[Congressional Record Volume 141, Number 103 (Thursday, June 22, 1995)]
[Senate]
[Page S8957]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                         ADDITIONAL STATEMENTS

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                      THE TELECOMMUNICATIONS BILL

 Mr. ABRAHAM. Mr. President, I want to take a few moments to 
set forth the reasoning behind a number of my votes with respect to S. 
652, the telecommunications bill. Although S. 652 would not deregulate 
the telecommunications industry as much or as quickly as I would like, 
it eventually would lead to competition in a number of 
telecommunications markets that currently are monopolistic. 
Specifically, the bill would remove artificial barriers to competition 
in the phone services markets as well as in the cable, equipment 
manufacturing, and other markets. I, therefore, supported final passage 
of S. 652.
  Much of the debate concerning the bill focused on the issue of RBOC 
entry into the long-distance market. An amendment offered by Senator 
McCain, No. 1261, would have defined the term ``public interest'' as it 
relates to the FCC's decision as to whether to allow a Bell to enter 
the long-distance market. The bill as introduced did not define that 
term. I voted for the McCain amendment because the absence of such a 
definition would give the FCC virtually absolute discretion as to 
whether a Bell can enter the long-distance market--or, put differently, 
as to whether consumers will enjoy the benefits of full competition in 
that market.
  The Senate's rejection of McCain amendment No. 1261 was part of the 
reason for my vote against the Dorgan-Thurmond amendment, No. 1265. The 
Dorgan-Thurmond amendment would have added yet another layer of 
regulatory obstacles to the RBOC's entry into the long-distance market. 
The bill already would have required a Bell to satisfy an extensive 
competitive checklist and to secure the FCC's public interest 
determination before entering the long-distance market; and even then, 
the Bell could enter that market only through a separate subsidiary. 
Moreover, the bill would for the first time allow utility and cable 
companies to compete for the Bells' local customers, thereby further 
reducing the Bells' ability to subsidize predatory pricing in the long-
distance market by raising the prices paid by local customers. Thus, 
the Dorgan-Thurmond amendment, by requiring the Bells additionally to 
secure the approval of the Department of Justice before entering the 
long-distance market, would only delay unnecessarily the arrival of 
full competition in that market. To paraphrase Holmes, three layers of 
regulatory obstacles is enough.
  From the outset of the Senate's consideration of S. 652, I was 
concerned that the bill might mandate discounted telecommunications 
rates for selected groups. The cost of such mandatory discounts is 
inevitably passed on to customers whose rates are not set by Congress, 
and thus often falls, at least in part, on poorer customers who cannot 
muster the lobbying clout necessary to secure special treatment. 
Moreover, apart from the equities of the issue, I think Government 
exceeds its legitimate role when it sets special telecommunications 
rates for favored groups. I, therefore, supported McCain amendment No. 
1262, which would have struck bill language, contained in section 310, 
that would force telecommunications providers to provide their services 
to schools and hospitals at discounted rates. After the Senate rejected 
amendment 1262, I voted for another McCain amendment, No. 1285, that at 
least would subject section 310 to means testing. The amendment passed.
  Finally, I want to set forth in detail my reasons for supporting 
McCain amendment No. 1276. This amendment would jettison our current 
crazy-quilt of universal-service subsidies, in favor of a means tested 
voucher system. The universal-service subsidies and rate-averaging 
schemes currently in place have as their principal effect the 
perpetuation of telephone service monopolies in rural areas. These 
schemes exclude competitors from rural telephone service markets in two 
ways. First, by keeping rural rates artificially low, rate averaging 
reduces if not eliminates the incentive of would-be competitors to 
enter the rural services market. Second, the subsidization of existing 
providers effectively bars the entry into those markets of competitors 
who would not be similarly subsidized. In contrast, a voucher system 
would not distort market signals or suppress competition in the markets 
whose customers it seeks to help. Thus, the need-based voucher system 
described in the McCain amendment would be vastly preferable to the 
current and proposed cost-based schemes, which make the inner-city poor 
pay higher phone rates so that customers in remote areas, including 
wealthy resort areas, can enjoy lower rates.


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