[Congressional Record (Bound Edition), Volume 159 (2013), Part 5]
[Senate]
[Pages 6644-6659]
[From the U.S. 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

[[Page 6645]]

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, 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

[[Page 6646]]

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.
  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, policymakers, 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

[[Page 6647]]

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 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

[[Page 6648]]

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