
and fathers ought to do what mine did and what my wife and I did with 
our children. [[Page S8331]] 
  In that regard, Mr. President, I also suggest that if we are going to 
get involved, maybe we should allow the elected Members of this body to 
do it. I was concerned when I heard the new Chaplain. I have not had a 
chance to meet him. Some day I will. After listening to his prayer, it 
seems like he was part of the debate. It reminds me of his predecessor 
who gave a long, long prayer here shortly after the arrest of O.J. 
Simpson saying that he worried about poor O.J. Simpson's state of 
being, and that we should pray for him and hopefully he would feel OK. 
Some of us suggested that maybe there ought to have also been prayers 
for the two people that were murdered. I do not mean in any way to 
suggest who committed the crime. But I recall suggesting that maybe if 
we are going to have the chaplains interject themselves into public 
debate, they may want to be evenhanded enough, at least, to pray for 
those who have died and not just for somebody who may be a wealthy ex-
football star.
  By the same token, I suggest to the Chaplain--who may be a very fine 
man, for all I know--that perhaps he should allow us to debate these 
issues and determine how they come out and maybe pray for our guidance, 
but allow us to debate them. He may find that he has enough other 
duties, such as composing a prayer each morning for us, to keep him 
busy.
  The concern I had in my amendment--my amendment speaks to the need to 
have a real study of just how we do this. I suggest one way, of course, 
is to have the kind of software that is now available, where parents 
can find out exactly who their children have been corresponding with or 
what they have been looking at on the Internet. Parents can make it 
very clear that if you want to use the computer, there are certain 
areas you do not go into.
  It is the same way we do it today. A parent can say, hey, you are 
going to bring books home and there are certain things that are going 
to be off limits--at least at your age. It is not that much different 
just because they might be able to call up the books, or whatever, at 
home. That is no different than calling up the books from the corner 
bookstore. I suspect that a number of these things are available there.
  My bill would require the Attorney General, in consultation with the 
National Telecommunications Information Administration of the 
Department of Commerce, to transmit to the Judiciary Committees in the 
Senate and in the House of Representatives a report of evaluating 
current laws and resources for prosecuting online obscenity and child 
pornography.
  If pornographers are out there, prosecute them. I have voted, as most 
of us have, to go after them. As a former prosecutor and as a parent, I 
find them the most disgusting people.
  What they do to our children is terrible, allowing authorities to go 
directly after them. Let us find out how we do that without destroying 
the Internet.
  For example, the first part of the amendment from the Senator from 
Nebraska and the Senator from Indiana would make it a felony not only 
to send obscene messages to another person, but apply the same penalty 
to sending an e-mail message with indecent or filthy words that you 
hope will annoy another person.
  For example, if someone sends you an annoying e-mail message and you 
respond with a filthy four-letter word, you may land in jail for 2 
years with $100,000 fine. If you picked up the phone and did the exact 
same thing, you are perfectly OK. But if you type it out and send it to 
the person electronically, no matter how annoyed you might be, tough.
  I do not think under this amendment a computer user would be able to 
send a private or public e-mail message with the so-called seven dirty 
words. Who knows when a recipient would feel annoyed by seeing a four-
letter word on-line?
  The second part of the amendment makes it a felony to send or receive 
over computer networks any obscene material. There is no requirement 
that the person soliciting and receiving the material knew it was 
obscene.
  In other words, you click on your Internet--and you can go through 
thousands and thousands of words--and find out that something you 
called up expecting it to be innocent is not, you could be prosecuted 
for receiving it under this statute.
  I think that goes too far. I think that could be far better worded. I 
think that if we had the Justice Department study the area and make 
recommendations that we then act upon within a very short period of 
time, which is also in my amendment, I think it would be far better.
  What I worry about is not to protect pornographers. Child 
pornographers, in my mind, ought to be in prison. The longer the 
better. I am trying to protect the Internet, and make sure that when we 
finally have something that really works in this country, that we do 
not step in and screw it up, as sometimes happens with Government 
regulation.
  When it came out that I was looking for an alternative approach, one 
that would allow the Justice Department to find a way to go after 
pornographers but to protect the free use of the Internet, I received 
these petitions almost immediately.
  Every page of this stack of documents that I am holding has dozens 
and dozens of names from across the Internet. These are people saying 
yes, that is the way to do it. Find out how to go after the 
pornographers, but keep our Internet working. There were 35,000 
petitions, in a matter of days.
  In that regard, Mr. President, I ask unanimous consent that an 
article in the New York Times magazine this Sunday by James Gleick, 
titled, ``This Is Sex?'' be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

           [From the New York Times Magazine, June 11, 1995]

                              This Is Sex?

                           (By James Gleick)

       At first glance, there's a lot of sex on the Internet. Or, 
     not at first glance--nobody can find anything on the Internet 
     at first glance. But if you have time on your hands, if 
     you're comfortable with computing, and if you have an 
     unflagging curiosity about sex--in other words, if you're a 
     teen-ager--you may think you've suddenly landed in 
     pornography heaven. Nude pictures! Foul language! Weird 
     bathroom humor! No wonder the Christian Coalition thinks the 
     Internet is turning into a red-light district. There's even a 
     ``Red Light District'' World Wide Web page.
       So we explore. Some sites make you promise to be a grown-
     up. (O.K.: you promise.) You try ``Girls,'' a link leading to 
     a computer at the University of Bordeaux, France. The message 
     flashes back: Document Contains No Data. ``Girls'' at Funet, 
     Finland, seems to offer lots of pictures (Dolly Parton! Ivana 
     Trump!)--Connect Timed Out. ``Girls,'' courtesy of Liberac 
     University of Technology, Czech Republic, does finally, with 
     painful slowness, deliver itself of a 112,696-byte image of 
     Madchen Amick. You could watch it spread across your screen, 
     pixel by tantalizing pixel, but instead you go have lunch 
     during the download, and when you return, there she is--in 
     black-and-white and wearing clothes.
       These pictures, by the way, are obviously scanned from 
     magazines. And magazines are the ideal medium for them. 
     Clearly the battle cry of the on-line voyeur is ``Host 
     Contacted--Waiting for Reply.''
       With old Internet technology, retrieving and viewing any 
     graphic image on a PC at home could be laborious. New 
     Internet technology, like browsers for the Web, makes all 
     this easier, though it still takes minutes for the typical 
     picture to squeeze its way through your modem. Meanwhile, 
     though, ease of use has killed off the typical purveyor of 
     dirty pictures, capable of serving hundreds of users a day 
     but uninterested in handling hundreds of thousands. The 
     Conservatoire National des Arts et Metiers has turned off its 
     ``Femmes femmes femmes je vous aime'' Web page. The good news 
     for erotica fans is that users are redirected to a new site 
     where ``You can find naked women, including topless and total 
     nudity''; the bad news is that this new site is the Louvre.
       The Internet does offer access to hundreds of sex 
     ``newsgroups,'' forums for discussion encompassing an amazing 
     spectrum of interests. They're easy to find--in the newsgroup 
     hierarchy ``alt.sex'' (``alt'' for alternative) comes right 
     after ``alt.sewing.'' And yes, alt.sex is busier than 
     alt.sewing. But quite a few of them turn out to be sham and 
     self-parody. Look at alt.sex.fish--practically nothing. 
     Alt.sex.bestiality--aha! just what Jesse Helms fears most--
     gives way to alt.sex.bestiality.hamster.duct-tape, and 
     fascinating as this sounds, when you call it up you find it's 
     empty, presumably the vestige of a short-lived joke. 
     Alt.sex.bondage.particle-physics is followed by 
     alt.sex.sheep.baaa.baaa.baaa.moo--help!
       Still, if you look hard enough, there is grotesque stuff 
     available. If pornography doesn't bother you, your stomach 
     may be curdled by the vulgar commentary and clinical how-to's 
     in the militia and gun newsgroups. Your local newsstand is a 
     far more user-friendly source of obscenity than the on-line 
     world, [[Page S8332]] but it's also true that, if you work at 
     it, you can find plenty on line that will disgust you, and 
     possibly even disgust your children.
       This is the justification for an effort in Congress to give 
     the Federal Government tools to control the content available 
     on the Internet. The Communications Decency Act, making its 
     way through Congress, aims to transform the obscene-phone-
     call laws into a vehicle for prosecuting any Internet user, 
     bulletin-board operator, or on-line service that knowingly 
     makes obscene material available.
       As originally written, the bill would not only have made it 
     a crime to write lewd E-mail to your lover; it would also 
     have made it a crime for your Internet provider to transmit 
     it. After a round of lobbying from the large on-line 
     services, the bill's authors have added ``defenses'' that 
     could exempt mere unwitting carriers of data, and they say it 
     is children, not consenting adults, they aim to protect. 
     Nevertheless, the legislation is a historically far-reaching 
     attempt at censorship on a national scale.
       The Senate authors of this language do not use E-mail 
     themselves, or browse the Web, or chat in newsgroups, and 
     their legislation reflects a mental picture of how the on-
     line world works that does not match the reality. The 
     existing models for Federal regulation of otherwise protected 
     speech--for example, censorship of broadcast television and 
     prohibition of harassing telephone calls--come from a world 
     that is already vanishing over the horizon. There aren't 
     three big television networks now, serving a unified mass 
     market; there are thousands of television broadcasters 
     serving, ever-narrower special interests. And on the 
     Internet, the number of broadcasters is rapidly approaching 
     the number of users: uncountable.
       With Internet use spreading globally, most live sources of 
     erotic images already seem to be overseas. The sad reality 
     for Federal authorities is that they cannot cut those off 
     without forcing the middlemen--on-line services in the United 
     States--to do the work of censorship, and that work is a 
     practical impossibility. Any teen-ager with an account on 
     Prodigy can use its new Web
      browser to search for the word ``pornography'' and click his 
     way to ``Femmes femmes femmes'' (oh, well, better luck 
     next time). Policing discussion groups presents the would-
     be censor with an even more hopeless set of choices. A 
     typical Internet provider carries more than 10,000 groups. 
     As many as 100 million new words flow through them every 
     day. The actual technology of these discussion groups is 
     hard to fathom at first. They are utterly decentralized. 
     Every new message begins on one person's computer and 
     propagates outward in waves, like a chain letter that 
     could eventually reach every mailbox in the world. 
     Legislators would like to cut off a group like 
     alt.sex.bondage.particle-physics at the source, or at its 
     home--but it has no source and no home, or rather, it has 
     as many homes as there are computers carrying newsgroups.
       This is the town-square speech the First Amendment was for: 
     often rancorous, sometimes harsh and occasionally obscene. 
     Voices do carry farther now. The world has never been this 
     global and this intimate at once. Even seasoned Internet 
     users sometimes forget that, lurking just behind the dozen 
     visible participants in an out-of-the-way newsgroup, tens of 
     millions of potential readers can examine every word they 
     post.
       If a handful of people wish to share their private 
     experiences with like-minded people in alt.sex.fetish.hair, 
     they can do so, efficiently--the most fervent wishes of 
     Congress notwithstanding--and for better or worse, they'll 
     have to learn that children can listen in. Meanwhile, if gun-
     wielding extremists wish to discuss the vulnerable points in 
     the anatomy of F.B.I. agents, they too can do so. At least 
     the rest of us can listen in on them, too. Perhaps there is a 
     grain of consolation there--instead of censorship, exposure 
     to the light. Anyway, the only real alternative now would be 
     to unwire the Information Superhighway altogether.
  Mr. LEAHY. I would note a couple things from the article. It points 
out that it is a sad reality for Federal authorities that they cannot 
cut off pornographers without forcing the middleman--the on-line 
services of the United States--to do the work of censorship. That work 
is a practical impossibility.
  A typical Internet provider carries more than 10,000 groups. As many 
as 100 million new words go through them every day. Are we going to 
have a whole new group in the Justice Department checking these 100 
million new words to find out if they are wrong?
  Some of the words might appear, just looking at their listings, to be 
something wild. There may, in fact, be nothing there.
  The article notes a listing for ``Femmes, Femmes, Femmes'', a French 
word for women. If you call up the listing, it is a catalog to the 
Louvre in Paris. Somebody has a sense of humor. But it gives everyone 
an idea. Is this person suddenly going to be under investigation 
because of his or her sense of humor?
  I am about to yield the floor, Mr. President, and reserve the balance 
of my time. Before I do that, I ask unanimous consent to have printed 
in the Record a list of groups ranging from the Association of American 
Publishers to the American Library Association, the Newspaper 
Association of America, to the Times Mirror, all of whom support my 
idea of a study in finding a better way of doing this.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                       Supporters of Leahy Study

       Association of American Publishers (AAP).
       Association of American University Presses (AAUP).
       The Faculty of the City University of New York.
       Interactive Working Group.
       Online Operators Policy Committee of the Interactive.
       Services Association.
       American Advertising Federation.
       American Association of Advertising Agencies.
       American Library Association.
       American Society of Newspaper Editors.
       Association of National Advertisers, Inc.
       Association of Research Libraries.
       Business Software Alliance.
       Center for Democracy and Technology.
       Computer and Communications Industry Association.
       Direct Marketing Association.
       Electronic Frontier Foundation.
       Feminists For Free Expression.
       Magazine Publishers of America.
       Media Access Project.
       National Public Telecomputing Network.
       Newspaper Association of America.
       People for the American Way Action Fund.
       Recreational Software Advisory Counsel
       Software Publishers Association.
       Times Mirror.

  Mr. LEAHY. I yield the floor, and I reserve the balance of my time.
  Mr. EXON. Mr. President, I yield 10 minutes to the Senator from 
Indiana.
  Mr. COATS. Mr. President, I want to start by thanking my colleague 
from Nebraska for his interest in this subject and for his willingness 
to work with me and our staff in putting together what I think is an 
important piece of legislation, and a very effective piece of 
legislation.
  Obviously, it is a difficult task, balancing first amendment rights 
with protections that go toward placing restrictions, in reasonable 
ways, so that particularly children are not recipients of obscene or 
indecent material.
  Mr. President, sometimes our technology races beyond our ability to 
stop and reflect. We are left with a very dangerous gap, a period of 
time when society is unprepared to deal with the results of such rapid 
change. That is the situation we face with the Internet. The Internet 
is a tool of great potential.
  Senator Leahy has said it opens a new world of opportunity. It has 
become, without, I believe, anybody specifically planning it or 
anticipating it, it has become one of the largest distributors of 
pornography in the world.
  One study found more than 450,000 pornographic images and text files 
are available to anyone with a modem. This vast library of obscenity 
and indecency was accessed 6.4 million times in just the last year.
  Now, we need to make sure what we are talking about here. We are not 
talking about what most people now have images in their mind as to what 
is available off the Internet. I looked at the Senator's blue book, and 
I would urge every Senator to look at that before they make a final 
decision on what we are doing here. It is important to understand the 
kind of material that is available. Everything imaginable. We are 
talking about images and text that deal with the sexual abuse of 
children. We are talking about images and words and sexual abuse of 
infants.
  By one estimate about a quarter of the images available involve the 
torture of women. We are dealing in many, many cases with perversion 
and brutality beyond normal imagination and beyond the boundaries of a 
civil society.
  These facts are clear, because it is available now in the Internet, 
and we have pictures of it if anybody wants to see it, or copies of the 
text that is available on the Internet.
  There is one more fact that ought to move the Senate from great and 
deep concern to immediate action here today. That is the fact that the 
Internet is the one area of communication technology that has no 
protection at all for children.
  Now, we face a somewhat unique, disturbing and urgent circumstance, 
because it is children who are the computer experts in our Nation's 
families. [[Page S8333]] 
  My generation--I have not figured out how to use the VCR yet. I have 
a blinking 12 I do not know how to get rid of. It is the children today 
who are trained from almost kindergarten on, on how to access the 
computer.
  They have technology available at their fingertips that most adults 
do not have. Sometimes in the interest of helping with their homework 
or for the development of our children, we place the computer either in 
a special room or even in their bedrooms.
  Of the 6.8 million homes with on-line accounts currently available, 
35 percent have children under the age of 18. The only barriers between 
those children and the material--the obscene and indecent material on 
the Internet--are perfunctory onscreen warnings which inform minors 
they are on their honor not to look at this. The Internet is like 
taking a porn shop and putting it in the bedroom of your children and 
then saying ``Do not look.''
  I think anybody who is a parent understands that is a pretty 
difficult situation to enforce. That really is a miscarriage of the 
responsibility that I think adults hold to our society, to our children 
in our society.
  We have all read the worst abuses of this new technology. Children, 
not realizing the danger, give out their names, their addresses, their 
phone numbers to people they meet over the Internet. They become easy 
targets for sexual abuse. Recently, one man, in an attempt to find out 
just how difficult a problem this was, posed--typed in on the 
computer--posed himself as a 13-year-old. In the course of one evening 
on-line he was approached by more than 20 pedophiles.
  I suggest that, as difficult and as horrendous as these stories are, 
the effect of this kind of material, this kind of practice is far 
broader. It does not turn all who see it into rapists and killers, but 
it does kill something about our spirit, particularly the spirit of our 
children. I think we have always felt a special responsibility and 
obligation to defend childhood through parents, through society; to 
make it, to the best extent we can, a safe harbor of innocence. It is a 
privileged time to develop values in an environment that is not hostile 
to our children.
  But the Internet has invaded that protected place and destroys that 
innocence. It takes the worst excesses of sexual depravity and places 
it directly into the child's bedroom, on the computer that their 
parents purchased in the thought it would help them do their homework 
or develop their intellect. When sexual violence and gross indecency 
are available to anyone at the touch of a button, both an individual or 
a culture become desensitized. It is not always that people emulate 
this material, but often you can become immune to it. The images and 
messages act like a novocaine on our national conscience. They numb our 
capacity for outrage.
  What used to outrage us now becomes almost commonplace. They have 
invaded our homes. They have invaded the minds of our children. I think 
they have numbed us to the shock that used to be present when this kind 
of material was exposed.
  This is an issue beyond partisanship. It is sponsored by a Democrat 
and Republican. I hope our concern will unite people across the 
ideological spectrum. A vote for the Exon-Coats amendment is a way to 
side with women endangered by rape and violence, to side with children 
threatened by abuse, to side with families concerned about the 
innocence of their children and the decency of our culture.
  The question, in my mind, is not if we should act but what we should 
we do. I believe the Exon-Coats amendment is a serious, thoughtful 
answer to that question. It is carefully crafted to be constitutional, 
to address the constitutional questions. But it is also designed to 
leave pornographers on the Internet, who would provide their material 
to children, with no place to hide.
  The approach we are taking has been legally upheld in the dial-a-porn 
statutes. It extends that approach, which has already proven its worth, 
to this new technology.
  What we are doing here is not new. What we are doing here is not 
something that has not been debated before this body. We are taking the 
standards adopted by the Senate, by the Congress, signed into law, that 
apply to the use of these kinds of communications over the phone wires 
and applied it, now, over the computer wires. It is just simply a 
different means of bringing a communication into a home--through the 
computer rather than through the phone. We are taking the same 
standards.
  This Senate, on November 16, 1989, voted 96 to 4 to adopt these 
standards; 96 Members of the Senate have already voted to adopt these 
standards and apply it to the telephone communication of obscenity and 
indecency. All Senator Exon and I are trying to do is apply those same 
standards now to this new means of reaching into our homes.
  The bottom line is simple. We are removing indecency from areas of 
cyberspace that are easily accessible to children. If individuals want 
to provide that material, they have to do so with barriers to minors. 
If adults want access to the material, they have to make an 
affirmative, positive effort to get it.
  Let me repeat that. That is the critical part of this bill. We are 
simply saying here if you are in the business of providing this 
material, you have a responsibility, and it is punishable by penalty of 
law if you violate that responsibility--I ask the Senator for 5 
additional minutes.
  Mr. EXON. I wish to yield whatever additional time the Senator from 
Indiana requires.
  Mr. COATS. I thank the Senator from Nebraska for the additional time.
  Mr. President, all we are saying is, if you are in the business of 
providing this material, you have to provide barriers so it does not 
get in the hands of children. If you are an adult who wants to receive 
this material, you have to call up and get it. You have to subscribe to 
it. You have to prove you are an adult before you receive it.
  What would our amendment do? It would clean up the Internet. We ban 
obscenity. And we require that indecency be walled off so children 
cannot have access.
  We also require commercial on-line services to adopt this standard. 
If they wish to provide indecent material, they have to make what we 
call an effective, good-faith effort to segregate it from access to 
children and, as the Senator from Nebraska has said, we protect women 
and children from sexual predators who use this technology to harass 
and to stalk.
  Critics of the amendment are going to say it will cripple or close 
the Internet. Nothing could be further from the truth. Our legislation 
includes reasonable protections for businesses and service providers 
who act in good faith to shield children from indecency. We provide 
defenses for those who do nothing more than merely provide access to 
the Internet. This means that small businessmen and others who simply 
have a computer in their office are not going to be subjected to the 
penalties when that computer is misused. It is important to note that 
both the chamber of commerce, representing business, and a number of 
national family groups concerned about pornography, have both endorsed 
this legislation. They have understood we have defined an approach that 
is strong but reasonable and realistic.
  Critics may also charge the standards we have set are too high and 
this will force businesses to deny children access to the Internet 
entirely, but that is not true. That is a scare tactic, not an 
argument. Our legislation simply provides the same protections for 
children that currently exist in every other sector of our society.
  Pornographic magazines today cannot be sold to minors. Telephones 
today cannot be used to provide indecent messages to minors. But 
magazine stores and telephone companies are alive and well. They still 
succeed because the reasonable efforts that we ask in the interests of 
children are not crippling demands.
  Mr. President, one of the most urgent questions in any modern society 
is how we humanize our technology, how we make it serve us instead of 
corrupt us. America is on the frontier of human knowledge but it is 
incomplete without applying human values.
  One of our most important values is the protection of our children, 
not only the protection of their bodies from violence but the 
protection of their minds and souls from abuse.
  We cannot and we should not resist change. But our brave new world 
must [[Page S8334]] not be hostile to the innocence of our children. 
The Exon-Coats amendment is a reasonable amendment. I hope that Members 
will support it.
  I am pleased to join the Senator from Nebraska in offering it to the 
Senate for its consideration.
  I yield the floor.
  Mr. FEINGOLD addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. LEAHY. Mr. President, unless the distinguished Senator from 
Nebraska is seeking recognition, I yield 20 minutes to the 
distinguished Senator from Wisconsin.
  The PRESIDING OFFICER. The Senator from Wisconsin is recognized.
  Mr. FEINGOLD. I thank the Chair.
  Mr. President, I rise in support of the amendment offered by the 
Senator from Vermont, and I am pleased to be a cosponsor of the 
amendment because I think that is the right approach. I oppose the 
second-degree amendment offered by the Senator from Nebraska.
  But I first want to applaud the Senator from Nebraska, Senator Exon, 
for his concern about the need to protect children from obscene and 
indecent material.
  No one has done more than he to raise the awareness of parents, 
educators, and legislators about the need to address the problem of 
materials on computer networks that may not be appropriate for 
children. One needs only to ``surf the net'' bulletin boards, read 
newspapers, periodicals, and listen to broadcast media to know that the 
question of obscenity and indecency on computer networks is one of the 
hottest topics around. The Senator for Nebraska is responsible for the 
debate on this important issue and I applaud his very genuine concern, 
his good intentions, and hard work to protect children.
  I have children of my own, and there are materials available through 
the Internet that would not be appropriate for them. Some of those 
materials skirt the boundaries of indecency or obscenity and other 
materials, while not indecent, are of an adult nature that my children 
may not have the maturity to understand at their age.
  So I, too, want to find methods to allow parents to protect their 
children from material on computer networks which they view as 
inappropriate without trampling on first amendment rights of the users 
of interactive telecommunications systems.
  I regret to say that I do not believe the Senator from Nebraska has 
revised the language as reflected in this second-degree amendment, 
which achieves that end.
  The Senator from Nebraska has gone a long way to revise the language 
of the Communications Decency Act to allay the concerns of 
antipornography groups, civil liberties organizations, and law 
enforcement officials who raised objections to the bill. His efforts to 
accommodate his colleagues only underscore his commitment to the 
welfare of our children.
  The language, as modified, now makes it a criminal offense, 
punishable by up to 2 years in prison and/or a $100,000 fine, to 
knowingly make, create, or solicit and initiate the transmission of, or 
purposefully make available any indecent--I emphasize the word 
``indecent''--communication, request, suggestion, proposal, image, or 
other communication to a person under 18 years of age.
  That would appear, on its face, to be within the scope of the 
Government's authority to regulate indecent speech directed at minors. 
The Supreme Court in the Pacifica Foundation case and other decisions 
has made it clear that the State may well have an interest in 
prohibiting indecency to minors.
  However, I, along with my colleague from Vermont, continue to have 
concerns about this provision. We share the goal of this provision, but 
disagree on the means to achieve that end.
  The crux of the problem, however, is that due to the unique nature of 
interactive telecommunications systems, attempts to prohibit indecent 
speech to minors on these networks raises questions of 
constitutionality.
  The Supreme Court, in the Sable decision, made it clear that any 
attempts to regulate indecent communications directed at minors must 
take into account the medium being used and the least restrictive means 
to achieve the goal of prohibiting indecency to minors. Thus, under 
Pacifica, offensive works could be banned from radio broadcasts during 
certain hours because there was, in effect, no other less restrictive 
means of preventing minors from being exposed to such materials.
  In contrast, Sable struck down broad Federal legislation seeking to 
ban certain communication via the telephone because there were 
alternative, less restrictive means available. The Federal statute in 
the Sable case was finally upheld when it was modified to require 
providers of sexually explicit telephone services, the so-called Dial-
A-Porn services, to adopt mechanisms such as credit card authorization 
or other means of verifying age to prevent minors from accessing such 
services.
  In other words, where alternative means are available to block access 
by minors to these services, those methods must be implemented rather 
than denying adults their constitutionally protected right to such 
material.
  The proposed amendment not only adopts an approach that is not the 
least restrictive, it has the potential to retard significantly the 
development of this new type of interactive telecommunications.


                  chilling effect on cyberspace speech

  I am concerned that this legislation will have a chilling effect on 
constitutionally protected speech on interactive communication 
networks, potentially slowing the rapid technological advances that are 
being made in this new technology.
  Because of the unique nature of interactive telecommunications 
networks, prohibiting indecency to minors without impacting 
constitutionally protected communications between adults must be 
carefully tailored.
  One of the most popular services accessed via the Internet is USENET, 
a series of interactive bulletin boards, news groups, and other 
participatory forums which are dedicated to different topics. They are 
literally thousands of these groups available on computer networks and 
they are used widely for discussion of everything from current events 
such as the legislation we are discussing today to completely obscure 
subjects. They are used for recreation, entertainment, business, 
research, and many other purposes.
  Users participating in those newsgroups may simply read the messages 
or they may post their own. There is no way to know who will be reading 
your message.
  Since it is possible that any minor whose home computer can access 
the Internet would also have access to the public bulletin board, one 
could make the case that the adult posting the so-called indecent 
message did so knowing that a minor might see the message.
  Thus, if this legislation became law, an adult participant on a 
bulletin board who posted a profane message using some of the ``seven 
dirty words'' on any subject could be subject to criminal penalties of 
up to 2 years in prison or a $100,000 fine, if a minor might read the 
message posted on that bulletin board.
  This threat of criminal sanctions could have a dramatic chilling 
effect on free speech on interactive telecommunications systems, and in 
particular, these newsgroups and bulletin boards accessed through the 
Internet. Quite simply, adults will have to watch what they say on 
these forums.
  Let me provide an example of how that might occur. According to an 
article in the Phoenix Gazette earlier this year, a large computer 
bulletin board was raided by the Arizona State Department of Public 
Safety and the local police for providing obscene material on their 
service. While months later the operators of that service had not yet 
been charged, it was reported that ``The crackdown had a chilling 
effect on providers of on-line services. Within days, operators of 
similar boards removed obscene files or eliminated public access to 
them.''
  Now, Mr. President, there is no issue raised when the legitimate law 
enforcement efforts to enforce anti-obscenity laws and ordinances have 
a chilling effect on the distribution of obscene materials. Under a 
constitutional interpretation in our country, obscenity does not have 
the same constitutionally protected status as nonobscene speech.
  However, Senator Exon's bill would likely have a chilling effect on 
protected speech--or speech which may be perceived to be indecent, but 
not obscene.
  Communication between adults through the Internet would likely be 
[[Page S8335]] reduced to the lowest common denominator--that which is 
appropriate for children. Mr. President, that is not free speech.


                indecency defined by community standards

  Second, Mr. President, the threat of criminal sanctions despite a 
user's lack of control over, or knowledge of, who views his/her 
message, is of additional concern given that indecency is defined based 
on community standards.
  The definition of indecency for computer networks hasn't been fully 
explored. For broadcast media, FCC has defined indecency as ``language 
or material that, in context, depicts or describes in terms patently 
offensive as measured by contemporary community standards for broadcast 
medium, sexual or excretory activities or organs''--including the so-
called seven dirty words.
  The nature of interactive telecommunications makes even the 
``community standard'' and entirely different matter. As a bulletin 
board user you may not even be aware of who will be reading your 
communication, let alone where they are located for purposes of 
figuring out what a community standard might be.
  It is unclear what would constitute a community standard for 
indecency? Whose community? That of the initiator or that of the 
recipient? Will all free speech on the Internet be diminished to what 
might be considered decent in the most conservative community in the 
United States?
  An article in the San Diego Union-Tribune in February of this year 
documented a case in which a Tennessee court convicted a California 
couple of violating obscenity laws with their sexually explicit 
bulletin board based and operated in California. The jury applied the 
community standards of Memphis because the materials from the bulletin 
board were downloaded there.
  Again, in the case of obscenity, the community standard is of less 
concern because obscene speech is not protected. But in S. 652, we are 
prohibiting protected speech, so-called indecent speech. The uncharted 
community standards for indecency pose a risk that few users will be 
willing to bear.


    indecency provisions could make illegal socially valuable forums

  Based on the definition which has been applied to broadcast media, we 
could declare the content of many bulletin boards indecent--including 
those containing medical and academic discussions, on-line support 
groups where users discuss the trauma of sexual and physical abuse, or 
bulletin boards which contain information on sexually transmitted 
diseases and AIDS and how one might prevent them.
  Arguably, while the content is of a mature nature, these types of 
forums have tremendous social value. However, if minors gained access 
to these services, those making the indecent comment could be subject 
to 2 years in prison. Many of these bulletin boards for adults would 
simply cease to exist.
  Would the threat of criminal sanctions and the unclear nature of an 
indecency standard have a chilling effect on free speech via computer 
networks? I say it will. You bet it will.
  Adults will be forced to self-censor their words, even if they did 
not intend those words for children and even if they are protected by 
the first amendment.
  Mr. President, the use of computer networks holds tremendous 
potential for the expansion of public dialog and discourse advancing 
the value of the first amendment. It is an industry that is growing by 
leaps and bounds.
  The business, educational, and social welfare potential of the 
information superhighway is almost without limit. It would be 
devastating to limit the potential of this medium by taking steps that 
could have the effect of silencing its users.


               different standards for the same materials

  An additional concern, Mr. President, is that this legislation will 
establish different standards for material which appears in print and 
on the computer screen. The legislation would make certain individuals 
subject to criminal penalties if they made their materials and 
publications available on computer networks to which minors had access. 
However, that same material, the same message would be perfectly legal, 
and fully protected under the Constitution, in a bookstore, or a 
library. If a minor stumbled across, or purposefully sought, indecent 
materials in a bookstore and simply looked at that material, the author 
of that material would not be subject to criminal penalties nor would 
the bookstore or library that stocked the material.
  I urge my colleagues to keep in mind that many published works are 
available over the World Wide Web through the Internet. There is even a 
``Virtual Library'' on the World Wide Web. Therefore it is entirely 
conceivable that we would have two separate standards for legality of 
the same works published in the print media and on electronic 
communications systems.
  Civil liberties advocates point out that under this bill it is 
possible that an individual who makes available electronically the 
novels such as ``Lady Chatterley's Lover,'' ``Catcher in the Rye'' by 
J.D. Salinger, or the many novels of Kurt Vonnegut such that they are 
potentially accessible to minors, could be subject to criminal 
penalties while could be found in any library and bookstore. Why the 
different standard?


   interactive media's unique technological characteristics must be 
                               considered

  The fundamental flaw in the language proposed by Senator Exon is that 
it attempts to regulate computer networks as we regulate broadcasting 
and telephones when it has little in common with either of them. 
Although the materials transmitted through interactive 
telecommunications systems often bear a greater resemblance to the 
print media, the fact remains that these interactive telecommunications 
systems have some entirely unique characteristics which need to be 
considered.
  It is a unique form of media posing differing challenges and 
opportunities. Unlike broadcast or print media, an individual on the 
Internet can be both a communications recipient and originator 
simultaneously. Congress needs to understand these differences before 
we can determine how best to protect children and the constitutional 
rights of Americans.


 Supreme Court Addresses Constitutionality of Content Regulation Based 
                    on Characteristics of the Medium

  The way in which the Supreme Court has dealt with obscenity and 
indecency questions as they relate to the first amendment has a lot to 
do with the structural characteristics of the medium in question.
  The Supreme Court has taken into consideration the scarcity of the 
medium as a public resource as well as the ability of the user to 
control the material he or she might view over the medium. The print 
media has been afforded a greater degree of first amendment protection 
because of the decentralized and nonintrusive nature of the medium. 
Newspapers are inexpensive to produce and to purchase, virtually 
unlimited in number, and are noninvasive--that is, it is easy for a 
consumer to avoid the media if they wish.
  Broadcasting, which uses the scarce public spectrum and which is more 
difficult to control from an end-user standpoint, has not enjoyed the 
same protection as print media. It is easier to come across indecent or 
offensive material while flipping through the channels on your 
television. Broadcast spectrum is also limited so courts have upheld 
content regulation to ensure that public resources furthered the public 
interest.
  Interactive communications are different, Mr. President. There is a 
greater ability on computer networks to avoid materials end users do 
not wish to receive than exists for either broadcast media or 
telephony, but arguably less than exists in print media.
  Users of the Internet and other on-line functions typically do not 
stumble across information, but go out surfing for materials on a 
particular subject. As such, they use search words, message headings, 
and the so-called gopher as their guide. Most newsgroups or bulletin 
boards that have sexually explicit materials are named such that there 
can be little doubt what types of materials one might encounter if you 
try to get into that area.


     Restriction of Protected Speech Justified To Serve Compelling 
          Government Interest Only For Least Restrictive Means

  In addition to characteristics of scarcity and user control, the 
Supreme Court has allowed the abridgement of [[Page S8336]] protected 
speech based on certain criteria. Over the years, the Court has 
carefully examined two factors when determining the extent to which 
content shall be subject to government controls without violating the 
first amendment:
  Whether there is a compelling government interest to abridge 
protected speech;
  Whether abridgement is accomplished in the least restrictive means.
  Mr. President, while the Supreme Court has recognized that there may 
be a compelling government interest in shielding minors from indecent 
communications, I do not believe that the provision in the Exon bill 
will serve that interest in the least restrictive means. The provision, 
while appearing to apply only to minors, will in fact restrict the free 
speech of adults.
  The interactive electronic communications market is growing and the 
technology is evolving rapidly. Contrary to what others might contend, 
it is not clear that there are not adequate technical means available 
to parents and service providers to screen out objectionable material 
for children.
  There is currently software available which allows parents and 
employers to screen out objectionable services or newsgroups on the 
Internet. On-line service providers also have the ability to provide 
parents with a choice of what types of information their children 
should access. Schools and universities that provide the service of 
connection to the Internet can also decide which types of news groups 
on USENET they will make available. Carnegie-Mellon University recently 
made offensive-news groups less accessible to students by taking their 
names off their master list.
  I want to clarify one other technical matter. The Senator from 
Nebraska presented a chart which indicated that one's home computer is 
connected directly to the Internet.
  That is not always accurate, Mr. President. In many cases, users need 
to access first a remote computer or connect with an access provider.
  In some cases, that service provider is an online service, like 
Prodigy or America On-Line. Other services merely provide the 
connection services, much like a common carrier to the home users.
  Why is this a crucial distinction? Because it makes clear there are 
ways to control what one receives on a computer. Because the access 
provider acts as an intermediary between the user and the Internet, 
they can also eliminate access to certain services. Many of those 
Internet access providers are already recognizing the market potential 
of providing parents and schools with the opportunity to control the 
access of children to some services on the network. And I am not just 
talking about the big ones like Prodigy and CompuServe. I am talking 
about Siecom, Inc., which is an Internet service provider in Grand 
Rapids, MI, which supplies 20 elementary and secondary schools with 
restricted one-way access to USENET discussion groups through the 
Internet. The company does not make available the news groups on USENET 
which may be inappropriate for children. That company is realizing that 
the simple service of not providing access to all the USENET services 
has been a marketing advantage for them.
  The PRESIDING OFFICER. The Senator has now used 20 minutes.
  Mr. FEINGOLD. I ask that I be yielded 5 minutes.
  Mr. LEAHY. I yield the Senator 5 minutes.
  The PRESIDING OFFICER. The Senator is recognized for 5 additional 
minutes.
  Mr. FEINGOLD. Mr. Krol states in his book, when explaining the 
technical needs of Internet users:

       No matter what level you're at, Internet access always 
     comes via an access provider; an organization whose job it is 
     to sell Internet access.

  He further indicates that Internet service providers are 
participating in a competitive market. That means the opportunity 
exists to solve at least part of the problem through the marketplace 
today, not through governmental prohibitions.
  None of the technical safeguards available, such as blocking software 
and provider screening, are perfect, but the nice thing is they do not 
violate the first amendment.
  Mr. President, I ask unanimous consent to print an article in the 
Record from the Wall Street Journal describing some of these 
technologies.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

              [From the Wall Street Journal, May 15, 1995]

    New Software Filters Sexual, Racist Fare Circulated on Internet


SurfWatch Program Addresses Renewed Cyberspace Fears Following Oklahoma 
                                 Blast

                          (By Jared Sandberg)

       Think of it as a parental hand shielding children's eyes 
     from the evils of cyberspace.
       That's the gist of a software program developed by 
     SurfWatch Software Inc., a Los Altos, Calif., start-up. The 
     program, expected to be released today, will allow Internet 
     users to block sexually oriented data transmitted via the 
     global computer network.
       ``The goal is to allow people to have a choice over what 
     they see on the Internet by allowing them to filter or block 
     sexually explicit material,'' said Jay Friedland, SurfWatch's 
     vice president of marketing. Mr. Friedland said the software 
     will also allow users to filter out files such as bomb-making 
     manuals and neo-Nazi screeds, which have been circulated by 
     hate groups on the Internet.
       A growing number of firms are racing to provide tools to 
     filter out pornographic and racist fare stored on the 
     Internet before the government takes action itself. The 
     proposed telecommunications-reform bill before the Senate 
     makes it illegal for individuals and corporations to put 
     sexually explicit material on the Internet. Last week, the 
     Senate held hearings in the wake of the Oklahoma bombing 
     regarding the use of computer networks to disseminate hate 
     literature that could incite violence.
       The government moves concern free-speech advocates, who 
     prefer a technological fix. ``We don't have to rely on the 
     government to attempt to censor everything on the Internet,'' 
     said Daniel Weitzner, deputy director of the Center for 
     Democracy and Technology, a civil-liberties group that 
     testified at last week's hearings. Users have no control of 
     broadcast media, other than to change channels or turn it 
     off. But in cyberspace, ``SurfWatch is a great example of the 
     flexibility and user control that is inherent in interactive 
     media,'' Mr. Weitzner said.
       On-line services such as Prodigy Services Co. only grant 
     Internet access to children with parental permission. Jostens 
     Inc. recently released software for schools that allows 
     teachers to block electronic bulletin boards that contain 
     pornographic pictures.
       SurfWatch's Mr. Friedland said the software contains the 
     Internet addresses of computers storing sexually explicit 
     material, blocking a user's attempt to access those 
     computers. But such porno-troves often are a moving target: 
     once users find out about them, those computers tend to get 
     overwhelmed by traffic, shut down and move elsewhere on the 
     network and take a new address.
       To counter that problem, SurfWatch will charge users a 
     subscription fee for software updates that include new 
     offending Internet addresses. The company is using a database 
     to search the Internet for words such as ``pornography'' and 
     ``pedophilia'' and make a list of Internet sites, which won't 
     be visible to users.

  Mr. FEINGOLD. Mr. President, clearly there are ways parents can exact 
control over what their children can access on their home computers. It 
is clearly preferable to leave this responsibility in the hands of 
parents, rather than have the Government step in and assert control 
over telecommunications. Whenever there is a choice between Government 
intervention and empowering people to make their own decisions, we 
ought to try first to use the situation of the approach that involves 
less Government control of our lives.
  It is also not clear that existing criminal statutes are incapable of 
enforcing laws to protect children on interactive telecommunications. 
There have been many reports of prosecution of illegal activity related 
to the transmission of obscenity using interactive telecommunications.
  So, Mr. President, I do not even think it is clear we do not have the 
authority today to prosecute online obscenity. The truth is we just do 
not know at this point. We need more information. However, it is 
entirely clear to me that Congress certainly should not abridge 
constitutionally protected speech if there are less restrictive means 
of serving the compelling Government interest.
  To conclude, that is why I strongly support, as an alternative, the 
efforts of the Senator from Vermont. This amendment requires an 
expeditious evaluation by the Department of Justice of the technology 
available now to allow parents to protect their children 
[[Page S8337]] from objectionable materials while upholding the values 
of the first amendment. The Attorney General must also evaluate whether 
existing laws are adequate to enforce criminal laws governing 
obscenity.
  This study, which has to be completed within 5 months, will provide 
Congress with the information we need before we consider legislation. 
Given the first amendment issues at stake here, I believe the Judiciary 
Committee of the Senate should also be given an opportunity to review 
this matter. I do not, in theory, object to some legislation.
  I simply want to work with my colleagues to determine how best to 
protect children, while at the same time protecting the rights of 
Americans to free speech.
  I will close with these remarks from an article in the Federal 
Communications Law Journal by Prof. Fred Cate. In the article, he 
discussed how electronic communications have changed the way we 
communicate and have even greater potential to revolutionize 
communications. He stated:

       If 60 years of the Communications Act of 1934 has taught us 
     nothing else, it must caution against excluding 
     communications media from the full protection of the first 
     amendment. To do so with today's electronic information 
     technologies would create an exception that would make the 
     rule of freedom of expression meaningless.

  Mr. President, I believe the Exon amendment, unfortunately, does 
create such an exception, and I urge my colleagues to oppose this 
language and support, as an alternative, the amendment of the Senator 
from Vermont.
  I urge my colleagues to vote accordingly when we vote. I thank the 
Chair and yield the floor.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. EXON. Mr. President, I yield myself 10 minutes.
  I have been listening with keen interest to my friends and 
colleagues, the Senator from Vermont and the Senator from Wisconsin. I 
hope that they will listen very carefully to some of the things this 
Senator has to say, because everything that they have brought up are 
things that I considered very long and very hard when I started working 
on this difficult situation a year ago. Nothing they said is new. I 
just think they are, without malice aforethought, putting some spin on 
the Exon-Coats amendment that simply is not there.
  I ask unanimous consent that Senator Byrd and Senator Heflin both be 
added as original cosponsors to the Exon-Coats amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. EXON. I appreciate very much Senator Byrd and Senator Heflin, two 
very distinguished lawyers, the latter, Senator Heflin, being the 
former chief justice of the supreme court of Alabama. I think both of 
them would not be a cosponsor of this Exon-Coats amendment unless they 
felt it had adequate constitutional safeguards.
  At this time, Mr. President, I ask unanimous consent that the 
following letters in support of the Exon-Coats amendment be printed in 
the Record.
  The first is from the Christian Coalition headed: ``Senators Exon and 
Coats Have Joined the Efforts. Support the Exon-Coats Antipornography 
Amendment.'' And we have the support of that organization.
  Next, a letter from the National Coalition for the Protection of 
Children and Families that has essentially the same message in 
different words.
  Next, Mr. President, a reference that Senator Coats made earlier in 
his excellent presentation. I pause for just a moment to thank him for 
all of his help and cooperation and for the excellent, forthright, 
factual statement he made in explaining what we are attempting to do 
and how seriously we consider this to be. That is why we are acting. 
Senator Coats mentioned the chamber of commerce supports this 
legislation. I have a letter from the chamber of commerce that I 
likewise will include in the unanimous-consent request.
  Next is the Family Research Council, along the same general line.
  Next is a news release from the National Law Center for Children and 
Families, of Fairfax, VA, that follows the same general category.
  Last but not least, a news release from Women of America Say ``Enough 
Is Enough.''
  I ask unanimous consent that those letters be printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

  Senators Exon and Coats Have Joined Their Efforts. Support the Exon-
                    Coats Anti-Pornography Amendment


                                          Christian Coalition,

                                    Washington, DC, June 13, 1995.
       Dear Senator: You may have received an earlier letter from 
     the Christian Coalition urging your support for the Coats 
     amendment to S. 652, the Telecommunications Reform Act. We 
     are pleased to see that the competing versions of anti-
     pornography legislation proposed by Senators James Exon and 
     Dan Coats have subsequently been reconciled into a joint 
     amendment. I write you now to urge your support for this 
     bipartisan computer pornography amendment.
       Pornography on the computer superhighway has become so 
     prevalent and accessible to children that it necessitates 
     congressional action. The comprehensive telecommunications 
     legislation which the Senate is currently debating is an 
     appropriate vehicle to address this critical problem, and we 
     urge the Senate not to let this opportunity go by.
       Although Senator Patrick Leahy and others may urge that the 
     matter be referred to the U.S. Department of Justice for its 
     review and analysis, we oppose such a course of action. The 
     increasing existence of computer pornography today requires 
     action, not more study.
       On behalf of the 1.6 million members and supporters of the 
     Christian Coalition, we urge you to support the Exon-Coats 
     amendment when it comes to the Senate floor. Thank you for 
     your attention to our concerns.
           Sincerely,

                                              Brian C. Lopina,

                                                         Director,
     Governmental Affairs Office.
                                                                    ____

                                        National Coalition for the


                            Protection of Children & Families,

                                    Cincinnati, OH, June 13, 1995.
     Hon. James Exon,
     U.S. Senate,
     Washington, DC.
       Dear Senator Exon: I am writing you on behalf of the 
     National Coalition for the Protection of Children & Families 
     to offer our strong support for your willingness to introduce 
     an amendment, along with Senator Coats, to the Telecom 
     legislation dealing with the problem of children's access to 
     pornography on computer networks. We believe that such 
     legislation is vital to the well being of our nation's most 
     important resource, its children.
       Unless the problem of computer pornography is addressed 
     now, millions of children will have access to the worst and 
     most violent forms of pornography via computer networks and 
     the Internet. Currently, almost any child with access to the 
     Internet can quickly download and view bestiality, torture, 
     rape, mutilation, bondage, necrophilia and other unspeakable 
     acts. The pornography industry has opened up a free store on 
     the Internet and invited our children to get whatever they 
     want. Pornographers have no right to hijack Cyberspace, which 
     offers a host of promising technologies which should be 
     available to children and families without fear of 
     encountering violent, degrading pornography. Our society now 
     faces a fundamental choice of whether we really believe that 
     the Internet is a public network where children will be 
     welcome, or rather, one which belongs just to pornographers 
     and their consumers.
       We have had the opportunity to review the language of the 
     ``Exon-Coats'' amendment in detail. We believe your careful 
     approach to amending the telecommunications legislation is 
     constitutional, wisely tailored to help protect children from 
     this heinous material, and effective in navigating complex 
     court precedents in this area.
       Thank you for your willingness to address these critical 
     issues. Your leadership on this issue is a great service to 
     the world's children.
           Sincerely,
                                                      Deen Kaplan,
     Vice President, Public Policy.
                                                                    ____

                                        Chamber of Commerce of the


                                     United States of America,

                                    Washington, DC, June 13, 1995.
     Members of the United States Senate:
       On behalf of the U.S. Chamber of Commerce Federation of 
     215,000 business members, 3,000 state and local chambers of 
     commerce, 1,200 trade and professional associations, and 72 
     American Chambers of Commerce abroad, we strongly urge your 
     support for the amendment to be offered by Senators Exon (D-
     NE) and Coats (R-IN) to S. 652, the ``Telecommunications 
     Competition and Deregulation Act of 1995,'' regarding 
     revisions to the Communications Decency Act.
       The Exon-Coats amendment firmly protects children against 
     obscene, indecent, and other types of objectionable 
     communications. It also preserves the interests of business 
     users of information systems. The language is rightfully 
     targeted to reach and prosecute the ``bad actors'' who 
     exploit the capabilities of information technologies to reach 
     children and unconsenting adults, [[Page S8338]] which we 
     support fully. Yet adequate defenses and safe harbors are 
     provided to ensure that American businesses can utilize these 
     telecommunications-based products and services to enhance 
     their competitiveness, address major business problems such 
     as employee training and customer service, and reach new 
     domestic and global market shares and suppliers--without 
     fearing unintended or uncertain liabilities flowing from the 
     actions of others.
       Unlike some previous proposals, this legislation provides 
     the certainty that businesses need to ensure that they can 
     employ online information technologies. The absence of this 
     certainty would create a broad and potent disincentive, 
     especially for small businesses, to the use of online systems 
     and the interconnection of private business systems with the 
     NII. The Chamber membership is calling on Congress to enact 
     telecommunications reform legislation to enhance our 
     children's lives and our business' productivity. This 
     amendment does both.
       Please vote ``Yes'' for the Exon-Coats amendment to S. 652.
           Sincerely,
                                                  R. Bruce Josten,
     Senior Vice President.
                                                                    ____

                                      Family Research Council,

                                    Washington, DC, June 13, 1995.
       Dear Senator: I wrote to you last week with my concern 
     about the pending anti-pornography amendments to the 
     Telecommunications Bill and urging your support of the 
     proposed Coats Amendment. Last night, Senator Exon agreed to 
     join Senator Coats in his legislative approach against the 
     obscenity and indecency polluting cyberspace. The Family 
     Research Council commends these Senators for their 
     willingness to take a stand on this unpopular issue. Today or 
     tomorrow, the Exon-Coats Amendment will be offered which will 
     criminalize commercial and non-commercial distribution of 
     hard-core pornography through computers, as well as keep all 
     forms of pornography out of the hands of the most vulnerable 
     ``Net surfers''--our children.
       I urge you to support the Exon-Coats Amendment to eliminate 
     ``cyberspace'' as a safe haven for pornographers.
       The Exon-Coats Amendment breaks new legal ground in the 
     fight against porn by criminalizing ``free'' obscenity traded 
     on the Internet, and by making it illegal to make indecent 
     material available to children.
       Importantly, the Exon-Coats Amendment still addresses the 
     problem of porn on basic cable packages. It will prohibit 
     cable programmers from forcing upon families channels which 
     feature indecent programs when they sign up for cable. The 
     indecent channels will be provided only upon specific 
     request.
       Computer pornography is the next great threat to our 
     children's hearts and minds. I commend Senator Coats and 
     Senator Exon for fighting an evil which transcends party 
     lines.
           Sincerely,
                                                    Gary L. Bauer,
     President.
                                                                    ____

Support Exon-Coats Computer Porn Amendment Says National Law Center for 
                         Children and Families

       The National Law Center for Children and Families (``NLC'') 
     is a non-profit legal advice organization which supports law 
     enforcement and governmental agencies in the prosecution and 
     improvement of federal and state laws dealing with obscenity 
     and the protection of children. NLC's Chief Counsel, Bruce 
     Taylor, feels that today's version of the ``Exon-Coats'' 
     amendment is both effective and constitutional. It would 
     criminalize the distribution of obscenity on the burgeoning 
     computer service networks, such as the ``Internet'', ``Use 
     Net'', and ``World Wide Web''. The amendment also 
     criminalizes the knowing distribution of ``indecent'' 
     material to minor children. Both provisions cover 
     noncommercial, as well as commercial, transmissions. This is 
     important, since present law does not cover indecency to 
     minors except for commercial dial-porn messages over the 
     phone lines. Also, the Exon-Coats amendment would clearly 
     cover all distributions of hard-core obscenity over the 
     computer networks, whereas existing law has been enforced 
     only against commercial sales of obscenity by common carrier 
     and computer.
       The vast amount of hard-core pornography on today's 
     computer bulletin boards is placed there indiscriminately by 
     ``porn pirates'' who post freely available pictures of 
     violence, rape, bestiality, torture, excretory functions, 
     group sex, and other forms of hard and soft core pornography 
     which are as available to teenager computer users as to men 
     who
      are addicted to pornography. A tough federal law is needed 
     to deter such unprotected and viciously harmful activity 
     and the Exon-Coats bill does just that, making such 
     activity a felony punishable by up to two years in prison 
     and $100,000 in fines.
       Many of the previous provisions of the Exon bill were 
     criticized by pro-family groups as too lenient and providing 
     too many defenses for pornographers, as well as for the on-
     line computer service access providers, such as Prodigy, 
     CompuServe, NETCOM, and America On Line. The present version 
     of the Exon-Coats amendment would exempt the phone company 
     carriers and computer access providers only to the extent 
     that they provide mere access for users to connect to the 
     services and boards of other companies and individuals beyond 
     their control. To the extent any phone or computer access 
     company would offer obscenity on their own boards, they would 
     be as liable as anyone else. Likewise for making indecent 
     material available to minors under age 18, if they do it--
     they are liable, but if they don't do it--they aren't liable 
     if someone else does it. This puts the primary criminal 
     liability on those who distribute obscenity to anyone and on 
     those who make indecency available to minors without taking 
     reasonable steps to limit it to adults. Although some people 
     and groups may feel that the phone and computer access 
     providers should bear responsibility for the traffic in 
     obscenity and indecency that is available to minors, there 
     are Constitutional limitations that apply by law to any act 
     of Congress in these regards. One, regulations to protect 
     minors from indecent speech must be the ``least restrictive 
     means'' to protect minors while allowing adults access to 
     non-obscene speech. Second, the law cannot impose strict 
     liability for obscenity. The Exon-Coats amendment is designed 
     to satisfy both constitutional requirements, while still 
     providing a serious criminal deterrent to those who would put 
     obscenity onto the computer nets or who would publicly post 
     indecent materials within easy reach of children.
       The amendment, therefore, contains ``good faith'' defenses 
     that would allow any company, carrier, internet connector, or 
     private individual to create reasonable and effective ways to 
     screen children out of adult conversations and allow adults 
     to use indecent, nonobscene, speech among adults. This should 
     encourage the access providers to take steps to enforce 
     corporate responsibility and family friendly policies and 
     monitor their systems against abuse. When they do take such 
     steps, the good faith defense would protect them from 
     becoming liable for unfound or unknown abuses by others, and 
     that is all we think the law can ask of them at this point. 
     There is only so much that can be done in a way that is 
     ``technically feasible'' at any point in time, and the Exon-
     Coats bill would not require anyone to take steps that are 
     not technically feasible and does not, and should not, expect 
     anyone to take all steps that may be technically possible. 
     This bill would also allow the States to enforce their own 
     obscenity and ``harmful to minors'' laws against the 
     pornographers and porn pirates. If the chose to regulate the 
     carriers and connectors, they would be bound by the Supremacy 
     Clause of the Constitution and the First Amendment to using 
     consistent measures. This is not inconsistent with existing 
     requirements for the States to meet under any criminal law. 
     The joint role of federal and state prosecution of those who 
     distribute the obscenity, and indecency to minors, is thus 
     preserved.
       The good faith defense also allows responsible users and 
     providers to utilize the existing regulations from the F.C.C. 
     for dial-porn systems until such time as the F.C.C. makes new 
     regulations specifically for the computer networks. This 
     means that a company or individual who takes a credit card, 
     pin number, or access code would be protected under present 
     F.C.C. rules if a minor stole his parent's Visa card or dad's 
     porn pin number. In other words, some responsibility still 
     resides with parents to watch what
      their kids are watching on the computer. This is serious 
     business and there is a lot of very harmful pornography on 
     the ``Internet'', so parents better take an interest in 
     what their children have access to, but cannot expect 
     every one else to solve the entire problem for them. 
     Federal law can make it a crime to post hard-core 
     obscenity on the computer boards, but many people are 
     willing to break that law. The porn pirates are posting 
     the kind of porn that hasn't been sold by the pornography 
     syndicate in their ``adult'' bookstores in nearly 20 
     years. This law should deter them from doing that any 
     longer and it would allow federal prosecutors to charge 
     them for it now.
       The defenses to indecency are available to every one, so 
     that every one has a chance to act responsibly as adults in 
     protecting children from indecency. This is what the Supreme 
     Court will require for the indecency provisions to be upheld 
     as ``least restrictive'' under the First Amendment. 
     Conversely, no one has a defense to obscenity when they 
     distribute or make obscenity available. The only exception to 
     this is for the carriers and connectors in their role as mere 
     access connectors, only then would they be exempt from the 
     obscenity traffic of others. However, if the on-line service 
     providers go beyond solely providing access, and attempt to 
     pander or conspire with pornographers, for instance, then 
     they would lose their obscenity exemption and be liable along 
     with every one else. This is a limited remedy to prevent the 
     bill from causing a ``prior restraint'' on First Amendment 
     rights. This bill would be nothing at all if it were struck 
     down or enjoined before it could be used against those who 
     are posting, selling, and disseminating all the pornography 
     on the computer networks.
       There has been some criticism that this bill in adopting 
     good faith defenses, would make it ineffectual and that this 
     would weaken the bill in the same way that the existing dial-
     porn law is not completely effective. We disagree. The 
     defenses in the dial-porn law were necessary to having that 
     law upheld by the courts. Without them, it was struck down by 
     the Supreme Court. Only after the F.C.C. provided its 
     technical screening defenses was the law upheld by the 
     federal appeals courts. This law adopts those 
     [[Page S8339]] constitutionally required measures for 
     indecency and for obscenity only for the mere access 
     providers. The dial-porn law has removed the pre-recorded 
     message services from the phone lines. The pornographers have 
     gone to live credit card calls. To the extent they are still 
     obscene, they can and should be prosecuted by the Department 
     of Justice, with the help of the F.B.I. That is what it will 
     take to remove the rest of the illegal dial-porn services. 
     The most ineffective part of the dial-porn law is not the 
     F.C.C. defenses, they are fine. What is broken is the phone 
     company defense in the statute, 47 U.S.C. Sec. 223(c)(2)(B), 
     that allows the bell companies to rely on ``the lack of any 
     representation by a provider'' of dial-porn that the provider 
     is offering illegal messages. This means that if the dial-
     porn company does not tell the phone company that the 
     messages are obscene or going to children as indecency, then 
     the phone company doesn't have to block all the dial-porn 
     lines until an adult subscribes in writing. This is not 
     workable and should be fixed by Congress. The dial-porn law 
     should also be amended to give good faith reliance only on a 
     false representation by a dial-porn provider. If the phone 
     company doesn't know about a dial-porn service, then they 
     should not be responsible. However, the phone company should 
     block all the dial-porn lines and only unblock them on adult 
     request. This is the provision that is causing the phone 
     companies not to act, not the F.C.C. defenses. There is no 
     such provision in the Exon-Coats amendment that would allow 
     the carriers or connectors to wait for the pornographers to 
     confess guilt before they must act. If they know, they must 
     act in good faith. No more, no less. This computer porn law 
     is, therefore, better than the existing dial-porn law in that 
     respect.
       This amendment would allow federal prosecutions against the 
     pornographers and porn pirates immediately, thus removing 
     much of the hard-core material from the networks that the 
     carriers would be providing access to anyway. This can't wait 
     several months or years. If Congress has to exempt the 
     connectors as long as they merely carry the signal and 
     otherwise act in good faith, then so be it. It they abuse it, 
     then Congress can take that break away when it is shown that 
     they don't deserve it. In the meantime, this law will give 
     federal law enforcement agencies a tool to get at those who 
     are responsible for distributing the obscenity that we all 
     complain of right now. It is a good and constitutional law 
     and arguments that it is not enough are not true, not 
     realistic, and could cause Congress to bypass this 
     opportunity to enact an effective remedy to protect the 
     public and our children from this insidious problem. Senators 
     Exon and Coats have done an admirable and honorable job in 
     forcing this issue to a resolution. They have agreed to a 
     tough and fair law, with reasonable exemptions and defenses 
     for legitimate and good faith interests. The effective role 
     of alternative measures, like that of Senators Grassley and 
     Dole, cannot be overlooked as part of the pressure that 
     brought this matter to a successful point. The efforts to 
     kill all effective action, such as the pornography protection 
     and delay the bill of Senator Leahy of Vermont would offer to 
     forego a criminal bill in favor of more ``study'', must be 
     rejected as unreasonable and Congress should act immediately 
     to criminalize obscenity on the computer networks and forbid 
     indecent material being sent or made available to minors.
                                                                    ____

                               ``Enough Is Enough!'' Campaign,

                                    Washington, DC, June 14, 1995.

  Women of America Say ``Enough Is Enough!'' in Support of Exon-Coats 
                        Computer Porn Amendment

       The ``Enough is Enough!'' campaign is a non-partisan non-
     profit organization which educates citizens about the harms 
     of pornography and its link to sexual violence. ``Enough is 
     Enough!'' is dedicated to eliminating child pornography and 
     removing illegal pornography from the marketplace.
       According to Dee Jepsen, President of ``Enough is 
     Enough!'', ``We represent thousands of women and concerned 
     men across America standing together in support of sound 
     legislative measures that will enhance law enforcement and 
     prosecution of the distribution of illegal pornography to 
     children.''
       ``Furthermore'', states Donna Rice Hughes, Communications 
     Director for the campaign, ``the current version of the Exon-
     Coats amendment will provide greater protection for children 
     from computer pornography's invasion into America's homes and 
     schools and still meet constitutional scrutiny.''
       This measure is an essential step in protecting children 
     from heinous forms of pornography available online.

  Mr. EXON. Mr. President, let me now, if I might, go into some matters 
that I think are tremendously important.
  First, I notice that my friend and colleague from Vermont indicated 
he has some 25,000 signatures that he has piled up on the desk down 
there from people who support his efforts, and his efforts are 
supported, of course, by my friend and colleague from Wisconsin.
  What they propose to do with the underlying amendment is to punt, to 
recognize there is a problem that they both have, but what they are 
suggesting we do is just delay a punt.
  We come from the football State of Nebraska. That is what the 
Nebraska football team does, Mr. President. Fourth down and 32 yards to 
go on their own 3-yard line, they always punt, except when they are 
down near the end of the game and they recognize the serious situation 
that they might be in and they might not get the ball back. Then they 
do not punt. They move aggressively forward, which is what we are 
trying to do in the thoughtful manner embodied in the Exon-Coats 
proposal.
  Those people that my friend and colleague from Vermont is supporting 
in carrying the ball would be interested in knowing, I am sure, what 
generated many of those letters that have been offered in debate by the 
Senator from Vermont.
  I happen to have a copy of a letter in this regard, which generated 
many of those letters, provided to me by my grandson. My grandson is 25 
years old, and he is old enough to take care of himself. But he thought 
that I would be interested in this. This is a letter that has been 
widely distributed on the e-mail system. It says: ``The obscenity of 
decency. With the introduction of Senator J.J. Exon's Communications 
Decency Act, the barbarians are really at the gate.''
  I have been called many things in my life, but never before have I 
been called a barbarian. I would hope that the Senator from Vermont 
would advise the people that he is using here as support for his 
position that his mutual friend, Jim Exon, is not a barbarian under any 
normally accepted definition of the term.
  Let me go into some of the things that I have been hearing and 
listening to and attempt, as best I can, to maybe straighten out some 
of the concerns that I think are very real and sincere, as stated by my 
colleague from Vermont and my colleague from the State of Wisconsin.
  First, let me say that the Exon-Coats amendment does not destroy, 
does not retard, does not chill accepted information, pictures, or 
speech. To the contrary. We are trying to make the Internet system, 
which is displayed here on this chart before me, safer, better, and to 
make it more frequently used.
  I do not know the authenticity of the statement that I am about to 
make. But I have read that it has been estimated that up to 75 percent, 
Mr. President, of present computer owners have refused to join the 
Internet system with their home computer, precisely because they know 
and they fear--and evidently they have seen or been advised as to what 
I have here in the blue book. Once again, before anyone votes against 
the Exon-Coats amendment, if they are interested, I am willing to share 
this information with them. It has pictures in it that were taken 
directly off the Internet system last week. So I simply say we are not 
trying to destroy, we are not trying to retard and we are certainly not 
trying to chill the great system that is the Internet. Anyone who 
believes that is very badly misinformed.
  I have also heard a great deal today about the parents' 
responsibilities, which, I guess, means that the parents that have such 
responsibilities must follow their children around all of the time. 
This is not simply something that the children have available to them 
at home. More likely, they are going to be introduced to it not at 
home, but in the schools. We have just made a concession in the 
telecommunications bill before us to give the schools and libraries a 
break, if you will, because we want them involved in this. The schools 
will be sources of the information that Senator Coats and I have been 
describing. The library is a place where they can pick it up. We also 
talk about some of the software and the off-limits proposition that 
some of the software may or may not provide.
  I simply say, Mr. President, that those who know what is going on 
with the Internet today--those who have seen it firsthand, those who 
are concerned about making the Internet the greatest thing that has 
ever happened as far as communications exchange is concerned--are the 
ones that are supporting the Exon-Coats amendment. We want to make it 
even bigger, and [[Page S8340]] we want to make it even better, but not 
for raunchy pornography that would turn most people off. And to the 
25,000 people who want to call this Senator a barbarian, I simply say 
that, evidently, they are so selfish--at least their actions are so 
selfish, that they simply say: We do not want to give up anything. We 
want to be able to see what we want to see, where we want to see it, 
any time we want to see it.
  I simply say that what we are trying to do is constructively make 
some changes that are necessary. Let me review for just a moment, if I 
can, and make sure that everyone understands what the Internet is all 
about. The Internet, basically, is in the center of this chart or 
graph. From listening to many of my colleagues today, those who do not 
support the Exon-Coats amendment, I think that they view this as the 
way the Internet is. First, you have a child at home or an adult at 
home entering the Internet, and they have to buy that service from one 
of the many people who make money charging the entry into the Internet, 
where they have special provisions, special facilities which that 
particular provider might apply.
  In addition to that, they apply for entry into the massive Internet 
itself. From the Internet, the child or the adult can go worldwide. We 
can go into all kinds of sources of information--the Library of 
Congress, any of the great universities, and all of the other massive 
sources of information. I think too many people believe that because 
the pornography bulletin board is sitting out here to the side, that 
you have to work to get to the pornography bulletin board. Mr. 
President, that is simply not the case. The pornographers have invaded 
the Internet down here, so that it is freely available, without cost--
all of the outlandish, disgusting, pornographic pictures of the worst 
type, that some of my colleagues think we can handle by punting. This 
is not a time to punt; this is the time to act.
  I want to bring reference to the fact that this is the system that 
the Coats-Exon amendment is trying to create--one that is envisioned as 
the way the Internet system works. Actually, the way the Internet 
system is working today--especially with regard to totally rampant 
pornography--is that when the child or adult at home goes into the 
Internet system, all too often he is looking for something other than 
basic information. He would have to pay if he wants to subscribe to the 
pornography bulletin board. But, Mr. President, it goes both ways. 
These people--the moneymakers on pornography up here--are feeding 
information because it can be fed free of charge into the Internet 
system. The pictures I have here in the blue book--there are a whole 
series of them--were taken freely off of the Internet system free of 
charge and readily available to anyone who has a computer and has the 
basic knowledge.
  What these pornographers do is place free-of-charge material on the 
Internet that is designed to lure people over to their bulletin board 
so they can maybe hook them into a monthly charge of some type, to have 
available whenever they want from their pornography which is a library 
full of everything you can imagine.
  What they are doing is taking previews of what they have in here. 
They are putting them, open and at large, on the Internet system for 
all people to see, not unlike, Mr. President, the previews of coming 
attractions that we see when we go to the movies. This is what we will 
see next.
  Obviously, many of the pictures, as evidenced by the blue book, are 
things that are readily available. They, of course, have a way of 
referencing back. If you like this picture, come into our porno shop 
over here. For a small fee, we will show you the real thing. The real 
thing is right here when it comes to pornography.
  Mr. President, I simply say, once again, that while I am sure my 
friend from Vermont and my friend from Wisconsin are sincere, I 
appreciate very much the very kind things that both have said about the 
efforts of this Senator and Senator Coats because we have brought 
attention to this.
  It is the intention of the Senator from Nebraska and the Senator from 
Indiana, though, now that we have called attention to it, we are going 
to do something about it. We do something about it in a fully 
constitutional way. We are not going to trample on the constitutional 
rights of anyone.
  I reserve the remainder of my time.
  Mr. LEAHY. Mr. President?
  Mr. COATS. Mr. President, could the Senator yield for a question, so 
we can get a sense where we might be with time.
  Mr. LEAHY. I yield.
  Mr. COATS. Mr. President, I am not aware of any specific requests for 
time from anyone on our side. We might be able to yield some time back.
  Mr. LEAHY. Mr. President, I would be happy to. I wanted to respond, 
as I am sure the Senator from Indiana realized I would, to a couple of 
points.
  Mr. COATS. We could get the word to Members.
  Mr. LEAHY. I hope we can vote by 5 o'clock.
  Mr. COATS. I thank the Senator.
  Mr. LEAHY. I have spoken before on the floor of my concerns with the 
Exon-Coats amendment. Last Friday, my good friend from Nebraska, 
Senator Exon, filed a revised version of the Decency Act as amendment 
No. 1268. The revisions made by Senator Exon reflect a diligent and 
considered effort by him and his staff to correct serious problems that 
the Department of Justice, I and others have pointed out with this 
section of the bill.
  I commend Senator Exon for proposing in his amendment the striking of 
the provision in the bill that would impose a blanket prohibition on 
wiretapping digital communications. This section would have totally 
undermined the legal authority for law enforcement to use court-
authorized wiretaps, one of the most significant tools in law 
enforcement's arsenal for fighting crime.
  If that particular section were passed as introduced, the FBI would 
not have been able to use court-ordered wiretaps to listen in on 
digital calls made by kidnappers, terrorists, mobsters, or other 
criminals. This is an excellent change that I heartily endorse.
                 problems with senator exon's amendment

  But, even with this fix, serious constitutional and practical 
problems remain in Senator Exon's proposed legislation.
  The first part of the amendment would make it a felony not only to 
send obscene electronic messages to harass another person, but would 
apply the same penalty to sending an e-mail message with an indecent or 
filthy word that you hope will annoy another person.
  For example, if someone sends you an annoying e-mail message and you 
respond with a filthy, four-letter word, you may land in jail for 2 
years or with a $100,000 fine.
  Under this amendment, no computer user will be able to send a private 
or public e-mail message with the seven dirty words in it. Who knows 
when any recipient will decide to feel annoyed by seeing a four-letter 
word online?
  The second part of the amendment would make it a felony to send out 
or receive over computer networks any obscene material. There is no 
requirement that the person soliciting and receiving the material knew 
it was obscene. This means that a computer user could be guilty of 
committing this crime at the moment of clicking to receive material, 
and before the user has looked at the material, let alone knows the 
material to be, obscene.
  This means that an adult sitting at his computer in the privacy of 
his own home, who wants to get a copy--consistent with our copyright 
laws--of a magazine article on stock car racing, could be subject to 2 
years in jail and a $100,000 fine for downloading the magazine, which 
unbeknownst to the user also contains obscene material.
  This also means that if you are part of an online discussion group on 
rape victims, your computer is programmed to automatically download 
messages sent into the discussion group. If a participant sends into 
the group a graphic story about a rape, which could be deemed obscene, 
this story will automatically be downloaded onto your computer, and you 
would be criminally liable under this amendment, even before you read 
the story.
  This may mark the end of online discussion groups on the Internet, 
since many users do not want to risk 2 years in jail because of what 
they might receive from online discussion groups. This amendment would 
chill free speech and the free flow of information [[Page S8341]] over 
the Internet and computer networks.
  The amendment does give one out to users who meet some government, 
FCC determined standards to take steps to protect themselves from 
receiving material the government has determined to be obscene or 
indecent.
 This may mean that any user with a connection to the Internet or an 
electronic communications service may be required to go out and buy 
special FCC endorsed and expensive software programs to stop obscene 
materials from reaching their computers. That way they could show that 
they have at least tried to avoid the receipt of obscene materials. 
Otherwise, they may risk criminal liability.

  Take another example. What if a user wants to join a campaign to stop 
obscenity on computer networks, and sends out the message to others on 
the campaign to send him examples of the obscene materials they are 
fighting to stop. Under this amendment, any receipt of these materials 
would be a crime. If this amendment had been the law, when my good 
friend from Nebraska collected the materials in his blue notebook, he 
would have committed a felony.
  How will anti-obscenity or pornography groups that now monitor online 
obscenity be able to do so without criminal liability?
  The third part of Senator Exon's amendment would make it a felony to 
purposefully make available, either privately or publicly, any indecent 
message to a minor.
  We all share my good friend's concern over the kind of material that 
may be available and harmful to minors on the Internet and other online 
computer networks. But this provision is not the way to address the 
problem.
  Under this provision, no indecent speech could be used on electronic 
bulletin boards dedicated to political debates, since kids under 18 may 
access these boards.
  This will certainly insure that civility is reintroduced into our 
political discourse when we are online. But this also means that works 
of fiction, ranging from ``Lady Chatterly's Lover'' to Newt Gingrich's 
science fiction novel ``1945,'' which contains some steamy scenes, 
could not be put out on the Internet because of the risk that a minor 
might download it. Rap music with bad words could not be distributed 
online.
 This provision would censor the Internet in a way that threatens to 
chill our first amendment rights on electronic communications systems.

  Under the amendment offered by my good friend from Nebraska, those of 
us who are users of computer e-mail and other network systems would 
have to speak as if we were in Sunday School every time we went on-
line.
  I, too, support raising our level of civility in communications in 
this country, but not with a government sanction and possible prison 
sentence when someone uses an expletive. All users of Internet and 
other information services would have to clean up their language when 
they go on-line, whether or not they are communicating with children.
  There is no question that we are now living through a revolution in 
telecommunications with cheaper, easier to use and faster ways to 
communicate electronically with people within our own homes and 
communities, and around the globe. A byproduct of this technical 
revolution is that supervising our children takes on a new dimension of 
responsibility.
  Very young children are so adept with computers that they can sit at 
a keypad in front of a computer screen at home or at school and connect 
to the outside world through the Internet or some other on-line 
service. Many of us are justifiably concerned about the accessibility 
of obscene and indecent materials on-line and the ability of parents to 
monitor and control the materials to which their children are exposed.
  But government regulation of the content of all computer 
communications, even private communications, under the rubric of 
protecting kids and in violation of the first amendment is not the 
answer.
                             existing laws

  One could get the incorrect idea that we in Congress have ignored the 
problem of protecting kids from harms that could befall them from 
materials they get online. This could not be further from the truth. We 
have a number of laws on the books that the Justice Department has 
successfully used to prosecute child pornography and obscenity 
transmitted over computer networks.
  Our criminal laws already prohibit the sale or distribution over 
computer networks of obscene or filthy material--18 U.S.C. 
Sec. Sec. 1465, 1466, 2252 and 2423(a). We already impose criminal 
liability for transmitting any threatening message over computer 
networks--18 U.S.C. Sec. 875(c). Our existing criminal laws also 
criminalize the solicitation of minors over computers for any sexual 
activity--18 U.S.C. Sec. 2452--and illegal luring of minors into sexual 
activity through computer conversations--18 U.S.C. Sec. 2423(b). Just 
this weekend, there were reports of two instances in which the FBI 
successfully tracked down teenagers who were solicited online.
  Congress took action 2 months ago to pass the Sexual Crimes Against 
Children Prevention Act of 1995 to increase the penalties and make 
these various laws even tougher.
  Congress has not been ignoring this problem. This does not mean we 
cannot or should not do better. But, the problem of policing the 
Internet is complex and involves many important constitutional issues.


                   leahy amendment requiring a study

  The amendment I am offering with Senators Kerrey, Feingold, and 
Moseley-Braun would require a study by the Department of Justice, in 
consultation with the U.S. Department of Commerce, on how we can 
empower parents and users of interactive telecommunications systems.
  We should examine the recommendations of these experts before we 
start imposing liability in ways that could severely damage electronic 
communications systems, sweep away important constitutional rights, and 
possibly undercut law enforcement at the same time.
  We should avoid quick fixes today that would interrupt and limit the 
rapid evolution of electronic information systems--for the public 
benefit far exceeds the problems it invariably creates by the force of 
its momentum.
  A number of groups support the approach of the Leahy study, including 
civil liberties groups, librarians, online providers, newspaper 
editors, and others. I ask that a list of the supporters of the Leahy 
study be placed in the Record.
  An electronic petition has been circulated on the Internet for the 
past few weeks. Over 35,000 people have signed on in support of the 
Leahy study, as an alternative to the proposed Communications Decency 
Act.
  A number of organizations have signed onto the electronic petition to 
support the Leahy study as an alternative to Government content 
regulation of electronic communications. These organizations, including 
the American Council for the Arts, Center for Democracy and Technology, 
Voters Telecommunications Watch, and others are helping to circulate 
the petition. Anyone is allowed to sign it or circulate it--this is a 
free country. Since May 19, when the petition was launched, over 35,000 
people have signed on.
  The Leahy study approach is supported by civil liberties groups, 
librarians, online service providers and newspaper groups, including: 
Association of American Publishers [AAP]; Association of American 
University Presses [AAUP]; The faculty of the City University of New 
York; Interactive Working Group; Online Operators Policy Committee of 
the Interactive Services Association; American Advertising Federation; 
American Association of Advertising Agencies; and American Library 
Association.
  Also American Society of Newspaper Editors; Association of National 
Advertisers, Inc.; Association of Research Libraries; Business Software 
Alliance; Center for Democracy and Technology; Computer and 
Communications Industry Association; Direct Marketing Association; 
Electronic Frontier Foundation; Feminists For Free Expression; Magazine 
Publishers of America; Media Access Project; National Public 
Telecomputing Network; Newspaper Association of America; People For the 
American Way Action Fund; Recreational Software Advisory Counsel; 
Software Publishers Association; and Times Mirror.
  I have also asked a coalition of industry and civil liberties groups, 
called [[Page S8342]] the Interactive Working Group, to address the 
legal and technical issues for policing electronic interactive 
services.
  There is no question that we need to educate parents about the types 
of materials available on the Internet which they may want to stop 
their children from accessing. By focusing attention on this issue, 
Senator Exon's efforts to legislate in this area have already made 
strides in alerting parents to the material available online that may 
be harmful to kids, such as the Internet, to control the material 
transmitted to them over those systems. We must find ways to do this 
that do not invite invasions of privacy, lead to censorship of private 
online communications, and undercut important constitutional 
protections.
  Before legislating to impose Government regulation on the content of 
communications in this enormously complex area, I feel we need more 
information from law enforcement and telecommunications experts. My 
bill calls for just such a fast-track study of this issue.
  Mr. President, I tell my good friend from Nebraska, I hope he 
realizes I would never call him a barbarian. We know each other too 
well and we are too good of friends for that.
  I have to admit, when he talks about football, he has the good grace 
to live in a State where the team has had some modicum of success. He 
has rightly achieved bragging rights on that.
  But when he talks about punting on this, with all due respect, Mr. 
President, I believe the Exon-Coats amendment punts, because it punts 
to the FCC the task of finding ways to restrict minors' access to 
indecent communications so users can implement them and have a defense 
to criminal prosecution.
  What we have to understand is that nobody in this place wants to give 
pornography to children. I do not. The distinguished Senator from 
Nebraska, the distinguished Senator from Indiana, the distinguished 
Senator from Wisconsin, all who have spoken on this issue this 
afternoon, none wants to give pornography to children.
  Many Members also do not want to destroy the Internet as we try to 
find how to do protect children from harmful material on the Internet. 
We can accomplish the goal of keeping pornography from children without 
putting on a huge Government layer of censorship and without destroying 
the Internet.
  Now, my friend from Nebraska says his amendment takes the same 
approach as the dial-a-porn statute. Not really. On dial-a-porn, it 
took 10 years of litigation for the FCC to find a way to implement the 
dial-a-porn statute in a constitutional way. That is why I say his 
amendment punts to the FCC the task of finding ways to restrict.
  Why not instead follow the Leahy amendment, which will require a 
study, a group of experts, an accelerated legislative path, so that we 
will pass responsible legislation that will not be attacked 
constitutionally for years thereafter.
  I note that the House Commerce Committee adopted basically the Leahy 
study in its markup of the House telecommunications legislation. This 
was Republicans and Democrats, across the political spectrum, trying to 
find the best way to handle this. They did what I have recommended 
here.
  In fact, some provisions in my friend's amendment could hurt 
prosecution of those who are not law-abiding users of the Internet but 
use it to distribute obscenity and child pornography.
  As a former prosecutor, I want prosecutors to have the best tools to 
go after criminals. I received a letter today from the Justice 
Department that makes several points. They say a study of the issue is 
needed. They also confirm that the Exon proposal would regulate 
indecent speech between consenting adults. And, third, the defenses in 
this proposal would undermine the ability of the Justice Department to 
prosecute online service providers even though they knowingly profit 
from the distribution of obscenity and child pornography.
  The Department says, ``We still have concerns. We continue to believe 
that comprehensive review should be undertaken to guide the response to 
the problems the Communications Decency Act seeks to address.''
  I ask unanimous consent to have that letter printed in the Record at 
this point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                       U.S. Department of Justice,


                                Office of Legislative Affairs,

                                      Washington, DC, May 3, 1995.
     Hon. Patrick J. Leahy,
     U.S. Senate,
     Washington, DC.
       Dear Senator Leahy: I write to respond to your letter of 
     March 1, 1995 concerning our prosecution of violations of 
     federal child pornography and obscenity laws and your April 
     21, 1995 request for the views of the United States 
     Department of Justice on the ``Communications Decency Act,'' 
     which has been incorporated as title IV of the proposed 
     ``Telecommunications Competition and Deregulation Act of 
     1995,'' S. 652. In accordance with your request, the analysis 
     of the Communications Decency Act focuses on sections 402 and 
     405 of the bill.
       The Department's Criminal Division has, indeed, 
     successfully prosecuted violations of federal child 
     pornography and obscenity laws which were perpetrated with 
     computer technology. In addition we have applied current law 
     to this emerging problem while also discovering areas where 
     the new technology may present challenges to successful 
     prosecution. While we agree with the goal of various 
     legislative proposals designed to keep obscenity and child 
     pornography off of the information superhighway, we are 
     currently developing a legislative proposal that will best 
     meet these challenges and provide additional prosecutorial 
     tools. This legislative package is being developed while 
     taking into consideration the need to protect fundamental 
     rights guaranteed by the First Amendment.
       With respect to the Communications Decency Act, while we 
     understand that section 402 is intended to provide users of 
     online services the same protection against obscene and 
     harassing communications afforded to telephone subscribers, 
     this provision would not accomplish that goal. Instead, it 
     would significantly thwart enforcement of existing laws 
     regarding obscenity and child pornography, create several 
     ways for distributors and packagers of obscenity and child 
     pornography to avoid criminal liability, and threaten 
     important First Amendment and privacy rights.
       Similarly, while we understand that section 405 of this 
     bill is intended to expand privacy protections to ``digital'' 
     communications, such communications are already protected 
     under existing law. Moreover, this provision would have the 
     unintended consequences of jeopardizing law enforcement's 
     authority to conduct lawful, court-ordered wiretaps and would 
     prevent system administrators from protecting their systems 
     when they are under attack by computer hackers.
       Despite the flaws in these provisions, the Administration 
     applauds the primary goal of this legislation: prevent 
     obscenity from being widely transmitted over 
     telecommunications networks to which minors have access. 
     However, the legislation raises complex policy issues that 
     merit close examination prior to Congressional action. We 
     recommend that a comprehensive review be undertaken of 
     current laws and law enforcement resources for prosecuting 
     online obscenity and child pornography, and the technical 
     means available to enable parents and users to control the 
     commercial and noncommercial communications they receive over 
     interactive telecommunications systems.
       The following are the Department's primary objections to 
     sections 402 and 405 of the pending telecommunications bill:
       First, section 402 of the bill would impose criminal 
     sanctions on the transmission of constitutionally protected 
     speech. Specifically, subsections 402(a)(1) and (b)(2) of the 
     bill would criminalize the transmission of indecent 
     communications, which are protected by the First Amendment. 
     In Sable Communications of Cal. v. FCC, 492 U.S. 115 (1989), 
     the Supreme Court ruled that any restrictions on the content 
     of protected speech in media other than broadcast media must 
     advance a compelling state interest and be accomplished by 
     the ``least restrictive means.'' By relying on technology 
     relevant only to 900 number services, section 402 fails to 
     take into account less restrictive alternatives utilizing 
     existing and emerging technologies which enable parents and 
     other adult users to control access to content.
       Nearly ten years of litigation, along with modifications of 
     the regulations, were necessary before the current statute as 
     applied to audiotext services, or ``dial-a-porn'' calling 
     numbers, was upheld as constitutional. See Dial Information 
     Services v. Thornburg, 938 F. 2d 1535 (2d Cir. 1991). The 
     proposed amendment in section 402 of the bill would 
     jeopardize the enforcement of the existing dial-a-porn 
     statute by inviting additional constitutional challenges, 
     with the concomitant diversion of law enforcement resources.
       Second, the definition of ``knowingly'' in section 402 of 
     the bill would cripple obscenity prosecutions. Under 
     subsection 402(e), only those persons with ``actual 
     knowledge'' of the ``specific content of the communication'' 
     could be held criminally liable. This definition would make 
     it difficult, if not impossible, to prove guilt, and the 
     standard is higher than the prevailing knowledge requirements 
     under existing obscenity and child sexual exploitation 
     statutes. Under Miller v. California, 413 U.S. 629 (1973), 
     the [[Page S8343]] government must only prove that a person 
     being prosecuted under an obscenity statute had knowledge of 
     the general nature of the material being distributed. Large-
     scale distributors of child pornography and other obscene 
     materials--among the most egregious violators--do not read or 
     view each obscene item they distribute. The proposed 
     definition in subsection 402(e) would make it nearly 
     impossible for the government to establish the necessary 
     knowledge requirement and would thereby severely handicap 
     enforcement of existing statutes.
       Third, section 402 would add new terms and defenses that 
     would thwart ongoing enforcement of the dial-a-porn statute. 
     Currently, the government is vigorously enforcing the 
     existing dial-a-porn statute. It took more than ten years for 
     the government to be able to do so, due to constitutional 
     challenges. The proposed amendment to this statute 
     fundamentally changes its provisions and subjects it to 
     renewed constitutional attack which would hinder current 
     enforcement efforts.
       Fourth, section 402 would do significant harm by inserting 
     new and sweeping defenses that may be applied to nullify 
     existing federal criminal statutes. The government currently 
     enforces federal criminal laws preventing the distribution 
     over computer networks of obscene and other pornographic 
     material that is harmful to minors (under 18 U.S.C. 
     Sec. Sec. 1465, 2252 & 2423(a)), the illegal solicitation of 
     a minor by way of a computer network (under 18 U.S.C. 
     Sec. 2252), and illegal ``luring'' of a minor into sexual 
     activity through computer conversations (under 18 U.S.C. 
     Sec. 2423(b)). These statutes apply to all methods of 
     ``distribution'' including over computer networks. The new 
     defenses proposed in subsection 402(d) would thwart ongoing 
     government obscenity and child sexual exploitation 
     prosecutions in several important ways:
       The first defense under subsection 402(d)(1) would immunize 
     from prosecution ``any action'' by a defendant who operates a 
     computer bulletin board service as an outlet for the 
     distribution of pornography and obscenity so long as he does 
     not create or alter the material. In fact, this defense would 
     establish a system under which distributors of pornographic 
     material by way of computer would be subject to fewer 
     criminal sanctions than distributors of obscene videos, books 
     or magazines.
       The second defense provided in subsection 402(d)(2) would 
     exculpate defendants who ``lacked editorial control over the 
     communications.'' Such a defense may significantly harm the 
     goal of ensuring that obscene or pornographic material is not 
     available on the Internet or other computer networks by 
     creating a disincentive for operators of public bulletin 
     board services to control the postings on their boards.
      Moreover, persons who provide critical links in the 
     pornography and obscenity distribution chains by serving 
     as ``package fulfillment centers'' filling orders for 
     obscene materials, could assert the defense that they lack 
     the requisite ``editorial control.'' This proposed defense 
     would complicate prosecutions of entire obscenity 
     distribution chains.
       The third defense provided in subsection 402(d)(3), 
     containing five subparts, would be available to pornographic 
     bulletin boards operators who take such innocuous steps as 
     (A) directing users to their ``on/off'' switches on their 
     computers as a ``means to restrict access'' to certain 
     communications; (B) warning, or advertising to, users that 
     they could receive obscene material; and (C) responding to 
     complaints about such minimum, this proposed defense would 
     lead to litigation over whether such actions constitute 
     ``good faith'' steps to avoid prosecution for violating the 
     section 402, and could thwart existing child pornography and 
     obscenity prosecutions.
       The fourth defense provided in subsection 402(d)(4) would 
     exculpate defendants whose pornography business does not have 
     the ``predominate purpose'' of engaging in unlawful activity. 
     This defense would severely undercut law enforcement's 
     efforts to prosecute makers and distributors of noncommercial 
     pornography and obscenity.
       The fifth defense provided in subsection 402(d)(5) would 
     preclude any cause of action from being brought against any 
     person who has taken good faith steps to, inter alia, 
     ``restrict or prevent the transmission of, or access to,'' a 
     communication deemed unlawful under section 402. This defense 
     would encourage intrusion by on-line service providers into 
     the private electronic mail communications of individual 
     users. The defense actually promotes intrusions into private 
     electronic mail by making it ``safer'' to monitor private 
     communications than to risk liability. At the same time, this 
     defense would defeat efforts by the government to enforce 
     federal privacy protections against illegal eavesdropping.
       Finally, but no less significantly, section 405 amends the 
     federal wiretap statute in several respects, each of which 
     creates considerable problems. First, it amends the wiretap 
     statute to add the term ``digital'' to 18 U.S.C. 
     Sec. 2511,\1\ without considering the effect of this 
     amendment on other statutory provisions. For example, 18 
     U.S.C. Sec. 2516(1) provides that certain government 
     officials may authorize an application for a wiretap order 
     for wire or oral communications while 18 U.S.C. Sec. 2516(3) 
     provides that other government officials may authorize an 
     application for a wiretap order for electronic 
     communications. Since section 405 does not amend 18 U.S.C. 
     Sec. 2516 to include the term ``digital,'' it would appear 
     that no government official has the authority to authorize an 
     application for a wiretap order for digital communications. 
     This is particularly problematic, since this investigative 
     tool is reserved for the most serious cases, including those 
     involving terrorists, organized crime, and narcotics.
     \1\It should be noted that ``digital'' communications are 
     already covered by the wiretap statute. Under current law, a 
     ``digital'' communication is either a wire communication 
     under 18 U.S.C. Sec. 2510(1) (if it contains voice) or an 
     ``electronic communication'' under 18 U.S.C. Sec. 2510(12) 
     (if it does not contain voice). Since such communications are 
     already covered, the reason for enacting section 405 is 
     unclear, and it is difficult to predict how the courts will 
     interpret the amendment.
---------------------------------------------------------------------------
       Equally disconcerting, the amendment serves to protect 
     computer hackers at the expense of all users of the National 
     Information Infrastructure (NII), including businesses, 
     government agencies and individuals. Prior to 1994, the 
     wiretap statute allowed electronic communication service 
     providers to monitor voice communications to protect their 
     systems from abuse. 18 U.S.C. Sec. 2511(2)(a)(i) (1986 
     version). Thus, when hackers attacked computer systems and 
     system administrators monitored these communications, they 
     had no clear statutory authority to do so. In October 1994, 
     Congress finally remedied this defect by amending 18 U.S.C. 
     Sec. 2511(2)(a)(i) to permit the monitoring of electronic 
     (i.e., digital, non-voice) communications. If section 405 is 
     enacted and these hacker communications are deemed digital, 
     system administrators will once again be denied the statutory 
     authority to monitor hacker communications. It would be most 
     unfortunate if, at the same time Congress is encouraging the 
     widespread use of the NII, it passed a law giving system 
     administrator's a Hobson's choice: either allow hackers to 
     attack systems unobserved or violate federal law.
       There are three other concerns as well. First, by adding 
     the term ``digital'' without amending the suppression 
     provisions of 18 U.S.C. Sec. 2515, voice communications--if 
     they are deemed ``digital''--will no longer be protected by 
     the statute's exclusionary rule. This would serve to reduce 
     the privacy protections for phone calls.
       Second, section 405 would replace the words ``oral 
     communication'' with ``communication'' in 18 U.S.C. 
     Sec. 2511(1)(B). This would have undesirable consequences for 
     law enforcement because it would criminalize the interception 
     of communications as to which there was no reasonable 
     expectation of privacy.\2\
     \2\The definition of ``oral communication'' in 18 U.S.C. 
     Sec. 2510(2) contains a requirement that the communication to 
     be protected must have been made under circumstances 
     justifying an expectation of privacy.
       From the law enforcement perspective, there is simply no 
     sound reason for eliminating this highly desirable feature of 
     present law. Additionally, the amendment might also impact 
     upon the news gathering process. For example, if the 
     conversation of two individuals shouting in a hotel room were 
     recorded by a news reporter standing outside the room, the 
     reporter would, under section 405, be violating the wiretap 
     statute. Under current law, of course, the individuals could 
     not complain about the recording because, by shouting loud 
     enough to be heard outside the room, they lack any reasonable 
     expectation of privacy.
       Last, the provision in section 402(d)(5) provides that ``no 
     cause of action may be brought in any court * * * against any 
     person on account of any action which the person has taken in 
     good faith to implement a defense authorized under this 
     section. * * *'' This would seem to suggest that any person 
     can freely engage in electronic surveillance otherwise 
     prohibited by Title III so long as they claim to be 
     implementing a section 402 defense. As such, section 
     402(d)(5) severely weakens the privacy protections currently 
     offered by the wiretap statute.
       In sum, sections 402 and 405 of the bill would hamper the 
     government's ongoing work in stopping the dissemination of 
     obscenity and child pornography and threaten law 
     enforcement's continued ability to use court-authorized 
     wiretaps. We believe that a comprehensive review be 
     undertaken to guide response to the problems that the 
     Communications Decency Act seeks to address.
       I assure you that the Department is aware of the growing 
     use of computers to transmit and traffic obscenity and child 
     pornography. The Criminal Division's Child Exploitation and 
     Obscenity Section is aggressively investigating and 
     prosecuting the distribution of child pornography and 
     obscenity through computer networks, and the use of computers 
     to locate minors of the purpose of sexual exploitation. As we 
     have discussed with your staff in a meeting focussed on these 
     issues, we remain committed to an aggressive effort to halt 
     the use of computers to sexually exploit children and 
     distribute obscenity.
           Sincerely,
                                                      Kent Markus,
     Acting Assistant Attorney General.
                                                                    ____

                                       U.S. Department of Justice,


                                Office of Legislative Affairs,

                                                   Washington, DC.
     Senator Patrick J. Leahy,
     U.S. Senate,
     Washington, DC.
       Dear Senator Leahy: This is in response to your June 14, 
     1995 letter to me posing [[Page S8344]] questions about my 
     June 13 letter to Senator Exon concerning his proposed 
     Communications Decency Act.
       My letter to Senator Exon commented on the version of his 
     proposal circulated in his ``dear colleague'' letter of June 
     7, 1995 (the ``Exon proposal''). Senator Exon had requested 
     that we comment on the extent to which that revised proposal 
     satisfied the concerns I detailed to you in my May 3 letter. 
     The letter does not address the Exon-Coats proposal, which we 
     had not seen nor were aware of until today. We have just 
     begun to review this new proposal.
       As stated in my letter to Senator Exon, his proposal still 
     raises a number of complex legal and policy issues that call 
     for in-depth analysis prior to congressional action. Because 
     we still have concerns, we continue to believe that a 
     comprehensive review should be undertaken to guide response 
     to the problems the Communications Decency Act seeks to 
     address.
       Among these concerns are constitutional questions raised 
     primarily by the lack of scienter required for the age 
     element of subsection (e) of the Exon proposal. In our view, 
     this subsection would consequently have the effect of 
     regulating indecent speech between consenting adults.\1\ 
     Subsection (a) does not have the same constitutional 
     infirmity because of the specific intent requirement that the 
     communication be done ``with intent to annoy, abuse, 
     threaten, or harass * * *'', which we believe is inconsistent 
     with the concept of ``consenting adults.''
     \1\Subsection (e) of the Exon-Coats measure exacerbates the 
     constitutional concerns because it is even more expansive 
     than the similar subsection (e) in the Exon proposal.
---------------------------------------------------------------------------
       As described in my June 13 letter, we continue to have a 
     concern with the ``knowledge'' requirements that were re-
     inserted in the Exon proposal as defenses for certain 
     parties.
       The defenses included in the Exon proposal would undermine 
     the ability of the Department of Justice to prosecute an on-
     line service provider even though it knowingly profits from 
     the distribution of obscenity or child pornography.\2\ 
     Although the existence of the defenses in the Exon proposal 
     would make prosecutions under the proposal's offenses 
     difficult, if not impossible, they would not threaten 
     obscenity prosecutions under existing statutes.
     \2\The defense in subsection (f)(1) of the Exon-Coats measure 
     is particularly problematic as it focusses on whether the 
     service provider has control over the bulletin board service. 
     If the provider does not have control, regardless of whether 
     it has guilty knowledge or intent, it is immune from 
     prosecution.

       I hope this information is helpful to you.
           Sincerely,
                                                      Kent Markus,
                                Acting Assistant Attorney General.
  Mr. LEAHY. Mr. President, let me conclude with this: No Member 
disagrees that we want to keep smut out of the hands of our children. I 
would remind everybody that the Internet has become the tremendous 
success it is because it did not have Big Brother, the Federal 
Government, trying to micromanage what it does and trying to tell users 
what it could do.
  If the Government had been in charge of figuring out how to expand 
the Internet or make it more available and so on, I guarantee it would 
not be one-tenth the success it is today.
  In our appropriate zeal to go after child pornographers, let the 
Senate not kill the Internet or smother it for the 99.9 percent of the 
people who use it legitimately, the scholars who use it legitimately, 
the people who use it for legitimate on-line discussion groups, the 
people who gather information from it, the constituents who use it to 
contact my office and other offices, and those who find a way to access 
information that they have never had before in their lives.
  That is why, Mr. President, earlier I printed in the Record a list of 
everybody from librarians to publishers to newspaper editors to civil 
liberties groups who support my alternative approach in my amendment.
  I am perfectly willing, if the managers are here and they want to 
move forward, to yield back the remaining time.
  Mr. EXON. Mr. President, I am prepared to yield back the remainder of 
our time, I think about 20 minutes. All I need to do is insert some 
additional material in the Record. If I could have 1 more minute, I 
would be prepared to yield back the remainder of my time.
  I thank my friend from Vermont for mentioning the Nebraska football 
again. I had a letter from Tom Osborne, the head football coach at the 
University of Nebraska, who wrote, ``Dear Jim: Thank you for what you 
are doing. I hope you are successful in passing the legislation.''
  I ask unanimous consent that the Osborne letter be printed in the 
Record, and I ask unanimous consent to have printed in the Record ``No 
Time to Study.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                            Nebraska Football,

                                   Lincoln, NE, February 10, 1995.
     Senator Exon,
     Washington, DC.
       Dear Jim: Thanks so much for what you are doing in your 
     effort to stop pornography. I realize this is always a 
     somewhat unpopular issue to tackle, however, my experience 
     has been that pornography is tremendously damaging to young 
     people and women in particular.
       I hope you are successful in passing the legislation.
           Best wishes,
                                                      Tom Osborne,
     Head Football Coach.
                                                                    ____


                            No Time To Study

       Further study does not solve the problem. The larger 
     telecommunications reform bill before the Senate will help 
     link up schools to new telecommunications services and 
     Internet services. As one of the Snowe-Rockefeller-Exon-
     Kerrey amendment authors, I am very proud of that fact.
       In addition, at least two Bell Companies plan to offer 
     Internet access as one of their common carrier services; 
     basic computer software manufacturers now offer ``easy 
     Internet access'' with their programs and thousands of homes 
     every day subscribe to new information service providers 
     which homes Internet access. Let's not lose sight of the fact 
     that this is a very good thing. This is a national policy 
     objective.
       But let us not turn a blind eye to a very serious problem 
     of obscenity, indecency, electronic stalking and pornography 
     in the digital world. Every day the Congress delays in 
     dealing with this problem the pornographers, pedophiles and 
     predators secure a much stronger foothold in what will be a 
     universal service network. That network was initially created 
     by the U.S. government and still, in part, is supported by 
     American tax dollars.
       Technology will help. But there is no technological magic 
     bullet. That is why industry is so concerned about vicarious 
     liability. Even the largest computer companies can not figure 
     out a ``fool proof'' way to prevent access. It is odd to 
     expect American tax dollars to pay for the development and 
     expansion of this marvelous system, only to turn it over to 
     pornographers. The Congress should not turn its eyes from 
     what is on the Internet and issue a mere request to parents 
     that they buy expensive products to keep this smut from their 
     homes and keep pedophiles away from their children.
       The American people need not pay twice in order to keep 
     pornography and filth from tarnishing the sanctity of their 
     homes, the pornographers and the pornography addicts must 
     find their own, secure adults-only stomping grounds and let 
     our kids and families enjoy this universal, public service 
     for education, enlightenment and entertainment.
       I introduced a version of this legislation nearly a year 
     ago. The time for study is over. The Congress must step up to 
     the plate. The law will facilitate free speech by creating an 
     environment through constitutional means where families and
      children can enjoy the benefits of the Internet.
       This is a fundamental question of burdens. The ``hands off 
     crowd'' say that the burden lies entirely on the parent. The 
     parent must spend hundreds of dollars on ``blocking'' 
     software and must be with the children 24 hours a day to 
     assure that they do not access improper material. The Exon-
     Coats approach says that parents have responsibilities, but 
     so do on-line service providers, and publishers and so does 
     law enforcement. If you operate an on-line adult pornographic 
     book store, movie house or swap meet, you have the burden to 
     assure that children do not enter, and that you are not 
     trading in illegal obscenity. Those engaging in pornography 
     and indecency should install electronic ``bouncers'' at their 
     electronic doorways. The Supreme Court in the Sable case 
     indicated that such a burden was not a constitutional 
     impediment.
       For all the talk about ``technological fixes'' it is ironic 
     that one group, the Electronic Frontier Foundation, who 
     opposes this measure in favor of more of the so-called 
     ``parental control'' posts on the Internet instructions on 
     ``How-to Access Blocked Groups.'' The fact of the matter is 
     that kids, not their parents know ``how-to'' access 
     everything.
       The Supreme Court noted that daytime radio is ``uniquely 
     accessible to children.'' I submit that computers are not 
     only ``uniquely accessible to children,'' but also ``uniquely 
     inaccessible to their parents.'' I expect that any child or 
     grandchild with basic computer skills can outperform any 
     member of this body when it comes to operating a computer.
       As the Supreme Court has noted in a number of cases, the 
     Congress has a compelling state interest in protecting the 
     physical and psychological health of America's children. We 
     should not throw our hands up and allow every child's 
     computer to become a branch office of Pornography 
     Incorporated.

  Mr. HATCH. As chairman of the Committee on the Judiciary, I would 
like to ask the Senator from Nebraska for clarification on one point. 
Title IV of this legislation, the Communications Decency Act, includes 
provisions 
[[Page S8345]] amending section 223 of the Communications Act to 
address, among other issues, the circumstances under which providers of 
network services may be held criminally liable for the transmission or 
distribution of obscene, indecent, or harassing materials.
  Copyright matters are, of course, within the jurisdiction of the 
Judiciary Committee, and it is my understanding that those provisions 
in title IV of the bill, as reported by the Commerce Committee, were 
not intended to--and in fact do not--serve as a precedent for 
addressing copyright infringement carried out over online services or 
other telecommunications or digital networks. Am I correct in that 
understanding?
  Mr. EXON. The Senator is correct. The liability standards contained 
in my proposal have no applicability to liability for copyright 
infringement. Nor are they intended to set any precedent in the 
copyright field.
  Mr. HATCH. I thank my colleague for this clarification.
  Mr. COATS. I wanted to clarify that it is the intent of this 
legislation that persons who are providing access to or connection with 
Internet or other electronic services not under their control are 
exempted under this legislation.
  Mr. EXON. Defense (f)(1) explicitly exempts a person who merely 
provides access to or connection with a network like the Internet for 
the act of providing such access. Understanding that providing access 
or connection to online services is an action which can include other 
incidental acts, this legislation is intended to exempt from 
prosecution the provision of access including transmission, 
downloading, storage, and certain navigational functions which are 
incidental to providing access or connection to a network like the 
Internet. An online service that is providing its customers with a 
gateway to networks like the Internet or the worldwide web over which 
it has no control is generally not aware of the contents of the 
communications which are being made on these networks, and therefore it 
should not be responsible for those communications. To the extent that 
service providers are doing more than merely providing access to a 
facility or network over which they have no control, the exemption 
would no longer apply. For instance, if an access provider were to 
create a menu to assist its customers in finding the pornographic areas 
of the network, then that access provider would be doing more than 
solely providing access to the network. Further, this exemption clearly 
does not apply where the service provider is owned or controlled by or 
is in conspiracy with a pornographer who is making communications in 
violation of this legislation.
  Mr. COATS. I understand that in a recent N.Y. State decision, 
Stratton Oakmont versus Prodigy, the court held that an online provider 
who screened for obscenities was exerting editorial content control. 
This led the court to treat the online provider as a publisher, not 
simply a distributor, and to therefore hold the provider responsible 
for defamatory statements made by others on the system. I want to be 
sure that the intend of the amendment is not to hold a company who 
tries to prevent obscene or indecent material under this section from 
being held liable as a publisher for defamatory statements for which 
they would not otherwise have been liable.
  Mr. EXON. Yes; that is the intent of the amendment.
  Mr. COATS. And am I further correct that the subsection (f)(4) 
defense is intended to protect companies from being put in such a 
catch-22 position? If they try to comply with this section by 
preventing or removing objectionable material, we don't intend that a 
court could hold that this is assertion of editorial content control, 
such that the company must be treated under the high standard of a 
publisher for the purposes of offenses such as libel.
  Mr. EXON. Yes; that is the intent of section (f)(4).
  Mr. COATS. Similarly, if a system operator discontinued service to a 
customer who was generating objectionable material, it is the intent in 
offering this amendment, and specifically the intent of subsection 
(f)(4), that no breach of contract action would lie against the system 
operator?
  Mr. EXON. Yes; that is our intent.
  Mr. COATS. I wanted to clarify that it is the intent of this 
legislation that persons who are providing access to or connection with 
the Internet or other electronic service not under their control are 
exempted under this legislation.
  Mr. EXON. Yes, defense (f)(1) explicitly exempts a person who 
provides access to or connection with a network like Internet that is 
not under that person's control. Providing access or connection is 
meant to include transmission, downloading, storage, navigational 
tools, and related capabilities which are incidental to the 
transmission of communications. An online service that is providing 
such services is not aware of the contents of the communications and 
should not be responsible for its contents. Of course this exemption 
does not apply where the service provider is owned or controlled by or 
is in conspiracy with a maker of communications that is determined to 
be in violation of this statute.
  Mr. HELMS. Mr. President, I would inquire of the Senator from Indiana 
if my understanding is correct that, under subsection (f)(1) of your 
amendment, a person is protected solely for providing access. Is that 
correct?
  Mr. COATS. The Senator is correct, this is a narrow defense. The 
defense is for solely providing access or connection and not a defense 
for any person or entity that provides anything more than solely 
providing access. This does not create a defense for someone who has 
some level of control over the material or the provision of material. 
To the extent that enhanced access would be an offense, this defense 
does not apply to someone who, among other things, manages the 
prohibited or restricted material, charges a fee for such material, 
provides instructions on how to access such material or provides an 
index of the material. This is merely an illustrative list and not an 
exhaustive list of the types of activities that would not qualify as 
solely providing access or connection under subsection (f)(1).
  Mr. EXON. I agree with the Senator from Indiana.
  Mr. BIDEN. Mr. President, I oppose the Exon-Coats second-degree 
amendment, I oppose it not because I disagree with its mission--which 
is to keep children out of the redlight districts of the Internet. With 
that, I wholeheartedly agree. As has become all too clear, the new 
information superhighway has its gritty roadside attractions: as the 
Senator from Nebraska has documented, some of the information traveling 
over the Internet is tasteless, offensive, and downright spine-
tingling. I stand with him and the Senator from Indiana in condemning 
and deploring this stuff--and I agree that we should do something here 
and now to help keep it out of the hands of our kids.
  But I respectfully disagree with them about how we should go about 
doing that. I believe there is a better, faster, and more effective way 
to make the information superhighway safe traveling for our children. 
If the Exon-Coats provision passes, we will have mountains of 
litigation over its constitutionality, dragging on for years and 
years--and all the while, our kids will be doing what they do best: 
finding new and better ways to satisfy their curiosity.
  The Exon-Coats amendment would make it a crime to send an indecent 
communications over the Internet to anyone under 18. Although that 
certainly sounds good, the problem is this: in the world of the 
Internet--where communications are sent out to hundreds and sometimes 
hundreds of thousands of people all at once--a ban on material that 
might reach a child is tantamount to a complete outright ban.
  That's where the constitutional problem comes in. In the case of 
Sable Communications versus FCC, the Supreme Court held that indecent 
speech--unlike obscenity--is protected first amendment expression. The 
Court also ruled that although indecent speech
 cannot be outlawed, it nevertheless can be restricted to protect 
children--provided, however, that the restrictions are drawn as 
narrowly as possible so as not to unduly limit adult access. This is 
known by lawyers as the least restrictive means requirement. Or put 
another way by Justice Frankfurter, you can't ``burn the house to roast 
the pig''--which is exactly what I believe the Exon-Coats provision 
would do. [[Page S8346]] 

  So I believe there will be a heated and protracted constitutional 
challenge to this provision. In fact, with history as our guide, such a 
challenge is virtually guaranteed: when Congress banned Dial-a-Porn 
services to minors, it took 10 years--and many different attempts by 
the FCC to write narrowly tailored regulations, all of which were 
challenged and fully litigated--for the statute to be upheld as 
constitutional.
  Ten years. Multiple rulemaking proceedings. Four different trips up 
to the court of appeals. I, for one, just can't wait that long. But 
more importantly, our children shouldn't have to wait that long. I want 
to get to work right now--and come up with the best and fastest way to 
get at this problem.
  That is why I support the underlying Leahy amendment. The Leahy 
amendment will get us going right now. It directs the Departments of 
Justice and Commerce to quickly come up with technological solutions--
ways by which parents can screen out of their computer systems violent, 
sexually explicit, harassing, offensive, or otherwise unwanted 
material. The Leahy measure also directs the Departments to evaluate 
whether current criminal laws are fully enforceable in interactive 
media, and to assess law enforcement resources currently available to 
enforce these laws.
  The Leahy amendment doesn't stop there: it requires that the 
Departments also submit a legislative proposal with their study--
outlining how best, technologically, to empower parents to protect 
their kids; how to amend, if necessary, our laws to better crack down 
on pornographers; how law enforcement resources should be allocated 
more effectively.
  What's more, the Leahy amendment puts that legislation on a fast-
track schedule. That means that it would only be a matter of months--
not 1 year, 5 years, or 10 years--for us to have taken smart and 
effective action to get at this problem.
  Government censorship, in this instance, is not just a bad idea in 
the eyes of first amendment scholars and activists. It's also a bad 
idea when it comes to the eyes and minds of our children. While we 
might be able to shut down some of the filthy talk on the net, we 
simply can't do the job right this way--we can't prevent access to 
sexually explicit information from Finland, Sweden, Japan or other 
countries, all of which are part of the Internet community.
  I also want to say that I--and I'm sure I'm joined by many parents 
across the country--am also very concerned about violent material on 
the net. As the Judiciary Committee has learned in some detail, you can 
learn all about bomb-building and other ways of war and destruction 
online. The Exon-Coats provision doesn't address violence. The Leahy 
amendment, with its headlights aimed at technology to screen out 
violent as well as offensive and sexually explicit material, does.
  I believe that a technology-based solution, as advanced in Senator 
Leahy's amendment, is a better answer--constitutionally and 
practically. The market, as we speak, is already developing software 
and hardware to enable parents to block children's access to filth, 
violence, and other objectionable material. I believe it makes more 
sense, and will be more effective, to empower users to protect 
themselves and their children than to attempt a topdown model of 
governmental regulation.
     levin on exon amendment to s. 652, the telecommunications bill

  Mr. LEVIN. Mr. President, I support keeping obscene material off the 
internet and other electronic media. This amendment goes significantly 
beyond that. The language of the amendment before us is so broad and 
vague that it would subject an American citizen to criminal liability 
and possible imprisonment for two years, a $100,000 fine or both for 
making what is termed a ``filthy comment'' on the internet which, in 
the words of the amendment, is intended to annoy.
  Annoying filthy comments that are put on the internet are 
reprehensible. But, I am afraid the attempt to make such language 
criminal will backfire and make it more difficult for us to effectively 
prohibit abusive and threatening activities and pornographic material 
aimed at children and adults. Our best chance to meet this objective is 
through means which are Constitutional.
  That is why I support the underlying Leahy amendment to protect the 
internet and other electronic media from obscene material. The Leahy 
Amendment would require the Attorney General of the United States 
within 150 days to produce Constitutional legislation to address the 
problem. The Leahy Amendment also provides for expedited procedures 
which would permit the Congress to consider such legislation quickly. I 
believe this is the more effective course to protect the internet and 
other telecommunications media.
  Mr. President, I ask unanimous consent to have a letter printed from 
the Department of Justice at this point in the Congressional Record. 
The letter states, in part, ``Defenses included in the Exon proposal 
would undermine the ability of the Department of Justice to prosecute 
an on-line service provider even though it knowingly profits from the 
distribution of obscenity or child pornography.''
  The Department of Justice letter also states that for many other 
reasons a comprehensive review should be made before Congress acts.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:
                                       U.S. Department of justice,


                                Office of Legislative Affairs,

                                                   Washington, DC.
     Senator Patrick J. Leahy,
     United States Senate, Washington, DC.
       Dear Senator Leahy: This is in response to your June 14, 
     1995 letter to me posing questions about my June 13 letter to 
     Senator Exon concerning his proposed Communications Decency 
     Act.
       My letter to Senator Exon commented on the version of his 
     proposal circulated in his ``dear colleague'' letter of June 
     7, 1995 (the ``Exon proposal''). Senator Exon had requested 
     that we comment on the extent to which that revised proposal 
     satisfied the concerns I detailed to you in my May 3 letter. 
     The letter does not address the Exon-Coats proposal, which we 
     had not seen nor were aware of until today. We have just 
     begun to review this new proposal.
       As stated in my letter to Senator Exon, his proposal still 
     raises a number of complex legal and policy issues that call 
     for in-depth analysis prior to congressional action. Because 
     we still have concerns, we continue to believe that a 
     comprehensive review should be undertaken to guide response 
     to the problems the Communications Decency Act seeks to 
     address.
       Among these concerns are constitutional questions raised 
     primarily by the lack of scienter required for the age 
     element of subsection (e) of the Exon proposal. In our view, 
     this subsection would consequently have the effect of 
     regulating indecent speech between consenting adults.\1\ 
     Subsection (a) does not have the same constitutional 
     infirmity because of the specific intent requirement that the 
     communication be done ``with intent to annoy, abuse, 
     threaten, or harass . . .'', which we believe is inconsistent 
     with the concept of ``consenting adults.''
     \1\Footnotes at end of letter.
---------------------------------------------------------------------------
       As described in my June 13 letter, we continue to have a 
     concern with the ``knowledge'' requirements that were re-
     inserted in the Exon proposal as defenses for certain 
     parties.
       The defenses included in the Exon proposal would undermine 
     the ability of the Department of Justice to prosecute an on-
     line service provider even though it knowingly profits from 
     the distribution of obscenity or child pornography.\2\ 
     Although the existence of the defenses in the Exon proposal 
     would make prosecutions under the proposal's offenses 
     difficult, if not impossible, they would not threaten 
     obscenity prosecutions under existing statutes.
       I hope this information is helpful to you.
           Sincerely,
                                                      Kent Markus,
                                Acting Assistant Attorney General.


                               footnotes

     \1\Subsection (e) of the Exon-Coats measure exacerbates the 
     constitutional concerns because it is even more expansive 
     than the similar subsection (e) in the Exon proposal.
     \2\The defense is subsection (f)(1) of the Exon-Coats measure 
     is particularly problematic as it focuses on whether the 
     service provider has control over the bulletin board service. 
     If the provider does not have control, regardless of whether 
     it has guilty knowledge or intent, it is immune from 
     prosecution.
  Mr. EXON. With that, if the Senator from Vermont is ready to yield 
back, I am ready to yield back our time.
  Mr. LEAHY. I yield back my time.
  The PRESIDING OFFICER. The question is on agreeing to the amendment 
numbered 1362.
  Mr. LEAHY. 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 amendment 
of the Senator from Nebraska.
  The clerk will call the roll.
  The bill clerk called the roll.
  [[Page S8347]] The PRESIDING OFFICER. Are there any other Senators in 
the Chamber who desire to vote?
  The result was announced, yeas 84, nays 16, as follows:
                      [Rollcall Vote No. 263 Leg.]

                                YEAS--84

     Abraham
     Akaka
     Ashcroft
     Baucus
     Bennett
     Bond
     Boxer
     Bradley
     Breaux
     Brown
     Bryan
     Bumpers
     Burns
     Byrd
     Campbell
     Coats
     Cochran
     Cohen
     Conrad
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Exon
     Faircloth
     Feinstein
     Ford
     Frist
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Harkin
     Hatch
     Hatfield
     Heflin
     Helms
     Hollings
     Hutchison
     Inhofe
     Inouye
     Johnston
     Kassebaum
     Kempthorne
     Kerrey
     Kerry
     Kohl
     Kyl
     Lautenberg
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Mikulski
     Murkowski
     Nickles
     Nunn
     Packwood
     Pell
     Pressler
     Pryor
     Reid
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Shelby
     Simpson
     Smith
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--16

     Biden
     Bingaman
     Chafee
     Feingold
     Glenn
     Jeffords
     Kennedy
     Leahy
     Levin
     Lieberman
     Moseley-Braun
     Moynihan
     Murray
     Robb
     Simon
     Wellstone
  So, the amendment (No. 1362) was agreed to.
  Mr. FORD. Mr. President, I move to reconsider the vote.
  Mr. COATS. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER (Mr. DeWine). The majority leader is 
recognized.


               Submitted Amendment No. 1286, as modified

  Mr. SIMON. Mr. President, will the Senator yield for a unanimous-
consent request?
  Mr. DOLE. I yield to the Senator from Illinois for a unanimous-
consent request.
  Mr. SIMON. Mr. President, I thank the majority leader for yielding.
  On my amendment No. 1286, there is a technical error. I ask unanimous 
consent to correct that error. There is no objection by Senators.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The submitted amendment (No. 1286), as modified, is as follows:

       On page 79, line 11, in the language added by the Dole 
     Amendment No. 1255 as modified, insert the following:
       (b)(3) Superseding Rule on Radio Ownership.--In lieu of 
     making the modification required by the first sentence of 
     subsection (b)(2), the Commission shall modify its rules set 
     forth in 47 CFR 73,3555 by limiting to 50 AM and 50 FM 
     broadcast stations the number of such stations which may be 
     owned or controlled by one entity nationally.

  Mr. DOLE addressed the Chair.
  The PRESIDING OFFICER. The majority leader.
  Mr. DOLE. As I understand, they need to take care of the underlying 
amendment.
  Mr. LEAHY. Mr. President, if the majority leader will yield, the 
Leahy amendment has now been amended by the Exon amendment. Because 
many, many Senators supported the amendment as one by itself--
obviously, the majority support the Exon amendment--there is really no 
reason to have a rollcall vote on my amendment.
  I recommend we adopt the Leahy amendment, as amended by the Exon 
amendment, by voice vote.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
1288, as modified, as amended.
  The amendment (No. 1228) was agreed to.
  Mr. EXON. Mr. President, I move to reconsider the vote by which the 
amendment was agreed to.
  Mr. PRESSLER. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. DOLE addressed the Chair.
  The PRESIDING OFFICER. The majority leader.
  Mr. DOLE. Mr. President, I am trying to determine when we can 
complete action on this bill. We had a heavy, positive vote on cloture. 
I am going to read a statement that I think satisfies the managers of 
the bill to see if we can get some agreement, some accommodation. The 
managers have been working toward a final resolution of this bill that 
encompasses the following request. I am not going to try to get the 
agreement, but I will read it:
  That all amendments qualified postcloture must be called up by number 
by 7:30 p.m.; that all amendments be limited to 15 minutes, 30 minutes 
for second degrees, for the debate to occur--we are not certain about 
this--either tonight or beginning at 9 o'clock in the morning. If some 
of those can be debated tonight, it can save us time tomorrow morning. 
If we can get the agreement, then rollcall votes will be stacked to 
begin at 12:30 p.m. I would rather begin at an earlier time tomorrow, 
but I understand there is a problem on that side. If we can resolve 
that, they will begin earlier, with the last vote in the voting 
sequence being final passage of the telecommunications bill.
  After that, if get consent, we will go to the highway bill, S. 440, 
which I understand there are a couple major issues, but, otherwise, we 
should be able to finish that by Friday sometime.
  So if Senators have amendments, the point is they ought to be letting 
the managers know. We think there are only about six, maybe a few more 
than that. I understand Senator Stevens has some that may be accepted. 
Senator Leahy has one that is going to be accepted. That would leave 
one by Senator Lieberman, one by Senator Simon, one by Senator McCain, 
one by Senator Harkin, and then the managers' amendment.
  Mr. LEAHY. If the Senator will yield, the major one that I had was 
dialing parity. At one time, we thought it would take several hours. I 
think Senator Breaux and I have worked out a consensus. I suspect, once 
you have gotten your unanimous consent, if the managers yield to us, we 
can probably dispose of it in 10 minutes.
  Mr. DOLE. Let us do that right now. Then I will come back after that 
and try to get consent on these other things. In the meantime, if 
somebody else has an amendment they feel a compelling desire to offer, 
we would appreciate that information, because it might determine how 
long we stay tonight.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. LEAHY. Mr. President, personally, I like the plan that the 
majority leader has laid down. As he knows, we tried on this other one 
to move as quickly as we could, and we moved it much faster than some 
thought. I note in that regard, I appreciate those who expressed their 
concern in wanting to protect the Internet but also to protect children 
from being exposed to smut and pornography. I will state again, the 
protection of children is something we all want equally in this body. 
We just have different ways of trying to figure out ultimately how to 
protect them and the first amendment at the same time.
  I hope we go to the dialing parity. I ask unanimous consent that it 
be in order for me to yield to the Senator from Louisiana to bring up 
an amendment on behalf of himself and myself. That may settle that part 
and save us several hours.
  Mr. STEVENS. Reserving the right to object, if that is a request, we 
have worked out an agreement on three technical amendments that deal 
with an amendment I previously offered, and I would like to get an 
agreement on those. We will proceed with them later in the evening, but 
I want to make sure we have an agreement before we get into this other 
unanimous-consent agreement.
  Will the Senator yield to me for the purpose of a unanimous-consent 
request?
  Mr. LEAHY. Mr. President, I yield to the Senator from Alaska for the 
purpose of making a unanimous-consent request without losing my right 
to the floor.
  Mr. STEVENS. Mr. President, I ask unanimous consent that there be 10 
minutes equally divided for the consideration of my amendments 1301, 
1302, and 1304; that at the end of that 10 minutes, we then proceed to 
consider, without any intervening action or debate, each of the three 
amendments. I will at that time ask that they be considered en bloc, 
but I think they should be explained first; in addition, that after 
consultation with the Members involved, I ask unanimous consent that 
[[Page S8348]] a modification to amendment No. 1301 be permitted prior 
to the vote on that amendment.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. LEAHY. Mr. President, I believe I still have the floor.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. LEAHY. Mr. President, as I stated earlier, I think there was 
general agreement among the body that we wanted to find a way to 
approach what many see as a problem on the Internet. We had different 
ways of approaching it. I note that only because those who supported 
the underlying amendment were trying to find the most constitutional 
way of doing it. It was not a case of anybody--anybody--in this body 
being in favor of providing pornography to children, it simply should 
go without saying, but so there will not be any mistake on that point.
  Mr. President, I yield to my friend from Louisiana. He has an 
amendment on behalf of the two of us.


                           Amendment No. 1421

  Mr. BREAUX. Mr. President, I ask unanimous consent that the Breaux-
Leahy amendment at the desk be in order.
  The PRESIDING OFFICER. Will the Senator state the number?
  Mr. BREAUX. It is an amendment entitled Breaux-Leahy at the desk.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The assistant legislative clerk read as follows:

       The Senator from Louisiana [Mr. Breaux], for himself and 
     Mr. Leahy, proposes an amendment numbered 1421.

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

       On page 93, strike lines 7-12 and insert the following:
       ``(ii) Except for single-LATA States and States which have 
     issued an order by June 1, 1995 requiring a Bell operating 
     company to implement toll dealing parity, a State may not 
     require a Bell operating company to implement toll dialing 
     parity in an intraLATA area before a Bell operating company 
     has been granted authority under this subsection to provide 
     interLATA services in that area or before three years after 
     the date of enactment of the Telecommunications Act of 1995, 
     whichever is earlier. Nothing in this clause precludes a 
     State from issuing an order requiring toll dialing parity in 
     an intraLATA area prior to either such date so long as such 
     order does not take effect until after the earlier of either 
     such dates.
       (iii) In any State in which intraLATA toll dialing parity 
     has been implemented prior to the earlier date specified in 
     clause (ii), no telecommunications carrier that serves 
     greater than five percent of the nation's presubscribed 
     access lines may jointly market interLATA telecommunications 
     services and intraLATA toll telecommunications services in a 
     telephone exchange area in such state until a Bell operating 
     company is authorized under this subsection to provide 
     interLATA services in such telephone exchange area or until 
     three years after the date of enactment of the 
     Telecommunications Act of 1995, whichever is earlier.''

  Mr. BREAUX. Mr. President, I thank the Senator from Vermont for 
yielding to me for this purpose and thank him for working with me and 
with the distinguished chairman of the committee, as well as the 
distinguished ranking member of the committee, as well as a number of 
other Members in the body.
  We have tried to work really for the past 2 to 3 days on trying to 
develop a consensus amendment, which I think we now have, which I think 
solves the problem both from a sense of fairness as well as a sense of 
trying to encourage additional companies to do what they can do best.
  I think the basic thrust of this telecommunications bill is to 
promote competition. I think the Commerce Committee has done a 
tremendous job in reporting to the body a bill that, in fact, does say 
to all of the companies, whether they be long distance companies or 
whether they be the so-called regional Bell companies, that we want you 
to be able to do what you do best, we want you to compete, we want you 
to provide good service at a good price to the consumers of America.
 And the big problem is then trying to manage these various companies 
to make sure everybody is treated fairly. We wanted to try to make sure 
no company got an economic advantage, because of legislation, over any 
other company. I think the bill does do that. One of the features of 
the legislation is that we sort of said, when you can do long distance 
service, the long distance companies can do local service. It is sort 
of saying that everybody is going to be able to start competing at the 
same time. One of the provisions in the bill dealt with a prohibition. 
It said simply that States could not order long distance companies to 
be able to receive dialing parity when they do long distance service 
within an intraLATA situation, within a State.

  Mr. President, we thought that the Commerce Committee provision that 
restricted that ability of a State was a good idea. It was consistent 
with what Judge Greene said. But there were concerns, particularly by 
the Senator from Vermont, who said that, no, the States should be able 
to move forward. We have crafted an amendment that the Senator from 
Vermont really was helpful in putting together, which said that those 
States that have only one LATA and already have issued orders to 
require dialing parity would be exempted from that prohibition in a way 
that would allow that State to take action on ordering parity.
  This amendment specifies that clearly. It also says, as a precaution 
and a protection that guarantees equal opportunity for all of the 
companies, that those States, while they would be able to order dialing 
parity, they would not be able to allow for joint marketing in those 
areas. I think that is a good balance and is fair treatment.
  One of the things I have always advocated is that companies, when 
they are allowed to move into another area, know that their competition 
will also be able to compete in their areas at the same time.
  So, Mr. President, I think that the amendment is clear, as clear as 
it possibly can be, in dealing with a very complicated situation. I 
think it continues with the thrust of the committee product, which says 
we want a level playing field. That is what this amendment addresses 
dealing with dialing parity.
  I thank all of the Members who had major input in helping us craft 
this. It has been a bipartisan effort, worked on by people whose 
concerns were making sure we treated long distance companies fairly, as 
well as Members who were concerned about making sure we treated 
regional Bells fairly at the same time. I think both sides have given a 
product that we now have pending before the Senate, and it is a good 
one.
  I urge my colleagues to support it by a voice vote, which is what I 
hope we will be able to do to dispose of it.
  Mr. GRAHAM. Will the Senator yield?
  Mr. BREAUX. Yes.
  Mr. GRAHAM. I briefly had an opportunity to look at the amendment. I 
asked for a copy to review it in more detail. Let me ask a question 
from the perspective of my State. The recent Florida legislature of 
this spring passed an interLATA dialing parity bill. That legislation 
goes into effect on January 1, 1996. What effect will this amendment 
have on my State's ability to adopt dialing parity?
  Mr. BREAUX. I will respond to the Senator by saying that we have 
tried to take into consideration two types of States in our amendment. 
The first would be about 10 States that are single-LATA States, which 
means they only have one division of what can happen in their State. 
That does not include Florida. The second category includes Florida--
except States which have issued an order by June 1, 1995, requiring 
this dialing parity, those States would be able to go forward with 
those orders, and they would be able to implement those orders. The 
only protection that is required--which I think is a level playing 
field--is that they would not be able to have joint marketing 
agreements in those areas. But the State of Florida would be able to go 
forward with that order and implement it. In essence, the State of 
Florida would be grandfathered in because they are a State that already 
issued the order at the State level.
  Mr. GRAHAM. Well, I am not certain if they have issued an order or 
not. My information is that the legislation goes into effect on January 
1, 1996. I am not certain if that is the threshold that brings a State 
into the category of those which will still be allowed to exercise some 
degree of State regulation over dialing parity.
[[Page S8349]]

  Mr. BREAUX. My answer to the Senator from Florida is simply, yes. The 
explanation is that it is based on the States' issuing the order, not 
the effective date. The State of Florida, for instance, would have 
issued the order in a timely fashion in order to be one of the excepted 
States.
  Mr. LEAHY. If the Senator will yield, the Senator from Louisiana is 
absolutely correct. Florida, having ordered it, even though they have 
not implemented it, would be covered by the Breaux-Leahy amendment and 
would be protected.
  Mr. GRAHAM. Thank you.
  Mr. BREAUX. Mr. President, I have no additional requests for time on 
behalf of my amendment.
  Mr. LEAHY. The Breaux-Leahy amendment makes a significant improvement 
in S. 652, and will permit States, at a time certain, to create a more 
competitive market for their in-state toll calls.
  Without this amendment, S. 652 would have prohibited all States from 
ordering a Bell operating company to provide dialing parity for in-
State toll calls before the company is authorized to provide long-
distance service in that area. The bill preempted States' prerogative 
to open up the in-State toll market to meaningful competition. This 
preemption would persist under the bill, as reported by the committee, 
until the Bell operating company in the State satisfied the unbundling 
and interconnection requirements in the bill and was permitted into the 
long-distance market.
  In addition, as introduced, the bill rolled back the actions of 10 
States that have already ordered local telephone companies to provide 
dialing parity for in-State toll calls.
  The 10 States that would have had to undo their dialing parity 
requirements are: Illinois, Wyoming, Wisconsin, Michigan, Florida, 
Connecticut, Georgia, Kentucky, Minnesota, and New York.
  These States recognize that dialing parity is a key to healthy 
competition for in-State toll calls.
  They should not be second-guessed and preempted on the Federal level. 
The bill would have stopped and reversed this progress toward a 
competitive market. The bill would also forbid all other States, many 
of which are considering changes, from implementing dialing parity 
until the regional Bell operating companies [RBOCs] are allowed into 
the intraLATA long distance market as a result, the States were left 
with no time certain for when they could require dialing parity for 
intraLATA calls.
  Without dialing parity for toll calls, Bell company customers can 
place an in-State toll call simply by dialing 1 plus the seven-digit 
telephone number, for a total of eight digits to complete the call.
  By contrast, customers who want to use their long distance company to 
complete that same call must dial 1 plus a special 5-digit access code 
plus the 7-digit telephone number, for a total of 13 digits to complete 
the call. Dialing these extra digits severely handicaps competition and 
gives an artificial advantage to Bell companies. This handicap is 
anticompetitive and anticonsumer.
  Dialing parity for in-State toll calls enhances competition for toll 
services. Requiring dialing parity overcomes the primary obstacle to 
meaningful competition in these short-haul long distance markets.
  Without dialing parity, intraLATA toll calls are simply carried by 
the local exchange carrier.
  For Vermont, a one ``LATA'' State, this means that NYNEX carries the 
bulk of in-State toll calls, because other toll call carriers may only 
be accessed by dialing cumbersome access codes. Consumers are the 
losers.
  When dialing parity is implemented, customers will be able to choose 
the carrier that carries their in-State toll calls with the same 
convenient ``1+'' dialing that they have had available for long-
distance calling for many years. Customers will be able to pre-select 
their carrier for these calls, just as there is presubscription for 
long-distance carriers.
  The availability of dialing parity for in-State toll service should 
substantially increase competition in this multibillion dollar 
telecommunications market. Increased competition, in turn, would bring 
lower prices for consumers and less need for regulation of such 
services by State public service commissions.
  A recent Wall Street Journal article stated, ``in California, MCI's 
direct-dial toll rates are as much as 30 percent cheaper than Pacific 
Bell's in some cases. Similar savings can be had in other major markets 
across the country.'' In general, in-State toll calls are significantly 
lower-priced where effective competition is introduced. Implementation 
of toll dialing parity would help accomplish that result.
  By preserving the Bell companies' dominant position in these markets 
until they secure long distance entry, the bill as reported would have 
diminished, rather than increased, the Bell companies' incentives to 
open their markets to competition as rapidly as possible.
  S. 652 provided a disincentive for the Bell companies to open their 
local exchange markets so that they could compete in all segments of 
the long distance market. Instead, the bill might have encouraged the 
Bell companies' to fight competition in their local markets, because as 
long as they do not enter the interLATA market, their lucrative 
intraLATA toll markets are protected.
  The bill, as reported, also puts unwarranted pressure on the 
regulatory agencies to approve Bell companies entry into the long-
distance market, interLATA entry, regardless of the status of local 
competition under the bill, until the Bell companies got into the 
interexchange long-distance market, real competition would not come to 
the multibillion-dollar in-State toll market.
  I have heard some concern that in-State dialing parity might increase 
local rates and thereby harm universal service. The 10 States that have 
ordered dialing parity have carefully analyzed and considered the 
effect of dialing parity on local rates.
  They have ordered dialing parity after determining that universal 
service will not be harmed, and that equal access is necessary for 
effective competition. Competition reduces total costs for consumers 
and results in new services and technological advancements. These 
advances in technology have reduced the cost of providing basic service 
and provided new revenue sources for the Bell companies.
  Some States may decide that circumstances in their regions are such 
that dialing parity for in-State toll calls is not in the public 
interest. In 1987, Vermont decided against requiring presubscription 
and dialing parity, but this issue is currently being reconsidered. The 
Breaux-Leahy amendment would permit the 10 States that have already 
ordered it, based upon the particular circumstances present in the 
State, to continue implementation of dialing parity.
  The intraLATA toll dialing parity preemption provision in S. 652, as 
reported, is opposed by consumer groups, long-distance carriers, 
alternative local transport providers, and State organizations such as 
the National Association of Regulatory Utility Commissioners [NARUC], 
and the Attorneys General of 22 States and Guam.
  In March 31, 1995 letter to Senator Pressler, NARUC wrote that:

       The blanket preemption of states that have already mandated 
     dialing parity will undercut state efforts, already in place, 
     to encourage competition and bring lower prices and more 
     choice to consumers.

  The Breaux-Leahy amendment would permit single-LATA States, including 
Vermont, Maine, Wyoming, New Hampshire, Rhode Island, New Mexico, Utah 
and South Dakota, and the 10 States, which have ordered intraLATA toll 
dialing parity, to implement dialing parity, whether or not the RBOC in 
the State has been authorized to provide interexchange service.
  In addition, the Breaux-Leahy amendment provides a time certain for 
all other States to be able to implement such dialing parity of the 
earlier of 3 years after enactment or when the RBOC is granted 
authority to provide interexchange service. The preemption ``sunset'' 
of 3 years permits those 13 States, Arizona, California, Delaware, 
Indiana, Kansas, Louisiana, Massachusetts, New Jersey, Pennsylvania, 
Texas, Vermont, Washington, and West Virginia--with proceedings 
underway, time to complete their proceedings, issue any order for 
intraLATA toll dialing parity and make plans for implementation, though 
those States may [[Page S8350]] not implement until the earlier of 36 
months or until the RBDOC is authorized to provide inter-exchange 
services.
  Finally, in those States where intraLATA toll dialing parity has been 
implemented--not merely ordered--during the 3 years after enactment or 
before the RBOC in the State has been authorized to provide 
interexchange service, whichever is earlier, the Breaux-Leahy amendment 
would bar telecommunications carriers in that State from jointly 
marketing interLATA and intraLATA services. This ban would be lifted or 
``sunset'', 3 years after enactment or when the RBOC in the State was 
authorized to offer interexchange services, whichever is earlier. 
Furthermore, this ban only applies to carriers serving greater than 5 
percent of the Nation's presubscribed access lines.
  The biggest telecommunications legislative reform package in more 
than 60 years should not include provisions that reverse progress 
toward competition. Supporting this amendment is proconsumer, 
procompetitive, and pro-States' rights.
  The PRESIDING OFFICER. Is there further debate?
  The question is on agreeing to the amendment.
  The amendment (No. 1421) was agreed to.
  Mr. LEAHY. Mr. President, I move to reconsider the vote.
  Mr. BREAUX. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. PRESSLER. Mr. President, I sincerely thank the Senators and their 
staffs who worked that out. That was truly a remarkable compromise. I 
thank them very much.
  I urge Senators to bring their amendments to the floor. We are 
marching forward, but we need everybody who has an amendment to get 
over here.


                 Amendments Nos. 1317 and 1318, en bloc

  Mr. BROWN. Mr. President, I send two amendments to the desk, en bloc, 
and ask for their immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Colorado [Mr. Brown] proposes amendments 
     numbered 1317 and 1318, en bloc.

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

                           Amendment No. 1317

       In managers' amendment, on page 13, line 20, after 
     ``programming'' insert: ``by any means''.
                                                                    ____


                           Amendment No. 1318

       On page 12, line 10 insert after ``services'': ``or its 
     affiliate''.

  Mr. BROWN. Mr. President, these are technical amendments. Both sides 
have had a chance to review them, and I believe they have signed off. 
What they do is deal with program access. They make it clear that the 
rules are the same for both cable operators and telephone companies. 
This is an area in which, it seemed to me, it was appropriate to have 
consistent rules and treat both of them the same.
  The PRESIDING OFFICER. Is there further debate?
  Mr. PRESSLER. Mr. President, perhaps my colleague will speak on the 
amendments, and then we will be sure we get an agreement here.
  Mr. BROWN. Mr. President, on amendment No. 1317, the amendment to the 
managers' amendment, on page 13, line 20, after the word 
``programming'' we insert the words ``by any means.'' And on amendment 
No. 1318, which deals with page 12 of the managers' amendment, line 10, 
after the word ``service,'' it inserts ``or its affiliates.''
  The purpose of these two amendments is to make it clear that the 
rules were the same for both cable operators and telephone companies in 
the area of program access. It seemed appropriate to treat both kinds 
of firms the same under these circumstances.
  I believe the amendment is more in terms of a technical amendment 
than a substantive amendment, in terms of the major policy issues this 
body has been dealing with.
  Mr. President, if I might correct something. Amendment No. 1318 is an 
amendment to the bill itself. Amendment No. 1317 is the amendment to 
the managers' amendment.
  Mr. PRESSLER. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DOLE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOLE. I am advised that I can make the following request that has 
been cleared on both sides.
  I ask unanimous consent all remaining first-degree amendments be 
offered by 7:30 p.m. this evening.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOLE. Let me indicate, at 7:30, we will assess and see where we 
are. If we can work it out, we will try to accommodate most of my 
colleagues.
  I understand there may be a movie tonight--Batman or something--that 
many of my colleagues are headed for. It is a good movie, I understand, 
too.


                       Vote on Amendment No. 1317

  Mr. BROWN. Mr. President, we have worked out approval of amendment 
No. 1317. My understanding is it has been signed off on both sides.
  Mr. PRESSLER. We have no objection, and we are in support of that 
amendment.
  The PRESIDING OFFICER. Amendment 1317 will now be considered 
separately. The question is on agreeing to the amendment.
  The amendment (No. 1317) was agreed to.
  Mr. PRESSLER. I move to reconsider the vote.
  Mr. BROWN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. BROWN. Mr. President, I ask unanimous consent to set aside 
amendment No. 1318.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                      Amendment No. 1319 Withdrawn

  Mr. BROWN. Mr. President, I ask unanimous consent to withdraw 
amendment No. 1319. That is not one we have been able to reach 
agreement on.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the amendment (No. 1319) was withdrawn.
  Mr. BROWN. Mr. President, my amendment No. 1320 is one we are 
attempting to clear on both sides. It is an amendment which I believe 
both sides have a copy of. My hope is that we will shortly be able to 
deal with both amendments numbered 1318 and 1320. I yield the floor.


                           Amendment No. 1272

(Purpose: To require broadcasters to review viewer input on the violent 
              content of programming upon license renewal)

  Mr. DORGAN. Mr. President, I send to the desk amendment No. 1272 and 
ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from North Dakota [Mr. Dorgan] proposes an 
     amendment numbered 1272.

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

       On page 82, between lines 4 and 5, insert the following:
       (3) This section shall operate only if the Commission shall 
     amend its ``Application for renewal of License for AM, FM, 
     TV, Translator or LPTV Station'' (FCC Form 303-S) to require 
     that, for commercial TV applicants only, the applicant attach 
     as an exhibit to the application a summary of written 
     comments and suggestions received from the public and 
     maintained by the licensee in accordance with 47 C.F.R. sec. 
     73.1202 that comment on the applicant's programming, if any, 
     characterized by the commentor as constituting violent 
     programming.

  Mr. DORGAN. Mr. President, this is a very simple amendment. I shall 
not take a great deal of time to explain it. We have visited with both 
the chairman of the committee and the minority member, the ranking 
minority member, on this issue. I know the ranking minority member is 
inclined to accept. I have not heard back from the Chair.
  Let me describe exactly what this does. It follows on the vote that 
we had [[Page S8351]] yesterday on the issue of television violence. I 
had originally thought about bringing to the floor the television 
violence report card, but I decided not to do that.
  My amendment would do something that is very simple: It would deal 
with the application to renewal of licenses for televisions and say 
that for commercial television applicants, for renewal, the applicants 
would attach as an exhibit for the application for renewal a summary of 
written comments and suggestions received by the public and maintained 
by the licensee--which is, incidentally, now required--and that comment 
on the applicants programming, if characterized by the commenters as 
constituting violent programming.
  What this says is, when you are doing a renewal of application, you 
are a television station and you are filing for a renewal of your 
license, that in your application, you shall provide a summary of 
written comments and suggestions that are in your file that you are 
required to keep, anyway, with respect to those who comment on violent 
programming that your viewers have witnessed and felt they wanted to 
bring to your attention, and that that information should be available 
to the FCC.
  It does not in any way expand the power of the FCC. It simply will 
require the disclosure and summary of information that is already in 
the file that is now required by law to be kept, and I think it will 
emphasize in a renewal for application any information that would exist 
in those files about viewers' concerns about violent programming.
  I think that that would be something the FCC would find useful in 
reviewing the renewal of applications. I think it also follows on the 
vote that we had yesterday on television violence. My colleague, 
Senator Conrad from North Dakota, offered an amendment with Senator 
Lieberman, which I voted for, on the issue of television violence.
  I have a piece of legislation that I cosponsored with Senator Kay 
Bailey Hutchison on television violence, calling for the development of 
a television violence report card so that parents would know which are 
the most violent programs, which programs have the most violence in 
them, and who sponsors them. Parents would, therefore, be able to 
better supervise their children's viewing habits and send messages to 
those who are sponsoring the violence.
  I have not offered that. Instead, I am offering something that I 
think complements what we did last evening and something that I think 
is simple, something I hope will not be controversial, and something I 
hope the committee Chair, the floor manager, will accept.
  I do not intend or need to take additional time on this. I think it 
is easily understood by everyone, and it is complementary to 
legislation the Senate passed last evening.
  As I indicated, it does not expand the FCC powers or authority, and 
does not require the television stations to collect information that 
they are not now collecting. It simply requires that the information 
they now have that is in their files must be disclosed and summarized 
with respect to comments they have received from viewers on television 
violence when they file for renewal of their license.
  Mr. President, I yield the floor.
  Mr. PRESSLER. Mr. President, we are prepared to accept the amendment.
  The PRESIDING OFFICER. If there is no further debate, the question is 
on agreeing to the amendment numbered 1272.
  The amendment (No. 1272) was agreed to.
  Mr. PRESSLER. I move to reconsider the vote, and I move to lay that 
motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRESSLER. Mr. President, if Senators will bring their amendments 
to the floor, we are eagerly awaiting. We want to do business here.
 We only have an hour and a half.

  The PRESIDING OFFICER. The Senator from South Carolina.


                amendment no. 1282, as further modified

  Mr. HOLLINGS. On behalf of Senator Moseley-Braun, I ask unanimous 
consent amendment 1282 be further modified as indicated in the 
modification that I send to the desk.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 1282), as further modified, is as follows:

       At the end of the bill, insert the following:

       TITLE  --NATIONAL EDUCATION TECHNOLOGY FUNDING CORPORATION

     SEC. --01. SHORT TITLE.

       This title may be cited as the ``National Education 
     Technology Funding Corporation Act of 1995''.

     SEC. --02. FINDINGS; PURPOSE.

       (a) Findings.--The Congress finds as follows:
       (1) Corporation.--There has been established in the 
     District of Columbia a private, nonprofit corporation known 
     as the National Education Technology Funding Corporation 
     which is not an agency or independent establishment of the 
     Federal Government.
       (2) Board of directors.--The Corporation is governed by a 
     Board of Directors, as prescribed in the Corporation's 
     articles of incorporation, consisting of 15 members, of 
     which--
       (A) five members are representative of public agencies 
     representative of schools and public libraries;
       (B) five members are representative of State government, 
     including persons knowledgeable about State finance, 
     technology and education; and
       (C) five members are representative of the private sector, 
     with expertise in network technology, finance and management.
       (3) Corporate purposes.--The purposes of the Corporation, 
     as set forth in its articles of incorporation, are--
       (A) to leverage resources and stimulate private investment 
     in education technology infrastructure;
       (B) to designate State education technology agencies to 
     receive loans, grants or other forms of assistance from the 
     Corporation;
       (C) to establish criteria for encouraging States to--
       (i) create, maintain, utilize and upgrade interactive high 
     capacity networks capable of providing audio, visual and data 
     communications for elementary schools, secondary schools and 
     public libraries;
       (ii) distribute resources to assure equitable aid to all 
     elementary schools and secondary schools in the State and 
     achieve universal access to network technology; and
       (iii) upgrade the delivery and development of learning 
     through innovative technology-based instructional tools and 
     applications;
       (D) to provide loans, grants and other forms of assistance 
     to State education technology agencies, with due regard for 
     providing a fair balance among types of school districts and 
     public libraries assisted and the disparate needs of such 
     districts and libraries;
       (E) to leverage resources to provide maximum aid to 
     elementary schools, secondary schools and public libraries; 
     and
       (F) to encourage the development of education 
     telecommunications and information technologies through 
     public-private ventures, by serving as a clearinghouse for 
     information on new education technologies, and by providing 
     technical assistance, including assistance to States, if 
     needed, to establish State education technology agencies.
       (b) Purpose.--The purpose of this title is to recognize the 
     Corporation as a nonprofit corporation operating under the 
     laws of the District of Columbia, and to provide authority 
     for Federal departments and agencies to provide assistance to 
     the Corporation.

     SEC. --03. DEFINITIONS.

       For the purpose of this title--
       (1) the term ``Corporation'' means the National Education 
     Technology Funding Corporation described in section ____ 
     02(a)(1);
       (2) the terms ``elementary school'' and ``secondary 
     school'' have the same meanings given such terms in section 
     14101 of the Elementary and Secondary Education Act of 1965; 
     and
       (3) the term ``public library'' has the same meaning given 
     such term in section 3 of the Library Services and 
     Construction Act.

     SEC. --04. ASSISTANCE FOR EDUCATION TECHNOLOGY PURPOSES.

       (a) Receipt by Corporation.--Notwithstanding any other 
     provision of law, in order to carry out the corporate 
     purposes described in section ____ 02(a)(3), the Corporation 
     shall be eligible to receive discretionary grants, contracts, 
     gifts, contributions, or technical assistance from any 
     federal department or agency, to the extent otherwise 
     permitted by law.
       (b) Agreement.--In order to receive any assistance 
     described in subsection (a) the Corporation shall enter into 
     an agreement with the Federal department or agency pro
      viding such assistance, under which the Corporation agrees--
       (1) to use such assistance to provide funding and technical 
     assistance only for activities which the Board of Directors 
     of the Corporation determines are consistent with the 
     corporate purposes described in section ---- 02(a)(3);
       (2) to review the activities of State education technology 
     agencies and other entities receiving assistance from the 
     Corporation to assure that the corporate purposes described 
     in section ---- 02(a)(3) are carried out;
       (3) that no part of the assets of the Corporation shall 
     accrue to the benefit of any member of the Board of Directors 
     of the Corporation, any officer or employee of the 
     Corporation, or any other individual, except as salary or 
     reasonable compensation for services;

[[Page S8352]]

       (4) that the Board of Directors of the Corporation will 
     adopt policies and procedures to prevent conflicts of 
     interest;
       (5) to maintain a Board of Directors of the Corporation 
     consistent with section ---- 02(a)(2);
       (6) that the Corporation, and any entity receiving the 
     assistance from the Corporation, are subject to the 
     appropriate oversight procedures of the Congress; and
       (7) to comply with--
       (A) the audit requirements described in section   05; and
       (B) the reporting and testimony requirements described in 
     section   06.
       (c) Construction.--Nothing in this title shall be construed 
     to establish the Corporation as an agency or independent 
     establishment of the Federal Government, or to establish the 
     members of the Board of Directors of the Corporation, or the 
     officers and employees of the Corporation, as officers or 
     employees of the Federal Government.

     SEC.   05. AUDITS.

       (A) Audits by Independent Certified Public Accountants.--
       (1) In general.--The Corporation's financial statements 
     shall be audited annually in accordance with generally 
     accepted auditing standards by independent certified public 
     accountants who are members of a nationally recognized 
     accounting firm and who are certified by a regulatory 
     authority of a State or other political subdivision of the 
     United States. The audits shall be conducted at the place or 
     places where the accounts of the Corporation are normally 
     kept. All books, accounts, financial records, reports, files, 
     and all other papers, things, or property belonging to or in 
     use by the Corporation and necessary to facilitate the audit 
     shall be made available to the person or persons conducting 
     the audits, and full facilities for verifying transactions 
     with the balances or securities held by depositories, fiscal 
     agents, and custodians shall be afforded to such person or 
     persons.
       (2) Reporting requirements.--The report of each annual 
     audit described in paragraph (1) shall be included in the 
     annual report required by section   06(a).
       (b) Recordkeeping Requirements; Audit and Examination of 
     Books.--
       (1) Recordkeeping requirements.--The Corporation shall 
     ensure that each recipient of assistance from the Corporation 
     keeps--
       (A) separate accounts with respect to such assistance;
       (B) such records as may be reasonably necessary to fully 
     disclose--
       (i) the amount and the disposition by such recipient of the 
     proceeds of such assistance;
       (ii) the total cost of the project or undertaking in 
     connection with which such assistance is given or used; and
       (iii) the amount and nature of that portion of the cost of 
     the project or undertaking supplied by other sources; and
       (C) such other records as will facilitate an effective 
     audit.
       (2) Audit and examination of books.--The Corporation shall 
     ensure that the Corporation, or any of the Corporation's duly 
     authorized representatives, shall have access for the purpose 
     of audit and examination to any books, documents, papers, and 
     records of any recipient of assistance from the Corporation 
     that are pertinent to such assistance. Representatives of the 
     Comptroller General shall also have such access for such 
     purpose.

     SEC.   06. ANNUAL REPORT; TESTIMONY TO THE CONGRESS.

       (a) Annual Report.--Not later than April 30 of each year, 
     the Corporation shall publish an annual report for the 
     preceding fiscal year and submit that report to the President 
     and the Congress. The report shall include a comprehensive 
     and detailed evaluation of the Corporation's operations, 
     activities, financial condition, and accomplishments under 
     this title and may include such recommendations as the 
     Corporation deems appropriate.
       (b) Testimony Before Congress.--The members of the Board of 
     Directors, and officers, of the Corporation shall be 
     available to testify before appropriate committees of the 
     Congress with respect to the report described in subsection 
     (a), the report of any audit made by the Comptroller General 
     pursuant to this title, or any other matter which any such 
     committee may determine appropriate.
                    Amendment No. 1318, as Modified

  The PRESIDING OFFICER. The question recurs on the Brown amendment, 
No. 1318.
  Is there further debate? The Senator from Colorado.
  Mr. BROWN. Mr. President, I ask unanimous consent to amend 1318 into 
a form the chairman of the committee and distinguished ranking member--
--
  Mr. PRESSLER. If my colleague will yield, he is not trying to amend 
the Moseley-Braun amendment?
  The PRESIDING OFFICER. The pending amendment is the amendment of the 
Senator from Colorado.
  Mr. BROWN. Mr. President, I send to the desk a revised version of 
amendment No. 1318, and ask unanimous consent I be allowed to offer the 
revised version.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
amendment is so modified.
  The amendment (No. 1318), as modified, is as follows:

       On page 13, line 20 insert after ``carrier'': ``or its 
     affiliate''.

  Mr. BROWN. It is my understanding both sides have agreed to this 
version. I think it more clearly states the intent that was involved. I 
urge its approval.
  The PRESIDING OFFICER. Is there further debate? If not the question 
occurs on amendment No. 1318, as modified.
  Mr. HOLLINGS. Mr. President, let me see a copy of it. I have not seen 
the modification. We had made suggestions as to the modification. Can 
we look at it?
  Mr. PRESSLER. Mr. President, is it possible the Senator from 
Pennsylvania could offer an amendment at this point? I ask unanimous 
consent whatever the pending business is it be set aside so the Senator 
from Pennsylvania can offer an amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Pennsylvania.


                    Amendment No. 1294, As Modified

  (Purpose: To promote the use of telecommuting by the American work 
                                 force)

  Mr. SPECTER. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. Is there objection to considering the 
amendment?
  Mr. SPECTER. It has been previously filed.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Pennsylvania [Mr. Specter], proposes an 
     amendment numbered 1294, as modified.

  Mr. SPECTER. I ask unanimous consent there be no reporting of the 
amendment so I may explain it.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place in the bill, insert the following:

     SEC.   . TELECOMMUTING PUBLIC INFORMATION PROGRAM.

       (a) Findings.--Congress makes the following findings--
       (1) Telecommuting is the practice of allowing people to 
     work either at home or in nearby centers located closer to 
     home during their normal working hours, substituting 
     telecommunications services, either partially or completely, 
     for transportation to a more traditional workplace;
       (2) Telecommuting is now practiced by an estimated two to 
     seven million Americans, including individuals with impaired 
     mobility, who are taking advantage of computer and 
     telecommunications advances in recent years;
       (3) Telecommuting has the potential to dramatically reduce 
     fuel consumption, mobile source air pollution, vehicle miles 
     traveled, and time spent commuting, thus contributing to an 
     improvement in the quality of life for millions of Americans; 
     and
       (4) It is in the public interest for the Federal Government 
     to collect and disseminate information encouraging the 
     increased use of telecommuting and identifying the potential 
     benefits and costs of telecommuting.
       (b) The Secretary of Transportation, in consultation with 
     the Secretary of Labor and the Administrator of the 
     Environmental Protection Agency, shall, within three months 
     of the date of enactment of this Act, carry out research to 
     identify successful telecommuting programs in the public and 
     private sectors and provide for the dissemination to the 
     public of information regarding--
       (1) the establishment of successful telecommuting programs; 
     and
       (2) the benefits and costs of telecommuting.
       (c) Report.--Within one year of the date of enactment of 
     this Act, the Secretary of Transportation shall report to 
     Congress its findings, conclusions, and recommendations 
     regarding telecommuting developed under this section.

  Mr. SPECTER. This amendment directs the Secretary of Transportation, 
in consultation with the Labor Department and EPA, to identify 
successful governmental and business telecommuting programs 
and to disseminate information about such programs, including the 
benefits of telecommuting, to the general public. The amendment is 
intended to promote the increased use of telecommuting through a 
broader awareness of the benefits, including flexibility, profamily 
employment, reduced traffic congestion, and lower fuel consumption. The 
Secretary of Transportation will be required to report to Congress on 
his findings, conclusions, and recommendations regarding telecommuting 
within 1 year of enactment.
  It is my understanding this amendment is acceptable on both sides.
  [[Page S8353]]
  
  Mr. PRESSLER. We are prepared to accept this amendment by Senator 
Specter from Pennsylvania. I commend him for his efforts.
  I believe the Specter amendment has been cleared on both sides.
  Mr. HOLLINGS. It has been cleared.
  Mr. PRESSLER. Mr. President, I urge the adoption of the amendment.
  The PRESIDING OFFICER. The pending question is amendment 1294, as 
modified.
  If there be no further debate, the question is on agreeing to the 
amendment.
  The amendment (No. 1294) was agreed to.
  Mr. SPECTER. Mr. President, I move to reconsider the vote.
  Mr. PRESSLER. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 1343

   (Purpose: To provide for Commission notification of the Attorney 
   General of any approval of Bell Company entry into long distance)

  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I have amendment No. 1343 at the desk. I 
ask for its consideration.
  The PRESIDING OFFICER. Without objection the pending amendment is set 
aside. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from North Dakota [Mr. Dorgan] proposes an 
     amendment numbered 1343.

  Mr. DORGAN. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER (Ms. Snowe). Without objection, it is so 
ordered.
  The amendment is as follows:
       On page 93, after line 12, insert the following:
       ``(6) Notification of attorney general.--
       ``(A) Notification.--The Commission shall immediately 
     notify the Attorney General of any approval of an application 
     under paragraph (1).
       ``(B) Action by attorney general.--Upon notification of an 
     approval of an application under paragraph (1), the Attorney 
     General may commence an action in any United States District 
     Court if
       ``(i) the Attorney General determines that the 
     authorization granted by the Commission may substantially 
     lessen competition or tend to create a monopoly; or
       ``(ii) the Attorney General determines that the 
     authorization granted by the Commission is inconsistent with 
     any recommendation of the Attorney General provided to the 
     Commission pursuant to paragraph (2) of this section.
       ``The commencement of such an action shall stay the 
     effectiveness of the Commission's approval unless the court 
     shall otherwise specifically order.
       ``(C) Standard of review.--In any such action, the court 
     shall review de novo the issues presented. The court may only 
     uphold the Commission's authorization if the court finds that 
     the effect of such authorization will not be substantially to 
     lessen competition or to tend to create a monopoly in any 
     line of commerce in any section of the country. The court may 
     uphold all or part of the authorization.''

  Mr. DORGAN. Madam President, because of the time constraint that 
amendments must be offered by 7:30, I feel constrained to offer the 
amendment but I admit this is a very controversial issue. This is a 
different approach on the issue that we have debated at some length 
with respect to the role of the Justice Department.
  I would not, in this amendment, preserve the same role for the 
Justice Department that we had previously debated, but the amendment I 
have offered, that is germane and I had previously at the desk, is one 
that would provide, upon notification by the Federal Communications 
Commission of an approval of an application under paragraph 1, that the 
Attorney General may commence an action in U.S. District Court and seek 
a stay, if the Attorney General determines the authorization granted by 
the Commission may substantially lessen competition or tend to create a 
monopoly.
  Mr. HOLLINGS. What is the last wording there? I am trying to hear.
  Mr. DORGAN. Let me read the paragraph again. Essentially what this 
amendment would do is to provide that, if the Federal Communications 
Commission approved an application under paragraph 1 in the bill, the 
Attorney General may commence an action in a U.S. District Court:

       . . . if . . . the Attorney General determines that the 
     authorization granted by the Commission may substantially 
     lessen competition or tend to create a monopoly; or, if the 
     Attorney General determines that the authorization granted by 
     the Commission is inconsistent with any recommendation of the 
     Attorney General provided to the Commission pursuant to 
     paragraph (2) of this section.
       The commencement of such an action shall stay the 
     effectiveness of the Commission's approval unless the court 
     shall otherwise specifically order.

  I recognize this is a very controversial issue. We have already 
debated a couple of versions of the Justice Department involvement. I 
do want to have this called up, as I have just done, prior to 7:30 to 
have the right to ask for a vote on this different approach with 
respect to the Justice Department prior to final passage of this bill. 
I do not intend to speak at length this evening but I did want to have 
this introduced. I will be happy to have it set aside.
  Mr. PRESSLER. I will be prepared to table right now and get a vote on 
it. Then it will be behind us. Would that be agreeable?
  Mr. DORGAN. My understanding is we are going to vote on a good number 
of amendments tomorrow en bloc. Or at least stacked amendments. I 
expect there may be some others who discussed the Justice Department 
role who may want to add some comments to this.
  Mr. PRESSLER. Madam President, if my friend will yield, we have had a 
long debate on the Senate floor. I thought we had a general agreement. 
We allowed the Thurmond amendment to be voted on first, in 
consideration of my friend from North Dakota. We bent over backward to 
give everybody every chance for this. The bill has been in for a week. 
I would plead with him, we would like to vote now before Members leave. 
This subject has been debated so thoroughly and for so many days. We 
are prepared to vote here on his amendment.
  Mr. DORGAN. The Senator from South Dakota is absolutely correct. He 
has been eminently fair. I have not referenced an amendment this 
evening that is identical to the Justice Department amendments that we 
have discussed before. This is a different amendment.
  It provides that the Attorney General will have the opportunity to 
seek a stay in U.S. District Court if and only if, upon approval of an 
application by the Federal Communications Commission, the Attorney 
General would determine the authorization granted by the Commission may 
substantially lessen competition or tend to create a monopoly.
  This is a different approach and it is gradations lower than the 
stuff, rather the approaches that we were talking about earlier.
  There may be some others who would like to discuss this. But, in any 
event, the Senator certainly has a right to table this. At the moment, 
I hope he will refrain from doing so in the event some others would 
like to discuss it.
  Mr. PRESSLER. If my friend will yield, I hate to do this because at 
7:30 we are supposed to have the potential list of amendments that we 
are trying to move forward. There is very little time tomorrow morning. 
Senator Dole has asked that we vote on as many of these amendments as 
we can. This has been debated thoroughly.
  Mr. DORGAN. Let me ask the Senator from South Dakota, as well as the 
ranking minority member on this issue--the Senator realizes that we 
have had substantial debate on the Justice Department role. Those of us 
who offered the Justice amendment understood that we lost, and it was a 
very close vote. But, nonetheless, we lost. Many of us feel very 
strongly about the need to update the 1934 law, that we ought to move 
forward in the rewrite of the telecommunications laws. We also feel 
very strongly that if we proceed just as we are now with this bill, we 
could find ourselves in a heck of a fix having dealt the Justice 
Department out of a legitimate role here.
  I guess my question is, Does the chairman of the Commerce Committee 
and the ranking member intend to hold oversight hearings in the next 
couple of years, next year, or the year after, so that you can, through 
the committee structure, address this issue of the Justice role and 
what has happened since the passage of the bill, if this bill in fact 
passes?
  If I had some assurance that maybe we would have aggressive 
oversight, and if we find in that oversight that we [[Page S8354]] have 
made a mistake here, then perhaps I would be persuaded to let this go. 
I am uncomfortable with where this rests. This amendment is not the 
same as the previous amendment. It is a different approach.
  I ask the chairman of the committee and the ranking minority member 
about their intentions with respect to evaluating whether what we have 
done works or does not work and whether dealing out the Justice 
Department the way they have been dealt out of this process has been 
helpful or hurtful to the consumers.
  Mr. PRESSLER. Let me first of all commend the Senator from North 
Dakota. He is my friend. We work together on all kinds of issues, and 
we will in the future. We will try to make this a part of a hearing or 
hearings. I cannot guarantee it. There is so much authorization 
legislation to do in the Commerce, Science, and Transportation 
Committee, a stack of authorizing legislation to do when we are getting 
a letter from Senator Domenici as to how to raise about $25 or $30 
billion. So we have a lot of work to do in the Commerce, Science, and 
Transportation Committee. But we will be holding hearings. This will be 
a part of it.
  I really wish that my friend from North Dakota would give us a chance 
in good faith to address this after the proper hearings and take it up 
legislatively later, if that would be possible.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Let me join in the comments with our distinguished 
chairman. What happens here is, with the amendment of the Senator from 
North Dakota, as this Senator sees it, it just comes back around and 
reiterates the amendment which was defeated. I do not think it was 
unjustifiably defeated or casually defeated, or whatever was the 
expression used by my friend from North Dakota. Yes, we should have 
oversight hearings. This is a really complex measure. I cannot see, as 
a member of that communications subcommittee, that we not have hearings 
each year to see the progress made, how they have managed to set down 
the rules for the unbundling, the dial parity, the interconnection, the 
number portability, and all of these particular things to move 
everything along down this information superhighway.
  So I agree with the Senator from North Dakota on that. But I agree 
with our chairman. We do not want to come back around now, and have it 
all settled--one-stop shopping, so to speak, that the FCC comes back 
around here at the last minute saying: By the way, we want to put the 
Attorney General back in there again.
  I am back in, if you want to hear those arguments again about 
antitrust lawyers.
  Mr. DORGAN. That is fine. The Senator does not need to repeat those 
arguments. But I was entertained by them the first time. I am sure I 
would be the second time, as well. In fact, I share some of them. But 
at least with respect to the Justice Department, the antitrust 
enforcement, now with Anne Bingaman down at the Attorney General's 
office, I am pretty pleased with what is going on.
  Let me ask one additional question. I guess if I get some feeling 
that you are willing to do oversight hearings and be aggressive, and 
find out whether this works or does not work, or whether the consumers 
are advantaged or disadvantaged, I would have some better feeling about 
it. When we go to conference with this bill, if this bill passes the 
Senate and the House comes to a conference with a Justice Department 
role in it, as you know, it is a lesser standard than we were 
proposing. I know that 43 percent of the membership of the Senate on 
the issue of the Justice role felt differently than the majority, but a 
substantial minority, nonetheless.
  I hope we can find a way in the conference to resolve this issue in a 
slightly different way, as well.
  I am happy to yield.
  Mr. PRESSLER. Madam President, I want to thank the Senator from North 
Dakota because I feel comfortable that our Commerce, Science, and 
Transportation Committee should be an oversight committee for part of 
the time. We have had two of the larger bills, the tort reform bill, 
and the product liability bill, coming through our committee. And then 
the telecommunications bill has occupied a lot of our time. Because we 
have the NASA space issue, we have the reauthorization of the Magnuson 
Act, which has had field hearings, we have had a lot of legislation.
  But I am hopeful that we can have a lot of oversight hearings because 
I am one who believes strongly that we should have a Congress 
oversight. David Boren used to say that in his discussions about 
reforms. That was one of the reforms we were going to have, was to have 
a Congress with no legislation and oversight, which is kind of the 
``Blue Monday'' work of Congress where you just sit and try to improve 
the Government we already have.
  So I think the Senator makes a good point. We hope to get into those 
types of hearings. We have had some already. We will have more. I hear 
what he is saying. But I think at this particular time in this bill, 
after all these negotiations and so forth have gone on, that we would 
have to oppose his amendment at this time. But we hope to work with him 
on it in the future.
  Mr. DORGAN. Madam President, whether we count votes or weigh votes, I 
do not think there is any reason to believe a tabling motion made by 
the chairman of the committee would produce a different result than I 
saw last evening. So I shall not pursue this, and I will ask unanimous 
consent to withdraw the amendment in a moment.
  But I will say to you that I think this issue will not dissolve. The 
issue of the Justice Department role and dealing with anticompetitive 
or antitrust issues will not go away and will show up again, certainly 
when some of us think we have the votes to win. When it does show up, 
you will know that we have counted differently. But in any event, if 
the chairman and the ranking member will permit me, I ask unanimous 
consent to withdraw the amendment at this point.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  So the amendment (No. 1343) was withdrawn.
  Mr. PRESSLER. I thank my friend from North Dakota very much for his 
cooperation on this.
  Mr. BROWN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Colorado.


                Vote on Amendment No. 1318, As Modified

  Mr. BROWN. Madam President, I call up amendment No. 1318, as 
modified. I believe all parties have had a chance to review it. It has 
been cleared now.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 1318), as modified, was agreed to.
  The PRESIDING OFFICER. Who seeks recognition?
  Mr. PRESSLER. Madam President, I again urge Senators to please come 
to the floor with their amendments. We are open for business. By 7:30, 
Senator Dole will return to the floor and look over the amendments that 
people wish to offer. We are eager to do business over here. I plead 
with Senators. We are trying to finish up. Please come to the floor 
with your speeches or amendments.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HOLLINGS. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HOLLINGS. I thank the distinguished Chair.


                           Amendment No. 1299

  Mr. HOLLINGS. Madam President, on behalf of the Senator from 
Louisiana [Mr. Breaux], he wanted to make sure he qualified amendment 
No. 1299 to be called up but not necessarily to be voted on at this 
particular time. He is not present, but I would like to call it up and 
then set it aside, 1299.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from South Carolina [Mr. Hollings], for Mr. 
     Breaux, proposes an amendment numbered 1299.

  Mr. HOLLINGS. Madam President, I ask unanimous consent that reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered. 
[[Page S8355]] 
  The amendment is as follows:

       On page 123, line 10, add the following new sentence: 
     ``This section shall take effect upon a determination by the 
     United States Coast Guard that at least 80% of vessels 
     required to implement the Global Maritime Distress and Safety 
     System have the equipment required by such System installed 
     and operating in good working condition.''

  Mr. HOLLINGS. And I ask unanimous consent now that the amendment be 
set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1285

 (Purpose: To means test the eligibility of the community users in the 
                                  act)

  Mr. PRESSLER. Madam President, I would like to call up amendment No. 
1285 on behalf of Senator John McCain. The intention is for this 
amendment to be debated and possibly voted on tomorrow.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The legislative clerk read as follows:

       The Senator from South Dakota [Mr. Pressler], for Mr. 
     McCain, for himself, Ms. Snowe, Mr. Rockefeller, Mr. Exon, 
     Mr. Kerrey, and Mr. Craig, proposes an amendment numbered 
     1285.

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

       At the end of section 310 of the Act, add the following:
       (  ) No entity listed in this section shall be entitled for 
     preferential rates or treatment as required by this section, 
     if such entity operates as a for-profit business, is a school 
     as defined in section 264(d)(1) with an endowment of more 
     than $50 million, or is a library not eligible for 
     participation in state-based plane for Library Services and 
     Construction Act title III funds.

  Mr. PRESSLER. I ask unanimous consent the amendment be laid aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HARKIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.


                    Amendment No. 1323, as Modified

 (Purpose: To postpone the effective date of the authority to provide 
                       alarm monitoring services)

  Mr. HARKIN. Madam President, I would like to call up my amendment. I 
believe it is amendment No. 1323.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Iowa [Mr. Harkin], for himself and Mr. 
     Packwood, proposes an amendment numbered 1323.

  Mr. HARKIN. Madam President, I would like just to take a couple of 
minutes to talk about this amendment. I do not want to take a great 
deal of time; I know the managers want to move on to other amendments, 
and I have two more amendments I want to offer.
  I believe this amendment as it has been modified will be acceptable 
to both sides. I wish to thank both Senator Hollings and Senator 
Pressler for being willing to accommodate me and to work this out. I 
thank the esteemed Senator from Kentucky also for his willingness to 
help work this matter out in an acceptable manner.
  Madam President, I ask unanimous consent to strike the number 6 and 
insert in lieu thereof the number 4.
  The PRESIDING OFFICER. Hearing no objection, it is so ordered.
  The amendment (No. 1323), as modified, is as follows:
       On page 109, line 4, strike out ``3 years'' and insert in 
     lieu thereof ``4 years''.

  Mr. HARKIN. Madam President, I know that most of any Senate 
colleagues share my belief that small business people are the backbone 
of both the economic and community life of this country. We know that 
the small business people in our villages, towns and cities back home 
help to provide neighborhood stability and pride by being the 
individuals who can be depended upon to participate in community 
affairs, and we all know small businesses are where the jobs are 
created.
  Today, in the midst of these great battles among corporate titans 
like the baby Bells, the major long distance carriers, the large cable 
television companies and the large broadcasters, this amendment helps 
the little person. The amendment that I have just introduced on behalf 
of myself and Senator Packwood is very simple. It merely changes the 
waiting period before the Bell companies could enter the alarm 
monitoring service business to 4 years.
  Now, some of my colleagues might ask why we are doing this. Well, 
this amendment would partially restore an agreement reached in the last 
Congress through good faith negotiations between the alarm industry and 
the Bells. They were asked by Members of Congress to work out a deal, 
and they did. There was give and take on both sides and they came to an 
agreement. It is the purpose of the Harkin-Packwood amendment to 
restore one key element in that agreement.
  And why was this agreement struck in the first place? First of all, 
the burglar and fire alarm industry is unique. It is the only 
information service which is competitively available in every community 
across the Nation. If you want to verify this, I urge you to go back to 
your offices and check the yellow pages in the phone book for your 
State. What you will find is that the alarm security services are 
widely and competitively available.
  What is less apparent is the fact that this highly competitive, $10 
billion industry is not dominated by large companies. Instead, it is 
dominated by small businesses which employ on average less than 10 
workers. There are over 13,000 alarm companies across the Nation. The 
top 100 control less than 25 percent of the marketplace and the 100th 
largest company has annual revenues of less than $3 million a year. The 
eight largest companies control merely 11 percent of the marketplace.
  Many of these businesses epitomize the American dream. Alarm 
companies are started by people with all kinds of backgrounds. A 
military veteran who learned electronics in the service, someone who 
worked in the building trades, or a retired police officer, they start 
their own businesses; they work hard; they succeed; and they want to 
pass on their business to their children.
  All of that is at risk. The industry is an open marketplace where 
small companies compete successfully every day with a few large 
national companies because no single company has the ability to control 
access to service or how it is delivered.
  Furthermore, no single individual or group of companies has the 
ability to set the price in the marketplace. It is the American 
consumer who has the most to lose because the consumer benefits from 
this competitive marketplace. Over the past decade, the average price 
of the installation of a home security system has declined 40 percent. 
Today, you can have a system installed in your home for as little as 
$200, and some companies are even offering free installation in order 
to promote alarm monitoring services.
  The alarm industry also has an excellent job creation record. Over 
the past 20 years, the alarm industry has more than tripled employment 
from 40,000 jobs to well over 140,000 jobs.
  This is a very vibrant sector of the American economy. So vigorous 
alarm industry competition benefits the consumer in another way--the 
development of an industry-wide culture which promotes prompt, reliable 
service.
  This is vitally important in an industry where the service involved 
is a protection of life, safety, and property in one's home or 
business. Knowing that a service person will be there next week 
sometime in the morning or afternoon is not good enough. Consumers 
benefit from the knowledge that if they do not like the service they 
are receiving, there is always another alarm company that will provide 
the service they want and need at a competitive price.
  Another compelling reason for increasing the transition period for 
the Bell entry into the alarm monitoring service is the fact most 
experts agree that the vast majority of small business alarm companies 
will be driven out of business if the regional Bell operating companies 
enter before a level playing field exists.
  The industry felt it had an excellent chance of developing that level 
playing field in its prior agreement with the Bells. That agreement 
included a ban on Bell company access to the customer lists of existing 
alarm companies, an expedited complaint process at the FCC, a 
Department of Justice-administered VIII(c) antitrust entry test, and an 
adequate waiting period to ensure that an overburdened FCC should 
actually address the industry's complaints when Bell entry occurs. 
[[Page S8356]] 
  While the first two of those provisions remain in the bill, the 
critical VIII(c) antitrust entry test is gone and the term of years 
prior to entry was cut in half to 3 years.
  So, Madam President, while S. 652 requires the RBOC's meet a 
checklist of requirements designed to establish conditions necessary 
for competition in the local exchange, it does not require actual 
competition to exist. An VIII(c) antitrust test is no longer available. 
Competition in the local telephone exchange is the next best assurance 
of a level playing field.
  So, Madam President, the goal of this amendment is to make sure that 
these small companies out there, indeed, have some period of time to 
ensure that there is a level playing field before the Bells can enter 
the alarm and service industry.
  This period, has been agreed upon for 4 years, and I am hopeful that 
would be the minimum length of time that we would have. I still believe 
that the initial agreement of 6 years should have been adhered to, but 
I understand that this has been worked out for 4 years here in the 
Senate, with the assurance of the committee that this would be 
acceptable. I am hopeful that a longer period can be worked out in the 
conference committee. Again, I want to thank Senators Pressler and 
Hollings for helping work out this agreement.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. PRESSLER. Madam President, these carveouts are always difficult 
because when there is a carveout, there are problems for new entrants. 
I agree with the Senator from Iowa that this is small business. There 
has been a lot of discussion on this, whether the burglar alarm people 
should be given a certain period of protection.
  We hope in a deregulatory bill to get everybody competing as soon as 
possible. In fact, we had a big thing--at least it was big to me--in 
the Commerce Committee of keeping even the newspaper publishers without 
a carveout, without a period of years --they have 5 or 6 years in the 
House bill.
  If we are going to have deregulation, we have to get people 
competing, because new people want to get into the field also out 
there, new small businesses.
  As I understand it, there is an informal agreement, if we can use 
that term, reached that they will not seek beyond 4 years in 
conference, hopefully. With that understanding, we can accept this 
amendment.
  I urge adoption of the amendment.
  The PRESIDING OFFICER. Does the Senator have any further debate on 
this amendment?
  Mr. HARKIN. No.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 1323), as modified, was agreed to.
  Mr. PRESSLER. Madam President, I move to reconsider the vote by which 
the amendment was agreed to, and I move to lay that motion on the 
table.
  The motion to lay on the table was agreed to.
  Mr. HARKIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.


                           Amendment No. 1322

   (Purpose: To prevent unfair billing practices for information or 
              services provided over calls to 800 numbers)

  Mr. HARKIN. Madam President, if my friend from Massachusetts will 
yield, I just have two other amendments that have been accepted. I call 
up amendment No. 1322 and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Iowa [Mr. Harkin] proposes an amendment 
     numbered 1322.

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

       On page 146, below line 14, add the following:

     SEC. 409. PREVENTION OF UNFAIR BILLING PRACTICES FOR 
                   INFORMATION OR SERVICES PROVIDED OVER TOLL-FREE 
                   TELEPHONE CALLS.

       (a) Findings.--Congress makes the following findings:
       (1) Reforms required by the Telephone Disclosure and 
     Dispute Resolution Act of 1992 have improved the reputation 
     of the pay-per-call industry and resulted in regulations that 
     have reduced the incidence of misleading practices that are 
     harmful to the public interest.
       (2) Among the successful reforms is a restriction on 
     charges being assessed for calls to 800 telephone numbers or 
     other telephone numbers advertised or widely understood to be 
     toll free.
       (3) Nevertheless, certain interstate pay-per-call 
     businesses are taking advantage of an exception in the 
     restriction on charging for information conveyed during a 
     call to a ``toll-free'' number to continue to engage in 
     misleading practices. These practices are not in compliance 
     with the intent of Congress in passing the Telephone 
     Disclosure and Dispute Resolution Act.
       (4) It is necessary for Congress to clarify that its intent 
     is that charges for information provided during a call to an 
     800 number or other number widely advertised and understood 
     to be toll free shall not be assessed to the calling party 
     unless the calling party agrees to be billed according to the 
     terms of a written subscription agreement or by other 
     appropriate means.
       (b) Prevention of Unfair Billing Practices.--
       (1) In general.--Section 228(c) (47 U.S.C. 228(c)) is 
     amended--
       (A) by striking out subparagraph (C) of paragraph (7) and 
     inserting in lieu thereof the following:
       ``(C) the calling party being charged for information 
     conveyed during the call unless--
       ``(i) the calling party has a written agreement (including 
     an agreement transmitted through electronic medium) that 
     meets the requirements of paragraph (8); or
       ``(ii) the calling party is charged for the information in 
     accordance with paragraph (9); or''; and
       (B) by adding at the end the following new paragraphs:
       ``(8) Subscription agreements for billing for information 
     provided via toll-free calls.--
       ``(A) In general.--For purposes of paragraph (7)(C), a 
     written subscription does not meet the requirements of this 
     paragraph unless the agreement specifies the material terms 
     and conditions under which the information is offered and 
     includes--
       ``(i) the rate at which charges are assessed for the 
     information;
       ``(ii) the information provider's name;
       ``(iii) the information provider's business address;
       ``(iv) the information provider's regular business 
     telephone number;
       ``(v) the information provider's agreement to notify the 
     subscriber of all future changes in the rates charged for the 
     information; and
       ``(vi) the subscriber's choice of payment method, which may 
     be by direct remit, debit, prepaid account, phone bill or 
     credit or calling card.
       ``(B) Billing arrangements.--If a subscriber elects, 
     pursuant to subparagraph (A)(vi), to pay by means of a phone 
     bill--
       ``(i) the agreement shall clearly explain that charges for 
     the service will appear on the subscriber's phone bill;
       ``(ii) the phone bill shall include, in prominent type, the 
     following disclaimer:

       `Common carriers may not disconnect local or long distance 
     telephone service for failure to pay disputed charges for 
     information services.'; and

       ``(iii) the phone bill shall clearly list the 800 number 
     dialed.
       ``(C) Use of pins to prevent unauthorized use.--A written 
     agreement does not meet the requirements of this paragraph 
     unless it requires the subscriber to use a personal 
     identification number to obtain access to the information 
     provided, and includes instructions on its use.
       ``(D) Exceptions.--Notwithstanding paragraph (7)(C), a 
     written agreement that meets the requirements of this 
     paragraph is not required--
       ``(i) for calls utilizing telecommunications devices for 
     the deaf;
       ``(ii) for services provided pursuant to a tariff that has 
     been approved or permitted to take effect by the Commission 
     or a State commission; or
       ``(iii) for any purchase of goods or of services that are 
     not information services.
       ``(E) Termination of service.--On receipt by a common 
     carrier of a complaint by any person that an information 
     provider is in violation of the provisions of this section, a 
     carrier shall--
       ``(i) promptly investigate the complaint; and
       ``(ii) if the carrier reasonably determines that the 
     complaint is valid, it may terminate the provision of service 
     to an information provider unless the provider supplies 
     evidence of a written agreement that meets the requirements 
     of this section.
       ``(F) Treatment of remedies.--The remedies provided in this 
     paragraph are in addition to any other remedies that are 
     available under title V of this Act.
       ``(9) Charges in absence of agreement.--A calling party is 
     charged for a call in accordance with this paragraph if the 
     provider of the information conveyed during the call--
       ``(A) clearly states to the calling party the total cost 
     per minute of the information provided during the call and 
     for any other information or service provided by the provider 
     to which the calling party requests connection during the 
     call; and
       ``(B) receives from the calling party-- [[Page S8357]] 
       ``(i) an agreement to accept the charges for any 
     information or services provided by the provider during the 
     call; and
       ``(ii) a credit, calling, or charge card number or 
     verification of a prepaid account to which such charges are 
     to be billed.
       ``(10) Definition.--As used in paragraphs (8) and (9), the 
     term `calling card' means an identifying number or code 
     unique to the individual, that is issued to the individual by 
     a common carrier and enables the individual to be charged by 
     means of a phone bill for charges incurred independent of 
     where the call originates.''
       (2) Regulations.--The Federal Communications Commission 
     shall revise its regulations to comply with the amendment 
     made by paragraph (1) not later than 180 days after the date 
     of the enactment of this Act.
       (3) Effective date.--The amendments made by paragraph (1) 
     shall take effect on the date of the enactment of this Act.
       (c) Clarification of ``Pay-Per-Call Services'' Under 
     Telephone Disclosure and Dispute Resolution Act.--Section 
     204(1) of the Telephone Disclosure and Dispute Resolution Act 
     (15 U.S.C. 5714(1)) is amended to read as follows:
       ``(1) The term `pay-per-call services' has the meaning 
     provided in section 228(j)(1) of the Communications Act of 
     1934, except that the Commission by rule may, notwithstanding 
     subparagraphs (B) and (C) of such section, extend such 
     definition to other similar services providing audio 
     information or audio entertainment if the Commission 
     determines that such services are susceptible to the unfair 
     and deceptive practices that are prohibited by the rules 
     prescribed pursuant to section 201(a).''.

  Mr. HARKIN. Madam President, I want to speak about a problem being 
faced by families across the country--a problem that has cost families 
hundreds and even thousands of dollars. This problem exposes families 
to ripoff schemes in their own homes. Worst of all, young people are 
being exposed to dial-a-porn phone sex services, even when the families 
take the step of placing a block on extra cost 900 number calls from 
their home.
  Most people believe that when they dial 1-800 at the beginning of a 
call, they are calling toll free. Toll free 800 number calling has had 
a dramatically positive impact on many businesses, allowing catalog 
sales to take off, and providing helpful customer services. My State of 
Iowa is prominent in providing these telemarketing services. So I 
strongly believe that we must ensure public confidence in toll-free 800 
numbers.
  Federal law prohibits most practices that would allow people calling 
to an 800 number to be charged for the call. Callers cannot be assessed 
a charge by virtue of completing the call, and they cannot be connected 
to a pay-per-call service--which are usually called 900 number 
services. They also cannot charge for information conveyed during the 
call--with one exception. If there is a preexisting agreement to be 
charged, a charge is allowed. This provision was added, because there 
was concern that the provision might be read to prevent people buying 
merchandise with a credit card on an 800 number, or for nationwide 
access numbers for long distance providers.
  Unfortunately, this small loophole has allowed some sleazy operators 
to set up phone sex services on 800 numbers--and to make the caller pay 
the bill. They use the loophole allowing a charge when there is a 
preexisting arrangement to turn a toll-free 800 number call into a toll 
call.
  Families are being hurt by these services. Youngsters run across the 
ads, and, thinking the call will be free, call numbers like 1-800 HOT 
TALK. These numbers appear in all kinds of publications--from the city 
paper here in Washington; Rolling Stone magazine; and a host of adult 
magazines.
  Here are just two examples of this outrageous behavior that has come 
to my attention recently. I would bet that every Senator has received 
calls from constituents about this problem, but here are just two from 
Iowa.
  Madam President, I ask unanimous consent to print some constituent 
letters in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

         Consumer Advocate, Office of Utilities, Lucas State 
           Office Bldg.,
                                  Des Moines, IA January 28, 1995.
     To Whom It May Concern:
       This letter is regarding my recent encounter with U.S. West 
     Communications.
       On Tuesday January 24, 1995 I called U.S. West to change 
     our service. Because of a recent problem with the so called 
     ``chat line'' and because of past problems with the 1-800's 
     that conveniently turn into the 1-900 charges. I asked U.S. 
     West to take my husband off the account completely and to 
     have all long distance service blocked from our home. I 
     wanted no access to any 1+ dialing, 1-800/1-900 calls. I also 
     cancelled all calling cards. My husband agreed and the 
     calling cards were stopped that same day and everything was 
     switched to only my access.
       On Thursday January 26th I thought I had better check to 
     see that my order was completed. I had no 1+ direct dialing 
     but I could still call 1-800 numbers. I was shocked.
       On Saturday January 28, 1995 I called U.S. West to see why 
     I still had 1-800 access. They informed me that there was no 
     way to block 1-800 calls. I explained to the lady that I had 
     been misinformed because I was told my husband would not be 
     able to make any long distance calls from our house. She put 
     me on hold then came back to me and said I could not block 1-
     800 calls. I waited a few hours, thinking about everything I 
     had been told and then I recalled U.S. West and asked to 
     speak to a supervisor. I was told that there were no 
     supervisors around to talk to. The representative offered to 
     help. I explained the situation to her. She read a new 
     department memo on the 1-800 information while I waited to 
     get some answers. I explained to her that I really needed to 
     speak to a supervisor and was told that the supervisor would 
     just do the same thing that she was doing (read the memo on 
     1-800).
       I am discouraged for many reasons: I could not speak to a 
     supervisor and it was not offered.
       For a minor to buy alcohol or cigarettes they must show an 
     I.D. They are face to face with the seller. These phone 
     conversations have a recording saying you must be 18 years or 
     older or have parents permission. They have no actual contact 
     with the buyer and in turn are selling to minors, and 
     unfortunately it's the parents who pay.
       In closing I would like to urge you to please find a way to 
     stop this problem. I would love to find a way to stop the 
     phone scam operations but I do not know where to begin. I 
     plan to send a copy of this letter to Senators Tom Harkin and 
     Charles Grassley. I can only hope that the more of us who 
     complain the easier it will be to put an end to it all.
       Thank you for your time in reading my concerns.
           Sincerely,
     Sheila Wenger.
                                                                    ____

                                             Iowa Utilities Board,


                                           Utilities Division,

                                                   Des Moines, IA.
       Dear Sirs: My name is Sue Tappe and I work as the Clinton 
     County Protective Payee. I work with clients that receive 
     some type of benefit, such as SS or SSI, VA etc., and cannot 
     handle their own funds for a variety of reasons.
       I am writing today in reference to a client that had a 
     phone service installed in Sept. 1994. This service, at the 
     time of order, had a long distance block set up on it, so I 
     assumed there would be no long distance calling. WRONG 
     assumption. My client got a hold of some advertisements that 
     offered 800 numbers, and went to town dialing them. They then 
     turned into 900 numbers by requesting the caller to push 
     another button. He can only read to approximately 3rd grade 
     level, but he can follow instructions. He said 800 numbers do 
     not cost anything when I questioned him on the subject.
       I have called all the long distance companies and have 
     asked for credits because of the long distance block. I have 
     gotten cooperation from a couple of the companies, but they 
     also let me know that the normal procedure is to have them 
     then turned over to a collection agency.
       What can be done about these pay talk telephone companies 
     who take advantage of clients who cannot understand the 
     consequences of their actions much less the value of their 
     money?
       By the way, my client no longer has a phone service, and 
     that, he does understand. But until there is complete credit 
     back, he will never have service again.
       I am enclosing copies of bills and sending copies to 
     Senator Tom Harkin and Congressman Jim Leach. We need to take 
     action for a change in laws, and to protect ourselves, all of 
     us, from this situation happening again.
       Thank you for listening and hope you might provide some 
     suggestions to me and certainly some action can be taken in 
     this area.
                                                 Sue Tappe, Payee.

  Mr. HARKIN. Madam President, here is how the companies do it. A 
caller calls an 800 number. He or she is directed to enter an ``access 
code,'' in order to be connected to a service--without knowing that, by 
entering the number, they are authorizing the service to charge for the 
call. Another scam is for the call to be switched to international 
numbers in small countries around the world, or to give an 
international phone number without disclosing the extremely high 
international calling rates. Phone sex companies set up in these 
companies, where local law in the host country allows them to receive a 
cut from the charges. One service operated out of Suriname charges some 
$50 per minute. [[Page S8358]] 
  Under another so-called preexisting agreement, the first call from a 
number establishes the agreement, and subsequent calls are charged to 
the phone number the first call was made from. This means that anyone 
making a telephone call from your phone could make you liable for 
hundreds of dollars of calls--even if the person never makes another 
call from that phone. A person making a call from a motel can set up 
one of these agreements with a phone-sex service, and the motel could 
be forced to pay for subsequent calls from anywhere in the country. At 
the Motel 6 chain alone, porn calls have cost a quarter of a million 
dollars in the last year. In our own offices here at the Senate, a 
courier who uses the courtesy telephone, supposedly to call his 
dispatcher, could charge phone-sex calls back to your office account.
  How many people are concerned about this problem? All you need to 
know is how many families have signed up for 900 number blocking. These 
families have said that they have no intention of using pay-per-call 
services. In Iowa, about one in four lines are restricted from calling 
900 numbers, most of which are homes, rather than businesses.
  Today, I am offering an amendment that would prohibit this abuse. My 
amendment, which is similar to one that has been included in the House 
Commerce Committee-passed version of this legislation by our House 
colleague, Representative Bart Gordon of Tennessee, would alleviate 
this problem. Representative Gordon has been a leader on this issue for 
many years, and has fought hard to get control of the phone-sex 
industry. This amendment would clarify that a preexisting agreement 
must be in writing, which would end the supposed preexisting agreements 
that are initiated by pressing a button on a phone. It also expands the 
definition of pay-per-call service to include the international calls, 
to allow the FCC to regulate them.
  Alternatively, it would allow information services on 800 numbers 
without a preexisting agreement. The service provider would have to 
disclose their rates on each call. If the caller agreed to pay and gave 
a credit, charge or calling card to pay for the information, the 
service could be provided.
  The bill as reported by committee purports to address this problem, 
in section 406. However, this section would not go as far as the 
language I am offering. My amendment was developed after extensive 
consultation with industry representatives, to try to take into account 
problems beyond the 800 numbers, and also to take into account the new 
legitimate information systems that are going to be offered in the new 
information environment that this bill will create. Further, a similar 
amendment has already been accepted in the House subcommittee markup. I 
urge my colleagues to support this important amendment to close the 
loophole on the phone sex peddlers.
  Madam President, again, I believe this amendment has been agreed to.
  The PRESIDING OFFICER. Is there further debate on this amendment? If 
not, the question is on agreeing to the amendment.
  The amendment (No. 1322) was agreed to.
  Mr. PRESSLER. Madam President, I move to reconsider the vote by which 
the amendment was agreed to, and I move to lay that motion on the 
table.
  The motion to lay on the table was agreed to.


                           Amendment No. 1324

 (Purpose: To combat telemarketing fraud through reasonable disclosure 
          of certain records for telemarketing investigations)

  Mr. HARKIN. Madam President, I call up amendment No. 1324.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Iowa [Mr. Harkin] proposes an amendment 
     numbered 1324.

  Mr. HARKIN. Madam President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       On page 146, below line 14, add the following:

     SEC. 409. DISCLOSURE OF CERTAIN RECORDS FOR INVESTIGATIONS OF 
                   TELE- MARKETING FRAUD.

       Section 2703(c)(1)(B) of title 18, United States Code, is 
     amended--
       (1) by striking out ``or'' at the end of clause (ii);
       (2) by striking out the period at the end of clause (iii) 
     and inserting in lieu thereof ``; or''; and
       (3) by adding at the end the following:
       ``(iv) submits a formal written request for information 
     relevant to a legitimate law enforcement investigation of the 
     governmental entity for the name, address, and place of 
     business of a subscriber or customer of such provider, which 
     subscriber or customer is engaged in telemarketing (as such 
     term is in section 2325 of this title).''.

  Mr. HARKIN. Madam President, every year thousands of Americans are 
victimized by fraudulent telemarketing promotions. And, unfortunately, 
these scam artists prey most often on our senior citizens. The losses 
every year are estimated to be in the billions of dollars. I send an 
amendment to the desk that would help law enforcement to more 
effectively combat these abuses.
  How do these rip-offs occur and why is my amendment necessary to stop 
them? Advertisements regarding sweepstakes, contests, loans, credit 
report and other promotions appear in newspapers, magazines, and other 
direct mail and telephone solicitations. The operators of many of these 
phoney promotions set up a telephone boiler room in which a number of 
phones are operated to receive calls responding to their ads and to 
make direct phone appeals, run their promotion for two to three months, 
ripping people off for thousands and even millions of dollars, and then 
discontinue the operation and move on to another location and rip-off 
promotion.
  By the time law enforcement authorities have received enough 
information to support obtaining the grand jury subpoenas required 
under current law, the business and the operators are gone. And the 
often elderly victims are out of luck. Law enforcement authorities 
currently do not have a mechanism available to quickly identify the 
location of the boiler room before the promotion is discontinued. So, 
they often cannot get after these scam artists until many people have 
been victimized and the operation has closed down.
  Law enforcement agencies have this problem because often these 
promotions furnish only a phone number, leaving no other means of 
identification or location. My amendment addresses this shortcoming by 
providing law enforcement authorities with a narrowly drawn procedure 
to more quickly obtain the name, address, and physical location of 
businesses suspected of being involved in telemarketing fraud. Phone 
companies would have to provide law enforcement officials only the 
name, address, and physical location of a telemarketing business 
holding a phone number if the officials submitted a formal written 
request for this information relevant to a legitimate law enforcement 
investigation.
  The need for this change was brought to my attention by the U.S. 
Postal Inspection Service, the Federal agency which investigates many 
of the telemarketing schemes. It is necessary to crack down on serious 
consumer fraud. With this change, we will have many more successful 
efforts to shut down these rip-off artists like several recent cases in 
my home State of Iowa.
  Gregory Dean Garrison of Red Oak, IA was recently indicted for 
operating a telemarketing promotion. He is alleged to have obtained 
lists of people who had previously been victimized by telemarketing 
schemes. Using the company named Teletrieve, he offered for a fee, of 
course, to help individuals recover all the money they previously lost 
to telemarketers. No money was ever recovered. Most of the victims were 
in their eighties.
  Approximately 30,000 Iowans received solicitations for another scam. 
Sweepstakes International, Inc., mailed these Iowans and others around 
the Nation postcards that enticed recipients to call a 900 number in 
order to receive a ``valuable prize.'' Callers were charged $9.95 on 
their phone bill. Based on a Postal Service investigation, civil action 
was initiated in U.S. District Court in Iowa. As a result of the court 
action the promotion was halted and $1.7 million was frozen. This 
represented just one and a half month's revenue from the scam.
  In a similar case, Disc Sweepstakes, Limited of West Des Moines 
mailed [[Page S8359]] about 1.5 million postcards during a three month 
period to individuals throughout the country, representing that they 
had won a valuable prize. To collect the ``prize'' people had to again 
call a 900 number for which they were billed $9.90. This scheme brought 
in over $1 million.
  These are obviously cases in which the Postal Inspection Service was 
able to take action. But for every scam they close down, there are many 
more that go unstopped. It is frustrating for our law enforcement 
professionals and it is costing consumers, particularly the elderly, 
millions of dollars every day.
  My amendment simply would allow law enforcement to more easily 
identify and locate these operations. To get any further information 
about the company, they would have to go through the current law 
subpoena process. For post office boxes rented for commercial purposes, 
any individual, let alone just law enforcement for a legitimate law 
enforcement purpose, can obtain the name and address of the box holder. 
So my proposal is very modest in comparison.
  I want to make it very clear that this amendment is not about 
privacy. It should in no way set a precedent for allowing the 
Government easier access to company or client records or other 
information from businesses. I share the concerns of those who seek to 
protect privacy rights generally. I want to work with them and others 
who may have a concern with this amendment to see how we can work 
together before this bill is subject to conference and final 
consideration by the Senate.
  I urge my colleagues to support this narrow but important amendment 
to give law enforcement a simple tool to better protect Americans from 
tele- marketing scams.
  Mr. PRESSLER. I urge the adoption of the amendment.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 1324) was agreed to.
  Mr. PRESSLER. Madam President, I move to reconsider the vote by which 
the amendment was agreed to, and I move to lay that motion on the 
table.
  The motion to lay on the table was agreed to.
  Mr. KERRY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.


                           Amendment No. 1342

  Mr. KERRY. Madam President, I ask unanimous consent that amendment 
No. 1342 be brought up at this time.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The legislative clerk read as follows:

       The Senator from Massachusetts [Mr. Kerry] proposes an 
     amendment numbered 1342.

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

       On page 146, strike line 14 and insert in lieu the 
     following: ``cency, or nudity''.
       This section shall not become effective unless the 
     Commission shall prohibit any telecommunications carrier from 
     excluding from any of such carrier's services any high-cost 
     area, or any area on the basis of the rural location or the 
     income of the residents of such area; provided that a carrier 
     may exclude an area in which the carrier can demonstrate 
     that--
       (1) providing a service to such area will be less 
     profitable for the carrier than providing the service in 
     areas to which the carrier is already providing or has 
     proposed to provide the service; and--
       (2) there will be insufficient consumer demand for the 
     carrier to earn some return over the long term on the capital 
     invested to provide such service to such area.
       The Commission shall provide for public comment on the 
     adequacy of the carrier's proposed service area on the basis 
     of the requirements of this section.
                    Amendment No. 1342, As Modified

  Mr. KERRY. Madam President, I ask unanimous consent that the 
amendment be modified with the changes that I now send to the desk, and 
I do this on behalf of myself, Senator Lott, Senator Hollings, and 
Senator Pressler. This amendment has been worked out on both sides. I 
advise the Senate that this modification makes no substantive change in 
the amendment. It merely places the amendment in a more appropriate 
place in the bill.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered. The amendment is so modified.
  The amendment, as modified, is as follows:

       At the appropriate place insert:
       ``(k) Prohibition on Exclusion of Areas From Service Based 
     on Rural Location, High Costs, or Income.--Part II of title 
     II (47 U.S.C. 201 et seq.) as amended by this Act, is amended 
     by adding after section 261 the following:

     ``SEC. 253A. PROHIBITION ON EXCLUSION OF AREAS FROM SERVICE 
                   BASED ON RURAL LOCATION, HIGH COSTS, OR INCOME.

       ``The Commission shall prohibit any telecommunications 
     carrier from excluding from any of such carrier's services 
     any high-cost area, or any area on the basis of the rural 
     location or the income of the residents of such area; 
     provided that a carrier may exclude an area in which the 
     carrier can demonstrate that--
       ``(1) there will be insufficient consumer demand for the 
     carrier to earn some return over the long term on the capital 
     invested to provide such service to such area, and--
       ``(2) providing a service to such area will be less 
     profitable for the carrier than providing the service in 
     areas to which the carrier is already providing or has 
     proposed to provide the service.
       ``The Commission shall provide for public comment on the 
     adequacy of the carrier's proposed service area on the basis 
     of the requirements of this section.

  Mr. KERRY. Madam President, I rise to offer a bipartisan amendment, 
with Senators Lott, Hollings, and Pressler, that will go a long way to 
make the intentions of the Senate clear in its recognition of the need 
for every segment of our society to have access to the information 
super-highway as it begins to weave its way across the Nation.
  In presenting this amendment, we recognize that there is a fear among 
many groups and community organizations that the infrastructure of the 
information super highway will leave out and leave behind those who 
most need access to it, families in parts of Boston, or in parts of 
South Dakota, South Carolina, or Mississippi, or other areas of the 
country.
  Ironically, in the 1950's the infrastructure debate was about which 
neighborhoods and which rural areas would be plowed under by bulldozers 
building the Federal highway system.
  And, here we are again, in the contemporary equivalent of that same 
debate.
  When the Federal highway system was developed, we plowed under the 
poorer areas of many cities and the poorest land in rural areas. We 
were willing then to lay roads and build bridges through the backyards 
of these areas in our good faith efforts to connect States and cities 
coast to coast. It was the key to commerce and economic opportunity. It 
was the future.
  Now, in the 1990's, the information super highway holds the same key 
to economic opportunity, and it would be unforgivable for us to ignore 
and avoid the same backyards that we were so willing to plow under when 
we built the interstates beginning in the 1950's.
  Without access to the information super highway there are those in 
our country who will surely be left behind, and we cannot let that 
happen.
  Let me make it clear that this is a bipartisan amendment, and that it 
does not imply that there is anyone in this Chamber or anyone who has 
participated in the development of this legislation who has intended in 
any way to allow the redlining of any area. It is equally true that no 
one is seeking to force telecommunications companies, in their good-
faith effort to provide universal service, to lose money by providing 
advanced telecommunications services to every road and home in the 
Nation no matter how remote or how impractical.
  That is not the intent of anyone.
  But, having said that, the intent of the Senate must be clear: that 
everyone, especially those less fortunate in our society, those poorer 
inner-city areas and poorer more remote rural areas struggling to keep 
up and move on, should have access to the equipment that will hold the 
keys to success and the tools to compete in the 21st century, even 
where it may not produce great profit for the provider companies.
  Fairness, in this case, means access; and, though there is no intent 
with this amendment to punish telecommunications companies or to force 
them to lose money by providing a service to an area where it is clear 
they will lose money in their effort, we also recognize the importance 
of universal access. [[Page S8360]] 
  The bill, of course, embodies this philosophy in several ways. But 
nowhere is the principle set forth as straight-forwardly as it should 
be, and as this amendment does.
  In summary, this amendment prohibits the exclusion of areas from 
access to service based on either rural location or income; and it 
requires the Federal Communications Commission to adopt rules and 
regulations to prohibit any telecommunications carrier from excluding 
an area from service based on the income of its residents, or the rural 
nature of the area; but it does allow the company to make a decision 
not to offer an advanced telecommunication service if it can 
demonstrate that there will be insufficient consumer demand for the 
carrier to earn some return over the long term on its capital 
investment in providing the service in that area.
  I think this is a fair amendment. It is fair to the consumer and to 
the industry. It establishes in law the principle that all our citizens 
should have access to these telecommunications services and it respects 
the complexity of providing those services on a universal basis.
  With this legislation we will move into a new age of information and 
communication--a promising future that demands our careful 
consideration. We will either establish an infrastructure that brings 
every American along, or leaves some behind.
  We must remember, that access to and knowledge of the information 
super-highway will define the economic and political power of this 
democracy. We can no more deny any American access to that power than 
we can deny them access to a decent education, or to the ballot, or to 
the voting booth, for in access to them are the fundamental freedoms of 
this democracy and the individual opportunities that those freedoms 
provide.
  Madam President, I urge passage of this amendment. It is fair. It is 
responsible. It is right. It places the benefit of the doubt where it 
ought to be.
  I thank the managers of the bill for their cooperation and 
assistance. I thank the committee staff. I especially appreciate the 
cooperation and efforts of the Senator from Mississippi [Mr. Lott] and 
his staff, both in committee and now as the bill is considered on the 
floor.
  I will just say very quickly that this amendment will empower the 
Commission to try to guarantee that, as we build an information highway 
structure, no part of America is left out of that for reasons of 
discrimination or oversight that no one in the Senate, I think, would 
embrace.
  I believe this will help us to have a fair and equitable approach. I 
appreciate the help of the managers of the bill in arriving at an 
agreement on this.
  Mr. PRESSLER. I commend my friend from Massachusetts. I urge the 
adoption of the amendment.
  The PRESIDING OFFICER. If there is no further debate, the question is 
on agreeing to the amendment No. 1342, as modified.
  The amendment (No. 1342), as modified, was agreed to.
  Mr. PRESSLER. Madam President, I move to reconsider the vote by which 
the amendment was agreed to, and I move to lay that motion on the 
table.
  The motion to lay on the table was agreed to.
  Mr. SIMON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Illinois.


                    Amendment No. 1283, As Modified

 (Purpose: To revise the authority relating to Federal Communications 
                  Commission rules on radio ownership)

  Mr. SIMON. Madam President, I offer amendment No. 1283, as modified. 
I will discuss it tomorrow.
  The PRESIDING OFFICER. The clerk will report the amendment, as 
modified.
  The legislative clerk read as follows:

       The Senator from Illinois [Mr. Simon] proposes an amendment 
     numbered 1283, as modified.

  Mr. SIMON. Madam 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, as modified, is as follows:
       On page 79, line 11, in the language added by the Dole 
     amendment No. 1255, as modified, insert the following:
       (b)(3) Superseding Rule on Radio Ownership.--In lieu of 
     making the modification required by the first sentence of 
     subsection (b)(2), the Commission shall modify its rules set 
     forth in 47 CFR 73,3555 by limiting to 50 AM and 50 FM 
     broadcast stations the number of such stations which may be 
     owned or controlled by one entity nationally.

  Mr. SIMON. Madam President, I am not sure we have the right amendment 
here.
  Mr. PRESSLER. Madam President, I will take this opportunity to urge 
Senators to bring their additional amendments to the floor and also to 
say that I am very proud that 500 delegates at the small business 
conference today sent over individual letters endorsing the passage of 
this bill and also urging President Clinton to strongly support it.
  I know the White House has been a little cool toward this bill, but I 
hope that they are warmed up by the small businessmen who are in the 
White House Conference on Small Business. I have a whole stack of 
letters here, which I will not put in the Record. I might put in the 
names, but they are from all over the Nation, small businessmen who 
have come to Washington, who have sent letters urging that the 
Telecommunications Competition and Deregulation Act of 1995 be passed 
and that the White House support it and that the Senate version is the 
version that they are interested in.
  So I am very proud of that. There has been some talk about big 
corporate interests and so forth. There has been talk about the 
cellular valley out here. But these are 500 small business men and 
women from across the Nation wanting to pass this bill because small 
business will benefit and small business will be able to participate.
  Mr. PRESSLER. Madam President, I hope that Senators will come to the 
floor with their amendments because the hour of 7:30 p.m. is 
approaching, and Senator Dole will be back here then.
  So I thank the Chair, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. Will the Senator suspend his request for a 
moment?
  The Senator from Illinois wanted a vote on his amendment tomorrow.
  The amendment will be set aside until tomorrow.


                           Amendment No. 1367

  Mr. HEFLIN. Madam 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 Alabama [Mr. Heflin] proposes an amendment 
     numbered 1367.

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

       At the appropriate place in the amendment, insert the 
     following:

     SEC.   . AUTHORITY TO ACQUIRE CABLE SYSTEMS.

       (a) In General.--Notwithstanding the provisions of section 
     613(b)(6) of the Communications Act of 1934, as added by 
     section 203(a) of this Act, a local exchange carrier (or any 
     affiliate of such carrier owned by, operated by, controlled 
     by, or under common control with such carrier) may purchase 
     or otherwise acquire more than a 10 percent financial 
     interest, or any management interest, or enter into a joint 
     venture or partnership with any cable system described in 
     subsection (b) within the local exchange carrier's telephone 
     service area.
       (b) Covered Cable Systems.--Subsection (a) applies to any 
     cable system serving no more than 20,000 cable subscribers of 
     which no more than 12,000 of those subscribers live within an 
     urbanized area, as defined by the Bureau of the Census.
       (c) Definition.--For purposes of this section, the term 
     ``local exchange carrier'' has the meaning given such term in 
     section 3 (kk) of the Communications Act of 1934, as added by 
     section 8(b) of this Act.

  Mr. HEFLIN. Madam President, I ask unanimous consent that this 
amendment be laid aside until later.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The PRESIDING OFFICER. Who seeks recognition?
  Mr. PRESSLER. Madam President, I ask unanimous consent that the 
Senate now turn to the consideration of amendment 1341.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1341

          (Purpose: To strike the volume discounts provision)

  Mr. PRESSLER. Madam President, I send an amendment to the desk for 
Mr. [[Page S8361]] Dole and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from South Dakota [Mr. Pressler], for Mr. Dole, 
     proposes an amendment numbered 1341.

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

       On page 70, beginning with line 22, strike through line 2 
     on page 71.

  Mr. PRESSLER. Madam President, I ask unanimous consent that the 
amendment be set aside and carried over until tomorrow.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRESSLER. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. WARNER. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1325

    (Purpose: To require additional rules as a precondition to the 
 authority for the Bell operating companies to engage in research and 
              design activities relating to manufacturing)

  Mr. WARNER. Madam 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 Virginia [Mr. Warner] proposes an 
     amendment numbered 1325.

  Mr. WARNER. Madam President, my amendment No. 1325 is a bipartisan 
proposal. I am joined by a number of my colleagues on both sides of the 
aisle, including my colleague Senator Robb as well as Senators 
Domenici, Graham, Kennedy, Kerry, Lieberman, and McCain.
  This amendment is intended to improve the procompetitive thrust of 
this bill as it relates to the manufacture of communications products, 
both telecommunications equipment and customer premises equipment. It 
will make the bill more workable, and most important it will support 
the bill's effort to generate more jobs, stimulate innovation, and 
deliver more consumer choices and lower prices.
  I want to express my thanks to the managers of this bill for their 
tireless efforts to draft and to enact telecommunications reform 
legislation. I had the privilege of serving on the Commerce Committee 
in the 1970's when we began to address the Federal policies that would 
be needed because of the then impending and dramatic changes in 
telecommunications technology. We learned two important things in those 
early efforts. First, changes in communications and information 
technology would transform our society and our economy. Second, 
drafting the appropriate policies to support this transformation would 
be a complex and controversial undertaking. Our floor consideration of 
S. 652 bears out the validity of these two points and demonstrates the 
challenges which the bill's managers have successfully faced.
  Our amendment deals with the manufacturing sector, which will develop 
the ``brick and mortar'' of the information highway. As with all key 
communication industries, the stakes for manufacturers in this bill are 
very high. We cannot jeopardize the current competitive nature of this 
sector as the MFJ restrictions are removed. It has been a very 
successful and competitive area, sparked by the innovation and growth 
made possible by the postdivestiture environment. This has become a $44 
billion sector, and it has created tens of thousands of jobs.
  The manufacturing sector came alive after the 1984 Modified Final 
Judgment ended practices which had discriminated against nontelephone 
company manufacturing. The heart of this discrimination was the control 
which the local Bell telephone company had--and still has--over the 
local telephone exchange. Equipment had to connect to and use the local 
exchange network. Companies who wanted to make telephone equipment 
needed to deal with the local exchange company as the exclusive 
designer of the network and the exclusive buyer of equipment to run the 
network. The MFJ eliminated the local telephone company's incentive to 
discriminate in manufacturing by preventing their direct participation 
in this sector, and that MFJ policy has been successful. Manufacturing 
has flourished while the BOC's have managed their networks in 
cooperation with the manufacturing community.
  S. 652 develops rules which will guide the local telephone companies 
and policymakers as the BOC's reenter manufacturing. Recognizing the 
continued potential for competitive problems associated with the local 
exchange monopoly, the bill also encourages the end to this local 
exchange monopoly by eliminating restrictions--government and 
facility--on local exchange competition. However, because we do not 
know how or when local competition will develop, the bill contains 
safeguards intended to
 preclude recurrence of the practices that hurt the manufacturing 
industry before 1984. These safeguards will be needed for so long as 
the local exchange monopoly persists.

  S. 652 contains two important principles for the manufacturing sector 
which are intended to maintain the current competitiveness in the 
manufacturing sector and to build on this competition. First, the bill 
treats elimination of the long distance and the manufacturing line of 
business restrictions in the same manner. The Bell operating company 
must comply with the ``competitive checklist'' before it is eligible to 
enter either the long distance or the manufacturing line of business. 
It is very important to retain this ``parity'' in the timing and the 
requirements for entry into both lines of business, and I commend the 
managers of the bill for establishing this important principle.
  The second important principle contained in this bill is one that we 
have relied upon for twenty years, namely, the requirement of a 
structural separation between the competitive and monopoly activities 
of the Bell operating company. S. 652 requires the Bell operating 
company to provide all competitive services, including manufacturing 
activities, through a fully separate affiliate. Without such a 
requirement, it would be virtually impossible to assure the ratepayers 
of this country that they were not underwriting the BOCs competitive 
ventures. Both the Courts and the FCC have said on many occasions that 
accounting separation alone is insufficient to protect ratepayers in 
this type of situation.
  I urge the bill's managers to continue to defend these important 
principles.
  Unfortunately, from a manufacturing perspective, and in my opinion, 
S. 652 has created a potential loophole. The bill would permit the Bell 
operating company to undertake research and design aspects of 
manufacturing and to enter into royalty agreements with third parties 
as soon as the separate subsidiary rules are adopted. This provision 
means that the operating company will not necessarily have complied 
with the ``competitive checklist'' before it is able to engage in these 
two activities. This provision has created an exception to the parity 
between manufacturing and long distance services, and in my opinion, it 
may become a very troubling distraction and loophole.
  In their package of amendments adopted last week, the managers of the 
bill have clarified that these exceptions are not effective until the 
separate affiliate rules have been adopted. This is an important 
clarification.
  In my opinion, these exceptions should be removed from the bill, and 
in my discussions with the bill's managers I am hopeful that you will 
keep an open mind on this question as you proceed forward to 
conference.
  For now, the presence of these exceptions in the bill highlights two 
areas where the bill's safeguards should be improved. In my view this 
amendment would be an important improvement to the bill even if the 
exceptions were not in the bill. But they are made more important 
because of the exceptions.
  First, the bill does not require full and ongoing information 
disclosure about the telephone exchange network. In order to develop 
the products and the services that would connect with and use the 
network, manufacturers need to know the protocols and technical 
requirements that control connection to and use of the network. As 
[[Page S8362]] currently written, the bill focuses on requiring 
disclosure of vital network information when the Bell operating company 
transfers that information to its affiliate. This trigger is important, 
but it begs the fundamental point that information should be available 
when manufacturers need it, not merely when the BOC may decide to 
transfer it to the affiliate. This trigger also does not address 
situations where information is transferred to preferred third party
 suppliers. A trigger based on a transfer to the affiliate invites 
``gaming'' by the BOC and it can encourage considerable debate about 
when information was given to the affiliate whether information was 
provided to competitors on the timely basis.

  In my opinion, information regarding protocols and technical 
requirements for connecting to the network should be on file with the 
FCC and kept current at all times. This is not a regulatory burden. 
This is good business and sound, pro-competitive policy. And it will 
reduce regulation because it will reduce debates about the timing and 
the caliber of information available to competitors. Our amendment 
would call on the Commission to establish this filing requirement at 
the same time that it establishes the separate affiliate rules.
  Second, the bill recognizes that relationships between the Bell 
operating companies and third parties can be a source of discrimination 
and cross subsidy. However, the development of rules to prevent such 
activities are discretionary. Given the royalty and design activities, 
it is especially important for the FCC to address this area at the same 
time it develops its separate affiliate rules, and our amendment 
includes this directive.
  Last, the amendment attempts to address the murky distinction between 
``research and design'' and the other aspects of manufacturing which 
remain prohibited until the BOC has complied with the checklist and is 
authorized to offer long distance service. If the Bell operating 
company is to be allowed to engage in research and design activities 
before it is permitted to engage in other manufacturing activities, 
then it is critical for the Commission to clearly identify and 
articulate these activities which are permitted to distinguish these 
activities from the other aspects of manufacturing and from BOC 
activities. This definitional undertaking must be part of the separate 
subsidiary rulemaking process in order to ensure that ``research and 
design'' are completely separate from other aspects of manufacturing 
and from BOC activities.
  The design area is the most important part of the manufacturing 
process. It is the area where considerable value is created, and it is 
the activity which largely determines the functionality and complexion 
of the products. The MFJ Court has repeatedly found that design 
presents the greatest opportunity for anticompetitive behavior. When 
the MFJ was adopted, the Court found that ``design'' had been a 
significant source of discrimination. More recently, in this report to 
the Justice Department, Peter Huber concluded that should the BOCs be 
permitted to again engage directly in manufacturing, then ``research 
and development costs, especially for system design and software 
development, would surely offer an important opportunity for cross-
subsidy.''
  For these reasons I oppose the idea of a more rapid elimination of 
the entry restrictions for ``design,'' but at the very least the 
Commission must confront the opportunities and risks associated with 
this exception as part of its development of separate affiliate 
safeguards rules.
  Mr. President, our amendment has broad support in the manufacturing 
community. The primary telecommunications manufacturing trade 
associations, including the Telecommunications Industry Associations, 
the Electronic Industries Association, the Independent Data 
Communications Manufacturers Association, and the MultiMedia 
Telecommunications Association, support this amendment. These 
manufacturers account for an overwhelming majority of the $55 billion 
generated by the telecommunications manufacturing industry in 1994. I 
ask by unanimous consent that a letter of support from these 
organizations be included in the Record at this point.
  Again I thank my colleagues, the managers of S. 652, for their 
efforts on this bill and for their cooperation on our amendment.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

     The Hon. John Warner,
     225 Russell Senate Office Building, Washington, DC.
       Dear Senator Warner: On behalf of the Telecommunications 
     Industry Association, I want to thank you for your efforts to 
     improve S. 652, the Telecommunications Competition and 
     Deregulation Act of 1995. We share your belief that the 
     ``design'' carve-out in the manufacturing section of S. 652 
     creates a dangerous exception to the bill's otherwise 
     reasonable proposal that a Bell operating company must comply 
     with the bill's ``competitive checklist'' and establish a 
     separate subsidiary before being granted relief from the 
     line-of-business restrictions imposed by the Modification of 
     Final Judgment. Accordingly, although we do not concede that 
     the ``design'' exception in Section 256(a)(2) is appropriate 
     communications policy, and while we continue to believe that 
     Section 256(a)(2) should be dropped from the bill, we 
     strongly support your proposed amendment to S. 652.
       There is a broad consensus that ``design'' activities are 
     the most important part of the manufacturing process, and 
     that it presents the greatest opportunity for anticompetitive 
     behavior. Thus, the Court administering the MFJ has stated 
     that:
       ```[I]n virtually every manufacturing episode' that was the 
     subject of a pretrial charge by the government or that 
     produced evidence at the trial, it was design and development 
     manipulation that was the focus or sole subject rather than 
     discrimination with respect to fabrication.'' See United 
     States v. Western Electric Co., 675 F.Supp. 655 (D.D.C. 
     1987).
       In his report to the Justice Department, Peter Huber 
     reached the same conclusion, stating that ``research and 
     development costs, especially for system design and software 
     development, would surely offer a[n] opportunity for cross-
     subsidy,'' and that such ``cross-subsidy by U.S. telcos comes 
     at the expense of U.S. ratepayers.'' See Peter Huber, The 
     Geodesic Network (Washington: U.S. Government Printing 
     Office, 1987) at 14.20 and 14.23n. 93. Therefore, allowing 
     the Bell companies to engage in these activities before they 
     have satisfied the ``competitive checklist'' could allow 
     significant anticompetitive conduct by the Bell companies.
       In addition to providing a check against cross-
     subsidization, your amendment will help reduce the likelihood 
     that the ``design'' exception will lead to the type of 
     regulatory and judicial disputes that the sponsors of S. 652 
     are seeking to avoid and ensure that manufacturers have 
     access to the interconnection information necessary to 
     compete equitably for Bell operating company procurement 
     contracts.
       We are joined in our support for your amendment by several 
     other manufacturing organizations, including the Electronic 
     Industries Association, the Independent Data Communications 
     Manufacturers Association and the MultiMedia 
     Telecommunications Association. Collectively, these 
     organizations represents manufacturers which collectively 
     account for an overwhelming majority of the $55 billion in 
     revenues generated by the telecommunications manufacturing 
     industry in 1994.
           Sincerely,
                                              Matthew J. Flanigan.

  Mr. WARNER. Madam President, this is an amendment which the managers 
have under consideration and, as yet, there has not been a resolution 
between the managers as to whether or not it can be accepted. Pending 
their decision, I have to make a decision as to whether or not to 
present it to the entire Senate.
  If I might briefly state it, I have concerns about the provision in 
S. 652 that permits the Bell operating companies into design aspects of 
manufacturing as soon as the separate affiliate rules are established. 
This amendment provides an exception to the bill's important principle 
that entry into manufacturing in long distance will not occur until the 
checklist for local exchange competition has been adopted.
  Short of delaying the design inception, it would be my hope that we 
could explore the possibility that the provision can be modified to 
mitigate what we view--that is my constituents--as serious potential 
for discrimination and cross-subsidization, which we view as the 
current situation. Given that the managers are reviewing this, I will 
ask that the amendment be laid aside until some future time.
  The PRESIDING OFFICER. Is there objection?
  Mr. PRESSLER. Madam President, I understand that some Senators have a 
problem with this amendment, and I think we will have to resolve those 
problems at a future time.
  Does the Senator from Virginia visage this coming up tomorrow?
  Mr. WARNER. Yes, that would be quite agreeable.
  [[Page S8363]]
  
                    Amendment No. 1325, As Modified

  Mr. WARNER. Madam President, to correct what seems to be an 
imperfection, I send a modification of my amendment to the desk.
  The PRESIDING OFFICER. The Senator has that right. The amendment is 
so modified.
  The amendment (No. 1325), as modified, is as follows:

       At the end of section 222 of the bill, insert the 
     following:
       (c) Additional Requirements Relating to Research and Design 
     Activities With Respect to Manufacturing.--(1) In addition to 
     the rules required under section 256(a)(2) of the 
     Communications Act of 1934, as added by subsection (a), a 
     Bell operating company may not engage in the activities or 
     enter into the agreements referred to in such section 
     256(a)(2) until the Commission adopts the rules required 
     under paragraph (2).
       (2) The Commission shall adopt rules that--
       (A) provide for the full, ongoing disclosure by the Bell 
     operating companies of all protocols and technical 
     specifications required for connection with and to the 
     telephone exchange networks of such companies, and of any 
     proposed research and design activities or other planned 
     revisions to the networks that might require a revision of 
     such protocols or specifications,
       (B) prevent discrimination and cross-subsidization by the 
     Bell operating companies in their transactions with third 
     parties and with the affiliates of such companies; and
       (C) ensure that the research and design activities are 
     clearly delineated and kept separate from other manufacturing 
     activities.

  Mr. PRESSLER. We have no objection to this amendment being laid over 
until tomorrow.
  I ask unanimous consent that amendment No. 1325, as modified, be set 
aside until tomorrow.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WARNER. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  Mr. PRESSLER. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRESSLER. Madam President, I mentioned earlier that over 500 
delegates of the, I think, about 1,600 or 1,700 delegates to the Small 
Business Conference going on now at the White House have written me 
letters--and also have written President Clinton--urging that he 
support the Senate version of the Telecommunications Competition and 
Deregulation Act and that the Senate pass it.
  I just pulled out of this packet of 500 letters, one letter from a 
Mr. Robbie Smith, Smith Communications in Chicago, IL. I do not know 
him, but he is a delegate to the Small Business Conference now going on 
at the White House. He wrote the
 following, and I think it is important, because it is illustrative 
that small business strongly supports this legislation.

       I am writing to urge you to support S. 652, the 
     Telecommunications Competition and Deregulation Act, which 
     would bring about changes in how telecommunications products 
     and services are sold that would greatly benefit the small 
     businesses of our state.
       A recent survey, sponsored by the National Federation of 
     Independent Business Foundation, found that a full 86 percent 
     of small business owners said they want the convenience of 
     ``one-stop shopping'' for telecommunications services.
       S. 652 would bring us one-stop shopping. By creating a more 
     competitive marketplace that will let local Bell companies 
     and long-distance companies and cable companies all compete 
     in each other's traditional businesses, it will provide small 
     businesses with the convenience and lower prices we need.
       In enacting legislation, we urge Members of Congress to 
     keep in mind ``Five Easy Pieces'' of guidance from small 
     business on what constitutes good telecommunications policy.
       1. For small businesses as customers, we need legislation 
     that maximizes choice and affordability by simultaneously 
     opening all telecommunications markets--at the earliest 
     possible date--to full and equal competition among vendors.
       2. For small businesses as customers, we need legislation 
     that minimizes confusion and complexity by letting all 
     vendors compete to offer us one-stop shopping for the full 
     array of telecommunications products and services.
       3. For all small businesses, we need legislation that 
     maximizes flexibility and minimizes regulation, so 
     introduction of new products and services can keep pace with 
     rapid technological and market changes.
       4. For small businesses as vendors, we need legislation 
     that maximizes opportunities for us to create and sell 
     innovative new products and services by removing regulatory 
     constraints.
       5. For small businesses in rural or high-cost areas, we 
     need legislation that maximizes universal opportunity by 
     insuring--through a fair system of cost sharing--that some 
     parts of our country do not become too costly in which to 
     operate, or technological backwaters.
       We believe S. 652 achieves these objectives. Please support 
     S. 652.
       The small businesses of our state thank you for your 
     consideration.

  What this letter is saying and seems to represent, talking of small 
businessmen, the majority of small businessmen--and indeed I guess 
there might be at some point some resolutions adopted over there. They 
made it a point to get to the Senate today over 500 letters supporting 
the Senate version of the Telecommunications Competition and 
Deregulation Act. They have also given the same letters to President 
Clinton, urging him to support it. I hope he is listening closely to 
the small businessmen in his White House conference.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mrs. BOXER. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. Madam President, I ask unanimous consent to speak as in 
morning business for 2 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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