[Congressional Record Volume 145, Number 76 (Tuesday, May 25, 1999)]
[Senate]
[Pages S5962-S5963]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY:
  S 1121. A bill to amend the Clayton Act to enhance the authority of 
the Attorney General to prevent certain mergers and acquisitions that 
would unreasonably limit competition; to the Committee on the 
Judiciary.


                   ANTITRUST IMPROVEMENTS ACT OF 1999

  Mr. LEAHY. Mr. President, we are living in a time of mega-mergers, 
and they are coming from all directions. Chrysler and Daimler-Benz 
automobile companies finalized their merger last year. In the computer 
world, AOL completed its purchase of Netscape just a few months ago. 
And in the largest corporate merger ever, Exxon Corporation announced 
its plan to acquire Mobil at a price tag of over $75 billion, thus 
creating the world's biggest private oil company, Exxon Mobil 
Corporation.
  While these mega-mergers have cut a swath across a number of 
industries, the consolidations that continue to raise the most 
questions in my mind are those that involve incumbent monopolies. For 
example, the mergers among Regional Bell Operating Companies, which 
continue to have a virtual stranglehold on the local telephone loop, 
pose a great threat to healthy competition in the telecommunications 
industry.
  Indeed, incumbent telephone companies still control more than 99% of 
the local residential telephone markets.
  As I said last Congress, and it is still the case today, at my farm 
in Middlesex and at my home here in Virginia, I have only one choice 
for dial-tone and local telephone service. That ``choice'' is the Bell 
operating company or no service at all.
  The Telecommunications Act of 1996 passed with the promise of 
bringing competition to benefit American consumers. However, this 
promise has yet to materialize.
  Since passage of the Telecommunications Act, Southwestern Bell has 
merged with PacTel into SBC Corporation, Bell Atlantic has merged into 
NYNEX, and AT&T has acquired IBM's Global Network, just to name a few. 
Just last week it was reported that U.S. West reached an agreement to 
merge with the telecommunications company Global Crossing.
  The U.S. Justice Department didn't spend years dividing up Ma Bell 
just to see it grow back together again under the guise of the 1996 
Telecommunications Act.
  I am very concerned that the concentration of ownership in the 
telecommunications industry is proceeding faster than the growth of 
competition. Old monopolies are simply regrouping and getting bigger 
and bigger.
  Before all the pieces of Ma Bell are put together again, Congress 
should revisit the Telecommunications Act. To ensure competition 
between Bell Operating Companies and long distance and other companies, 
as contemplated by passage of this law, we need clearer guidelines and 
better incentives. Specifically, we should ensure that Bell Operating 
Companies do not gain more concentrated control over huge percentages 
of the telephone access lines of this country through mergers, but only 
through robust competition.
  Today I am reintroducing antitrust legislation that will bar future 
mergers between Bell Operating Companies or GTE, unless the federal 
requirements for opening the local loop to competition have been 
satisfied in at least half of the access lines in each State.
  The bill provides that a ``large local telephone company'' may not 
merge with another large local telephone company unless the Attorney 
General finds that the merger will promote competition for telephone 
exchange services and exchange access services. Also, before a merger 
can take place, the Federal Communications Commission must find that 
each large local telephone company has for at least one-half of the 
access lines in each State served by such carrier, of which as least 
one-half are residential access lines, fully implemented the 
requirements of sections 251 and 252 of the Communications Act of 1934.
  The bill requires that each large local telephone company that wishes 
to merge with another must file an application with the Attorney 
General and the FCC. A review of these applications will be subject to 
the same time limits set under the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976.
  The bill also provides that nothing in this Act shall be construed to 
modify, impair, or supersede the applicability of the antitrust laws of 
the United States, or any authority of the Federal Communications 
Commission, or any

[[Page S5963]]

authority of the States with respect to mergers and acquisitions of 
large local telephone companies.
  The bill is effective on enactment and has no retroactive effect. It 
is enforceable by the Attorney General in federal district courts.
  This bill has the potential to make the 1996 Telecommunications Act 
finally live up to some of its promises.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1121

       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 ``Antitrust Improvements Act 
     of 1999''.

     SEC. 2. PURPOSE

       The purpose of this Act is to enhance the authority of the 
     Attorney General to prevent certain mergers and acquisitions 
     that would unreasonably limit competition in the 
     telecommunications industry in any case in which certain 
     Federal requirements that would enhance competition are not 
     met.

     SEC. 3. RESTRAINT OF TRADE.

       The Clayton Act (15 U.S.C. 12 et seq.) is amended--
       (1) by redesignating section 27 (as designated by section 2 
     of Public Law 96-493) as section 29; and
       (2) by inserting after section 27 (as added by the Curt 
     Flood Act of 1998 (Public Law 105-297)) the following new 
     section:
       ``Sec. 28. (a) In this section, the term `large local 
     telephone company' means a local telephone company that, as 
     of the date of a proposed merger or acquisition covered by 
     this section, serves more than 5 percent of the telephone 
     access lines in the United States.
       ``(b) Notwithstanding any other provision of law, a large 
     local telephone company, including any affiliate of such a 
     company, shall not merge with or acquire a controlling 
     interest in another large local telephone company unless--
       ``(1) the Attorney General finds that the proposed merger 
     or acquisition will promote competition for telephone 
     exchange services and exchange access services; and
       ``(2) The Federal Communication Commission finds that each 
     large local telephone company that is a party to the proposed 
     merger or acquisition, with respect to at least \1/2\ of the 
     access lines in each State served by that company, of which 
     at least \1/2\ are residential access lines, has fully 
     implemented the requirements of sections 251 and 252 of the 
     Communications Act of 1934 (47 U.S.C. 251, 252), including 
     the regulations of the Commission and of the States that 
     implemented those requirements.
       ``(c) Not later than 10 days after the Attorney General 
     makes a finding described in subsection (b)(1), the Attorney 
     General shall submit to the Committee on the Judiciary of the 
     Senate and the Committee on the Judiciary of the House of 
     Representatives a report on the finding, including an 
     analysis of the effect of the merger or acquisition on 
     competition in the United States telecommunications industry.
       ``(d)(1) Each large local telephone company or affiliate of 
     a large local telephone company proposing the merge with or 
     acquire a controlling interest in another large local 
     telephone company shall file an application under this 
     section with respect to the merger or acquisition with both 
     the Attorney General and the Federal Communication Commission 
     on the same day.
       ``(2) The Attorney General and the Federal Communication 
     Commission shall issue a decision regarding the application 
     within the time period applicable to review of mergers under 
     section 7A.
       ``(e)(1) The district courts of the United States are 
     vested with jurisdiction to prevent and restrain any mergers 
     or acquisitions described in subsection (d) that are 
     inconsistent with a finding under paragraph (1) or (2) of 
     subsection (b).
       ``(2) The Attorney General may institute proceedings in any 
     district court of the United States in the district in which 
     the defendant resides or is found or has an agent and that 
     court shall order such injunctive, and other relief, as may 
     be appropriate if--
       ``(A) the Attorney General makes a finding that a proposed 
     merger or acquisition covered by an application under 
     subsection (d) does not meet the condition specified in 
     subsection (b)(1); or
       ``(B) The Federal Communications Commission makes a finding 
     that 1 or more of the parties to the proposed merger or 
     acquisition do not meet the requirements specified in 
     subsection (b)(2).''.

     SEC. 4 PRESERVATION OF EXISTING AUTHORITIES.

       (1) In General.--Nothing in this Act or the amendment made 
     by section 3(2) shall be construed to modify, impair, or 
     supersede the applicability of the antitrust laws, or any 
     authority of the Federal Communication Commission under the 
     Communication Act of 1934 (47 U.S.C. 151 et. seq.), with 
     respect to mergers, acquisitions, and affiliations of large 
     local exchange carriers.
       (b) Antitrust Laws Defined.--In this section, the term 
     ``antitrust laws'' has the meaning given that term in the 
     first section of the Clayton Act (15 U.S.C. 12).

     SEC 5. APPLICABILITY

       This Act and the amendment made by section 3(2) shall apply 
     to a merger or acquisition of a controlling interest of a 
     large local telephone company (as that term is defined in 
     section 27 of the Clayton Act, as added by such section 
     3(2)), occurring on or after the date of the enactment of 
     this Act.
                                 ______