Michael Enzi

Mr. ENZI

Mr. ENZI. Madam President, I will make brief comments while my colleagues are preparing to speak. I am pleased we have had the opening statements that we have had so far, and particularly I am pleased with this colloquy we have just had which shows that we have built some supreme authority into the Presidential position that gives the President the right to trump the other provisions that are in the bill but that still puts a process in place which we hope will be followed because foreign availability will definitely bite us if we do not work with other countries to control it.

Mr. ENZI. Mr. President, I rise in support of S. 149, the Export Administration Act of 2001. Consideration and passage of this bill are essential for the advancement of our national security, our foreign policy, and our economic interests. I am very excited that today is here. This is the culmination of a lot of effort on the part of Senator Johnson, myself, Senator Sarbanes, and Senator Gramm. Almost 3 years ago now, Senator Johnson and I, as chairman and ranking member of the International Finance Trade Subcommittee of the Banking Committee, were given the task of looking at the Export Administration Act to see if it could be renewed. It had expired in 1994, and there was recognition that there was a huge gap in our national security. That was brought to light a lot, of course, by the Cox commission, which looked at some of the ways China was stealing secrets from the United States. A very extensive document during the original part of this process was a top secret document, and later a public version was put out; it brought a lot of attention to the issue. There had been 12 previous attempts to renew the Export Administration Act. They had failed. Only one version in the House had even gotten out of committee. It is an interesting bill because here in the Senate there are 100 Senators who are concerned about national security. There are also 100 Senators who are concerned about the economic interests of the United States. When a bill is balanced, it will have more than 50 percent in favor, but we have found that the way these coalitions merge, there are more than a majority in opposition to everything that has happened. We faced the unique challenge of trying to do what the other 12 bills had not been able to do. To do that, Senator Johnson and I went through a process and saw exactly how the whole process worked. We visited each stage of the licensing process. It occurs to me at this moment that there may be people who don't understand the licensing process. There is a lot of confusion among people about the different licensing processes because there isn't just one. We are only talking about the Export Administration Act. The Export Administration Act is different from the Arms Export Control Act. It is different by way of what is controlled. The Arms Export Control Act, of course, handles defense articles and services. The Export Administration Act, on the other hand, handles dual-use products. That could be very confusing. Dual-use products are primarily not used for a military purpose but could have a military purpose. That is the main distinction between the Arms Export Control Act and the Export Administration Act. The jurisdiction between these two acts is different because the State Department and the Defense Department, of course, have a much greater interest and need to control the defense articles and services. The Commerce Department has been given the jurisdiction over dual-use products provided they are involved with the Department of Defense, the Department of State, and the security agencies, all of which have some voice in the licensing process. One of the big changes in this bill is the way that licensing process happens so that each of those agencies has a little greater role in being able to object to a license. At any rate, the Republicans and the Democrats on the Banking Committee and on the subcommittee went through a bipartisan process and worked together to reach a point of balance with a majority of the security folks who are interested in the bill and a majority of the economic interest folks who are interested in the bill. And there is overlap. That is how it is possible to have a vast majority from both sides. I am pleased to have a bill before us today that, after a lot of changes, I think has reached that point. I have to thank Senator Sarbanes and Senator Gramm for giving us the opportunity to pursue this. I know it is not the most exciting bill in the world. In fact, some people would say it is an accounting sort of thing, a boring sort of thing. But it is one of the most important bills that will pass. It is just very detailed. That makes it difficult to consider. Over the last 3 years, a lot of people have looked at this, a lot of people have given suggestions and, in fact, the handful of people who have provided the most opposition have also provided the most change. We have put in 59 changes based on their suggestions for how we needed to increase national security. We have been working with everyone. We are still willing to work with everyone. Of course, the latest one we worked with is the President. The President suggested 16 changes that are also included in the bill. At this point, we appear to have a balance that still has a vast working majority to pass the bill and I think a bill that will provide national security. Of course, the best evidence that it will provide national security is the President himself. The President has strongly urged the Senate to pass it quickly. I have a chart of President Bush's support: In working with the Senate, we're working to tighten control of sensitive technology products with unique military applications, and to give our industry an equal chance in world markets. I believe we've got a good bill, and I urge the Senate to pass it quickly. That was March 28. Later: During the campaign, I promised to lead an effort to reform our export control system, so that it safeguards genuine military technology while letting American companies sell items that are already widely available. I'm pleased to report the Senate Banking Committee passed a revised EAA, which my administration strongly supports. It's now time to pass it for the House, so I can sign it into law. There have been numerous statements by the President. He has had an interest in this bill, clear back to when he was campaigning and this was part of his Web site. Since August 20, we have been operating under the International Economic Emergency Powers Act, IEEPA, that was referred to by the chairman of the committee, Senator Sarbanes, due to the expiration of the EAA. It is one of those temporary extensions we passed. Operating EAA under IEEPA is unacceptable. IEEPA applies minimal penalties to exporters of unlicensed technologies and puts confidential business records of the business community at risk of exposure. I want to mention some of the changes and the differences between penalties because that is a big security portion of this bill. Under criminal penalties, for companies that willfully violate under IEEPA, there is a penalty of $50,000 per violation. Under the old EAA of 1979, which has been extended a few times, there is a $1 million penalty, considerably greater than the $50,000 penalty, or five times the value of the exports, whichever is greater. Under the bill we are considering, instead of even the $1 million fine under EAA, it will be $5 million per violation or 10 times the value of the exports, whichever is greater. Persons who willfully violated under the IEEPA would have gotten a $50,000 penalty or 10 years imprisonment or both. Under the EAA, they would get $250,000 or 10 years imprisonment or both. But under the bill we are considering at the present time, instead of the $250,000, it will be $1 million or 10 times the value of the exports, whichever is greater, or 10 years imprisonment, or both. We have considerably increased the penalties. Under IEEPA, the penalties are almost the cost of doing business or perhaps less than that. Under the EAA, the amount of the violations has been bypassed by inflation, but that has been easily taken care of in this bill. Under civil penalties, it is the same situation. Under IEEPA a civil penalty is $10,000, and under EAA a civil penalty is $100,000. Under this bill, a civil penalty will be $500,000. The last major revision to the EAA came when the Soviet Union was still in existence and considered a threat to our national security. That revision of the EAA of 1979 occurred before the Berlin Wall came crumbling down and freedom was unleashed for the first time in almost a generation for millions of Europeans. At that time, almost all of the new invention development was also Government funded. Today most of it is done by the private sector which is forging ahead without Government money involved. There is no need to postpone passage of this critical legislation any further. The issues surrounding the reauthorization of the EAA have been studied and studied and restudied. The President, Secretary Rumsfeld, Secretary Powell, Secretary Evans, and National Security Adviser Condoleezza Rice have endorsed this bipartisan and responsible legislation. Here is one of the messages from Condoleezza Rice, National Security Adviser: The Secretary of State, Secretary of Defense, Secretary of Commerce, and I agree that [S. 149 as reported] will strengthen the President's national security and foreign policy authorities to control dual-use exports in a balanced manner, which will permit U.S. companies to compete more effectively in the global marketplace. S. 149 represents a positive step towards the reform of the U.S. export control system supported by the President. In listening to the arguments of the critics of this reasonable bill, there seems to be a misunderstanding about what the current law is. If a comparison of the 1979 EAA and S. 149 were made, one would find numerous similarities, as were pointed out by Senator Sarbanes, chairman of the committee. In addition, one would find several new and more extensive national security control authorities included in S. 149 that allow the President to restrict the export of technologies critical to our national security. Senator Sarbanes has covered that in his remarks. Contrary to what the critics would have you believe, this bill is not a radical new approach to export controls or a radical departure from the current export control system. It updates and simplifies certain aspects of the act that are outdated or unnecessary but keeps the basic structure of the 1979 act. There are reasons why this administration's national security experts are unified in their support of S. 149. It builds upon the framework of the current law, or the 1979 act, while modernizing, simplifying, and streamlining the act and export control processes, again involving all of the people who have been involved in it in the past in this administration and the previous administration to come up with a balanced proposal. It requires a risk analysis of proposed exports and emphasizes transparency and accountability to both the Congress and the exporter. With transparency and accountability, we and the people trying to put products out will have a better opportunity to follow the process and stay within the law. S. 149 embraces national security and foreign policy export controls even going well beyond the 1979 act in several respects. For example, the bill grants to the President special control authorities for cases involving national security and international terrorism, as well as international commitments made by the United States. Section 201(c) allows controls to be imposed based on end user and end use of an item if it would contribute to the proliferation of weapons of mass destruction. Section 201(d) adds enhanced controls which allow the President to impose controls on any item, including those items with incorporated parts for national security purposes. These two national security protections are not in current law and could be used regardless of the foreign availability or mass market status of the item. In addition, the bill retains the Presidential set- aside authority in the case of foreign availability determination, section 212, as well as unlimited set-aside authority for mass market determination. Those are two determinations. Foreign availability, of course, is if the same product of the same quality is available from other countries that can compete with our industry and do not have to follow our export laws, under some very careful criteria that has been outlined in the bill, then they have the right to export those properties. The President has the right to override it. Mass market, of course, has already been explained as those items you can go to the store and buy at a relatively low price anywhere in the country, which makes any regulation over their export very difficult. A tourist coming to the country can go to the store, pick up the item, put it in their suitcase, and take it home. If it is that widely available, then it is very difficult to control. The purpose of our bill, of course, is to build a higher fence around fewer items and really concentrate on those things that can be controlled and need to be controlled and put more effort and resources into it. The general authorities contained throughout the bill are entirely consistent with the current law. The bill requires concurrence with the Secretary of Defense for identifying which items are to be included on the control list for national security purposes. There are three stages to this. There is a control list which gives people an idea of what kinds of items need to be licensed. There is a country tiering system. This is the one that evaluates countries in the world. No countries are named specifically, but the President, in cooperation with the experts that he has, would rank these people through three tiers from bad to good, with a whole bunch in the middle, which would all have different rights to access things on the control list based on their sensitivity. Then, of course, if it has to be licensed, it has to go through a licensing process. So we are talking about concurrence of the Secretary of Defense for identifying items to be included on the control list for national security purposes, and this is consistent with current law. The foreign policy export control authorities in title III are exercised by the Secretary of Commerce in consultation with the Secretary of State. This is also identical to current law. In addition, the authority for the issuance of regulations is the same as the EAA of 1979. The Banking Committee determined that a flexible but transparent process was essential to keep the export control system from becoming obsolete the day after it becomes law. S. 149 allows flexibility for the administration in implementation of export controls because technology is changing at a phenomenal rate. Business models are very different from those employed a decade ago and, of course, globalization is breaking down some of the traditional barriers to trade and investment. As a result, it is vital that Congress resist the temptation to lock into a statute policy toward a specific country or a specific item. Experience has shown that this is not an advisable course of action in most cases. Flexibility is needed in the light of rapid technological change. To illustrate this point, the Congress placed in fiscal year 1998 the National Defense Authorization Act provisions relating to high-performance computers. Concerns were genuine about the export of computers to potentially dangerous end users. However, to my knowledge, never before had the Congress locked into statute a specific parameter of control for an item. In addition, the Congress initially required a 180-day waiting period before the President could change the MTOPS control threshold, the speed of the computers. As we all know, this was in the midst of some of the most rapid advancements in computing power constraining the administration's ability to keep pace with technological progressions. In keeping with the need for flexibility, the Banking Committee adopted an amendment offered by Senator Bennett that would repeal the MTOPS 180-day waiting period. This does not mean computers would not be controlled. Instead, it means the President may control computer exports in a way that is more effective, more updated. S. 149 emphasizes the need for strengthened multilateral export control regimes. Multilateral controls are the most desirable because they are the most effective. This is where we get our allies and our friends, again any country that we can talk into it, to join us in the control effort. As Senator Sarbanes pointed out, we have been emphasizing to other countries they need to have a good export control act, a good export licensing process. We are the ones who are behind the curve on doing that. The multilateral controls need to be more emphasized. We used to have a process, a regime, called COCOM, and it was a mandatory group of our allies that under agreement would eliminate exports on which they agreed across the board. After the fall of the Berlin Wall, COCOM disappeared. We have a process called Wassenaar now, the Wassenaar Arrangement, which is more of a voluntary effort. Section 501 of this act urges the President to undertake efforts to strengthen or build upon multilateral export control regimes. I had the distinct pleasure of serving as a cochair with Senator Bingaman and Congressman Cox and Congressman Berman on the congressionally mandated Study Group on Enhancing Multilateral Export Controls for U.S. National Security. The study group, with the assistance of the Stimson Center, came to the conclusion that reform of the export control system is vital to U.S. national security objectives. Now we recommend that the U.S. should seek to improve the Wassenaar Arrangement with the long-term goal of merging existing multilateral regimes. Additionally, the study group recommended that the U.S. should reform its export control laws to build confidence and support among allies and friends for improving multilateral export control regimes. The provisions in S. 149 are consistent with these recommendations and should help to guide the administration as it seeks to strengthen the multilateral efforts and arrangements so we do not unnecessarily punish U.S. firms with unilateral controls. Finally, and importantly, the bill greatly enhances enforcement. It substantially increases criminal and civil penalties for violators, and I went through some of those differences between what happens with the Executive order we are under now and the previous EAA act of 1979 and the present one. It adds new resources for enforcement activities including an additional $4.5 million for end-use checks. It strengthens postshipment verifications, checking to see if the product actually went where the product was supposed to go. By targeting resources to exports involving the greatest risk rather than focusing solely on computers--there are other things out there that need to be checked on--this puts more money into the checking and targets those things that create the greatest risk to the United States. The Banking Committee took a tough stand on violators of postshipment verifications. We do not believe we should reward those entities that deny postshipment verifications. Therefore, the bill requires the Secretary to deny licenses to end users that do not allow postshipment verification for a controlled item. That is pretty well nailed down with the company involved, any subsidiaries of the company. I think it keeps them from getting around any provision of that. It strengthens postshipment verification, which is something that needed to be done. In conclusion, I offer a couple of quotes from a general and a former National Security Adviser, Brent Scowcroft. On June 8, 2001, when the Center for Strategic and International Studies publicly released its report on computer exports and national security in the global era, General Scowcroft said that some seem chained to the same policies that are largely not useful, and that there is a natural bureaucratic tendency to cling to the current rules. As we consider S. 149, I urge my colleagues to be mindful of General Scowcroft's comment and do the right thing and support passage of the Export Administration Act of 2001. Export control issues have been intensely reviewed and all the results of the studies come to the same conclusion. It is best for Congress to reauthorize the EAA now. The Senate should act now and pass this bill. I express thanks to the chairman, Senator Sarbanes, and Senator Gramm, to my coworker on this, Senator Johnson, and the new chairman and ranking member of the Subcommittee on International Trade and Finance, Senators Bayh and Hagel who have done a great job. I would be remiss if I did not mention some of the staff people: Katherine McGuire; my legislative director, Amy Dunathan; the Banking Committee staff, Joel Oswald, who used to be on my staff. There was a 3-year time and there has been some transition. Paul Nash, Naomi Campbell, and Marty Gruenberg have done a tremendous job working around the clock in putting together this bill. They have been good at coordinating our efforts so we could get together with everybody. As I mentioned, we are still willing to talk to anybody about any of the provisions but think that a bill has been put in place now that has some balance to it. Of course, 16 changes we made on behalf of the President incorporated a number of issues that some of the security chairmen had been concerned about. We think we have a bill that should and can be passed. I yield the floor.

Mr. ENZI. Mr. President, I rise in opposition to the amendment to S. 149 proposed by the Senator from Tennessee. This amendment contains substantial changes that will not only upset the delicate balance of control between agencies established in S. 149, but it will create a burdensome licensing, classification and regulatory process and further fuel the turf battles between agencies. This amendment would allow a reviewing agency to stop the clock during the licensing application process ``due to the complexity of the analysis'' or ``because of the potential impact on the national security or foreign policy interests of the United States.'' Simply put, it would unnecessarily delay licensing decisions and, ultimately, reduce the competitiveness of U.S. exports. This amendment is unneeded at best and harmful to national security and the economy at worst. The danger of this amendment lies in that it would enable a single agency to delay the approval of a license for up to 60 days due to the ``complexity of the analysis.'' Used effectively as a delay tactic, a reviewing agency could bury an application in the ``complex analysis required'' bin and walk away for 2 months. The natural bureaucratic tendency to avoid risk would cause unprocessed license applications to languish for days weeks or even months without any action. This extended delay would not only greatly increase the overall processing time, but it could bring the entire process to a grinding halt and destroy an exporters ability to meet market demand quickly and efficiently. Furthermore, at this point, the exporter is in limbo, as she or he neither has the approval needed to move forward or the denial needed to make improvements. One exception would allow for 60 days, but there are two exceptions in here. So it can be read that an agency would get 120 days by utilizing the two exceptions one right after the other. Although proponents argue that this amendment would ensure ample time for the Department of Defense, the Department of State or other reviewing agencies to conduct their investigations, it is, in reality, a solution in search of a problem. Never has there been a case where the Departments of State and Defense have not had enough time to adequately review a license application. In fact, Fiscal Year 2000 data from the Department of Commerce indicates that the average time for the review of a license by the Department of Defense was only 13 days. The Department of Energy averaged 22 days, while the State Department averaged 9 days. All three agencies demonstrated that the 30 days currently permitted to review a license is more than adequate. Exporters lose their customers when faced with uncertainty about delivery times. This amendment could place all export licenses in virtual limbo for five months--surely enough time for competitors to easily step in and fill our exporters orders. Moreover, any agency that might conceivably require more time to review an application is fully protected under S. 149. First, an agency may exercise any of the carefully thought-out exceptions listed in Section 401(g). For example, under Sec. 401(g)(1), the applicant might be willing to provide additional time in order to have a better chance at approval. Second, an agency is always free to return a recommendation of disapproval, thereby kicking the application into the interagency dispute resolution process. Third, once within the interagency process, an agency can escalate a decision to a higher level. Second, the amendment undoes the discipline of the entire system. A key recommendation of the various commissions that have studied our export control system is to increase discipline in the export control system. Without strict deadlines, discipline disappears. And without discipline, the system is unworkable. An undisciplined system is the same as no system at all. The consequences for both our national security and economic interests would be severe. It was mentioned in the arguments in favor that the Cox commission had taken a look at this and proponents argue that the longer review periods were provided for by the Cox commission. The Banking Committee extensively reviewed the recommendations of the Cox committee, and indeed adopted virtually all of their dual-use- related suggestions. Recommendation 31 of the Cox committee did suggest longer review periods for national security purposes. However, the Cox committee made that recommendation only with regard to items that are of the greatest national security concern. For other items, the Cox committee strongly recommended streamlining the process and providing greater transparency, predictability, and certainty. S. 149 does not classify items as of ``greatest national security concern'' or ``lesser national security concern.'' Instead, it sets up a risk-based system that allows the administration to make such determinations within the bill's guidelines. Based on past experience and demonstrated agency data, both the administration and the bill sponsors believe that S. 149's system--by setting mandatory time periods with the existing ``stop the clock'' exceptions--is the most effective framework for operating export controls. In conclusion, this amendment, although it is portrayed as simple and common-sense, undoes the key element of discipline of S. 149. It would result in a application system bogged down by bureaucracy and politics, a system in which delays are the rule rather than the exception. It is not simple or technical, but would undo the careful balance of the bill. I urge its rejection. I thank the President. I yield the floor.

Mr. ENZI. That is why we are concentrating on the multilateral control as opposed to the way we have been doing it which is the unilateral control. Unilateral control does not work. Every report shows that. I also thank the Senator from Tennessee for his comments about the commission that was chaired by Mr. Rumsfeld and the expertise that he alluded to--and I would confirm--that Mr. Rumsfeld has on weapons of mass destruction. Of course, one of the reasons that I am very willing to point that out is to reemphasize the letter that we had printed in the Record this morning from the Secretary of State, Colin Powell, the Secretary of Defense, Donald Rumsfeld, and the Secretary of Commerce, Donald Evans, which is dated today, and was delivered to us, that shows the support of these three Secretaries for S. 149. It isn't a hedged support; it is a very specific support. We appreciate the expertise of Mr. Rumsfeld in the area of weapons of mass destruction and, while these are dual-use items, he gives the same level of credence to our bill as to his report. Another fine line that needs to be pointed out is that in our bill one of the things we did not do was turn the process over to the bureaucrats. We turned the process over to the elected officials. We went to the power at the top. The reason we did that is because there is a tendency among bureaucrats to pigeonhole things, to avoid decisions; and if you build a process that allows them to avoid decisions, they will avoid decisions. That is why we put some of the time limits that are in here in here. But there is, at any step of the process, the capability of stopping the whole process. And that is also built in this bill. Mr. Thompson. Would the Senator yield for a moment?

Mr. ENZI. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. ENZI. Mr. President, it is with a lot of regret and sadness that I learned of this decision this afternoon. I came to the Senate just 4\1/2\ years ago, which would be about the equivalent of the college degree. During that time, I have gotten to study under Phil Gramm. There have been a lot of times that I really thought I ought to be paying him tuition. It has been a tremendous educational process. If we could just get him to be a little more outspoken. I do recall he said when he retires he is going to retire to a town in the United States that does not have a single traffic light. I assume there are still some of those in Texas. If there are not, Wyoming would welcome the Senator with open arms. We would love to have him there and, of course, we are looking forward to the game against his alma mater, Texas A&M, the team the Senator follows day in and day out, and we are looking forward to a good contest. I thank the Senator for all of the instruction that he has given, for the education he has provided for America. I have appreciated the stands he has taken and the ferocity with which he has taken them. Thanks again for the education.

Mr. ENZI. I appreciate that. I was hoping we would get to amendments. I yield for that purpose. Amendment No. 1481

Mr. ENZI. While the parties have been speaking, and we have been in contact with the White House to see how difficult the time schedule in the S. 149 bill would be to meet, I have been told there is no problem meeting those time schedules, that the agencies can do that, the agencies have done that; that the records show they have been able to meet those time deadlines, and the administration is opposed to this amendment. This amendment allows the reviewing agency to stop the clock during the licensing application process. One of our difficulties in arriving at a bill has been to eliminate turf battles. The agencies are working very cooperatively, but there is the potential of who will be in charge of what and how long the delay and who can cause them, which changes the balance between the agencies. This bill has that balance between agencies. The agencies agree--and there will be a letter on everyone's desk-- that they have the capability of operating 60 days under this bill. This bill does not just give 60 days. It could give 120 days the way it is written, which in addition to the 30 is 150 days for a process that has been workable in less than 30 days by each of the three main agencies that have been reviewing the bill. Under this amendment, a single agency could further delay the approval of the license based on the complexity of analysis and then potentially use the other excuse to delay it another 60 days. The bill already provides for several different ways to stop the clock on any bill. The license applicant and the Secretary of Commerce mutually agree more time is necessary to process the application, or if more time is needed to verify and identify the reliability of an end user, or if additional time is necessary to secure government to government assurances regarding item end use, or if more time is required for multilateral review if applicable or if additional time is needed to allow for congressional notification, if that is required, if more time is necessary to permit consultation with foreign governments, then, of course, we have the essential provisions of the bill. First, an agency could exercise any of these thought-out exceptions that are very carefully defined in the bill. The two provisions in this amendment are not carefully defined. So they give a very broad, general, bureaucratic approach that allows people to pigeon hole a bill and walk away from it for at least 60 to 120 days. They could use the carefully thought-out defined provisions in section 401(g). Second, any of the agencies are free to return a recommendation of disapproval. That kicks the application into the interagency dispute resolution process which would give additional time for the review. Third, once within the interagency process, the agency can escalate a decision to the higher level. In practicality, after you and I have watched the process, Mr. President, and seen how it works, it also works if the agency calls and says we can give you a disapproval right now unless you can provide additional time or information. That same process is an effective way of stopping the clock, provided the application doesn't have to go back to ground zero when it comes back in again. That is a mechanism that has been used. This amendment unravels the discipline of the system that has been set out. With its capability of escalating clear up to the President, there is a recognition that this can take a lot more time. That is how the time element was addressed under the recommendations we had from the different commissions. A key recommendation of the various commissions that study our export system is to increase the discipline in the export system. Without deadlines, discipline disappears. Without discipline, the system is unworkable. An undisciplined system is the same as no system at all. The consequences for both our national security and economic interests would be severe. My colleague mentioned the Cox report. The Cox report was done before S. 149 was done, or even S. 1712 was done. We reviewed those recommendations. Recommendation No. 31 did suggest longer review periods for national security purposes. The Cox Commission made that recommendation only with items that are of the greatest national security concern. For other items, the Cox Commission strongly recommended streamlining the process and providing greater transparency, predictability, and certainty. We did that, plus building into the system this system of referrals, that easier process of resolving interagency disputes or interagency concerns, the ability to escalate in the process. So that got built into the system at the same time, which answers some of those concerns. S. 149 does not classify items as being ``of greatest national security concern'' or ``of lesser national security concern.'' It sets up a risk-based system that allows the administration to make such determinations within the bill's guidelines. Based on past experience and demonstrated agency data, both the administration and the bill's sponsors believe that S. 149's system, by setting mandatory time periods with the existing ``stop the clock'' exceptions, is the most effective framework for operating export controls. For that reason, the bill does not include that particular and specific aspect of the Cox Commission recommendation. This amendment, although it is portrayed as simple and common sense, undoes the key element of the discipline in S. 149. It would result in an application system bogged down by bureaucracy and politics, a system in which delays are the rule rather than the exception. It is not a simple or technical change but would undo the careful balance of the bill. I have mentioned what can be a tendency. What we tried to do with the bill was escalate the decisions up to the higher levels of government rather than have the decisions made at the bureaucratic level. We have tried to eliminate possibilities that, rather than make a decision, people would pigeonhole things. This is one of those opportunities to pigeonhole things for 60 to 120 days, with an undefined but good- sounding concern. I do urge rejection of this amendment and ask colleagues on behalf of the administration to join me in that rejection.

Mr. ENZI

Mr. ENZI. Mr. President, I ask unanimous consent that Cara Calvert, a new legislative assistant on my staff, be given floor privileges during the remainder of this debate.

Mr. ENZI

Mr. ENZI. Madam President, I rise to express my concerns about the lack of review and reporting requirements for S.1218, the reauthorization of the Iran-Libya Sanctions Act, known as, ILSA. I believe that a renewal of any sanctions law should accompany a full review and report to the Congress on the effectiveness of the sanctions policy it imposes. First, I want to express my support for the goals of ILSA. All of us want to prevent terrorist organizations from carrying out their terrible activities and we want to stop the dangerous proliferation of weapons of mass destruction, (WMD), technology. We must work with our allies and friends to use multilateral means and pressure these entities and countries to depart from these dangerous activities and work to encourage them to behave in a manner consistent with international norms. In the case of Libya, multilateral agreement on the course of action has been largely reached. Libya must take full responsibility for the despicable terrorist act resulting in the downing of Pan Am flight 103. In the case of Iran, however, the level of multilateral agreement is less consistent, in part because Iran has made some changes, albeit very small. The Banking Committee recently reported, by a 19 to 2 margin, the Iran-Libya Sanctions Act. I was one of those who could not support the bill at the time because it failed to require a report on the results of ILSA. I believe that this Congress has neither taken adequate time to examine the effectiveness of ILSA, nor the consequences of renewing ILSA for 5 years. At the Banking Committee markup, I supported Senator Hagel's amendment, which would have reauthorized ILSA for two years, and more importantly, required the President to report to the Congress on the effectiveness of the Iran-Libya Sanctions Act. The administration also requested a 2-year reauthorization so it could have a better opportunity to review its effectiveness. It is reasonable and prudent policy to review sanctions laws on a periodic basis. It would help ensure that the administration and Congress work together to forge an effective, commonsense policy which promotes our national security and foreign policy goals. We are living in a complex and more globalized world, so periodic review is necessary to keep pace with new developments. I also encourage a review of all of our sanctions statutes specifically relating to Iran to ensure a simplified approach to U.S. sanctions policy toward Iran. The current ILSA does not sanction Iran and Libya. Instead, it sanctions those who engage in certain levels of investment in Iran's and Libya's petroleum sectors. In addition, it does not appear to me that the Congress fully considered the few positive developments that have occurred in Iran since the 1996 when ILSA was first passed. I fully understand that the hard-line clerics still control many of Iran's policies. However, we must not turn a blind eye toward Iran's election of Khatemi and the desire of young Iranian people to liberalize Iran's policies. Instead of showing some willingness to work with Iran, we are demonstrating our own inflexibility. The United States has direct national security interests in maintaining the stability of the Middle East. Israel is an island of stability within this turbulent region. It deserves the support of the United States. In doing so, however, we must do everything possible to avoid making enemies for both the United States and Israel in that region. The U.S. must remain strong, but willing to revisit issues of such importance to the security of both the United States and Israel. It is my hope that despite the lack of a reporting requirement in S.1218, the Bush administration will conduct a thorough review of the effectiveness of ILSA and other sanctions laws.

Mr. ENZI

Mr. ENZI. Mr. President, I ask unanimous consent that Patrick Thompson, who is from my committee staff, be granted the privilege of the floor during the remainder of the debate.

Mr. ENZI

Mr. ENZI. I thank the Chair. Mr. President, I congratulate the Appropriations Committee for the fact they covered all of the expenditures. Senator McCain has covered the expenditures, but before we vote for Senator McCain's amendment, I ask that we give some serious concern to from where some of this money is coming. I serve on the Small Business Committee, and we have worked on a number of ways to be sure people who lost jobs could have additional training. So I rise today to express some serious concern over the use of workforce investment funds to offset 2001 supplemental appropriations. While I do support additional appropriations for the purposes outlined in the underlying bill, dramatically reducing funding for State and local workforce development programs to pay for it does not seem prudent. Again, I recognize the pressures placed on the appropriators, but I would have expected that the Members responsible for oversight of such programs would have been consulted as to the impact of such cuts on the program's ability to fulfill its purpose. The programs authorized by the Workforce Investment Act were agreed to through a strong bipartisan process, led by Senators DeWine, Kennedy, Jeffords, Wellstone, and myself. I fear, given the apparent willingness to cut funding for the act, that we did too good of a job in 1998 when Workforce Investment Act was enacted. What I mean by that is that we successfully streamlined the often duplicative and disjointed collage of job training programs in existence prior to 1998. So now, if these rescissions are adopted, there will not be any alternative workforce investment programs for people to access. The point is, this money is the program. None of us can support this rescission and walk away thinking another workforce initiative will simply absorb our constituents. Moreover, a retroactive cut of this size will compound the challenges that many States are already facing during the transition from the Job Training Partnership Act, which my colleagues know as JTPA, to the Workforce Investment Act. Also--and no one is really talking about this part--since States were due a portion of their annual allotment on July 1, they now are going to have to turn around and send a large portion of that back to Washington in the form of a rebate check. This just does not seem right to me. I do not have any formulas at hand to demonstrate the value of workforce development programs in the face of a slowed economy. It is simply too early too soon, but what I can offer my colleagues is common sense. Now is not the time for us to scale back basic skills training, re-training of displaced workers, or innovative initiatives designed to spur long-range economic development in struggling communities. It is these communities that need our help, and that is help that we promised last year in the ``regular'' FY 2001 appropriations bill. Again, I know the dilemma facing our appropriators is not easy. There is consensus that we need to provide immediate additional resources to our military, our farmers and others whose distress is our responsibility. I also recognize that identifying unobligated current year appropriations in July is like finding a needle in a haystack, but rescinding funds from people who are trying to make themselves employable, to make themselves contributing members of their community is not exactly skimming fat off the top. This cuts to the bone in Wyoming and in countless other States. My State, for instance, was due to receive $555,420 on July 1 for dislocated workers. I know this does not sound like a lot to those of you from larger States, and it is not a lot even in Wyoming, but it is crucial in Wyoming in the effort to address the counties that have been hard hit by unemployment. So now instead of $555,000, we will receive 62 percent of that, or $345,000. That is a 38-percent cut of already appropriated money. We are not talking about cutting a request; it is already appropriated and should have been sent. I can assure Members it will have an adverse impact on the progress we have made in the implementation of the Workforce Investment Act and will impact getting people retrained for currently useful jobs. My concern over this rescission is clear, and I will not belabor my opposition. I ask that the able managers of the bill reconsider using workforce investment funds to offset supplemental spending. I am happy to work with them and their House counterparts as they reconcile the two bills in conference. I yield the floor.

Mr. ENZI

Mr. ENZI. Mr. President, I, too, thank the Senator from Arizona, Mr. Kyl, for bringing this amendment to us. This debate has been framed as though everybody had all of their insurance paid for by the company for which they work. I know that is not the case. Throughout America, most people participate in the cost of their insurance. So it is going to be very important for every individual who has to participate in the cost of their insurance to be searching, with their employer, for a lower cost way of doing it. This is one of those solutions. This is very innovative. It will fill a void we have left by doing the bill, particularly if the estimates are true on how much insurance is going to go up based on this ability to sue. If it goes up dramatically, there are going to be a lot more people who are going to hope there is this kind of an alternative around. So I congratulate the Senator from Arizona for this approach.

Mr. ENZI

Mr. ENZI. Mr. President, we have spent more than a week debating this version of a Patients' Bill of Rights which would affect the health care coverage of more than 160 million working families who are currently provided insurance by employers on a voluntary basis. We have specifically debated the matter of protecting employers from the new liability in the bill. To that end, Senators Gramm and Hutchison offered an amendment that mirrored the employer protection provision of Texas law by completely carving it out. That amendment was unfortunately defeated. So we are still in the same predicament. We have employers that are providing health care coverage that may think twice about doing so if this bill passes as it currently reads. Now everyone, including the sponsors of the bill, acknowledges that this bill's stab at an employer protection from frivolous lawsuits needs to be fixed. The Senators are now talking about how we protect the good actors. Those are employers that are doing right by their employees, offering health coverage but not playing a role in denying medical care to which their employees are entitled under the insurance contract. My hope is that in the course of these discussions everyone will settle on a comprehensive liability fix that includes the designated decisionmaker model presented in the Frist-Breaux-Jeffords bill. As many of my colleagues have said, that certainly seems to do the job. I agree it certainly seems to. In fact, I agree that the designated decisionmaker mechanism must be part of an amendment to successfully resolve the problems in the underlying bill. However, while the designated decisionmaker model does present itself as the most reliable proposal for protecting most employers, there remains a small segment of the market that will continue to go unprotected. Ironically, this handful of employer health plans may represent the best of the best. These are the plans that we all should envy. They are plans better than we have in the Senate. They are referred to as the self-insured, self-administered employer plans. They comprise roughly 5 percent of the entire ERISA market. Five percent is not a small number because that is still 6 million people, but the problem under the Kennedy-McCain direct participation model and even a designated decisionmaker model as we have been debating in the last few minutes is that these employers will have to dramatically alter their health plan because they do the plan administration in-house. That means they are participating in everything, and it means they cannot just designate their third party administration or insurance company because they don't currently contract with such entities for the purpose of processing claims. That is the difference between the self-administered and the fully insured employer plan. We can reasonably expect the fully insured employer plan to be able to designate the final decision on a claim for benefit because that is generally how they function now, having the insurance company administer the plan, with the employer participation ranging from full plan design to advocating for a sick employee. But that is not the way the self-administered plan operates. So none of the proposals protects them. My fear is that none of the proposals even preserves that kind of a plan. Let me explain why that is a problem. These companies that self- administer are few and far between, probably a dozen in the entire United States. But they are the big companies, the companies that operate probably in everybody's State but mine. Usually I am the advocate for small businesses because all of my businesses are small. There is not a single company headquartered in Wyoming that would be considered big business by the Small Business Administration. This issue has come to my attention from companies that participate all over the United States, and they have brought me the stories of how it will affect their plan, what the costs will be. It does require a fair bit of capital to administer a health plan and also requires that the employer wants to be actively involved in the caliber and range of benefits their employees receive. They receive more benefits than almost anyone else. And they want to design a wide, often unique range of benefits to suit the specific needs of their employees. Because the employers have the in-house resources to do so, they are actually able to be more cost-effective in what they provide than if they provided a fully insured health plan. They would rather have the health benefits than the administration benefit. It is not that they can just provide the same benefits cheaper and more efficiently; they actually provide a richer benefit package for less. The benefits some of these employers provide include extensive mental health counseling, on-site wellness clinics, routine screenings, they include cancer, osteoporosis, and domestic violence counseling, and the list goes on. These employers often use employee review boards to evaluate disputed claims for benefits, which is also a practice used by a number of employee union operated health plans. These are clearly benefits and administrative practices designed to help employees get the highest quality health care available. In fact, these employer plans are often referred to as the Cadillac of plans. As I said before, isn't it ironic that these are the health plans hardest hit by this bill? That doesn't make any sense to me. And it clearly doesn't make any sense to me to leave these employers unprotected as we identify a way to protect employers. For that reason, the amendment I offer today is a solution that I think is reasonable and will force us to ask ourselves a few tough questions about the purpose of a Patients' Bill of Rights. The amendment would require a self-insured, self-administered employer to offer their employees one or both of the following options, in addition to the self-administered, self-funded plan, and thereby gain a ``shield'' around that self-administered plan from the new cause of action. The logic of this amendment is to provide employees with the option of choosing a different health plan, which would also afford them access to a cause of action. The employee chooses if he or she wants that to be a component of their health benefit. Under the amendment, self-administered, self-insured employers would be required to offer at least one of the following options. The first would be a fully insured product, under which an employee could exercise the cause of action in this bill against the insurance company administering the health plan; or, the employer would provide the option of receiving, in the form of an ``individual health benefit,'' the amount of their employer's annual premium contribution under the self- administered employer plan. This would have to be used to buy health care, which is done in the State regulated individual market. They have the right to sue. If an employer offers one or both of these choices to employees, then the employer would not be subject to the new cause of action under the Patients' Bill of Rights. Any new civil monetary penalties would apply to these employers for violations of the act, and the external appeals determination would be binding on the employer, but enrollees would not be able to pursue damage awards against the employer under the new cause of action. As under the Frist-Breaux-Jeffords bill, this provision would not preempt any medical malpractice action currently available in state court. It would not do that. This is very clear. An employee makes the choice to either keep the caliber of benefits under the self- administered plan, or to choose a plan specifically for the right to sue. Those employees that choose the fully insured product will be able to hold their plan accountable under the new cause of action. And, those employees that choose to purchase their own plan through the ``individual health benefit'' are similarly able to hold their plan accountable under state law. The argument has always been that ERISA is unfair because it ``traps'' employees in the employer sponsored plan, affording that option alone, where damage lawsuits aren't available. This proposal solves that dilemma without jeopardizing access to top-notch employer sponsored health care for those employees. Have any of you been hearing from the major companies that provide the self-insured, self- administered employer plan? No, you have not. They have not been asking for that right to sue. They like the range of benefits they have. They like the personal way it is handled. The arguments you will hear against the amendment, I believe, actually make the case for it. It is very simple. It will be argued that employees will never be able to get the rich benefit packages that their employer's self-administered plan currently provides if they opt into the individual market by taking the ``individual benefit,'' and, while it may be better than the individual market under the fully insured option, surely it won't compare to the self-administered option. That is absolutely right. If they spend the same amount of money and add a liability part to it, you do not get as much insurance. I am trying to preserve their insurance, not the right to sue, by giving them the flexibility. Any employer that ever had a bad actor incident in their company would have all of their people go out into the individual market under this plan. This bill would eliminate the best employer plans out there because we feel compelled to sue them instead of making the decision to eliminate self-administered plans by a lawsuit from Washington. Why don't we let the employees make the choice for themselves? Every time a window of choice comes open they can opt into this other plan if they think it is a good way to go. But I will tell you why the businesses cannot do what is being mandated under this bill. If they have to have a designated decisionmaker, they are hiring somebody to take the liability risk. They are not just hiring somebody to administer the plan. That is only a 5-percent cost. This will drive their prices up dramatically if we do not give this option, and people who are receiving the best care in the United States at the present time will have to settle for something else. I believe we have made a concerted effort through the amendment. It is one we talked about a lot last year in the Patients' Bill of Rights conference committees. We made an attempt to amend the process, to remedy the problems of the entire liability section under the underlying bill, including protecting employers and including protecting small employers. It is not worry about the small ones; this is worry about the big ones who are providing the best of the best. I do not believe we will be doing a good job unless we include this amendment. I yield the floor and reserve the remainder of my time.

Mr. ENZI. Mr. President, this bill is really a strange one for me to be working on at all. Wyoming has one HMO. It is owned by some doctors. So far as I know, there are not any complaints on it. But there are some basic problems here that people in Wyoming are asking about. Because of Wyoming's makeup, I usually talk about small companies, because under the Federal definition of ``500 employees or less,'' we do not have a single company headquartered in Wyoming that would be considered ``big business.'' But on this amendment I have to talk about big business. I have been hearing from the accountants of a number of these companies. They are a little bit concerned about what is going to happen to their health care. They work for those companies. They can see what the costs are going to be on their companies. I have to say that this amendment before us now does not address the problem. I would like to think that it did. I would like to be able to pass this. I would like to not have to talk about a big company. There are the Caterpillers and Motorolas and the Pitney Bowes and the Hewlett Packards. There are about a dozen of these big companies in the United States. Again, none of them is headquartered in Wyoming. I am pretty sure that none of them operates in Wyoming. But I am still concerned about them because there are 6 million people who get their insurance that way. I would suspect that almost everybody in this Chamber, with the exception of my friend from Wyoming, has one of these big companies in their State. Six million people are getting their insurance from these companies. What we are talking about is having a designated decisionmaker. It does sound like baseball season, doesn't it? Let me tell you how this insurance works. Right now they work it in- house. They are able to keep their administrative expenses down to 5 percent. Now they are faced with the possibility of having liability. These are the companies that are providing the Cadillac insurance in this Nation. I am not aware of complaints of these companies on their insurance. The insurance these people have is far better than the plan we have in the Senate. But they are self-funded, and they are self-administered. Where they make their big savings is in self-administration. Now we are talking about having a designated decisionmaker. That means they are going to shift the administration to somebody else, which might still be done at 5 percent, but there is this new liability factor that goes with it. The guy that is over here, who is the designated decisionmaker, is going to have to charge them for his potential liability in the decisions that he makes incorrectly. He will not do that for 5 percent. He will need a lot more because what he is selling is liability insurance. So it is going to drive up the costs. I have asked some of these companies what those costs would be. They have said that, quite frankly, what they will have to do is get group plans for their employees that have less benefits, to fit in the same cost level that they have right now, because this little bit of a liability factor drives up the price astronomically. So in this particular provision that is before us, we are not taking care of the self-insured and the self-administered. I do have a proposal that I may offer after this one is finished, one that will provide some mechanism for them to continue to do that, and for those employees who they have, who are more concerned about their ability to sue than they are about the current benefits that they have, would have a choice. In exchange for that choice, this company would not have to hire a designated liability holder because that is what a designated decisionmaker would be. For most of the firms that have the Cadillacs of the industry, most of them will have to change to a designated decisionmaker. That additional cost will be considerably more than the 5 percent they are currently paying to handle administration, that 5 percent that they do partly because they have employee committees that get involved in the decisions. And those employee committees are not going to want to be sued, so they are going to need some relief. I am here in the uncomfortable position of speaking up for the companies that are in your States, not mine, to protect the kind of health insurance they have at the present time and not drive up the cost, forcing them to go to a lower benefit plan with a designated decisionmaker. This is not the solution. I hope you will pay attention to the solution when that amendment comes forward.

Mr. ENZI. I will yield on the time of the Senator from Ohio. I was just given pretty limited time.

Mr. ENZI. Madam President, I ask unanimous consent to withdraw division II of the amendment.

Mr. ENZI. I yield the floor and reserve the remainder of my time.

Mr. ENZI. Madam President, I ask for the yeas and nays.

Mr. ENZI. Mr. President, I call up amendment No. 840.

Mr. ENZI. Mr. President, I ask unanimous consent reading of the amendment be dispensed with.

Mr. ENZI. Madam President, under the amendment we just agreed to, we made some progress on handling liability. But there is a group of businesses that were left out. You will never hear me in this Chamber talk about big businesses. I always talk about the small ones. None of these is headquartered in Wyoming. But I am compelled to put in an amendment that will take care of a major problem which will take care of health care at the level they know it for 6 million people in the U.S. who work for the big, self-insured, self-administered companies, such as Hewlett-Packard, Caterpillar, Wal-Mart, and Pitney Bowes. None of those is in my State. This provides an option to allow one of two ways of providing insurance to their people so individuals can get the right to sue if they want that right or they can stay with the plan which they presently get all the benefits from without any difficulty. This provides that option for them. This is providing an option so that the company can avoid liability by providing a liability option for their people. I ask for your support on this amendment to clear up what the people in your State need. I also believe it is my right to divide the amendment on page 3, line 18.

Mr. ENZI. I ask for the yeas and nays.

Mr. ENZI

Mr. ENZI. Mr. President, I rise as an original cosponsor of Senator Brownback's Broadband Deployment and Competition Enhancement Act of 2001. I thank my colleague from Kansas for drafting this innovative legislation to help solve the problem of the lack of availability of advanced telecommunications services in rural areas. Telecommunications has come a long way from the days of the party line and operator assisted calls. Telecommunications services have allowed entrepreneurs to locate their business anywhere they can get a dial tone and have helped to bring jobs to rural America. I have been working to encourage more infrastructure development as a way of creating a business environment that will attract new jobs to the places that need them. The 20th Century has seen the economy of the United States and the world change from an industrial economy to an information economy. We are only at the beginning of the ``Information Revolution'' and now is the best time for private industry and government to take a pro-active role in helping to create the business and regulatory conditions necessary to encourage the widespread deployment of advanced telecommunications services. Since 1995, the State of Wyoming has been attempting to create a competitive local phone market that would have a multitude of competitors and result in lower rates. The cost of providing service in Wyoming is significantly higher than in other areas of the Nation due to our low population and long distances between towns. This has caused many companies to pass Wyoming by in search of easier profits in urban areas and leave many of our towns with only one choice for broadband service, if they have a provider at all. One of the reasons why advanced services have been slowly deployed is that Wyoming's wide open spaces make the telecommunications needs of our residents very different than people in urban areas. The economic model of the industry is to serve areas with a high population density in order to keep costs low. In the West, it's harder to make that model work, but the independent telephone companies, Qwest and the cable companies are working hard to offer their customers a full complement of services at a reasonable price, many services that urban telephone customers take for granted. High speed Internet access has been delayed for two reasons, cost and availability. Advanced telecommunications services can help to build Wyoming's economy. Companies are beginning to realize that our State has a ready work force and the lower costs of doing business are making companies choose Wyoming. Many existing businesses are taking advantage of the Internet to bring their products and services to the world. Where once a store was limited to only being able to serve those within driving distance of it, now it can bring Wyoming to the world. This cannot take place without the continued roll out of broadband business services. Wyoming has for many years been promoting the benefits of telecommuting. People living around the State have been able to connect to their office via computer and remain in contact with clients. Telecommuting now requires high speed access and that is available in some limited areas. In other areas, the only data access is via a regular dial-up modem. There are companies that are deploying digital subscriber lines and cable modems, but those locations are limited and the price is too high to be adopted by a majority of Wyoming residents. Over time that price will come down, but this is not a call for public subsidies or government mandates, but a call for more competition and deregulation. Competition will bring lower prices and greater deployment of services to even the smallest of towns. That is why I am an original cosponsor of Senator Brownback's bill. His bill creates a deregulatory regime that is backed by specific performance requirements and strong enforcement provisions. The bill requires Incumbent Local Exchange Carriers, ILEC's, to be able to provide advanced services to all of its customers within 5 years of the enactment of this legislation in order to receive the benefits of deregulation. This ensures that companies will bring advanced services and competition to rural areas by giving a hard deadline for companies to complete their build-out. Advanced services would be deregulated by exempting them from the requirements that ILECs make packet switching and fiber available to competitors at below cost rates. This would specifically deregulate the equipment that makes it possible to provide advanced services over traditional phone lines. The bill also exempts fiber optic lines owned by ILECs from below cost pricing if the fiber is deployed either to the home or in areas that never had telephone infrastructure before. I believe that this will be key to making the economics of rural advanced services more favorable for companies wanting to invest in rural broadband deployment. The bill would also give ILECs the necessary pricing flexibility for their broadband services. I believe that we should not hamstring a new technology in a very competitive marketplace with outdated regulations on price. It is important that Congress ensure that in addition to the wholesale pricing relief contained in this legislation, it also includes retail pricing flexibility to further make the economics more favorable. The bill does not change the requirements that ILECs allow competitors to collocate their equipment in an ILEC facility. Collocation is very important since it ensures that competitors have access to the network and do not have to build distant links or other connections to the ILEC network. The bill also does not eliminate the requirement that ILECs give competitors access to local loops. In fact, if an ILEC does not grant a competitor access to local lines the bill gives state regulators the right to strip the ILEC of the deregulatory benefits contained in the bill. The bill's enforcement provisions are very strong and explicit. If a company does not meet the build-out requirement, does not permit a competitor to collocate and/or grant competitors access to local loops, state regulators have the authority to return an ILEC to the old regulatory regime. Deregulation without proper enforcement mechanisms does not benefit consumers and competitors. It is important that we hold ILECs accountable if they are granted relief from the pricing requirements. I have been working with my colleagues to create a mix of deregulation and incentives to encourage private infrastructure development. Government cannot force private firms to make unprofitable investments, but government can work to make investments in rural infrastructure more favorable. The Broadband Deployment and Competition Investment Act helps to make investment in advanced services in rural areas possible. The great strides made by both Qwest, the smaller phone companies and the cooperatives show that rural areas can support fiber optic based services. The Wyoming Equality Network, the fiber based network linking all of Wyoming's high schools, has been a great advancement for education and I applaud the State's foresight for undertaking such a far reaching project. The WEN has had the added effect of showing other companies that it is possible to link rural areas with fiber, bringing high speed data services and other advanced services to homes and businesses. I am pleased to see that Qwest and several smaller companies have worked together to close the inter-office fiber loop, linking all local phone exchanges with a fiber optic connection. This will allow for greater capacity and new services like DSL and other high speed broadband services. This connection will help many areas of Wyoming overcome many of the service problems they have been experiencing for the last several years. The objective of telecommunications policy should be to bring as many players into the marketplace and allow them to compete in the marketplace. Congress should not tie a company's hands in a continually changing and competitive marketplace. We should ensure that all parties are on a level playing field and that all services are regulated in the same manner regardless of the company that is offering the service or the technology they are using. This legislation will help bring some needed consistancy to the regulation of advanced services and I urge my colleagues to support this vital legislation.

Mr. ENZI

Mr. ENZI. Mr. President, I rise as an original cosponsor of Senator Brownback's Broadband Deployment and Competition Enhancement Act of 2001. I thank my colleague from Kansas for drafting this innovative legislation to help solve the problem of the lack of availability of advanced telecommunications services in rural areas. Telecommunications has come a long way from the days of the party line and operator assisted calls. Telecommunications services have allowed entrepreneurs to locate their business anywhere they can get a dial tone and have helped to bring jobs to rural America. I have been working to encourage more infrastructure development as a way of creating a business environment that will attract new jobs to the places that need them. The 20th Century has seen the economy of the United States and the world change from an industrial economy to an information economy. We are only at the beginning of the ``Information Revolution'' and now is the best time for private industry and government to take a pro-active role in helping to create the business and regulatory conditions necessary to encourage the widespread deployment of advanced telecommunications services. Since 1995, the State of Wyoming has been attempting to create a competitive local phone market that would have a multitude of competitors and result in lower rates. The cost of providing service in Wyoming is significantly higher than in other areas of the Nation due to our low population and long distances between towns. This has caused many companies to pass Wyoming by in search of easier profits in urban areas and leave many of our towns with only one choice for broadband service, if they have a provider at all. One of the reasons why advanced services have been slowly deployed is that Wyoming's wide open spaces make the telecommunications needs of our residents very different than people in urban areas. The economic model of the industry is to serve areas with a high population density in order to keep costs low. In the West, it's harder to make that model work, but the independent telephone companies, Qwest and the cable companies are working hard to offer their customers a full complement of services at a reasonable price, many services that urban telephone customers take for granted. High speed Internet access has been delayed for two reasons, cost and availability. Advanced telecommunications services can help to build Wyoming's economy. Companies are beginning to realize that our State has a ready work force and the lower costs of doing business are making companies choose Wyoming. Many existing businesses are taking advantage of the Internet to bring their products and services to the world. Where once a store was limited to only being able to serve those within driving distance of it, now it can bring Wyoming to the world. This cannot take place without the continued roll out of broadband business services. Wyoming has for many years been promoting the benefits of telecommuting. People living around the State have been able to connect to their office via computer and remain in contact with clients. Telecommuting now requires high speed access and that is available in some limited areas. In other areas, the only data access is via a regular dial-up modem. There are companies that are deploying digital subscriber lines and cable modems, but those locations are limited and the price is too high to be adopted by a majority of Wyoming residents. Over time that price will come down, but this is not a call for public subsidies or government mandates, but a call for more competition and deregulation. Competition will bring lower prices and greater deployment of services to even the smallest of towns. That is why I am an original cosponsor of Senator Brownback's bill. His bill creates a deregulatory regime that is backed by specific performance requirements and strong enforcement provisions. The bill requires Incumbent Local Exchange Carriers, ILEC's, to be able to provide advanced services to all of its customers within 5 years of the enactment of this legislation in order to receive the benefits of deregulation. This ensures that companies will bring advanced services and competition to rural areas by giving a hard deadline for companies to complete their build-out. Advanced services would be deregulated by exempting them from the requirements that ILECs make packet switching and fiber available to competitors at below cost rates. This would specifically deregulate the equipment that makes it possible to provide advanced services over traditional phone lines. The bill also exempts fiber optic lines owned by ILECs from below cost pricing if the fiber is deployed either to the home or in areas that never had telephone infrastructure before. I believe that this will be key to making the economics of rural advanced services more favorable for companies wanting to invest in rural broadband deployment. The bill would also give ILECs the necessary pricing flexibility for their broadband services. I believe that we should not hamstring a new technology in a very competitive marketplace with outdated regulations on price. It is important that Congress ensure that in addition to the wholesale pricing relief contained in this legislation, it also includes retail pricing flexibility to further make the economics more favorable. The bill does not change the requirements that ILECs allow competitors to collocate their equipment in an ILEC facility. Collocation is very important since it ensures that competitors have access to the network and do not have to build distant links or other connections to the ILEC network. The bill also does not eliminate the requirement that ILECs give competitors access to local loops. In fact, if an ILEC does not grant a competitor access to local lines the bill gives state regulators the right to strip the ILEC of the deregulatory benefits contained in the bill. The bill's enforcement provisions are very strong and explicit. If a company does not meet the build-out requirement, does not permit a competitor to collocate and/or grant competitors access to local loops, state regulators have the authority to return an ILEC to the old regulatory regime. Deregulation without proper enforcement mechanisms does not benefit consumers and competitors. It is important that we hold ILECs accountable if they are granted relief from the pricing requirements. I have been working with my colleagues to create a mix of deregulation and incentives to encourage private infrastructure development. Government cannot force private firms to make unprofitable investments, but government can work to make investments in rural infrastructure more favorable. The Broadband Deployment and Competition Investment Act helps to make investment in advanced services in rural areas possible. The great strides made by both Qwest, the smaller phone companies and the cooperatives show that rural areas can support fiber optic based services. The Wyoming Equality Network, the fiber based network linking all of Wyoming's high schools, has been a great advancement for education and I applaud the State's foresight for undertaking such a far reaching project. The WEN has had the added effect of showing other companies that it is possible to link rural areas with fiber, bringing high speed data services and other advanced services to homes and businesses. I am pleased to see that Qwest and several smaller companies have worked together to close the inter-office fiber loop, linking all local phone exchanges with a fiber optic connection. This will allow for greater capacity and new services like DSL and other high speed broadband services. This connection will help many areas of Wyoming overcome many of the service problems they have been experiencing for the last several years. The objective of telecommunications policy should be to bring as many players into the marketplace and allow them to compete in the marketplace. Congress should not tie a company's hands in a continually changing and competitive marketplace. We should ensure that all parties are on a level playing field and that all services are regulated in the same manner regardless of the company that is offering the service or the technology they are using. This legislation will help bring some needed consistancy to the regulation of advanced services and I urge my colleagues to support this vital legislation.