[Congressional Record Volume 143, Number 102 (Thursday, July 17, 1997)]
[Senate]
[Pages S7669-S7688]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  NOMINATION OF JOEL I. KLEIN, OF THE DISTRICT OF COLUMBIA, TO BE AN 
                       ASSISTANT ATTORNEY GENERAL

  The bill clerk read the nomination of Joel I. Klein, of the District 
of Columbia, to be an Assistant Attorney General.
  Mr. ALLARD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Colorado is recognized.
  Mr. ALLARD. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. HATCH. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. Madam President, I would like to comment just briefly here 
on the nomination of Mr. Joel Klein, who has been nominated for the 
position of Assistant Attorney General of the Antitrust Division of the 
Department of Justice.
  Last Friday, I spoke on this floor in support of Mr. Klein and urged 
my colleagues to support his nomination. I certainly continue 
wholeheartedly to support Mr. Joel Klein. And I continue to urge my 
colleagues to join me.
  I will not repeat today all that I had to say last week on Mr. 
Klein's behalf, but I would like to reiterate that support and have my 
statement from last Friday printed in the Record. I ask unanimous 
consent to have that statement printed in the Record.

[[Page S7670]]

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Statement of Senator Orrin Hatch on the Nomination of Joel I. Klein To 
    Be Assistant Attorney General of the Antitrust Division of the 
                  Department of Justice, July 11, 1997

       Mr. President, I rise today on behalf of Mr. Joel Klein, 
     who has been nominated for the position of Assistant Attorney 
     General of the Antitrust Division of the Department of 
     Justice. Mr. Klein was reported out of the Judiciary 
     Committee unanimously on May 5. As his record and testimony 
     reflect, Mr. Klein is a fine nominee for this position, and I 
     am pleased that his nomination has finally been brought 
     before the full Senate today. He has my strong support.
       I believe Mr. Klein is as fine a lawyer as any nominee who 
     has come before this committee. He graduated magna cum laude 
     from Harvard Law School before clerking for Chief Judge David 
     Brazelon of the D.C. Circuit and then Supreme Court Justice 
     Lewis Powell. Mr. Klein went on to practice public interest 
     law and later formed his own law firm, in which he developed 
     an outstanding reputation as an appellate lawyer arguing--and 
     winning--many important cases before the U.S. Supreme Court. 
     For the past two years, Mr. Klein has ably served as 
     Principal Deputy in the Justice Department's Antitrust 
     Division, and for the past several months he has been the 
     Acting Assistant Attorney General for the Antitrust Division.
       It is clear, both from his speeches and his enforcement 
     decisions, that Mr. Klein is within the mainstream of 
     antitrust law and doctrine and will be a stabilizing 
     influence at the Antitrust Division. While no one doubts his 
     willingness to take vigorous enforcement actions when 
     appropriate, it is a credit to Mr. Klein that the U.S. 
     Chamber of Commerce, the National Association of 
     Manufacturers and other business associations have written in 
     strong support of his nomination to lead the Antitrust 
     Division. They believe he will be good for American business. 
     And I think they are right.
       At the same time, Mr. Klein has demonstrated a sense of 
     direction and a vision for the Antitrust Division, which is 
     important in a leader. He is committed to enforcing our 
     Nation's antitrust laws in order to uphold our cherished free 
     enterprise system and protect consumers from cartels and 
     other anticompetitive conduct. So, I am certain that Mr. 
     Klein will also be good for consumers.
       Antitrust doctrine has had its ups and downs over the 
     years--although we may not all agree on which times were 
     which. At this point, however, I am hopeful that antitrust is 
     entering a more mature and more stable period. Although 
     antitrust analysis is fact-intensive and will always contain 
     gray areas, I hope Mr. Klein will work to help make antitrust 
     doctrine as clear and predictable as possible so that 
     companies know what is permitted and what the Antitrust 
     Division will challenge. This will help businesses compete 
     vigorously without the worry and chilling effects that result 
     from uncertainty. I would suggest that the Division's goal 
     should be to avoid burdens on lawful business activities 
     while appropriately enforcing the law against those who 
     clearly violate it.
       Finally, I would like to add that I personally have been 
     very impressed with Mr. Klein. He strikes me as a person of 
     strong integrity, as a highly competent and talented lawyer 
     who is well-suited to lead the Antitrust Division. While I 
     expect we may not always agree on every issue, I believe that 
     Mr. Klein's skills and expertise will be a service to the 
     Department of Justice, to antitrust policymakers, and the 
     health of competition in our economy and I look forward to 
     working with him in the coming years.
       In what appears to be a last-ditch effort to scuttle Mr. 
     Klein's nomination, there are some who have now floated an 
     allegation that the nominee's participation in a particular 
     merger decision was somehow improper. Upon examination, let 
     me say that it appears to me that these reports are wholly 
     unfounded and provide no basis whatsoever for questioning the 
     nominees conduct. I understand that, with respect to the 
     matter at issue, Mr. Klein consulted with the proper ethics 
     officials and was assured that his participation raised no 
     conflict of interest or even the appearance thereof. Based on 
     what we know, this judgment appears sound, and I am confident 
     that the nominee has conducted himself appropriately. I 
     should hope that nobody in this body will use this 
     extraneous, ill-founded notion as an eleventh hour basis for 
     opposing Mr. Klein's nomination. I am confident that Mr. 
     Klein is a man of integrity, and urge my colleagues to cast 
     their votes in his favor.
       Some have suggested that Mr. Klein is misapplying the 
     Telecommunications Act and has taken questionable positions 
     on particular mergers. I will refrain here from passing 
     judgment on any particular decision and from engaging in a 
     detailed debate on Telecommunications antitrust policy. I 
     fully recognize that there are some very, very important 
     issues at stake here, especially in light of a number of 
     ambiguities left in the wake of the Telecommunications Act. I 
     also recognize that there have been some controversial 
     mergers in this area, and yet other potentially landmark 
     mergers which have not come to pass.
       In short, telecommunications competition and antitrust 
     policy is one of the most important, yet somewhat unsettled, 
     policy areas affecting our emerging, transforming economy. 
     The looming policy decisions to be made in this area cannot 
     be ignored and indeed I plan to have the Judiciary Committee 
     and/or our Antitrust Subcommittee fully explore these issues.
       But I believe it is neither fair nor wise to hold a nominee 
     hostage because of such concerns. In my view, sound public 
     policy is best served by bringing this nominee up for a vote, 
     permitting the Justice Department to proceed with a confirmed 
     Chief of the Antitrust Division, and for us in Congress to 
     move forward and work with the Department and other involved 
     agencies in the formulation and implementation of 
     telecommunications policies.
       I hope that all Senators, and especially those of the 
     President's own party, would permit the administration's 
     nominee to be voted on.

  Mr. HATCH. I would also like to point out that numerous past and 
present Government officials and attorneys have voiced strong support 
for Mr. Klein, including James Rill and John Shenefield, who headed the 
Antitrust Division during the Bush and Carter administrations 
respectively.
  I also ask unanimous consent that a letter to the New York Times 
editor from Messrs. Rill and Shenefield be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                               Washington, DC,

                                                    July 11, 1997.
     The New York Times,
     New York, NY.
       To the Editor: We write to state our disagreement with the 
     New York Times and with several Senators who have expressed 
     opposition to the nomination of Joel Klein to head the 
     Antitrust Division at the Justice Department. Mr. Klein 
     should be confirmed because he has all the qualities of 
     leadership and judgment to make an outstanding Assistant 
     Attorney General. In fact, the reasons why his detractors 
     have put his nomination on ``hold'' actually support the case 
     for his nomination. The objections to his nomination stem not 
     from concern about his qualifications, but from a difference 
     of opinion over the best way to ensure competitive markets in 
     telecommunications.
       The Antitrust Division was created to function as a 
     specialist agency with the expertise and experience essential 
     to making sound antitrust enforcement decisions. Quick, 
     intuitive judgments based upon an incomplete understanding of 
     either the facts or the law can easily lead to incorrect 
     decisions. Critics of Mr. Klein's recent decisions are at a 
     disadvantage because they cannot possibly have his detailed 
     knowledge of the facts. That is why Congress wisely entrusted 
     such decisions to an expert agency. In the past that trust 
     has not been misplaced because the Division has been willing 
     to take an unpopular stand that it considered to be in the 
     public interest--as it did in settling the AT&T case.
       Mr. Klein's willingness to reach a decision on the Bell 
     Atlantic merger indicates he has the courage to make a fine 
     Assistant Attorney General. He made a decision despite the 
     fact that whatever he decided to do was likely to offend 
     someone who was considering his nomination. No doubt Mr. 
     Klein could have found a way to delay a decision until after 
     he was confirmed. Instead, he made what he believed was the 
     correct decision from the perspective of the antitrust laws. 
     Mr. Klein is being criticized for doing his job. To 
     substitute the political process for the judgment of an 
     expert enforcement agency in an area where both the facts and 
     the law are remarkably complicated would be a dangerous 
     precedent that could only harm enforcement of the antitrust 
     laws in the future. We hope that those who have expressed 
     misgivings about Mr. Klein's nomination will soon allow it to 
     come to a vote, so that Mr. Klein can be confirmed--as he 
     should be.

     James F. Rill.
     John H. Shenefield.

       Mr. Rill was Assistant Attorney General in charge of the 
     Antitrust Division during the Bush Administration; Mr. 
     Shenefield was Assistant Attorney General in charge of the 
     Antitrust Division during the Carter Administration.

  Mr. HATCH. I am very pleased that cloture was invoked last week with 
such overwhelming support. I must say, however, that I was quite 
surprised, and disappointed even, to find us in the position of voting 
on cloture for someone as good as Joel Klein. Even I, as chairman or 
ranking member of the Judiciary Committee, have not filibustered a 
single Clinton administration nominee for the Justice Department or the 
Federal courts. I am not saying I will not in the future, but I will 
say that I have not up until now.
  Indeed, the last filibuster of a Justice Department nominee was over 
the nomination of Walter Dellinger to head the Department's Office of 
Legal Counsel back in October of 1993. Of all the nominees I have seen 
in recent years, I must say that Joel Klein certainly ranks among the 
very best of them.
  Of course, I know my good colleague from South Carolina would not 
take

[[Page S7671]]

this step lightly and without what is, in his view, adequate 
justification, but in fairness I think we must now move quickly to 
confirm this nominee who has been awaiting confirmation since May 5 of 
this year.
  As I explained last Friday, I believe it is critical for the 
Department of Justice, and the business community generally, to have a 
permanent, confirmed antitrust chief. Until we do, any antitrust matter 
before the Department of Justice will invite political maneuvering and 
gamesmanship by the affected parties, and any ultimate decision by the 
Department, no matter how justified on the merits, will unfairly be 
subject to criticism.
  Mr. Klein has, to his credit, not permitted the likelihood of such 
criticism to deter him from leading the Department to bring closure on 
critical matters pending before the Antitrust Division. I believe it is 
most unfortunate that, because of this body's, the U.S. Senate's, 
delay, Mr. Klein has been unfairly criticized for such decisions. This 
does a disservice to the Department as well as to those who come before 
it.
  By urging that we move to confirm Mr. Klein, and in expressing my 
support for this fine nominee, I intend in no way to diminish the 
important issues raised by my colleague from South Carolina, and 
others, regarding competition and antitrust policy in the 
telecommunications field. Quite the contrary, it is my belief that 
telecommunications competition and antitrust policy is one of the most 
important, yet somewhat unsettled, policy areas affecting our emerging 
and transforming economy.
  In fact, I announce today that I plan to work in coordination with 
Senator DeWine, who chairs the Judiciary Committee's Antitrust 
Subcommittee, to explore the looming policy decisions in this area and 
the role of the Department of Justice in the telecommunications arena. 
In my view, there are few competitive issues which are more worthy of 
examination than this one.
  Notwithstanding the tremendous import of the issues raised by some of 
my colleagues, I believe it is neither fair nor wise to hold this 
nominee and the Antitrust Division hostage because of concerns about 
his potential positions in this very turbulent area of the law. In my 
view, sound public policy is best served by bringing this nominee up 
for a vote, permitting the Justice Department to proceed with a 
confirmed Chief of the Antitrust Division, and for us in Congress to 
move forward and work with the Department and other involved agencies 
in the formulation and implementation of telecommunications policies.
  So, I urge my colleagues on both sides of the aisle to vote to 
confirm Joel Klein as Assistant Attorney General for the Antitrust 
Division.
  I have known Mr. Klein for quite a while, and I have to say I know 
him well. I also know his abilities well. I can also say, as someone 
who has had a little experience in the law, that Mr. Klein will stack 
up with anybody. He is a fine nominee. I commend the President for 
having made this choice, for having had the foresight to put somebody 
like this into the Justice Department.
  I commend Mr. Klein for the work that he has done up to date, for his 
fearless work and not waiting until he is confirmed to act as the 
acting person in that Department and for the work he did prior to this 
nomination in that Department. I commend him for a lifetime of service 
to this country and to his family and to the law firms that he has 
worked with.
  There is no question he has the academic and other credentials that 
far exceed the academic and other credentials of many others who served 
with distinction, who served in the Government of the United States, 
and particularly in the Justice Department.
  So I am very happy to support his nomination. I hope that today 
everybody will support his nomination. I think it is the right thing to 
do.
  Again, I say, my colleague from South Carolina is sincere and 
dedicated in his effort, but I hope he will see fit to support this 
nomination as well, on the basis that he has made his case, he has made 
his arguments, he has stood up for what he believes his principles are, 
and now it is time to support the President's nominee for this 
particular, important position in the Antitrust Division.
  Mr. LEAHY. Madam President, it is my hope that Joel Klein will be a 
strong and effective advocate for competition and the interests of 
consumers when he is confirmed as Assistant Attorney General for the 
Antitrust Division of the Department of Justice.
  I had a close working relationship with his predecessor, Anne 
Bingaman. I hope that we can develop that kind of relationship, as 
well.
  Mr. Klein has been buffeted a good bit since being nominated. He had 
to answer some tough questions during his nomination hearing about 
approving the Bell Atlantic-NYNEX merger without conditions. After the 
Judiciary Committee reported his nomination to the Senate on May 8, he 
responded to a letter from Senator Burns and succeeded in convincing 
our colleague to remove his hold on this nomination. That letter and an 
addendum filed by Mr. Klein as Acting Assistant Attorney in connection 
with the application of SBC Communications before the FCC raised 
serious concerns for a number of other Senators, however.
  Last week the Senate proceeded by unanimous consent to consideration 
of this nomination. Until that moment, I understood there to have been 
Republican holds against this nominee. Why the Republican leadership 
proceeded immediately upon calling up this nomination to file a cloture 
petition, they will have to explain. In fact, we had worked out a time 
agreement for the debate before the unnecessary cloture vote on Monday. 
That agreement was confirmed by the majority and minority leaders and 
pursuant thereto we are debating the nomination today.
  In this regard, I note the consistent willingness of Senator Hollings 
to debate and vote on this nomination from the outset, and the sincere 
efforts of Senators Dorgan and Kerrey to obtain clarification of issues 
that concern many of us.
  I have given a good deal of thought to this nomination. I believe 
that the Antitrust Division and the Assistant Attorney General who 
heads it are extremely important to effective enforcement of our laws 
and protection of American consumers. I have come to rely on them for 
advice as we draft legislation and develop policies to foster 
competition.
  I hope to continue to do so. I believe that the President is to be 
given significant deference on his selections for his Administration 
team. The Attorney General has contacted us in support of Mr. Klein and 
his interpretation of the law, and that means a good deal to me. As I 
consider the legal interpretations and policies in question, I do not 
find myself in total agreement with the Acting Assistant Attorney 
General. Nonetheless, I will vote to confirm him.
  Unlike some who have spoken in opposition to this nomination, I feel 
that a good deal of the fault I find with Mr. Klein's positions stems 
from the Telecommunications Act of 1996. I worked hard to correct and 
improve that act's weak and deferential standards for ensuring 
competition. In some measure we succeeded in strengthening the act, but 
other significant provisions that I supported to foster competition and 
protect consumers were rejected. That was a principal factor in my 
decision to vote against that act--the bill was not strong enough.
  Others predicted that passage of the Telecommunications Act would 
launch an era of competition in which cable companies would compete 
with the regional Bell operating companies for local phone service, 
long distance companies would compete with the Bells in both local and 
long distance services, and regional Bell operating companies would 
compete against each other. The promise of competition was a sales 
pitch but has not materialized to benefit American consumers. Instead 
of competition, we see entrenchment, mega-mergers, consolidation, and 
the divvying up of markets.
  I, too, hoped that the Justice Department Antitrust Division would 
act aggressively to protect consumers and foster competition. I have 
noted my concerns during Mr. Klein's confirmation hearing in my 
questioning of his unconditional approval of the Bell Atlantic-NYNEX 
merger. If the current law only serves to protect against mergers that 
tend to diminish competition where it already exists, it may be

[[Page S7672]]

time to amend the law to foster competition where none has existed. I 
hope that Joel Klein will help us do that.
  I was taken aback by the language Mr. Klein used in his May 20 letter 
to Senator Burns by which he ``specifically rejected the suggestion in 
the conference report'' on the Telecommunications Act that the 8(c) 
test be employed. But the more that I reviewed the matter, the more I 
realized that much of the fault lies with the conference report itself 
and the Telecommunications Act's failure to provide a definitive test.
  I was not appointed to serve on that conference committee, although I 
was serving as the ranking Democrat on the Antitrust Subcommittee on 
the Judiciary Committee at the time. I would have wanted to help that 
conference incorporate a stronger test into the law. That did not 
happen.
  It is my hope that working with the Department of Justice we can now 
help ensure that the test the Attorney General has adopted--that the 
local market be fully and irreversibly open to competition--is a 
meaningful standard and strong enforcement tool. If not, Congress 
should revisit it and strengthen it.
  I do think that Senator Hollings is correct when he criticizes the 
addendum to the Justice Department's submission in connection with the 
SBC Communications application. Both Senator Hollings and Congressman 
Bliley concur as principal drafters of the law regarding their intent 
and its meaning. I trust that the Antitrust Division will review its 
position on the proper meaning of section 271 of the Telecommunications 
Act and its requirement for competing service providers to offer 
facilities-based services.
  In opening the debate on this nomination, Senator Hatch cited 
``ambiguities left in the wake of the Telecommunications law'' and 
``unsettled policy areas'' and said:

       But I believe it is neither fair nor wise to hold a nominee 
     hostage because of such concerns, especially one as competent 
     and decent as Joel Klein. In my view, sound public policy is 
     best served by bringing this nominee up for a vote permitting 
     the Justice Department to proceed with a confirmed chief of 
     the Antitrust Division, and for us in Congress to move 
     forward and work with the Department and other involved 
     agencies in the formulation and implementation of 
     telecommunications policies.

  I agree. I look forward to the Judiciary Committee and our Antitrust 
Subcommittee exploring these important competition and antitrust policy 
matters. I will likewise expect Senator Hatch to support other 
Administration nominees for areas in which policies are in controversy.
  Now that the majority leader has moved to implement his new hold 
policy of proceeding on nominations, I trust he will not delay any 
further the nomination of Eric Holder to be Deputy Attorney General and 
that he will promptly move to consideration of the judicial nominations 
reported by the Judiciary Committee over the last several weeks.
  Some wrongly view confirmation as the end of the nominee's work with 
the Senate. I hope that this is just the beginning of Assistant 
Attorney General Joel Klein's work with us to protect consumers and 
foster competition. This is an awesome responsibility.
  Mr. HATCH. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. HATCH. I ask unanimous consent that the call of the quorum be 
rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. KERREY. Madam President, I had a conversation with the 
distinguished Senator from Utah who encouraged me to throw my entire 
prepared remarks away and take a gentlemanly course and support the 
nomination of Joel Klein. I have chosen not to do that. I have great 
respect for the Senator from Utah, and I have chosen to continue to 
offer to my colleagues reasons why I have chosen to vote against Joel 
Klein, why I have chosen to oppose the nomination.
  I like the man, I respect him, I believe he is a good individual, and 
I don't like coming here opposing a nominee that President Clinton sent 
to the Congress for confirmation. I would like very much to give him my 
unqualified support, but I simply, Madam President, cannot.
  About a year and a half ago, many of us in this Chamber who 
participated in this debate over the Telecommunications Act--and I must 
say, Madam President, one of the reasons I found myself in opposition 
to Mr. Klein is I led him to get the Department a role in the 
Telecommunications Act so that they would have some voice in 
determining whether or not there could be competition prior to 
approving the moving of entry from one sector to another. I fought for 
that, and many opposed that. We ended the day and prevailed here on the 
floor, prevailed in conference, and prevailed for final passage. It was 
signed and made a part of the law.
  Mr. Klein, in response to a question raised by a Member of this body 
who actually opposed that, it seems to me in a letter gives away 
Justice's role. Now the Attorney General, Janet Reno, has written in 
response to our asking her if she thinks Justice has a role, has 
written a letter saying, indeed, she believes Justice does have a role, 
and she intends to exercise the authority the law gives her.
  Indeed, Madam President, Mr. Klein, in meetings with me and with 
others who were concerned about the remarks he made in this letter, has 
given me assurance and pointed to several cases where his actions seem 
to be very, very much procompetitor--my hope is that Mr. Klein is. As 
the head of the Antitrust Division of Justice--I can read the tea 
leaves earlier on the cloture vote and would expect he will receive a 
fairly substantial vote, a resounding vote of support. My hope is I am 
wrong.
  This morning in the Omaha World Herald this article appeared. The 
headline says, ``So Far, Consumers the Losers in Battle for Dial-Tone 
Dollars.''
  Madam President, this is what Members should be concerned about, not 
just the Antitrust Division of Justice but they should also be 
concerned about the nominees for the Federal Communications Commission 
and what they intend to do, how they intend to vote, how they intend to 
make certain that we have competition, because unless we get 
competition at the local level, unless there is competition at that 
local level for that local dial tone, indeed for all information and 
services at the local level, it is not likely the consumers will 
benefit in the same ways that consumers benefited after divestiture in 
1982. Divestiture produced competition in long distance. That 
competition resulted in a reduction of price to the consumer and an 
improvement of quality, as competition almost always does.
  Without precedent, this legislation proposes to move us from a 
monopoly at the local level--which we still have for most residential 
customers--from a monopoly to a competitive environment. We are not 
there yet. We still have a monopoly. That monopoly can always, if there 
is only one choice that the consumer has, can always basically charge 
whatever they want to charge.
  This new legislation preempts States authorities from being able to 
do many of the things they had done in the past. There are 358,000 
residential lines in the regional Bell company serving Omaha, NE. The 
present rate for that local residential service is proposed to be 
$16.35, from a current rate of $14.90, a 9.7-percent increase, almost a 
10-percent increase from another local company that is also being 
proposed. They have that authority, now Madam President, to be able to 
come and raise these residential rates.

  It is going to be a problem for all of us if we do not get, in as 
expeditious a way as possible, competition down to the local level. 
What will happen, all of us will have to be explaining why it was, in 
1996 when we debated this bill, why it was that we all promised this 
would be great for the consumers--reduction in price, improvement in 
quality of service--why it is that they are not seeing this reduction 
in price, why it is they are seeing an increase in price instead of a 
promised reduction. The answer will be, we don't have competition yet.
  My belief is that the Congress is going to have to think in a very 
hard and clear fashion what it is we have to do in order to make 
certain that we

[[Page S7673]]

have competition. I remember the distinguished Senator from Arizona, 
Senator McCain, as he debated this bill, and I believe he ended up 
voting against it for precisely the same reasons I am talking about 
now. He actually talked about lots of regulatory requirements that 
didn't necessarily mean that we would get competition. He favored, as I 
heard him at the time, something that actually had great appeal to me, 
which is forget all the regulatory requirements, let's have almost a Le 
Mans racing start. Set a time certain when everybody can compete, 
regardless of who they were, in everybody else's market--let's have 
that.
  As my colleagues will probably recall in 1996 when we were having our 
debate, the prediction was that what we would have is the regional Bell 
companies competing against one another in individual markets, that we 
would have the cable companies then competing. Since that time, what we 
have seen is a significant amount of mergers, and I don't believe the 
kind of movement needed, with the single exception of a few companies. 
We have seen Ameritech moving aggressively to open their market and try 
to get approval, as well to get into long distance. That is the 
transaction that the law provides for--open up your local market and 
then you can go into long distance service. That is the idea of the 
law. But it isn't happening very fast.
  As a consequence, I don't think I will be the only Member who opens 
up their hometown newspaper and looks at the headline and sees, ``So 
far consumers the losers in battle for dial-tone dollars.'' The reason 
the consumers will be the losers is that the consumers in Omaha, NE, 
the residential consumers, when it comes to dial tone, they have two 
choices--take it or leave it. If you don't like the increase you can 
buy your local service from nobody else. You really only have one 
choice.
  I say, Madam President, I will not be supporting the nomination of 
Mr. Klein. I will be voting against Mr. Klein. I hope that other 
Members who are wondering what this debate is about will give it some 
very serious thought. They will, as well, be hearing from consumers in 
the not-too-distant future, if they haven't already, ``I remember, 
Senator, when you were debating this. Didn't I recall you issued a 
press release saying that this legislation was going to produce lots of 
new competition and reduction in price, and improvement and quality of 
service? Where is the competition? I still don't see it. Where is the 
promised price reduction? Where is the promised benefits to the 
consumers that were supposed to be coming our way at a theater near 
you?'' Instead, what we have is price increases.
  Mr. Klein, in his rather unfortunate, as he describes it, letter in 
response to a question by a Member who opposed giving the Justice 
Department authority over antitrust matters when it came to 
telecommunications, Mr. Klein says today, ``Well, I didn't really mean 
all those things. I intend to be a very forceful advocate for 
competition.''
  Madam President, I don't believe that is likely to happen. Mr. Klein 
approved the Bell Atlantic NYNEX merger. There were a lot of people, 
when this bill was being debated, that would not have stood up and 
said, ``The reason I am supporting this is because I hope what we get 
is the regional Bell operating companies merging with one another. I 
hope that happens. I hope we get mergers because that is exactly what 
we need in order to get more choice.'' I don't know how that produces 
more choice for the residential consumers in this new expanded area 
that now a single company will have. I see decreased choice.
  I heard a lot of people coming down and saying in fact what we are 
likely to see is the large local monopolies competing with one another 
for service. Though we are seeing some of it, I don't believe we are 
seeing anywhere near what we promised we were going to see, and unless 
we get a vigorous advocate for competition in the Department of 
Justice, unless we get, as well, on the Federal Communications 
Commission, appointees who will do the same, as I said, Madam 
President, there will be a lot of people in this Senate as well as in 
the House of Representatives having to explain to their consumers, to 
their residential consumers, just what exactly did you think was going 
to happen back in 1996?
  So I hope that my colleagues, when they come down here to make a 
decision about whether or not they will vote yes or no for the man who 
will have a very significant role in determining whether or not we were 
right or wrong in 1996, I hope they give very serious consideration to 
whether or not they believe that this individual is going to be able to 
do what we all promised we were going to try to do when we voted for 
and took credit for this very significant piece of legislation in 1996.

  I yield the floor.
  Mr. HOLLINGS. Madam President, let me first thank my colleague, the 
distinguished Senator from Nebraska. He has been very, very 
participatory over the years. It actually took us about 4 years to get 
the Telecommunications Act of 1996 to a vote. On both sides of the 
Capitol and both sides of the aisle we had a very, very deliberate 
discussion and treatment of the particular issues involved. No one 
understood better the thrust of trying to deregulate and bring about 
competition than Senator Kerrey of Nebraska. I praise him publicly, 
once again, for his leadership and the inclusions that he had contained 
in the final act itself.
  Referring to that final act, Senator Kerrey tells exactly what is at 
stake here--this institution. The U.S. Senate seemingly has no 
historical memory. What we really had on course during the 1960's, 
1970's and early 1980's was a terrible monopolistic control of American 
Telephone & Telegraph. The fact of the matter was that they had some 12 
particular rulings by the Federal Communications Commission. But the 
smart lawyers for the AT&T group would always put those on appeal, seek 
further delay, further consideration. While there were 12 orders on 
course at the Federal Communications Commission, mind you me, none of 
them could get enforced. We were in an outrageous standoff in the 
courts and at the Commission and, yes, an outrageous standoff in the 
Congress itself. We could not get a bill passed. They have that much 
political power. There isn't any question about it.
  So, a very brilliant and dedicated jurist, Harold Greene of the 
circuit court here in Washington, DC, took this matter over on a 
petition from the Justice Department for the AT&T breakup. In 1984, the 
modified final judgment was handed down and the Bell companies were 
spun off on their own to begin competition, and AT&T itself was opened 
up for competition. That wasn't easy. I wish my friend, Bill McGowan of 
MCI was here because it was 30 years ago, practically, that he, with a 
little two-floor apartment down in Georgetown, with a little aerial on 
top and three assistants, started to try to get into long distance. 
Very interestingly, the Farmer's Home finally gave him a loan. Can you 
imagine that? Competition started with a Farmer's Home loan. With that 
little bank, so to speak, he worked and brought some cases, he began 
nibbling away at the magnificent monopoly of AT&T in long distance.

  Since that time, of course, the long distance market has opened up. 
You've got MCI, Sprint, GTE, and the Brits are coming in, and the 
Germans, and all are participating--the Canadians, and otherwise. And 
so you have a very dynamic long distance market.
  However, the monopolies at the local level persisted, and those 
monopolies were intended for the ``public convenience and necessity''--
that is a phrase hardly heard in the halls of our National Government--
in order for the advantages, the services, the opportunity, the 
advancements to be brought onto the market and enjoyed by the public, 
we instituted the Federal Communications Commission. We had the old 
rulings coming out with respect to getting licenses to carry, and 
otherwise, at the State level, at ``public convenience and necessity.'' 
And we intentionally gave these seven Bell operating companies a 
monopoly. We said: You provide the services and we will protect you so 
that you are not bothered with the competition. On the contrary, if you 
get those services to the people, we will give you a profit that 
averages around 12 percent. Sometimes, in hearings, it went above that. 
You find them now to have made one heck of a lot of money. But my crowd 
is down in Buenos Aires, and I just read

[[Page S7674]]

this past week that Bell South is investing in Brazil, which has some 
20 million people. That is way more than the 3.6 million that we have 
in my little State of South Carolina. So more power to them. They have 
been well-operated. They have that monopoly. That was a big headache 
that we had in trying to bring about deregulation, deregulation, 
deregulation.
  This crowd up here in the House and Senate have no idea of the 
struggle that we had and the expertise that went into the drafting of 
this particular Telecommunications Act of 1996, to make sure that that 
monopolistic control, that checkpoint, that bottleneck, that choke-
point was broken up, so that competition really could ensue. And we had 
what we call the ``checklist.'' And I can see that being worked on late 
nights around the clock, over Thanksgiving holidays, working, of 
course, with the Bell operating companies, we would meet--I forgot my 
days now-- there was one on Friday and long distance on Monday. The 
long distance may have been on Friday and the Bell operating companies 
on Monday. But I set up a system, those years back, as the chairman of 
the Committee of Commerce, Science, and Transportation, whereby 
everything would be operated on top of the table. We would bring all 
sides in. They would all be considered and they would be told where we 
were and what we were negotiating and why.
  I deemed that nothing was going to be done, because there were all 
kinds of attempts during the 1970's and 1980's--and I had learned from 
hard experience that you had to have a bipartisan bill and you had to 
have all the parties in, and no last minute surprises, or anything of 
that kind. So credit must be given to the various staffs on the 
Republican and Democratic sides, working around the clock, to fathom 
the particular provisions that are in issue in this particular 
appointment.
  I know that some don't want to hear, and others don't care and they 
don't listen to this particular background. But it is a very 
interesting thing because it was worked out and finally voted upon by 
95 Republican and Democratic Senators when it passed. There was a 
strong majority over on the House side.
  It was a bill that, interestingly, when we finally agreed in December 
of 1995, our distinguished friend, the Vice President of the United 
States, heard that we in conference had gotten an agreement, and he 
came on the NBC Evening News program right in the middle of the news 
program. I happened to be listening when I had gotten back to the 
office. What occurred was that Tom Brokaw said, ``Wait a minute, ladies 
and gentlemen, we have a newsbreak from the Vice President of the 
United States.'' I was worried that something may have occurred to the 
President, but it was not that at all. He came on and said, ``We 
finally got my information superhighway agreed upon and I got 
everything I wanted. Well, this was December 1995, right after that 
1994 election. Speaker Gingrich on the House side said, ``If he got 
everything he wanted, that bill is deader than Elvis.'' The leader on 
the Senate side, Senator Robert Dole, said, ``I am not going to call 
it.''

  Of course, I had the duty, during the ensuing weeks through into 
Christmas and Christmas week, and all through the month of January, of 
holding the line.
  I describe that to my colleagues because I want them to know that 
every little thing in that bill was worked out with everyone and to 
their satisfaction and, finally, of course, to the Speaker and the 
Majority Leader Dole, because the bills were called in February of last 
year and passed both Houses and were signed by the President.
  Now, in coming about the breakup of the monopolies, to make sure--
because you can't get competition going unless the Bell companies go 
along. I can tell you here and now, if I ran a monopoly, I would 
continue investing in Buenos Aires and all like that for my 
stockholders, and what have you, and making money, and just hold on and 
appeal and drag feet and everything else.
  Let me emphasize that is just exactly what has happened, why this 
particular nomination ought to really be rejected. It is a sort of sad 
day when you work as hard as you do to get something done for the 
administration, and the administration sends up an appointment of this 
kind that upsets the entire apple cart.
  Let me tell you, Madam President, here it is, just last weekend, 
``MCI Widens Local Market; Loss Estimate,'' in the July 11 Wall Street 
Journal. Some $800 million--saying its losses from entering that 
business could total $800 million this year, more than double its 
original estimate. Why? Because here is an analysis right here again in 
the Wall Street Journal, over the weekend, when they announced that 
their shares dropped 17 percent. I only quote Chris Mines, senior 
analyst of Forester Research, Inc., in Cambridge, MA, who said, ``MCI's 
complaints are totally justified. In general, I think local carriers 
are dragging their feet, using every means at their disposal to protect 
their monopolies.''
  Now, Madam President, it is just not the news articles in the Wall 
Street Journal. Take this week's Business Week magazine, on page 33, 
``Why SBC Shouldn't be the First Bell in Long Distance.'' Rather than 
reading the entire article, little squibs encapsulate those reasons. 
``How SBC keeps rivals away: one, excess charges. AT&T needed 
customized routing to provide directory assistance to its customers in 
SBC's territory. SBC's initial quote is $300 million. AT&T says other 
Bells charge $1 million to $2 million.'' That is rather than the $300 
million.
  So it is perfectly obvious that they sit there and make this 
outrageous charge and that holds up everything. You get Senators 
running around, ``I don't know what is the matter with our bill. We 
want to open up the market. Let market forces operate.'' You have 
monopolies determined. Here is another reason here how SBC keeps rivals 
away. ``In Oklahoma, competitors must pay $19.13 per line for SBC's 
unbundled network, but SBC's retail rates are $14.34 a month.''
  So, if they are going to charge 20 percent again more than anybody 
coming in the market, anybody coming in the market is going broke, and 
there is a loss by another long distance carrier. AT&T is trying to get 
in this market. MCI is trying to get in the other long distance market. 
They are losing already $800 million trying to just break it.
  Third, legal attacks. How SBC keeps rivals away. Legal attacks. SBC 
has appealed even basic decisions by State regulators. For example, SBC 
appealed a Texas decision to let Teleport Communications Group provide 
competing local service. SBC contends Teleport had not met State 
standards.
  Madam President, I cite this from this particular article because 
it's momentary, it's timely. What really happens is not just MCI and 
AT&T, but others in these monopolies, with their lawyers, are bringing 
cases to test the constitutionality of the Telecommunications Act of 
1996. The one thing they said, ``Let's stop the bickering. Can't we 
work in a bipartisan nature and get things done?'' The one thing done 
this past Congress on a bipartisan basis was a 95 to 4 vote for the 
Telecommunications Act of 1996--totally bipartisan. I think those 
things ought to be understood and how they came about, and how long and 
hard we worked over them.
  Now, in getting about this particular task, I communicated with 
President Clinton and the White House and asked him if he could note in 
a letter just exactly what his concerns were. I want to make sure staff 
gets copies of every one of these because they are not getting my file. 
And every time I get ready to talk, I just need a few notes. I can't 
even get a few notes. They are back there hidden away. So you get your 
copies.
  Remember this: I have a White House letter, Madam President, dated 
October 26, 1995, from President Clinton. I ask unanimous consent that 
this letter be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                              The White House,

                                 Washington, DC, October 26, 1995.
     Hon. Ernest F. Hollings,
     Ranking Member, Committee on Commerce, Science, and 
         Transportation, U.S. Senate, Washington, DC.
       Dear Fritz: I enjoyed our telephone conversation today 
     regarding the upcoming conference on the telecommunications 
     reform bill and would like to follow-up on your request 
     regarding the specific issues of concern to me in the 
     proposed legislation.
       As I said in our discussion, I am committed to promoting 
     competition in every aspect of

[[Page S7675]]

     the telecommunications and information industries. I believe 
     that the legislation should protect and promote diversity of 
     ownership and opinions in the mass media, should protect 
     consumers from unjustified rate increases for cable and 
     telephone services, and, in particular, should include a test 
     specifically designed to ensure that the Bell companies 
     entering into long distance markets will not impede 
     competition.
       Earlier this year, my Administration provided comments on 
     S. 652 and H.R. 1555 as passed. I remain concerned that 
     neither bill provides a meaningful role for the Department of 
     Justice in safeguarding competition before local telephone 
     companies enter new markets. I continue to be concerned that 
     the bills allow too much concentration within the mass media 
     and in individual markets, which could reduce the diversity 
     of news and information available to the public. I also 
     believe that the provisions allowing mergers of cable and 
     telephone companies are overly broad. In addition, I oppose 
     deregulating cable programming services and equipment rates 
     before cable operators face real competition. I remain 
     committed, as well, to the other concerns contained in those 
     earlier statements on the two bills.
       I applaud the Senate and the House for including provisions 
     requiring all new televisions to contain technology that will 
     allow parents to block out programs with violent or 
     objectionable content. I strongly support retention in the 
     final bill of the Snowe-Rockefeller provision that will 
     ensure that schools, libraries and hospitals have access to 
     advanced telecommunications services.
       I look forward to working with you and your colleagues 
     during the conference to produce legislation that effectively 
     addresses these concerns.
           Sincerely,
                                                     Bill Clinton.

  Mr. HOLLINGS. Madam President, I quote the second paragraph:

       As I said in our discussion, I am committed to promoting 
     competition in every aspect of the telecommunications and 
     information industries. I believe that the legislation should 
     protect and promote diversity of ownership and opinions in 
     the mass media, should protect consumers from unjustified 
     rate increases for cable and telephone services and, in 
     particular, should include a test specifically designed to 
     ensure that the bell companies entering into long distance 
     markets will not impede competition.

  I emphasize this because I had the charge from the President himself. 
Now you have the President's nominee coming and refuting all of that, 
because if you want to know where rates will increase, instead of 
competition, we are going to get consolidation, and instead of a 
competitive place in the market, you are going to get fixes all around. 
This crowd has been operating monopolies for, lo, decades upon decades. 
They know how to do it. They have a hard time learning.
  AT&T in the 1980's pared down by a third the size of AT&T after the 
modified final judgment in 1984. But they made twice the profit after 
they finally learned how to compete. Our friends, the Bells, have yet 
to come and learn that. In fact, I strongly advised from these 
happenings that they have no idea of competing; they have every idea of 
holding onto the monopoly as long as they can.
  Madam President, ``If we can get an Assistant Attorney General or 
Deputy Attorney General''--whatever you want to call Mr. Joel Klein--
``in our camp, rather we can hold on and continue making out like 
gangbusters for years to come.''
  Now, as a result of the President's letter, we finally have section 
271(c)(1)(A) of the Telecommunications Act, and I ask that the 
statement under ``presence of the facilities-based competitor, 
including both residential and business subscribers, having a 
facilities-based competitor for both business and residential''--which 
was proscribed in this law, and there are no ifs, ands and buts how it 
is written--I ask unanimous consent that it be printed in the Record, 
just that section is necessary and not the entire act, of course.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       (A) Presence of a facilities-based competitor.--A Bell 
     operating company meets the requirements of this subparagraph 
     if it has entered into one or more binding agreements that 
     have been approved under section 252 specifying the terms and 
     conditions under which the Bell operating company is 
     providing access and interconnection to its network 
     facilities for the network facilities of one or more 
     unaffiliated competing providers of telephone exchange 
     service (as defined in section 3(47)(A), but excluding 
     exchange access) to residential and business subscribers. For 
     the purpose of this subparagraph, such telephone exchange 
     service may be offered by such competing providers either 
     exclusively over their own telephone exchange service 
     facilities or predominantly over their own telephone exchange 
     facilities in combination with the resale of the 
     telecommunications services of another carrier. For the 
     purpose of this subparagraph, services provided pursuant to 
     subpart K of part 22 of the Commission's regulations (47 
     C.F.R. 22.901 et seq.) shall not be considered to be 
     telephone exchange services.

  Mr. HOLLINGS. Madam President, we had a glowing candidate for the 
Acting Assistant Attorney General in Joel Klein on March 11, 1997. He 
went down to a class, a legal work seminar, on March 11, and the title 
of the seminar was ``Preparing for Competition in a Deregulated 
Telecommunications Market.''
  Joel Klein, on page 9, I read here, and I quote: ``Now let me add a 
few words about how we will apply this standard to our BOC applications 
under section 271 of the act. Our preference, though we recognize that 
it may not always occur, is to see actual broad-based business and 
residential entry into a local market.''
  I ask unanimous consent that this particular speech be printed in the 
Record in its entirety. So I am not quoting out of context.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Preparing for Competition in a Deregulated Telecommunications Market

    (By Joel I. Klein, Acting Assistant Attorney General, Antitrust 
                 Division, U.S. Department of Justice)

       First, I want to say that I'm delighted to be here today 
     and I'm grateful to Joe Sims and Phil Verveer for having 
     invited me. I can tell from reading the program and looking 
     at the impressive array of speakers that this has been a 
     comprehensive and informative conference on some cutting-edge 
     issues in the communications industry. In fact, when I 
     realized that I was going to be the last person to speak I 
     was reminded of Adlai Stevenson's quip in a similar situation 
     when he said, ``We're at the point in the program where 
     everything that could be said has been said but, 
     unfortunately, not everyone has had a chance to say it.'' So, 
     I'm especially appreciative that so many of you have stayed 
     around to hear my closing remarks and I hope that, despite 
     the odds, I may be able to add something to the overall 
     discussion.
       Let me start by stating the obvious: what we're going 
     through right now in the communications field is truly 
     extraordinary. Technology, globalization, and last year's 
     legislative, executive, and administrative actions have come 
     together to create an environment of rapid change, great 
     opportunity, and considerable risk. We all know that ten 
     years from now things will be very different in the 
     communications industry; we just don't know how they'll 
     differ. From our perspective at the Antitrust Division, we 
     have one, overarching goal--to maximize competition. To be 
     more concrete about that, as I see it, the ideal result would 
     be a variety of different conduits--be it wire, wireless, 
     cable, or what have you--that link people with all kinds of 
     content--be it voice, video, audio, computer, and so on. But 
     envisioning an ultimately desirable competitive market 
     structure is not the difficult part here: what's really hard 
     is how we get there in a market that's transitioning from 
     regulation to competition. And that is the journey that we in 
     the Antitrust Division have embarked upon--at a somewhat 
     dizzying pace. I might add, since the passage of the 1996 
     Telecom Act a little more than a year ago.
       Before I focus in on some of the specifics, let me give you 
     a sense of the breadth of what we're dealing with. In the 
     first place, we've seen a flood of radio mergers now that the 
     1996 Act has authorized far more liberal ownership rules. I'm 
     advised that there have been over a thousand such mergers in 
     the past year and about 150 of them have been brought before 
     the Division, principally through the hart-Scott-Rodino 
     process, but also through independent inquiry in several non-
     reportable transactions. We've conducted extensive 
     investigations in many of these cases and, to date, we've 
     sought divestitures in a handful of mergers. And while that's 
     important in terms of the economy the real story here is how 
     much concentration is occurring. In short, the concentration 
     envisioned by Congress is taking place, no doubt allowing the 
     industry to achieve some important efficiencies. And so long 
     as this consolidation doesn't erode competitive opportunities 
     in any market--and, with the application of sound antitrust 
     principles as a guide. I don't think it will--then these 
     mergers may ultimately strengthen the position of radio in 
     the overall communications industry. And, frankly, that's all 
     to the good.
       Beyond radio, we're also experiencing consolidation in 
     other areas of the communications industry. The FCC is still 
     evaluating what limits to place on broadcast ownership but, 
     in other areas, we've already seen significant movement. 
     There's been a major Bell Company/cable merger--U.S. West/
     Continental Cable--which the Division cleared with some 
     modification to the original deal. And we've also seen three 
     major telephone mergers--SBC/Pactel, which we cleared without 
     objection several months ago, and Bell Atlantic/NYNEX and 
     MCI/British Telecom,

[[Page S7676]]

     which are both still pending before us. These cases raise 
     important questions about potential competition, and also 
     about international interconnection where market conditions 
     may differ significantly in different countries and we have 
     expended, and will continue to expend, considerable time and 
     energy analyzing them and other such mergers that may come 
     before us in the future.
       Now, in the time that remains, I'd like to focus in on one 
     particularly challenging aspect of this journey through the 
     communications industry and that is the deregulation of 
     telephone services in this country. This was probably the 
     most significant part of the 1996 Act and it raises 
     enormously difficult questions, questions that we at the 
     Division have, to some degree, been dealing with under the 
     Modified Final Judgment, or the ``MFJ,'' that resulted in the 
     break-up of AT&T and the creation of seven Regional Bell 
     Operating Companies, or ``RBOCs,'' as they are called, with 
     severe restrictions on what they could do beyond providing 
     local telephony within their own service areas. As a result 
     of that lawsuit, there can be little doubt that the Nation 
     has seen significantly improved long distance competition, 
     accompanied by the innovation and downward pressure on prices 
     that results from such competition. That is not to say that 
     everything's perfect in long distance--even more competition 
     would certainly be welcome--but it's important to recognize 
     how far we have come when we have three well-established 
     competitors, hundreds of other resellers, and four fiber-
     optic systems wiring the country, with a fifth in progress. I 
     can tell you from my personal dealings with officials from 
     other countries that, as a result of the AT&T case, the U.S. 
     is positioned for global competition in a way that is the 
     envy of our current trading partners--whose telephone 
     companies will be our future competitors, I might add.
       But now we are charged with taking the next steps--in 
     particular, the Congress, together with the leadership 
     provided by the Clinton Administration, established a 
     statutory framework that is designed to open up local 
     telephone markets to competition and that would allow the 
     local companies to move into in-region, long distance service 
     for the first time. The goal of this process is to have full-
     scale competition in telephony throughout the nation. In a 
     nutshell, consumers should have as many as possible, but at 
     least several local options, long distance options, and, 
     ultimately, combined local and long distance options (one-
     stop shopping, if you will). Once again, knowing where we 
     want to get is the easy part: it's getting there that's hard. 
     And to accomplish that goal, the statute puts in place a 
     variety of interrelated steps and assigns responsibility to 
     three separate agencies--the FCC, the various state 
     regulatory commissions, and the Department of Justice. This 
     mix of players, I would suggest, sensibly reflects the fact 
     that telephone regulation has historically been a shared 
     function of the FCC and the state agencies and, quite 
     naturally, both of them are necessary to the deregulatory 
     process as well. And we also belong there, essentially 
     because the goal of the process is competition and we have 
     expertise in that area generally and with respect to 
     telephony, in particular, because of our extensive 
     involvement in the AT&T case.
       The vision of the 1996 Act was premised on a simple 
     formula: if the regulatory environment were different, the 
     market for local telephone service--previously thought to be 
     a ``natural monopoly''--would be subject to the discipline of 
     competition, bringing down prices and increasing quality and 
     choices for consumers. On this point, there was widespread 
     agreement, supported by the experience of several states in 
     paving the way for competition in the market for local 
     telephone service. Building on that experience in 1995, the 
     Antitrust Division, along with Ameritech, AT&T, and many 
     other parties proposed, on a trial basis, a waiver of the 
     MFJ, allowing Ameritech to offer in-region, long distance 
     service in return for compliance with some measures designed 
     to open its local market to competition and a demonstration 
     that actual competitive opportunities were expanding. This 
     proposed waiver, like the 1996 Act, contemplated the creation 
     of new, facilities-based, local service as a way to bring 
     real competition to the local telephone market. The Act seeks 
     to do this on a much broader scale, and in so doing, calls 
     for a series of transitional steps. Getting these steps right 
     is no easy task, and although they may not immediately lead 
     to the type of comprehensive facilities-based service that 
     we hope to see over time, we all realize that we should 
     not let the perfect be the enemy of the good here.
       As I see it then, implementing the deregulatory vision set 
     out in the 1996 Act involves four basic things: (1) a set of 
     rules that will allow new entrants into local markets--the 
     so-called interconnection rules adopted by the FCC last 
     August and which have now been stayed in significant part by 
     the Eighth Circuit: (2) another set of provisions that 
     establish the criteria necessary to facilitate local 
     competition and with which the RBOCs must comply before they 
     are allowed to provide long distance and one-stop shopping 
     services: (3) access reform, designed to reduce the price 
     paid to local carriers for originating and terminating long 
     distance calls so that this price will reflect the actual 
     cost of providing the service: and (4) a universal service 
     plan that will eventually replace the implicit subsidies 
     contained within the current regulated telephone service 
     system with explicit and competitively neutral subsidies. As 
     to this last point, I should quickly explain that the current 
     system requires some users to pay above-cost rates to 
     subsidize other users who are served at rates below cost: the 
     1996 Act calls for these implicit subsidies to be made 
     explicit and to be paid for through a competitively neutral 
     universal service fund. Until we fully implement this 
     mandate, some local exchange carriers (or LECs, as they are 
     called) may be required to bear the costs of serving these 
     customers at uneconomic rates and/or we will continue to see 
     inefficient pricing and entry signals which will tend to 
     distort competitive opportunities and thereby hurt consumers.
       Now, as I see it, the paradox of this kind of deregulatory 
     effort is that it depends upon a series of regulatory steps--
     all taken, to be sure, in the name of deregulation--and those 
     regulatory steps, in turn, can significantly affect the long-
     term prospects for full-scale competition in telephony. There 
     is no formula or equation that one can look to in order to 
     get these things right. They involve the exercise of 
     discretion by government agencies, which in turn requires 
     careful, sound judgments. And, given that these predictive 
     judgments are necessarily based on incomplete information, we 
     should all be somewhat humble in second-guessing those who 
     have to make the calls. Interestingly, the Fifth Circuit, 
     quoting Justice Cardozo, made just this point about a quarter 
     of a century ago in a case evaluating an FCC regulation 
     prohibiting telephone companies from offering cable service 
     in their regions, explaining that: ``[i]n a complex and 
     dynamic industry such as the communications field, it cannot 
     be expected that the agency charged with its regulation will 
     have perfect clairvoyance. Indeed, Justice Cardozo once said, 
     `Hardship must at times result from postponement of the rule 
     of action till a time when action is complete. It is one of 
     the consequences of the limitations of the human intellect 
     and of the denial to legislators and judges of infinite 
     prevision.' '' \1\
---------------------------------------------------------------------------
     \1\ General Telephone Co. of Southwest v. United States, 449 
     F.2d 846, 863 (5th Cir. 1971) (quoting Benjamin Cardozo. The 
     Nature of the Judicial Process 145 (1921)).
---------------------------------------------------------------------------
       Against the backdrop of this call for humility, let me now 
     go on to highlight the problems in making the necessary 
     regulatory judgments by examining the four transitional steps 
     that I just mentioned. First, in order to get even some local 
     competition, at least for some period of time, competing 
     carriers will have to either purchase service from the LEC at 
     wholesale and attempt to compete with the same LEC by 
     reselling at retail or it will have to use the LEC's 
     facilities--switches, loops, and the like--in whole or in 
     part. In either case, someone has to set a price for the 
     product--be it wholesale service or the unbundled elements. 
     That price in turn can have important repercussions--set too 
     high, it can unfairly burden new entrants and make local 
     competition impossible; and set too low, it can give new 
     entrants a competitive advantage at the expense of the 
     incumbent LEC. What this all means is not just that one of 
     these companies may make a little (or even a lot) more than 
     the other but that long-term competitive conditions can be 
     seriously affected by these pricing decisions. This 
     particular concern has led to the Eighth Circuit litigation 
     in which the incumbent LECs are challenging the FCC's pricing 
     methodology (as well as the Commission's authority to impose 
     a certain pricing methodology to begin with). Fortunately, at 
     least from our point of view, most of the States have 
     followed the Commission's pricing methodology and so, while 
     the litigation goes forward, the actual prices for wholesale 
     and unbundled elements may not be materially different 
     regardless of who ultimately prevails in the Eighth Circuit. 
     I say that's fortunate from our point of view because we 
     supported the FCC's approach as a sound pricing methodology 
     for stimulating efficient local entry.
       The second area where some difficult regulatory decisions 
     must be made in this deregulatory process has to do with the 
     issue of when a particular RBOC is permitted to enter the 
     long distance market. Under the statute, this is a state-by-
     state determination, made by the FCC, with key inputs from 
     the state regulatory agencies and the Department of Justice. 
     Here, too, you can readily see the significance of the trade-
     offs in the regulatory decision. If you let the RBOC into 
     long distance prematurely, two bad things can happen. First, 
     you may undermine the chance to ensure a competitive local 
     market since once in long distance, the RBOC's incentive to 
     cooperate with its competitors will diminish--if not 
     altogether, at least significantly. And second and 
     derivatively, a premature entry into in-region, long distance 
     service gives the RBOC an unfair advantage in the offering of 
     one-stop shopping since it can readily combine its local 
     service with one of several long distance services easily 
     available to it in the marketplace, while its potential 
     competitors may not have nearly so easy a time 
     combining their long distance service with local service 
     that has heretofore been unavailable to them. On the other 
     hand, if you keep the RBOC out of long distances for too 
     long a period, you risk giving the long distance carriers 
     an undue competitive benefit, since only they are able to 
     offer customers both local and long distance service for 
     the period of time that the RBOC is denied entry, thereby 
     giving them a first mover advantage. Not surprisingly in 
     this environment both kinds

[[Page S7677]]

     of carriers--local and long distance--feel very strongly 
     about the timing of RBOC entry into long distance, even to 
     the point of purchasing significant advertising to make 
     their respective cases.
       For our part at the Antirust Division the issue of RBOC 
     entry into long distance has been a special focus. Under the 
     statute, we are expressly charged with evaluating each of the 
     fifty state applications and our competitive assessment must 
     be given ``substantial weight'' by the FCC. What is probably 
     most notable about the process is that we are authorized to 
     make our assessment ``using any standard the Attorney General 
     considers appropriate.'' Now, given that broad swath the 
     first thing we needed to do is to establish a concrete 
     standard so that applicants would know in advance how we'd be 
     evaluating them. We also needed to relate our standard to the 
     other, specific provisions of the statute--such as the 14-
     point checklist the Section 272 separate-subsidiary 
     requirements, and the Track A and Track B entry provisions, 
     as well as the public interest test that the FCC is charged 
     with applying. In order to meet this challenge, we engaged in 
     an extensive inquiry, soliciting comments from all interested 
     parties and meeting with virtually all the affected players. 
     We received almost seventy-five comments and have met with 
     countless industry officials.
       The upshot of this process has been to reach the following 
     conclusion: Our basic standard is that before an RBOC should 
     be allowed to enter long distance, it must be able to 
     demonstrate that its market is truly open (which, I should 
     make clear, is different from saying its market is fully 
     competitive). Before I put meat on the bones of that standard 
     let me first say how we think it integrates with the 
     remainder of Section 271. We believe that the other 
     provisions--the checklist the facilities-based requirement 
     the separate-subsidiary requirement and the option of Track 
     B--are all necessary, though not sufficient, to support 
     entry. These requirements, almost as their names imply, 
     involves fixed points but, by themselves are not sufficiently 
     dynamic to ensure that real competition can take place. 
     That's where we think our approach comes into play; we view 
     it as the dynamic part of the equation looking to ensure that 
     the wholesale support systems for opening up local markets 
     are not simply claimed to be in place, but that they will 
     actually work in fact are scalable, and have been 
     beachmarked, so that competition will be real and not marely 
     theortical. We think this approach is the best way to ensure 
     competitive effectiveness which we take to be our express 
     charge under the statute and we think it dovetails nicely 
     with the ``public interest'' standard that the FCC is charged 
     with applying in making the ultimate decision under 271 
     whether to approve a particular application. More broadly, we 
     believe that our approach fits well within the overall 
     statutory scheme adopted by Congress, nicely blending the 
     fixed and dynamic requirements to reach an effective result.
       Now, let me add a few words about how we will apply this 
     standard to RBOC applications under Section 271 of the Act 
     Our preference, though we recognize that it may not always 
     occur, is to see actual broad-based--ie, business and 
     residential--entry into a local market. This kind of entry 
     requires not only appropriate agreements between the RBOCs 
     and their potential competitors, but also the wholesale 
     support systems necessary to ensure that when a current 
     customer is switched from the RBOC to the new competitor, 
     the switching process occurs quickly and effectively, so 
     that the customer is satisfied and its new phone company 
     is not blamed for messing up the transfer--or that, after 
     a customer has been switched and she needs any services, 
     such as repair of her phone line, she gets it from the 
     RBOC in a timely and effective manner. The truth is that, 
     no matter how effectively systems are designed and even 
     assuming complete good faith on the part of the RBOC, this 
     kind of transition can have a lot of bugs in it. Once we 
     see successful full-scale entry, however, then we will 
     have reason to believe that the local market is open to 
     competition. This approach doesn't require the shift of 
     any particular amount of market share; nor should it take 
     very long once there is true broad-based entry into the 
     RBOC's market. Rather, using a metaphor that I've become 
     quite fond of, we just want to make sure that gas actually 
     can flow through the pipeline; and the best way to do that 
     is to see it happen.
       This approach--i.e., looking for tangible entry--also has 
     two additional virtues: first, once there is such entry, the 
     new entrant certainly should have an incentive to make the 
     process work, since any new customers that are ill-served 
     will blame the new entrant. This will mean that the new 
     entrant is not likely to be gaming the system and, if there 
     are problems, the reason will be that the local market, for 
     some real-world reason--malign or benign--just isn't ready 
     for competition yet. And second, if broad-based competition 
     appears to be working smoothly, as we certainly hope it does, 
     it will establish a benchmark against which future, post-RBOC 
     entry into long distance, performance can be measured. In 
     other words, if competitors can obtain what they need, and 
     what they are legally entitled to get from the RBOC prior to 
     its entry into long distance, but not after it then we will 
     have reason to suspect that something is wrong and we will be 
     able to pursue appropriate remedial action.
       Now, an even harder problem arises when the RBOC claims 
     that it's done everything it can to make entry opportunities 
     fully available but, for some reasons, no new entrant has 
     decided to go forward in a significant way. In these 
     circumstances, we will attempt to determine what the problem 
     is. And, purely at the level of speculation, one could 
     imagine a variety of explanations. For example, the prices 
     being charged by the RBOC could be too high to allow 
     effective competition any time soon or its systems may be too 
     uncertain for the new entrant to take the risk of large-scale 
     entry, or the RBOC may not be cooperating with its 
     competitors by providing the necessary wholesale support 
     systems. One the other hand, it may be that, despite 
     reasonable interconnection terms, fully available support 
     systems, and so on, it simply may not make economic sense for 
     a new entrant to come into any given market on a large-scale 
     basis. Or, a more elaborate version of this problem may be 
     that, if the long distance carriers think they are better off 
     preventing the new competition by the RBOC in their market 
     and also think that the best way to achieve this result is to 
     stay out of the local markets, they may simply choose not to 
     enter. On the third hand, if you will, it may be that some 
     other factor--such as a state statute or local regulation--is 
     making large-scale entry infeasible or, at least, very 
     unattractive. These are some possibilities, and I'm sure 
     there are others as well.
       In any event, we will carefully examine the facts in any 
     case where there isn't full-scale entry to determine what's 
     actually going on. In such circumstances, of course, we will 
     ultimately have to make a fact-based determination on a case-
     by-case basis. But I want to be very clear about one thing: 
     we will pay careful attention to see whether any party is 
     trying to game the system for its own parochial reasons. And, 
     if we think that's what's going on, be assured that we'll 
     take appropriate action. We don't have any dog in this 
     fight--just a desire to ensure full-scale competition in 
     telephony in an enduring fashion. Once that occurs, the 
     market can pick the winners and losers.
       Let me now quickly turn to the last couple pieces of this 
     deregulatory puzzle--access reform and universal service. 
     These areas, which are related, also raise long-term 
     competitive concerns. Lowering access charges to cost is 
     desirable in a competitive market but, in the process, there 
     are at least a couple of things you need to be alert to--
     first, you want to ensure that no one gets an undue 
     competitive advantage during the transition process: and 
     second, you need to make sure that the incumbent LEC is 
     fairly compensation for any implicit subsidies in the system 
     that it has to bear and which have previously been supported 
     by above-cost access charges. That is where the universal 
     service funding system kicks in. It is designed to pick up 
     these kinds of subsidies so that, as I said earlier, 
     competition can go forward without unfairly burdening those 
     players that have to bear the costs of such subsidies.
       These kinds of issues can be enormously complex--first, how 
     do you sort out implicit subsidies as well as any historic 
     costs that a LEC is entitled to recover in a way that is fair 
     and, second, how do you then collect the money necessary to 
     pay these costs through a competitively neutral system. If 
     you've seen the FCC's Notice of Proposed Rulemaking on Access 
     Charges--a rulemaking that is ongoing as we speak--you 
     probably have some idea of how complicated this whole process 
     is. The Commission has raised important questions about rate 
     structure, about rate levels--including possible market-based 
     as well as prescriptive methods for dealing with these 
     levels--and about rate de-averaging, which means allowing 
     different access charges for different customers. Anyway, the 
     trick is to do this in a way that hastens competitive 
     opportunities but that is fair to all parties. I am confident 
     that the Commission will do just that.
       One final point to remember as we move into a deregulated 
     environment is that the Telecom Act explicitly keeps the 
     antitrust laws in force. This serves not only to guard 
     against any anticompetitive consolidation, but also against 
     any other practices that violate the antitrust laws. Once 
     regulation begins moving off center stage, we are prepared 
     for the possibility that antitrust enforcement may be 
     necessary to ensure full and fair competition in these 
     markets. Especially in network industries, questions of 
     exclusive dealing, control over essential facilities and the 
     use of market power can raise significant antitrust concerns. 
     As a result I intend to make sure that the Division keeps 
     fully abreast of the developments in the marketplace and is 
     ready to take any action necessary to prevent abuses of 
     market power or other anticompetitive practices.
       Let me close my emphasizing that while I've tried to 
     accurately portray at least some of the difficulties set in 
     motion by last year's Telcom Act I'm very optimistic about 
     the endeavor we have embarked upon. I've seen some recent 
     stories in the press complaining that consumers haven't yet 
     received the benefits of the 1996 Act but frankly, I think 
     such expectations are unrealistic. We've had a regulated 
     system of telephony in this country for over a century; it 
     won't be deregulated in a year and even after it is 
     deregulated, it'll take time for competition to wring all the 
     fat out of the system so that consumers truly get the best 
     service at the lowest prices. But, if we stay the course, I'm 
     confident that we will ultimately realize how wise this 
     legislation was and how much it will benefit our people. I 
     say that because

[[Page S7678]]

     history has taught us, time and time again, that deregulation 
     is difficult and transitions can be costly, but if our 
     Nation's economy is to be as strong as it can be--indeed, as 
     strong as it must be in an increasingly globalized market--
     deregulation is not only desirable, it's essential. In short, 
     history is on our side. A little patience is all that's 
     needed.

  Mr. HOLLINGS. I thank the distinguished Chair.
  Madam President, it is very interesting. I want to refer back to this 
because that is in regular type. ``Though we may recognize that it may 
not always occur''--``though we recognize that it may not always 
occur.'' We are going to refer back to that in just a few minutes 
because our distinguished chairman of the Communications Subcommittee, 
Senator Conrad Burns, of Montana, wrote Mr. Joel Klein on May 15, 1997.
  I ask unanimous consent that a copy of this letter be printed in the 
Record in its entirety.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                  U.S. Senate,

                                     Washington, DC, May 15, 1997.
     Mr. Joel I. Klein,
     Acting Assistant Attorney General,
     Antitrust Division,
     Department of Justice,
     Washington, DC.
       Dear Mr. Klein: I have written to the Senate Majority 
     Leader requesting that a hold be placed on your nomination to 
     be Assistant Attorney General of the Justice Department's 
     Antitrust Division. I have concerns as to whether your views 
     of the implementation of the Telecommunications Act of 1996 
     are in accordance with Congressional intent.
       Section 271(d)(2)(A) of the Telecommunications Act of 1996 
     gives the Department of Justice a consultative role when the 
     Federal Communications Commission considers petitions filed 
     by the Bell Operating Companies (BOCs) for authorization to 
     provide in-region interLATA service. This summer the FCC will 
     begin ruling on these applications and I have several 
     concerns about how both the Department and the FCC will 
     implement Section 271 of the Act. As you know, both the House 
     and the Senate, in establishing a test for BOC entry into the 
     interLATA business, rejected the imposition of any 
     requirement that a BOC must face ``actual and demonstrable 
     competition'' in the local exchange market before obtaining 
     relief. While the statute allows the Department to apply 
     ``any standard the Attorney General considers appropriate'', 
     a speech you gave in March raises fears the Department and 
     the FCC may attempt to resurrect this test that was rejected 
     in Congress.
       My concern arises particularly from your March 11 speech 
     announcing the Antitrust Division's position regarding 
     implementation of Section 271 of the Telecommunications Act 
     of 1996 (47 U.S.C. Section 271). You stated that the Division 
     would take the position that the BOCs should be forbidden to 
     enter long distance under Section 271 until there is 
     ``successful full-scale entry'' into the local market. As you 
     put it, the point of this requirement is to be sure that with 
     respect to local telephone services, ``gas naturally can flow 
     through the pipeline.'' I also read your speech as suggesting 
     that where there has not been full-scale entry, you would 
     oppose BOC entry unless the BOC could show that its 
     competitors are ``gaming the system.''
       You have suggested that Section 271 gives you ``broad 
     swath'' to urge whatever position the Antitrust Division 
     likes. Congress, however, gave the Attorney General a role in 
     advising the FCC with respect to public interest issues 
     because of the Department's antitrust expertise. See, for 
     example, Sen. Conf. Rep. 104-230 for a list of some antitrust 
     standards that might be used. A ``gas in the pipeline'' 
     standard is plainly unrelated to the antitrust laws and, even 
     worse, violates congressional intent that the checklist 
     should be the only measure of when local markets are open. 
     Simply stated, the Attorney General's consultation on 
     antitrust issues must be framed by the specific statutory 
     standards for BOC entry, which preclude anything approaching 
     a ``metric test'' like the one Congress rejected.
       More fundamentally, the basic point of the 
     Telecommunications Act is that regulators should stand aside 
     and let market forces work once fair competition is possible. 
     Holding up competition in one market because there is not 
     enough competition in another market makes no sense. It is 
     particularly harmful in this context, for local telephone 
     competition may be slow in coming to rural states for reasons 
     that have nothing to do with BOCs' steps to satisfy the 
     checklist. If so, your approach would prevent rural consumers 
     from realizing the benefits of long distance competition that 
     will be available to residents of urban states, just because 
     potential local competitors want to enter profitable urban 
     markets first.
       As you prepare to discharge your responsibilities under the 
     Act, I would appreciate your answers to the following 
     questions. This will enable the Subcommittee on 
     Communications to carefully monitor implementation of this 
     portion of the Telecommunications Act.
       1. In your speech you used the following terms--``real'' 
     and ``broad-based competitions'', ``actual, broad-based 
     entry'', ``true broad-based-entry'', ``tangible entry'', 
     ``large-scale entry'', and entry on a ``large-scale basis''. 
     What do these terms mean to the Department?
       2. How many residential customers have to be served by a 
     competitor to meet the Department's entry test?
       3. How many business customers have to be served by a 
     competitor to meet the Department's entry test?
       4. Does there have to be more than one competitor in the 
     local exchange market to meet the Department's entry test?
       5. Does a BOC have to face competition from AT&T, MCI or, 
     Sprint to meet the Department's entry test?
       6. How do you reconcile Congress' rejection of a metric 
     test for BOC entry into the long distance market with our 
     statement that ``successful full-scale entry'' is necessary 
     in order for the Department to ``believe the local market is 
     open to competition?''
       7. You have used the metaphor that the Department ``want(s) 
     to make sure that gas actually can flow through the 
     pipeline'' before allowing interLATA entry. How many orders 
     for resold services must be processed by a BOC in order to 
     satisfy this standard?
       8. How many orders for unbundled network elements must be 
     processed by a BOC to satisfy this standard?
       9. How much market share must a BOC lose to its competitors 
     to demonstrate that ``gas can flow through the pipeline?''
       10. FCC Chairman Reed Hundt testified on March 12, 1997, 
     before the Senate Commerce Committee that a BOC that 
     satisfied the checklist but did not have an actual competitor 
     in its market would meet the entry standard. Do you agree 
     with Chairman Hundt?
       11. If the Department opposes a BOC interLATA application, 
     do you believe the FCC should reject that application? If so, 
     wouldn't that give the Department's recommendation 
     ``preclusive effect,'' something that the Act specifically 
     prohibited?
       12. You have also stated that the checklist, the 
     facilities-based requirement, the separate subsidiary 
     requirement and the option of ``Track B'' (the statement of 
     terms and conditions) are all ``necessary, though not 
     sufficient, to support entry. What more must a BOC 
     demonstrate to obtain the Department's support?
       13. Do you believe that Track B can be used only if no one 
     has requested interconnection under Track A?
       14. Can a BOC rely on Track B if it has received 
     interconnection requests from potential competitors but faces 
     no ``competing provider'' which is actually providing 
     telephone exchange service to residential and business 
     customers predominantly over its own facilities?
       15. What if requesting interconnectors under Track A do not 
     ask for, or wish to pay for, all of the items in the 
     checklist? Can the BOC satisfy the entry test by 
     supplementing their interconnection agreements with a filing 
     under Track B to cover at least all remaining items in the 
     checklist?
       Your prompt attention to these questions would be helpful 
     to the Subcommittee.
           Sincerely,

                                                 Conrad Burns,

                                                         Chairman,
                            Senate Subcommittee on Communications.

  Mr. HOLLINGS. Madam President, you can read the entire letter. But I 
can see the thrust of the letter by this language here, and I quote on 
page 2.

       Congress, however, gave the Attorney General a role in 
     advising the FCC with respect to public interest issues 
     because of the Department's antitrust expertise. See, for 
     example, House conference report 104-458 for a list of some 
     antitrust standards that might be used. A gas-in-the-pipeline 
     standard is plainly unrelated to antitrust laws, and, even 
     worse, violates Congressional intent that the checklist 
     should be the only measure of when local markets are open.

  We in the majority who wrote this particular bill would demur very, 
very strongly from that wording by our distinguished friend, the 
Senator from Montana, in this particular letter.
  What occurred is that the nominee, Joel Klein, in the talk, he talked 
about you can see when competition is present, when you get to see the 
gas coming through the pipeline. He alludes to the anecdotal situation 
of gas pipeline cases.
  But Senator Burns differs with that. He says you are supposed to 
handle this antitrust, and don't give us anything about when 
competition starts. You can tell his displeasure because, along with 
the letter, he put a hold on the Joel Klein nomination. You have a hold 
on the nomination by the chairman of the Communications Subcommittee, 
and you got a strong letter with a questionnaire that is included, 
because I have included it in its entirety in the Record.
  So 5 days later, on May 20, the Department of Justice, Acting 
Assistant Attorney General Joel Klein sends a letter to Senator Burns.
  Madam President, I quote:

       To begin with, I wholeheartedly agree with your statement 
     that the basic point of the

[[Page S7679]]

     Telecommunications Act is that regulators should stand aside 
     and let market forces work once fair competition is possible. 
     I want to assure you that the Department of Justice shares 
     that view.

  Well, both distinguished gentlemen are writing and speaking 
colloquially. One wants to tell you that competition is present when 
you can see the gas coming through the pipeline, or smell the gas if 
you can't see it. Otherwise, the Acting Assistant Attorney General 
said, ``Oh, yes, I want to let'' --in the Conrad letter, all these 
expressions about ``let market forces.'' What we are trying to do is 
``let market forces.'' He said, ``I agree with you. We have to stand 
aside and let market forces work.''
  That, Madam President, is not the duty of the Acting Attorney General 
of the United States. He is supposed to stand there by that market and 
watch it day in and day out. Because there is one thing that will occur 
if you let market forces work freely, and that is, monopolies will 
develop. Consolidations and mergers you see afoot right now are 
occurring every day, and money is talking. People are not suffering 
yet, but when they get into that monopolistic position, they will, 
because there won't be any of the rules and regulations, and they will 
be in their own private businesses.
  This group up here that continues to talk about ``let market forces'' 
operate, this tells me, one, I have a questionable candidate for the 
Antitrust Department of the Office of the Attorney General of the 
United States when he starts chanting about monopolies.
  Reading on page 2, again, from the Joel Klein letter, I read on page 
2, one sentence:

       In order to accomplish these goals, almost immediately 
     after I became Acting Assistant Attorney last October, I 
     asked all of the BOCs [the Bell Operating Companies] as well 
     as any other interested party, to give me their views of the 
     appropriate competition standards under section 271.

  We set it out. We set out our report. We didn't need an Assistant 
Attorney General running around rewriting the law. He is talking about, 
``Oh, I got them all in. I am going to start developing policy.'' The 
Congress developed the policy. It took us 4 years to do it.
  Here, he says gratuitously in the next sentence on the bottom of page 
2--this is Joel Klein, the nominee:

       In formulating this standard, I specifically rejected using 
     the suggestion in the conference report that the Department 
     analyze Bell Operating Company applications employing the 
     standard used in the AT&T consent decree objecting to the 
     Bell Operating Company in regional long distance entry 
     ``unless there is no substantial possibility that the Bell 
     Operating Company or its affiliates could use its monopoly 
     power to impede competition in the market such company seeks 
     to enter.''

  Bear with me a minute. I know this thing sounds complicated. And 
those who want to watch a good, loud show they put on around the world, 
or whatever the dickens they put on in the afternoon, go ahead and turn 
to it. But this is very, very important.
  Judge Greene had what we call in the trade ``the VIII(c) test''--that 
they couldn't enter these markets until--this is the one rejected by 
Joel Klein--``there is no substantial possibility that the Bell 
Operating Company or its affiliates could use its monopoly power to 
impede competition in the market such company seeks to do enter.''
  Madam President, with that particular VIII(c) test, that is how 
competition starts in long distance that we have today. We don't have 
any in the local. Ninety-eight percent of the local calls are still 
controlled by the local Bell Operating Company. They have the monopoly. 
But this really genius test, the VIII(c) test, became the standard of 
the discipline, the standard of the industry.

  In one hearing, as chairman of the Communications Subcommittee--the 
Commerce, Science, and Transportation hearing--I had the seven Bells 
attest. And we will put that in the Record, if necessary. They agreed 
with this particular test. You have the Bell Operating Companies 
agreeing to that particular test, and that is why we kept it in there. 
We didn't write it into the formal statute because one former colleague 
on the House side had held up. He had tremendous influence, Jack Fields 
of Texas. So we put it in the language. But you follow the course or 
talk to any of the conferees, you talk to any of the House and Senate 
Members, they will tell you the VIII(c) test was the test, and we 
couldn't think of a better one.
  Here comes nominee Joel Klein, stating categorically here in May, 
``In formulating this standard, I specifically rejected using the 
suggestion in the conference report that the Department analyze BOC 
applications employing the standard used''--the VIII(c) standard.
  Madam President, when you work this long and you know the industry, 
you know the monopolies, you know how Judge Greene held control and 
operated as well as he did, and communications prospered, expanded, and 
competition burst out all over in the long distance field with this 
particular standard, and then have a gentleman come in totally green 
and just write back, just as he got a letter from the chairman who put 
a hold on his nomination, and said ``I threw that out.'' The Bell 
Operating Companies tried to throw it out, and they couldn't. They know 
it because they had already testified in behalf of it.
  He goes on to say that ``the VIII(c) standard which has barred Bell 
Operating Company entry into long distance since their divestiture from 
AT&T, struck me as insufficiently sensitive to the market conditions, 
and I was concerned that it would bar Bell Operating Company entry even 
where it would be competitively warranted.''
  I want him to describe that. My understanding is that another 
Senator, my distinguished colleague from North Dakota--and also I was 
talking to the Senator from Nebraska. And they have talked with the 
gentleman, Mr. Klein, and have asked him. And he has yet to come and 
elaborate about what is more ``sensitive.'' He says this is 
``insufficiently sensitive.'' We have yet to find another.
  I have met twice with Joel Klein. And he said I was right. He was 
there with the Attorney General. He understood, and he would get some 
ensuing opinion, or letter, or some note that he understood, and he 
could read the language, and it was going to be corrected.
  Madam President, let's turn the page and go to Senator Conrad Burns' 
questions and answers, and go to that question. Here is what Senator 
Burns questioned, and I quote.

       In your speech, you use the following terms: ``Real and 
     broad-based competition,'' ``actual broad-based entry,'' 
     ``true broad-based entry,'' ``tangible entry,'' ``large-scale 
     entry,'' and ``entry on a large-scale basis.''
       What do those terms mean to the department?

  And I could read it all. The entire letter has been included. But let 
me read this last sentence.

       Thus, in my March 11th speech--

  The Acting Attorney General, he knows what we are talking about. He 
refers to that speech.

       In my March 11th speech to which you referred, I stated 
     that ``our preference, though we recognize that it may not 
     always occur, is to see actual broad based, that is, business 
     and residential, entry into a local market.''

  Now, Madam President, for all of those unstudied in trying cases with 
lawyers, watch this particular language because it has the regular 
language and regular print but he highlights with italic the phrase: 
``Our preference, though we recognize that it may not always occur.''
  Now, that is in italic, not the rest of it. So the distinguished 
chairman of the communications subcommittee is given a signal. Watch 
the play. And then comes the play.
  Madam President, on May 21, the next day, he doesn't delay. Oh, that 
Acting Attorney General for antitrust that held up for weeks the answer 
to the Dorgan letter and the Kerrey letter, he was prompt; he answered 
that letter of Senator Burns in 5 days, gave the signal with the 
italics.
  (Mr. BENNETT assumed the Chair.)
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that this docket 
No. 97-121, in the matter of the application of SBC Communications, be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   [Before the Federal Communications Commission, Washington, DC, CC 
                           Docket No. 97-121]

       In the Matter of Application of SBC Communications Inc. et 
     al. Pursuant to Section 271 of the Telecommunications Act of 
     1996 to Provide In-Region, InterLATA Services in the State of 
     Oklahoma.


 addendum to the evaluation of the united states department of justice

       Several parties have informally asked the Department to 
     clarify its views concerning

[[Page S7680]]

     two issues that have arisen in connection with this 
     proceeding: (1) whether we agree with the argument made by 
     some commentors that under Section 271(c)(1)(A) (``Track 
     A''), each separate class of subscribers that must be served 
     to satisfy that entry track, i.e., residential and business, 
     must be served ``exclusively . . . or predominantly'' over 
     the telephone exchange facilities of an unaffiliated 
     provider; \1\ and (2) the importance (and meaning) of 
     ``performance benchmarks'' in assessing whether BOC in-region 
     interLATA entry would be in the public interest. To address 
     any confusion on these points, the Department now files this 
     addendum.
---------------------------------------------------------------------------
     Footnotes at end of article.
---------------------------------------------------------------------------
     I. Section 271(c)(1)(A) does not require that both 
         residential and business customers be served over the 
         facilities-based competitors' own facilities
       Section 271(c)(1) requires that a BOC's application to 
     provide in-region interLATA services proceed under one of two 
     distinct tracks. As our evaluation explained, SBC's 
     application is governed by the standards of Track A. 47 
     U.S.C. Sec. 271(c)(1)(A). See SBC Evaluation at 9-20. Under 
     Track A, a BOC must be providing ``access and interconnection 
     to its network facilities for the network facilities of one 
     or more unaffiliated competing providers of telephone 
     exchange service . . . to residential and business 
     subscribers.'' The statute further specifies that ``such 
     telephone exchange service may be offered by such competing 
     providers either exclusively over their own telephone 
     exchange service facilities or predominantly over their own 
     telephone exchange service facilities in combination with the 
     resale of the telecommunications services of another 
     carrier.'' 47 U.S.C. Sec. 271(c)(1)(A). As we explained in 
     our evaluation, SBC does not meet the standards of Track A 
     because there is no facilities-based competitor offering 
     service to residential subscribers. See SBC Evaluation at 20-
     21. Brooks Fiber, to which SBC points as a residential 
     service provider, is merely testing its ability to offer 
     residential service by providing uncompensated service to 
     four employees; thus, it does not compete with SBC to serve 
     any residential ``subscribers.'' See id.
       Some parties have pressed for rejection of SBC's 
     application on the additional ground that Brooks does not 
     provide residential service to anyone, including its four 
     employees, over its own facilities. In their view, Track A 
     requires, among other things, that residential service is 
     being provided completely or predominantly over a 
     competitor's own facilities. We disagree.
       The statute requires that both business and residential 
     subscribers be served by a competing provider, and that such 
     provider must be exclusively or predominantly facilities-
     based. It does not, however, require that each class of 
     customers (i.e., business and residential) must be served 
     over a facilities-based competitor's own facilities. To the 
     contrary, Congress expressly provided that the competitor may 
     be providing services ``predominantly'' over its own 
     facilities ``in combination with the resale of'' BOC 
     services. 47 U.S.C. Sec. 271(c)(1)(A). Thus, it does not 
     matter whether the competitor reaches one class of 
     customers--e.g., residential--only through resale, provided 
     that the competitor's local exchange services as a whole are 
     provided ``predominantly''over its own facilities.
       This reading is not only consistent with the language of 
     the statute, but also serves Congress' twin purposes of 
     maximizing competition in local exchange and interexchange 
     telecommunications markets. To ensure that the BOCs truly 
     opened up their local networks to competitors, Congress 
     required that any BOC qualifying for Track A consideration 
     wait until a facilities-based competitor became operational--
     provided that there is at least one potential competitor 
     proceeding toward that goal in a timely fashion--before that 
     BOC could satisfy the statute's in-region interLATA entry 
     requirements. In mandating that such a facilities-based 
     competitor offer both residential and business service, 
     Congress ensured both that (1) facilities-based entry path is 
     being used wherever requested; and (2) at least one 
     facilities-based competitor is offering service to 
     residential, as well as business, subscribers. See SBC 
     Evaluation at 14-17. Once those two basic conditions have 
     been satisfied, however, there is no reason to delay BOC 
     entry into interLATA markets simply because competitors that 
     have a demonstrated ability to operate as facilities-based 
     competitors, and that are in fact providing service 
     predominantly over their own facilities, find it most 
     advantageous to serve one class of customers on a resale 
     basis. Imposing this requirement would tip unnecessarily the 
     statute's balance between facilitating local entry and 
     providing for additional competition in interLATA services by 
     adding an unnecessary prerequisite to Track A that might 
     foreclose entry in certain cases for no beneficial 
     competitive purpose. Cf. id. at 22.
     II. The Importance of performance benchmarks
       In articulating the Department's approach to assessing BOC 
     applications for in-region, interLATA authority, we stated 
     that the existence of ``performance benchmarks'' serves an 
     important purpose in demonstrating that the market has been 
     ``irreversibly opened to competition.'' To better explain the 
     role of ``performance benchmarks,'' ``performance 
     standards,'' and ``performance measures'' in our analysis, we 
     have outlined further the definition and importance of these 
     concepts below.\2\
       At bottom, a ``performance benchmark'' is a level of 
     performance to which regulators and competitors will be able 
     to hold a BOC after it receives in-region interLATA 
     authority. The most effective benchmarks are those based on a 
     ``track record'' of reliable service established by the BOC. 
     Such benchmarks may reflect either the BOC's performance of a 
     wholesale support function for a competitor, or, in areas 
     where the BOC performs the same function for its competitors 
     as it does for its own retail operations, a benchmark may 
     also be established by the BOC's service to its own retail 
     operations. In instances where neither type of benchmark is 
     available, the Department will consider other alternatives 
     that would ensure a consistent level of performance, such as, 
     for example, a commitment to adhere to certain industry 
     performance standards and/or an audit of the BOC's systems by 
     a neutral third party. Such benchmarks are significant 
     because they demonstrate the ability of the BOC to perform a 
     critical function--for example, the provisioning of an 
     unbundled loop within a measurable period of time. Thus, 
     benchmarks serve, as explained in our evaluation, the 
     important purpose of foreclosing post-entry BOC claims that 
     the delay or withholding of services needed by its 
     competitors should be excused on the ground that the services 
     or performance levels demanded by competitors are technically 
     infeasible. See SBC Evaluation at 45-48.
       To make ``performance benchmarks'' a useful tool for post-
     entry oversight, we also expect the BOC to adopt the specific 
     means and mechanisms necessary to measure its performance--
     i.e., ``performance measures.'' That is, if there are no such 
     systems in place, it will be considerably more difficult to 
     ensure that the BOC continues to meet its established 
     performance benchmarks. Finally, we acknowledge that there 
     may be areas in which the present industry standards will be 
     updated, requiring new levels of performance. Accordingly, 
     the Department will also focus on the importance of 
     commitments by BOCs to adhere to ``performance 
     standards,'' even when they will be imposed upon it post-
     entry.


                               footnotes

     \1\ See, e.g., Opposition of Brooks Fiber Properties, Inc. to 
     Application of SBC Communications, Inc., CC Docket No. 97-
     121, at 8-9 (May 1, 1997).
     \2\ To reflect this typology, our evaluation should be 
     modified as follows:
     Page 45 line 2 of heading ``b.'' (and Table of Contents), 
     ``standards'' to ``benchmarks'';
     Page 47 line 3, ``measures'' to ``benchmarks'';
     Page 47 line 5, ``measures'' to ``benchmarks'';
     Page 48 line 9, ``measures'' to ``benchmarks'' and add ``as 
     well as its commitment to adhere to certain performance 
     standards'' to the end of the sentence;
     Page 60 line 9, ``measures'' to ``benchmarks''; and
     Page 60 line 11, 15, 18 ``measures'' to ``benchmarks''

           Respectfully submitted,
         Donald Russell, Chief; Joel I. Klein, Acting Assistant 
           Attorney General, Antitrust Division; Andrew S. Joskow, 
           Deputy Assistant Attorney General, Antitrust Division; 
           Lawrence J. Fullerton, Deputy Assistant Attorney 
           General, Antitrust Division; Philip J. Weiser, Senior 
           Counsel, Antitrust Division; Carl Willner, Jonathan D. 
           Lee, Stuart H. Kupinsky: Attorneys, Telecommunications 
           Task Force; Gerald B. Lumer, Economist, Competition 
           Policy Section; Antitrust Division, U.S. Department of 
           Justice, 555 4th Street, N.W., Room 8104, Washington, 
           D.C. 20001.

                         Certificate of Service

       I hereby certify that I am an Attorney for the United 
     States in this proceeding, and have caused a true and 
     accurate copy of the foregoing Addendum to the Evaluation of 
     the United States Department of Justice to be served on all 
     petitioners in this proceeding and other interested parties 
     as indicated on the attached service list, by first class 
     mail, on May 21, 1997.
                                                  Jonathan D. Lee,
         Attorney, Telecommunications Task Force, Antitrust 
           Division, U.S. Department of Justice.

                              Service List

       Richard Metzger, General Counsel, Association for Local 
     Telecommunications Services, 1200 19th Street, NW., 
     Washington, DC 20036.
       John Lenahan, Ameritech Corporation, 30 South Wacker Drive, 
     Chicago, IL 60606.
       Mark Rosenblum, AT&T Corporation, 295 North Maple Ave., 
     Basking Ridge, NJ 07920.
       Susan Miller, Esq., ATIS, 1200 G Street, NW., Suite 500, 
     Washington, DC 20005.
       James R. Young, Bell Atlantic, 1320 N. Courthouse Road, 8th 
     Floor, Arlington, VA 22201.
       Walter Alford, BellSouth, 1155 Peachtree Street, NE., 
     Atlanta, GA 30367.
       Edward J. Cadieux, Director, Regulatory Affairs--Central 
     Region, Brooks Fiber Properties, Inc., 425 Woods Mill Road 
     South, Town and Country, MO 63017.
       John Windhausen, Jr., General Counsel, Competition Policy 
     Institute, 1156 15th Street, NW., Suite 310, Washington, DC 
     20005.
       Genevieve Morelli, Executive Vice President and General 
     Counsel, The Competitive Telecommunications Association, 1900 
     M Street, NW., Suite 800, Washington, DC 20036.
       Laura Phillips, Dow, Lohnes, and Albertson, PLLC, 1200 New 
     Hampshire Ave., NW., Suite 800, Washington, DC 20036, Counsel 
     for Cox Communications.

[[Page S7681]]

       Russell M. Blau, Swidler & Berlin, chartered, 3000 K 
     Street, NW., Suite 300, Washington, DC 20007-5116, Counsel 
     for Dobson Wireless.
       Gregory M. Casey, LCI International Telecom Corp., 8180 
     Greensboro Drive, Suite 800, McLean, VA 22102.
       Rocky Unruh, Morgenstein & Jubelirer, One Market, Spear 
     Street Tower, 32d Floor, San Francisco, CA 94105, Counsel for 
     LCI Telecom Group.
       Anthony Epstein, Jenner & Block, 601 13th Street, NW., 
     Washington, DC 20005, Counsel for MCI.
       Susan Jin Davis, MCI Telecommunications Corporation, 1801 
     Pennsylvania Ave., NW., Washington, DC 20006.
       Daniel Brenner, National Cable Television Association, 1724 
     Massachusetts Ave., NW., Washington, DC 20036.
       NYNEX Telephone Companies, Saul Fisher, 1095 Ave. of the 
     Americas, New York, NY 10036.
       Cody L. Graves, Chairman, Oklahoma Corporation Commission, 
     Jim Thorpe Building, Post Office Box 52000-2000, Oklahoma 
     City, OK 73152-2000.
       Mickey S. Moon, Assistant Attorney General, Oklahoma 
     Attorney General's Office, 2300 North Lincoln Boulevard, Room 
     112, State Capitol, Oklahoma City, OK 73105-4894.
       Robert Hoggarth, Senior Vice President, Paging and 
     Narrowband PCS Alliance, 500 Montgomery Street, Suite 700, 
     Alexandria, VA 22314-1561.
       James D. Ellis, Paul K. Mancini, SBC Communications, Inc., 
     175 E. Houston, Room 1260, San Antonio, TX 78205.
       Philip L. Verveer, Wilkie, Farr & Gallagher, 1155 21st 
     Street, NW., Washington, DC 20036, Counsel for Sprint.
       Richard Karre, U S West, 1020 19th Street, NW., Suite 700, 
     Washington, DC 20036.
       Charles D. Land, P.E., Executive Director, Texas 
     Association of Long Distance Telephone Companies, 503 W. 17th 
     Street, Suite 200, Austin, TX 78701-1236.
       David Poe, LeBoeuf, Lamb, Greene & MacRae, LLP, 1875 
     Connecticut Ave., NW., Suite 1200, Washington, DC 20009, 
     Counsel for Time Warner.
       Janis Stahlhut, Time Warner Communications Holdings, Inc., 
     300 First Stamford Place, Stamford, CT 06902-6732.
       Danny Adams, Kelley, Drye & Warren LLP, 1200 19th Street, 
     NW., Suite 500, Washington, DC 20036, Counsel for USLD.
       Catherine Sloan, WorldCom, Inc., 1120 Connecticut Ave., 
     NW., Washington, DC 20036-3902.
       Charles Hunter, Hunter Communications Law Group, 1620 I 
     Street, NW., Suite 701, Washington, DC 20006, Counsel for 
     Telecommunications Resellers Association.

  Mr. HOLLINGS. I thank the distinguished Chair. And again now on page 
3 here the fellow has gotten the signal, and I read on page 3--the 
entire matter is in the Record.

       It does not, however, require that each class of customers, 
     business and residential, must be served over a facilities 
     based competitor's own facilities. To the contrary, Congress 
     expressly provided that the competitor may be providing 
     services predominantly over its own facilities in combination 
     with the resale of Bell Operating Company services (47 USC 
     271 (c)(1)(A)). Thus, it does not matter whether the 
     competitor reaches one class of customers, namely 
     residential, only through resale provided that the 
     competitor's local exchange services as a whole are provided 
     predominantly over its own facilities.

  Well, Mr. President, there it was. Bell Operating Companies through 
the distinguished Senator from Montana got what they wanted in black 
and white. They just totally refuted 4 years of work, the most 
important part of the checklist, the most important part that provided 
for competition in the long distance market, the most important part 
that we included. We talked about it. We discussed it. We debated it. I 
was in these conferences. They were in the conferences, like I tried to 
emphasize. The Bell Companies met all one day with our staffs on both 
sides and the long distance companies met all one day, and it was 
worked out. But do not take the word of the Senator from South 
Carolina.
  Mr. President, I ask unanimous consent that a letter to the Honorable 
Reed Hunt, Chairman of the Federal Communications Commission, from 
Chairman Tom Bliley, Congressman from Virginia, and chairman of the 
Commerce Committee over on the House side, be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    U.S. House of Representatives,


                                        Committee on Commerce,

                                    Washington, DC, June 20, 1997.
     Hon. Reed Hundt,
     Chairman, Federal Communications Commission, Washington, DC.
       Dear Chairman Hundt: I recently read with interest and 
     dismay the Department of Justice's additional comments 
     regarding SBC Communications Inc.'s (SBC's) application to 
     provide in-region, interLATA services in the State of 
     Oklahoma. The Department therein clarified its views on 
     section 271(c)(1)(A) of the Communications Act, as amended. 
     As the primary author of this provision. I feel compelled to 
     inform you that the Department misread the statute's plain 
     language. As you rule on SBC's application and future BOC 
     applications, you should not overlook the clear meaning of 
     section 271 or its legislative history.
       The Department argued that a BOC should be allowed to enter 
     the in-region, interLATA market under ``Track A'' (i.e., 
     section 271(1)(A)) if a competing service provider offers 
     facilities-based services to business customers and resale 
     services to residential customers, so long as the combined 
     provision of both services is predominantly over the 
     competing service provider's facilities. In other words, the 
     Department wrongly takes the view that section 271(c)(1)(A) 
     is satisfied if a competitor is serving either residential or 
     business customers over its own facilities.
       Section 271(c)(1)(A), however, clearly requires a different 
     interpretation. To quote the statute, a competing service 
     provider must offer telephone exchange service to 
     ``residential and business subscribers . . . either 
     exclusively over their own telephone exchange service 
     facilities or predominantly over their own telephone exchange 
     service facilities.'' Track A is thus satisfied if--and only 
     if--a BOC faces facilities-based competition in both 
     residential and business markets. Neither the statute nor its 
     legislative history permits any other interpretation; I know 
     this because I drafted both texts.
       In the end, the Department's recent misinterpretation of 
     section 271 reinforces a point I frequently made during 
     Congressional debate over the Telecommunications Act of 1996: 
     the Department of Justice does not have the expertise to make 
     important telecommunications policy decisions. The FCC, by 
     contrast, does have the necessary expertise, which explains 
     why Congress gave you and your colleagues--and no one else--
     the ultimate authority to make important decisions, such as 
     the decision to interpret section 271. I remind you that the 
     Department's role in this matter is a consultative one, and 
     should be treated as such.
       Let me conclude by noting that, while this letter focuses 
     exclusively on Department's interpretation of section 
     271(c)(1)(A), it should not be construed to mean that the 
     balance of the Department's comments were either consistent 
     or inconsistent with Congressional intent.
           Sincerely,
                                                       Tom Bliley,
                                                         Chairman.

  Mr. HOLLINGS. This is dated June 20, 1997.

       Dear Chairman Hunt:
       I recently read with interest and dismay the Department of 
     Justice's additional comments regarding SBC Communications' 
     application to provide in-region interLATA services in the 
     State of Oklahoma. The department therein clarified its views 
     on section 271(c)(1)(A) of the Communications Act, as 
     amended. As a primary author--

  Let me emphasize that. This is Chairman Bliley--

       As a primary author of this provision, I feel compelled to 
     inform you that the department misread the statute's plain 
     language. As you rule on SBC's application and future Bell 
     Operating Company applications, you should not overlook the 
     clear meaning of section 271 or its legislative history. The 
     Department argued that a Bell Operating Company should be 
     allowed to enter the in-region interLATA market under track 
     A, that is, section 271(c)(1)(A) if a competing service 
     provides office facilities based services to business 
     customers and resale services to residential customers, so 
     long as the combined provision of both services is 
     predominantly over the competing service provider's 
     facilities.
       In other words, the Department wrongly takes the view that 
     section 271(c)(1)(A) is satisfied if a competitor is serving 
     either residential or business customers over its own 
     facilities. Section 271(c)(1)(a), however, clearly requires a 
     different interpretation. To quote the statute, ``A competing 
     service provider must offer telephone exchange service to 
     residential and business subscribers either exclusively over 
     their own telephone exchange service facilities or 
     predominantly over their own telephone exchange service 
     facilities. Track A is thus satisfied if and only if a Bell 
     Operating Company faces facilities based competition in both 
     residential and business markets. Neither the statute nor its 
     legislative history permits any other interpretation. I know 
     this because I drafted both texts.

  Mr. President, that is Chairman Bliley. I do not know how you can 
make it more clear. He talks of the history. He talks of the conference 
report. He talks of the actual language. And anybody reading it can see 
exactly that. In essence, Mr. Klein sort of quietly acknowledged it. I 
was waiting because I met with him individually and then I met with him 
with the Attorney General, I can tell you here and now for those who 
watch this and follow it. And I ask unanimous consent the recent 
editorial in the New York Times entitled ``A Weak Antitrust Nominee'' 
be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

[[Page S7682]]

                [From the New York Times, July 11, 1997]

                        A Weak Antitrust Nominee

       The next head of the Justice Department's antitrust 
     division will have a lot to say about whether the 1996 
     Telecommunications Act breaks the monopoly chokehold that 
     Bell companies exert over local phone customers. He will rule 
     on mergers among telecommunications companies and advise the 
     Federal Communications Commission on applications by Bell 
     companies to enter long-distance markets. Thus it is 
     disheartening and disqualifying that President Clinton's 
     nominee, Joel Klein, is scheduled to come up for confirmation 
     today in the Senate with a record that suggests he might 
     knuckle under to the powerful Bell companies and the 
     politicians who do their bidding.
       Senators Bob Kerrey, Ernest Hollings and Byron Dorgan have 
     threatened to block the vote today and put off until next 
     week a final determination of Mr. Klein's fate. But the 
     Administration would do its own telecommunications policy a 
     favor by withdrawing the nomination and finding a stronger, 
     more aggressive successor.
       Mr. Klein, who has been serving as the Government's acting 
     Assistant Attorney General for Antitrust, demonstrated his 
     inclinations when he overrode objections of some of his staff 
     and approved unconditionally the merger of Bell Atlantic and 
     Nynex. That merger will remove Bell Atlantic as a potential 
     competitor for Nynex's many dissatisfied customers. Mr. Klein 
     refused even to impose conditions that would have made it 
     easier for state and Federal regulators to pry open Nynex's 
     markets to rivals such as AT&T.
       Worse, Mr. Klein sent a letter to Chairman Conrad Burns of 
     the Senate communications subcommittee, who runs political 
     interference for the Bell companies, that committed the 
     antitrust division to pro-Bell positions in defiance of the 
     1996 act.
       That act invites the Bell companies to provide long-
     distance service, but only if the Bells first open their 
     systems to rivals that want to compete for local customers. 
     Yet in the letter to Mr. Burns, Mr. Klein explicitly rejected 
     Congress's interpretation of requirements to be imposed on 
     the Bells in favor of his own, weaker standard.
       In a subsequent submission to the Federal Communications 
     Commission, Mr. Klein further weakened a requirement that 
     before the Bells enter long-distance service they face a 
     competitor that is serious enough to build its own switches 
     and wires. Mr. Klein has also upset some senators by seeming 
     to minimize the importance, provided in the 1996 
     Telecommunications Act, of Justice's advice to the F.C.C. on 
     applications by Bell companies to enter long-distance.
       True, Mr. Klein has blocked applications by two Bell 
     companies, SBC and Ameritech, to offer long-distance service 
     before they had opened their local markets to competition. 
     But by pandering to Mr. Burns, he has created strong doubts 
     that he can provide aggressive antitrust leadership.

  Mr. HOLLINGS. I ask unanimous consent that the Consumer Federation of 
America letter of July 14, 1997, on this score be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                               Consumer Federation of America,

                                                    July 14, 1997.
       Dear Senator: With cable rates rising almost three times 
     faster than inflation and massive consolidation in cable, 
     radio and telecommunications markets, your efforts to promote 
     competition through the 1996 Telecommunications Act are 
     backfiring.
       Acting Assistant Attorney General for Antitrust Joel Klein 
     bears significant responsibility for these unintended, 
     monopolistic results. Unless you demand that the Justice 
     Department's Antitrust Division reverse course and engage in 
     strict antitrust enforcement (see attached New York Times 
     editorial: ``A Weak Antitrust Nominee''), consumers will face 
     vastly inflated telephone and cable rates from increasingly 
     entrenched monopolies.
       After antitrust officials allowed the seven local Bell 
     telephone monopolies to consolidate into four bigger 
     monopolies; permitted Time Warner and TeleCommunications Inc. 
     (TCI) to unite companies service almost one-half of all cable 
     customers through a combination with Turner Broadcasting; and 
     approved hundreds of radio mergers, consumers are seeing no 
     appreciable increase in either competition or pocketbook 
     savings from the Telecommunications Act.
       While Acting Assistant Attorney General Joel Klein 
     described some of this activity as ``the concentration 
     envisioned by Congress'' (remarks to Glasser Legalworks 
     Seminar, March 11, 1997), we believe you were hoping 
     antitrust enforcement would foster increased competition 
     rather than concentration.
       Contrary to promises they made to Congress in return for 
     more market freedom, large cable, telephone and other 
     telecommunications companies are not vigorously entering each 
     other's markets:
       AT&T appears to be throwing in the towel on the notion of 
     competing with the local Bell monopolies, as it pursues 
     mergers with the Bell companies.
       MCI is losing money hand-over-fist in its failed efforts to 
     jump-start local phone competition.
       After failing to start a competitive satellite alternative 
     to cable monopolies, Rupert Murdoch decided to join forces 
     with the cable giants through deals with TCI's John Malone, 
     Primestar and Cablevision.
       Finally, local phone companies have pulled the plug on most 
     of their grandiose efforts to enter the cable business, and 
     cable companies have retreated just as quickly from entering 
     the phone business.
       And while all this market entrenchment goes on, cable rates 
     are skyrocketing and many local phone companies seek a 
     doubling of local phone rates in anticipation of 
     ``competition.''
       It is more obvious than ever before that the 
     Telecommunications Act will be an abject failure unless 
     Congress makes sure that the Antitrust Division reverses 
     course and reinvigorates its enforcement practices.
           Sincerely,
     Howard M. Metzenbaum, Chairman, Consumer Federation of 
     America, former chairman, Senate Subcommittee on Antitrust, 
     Business Rights and Competition.
     Gene Kimmelman,
       Co-Director, Consumers Union.
     Dr. Mark Cooper,
       Research Director, Consumer Federation of America.

  Mr. HOLLINGS. Consumer Federation and others who have followed this 
thing have been on the phone and otherwise just fighting to make sure 
that this was really held up and defeated. And in all fairness, I am 
sorry, after we see the exchange of letters here recently, that I did 
not fight this nomination. I put a hold on it. I thought that Members 
would listen, that they would want to learn and they would want to 
understand. But evidently the jury has been fixed.
  Mr. President, I ask unanimous consent that two letters, one by 
Senator Kerrey to the Attorney General dated June 23, and the letter 
back from the Office of the Attorney General dated July 14 to Senator 
Dorgan be printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                                  U.S. Senate,

                                    Washington, DC, June 23, 1997.
     Hon. Janet Reno,
     U.S. Department of Justice,
     Washington, DC.
       Dear Madam Attorney General: Not too long ago, I met Joel 
     Klein and found him to be an intelligent, talented attorney 
     and a dedicated public servant. I would like very much to 
     support his nomination for Assistant Attorney General for 
     Antitrust but have some very serious concerns about the 
     Administration's telecommunications policies and Mr. Klein's 
     interpretation of the Telecommunications Act of 1996. I am 
     hopeful you can clarify the Department's official views for 
     me.
       I am particularly concerned about recent comments made by 
     Acting Assistant Attorney General Klein regarding the 
     Department of Justice's (DOJ) role in facilitating 
     competition in the wake of the Telecommunications Act of 
     1996. As you know, my support of the Telecommunications Act 
     was contingent upon a strong role for DOJ in shaping a 
     competitive telecommunications market. I did not stop the 
     work of the United States Senate with a filibuster in order 
     for the Department of Justice to take its responsibilities 
     lightly. In the contrary, I expected DOJ to use every ounce 
     of its authority, including those powers granted outside of 
     the Telecommunications Act, to ensure the competitive 
     integrity of the new telecommunications market.
       In response to questions by the Chairman of the Senate 
     Communications Subcommittee, Mr. Klein said that he 
     ``specifically rejected using the suggestion in the 
     Conference Report that the Department analyze Bell Operating 
     Company (BOC) applications employing the standard used in the 
     AT&T consent decree''. This standard would reject BOC entry 
     into in-region long distance unless ``there is a substantial 
     possibility that the BOC or its affiliates could use its 
     monopoly power to impede competition in the market such 
     company seeks to enter.'' The Telecommunications Act gave you 
     the authority to choose any standard you see fit to evaluate 
     BOC entry into in-region service. Winning that discretion was 
     a hard fought battle. Is the Department using its discretion 
     to chose a weak standard? Does Mr. Klein's statement mean 
     that a Bell Operating Company should be allowed to enter the 
     in-region long distance market even if there is a 
     ``substantial possibility that he BOC or its affiliates could 
     use monopoly power to impede competition?''
       Mr. Klein's comment to the Chairman that ``we think that 
     the openness of a local market can be best assessed by the 
     discretionary authority of the FCC, relying in part on the 
     Department of Justice's competitive assessment, and based on 
     the evaluation of the particular circumstances in an 
     individual state.'' I fought hard to include DOJ in this 
     process because of the legal and economic expertise of the 
     Antitrust Division. Is the Department abdicating its role in 
     this area? The Federal Communications Commission (FCC) is not 
     the only agency equipped to

[[Page S7683]]

     make decisions about the openness of markets. Can a market be 
     competitive if it is not open? The Department's 
     responsibility under the act and the nation's antitrust laws 
     is most serious and should be aggressively pursued by the 
     Antitrust Division. Although the ultimate decision lies with 
     the FCC, the Department should accept its important role as 
     the expert in competition and market power and adopt a 
     meaningful entry standard based on pro-competitive 
     principles. I am not convinced that the Department has done 
     that.
       On a separate but equally important competition issue, I 
     remain very concerned about recent mergers between large 
     telecommunications providers. The decision by Justice to 
     approve the Bell Atlantic/NYNEX merger without any conditions 
     is troubling. I am also concerned about rumors circulating 
     about a possible reconstruction of the old Bell system. 
     Reports of AT&T efforts to bring two BOC's back into its fold 
     should give everyone pause. Such a merger will likely lead to 
     a new round of large telecommunications mergers which could 
     greatly reduce any chance for the swift adoption of a 
     vibrant, competitive telecommunications market. Competitive 
     entry could be frozen while real and potential competitors 
     court, woo and marry each other.
       Finally, I am pleased with Mr. Klein's emphasis on ensuring 
     that the BOC's take the necessary steps to allow competition 
     in their markets. The Department of Justice should use its 
     authority to ensure that no one creates or uses artificial 
     impediments to block competitive entry. Interconnection 
     agreements are pending in all fifty states, but at this time 
     no significant competition has developed. The era of 
     telecommunications monopolies should be over, not recreated. 
     Market forces, not market power should motivate all 
     telecommunications carriers to work night and day to win and 
     keep customers. Interconnection should be made as simple and 
     efficient as possible. It should be very easy for a 
     telecommunications entrepreneur to gather a group of 
     customers and easily, efficiently and expeditiously begin 
     providing them service through interconnection or resale.
       The telecommunications industry is at a critical point in 
     its history. The Department's commitment to using its full 
     authority to promote competition is important to achieving an 
     environment where consumers come first and entrepreneurs are 
     encouraged to challenge the status quo. Thank you for your 
     careful consideration of my concerns and would appreciate 
     your views on these matters. I look forward to your response.
           Sincerely,
     J. Robert Kerrey.
                                                                    ____



                               Office of the Attorney General,

                                    Washington, DC, July 14, 1997.
     Hon. Byron L. Dorgan,
     U.S. Senate,
     Washington, DC.
       Dear Senator Dorgan: The President has requested that I 
     respond to your recent letter to him regarding the nomination 
     of Joel Klein to be Assistant Attorney General for Antitrust 
     and the Administration's telecommunications policies.
       At the outset, I want to emphasize my appreciation and that 
     of the Department as a whole for your strong and unwavering 
     support for the important role provided for the Department in 
     the implementation of the Telecommunications Act of 1996. I 
     remember how hard we fought together to secure the DOJ role. 
     As a consequence, I share with you a keen interest in 
     ensuring that the Department carries out its role under the 
     Telecommunications Act effectively.
       Let me begin by assuring you that the Department of Justice 
     takes its role under the Telecommunications Act of 1996 
     extremely seriously. We have devoted substantial resources to 
     preliminary investigations all across the nation on a state-
     by-state basis to understand the competitive conditions in 
     each state. We have devoted even more resources to our review 
     and evaluation of specific Section 271 applications. We 
     prepared extensive, even exhaustive, analyses of SBC's 
     Section 271 application for in-region long distance authority 
     in Oklahoma and Ameritech's Section 271 application for in-
     region long distance authority in Michigan.
       Our actions in these matters make absolutely clear that the 
     Department is firmly committed to ensuring that local markets 
     are fully and irreversibly open, so that competition can take 
     hold there and flourish, and that long distance markets are 
     as competitive as possible. We share your view that this is 
     crucial for consumers in this country. To this end, we have 
     adopted a procompetitive standard for evaluating Section 271 
     applications, and we are providing the FCC with meaningful 
     guidance on competition policy in specific cases. The FCC 
     relied heavily on our analysis in its only decision to date, 
     its recent decision denying SBC's application.
       You have specific questions regarding the standard used by 
     the Department in evaluating Bell Operating Company (BOC) FCC 
     applications to provide in-region long distance service.
       After a careful evaluation of public input, the Department 
     adopted a standard that the local market had to be ``fully 
     and irreversibly open to competition.'' I assure you that 
     this is not a weak standard. It is a meaningful standard 
     based on strong procompetitive principles and is designed to 
     ensure and protect competition in both local and long-
     distance markets. It ensures that no one can create 
     artificial impediments to entry, and it ensures that BOCs are 
     not able to provide in-region long distance service 
     prematurely, when they might have unfair competitive 
     advantages over competitors. Otherwise, the promise of fully 
     competitive local and long distance markets would be delayed.
       As demonstrated by our evaluations of SBC's Section 271 
     Oklahoma application in May, and of Ameritech's Section 271 
     Michigan application in late June, we will not support long 
     distance entry until local markets are fully and irreversibly 
     open to competition. Our position (and our standard) is one 
     that is tough but fair and designed to promote the maximum 
     amount of competition in all markets. The Department is fully 
     committed to ensuring that all telecommunications markets 
     become as competitive as possible.
       In closing, let me say Joel Klein is an extremely 
     intelligent and talented attorney and a dedicated public 
     servant. The President and I hope he is rapidly confirmed by 
     the United States Senate to be the Assistant Attorney General 
     for Antitrust.
           Sincerely,
                                                       Janet Reno.

  Mr. HOLLINGS. Now, you see every effort has been made to try to clear 
that record, and you can read the Attorney General's letter, and for 
the purposes at hand it is not worth the paper it is written on. You 
can throw it away. It says nothing--that she believes in competition. 
Now, she is a lawyer. She knows how to read emphasized italics 
language. She saw the pitch. I told her about the pitch and how it 
occurred. I showed her the talk that Klein made. We went down the whole 
thing. So Senator Kerrey, and I understand, of course, Senator Dorgan 
wrote a letter, and we were waiting for a letter back and we had to 
wait several weeks. Not the Senator from Montana. His letter and 
addendum and opinion were all put out immediately. But when Senators 
who worked on the bill as diligently as we did tried to meet with him 
and then put down in black and white our misgivings, write the Attorney 
General's department and ask, please, now, let's see your position here 
on the plain, clear language, they write back--``I believe in 
competition.'' Just two pages of nothing. I have that in the Record.
  Mr. President, I should have, like I say, politicked this nomination 
for its defeat.
  Let me ask unanimous consent that the ``Dear Colleague'' letter of 
July 10 by Senator Dorgan of North Dakota and myself be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:
         U.S. Senate, Committee on Commerce, Science, and 
           Transportation,
                                    Washington, DC, July 10, 1997.
       Dear Colleague: The Senate may soon move to consider the 
     nomination of Joel Klein to be the Assistant Attorney General 
     in charge of the Antitrust Division. Because of statements 
     and actions by Mr. Klein in his acting capacity at the 
     Department of Justice we are very concerned with the 
     direction of the Administration's policies with respect to 
     its interpretation of certain provisions of the 
     Telecommunications Act of 1996. We believe that these issues 
     need clarification before Mr. Klein's nomination should be 
     brought to a vote in the Senate. We urge you to support us in 
     our desire to resolve the issues surrounding Mr. Klein's 
     actions before his nomination is brought to the Senate floor 
     for debate.
       Whether or not robust competition develops in the local 
     telephone service market depends upon the Administration's 
     commitment to vigorously enforce these critical provisions of 
     the Telecommunications Act. Unfortunately, while serving as 
     acting chief of the Antitrust Division, Mr. Klein has 
     explicitly contradicted specific statutory mandates and 
     conference report directions that we, working with the White 
     House, fought again all odds to have added to the 
     Telecommunications Act of 1996. We have asked Mr. Klein, 
     Attorney General Reno, and the White House to review our 
     concerns and demonstrate that the Antitrust Division will 
     follow the explicit meaning of the Telecommunications Act. So 
     far, we have not received a satisfactory response to our 
     concerns.
       Our misgivings about Mr. Klein go to the very heart of 
     whether the Telecommunications Act achieves its goal of 
     promoting more competition and lower prices for consumers. In 
     response to White House requests (and a very specific veto 
     threat) we made sure that nothing in the Telecommunications 
     act in any way undermined the antitrust laws. In fact, to 
     address these concerns, we gave the Justice Department new 
     authority to rule on mergers of telecommunications common 
     carriers (power previously reserved for the Federal 
     Communications Commission), and we gave the Justice 
     Department a substantial role in determining when a local 
     Bell telephone monopoly could enter the long distance market 
     because it had sufficiently opened its market to competition. 
     However, under the leadership of Mr. Klein, the Justice 
     Department has abdicated its responsibility and failed to use

[[Page S7684]]

     these tools to promote the level of competition that we and 
     the Clinton Administration believed should be developing in 
     telecommunications markets.
       By interpreting the Telecommunications Act in a manner that 
     fails to ensure that both consumers and businesses receive 
     competitive choices from separate local phone companies; by 
     abandoning the Department of Justice's traditional standard 
     for measuring competition to make it easier for the Bell 
     companies to enter long distance; and by approving the 
     largest merger in telecommunications history without even a 
     policing mechanism to ensure that competition would be 
     enhanced, Mr. Klein has sent the wrong signal to the 
     marketplace and undermined the core principles that are the 
     foundation upon which the Telecommunications Act was 
     constructed.
       In a letter describing his final concerns about our bill 
     and the bill passed by our colleagues in the House, President 
     Clinton wrote that the final bill ``should include a test 
     specifically designed to ensure that the Bell companies 
     entering into long distance markets will not impede 
     competition.'' This test described by President Clinton is 
     actually a stronger test than the VIII(c) test contained 
     within the Modified Final Judgment. Yet, Mr. Klein rejected 
     both these tests recently and decided to develop his own 
     lesser standard of ``irreversibly open to competition.''
       In another more compelling matter, Mr. Klein has turned the 
     statute on its head in his interpretation of the facilities-
     based entry test for long distance. The statute requires that 
     a facilities-based provider serve both business and 
     residential customers before the Bell company can enter long 
     distance. Mr. Klein, however, believes the statute can be 
     interpreted to mean that a facilities-based carrier need only 
     provide service to business or residential customers. Yet 
     again, another instance where Mr. Klein has weakened the 
     protections that the Congress fought hard to enact into law 
     to protect consumers from premature entry into long distance.
       We will insist that any Administration nominee support the 
     consumer protection we fought hard to put into place. Mr. 
     Klein's interpretation of the law will result in more 
     consolidation, less choice and higher costs to consumers. We 
     therefore want to ensure that this or any Administration 
     nominee implement the letter of the law and follow the steps 
     that we and the Administration outlined in achieving a 
     consensus during deliberations on the Telecommunications 
     Act's conference report.
           Sincerely,
     Byron L. Dorgan.
     Ernest F. Hollings.

  Mr. HOLLINGS. It is not my intent to take further time. I can tell 
that this was called. I had checked after the last rollcall. They said 
it wasn't going to be called until after 6 o'clock. When they filed it, 
they filed cloture immediately before there was any kind of debate 
whatever. They have not only lost their senses with respect to reality, 
calling deficits listed in the document as $179.3 billion as balanced, 
but they have lost their manners and their courtesy. Usually you have 
the Senator who had the hold and caused the particular confusion put on 
notice, but I had a staffer watching the TV and saw our friend from 
Utah, Senator Hatch, was talking. So there we are, just right in the 
middle.
  You did not need cloture. At the time we put on a hold and were 
asked: Do you want to be identified as the one having the hold, I said 
absolutely. I am not playing games, tricks or anything of that kind. I 
would be glad if you called it this afternoon. That was weeks ago where 
I would have a chance to explain exactly what occurred. But, of course, 
you can see what has occurred. They have politically worked it, got the 
votes, got cloture. Don't waste time. Let us get on with this.
  And then when the rates go up, when you get consolidation instead of 
competition and those rates go up, and you don't get competition in the 
local market and you don't get what we intended in the 
Telecommunications Act, don't come around like in Gramm-Rudman-Hollings 
and say it didn't work. Gramm-Rudman-Hollings worked up until 1990 when 
they went out to Andrews Air Base and they put in the categories and 
so-called ceilings--we haven't reached those ceilings yet--and repealed 
the across-the-board cuts, the sequester language. On October 21 at 
1:40 a.m. I made the point of order that you are now repealing the 
thrust of Gramm-Rudman-Hollings. Today, this afternoon, I am making the 
same point. You are repealing the competitive feature of the 
Telecommuncations Act of 1996.
  I hope the nomination is defeated and we get somebody here who can 
read.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, I yield 4 minutes to the distinguished 
Senator from South Carolina.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. THURMOND. Mr. President, I rise today in support of the 
nomination of Joel I. Klein to serve as Assistant Attorney General for 
the Antitrust Division of the Department of Justice. Mr. Klein is a 
fine man and is an outstanding nominee for this important position. I 
am pleased to support him.
  Mr. Klein achieved an excellent academic record at both Columbia 
College in New York and Harvard Law School. He then served as a law 
clerk for the Chief Judge of the D.C. Circuit Court of Appeals and 
later for U.S. Supreme Court Justice Lewis Powell. Afterward, he 
developed a distinguished reputation in private practice, where he 
argued important cases before the U.S. Supreme Court.
  For the past several months, he has served as the Acting Assistant 
Attorney General for the Antitrust Division. During that time, he has 
shown that he is firmly committed to enforcing our nation's antitrust 
laws. For example, under his leadership, the Antitrust Division has 
greatly increased its collection of criminal fines. Thus far this 
fiscal year, which almost coincides with Joel Klein's tenure, the 
Antitrust Division has collected over $192 million dollars in criminal 
fines, compared to only about $27 million for all of fiscal year 1996.
  Mr. President, I am confident that Mr. Klein is within the mainstream 
of antitrust law and doctrine, and will exercise his responsibilities 
fairly and within the dictates of the law. He is committed to upholding 
our free enterprise system and to protecting consumers from anti-
competitive conduct.
  Under Chairman Hatch's distinguished leadership, the Judiciary 
Committee held a hearing on Mr. Klein's nomination in April, and his 
nomination was reported out of the Committee unanimously in May.
  In short, I strongly believe that Mr. Klein is a man of unquestioned 
integrity and great ability. I urge my colleagues to vote in favor of 
this nomination.
  Mr. President, in closing I want to commend Senator Hatch, the able 
chairman of the Judiciary Committee for the position he has taken on 
this particular nomination.
  Mr. President, I yield the floor.
  Mr. KOHL. Mr. President, let me make a few brief points. First, it is 
kind of ironic that Joel Klein's nomination has nearly universal 
Republican support, but has divided many Democrats. After all, he is 
the President's choice for the job and any Presidential nominee for an 
executive branch appointment--Democrat or Republican--deserves the 
benefit of the doubt. More than that, Mr. Klein has the support of many 
prominent Democrats, among them Judge Abner Mikva, Former Deputy 
Attorney General Jamie Gorelick, Lloyd Cutler, and others. I ask 
unanimous consent that a letter from them--and from prominent 
Republicans--in support of Joel Klein be printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                                    July 14, 1997.
     Hon. Trent Lott,
     Senate Majority Leader, Washington, DC.

     Hon. Tom Daschle,
     Senate Minority Leader, Washington, DC.
       Dear Senator Lott and Senator Daschle: We are lawyers, 
     academics, and former government officials with differing 
     views on various legal and public policy issues. We are 
     united, however, in our belief that Joel I. Klein is a 
     superbly and uniquely qualified nominee to be the Assistant 
     Attorney General for Antitrust at the Department of Justice. 
     We are confident that as Assistant Attorney General Joel 
     Klein would vigorously enforce the nation's antitrust laws 
     and effectively serve the public interest. We urge the Senate 
     to act upon this nomination promptly and confirm Mr. Klein to 
     this important post.
           Sincerely,
         Donald B. Ayer, Former Deputy Attorney General, Former 
           Deputy Solicitor General; Warren Christopher, Former 
           Secretary of State, Former Deputy Attorney General; 
           Lloyd N. Cutler, Former Counsel to the President; Alan 
           Dershowitz, Professor of Law, Harvard Law School; Peter 
           Edelman, Professor of Law, Georgetown Law Center; 
           Eleanor Fox, Professor of Law, NYU Law School; Jamie 
           Gorelick, Former Deputy Attorney General; Carla A. 
           Hills, Former United States Trade Representative, 
           Former Secretary of Housing and Urban Development; 
           Charles James, Former Assistant Attorney General, 
           Antitrust Division.

[[Page S7685]]

         Harry McPherson, Former Counsel to the President; Abner 
           J. Mikva, Former Counsel to the President, Former Chief 
           Judge, United States Court of Appeals for the District 
           of Columbia, Former Member of Congress; Newton N. 
           Minow, Former Chairman, Federal Communications 
           Commission; Leon E. Panetta, Former White House Chief 
           of Staff, Former Member of Congress; Deval Patrick, 
           Former Assistant Attorney General, Civil Rights 
           Division; Robert B. Reich, Former Secretary of Labor; 
           James Rill, Former Assistant Attorney General, 
           Antitrust Division; Richard E. Wiley, Former Chairman, 
           Federal Communications Commission.
                                                                    ____

     Senator Orrin Hatch,
     U.S. Senate.
       We are writing to express our support for the nomination of 
     Joel Klein as Assistant Attorney General for Antitrust.
       We are a group of economists who are working actively to 
     help break down entry barriers and bring competition in the 
     telecommunications sector, as Congress intended in passing 
     the Telecommunications Act of 1996. Collectively, we have 
     served as economic experts for interexchange carriers, 
     wireless companies, and Bell operating companies. The 
     signatories below include four recent Economics Deputies from 
     the Antitrust Division and the two most recent Chief 
     Economists at the Federal Communications Commission.
       Although we have our differences in the interpretation of 
     various economic evidence, and in our recommendations for 
     telecommunications policies, we all believe that Joel Klein 
     will make an excellent Assistant Attorney General. He is fair 
     and thoughtful, he understands and uses economic arguments 
     and analysis effectively, and he is dedicated to enforcing 
     our antitrust laws and promoting competition in our economy.
           Sincerely yours,
     Joseph Farrell,
       Prof. of Economics, U. of California at Berkeley.
     Michael Katz,
       Prof. of Business Administration, U. of California at 
     Berkeley.
     Carl Shapiro,
       Prof. of Business Strategy, U. of California at Berkeley.
     Richard Gilbert,
       Prof. of Economics, U. of California at Berkeley.
     Janusz Ordover,
       Prof. of Economics, New York U.
     Robert Willig,
       Prof. of Economics and Public Affairs, Princeton U.

  Mr. KOHL. Second, while it is unfortunate that Eric Holder is being 
held ``hostage'' to Joel Klein's nomination, the truth is that the 
sooner we confirm Mr. Klein, the sooner we can move forward and confirm 
Eric Holder. The Department of Justice, and the American people, will 
be better off with a confirmed Deputy Attorney General.
  Third, I respect the efforts of my colleagues, Senator Hollings, 
Senator Dorgan and Senator Kerrey, who have fought long and hard for 
consumers on telecommunications matters. Like me, they clearly want 
someone in charge of the Antitrust Division who will bring about the 
kind of competition promised in--but not yet delivered by--the 
Telecommunications Act. They have sent a strong message to Joel Klein 
on how to interpret Section 271 of the Act, and I believe he 
understands that message and will work hard to promote vigorous 
competition in the telephone industry--and all other industries.
  My hope is that Joel Klein, as a confirmed appointee, will surprise 
his critics and please his supporters in his enforcement of the 
antitrust laws. I urge my colleagues to support him.
  Mr. KENNEDY. Mr. President, I give my strong support to Joel Klein's 
nomination to serve as Assistant Attorney General of the Antitrust 
Division at the Department of Justice. Mr. Klein's background and 
experience have prepared him well to serve the country in this 
capacity.
  After graduating magna cum laude from Columbia University and Harvard 
Law School, Mr. Klein served as a law clerk for both D.C. Circuit Judge 
David Bazelon and Supreme Court Justice Lewis Powell. He later served 
with great distinction as a public interest lawyer, Deputy White House 
Counsel, and Principal Deputy of the Antitrust Division where he is now 
the Acting Assistant Attorney General.
  Mr. Klein's work in the Antitrust Division has earned wide praise. 
Leading economists, including two former Chief Economists of the 
Federal Communications Commission, believe that he will be an excellent 
Assistant Attorney General who is ``dedicated to enforcing our 
antitrust laws and promoting competition in our economy.'' Mr. Klein 
wins similar high praise from State and Federal officials and many 
members of the American Bar Association active in the Section of 
Antitrust Law.
  This praise is well deserved. Mr. Klein has won substantial criminal 
fines against large companies guilty of price-fixing. He has challenged 
anticompetitive practices and anticompetitive mergers that harm 
consumers. He has given new emphasis to antitrust enforcement overseas 
to help open more markets for U.S. businesses.
  I have had the opportunity to work closely with Mr. Klein on several 
issues, including a recent ``East-West Initiative,'' which brought 
together business leaders, government officials, and Republican and 
Democratic Senators from Massachusetts, North Carolina, Washington, 
Utah, and California to discuss cooperative efforts by government and 
business to help consumers. Mr. Klein's participation in this effort 
was key to its success, and I have the greatest respect for his ability 
and his commitment to public service.
  I urge the Senate to approve his nomination. His outstanding record 
makes him an excellent nominee for this position. I hope that the 
strong bipartisan support already expressed by many Senators on both 
sides of the aisle will lead to further cooperation in expediting 
action on other nominees for the Department of Justice, and for long 
overdue bipartisan action on judicial nominations as well.
  Mr. WYDEN. Mr. President, the position of Assistant Attorney General 
for Anti-Trust is one of the most critical to assuring American 
consumers enjoy the benefits of competition. The decisions made by the 
individual who holds this title affect billions of dollars and the 
ability of our companies to compete in the global economy. They affect 
corporate profit and loss sheets and the course of the stock market. 
But most importantly, they affect the prices consumers pay for basic 
services, from telephone calls to transportation and television.
  No area holds more promise for competition than communications, and 
that was the major impetus for the 1996 Telecommunications Act. The Act 
was intended to eliminate monopolies, spur new entrants and bring down 
prices. Eighteen months later, we have seen pitifully little progress. 
The Administration has not moved aggressively to promote competition. 
The vote I will cast today is meant to send a signal to the 
Administration that those of us in Congress who supported the 1996 
Telecommunications Act want to see competition rather than 
concentration.
  As a member of the Commerce Communications Subcommittee, I had hoped 
the 1996 Telecommunications Act would unleash a torrent of competition. 
Instead, we have seen prices outpace inflation in many areas. Each day 
the paper seems to carry yet another announcement of one giant 
company's plans to merge with another. Companies are spending millions 
of dollars on litigation and negative advertising. The situation 
reminds me of the African proverb: when elephants fight, the grass gets 
trampled. The grass here is the American consumer.
  Perhaps the overwhelming array of choices has lulled the consumer 
into a sense of complacency. We hear about 500 channel broadcast 
satellite and video-on-demand. We see pages and pages of advertisements 
for cellular phones and CD ROM's, interactive computers and digital 
cameras. The pace of progress is incredible.
  But if one peeks behind the smorgasboard, there is a very disturbing 
trend. The trend is toward concentration and media mega-mergers. 
Today's competitors are becoming tomorrow's partners.
  Mr. President, this is why the position of Assistant Attorney General 
for Anti-Trust is so crucial. The individual who sits in that office 
plays a pivotal role in assuring our anti-trust laws produce robust 
competition rather than rogue concentration. Consumers need a champion 
for choice in communications.
  I like Mr. Klein personally and believe him to be a skilled lawyer. 
It is the Administration's failure to move aggressively to promote 
competition that disturbs me. I hope my vote today

[[Page S7686]]

sends a clear message to the Administration that the trend toward 
increased communications concentration needs to be thorougly examined 
and challenged. For this reason, Mr. President, I will not be able to 
support the Administration on this vote.
  Mr. TORRICELLI. Mr. President, I rise in support of the nomination of 
Joel Klein because of my confidence in his ability to be the kind of 
antitrust law enforcer the Justice Department and the country need to 
protect consumers and ensure vigorous competition.
  My confidence comes from Mr. Klein's record of great success during 
the past nine months during which he has headed the Antitrust Division. 
He has proven to be a strong advocate in promotion of competition. His 
accomplishments include suing Rochster Gas and Electric for impeding 
competition for electric power, suing to block a hospital merger that 
would have raised prices for patients on Long Island, NY, obtaining 
indictments of an insulation company executive for price fixing, 
blocking an acquisition that would have created a dominant provider of 
asphalt concrete in New Hampshire and Vermont, and blocking an 
acquisition by Gulfstar Communications that would have created 
unacceptable media concentration.
  His record also includes numerous guilty pleas and fines and 
settlements from antitrust violators, including a record $5.6 million 
penalty from German and Brazilian companies for violating pre-merger 
notification rules.
  With an already strong record in an acting capacity, we can look 
forward to great things from Mr. Klein should he be confirmed by the 
Senate.
  Mr. HATCH. Mr. President, I must say I find some irony in the 
criticisms I am hearing today regarding Mr. Klein's efforts to 
implement the Telecommunications Act. In essence, it is being suggested 
that Mr. Klein's interpretation of the Act would permit local Bell 
companies to enter the long distance market prematurely, or too easily.
  In fact, however, Mr. Klein has weighed in against Bell entry into 
long distance in the 2 applications that have, to date, come before 
him--that is, the SBC and Ameritech applications. So it is curious to 
me that, while Mr. Klein's only actions in this regard have been 
contrary to the Bells, his confirmation is being opposed on the ground 
that he is being too lax on the Bells. This puzzles me.
  But the broader point here is that Mr. Klein has demonstrated a 
studied, fair approach to interpreting the law, as a general matter.
  I may well disagree with particular decisions Mr. Klein makes, but I 
am persuaded he will make a top-flight antitrust chief. So I urge my 
colleagues to join me in supporting this nomination.
  Mr. BURNS. Mr. President, I rise this evening to offer may support 
for nomination of Joel Klein to assume the position of Assistant 
Attorney General of the Antitrust Division of the U.S. Department of 
Justice.
  There has been much debate here this evening over my letter to Mr. 
Klein dated May 15, 1997, and his subsequent letter in response dated 
May 20, 1997. I'd like to take this opportunity to offer my two cents.
  When Mr. Klein's nomination was first reported out of the Judiciary 
Committee, I was concerned for three primary reasons. First, I had 
recently read Mr. Klein's paper entitled ``Preparing for Competition in 
a Deregulated Telecommunications Market,'' which he presented at the 
Willard Inter-Continental Hotel in Washington, DC, on March 11, 1997, 
and his interpretation in that paper of Section 271 of the 
Telecommunications Act of 1996 troubled me. Because I chair the 
Subcommittee on Communications, I felt that I could not, in good 
conscience, allow his nomination to move forward; consequently, I 
placed a hold upon his nomination and sent a letter to him asking him 
to explain his statements concerning 271 applications. He promptly 
responded with a comprehensive explanation of his statements, and, 
while I did not at that time nor do I now, necessarily agree with his 
assessment of the DoJ's role in the 271 application process, I 
understood the basis of his convictions.
  Second, in addition to the questions raised in my letter, I also 
telephoned him and expressed concern over what had been reported to 
me--both by press accounts and by a wide range of industry 
representatives--as a total failure on the part of the Antitrust 
Division to investigate allegations that Microsoft Corporation was in 
violation of the Consent Decree entered into with the Department of 
Justice on August 21, 1995. I have here one of several newspaper 
articles detailing these allegations and seek unanimous consent for its 
introduction into the Record. Subsequently, I met with Mr. Klein and he 
assured me that he would investigate these allegations.
  Finally, I had been contacted by a number of radio broadcasters who 
had complained that the Antitrust Division was misinterpreting the 
radio ownership provisions of the Telecommunications Act, but, after 
meeting with Mr. Klein, and discussing the issue at length, I was 
satisfied with his approach in this matter.
  Consequently, based upon both his written and verbal responses to my 
concerns. I am satisfied that he will be a fine Assistant Attorney 
General for the Antitrust Division, and I support his nomination.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, if there is a cure for insomnia, as I said 
the other day, this kind of debate surely must be it. This is so arcane 
and technical, to be talking about antitrust issues and VIII(C) and 
section 271, and all of these issues that almost no one understands. 
They seem not very important to many, I am sure. I suppose most who 
would listen to this would think it incredibly boring. But, in fact, it 
is very, very important. We have a market system in this country that 
works only when there is competition. When you don't have competition, 
the market system doesn't work.
  We have something called a referee several places in this Government: 
One at Justice, in the Antitrust Division; we have a referee function 
in the Federal Trade Commission. In fact, we have 1,000 attorneys, 
roughly, I understand, whose job it is to deal with antitrust issues 
and the issues of monopoly and so on. The purpose is to make sure that 
we don't have enterprises, where people come in and grab markets and 
develop trusts or monopolies and extract from the consumers a price 
that is unfair, a price that is not set in an open market or an open 
competition. That is what this antitrust enforcement is about.
  Mr. Joel Klein is, by all accounts, capable, smart, and a fellow with 
a distinguished career. I have met him. I think he is a nice fellow. We 
should not be voting on this nomination at this point. We should not 
have been voting on a cloture motion on this nomination either, as we 
did a week ago. Why? Because there are substantial questions that a 
number of us have raised about the nomination of Mr. Klein that have 
not been answered. I feel I must vote against this nomination. I don't 
like that position, but I don't intend to vote for a nomination with 
the kind of questions that remain about a number of positions that have 
been taken, a number of things that have been written and said by this 
potential nominee on antitrust issues, that give me great concern.
  I intend to speak only briefly because I think my colleagues have 
covered this subject. After I complete my presentation I will yield 
back the remainder of our time. But I want to make a couple of 
important points.
  The fight on the Telecommunications Act, which was the first major 
reform of the telecommunications laws in this country in five or six 
decades, was a substantial battle between behemoths in our country--
organizations that provided local service that are collecting tens and 
tens of billions of dollars of revenue, and organizations that are 
involved in long distance telephone service that are just as big. These 
titans then clashed as we wrote a Telecommunications Act. One of my 
concerns as we wrote this act was that we would end up, not with more 
competition, but, instead, with more concentration. If you have less 
competition and more concentration you will have higher prices.
  My colleague from Nebraska held up something that was in the paper 
this morning in Nebraska, ``So Far, Consumers Losers in Battle for 
Dial-Tone Dollars; basic rates for telephone service are up for 93 
percent of Nebraska

[[Page S7687]]

residential customers the past year.'' I don't know much about 
Nebraska, but I fear what will happen if we don't have aggressive 
antitrust enforcement at the Justice Department, something I fought 
very hard for, as did the Senator from South Carolina, as did the 
Senator from Nebraska, when we passed the Telecommunications Act. We 
were the ones standing out here on the floor talking about the VIII(C) 
test. We are the ones who fought for a role for the Justice Department 
in all of these issues. Were it not for us, it would not have been 
there.
  Now, the Justice Department role is critical, as is the role of the 
Federal Communications Commission. If we have a Federal Communications 
Commission that does the wrong thing, or we have a Justice Department 
that doesn't do the right thing in antitrust enforcement, I guarantee 
the result of the Telecommunications Act last year will not be more 
competition and lower prices, it will be more concentration, fewer 
companies, and higher prices. I guarantee it.
  This is important. This is about billions and billions and billions 
of dollars of additional charges that consumers may or may not have to 
pay in the future, depending on antitrust enforcement in the Justice 
Department and on thoughtful, responsible decisions in the Federal 
Communications Commission that properly implement the 
Telecommunications Act. There will be more discussion about that 
because we also have some disagreements about nominations to the 
Federal Communications Commission.
  Mr. President, I ask unanimous consent to have printed in the Record 
at this point a letter that I have written to Mr. Joel Klein dated July 
15, asking some questions about the interpretations that have been made 
on the VIII(C) test--the VIII(C) standards, rather, relative to the new 
standard called ``irreversibly open to competition.''
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                  U.S. Senate,

                                    Washington, DC, July 15, 1997.
     Mr. Joel Klein,
     Acting Assistant Attorney General, U.S. Department of 
         Justice, Washington, DC.
       Dear Mr. Klein: Last night, I received a letter from 
     Attorney General Janet Reno responding to a letter I sent to 
     President Clinton relating to issues that I have with respect 
     to your nomination. While I appreciate the fact that the 
     Administration has acted to respond to my inquiry, the 
     response was very general and lacks sufficient specificity to 
     alleviate my concerns.
       I expect that you will be confirmed by the Senate on 
     Thursday. However, before I can vote in your favor, I still 
     need to resolve some concerns with respect to the role of the 
     Justice Department in the antitrust aspects of 
     telecommunications policy. In particular, your assurance to 
     other Senators that you reject the VIII(C) standard with 
     respect to the Justice Department's evaluation of a Section 
     271 application by a Regional Bell Operating Company (RBOC) 
     needs further explanation. I would like a more detailed and 
     specific analysis from you on how the ``irreversibly open to 
     competition'' standard relates to the VIII(C) standard, which 
     was recommended in the Conference Report on the 
     Telecommunications Act of 1996. How does the ``irreversibly 
     open to competition'' standard differ from the VIII(C) 
     standard with respect to assessing adequate local competition 
     and the impact of RBOC entry into long distance services on 
     long distance competition.
       In our meeting last week, you said that the standard that 
     you and the Antitrust Division have developed is stronger 
     than the VIII(C) standard, and more appropriate in your 
     judgement. I would like your analysis why this is the case. I 
     want to assure you that I have an open mind on this subject. 
     My position is not absolutely wedded to the VIII(C) standard 
     as the only test for evaluation of a Section 271 application 
     by an RBOC. Rather, I become concerned when an Administration 
     official adopts a position that differs from previous 
     Administration policy--which I fought for in the debate over 
     the Telecommunications Act--and I would like to better 
     understand the new position.
       As I said on the Senate floor last Friday, I do not doubt 
     your abilities nor your integrity. I simply would like some 
     clarification on some issues that I fought hard to secure in 
     the Telecommunications Act at the request of the 
     Administration before the Senate votes on your nomination to 
     be Assistant Attorney General for the Antitrust Division.
       Thank you for your assistance and cooperation.
           Sincerely,
                                                  Byron L. Dorgan,
                                                      U.S. Senate.

  Mr. DORGAN. I have sent Mr. Klein this letter.
  Let me say this. It may well be that the irreversibly open to 
competition standard is a tougher standard, as they allege. I don't 
have the foggiest idea. I don't know. Nobody knows. And I am not 
prepared to have someone say, ``I reject the standard that Congress 
determined to be the standard when it passed the Telecommunications 
Act, and I create my own standard,'' and none of us know what that 
means here--I am not prepared to say, ``Yes, let me sign up for that. 
Let me be a partner in that process.'' I am not willing to do it.
  It may be, at the end stage of this process, maybe it is proven to us 
that Mr. Klein was right. I hope so. I hope that is the case. But if he 
is not right, if we are right, what is going to happen is everybody in 
this country who uses a telephone, everybody in this country who is a 
consumer of telecommunications services, is going to end up paying 
higher prices. That's the test.
  Mr. President, one final point and then I will conclude. During the 
debate on the Telecommunications Act, something happened to me that was 
a real learning experience. All of us in the Senate have learning 
experiences, despite the fact that some say we never seem to be able to 
learn.
  I offered an amendment on the floor of this Senate on the issue of 
concentration, because the bill that came to the Senate said, ``Let's 
take the limits off. Let's let these companies marry up. The more 
weddings the better. Let three companies become one. Let two companies 
become--let's have mergers, let them go off and get married--it is just 
terrific.'' That is what the bill was. So I offered an amendment on the 
floor of the Senate and said, ``Let's put these limits back on at this 
point.'' I don't support taking the limits off how many television 
stations you can own, how many radio stations you can own.
  We had a vote and guess what? Guess who won? I won. My amendment 
prevailed. I was so surprised I could hardly stand, and it was about 4 
o'clock in the afternoon. The then-majority leader did not support my 
position. He was on the opposite side. He changed his vote--had another 
Member change his vote, and asked for reconsideration after dinner, 3 
hours later. And do you know what happened? There were four, five, or 
six Members of the Senate that went out to have dinner--Lord only knows 
what they ate--they came back and 3 hours later they had some sort of 
epiphany that allowed them to vote against my amendment, so I lost.
  I learned that winning around here sometimes means you only win for 3 
hours. It felt good from 4 to 7, but the fact is I lost. Then the bill 
went to conference and the bill had enough in it to make me feel that 
maybe we will move in the right direction. But I would rue the day of 
supporting any portion of this telecommunications act if we don't have 
the most aggressive antitrust enforcement and the best decisions, the 
most thoughtful decisions comporting with what we decide is in this act 
from the Federal Communications Commission.
  I have a lot more to say but I know there are other times when 
Members will be anxious to hear it, and I will save it for those times.
  Let me compliment the Senator from South Carolina and the Senator 
from Nebraska.
  Let me say a word, finally to the nominee. I expect the Senate will 
cast a favorable vote for this nominee. I hope this nominee succeeds. I 
hope this nominee proves that the standard that he has developed is a 
tough, no-nonsense standard. If he does, I will come to the floor at 
some point in the future and say, ``Hurrah for you. I support what you 
have done.'' I think we should not be voting on this nominee today. I 
wish we had more time. If we had more time, maybe some of these votes 
would have been different.
  Mr. President, I yield the floor and yield the remainder of our time.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, do I understand the other side is willing 
to yield back the remainder of their time and we are prepared to yield 
back the remainder of our time?
  Mr. HOLLINGS. Mr. President, we yield the remainder of our time.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, I yield back the remainder of our time. I 
ask unanimous consent that upon the completion of debate or the 
yielding back

[[Page S7688]]

of time on the Klein nomination, we proceed to a rollcall vote on the 
nomination and then, after that vote we proceed to vote on Executive 
Calendar No. 139, the nomination of Eric Holder to be Deputy Attorney 
General of the United States.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. LEAHY. May I ask for the yeas and nays on both.
  Mr. HATCH. On both nominees.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. LEAHY. I ask unanimous consent the yeas and nays be ordered on 
both.
  The PRESIDING OFFICER. Is there objection to the ordering of the yeas 
and nays on the second nomination?
  Without objection, it is so ordered. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. HATCH. I yield the remainder of my time.
  The PRESIDING OFFICER. The question is, Will the Senate advise and 
consent to the nomination of Joel L. Klein, of the District of 
Columbia, to be an Assistant Attorney General. On this question the 
yeas and nays have been ordered. The clerk will call the roll.
  The yeas and nays have been ordered.
  The clerk will call the roll.
  The legislative clerk called the roll.
  The result was announced, yeas 88, nays 12, as follows:

                      [Rollcall Vote No. 187 Ex.]

                                YEAS--88

     Abraham
     Akaka
     Allard
     Ashcroft
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bryan
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Collins
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Domenici
     Durbin
     Enzi
     Faircloth
     Feinstein
     Frist
     Glenn
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Johnson
     Kempthorne
     Kennedy
     Kerry
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Mikulski
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Nickles
     Reed
     Reid
     Robb
     Roberts
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Warner
     Wellstone

                                NAYS--12

     Bumpers
     Byrd
     Cleland
     Conrad
     Dorgan
     Feingold
     Ford
     Harkin
     Hollings
     Inouye
     Kerrey
     Wyden
  The nomination was confirmed.

                          ____________________