J. Kerrey

Mr. KERREY

Mr. KERREY. The Senator from South Dakota asked and then raised in the following series of arguments against, after having asserted that the Department of Justice has a different role and function, which it unquestionably does--it has been managing the movement from a monopoly to a competitive environment. Why should it not be different? Of course, it is different. As to the Yellow Pages case, it is a very important anticompetitive case, very important anticompetitive case.

Mr. KERREY. Mr. President, I thank the Senator. I am sorry for the long warmup to the question. I appreciate the yielding of the floor. As to the question the Senator from South Dakota is asking, the language of 652 on page 89 appears to be--and I ask my colleague if he reads it the same way--on line 7, it says: The commission shall issue a written determination . . . And here is the language that triggers the administrative procedures that the Senator was asking whether or not would exist. As I understand it, case law says this is the language that you need in order to trigger the very administrative review that the Senator is for. The language is: . . . on the record after a hearing and opportunity for comment. I think it is a legitimate concern. I think the question that is being raised by the Senator from South Dakota is quite legitimate. Mr. EXON addressed the Chair.

Mr. KERREY. Mr. President, I inform the Senator from South Dakota, I object to the time of 6 o'clock. We should talk about it.

Mr. KERREY. I understand we are trying to move the process along. It is not so much that I have an interest in debating this all night long. It is that there have been requests from a number of people who indicated they prefer to stack votes and vote tomorrow morning. I am obliged to tell you I think that is not an unreasonable request.

Mr. KERREY. That would be satisfactory. I have no objection to that. It is the Dorgan-Thurmond amendment.

Mr. KERREY. I know the Senator from Montana is on the floor, and I will be here for a while longer. I just want to respond. There were actually three speakers previously who opposed this amendment and said many things. The distinguished Senator from Missouri did not cite me by name, but he quoted me generously during his own presentation, and every quote he opposed. Let me begin. One of the strongest arguments the distinguished Senator from Missouri and others have made is that you cannot trust the Department of Justice. You should not involve them with this. They do not have a role. I, last week, made a mistake in assessing the Department of Justice. I said they have approximately 800 lawyers because I was informed that in 1982, when the consent decree was filed, that is approximately how many people were down there. That is true, 860 --about 800 actually, in 1982. But today there are 323 lawyers and 686 total employees, total staff at the Antitrust Division at the Department of Justice. It is a very small agency. This bill is about power. I do not walk, as the Senator from Missouri implied, to the precipice of change and be afraid of change. I am not afraid of this bill other than what it might do if we do not have the agency that has not only current responsibility but experience in managing what this bill describes we are going to do. This bill says we are going to move from a monopoly to a competitive environment. That is what it attempts to do. We are going to move from a monopoly in local telephone service in a market--no free market down there, folks. This is not a little mom and pop shop that started in business 10 years ago now with local telephone service. They were given a monopoly franchise. If the people of the United States of America are trying to figure out who do I trust in this deal, it was not the peoples' Congress in 1982 that busted up the monopoly, that gave them a competitive environment in long distance, that managed that transition from monopoly to competition that is cited over and over and over by people who come down here to the floor. It was not the U.S. Congress. It was the Justice Department. A Reagan appointee goes to the court and files a consent decree with AT&T, and that is what this is all about. To set this thing up as ``you are either for the devil or for the angels'' sort of an argument does not, it seems to me, lead to a very constructive argument. The question really is how are we going to manage this? How are we going to manage this transition now? We have decided. There is very little argument. I do not think there is a single Member of this body, maybe there is, maybe there is somebody who believes we ought to preserve the monopoly at the local level. I do not. The Senator from Missouri acts like that is the argument here: Choose the market or choose a regulatory environment. Have the Government tell you what to do or let the market tell you. That is nonsense, baloney. That is not the argument here. That is not the question that needs to be answered. If you believe you want to preserve the local monopoly and keep it the way it is, fine. I do not hear anybody or have not heard anybody yet argue that is what ought to occur. I caution Members that when we move from that monopoly to a competitive environment, there is going to be trauma, there is going to be real trauma, and we better make sure we get this thing right because it is not the demand for change we are talking about here and that I am an advocate for. The demand for change is not coming from townhall meetings. It is not coming from citizens in Missouri or citizens in Nebraska or citizens in Ohio who are saying, ``I am unhappy with local telephone service, I am unhappy with my cable service, I am unhappy with broadcast, except for some of the things having been raised having to do with obscenity and violence and that sort of thing.'' That does come from town hall meetings. But as far as, ``Do I want a monopoly or do I want to deregulate?'' That is hardly a debate going on out there on Main Street. We have made a reasoned judgment based upon input from a variety of different people that we can go to a competitive marketplace in local service. These arguments have a way of turning it around every now and then. In 1986, a couple of years after the consent decree was fully in place and the divestiture had occurred, I supported legislation in the Nebraska Legislature to deregulate the telephone companies on the question of pricing. I tried to get them to change the law. The legislature changed the law to allow competition at the local level and was told--indeed I was rolled at the time, not told--I was told and rolled we were not going to do that. Technology would not allow competition. That was the argument in 1986. So I lost that battle. We deregulated on price but we did not deregulate to produce a competitive environment because we were told the technology would not allow it. And lest anybody think I have walked to the precipice and am fearful of embracing change, as was suggested earlier, in 1986 I asked and was given the authority to be the lead Governor for telecommunications for the National Governors' Association. We reached a conclusion--I had a little task force --that we ought to, in an expeditious fashion, eliminate the restrictions that were currently in place in the modified final judgment. I thought we had the votes. It was one of those deals where you were sure you had all the votes, did all the calling and everything. We had a meeting, annual meeting, in South Carolina in 1986. I was sure I had that thing won. That year I got rolled by AT&T. They came to that deal and said: Oh, no, if you loosen the restrictions and you have competition, all these things-- they did, like many of the speakers have said--here are the horrible, terrible things that are going to happen. Here are all the bad. Jobs are going to go down the toilet, things are going to explode and be bad. And we lost. We got rolled in 1986 trying to change that policy. So I understand that there is a lot of active interest in whether or not the Department of Justice should have a role. Earlier, the Senator from Missouri said, ``I am a former Attorney General and I have experience doing this.'' And he said ``I hope I am listened to.'' Mr. President, I ask unanimous consent a letter from 24 State attorneys general be printed as part of the Record at this point.

Mr. KERREY. Mr. President, with some assist from my drugstore eye glasses, let me read one paragraph from it. It says, ``The United States Department of Justice should have a meaningful role in determining, in advance--not after the fact--whether competition at the local level is sufficient to allow an RBOC to enter the long distance services and equipment manufacturing markets for a particular region.'' Understand we are not just talking about the interLATA long distance. We are also talking about removing the restrictions on manufacturing. So the question is, ``Do you have some competition at the local level?" If you have it, it will allow you to get into previously restricted areas. The Department of Justice has unmatched experience and expertise in evaluating competition in the telecommunications field. Such a role is vital regardless of whether Congress adopts a ``competitive checklist'' or ``modified final judgment safeguard'' approach to evaluating competition in local markets. Mr. President, I really do not believe this is one of those amendments that ought to be characterized as a choice between picking the ``dreaded Government regulators who are going to micromanage everything in your life'' or choosing the market. But what we are attempting to do in good faith is answer the question, ``How do we manage this thing?'' This is an unprecedented change, unprecedented that Congress is going to attempt to manage. We have reached the decision, I believe a majority of us have, that we should use competition in the local market, competition in manufacturing, competition in services, competition in switching, not to regulate but to determine what is the best service, what is the best piece of equipment, what is the best switching offered out there. Let competition determine that. We have been successful in long distance. We grow confidence based upon success. We can do it at the local level and in manufacturing. We are about at the edge of enacting legislation to do that. The question before us is, ``Should we give the Department of Justice more than a consultative role?" I would like to offer a couple of things. Earlier the Senator from South Dakota I believe had a question having to do with administrative law with the Department of Justice, a very good question. I will try to restate the question--I do not know if I will get it right--the question was with the Federal Communications Commission, we have an open process. You have an administrative law that governs hearings and so forth. It has to be open. Then the Senator from South Dakota asked-- at that time it was the Senator from North Dakota on the floor--would the Department of Justice have that same kind of law apply to it? The amendment specifically inserts on the page that the Senator from South Dakota referenced on page 89, and it refers to the determination by the Commission and the Attorney General. They would issue a written determination on the record--after hearings and the opportunity for a commitment. So the language that we discussed earlier, I say to the distinguished chairman of the committee, does not just refer to the Commission. It also refers to the Department of Justice. Second, I say it again for emphasis, we are not talking lawyering or a new bureaucracy. It is a parallel process. You apply specifically what one does, and what the other one does. You ask the guy that has the experience. We are trying to figure out. Do we have the competitive market, perhaps in a perfect fashion? You are looking for the person that got the job done before this, the person you ought to call on in the agency, a very small agency I point out, again to attempt to manage this transition again. Then one of the questions that comes up says, ``Well, we did not do this with airlines, we did not do this with trucking, and we should not, therefore, do this with telecommunications.'' Telecommunications is by many people's estimate one-half of the U.S. economy directly or indirectly. It is a big part of the economy, probably two or three times the size of the entire health care industry which was of great concern to us during our debate in 1993-1994. At least that is what has been represented to me. It leads directly to the manufacturing and the production of goods and services, or indirectly the information industry is now roughly half the U.S. economy. Not all of these are regulated. Many of these are unregulated businesses. We are talking about in any event managing a substantial amount of the U.S. economy; that is to say, not managing it. We are managing from a monopoly situation trying to transfer the control of the decisions away from regulators so that the marketplace is making those decisions. The reference earlier was that airline and trucking success of airline and trucking deregulation we should not have a DOJ role. However, Mr. President, I look at a couple of incidents. From 1985 to 1989, during the transition from airline regulation to competition, the Department of Transportation (DOT) had the authority to approve airline mergers, subject to advice from DOJ. In 1986, DOT approved two mergers over DOJ's vigorous objections: Northwest Airlines' deal with its main rival in Minneapolis, Republic, and TWA's acquisition of its main competitor in St. Louis, Ozark. DOJ advised DOT that each transaction would sharply reduce competition for air travel into and out of the affected city. DOT rejected this advice, concluding that the deals would not result in a substantial reduction of competition in any market. Unfortunately, DOT--with little expertise in assessing competition--was wrong. Just as DOJ predicted, the transactions resulted in higher air fares and less choice for travelers at the Minneapolis and St. Louis hubs. In fact, a study by the General Accounting Office found that TWA's air fares at St. Louis shot up at two to three times the rate of all other air fares in the wake of the merger. The Department of Transportation now concedes that assigning the job of making competitive assessments to it, instead of DOJ, ``was not a success.'' Mr. President, we are not talking about an assignment of responsibility here that is heavily bureaucratized. We are talking about a question that we ought to be able to assess, particularly given the fact that I believe it is the case that an awful lot of us are going to be held accountable for this vote. Those of us who are advocates of deregulation are attempting to answer the question, ``How do we do this in a fashion so that our consumers get the benefit of lower prices and higher quality that comes at a competitive environment?'' We want to make sure that, as you move from a monopoly to a competitive environment, the consumers indeed benefit from that transition. DOJ still has the role. It is not enough. DOJ has the role after the fact, not prior to the decision being made. The Antitrust Division is not doing the same thing as the FCC. It is not duplication, as has been alleged. As to the delays, I can go through that argument. I have gone through it once before. If you examine the detail of why there has been delay, I think the presentation of the charts going up to the right, in fact, fall on their face. The Department of Justice is not asking to be a regulator in this thing. I am not coming to the floor because I am concerned about the Department of Justice. I am not on the Judiciary Committee. I am on the Agriculture Committee, the Appropriations Committee, and the Intelligence Committee. I am not trying to figure out how to give some additional authority. They are not asking for regulatory authority. They are merely asking, and I think correctly so in this case, for some additional authority as we try to move from a regulated sector at the local level, at the local loop, and regulated sector in manufacturing as well to a competitive environment. If we get it right, we will end up being rewarded right along with the consumers with the praise as a consequence. Mr. President, I believe again that the 146 pages that we are about to vote on, whatever it is, relatively soon, we will be voting on final passage, I presume, is one of the most important pieces of legislation that I have had the opportunity to be a part of in my entire political career. I really want, as I have done before, to pay tribute to the Senator from South Dakota and the Senator from South Carolina both who have pushed on this thing. Leadership in the majority changed in November 1994. That change did not result in the stopping of this legislation. These two men have worked very, very closely together. They have worked to try to come up with a reasonable solution. I think they have made a good-faith effort. I think this amendment improves the legislation. It does not repeal the legislation. It improves the legislation. The risk that we will be taking in giving the Department of Justice this role is relatively small given the risk of not giving them this role, in my opinion. If it turns out that things get slowed down and the wheels of progress start to grind, we can always reverse it. We are literally in uncharted waters. To my knowledge this has never been done before with a sector of the economy as large as this and which is growing. We are trying to figure out how to go where we have not gone before. This bill does not deregulate in a massive fashion. It is a structured for the movement from a monopoly situation to a competitive situation. I hope that this amendment can continue to be argued in a straightforward fashion, as the ranking Democrat and the chairman of this committee have thus far. I hope, in fact, that it is adopted. I believe it will improve the legislation. I believe the compromise worked out between the distinguished Senator from North Dakota and the distinguished Senator from South Carolina, though it lowers the test, does not remove the strength from the amendment which is to keep the Department of Justice, the agency that has demonstrated its capacity to get the job done, involved in this process. Mr. President, I yield the floor.

Mr. KERREY. I would like to speak in response.

Mr. KERREY. Mr. President, we have been debating this particular amendment, although in its current incarnation just about 4 or 5 hours, but we have been debating the overall role of the Justice Department for a couple of days now. I am beginning to learn that in debate--I had not noticed it used quite so often--but one of the devices that one uses in debate is you set up a straw-man and you say, ``Do you want that strawman?'' And you say, ``No, I don't want that strawman,'' and then you knock it down with your argument. The strawman in this argument is to say that this amendment would require the poor old phone company, little old mom-and-pop phone company, to go through all this burdensome procedure before the Federal Communications Commission and then go over to the Department of Justice and that we are setting up a whole new level of bureaucracy. It is not true. That is not what is going on. It is a simultaneous process. The idea that somehow it is not going to occur simultaneously is an idea that is sold, but I do not believe is an effective sale. The question is not do you want the Department of Justice to regulate--we are not asking for regulatory authority--the question before the body is, do you want, as you proceed to a competitive environment--when you get right down to the application, the FCC will be making a judgment, just as the Department of Transportation did, as referenced earlier, when TWA tries to acquire Ozark, or when Republic is the target of Northwest Airlines. In the deregulation of the airline industry, we did not give the Department of Justice the authority to say we do not approve of it. We do not think there is competition. We do not think there will be competitive choice. We think this will decrease that. That is the question before us is not do you want the Department of Justice, in an unprecedented fashion, to regulate, but do you want the Department of Justice to have a role more than ``What do you think?'' The Department of Justice, under this amendment, would have a role to say, ``There is not competition at the local level, and we do not believe this application should be approved.'' That is the question before us. We are going from a monopoly to a competitive environment. We are not citing enormous power in a conspiratorial fashion. With or without this amendment, I say to my colleagues, there is substantial deregulation. Without this amendment, if this fails, your cable company can still price its premium service without being regulated. With or without this amendment, Rupert Murdoch can still acquire 50 percent of the television stations in a local area. With or without this amendment, you have companies out there that will be doing things they were previously prevented from doing. This bill will deregulate without this amendment. So this is not a question before the body that you have to answer, such as, ``Do I want to deregulate, or do I want to continue the current regulatory structure?'' We are going to deregulate either way. The question before the body is, do you want the Department of Justice, with a date-certain requirement, involved not just, ``Oh, what do you think about this proposed''--I almost said merger. But that is what it becomes. One of the ironies is, if a local telephone company acquires or merges with a local cable company, the Department of Justice has to approve it. Nobody suggests that is undue regulatory authority. Effectively, when you go from a monopoly with a local franchise into long distance, it is effectively the same thing. The question before us is: Do you want the Department of Justice to say we do not think there is competition? Now, very instructive for Members, as you try to reach that decision, I think, would be to go through either one of the checklists. There are two, by the way. In section 251, there is a checklist that says here is what a local company has to do, if a long distance or another carrier-- and my vision for competition, by the way, again, is that you get competitive choice not for the existing line of businesses, but you get it for a package of information services. So it is likely to come, this desire to compete at the local level, and the competition and the desire is just as likely to come from a medium-sized entrepreneur that wants to deliver information services to a resident in Cleveland, or Omaha, or wherever. That is apt to happen. In section 251 there is a checklist, as well, that says here is what you have to do. It is a pretty tough checklist. In fact, it may be tougher than in 255. In 255, you have a checklist that says this is what you have to do if you want to do interLATA, or long distance service. If you are a local telephone company, this is what you have to do. Well, I do not doubt--and indeed I know--that the committee spent a long time putting this checklist together. There are 14 things. But read them. Read them and then ask yourself the question: Does this mean I have competition? Does this mean I have competitive choice at the local level? For the consumer a competitive choice means that if they do not like the business [[Page S8165]] that is offering to sell them something, they can shop it someplace else. That is a competitive choice. Competitive choice means that business person that is selling you something has to make sure that the price and quality and all of the other terms and circumstances of the sale are what you want, or you take your business someplace else. That is what a competitive choice provides a consumer. Well, I do not know if this 14-point checklist gets that job done. Maybe it does. Maybe it does. I do not know. Again, it is a very impressive checklist. Members ought to read it. Ask yourselves what does it mean if I have ``nondiscriminatory access on an unbundled basis to the network functions and services of the Bell operating company's telecommunications network that is at least equal in type, quality, and price to the access the Bell operating company affords to itself or any other entity.'' That would appear to mean that you have a competitive opportunity. I do not know. The real test of competition is going to occur when the consumer says, ``I have competitive choice,'' and when that person in the neighborhood says, ``I do not like my service. I do not like this. The price is too high. The quality is not what I want. I am going to take it someplace else.'' You do not have that today with local telephone and cable. We are trying to move from that monopoly situation to a competitive situation, and we are merely saying with this amendment: Ask the Department of Justice--not giving them regulatory control in some sort of dark and mysterious fashion, but ask the agency that, on a regular, routine basis, is charged with a responsibility of assessing whether or not you have competition. If you do not think they can do it, look at their success in this industry. Again, it was not Congress in 1982 that stood up to AT&T. Congress did not stand up to AT&T and say we have had enough of this monopoly, our consumers and citizens are complaining; we are going to pass legislation and divest you. Congress did not do that. The people's Congress did not respond to that and pass legislation. It was the Department of Justice that filed a suit against them originally, and eventually, as a consequence of AT&T believing they would win the suit, write up a consent decree and file it with the judge. I hope that colleagues understand that this amendment is not offered as a consequence of our desire to continue regulation. As I said, we are deregulating telecommunications with or without this amendment. So the choice is not do I favor deregulation. With or without this amendment, you will have deregulation. I hope my colleagues do not fall into the illusion that this is a choice between, do I want another layer of bureaucracy, or do I want to prolong the process? If there is a specific objection to the language of this bill that implies there might be an unreasonable delay or might layer on bureaucracies, bring it. We have made modifications already in the amendment. I do not want to layer on excessive bureaucracy. I urge my colleagues to go back and look at airline deregulation, in particular, not with the purpose of trying to revisit and reargue that thorny, old problem, but to look at what happened to the Department of Transportation, which was making the decisions, and the Department of Justice was merely in a consultative role. They merely said, ``We advise against them,'' rather than being in a position where the companies understand that they do have the ability to say there is competition, thus, let us go forward, or say there is no competition, do not allow it to go forward. I yield the floor.

Mr. KERREY. I do not give----

Mr. KERREY. The question is, is there simultaneous application?

Mr. KERREY. The question I am asking----

Mr. KERREY. The Senator twice has said an applicant must go to the FCC, go through all that, and then they have to go to the Department of Justice. Will the Senator from South Dakota agree the language of the amendment calls for simultaneous application? It does not call for consecutive application, where you go to one and then have to go to another. You do not get approval at FCC and then get approval at the Department of Justice. The Senator twice said that you get your approval at the FCC. Then you have to go to another agency. Does the Senator allow that the Thurmond-Dorgan amendment calls for a simultaneous process?

Mr. KERREY. Will the Senator from South Dakota yield?

Mr. KERREY. Will the Senator from South Dakota yield on that?

Mr. KERREY. Mr. President, I rise again to discuss this bill and to discuss the amendment offered by the Senator from North Dakota, as well as the amendment offered by the senior Senator from South Carolina, to give the Department of Justice a role in what is essentially an amendment of the 1934 Communications Act which will again move us in the direction, further in the direction of competition, further in the direction of deregulation than the modified consent decree which was filed in August 1982 has done over the past 13 years. The central question I think for colleagues as they consider this amendment ought to be whether or not the Department of Justice can perform a role in promoting competition. Indeed, I believe that the Department of Justice is the only agency in Washington, DC, with any experience or any demonstrable success at moving us from a monopoly situation, in this case in the communications industry, to a competitive arena. Let me point out, I appreciate very much what the chairman and the ranking member have done thus far. I believe there had been a number of significant victories that have occurred thus far in the debate important to identify because we have taken a bit more time than was originally anticipated, but I think it has been time well spent. First, we were successful in defeating an effort to strike the language that the chairman and the ranking member made certain was in the bill that gives preferential rates to education, libraries, and to health care facilities. It is very important, particularly in the area of K-12 education, that we provide those preferential rates. I know some will argue it runs at odds with what we are trying to do. Indeed, I must confess, it essentially does run, in many ways, at odds. The problem is our schools, particularly in the K-12 environment, are not market operations, they are government operations. If we do not carve out and provide a special opportunity for them to get access, it is highly unlikely they are going to be able to take advantage of the communications revolution that I think this legislation is apt to set off, at least accelerate. And if they do not take advantage of it, our test scores are not going to be affected by technology. The capacity of our students to do well and prepare themselves either for the work force or college will be significantly diminished. That was a big victory in beating back an effort to strike that language, essentially what would amount to the new section 264 under the 1934 Communications Act. Second, there was an effort to strike what has been described as the public interest, necessity, and convenience [[Page S8137]] test. This is a longstanding test that has been applied by the Federal Communications Commission to determine how it is that we regulate. It seems like it is a relatively small effort, but it is a very large victory for American consumers, and I appreciate my colleagues' support in keeping that language in here. In the managers' amendment offered earlier, the managers changed the regulations as it affects in-area acquisition of cable, which I think is going to be terribly important to maintain a competitive environment. Personally, I believe strongly, at least in the short term, unless households have two lines coming in--a telephone line and a cable line--it is not likely that you are going to get that kind of competitive situation. This in-area acquisition amendment was an extremely important amendment to get attached. There was a joint marketing provision for small companies that was added. I appreciate very much that being added. I believe that promotes competition and allows the smaller entities--I say again for emphasis, that is likely to be where the jobs are going to be created subsequent to this legislation--it allows smaller companies to do joint marketing. It is a very important procompetitive change that was made in the bill. The legislation has very strong language making sure the system is interoperable, though it does not establish, as I think it should establish, the Government's role in setting de jure--that is, legal standards. The markets should be in a de facto way establishing those standards. Nonetheless, the legislation directs the FCC to put interoperability very high on the agenda and has a mechanism for making sure we have interoperability in the system. It is a very important procompetitive step and a very significant victory, in my judgment. The bill already had very good rural provisions in there. The managers' amendment, as well as Senator Dole's and Senator Daschle's amendment, strengthened the protection for rural communities, and we have thus far been successful at preserving the universal service fund. The distinguished Senator from Alaska--I believe it was the first amendment placed on the bill--made certain there would not be any budget point of order by placing an amendment on here that provided the money that CBO says we are going to need to pay for this universal service fund. Even though the bill results in a $3 billion reduction in the cost of the universal fund, CBO, in their own mysterious ways, came up with the $7 billion mark, and the Senator from Alaska changed the bill to provide the money to get that done. Mr. President, this is a very difficult piece of legislation because it is difficult to try to assess what the impact is going to be, what will it do for the households, the voters, the consumers in your district and your State. It is undoubtedly a question that more and more Members, I hope, are beginning to ask and attempt to answer. It is not an easy question to answer. The chairman and the ranking member of the committee have attempted to draft legislation that would move us very carefully from a monopoly situation to a competitive situation. The question, though, is, Will competition produce something that makes my consumers happier? Will my taxpaying citizens 1 year, 2, 3, 4, 5 years from now say, as I believe they do in a number of other areas, including the watershed divestiture that occurred starting in 1982, This has been good for me. I have gotten a reduction in price, I have gotten an increase in quality coming as a consequence, Senator Kerrey, of a piece of legislation you voted for way back there in 1995. The bill is divided up into three sections. It attempts to describe in general terms what it is that we are trying to do. It is important, I think, for all of us to try to examine each one of these little words inside of 146 pages, now a bit longer as a consequence of amendments that have been attached, because each one of them could potentially be the tripwire that sets off an explosion at home. Each one of them could at the same time add unnecessary regulation, for all we know. We are attempting to balance the need to move to a competitive environment with the need to preserve some regulation in order to make certain that this transition is smooth. The first section is one that will have an impact immediately. What will happen is you will see companies--I would guess mostly long distance companies, although it could be any number of other companies--coming into the local area asking permission to interconnect, asking permission from the local telephone company to interconnect and begin to provide local telephone service. The company basically controls that. There is a checklist in there, but the company basically controls the flow of that decision. There is no Department of Justice role there. The FCC is involved in that decision. There are enforcement mechanisms in there. That is where the universal service description is maintained. There are separate subsidiary requirements to protect against cross-subsidization that might make it difficult for competition to occur. There is language in there--I do not know how you describe it--that allows foreign companies to come in and buy American telecommunications companies, but only if their nations reciprocate by changing their laws. It has a snap-back provision. If their countries do not change their laws, they would not be allowed to come in and make investments in local or any other telecommunications carriers. There is language in there--very important language in there--for infrastructure sharing. But in that first section perhaps most important is a checklist that says here are the sorts of things that have to occur in order to provide that interconnection, in order to give that interconnection opportunity, for, as I said, it is either going to be a long distance company consumers are likely to see or it could be some company you never have seen before that tries to come in and provides local competition. These requirements, in what would become section 251, are different than the interconnection requirements that you find in title II. Title I is called transition and competition. Title II is the removal of the barriers to competition. There are two subtitles there. The biggest one is a lengthy description of how we are going to try to remove the barriers to entry. There are lots of important detail in that particular section. The new section 255 is the one that we are addressing with the Department of Justice role. That is where you have a checklist. If your local phone company wants to get into long distance, they then go to the Federal Communications Commission and present evidence that they are allowing local competition. As I said, it is significantly different than the language in 251. I for one have not been able to determine whether 255 preempts 251, whether the checklist in 251 is preempted in short by the language of 255. I suspect it is an important question that I have not been able to answer to my own satisfaction. Nonetheless, the company then comes and says, ``I met the checklist required in the language.'' There is a consultative role for the Department of Justice, and the Federal Communications Commission has a prescribed period of time in which it has to make a decision about whether or not to let that company get into interLATA or basically get into long distance service. Mr. President, the Department of Justice has a longstanding role in our lives in making sure, with its Antitrust Division, that we have competitive marketplaces, not just in telecommunications but in every other area of economic life. The larger a business gets and the more of the market a business controls, the more likely it is, the more chances and opportunities there are for that business to say, we are going to disregard what the consumer wants, we do not really care what the consumer wants because, frankly, we control so much now of the market that we do not really have to discover what the consumer is willing to pay. We will tell the consumer what they are going to go pay because we control such a large share of the marketplace. There really is no competitive choice. Well, that is the way it is for most local telephone companies. There is some local competition but not significant local competition. It is also true for many cable companies. They have been given a monopoly franchise, and [[Page S8138]] there is not much competitive choice. That is why we are suggesting with this language--whether it is the Thurmond language or the Dorgan language--a stronger role for the Department of Justice in making certain that we do have a competitive environment before that permission is granted to get into long-distance service. That is the carrot that is being offered. We say to the local company you can either negotiate to provide interconnection, or you can provide the interconnection requirements that are in 251. Or if you want to present that you have done all of that, we have a separate section that says you come and present that to the FCC, but the Department of Justice is engaged in a consultative way. We are saying with this amendment--and again whether it is the VIII(c) test of Senator Dorgan or the Clayton test of Senator Thurmond, it is very important to describe the roles of both of these regulatory agencies and set a time certain for the approval so you do not get into the problem of unnecessary delay and duplication of bureaucratic oversight. Mr. President, the Department of Justice was instrumental in shattering the Bell system's monopoly grip on long-distance and equipment manufacturing markets in bringing competition to those markets. Colleagues, again, are wondering why the Department of Justice should be given a role. The reason is that they are the ones with the most experience, the ones that have the capacity to make this thing happen. Competition has resulted as a consequence of the MFJ that was filed in August 1982, and that competition has made possible the communications revolution that is changing the lives of all Americans. The telecommunications legislation should take advantage of the Department of Justice's profound expertise in telecommunications competition to ensure that deregulation leads to real competition, not unfettered monopoly. Again, the potential for monopoly is already there. Since we are beginning with a monopoly situation, the potential for a monopoly situation adverse to the consumer would produce a very unhappy consumer, taxpayer, and citizen out there. And we are, with our amendment, suggesting that the best way to ensure that that does not happen is to provide the Department of Justice with what fairly, I think, is described as a limited role in assisting the Federal Communications Commission in making a decision about whether or not to allow a local company to get into long-distance, and whether or not the company has, in short, provided a competitive opportunity at the local level--because that is the question. The question is whether or not to grant long-distance competitive opportunity, and that question is answered by determining whether or not there is competition at the local level. The bill, as I said, has two sets of tests, one in section 251, that could occur almost immediately, and 255, which is the question at hand, when a company is trying to prove that they have local competition by providing the 14- point checklist, as required by this legislation to the FCC. The Department of Justice has effectively enforced the antitrust laws in the telecommunications industry on a completely bipartisan and nonpartisan basis throughout this century. It sued the Bell system in 1913 and in 1949. Both times the Department of Justice succeeded in obtaining consent decrees and sought to protect competition. But that allowed AT&T to continue participating in local, long-distance, and equipment manufacturing markets. In the mid-1960's, Mr. President, it filed comments with the FCC arguing that the Bell system should not be allowed to use its local telephone monopoly to force consumers to buy their telephone sets from it. Although the FCC agreed that customers had the right to choose among competitors, the Bell system succeeded in using its local monopoly bottleneck to impose such burdensome conditions on the interconnection of competitors' equipment to the local network that evidence of those conditions was an important part of the monopolization case that the Justice Department then presented in 1981. Open competition in so-called customer premises equipment did not become a reality until after the breakup of the Bell system in 1984. The Department of Justice, Mr. President, initiated its third major investigation of the Bell system in 1969 during the Nixon administration. In 1974, during the Ford administration, the Department filed its historic suit against AT&T charging that the vertically integrated Bell system illegally used its monopoly control over local telephone service to thwart competition in long-distance and equipment manufacturing. Over the course of the next 7 years, through the end of the Ford administration and into the Carter administration, the Department litigated the case vigorously, filing and organizing the complex evidence that showed how the Bell system used the local monopoly to hurt competition in other markets. In January 1981, at the beginning of the Reagan administration, trial of the case began. The Department of Justice offered in court almost 100 witnesses and thousands of documents as it systematically laid out the facts that demonstrated how the Bell system unlawfully used the local monopoly bottleneck to hurt competition in other markets. In negotiations to settle the case, President Reagan's Assistant Attorney General, E. William Baxter, insisted that the only way to protect competition in the long-distance and equipment markets was to separate those markets structurally from the local telephone bottleneck. Unless the local monopolist was prevented from participating in other markets, it would always have the incentive and ability to hurt competition in those markets. At first, the Bell system refused even to consider such a settlement. After hearing the Government's case, and presenting about 90 percent of its own case, 250 witnesses, and tens of thousands of pages of documents, the Bell system relented and agreed to settle the case based on a consent decree that dismantled the vertical monopoly. After it was approved by Judge Harold Greene, the modification of final judgment--which is referred to often as the MFJ--required the Bell systems to split itself into AT&T and the seven regional Bell operating companies now called the Bell companies. AT&T retained the long-distance and manufacturing operations. The Bell companies, independent of each other and of AT&T, retained monopolies over local telephone service in vast geographic expanses, subject to the requirement that AT&T, along with competitors, have equal nondiscriminatory access to customers through the local networks. The key point of the MFJ was that it removed the Bell companies' incentive to use the local monopoly to hurt competition in long- distance and equipment manufacturing by prohibiting them from entering these markets. By the same token, AT&T no longer had the ability to hurt its competitors in those markets because it no longer controlled the local monopoly. The restrictions on the Bell company grew directly out of the fact noted by Judge Greene that ``the key to the Bell system's power to impede competition has been its control of local telephone markets.'' Section VIII(c) of the MFJ--modified final judgment--the language that is in the Dorgan amendment provides that the line of business restrictions can be waived if a regional Bell operating company shows that there is no substantial possibility that it could use its monopoly power to impede competition in the market it seeks to enter. Removing the restrictions under any other circumstances would give the local telephone company the incentive and ability to recreate the vertical monopoly that the Department of Justice and many others worked so long and hard to dismantle. Since the entry of the MFJ in 1982, the Department has assisted Judge Greene in administering its terms--in Republican and Democratic administrations alike. It has been dedicated to ensuring that the line of business restrictions hinder the RBOC's only to the extent necessary for protecting competition in other markets. The Department has supported waiver of the restrictions when it has concluded that Bell companies' entry into other markets presented no substantial possibility of impeding competition in those markets. The Department now has over 50 professionals--lawyers, economists, and paralegals--who are [[Page S8139]] dedicated and experienced in telecommunications competition issues, and who understand the complex markets and technologies involved. The Department, therefore, is uniquely positioned to assess what is actually happening in the market and whether there is a danger that entry by the Bell companies could impede competition. That is exactly the task that has been performed since the entry of the MFJ over a decade ago. Mr. President, the competition long-distance and equipment manufacturing unleashed by the MFJ has benefited the United States of America and its citizens and consumers enormously. MCI, Sprint, and hundreds of smaller carriers buy from AT&T to provide long-distance service. Prices have dropped and quality has improved, with the result that Americans are talking to each other via long-distance more than ever before. Americans have not been shy about exercising the right to choose that the MFJ guaranteed. The New York Times reported that 25 million people changed their long-distance carrier in 1994. In an article, ``No Holds Barred for Long Distance Call,'' Edmond Andrews, the New York Times, January 21, 1995, describes the competition that exists in long-distance, and describes who was benefiting from that competition. Similarly, businesses and consumers enjoy lower prices, more choice, better quality, and communications equipment, as competition has eroded AT&T's power in that market and forced it to compete for customers. Mr. President, that is at the heart of what this legislation is attempting to do: Force existing monopolies to compete for customers. If that competition occurs, the competition for your business--you as a customer--will force the company to pay more attention to quality, giving not just the quality that you want but give you competitive price, knowing that if either the quality or the price are not what you like, you will see a competitive alternative. These benefits stem directly from the strict separation of the local monopoly from other markets. Although it now appears possible that the local markets can be opened up to competition, they are not natural monopolies any longer. Removing the separation between the local markets and other markets without ensuring that the Bell companies cannot use the local monopoly to hurt competition and long-distance could squander the gains of the past decade. The expense of the Bell system in the years before the MFJ, when it frustrated consumer choice and actual competition, long after competition and long-distance service and communications equipment became technologically and economically feasible, counsels against allowing the Bell companies into other markets before determining, based on actual marketplace facts, the effect it will have on the market. Again, there are two places in this legislation that I call to my colleagues' attention who are trying to figure out what to do with this legislation, whether to support this amendment. There are two sections in this legislation that talk about interconnection. The first will be the new section 255 of the 1934 Communications Act, and the second, the one we are talking about now, the interconnection requirements prior to getting into long-distance that are described in the new section 255. The fundamental goal for all should be to allow the Bell companies into any market they choose to enter as soon as such entry does not threaten to impede competition in the other markets. That is the success that we have had to date, Mr. President. By ensuring that there is competition, the consumer has benefited, and it has been the Justice Department that has managed that effort. The simple fact, however, is that telecommunications networks are so complex that the RBOC's ability to frustrate viable competition exceeds the ability of legislators and regulators to specify the steps necessary for opening local markets. As was the integrated Bell system before the MFJ, the Bell companies today are in a position to ensure that every step forward is accomplished by a step backward, preserving their local monopoly as they race into long-distance with the advantage of the monopoly still intact. The way to overcome this ability of the RBOC to thwart the open local markets is to give them a positive incentive to cooperate in the development of competition. The RBOC's will have such incentives when the specified steps for opening the local markets are supplemented by a process that ensures analysis of actual marketplace facts before the RBOC's are allowed to enter long-distance. That is what both the Dorgan amendment and the Thurmond amendment attempt to do. As I said, Mr. President, we have been through this bill a number of times, and there are places in this bill where I believe the Bell companies make a good case. We may have regulatory requirements that are unnecessary that may, in fact, impede the development of competition. I am prepared to entertain discussion of regulation that is still required in this bill that may, in fact, impede competition, that may provide an unnecessary burden for the regional Bell operating companies unnecessarily, at least that they cannot be defended in what they provide for the American consumers. Both the chairman and the ranking member of the committee, as they have said on many occasions on this floor, are attempting to create a structure where we can, first of all, begin the process of competition, initiate competition at the local level, then move to end many of the barriers that currently exist to entry into these markets and finally, in section 3, come to an era of substantial deregulation where price will be determined by competition, not by regulatory fiat. The Department of Justice role in promoting competition has been historically not only bipartisan but also nonpartisan. As I indicated earlier, the antitrust investigation against the Bell system was initiated in the Nixon administration. The antitrust case against the Bell system was filed in 1974 in the Ford administration. Litigation continued through the Carter administration, into the Reagan administration. The case was settled by requiring divestiture during the Reagan administration. The Department of Justice assisted Judge Greene administering the consent decree throughout the Bush and the Clinton administrations. The decisionmaking process of the Department of Justice has not been a partisan issue. It was approved last year by the House, with over 420 votes. It was approved last year by the Senate Commerce Committee by an 18-to-2 vote and supported by President Reagan's Assistant Attorney General for antitrust, Prof. William Bater, Judge Robert Bork, a letter from a bipartisan group, and a former member of the House of Representatives, Vin Weber, in a piece he wrote in the Washington Times. The role for the Department of Justice is not being suggested as a consequence of concern for one sector of the economy or the other. It is the suggestion--recommended change in this law--based both upon what politicians themselves have concluded in the past was necessary, as well, mostly based upon evidence at hand of the Justice Department's capacity to manage what will be an unprecedented transition from a regulated monopoly situation to a competitive environment. It seems to me, Mr. President, quite appropriate to be calling upon the Justice Department to once again do more than be a consultant in this matter, much more than just in the end, during the 90-day period during which the FCC will make its determination. It is better to have a parallel process going on with the Justice Department, where they will be making determinations as to whether or not competition exists; again, whether it is the VIII(c) test of no substantial standard possible, or the Clayton test, which I will get to later. The Justice Department is the agency that understands the markets, that knows whether or not there is competition, and it is the agency that I believe we need to turn to if we are concerned about what kind of response it is going to be from our consumers, our taxpayers, and voters. Procedures for the Bell operating company's entry into long-distance over the Dorgan or Thurmond amendment does not represent unnecessary duplication. The idea that we will get a [[Page S8140]] lengthy process, in fact, is just the opposite of what will occur without this amendment. What happens is the Bell operating company would file an application for entry into long-distance. The Justice Department and the FCC would review and proceed simultaneously. The Bell operating company would have an answer within 90 days after application, in accordance with a date certain, established by Congress. This procedure is fast. It takes 90 days. The standard for the Justice Department review will be clear, again, whether it is Clayton or VIII(c). The test has been litigated many, many times in the past. It is not a difficult standard for the Justice Department to apply in either case, in either the Dorgan or the Thurmond case. The procedure will reduce litigation, will reduce the likelihood of subsequent antitrust suits. Mr. President, I will get into that later, but one of the things, if Senators are concerned about what this will do after a person votes ``aye,'' what final passage will do, what changing the law will do, one question to answer is, Is this process going to take a long time? Is it going to be slow? Can the existing companies in here sort of drag this thing out for a long period of time? One of the reasons we need a Department of Justice role is to reduce the possibility of litigation, to reduce the opportunity to drag this thing out in the courts, and to increase the date when real competition will begin to produce benefits for the consumer. Mr. President, the VIII(c) test is pretty well established. I want to talk now about what the language of the Thurmond amendment does. I believe that it is likely to be that test which we will be deliberating, that Members will have to decide whether or not they approve or want the Clayton standard. First of all, the Clayton Act was passed in 1914 and it was passed to prevent mergers that may substantially lessen competition or create a monopoly. That standard has been applied to every industry, not just to telecommunications. It is applied to mergers with critical national importance such as defense industry mergers like Martin Marietta and Lockheed, applied to mergers in other high-technology industries, software industries, the recent case of Microsoft and Intuit, applied to mergers, long distance mergers in the telecommunications industry like AT&T-McCaw and British Telecom-MCI mergers. The standard is a known quantity. It is a known quantity and it has been developed through 80 years of litigation under that standard. If the Bell operating companies want to enter into long distance by buying a long distance company, this is the standard that would be applied. It is logical to apply the same standard if they want to enter long distance in other ways under the unique circumstances of this bill superseding an antitrust consent decree with the intention of creating competition. The Thurmond amendment, the Clayton language, makes entry dependent on passing the Clayton Act test. This test is normally applied to mergers that would be applied to the RBOC's, even in the absence of this amendment, if they propose to acquire a long distance company. The Clayton Act test would apply to RBOC entry unless the effect of such entry may be substantially to lessen competition or to tend to create monopoly. This is exactly what we want. We want an agency that is experienced with measuring that question engaged in the process of saying to the American people, if you pass that test, there is no substantial possibility to lessen competition or create a monopoly. We see a competitive marketplace there, and we give permission and a date certain, a time certain. That should remove any doubt about whether or not this thing is going to be dragged on for a long period of time. Under such a standard, the Department of Justice would consider whether allowing an RBOC, that is a local telephone company, to provide long distance service would give it the ability and incentive to use its monopoly power in local exchange services substantially to lessen competition in the long distance market and raise prices for consumers. At the end of the game, that is what we are talking about. If you have a monopoly, you have the possibility of raising prices regardless of what the consumers want. You can ignore the consumer if you control a large enough portion of the market share. What we want to make sure is you have competition. With that competition, whether it is coming from below or coming from above, regardless of where it is coming from, give that consumer choice in the household and the consumer will benefit as a consequence of lower prices and higher quality. The RBOC's could meet such a test and be allowed to enter the long distance market in any one of three ways. First, if competition has developed in local exchange services so there is no longer a local monopoly that could be used substantially to lessen competition in long distance, or second, if, even absent local competition, safeguards or other constraints would prevent the RBOC's from using their local monopoly to substantially lessen competition in long distance. A very important point, Mr. President. It may be that local competition does not develop immediately. We should not say to a RBOC, you cannot get into long distance under that circumstance. The Department of Justice has experience in making sure that the negative impacts of lack of competition do not occur at the local level, thus actually saying to a Bell operating company, here is a way for you to get into long distance interLATA businesses even faster than what might otherwise be possible. Third, if some one combination of alternatives to the telephone company local exchange services, safeguards, and other factors should prevent the telephone company from substantially lessening competition in long distance service. More competition would require fewer safeguards, and obviously the opposite is the case as well. Fewer safeguards will be likely. As we get competition in these local markets, we are going to need less and less and less. In several acts in the telecommunications industry, the Department of Justice has carefully considered the competitive risk of allowing firms that dominate a market to enter into a closely related market through mergers and joint ventures. Based on the facts of those particular cases, the Department of Justice concluded that under certain market conditions it is not necessary to prohibit entry by a provider of local exchange services into long distance services. But the Department of Justice has required structural separation and other safeguards in the anticompetitive areas to protect the public interest in competition, for example the GTE's 1983 acquisition of Sprint; again the AT&T-McCaw merger and the British Telecom-MCI joint venture. Mr. President, I would like to now try to give Members--I see the distinguished Senator from Vermont is here.

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

Mr. KERREY. Mr. President, again, the question for colleagues is whether or not the Department of Justice can perform a role that would be useful, that would enable us, 50 years from now, to say we have, as again the chairman and ranking member have attempted to do in this legislation, created a structure under which we will go from a monopoly situation at the local level to a competitive environment for all telecommunications services. One of the statements that is very often made is that, well, there have been lengthy delays. You will hear people say there are a lot of delays over at the Department of Justice. A triennial review that was required has not been done, or, well, the SEC can do it just as well; they will just hire some more people over here in this area and they should be able to handle it very well. Mr. President, what I would like to do is cite a couple of instances to give you an example, and they illustrate the kinds of things that are going to occur, the kinds of questions that are going to be raised when businesses try to do things that the current law prevents them from doing. Basically, that is what we are talking about here. Telecommunications corporations that are prevented from doing something will be allowed to do it with this legislation. It is not just the common carriers, by the way. We are allowing cable companies to price differently. We are deregulating them substantially. We are changing the laws for broadcast ownership. There are lots of changes in this bill besides just having to do with common carriers, but it is the common carriers we are dealing with in this particular amendment. The case of GTE is very instructive, Mr. President. In this case, what you had was a company, GTE, with a local exchange monopoly in markets that were scattered around the country, and Sprint, a long distance company, recently established. What the Department of Justice did was to write up and get both parties to agree to a consent decree that was filed in court that prevents further litigation requiring separate subsidiaries and equal access for other long distance companies to make sure that GTE customers would have the benefits of long distance competition. The Department of Justice ensured that there was competition. They promoted and allowed the businesses to merge, in this case GTE and Sprint. One of the things this bill does is it sets aside that consent decree. I believe it was in one of Senator Dole's amendments earlier. So now this original consent decree that was filed on behalf of a merger and on behalf of consumers to make sure that you still have competition at the local and at the long distance level. An even more difficult one was the merger of AT&T and McCaw that my colleagues might recall happened, I guess, about a year ago now in 1994. AT&T, obviously, by far the largest of the long distance carriers, was attempting to acquire initially, I think, 50 percent, eventually 100 percent of the larger cellular provider, providing not just long distance but local telephone service as well. There was vertical integration involving two companies with substantial market power. AT&T was dominant in both long distance and manufacturing of cellular equipment used by McCaw's competitors. The question was whether or not by acquiring McCaw, AT&T was going to restrict competition from competitors who were buying equipment that AT&T was manufacturing. McCaw, on the other hand, has only one competitor in each of the markets it has been given by the Federal Communications Commission. So what happened? The Department of Justice intervenes. They work with both companies. They negotiate between both companies. They declare what it is they are going to be filing, and they file a consent decree which required separation and nondiscrimination safeguards so that McCaw customers will have equal access to long distance carriers and cannot be required to buy long distance from AT&T, and cellular rivals to McCaw that want to use cellular equipment will continue to have access to necessary product and will be free from interference of AT&T should they wish to change suppliers. AT&T and McCaw will not misuse confidential information obtained from AT&T equipment customers or McCaw equipment suppliers. Those are the kinds of questions, Mr. President, that will occur on an increasingly frequent basis. Who knows? There may be hundreds of these applications that are going to fall into the lap of the Federal Communications Commission solely unless, again, either the VIII(c) test of the Senator from North Dakota or the Clayton test of the Senator from South Carolina is adopted and the Department of Justice is given a parallel, simultaneous role; not a new role, a historic role; not an unprecedented role but a role consistent with the unprecedented nature of this legislation itself. The third example that I would cite was a very complicated one involving a foreign company, British Telecom, that had proposed to acquire a 20-percent stake in MCI. Here again the question was that you were dealing with a company with substantial vertical integration, with substantial market power, and once again the Department of Justice comes in and says, well, here is what we are [[Page S8143]] going to do. We are going to put a consent decree together establishing separation together with nondiscrimination safeguards so that public disclosure of rates, public disclosure of terms and conditions under which MCI and the joint venture gain access to BT's network is required. Second, British Telecom is barred from providing the joint venture with proprietary information about their American competitor. Again, Mr. President, I do not expect my colleagues, I do expect myself, to understand exactly what all this means but what it establishes is that the Department of Justice has experience in making certain there is a competitive environment so that neither the providers nor the consumers who are out there trying either to sell or to buy are affected in an adverse way as a consequence of mergers, as a consequence of new lines of business that are developed as we lower the barriers to entry, as we decrease the regulatory burden and increase the extent to which competition is going to be used to determine our prices and quality of our goods. Now, as to the question of whether or not the Department of Justice has failed to fulfill its obligation to review the need for continuing the MFJ's line of business restriction--that is a statement that is made relatively frequently--well, I think this criticism is not terribly valid. There was a triennial review that was done in 1987, 3 years after the breakup of the Bell system, but the suggestion that because there has been only one triennial review, there has not been a constant review, I think that suggestion does not stand up in the face of the evidence of what Judge Greene has been instructing the Department of Justice to do, it does not stand up in the face of the enormous volume of waiver applications that has been coming up and what has been effectively a de facto situation of constant reviewing of the line of business restrictions, and it does not stand up in the face of the current review leading to recommendations on line of business restrictions. Experience demonstrated that triennial reviews by the Department of Justice were not necessary to achieve the intended goal of ensuring review of the need for the MFJ's line of business restrictions. Judge Greene himself explained why DOJ should have complete discretion as to whether or when to file additional triennial reviews. In his language: The Court and the Department envisioned a comprehensive review every 3 years interspersed with occasional waiver requests. What has occurred, however, is the process of almost continuous review generated by an incessant stream of regional company motions and requests dealing with all aspects of the line of business restrictions. Let me read that again for emphasis, Mr. President, because those who very often criticize the Department of Justice for not doing a sufficient amount of review are the very companies that have created a constant review as a result of their application for waiver and the motions that they are filing in Judge Greene's court. The original intent was for triennial review, Mr. President, because the court and the Department envisioned a comprehensive review every 3 years, kind of quiet period of time, interspersed with an occasional waiver request. So when the consent decree was filed originally breaking up AT&T, the idea was, ``Well, we will get a few waiver requests here and an occasional motion, but it will not be very often. Because there are not very many waivers or motions, we will do a triennial review.'' The situation was just the opposite: Constant motions, constant waiver applications and, thus, no need for a triennial review and, thus, it does not stand up to criticize the Department of Justice and say, ``See, don't give them a role in this matter because they didn't do what they were originally supposed to do.'' They did not do what they were originally supposed to do because circumstances developed precisely the opposite of what both Judge Greene and the Department expected to have happen in 1981 and 1982 when this decree was being negotiated between AT&T and the U.S. people through the U.S. Department of Justice. Judge Greene further explained why he did not require further triennial reviews. He said, with the stream of waiver requests, he ``repeatedly considered broad issues regarding information services, manufacturing and even long distance.'' Mr. President, basically he is saying that though this thing did not develop as was expected--long periods of quiet time interrupted by triennial reviews--the waivers and the motions have enabled us to constantly review the line of business restrictions and determine whether modifications need to be made. The judge also explained that ``as soon as there is a change, real or imaginary in the industry or other markets, motions are filed and all aspects of the issue are reviewed in dozens of briefs.'' These observations are still valid. In the life of the MFJ, Bell companies have filed an average of one waiver every 2 weeks. In fact, what amounts to a triennial review is underway right now as the Justice Department investigates a motion to vacate the entire decree pursued by three Bell operating companies. This investigation will culminate with a report to Judge Greene in the next few months, and that report will be a comprehensive review of the need for continuing the line of business restrictions. It is likely the recommendations that are going to be made at that time will support most, if not all, of the changes that are being recommended in this legislation. Let me talk about this purported delay. You hear, ``Well, the Department of Justice takes a long time; this waiver process takes a long time.'' Typically what is done is a statistical analysis is used of the average age of pending MFJ waivers; that is to say, the request for waiver of the consent decree. There was a consent decree filed in the court. Judge Greene is administering that consent degree on behalf of American consumers who benefited enormously as a result of that Department of Justice action and what Judge Greene has done. The statistical analysis, in my judgment, is a red herring. This argument that is used against DOJ decisionmaking is that you will see an unnecessary delay as a consequence of this statistical analysis, to back up the assertion this analysis purports to show that a Department of Justice role will cause a long period of time for decisions to be made. Again, two things argue against that. One is what I will get to here in a minute. The other is in the language of the amendment, either as modified by the Senator from South Carolina or as originally contained in Senator Dorgan's amendment. It is a review process that takes place simultaneous in the Department of Justice and in the Federal Communications Commission. Both have a date certain of 90 days. Only with the Department of Justice role, in my judgment, are you going to limit it to 90 days. Without that Department of Justice role, I stand here and predict you are going to have substantial litigation and the very delay we all seek to avoid. Congress can and should require the Department of Justice to make this determination by a date certain. It is as simple as that. That is what the amendment does. That is what either one of these amendments, in fact, would accomplish. The amendments guarantee the Bell companies will get an answer on long distance entry by a date certain. The legislation will replace the waiver procedure with specific deadlines. You eliminate the waiver procedures included in the 214 waiver procedures that are in current law under the 1934 Communications Act. The Department of Justice review cannot possibly slow Bell company entry into long distance unless such entry would be harmful to competition and, thus, undesirable for American consumers and businesses. Under that situation, you want the Department of Justice to slow it down if, in their reasoned judgment, based upon the experience that they have had, it is going to restrict competition. They are the ones with the experience. You do not want this process to end if the Department of Justice, before granting permission, interprets the proposal to mean less choice, less competition, because in a monopoly situation, with all the other things that we are doing with this legislation, you are unquestionably going to get increased prices and marginal, if any, improvement in quality. [[Page S8144]] Entry will be permitted to occur as quickly as possible, consistent with the appropriate entry tests that have been established by Congress in this legislation. But there is a follow-on question, which is, does the MFJ waiver process show that the Department of Justice has been a barrier to greater competition by unnecessarily delaying waiver requests that are eventually approved? No, the users of that argument imply the Department of Justice review of waiver request has been worthless because the Department of Justice has supported and the district court has approved some 95 percent of those requests. Mr. President, that examination, that figure of 95 percent does not tell all the story. A typical pattern is for one or more of the Bell companies to file an overbroad waiver request seeking relief that could not possibly be consistent with section VIII(c) of the MFJ. These unreasonable requests evoke extensive public concern and comment. The Department of Justice then has two choices: Recommend denial when the request is made, which would be relatively quick, or work with the Bell company or companies to fix the request so that it satisfies the requirements for approval. Fixing the request is harder and takes much longer than just saying no. But the Department of Justice has committed itself to this harder course because it believes that the cause of competition is better served by taking the time to negotiate a reasonable request than by merely opposing an unreasonable request itself. Of the waivers approved by the courts in 1993-1994 that were not mere copies of other waivers, fully 60 percent were the product of negotiations between the Department of Justice and the Bell companies that resulted in a modification of the original waiver request. That is the bottom line analysis, Mr. President: Fully 60 percent with the product negotiations between DOJ and the Bell companies that resulted in a modification of the original waiver request. Thus, the approval rate to which opponents refer is, in large part, a testament to DOJ success in preserving competition while working to minimize the burden of MFJ's line of business restrictions. Another argument that is very often thrown up in this debate is that you are seeing an increase in the age of pending waiver applications. The timetables for waivers under the present court-administered consent decree is irrelevant. The Thurmond and Dorgan amendments require that the Department of Justice render its determination no later than 90 days after receiving an application for long distance entry. So, to refer to the current delays and say, here is the problem and this is going to be perpetuated by either the Thurmond or the Dorgan amendment is wrong, Mr. President. These amendments specify 90 days of parallel processing during which both the FCC and the Department of Justice will consider an application by a local telephone company to get into long distance service. Mr. President, there is, by the way, some reasons why these waiver requests are pending with the Department of Justice and why they have increased since the early years of the MFJ. I would like to go through one or two of them. But, again, I am actually offering some examples of why the Department of Justice is more competent than they might appear, if this is your only method of evaluation. I am not offering these to try to persuade any colleagues that this is why you should trust that the process is not going to take very long. The amendment itself says 90 days. There is a date certain in the amendment. Do not worry about this dragging on forever, the law does not allow it. Well, again, opponents have compared and taken to resolve waiver requests in the early years of the modified final judgment and the time taken more recently and asserted from the Department of Justice fails to deal with requests in a timely manner. But this comparison is simplistic and ignores fundamental changes in the character of waiver requests. It is worth noting that when you compare the age of waivers in 1984 to the age of waivers in 1994, it is not surprising that the average age of waivers in 1984 would be low, since they could not even be requested before that year. Why would they not be low then? A filed waiver application in 1984 is a year old. It is understandable and logical and indeed would be surprising if the opposite was the case if these waivers would not age the longer the consent decree is in place. More recent waiver requests require more time, as well, to evaluate for several additional reasons. I think it needs to be understood. They are not illegitimate reasons. If they are not legitimate fines, that is fine. But do not come and say merely that we have one single statistic that shows in 1984 here is the age of the waiver application, and in 1994, here is the age of the waiver application and say, see, that justifies the conclusion that the Department of Justice should not be given a role. Again, there are two reasons why that argument does not stand up. One is a fact I will isolate it in a minute. The other is that both the Thurmond and Dorgan amendment say a 90-day time certain. The recent waiver requests, however, deal almost entirely with lifting the MFJ's core business restrictions--that is, inter-exchange, information services, manufacturing--while early request waivers were primarily for the local company entry into the nontelecommunications business--a much easier waiver to grant. When you get into the core business application, the waivers are more difficult to grant and assess and thus take more time to either approve or to deny. They also evoke more public concern and comments. It is a tough deal when a person comes up and says, ``A company has applied for a waiver, and I do not like it.'' One of the reasons the Department of Justice has taken longer is that you have an increase in the numbers of public comments and expressions of concern. For example, of waivers filed with the Department of Justice in 1993 and 1994, the Department receives nearly six times as many comments per waiver as in the 1984 to 1992 period. So just in the last 2 years, you have had a substantial increase in the number of public concerns and comments which are made on the waiver applications that are put to the Department of Justice. The recent waiver applications present broader and more complex issues. A number of waivers still considered pending are actually subsumed within broader requests that have already been addressed by the Department of Justice. Despite these challenges, the Department of Justice succeeded in speeding up the waiver review process. In 1994, DOJ disposed of 43 percent more waiver requests than in 1993, while the average age of pending waivers decreased by 17 percent. So if you are looking for how they are doing over there, the 900 or so employees in the Antitrust Division of the Department of Justice who have the responsibility for assessing concentration in the meat packing industry and concentration in all other industries--they have the responsibility for antitrust action in all sectors of the U.S. economy, these 900 employees--if you are looking for facts as to how well they are doing, I urge my colleagues to look at the progress they have made from 1993 to 1994. Look at the complexity of the cases, and look beyond merely an examination that says from 1984 to 1994 in the cases the age of the waiver applications has been lessened. For all kinds of reasons, it is understandable, and it does not indicate that the Department of Justice is incompetent or unqualified. If that does not persuade you, look at the language of the Dorgan amendment and the Thurmond amendment, because they remove all possibility of this thing being delayed for a long period of time by putting a 90-day time certain, a date certain in the law. Mr. President, the Department of Justice is the agency with the expertise in the competition and telecommunications markets. The Department of Justice has had an unwavering focus on the protection and promotion of competition. All facts support that conclusion. No facts that I have heard support the conclusion that the Department of Justice does not have the capacity to assist the people of the United States of America, as we the Congress attempt to move this local promoted competition in telecommunications on a nonpartisan and bipartisan basis throughout this entire century. The Department of Justice has deepened its expertise in telecommunications competition over the past quarter century by investigating the Bell system's monopoly, suing to break up the monopoly, and allow competition in long-distance and equipment markets to flourish, and in assisting the Federal district court in administering the modification of final judgment, the consent decree that dismantled AT&T. The benefits to the Nation from the Department's role in promoting competition have been more jobs, more exports, greater innovation, and more products available to businesses and consumers at lower prices than at any time in our history. I see that the Senator from South Carolina is here. I yield the floor.

Mr. KERREY. Mr. President, let me shorten this by a couple of sections here and then regain the floor at a later time since this debate probably will be going on for some time before we actually vote. One of the questions, again, I know I have asked myself that I think it is important to answer is whether or not giving the Department of Justice a decisionmaking role in this is going to cost the taxpayers more money. Many have argued against this and implied it is going to increase taxpayer requirements, it is going to result in more and more litigation. The ominous thought of more litigation and more taxpayer cost sort of hangs over the argument. But a Department of Justice role would avoid complex and expensive antitrust suits in the future by making sure that competition is safeguarded in the first instance. These suits would consume resources better spent on competing to offer American businesses and consumers lower prices and higher quality. I can, and will at a later time, go through many examples where that in fact is the case. If you go back and look at the situation prior to the filing of the MFJ by the Department of Justice, that is exactly what was happening. It has also [[Page S8141]] happened since that time during the years that these suits would be litigated. The American economy would suffer from the effects of lessened competition and higher prices. Before the MFJ broke up the Bell system, there were dozens of private antitrust suits against the system ongoing in courts across the country at any given time. AT&T's 1977 annual report said that some 40-such private suits were then pending against it. Asking for more of those suits would be a giant step backward. Mr. President, I say with respect that without either the Thurmond or Dorgan language here, that is precisely what we are doing. We are inviting suits in the absence of the Department of Justice moving at the same pace, the same 90-day period. It is not an additional 90 days, not an additional 180 days. During the same 90-day period during which the FCC is examining the merits of the application, determining whether or not the intersection requirements of section 25(a) have been satisfied, during that same 90-day period the Department of Justice would be doing an analysis of whether or not competition exists at the local level or whether or not the negative impacts of monopoly were not likely to risk higher prices for the consumer at the local level. At the end of the 90-day period, just as would occur at the Federal Communications Commission, the Department of Justice would have to make its ruling. You have a simultaneous process. I say to my colleagues, if you are trying to reduce bureaucracy, if you are trying to reduce the potential for lawsuit, then either the Dorgan or the Thurmond amendment is something you must be for. The opponents of the Thurmond and Dorgan amendments argue that all we need to do is allow the Department of Justice to bring lawsuits after competition has been harmed. They never explain how an after-the-fact antitrust case will solve the problem. It took 10 years of litigation to resolve the Government's case against AT&T. Years of litigation is not a solution. That is a problem we should avoid. Again, either the Dorgan or the Thurmond language--either the no substantial possibility language of VIII(c) or the well-litigated 80-year test of Clayton--would suffice, in my judgment, to make certain we avoid the kind of litigation that I believe both the chairman and ranking member and other advocates of not having the Department of Justice in here are trying to avoid. Mr. President, I yield the floor.

Mr. KERREY. I am pleased to yield. The Senator keeps saying miraculously, and three sets of lawyers. I just do not think the facts support that. I do not think the facts support that is what a company would do, have to hire a whole separate set of lawyers or, being a miracle, that there would be simultaneous application. The application process is different at the Department of Justice because the Department of Justice is the agency that has the experience of determining whether or not there is competition. They are the ones with the experience. The FCC does not have that experience. Indeed, the checklist the Senator is referring to is the placement for the VII(c) test. The Senator voted for an VII(c) test last year. Last year, the Senator from South Dakota was quite willing to have simultaneous application then because the Department of Justice had a ruling with an VII(c) test involved.

Mr. KERREY. Will the Senator from North Dakota yield?

Mr. KERREY

Mr. KERREY. I thank the Senator from Mississippi. Mr. President, I rise but will withhold most of my comments. The Senator from South Dakota and I will have an opportunity to go round and round again on the DOJ rule amendment tomorrow. I would point out for those few who are still remaining and listening to this, that this amendment illustrates why colleagues should be paying attention to this piece of legislation. I, myself, support this particular section, this preemption by the Federal Government. But it is a significant preemption. Any time we see language that says, ``We hereby preempt State and local laws'' around here, you only get 90 votes against it. Lately, the mood is shifting, and I think quite correctly so. The Supreme Court is shifting right along with it to an argument that cedes more and more power to the State government, whether it is welfare reform, health care, or whatever it is. We are block granting after block granting after block granting more authority back to the State law. As I said, the Supreme Court is increasingly challenging our authority to intervene at all at the local level, the State level. Intervening with State laws at all gets to be a difficult business. This piece of legislation preempts not just State laws but preempts local laws, I think quite repeatedly so. If we want a competitive environment, these airwaves, these cables, these lines, do not stop at a border. It is, it seems to me, an interstate commerce issue. Nonetheless, it will [[Page S8187]] feel very much local when we are dealing with local cable or local telephone. The citizens are not likely to think of it as an interstate issue as much as we are, who are trying to create some uniformity. I think the Senator from South Dakota is quite right. This does get to the heart of the bill. It is an effort to preempt and create uniformity in the country and create certainty in the country so investment can be made and all the things that need to occur, if we are going to see this legislation produce the desired effect and benefits, for example, reduced prices for consumers, for cable. My belief is that in short order, people are going to be buying video, dial tone, text, in a package form, but if they get a reduced price for that and they get improvement in quality and service, we have to take this action and come in and preempt the way the States can regulate. This legislation, by this section here, not only removes the barrier, but it sets up the title 3 section which moves to pricing flexibility, not just allowing States, but requiring the States to end a rate-based rate of return system of regulation. In this legislation, we are accelerating the number of States that have adopted alternative regulatory regimes. We are saying that we will not wait for State legislatures to take action or public service commissions to take action. We will preempt their authority and say we they will end rate-based pricing and go to a price cap system and try to give these companies that are selling telecommunications service more flexibility. I think that has merit, frankly. This idea of preemption, I think, is a very important idea as part of this legislation, but I believe that it illustrates why colleagues need to be alert to the reaction that this will produce after this legislation is enacted. With the filing of cloture, that the distinguished Senator from Mississippi just did, this bill is coming to a vote relatively soon. Unless I have this thing figured out wrong, it is likely there will be a majority of Senators voting for it. I hope my colleagues understand this is not likely to be the last situation but the first situation of many, many, where we need to understand where it is we are going in order to be able to answer a citizen that will say, ``Wait a minute. This is big change.'' Yes, it is, American citizen. This legislation represents significant change in the way that we regulate and the way the Federal Government establishes its presence at the local level and at the State level. I see ways to interpret the amendment that the Senators from California and Idaho have presented, striking this particular language. Part of this language does appear to be a bit vague to me, as well. No matter how we do it, if they want to strike the section, we are still left with significant preemption in the overall title. I yield the floor.

Mr. KERREY

Mr. KERREY. Mr. President, I do not know how long I am going to respond, but we will have time tomorrow to discuss this. In my judgment, the Senator from South Dakota just misdescribed both our amendment and what the Department of Justice is doing and why the people of the United States of America should want this amendment adopted. He repeatedly comes to the floor and says that this is ``another layer of bureaucracy,'' and describes himself as being beleaguered with opponents who are trying to prevent something from happening, that we are deregulating, and we ought not interfere with this process. I say again for emphasis, Mr. President, that nobody in my campaign in 1994 came to me and said, gee, I hope you deregulate the telephone companies. I am an advocate of doing this. But the Senator from South Dakota says, gee, this was not written by industry. It may not have been written specifically by industry, although I daresay you would have to struggle long and hard to find a Member of this Congress that could come up with that 14-point checklist. That is a technical checklist that does not look like it is in the language that at least I hear us using as we describe telecommunications. It may not have been written by industry, but American industry is asking for this legislation. It allows them to do things they are currently prohibited from doing. I am an advocate of allowing them doing some things they are prohibited from doing. I favor deregulation. I am tired of hearing the straw man set up time after time that somehow you are either for deregulation and therefore against this amendment, or you are against deregulation and, therefore, you support the amendment. That is a nonsense straw man argument. [[Page S8193]] The questions for consumers, for citizens to ask is, what is this thing all about? What do you mean, Senator Kerrey, that these companies want to do something they cannot currently do? The long distance companies want to come in and sell us local telephone service. So there is a section in here that tells them not only how they get in the business but how others can get in the business. Section 251 is a pretty darn good section. Section 255 is the one that is in question now, which is the local companies saying we want to provide long distance service. We want to enter the long distance service market. By the way, I heard the Senator from South Dakota talking about the Humphrey-Hawkins Act and full employment. The companies that are arguing the loudest and strongest for this legislation have reduced their employment. They have reduced their employment in the decade of the 1980's, since divestiture occurred. Do we have more jobs in computers? No. We have 150,000 fewer. Do we have more jobs in local telephone companies? No, smaller employment. Do we have more jobs at AT&T long distance? No, smaller employment. I would be, as a Member of this body, real careful not to promise that somehow when I deregulate and say to a company, you can start pricing at cost, that that is going to result in an increase in employment. I will bet you this results in additional downsizing of businesses. This promise of jobs is going to taste real bitter to the families who get laid off. You can say, well, Senator, but there are going to be jobs created in other sectors. I think that is likely to be the case. It is likely to be the case. The Senator from South Dakota asks why would I want the Department of Justice role, and says, look at the lousy job they have done. Those charts misrepresent what the Department of Justice has done. They are the competition agency, not the Congress. This Congress did not have the guts to stand up to the AT&T monopoly in 1982. It did not have the guts to stand up to them. Who filed the consent decree? Who sued the AT&T monopoly? Who led to this competitive environment in long distance? Was it the people's Congress, out of concern for the citizens and the rates they were paying? No, siree, it was not. It was the Justice Department suing on our behalf. Because we did not have the guts to take them on. That is what happened. So citizens say, why do I want the Justice Department to be involved? The answer, plain and simple, is when it comes time to go after a monopoly who is preventing competition, they are the ones that have done it. They are the ones that have done it. The second reason we want them involved, I would argue, is they are the ones, for a relatively small amount of money, that are likely to make the tough calls. I am not going to get into a great discussion about this here this evening, but there was a newspaper article this morning in the New York Times. It talked about whether or not the Federal Communications Commission, the agency that has all the responsibility here, is doing a very good job. I have not up until now, and indeed even now I will not say as the Senator from South Dakota just said, ``I suspect that the reason Senator Kerrey wants a DOJ rule is there are a few lawyers that want to keep their job.'' What baloney. Leave that argument off the floor. That is baloney. That is not what is going on. Go back to airline deregulation. When we passed deregulation for the airline industry, we said precisely what we are saying in this bill. We said we are not going to give the Department any role beyond consultation. Guess what happened when TWA proposed to acquire Ozark, when Northwest Airlines proposed to acquire Republic? What happened? The Department opposed it, objected to it, offered strenuous objections, but they had no ability to say no. They had no legal authority. We are trying to correct, based upon lessons of the past, mistakes of the past. That is what we are trying to do, on behalf of consumers. If we do not get a competitive environment, they will not get any advantages. I bet, of the seven regional Bell operating companies, there is at least $1.5 billion cash flow average from these corporations. These are big corporations. These are big businesses. They are hungry to expand their business, and I want to allow them to expand their business. Unless we get competition at the local level, we will end up having what we had with airline deregulation, when the Department, with only a consultative role, only could object to the mergers in question. And look what happened to St. Louis when TWA was allowed to come in and acquire Ozark. Look what happened in Minneapolis when Northwest proceeded without any obstacle being offered to the acquisition of Republic Airlines. Mr. President, all the Dorgan-Thurmond amendment says is, do the citizens want the Department of Justice to be able to say yes or no? Do you want the Department to be able to say yes or no? All the presentations about the waiver requests that have been slowing up; the very people that filed the applications very often cause the cases to go slow because they make an overly broad application for waiver of the problems that the Department can say, we can, in an expeditious fashion, say no. Or we can sit with a company and try to work through this application that they know is too broad, that goes at the core of the restrictions under the modified final judgment. I ask unanimous consent that the article that appeared in this morning's New York Times be printed in the Record.

Mr. KERREY. Mr. President, it is an interesting article for citizens saying what is going on here. Will the consumer get a fair shake? Let me call your attention to the amendment that actually is in front of the Senate, which is the amendment of the Senator from California and from Idaho, on behalf of cities saying, ``Wait a minute.'' In the midst of all this talk, is it not part of the Republican Contract With America to shift more authority back to the States? Those engines of innovation. What happened to the engines of innovation argument? Forget that. Thirty-some States that have deregulated from rate-based rate of return, we are saying, that is enough. We will preempt all and go to price caps. States do not have authority any longer in this regard. They have authority under price caps, or pricing regulation, but no longer do they have a choice. If you are a State legislature or citizen out there wrestling with the early stages of debate, the Federal Government will decide it for you. Rate-based rate of return is out the window, and we are going to price caps. The Senators from California and from Idaho point out not only that, but anything that local government does, if it interferes with a competitive environment, can be prohibited under reducing and eliminating the barriers to competition. This is a substantial move, I think a correct move, in general. By the way, I am not trying to come to the floor and say I think the FCC is a lousy organization or I think there is a bunch of lobbyists trying to influence my vote or anybody else's vote. I am trying to say on behalf of consumers based upon the experience both that created the breakup of AT&T in the first place and the airline deregulation case where the Department of Transportation now says they made a mistake not asking for more than merely a consultative role from the Department. Mr. President, the story in the New York Times this morning is headlined ``Has the FCC Become Obsolete?'' I understand the Senator from South Dakota is basically saying let the FCC do it all, with only a nominal Department of Justice role. We will run this whole thing through the Federal Communications Commission. We do not want duplication of the bureaucracy. We know how the bureaucracies get. They tie things up. Let me read things in this article. This touches the tip of the proverbial iceberg. CD Radio, Inc, that says, with $15 million since 1990 to develop a satellite service that beams 30 channels of music to radios, they think they fill a big need. The FCC will not let them do it. Why? Because traditional radio broadcasters have adamantly fought satellite radio, fearing it as a competitor. The FCC is blocking competition in this case, not allowing it, nervous about it. Why? Because they are the most vulnerable to political pressure, frankly, Mr. President, a lot more vulnerable than the Department of Justice. That has been the competitive agency, the one that has promoted the most competition between the FCC and the Department of Justice. I get a lot more citizens questioning the existence of the FCC than I get citizens coming to me saying, ``Why don't you abolish the Antitrust Division of the Department?'' I do not get people saying, ``I think the Antitrust Division overstepped its bounds. Why not get rid of them?'' But I am hearing complaints from people who question decisions of the Federal Communications Commission. This agency, as I indicated, is an interesting agency. We will hear businesses complain about it an awful lot. ``They are slowing me down,'' and all the arguments that the Senator from South Dakota makes, ``Poor old businesses. They are making it difficult for that. It says for all the complaints by businesses and their congressional champions, it is business groups that typically have sought to have the agency umpire their disputes. Some of the most ridiculed FCC rules are those resulting from intense, industry lobbying. For instance, Hollywood studios fought ferociously to keep television networks out of their business, until a Federal court overturned the FCC's rules. Local telephone companies lobby fiercely to preserve universal service and to delay rules exposing them to new competition. Cable companies have filed more than 20,000 pages of briefs to block phone companies from providing TV programs. Mr. President, I do not believe that the FCC intentionally is creating bottlenecks so as to employ themselves. I do not come down here to the floor saying I know why they are doing this. There is nothing devious going on. The fact of the matter is our problem is we have a tough time making political decisions. I have a business come and say, ``I want to compete,'' and the next day someone says, ``I don't want to compete.'' It is tough to say you have to compete. That is what this legislation purportedly attempts to do. The Department needs a role, Mr. President. The Department can, on behalf of consumers, say, not that you have a 14-point checklist. You could have the 14-point checklist and a consumer not have any choice. How do I know I have a choice with a 14-point checklist? I would rather abolish the checklist and have the DOJ with a role in this deal, if that is what the Senator from South Dakota wants to do, wants to get rid of some of the things the FCC does under this legislation, I am willing to do it. I am willing to deregulate the companies, so you have less regulation for them. I am not an advocate of the status quo, of maintaining the status quo. But I want the agency that has had, I think, the best success, being able to say to the monopoly we are not going to allow you to prevent competition. I want that agency on behalf of consumers to make sure I do have competition. I do not want a bunch of mumbo- jumbo rules and regulations that everybody can cook and game and hire lawyers to try to figure out how to come out on the winning side. That, it seems to me, is what happens if you set up all these little rules and regulations and hoops you have to jump through, down at the FCC. I would sooner have the Department of Justice sitting there saying: We want competition at the local level. If we see competition at the local level we are going to allow you to go into long distance. I would much sooner have the Department of Justice be that arbiter--not regulator, but an arbiter of the question: Do we have competition? Yes or no? Is it competitive down there at the local level? Do we have the kind of competition that allows us, now, to run the risk--and it is a risk--of allowing the telephone companies to get into long distance? I hope this amendment is accepted. I hope the Thurmond amendment is accepted, because I believe it is one of the few proconsumer things in this legislation. I think consumers will benefit enormously the quicker we get to competition, where true competition exists at the local level and across the range of telecommunications industries. This bill does not get us there immediately. It sets a structure in place to move from a monopoly to a competitive environment. That is what it does. No one denies that. The idea that somehow we are deregulating these companies automatically--it is not true. We allow them to keep their monopoly in place. We phase it out. We set timetables in place. We have tests they have to meet and all that sort of thing. They are allowed to stay in a monopoly situation. The sooner you get to a competitive environment where the consumers are deciding what they want and what is best for them the sooner we are going to get rapid decreases in prices and rapid increases in quality. I believe the Senator from South Dakota is well-intended with this legislation, as I have indicated before. I support large portions of this. I do not come down here and say this bill is anticompetitive or anticonsumer. But I do believe strongly that if we want the consumer to benefit from competition then we have to make sure the Department of Justice has a role in telling us when competition exists.

Mr. KERREY. Mr. President, one very quick response. One of the rules of debate is say something over and over and over and pretty soon people begin to believe it is true. This amendment [[Page S8197]] does not give the Department of Justice a regulatory role. It gives them a responsibility to make a determination as to whether or not there is competition. That is what it does. It does not carve out some new area of the Department of Justice to regulate. Indeed, the legislation itself is as a consequence of our recognizing that there is too much confusion in current law; that there are too many bottlenecks in current law. That is what we are attempting to do about the underlying legislation, to come up with a simplified test in a simplified way for businesses to know what it is that they can do and try to remove the regulatory hurdles of entry into various markets. That is what we are trying to do. This underlying amendment very simply says, first by Senator Dorgan and now by Senator Thurmond, merely that the Department of Justice should not just have a consultative role. ``Oh, by the way. What do you think?'' Instead, the Department would have a role based on section 7 of the Clayton Act in making a determination as to whether RBOC entry into interLATA services would substantially lessen competition or tend to create a monopoly. That is the idea. I just appeal to the consumers out there trying to figure out which side to come down on. Look at that 14-point test. It all looks fine to me. They say, ``Well, this was put together by staff or it was put together by us here in Congress.'' It took me a long time to figure out what all 14 mean, and I am still am not sure what each one means. I do not know if they will produce competition. I can imagine a scenario under which you get no competition with those 14 items. Competition again means the consumers have real choices. The Senator from South Dakota talks about the cellular industry being restricted. It was restricted by the monopoly of AT&T. The monopoly kept the technology from coming online. It was not Congress. Congress did not say in the 1970's we have this great new technology, cellular. So what we are going to do is take on the monopoly, and we do not care what AT&T says. We are going to disregard this influence on Congress and we will come down here and pass legislation that will break them up. That did not happen, I say to consumers now who have benefited from reduced rates for long distance and increased quality in long distance. The increase in quality and deployment of fiber occurred as a consequence of this competition. That benefit did not come as a result of Congress having the courage to take on the monopoly. It came as a consequence of the Department of Justice suing on behalf of the American consumer. So this amendment is simply something that says to consumers you are going to have the Department of Justice who brought you competition in the long-distance arena, who objected to mergers that were allowed to go forward in airline deregulation which reduced competitive choice and increased prices, we are going to give this agency not a consultative role but the opportunity to say that there is or there is not competition. If there is competition, have at it. It may be that they say it is a heck of a lot faster. Judging from the evidence at hand, it is likely they come at least as quick to the conclusion as to whether or not there is competition as the FCC looking at this 14-part test. So we are going to have a vote on this tomorrow at 12:30. We will have an opportunity to debate it a little bit in the morning. I look forward to it, and I hope it will be that the amendment passes because I believe on behalf of American consumers it is going to ensure competition and only by ensuring competition are we going to get the benefits that both the Senator from South Dakota and I wish to see happen in the United States. I yield the floor.