[Congressional Record (Bound Edition), Volume 146 (2000), Part 15]
[Senate]
[Pages 22123-22124]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 22123]]

                    RURAL TELECOMMUNICATIONS POLICY

  Mr. GRAMS. Mr. President, I rise today to express my views toward 
Federal implementation of the 1996 Telecommunications Act and my 
support for a strong national rural telecommunications policy.
  One of the most important responsibilities of a United States Senator 
is to exercise appropriate oversight of Federal regulatory agencies to 
ensure sound policy and the wisest use of taxpayers dollars. Toward 
this end, I have carefully monitored the Federal Communications 
Commission's implementation of the 1996 Telecommunications Act in an 
attempt to ensure that this agency follows the intent of Congress in 
developing a strong national rural telecommunications policy.
  I am proud to have supported the historic 1996 Telecommunications Act 
which deregulated the telecommunications industry for the first time in 
62 years. I believe this Act has begun to reach its promise of a 
competitive marketplace, lower prices, and greater consumer choice in 
services for every American. Since its passage, the telecommunications 
industry has grown dramatically, creating 230,000 more jobs nationwide, 
generating an additional $57 billion in revenues, and fostering an 
environment in which billions of dollars has been invested in 
telecommunications infrastructure. Despite this promising news, I am 
very concerned that the FCC's implementation of the Act has stifled the 
expansion of some of these benefits into rural parts of Minnesota.
  As a former small businessman, I often hear about the regulatory 
burdens experienced by my state's entrepreneurs and businesses. As 
someone who spent 23 years in the broadcasting industry, I also 
understand their frustration with the far-reaching regulatory authority 
of the Federal Communications Commission. It has become very clear to 
me that the administrative and regulatory burdens imposed upon small 
telecommunications providers reflect the Commission's neglect for the 
unique needs of rural telecommunications companies and their need for 
fairer regulatory treatment.
  The concerns of rural telecommunications companies are underscored in 
a letter sent to me by Farmers Mutual Telephone Company General Manager 
Robert Hoffman, who wrote, ``My concern with the FCC is all the 
additional filings and requirements they are placing on small telephone 
companies. A couple of years ago we didn't have any filings with the 
FCC. Now we have about ten annual filings which are confusing and labor 
intensive, and thus expensive for companies of our size. The FCC has no 
sympathy for small rural telecommunications companies.''
  As my colleagues know, this de-regulatory law has been the subject of 
litigation from the moment it was enacted due to what many perceive to 
be the FCC's over-regulatory approach to its implementation. Far too 
often, the Commission's rules have gone beyond Congressional intent. In 
particular, I am disappointed by the Commission's implementation of 
sections of the Act which are intended to preserve universal service 
assistance and the deployment of advanced telecommunications services. 
I am sure that my colleagues would agree that universal service 
assistance is the cornerstone of an effective rural telecommunications 
policy.
  In implementing the 1996 Act, the Commission has thus far failed to 
adhere to the important universal service principles established by 
Congress under this law. The Act specifically required the joint board 
on universal service and the FCC to base their universal service 
policies upon the following principles: the ability of quality services 
to be provided at just, reasonable and affordable rates; that all 
regions of the country should have access to advanced 
telecommunications services; that telecommunications services should be 
comparable to services in urban areas; and that universal service 
should be supported by specific and predictable funding mechanisms. 
Congress should clearly do more to hold the Commission's feet to the 
fire to ensure that there is proper implementation of universal service 
support.
  I have worked hard in Congress to ensure that the decades-long policy 
of universal service is preserved and advanced and that there are 
adequate revenues to maintain rural networks. Earlier this Congress, I 
wrote to FCC Chairman Kennard to express my opposition to any proposal 
which would transfer authority over the Universal Service Fund to the 
Department of Treasury. I believe that such an approach would undermine 
universal service policy and could have an adverse impact upon small 
telephone carriers and the communities they serve. More importantly, 
this plan would place the Universal Service Fund at great risk of 
manipulation by the federal government and the excessive spending 
habits of Members of Congress. I am pleased that the Administration has 
finally agreed that is not ``public money'' and has withdrawn this ill-
advised plan.
  I also believe that the Rural Utilities Service telephone loan 
program is vital to the development of a strong rural 
telecommunications infrastructure, and an essential component of our 
national commitment to universal service. I have repeatedly written the 
Senate Appropriations Committee to urge funding for the Rural Utilities 
Service telephone loan program. I firmly believe that RUS telephone 
loans have helped to improve telephone service in rural and high cost 
areas. Through RUS financing, telephone borrowers have made significant 
improvements to telecommunications services throughout rural Minnesota.
  My oversight of the FCC has also included efforts to make it easier 
for rural telecommunications carriers to meet the requirements of the 
Communications Assistance for Law Enforcement Act, or CALEA. In meeting 
with small telephone carriers from Minnesota earlier this year, I 
learned about the difficulty many carriers face in meeting the June 30, 
2000 CALEA compliance date. I agree that the FCC should grant a blanket 
extension of the compliance date so that rural carriers will not face a 
$10,000 penalty for each day that they were not in compliance with 
CALEA.
  For these reasons, I was pleased to join this past April with twenty-
five of my Senate colleagues in a writing the Commission to urge that 
it extend the June 30, 2000 CALEA compliance date for software upgrades 
by small carriers by one year. I regret that the Commission has a 
different interpretation of the needs of rural carriers in meeting this 
compliance date. I expect that the Commission's new process by which 
individual carriers could petition for and receive extensions to comply 
with CALEA has been time consuming and burdensome for small telephone 
carriers. I would be supportive of legislative action to address 
problems with CALEA compliance.
  During this Congress, I have also worked with the Minnesota 
Association for Rural Telecommunications and the Minnesota Telephone 
Association to encourage local phone competition in Minnesota by urging 
the Commission to address the petition filed by the State of Minnesota 
in 1997 on whether its ``Connecting Minnesota'' proposal between the 
state and a private company was consistent with the rights-of-way 
criteria established through Section 253 of the Act. Not surprisingly, 
it took the Commission nearly two years to analyze and rule upon the 
State of Minnesota petition. Rural consumers may witness additional 
entrants into local television markets following the Federal 
Communications Commission's decision to deny the petition.
  Bringing technology to rural areas has always been a top priority for 
me. As a member of the Congressional Internet Caucus, I have supported 
policies to address the growing concern in Minnesota about the 
``digital divide'' and access to the Internet. High-speed Internet 
access is a key to improved economic development in rural communities 
and important to Minnesota's farmers, schools, small businesses, and 
hospitals. For these reasons, I strongly

[[Page 22124]]

disagree with the Commission's interpretation of section 706 of the Act 
which requires the agency to encourage the deployment of high-speed 
Internet access and other advanced communications services to rural 
Minnesota. In my view, inaction by the FCC in removing barriers to the 
deployment of advanced telecommunications services can be overcome 
through the enactment of incremental proposals that complement 
marketplace solutions.
  More specifically, I am proud to be a cosponsor of the ``Universal 
Service Support Act'' introduced by Senator Conrad Burns and endorsed 
by the National Telephone Cooperative Association. This legislation 
will lift the regulatory caps imposed upon the Universal Service Fund 
that limit the amount of support that can be directed to rural 
telephone companies that serve high-cost areas of our state. These 
regulatory caps are inconsistent with the de-regulatory framework 
established by the 1996 Act and an unnecessary barrier to allowing 
further the further deployment of advanced telecommunications services 
in rural communities.
  I believe that we can also prevent rural communities from becoming 
technology ``have nots'' through repeal of the federal telephone excise 
tax. The 3 percent telephone excise tax was first established to fund 
the Spanish-American War of 1898 but has since become an obstacle to 
community investment in technology. I am proud to be a cosponsor of 
legislation to repeal this ``Tax on Talking'' and save taxpayers 
billions annually.
  There is no single solution to closing the digital divide and I also 
support S. 2572, the ``Facilitating Access to Speedy Transmission for 
Networks, E-commerce and Telecommunications Act,'' also known as the 
``FASTNET Act.'' This legislation will relieve mid-size telephone 
companies of excessive reporting requirements that are a barrier to 
additional company investment in Internet services that would serve 
rural communities. This legislation was passed unanimously by the House 
of Representatives and I hope that it will be considered by the Senate 
soon. Congress should also consider proposals that will authorize the 
Rural Utilities Service to provide low-interest loans to companies that 
are deploying broadband technology, as well as legislation that will 
analyze the feasibility of allowing low power television stations to 
provide data services to rural areas.
  As we embark on the 21st Century, it is vital that Minnesota's high-
tech businesses serving rural areas are not left behind in our new e-
commerce economy. During this session of Congress, I was an early and 
strong supporter of the enactment of ``E-SIGN,'' electronic signature 
legislation that will facilitate the growth of electronic commerce into 
rural Minnesota. This new law grants legal effect to electronic online 
electronic signatures that will enhance the ability of rural companies 
to complete business transactions and compete in our emerging digital 
economy. Rather than spend precious time and resources completing paper 
transactions, the E-SIGN Act will also allow consumers to pay bills, 
trade securities, and shop online for a home mortgage and complete the 
deal by striking a few keys on their computer.
  Finally, I am proud to have worked with my colleagues on the Senate 
Banking Committee to pass the ``Launching Our Communities Access to 
Local Television Act of 2000.'' The LOCAL TV Act would establish a 
$1.25 billion loan guarantee program to facilitate access to local 
television programming in rural Minnesota communities. I am very 
pleased that the Senate unanimously passed my amendment that will 
ensure that the National Cooperative Finance Cooperation is considered 
an eligible lender under the proposed loan guarantee program. The CFC 
is among several private sector lenders which have substantial 
experience providing multi-million loans in a cooperative environment 
and which have a track record of projects of this size in rural areas. 
I am confident that this legislation will be signed into law later this 
month.
  I am proud to have worked with consumers and Minnesota's rural 
telecommunications companies on these issues and other initiatives that 
will help our state and country to develop a strong rural 
telecommunications policy.

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