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THE TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT
(Senate - June 08, 1995)
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THE TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT
The PRESIDING OFFICER. Under the previous order, the Senate will
resume consideration of
S. 652, which the clerk will report.
The assistant legislative clerk read as follows:
A bill (
S. 652) to provide for a pro-competitive,
deregulatory national policy framework designed to accelerate
rapidly private sector deployment of advanced
telecommunications and information technologies and services
to all Americans by opening all telecommunications markets to
competition, and for other purposes.
Pending:
Dole amendment No. 1255, to provide additional deregulation
of telecommunications services, including rural and small
cable TV systems.
Pressler-Hollings amendment No. 1258, to make certain
technical corrections.
The Senate resumed consideration of the bill.
The PRESIDING OFFICER. Who seeks time?
The Senator from South Dakota.
Mr. PRESSLER. Mr. President, we are resuming consideration of the
telecommunications bill. We had opening [[Page
S7943]] statements last
night and we urged Senators to bring amendments to the floor. We
eagerly are awaiting the many amendments because we only have a certain
amount of time and we are urging all offices and all Senators who have
amendments to bring them to the floor. We are ready to go, as we have
emphasized in our opening speeches last night.
Let me just reiterate, I think the movement of this bill is very
important to America. It will create an explosion of new jobs, of new
devices, and of new activities. I know there are a variety of
amendments. We have welcomed them. I am prepared to yield the floor to
any other Senator who has statements at this time.
The PRESIDING OFFICER. Who seeks recognition?
The Senator from Nebraska.
Mr. KERREY. Mr. President, I restate at the beginning what I said
last evening; that is, I believe the distinguished chairman, the
Senator from South Dakota, and the distinguished ranking member, the
Senator from South Carolina, have done an awful lot of work on this, a
lot of good work. I appreciate the work they have done. They allowed me
to be involved in many of these steps.
But I say for emphasis, I cannot support this bill. I do not believe
it provides the kind of protection for consumers that needs to be
provided. I believe many of the statements that have been made thus far
overestimate the impact upon the economy and underestimate the
disruption that will occur to households throughout this country.
No Member should doubt this. Any Member who doubts the impact of this
legislation should go back and read clippings from 1984, when William
Baxter and Judge Greene signed a consent decree, or when the U.S.
Government and AT signed a consent decree in Judge Greene's court.
Talk to consumers and talk to households and citizens in 1984 and 1985,
and you will find an awful lot of those folks will say, ``Why don't you
put the phone company back together?''
I believe that action was good. That action was taken by the
Antitrust Division of the Department of Justice. I say that for
emphasis. Justice is given a consultative role in this legislation. But
they were the prime mover in breaking up the monopoly that many people
cite as the reason for wanting to go even further today.
Second, you will hear people come to the floor and say and act as if
somehow the regulations are really tying up American business. I intend
to come to the floor and bring profit and loss statements and to bring
economic analysis.
Where do you go in this world to find better phone service? Where do
you go in this world to find better cable? Where do you go in this
world to find businesses doing better than American businesses in
telecommunications? It may be in fact it is true that our regulations
need to be changed. But please let us not come down here and act as if
we have these corporations all handcuffed as if they are not making any
money, sort of hamstrung and cannot move and cannot reach the customers
they want to reach to generate the revenue they are trying to generate.
This piece of legislation will touch roughly half of the U.S.
companies in America and every single American household. Citizens who
wonder how it is going to affect them need to pay careful attention to
the 146 pages of legislation that is before this body today. The law
matters. The law determines how people behave. This law governs the
behavior of American corporations in nine basic communications
industries. If you are a household or a citizen who is affected by the
broadcast industry, this legislation affects you because this
legislation affects the broadcast industry. If you are a home or a
citizen who has cable coming into your household, this affects you.
This legislation affects the regulations governing the cable industries
of America and the telephone coming into your household.
This 146 pages in
S. 652 affects you because this deregulates the
telephone industries in America in a very dramatic and I believe
generally constructive fashion. If you are a person who goes to the
movies, or you are a person who buys CD-ROM's or buys records of any
kind, this affects you because it affects Hollywood, and it affects the
music recording business. It is written into this law.
If you have a newspaper coming into your household, or you subscribe
to magazines or electronic publishing of any kind, it affects you
because this legislation affects American publishers as well. If you
buy a computer or use a computer in the workplace, it affects you
again. If you purchase consumer electronics or are a consumer of
wireless services or satellite services, all the nine basic
communications industries, all growing relatively rapidly, all affect
each and every single American citizen in their homes and in their
workplace.
Let no Member of this Senate underestimate the impact of this
legislation. We had a great debate over the budget resolution. I know
from my own personal experience with that legislation that there was a
great deal of concern. Gosh, what if you vote for it, is it going to be
a problem? Are people going to get angry with you? There are changes in
Medicare, and cuts in programs. Are people going to get unhappy because
we finally are asking them to pay the bills of the Government? The
answer is probably yes. Probably they are going to get a little bit
upset.
This piece of legislation is more dramatic than the budget
resolution. This piece of legislation affects Americans far more
intimately than that budget resolution. There is not an American
citizen that will not be affected by this piece of legislation.
Last night on the floor of the Senate the distinguished Senator from
South Dakota said:
The recent hearing process which informed the Commerce
Committee and led to the development of
S. 652 began in
February 1994. In 1994 and 1995, the Commerce Committee held
14 days of hearings on telecommunications reform. The
committee heard from 109 witnesses during this process. The
overwhelming message we received was that Americans want
urgent action to open up our Nation's telecommunications
market.
Mr. President, I challenge that statement. I challenge the statement
that we can conclude from the hearing process that ``Americans want
urgent action to open up our Nation's telecommunications market.''
Tell me who it was that in a town hall meeting stood up and said,
``Senator Gregg, would you go to Congress and make sure you get down
there and change the laws to help our telecommunications market?''
Where do we have polling data that shows what the people of South
Dakota or Nebraska or South Dakota or New Hampshire or elsewhere say
about this particular piece of legislation? Were they heard in the
hearing procession?
If you look, in fact, at the hearings held on this bill, on January
9, 1995, the committee had their first hearing. They heard from the
distinguished majority leader, the Senator from Kansas, Senator Dole.
They heard from the chairman of the House full Committee on Commerce,
Congressman Bliley. They heard from the chairman of the Subcommittee on
Telecommunications, Jack Fields. That was panel No. 1.
Then on the 2d of March, the committee held another hearing. They
heard from Anne Bingaman, who is the Chief of the Antitrust Division at
the Department of Justice. They heard from Larry Irving, Assistant
Secretary of the National Telecommuncations Information Administration
in the Department of Commerce, which is being proposed to be abolished,
an interesting witness; Kenneth Gordon, representing NARUC, a State
regulatory agency. That is panel No. 2 on the 2d of March.
Also, on the 2d of March another panel, Peter Huber, senior fellow
from the Manhattan Institute; George Gilder, senior fellow from the
Discovery Institute; Clay Whitehead with Clay Whitehead & Associates;
Henry Geller from the Markle Foundation; John Mayo, professor at the
University of Tennessee; Lee Selwyn, professor of economics and
technology.
Then on the 21st of March the committee met again. This is the third
hearing on this particular piece of legislation. On that day there were
three panels.
Panel No. 1: Decker Anstrom with the National Cable Association;
Richard Cutler, Satellite Cable Services; Gerald Hassell, Bank of New
York; Roy Neel, U.S. Telephone Association; Bradley Stillman, Consumer
Federation of America. [[Page
S7944]]
Then the second panel: U. Bertram Ellis, Ellis Communications, Inc.;
Edward Fritts, National Association of Broadcasters; Preston Padden,
Fox Network; Jim Waterbury of NBC Affiliates.
Panel No. 3: Scott Harris from the FCC, not on behalf of the FCC but
his own personal testimony; and Eli Noam, Communications Institute for
Teleinformation. That was the third set of hearings.
On the 23d of March, the full committee had their markup, and the
bill was reported out 17 to 2.
I would like to put on my glasses and read the small print of some of
the things that were said in these hearings. Just again, the idea here
is I am respectfully challenging what I think is a very important
statement, a very important statement that lots of others are going to
make as well; that is, that the overwhelming message we received was
that Americans ``want urgent action to open up our Nation's
telecommunications market.'' Keep that in mind.
What do the households in your State want? What do the citizens of
your State want? What do the people who elected you and sent you here
to the U.S. Congress want? What do they want?
Let us see what they wanted as we look at the hearings that were
held. They said: First, there were the three Members of Congress.
Senator Dole advocated quick passage of telecommunications
legislation. He noted that rural Americans are concerned
about telecommunications legislation, as it offers tremendous
opportunities for economic growth. He testified that
legislation should underscore competition and deregulation,
not reregulation.
Chairman Bliley stated that the goals of telecommunications
legislation should be to: one, encourage a competitive
marketplace; two, not grant special Government privileges;
three, return telecommunications policy to Congress; four,
create incentives for telecommunications infrastructure
investment, including open competition for consumer hardware;
and, five, remove regulatory barriers to competition.
Chairman Fields stated telecommunications reform is a key
component of the legislative agenda of 104th Congress. He
chastised those who speculated that Congress will be unable
to pass telecommunications legislation this year. He asserted
that the telecommunications industry is in a critical stage
of development, and that Congress must provide guidance.
I did not hear any of those three witnesses come and say ``Americans
want urgent action to open up the telecommunications market.'' They are
talking about American corporations. They are talking about American
industry and advising them that they want to do things that they are
currently unable to do because the regulations say they are prohibited
from doing it. That is what this bill is about, businesses that want to
do something that they are currently not allowed to do. That is what it
is all about--change in the law. All of these various businesses do
something that they currently cannot do. In many cases, I support it.
But I am not getting calls from people at home saying, ``Gee, Bob, I
hope you are really getting there because we want to make sure that our
Nation's telecommunications markets get opened, there is a very urgent
need to do it.''
Listen to panel No. 1, second hearing:
Anne Bingaman testified that the administration favors
legislation that is comprehensive and national in scope,
opens the BOC local monopoly, and provides for
interconnection at all points.
She claims that local loop competition will bring consumers
the same benefits that long distance competition brought
consumers when the Justice Department broke up AT
I believe that Anne Bingaman is right, but I caution my colleagues it
took 7 or 8 years before the consumers gave you a round of applause.
There was a long period of time after 1984 when people, at least in my
State, were saying what in the Lord's name is going on here? All of a
sudden I cannot get a phone into my house; I have to go to a different
provider; I have competition; I have choice. What the heck is going on?
What was wrong with what they had? they were saying to me. I said,
well, stay with this thing. It is going to work. We are going to open
up the long distance market. We are going to have competition. It is
going to be good. Trust me. I trust it is going to be good.
And it has worked. It was not coming from home, Mr. President. It was
not coming from households and citizens who said, Gee, Governor, would
you write a letter to the Justice Department, old Bill Baxter back
there, and see if he can get together with AT and file a document
down in Judge Greene's court because we would really like to see the
RBOC's spun off, and all that sort of thing.
It has worked. Anne Bingaman is correct that it worked. But it took
years before we understood that citizens began to see the benefits.
Larry Irving agreed that opening telecommunications markets
will promote competition, lower prices, and increase consumer
choice. He stated that the government must maintain its
commitment to universal service. He stated the
administration's concern that private negotiations may not be
the best way to open the local loop to competition. He also
asserted that a date certain for elimination of the MFJ
restrictions will hurt efforts to negotiate interconnection
agreements with Bell operating companies.
Kenneth Gordon stated the State regulators, including those
in Massachusetts, were once a barrier to competition, but are
now at the forefront of promoting competition. He said that
States must also retain control of universal service.
And he goes on to make some other additional comments.
But these three witnesses are beginning to talk about the consumers.
They are beginning to talk about the impact upon the American people.
They are beginning to express, particularly the last witness, Larry
Irving, they are beginning to express concern for what happens when
deregulation and competition come in. But, again, no overwhelming
testimony here. None of them comes in and says we have to do this
because the American people are banging down our doors and urging us to
do this; no statement that has the overwhelming support of the American
people; merely saying that we think it is right to deregulate; we think
it will be good to deregulate; we think this will be good for the
people.
Now, how many of us understand the 1994 election? A lot of us here
have heard people come down to the floor and say it was this, that, and
the other thing. I agree with an awful lot of it. Most of us understand
one of the things that was going on in 1994, people said we do not
think you people in Congress understand. We do not have any power. We
are disenfranchised. We do not feel a part of this process.
Mr. President, they have not been a part of this process, in my
judgment. This is about power. Corporations should do things they
currently cannot do. They are telling us it is going to be good for the
American people. They are telling us it is going to be good for
consumers. They are telling us it is going to be good for jobs. They
are telling us it is going to be good for the people. It is not the
people telling us it is going to be good for them, Mr. President.
Then on that same date, on the second panel, Peter Huber noted that a
date certain for entry is necessary because the FCC and the Department
of Justice are very slow to act. And this is a very important issue. We
have to get the witnesses coming in and saying that the FCC is a
terrible regulatory body and they are very slow. This is all language
to give you the impression that somehow American communications
businesses are burdened down by these nasty bureaucrats over at FCC.
Peter Huber said he advocated swift enactment of legislation with a
date certain for entry into restricted lines of business.
Then George Gilder, the greatest advocate of deregulation of all,
also advocated swift congressional action, claiming that
telecommunications deregulation could result in a $2 trillion increase
in the net worth of U.S. companies.
He said the U.S. needs an integrated broadband network with
no distinction between long haul, short haul, and local
service.
Clay Whitehead comes in and says:
Congress should not try to come in and chart the future of
the telecommunications industry but should try to enable it.
He also advocated a time certain for entry into restricted
lines of business.
Then Henry Geller comes in. He agrees with the previous speakers that
Congress should act soon.
He said that a time certain approach would work for the
``letting in'' process, allowing competition in the local
loop, as well as the ``letting out'' process.
Geller advocated that the FCC should allow users of
spectrum the flexibility to [[Page
S7945]] provide any
service, as long as it does not interfere with other
licensees.
John Mayo testified that the spread of competition in other
markets over the last decade supports the opening of the
local loop. He said that the interLATA telecommunications
competition has been a success and Congress should follow the
same model for local exchange competition.
Lee Selwyn asserted that there will be no true competition
in the local loop unless all participants are required to
take similar risks. Selwyn also testified that premature
entry by the Bell operating companies into long distance
could delay the growth of competition for local service.
I frankly do not know who all these individuals are. I do not know
whether they are consultants for one company or another. I suspect that
all of them have a fairly defined sense of view, defined either by the
companies or encouraged by the companies as a result of previously
reached conclusions.
Again, I do not hear individuals coming in and saying, do you know
what it is like out in the households today trying to get cable
service, trying to keep phone service? Do you know what consumers are
saying out there today? Do you know what individuals are saying when
all of these entities have downsized over the last 4 or 5 years? Any
expression of concern for what technology does to families on the
underside of that two-edged sword? Any expression of concern from any
of these highfalutin individuals that are paid a lot of money to
provide us with their advice about what is going on out there in
America?
No, just swift action, by God. Let us get the laws out of the way,
get rid of the regulations. Let these companies do whatever they see
fit, whatever they decide is best for the bottom line. Whatever they
decide is best for the shareowners will in the end be better for their
customers.
Then on March 21, Mr. President, three panels come before the
committee. This is getting a little lengthy. I do not think I will read
every single one of these.
Decker Anstrom, from the cable industry, they support
telecommunications legislation because the cable industry is ready to
compete.
Roy Neel agreed with Anstrom. He is with the U.S. Telephone
Association. He agrees that cable regulation repeal would allow for
investments incentive.
Richard Cutler testified that the 1992 Cable Act had a
devastating effect on small cable operators.
Bradley Stillman said that the 1992 Cable Act resulted in
lower programming and equipment prices for consumers.
Weighing in that in fact the Cable Act of 1992 did work.
Gerald Hassell stated that true competition will only
develop if both cable and telephone survive and flourish.
I happen to agree with that. I think if we are to have competition at
the local loop, we have got to make sure we have two lines coming in.
One of my problems with this legislation is it allows acquisition of
cable in the area by the telephone company. You folks out there right
now in your households, you have a cable line coming in; you have a
phone line coming in. You may not have both for long. You may have one
line and only one opportunity to choose. That is not my idea of
competition.
Panel No. 2.
Bertram Ellis testified that the local ownership
restrictions no longer serve the public interest. He said
that allowing local multiple ownership will permit new
stations to get on the air that would not otherwise be able
to survive. He also stated that local marketing agreements--
joint venture between broadcasters--
Et cetera, et cetera. Open it all up. Let us get rid of the
restrictions. I do not care if they own 50 percent of the market, 100
percent of the market. I do not care who controls. Just let the flow of
the cap determine the public interest.
There is no public interest here involved any longer. We do not care
who controls the information, who controls the stakes, who controls the
radio, the newspaper.
Mr. President, again, as I said at the start, this is about
information. It is about communication. And it does matter who controls
it. It does matter if we have one single individual controlling a
significant portion of the local market, controlling our access to
information. It does matter. There is a consumer interest.
I am an advocate of deregulating the telecommunications industry. I
do not know that I am, but I may be the only Member of Congress who can
stand here and say that I signed a bill in 1986 that deregulated the
telecommunications industry in Nebraska, that removed the requirement
of them to go to the local public service commission for rate increases
because I thought, and believe still, it would free up capital and they
were in fact just spending a lot of money on lawyers and not really
serving the public's interest requiring the companies to come forward.
So I am an advocate of deregulation. But I also believe there are times
when we need to declare and protect the public interest. And I do not
believe in many cases this piece of legislation does that. I have
already heard people come to the floor and say the best regulator is
competition.
That is not true, Mr. President. If you want to get goods and
services delivered in the most efficient fashion, competition does
that. That is true. If you are trying to get goods and services at the
highest quality and lowest price, competition is the best way to get
the job done.
However, competition is not the best regulator. The only time we
should be regulating is when we say we have the public interest in
doing this. There is no other way of getting it done. The market is not
going to be able to accomplish it. We agree there is going to be cost
on businesses to do it. We believe it is a reasonable cost. We measure
the cost. We assess the cost. We do not go blindly and say there is no
cost to this deal. We understand the costs going in. But we say the
public interest is so great that we believe it is necessary to do that.
That is the purpose of regulation. Competition is not the best
regulator. It is the best way to get goods and services delivered in a
highly efficient fashion. But competition, unless you believe, unless
you are prepared to come down to the floor and say American public
corporations performing for their shareowners and American CEO's
performing for their shareowners, worrying about what the analysts are
going to say on Wall Street about the value of their stock, facing a
decision of laying off 1,000 people that would improve the value of
their stock--and make no mistake about it, analysts love cold blooded
CEO's. You read it in the paper all the time.
Some CEO just takes over a company, reduces the force by 20 percent.
What do the analysts say? ``Buy the stock; this guy is doing the right
thing.'' So they are rewarding the downsizing, they are rewarding the
cutting of the employee base.
Does it improve the productivity of the company? Absolutely. Does it
make the company more competitive? Absolutely. Make no mistake, it has
a devastating impact upon those families, upon those individuals who
work for the company.
We do not find, I think, any evidence that CEO's are heartless, but
when they are out there trying to perform for their share owners, they
are not trying to satisfy some public interest, they are trying to
satisfy the interest of people who own shares in their stock.
On that same day, Preston Padden advocated deregulation; Jim
Waterbury said retain some ownership rules; on panel three they had
Scott Harris testifying on behalf of himself, not the FCC, and Eli
Noam, an expert in telecommunications. The two individuals debated a
section of our telecommunications law called 310(b), which is foreign
ownership. That is enough. That should give people some sense of what
went on.
There were three hearings--three hearings, Mr. President. Three
hearings that were held, four if you include the statements made by the
majority leader, the chairman of the House Commerce Committee, and the
chairman of the Subcommittee on Telecommunications. There were three
total hearings, and I do not believe that the sum and substance of
those hearings justifies the conclusion that the American people
overwhelmingly back this particular piece of legislation.
Mr. President, I was on a trip this past week, a trip with the
Intelligence Committee on narcotics. We went to Colombia, Peru, and
Bolivia. One of the places I went was down in the Amazon River Basin on
the Ucayali River. I went to church on Sunday, to mass actually, more
appropriately, a Catholic [[Page
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just happened that Sunday was celebration of Pentecost. Being a good
Christian man, I go to church regularly, but I must confess, I did not
remember all the details of what Pentecost meant. I listened carefully.
Just by coincidence, the service, the Pentecost is about communication.
The prayer of Pentecost is that we appeal to the Holy Spirit to come
and fill our hearts with his love. That is the appeal.
The priest that Sunday said to the congregation that the tongue is
the most powerful organ in the human body, that it delivers the word
and a word can unite us, it can divide us, it can cause us to love one
another, it can cause us to hate one another. The word coming from God
can change our life. The word coming from human beings can inform us,
change us and can cause us to reach all kinds of conclusions.
That is what this debate is about, Mr. President. You can turn on the
news tonight, you can pick up the newspaper in the morning, and you
watch and read what is going on. These people have the control over
what they are going to put on the air, what they are going to put in
the newspaper, what they are going to have in the form of serving up
information to you and me. It is about power, Mr. President, power to
do what they want to do.
Again, I am not against deregulation, I am not against changing the
1934 Communications Act, but this piece of legislation is being driven
by a desire of corporations to do things that they currently are not
allowed to do.
I also brought down here this morning some additional things. I do
not know if the managers want to speak. I will be glad to yield or keep
going and read some things that the press has said about this whole
process.
I am not an apologist of the press. Sometimes they get it right,
sometimes they get it wrong. Form your own impression. This is people
observing this whole process, and this is what they say about it. Let
us see if you hear anything about the American people coming here in
airplanes and buses and demonstrating out front with placards,
``Deregulate the telecommunications industry.''
Here is one from Ken Auletta, ``Pay Per Views,'' in the New Yorker,
June 5, 1995. Mr. Auletta says:
The hubris was visible at the House Commerce Committee
briefings, on January 19th and 20th. Held in the Cannon
Office Building, they were closed to the press and to the
Democrats. At dinner the first night, Gingrich was the
featured speaker, and he took the occasion to attack the
media as too negative and too biased, and even unethical.
After the speech, Time-Warner's CEO, Gerald Levin, rose and
gently rebuked Gingrich for being too general in his remarks.
Surely Gingrich did not mean to tar all journalists with the
same brush--to lump, say, Time in with the more
sensationalist tabloid press? ``I hope you don't mean all of
us,'' Levin concluded. ``Yes, I do,'' Gingrich is reported to
have replied. ``Time is killing us.'' And, according to
several accounts, he went on to say that he had been
particularly incensed by Time's account of his mother's
interview with Connie Chung, of CBS . . .
[O]thers found it chilling that the Speaker would press the
CEO's to have their journalistic troops hold their fire.
``We're at greater risk now of that kind of pressure having
an impact.''
The interviewee went on to say:
``Traditionally, there has been a separation between news
and corporate functions. Given the consolidation, you may
have more instances where the top business executives, who
have many corporate policy objectives, may find it tempting
to impose control over their news divisions to advance
corporate objectives.'' . . .
Another observation is from ``The Mass-Media Gold Rush,'' Christian
Science Monitor, Jerry Landay, reporting June 2, 1995:
The players are limited to the cash-rich: The regional
phone companies, networks and cable companies, and
conglomerates such as Time-Warner. Smaller ownership groups,
such as local television stations, are distressed. They
expect the balance of power to swing to the cash-rich
networks, which will gobble up many of them . . .
It goes on to say:
To influence the House legislation, legions of lobbyists
swept across Capitol hill, with bags of campaign cash. Over
the past 2 years the communications industry has handed out
some $13 million. Republican lawmakers literally invited
industry executives to tell them what they wanted. They're
getting most of it.
The next one is from Congressional Quarterly Weekly. The headline is:
``GOP Dealing Wins the Votes for Deregulatory Bill.''
After doling out legislative plums to broadcasters, phone
companies and carriers, top Republicans on the House Commerce
Committee won bipartisan backing for a bill to promote
competition and deregulation in the telecommunications
industry. The committee's leaders--Chairman Thomas J. Bliley,
Jr., R-VA, and Telecommunications and Finance Subcommittee
Chairman Jack Fields, R-Texas--engaged in a lengthy give-and-
take with committee members and telephone company lobbyists
over the bill's rules for competition in local and long-
distance phone markets. . . .
The intra-industry horse trading left consumer advocates
feeling frustrated and ignored on the sidelines. . . . The
biggest winners at the markup were broadcast networks, media
conglomerates and cable companies.
The next one is from the New York Times, Edmund L. Andrews. Headline:
``House Panel Acts to Loosen Limits on Media Industry.'' Dateline, May
26, 1995:
Rolling over the protests of several Democrats, the House
Commerce Committee voted today to kill most cable television
price regulation and lift scores of restrictions on the
number of television, radio and other media properties a
single company may own. . . .
ABC, NBC and CBS and other large broadcasters like the
Westinghouse Electric Company, the Tribune Company and Ronald
O. Perelman's New World Communications Group all lobbied for
sharply increasing the number of television and radio
stations a company could own nationwide. . . .
But industry lobbyists have seldom met more receptive
lawmakers. Committee Republicans have held numerous meetings
with industry executives since January, some behind closed
doors, at which they implored companies to offer as many
suggestions as possible about the ways Congress could help
them.
Next, an article that appeared in the Washington Post, a longer
article that I will take pieces from, written by Mr. Mike Mills on the
23d of April, 1995:
The Bells--the folks who bring you local phone service--
like to play political hardball, and they have been
remarkably successful at it. This year, the Bells stand a
very good chance of winning most of the prize they've sought
for the last decade: Freedom from U.S. District Judge Harold
H. Greene. . . . If they get what they want, the Bells can
claim a place among history's most powerful Capitol Hill
lobbyists, ranking them with the oil industries of the 1970's
and the steel trusts of the turn of the cen-
tury. . . .
All that lobbying costs money. According to the Federal
Communications Commission, the Bells' individual phone
companies spent $64 million on State and Federal lobbying
expenses in 1993 and $41 million in 1992. Bell lobbyists
themselves say their annual budget for influencing Congress
has been $20 million a year in recent years, but has dropped
to half of that this year. . . .
It goes on and on:
``Right now, the doors to the candy stores are wide open,''
said Brian Moir, who heads a coalition of business telephone
users fighting the Bells.
These are the customers, Mr. President, make no mistake about it.
These business users are the customers. These are not the companies
providing the service. These are people using the service. This man
says, ``. . . the doors to the candy store are wide open.''
It continues:.
The Bells figure, ``Why focus on one thing? Just go in with
a frontloader.'' They're covering the waterfront. And why
not? Moir estimates that if States' regulatory powers are
limited, the Pressler bill will raise the typical Bell
residential telephone bill by $3 to $6 a month. For the
companies, that would raise it at least $24 billion over 4
years.
An editorial in the Baltimore Sun called ``Communicating Again,''
April 3, 1995:
Still, there are hundreds of billions of dollars at stake,
and the lobbying is as fierce as Washington has seen in many
years. Though the rivals like to make their cases in terms of
what's best for the consumer, the quarrel is really over who
gets a head start in capturing market share.
No one can deny that that is true.
Edmund L. Andrews, ``Big guns lobby for long-distance; insiders are
trying to influence bill,'' Raleigh News & Observer, March 28, 1995:
With so much at stake, and so little to pin on labels of
right and wrong, the various factions are seeking a personal
edge by throwing into the fray as many people with friends in
high places as possible. All of which made telecommunications
as much of a bonanza for lobbyists this year as health care
was last year. ``Everybody in this town who has a pulse has
been hired by the long-distance coalition or the Bell
operating companies,'' said Michael Oxley, R-Ohio, a member
of the Commerce Committee. ``It's just amaz-
ing. . . .''
Michael Ross with the Pittsburgh Post-Gazette, January 20, 1995.
Headline: ``Gingrich Defends Book Deal; [[Page
S7947]] GOP Beats
Murdoch.'' I am sorry I brought in all this. This article is talking
about this bill:
Besides Murdoch, there were 10 other executives at the
Capitol session, including Thomas Murphy of Capital Cities/
ABC; Robert Wright, NBC; Howard Stringer, CBS; Bill Korn of
Group W; and John Curley of
Gannett. Gingrich was to address a private dinner last night
for the communications firm chiefs in the Cannon House Office
Building. . . .
Gingrich said the meeting yesterday was closed because ``we
want their advice on how the United States can be the most
competitive country in the world, and we would just as soon
not have them give advice with the Japanese and Europeans
listening.''
I do not believe it is the Japanese and the Europeans they were
trying to keep out.
GOP organizers sought to keep the meeting secret, excluding
notice of the events from the official daily calendar. But
word leaked out from the executives, prompting protests from
consumer advocates and from the committee's former Democratic
chairman, Rep. John Dingell of Michigan, now the ranking
minority member.
The last one is a piece that appeared in the Washington Post, again
Mike Mills:
Consumer advocates yesterday protested plans by House
Republicans to hold 2 days of private meetings with top
communications executives that will feature a dinner with
House Speaker Newt Gingrich. . . .
Media will not be present so Members and chief executive
officers of various companies. . . . have honest and
informative discussions.''
Boy, if that is not a keyword to telling you to hang on to your
billfold I have not heard one.
``What policies can the Congress promote or repeal that
would help your company to be more competitive and successful
domestically?'' the letter asked. ``And, second, what
obstacles does your company face when trying to do business
abroad?''
I do not mind in general saying to any company in America, is there
anything we are doing we should not be doing, anything we are doing
with regulations or rules that do not make any sense at all? Lord
knows, we have lots of things we do to small business and big business
alike that add no value at all to the public interest, that you really
cannot defend it all, have been around a long time, and you scratch
your head trying to figure out why they are even there.
But that is not this invitation. This does not say after you
established what the public interest is, is there anything here you
would like to get out of the way that makes no sense at all; is there
any nonsensical regulation? This did not add any qualifier in the
public interest.
This merely says is there anything out there adding cost to your
business that you would like to get rid of? It would be like me saying,
``I would like to drive about 90 miles an hour, would that be OK? Can
you get the law of Nebraska to let me drive my automobile 90 miles an
hour? I find that a major inconvenience. I like to drive fast. Why
don't you have a meeting and ask people driving automobiles what they
think about that? Maybe we can change the rules and regulations to
accommodate them as well.''
Mr. President, I will wrap this up by quoting from an article, I
believe it was David Sanger of the New York Times. The article
describes the conflict between the United States of America and the
Japanese over automobiles. It was assessing the impact of, I think, the
correct decision by the Trade Representative to say to the Japanese,
``It is time to open up your market and let our parts, in particular,
be sold and loosen the restrictions so we can begin to sell automobiles
in Japan.'' It was trying to measure the impact. It interviewed a man
who was the trade minister from Indonesia, I believe.
You know, we are worried about Japan and the United States. They are
the big ones. They are the big elephants in this jungle. And they have
a saying in Asia. They say that when the elephants fight, the grass
gets trampled. But even worse, they said, is when the elephants make
love. That is what we have here, Mr. President. We have a real lovefest
going on.
Corporations have basically all signed off on this deal. They have
had the opportunity to look at the language. They have had the
opportunity to examine the details, and they are saying it looks pretty
good to them. I say it is time for us to come to the floor to debate
this. I hope we are, in fact, able to enact legislation. I intend and
expect to support it. I cannot support it in its current form, but I
want the American consumer to be heard on the floor of the Senate. I
want the interests of American households to be considered and the
interests of the average American citizen to be considered when this
piece of legislation, which is important, is being debated.
I yield the floor.
Mr. DORGAN. What is the pending business?
The PRESIDING OFFICER. The pending measure is amendment No. 1258
offered by the managers of the bill.
Mr. DORGAN. This is the managers' amendment.
The PRESIDING OFFICER. Is there further debate on that amendment?
Mr. HOLLINGS. We can go right ahead with the Senator's amendment.
Mr. PRESSLER. If it has not been laid aside, and if it is proper at
this point, we will lay that amendment aside so that the Senator from
North Dakota can offer his amendment.
I ask unanimous consent that the managers' amendment be laid aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from North Dakota is recognized.
Amendment No. 1259
(Purpose: To require certain criteria upon the designation of an
additional Essential Telecommunications Carrier)
Mr. DORGAN. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER (Mr. Kyl). The clerk will report.
The legislative clerk read as follows:
The Senator from North Dakota [Mr. Dorgan] proposes an
amendment numbered 1259.
The amendment is as follows:
On line 24 of page 44, strike the word ``may'' and insert
in lieu thereof ``shall''.
Mr. DORGAN. Mr. President, in the telecommunications bill there is a
provision with respect to universal service that describes certain
conditions in which the State designates additional essential
telecommunications carriers that may impose certain requirements. I
think it is sufficiently important to say the State shall impose those
requirements. I would like to explain why this is important to me and
why I think it is important to rural America.
Before I do, let me comment on a couple of broader points about this
legislation. Clearly, there would never be a circumstance where
legislation affecting the telecommunications industry would be moving
through the Congress without their being an intense interest by the
telecommunications industry. The fact is that without congressional
involvement in trying to set some new rules for competition, the
industry itself is out creating the rules.
That is why universal service legislation is necessary. We must
establish some guidelines about where we move in the future and what is
in the public interest as we do that.
I come from a rural State. I know there are a lot of people in this
Chamber who worship at the altar of competition and the free market.
That is wonderful. But, I have seen deregulation. I have seen the mania
for deregulation that does preserve for some people in this country
wonderful new opportunities of choice and lower prices: Example:
Airline deregulation. There was a move in this country and in these
Chambers for airline deregulation, saying this will be the nirvana. If
we get airline deregulation, Americans are going to be better served
with more choices, more flights, lower prices, better service.
Well, that is fine. That has happened for some Americans but not for
all Americans. Deregulation in the airline industry has had an
enormously important impact if you live in Chicago or Los Angeles. If
you want to fly from Chicago to Los Angeles you check the official
airline guide and find out what flights are offered. You have a broad
range of choices, a vast array of carriers competing in a market that
is densely populated, where they have an opportunity to make big money.
In this market, there is intense competition for the consumers dollar
in both choice and price.
But I bet if you go to the rural regions of Nebraska, and I know if
you go [[Page
S7948]] to the rural regions of North Dakota and ask
consumers, what has airline deregulation done to their lives, they will
not give you a similar story. They will not tell you that airline
deregulation has been good, providing more choices and lower fares.
That has not been the case.
In fact, airline deregulation has largely, in my judgment, hurt
consumers in rural America. We have fewer choices at higher prices as a
result of deregulation.
For that reason, when we talk about deregulation and setting the
forces of competition loose in order to better serve consumers, we need
to understand how it works. Competition works in some cases to an
advantage of certain consumers. In other cases, it does not.
That is why when the telecommunications legislation was crafted I was
very concerned about something called the universal service fund. For
those who don't know, I want to explain what the universal service fund
is.
It probably stands to reason that it is presumably less expensive to
put telephone service into New York City when you spread the fixed
costs of the telephone service over millions of telephone instruments;
less expensive to do it there than to go into a small town of 300
people that is 50 to 100 miles from the nearest population center. How
will you decide how to spread the fixed costs of telephone service over
300 people? The fact is, you have a higher cost of telephone service in
rural areas of our country.
We have always understood, however, that a telephone in Grenora, ND,
is just as important as a telephone in New York City, because if you
don't have the telephone in Grenora, the person in New York City cannot
call them, and vice versa.
The universal service nature of communications is critical. The
presence of one telephone instrument makes the other telephone
instrument, no matter where it is in this country, more valuable.
That is why we have, as a country, decided that an objective of
universal service makes good sense. We have generally tried to move in
that direction to see that we use a universal service fund to even out
the costs and the price to the consumer.
Therefore, even in the higher cost areas, the lower populated, more
rural areas, we are able to bring the cost down to the consumer with a
universal service fund by moving money into those areas to try to help
keep prices down for the consumer. Therefore, consumers will be able to
afford this service and we will have a more universal nature of that
service.
Well, in this legislation, Mr. President, we understood that there
will be substantial competition in many areas of telecommunications.
Take my home county of Hettinger County, ND, a very small county,
several thousand people, about three towns, the largest of which is
1,200 or 1,400 people, no one will be rushing in to provide local
telephone service in Hettinger County.
This is not a case where you fire the gun and at the starting line
you have eight contestants lined up to find out who can win the
commercial battle to serve the telephone needs of that small rural
county. You might, however, have someone decide to come in and serve
one little town in that county, because maybe it would be worthwhile to
serve that little town, but only that town.
If they bring telephone needs to that town and take the business away
from the existing service carrier, the rest of the services would be
far too expensive and the whole system collapses.
For that reason, in this legislation we described a condition in
which, if someone comes in and decides to serve in one of those areas,
one of the conditions is that they would have to serve the entire area.
They would be required to serve the entire area as a condition of
receiving these support payments from the universal service fund.
Then the bill also said that in designating an additional essential
telecommunications carrier to come in and compete in a rural area,
aside from requiring they have to serve the entire area, they cannot
come in and cherry-pick and pick one little piece out.
Aside from that, the bill said that the States may require there be a
designation; that the designation would be: First, in the public
interest; second, encourage development of advanced telecommunications
services, and third, protect public safety and welfare.
My universal service amendment very simply says that provision of law
shall be changed from ``may'' to ``shall.'' In other words, the States
shall require that there be a demonstration of those three approaches.
I think it is very important that those who live in rural America,
who are not going to bear the benefit of the fruits of competition, are
given protection.
That is the purpose of my offering a universal service amendment.
This amendment is supported by the National Telephone Cooperative
Association, National Rural Telecom Association, the USTA, Organization
for Protection and Advancement of Small Telephone Companies.
They understand, like I understand, that the chant of competition is
not a chant that will be heard in the rural reaches of our country. We
are simply not going to see company after company line up to compete
for local service in many rural areas.
If that does not happen, and it will not, we need to make certain
that the kind of telephone service that exists in rural counties will
be the kind of telephone service that brings them the same opportunity
as others in the country will be provided.
We should make sure that we have a buildout of the infrastructure, so
this information highway has on ramps and off ramps--yes, even in rural
counties of our country.
If we, in the end of this process, finish the building out of an
infrastructure in telecommunications by having a continued, incessant
wave of mergers and consolidations into behemoth companies that are
trying to fight to serve where the dollars are, big population centers,
affluent neighborhoods, but decide to leave the rural areas of the
country without the build-out of the infrastructure and without the
opportunities that they should have, we will, in my judgment, have
failed.
Mr. President, while I am on my feet I would like to comment on a
couple of other points in this legislation. I supported the legislation
coming out of the Commerce Committee and indicated then that I had some
difficulties with several provisions in it.
One concern I have deals with the provision in the legislation on the
subject of ownership restrictions.
It is interesting that we have in this bill the inertia to try to
provide more competition, and then we, in this attempt to say to those
who want to own more and more television stations, yes, we will lift
the barrier here, we will change the rules so that you can come in and
consolidate and buy and own more television stations.
That does not make sense to me. That is moving in the opposite
direction. The telecommunications bill is about competition. I do not
think we should say it is fine with us if one group or consortium
decides to buy more and more television stations and we lift the
ownership limit from 25 to 30 percent--some say to 50 percent--of the
audience share. I think that flies exactly in the opposite direction of
competition.
Consolidation is the opposite of competition. I intend to offer an
amendment on this and hope we will preserve the opportunity to decide
what is in the public interest with the Federal Communications
Commission. Instead of having an artificial judgment in this bill that
says let us lift the restrictions and allow people to come in and buy
more and more television stations into some sort of ownership group. I
do not think that comports at all with the notion of competition. I am
going to offer an amendment on that at some point.
I would like to talk also about the issue of the role of the Justice
Department. I know Senator Strom Thurmond and others are interested in
this subject. I intend to offer an amendment on the subject of the role
of the Justice Department in this bill. The question of when the
regional Bell Companies are free to engage in competition for long
distance relates to when there is competition in the local service
area, in the local exchange. When will the Bell Service Companies open
themselves to local competition? When they do, when there is true local
competition, then they have a right [[Page
S7949]] and ought to be able
to compete in the long distance markets.
The problem is that in the telecommunications bill, the role of the
Justice Department--which ought to be the location of where the
judgments about whether or not there is competition in the local
exchanges--is rendered a consultative role. The Justice Department is
defanged here, and I do not think that ought to be the role of the
Justice Department. Again, I think this flies in the face of all of the
discussions I heard about the virtues of competition. If we are talking
about competition being virtuous, then let us make sure competition
exists before we release the Bell Companies to engage in competition
with the long distance industry.
How do you best determine competition exists? With the mechanism we
have always used to determine it. The antitrust judgments and
evaluations by the Justice Department. It does no service, in my
judgment, to the American people to decide to take out the traditional
role of the Justice Department in preserving and protecting the
interests of competition with respect to this issue when the Bell
Companies will be set loose to engage in competition in the long
distance business. So I also intend to offer an amendment on that
issue. That is a critically important issue.
In conclusion, I think there is much in the telecommunications bill
that is useful, valuable and will provide guidance to the direction of
the telecommunications industry and its service to the American people,
but this legislation is not perfect. This legislation has some
problems. I pointed that out when I supported it out of the Commerce
Committee.
I have a great friend on the floor, Senator Hollings, the ranking
member on the Commerce Committee, who I think is one of the best on
telecommunications issues. I have been pleased to work with Senator
Pressler, who I think has done a remarkable job in bringing this bill
to the floor as well. But let us not say, ``Now, gee, this bill came
from high on stone tablets and cannot be changed. We cannot accept any
changes here.'' I think universal service is one amendment we can
accept, but there are going to be some big changes proposed, some of
which will have merit.
You can say, ``This bill is carefully balanced on the scale. We read
the meter with expertise and just cannot make changes.'' It is like the
argument of a loose thread on a $20 suit. You pull the thread and the
arms fall off. We have people coming here and saying if this amendment
is agreed to, the coalition breaks apart, the balance of the bill
somehow is skewed, and the bill will fail.
We must, in the intervening days as we debate this legislation, take
a hard look at a whole range of issues. The Justice Department role,
yes. I have not mentioned the foreign ownership issue, but that is also
of concern to me. The concentration of ownership in this country of
television stations, as an example. Those are all issues I think are of
great concern and we ought to weigh carefully.
I hope the Chair and the ranking member on this legislation will
entertain constructive and useful proposals to strengthen and improve
this legislation in the public interest of this country.
Mr. President, I have sent the amendment to the desk. I believe this
amendment may be acceptable. In any event, at this point, I yield the
floor.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. HOLLINGS. Right to the point, Mr. President, the distinguished
Senator from North Dakota has a good amendment. I should make a couple
of comments, though, with reference to his references and those of my
friend, the distinguished Senator from Nebraska, who has been very
participatory, and a cosponsor of the legislative reform in
communications reform.
With respect to the general picture here on communications, the
Senator from North Dakota is right. We do think this is balanced, that
it cannot be balanced any more, that this bill did come down from on
high and we are not going to accept any amendments.
That is out of the whole cloth. I learned long ago I could not pass a
communications bill by itself, that the Democrats could not pass a
communications bill by itself and the Republicans could not pass a
communications bill by itself. We really have to work this out in a
bipartisan fashion. Senator Pressler has given us the necessary
leadership and I am committed to working with him in a bipartisan
fashion. That maybe I have created an atmosphere where there will be no
amendments and we know it, the opposite is the case. We are begging
Senators to come, as we begged the Senator from North Dakota to hasten
on and present that amendment.
A word should be said about the industry and the service that we have
because comments have been made about all of these entities involved,
and there are 30-some. People should understand. We have the long
distance industry, the cable industry, the wireless cable, the regional
Bell Operating Companies, the independent telephone companies, the
rural telephone companies, newspaper industry, electronic publishing
industry, the satellite industry, the disabled groups, the broadcast
industry, electric utilities, computer industry, consumer groups,
burglar alarm industry, telemessage industry, pay phone industry,
directory publishing industry, software industry, manufacturers, retail
manufacturers, direct broadcast satellite industry, cellular industry,
PCS, States, public service committees, commissions, the cities, the
Federal Communications Commission, the Clinton administration, the
Department of Justice, the Secretary of Education--all the public
entities.
Communications is a very splendid thing. With respect to not wanting
to open up all the markets, I had a good friend who took a poll with
what you call a peer review group, testing thing, what do they call
that thing when they get them all together?
Mr. DORGAN. A focus group.
Mr. HOLLINGS. A focus group. Thank you, Senator.
They had a focus group in Maryland last week and 90 percent of them
have never heard of the Contract With America. That is all I heard
about since January. In fact, it started in November, I think. But they
still had not heard of the contract. You can bet your boots the Senator
from Nebraska is right; people are not storming the doors for a
communications bill. In fact, with all of these entities calling on the
Senators and having to make up their minds, yes or no, the Senators
from the South say let that communications bill go, let us not call it
up now, let us delay it, we did last year because there are so many
tough decisions to be made. But on the information superhighway,
Congress and Government are squatting right in the middle of the road
and the technology is rushing past it.
The information superhighway is there. We have been a hindrance,
obstacle to it, and what we are trying in this balanced approach and
bipartisan approach is to remove the obstacle of Government, with the
view of the Senator from North Dakota that universal service continue.
He is right on target. I have been very much concerned having
experienced the airline deregulation. So we want to make certain that
they can come in and render this service. In that light, our
communications system has been the best in the world. Yes. The Bell
Operating Companies, because these parties are so competitive--I have
not necessarily been in love with either side because it is hard--they
are really individually competitive. But after all, AT, long
distance, has to file tariffs. They are controlled by the public, and
operate in the interest of the public convenience and necessity. Every
one of the Bell Companies have to respond, not just to the FCC but to
the individual public service commissions. They operate on the basis of
public convenience and necessity. They have a monopoly, yes, but their
profits are controlled, and everything else.
If there is anything operating as a large corporate entity in the
interest of the public, it has been the Bell Operating Companies. They
have been most responsive. We have as a result the finest
communications system in the world. Let us maintain it. On universal
service, let us extend it. Let us not be in any way doubtful about it
because the lead-in word that goes into this particular requirement
about another universal service carrier is ``shall.''
[[Page
S7950]] The lan
Major Actions:
All articles in Senate section
THE TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT
(Senate - June 08, 1995)
Text of this article available as:
TXT
PDF
[Pages
S7942-S7972]
THE TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT
The PRESIDING OFFICER. Under the previous order, the Senate will
resume consideration of
S. 652, which the clerk will report.
The assistant legislative clerk read as follows:
A bill (
S. 652) to provide for a pro-competitive,
deregulatory national policy framework designed to accelerate
rapidly private sector deployment of advanced
telecommunications and information technologies and services
to all Americans by opening all telecommunications markets to
competition, and for other purposes.
Pending:
Dole amendment No. 1255, to provide additional deregulation
of telecommunications services, including rural and small
cable TV systems.
Pressler-Hollings amendment No. 1258, to make certain
technical corrections.
The Senate resumed consideration of the bill.
The PRESIDING OFFICER. Who seeks time?
The Senator from South Dakota.
Mr. PRESSLER. Mr. President, we are resuming consideration of the
telecommunications bill. We had opening [[Page
S7943]] statements last
night and we urged Senators to bring amendments to the floor. We
eagerly are awaiting the many amendments because we only have a certain
amount of time and we are urging all offices and all Senators who have
amendments to bring them to the floor. We are ready to go, as we have
emphasized in our opening speeches last night.
Let me just reiterate, I think the movement of this bill is very
important to America. It will create an explosion of new jobs, of new
devices, and of new activities. I know there are a variety of
amendments. We have welcomed them. I am prepared to yield the floor to
any other Senator who has statements at this time.
The PRESIDING OFFICER. Who seeks recognition?
The Senator from Nebraska.
Mr. KERREY. Mr. President, I restate at the beginning what I said
last evening; that is, I believe the distinguished chairman, the
Senator from South Dakota, and the distinguished ranking member, the
Senator from South Carolina, have done an awful lot of work on this, a
lot of good work. I appreciate the work they have done. They allowed me
to be involved in many of these steps.
But I say for emphasis, I cannot support this bill. I do not believe
it provides the kind of protection for consumers that needs to be
provided. I believe many of the statements that have been made thus far
overestimate the impact upon the economy and underestimate the
disruption that will occur to households throughout this country.
No Member should doubt this. Any Member who doubts the impact of this
legislation should go back and read clippings from 1984, when William
Baxter and Judge Greene signed a consent decree, or when the U.S.
Government and AT signed a consent decree in Judge Greene's court.
Talk to consumers and talk to households and citizens in 1984 and 1985,
and you will find an awful lot of those folks will say, ``Why don't you
put the phone company back together?''
I believe that action was good. That action was taken by the
Antitrust Division of the Department of Justice. I say that for
emphasis. Justice is given a consultative role in this legislation. But
they were the prime mover in breaking up the monopoly that many people
cite as the reason for wanting to go even further today.
Second, you will hear people come to the floor and say and act as if
somehow the regulations are really tying up American business. I intend
to come to the floor and bring profit and loss statements and to bring
economic analysis.
Where do you go in this world to find better phone service? Where do
you go in this world to find better cable? Where do you go in this
world to find businesses doing better than American businesses in
telecommunications? It may be in fact it is true that our regulations
need to be changed. But please let us not come down here and act as if
we have these corporations all handcuffed as if they are not making any
money, sort of hamstrung and cannot move and cannot reach the customers
they want to reach to generate the revenue they are trying to generate.
This piece of legislation will touch roughly half of the U.S.
companies in America and every single American household. Citizens who
wonder how it is going to affect them need to pay careful attention to
the 146 pages of legislation that is before this body today. The law
matters. The law determines how people behave. This law governs the
behavior of American corporations in nine basic communications
industries. If you are a household or a citizen who is affected by the
broadcast industry, this legislation affects you because this
legislation affects the broadcast industry. If you are a home or a
citizen who has cable coming into your household, this affects you.
This legislation affects the regulations governing the cable industries
of America and the telephone coming into your household.
This 146 pages in
S. 652 affects you because this deregulates the
telephone industries in America in a very dramatic and I believe
generally constructive fashion. If you are a person who goes to the
movies, or you are a person who buys CD-ROM's or buys records of any
kind, this affects you because it affects Hollywood, and it affects the
music recording business. It is written into this law.
If you have a newspaper coming into your household, or you subscribe
to magazines or electronic publishing of any kind, it affects you
because this legislation affects American publishers as well. If you
buy a computer or use a computer in the workplace, it affects you
again. If you purchase consumer electronics or are a consumer of
wireless services or satellite services, all the nine basic
communications industries, all growing relatively rapidly, all affect
each and every single American citizen in their homes and in their
workplace.
Let no Member of this Senate underestimate the impact of this
legislation. We had a great debate over the budget resolution. I know
from my own personal experience with that legislation that there was a
great deal of concern. Gosh, what if you vote for it, is it going to be
a problem? Are people going to get angry with you? There are changes in
Medicare, and cuts in programs. Are people going to get unhappy because
we finally are asking them to pay the bills of the Government? The
answer is probably yes. Probably they are going to get a little bit
upset.
This piece of legislation is more dramatic than the budget
resolution. This piece of legislation affects Americans far more
intimately than that budget resolution. There is not an American
citizen that will not be affected by this piece of legislation.
Last night on the floor of the Senate the distinguished Senator from
South Dakota said:
The recent hearing process which informed the Commerce
Committee and led to the development of
S. 652 began in
February 1994. In 1994 and 1995, the Commerce Committee held
14 days of hearings on telecommunications reform. The
committee heard from 109 witnesses during this process. The
overwhelming message we received was that Americans want
urgent action to open up our Nation's telecommunications
market.
Mr. President, I challenge that statement. I challenge the statement
that we can conclude from the hearing process that ``Americans want
urgent action to open up our Nation's telecommunications market.''
Tell me who it was that in a town hall meeting stood up and said,
``Senator Gregg, would you go to Congress and make sure you get down
there and change the laws to help our telecommunications market?''
Where do we have polling data that shows what the people of South
Dakota or Nebraska or South Dakota or New Hampshire or elsewhere say
about this particular piece of legislation? Were they heard in the
hearing procession?
If you look, in fact, at the hearings held on this bill, on January
9, 1995, the committee had their first hearing. They heard from the
distinguished majority leader, the Senator from Kansas, Senator Dole.
They heard from the chairman of the House full Committee on Commerce,
Congressman Bliley. They heard from the chairman of the Subcommittee on
Telecommunications, Jack Fields. That was panel No. 1.
Then on the 2d of March, the committee held another hearing. They
heard from Anne Bingaman, who is the Chief of the Antitrust Division at
the Department of Justice. They heard from Larry Irving, Assistant
Secretary of the National Telecommuncations Information Administration
in the Department of Commerce, which is being proposed to be abolished,
an interesting witness; Kenneth Gordon, representing NARUC, a State
regulatory agency. That is panel No. 2 on the 2d of March.
Also, on the 2d of March another panel, Peter Huber, senior fellow
from the Manhattan Institute; George Gilder, senior fellow from the
Discovery Institute; Clay Whitehead with Clay Whitehead & Associates;
Henry Geller from the Markle Foundation; John Mayo, professor at the
University of Tennessee; Lee Selwyn, professor of economics and
technology.
Then on the 21st of March the committee met again. This is the third
hearing on this particular piece of legislation. On that day there were
three panels.
Panel No. 1: Decker Anstrom with the National Cable Association;
Richard Cutler, Satellite Cable Services; Gerald Hassell, Bank of New
York; Roy Neel, U.S. Telephone Association; Bradley Stillman, Consumer
Federation of America. [[Page
S7944]]
Then the second panel: U. Bertram Ellis, Ellis Communications, Inc.;
Edward Fritts, National Association of Broadcasters; Preston Padden,
Fox Network; Jim Waterbury of NBC Affiliates.
Panel No. 3: Scott Harris from the FCC, not on behalf of the FCC but
his own personal testimony; and Eli Noam, Communications Institute for
Teleinformation. That was the third set of hearings.
On the 23d of March, the full committee had their markup, and the
bill was reported out 17 to 2.
I would like to put on my glasses and read the small print of some of
the things that were said in these hearings. Just again, the idea here
is I am respectfully challenging what I think is a very important
statement, a very important statement that lots of others are going to
make as well; that is, that the overwhelming message we received was
that Americans ``want urgent action to open up our Nation's
telecommunications market.'' Keep that in mind.
What do the households in your State want? What do the citizens of
your State want? What do the people who elected you and sent you here
to the U.S. Congress want? What do they want?
Let us see what they wanted as we look at the hearings that were
held. They said: First, there were the three Members of Congress.
Senator Dole advocated quick passage of telecommunications
legislation. He noted that rural Americans are concerned
about telecommunications legislation, as it offers tremendous
opportunities for economic growth. He testified that
legislation should underscore competition and deregulation,
not reregulation.
Chairman Bliley stated that the goals of telecommunications
legislation should be to: one, encourage a competitive
marketplace; two, not grant special Government privileges;
three, return telecommunications policy to Congress; four,
create incentives for telecommunications infrastructure
investment, including open competition for consumer hardware;
and, five, remove regulatory barriers to competition.
Chairman Fields stated telecommunications reform is a key
component of the legislative agenda of 104th Congress. He
chastised those who speculated that Congress will be unable
to pass telecommunications legislation this year. He asserted
that the telecommunications industry is in a critical stage
of development, and that Congress must provide guidance.
I did not hear any of those three witnesses come and say ``Americans
want urgent action to open up the telecommunications market.'' They are
talking about American corporations. They are talking about American
industry and advising them that they want to do things that they are
currently unable to do because the regulations say they are prohibited
from doing it. That is what this bill is about, businesses that want to
do something that they are currently not allowed to do. That is what it
is all about--change in the law. All of these various businesses do
something that they currently cannot do. In many cases, I support it.
But I am not getting calls from people at home saying, ``Gee, Bob, I
hope you are really getting there because we want to make sure that our
Nation's telecommunications markets get opened, there is a very urgent
need to do it.''
Listen to panel No. 1, second hearing:
Anne Bingaman testified that the administration favors
legislation that is comprehensive and national in scope,
opens the BOC local monopoly, and provides for
interconnection at all points.
She claims that local loop competition will bring consumers
the same benefits that long distance competition brought
consumers when the Justice Department broke up AT
I believe that Anne Bingaman is right, but I caution my colleagues it
took 7 or 8 years before the consumers gave you a round of applause.
There was a long period of time after 1984 when people, at least in my
State, were saying what in the Lord's name is going on here? All of a
sudden I cannot get a phone into my house; I have to go to a different
provider; I have competition; I have choice. What the heck is going on?
What was wrong with what they had? they were saying to me. I said,
well, stay with this thing. It is going to work. We are going to open
up the long distance market. We are going to have competition. It is
going to be good. Trust me. I trust it is going to be good.
And it has worked. It was not coming from home, Mr. President. It was
not coming from households and citizens who said, Gee, Governor, would
you write a letter to the Justice Department, old Bill Baxter back
there, and see if he can get together with AT and file a document
down in Judge Greene's court because we would really like to see the
RBOC's spun off, and all that sort of thing.
It has worked. Anne Bingaman is correct that it worked. But it took
years before we understood that citizens began to see the benefits.
Larry Irving agreed that opening telecommunications markets
will promote competition, lower prices, and increase consumer
choice. He stated that the government must maintain its
commitment to universal service. He stated the
administration's concern that private negotiations may not be
the best way to open the local loop to competition. He also
asserted that a date certain for elimination of the MFJ
restrictions will hurt efforts to negotiate interconnection
agreements with Bell operating companies.
Kenneth Gordon stated the State regulators, including those
in Massachusetts, were once a barrier to competition, but are
now at the forefront of promoting competition. He said that
States must also retain control of universal service.
And he goes on to make some other additional comments.
But these three witnesses are beginning to talk about the consumers.
They are beginning to talk about the impact upon the American people.
They are beginning to express, particularly the last witness, Larry
Irving, they are beginning to express concern for what happens when
deregulation and competition come in. But, again, no overwhelming
testimony here. None of them comes in and says we have to do this
because the American people are banging down our doors and urging us to
do this; no statement that has the overwhelming support of the American
people; merely saying that we think it is right to deregulate; we think
it will be good to deregulate; we think this will be good for the
people.
Now, how many of us understand the 1994 election? A lot of us here
have heard people come down to the floor and say it was this, that, and
the other thing. I agree with an awful lot of it. Most of us understand
one of the things that was going on in 1994, people said we do not
think you people in Congress understand. We do not have any power. We
are disenfranchised. We do not feel a part of this process.
Mr. President, they have not been a part of this process, in my
judgment. This is about power. Corporations should do things they
currently cannot do. They are telling us it is going to be good for the
American people. They are telling us it is going to be good for
consumers. They are telling us it is going to be good for jobs. They
are telling us it is going to be good for the people. It is not the
people telling us it is going to be good for them, Mr. President.
Then on that same date, on the second panel, Peter Huber noted that a
date certain for entry is necessary because the FCC and the Department
of Justice are very slow to act. And this is a very important issue. We
have to get the witnesses coming in and saying that the FCC is a
terrible regulatory body and they are very slow. This is all language
to give you the impression that somehow American communications
businesses are burdened down by these nasty bureaucrats over at FCC.
Peter Huber said he advocated swift enactment of legislation with a
date certain for entry into restricted lines of business.
Then George Gilder, the greatest advocate of deregulation of all,
also advocated swift congressional action, claiming that
telecommunications deregulation could result in a $2 trillion increase
in the net worth of U.S. companies.
He said the U.S. needs an integrated broadband network with
no distinction between long haul, short haul, and local
service.
Clay Whitehead comes in and says:
Congress should not try to come in and chart the future of
the telecommunications industry but should try to enable it.
He also advocated a time certain for entry into restricted
lines of business.
Then Henry Geller comes in. He agrees with the previous speakers that
Congress should act soon.
He said that a time certain approach would work for the
``letting in'' process, allowing competition in the local
loop, as well as the ``letting out'' process.
Geller advocated that the FCC should allow users of
spectrum the flexibility to [[Page
S7945]] provide any
service, as long as it does not interfere with other
licensees.
John Mayo testified that the spread of competition in other
markets over the last decade supports the opening of the
local loop. He said that the interLATA telecommunications
competition has been a success and Congress should follow the
same model for local exchange competition.
Lee Selwyn asserted that there will be no true competition
in the local loop unless all participants are required to
take similar risks. Selwyn also testified that premature
entry by the Bell operating companies into long distance
could delay the growth of competition for local service.
I frankly do not know who all these individuals are. I do not know
whether they are consultants for one company or another. I suspect that
all of them have a fairly defined sense of view, defined either by the
companies or encouraged by the companies as a result of previously
reached conclusions.
Again, I do not hear individuals coming in and saying, do you know
what it is like out in the households today trying to get cable
service, trying to keep phone service? Do you know what consumers are
saying out there today? Do you know what individuals are saying when
all of these entities have downsized over the last 4 or 5 years? Any
expression of concern for what technology does to families on the
underside of that two-edged sword? Any expression of concern from any
of these highfalutin individuals that are paid a lot of money to
provide us with their advice about what is going on out there in
America?
No, just swift action, by God. Let us get the laws out of the way,
get rid of the regulations. Let these companies do whatever they see
fit, whatever they decide is best for the bottom line. Whatever they
decide is best for the shareowners will in the end be better for their
customers.
Then on March 21, Mr. President, three panels come before the
committee. This is getting a little lengthy. I do not think I will read
every single one of these.
Decker Anstrom, from the cable industry, they support
telecommunications legislation because the cable industry is ready to
compete.
Roy Neel agreed with Anstrom. He is with the U.S. Telephone
Association. He agrees that cable regulation repeal would allow for
investments incentive.
Richard Cutler testified that the 1992 Cable Act had a
devastating effect on small cable operators.
Bradley Stillman said that the 1992 Cable Act resulted in
lower programming and equipment prices for consumers.
Weighing in that in fact the Cable Act of 1992 did work.
Gerald Hassell stated that true competition will only
develop if both cable and telephone survive and flourish.
I happen to agree with that. I think if we are to have competition at
the local loop, we have got to make sure we have two lines coming in.
One of my problems with this legislation is it allows acquisition of
cable in the area by the telephone company. You folks out there right
now in your households, you have a cable line coming in; you have a
phone line coming in. You may not have both for long. You may have one
line and only one opportunity to choose. That is not my idea of
competition.
Panel No. 2.
Bertram Ellis testified that the local ownership
restrictions no longer serve the public interest. He said
that allowing local multiple ownership will permit new
stations to get on the air that would not otherwise be able
to survive. He also stated that local marketing agreements--
joint venture between broadcasters--
Et cetera, et cetera. Open it all up. Let us get rid of the
restrictions. I do not care if they own 50 percent of the market, 100
percent of the market. I do not care who controls. Just let the flow of
the cap determine the public interest.
There is no public interest here involved any longer. We do not care
who controls the information, who controls the stakes, who controls the
radio, the newspaper.
Mr. President, again, as I said at the start, this is about
information. It is about communication. And it does matter who controls
it. It does matter if we have one single individual controlling a
significant portion of the local market, controlling our access to
information. It does matter. There is a consumer interest.
I am an advocate of deregulating the telecommunications industry. I
do not know that I am, but I may be the only Member of Congress who can
stand here and say that I signed a bill in 1986 that deregulated the
telecommunications industry in Nebraska, that removed the requirement
of them to go to the local public service commission for rate increases
because I thought, and believe still, it would free up capital and they
were in fact just spending a lot of money on lawyers and not really
serving the public's interest requiring the companies to come forward.
So I am an advocate of deregulation. But I also believe there are times
when we need to declare and protect the public interest. And I do not
believe in many cases this piece of legislation does that. I have
already heard people come to the floor and say the best regulator is
competition.
That is not true, Mr. President. If you want to get goods and
services delivered in the most efficient fashion, competition does
that. That is true. If you are trying to get goods and services at the
highest quality and lowest price, competition is the best way to get
the job done.
However, competition is not the best regulator. The only time we
should be regulating is when we say we have the public interest in
doing this. There is no other way of getting it done. The market is not
going to be able to accomplish it. We agree there is going to be cost
on businesses to do it. We believe it is a reasonable cost. We measure
the cost. We assess the cost. We do not go blindly and say there is no
cost to this deal. We understand the costs going in. But we say the
public interest is so great that we believe it is necessary to do that.
That is the purpose of regulation. Competition is not the best
regulator. It is the best way to get goods and services delivered in a
highly efficient fashion. But competition, unless you believe, unless
you are prepared to come down to the floor and say American public
corporations performing for their shareowners and American CEO's
performing for their shareowners, worrying about what the analysts are
going to say on Wall Street about the value of their stock, facing a
decision of laying off 1,000 people that would improve the value of
their stock--and make no mistake about it, analysts love cold blooded
CEO's. You read it in the paper all the time.
Some CEO just takes over a company, reduces the force by 20 percent.
What do the analysts say? ``Buy the stock; this guy is doing the right
thing.'' So they are rewarding the downsizing, they are rewarding the
cutting of the employee base.
Does it improve the productivity of the company? Absolutely. Does it
make the company more competitive? Absolutely. Make no mistake, it has
a devastating impact upon those families, upon those individuals who
work for the company.
We do not find, I think, any evidence that CEO's are heartless, but
when they are out there trying to perform for their share owners, they
are not trying to satisfy some public interest, they are trying to
satisfy the interest of people who own shares in their stock.
On that same day, Preston Padden advocated deregulation; Jim
Waterbury said retain some ownership rules; on panel three they had
Scott Harris testifying on behalf of himself, not the FCC, and Eli
Noam, an expert in telecommunications. The two individuals debated a
section of our telecommunications law called 310(b), which is foreign
ownership. That is enough. That should give people some sense of what
went on.
There were three hearings--three hearings, Mr. President. Three
hearings that were held, four if you include the statements made by the
majority leader, the chairman of the House Commerce Committee, and the
chairman of the Subcommittee on Telecommunications. There were three
total hearings, and I do not believe that the sum and substance of
those hearings justifies the conclusion that the American people
overwhelmingly back this particular piece of legislation.
Mr. President, I was on a trip this past week, a trip with the
Intelligence Committee on narcotics. We went to Colombia, Peru, and
Bolivia. One of the places I went was down in the Amazon River Basin on
the Ucayali River. I went to church on Sunday, to mass actually, more
appropriately, a Catholic [[Page
S7946]] church in Pucallpa, Peru. It
just happened that Sunday was celebration of Pentecost. Being a good
Christian man, I go to church regularly, but I must confess, I did not
remember all the details of what Pentecost meant. I listened carefully.
Just by coincidence, the service, the Pentecost is about communication.
The prayer of Pentecost is that we appeal to the Holy Spirit to come
and fill our hearts with his love. That is the appeal.
The priest that Sunday said to the congregation that the tongue is
the most powerful organ in the human body, that it delivers the word
and a word can unite us, it can divide us, it can cause us to love one
another, it can cause us to hate one another. The word coming from God
can change our life. The word coming from human beings can inform us,
change us and can cause us to reach all kinds of conclusions.
That is what this debate is about, Mr. President. You can turn on the
news tonight, you can pick up the newspaper in the morning, and you
watch and read what is going on. These people have the control over
what they are going to put on the air, what they are going to put in
the newspaper, what they are going to have in the form of serving up
information to you and me. It is about power, Mr. President, power to
do what they want to do.
Again, I am not against deregulation, I am not against changing the
1934 Communications Act, but this piece of legislation is being driven
by a desire of corporations to do things that they currently are not
allowed to do.
I also brought down here this morning some additional things. I do
not know if the managers want to speak. I will be glad to yield or keep
going and read some things that the press has said about this whole
process.
I am not an apologist of the press. Sometimes they get it right,
sometimes they get it wrong. Form your own impression. This is people
observing this whole process, and this is what they say about it. Let
us see if you hear anything about the American people coming here in
airplanes and buses and demonstrating out front with placards,
``Deregulate the telecommunications industry.''
Here is one from Ken Auletta, ``Pay Per Views,'' in the New Yorker,
June 5, 1995. Mr. Auletta says:
The hubris was visible at the House Commerce Committee
briefings, on January 19th and 20th. Held in the Cannon
Office Building, they were closed to the press and to the
Democrats. At dinner the first night, Gingrich was the
featured speaker, and he took the occasion to attack the
media as too negative and too biased, and even unethical.
After the speech, Time-Warner's CEO, Gerald Levin, rose and
gently rebuked Gingrich for being too general in his remarks.
Surely Gingrich did not mean to tar all journalists with the
same brush--to lump, say, Time in with the more
sensationalist tabloid press? ``I hope you don't mean all of
us,'' Levin concluded. ``Yes, I do,'' Gingrich is reported to
have replied. ``Time is killing us.'' And, according to
several accounts, he went on to say that he had been
particularly incensed by Time's account of his mother's
interview with Connie Chung, of CBS . . .
[O]thers found it chilling that the Speaker would press the
CEO's to have their journalistic troops hold their fire.
``We're at greater risk now of that kind of pressure having
an impact.''
The interviewee went on to say:
``Traditionally, there has been a separation between news
and corporate functions. Given the consolidation, you may
have more instances where the top business executives, who
have many corporate policy objectives, may find it tempting
to impose control over their news divisions to advance
corporate objectives.'' . . .
Another observation is from ``The Mass-Media Gold Rush,'' Christian
Science Monitor, Jerry Landay, reporting June 2, 1995:
The players are limited to the cash-rich: The regional
phone companies, networks and cable companies, and
conglomerates such as Time-Warner. Smaller ownership groups,
such as local television stations, are distressed. They
expect the balance of power to swing to the cash-rich
networks, which will gobble up many of them . . .
It goes on to say:
To influence the House legislation, legions of lobbyists
swept across Capitol hill, with bags of campaign cash. Over
the past 2 years the communications industry has handed out
some $13 million. Republican lawmakers literally invited
industry executives to tell them what they wanted. They're
getting most of it.
The next one is from Congressional Quarterly Weekly. The headline is:
``GOP Dealing Wins the Votes for Deregulatory Bill.''
After doling out legislative plums to broadcasters, phone
companies and carriers, top Republicans on the House Commerce
Committee won bipartisan backing for a bill to promote
competition and deregulation in the telecommunications
industry. The committee's leaders--Chairman Thomas J. Bliley,
Jr., R-VA, and Telecommunications and Finance Subcommittee
Chairman Jack Fields, R-Texas--engaged in a lengthy give-and-
take with committee members and telephone company lobbyists
over the bill's rules for competition in local and long-
distance phone markets. . . .
The intra-industry horse trading left consumer advocates
feeling frustrated and ignored on the sidelines. . . . The
biggest winners at the markup were broadcast networks, media
conglomerates and cable companies.
The next one is from the New York Times, Edmund L. Andrews. Headline:
``House Panel Acts to Loosen Limits on Media Industry.'' Dateline, May
26, 1995:
Rolling over the protests of several Democrats, the House
Commerce Committee voted today to kill most cable television
price regulation and lift scores of restrictions on the
number of television, radio and other media properties a
single company may own. . . .
ABC, NBC and CBS and other large broadcasters like the
Westinghouse Electric Company, the Tribune Company and Ronald
O. Perelman's New World Communications Group all lobbied for
sharply increasing the number of television and radio
stations a company could own nationwide. . . .
But industry lobbyists have seldom met more receptive
lawmakers. Committee Republicans have held numerous meetings
with industry executives since January, some behind closed
doors, at which they implored companies to offer as many
suggestions as possible about the ways Congress could help
them.
Next, an article that appeared in the Washington Post, a longer
article that I will take pieces from, written by Mr. Mike Mills on the
23d of April, 1995:
The Bells--the folks who bring you local phone service--
like to play political hardball, and they have been
remarkably successful at it. This year, the Bells stand a
very good chance of winning most of the prize they've sought
for the last decade: Freedom from U.S. District Judge Harold
H. Greene. . . . If they get what they want, the Bells can
claim a place among history's most powerful Capitol Hill
lobbyists, ranking them with the oil industries of the 1970's
and the steel trusts of the turn of the cen-
tury. . . .
All that lobbying costs money. According to the Federal
Communications Commission, the Bells' individual phone
companies spent $64 million on State and Federal lobbying
expenses in 1993 and $41 million in 1992. Bell lobbyists
themselves say their annual budget for influencing Congress
has been $20 million a year in recent years, but has dropped
to half of that this year. . . .
It goes on and on:
``Right now, the doors to the candy stores are wide open,''
said Brian Moir, who heads a coalition of business telephone
users fighting the Bells.
These are the customers, Mr. President, make no mistake about it.
These business users are the customers. These are not the companies
providing the service. These are people using the service. This man
says, ``. . . the doors to the candy store are wide open.''
It continues:.
The Bells figure, ``Why focus on one thing? Just go in with
a frontloader.'' They're covering the waterfront. And why
not? Moir estimates that if States' regulatory powers are
limited, the Pressler bill will raise the typical Bell
residential telephone bill by $3 to $6 a month. For the
companies, that would raise it at least $24 billion over 4
years.
An editorial in the Baltimore Sun called ``Communicating Again,''
April 3, 1995:
Still, there are hundreds of billions of dollars at stake,
and the lobbying is as fierce as Washington has seen in many
years. Though the rivals like to make their cases in terms of
what's best for the consumer, the quarrel is really over who
gets a head start in capturing market share.
No one can deny that that is true.
Edmund L. Andrews, ``Big guns lobby for long-distance; insiders are
trying to influence bill,'' Raleigh News & Observer, March 28, 1995:
With so much at stake, and so little to pin on labels of
right and wrong, the various factions are seeking a personal
edge by throwing into the fray as many people with friends in
high places as possible. All of which made telecommunications
as much of a bonanza for lobbyists this year as health care
was last year. ``Everybody in this town who has a pulse has
been hired by the long-distance coalition or the Bell
operating companies,'' said Michael Oxley, R-Ohio, a member
of the Commerce Committee. ``It's just amaz-
ing. . . .''
Michael Ross with the Pittsburgh Post-Gazette, January 20, 1995.
Headline: ``Gingrich Defends Book Deal; [[Page
S7947]] GOP Beats
Murdoch.'' I am sorry I brought in all this. This article is talking
about this bill:
Besides Murdoch, there were 10 other executives at the
Capitol session, including Thomas Murphy of Capital Cities/
ABC; Robert Wright, NBC; Howard Stringer, CBS; Bill Korn of
Group W; and John Curley of
Gannett. Gingrich was to address a private dinner last night
for the communications firm chiefs in the Cannon House Office
Building. . . .
Gingrich said the meeting yesterday was closed because ``we
want their advice on how the United States can be the most
competitive country in the world, and we would just as soon
not have them give advice with the Japanese and Europeans
listening.''
I do not believe it is the Japanese and the Europeans they were
trying to keep out.
GOP organizers sought to keep the meeting secret, excluding
notice of the events from the official daily calendar. But
word leaked out from the executives, prompting protests from
consumer advocates and from the committee's former Democratic
chairman, Rep. John Dingell of Michigan, now the ranking
minority member.
The last one is a piece that appeared in the Washington Post, again
Mike Mills:
Consumer advocates yesterday protested plans by House
Republicans to hold 2 days of private meetings with top
communications executives that will feature a dinner with
House Speaker Newt Gingrich. . . .
Media will not be present so Members and chief executive
officers of various companies. . . . have honest and
informative discussions.''
Boy, if that is not a keyword to telling you to hang on to your
billfold I have not heard one.
``What policies can the Congress promote or repeal that
would help your company to be more competitive and successful
domestically?'' the letter asked. ``And, second, what
obstacles does your company face when trying to do business
abroad?''
I do not mind in general saying to any company in America, is there
anything we are doing we should not be doing, anything we are doing
with regulations or rules that do not make any sense at all? Lord
knows, we have lots of things we do to small business and big business
alike that add no value at all to the public interest, that you really
cannot defend it all, have been around a long time, and you scratch
your head trying to figure out why they are even there.
But that is not this invitation. This does not say after you
established what the public interest is, is there anything here you
would like to get out of the way that makes no sense at all; is there
any nonsensical regulation? This did not add any qualifier in the
public interest.
This merely says is there anything out there adding cost to your
business that you would like to get rid of? It would be like me saying,
``I would like to drive about 90 miles an hour, would that be OK? Can
you get the law of Nebraska to let me drive my automobile 90 miles an
hour? I find that a major inconvenience. I like to drive fast. Why
don't you have a meeting and ask people driving automobiles what they
think about that? Maybe we can change the rules and regulations to
accommodate them as well.''
Mr. President, I will wrap this up by quoting from an article, I
believe it was David Sanger of the New York Times. The article
describes the conflict between the United States of America and the
Japanese over automobiles. It was assessing the impact of, I think, the
correct decision by the Trade Representative to say to the Japanese,
``It is time to open up your market and let our parts, in particular,
be sold and loosen the restrictions so we can begin to sell automobiles
in Japan.'' It was trying to measure the impact. It interviewed a man
who was the trade minister from Indonesia, I believe.
You know, we are worried about Japan and the United States. They are
the big ones. They are the big elephants in this jungle. And they have
a saying in Asia. They say that when the elephants fight, the grass
gets trampled. But even worse, they said, is when the elephants make
love. That is what we have here, Mr. President. We have a real lovefest
going on.
Corporations have basically all signed off on this deal. They have
had the opportunity to look at the language. They have had the
opportunity to examine the details, and they are saying it looks pretty
good to them. I say it is time for us to come to the floor to debate
this. I hope we are, in fact, able to enact legislation. I intend and
expect to support it. I cannot support it in its current form, but I
want the American consumer to be heard on the floor of the Senate. I
want the interests of American households to be considered and the
interests of the average American citizen to be considered when this
piece of legislation, which is important, is being debated.
I yield the floor.
Mr. DORGAN. What is the pending business?
The PRESIDING OFFICER. The pending measure is amendment No. 1258
offered by the managers of the bill.
Mr. DORGAN. This is the managers' amendment.
The PRESIDING OFFICER. Is there further debate on that amendment?
Mr. HOLLINGS. We can go right ahead with the Senator's amendment.
Mr. PRESSLER. If it has not been laid aside, and if it is proper at
this point, we will lay that amendment aside so that the Senator from
North Dakota can offer his amendment.
I ask unanimous consent that the managers' amendment be laid aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from North Dakota is recognized.
Amendment No. 1259
(Purpose: To require certain criteria upon the designation of an
additional Essential Telecommunications Carrier)
Mr. DORGAN. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER (Mr. Kyl). The clerk will report.
The legislative clerk read as follows:
The Senator from North Dakota [Mr. Dorgan] proposes an
amendment numbered 1259.
The amendment is as follows:
On line 24 of page 44, strike the word ``may'' and insert
in lieu thereof ``shall''.
Mr. DORGAN. Mr. President, in the telecommunications bill there is a
provision with respect to universal service that describes certain
conditions in which the State designates additional essential
telecommunications carriers that may impose certain requirements. I
think it is sufficiently important to say the State shall impose those
requirements. I would like to explain why this is important to me and
why I think it is important to rural America.
Before I do, let me comment on a couple of broader points about this
legislation. Clearly, there would never be a circumstance where
legislation affecting the telecommunications industry would be moving
through the Congress without their being an intense interest by the
telecommunications industry. The fact is that without congressional
involvement in trying to set some new rules for competition, the
industry itself is out creating the rules.
That is why universal service legislation is necessary. We must
establish some guidelines about where we move in the future and what is
in the public interest as we do that.
I come from a rural State. I know there are a lot of people in this
Chamber who worship at the altar of competition and the free market.
That is wonderful. But, I have seen deregulation. I have seen the mania
for deregulation that does preserve for some people in this country
wonderful new opportunities of choice and lower prices: Example:
Airline deregulation. There was a move in this country and in these
Chambers for airline deregulation, saying this will be the nirvana. If
we get airline deregulation, Americans are going to be better served
with more choices, more flights, lower prices, better service.
Well, that is fine. That has happened for some Americans but not for
all Americans. Deregulation in the airline industry has had an
enormously important impact if you live in Chicago or Los Angeles. If
you want to fly from Chicago to Los Angeles you check the official
airline guide and find out what flights are offered. You have a broad
range of choices, a vast array of carriers competing in a market that
is densely populated, where they have an opportunity to make big money.
In this market, there is intense competition for the consumers dollar
in both choice and price.
But I bet if you go to the rural regions of Nebraska, and I know if
you go [[Page
S7948]] to the rural regions of North Dakota and ask
consumers, what has airline deregulation done to their lives, they will
not give you a similar story. They will not tell you that airline
deregulation has been good, providing more choices and lower fares.
That has not been the case.
In fact, airline deregulation has largely, in my judgment, hurt
consumers in rural America. We have fewer choices at higher prices as a
result of deregulation.
For that reason, when we talk about deregulation and setting the
forces of competition loose in order to better serve consumers, we need
to understand how it works. Competition works in some cases to an
advantage of certain consumers. In other cases, it does not.
That is why when the telecommunications legislation was crafted I was
very concerned about something called the universal service fund. For
those who don't know, I want to explain what the universal service fund
is.
It probably stands to reason that it is presumably less expensive to
put telephone service into New York City when you spread the fixed
costs of the telephone service over millions of telephone instruments;
less expensive to do it there than to go into a small town of 300
people that is 50 to 100 miles from the nearest population center. How
will you decide how to spread the fixed costs of telephone service over
300 people? The fact is, you have a higher cost of telephone service in
rural areas of our country.
We have always understood, however, that a telephone in Grenora, ND,
is just as important as a telephone in New York City, because if you
don't have the telephone in Grenora, the person in New York City cannot
call them, and vice versa.
The universal service nature of communications is critical. The
presence of one telephone instrument makes the other telephone
instrument, no matter where it is in this country, more valuable.
That is why we have, as a country, decided that an objective of
universal service makes good sense. We have generally tried to move in
that direction to see that we use a universal service fund to even out
the costs and the price to the consumer.
Therefore, even in the higher cost areas, the lower populated, more
rural areas, we are able to bring the cost down to the consumer with a
universal service fund by moving money into those areas to try to help
keep prices down for the consumer. Therefore, consumers will be able to
afford this service and we will have a more universal nature of that
service.
Well, in this legislation, Mr. President, we understood that there
will be substantial competition in many areas of telecommunications.
Take my home county of Hettinger County, ND, a very small county,
several thousand people, about three towns, the largest of which is
1,200 or 1,400 people, no one will be rushing in to provide local
telephone service in Hettinger County.
This is not a case where you fire the gun and at the starting line
you have eight contestants lined up to find out who can win the
commercial battle to serve the telephone needs of that small rural
county. You might, however, have someone decide to come in and serve
one little town in that county, because maybe it would be worthwhile to
serve that little town, but only that town.
If they bring telephone needs to that town and take the business away
from the existing service carrier, the rest of the services would be
far too expensive and the whole system collapses.
For that reason, in this legislation we described a condition in
which, if someone comes in and decides to serve in one of those areas,
one of the conditions is that they would have to serve the entire area.
They would be required to serve the entire area as a condition of
receiving these support payments from the universal service fund.
Then the bill also said that in designating an additional essential
telecommunications carrier to come in and compete in a rural area,
aside from requiring they have to serve the entire area, they cannot
come in and cherry-pick and pick one little piece out.
Aside from that, the bill said that the States may require there be a
designation; that the designation would be: First, in the public
interest; second, encourage development of advanced telecommunications
services, and third, protect public safety and welfare.
My universal service amendment very simply says that provision of law
shall be changed from ``may'' to ``shall.'' In other words, the States
shall require that there be a demonstration of those three approaches.
I think it is very important that those who live in rural America,
who are not going to bear the benefit of the fruits of competition, are
given protection.
That is the purpose of my offering a universal service amendment.
This amendment is supported by the National Telephone Cooperative
Association, National Rural Telecom Association, the USTA, Organization
for Protection and Advancement of Small Telephone Companies.
They understand, like I understand, that the chant of competition is
not a chant that will be heard in the rural reaches of our country. We
are simply not going to see company after company line up to compete
for local service in many rural areas.
If that does not happen, and it will not, we need to make certain
that the kind of telephone service that exists in rural counties will
be the kind of telephone service that brings them the same opportunity
as others in the country will be provided.
We should make sure that we have a buildout of the infrastructure, so
this information highway has on ramps and off ramps--yes, even in rural
counties of our country.
If we, in the end of this process, finish the building out of an
infrastructure in telecommunications by having a continued, incessant
wave of mergers and consolidations into behemoth companies that are
trying to fight to serve where the dollars are, big population centers,
affluent neighborhoods, but decide to leave the rural areas of the
country without the build-out of the infrastructure and without the
opportunities that they should have, we will, in my judgment, have
failed.
Mr. President, while I am on my feet I would like to comment on a
couple of other points in this legislation. I supported the legislation
coming out of the Commerce Committee and indicated then that I had some
difficulties with several provisions in it.
One concern I have deals with the provision in the legislation on the
subject of ownership restrictions.
It is interesting that we have in this bill the inertia to try to
provide more competition, and then we, in this attempt to say to those
who want to own more and more television stations, yes, we will lift
the barrier here, we will change the rules so that you can come in and
consolidate and buy and own more television stations.
That does not make sense to me. That is moving in the opposite
direction. The telecommunications bill is about competition. I do not
think we should say it is fine with us if one group or consortium
decides to buy more and more television stations and we lift the
ownership limit from 25 to 30 percent--some say to 50 percent--of the
audience share. I think that flies exactly in the opposite direction of
competition.
Consolidation is the opposite of competition. I intend to offer an
amendment on this and hope we will preserve the opportunity to decide
what is in the public interest with the Federal Communications
Commission. Instead of having an artificial judgment in this bill that
says let us lift the restrictions and allow people to come in and buy
more and more television stations into some sort of ownership group. I
do not think that comports at all with the notion of competition. I am
going to offer an amendment on that at some point.
I would like to talk also about the issue of the role of the Justice
Department. I know Senator Strom Thurmond and others are interested in
this subject. I intend to offer an amendment on the subject of the role
of the Justice Department in this bill. The question of when the
regional Bell Companies are free to engage in competition for long
distance relates to when there is competition in the local service
area, in the local exchange. When will the Bell Service Companies open
themselves to local competition? When they do, when there is true local
competition, then they have a right [[Page
S7949]] and ought to be able
to compete in the long distance markets.
The problem is that in the telecommunications bill, the role of the
Justice Department--which ought to be the location of where the
judgments about whether or not there is competition in the local
exchanges--is rendered a consultative role. The Justice Department is
defanged here, and I do not think that ought to be the role of the
Justice Department. Again, I think this flies in the face of all of the
discussions I heard about the virtues of competition. If we are talking
about competition being virtuous, then let us make sure competition
exists before we release the Bell Companies to engage in competition
with the long distance industry.
How do you best determine competition exists? With the mechanism we
have always used to determine it. The antitrust judgments and
evaluations by the Justice Department. It does no service, in my
judgment, to the American people to decide to take out the traditional
role of the Justice Department in preserving and protecting the
interests of competition with respect to this issue when the Bell
Companies will be set loose to engage in competition in the long
distance business. So I also intend to offer an amendment on that
issue. That is a critically important issue.
In conclusion, I think there is much in the telecommunications bill
that is useful, valuable and will provide guidance to the direction of
the telecommunications industry and its service to the American people,
but this legislation is not perfect. This legislation has some
problems. I pointed that out when I supported it out of the Commerce
Committee.
I have a great friend on the floor, Senator Hollings, the ranking
member on the Commerce Committee, who I think is one of the best on
telecommunications issues. I have been pleased to work with Senator
Pressler, who I think has done a remarkable job in bringing this bill
to the floor as well. But let us not say, ``Now, gee, this bill came
from high on stone tablets and cannot be changed. We cannot accept any
changes here.'' I think universal service is one amendment we can
accept, but there are going to be some big changes proposed, some of
which will have merit.
You can say, ``This bill is carefully balanced on the scale. We read
the meter with expertise and just cannot make changes.'' It is like the
argument of a loose thread on a $20 suit. You pull the thread and the
arms fall off. We have people coming here and saying if this amendment
is agreed to, the coalition breaks apart, the balance of the bill
somehow is skewed, and the bill will fail.
We must, in the intervening days as we debate this legislation, take
a hard look at a whole range of issues. The Justice Department role,
yes. I have not mentioned the foreign ownership issue, but that is also
of concern to me. The concentration of ownership in this country of
television stations, as an example. Those are all issues I think are of
great concern and we ought to weigh carefully.
I hope the Chair and the ranking member on this legislation will
entertain constructive and useful proposals to strengthen and improve
this legislation in the public interest of this country.
Mr. President, I have sent the amendment to the desk. I believe this
amendment may be acceptable. In any event, at this point, I yield the
floor.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. HOLLINGS. Right to the point, Mr. President, the distinguished
Senator from North Dakota has a good amendment. I should make a couple
of comments, though, with reference to his references and those of my
friend, the distinguished Senator from Nebraska, who has been very
participatory, and a cosponsor of the legislative reform in
communications reform.
With respect to the general picture here on communications, the
Senator from North Dakota is right. We do think this is balanced, that
it cannot be balanced any more, that this bill did come down from on
high and we are not going to accept any amendments.
That is out of the whole cloth. I learned long ago I could not pass a
communications bill by itself, that the Democrats could not pass a
communications bill by itself and the Republicans could not pass a
communications bill by itself. We really have to work this out in a
bipartisan fashion. Senator Pressler has given us the necessary
leadership and I am committed to working with him in a bipartisan
fashion. That maybe I have created an atmosphere where there will be no
amendments and we know it, the opposite is the case. We are begging
Senators to come, as we begged the Senator from North Dakota to hasten
on and present that amendment.
A word should be said about the industry and the service that we have
because comments have been made about all of these entities involved,
and there are 30-some. People should understand. We have the long
distance industry, the cable industry, the wireless cable, the regional
Bell Operating Companies, the independent telephone companies, the
rural telephone companies, newspaper industry, electronic publishing
industry, the satellite industry, the disabled groups, the broadcast
industry, electric utilities, computer industry, consumer groups,
burglar alarm industry, telemessage industry, pay phone industry,
directory publishing industry, software industry, manufacturers, retail
manufacturers, direct broadcast satellite industry, cellular industry,
PCS, States, public service committees, commissions, the cities, the
Federal Communications Commission, the Clinton administration, the
Department of Justice, the Secretary of Education--all the public
entities.
Communications is a very splendid thing. With respect to not wanting
to open up all the markets, I had a good friend who took a poll with
what you call a peer review group, testing thing, what do they call
that thing when they get them all together?
Mr. DORGAN. A focus group.
Mr. HOLLINGS. A focus group. Thank you, Senator.
They had a focus group in Maryland last week and 90 percent of them
have never heard of the Contract With America. That is all I heard
about since January. In fact, it started in November, I think. But they
still had not heard of the contract. You can bet your boots the Senator
from Nebraska is right; people are not storming the doors for a
communications bill. In fact, with all of these entities calling on the
Senators and having to make up their minds, yes or no, the Senators
from the South say let that communications bill go, let us not call it
up now, let us delay it, we did last year because there are so many
tough decisions to be made. But on the information superhighway,
Congress and Government are squatting right in the middle of the road
and the technology is rushing past it.
The information superhighway is there. We have been a hindrance,
obstacle to it, and what we are trying in this balanced approach and
bipartisan approach is to remove the obstacle of Government, with the
view of the Senator from North Dakota that universal service continue.
He is right on target. I have been very much concerned having
experienced the airline deregulation. So we want to make certain that
they can come in and render this service. In that light, our
communications system has been the best in the world. Yes. The Bell
Operating Companies, because these parties are so competitive--I have
not necessarily been in love with either side because it is hard--they
are really individually competitive. But after all, AT, long
distance, has to file tariffs. They are controlled by the public, and
operate in the interest of the public convenience and necessity. Every
one of the Bell Companies have to respond, not just to the FCC but to
the individual public service commissions. They operate on the basis of
public convenience and necessity. They have a monopoly, yes, but their
profits are controlled, and everything else.
If there is anything operating as a large corporate entity in the
interest of the public, it has been the Bell Operating Companies. They
have been most responsive. We have as a result the finest
communications system in the world. Let us maintain it. On universal
service, let us extend it. Let us not be in any way doubtful about it
because the lead-in word that goes into this particular requirement
about another universal service carrier is ``shall.''
[[Page
S7950]] The language reads, ``If the commission
