[Congressional Record Volume 143, Number 53 (Tuesday, April 29, 1997)]
[Senate]
[Pages S3801-S3802]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERREY:
  S. 665. A bill to monitor the progress of the Telecommunications Act 
of 1996; to the Committee on Commerce, Science, and Transportation.


             the telecommunications act progress report act

 Mr. KERREY. Mr. President, the Department of Justice has 
approved the merger of the Bell Atlantic and Nynex Corporations. While 
this is a matter within the discretion and jurisdiction of the 
Department, I rise to express my concern and disappointment with this 
decision.
  With this merger, two strong potential competitors with two vibrant, 
rich markets have combined.
  Bell Atlantic/Nynex will control more than 25 percent of all access 
lines in the United States and would serve 26 million customers. The 
merger is the second largest in U.S. history and the new company will 
rank among the 25 largest U.S. companies.
  A little more than a year ago, the Congress enacted landmark 
legislation to open telecommunications markets to competition, preserve 
and advance universal service and spur private investment in 
telecommunication infrastructure. Over the last year, the Federal 
Communications Commission has worked overtime to implement the new law. 
It has been a daunting task.
  While the FCC struggles with implementation of the new law, it is 
important to remember that a key part of that legislation did not rely 
on regulation, it relied on the marketplace. The idea was to unleash 
pent up competitive forces among and between telecommunications 
companies.
  This transaction replaces the urge to compete with the urge to merge.
  To unshackle the restraints of the modified final judgment which 
controlled the break up of AT&T, the Congress gave regional Bell 
operating companies instant access to long-distance markets outside of 
their local service regions and access to long-distance markets inside 
their regions when they opened their markets to local competition as 
measured by the bill's competitive checklist.
  In addition to responding to the lure of long-distance markets, 
regional Bell operating companies and other local exchange carriers 
were expected to covet each other's markets. The attraction of serving 
markets like New

[[Page S3802]]

York City, Baltimore, and Washington, DC, with local and long distance 
products was to be a key catalyst for breaking down barriers to 
competition. Who knows better what is needed to compete for local 
exchange customers in a new market better than another local exchange 
company?
  With this transaction, local competition and long-distance 
competition is lost. In addition, potential internet, video and broad-
band competition has disappeared.
  The promise of the new law was that competition, not consolidation 
would bring new services at lower prices to consumers. Where 
competition failed to advance service and restrain prices, universal 
service support would assure that telephone rates and services were 
comparable in rural and urban areas.
  When large telecommunications companies combine, they not only 
eliminate the potential of competition with each other in each other's 
markets, but they create a market power which may be capable of 
resisting competition from others. They also create the possibility of 
an unequal bargaining power when they compete with or deal with small, 
independent and new carriers.
  A strong role for the Department of Justice was my No. 1 cause when 
the full Senate considered the Telecommunications Act. I supported 
final passage of the law because the conference committee bolstered the 
Department's authority as compared to the Senate version of the bill. 
The legislation relied on the existing, strong antitrust powers of the 
Department of Justice. It also removed the FCC's ability to bypass 
Department of Justice antitrust review.
  As we measure progress against promise, it is vitally important that 
the Congress have sufficient information to assure that those powers 
are sufficient to promote competition, affordable prices and universal 
service.
  Mr. President, I am introducing legislation today to monitor the 
progress of the Telecommunications Act of 1996. This bill instructs the 
National Telecommunications and Information Administration, in 
consultation with the Federal Communications Commission, the Department 
of Justice, other executive branch agencies and State regulatory 
utility commissions to issue an annual report to the Congress on 
telecommunications services in America.
  The report would review available information and consider at a 
minimum the level of competition, the provision of universal service in 
telecommunications markets, mergers among telecommunications providers 
and their effect, employment in the American telecommunications 
industry and the affordability of residential rates for 
telecommunications services. The report will also make legislative and 
policy recommendations to the Congress and the President.
   Mr. President, I believe that if properly implemented, the 
Telecommunications Act of 1996 can deliver on its promises of 
competition, affordable rates, universal service, jobs, and investment. 
I am not prepared to recommend major change to the 1996 law, but I am 
prepared to argue for a higher level of competitive vigilance by this 
Congress and the executive branch.
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