[Congressional Record Volume 146, Number 38 (Thursday, March 30, 2000)]
[Senate]
[Pages S1949-S1956]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
LAUNCHING OUR COMMUNITIES' ACCESS TO LOCAL TELEVISION ACT OF 2000--
Continued
Mr. LEAHY. Mr. President, I was a conferee last year on the satellite
television bill. I worked very hard, along with a number of my
colleagues, to put in a provision that would have ensured the benefits
of this bill would be shared by rural America through a loan guarantee
program.
I appreciate the work of the Banking Committee under the leadership
of Senator Gramm and Senator Sarbanes to report out a bill which
provides a strong framework in which to move forward with this program.
I appreciate the majority leader, Senator Lott, and the Democratic
leader, Senator Daschle, who worked out an agreement with the committee
leadership that put the bill before the Senate today.
Senator Max Baucus of Montana introduced legislation with me last
year. He has now joined with me on some very constructive amendments
which I hope can be accepted.
I am here today to stand with rural America. I am proud to be a son
of rural America. I know that oftentimes the needs of this special part
of our Nation must be heard on the Senate floor.
I am not trying to change the main thrust or the intent of this
committee-reported bill. My amendments don't alter the structure of the
bill. My amendments simply say that I want the board, which will have
the job of approving these loan guarantees for local-into-local
television, to look at one thing. If we are going to have loan
guarantees for local-into-local television, we should give additional
consideration to the projects that can provide high-speed Internet
access and emergency Weather Service reports to rural America.
If rural America is going to have high-speed Internet access, it is
going to have to rely on satellite service; cable companies are not
going to put wire out for it. For most of those parts of the country,
they are not going to have the kind of fiber optics that might do it.
But they can do it with satellite service.
I hope we will not allow a digital divide between urban America and
rural America. Give us the special access through the satellite system.
For example, say the board that is going to do the loan guarantees
has two equally balanced satellite systems that might give the same
level of service, and at about the same cost, but one would offer high-
speed Internet access to rural families; I say give that one the loan
guarantee.
In America, there is a growing disparity between the digital haves
and have-nots as portions of our society get left behind at the same
lightning pace at which Internet develops. Our amendment closes this
digital divide.
Having broadband, especially in rural areas, can provide
opportunities to the handicapped, to the elderly, to education, and
everyone, along with business opportunities and entertainment. Whether
you are sitting on the dirt road at my home in Middlesex, VT, whether
you are out in rural Utah, or whether you are in rural California, it
means you can have the same kind of Internet business, the same kind of
access to information, and the same kind of access to educational
opportunities.
My amendment would ensure that as long as the loan guarantee is to be
made, the high-speed Internet access ought to be financed under the
loan guarantee program, if there is excess capacity.
All we say is, before the board gives a satellite company a loan
guarantee to provide rural satellite service, ask, first and foremost,
Will you provide high-speed Internet access for the people in rural
America? If you do, you have a better chance of being supported.
I want to provide a little history on this matter. A provision which
we offered to conferees last year would have provided up to $1.25
billion in loan
[[Page S1950]]
guarantees to help finance the delivery of local broadcast stations to
rural America. I pushed for that amendment because certain satellite
companies were concerned that they could not cost-efficiently provide
``local-into-local'' satellite service to markets more rural than about
the top 60 to 70 markets. That meant that bigger cities would get the
local broadcast television service but that rural areas, by and large,
would not.
Other Senators, not on the conference were also vitally interested in
providing this service to rural America. I know that Senator Burns and
his key staffer on this issue Mike Rawson worked long and hard to get
this language included in conference.
In addition, Senator Baucus introduced a bill which I cosponsored to
address these rural concerns after efforts to include it in the
conference report failed.
I do not want to be misunderstood, I want to point out that the
leaders of the satellite industry--such as Charlie Ergen of EchoStar
who is known for his creative and innovative ideas--want to provide
this local service.
I want to congratulate Charlie Ergen for his recent partnership with
iSKY which will offer consumers two-way wireless broadband access via
satellite along with satellite television service. This broadband
access will be 30 times faster than current dial-up speeds of 56k
according to news accounts. Charlie has often been a leader in this
arena and he has done it again.
I also want to point out that in Montana or my home state of Vermont,
or in Alaska, or a Great Plains state, or elsewhere, receiving local
broadcast television over satellite is more than entertainment.
Local television provides local weather, local news about
emergencies, and local public affairs programming. It is a way for
residents to better participate in government and to more effectively
influence local government, school board or zoning decisions.
This bill that we are debating is indeed very important.
I need to emphasize a very important point. Section 336 of the
Communications Act of 1934 sets forth requirements for the rollout to
digital television. This bill in no way is intended to alter or change
those requirements.
Thus, it is imperative for the Board to only approve loans made to
finance a local television signal delivery system that will be forward
compatible and in compliance with the digital television rollout
requirements in the Communications Act.
It is thus common sense that applicants for loan guarantees under
this legislation must be able to show that the proposed signal delivery
system will be forward compatible. Applicants should be required to
show how their proposed delivery system can be readily adapted to
deliver local television signals in a format compatible with the
digital rollout requirements. Without this, I do not see how the loans
could be other than risky.
This conversion to digital television also cannot be ignored. I have
met with Jim Goodmon, the CEO of Capitol Broadcasting, on this matter
and appreciate his visionary role and his willingness to take the lead.
Digital TV is more than just a crystal clear moving picture. Digital TV
can use multiple channels and datacasting on their single digital
channel to better serve the public. I have been advised that the same
digital bandwidth used to broadcast HDTV can also transmit as many as
three video channels and a data signal on the single digital channel.
Thus, during the recent floods that devastated North Carolina, WRAL-
HDTV, a digital station in Raleigh, was able to simultaneously
broadcast on one digital channel: coverage of a basketball game;
continuous local news on flood conditions; the continuous sweep of the
local Doppler radar showing where the rainfall was the most severe and
the direction of the storm; and, a data broadcast alongside the video
services that enabled home computer access to specific flood, traffic,
rainfall and emergency information. Jim Goodmon and his staff down in
Raleigh did a great job during this crisis and I commend them.
Thus, I do not want loans under this bill to interfere with the
rollout under the Communications Act. Rural America deserves digital
service along with urban America.
I want to raise an additional matter. I am concerned that additional
steps will be needed to assure full competition in rural areas and
convenience to consumers. In a nutshell, multiple providers of
satellite service may be needed in many areas to provide service to
rural customers. However, if the set top boxes and satellite dishes are
incompatible with these systems then competition will be reduced and
consumers will receive fewer services or have to purchase additional
satellite receivers at an additional cost of hundreds of dollars.
This same integration or interoperability problem exists regarding
program and schedule information. Access to program and schedule
information would enable third party satellite providers to create
integrated program guides. This would enhance consumer choices and
provide more competition.
Resolving these interoperability problems so that multiple satellite
TV signals, offered by competitors, can be accessed by consumers in a
convenient and inexpensive way is in the public interest. The FCC
should use all its authority to resolve these matters.
In addition to the points I have just made, and the amendments I have
offered, I want to point out improvements in the bill which I hope can
be addressed at conference. I believe that the three-person Board
should have more of an oversight and loan approval role and less of a
day-by-day management role. The management of the program should be
with the Administrator of the Rural Utilities Service. For example,
references to the Board on page 28 should be struck and the
Administrator and the Board should work out the regulations together.
Also, the Board should delegate responsibility for loan guarantees of
up to $50 million to the Administrator.
It is also important, to assure that this bill is not biased toward
the cable industry, that spectrum rights be allowed to be purchased or
leased with the guaranteed loans. If cable borrowers will be able to
purchase cable and install that cable using the guaranteed loans then
satellite borrows should be able to use the loan proceeds for spectrum
rights, which is their medium to deliver signals.
I also support the amendment offered by Senators Thomas and Johnson
that would allow the Federal Financing Bank and the National Rural
Utilities Cooperative Finance Corporation to participate in these loan
guarantee programs. They could offer borrowers a lower rate than
commercial banks and should not be excluded from this process.
In section 4(f) the full $1.25 billion in aggregate for all loans
should not be artificially limited by including other debt in the $1.25
billion. In section 5(h) the Administrator, in consultation with the
Board, should establish and approve the credit risk premiums and
amounts.
To ensure that the Administrator can best protect the interests of
the United States the text on lines 3 through 10 of page 38 should be
replaced with the following: ``after exercising of rights and remedies
by the Administrator any shortfall in the guarantee amount''. This
would allow the Administrator working with the Board to restructure a
loan if that were the best way to protect the government's interest. I
am very nervous about section 5.
The Administrator should have more responsibility to manage the
program. Daily management by a 3-member board that does not meet daily
will not work very well. Also, section 5(l) appears to give state
courts jurisdiction over the United States.
I am also worried about that unless more flexibility is provided
under section 4(d)(2) and (3) that excellent loans for excellent
projects will be needlessly denied because of the timing of when
paperwork is done, or when the FCC approves certain regulations, or
when spectrum rights are obtained. Also, the unnecessarily constraining
collateral, security, insurance and lien requirements will make it very
difficult for the program to work well. These duplicative constraints
do not provide additional protection for the United States.
I will urge the conferees to provide a strong oversight role for the
Board, greater ability of the Administrator to manage the day-to-day
operations, more flexibility for the Administrator, a more level
playing field with respect to cable TV, and other improvements.
[[Page S1951]]
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I commend my good friend and colleague
from Vermont for his leadership on this issue, as well as Senator Gramm
from Texas, and my colleague from Montana, Senator Burns, and others
who are addressing this issue. Frankly, there is a great need in rural
America. I compliment him and thank Senator Leahy for his work.
I am a cosponsor with Senator Leahy in his efforts not only to help
bring faster local-to-local service via satellite to rural America but
also to help provide stimulus for more broad bandwidth coverage to
rural America as well.
Mr. President, I ask unanimous consent that the pending amendment be
temporarily laid aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 2900
Mr. BAUCUS. Mr. President, I send an amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Montana (Mr. Baucus), for himself, Mr.
Leahy, and Mr. Robb, proposes an amendment numbered 2900.
Mr. BAUCUS. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
On page 25, line 10, insert after ``local television
stations'' the following: ``, and related signals (including
high-speed Internet access and National Weather Service
broadcasts),''.
On page 30, strike line 9 and insert the following: ``means
by which local television broadcast signals, and related
signals (including high-speed Internet access and National
Weather Service broadcasts),''.
On page 33, between lines 23 and 24, insert the following:
(B) Additional considerations.--To the maximum extent
practicable, the Board should give additional consideration
to projects which also provide related signals (including
high-speed Internet access and National Weather Service
broadcasts).
On page 33, line 24, strike ``(B)'' and insert ``(C)''.
Mr. BAUCUS. Mr. President, I ask unanimous consent that amendment be
temporarily laid aside and that the previous amendment then pending be
the pending business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LEAHY. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. ENZI. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Voinovich). Without objection, it is so
ordered.
The Senator from Wyoming.
Mr. ENZI. Mr. President, I rise to speak in support of S. 2097, the
Launching of Our Communities' Access to Local Television Act of 2000. I
commend the senior Senator from Texas, Chairman Gramm, for the great
work he has done to bring the bill to this point. The bipartisan effort
he has encouraged and the painstaking process by which he has produced
this bill is to be commended. He has done a tremendous job of watching
it from the banking perspective to make sure we could have the loan
guarantees and that there would be neither favoritism nor the potential
of putting banks or other institutions in financial trouble. He spent a
great deal of time and effort on it. I appreciate the willingness of
all the members of the Banking Committee to work together to get this
bill to this point.
As many of you will recall, last year during the appropriations
process, this bill would have been a part of that, but there was a lot
of concern about how loan guarantees should work, not just loan
guarantees for satellite television but loan guarantees, and this is a
landmark effort to develop a pattern for banking loan guarantees.
Last November, Congress passed the Satellite Home Viewer Improvement
Act to bring the law governing the direct broadcast satellite industry
up to date and reflect the current state of technology. As part of that
bill, Congress authorized, for the first time, satellite companies to
retransmit local stations back into their local markets. However, due
to satellite capacity, the two national direct broadcast satellite
companies--DirecTV and Echostar--will only be able to serve the top 50
of 210 television markets. That is about 75 percent of the households
in the Nation, but that leaves 160 markets, which is 25 percent of the
Nation--a very important part, as Wyoming is included in that--without
satellite-delivered local television stations. The two media markets in
Wyoming are ranked 197 and 199. Remember, we are serving the top 50 out
of 210. So 197 and 199 are way down the list, meaning that without some
sort of incentive, local television will probably not be available in
Wyoming.
The bill before us will provide that incentive. It establishes a
Federal loan guarantee program to promote the delivery of local
television signals at places such as Wamsutter, WY. The bill provides
the criteria to protect the taxpayer to the maximum extent. The
Congressional Budget Office estimates this bill could cost American
taxpayers about $100 million less than previous versions. There is a
cost involved, a potential cost.
The Banking Committee had to balance its need to protect the taxpayer
and its need to provide a reasonable incentive to make investing in
rural television service a worthwhile project for private risk capital.
During the committee's deliberations on the bill, we looked at all the
other existing government loan guarantees and examined what either made
the program successful or, in some cases, caused it to fail. We have
taken great care to ensure the loan program is fair and has the
greatest chance of achieving the goal of providing local television
service to rural America.
People rely on TV not just for entertainment but for news and weather
and special warnings of impending disasters. Children rely on it for
educational programming, and soon students will need improved access to
the information superhighway. The more rural a person is, the more that
person needs to have access to TV for critical information as well as
for entertainment. Almost 40 percent of Wyoming television households
are satellite subscribers, the third highest penetration rate in the
Nation. People are not choosing satellite over cable or some other
system but are satellite subscribers because it is the only way to
receive any sort of television programming.
Wyoming has television stations in only three cities: Casper, WY,
about 48,000 people; Cheyenne, 50,008; and Jackson, which fluctuates
during the season but I think is listed at about 6,500 people. The rest
of the State is served by stations from out of State or by relay
transmitters that bring Wyoming stations to outlying towns.
Wyoming has vast open spaces. The borders on Wyoming are about 500
miles on a side, with that big square out there. It gives us a little
difficulty with lapel pins because we are not recognizable.
We have low populations and lots of distances. We have high altitudes
and low multitudes. We have tall mountains that make the best efforts
by over-the-air broadcasters and cable companies even more difficult.
For households that are in remote areas of the State beyond the reach
of cable and relay, satellite is the only reliable and cost-effective
choice.
But until now, satellite has had one distinct drawback. There was no
way to get the news or other local programming through reliable access
to a local Wyoming television station. It is doubtful that without some
kind of Federal encouragement local television stations would be
available to rural households. This bill provides the proper incentive.
It gives equal opportunity throughout the United States. It is
important to rural Americans, and I do urge my colleagues to support
it.
Mr. President, I yield the floor and I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. THOMAS. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator from Wyoming is recognized.
Mr. THOMAS. Mr. President, I wanted to come back this afternoon--I
[[Page S1952]]
talked some this morning--to talk about this bill. It is a very
important bill to us. It is one that provides an opportunity for us to
have local television in rural areas. There is great support for this
idea. We are trying to find a way to put it into the proper perspective
in terms of the lending of money to guarantee loans that will cause
this to happen--I agree with the chairman--where we have 80 percent of
a loan guaranteed by the Federal Government, but that the remaining 20
percent be done in the private sector without further guarantees by the
Federal Government, by the taxpayers, so there is that sharing of risk
and that incentive to continue to be very careful with these kinds of
expenditures. There is no question that this is a somewhat risky
operation, something that is new and technically different.
The conversation we are having currently, of course, is to provide an
opportunity for CFC, the Cooperative Finance Corporation, to be a
participant. CFC was formed in 1969 by the Rural Electric Cooperatives
and provides private capital. I have worked with it a great deal,
having been manager of a rural electric association in Wyoming for a
number of years.
CFC was not created by the Federal Government and does not receive
Federal funds. This is a private corporation. CFC has 31 years of
experience in lending to rural electric systems, and since 1987 has
provided more than $3 billion to rural telecommunications projects.
Our Wyoming rural electrics, starting 15 years ago, were involved in
bringing satellite TV to rural consumers and have been doing that from
a programming standpoint. Unfortunately, we could not get our local
stations, and that is what this is all about. This is something the
rural electrics have been involved in for some time.
CFC is AA rated. It has $16 billion in loan assets. Over 31 years,
CFC has had only $77 million in losses and has loss reserves of $235
million.
This is a strong organization and one that is capable of doing this
work. Furthermore, it is owned and operated by citizens, by rural
people, by boards of directors of the rural electrics, by people who
are elected to serve.
What we want is to give an equal opportunity for this unit to give
loans and to participate as well as others.
CFC has backup lines of credit with 50 banks. These lines of credit
amount to about $5 billion. This is a large group. We have heard some
information about the allegation that a loan loss by CFC will result in
rate increases to 25 million consumers. I think that is very
farfetched. I do not believe it is accurate.
If CFC incurs a loss, CFC, as a private corporation, will incur the
loss, with no liability to the Federal Government.
If CFC incurs a loss and its interest rates increase, rural utilities
are free to borrow from other lenders, including banks and other
finance companies.
Co-ops are not responsible for repaying CFC losses or obligations.
What we need to do, of course, is to ensure they are treated like
others in the private sector. But this idea that they somehow have a
special advantage in that any losses can be passed on to rural electric
consumers in the electric business is not true. We have heard a great
deal about that.
The bottom line is, in the worst case scenario, CFC's rates could
increase and co-ops would then borrow from other entities.
CFC is a private cooperative. It is paternalistic to set up this
private organization to have people governing under the rules of
private sector and private enterprise and to suggest the Senate ought
to design for them their rules. I reject that idea.
I am happy to say we are seeking to find some language that will
satisfy the need to move forward with this bill and also to provide an
equal opportunity for CFC to participate without unwarranted
supervision. I am hopeful we can find that arrangement.
We ought to make that discipline work. I think we can, and I
certainly look forward to working with others this afternoon so we can
pass this bill and move toward rural communications and local-to-local
communications.
I yield the floor.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. BREAUX. Mr. President, what is the pending business before the
Senate?
The PRESIDING OFFICER. The Johnson amendment No. 2898.
Mr. BREAUX. Mr. President, because an amendment is pending, rather
than ask it be set aside to offer another amendment, I will make a few
comments about something I intend to do. I am glad the distinguished
chairman of the Banking Committee is here, so he has a chance to listen
to some of the comments and maybe have a dialog on what I am attempting
to do.
First, I congratulate the chairman of the Banking Committee and the
Senator from South Dakota and all those on the Banking Committee who
have worked so hard to bring this legislation to the floor. It truly
addresses a very important need for rural America, and that is the
guarantee that people in rural America are not going to be treated as
second-class citizens when it comes to their access to the information
age.
This legislation addresses a problem of allowing companies that
provide satellite television and broadcast signals getting into rural
parts of America and providing them the same type of quality
information services that someone in the city of Washington, DC, or any
of the large metropolitan areas of our country are already receiving
because that is where the people happen to live.
The people in rural Texas or in rural South Dakota or the people in
rural Louisiana are no less important than people in the large cities
of America. Without this legislation, it is very clear that people in
these areas will not have access to this information because, in many
cases, it is not economically feasible to spend large sums of money to
provide information to sparsely populated areas of our country. That is
unfortunate, but that is recognizing the way things are.
The purpose of the legislation, as I understand it, is to lower the
overall cost of bringing satellite and television broadcast to rural
America, something that has almost unanimous agreement and is in the
national interest. Without this legislation, people in rural areas
would simply not have the same advantages as we do in urban areas.
Clearly, this is very important.
One of my concerns, I say to the distinguished managers of the bill,
is that when you look at what it costs to bring broadcast signals to
rural America, it is not only a question of building satellites for
rural areas and moving into these areas.
That represents about 45 percent of the cost of the actual satellite.
But getting the satellite, obviously, launched into space represents
about 37 percent of the total cost of bringing broadcast signals,
through satellites, to any part of this country.
I think you have to agree that a significant cost associated with all
of what we are trying to do today is actually launching the satellite
into space in order to bring the broadcast signals to all parts of the
United States. Forty-five percent is the actual satellite cost;
insurance is 12 percent; the ground costs are another 6 percent. But a
very significant portion of the cost of bringing a satellite into
working condition is the cost of launching it. More than one-third, as
I have said, of the cost of the satellite is expended when the actual
satellite is launched into space.
Clearly, it would further our goal of lowering the cost of bringing
these services to rural America if we could also lower the cost of
transportation, which is a very significant cost throughout our
country.
Launch costs, obviously, are a very significant component of the
overall satellite costs, but I think they can be reduced. That is why I
take the floor this afternoon to make a suggestion.
The authors of the legislation, again, who are to be commended for
their vision, have clearly indicated that launch costs were on their
mind when they crafted the bill.
I was looking at the legislation, and clearly the legislation, on
page 30 of the actual bill that is pending before the Senate, talks
about the type of loans this bill envisions. It says:
. . . a loan may not be guaranteed under this Act unless--
It spells out what the ``unless'' is. But what it actually says is
that, in other words, it will be allowed if it does the following. In
other words, a loan
[[Page S1953]]
can be guaranteed under the legislation pending before the Senate if:
the loan is made to finance the acquisition, improvement,
enhancement, construction, deployment, launch, or
rehabilitation of the means by which local television
broadcast signals will be delivered to an unserved area or
underserved area . . .
Therefore, the bill, as it is currently pending before the Senate,
talks about trying to make loans available to cover a number of things,
one of which specifically mentioned in the bill is the launch of
satellites designed to bring broadcast signals to rural parts of
America.
As I tried to point out initially, 37 percent of the whole cost of
this project is in the launching of the satellite. Obviously, without
the launching of the satellite into space, you, in fact, are not going
to ever complete the rest of the project. I think it is very relevant,
when the bill talks about a loan guarantee program, that the launch is
listed as one of the means by which broadcast signals are ultimately
brought to all parts of America.
I think, for that portion of the industry that launches the
satellites into space, the loan guarantee is very important. An
interesting thing that I would point out is, when you are in the launch
satellite business, when you are in the business of building a
spaceship to, in fact, launch a vehicle, you have been competing
against other countries where their governments do it. You are
competing against industries that are totally financed by their
respective governments because it has been in their national interest
to do so.
In the past, that is also what we have done in this country through
the National Aeronautics and Space Administration, where NASA has used
the shuttle to launch the satellites into space, and the taxpayer has
been paying for the cost of those vehicles. But, clearly, NASA is
getting out of the business. We are trying to say to the private
sector: We want you to move into this business. We want you to build
the launch vehicles. We want to create a new industry in the private
sector, get the Government out of the business of launching broadcast
satellites, and let the private sector do it.
But one of the disadvantages our private sector has is that they are
competing against other countries that are involved in doing this, and
they cannot compete on a level playing field. What we are suggesting is
that we help the U.S. industries become involved in this in a
competitive fashion, which I think is very important.
U.S. companies that are having to compete against other countries are
not able to compete on a level playing field. Therefore, when the
country of China or the country of France--highly subsidized by their
Governments--is trying to sell their launch vehicles to the United
States, obviously, they can do it at a price that makes our companies
not able to compete.
I think the authors of the bill are right on target. Some might say:
The Government should not be in the business of loan guarantees. It is
not a function of our Government. The exact opposite is true.
Historically, the U.S. Government has sought to assist the private
sector by saying, we are going to help--we are not going to monopolize
it; we are not going to do it, but we are going to help the private
sector do it. One way we can help certain activities that are important
to our country is by loan guarantee programs.
I point out, for the commercial shipbuilding industry--very important
to my State and to the State of the Senator from Texas, as well as all
the States along the coast that have the shipbuilding industry--we have
had a title 11 shipbuilding guarantee program, in which companies have
been able to go into the private market, borrow money from the private
sector, from private banks, from private insurance companies, and
having a certain portion of that loan guaranteed by the Federal
Government. It allows them to get a better interest rate and allows
them to get financing for something that may not be able to be financed
otherwise.
Where we have tried it before, in the area of shipbuilding, it has
worked very well. It has worked at a profit to the U.S. Government
because the loans have been paid back. The Government has made money.
The work was done. The ships were built. The Loan Guarantee Program was
an integral portion of it.
Currently, when you look at whether financial assistance is available
in this area in the private sector, without any help from the
Government, it is interesting to see what the comments are from those
in the financial markets.
We have had hearings on this legislation before the Senate Commerce
Committee. One of the companies that does the bulk of financing these
launch vehicles is Donaldson, Lufkin & Jenrette. When they testified
before the Senate Commerce Committee, as the largest group of
investment bankers in the country, they talked about the problem of
being hampered by the inability to find the necessary private financing
for these types of ventures, particularly when they are, in fact,
competing against other countries that are government-financed 100
percent.
They pointed out in their testimony that in some cases the cost of
the launch vehicles, and the insurance that goes with it, almost equals
the entire cost of the satellite itself. So if we want to help bring
broadcast signals to rural areas, we cannot just look at the satellite
itself that needs to be constructed, you also need to look at the
vehicles that would be built in order to launch those satellites into
the sky.
It was really interesting, colleagues, that last week we had the head
of the National Aeronautics and Space Administration, NASA, before our
committee. Dan Goldin was testifying. I asked him a question about this
concept. He said the provision was very innovative. He said this
provision:
. . . would help small and big rocket companies to overcome
critical barriers so that we have technology that will allow
us to improve the reliability ten times and cut their cost by
a factor of ten. This will enable us to have private launch
services not involving the Government. This bill makes sense
to me.
This is the person who is the head of NASA saying that this idea of
having a loan guarantee for the launch vehicles is something that makes
sense to him, that it would allow us to increase the reliability by 10
times, and that it would allow us to decrease the cost by a factor of
10, which is very significant.
Obviously, we should be looking for more reliable launch vehicles. We
should be looking at vehicles that cost a lot less. The Government
should not be in the business of building the launch vehicles, but we
can assist companies--small companies and large companies--by making it
easier for them to get adequate private sector financing for these very
important ventures. I have not offered an amendment, I say to the
distinguished Banking Committee chairman, because there is an amendment
pending at the current time, I did want to outline the concept of an
amendment I am prepared to offer, and will offer, as to the feasibility
of saying that if you are going to have a loan guarantee program for
the actual satellite, there is a desperate need for a loan guarantee
program for the vehicles that will be required in order to launch the
satellites.
We have in the past used foreign launch vehicles from France, China,
and the Ukraine, using Ukraine launch vehicles because there is not an
adequate supply of launch vehicles in this country. Those rockets and
launch vehicles have been inadequate. They have been imperfect. They
have had failures and at a great expense to the satellite industry in
this country. How much better would it be if we were to have a viable,
growing private industry in this country that were assisted by a loan
guarantee program to enable them to get adequate financing in the
private sector in order to launch the satellites for the purpose of
bringing broadcast signals to rural areas as well as to urban areas in
the country.
Due to the fact that an amendment is pending, I will not be able to
offer my amendment at this time. I yield the floor until such time as
it is appropriate for me to offer an amendment. I suggest the absence
of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. GRAMM. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRAMM. Mr. President, I thank our colleague from Louisiana for
raising the obvious point that one of the
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technologies that would be potentially subsidized under this bill is
satellite technology. If you are going to have a satellite, you have to
put it into orbit. We have been for some time in the process of trying
to commercialize space. There are companies now that are beginning to
respond to that potential with real investment and real potential.
The question the Senator from Louisiana asked was, Would not this be
a good time to address this additional problem? Personally, I believe
this is something that will have to be addressed and looked at. The big
difference is, on the loan guarantee proposal before us, we have had a
series of hearings. We have gone to great lengths to try to minimize
the potential exposure to the taxpayer. We have tried to call in
technical expertise to be sure we understand what we are doing.
In terms of expanding this program now on the floor of the Senate to
launch vehicles, I don't see how we could possibly get that job done. I
think this is, in terms of this bill, a bridge too far. I think it is
something that will be looked at. I know, from having talked to them
personally, there are at least two private companies that are
interested in commercial launching to try to do in America what we are
contracting out to France and to China.
We have two problems in considering this today. One is that under
unanimous consent, only relevant amendments are in order. This
amendment would be deemed to not be relevant, in my opinion.
Secondly, I could do my due diligence as chairman of the Banking
Committee to agree to an add-on loan guarantee on the floor of the
Senate when we have not held a hearing, when we have not looked at it,
when we know relatively little about the technology, the public/private
competition, the economic feasibility of the project. We don't have any
scoring from CBO as to what it would cost. It may very well be at some
point, someday, we will be in a position of looking at the proposal
that has been made by the distinguished Senator from Louisiana. I don't
believe we are at that point today.
Obviously, the Senator has a right to offer his amendment. I do not
believe we should adopt his amendment today. I think we are already
carrying a pretty heavy load on this bill. In order for this to go
forward as it is now written, the Appropriations Committee is going to
have to appropriate a quarter of a billion dollars. I believe we would
have a train that would be overloaded if we added this loan guarantee
to it today.
I am not hostile to what the distinguished Senator from Louisiana is
trying to do. I simply do not know enough about it to make that
decision today on the floor.
Before I could get to the point of making a decision on it in the
Banking Committee, we would have to meet with a lot of different
people, a lot of different competing technologies. We would have to
meet with NASA. We would have to analyze this in detail. We would have
to do our due diligence. We would have to hold public hearings. We
would have to go through a markup in the Banking Committee to try to
refine it, as we have the bill that is now before us. We are just a
long way from that.
I am sorry I am not in a position of being able to support the
Senator from Louisiana. As of today, I am not.
Mr. President, I withdraw amendment No. 2897. That will pull down my
amendment and pull down the Johnson amendment with it.
The PRESIDING OFFICER. The amendment is withdrawn.
The question is on agreeing to the Bunning amendment, No. 2896.
Mr. BUNNING. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
Mr. GRAMM. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. GRAMM. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BUNNING. Mr. President, I ask for the yeas and nays on the
Bunning amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
Mr. GRAMM. Mr. President, I ask unanimous consent that the vote on
the amendment be stacked after the first vote we have today.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Louisiana.
Mr. BREAUX. Mr. President, I will address my remarks to some of the
points the Banking Committee chairman made, if he will give me his
attention, regarding some of the concerns he raised in his comments
about the amendment I outlined but have not yet offered.
On the point the chairman raised, that we do not have a scoring on
the amendment, the scoring is very simple. It is $250 million. That is
what is authorized. We don't authorize a nickel more or a nickel less.
It is not difficult to figure out the scoring and the cost of an
amendment that authorizes $250 million. It is $250 million, if that
amount is in fact appropriated.
He also said we needed to have hearings on this amendment. The
Congress has had hearings on the amendment. We had hearings in the
Senate Commerce Committee. We had people from industry testify. We had
large and small companies testify. We had the head of the National
Aeronautics and Space Administration testify. We had a sufficient
number of people testifying about the pros and cons.
He raised the point that we should hear from NASA as to their
opinion. I provided the opinion of NASA when I quoted from the
statement of the distinguished Administrator of NASA, Dan Goldin, in
which he said this amendment could conceivably increase launch vehicle
reliability by 10 times and decrease the cost by a factor of 10.
So there could not be a clearer statement. He concluded by saying:
``This bill makes sense to me.'' You can't get a clearer statement from
NASA as to what they think about the amendment. There could not be a
clearer statement about the cost of the amendment other than the fact
that we authorize $250 million, not a nickel more, not a dime less but
$250 million.
So it is very clear. One, we know what the costs are; two, we have in
fact had hearings in the Senate on this question; three, we have heard
from industry, both large companies and small companies; and finally,
we have heard from NASA, which said that it makes a great deal of sense
to them, including the fact of reducing the cost of launching vehicles
by a factor of 10. I don't know who else we can possibly ask to come
before the Congress and address this question.
The final point--and I will not prejudge the ruling of the Chair--is
on the question of the relevancy. It is clear that the bill before the
Senate right now covers the cost of launching satellites to bring
broadcast signals to rural America. It is in the bill. The bill clearly
says that the loan guarantees are for the acquisition, improvement,
enhancement, construction, deployment, and launch of satellites--the
means by which local television broadcast signals will be delivered.
Well, launching a satellite is absolutely essential and totally
relevant to putting satellite broadcast signals into rural America. It
could not possibly even be more relevant to the bill before the Senate.
The bill itself talks about launching satellites.
My amendment provides a loan guarantee to launch satellites. If that
is not relevant, I am not sure what would ever be relevant. We are not
talking about germaneness. We are talking about relevant to the bill
before the Senate, and this is a loan guarantee for launching
satellites to bring broadcast signals to rural areas. My amendment
creates a loan guarantee program to launch satellites to bring
broadcast signals to rural America. It does it through a different
department, but obviously it has to be relevant. You don't have to have
exactly the same language in an amendment as the bill for it to be
relevant. It has to be relevant to what the bill does that is pending
before the Senate. I think the question of relevancy is very clear.
The fact that we have had hearings in this Congress on this specific
amendment, and the fact that we have had
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NASA testify in favor of this amendment and say it would reduce the
cost by 10 times, reduce the liability by a factor of 10, and the fact
that we have had industry, both small and large companies, appear
before Congress and testify as to their opinions on this means that we
have had hearings, we have the support, and it is certainly relevant,
and I think it is the right public policy.
While I can't offer the amendment at this time because another one is
pending, we will do it at the appropriate time.
I yield the floor.
The PRESIDING OFFICER. Who seeks time?
Mr. JOHNSON. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BREAUX. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BREAUX. Mr. President, what is the current business before the
Senate?
The PRESIDING OFFICER. The amendment of the Senator from Kentucky,
No. 2896.
Mr. BREAUX. The yeas and nays have not been ordered?
The PRESIDING OFFICER. They have been ordered.
Mr. BREAUX. Is it in order to ask unanimous consent to temporarily
set aside that amendment in order to offer an amendment?
Mr. GRAMM. Reserving the right to object, people yell at me so much,
I don't hear so good. Will the Senator repeat that?
Mr. BREAUX. I am asking to set aside the pending amendment to offer
my amendment. Is that appropriate?
Mr. GRAMM. That is fine.
The PRESIDING OFFICER. It is in order to make that request.
Mr. BREAUX. Mr. President, I ask unanimous consent that the pending
amendment be temporarily set aside in order to offer my amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 2901
Mr. BREAUX. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Louisiana (Mr. Breaux) proposes an
amendment numbered 2901.
Mr. BREAUX. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place insert the following:
Section 4(d)(2)(a) of S. 2097 is amended by striking the
word ``launch,''.
S. 2097 is amended by inserting the following Section 5A:
``SEC. 5A. APPROVAL AND ADMINISTRATION OF LOAN GUARANTEES
RELATING TO LAUNCH VEHICLES.
``(a) Authority To Approve Loan Guarantees Relating to
Launch Vehicles.--To further the purposes of this Act
including to reduce costs necessary to facilitate access to
local television broadcast signals in unserved and
underserved areas, without unnecessarily creating a new
administrative apparatus, the Secretary of Transportation is
authorized, subject to the provisions of this Section, to
approve loan guarantees relating to space launch vehicles.
For this purpose, the credit assistance program established
in Section 1503 of Chapter 1 of Subtitle E of the
Transportation Equity Act for the 21st Century, Pub. L. No.
105-178, is expanded to include projects for the design,
development, and construction of space transportation systems
and infrastructure, including launch and reentry vehicles
subject to the licensing requirements of Section 70104 of
Title 49, United States Code.
``(b) Funding.--To fund the cost to the Government of loan
guarantees provided under this Section for space
transportation systems and infrastructure projects, there is
authorized to be appropriated $250 million for Fiscal Year
2001, and such other sums as may be necessary for each of
Fiscal Years 2002 through 2005. From funds made available
under this subsection, the Secretary of Transportation, for
the administration of the program, may use not more than $2
million for each of Fiscal Years 2001 through 2005. For each
of Fiscal Years 2001 through 2005, principal amount of
Federal credit instruments made available for space
transportation systems and infrastructure projects shall be
limited to the same amounts set forth in Section 1503 of
Chapter 1 of Subtitle E of the Transportation Equity Act for
the 21st Century, Pub. L. No. 105-178.
``(c) Regulatory Authority.--To carry out the provisions of
this Section, the Secretary shall, within 120 days after
enactment of this Act, adopt such regulations as he
reasonably deems necessary. Such regulations shall not be
inconsistent with the provisions of Section 5 of S. 2097, the
``Launching Our Communities' Access to Local Television Act
of 2000.''
Mr. BREAUX. Mr. President, I made remarks earlier about the intent to
offer this amendment. I will not repeat the arguments in favor of it. I
will only summarize by saying the Senate Commerce Committee had a
complete and full hearing. The distinguished chairman of the
subcommittee is on the floor today. We had the privilege of hearing
NASA Administrator Dan Goldin testify on this amendment, saying it
would save as much as 10 times the cost of a launch vehicle and improve
the reliability of those by a factor of 10. We are hearing from big
launch companies and also small launch companies that are interested in
this industry, and trying to improve it.
We had testimony from people in the finance business who speak to the
difficulty of getting adequate financing in the private sector because
of the questionable nature of the launch vehicle industry and
testifying to the fact that a loan guarantee program would be very
helpful.
The final point is that when you talk about bringing satellite
broadcast signals to rural America, you cannot just talk about the
``big ball'' that, in fact, is the satellite. You also have to talk
about how you get the satellite into orbit around the country. Thirty-
seven percent of the cost of bringing that broadcast signal to rural
America involves the cost of the launch vehicle.
Currently, the United States relies on China, France, Ukraine, and
other countries that are not market-based countries but, rather, are
countries in which their industry is financed 100 percent by the
government. Our companies cannot compete unless we have a level playing
field.
Therefore, the concept of providing a loan guarantee program of a
definitive amount of money we know will cost $250 million. That is the
money authorized. It would have to go through the Appropriations
Committee to get the appropriations, but it could not be any more than
$250 million to create a loan guarantee where they could go to the
private sector and get a loan from the banks. Having a percentage of it
guaranteed by the Federal Government is good, sound economic policy. It
is good broadcast industry policy. It is a policy this country should
embrace. In areas where we have done it before, as in shipbuilding, it
has worked very successfully.
I suggest this amendment is very relevant because the bill itself is
clear that the Loan Guarantee Program ``is for the acquisition,
improvement, enhancement, construction, deployment and launch''--
emphasizing launch--``rehabilitation or the means from which local TV
broadcast signals will be delivered to an unserved area or underserved
area.''
It is clearly relevant, and both amendments are an effort to try to
help through loan programs the delivering of broadcast signals to rural
America.
This is not a germaneness question. It is a relevancy question. If
this is not relevant, I don't know what would be relevant on an
amendment on the floor of the Senate.
Mr. President, I urge adoption of the amendment.
The PRESIDING OFFICER. The Senator from Texas.
Mr. GRAMM. Mr. President, as I said before, I have some sympathy for
the Senator from Louisiana. I think this is obviously a very real issue
to be considered. But the bottom line is we are on the floor with a
bill that has been a year in the making having to do with our goal of
trying to see that everybody who lives in rural Texas or rural America
has access to their local news and local weather and to the local
television station.
You could write volumes about what we don't know about this subject,
even though we have worked on it for a year, even though we have had
extensive hearings, even though we have had innumerable private
meetings, and even though we have gone through a markup in committee
where we have
[[Page S1956]]
debated it at some length and reached some consensus on it--not total
consensus.
The problem with the Breaux amendment is that this is an area, while
it is obviously of importance in terms of one potential technology that
might be used in the bill--and that is a satellite--we in our bill are
not setting out technology as such. We are letting the marketplace
decide that. The point is we have had no hearings. We have heard from
no one. We have not discussed, analyzed, or studied this in any detail.
We are not ready to make a decision on this today.
Under the unanimous consent agreement entered into on November 18, no
amendment is in order which is not deemed to be relevant--not relevant
to mankind, not relevant to any problem facing us in the future, or any
opportunity but relevant specifically to the bill that is pending
before the Senate.
I make a point of order that the amendment offered by Senator Breaux
is not relevant.
The PRESIDING OFFICER. In the opinion of the Chair, the amendment is
not relevant and the point of order is sustained.
The Senator from Louisiana.
Mr. BREAUX. Mr. President, I take it that the Chair is not in the
position to give a reason behind the ruling.
The PRESIDING OFFICER. The program in the amendment is not what was
envisioned by the unanimous consent agreement.
Mr. BREAUX. I inquire of the Chair: Is that not an argument for the
question of germaneness as opposed to the question of relevancy?
The PRESIDING OFFICER. Germaneness is a different test which is not
at issue here.
Mr. BREAUX. Further parliamentary inquiry: Is not the statement of
the Chair relevant to a question on germaneness as opposed to a
question of relevancy?
The PRESIDING OFFICER. The statement of the Chair was with regard to
the relevancy standard.
Mr. BREAUX. I will not pursue it. Obviously, I accept the ruling of
the Chair.
Mr. GRAMM. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. GREGG. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Fitzgerald). Without objection, it is so
ordered.
Mr. GREGG. I ask unanimous consent to speak as in morning business
for 10 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________