[Congressional Record Volume 144, Number 28 (Monday, March 16, 1998)]
[Senate]
[Pages S1994-S1995]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN:
  S. 1766. A bill to amend the Communications Act of 1934 to permit 
Bell operating companies to provide interstate and intrastate 
telecommunications services within one year after the date of enactment 
of this Act; to the Committee on Commerce, Science, and Transportation.


             the telecommunications competition act of 1998

  Mr. McCAIN. Mr. President, today I am introducing the 
Telecommunications Competition Act of 1998. This legislation is aimed 
at encouraging the development of competition in telecommunications and 
thus allowing consumers to enjoy the benefits of competition including 
lower prices, universal availability, increased variety of new 
services.
  The Telecommunications Act of 1996 was enacted two years ago with 
great promise that increased competition would rapidly emerge on both 
the local and long distance telecommunications markets. The last two 
years have instead brought forth rampant litigation challenging 
everything from the constitutionality of the Act itself to the legality 
of the Federal Communications Commission's implementation rules. Within 
that same time frame, consumers have seen prices rise instead of fall, 
carriers merging instead of competing, and more regulation rather than 
deregulation.
  Mr. President, it is time to consider whether the Telecommunications 
Act of 1996, particularly section 271 of the Act that keeps Bell 
Operating Companies (BOCs) from competing in the interLATA 
telecommunications market prior to their fulfilling a set of market 
opening requirements, has been a success or failure.
  Section 271 requires BOCs to satisfy a detailed fourteen point 
competitive checklist that claims to guarantee that competitors have 
access to a BOC's services and facilities at rates, terms, and 
conditions that are nondiscriminatory. Section 271 also requires that 
BOCs seek approval for their applications from the Department of 
Justice, the relevant state commission, and the Federal Communications 
Commission; each of which may have a different interpretation of the 
requirements. Finally, beyond all of the other requirements a BOC must 
satisfy to gain section 271 approval, the Act gives the FCC the ability 
to reject an application based on a vague and undefined public 
interest, convenience, or necessity requirement.
  It is time to reevaluate whether the regulatory intensive approach to 
deregulation that was followed in section 271 is the best method for 
encouraging the development of competition. I realize that in 1996 
Congress passed the Telecommunications Act while reacting to pressure 
from all sides of the telecommunications industry. I understand that 
any modifications to the Act will require that we seek compromise from 
those same industry forces. I am thus currently working to find such 
compromises and hope to introduce a different bill that will further 
the goal of competition through a framework that will focus on the 
truly pertinent factors while minimizing current incentives to game the 
process for anticompetitive ends.
  The bill I introduce today is what I believe to be the most 
deregulatory approach to encouraging competition in telecommunications. 
This bill takes a straightforward approach to bringing the benefits of 
competition to consumers by permitting all carriers to enter each 
others' markets and compete to bring the best and lowest priced 
services to consumers.

  The bill requires that all providers of telecommunications and 
information services be subject to equivalent regulation. The bill also 
states that if all providers of telecommunications services do not have 
the opportunity to provide all telecommunications and information 
services, it would be in the public interest to remove barriers to 
entry to intrastate telecommunications services such as telephone 
exchange service, intrastate intraLATA telecommunications services, and 
telephone exchange access services.
  When barriers to entry to intrastate telecommunications services are 
removed, all lines of business restrictions should be eliminated for 
existing providers of these services. The elimination of such 
restrictions will result in the creation of substantial numbers of new 
jobs and the deployment of advanced telecommunications services. This 
will enhance the quality of life and promote economic development, job 
creation, and international competitiveness.
  Advancements in the nation's telecommunications infrastructure will 
enhance the public welfare by helping to speed the delivery of services 
such as telemedicine, distance learning, remote medical services, and 
distribution of health information.
  Rural and sparsely populated areas will not receive the benefits of 
advanced telecommunications services unless all providers of 
telecommunications services have eliminated the restrictions on the 
lines of business in which they may engage.
  Existing regulatory devices no longer work, and the regulatory 
asymmetries that exist today are inconsistent with competitive 
marketplaces. Oversight of the telecommunications industry

[[Page S1995]]

should be conducted from the perspective of the antitrust laws by the 
Department of Justice and from the regulatory perspective by the 
Commission for interstate telecommunications services and the states 
for intrastate telecommunications services.
  Finally Mr. President, this bill removes the current perverse 
incentives that some parties have to use the regulatory process to 
delay BOC entry into long entrance. By permitting all competitors to 
compete one year from the date of enactment, all parties will have the 
incentive to bring the benefits of competition to consumers as soon as 
possible.
  Mr. President, I ask unanimous consent that the text of the bill 
appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1766

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Telecommunications 
     Competition Act of 1998''.

     SEC. 2 FINDINGS.

       The Congress finds that--
       (1) competition in telecommunications will encourage 
     infrastructure development, have beneficial effects on the 
     price, universal availability, variety and quality of 
     telecommunications services, and improve our economy, our 
     culture, and our political system;
       (2) all telecommunications markets should be open to 
     competition and all providers of telecommunications services 
     should be able to provide such services and be subject to 
     equivalent regulation when offering such services;
       (3) all providers of telecommunications should be subject 
     to equivalent regulation;
       (5) the elimination of the restraints on the lines of 
     business will result in the creation of a substantial number 
     of new jobs;
       (6) if the removal of the restrictions on the lines of 
     business are delayed, the job creation resulting from the 
     removal of these constraints will also be delayed;
       (7) advanced telecommunications services can enhance the 
     quality of life and promote economic developments, job 
     creation, and international competitiveness;
       (8) advancements in the nation's telecommunications 
     infrastructure will enhance the public welfare by helping to 
     speed the delivery of services such as telemedicine, distance 
     learning, remote medical services, and distribution of health 
     information;
       (9) improvements in the telecommunications infrastructure 
     will be greatly enhanced if all providers of 
     telecommunications services are permitted to offer these 
     services on the same basis and subject to equivalent 
     regulatory requirements;
       (10) rural and sparsely populated areas will not receive 
     the benefits of advanced telecommunications services unless 
     all providers of telecommunications services have eliminated 
     the restrictions on the lines of business in which they may 
     engage;
       (11) existing regulatory devices no longer work, and the 
     regulatory asymmetries that exist today are inconsistent with 
     competitive marketplaces; and
       (12) oversight of the telecommunications industry should be 
     conducted from the perspective of the Antitrust Laws by the 
     Department of Justice and from the regulatory perspective by 
     the Commission for interstate telecommunications services and 
     the States for intrastate telecommunications services.

     SEC. 3. ONE-YEAR MAXIMUM START DATE FOR BOC INTERSTATE AND 
                   INTRASTATE SERVICES.

       Part III of title II of the Communications Act of 1934 (47 
     U.S.C. 271 et seq.) is amended by inserting before section 
     271 the following:

     ``SEC. 270. DATE CERTAIN FOR START OF BELL OPERATING COMPANY 
                   SERVICES.

       ``(a) In General.--Notwithstanding any provision of this 
     Act to the contrary, on the date that is one year after the 
     date of enactment of the Telecommunications Competition Act 
     of 1998, a Bell operating company, and any affiliate of a 
     Bell operating company, may provide interstate and intrastate 
     telecommunications services.
       ``(b) State Law Superseded.--No State or local law may 
     prohibit or prevent a Bell operating company, or an affiliate 
     of a Bell operating company, from providing interstate and 
     intrastate telecommunications services after the date 
     specified in subsection (a).
       ``(c) Applicaiton with Other Provisions.--Any prerequisite 
     established by any other provision of this Act that 
     conditions the right to provide services regulated under this 
     Act in any area upon the satification by a Bell operating 
     company of any requirement under this Act shall be for all 
     purposes of this Act, deemed to have been met on the date 
     specified in subsection (a).''.
                                 ______