[Congressional Record Volume 159, Number 65 (Thursday, May 9, 2013)]
[Senate]
[Pages S3329-S3342]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. McCAIN:
S. 912. A bill to allow multichannel video programming distributors
to provide video programming to subscribers on an a la carte basis, and
for other purposes; to the Committee on Commerce, Science, and
Transportation.
Mr. McCAIN. Today I am introducing the Television Consumer Freedom
Act of 2013. The legislation has three principal objectives:
One, encourage the wholesale and retail unbundling of programming by
distributors and programmers. Allow the consumer, the television viewer
who subscribes to cable, to have a la carte capability--in other words,
not be required to buy a whole bunch of channels that consumer may not
wish to subscribe to--in order words, a la carte. If you want to watch
one television program, you can watch it. If you do not, you do not
have to. The situation today obviously is far different from that.
It would also establish consequences if broadcasters choose to
downgrade their over-the-air service.
Three, it eliminates the sports blackout rule for events that are
held in publicly financed stadiums.
For over 15 years, I have supported giving consumers the ability to
buy cable channels individually, which is known as a la carte, to
provide consumers more control over viewing options in their homes and,
as a result, their monthly cable bills. The video industry--principally
cable companies and satellite companies and the programmers that sell
channels, such as NBC and Disney-ABC--continues to give consumers two
options when buying TV programming: first, to purchase a package of
channels whether they watch them all or not or, second, not purchase
any cable programming at all.
There are two choices: You can either buy one of their packages or
not watch it at all. That is unfair and wrong, especially when you
consider how the regulatory deck is stacked in favor of industry
against the American consumer. It is clear when one looks at how cable
prices have gone up over the last 15 years, which was brought to the
light by the most recent Federal Communications Commission pricing
survey. In the FCC survey, the average monthly price of expanded basic
service--basic service--for all communities surveyed increased 5.4
percent over the 12 months ending January 1, 2011, or to $54.46,
compared to an increase of 1.6 percent in the Consumer Price Index. In
other words, the cost of cable went up nearly four times the consumer
prices people pay for everything else. You can only do that when you
have a monopoly.
Over the last 15 years, this rise in cost has become even more
evident. According to the FCC, the price of expanded basic cable has
gone up at a compound average annual growth rate of 6.1 percent during
the period from 1995 to 2011. This means that the average annual cable
price has gone up about $25 a month from 1995, to over $54 today. That
is a 100-percent price increase. People are on fixed incomes. People
are hurting. Why in the world should they have a 100-percent cost
increase? The only way it can be done is through monopolies.
Those that provide video directly to consumers, such as cable and
satellite companies, are not solely to blame for the high prices
consumers face today. Many articles have been written about the
packages of channels--commonly called bundles--that are sold to cable
and satellite companies by video programmers such as Comcast, NBC, Time
Warner, Viacom, and the Walt Disney Company, which owns 80 percent of
ESPN.
The worldwide leader in sports, as ESPN calls itself, thrives because
of the advertising revenue it is able to generate and large subscriber
fees. According to a January 2012 Newsweek article, ESPN charges $4.69
per household per month, citing a research company. By comparison, the
next costliest national network, TNT, costs $1.16. Again, $4.69 for
ESPN and the next most expensive one is $1.16 for TNT. Whether or not
you watch ESPN--and I do all the time--all cable subscribers are forced
to absorb this cost. Not every American watches ESPN. Not every
American should be forced to watch ESPN and pay $4.69 per household per
month in order to have it carried into their homes when they do not
view it. Because these channels are bundled into packages, all cable
consumers, whether they watch sports or not, are paying for them
anyway.
Cable and satellite carriers that consider dropping ESPN must also
contemplate losing other channels in the bundle, such as the Disney
Channel. Some have described this as ``a tax on every American
household.''
Others, like the CEO of the American Cable Association, have said:
My next-door neighbor is 74, a widow. She says to me, ``Why
do I have to get all that sports programming?'' She has no
idea that in the course of a year, for just ESPN and ESPN2,
she is sending a check to Disney for about $70. She would be
apoplectic if she knew . . . Ultimately there is going to be
a revolt over the cost. Or policymakers will get involved
because the cost of these things are so out of line with the
cost of living that someone's going to put up a stop sign.
Today we are putting up a stop sign. We are going to find out how
powerful these companies are, as opposed to clearly correcting an
injustice that is being inflicted on the American people. This
legislation would eliminate regulatory barriers to a la carte by
freeing up multichannel video programming distributors, such as cable,
satellite, and others offering video services, to offer any video
programming service on an a la carte basis. But if they want to keep
bundling, they can do that too. They can make both offers to the
American subscriber.
In order to give these companies an incentive to offer programming on
an a la carte basis, the legislation links the availability of the
compulsory copyright license to the voluntary offering of a la carte
service by the MVPD. In other words, if these companies do not offer a
broadcast station and any other channels owned by the broadcaster on an
a la carte basis, then that company cannot rely on the compulsory
license to carry those broadcast stations. The compulsory license is a
benefit conferred on these corporations, so it is reasonable to ask the
recipients of that benefit to provide consumers with an a la carte
option. I emphasize ``an option.''
To address the notion that a la carte options are being denied
distributors,
[[Page S3330]]
the legislation conditions important regulatory benefits such as
network nonduplication, syndicated exclusivity, blackout rights, and
retransmission consent option on the programmers, allowing MVPDs to
sell their channels on an a la carte basis.
It is time that the consumers got something in return, other than a
higher bill at the end of the month.
Furthermore, because not all programmers also own broadcast stations,
the bill contains a provision that would create a wholesale a la carte
market by allowing programmers to bundle their services in a package
only if they also offer these services for the MVPDs to purchase on an
individual channel basis. If a cable operator does not want to carry
channels like MTV, it would have the option of not doing so and only
buying and carrying the channels it thinks its consumers want to watch.
Finally, the bill provides that if the parties cannot agree to the
terms of a carriage agreement, the final offer made by each side must
be disclosed to the FCC.
The second section of the bill responds to statements by broadcast
executives that they may downgrade the content of their over-the-air
signals or pull them altogether so that the program received by MVPD
customers is preferable to that available over the air. Our country is
facing a spectrum crunch. If broadcasters that are using the public
airwaves in return for meeting certain public interest obligations are
going to deviate from those obligations, it is my view that we should
consider whether that is the most efficient use of our country's
spectrum. It would be a distortion of this basic social compact if
over-the-air viewers were treated as second-class citizens.
This bill provides a legislative response if broadcasters either
downgrade their signal or pull it altogether. The bill provides that a
broadcaster will lose its spectrum allocation and that spectrum will be
auctioned by the FCC if the broadcaster does not provide the same
content over the air as it provides through MVPDs.
Finally, my bill touches on sports blackout rules that can limit the
ability of subscribers to see sporting events when they take place in
their local community but are not broadcast on a local station. When
the venues in which these sporting events take place have been the
beneficiary of taxpayer funding, it is unconscionable to deny those
taxpayers who paid for it the ability to watch the games on television
when they would otherwise be available. Therefore, the bill proposes to
repeal the sports blackout rules so far as they apply to events taking
place in publicly financed venues and/or involve a publicly financed
local sports team.
In the end, this Television Consumer Freedom Act is about giving the
consumer more choices when watching television. It is time for us to
help shift the landscape to benefit television consumers. I know the
broadcasters and cable companies are likely to suggest that the
government should not micromanage how they offer their product to
customers and that bundling can promote diverse offerings. What those
interests fail to mention is that the government has already entered
the marketplace and conferred certain rights and privileges, such as a
compulsory license, network nonduplication, syndicated exclusivity, and
retransmission consent, which stack the deck in favor of everyone but
the American consumer.
I hope the introduction of this act furthers the debate on issues
such as a la carte channel selection. I look forward to the Chamber's
consideration of the bill.
______
By Mr. COCHRAN (for himself and Mr. Wicker):
S. 914. A bill to amend title XVIII of the Social Security Act to
permit direct payment to pharmacies for certain compounded drugs that
are prepared by the pharmacies for a specific beneficiary for use
through an implanted infusion pump; to the Committee on Finance.
Mr. COCHRAN. Mr. President, on January 1, 2013, the Centers for
Medicare and Medicaid Services began implementing a final rule to
prohibit compounding pharmacies that prepare medications used in
implanted infusion pumps from billing Medicare directly for these
services. This reverses a policy that has been permissible in several
States for over 20 years. Since the proposed change in May 2011, I have
worked with Senator Wicker and other Members of Congress to delay this
change until its effects have been fully considered.
During the public comment period for this rule, pharmacies,
physicians, and patients overwhelmingly opposed this policy change. In
Mississippi, the State board of pharmacy prohibits pharmacies from
selling compounded pain medications to physicians, resulting in
decreased access to effective treatments for chronic pain disorders.
States across the nation are coming to realize the negative
implications of this policy change.
With this final rule, the Centers for Medicare and Medicaid Services
has not fully taken into account patient impact or State regulations.
In addition, pharmacies that bill Medicare must comply with Federal
accreditation rules, further enhancing patient safety. We should
protect patient access to effective treatments rather than hinder it.
This bill would allow compounding pharmacies to continue to bill
Medicare directly for their services in the interest of helping
patients receive the quality care they deserve.
______
By Mr. WYDEN (for himself, Mr. Rubio, and Mr. Warner):
S. 915. A bill to amend the Higher Education Act of 1965 to update
reporting requirements for institutions of higher education and provide
for more accurate and complete data on student retention, graduation,
and earnings outcomes at all levels of postsecondary enrollment; to the
Committee on Health, Education, Labor, and Pensions.
Mr. WYDEN. Mr. President, when my colleagues and I went to college,
things were a lot different. We took out loans, but those loans were
manageable, and there were jobs waiting after graduation. Today, too
often, that's simply not the case. In fact, the majority of students
today will leave school weighed down with more than $26,000 in debt and
will attempt to enter a labor market in an environment where there are
more unemployed Americans than there are jobs available.
For the first time in our Nation's history, student loan debt exceeds
credit card debt and now totals over $1 trillion.
James Garfield once said, ``Next in importance to freedom and justice
is popular education, without which neither freedom nor justice can be
permanently maintained.'' He was right. Investment in higher education
is an economic imperative. Education is the great equalizer. It enables
upward economic mobility and breaks down class structures. A highly
skilled and educated workforce is the basis for any healthy economy. It
is the foundation of our country's future.
In nearly every financial decision Americans make, individuals and
families try to evaluate the economic value of that decision. Like
prospective homebuyers who inspect and assess the potential value of
their future home, students should be able to compare colleges and
programs based on what the likely return on their investment will be.
Our capital markets work best when there is transparency so we can
accurately measure the value of what we choose to invest in. We saw
what happens when this is not the case with the burst of the housing
bubble. Our economy is still struggling to recover from the mortgage
crisis. Misinformed consumers bought a product based on misleading
information and, often times, fell victim to bad loans offered by
predatory lenders.
Consumers must know what they can expect from their investments.
Similarly, students are entitled to know the value of their education
before they borrow tens of thousands of dollars from banks and the
government to finance their future.
Right now, consumers don't have this information. It is unavailable
to students and families who are making critical decisions that will
impact not only their future, both their financial future and career
path, but also the collective future of our country. That is why today,
Senator Rubio, Senator Warner and I are introducing an updated version
of the Student Right to Know Before You Go Act which will help inform
consumers and prevent market failures.
[[Page S3331]]
This proposal would ensure future students and their families can
make well-informed decisions by creating a market in which specific
schools and specific programs can be evaluated based on the average
annual earnings and employment outcomes of graduates; rates of remedial
enrollment and success of students that participate in remedial
education; the percent of students that receive Federal, State, and
institutional grant aid or loans; the average amount of total Federal
loan debt of students upon graduation; the average amount of total
Federal loan debt for students that do not complete a program; transfer
success rates; and rates at which students continue on to higher levels
of education.
The Department of Education has created a College Scorecard which is
a step in the right direction. The Scorecard, however, does not fully
capture any of the metrics outlined above and includes no information
to prospective students to evaluate the economic returns of their
program of study. The Wyden-Rubio-Warner bill generates this critical
information.
Markets fail when there is too little information and until now, it
has been impossible to ``Collect this data in a cost-effective way
while ensuring student privacy.
This proposal makes it possible to secure a return on investment for
students, parents, policy makers, and taxpayers while creating a
workforce that meets the demands of today's businesses and ensures that
American workers can successfully compete in the global economy.
______
By Mr. KAINE (for himself, Mr. Cochran, and Mr. Heinrich):
S. 916. A bill to authorize the acquisition and protection of
nationally significant battlefields and associated sites of the
Revolutionary War and the War of 1812 under the American Battlefield
Protection Program; to the Committee on Energy and Natural Resources.
Mr. KAINE. Mr. President, the battlefields on American soil contain
our national history and commemorate the events that made our nation
what it is today. Too many of these sites are open to urban development
that could 1eave no trace of the sacrifices made there.
That is why I am pleased to introduce the American Battlefield
Protection Program Amendments Act, which reauthorizes Federal
competitive matching grants to protect these historic lands. I was
proud to have supported this program at the State level when I was
Governor of Virginia, and I am proud to be joined on this bipartisan
legislation by my colleague, Senator Thad Cochran from Mississippi. Our
States hosted key battles of the Civil War, and we have led the Nation
in preserving the land on which these defining battles were fought.
This bill extends the authorization for the American Battlefield
Protection Program for 5 years at the current funding level and adds
sites of the Revolutionary War and the War of 1812 to the program's
eligibility. These grants have a 1/1 federal/non-federal match, which
is often exceeded on the non-federal side by private contributions from
people interested in American history.
This program is strictly voluntary. The bill specifies that land will
be acquired only from willing sellers and only at fair market value. It
also authorizes funding solely for land acquisition and does not incur
development or maintenance costs for the National Park Service.
It would be worth protecting these battlefields for the historic
value alone, but these activities also have economic value. Battlefield
tourists do not simply pass through a region. They pay for guided
tours. They stay in hotels and bed and breakfasts. They dine at local
restaurants. They browse the shops on town streets. According to a
study by the Virginia Tourism Corporation, Civil War tourists in
Virginia stay twice as long and spend double the money of the average
tourist. Of out-of-town visitors interviewed at 20 battlefields, two-
thirds were visiting the area specifically to see the battlefield, and
three-quarters said they would visit other Civil War sites while in the
area.
Virginia is a state where history is all around us, and to understand
this history is to understand ourselves as Americans. This effort
brings together federal, state, and private sector supporters to ensure
that future generations will be able to visit these sites and
appreciate the historic deeds that transpired on this hallowed ground.
Mr. COCHRAN. Mr. President, I am pleased to join the junior Senator
from Virginia in introducing the American Battlefield Protection
Program Amendments Act. I doubt there has been a more defining period
in this country's history than the Civil War. The scars left by that
conflict were deep and slow to heal. This year marks the 150th
anniversary of the first major Civil War battle in the western theater
and with Memorial Day approaching, the preservation of historic
battlefields reminds Americans of those who have fought and died for
freedom. Stressing preservation, commemoration, and education, the
Civil War Battlefield Preservation Program, for almost 15 years, has
partnered with neighboring communities to promote resource protection
and heritage tourism. By bringing together local, State, and national
stakeholders to preserve America's most historically significant Civil
War battlefields, the program has built a consensus to protect 19,000
acres of hallowed ground in 16 states. In my state, more than 3,300
acres of related Civil War battles have been protected. Among the many
other battlefields that have benefited from this program are: Antietam,
Maryland; Averasboro, North Carolina; Chancellorsville, Virginia;
Chattanooga, Tennessee; Gettysburg, Pennsylvania; Harpers Ferry, West
Virginia; Mill Springs, Kentucky; and Prairie Grove, Arkansas. I am
pleased that this legislation will extend program eligibility to
Revolutionary War and War of 1812 battlefields. This is an appropriate
time for the Congress to embrace this legislation and to preserve and
discover our history, our culture and our individual stories. By
highlighting the history and cultural significance of these battle
sites, we can help maintain our sense of place as Americans. With it,
we can be more aware of our history and reflect upon how we have become
who we are as individuals and who we are collectively as Americans. It
is an investment in the preservation of our history and culture, which
is well spent.
______
By Mr. CARDIN (for himself, Ms. Collins, Ms. Baldwin, Mr. Begich,
Mr. Cochran, Mr. Coons, Mr. Cowan, Mr. Menendez, Mr. Merkley,
Ms. Mikulski, Mr. Sanders, Mr. Schumer, Mr. Tester, Mr. Wicker,
Mr. Wyden, Mr. Carper, Mr. Portman, and Mr. King):
S. 917. A bill to amend the Internal Revenue Code of 1986 to provide
a reduced rate of excise tax on beer produced domestically by certain
qualifying producers; to the Committee on Finance.
Mr. CARDIN. Mr. President, next week is American Craft Beer Week so I
am pleased to rise today with my friend and colleague, the senior
Senator from Maine, Senator Collins, to introduce the Small Brewer
Reinvestment & Expanding Workforce Act of 2013, otherwise known as the
Small BREW Act. Our esteemed former colleague, Senator Kerry, now
Secretary of State, introduced this bill in the 112th Congress. I am
honored to take up the mantel.
The Small BREW Act of 2013 would reduce the excise tax on America's
craft brewers. Under current federal law, brewers producing fewer than
2 million barrels annually pay $7 per barrel on the first 60,000
barrels they brew, and $18 per barrel on every barrel thereafter, one
barrel = 31 gallons. The Small BREW Act would create a new excise tax
rate structure that helps start-up and small breweries and reflects the
evolution of the craft brewing industry. The rate for the smallest
packaging breweries and brewpubs would be $3.50 per barrel on the first
60,000 barrels. For production between 60,001 and 2 million barrels,
the rate would be $16.00 per barrel. Thereafter, the rate would be
$18.00 per barrel. Breweries with an annual production of 6 million
barrels or less would qualify for these recalibrated tax rates.
The small brewer threshold and tax rate were established in 1976 and
have never been updated. Since then, the annual production of the
largest U.S. brewery has increased from 45 million barrels to 105
million barrels. Raising
[[Page S3332]]
the ceiling that defines small breweries from 2 million barrels to 6
million barrels more accurately reflects the intent of the original
differentiation between large and small brewers in the U.S. Because of
differences in economies of scale, small brewers have higher costs for
raw materials, production, packaging, and market entry compared to
larger, well-established multi-national competitors. Adjusting the
excise tax rate would provide small brewers with an additional $67
million each year they could use to start or expand their businesses on
a regional or national scale.
Three years ago, the Joint Committee on Taxation, JCT, scored the
bill at roughly $33 million annually and $324 million over 10 years. A
more recent, March 2013, study on the costs and benefits of the House
companion bill that Harvard University economist John Friedman prepared
on behalf of the Brewers Association indicates that the bill would
directly reduce the excise tax revenue collected by the Federal
Government by $67.0 million in 2013. But Professor Friedman notes that
such a loss would be offset in large part by $49.1 million in new
payroll and income taxes collected on the increased economic activity.
As craft beer prices decline, demand would rise and the Federal
Government would collect an additional $1.1 million in excise taxes
from the increased sales. The net yearly revenue loss, therefore, would
be $16.9 million in 2013. The total net revenue loss over 5 years would
be $95.9 million. The bill would lead to the creation of 5,230 new jobs
in the first 12-18 months after passage and the cost of each new job in
foregone revenue would be just $3,300.
While some people may think this is a bill about beer, it is really
about jobs. Small brewers are small business owners in communities in
each and every State across the country. Nationally, small and
independent brewers employ over 108,000 full and part-time employees,
generate more than $3 billion in wages and benefits, and pay more than
$2.3 billion in business, personal and consumption taxes, according to
the Brewers Association. As the craft beer industry grows so, too, does
the demand for American-grown barley and hops and American-made
brewing, bottling, canning, and other equipment.
Maryland is home to 29 craft brewers, with at least 24 more in the
planning stages. According to the Brewers Association of Maryland,
there were 342 people employed full-time who were directly involved in
producing craft beer in the State last year, and another 1,420 people
employed full or part-time who were indirectly involved, including
brew-pub restaurant staff and associated employees. The brewing
industry accounted for $8.9 million in State excise taxes and $56.7
million in Federal excise taxes, paid some $13 million in wages, and
generated nearly $95 million in economic activity.
Small brewers have been anchors of local communities and America's
economy since the start of our history. Indeed, there is a Mayflower
document published in 1622 that explains why the Pilgrims landed at
Plymouth Rock which states, ``For we could not now take time for
further search or consideration: our victuals being much spent,
especially our beer.'' Presidents from George Washington to Barack
Obama have been homebrewers. Going back much further, the oldest extant
recipe is for beer. And many people would argue that our thirst for
beer is what drove man from being a hunter-gatherer to a crop
cultivator since the earliest domesticated cereal grains were various
types of barley better suited for beer production than making bread.
Saint Arnulf of Metz, also known as St. Arnold, who lived from roughly
582 to 640 AD, is known as the ``Patron Saint of Brewers'' because he
recognized that beer, which is boiled first, contains alcohol and is
slightly acidic, was much safer to consume than water. French chemist
and microbiologist Louis Pasteur, who discovered yeast and propounded
the germ theory that is the basis of so much of modern medicine, worked
for breweries for much of his career. The pH scale, the standard
measurement of acidity, was developed by the head of Carlsberg
Laboratory's Chemical Department in 1909. Dr. S