[Congressional Record Volume 142, Number 25 (Wednesday, February 28, 1996)]
[Extensions of Remarks]
[Page E238]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE TELECOMMUNICATIONS BILL

                                 ______


                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                      Wednesday, February 28, 1996

  Mr. HAMILTON. Mr. Speaker, I would like to insert my Washington 
Report for Wednesday, February 14, 1996, into the Congressional Record.

                      The Telecommunications Bill

       With my support, Congress this month enacted into law a 
     sweeping telecommunications reform bill, the most far-
     reaching measure passed by this Congress. It affects services 
     that virtually every American uses and which generate 
     hundreds of billions of dollars annually. The bill, which 
     President Clinton has signed into law, is the culmination of 
     several years of efforts to reform the nation's 
     telecommunication laws, which were last comprehensively 
     rewritten in 1934. There has long been broad consensus that 
     those laws were outdated, failing to take into account 
     rapidly advancing technology, but often vast disagreement 
     about how best to change them.


                         What does the law do?

       Many telecommunications services are currently provided by 
     highly regulated monopolies. Often, competition has been 
     expressly prohibited: for example, local phone companies 
     cannot provide cable TV, and vice versa. The purpose of the 
     new law is to create one giant marketplace for 
     telecommunications services. It aims to end monopolies, 
     allowing largely deregulated competition. The goal is to 
     expand consumers' choices while lowering their costs, 
     spurring innovation along the way.
       Phone service: The breakup of the Bell system in 1984 
     generally prohibited one company from offering both local and 
     long-distance service to the same customers. The new law 
     eliminates those barriers, requiring local phone companies to 
     open up their networks to competitors, including long-
     distance companies. Once there is competition, local phone 
     companies could offer long-distance services to their 
     subscribers. In addition, public utilities, like electric 
     companies, will now be permitted to provide 
     telecommunications services through a separate subsidiary.
       The bill contains protections for rural communities, which 
     may see less competition because of the high cost of 
     providing service to these areas. The law allows the Federal 
     Communications Commission (FCC) and states to order carriers 
     to provide quality phone service at reasonable rates in rural 
     areas, and exempts small phone companies from some 
     requirements if they prove economically burdensome. In 
     addition, the bill prohibits ``slamming''--the practice of 
     duping customers into unwittingly switching their long-
     distance carrier.
       Television: The new law permits phone companies to offer 
     cable service and allows television networks to own cable 
     systems. It also deregulates cable television rates over the 
     next three years, except for basic service. Some current 
     restrictions on the number of radio and television stations 
     that one company may own are relaxed.
       Congress deferred final action on the contentious issue of 
     advanced television services, such as high-definition TV. 
     Broadcasters argue that they need additional broadcast 
     spectrum in order to make the transition to high-definition 
     TV, while phone companies and cable operators argue that 
     broadcasters should have to pay for any additional spectrum.
       V-chip: The law requires all newly manufactured TVs with 
     13-inch or larger screens to include a ``v-chip.'' 
     Broadcasters have one year to voluntarily establish rules for 
     rating video programming that contains sexual, violent, or 
     indecent material and to transmit such ratings during 
     broadcasts. The v-chip would then enable parents to block 
     objectionable programming from their TV sets.
       Computing: The new law bars the transmission of obscene 
     materials to minors over a computer network. Violators could 
     be punished with up to two years in jail and fines as high as 
     $250,000 for an individual and $500,000 for a company. The 
     law protects providers of on-line service, like America On-
     line, from prosecution if their systems are merely the means 
     by which someone transmits the indecent material. The law 
     also endorses efforts by software companies to design 
     programs that parents and others can use to block 
     objectionable material.


                                Outlook

       The new law is a watershed in U.S. telecommunications 
     policy. The transition from highly controlled monopolies to 
     competition is likely to be bumpy at times, and the effects 
     will not be the same for all consumers. Some companies are 
     better positioned to take advantage of the new opportunities, 
     and some industries and regions of the country are likely to 
     see fiercer competition than others. In the short term we may 
     see more joint ventures and mergers, as companies that were 
     previously barred from entering each other's business are 
     now able to cooperate. The end result may be a handful of 
     industry giants, each of which offers the customer a wide 
     range of information and entertainment services.
       The new laws breaks down barriers that have existed for 
     decades and sets off a competitive free-for-all. Consumers 
     who find themselves annoyed by frequent solicitations to 
     change their long-distance carriers are in for more of the 
     same, as expanded choices become available in cable and local 
     phone service. But greater competition is likely to drive 
     prices down over time, and companies will have to innovate in 
     order to compete.
       The law, of course, does not please everyone. Many computer 
     users and advocates of free speech protest that it places 
     unconstitutional restrictions on speech. Consumer groups warn 
     that cable and telephone services could be more expensive.
       The challenge Congress faced in writing this law was to 
     establish a level playing field for all providers of 
     telecommunication services, ensuring that no one provider 
     would become so dominant as to establish a new, and 
     unregulated, monopoly. I am optimistic that the new law will 
     do that, but I also agree with those who say that none of us 
     can predict precisely how it will play out. While the bill 
     goes far to break down barriers to competition, and junks 
     volumes of regulations, the final product leaves many issues 
     to the FCC. My strong suspicion is that the bill does not 
     deregulate the industry as much as some proponents claim. I 
     believe that Congress must keep a close watch to ensure that 
     the promise of the new law is realized, and be prepared to 
     take action if consumers are adversely affected.
       In the end, this bill was finally pushed forward because 
     the congressional leadership desperately wanted a major 
     legislative achievement to point to. And it was accomplished 
     through a genuinely bipartisan effort, involving 
     congressional leaders on both sides of the aisle and the 
     Clinton Administration. The lesson we should learn is that 
     fostering consensus across party lines is the way to get 
     things done. I hope that we see more of that in the days 
     ahead.

                          ____________________