[Congressional Record Volume 141, Number 157 (Wednesday, October 11, 1995)]
[Extensions of Remarks]
[Pages E1913-E1914]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     H.R. 1555--TELECOMMUNICATIONS

                                 ______


                             HON. MIKE WARD

                              of kentucky

                    in the house of representatives

                      Wednesday, October 11, 1995

  Mr. WARD. Mr. Speaker, in early August this House passed a historic 
bill to update this Nation's telecommunications laws. H.R. 1555 will 
change the status quo and allow for full and fair competition in local 
service, cable, and long distance. Consumers across America will 
benefit from the new jobs and economic benefits that will be created by 
this important bill.
  While the long distance companies opposed H.R. 1555, there are still 
a number of advantages they retain if this bill becomes law. I would 
like to include in the Record the attached paper which outlines these 
advantages.

              Why Bell Companies Need Federal Legislation

       The states are opening the Bell companies markets to 
     competition, without Federal legislation. Currently over 60% 
     of all local telephone lines are in states that allow local 
     competition. By year end 1995 it is expected that almost 80% 
     of all local telephone lines will be subject to competition.
       Nevertheless, a Federal Court-approved AT&T consent decree 
     absolutely bars Bell companies from offering interLATA 
     services or manufacturing, and seriously interferes with 
     their information services and other offerings (e.g., 
     customer premises equipment, cellular and PCS).
       This results in government-mandated advantage to long 
     distance companies that can offer one-stop shopping of local, 
     long distance and information services.
       The Bell companies have only two avenues for relief--
     Congress and the courts. The triennial review process 
     promised by the Department of Justice to lift the decree 
     prohibitions has broken down. The waiver process in the AT&T 
     consent decree has broken down.
       Even when it works, the Court process (e.g., information 
     services relief), including appellate review, takes years, 
     creates uncertainty, delays relief, and stifles real 
     competition.
       AT&T reneged on its commitment to support Bell companies 
     efforts to lift the ``line of business'' restrictions in the 
     Decree, restrictions that AT&T said it did not support.
       AT&T and others continue to use the decree successfully to 
     limit competition in their long distance markets.
       With increasing competition from new local exchange 
     carriers, cellular providers and PCS, the Bell companies will 
     increasingly be harmed by the inability to offer the same 
     one-stop shopping alternatives that long distance companies 
     can offer.
       Congress should reestablish itself as the principal 
     telecommunications policy maker and open all markets to 
     competition as soon as possible and at the same time.


   why long distance carriers can afford to kill federal legislation

       There are no Federal restrictions uniquely applied to long 
     distance companies affecting their ability to enter any other 
     telecommunications market including the local exchange 
     market, the intraLATA toll market, the cable TV market, or 
     manufacturing.
       Virtually all States already permit intraLATA toll 
     competition, 29 States have opened and 14 others are 
     considering opening the local exchange to competition.
       Currently over 60% of all local telephone lines are in 
     states that allow local telephone competition.
       By year end almost 80% of all local telephone lines are 
     expected to be subject to competition.
       States commissions have years of experience working with 
     carriers on interconnection of local networks, e.g., cellular 
     to local, intraLATA toll to local, and local to local 
     networks, so no new Federal program is required.
       Issues of interconnecting local to interstate networks have 
     largely been resolved through FCC-mandated equal access and 
     interconnection rules.
       The FCC already has fully adequate powers over 
     interconnection in the communications Act.
       Long distance carriers have already announced that they are 
     investing billions of dollars in local networks and services 
     in virtually every major metropolitan market as soon as 
     possible, showing their confidence in existing processes.
       Long distance carriers also have access to alternatives to 
     the local loop.
       Cellular services through ownership (e.g., ATT/McCaw) or 
     simple resale (e.g., MCI's recently announced strategy).
       Personal Communications Services: AT&T spent over $1.68B in 
     21 MTAs, and will spend an estimated additional $2.5B to 
     build out those properties; Sprint spent $2.1B in 29 MTAs. 
     Cable loops to over 70% of households and businesses in the 
     US.
       Long distance carriers have been able to use consent decree 
     restrictions to keep the Bell companies from competing with 
     them. As a result, the long distance companies have been able 
     to raise their rates 5 times and 20% in the last 4 years, 
     while the Bell companies lowered their access charges to 
     those long distance companies 7 times and 40% during the same 
     period.
       In other words, long distance companies win if there is no 
     Federal legislation. They keep their markets closed to Bell 
     company competition, maintain oligopoly profits for the Big 
     Three, gain unrestrained access to the Bell companies' 
     markets, and can offer one-step shopping while the Bell 
     companies cannot.


 key advantages retained by long distance carriers under revised h.r. 
                                  1555

 long distance carriers may enter the local telephone exchange market 
                              immediately

       Bell Companies Cannot Enter the Long Distance Market Until:
       They Face Facilities-based Competition in Residence and 
     Business Markets.
       They Comply with Checklist.
       
[[Page E 1914]]



long distance carriers may immediately resell the local services of the 
                    bell companies at special rates

       Bell Companies Are Barred from Reselling Long Distance 
     Services until They are Granted Full InterLATA Relief, Except 
     Limited Incidental InterLATA Services.


long distance carriers are not required to use separate subsidiaries to 
                          offer local services

       Bell Companies Are Required to Use Separate Subsidiaries 
     for Long Distance Offerings, Including Incidental InterLATA 
     Service and Grandfathered InterLATA Services


       long distance carriers may offer alarm monitoring services

       Bell Companies Cannot Offer Alarm Monitoring Services for 
     Years


   long distance companies may offer electronic publishing services 
                without separate subsidiary requirements

       Bell Companies May Offer Electronic Publishing Services 
     Only Through Separated Affiliate Or Joint Venture Structures


        long distance companies may manufacture their equipment

       Bell Companies Cannot Manufacture Their Equipment Until 
     InterLATA Relief Is Obtained

                          ____________________