[Congressional Record Volume 142, Number 141 (Thursday, October 3, 1996)]
[Senate]
[Pages S12333-S12334]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       FCC'S IMPLEMENTATION OF THE TELECOMMUNICATIONS ACT OF 1996

 Mr. BURNS. Mr. President, I'd like to take a moment today to 
offer some observations on the FCC's recent attempts to implement the 
important Telecommunications Act that we passed during the 104th 
Congress. I ask unanimous consent that my comments appear as if 
presented in morning business.
  As we all know, prior to the 104th Congress, we had been debating 
communications issues for almost 20 years with little forward progress. 
During the 104th, the chairman of the Senate Commerce, Science, and 
Transportation Committee, Senator Larry Pressler, hammered out a 
balanced, bipartisan piece of legislation that addressed the extremely 
technical and controversial issues raised in deregulating the 
broadcasting and communications industries. When we all gathered in the 
Library of Congress on February 8, 1996, to witness the signing of this 
historic legislation into law, I think pretty much all of us were proud 
of our collective accomplishment. We hoped and expected that our 
efforts would produce new services, new competitive options, new jobs 
and investment, and a competitive marketplace.
  However, recently, I have been watching the highly controversial 
efforts of the FCC at it has worked to implement this new law. And, as 
Yogi Berra once said, it's starting to look like deja vu all over 
again.
  Congress hammered out a consensus blueprint--one that was fair and 
balanced, and one that all the various industries signed onto. That 
process took a lot of work; in fact, the Senate-House conference took 
over 4 months. However, I am concerned with the manner in which the FCC 
has gone about implementing this bill. In fact, yesterday's Wall Street 
Journal contained an article which identified many of the problems 
arising from the FCC's implementation of the Telecommunications Act. I 
ask unanimous consent that a copy of that article be printed in the 
Record at the end of my statement.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. BURNS. Mr. President, I am concerned that the FCC's 
implementation of the Interconnection provision--the FCC's order 
implementing this provision is 932 pages and contains some 4,062 
footnotes--has alienated virtually all of the State regulators, and it 
has generated a massive appeal to the courts by the local exchange 
companies--this represents about three-quarters of the entire industry. 
Thus, the balanced, consensus approach that Congress achieved has, 
apparently, been set aside, and now, unfortunately, we are seeing these 
issues before the courts.
  Mr. President, this situation is not good for anyone. Confusion, 
industry strife, and massive court filings don't facilitate the 
construction of the information superhighway. Because I believe that 
the U.S. competitiveness in the global information economy will 
be dependent upon how quickly we upgrade our communications networks, 
it is absolutely essential that the FCC not adopt implementation 
policies that frustrate the timely deployment of information and 
communications infrastructure. I encourage the FCC to go back to the 
legislation that we passed and to follow the roadmap that Congress 
outlined. That roadmap calls for,

[[Page S12334]]

first, encouraging private sector negotiations, and, second, relying 
upon the State commissions to arbitrate solutions to the problems that 
private parties cannot work out. The FCC is responsible for overseeing 
this process but should not try to take over the process by rehashing 
all the issues that Congress resolved in the enactment of this act. It 
needs to implement Congress' blueprint in a balanced, consensus 
fashion, so that the communications industry can begin the important 
job of bringing new services, new options, and new technologies to the 
American public.

  Thank you, Mr. President. I yield the floor.

                               Exhibit 1

              [From the Wall Street Journal, Oct. 2, 1996]

                      How Bureaucrats Rewrite Laws

                        (By John J. DiIulio Jr.)

       As the historic 104th Congress draws to a close, scholars 
     have already begun to debate its legislative record. Some 
     stress that the first Republican Congress in four decades 
     enacted fewer major laws than any Congress since the end of 
     World War II. Others respond that it was only natural that a 
     new conservative Congress committed to restraining the post-
     New Deal rise of national government activism would pass 
     fewer big-government bills. Likewise, while some interpret 
     President Clinton's bright re-election prospects as a 
     negative referendum on the GOP-led House and Senate, other 
     focus on how Republicans ended up setting the agenda on 
     everything from balancing the budget to welfare reform.
       For at least two reasons, however, both sides in this early 
     war over the 104th history are firing intellectual blanks. 
     One reason is that it is not yet clear how much of the 
     legislation will stick politically. For example, Mr. Clinton 
     has made plain that, if reelected, he plans to ``fix'' the 
     new welfare law. And should the House fall to the Democrats, 
     ultraliberal committee chairmen will move quickly to undo 
     much of what the Republicans did legislatively on welfare, 
     crime, immigration and more.
       The other and more fundamental reason is that, no matter 
     what happens in November, it is by no means certain that the 
     laws passed by the Republican Congress over the last two 
     years will survive administratively.


                           bureaucratic wars

       Victories won on the legislative battlefield are routinely 
     lost in the fog of bureaucratic wars over what the laws mean 
     and how best to implement them. One of many recent examples 
     is how the Federal Communications Commission has already 
     virtually rewritten the Telecommunications Act of 1996.
       On Feb. 8, President Clinton signed the first major rewrite 
     of telecommunications law in 62 years. To many observers, the 
     act represented the culmination of a series of political and 
     judicial decisions that began in 1974 when the U.S. Justice 
     Department filed an antitrust suit against AT&T, leading to a 
     breakup of the old telephone monopoly and the creation in 
     1984 of the seven regional ``Baby Bells.'' The bill-
     signing ceremony, the first ever held at the Library of 
     Congress, was draped in symbolism. The president signed 
     the bill with a digital pen that put his signature on the 
     Internet. On a TV screen, Comedian Lily Tomlin played her 
     classic telephone company operator Ernestine, opening her 
     skit with ``one gigabyte'' instead of ``one ringle-
     dinglie.''
       During the debate over the bill and for weeks after its 
     enactment, the press played up the law's social-policy side-
     shows, like the requirement that most new television sets 
     contain a ``V-chip'' enabling parents to lock out programs 
     deemed inappropriate for children. But its true significance 
     lay in removing barriers to competition in the 
     telecommunications industry, and devolving responsibility for 
     remaining regulation to the states. While its language is 
     often technical, you need not be a telecom junkie to 
     understand the letter of the law or the record of floor 
     debates in Congress.
       For example, Sections 251 and 252 of the law promote 
     competition in local telephone markets, expressly giving 
     state commissions authority to decide, via a strictly 
     localized, case-specific process, what constitutes ``just and 
     reasonable'' rates. It affords the FCC no role whatsoever in 
     setting local exchange prices: ``Nothing in this chapter 
     shall be construed to apply or to give the Commission 
     jurisdiction with respect to . . . charges, classifications, 
     practices, facilities, or regulations for or in connection 
     with intrastate communication service.''
       The law's devolutionary language and deregulatory intent 
     was so clear that groups such as the National Council of 
     Governors' Advisors quickly produced reports advising key 
     state and local decision makers to prepare for ``telewars in 
     the states.'' Soon, one NCGA report on the law explained, 
     ``governors' offices, state legislatures and state public 
     utility commissioners will be drawn into state debates on 
     how to ensure a `level playing field for competition' 
     among those firms seeking to provide local and intrastate 
     telephone service.'' The major battles, the NCGA 
     predicted, would be over the terms of price and 
     interconnection agreements. Telephone company rivals could 
     be expected to lobby governors, utility commissions and 
     state legislatures in search of allies.
       But within six months of the law's enactment, the FCC 
     declared a victor in the ``telewars in the states''--namely, 
     itself. The commission produced a 600-page document 
     promulgating presumptive national pricing standards in local 
     telephone markets. The FCC insists that the order is 
     necessary to pry open local markets to long-distance carriers 
     like AT&T, small firms like Teleport, and cable and wireless 
     companies. Otherwise, the commission asserts, incumbent local 
     carriers like the Regional Bell Operating Companies will 
     remain invulnerable to real competition as potential entrants 
     to intrastate markets are forced to contend with 50 
     different, localized state regulatory regimes.
       But the FCC's rushed, revanchist rewrite of the 
     telecommunications law is based on a hypothetical pricing 
     scheme that only an armchair economist could love. In its 
     hundreds of pages of national regulatory dictates, the FCC 
     almost completely ignores the actual costs that local 
     companies incurred to create the system, and the regional and 
     other variation in how they operate.
       On Aug. 28, GTE Corp. and Southern New England Telephone 
     Co. jointly challenged the FCC in court, arguing that the 
     FCC's order constitutes an uncompensated taking under the 
     Fifth Amendment by requiring them to sell their services 
     at below actual costs. The order, they claim, would almost 
     certainly enervate competition by permitting long-distance 
     giants like AT&T to buy up local phone networks at huge 
     discounts--an ironic potential outcome indeed given how 
     all this began in 1974. Moreover, not only giants like 
     AT&T but fly-by-night arbitrage artists could enrich 
     themselves at the expense of consumers on the spread 
     between actual operating costs and the prices set by the 
     FCC. In response to the suit, a federal appeals court 
     ordered a temporary stay of the FCC regulations and will 
     hear oral arguments in the case tomorrow.
       At a recent press conference, GTE's senior vice president 
     and general counsel, former U.S. Attorney General William F. 
     Barr, demanded to know why the FCC believes that it is better 
     at making decisions ``for 50 states than the state 
     commissions are, who have done this historically, who have 
     all the data that are relevant to the state before them.''

                               A Mockery

       But whether or not the FCC is wiser than the states, but 
     regardless of who is right about the economics of the case, 
     the FCC bureaucrats' order mocks key provisions of a 
     democratically enacted law. The FCC's action is at odds not 
     only with the textbook understanding of ``how a bill becomes 
     law,'' but the first principles of limited government and 
     American constitutionalism.
       The FCC's action should serve to remind us that the 
     devolution and deregulation of federal authority are always 
     in the administrative details. On telecommunications, 
     welfare, and almost every other major issue, big government 
     is the administrative state in which judges and unelected 
     officials, and not the elected representatives who debate and 
     enact the laws, govern us all.

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