[Congressional Record Volume 141, Number 135 (Friday, August 11, 1995)]
[Senate]
[Pages S12363-S12365]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                            SPECTRUM REFORM

  Mr. PRESSLER. Mr. President, I rise today to call attention to the 
historic action taken in the House of Representatives on August 4. Our 
colleagues in the other body, under the able leadership of Chairmen Tom 
Bliley and Jack Fields and ranking minority member John Dingell, 
overwhelmingly approved, on a broad bi-partisan vote of 305 to 117, 
H.R. 1555, a companion bill to S. 652, the Senate telecommunications 
reform bill. As my 

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colleagues will recall, in June the Senate overwhelmingly approved the 
Telecommunications Competition and Deregulation Act of 1995 by a vote 
of 81 to 18. We have moved in record time--through both houses of 
Congress--the most comprehensive rewrite of America's 
telecommunications laws in over 60 years.
  Since the 1970's, Congress has considered broad based legislation to 
modernize our laws governing the telecommunications industry. Nothing, 
however, has been enacted into law. The Telecommunications Competition 
and Deregulation Act of 1995 will make dramatic and long needed changes 
in the Government's regulatory oversight of the telecommunications 
industry. It promotes unprecedented competition among the various 
providers of telecommunications products, services, and technologies 
and dramatically reduces costly and counterproductive regulation of 
this vitally important sector of American industry.
  The changes made in the legislation are long overdue. The dramatic 
enhancements in technology over the last few years have vastly 
outstripped the existing regulatory process. A major overhaul of this 
process is essential if we want competition and its results: better 
jobs, more exports, greater choice and lower prices. That is exactly 
what the telecommunications reform bill does.
  In moving forward to pass reform legislation, we are shunning the old 
way of doing business. Instead of splitting the difference between 
warring commercial interests and special pleaders, we must keep our 
focus on a free-market outcome that will benefit consumers and 
taxpayers across the country.
  Americans trust this country's free enterprise system. Consumers know 
there is far too much regulation in much of American business. We have 
witnessed a burgeoning computer industry develop over the past decade 
precisely because it has been unfettered by excessive Government 
regulation. Many parts of the telecommunications sector have been less 
dynamic, because of excessive Government regulation and micromangement. 
Consumers know that more competition means more choices, lower prices, 
better quality and more technological innovation. That is what the 
Telecommunications Competition and Deregulation Act of 1995 is all 
about.
  The bill affirms the tenets of the American free enterprise system by 
establishing that the marketplace shall determine the winners and 
losers, not those companies who have demonstrated prowess in protecting 
markets through the courts and the regulatory process.
  Mr. President, passage of telecommunications reform legislation is 
but one step in moving America forward in the information age of the 
21st century. As a next step forward, I intend to press ahead with 
dramatic radio spectrum reform.
  Mr. President, many Americans are aware that wireless technology 
provides the magic of radio broadcasting and the miracle of television. 
What is not as well known, but equally important, is that the radio 
spectrum also enables consumers to receive and transmit a wide variety 
of wireless voice, data, graphic and video information over the 
airwaves. At a hearing of the Committee on Commerce, Science, and 
Transportation Committee, which I chaired on July 27, Members saw 
demonstrations of a variety of advanced spectrum services.
  Wireless communications often are overlooked by many experts in the 
policy community who rely far too heavily on a high fiber diet. This is 
unfortunate. Wireless communications is a rapidly expanding multi-
billion dollar industry that is transforming modern American life as 
profoundly as the landline telephone system did at the beginning of 
this century.
  This is especially important in parts of our country dominated by 
small cities and towns such as in my home State of South Dakota. Such 
places experience a significant cost differential between wireless and 
wireline communications--and wireless is far less expensive. Wireless 
technology could provide solutions to universal service problems we 
face currently.
  Equally profound is the effect wireless communications will have on 
the once-sacrosanct local wireline telephone monopoly. The introduction 
of radio technologies into the long distance segment of the 
telecommunications market in the 1950's led directly to the breakup of 
the monopoly for long distance services. New generations of wireless 
telephones will work the same transformation in the local exchange 
market. This, of course, is one of the fundamental purposes of S. 652.
  Today, two out of every three requests for new telephone service are 
wireless. There are 25 million cellular telephone subscribers and 20 
million users of paging technology. Direct Broadcast Satellite DBS 
service is providing over 200 digital video and audio channels in 
competition with cable TV. This is only the beginning.
  Mr. President, America--indeed the world--is on the cusp of a golden 
wireless age of communications. Just yesterday I had the great 
privilege of making the first PCS call in America--to my mother in 
South Dakota. PCS, or personal communications service, is a fully 
digital, wireless communications system with advanced features. The 
launching of PCS service in America is an especially important 
milestone in our march to the wireless age.
  While many people talk about how telecommunications promotes 
productivity, mobile radio services provide positive proof. Moreover, 
radio frequency systems are important from a social policy perspective. 
Mobile radio is a liberating technology. Wireless communications also 
play an important role against crime, saving lives and promoting public 
safety. There are over a half-million wireless calls per month to 911 
nationwide.
  On July 27, the Commerce Committee saw demonstrations of advanced 
products, services and technologies utilizing the radio frequency 
spectrum. We also heard witnesses present an informative discussion of 
new spectrum policy reform initiatives to increase American 
competitiveness and consumer options. To spark a major reform of our 
Nation's spectrum use, I will promote legislation for more auctions of 
spectrum and for more flexibility in spectrum use as part of the 
reconciliation process.
  The spectrum is an enormously valuable, yet finite resource. Unless a 
reform plan is developed that creates a more effective and efficient 
use of the spectrum, as well as a more stable supply of spectrum for 
private sector use, a vast array of new spectrum-based products, 
services, and technologies will go unrealized.
  Such a prospect is particularly disheartening when one considers the 
benefits that are derived from current spectrum-based technology. The 
example of cellular telephone technology is a cautionary example. In 
1962, AT&T was operating its first experimental cellular telephone 
system. It was not until 20 years later that the first cellular 
licenses were handed out by the FCC. Bureaucratic delay and inefficient 
regulation hampered the development and availability of cellular phones 
for years. Today, the cellular industry generates about $14.2 billion 
in revenues a year.
  From its very beginning, wireless communications has played a vital 
role in protecting lives and property and, subsequently--through the 
development of radio and television broadcasting--in delivering 
information and entertainment programming to the public at large. More 
recently, there has been a realization that wireless, spectrum-based 
telecommunications services, products and technologies are 
indispensable enablers or drivers of productivity and economic growth, 
as well as international competitiveness.
  The use of spectrum, however, is determined through bureaucratic 
licensing rules, regulations and procedures first developed in the 
1920's. Under this Byzantine system, the Federal Communications 
Commission [FCC] determines the general uses for the radio spectrum, 
allocates bands of frequencies to each of those uses, and then issues/
assigns licenses for the use of frequencies in each band for specific 
uses. Spectrum utilized by Federal Government agencies is managed by 
the National Telecommunications and Information Administration [NTIA] 
of the Department of Commerce.
  Compared to that of most other countries, the U.S. spectrum 
management system allows for some degree of private sector involvement 
in spectrum. Yet, the system involves a 

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central Government planning scheme by Federal regulators and 
bureaucrats. It is, in short, electromagnetic industrial policy. The 
FCC must determine which services, which frequencies and the conditions 
under which they will be provided, and often the specific technology to 
be used.
  The spectrum management system currently utilized in the U.S. tends 
to result in an inefficient use of the spectrum resource. Federal 
regulators--rather than consumers--decide whether taxis, telephone 
service, broadcasters, or foresters are in greatest need of spectrum.
  Most importantly, new services, products and technologies face 
inordinate delays which impose tremendous costs on society. It 
typically takes many years to get a new service approved by the FCC. 
The lengthy delay in making cellular telephone service available, as 
noted earlier, imposed a huge cost on the economy. One recent study 
estimated the delay cost our economy $86 billion.
  In addition, the system constrains competition. One of the most 
important determinants of a competitive industry is the ability of new 
firms to enter the business. The allocation process typically provides 
for a set number of licenses for each service, precluding additional 
competitors. Only two cellular franchises, for instance, are allowed in 
each market. This takes on added significance when one considers the 
important role wireless services will play in bringing competitive 
alternatives to the wireline telephone system.
  Changes in new communications technologies, especially the 
digitization phenomenon, are making the bureaucratic system even more 
unworkable. New wireless communications technologies, services and 
products are being developed at an ever accelerating rate. Even if the 
FCC were able to weigh the needs and merits of the relatively few 
spectrum-based services which existed in the 1930's, it is simply not 
able to do so today. Even if it could, the lengthy delays associated 
with the allocation and assignment processes, while perhaps acceptable 
in a slow-changing analog world, are seriously out of step with the 
fast-changing digitized world of today.
  Spectrum auctions employing competitive bidding for spectrum would 
give applicants for spectrum the right incentives. Applicants would 
have incentives to bid only for that amount they truly need, and to use 
it in the most efficient manner possible. The Government would be 
compensated at a fair market value for granting an applicant the use of 
the spectrum. There is already a vigorous private market for spectrum 
rights. The only difference between the private auctions and FCC 
auctions is that taxpayers, rather than lucky lottery or comparative 
hearing winners, receive the revenue.
  In addition to expanded auctioning authority, I also intend to pursue 
spectrum flexibility reforms. Historically, when Government allocated a 
portion of the spectrum was allocated, they have done so for one and 
only one use. More flexible use of spectrum would be more productive. 
Since the 1980's, the FCC has allowed the cellular industry to use its 
spectrum for alternative purposes. As a result of this increased 
flexibility, we have seen the advent of data services. The recently 
passed Telecommunications Competition and Deregulation Act of 1995, S. 
652, contains provisions for spectrum flexibility for broadcasters. Now 
is the time to expand on this important spectrum reform.
  Recent digital technological developments make other applications of 
flexible spectrum use feasible. Smart radios using microprocessor 
technology now make continuous communications possible on tiny slivers 
of shifting, noncontiguous spectrum. Such spread spectrum technologies 
also make it possible to program a cellular telephone to operate on 
different frequencies based on the part of town from which it is 
transmitting, or even on the time of day.
  Mr. President, our country's future hinges on our ability to maintain 
our leadership in telecommunications, computing and information 
technology and innovation. The growth in jobs, productivity and 
international competitiveness will come in the telecommunications, 
computing and information sector if the Government gets out of the way. 
By passing a major overhaul and deregulation of telecommunications, and 
following this with reform of the spectrum system, this Congress can 
make a major contribution toward greater consumer choices, jobs 
creation and U.S. competitiveness in global markets.


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