J. Kerrey

Mr. KERREY

Mr. KERREY. I conclude my debate. Mr. President, I yield the floor.

Mr. KERREY. Mr. President, it unquestionably asks for a minimum requirement. That is unquestionably true. I believe if this amendment were adopted, it would be a reasonable substitute for the Department of Justice role. It makes sure you have competition. The concern ought not to be for most of these companies trying to figure out whether you have competition; [[Page S8322]] the concern really ought to be is there a competitive choice: Do I have in my residence in Omaha, NE, or do I have in my residence in any other area a competitive choice? It does not insert ``no substantial possibility'' language. It does not insert any specific language. It just says that it has to be more than a single, small interconnection.

Mr. KERREY. Mr. President, I understand the concern, but the larger concern, I believe, still remains, which is expressed by the findings in the bill and the description of the bill of what it is attempting to do, which is: We want to make sure we have competition before we get into long distance. That is the idea. Currently, if I am a consumer, a household in Omaha, NE, I have one choice. That is what I have. My telephone company wants to get into long distance. The intent here is before you get into long distance, you get some competitive choice at the local level. If all I have to do is sign an interconnection agreement with one small company before that occurs, that hardly provides the kind of competitive choice, as I understand the intent of the bill. I understand the Senator's concern about rural carriers, but I do not believe, at least as I read it, that the amendment precludes the possibility of a rural carrier, a smaller carrier interconnecting. Mr. STEVENS addressed the Chair.

Mr. KERREY. What the bill does not do, as I read it, is give me at least confidence in the 14-point checklist. What it says is--Mr. President, 255 is the new section. It is actually called section 221 in the bill, but it creates a new section 255 in the 1934 act, and it is called interexchange telecommunications services, but it is the point where we were removing the restrictions that are currently in place. Currently, a local company cannot do long distance. What this does is says here are the terms and circumstances under which it can do long distance. We fought the battle yesterday saying that I thought that the test that was in last year's legislation, S. 1822, and I think it was H.R. 3626, the House bill, that the test there was the right one; it had the Department of Justice determine the competition, and when there is no substantial possibility that the monopoly could use their power to impede competition, have at it. Go to it. Let the Department of Justice make that determination. We lost that battle. Now what I am attempting to do is to say that the language, as I read the current language in the bill it sets specific interLATA interconnection requirements under, whatever it is, (b) of section 255, specific interLATA interconnection requirements. There are two sections, two paragraphs in there that are important. The first one is the general paragraph which this amendment replaces, and the second one is the competitive checklist. The current general paragraph says a Bell operating company may provide interLATA, do long-distance service, in accordance with this section only if that company has reached an interconnection agreement under section 251 and that agreement provides at a minimum for interconnection that meets the competitive checklist requirements of paragraph 2. As I read this, what I can do, if I am a Bell company, and let us say I have 50 people applying to go into interconnection, all I have to do is get one of them on line. I could have relatively stable competition. I just do not get into an agreement with them. I wish to get into long distance. What I am trying to do is to make sure that I have that competitive choice at the local level before permission is granted. And so I do not say in my substitute paragraph that any company is precluded from an interconnection agreement under section 251. It says instead that ``a Bell operating company may provide interLATA service in accordance with this section only if that company has reached''--which is in the language here--``only if that company has reached an interconnection agreement under section 251''--all that is the same as the paragraph I am replacing--``with telecommunications carriers.'' And here is where it differs: ``Telecommunications carriers that have requested interconnection for the purpose of providing telephone exchange service or exchange access service, including telecommunications carriers capable''--it does not say it is going to preclude anybody. It just has to include ``carriers capable of providing a substantial number of business and residential customers with telephone exchange or exchange access service.'' It says these agreements shall provide at a minimum the competitive checklist which is also in this other language. It does not say any company is precluded. It does not in fact say it has to be x percent of the market or anything like that. It just says that it has to be more than a relatively small company that does not really provide that competitive alternative for that consumer, that customer, that household at the local level. The Senator from Alaska may still move to table. I hope not, based upon the language precluding a small company from still coming--a small company could still come and be allowed under the interconnection agreements of 251 to interconnect at the local level. This means I need a little bit more than a small company before the interLATA approval is granted.

Mr. KERREY. That is correct.

Mr. KERREY

Mr. KERREY. The Senator should have the final copy now.

Mr. KERREY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. KERREY. Mr. President, I have an amendment that is already at the desk that I have discussed with the managers of this bill. It is similar to an earlier amendment that was offered by the Senator from Pennsylvania and adopted, I believe 90-something to something, dealing with incidental interLATA relief. Mr. President, I ask unanimous consent that the Bumpers amendment be laid aside temporarily so that we may consider this amendment.

Mr. KERREY. Mr. President, on this chart I am going to show the problem. We also have an illustration of why this amendment is needed or why we need to change the current method of regulation. We have in the United States of America, since the divestiture in AT&T, created these local access transport areas (LATA's) throughout the country defining what local telephone service is. In northeast Nebraska, we have two--644 and 630. The red line down the center separates one from the other. We have established a method to get our K through 12 schools hooked up to the Internet that requires us to go through a central hub. There are a number of them called educational service units. Unfortunately for schools up in the northeastern part of the State, they have to cross one of these artificial boundaries, these LATA boundaries, in order to get to this little red dot here which represents the Wakefield, NE, educational service unit. All of these school districts here--Jackson, South Sioux City, Dakota City, Homer, Hubbard, Winnebago, Walthill, Macy, Rosalie--all have to cross that LATA in order to be able to connect to the educational service unit in Wakefield. It is about 17 miles total, somewhere in that range, from one of these towns to this central hub. This problem was identified to me originally by a principal, Chuck Squire, of Macy School, as he was trying to get his school hooked up to the Internet. The requirement was again, as I said, to go through Wakefield. Because it crosses that interLATA boundary, it is no longer a local call. You have to pay an access charge when you are going from here to any one of these schools over here. The cost for dedicated Internet service if the local Bell company could provide the service would be approximately $180 a month, with an $800 installation charge. But for a long distance company, it ends up being almost $1,100 a month with a $1,000 installation charge, because the traffic needs to be routed across the State boundary. What happens is the schools end up with about $10,000 to $12,000 more per year in the monthly charge. These are very small school districts, most of them, and $12,000 ends up being a lot of money. They get nothing more for it. And this amendment, as I said, that I have discussed both with the chairman of the committee and with the ranking member, would grant incidental LATA relief to the Bell Operating Companies to provide dedicated two-way video or Internet service for this dedicated purpose, in this case the K through 12 environment. The hope is, of course, that the legislation itself will eventually obliterate the need to ask for this kind of incidental relief. The hope is that these kinds of restrictions that make it difficult for prices to come down--you can see in a competitive environment, if you had competition at play here, these prices would go down. This price was not high as a consequence of some cost. It is a consequence entirely of the current regulatory structure. So again, I am finished describing what the amendment does. I hope that the amendment can be simply agreed to at this time.

Mr. KERREY. I will send a copy that I have here to the desk. Amendment No. 1335 (Purpose: To provide that the incidental services which Bell operating companies may provide shall include two-way interactive video services or Internet services to or for elementary and secondary schools)

Mr. KERREY. Mr. President, I send the amendment to the desk and ask for its immediate consideration.

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

Mr. KERREY. I do not quite follow. I thought earlier we had discussed it.

Mr. KERREY. We just sent a copy to the desk.

Mr. KERREY. Sure. I would be pleased to.

Mr. KERREY

Mr. KERREY. Mr. President, the choice before Members on the tabling motion will be: Trust the 14-point checklist, basically, that the committee has offered as an indication; or do we want, in a parallel process, the Department to make a determination as to whether or not competition exists at the local level. That is all we are discussing and debating. I believe we want the Department of Justice to make that determination. I do not have the confidence in the 14-point checklist that others do. It is as simple as that. Many of the statements that have been made about what this amendment attempts to do have simply not been true. Many of the statements that have been made about what the Department of Justice is trying to accomplish here simply are not true. We are simply saying, with this amendment, to Members of Congress, the Department of Justice should have a determination role. They should say, ``We have determined that there is competition,'' or ``We have determined that there is not competition.'' I will cite, in a repetitive example, two instances that ought to give, I think, Members of Congress a pause. The Senator from South Dakota gets up and says all these delays occur. I cited an application for a waiver of the MFJ that was made in 1994 by Southwestern Bell. I ask the Senator from South Dakota, did he wish that would have been approved in 30 days? That waiver application would strike all the MFJ requirements, strike all the restrictions with no determination of local competition whatsoever. Perhaps the Senator from South Dakota does not like that delay. Perhaps the Senator from South Dakota and other Members would like to have a situation where there is no determination being made by the Department of Justice. If that is the case, vote to table. But if you want the Department of Justice to have the determination role rather than just ``Here is our opinion about this proposal,'' then you have to vote for this amendment. [[Page S8225]] I believe if you do vote for this amendment, you will be happy you did. At the end of the day you do not want to just try to make sure these folks are happy who are outside the hallway out here, adding up votes trying to figure whether this amendment is going to pass or fail. You want the consumers and the citizens and the taxpayers and the voters of your State to be happy. And the only way they are going to be happy, the only way they are going to say this thing works, is if we get real competition at the local level. With real competition at the local level, there will be choice and there will be decreases in price and increases in quality. And that is the only way in my judgment that S. 652 is going to produce the benefits that have been promised.

Mr. KERREY. Earlier I said that the opponents of this included the Democratic leader. The Democratic leader is on our side. He is against the law in its current form, and is in support of the Dorgan-Thurmond amendment.

Mr. KERREY. Mr. President, I ask unanimous consent to be added as a cosponsor of this amendment.

Mr. KERREY. Mr. President, before the Senator from North Dakota leaves, it is my intent, unless he objects now, after making my comments to ask for the yeas and nays on this amendment, unless the Senator will object to my asking at the end of my remarks.

Mr. KERREY. Mr. President, first, let me say that the central point of this whole legislation has been that we are trying to create a regulatory environment where competition can produce lower prices and higher quality service for the American consumer. The service that is being sold is information. Unlike many other commodities that we buy-- natural gas, for example, transportation, and so forth--this is a very unusual commodity that we are buying, information, although maybe commodity is not exactly the precise words like you are buying hardware and other sorts of things. It really is an issue of giving power to somebody to control to a very great extent the information that we get. You say, ``Well, I have community standards in place.'' That is true, the FCC does have control over community standards, and there are lots of other regulatory determinations that could be made by the FCC, but it is the power to broadcast, the power to publish, the power to transmit information. It is the word, Mr. President. Unlike other commodities, I have only 24 hours in the day in which I can process this information, in which I can either listen to the radio or watch television or read a newspaper, or go on-line, or call my kids, or listen to my kids, or engage in some manner, shape, or form in purchasing or using the information services or equipment that this $800 to $900 billion industry is out there manufacturing and producing and trying to get me to buy. So I have 24 hours a day. That is all anybody has. What we have, over the years, understood is that the person who controls that information very often controls a great deal more than just the right to sell to you. The person who controls the right to own a station, radio or television, or who controls the newspaper, who controls some other information source, they are in control of much more than just the right to sell you some product. In fact, rarely--I am not sure I can even cite an owner that does not respect that they have more than just a fiduciary responsibility to shareholders. They understand that they have a responsibility that is larger than that. This amendment, I believe, maintains what we have traditionally done, and that is to say you can get all the competition you want with 12 stations and all the competition you want with 25 percent--25 percent ownership in a service area. That has worked. Again, I have not heard consumers come to me on this one and say, gee, could you lift the ownership restrictions because we are not getting the kind of quality service we want, and we believe that if we have 35 percent ownership of our television and radio stations in a service area, that that will improve the quality of our product, and if we concentrate this industry even more, we are going to get improved quality of product. I believe that the amendment before us illustrates this issue that I have been raising a time or two on the floor, which is that at stake here is the power of a business or an individual to do something--the power of an individual or a corporation, mostly, to do something that they are currently prohibited from doing. A corporation that restrictions placed on them, and the bill, as currently described, would lift a number of those restrictions. Mr. President, I ask unanimous consent that an article in this morning's Washington Post by Tom Shales be printed in the Record at this time.

Mr. KERREY. The headline of this article says, ``Fat Cat Broadcast Bonanza.'' I admit that is a useful headline for me to make my point, but listen to the argument here. Limits on multiple ownership would be eased by the bill, so that any individual owner could control stations serving up to 35 percent of the country . . . The House, by the way, goes to 50 percent versus the 25 percent now. There would be no limit on the number of radio stations owned. Cable and phone companies could merge in municipalities with populations up to 50,000. Broadcast licenses of local TV stations would be extended from a 5-year to a 10-year term and would be even more easily renewed than they are now. It would become nearly impossible for angry civic groups or individuals to challenge the licenses of even the most irresponsible broadcasters. In addition, the rate controls that were imposed on the cable industry in 1992, and have saved consumers $3 billion in the years since, would be abolished, so that your local cable company could hike those rates right back up again. Mr. President, I believe that those, like myself, who want a competitive environment in telecommunications, who want to support a bill that moves us from a monopoly at the local level to a competitive environment, who believe that you can get benefits from competition, that consumers, taxpayers, and citizens, will say, Senator, I am glad you voted for that bill. I believe we can get that kind of competition without changing the ownership rules for our broadcasters. I just do not see a compelling reason for it. I do not see, indeed, increased competition. I think an argument can be made, in fact, that it is moving in the wrong direction, much more toward a concentration and less competition, and thus I support the Dorgan amendment before us now. I yield the floor. Mr. PRESSLER addressed the Chair.

Mr. KERREY. I appreciate the kindness. I can read the handwriting on the wall, Mr. President. The majority leader opposes this amendment, the Democratic leader opposes it, the Democratic whip, the Republican whip, the manager of the bill, the Republican chairman, the Democratic ranking member--all oppose this amendment. So what I find interesting is the hyperbole that gets layered upon the argument against that the Department of Justice is overreaching, that they are incompetent. That is an argument that I just heard the Senator from South Dakota use against the Department to demonstrate that they are incompetent. It takes a long time, 1,500 days I heard from the Senator from South Dakota say. Let me give my colleagues an example of the reason it takes a long time. Maybe the Senator from South Dakota thinks the Department of Justice should have this waiver. In 1994, Southwestern Bell and three other RBOC's filed a request to vacate the final modified judgment to simply completely eliminate its restrictions without replacing those restrictions with any consumer safeguard, with any requirement such as those contained in S. 652. That was the waiver application. The Senator from South Dakota and the Senator from Missouri talk about all this overreaching regulation. Perhaps they would like to have the Department of Justice approve this waiver, get it out of the way in a hurry. Is that what the Senator from South Dakota has been arguing for when he talks about delays? Is this the sort of thing he wants them to approve? Let us not come to the floor and talk about 1,500-day delays. It is being delayed because of this kind of thing. Nobody, I do not believe anybody; maybe there is; maybe someone down here says what we should have had was the Department of Justice approving this kind of waiver. Then S. 652 would not be necessary. Maybe that is the feeling here, we do not want any consumer protection. We do not care if there is local competition. Forget the checklist. Forget the VIII(c) test, and all that nonsense. Let these guys go out and have at it, take their monopoly and run with it, and use the power in any fashion they want. I do not think so. I think the structure of this bill implies that we are concerned about this monopoly power and that we want some restraint as we move to a competitive environment. And the Department of Justice has been attempting to measure that as [[Page S8218]] they evaluate these waivers. My colleagues will come down and say, ``Oh, no. Another layer of bureaucracy.'' Let us not repeat the mistakes of the past. I call my colleagues' attention to the last major deregulation action in airlines when the Department of Justice again was given a consultative role. They basically had the opportunity to file a brief. They would just as well write their opinion on the wall of a bathroom for all the impact it has. Now we have in this case the airlines being deregulated. Now comes TWA and a hub in St. Louis wanting to acquire Ozark Airlines. The Department of Transportation gets the application as the FCC would in this case. Now we have Northwest Airlines trying to acquire Republic Airlines in the hub serving Minneapolis. The Department of Justice said: In our opinion, you will get less competition. That is our opinion. That is all the law allows, just an expression of their opinion. They vigorously, in fact, said you are going to get less competition. The Department of Transportation says your opinion is as good as anybody else's. We ignore it. Guess what? There is less competition and higher prices in both of those hubs as a consequence of those actions. We are not talking about another layer of regulation. The Department of Justice is not asking to intervene and get involved in something about which they know nothing. We are asking with this amendment, which is obviously going to get defeated--the opponents of this deal are lined up, in effect. We have been working long and hard, and are likely to get 40 votes for this thing. But I will stand here and predict that the Department of Justice is going to issue an opinion on an action taken by a local telephone company that the consumers are going to get less competition, not more. They are going to get less competition. They are going to file an opinion. That opinion will be ignored by the FCC, and Members will be up here saying, ``Gee, that was not quite what we had in mind.'' So we are not asking for increased regulatory authority. Please do not talk about the delays unless you are prepared to identify a specific waiver that you think should be approved. Let us talk about the waiver. I alert my colleagues that we will have an opportunity on additional amendments to revisit this issue. I yield the floor.

Mr. KERREY. Mr. President, will the Senator from North Dakota yield to me 15 seconds to correct a statement?

Mr. KERREY

Mr. KERREY. Mr. President, thank you. As I indicated earlier, this amendment simply conforms with the underlying theme of S. 652 which is that if we have competition the consumers will benefit. The current language of the bill moves us in the direction of less competition. You cannot go from 25 percent ownership of stations in a service area to 35 percent without decreasing the competition. Inescapably the consequence is decreasing the number of broadcast owners in a particular area. So, in addition to the localism argument, which was very eloquently made by both the Senator from Illinois and the Senator from North Carolina, the important issue when you are dealing with news--I point out a very important issue--when you are dealing with the question of how does the electorate, how does the public, how do the citizens themselves acquire information, is the issue of concentration of ownership. That is a very important issue. So in addition to the idea that this shifts us away from local control of stations, there is also the very important idea of concentration in the industry, and lack of competition. It is highly likely that companies that we currently see as networks, or companies that we currently see as broadcasters, will be coming in at the local level saying we would like to provide what we previously regarded as dial tone and vice versa. This whole thing is going to get jumbled up in a hurry. As the Senator from South Dakota said several times, we allow people to get into each other's business. That is basically what the bill does. So I hope Members who want competition, who want the consumers to benefit from that competition, will support the Dorgan amendment.

Mr. KERREY

Mr. KERREY. Just for a question.