[Congressional Record Volume 141, Number 127 (Wednesday, August 2, 1995)]
[Extensions of Remarks]
[Pages E1579-E1580]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       TELECOM BILL IS PRO-COMPETITION, PRO-JOBS AND PRO-CONSUMER

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                         HON. CHARLES H. TAYLOR

                           of north carolina

                    in the house of representatives

                        Tuesday, August 1, 1995
  Mr. TAYLOR of North Carolina. Mr. Speaker, this week--perhaps as 
early as tommorow--the House is expected to consider sweeping 
telecommunications legislation, H.R. 1555. This landmark regulatory 
reform bill will offer countless benefits to American consumers and 
open telecommunications markets to competition by eliminating layers of 
burdensome Federal regulations.
  I would like to include an editorial from Friday's Washington Times 
for the Record. It sets out the reasons why the long distance carriers 
withdrew their support for H.R. 1555. I hope that my colleagues will 
read this article, and I urge them to vote in favor of the bill with 
the manager's amendment.
               [From the Washington Times, July 28, 1995]

                    Who's afraid of the Baby Bells?

       Up for a vote next week in the House is the long-awaited 
     and hard-fought telecommunications legislation. Accordingly, 
     the AT&T, MCI and Sprint coalition got down to the serious 
     business of retail politics yesterday, busing and training 
     thousands of their employees into the Capitol to flood 
     members' offices and to demand that the telecom bill be 
     changed to their advantage. Happily, that is not likely to 
     happen.
       the bill, as it originally emerged from Rep. Thomas 
     Bliley's House Commerce Committee, was packed full of the 
     long-distance companies' druthers. The package of goodies for 
     AT&T, MCI and Sprint posed a big enough threat to competition 
     that the Republican leadership had a talk with Mr. Bliley, 
     who agreed that when the bill comes up for a vote next week 
     he will offer what is known as a ``Manager's amendment'' 
     stripping the legislation of the provisions expected to 
     hobble the Baby Bells. With Mr. Bliley offering the 
     amendment, it is expected to pass easily, which is why the 
     long-distance coalition put the full-court press on 
     yesterday.
       For all the complexities of the bill, the basic issue 
     dividing the Baby Bells from the long-distance group is 
     fairly simple. Marketing studies done by both camps show that 
     the big prize goes to whoever is first at offering consumers 
     simple, complete phone service. Phone customers are tired of 
     having separate bills and companies for local and long 
     distance, and would sign up with the first 

[[Page E1580]]
     company to offer inexpensive combined service. All the jockeying 
     between the Bells and the long-distance firms is about 
     determining who will get the first shot at combining local 
     and long-distance plans.
       The provisions that AT&T et al. succeeded in working into 
     the original committee bill, H.R. 1555, would have placed a 
     series of hazards and roadblocks in the way of the Bell 
     companies, while leaving their path to the market wide open.
       The most important of these was the requirement that a 
     local Bell company have a ``facilities-based'' competitor in 
     its market before being allowed to compete in the long-
     distance market. In other words, the local company would be 
     blocked from offering long-distance service until some other 
     company had come into its market and built a physical network 
     of wires comparable to the network the local Bell already has 
     in place. In practice, that would be a very, very long time.
       Since the legislation also requires the Bells to sell time 
     on their own networks to the long-distance companies at a 
     discount so the time can be resold as part of a local and 
     long-distance package. AT&T, MCI and Sprint would have no 
     reason to build local networks of their own. They would have 
     been able to use the Bell local networks to get into the 
     local service business, while at the same time keeping the 
     Bells from competing with them in the Long-distance business.
       The Bells successfully fought that provision, arguing that 
     the market should be opened for everybody all at the same 
     time. So too a slew of other provisions that would also have 
     hindered the Bells' entrance into the long-distance market. 
     That entry is feared by a long-distance industry that appears 
     to have a very cozy environment going for itself.
       For all the television ads touting the cut-throat 
     competition among AT&T, MCI and Sprint, it turns out that 
     basic long-distance rates have been going up for the last 
     couple of years, by more than 5 percent a year. More 
     disturbing still, the big three companies, which account for 
     more than 95 percent of the long-distance market, have raised 
     their prices in lock step. This is a happenstance that will 
     likely end once the various Baby Bells are able to bring a 
     new round of competition into the long-distance market.
       As for the long-distance companies' argument that the Bells 
     will be able to use their ``monopoly'' position to dominate 
     the market, it is a little hard to see how a financial 
     behemoth like AT&T is going to be intimidated by a regional 
     phone company. Given that the Bells will be required to 
     discount their lines to the long-distance companies for 
     resale, the Bells' local monopolies become meaningless.
       The long-distance coalition plans to do everything it can 
     to kill the telecom bill as it now stands--with the manager's 
     amendment. No bill at all, from the big three's perspective, 
     is almost as good as a bill written to their liking. The 
     long-distance companies can get into the local phone business 
     if local law allows, as it does in almost half the states. 
     But it takes a change in federal law to allow the Baby Bells 
     into the interstate business of long-distance. Nonetheless, 
     the bill is expected to pass next week with the support of 
     the House leadership and Mr. Bliley. That is good news for 
     consumers, for whom the greater the competition, the better.
     

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