J. Kerrey

Mr. KERREY

Mr. KERREY. What I am asking for, they came over to me earlier and said that the distinguished majority leader was going to table, and what I had asked for as opposed to putting us into a quorum call was just a little bit of time to offer some comments on the amendment itself. I do not want to agree to an up-or-down vote on it. I really have not had time to look at the amendment that carefully, but I was just with respect asking for a small period of time to make some comments on the amendment.

Mr. KERREY. Mr. President, if I may respond, what transpired here this morning was we were debating the second-degree amendment offered by the Senator from South Carolina to the underlying amendment offered last night by the Senator from North Dakota. We had a short period of debate last night. We came in here early this morning. We had just begun the debate and the Senator from Pennsylvania came to the floor, I understood with an amendment, and asked for unanimous consent to go into morning business. I did not, in good conscience, in good faith to a colleague, ask for any time limitation. Then the distinguished Senator from Pennsylvania came--and not for the purpose of talking for a short period of time and then going to his amendment--with a very provocative, very effective, but very provocative political appeal against the President of the United States, to which I responded; to which I was quite willing to respond at an even longer time and had no opportunity. I had a very short exchange with the Senator from Pennsylvania on that issue. I laid his amendment aside, which I think is appropriate for me to do. He has provoked an argument not on his amendment but on another issue. I did not choose to do that. He chose to come to the floor and, instead of addressing his amendment, provoked a debate on another subject. I laid that amendment aside and began to prepare my remarks to address the subject that he chose. [[Page S8062]] That is what happened here this morning. As to the underlying amendment, it is not that I am unwilling to set a time. I am not trying to filibuster this, I truly am not. I believe the differences between, in particular, Senator Dorgan and Senator Thurmond and myself, are not very far and there might be possibility for an agreement here on this particular proposal. I heard the Senator from Arizona earlier, when he got up and made his opening remarks on this bill. He and I are not that far apart as to what we think the regulatory structure ought to be. I truly am trying to improve this bill. I am not trying to stop it. I am not trying to kill it. I am not trying to filibuster it indefinitely. I would agree here this morning, if the Senator from Pennsylvania wants to lay his amendment down and you want to table it, I would like a short period of time at least to describe how I view this particular amendment in the brief period of time I have had to look at it.

Mr. KERREY. The answer is no. I say to the majority leader, I came-- the distinguished Senator from Pennsylvania gave me his amendment. I was reading it over, and he got up and he provoked me. There is no other way to say it. So I took his amendment and put it in a little square thing over here called the trash can and started to make notes to respond to what he was arguing. He was not arguing his amendment.

Mr. KERREY. Mr. President, I would like to take a few minutes and describe what was in the Hollings-Daschle amendment that was adopted earlier and describe why we believe it is important to have these things included in the bill. Before I do, I would like to once again compliment and respond to the comments just made by the distinguished chairman of the Commerce Committee, the Senator from South Dakota. Mr. President, what we are about to do in this legislation is without precedent. There is no legislative precedent for taking this large a sector of the economy. It is true we have deregulated other sectors of the economy but nothing that touches nearly half of all the U.S. economy, either directly or indirectly. It is a mammoth part of the economy. Make no mistake about it, while it may be true that some Americans do not fly, and some Americans do not use a truck, every single American will be touched by this piece of legislation. If you have a telephone line coming into your home, if you watch broadcast television, if you buy records, if you have cable service, if you use any consumer electronics, if you have a computer, if you have any contact at all with information industries or services, this bill will have an impact on you--a substantial impact on you. I say this to my colleagues who are wondering why this is important. There will be precious little interest, I suspect, in this legislation, or a relatively small amount of interest in this legislation, while we are debating it as perhaps in the first 30 or 60 days after it is enacted. For those who wonder what this bill will do, I urge you to go back and examine the 1984, 1985, 1986 period and try and reach back and test the waters to see what consumers and citizens were saying the last time we attempted to move from a monopoly to a competitive environment. At that time, the Department of Justice managed that transition. That is why the role for the Department of Justice is so important. That is why the Dorgan amendment and the Thurmond amendment are so critical. The Department of Justice does have expertise in doing this. It is not duplicative. It is not additional bureaucracy, Mr. President. Those who say that and who believe that is true should look at the long run. It requires a process to go forward simultaneously with the Department of Justice and with the FCC. In the Department of Justice, there is a 90-day time certain. That is not duplicative. That does not require people to go through a long, lengthy process. Indeed, I will predict with great confidence that if this bill is passed without-- without--the DOJ language in there, what will happen is we will have extensive litigation, because the 14-part test that is required before a regional Bell operating company can get into long-distance service, before your local telephone company can do long-distance telephone service, has not been litigated. There is no precedent. There is no court history that can be referenced with clarity so that people understand what is going on. And it will be litigated. I understand the delicate balance argument. I understand what the committee had to do. I understand what the committee had to try to balance in order to get this out. Indeed, it is the sole responsibility and credit of the senior Senator from Nebraska, Senator Exon, that the compromise that gives DOJ a consultative role was added by the committee prior to it being voted out. Nonetheless, I say over and over and over, do not underestimate the difficulty this vote is going to produce for you unless the most experienced manager of taking a monopoly to a competitive environment has more involvement than just consultation. If you are uncomfortable with the bureaucracy argument, there are fewer than 900 employees over in antitrust at the Department of Justice. If the language troubles you in some fashion and you think we need to make certain that time certain is held to, that it is not delayed for a long period of time, come and argue for changes in that. Second, the distinguished Senator from South Dakota lays out the differences in results with the Justice Department's action with IBM in the early 1980's--about 1982--and the action taken by the Justice Department in 1984. I say to my colleagues, this makes the case for Justice involvement. They had a success in both cases. It is a completely different situation, however, when you are talking about a monopoly that has been created by law to perform a public service of providing telephone service to all American households. The goal of the 1934 act says universal service and, indeed, as early as 20 years ago universal service had been attained, but it is a franchise, a monopoly franchise granted first to AT&T and second, after divestiture, to the regional Bell operating companies, and no one should suffer the belief that somehow these companies are not earning relatively high rates of return on equity. Their P&L's are quite impressive. Their performance has been quite impressive. We are not receiving complaints from citizens of this country who come back from Europe or Asia or South America or Australia or Africa saying, ``Gosh, I wish I had as good a service as I got when I was outside the United States.'' We have exceptional service. We have high-quality service. We have high- and well-performing corporations that are providing that service. So we are going to be asked by our people, the citizens who are not, in the main, asking for us to deregulate these industries, these companies, why we did this thing. It is fair to say, I think, this is a contract with America's corporations who are currently not allowed to do many things that this law will allow them to do. Corporations are saying to us, ``Please let us do these things, because if you do, trust us, things are going to get better.'' But if they do not get better, Mr. President, it will be our vote and we, as Members of this body, will be responsible for it. I hope the Senate will seriously consider next week when we vote on the Dorgan and the Thurmond amendments--my hope is we can bring the two amendments close enough together that we will have a vote on a single amendment--my hope is that my colleagues will look at this seriously and say this may be the only safety valve that I have on behalf of the consumers, the citizens, the voters of the State which I represent. Mr. President, I was actually going to do this next week. I will start to do a little of this now. This is the annual report of one of the companies. You hear people say--I heard it already in this debate--``Gee, the Government is sitting like a big animal in the middle of the road preventing this gold rush to occur, this stampede of innovation, this creation of new jobs.'' Look at the job creation over the last 10 years created by the regional Bell operating companies, created by AT&T and other long- distance providers, created by the computer industry. The computer industry surprisingly has laid off 150,000 people over the last 9 years. Look at the existing industries that are coming and talking to us saying they need this change and you do not see much in the way of job creation. You do not see much in the way of job creation, indeed, with the exception of cellular and cable. The job growth has been going downward to the right. So do not expect in your home States to be greeted by a round of applause that you are going to create jobs in the areas where you are currently being asked or lobbied to support one provision or another, with a few notable exceptions. This is Southwestern Bell. The headline reads: ``Southwestern Bell builds value, your $100 investment has grown to $173 in 10 years and we're ready for another decade of growth.'' [[Page S8075]] I have a whole stack of them. I suppose I will have a chance next week. I am sure somebody is going to come to the floor and talk about how we are blocking these companies; it is difficult for them to do well. Their P&L's are very impressive. They outperform most manufacturing businesses in America. They are doing quite well. As I said, I do not object to many of the deregulatory efforts. I do not object to cutting the regulation. I am the only Member of Congress to have signed a deregulation bill. But I do not want the presumption that we need to deregulate be that these companies are really underperforming against other corporations in America or that somehow Congress has denied them a fair shake in the marketplace. Mr. President, let me now go through the package of amendments that we took up earlier. The Hollings-Daschle amendment was a package of provisions that attempted to strike a better balance between consumer protection and market deregulation. These were safeguards which were designed to protect consumers by expanding services and keeping them affordable. The first amendment improved the cable rate regulation provision of the committee bill by strengthening what was known as the bad actor test. Rates for the upper tiers of cable service will now only be found unreasonable if they significantly exceed the national average rate for comparable cable service for systems other than small cable systems determined on a per channel basis as of June 1, 1995. It sounds arcane. It was significant. By excluding the small cable system, we raised the bar a bit--and I think quite appropriately so--to protect American consumers. In addition, the amendment will deregulate a cable company only after a telephone company begins to provide video programming service that is comparable; not just a single channel, but comparable to the video service provided by the cable company. A second amendment also prohibited buyouts in joint ventures by telephone companies and cable companies, except in areas below 50,000 and in a nonurbanized areas or if the FCC waives the provision. This places reasonable limitations on the ability of cable and telephone companies to eliminate each other as potential competitors through buyouts and mergers, except in rural areas where competition may not be viable. This change improves the bill. I must tell you that I am still very much concerned about the potential for a telephone company to buy out a local cable company. Again, you can imagine your own household, where you have a telephone line coming in, a cable line coming in, and those two pipes give you the potential for a competitive environment. That environment is going to be substantially reduced if you allow that kind of acquisition which will reduce you from two to one line. The Hollings-Daschle amendment will also allow small competitors to the telephone companies to jointly market local and long distance service, but not AT&T, MCI, and Sprint. It amends the provision on joint marketing to allow carriers with under 5 percent of the Nation's prescribers to engage in joint marketing and to sunset the prohibition on joint marketing after 3 years. With the earlier provision, this is something I have taken a particular interest in, as many colleagues have as well. It is unquestionably a procompetitive action. I urge, again, upon my colleagues the idea that if we are going to have a competitive environment, the competition is going to come from start-up companies who are going to end up like Intel, having a microprocessor 12 years ago and now with tremendous market value, and a tremendous market net worth as a consequence of them having an idea, actually spun off from IBM, that they developed over that period of time. That is where the jobs are going to be created. They are going to be created from new competitors, not from the established businesses. We do not want to be unfair to established businesses, but what this change allows is for the smaller entrepreneurial companies to jointly market and, as a consequence, have a better chance of surviving in that market. The amendment will allow consumers to realize the benefits of competition in the local telephone exchange, while preserving the competitive balance between the regional Bell operating companies and the major long distance carriers. The provision also promotes network interoperability by all communications carriers. This is a provision I was also personally involved in, having introduced legislation to this effect some months ago. This is an important part of building a seamless national information infrastructure that will enhance education, business, and health care providers. This amendment would not expand or limit the FCC's current authority over standards setting. I emphasize that last part because, as originally introduced--and this is one of the dangers of these kinds of law-making efforts--it did in fact establish what are called de jure standards, a legal standard thus preventing de facto standards. What is happening across the board in networking, in transmission, in hardware, in information services, in content, in the market sitting out there, businesses are out there and individuals are out there saying: These are my needs, this is what I need to get done; here is point A and here is point B. This is the kind of network requirements that I have, and the engineers and the innovators are coming up with new solutions constantly. Thus, though it is terribly important for us to have interoperability in this network, particularly the network-to-network, and the ability to come on line anyplace you are, it is terribly important to have that. This legislation, I think, strikes a very good balance between that need and the comparable need to avoid establishing a standard that would restrict and constrict the development of technology itself. Nothing in this amendment, Mr. President, precludes existing local telephone marketing agreements from continuing in effects. Many small broadcasters like the programming to fill an entire broadcast day, and consequently they often lease their facilities to other programmers. These are called local marketing agreements. This amendment I referenced earlier recognizes this need and will help small broadcasters continue to diversify their products. Mr. President, as with the amendment offered by the majority leader, the amendment that was agreed to earlier, that was approved earlier on a rollcall vote, and offered by the distinguished Democratic leader and the distinguished ranking Democratic member of the Commerce Committee, comes to this law and says we are concerned about consumers, we are concerned about those individual families living in households, we are concerned about that small entrepreneur, that start up company that nobody even knows about today. We want to make sure that we give them a full and fair opportunity. Mr. President, we are probably at a point where it is not worthwhile to continue this exchange. It looks to me like it might be the Senator from South Dakota and I alone sitting here all afternoon talking to one another. That would not necessarily be very constructive. Thus, I look forward to continuing the debate next week on the Department of Justice amendment offered by the Senator from North Dakota and the second- degree amendment offered by the senior Senator from South Carolina. I yield the floor. Mr. PRESSLER addressed the Chair.

Mr. KERREY. Reserving the right to object, Mr. President, I have not----

Mr. KERREY

Mr. KERREY. The Senator brings an amendment to the floor and then stands up for a discussion. It should not be a surprise the amendment is being delayed.

Mr. KERREY. Will the Senator yield for an explanation? I say to my colleague----

Mr. KERREY. Mr. President, I believe you have to look long and hard to find a Member who comes here and refers to the President by his first name, whether it is President Clinton, President Bush, or President Reagan. You have to look long and hard to find it. I appreciate the Senator from Pennsylvania thinks it is humorous. I do not.

Mr. KERREY. I just heard my comment referred to as nonsense. Is that correct?

Mr. KERREY. Parliamentary point.

Mr. KERREY. Mr. President, is the Senator from Pennsylvania saying essentially then if somebody else does something that he finds objectionable, because the other person has done it, therefore it establishes a precedent and he does not mind doing it as well? Is the Senator from Pennsylvania saying he is following the example of the Senator from Massachusetts, that whenever the Senator from Massachusetts does something, even though he may object to it, he is going to cite it as a precedent? The question that I asked was, does he respect the Commander in Chief, the President of the United States, enough to call him by a name that is worthy of that respect, regardless of whether he disagrees? If you want to bring up these opinions, bring up these policies, bring up whatever you want to the floor----

Mr. KERREY. Mr. President, I have not been in the Chamber before when the Senator brought this chart down. I am 51 years old, 51 years old. I spent 3 years in the world's largest, most powerful Navy. And I was taught, when I was in the Navy, the Commander in Chief, the President of the United States, deserved respect, and I never called the President of the United States by his first name in public, let alone on the floor of the Senate. I just ask my colleague, do you feel this is respectful? You can disagree with the President, say you have something you do not like about what he is doing, but, for God sakes, ``Where is Bill?'' I ask my colleague----

Mr. KERREY. Will the Senator yield for a question?

Mr. KERREY. Mr. President, will the Senator yield for a followup question on that?

Mr. KERREY

Mr. KERREY. Let me just continue what I am doing, which is reviewing the amendment which I am looking at now for the first time.

Mr. KERREY. Mr. President, 10 o'clock--my understanding last night was we were going to take it up at 10 o'clock. I did not understand.

Mr. KERREY. I just got this amendment. I am not going to agree to a time of 10:30 or any other time at the moment until I review this amendment.

Mr. KERREY. Did the majority leader not earlier ask? Is that what we are proceeding under? I thought we were going to----

Mr. KERREY. Reserving the right to object. As in morning business? I thought the Senator was going to offer an amendment.

Mr. KERREY. Reserving the right to object, I do not believe I intend to object. As I understand, the Senator is asking to proceed to the Santorum amendment with no agreement as to how long we will debate the Santorum amendment.

Mr. KERREY. I have not yet read, or we have not yet seen the amendment from the distinguished Senator from South Carolina. But I am going to make some presumptions here that I understand in general terms what it is about. I think in that amendment, there is a possibility of a compromise here, something that could satisfy both sides and get us to a point where we have a bill where we are going to get large numbers of people rather than a relatively smaller number of people supporting the legislation. I believe that S. 652 in its current form, unamended, is not good for the American consumer. I will make it [[Page S8056]] clear on that. I do not believe the American consumer will enjoy the full benefits of competition with S. 652 in its current form. The reason I believe that is that competition will not bring the kinds of benefits to the American consumer unless that competition comes from the bottom up, from entrepreneurs who have a chance to come to our households--100 million households total in the United States of America--and offer us packaged information services through two alternative lines coming into our home--a telephone line and a cable line. If they have an opportunity to come into that environment and say, well, Mr. Kerrey, we would like to sell you a packaged service of voice, video, or text; you are purchasing services today of $120 to $150 a month, and we can sell that to you for $75, $80, or $90 a month, in that kind of a competitive environment, the prices will come down and the quality is going to go up in the four big areas where households tend to see services. No. 1, the price is going to go down for the switching services; that is, the movement of the bundled data from household to household or from household to business or vice versa. We will see reductions in the cost of the manufactured hardware that is used in the home, regardless of what that hardware is, as the market tries to give better and better service. We will see prices come down in the content--that package I described earlier--and we will see prices come down and quality come up in a range of services that household services buy. My fear is that in a good faith effort to produce a means to replace the VIII(c) test--I apologize for getting a little technical--what the committee did in a good faith effort to replace the VIII(c), test which I believe 18 members of the committee last year voted for in S. 1822 that was tied up late last fall, to replace that test, the committee came up with 134 individual things that the ARBOC, the local telephone company, has to have before they are allowed into long distance service. That is kind of a summary, I believe, the distinguished Senator from South Carolina last evening gave as to how those 14 items did, in fact, replace this old test that was S. 1822, a bill that was supported by 18 members of the Commerce Committee last year. The reason I say with respect that I do not feel that is adequate is, again, the Justice Department has the expertise of managing unprecedented movements from a monopoly situation to a competitive situation. We need that. That is a service that the people of the United States of America need. That is what this whole bill is about. If we look at the title, title I is ``Transition to Competition''; title II, ``Removal of Restrictions to Competition''; title III, ``An End to Regulation.'' Mr. President, the only people in the U.S. Capital, the people's Capital, with experience in all these three of those areas is the Antitrust Division of the Department, approximately 800 people. We will not fall into the illusion that this is an enormous bureaucracy over there just busting at the seams with all sorts of people. It is approximately 800 people that run the Antitrust Division at Justice, and they managed the movement from a monopoly, AT&T, to our current competitive environment we have in long distance. We are talking about doing the same thing with local telephone service. It seems to me, Mr. President, for those who want to survive this vote, who want to not just get a pat on the back as we walk out of here on final passage from those folks in industry that are out there hoping we vote the right way, whichever way that is, if we hope to get a pat on the back by our consumers, by our citizens, by our voters--and I would argue that is, in the end, the ultimate test--then we need to go to that agency that has experience in managing an unprecedented event, a movement from a monopoly situation at the local telephone service to a competitive environment. This is going to be an extremely difficult thing to do. As I understand it, the distinguished Senator from South Carolina has proposed an amendment. I have not seen that amendment yet. He has proposed an amendment that might, in fact, solve problems that people have about having dual authority here. As I understand it, it may reduce the role of the FCC while giving the Department of Justice some additional authority. It seems to me that that is the right direction to go. I want to walk through a little bit here this morning, and I will stop and yield afterward to anyone else that wants to talk on this issue. There is, I think, legitimate concerns about what this will mean in terms of the time that is taken. In a time we are trying to get rid of regulation, which we are trying to do, we ought not have any unnecessary regulation. I am prepared to support any person that has an amendment that says, here is something we will regulate that does not add any value at all; all it does is slow things down. I am prepared to vote for the elimination of any regulation that still is in the bill that might be unnecessary and that might add unnecessary costs. The procedures for a Bell operating company entering into long distance--under the amendments proposed, the underlying Dorgan amendment, the Bell operating company would file an application to get into long distance. The Department of Justice and the Federal Communications Commission would review and proceed simultaneously. Their reviews go forward at the same time. We do not go to one and then to the other. We go to both simultaneously and each reviews something different. The Bell operating company has an answer within 90 days after application in accordance with a date certain established by Congress. For Members that are wondering about how this will all work out and whether or not this is going to delay things, the language of the Dorgan amendment provides a date certain for an answer to be given by the Department of Justice to the Bell operating corporation applying for permission to get into long distance. The procedure is fast--90 days. It is fast. We can set into the Record, with people who are experienced with how the courts work, if we need stronger colloquies filed so the courts understand that 90 days means 90 days, then we will do that and make certain that the time will be 90 days and that extensions are not granted for this particular procedure. The standard for DOJ is clear, Mr. President. There is not ambiguity here. It is based on a well-established law applying both the Clayton Act and, by the way, the VIII(c) test under MFJ. The procedure will reduce litigation. Make no mistake about it. In my estimation, the existing law as written will encourage litigation and prolong the process. If Members believe it will do the opposite, come and say that it will do the opposite. I am saying that my concern, as one Member that has one vote here, is that we come here and try to satisfy citizens--in this case, citizens as consumers--and I say that the existing law, in my judgment, will produce consumer confusion, it will produce consumer dissatisfaction, and it will produce problems that are going to cause Members who vote for it in its current form to say, well, I did not realize it would do that. Maybe we can come back in afterward and fix it with an amendment. Unfortunately, it is likely to be the very amendment we are considering today. I said at the beginning that somewhere in the mix, somewhere in the mix, and I appreciate what we are basically doing is trying to figure out some way to continue the work that the senior Senator from Nebraska came up with this compromise language in committee. He is the one that has taken the lead on this. I understand the committee had a difficult time balancing and getting this stuff done. Somewhere in the mix is a way for Members to give DOJ a role, perhaps limit and reduce some of the regulation that is at the FCC, and give those Members who are concerned about how we will manage this transition from monopoly to competition, give those Members that have that kind of concern some satisfaction. I yield the floor.

Mr. KERREY. Mr. President, we now resume the discussion of S. 652, in particular the amendment before us, which is, as I understand it, the second-degree amendment offered by the Senator from South Carolina to the amendment from the Senator from North Dakota; is that correct?

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

Mr. KERREY

Mr. KERREY. I ask unanimous consent that the earlier unanimous- consent order be revised and that we will go out at 4:30.

Mr. KERREY. Should I be asking unanimous consent to speak until the presiding officer has to leave?