Joseph Lieberman

Mr. LIEBERMAN

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

Mr. LIEBERMAN. Mr. President, at this time I call up amendment No. 1298.

Mr. LIEBERMAN. Mr. President, I am delighted to see occupying the chair at this time, the distinguished former attorney general of the State of Missouri, because my interest in this subject of the regulation of cable rates started in 1984 when I was the attorney general of the State of Connecticut. We had established a system similar in many ways, different in some ways, to other States and municipalities around the country to deal with the advent of this exciting new technology, cable television, in which our State--during the 1960's, originally, and the 1970's--had given out franchises for cable television in different areas of the State. These were monopolies. Because they were monopolies, which is to say there was only one that any consumer had any access to in the State of Connecticut, they were subject to a kind of public utilities regulation, since there was no competition. This went on until 1984 when the Congress in its wisdom, without the participation of the occupant of the chair or myself, at that time passed an act which prohibited the States from regulating the cost of cable. As I will document in a moment or two, there was a great outcry from many of us at the State level, first on the basis of federalism, that we had been deprived of this opportunity to exercise our capacity and obligation to protect our consumers in the State of Connecticut or elsewhere as we saw fit, but also because the effect of the congressional act of 1984 was to leave cable consumers facing monopolies, only one cable provider, without the benefit of protection from consumer protection legislation, and without the benefit of competition. What happened I will document in a moment or two, but it ultimately led to a very successful effort in 1992 to adopt a cable act which was passed with strong bipartisan majorities, and was vetoed by President Bush. It turned out to be the only veto of the Bush years that was overridden by this Congress. The Cable Act of 1992 went into effect, with positive effect, as I will describe in a moment. Then, suddenly as part of this major reform of telecommunications, there appears what amounts to the evisceration of that cable consumer protection. So just 3 years after passing that landmark legislation to bring competition to cable television and keep regulation until that competition came, just 3 years after the effort began once again to hold down cable rates for the millions of cable consumers around America until competition emerges, we are now considering a bill that I am afraid will undo many of the consumer protection benefits of the 1992 Cable Act. The amendment that I have introduced this evening, No. 1298, will prevent the dismantling of the cable consumer protections of the 1992 act. Mr. President, I assume we all agree--I certainly do--that competition is the best way to set prices. Markets can set prices much more accurately and effectively than regulators can. Although consumers cannot really reap the benefits of competition, obviously, until there is effective competition in their local markets, the amendment that I am introducing, I think, will provide consumers with some of the advantages of competition. Without competition, monopolies have the license to unreasonable rate increases. So we have a choice. When there is no competition, we can have regulation, or we can just simply say let the monopolies go. The cable rate regulation included in the current underlying bill before us, in my opinion, does not prevent monopoly abuses, and virtually deregulates cable, which means that without this amendment we are inviting the majority of cable companies to raise their rates. And, unfortunately, we are guaranteeing that the majority of our constituents, many of whom may be watching tonight, are going to see increases in the cost of cable television every month, unless we act to amend this bill. And I believe the amendment I am offering is a good procompetitive way to do so, consistent with the overall procompetitive spirit of this legislation. Mr. President, before my colleagues vote on this matter, I think it is imperative to review the current status of cable regulation and how it is working. First of all, let us ask what has happened since we passed the Cable Act of 1992; and, second, what impact will this legislation before us have? My concern again is that this legislation, if unamended, virtually guarantees significant cable rate increases before competition comes to the cable market. And today, the FCC tells us that only 50 of the more than 10,000 cable markets in America have effective competition. That means if we have constituents in the 9,950-plus other markets, and if this legislation goes forward as it is, they are probably going to see a cable rate increase. What I see happening here is the potential for this Congress to make the same mistake that was made in 1984 when the cable industry was deregulated based on the promise or the hope that competition was right around the corner. In 1984, it was the promise of competition from satellites to the traditional cable. Now it is again and still the promise of satellite competition plus the promise of telephone company competition. After the 1984 act passed the Congress, the fact is that the cost of cable television skyrocketed. Today only one-half of 1 percent of cable consumers receiving satellite service from DBS, direct broadcast satellite, which is the new satellite competitor, and only experimental efforts exist today to transmit cable over telephone lines. It is only natural to fear that cable rates will shoot up again under the current bill. Let me just go back over that. The promise of satellite reception for cable consumers, television consumers, was ripe in the air in 1984 when cable was deregulated. Today, 11 years later, one-half of 1 percent of the television consumers with multichannel service receive that service from the Direct Broadcast Satellite. The last time Congress prematurely deregulated cable rates, the General Accounting Office found that the price of basic cable service rose more than 40 percent in the first 3 years without regulation. And 40 percent is three times the rate of inflation during that same period of time, 1986 to 1989, and four times the level of increases experienced under regulation. [[Page S8365]] Mr. President, the Commerce Committee received testimony from local officials that demonstrated real price exorbitance. Mayor Sharpe James of Newark testified that rates increased by more than 130 percent from 1986 to 1989 in his community. Mayor Eddy Patterson of Henderson, TN, noted rates rose 40 percent in the same period in his area. Rates shot up as much as 99 percent in communities in Hawaii, according to Robert Alm from Hawaii's Department of Commerce. David Adkisson, Mayor of Owensboro, KY, testified that basic receipts rose 40 percent in just 1 year. And I can report that rates in Connecticut jumped 52 percent in those 3 years in the mid-1980's, led by one company which actually hiked its rates by an unbelievable 222 percent when there was no regulation and no competition, which effectively is what this bill will bring us back to. Consumer groups testified to the Commerce Committee demonstrating that in the few communities where there was competition, which is to say two cable companies going head to head, rates were about 30 percent lower than in the monopoly markets. So on the basis of that evidence this Congress moved in a bipartisan fashion in 1992 to pass the Cable Act. Let me now remind my colleagues briefly what that law does. The Cable Act--that is the law in effect today, before this bill--allows Federal and local officials to limit cable rates to a reasonable level until there is effective competition to the cable monopoly. This is not permanent regulation. This is not the heavy, immovable hand of Government. This says let us get regulation out of here as soon as there is competition. In other words, regulation sunsets, disappears. And the standard here is it disappears when half the residents of a community have more than one choice for cable service and 15 percent of them, only 15 percent of that community, actually select the service from the cable competitor. Let us talk about the results of the law. Mr. President, according to the Consumer Price Index for cable service, rates are down about 11 percent from their trend line when cable was deregulated. I plotted here on this chart the trend of cable rate increases before rate regulation extrapolated to the present. That is the blue line. Also plotted are cable rates after rate regulation, and cable rates subject to competition. So the red line is the difference here in rates after the 1992 act went into effect, and this actually is a projection of what has happened in those 50 markets where there is competition, which is great for consumers. Regulation is modestly controlling monopolies. That is what the red line tells us. But competition is the real solution. Competition works at keeping cable rates under control. Without competition, regulation is necessary to control those price increases. On a nationwide basis-- this is an interesting number--this translates into a consumer savings of $2.5 billion to $3 billion per year since the adoption of the Cable Act of 1992. Furthermore, consumers were not hit by the two to three times inflation rate increases they used to face when cable was deregulated. So not only did we not have the increases, we actually had $2.5 billion to $3 billion of consumer savings, and there is not much that we can look at in the way of the cost of living in our society that went down during this period of time. While consumers have come out ahead, I want to point out that the cable industry has done well, contrary to its fears, under this new act. They have been busy developing new service and increasing revenue streams, and as far as I am concerned that is great news. With pay channels, increased advertising revenue and digital audio services, the cable industry has made up all of the money consumers saved from regulation. In addition, cable has had the money to prosper through expansion. And you can see in this plot the increase in subscribers that cable companies have had since the regulations imposed by the Cable Act. The impact of the Cable Consumer Act of 1992 saved consumers a substantial amount of money, $2.5 billion to $3 billion a year, and rates went down 11 percent. But the great news about it is that all that happened and the cable companies still remained healthy. In this chart, I am showing the increase in the number of subscribers the cable companies have had since the regulations imposed in the cable act. This is 1990, a 4.4 percent increase; 1991; and then after the act, 1993-1994, you can see they go up 2.8 percent; and then in 1994, when the act really kicked in for the full year, a 5-percent increase in subscriber growth to cable, which shows that the business remained healthy during that period of time. Last year, cable systems expanded their infrastructure to reach 1 million additional homes, 1.4 additional households subscribed to basic cable service, and 1.1 million families purchased expanded cable packages. Pay services were taken by an additional 2 million homes, and dozens of new programming channels were developed and offered to the public, all of that growth occurring during these 2 years in which regulation has been in place. Equally important, some would say most important, the cable industry has been investing to compete with telephone companies in the multimedia services. I know that one of the arguments that the cable company folks have made against this amendment and for deregulation now before there is any competition to them has been that they have to be able to raise money to compete, build an infrastructure with the telephone companies when they get into the cable business. But the fact is that the chart illustrates during this period in which regulation has existed again for a couple of years, the capital expenditures of the cable industry have been very healthy. In fact, they have dramatically increased in the years that regulation has been on. We go from 1993, up to almost $3 billion; in 1994, up to almost $4 billion, $3.7 billion. Since last summer, 1994, major cable companies have raised and invested over $15 billion in new competitive ventures. Most recently, a consortium that includes TCI, Comcast and Cox, raised and spent more than $2 billion to buy, if you will, the spectrum that was auctioned, a figure higher than any other set of bidders paid in the spectrum auction. Let us talk about the profit margin for the cable industry during this period of time. For 1993, it was 20 percent, the highest profit margin of any segment of the telecommunications industry, and this is after regulation went into effect, because there was no competition. Cable companies have been successful in acquiring and spending money, and that is the way it ought to be. I want them to grow and prosper. Finally, here I have plotted the average value of cable stocks as compared to the S&P 500. As you can see, regulation has not hurt the performance of cable stocks. In blue, we have cable industry stocks charted. The S&P 500 is in red. Here, again, you can see how healthy the cable industry has been--and the stock market, after all, is a measurement of consumer confidence in the future of this industry. Here we go, 1993 and 1994, during that period of time when regulation was instituted because there was no competition, the cable industry stock index performed significantly better than the Standard & Poor's 500. Obviously, investors do not think regulation has been bad for the cable industry. Just about every day newspapers announce new examples of major cable advancement or system upgrades or system expansion. Again, that is good news. Finally, it is critical to understand that the cable act and the FCC regulations allow cable operators to respond to both the threat of competition or actual competition in the same manner that any reasonable business in an unregulated market would react to such threats. In the face of competition, a cable operator may either improve service--that is what competition is all about--without any regulatory filings, reduce prices for any tier of service--that is what a normal business does when they have competition without any regulatory OK, they reduce their prices--they may offer new services at any price, all this without regulation. And, of course, under the act, all pay services--this is the 1992 act--all pay services and premium channels are already unregulated. Mr. President, there is only one thing the cable operator may not do under the Cable Act of 1992 and that is to raise rates above a reasonable level. [[Page S8366]] Why would any cable operator who faced real competition want to raise prices above a reasonable level? Obviously, most sensible business people would not raise prices in the face of that competition. But does that not all change if there is no competition? I am sorry to say that the committee bill with its repeal of these cable consumer protections that have worked for the consumer and the industry will allow the industry to raise its rates again before competition ever arrives and literally takes us back to 1984. Although proponents of this bill, S. 652, note that it does explicitly deregulate all cable services immediately, the bill provides cable operators an opportunity to raise rates back to about the level they would have been if we had not passed the Cable Act of 1992. Let me briefly explain. In this bill, S. 652 before us now, the standard for determining that a cable company is charging unreasonable rates for program services would be a comparison to the national average of cable system rates as of June 1, 1995, a few weeks ago. A cable company would have to charge rates that are substantially above the national average on June 1, 1995, before that company could be regulated. And this deals with what we all consider to be cable. The bill, S. 652, leaves basic services regulated. There are three tiers of cable: basic, which is what you can get without cable over antenna, in most cases, the networks and maybe public television; the middle tier, what most people think of as cable--CNN, ESPN, Nickelodeon, whatever; and the third tier is channels unregulated. Today, the basic tier and middle tier are regulated. Premium channels are not. Under this legislation, the basic tier remains regulated, the middle tier is unregulated, unless the rates are found to be substantially above the national average. The national average will be recalculated every 2 years. So, there again, we have an incentive for the industry to increase its prices. Ironically, it is as if instead of a reason to reduce prices or hold prices, we are giving in this legislation the industry an incentive to increase prices, because the standard will be changed every 2 years. With almost 40 percent of the market dominated by two cable companies, the national average will be controlled by a small number of companies. For example, an average package of cable programming around this country now costs about $15 or $20 a month. Every cable consumer whose company currently charges less than this average will have a green light to increase their rates to $20 to $25 per month without being substantially above the national average, which is the standard in this legislation. In other words, consumers are likely to face at least a $5 a month rate increase for stations like ESPN, CNN, Discovery, Lifetime, USA and, in many cases, C-SPAN. Rate increases in this range would drive cable prices back up to the levels experienced from 1986 to 1992 when there was no consumer protection. What we are presenting here is an opportunity for the cable operators to go back to their old ways. What I am saying is you do not need to do this to keep them healthy, as the numbers I have shown indicated. Even if the Congress completely deregulated cable again, it--well, basically this amounts to complete deregulation. In my amendment, No. 1298, the national average would be calculated not by what exists on June 1, 1995, or on what exists 2 years from now after raising the rates. It will be calculated by including markets that currently have effective competition and those who become competitive over time, allowing the markets, not regulators to set prices. That is the point of this amendment, and that is why I think this amendment is so consistent with the overall thrust of this bill. It is procompetitive. It says let the markets, not regulators, set reasonable prices. Small cable companies, because they have their own economic pressures that control their rates, in my opinion, would be exempt from regulation under this amendment. I want to emphasize that the negotiations that resulted in some changes in the calculation of the national average, while moving in the direction of putting some pressure on these monopolies and protecting consumers, in my opinion, just do not go far enough. The national average would be calculated using the rates from June 1 of this year. Using a fixed date when regulation is in effect is supposed to result in a fair value for the national average for cable rates. But that date, June 1, occurs after some significant deregulation for certain cable systems under the FCC procedure. Using that date will increase the national average, therefore, leading to higher cable rates. The method of calculation spelled out in the bill, which is complicated, uses a per-channel approach, cost per channel. So let me give you an example based on numbers from a compilation of cost per channel rates in an article that appeared in Consumers Research. In 1990, monopoly cable systems were charging 50 percent more than cable companies in competitive markets on a cost per channel basis. Using the complex calculation described in the current bill, as modified by the managers amendment, there would be a significant increase in the cost per channel over the rates charged in competitive markets. So taking inflation into account, the average cost per channel would be 20 percent higher in the current bill than by simply comparing rates to competitive markets, as occurs in my amendment. So to summarize, the current bill defines a very complex method of calculation dreamed up by regulators. Not only is the system illogical, it is also unfair. And though the system of calculation may be complex, the result, in my opinion, will be plain and simple, and that is that the consumer of cable services--the millions out there across America, who depend on cable for their entertainment, for their information, in many cases today, even for their shopping--are going to be the ones to lose their rates. Their rates will go up. My amendment uses markets to set prices, not arcane formulas devised by regulators. In conclusion, I want to make sure we do not make the same mistake I believe Congress made in 1984 and that Congress recognized it made in 1992. Consumers paid a hefty price for premature deregulation of cable over the last decade. I say ``premature'' because competition effectively exists in very few cable markets. I do not want to redo that mistake. This amendment will prevent excessive deregulation before there is competition, while maintaining the spirit of the underlying bill. I am in favor of competition. I hope it comes quickly. I hope there are more than one-half of 1 percent who get a competitive cable service from the direct broadcast satellites. I hope that the telephone companies move as rapidly as some suggest they will--though, I doubt it--into providing multi-channel services and competition with existing cable systems. Let competition set rates and protect consumers, not regulators. That is what my amendment is all about. I thank the Chair for the courtesy and the opportunity to address my colleagues on behalf of this amendment. I urge support for it, and I yield the floor.

Mr. LIEBERMAN

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

Mr. LIEBERMAN

Mr. LIEBERMAN. I thank the chairman of the committee. Madam President, again, I am privileged to join with my colleague from North Dakota in this amendment. The fact is that every study we have seen shows the extraordinary unacceptable amount of violence on television. It affects our children. It makes them more violent. The fact is that it is hard to believe that amount of inappropriate, objectionable material that the majority leader has referred to as casual sex on television which affects the violence of our kids. One survey I quoted in an earlier statement here said the kids themselves admitted that what they saw on television encouraged them to be involved in sexual activity earlier than they should have. It is time finally in our society that we focus on some of the major forces that affect our values and our children's values. We are confronting the difficult question of the impact of the entertainment media which is so powerful on our values and on our lives in our society. This amendment gives the Members of this Chamber the opportunity to do more than talk about this problem. This is an opportunity to do something about it--not to create censorship, far from it--but under the terms of this amendment to basically get the attention of the television industry. Senator Simon, our colleague, has been a leader in this. But the fact is, as I understand it, that it is because of his understanding of the television industry that he has offered his sense of the Senate. The fact is that the industry has not gotten the message. The programs that our kids are seeing are giving them the wrong message, and it is affecting their behavior and challenging the ability of parents in this country to raise their kids the way they want to raise them. This amendment, modified by my second-degree amendment, simply gives the industry a year to create its own standards; if they do not, then sets up a rating board, two members from the industry, three from the public, to do the job.

Mr. LIEBERMAN. Mr. President, I move to reconsider the vote.

Mr. LIEBERMAN. I thank the Chair. This Senate ought to act on this problem. I yield the floor. Mr. PRESSLER addressed the Chair.

Mr. LIEBERMAN. I thank the Chair.

Mr. LIEBERMAN. I am happy to proceed with my statement.

Mr. LIEBERMAN. Madam President, I exercised, I say to the chairman of the committee, my right to modify my second-degree amendment. It is a technical modification which in part responds to the suggestion of the ranking member of the committee to remove the section of the original amendment that would have established a system of fees to finance the grading board.

Mr. LIEBERMAN. This is a technical amendment which in part----

Mr. LIEBERMAN. I thank the Chair.

Mr. LIEBERMAN. I thank the Chair. Madam President, I first want to exercise my ability to send a modification of my second-degree amendment to the desk.

Mr. LIEBERMAN

Mr. LIEBERMAN. Reserving the right to object, and I will not object, I just want to take this moment to respond to the remarks of the Senator from South Dakota, to thank him for his support of the concept, to acknowledge that he has been on the frontier of this one and has been a pioneer for quite a while, and also to say, in the interim, while this amendment is being laid aside, I am going to pursue the suggestion that he made to modify the amendment to remove the fee provision from my second-degree amendment. It was put in there to make this ratings board self-financing. If the distinguished ranking member thinks that may complicate the future of the proposal, I will be happy to modify it. So I will not object.

Mr. LIEBERMAN. Mr. President, I thank the Chair. Again, I want to thank my friend and colleague from North Dakota, Senator Conrad, for his leadership on this matter and to tell him how pleased I am to join with him in this effort. This is a complicated problem, to which there is not a clear, perfect solution. What we know is that the values of our society, of our children, are being threatened, and that the entertainment media too often have sent messages to our kids that are different than what we as parents are trying to send. I think Senator Conrad has taken a real leadership role here and stepped out, stepped forward, with a response that will force this Senate, I hope the television industry, and indeed the country, to face the reality of what we and our kids are watching over television and what we can do about it. Mr. President, the growing public debate over the entertainment industry's contribution to the degradation of our culture could not have come at a more fortuitous time for the Senate Calendar. We are in the process here of considering the most comprehensive rewrite of the Nation's telecommunications law in 60 years. We are making some pivotal decisions about the future of a most powerful force in American culture. That is television. Up to this point in the floor debate, we have heard mostly about the wonders of the new technology that will be at our disposal, who will control it, and how much it will cost. What has not been heard that much in all the talk about the wiring, however, is discussion of what exactly those wires are going to carry into our homes. Few questions have been asked about the substance of the programs that will be shown over the proverbial 500 channels we expect once the road map of American telecommunications has been digitized. Even fewer questions have been asked about the quality of programs, of products, to which we will be exposing our children. Now, in many ways, that is understandable. We, as elected officials, are traditionally and understandably reluctant to set limits of any kind on broadcasters, out of deference to their first amendment freedoms we all are committed to. That is as it should be. Legislators should make laws, not programming decisions. But we also must remember that we are leaders as well as lawmakers, and we must lead in dealing with America's problems. That is why, again, I commend my colleague, Senator Conrad, for forcing this body to consider and weigh carefully the ramifications of this legislation for America's families and for our moral health. Why is this so important now? Because at the very moment that new technologies are exploding through the roof, the standards of television programmers are heading for the floor dropping with the velocity of a safe dropped off a cliff in a vintage Road Runner cartoon. Except, instead of [[Page S8231]] Wile E. Coyote, it is the values and sensibilities of our children that are put in peril. More and more these days, the television aimed at our sons and daughters either numbs their minds or thumbs its nose at the values most parents are trying to instill in them. Turn on the TV at night, and it's hard to avoid the gratuitous sex and violence that has become the bread and butter of prime time television. The Wall Street Journal recently carried a report detailing how even the 8 p.m. timeslot, once the last bastion of family-oriented shows, has become a hotbed of sex and other spicy fare. That is all the more disturbing when you realize that 35 percent of all American children ages 2 to 11 are watching during that hour. If you tune in after school, you have your pick of the parade of talk shows edging ever closer toward pornography, often dwelling on abnormality, perversion. On Saturday morning, you will be treated to a litany of glossy toy commercials masquerading as real programming. The industry's regard for children and families has grown so low that one network, it happened to be ABC, recently announced that it was adding a cartoon version of the movie ``Dumb and Dumber'' to its Saturday morning lineup. Television has now officially, with this act, crossed the threshold from covertly encouraging thoughtless behavior to openly celebrating it. Given the direction television is heading, and given the overwhelming evidence showing that TV's affinity for violence is a real threat to the development of our children, I think we, as Members of the U.S. Senate, should be seriously concerned with where these new technologies will take us. Do we, as a nation, really want to invest billions into building an information superhighway only to turn it into a cybernetic garbage disposal? Are we making progress if we offer consumers 500 different talk shows rather than just a few dozen? Do we not owe our children and our country more than that? These are questions we, as a society, must address as we try to make sense of the ongoing information revolution, and as we try to deal with the decline in values in our country and our culture. Technology is not a good in itself, but a tool. The information superhighway could potentially help speed the recovery of America's public education system. It could help elevate our culture and our values. But it also could help accelerate the moral breakdown of our society, and that is something I believe we need to talk about openly as we go about reforming of our telecommunications laws. I recognize that the issue of content, especially as it relates to television, is a difficult one. In this case, we are faced with contradictory goals--protecting the right of the media to speak freely and independently, and allowing the community to influence them when they go too far. In the past, we have erred on the side of free speech, which is a testament to our commitment to the first amendment. But in a great constitutional irony, our determination to avoid any hint of censorship has been so great that we have effectively chilled the discussion about how we might properly, hopefully working with the television industry, improve the quality of television programming. That neglect has come at a heavy cost to society, for we have opened the door to an anything-goes mentality that is contributing significantly to the crisis of values this country is experiencing. There is no better--or worse, shall I say--example of this mentality than the proliferating legion of sensationalistic talk shows. They are on the air constantly--by my staff's count there were 23 separate hour- long offering on Washington-area stations in one 9-hour period. You can see this for yourself, Mr. President, on this chart, with the boxes colored in with the yellow or orange, however it looks from your vantage point, being hour-long talk shows. For the most part, if you turn your TV on to these shows you are not going to find wholesome family fare that you would like your kids to watch. I should point out, in an expression of appreciation of my staff, that ``Regis & Kathie'' Lee are not colored in on this chart. Many of these programs air in the afternoon, when many children are home alone because their parents at work, or home with their parents but they parents may be doing something else. But it is the quality--or lack thereof--that is more disturbing than the quantity. Many of these programs are simply debasing. Their growth has turned daytime television into a waste site of abnormality and amorality, as Ellen Goodman so aptly put it, which is on the its way toward stamping out any last semblance of standards, and shame when those standards are broken, in this country. The greatest indictment of these shows, as well as the gamut of programming aimed directly or indirectly at children, comes from kids themselves. A recent poll conducted by the California-based advocacy group Children Now showed that a majority of youths between 10 and 16 said that television encourages them to lie, to be disrespectful to their parents, to engage in aggressive and violent behavior, and, perhaps most disturbing of all, to become sexually active too soon. I am the father of a 7-year-old daughter. When I hear about these programs or see them, I can only wonder if those responsible for this junk appearing on television are parents themselves. Would they allow their children to watch the garbage that they are putting on display? Mr. President, I have watched my daughter come home and watch one of the cable networks which has a lot of children's material in it. And suddenly you turn in the afternoon to adolescent fare, which may be OK for adolescents, but certainly is not for a 7-year-old. The same is true of some of the evening programming, whose content, even in early evening hours, is inappropriate for children. I wonder the same thing about those responsible for deciding to target a version of ``Dumb and Dumber'' to young children. Especially the studio spokesperson who described the upcoming series by saying, ``It's going to so dumb it's smart. Or so smart it's dumb. I don't know which'' The case of ``Dumb and Dumber'' is particularly distressing, because on the same day that ABC announced that it was adding ``Dumb and Dumber'' to its lineup, the network said it was canceling one of its few quality educational programs for kids. That move would be alarming in its own right. By all accounts the program ABC was abandoning--a science-oriented show called ``Cro'' that is produced by the same highly regarded group that gave us ``Sesame Street''--was an inventive and thought-provoking series. Like too many of the choices made in our entertainment industry these days, this one mocks the efforts of mothers and fathers who are struggling to create a healthy environment for their children to learn and grow. There is a place for fun, for laughter, for cartoons. But at the same time, there has to be a place about respecting values, intelligence, and good family fare. Sadly, ABC's decision is typical of the priorities set by America's big four broadcast networks, and those carried out by their local affiliates. According to a congressional hearing held last June, ABC, NBC, CBS, and Fox combined to show a total of 8 hours of educational programming a week in 1993, whereas in 1980, 11 hours was the average for just one network. If that is not distressing enough, a study conducted by the Center for Media Education showed that the clear majority of children's educational shows are broadcast when kids were usually asleep. That raises real doubts about the commitment of the networks and the affiliates to these programs. The ritual defense and industry uses to justify their growing irresponsibility is that they are providing what the market demands. In some ways it is a persuasive argument in this country, and in most cases I am willing to abide by the market and let it be. But when it is used to shield behavior that potentially puts America's children at risk, I think we have to figure out a reasonable way to set up some warning signs so parents can protect their own children. As Washington Post TV critic Tom Shales said, ``Just because people are willing to come is no defense. There's an audience for bloody traffic accidents too.'' Our colleague Senator Bradley spoke forcefully about this issue in an excellent speech he delivered earlier this year at the National Press Club. [[Page S8232]] Yes, we must remain committed to upholding freedom, Senator Bradley said, but we must also guard against the corrosive effect of the liberties we afford the markets, especially the entertainment industry. ``The answer is not censorship,'' he said, ``but more citizenship.'' The Senate majority leader spoke out just within the last week or 10 days on this subject forcefully, and I think appropriately. The Senator from Illinois [Mr. Simon] has been a long-time critic of television programming, and has appealed to those involved to give better fare to our kids. What Senator Bradley and Senator Dole said about this not being about censorship but citizenship is absolutely right. That is what H.L. Mencken was talking about when he said long ago that the cure to whatever ails democracy is more democracy. Parents must exercise their primary responsibility and hold television programmers accountable and remind them that profits accrued at the expense of our children are really fool's gold. That means speaking out--loudly--and acting as informed consumers. The networks and their local affiliates, the programmers and the syndicators need our help in hearing the call that we expect more in the way of citizenship. And advertisers should recognize their responsibility to the larger civil society that allows us all to exist and grow in this great democracy of ours. But the question remains, though, what should the proper response of Congress and the law be? I have come to the conclusion myself that talk or jawboning is not enough. Talk is not only cheap, as the proliferation of talk shows has demonstrated. It also is apparently not sufficiently effective in changing the programming climate. Without adequate relief in sight, I believe we have an obligation to provide parents with the help they need to reduce their children's exposure to programs that the parents find offensive and harmful. And that is what Senator Conrad's amendment puts at issue, confronts, and that is why I am pleased to be supporting his efforts to make the expanding communications technology family friendly and to empower parents to control the programs that enter their own homes. Rather than placing any restraints on content and encroaching on any first amendment freedoms, the Conrad amendment would simply give parents the ability to block programming they do not want their children to see. This technology is readily available, and its addition as a standard feature in televisions sold today would come at a very small cost, by one estimate less than 5 additional dollars per television set. That is a small price to pay for gaining control over influences that a lot of American families do not want to commit to their home. For this technology to work, network programming must come with some form of ratings. With his amendment, Senator Conrad is calling on the television industry to do nothing more than the movie makers and the video game manufacturers have done, and that is to establish a voluntary rating system to evaluate programming for objectionable content. This amendment, which I am pleased to support, will give the industry a year to develop such a system on their own. If the broadcasters and cable networks for some reason do not respond to this call, then under the proposal of the Senator from North Dakota the FCC would be required to promulgate ratings that would trigger the use of the blocking technology called for in the proposal. While I share Senator Conrad's commitment to ratings, I also recognize that some people have first amendment concerns regarding the FCC's direct involvement in developing ratings, and that those concerns may prevent them from supporting this amendment even though they may strongly support its goals. So with that in mind, I have proposed the second-degree amendment that would limit the Government's role, the FCC's role, should the industry refuse to comply to the invitation to self-restraint that is at the heart of this amendment. Instead of the FCC stepping in, if the television industry fails to develop a voluntary set of standards after 1 year, this amendment would bring about the creation of an independent board, a joint independent ratings board, comprised of representatives of the public and representatives of the television industry to create the ratings necessary under the amendment. The panel would be a mechanism of last resort, if you will, because I think Senator Conrad and I both want to work cooperatively with the television industry to see that a truly voluntary system is put in place. That is the best way for this to happen. But if it does not happen, then this second-degree amendment will ensure that the ratings system that emerges will be born from a true public-private partnership, and will be the product of a broad-minded consensus. Based on my recent experience with the video game industry, I am optimistic that we can reach a constructive solution that would avoid any Government intervention. As some of my colleagues may recall--and Senator Conrad made reference to it--a little more than a year and a half ago, Senator Kohl and I held a series of hearings to call attention to the increasingly graphic violent, sometimes sexually abusive, nature of video games played by our kids. From the outset we appealed to the producers' sense of responsibility to give parents information necessary to make the right choice for their children. As an incentive, we gave them a choice between rating the games themselves or having an independent board do it. To the credit of the video game makers, and the producers of recreational software that will enable games to be played on personal computers, the industry itself developed a voluntary system that actually was in place less than a year after Senator Kohl and I held our first hearing. Now I am pleased to say that almost 600 video game titles have been rated. By this year's Christmas shopping season, we hope and believe, based on conversations with the industry itself, that almost all of the video games in the stores will be rated, and, therefore, parents will know the content of the games that they are buying for their children. Mr. President, finally, it is my hope that the television industry will respond similarly to this initiative by the Senator from North Dakota, by Senator Mikulski from Maryland, and by myself, and accept that it has not only obligations but opportunities as a very important member of the greater American community. I can assure the folks in the television and broadcast industry that we stand ready to work with them in a cooperative fashion to do what is best for America's families. Yes, but also ultimately what is best for the American television industry without infringing on any of the freedoms all of us rightly cherish and protect. This is not about censorship. It is about choices. We do not want to take away a network's choice to air offensive material if that is their choice. We just want to make sure that parents and citizens have the choice to prevent their kids or their families or, indeed, themselves from watching that material. Mr. President, I thank the Chair. I yield the floor. Mr. CONRAD addressed the Chair.

Mr. LIEBERMAN. Mr. President, at this point, I will yield the floor and look forward to hearing the remainder of the statement of my friend and colleague from North Dakota.

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

Mr. LIEBERMAN. Mr. President, I send a second-degree amendment to the desk and ask for its immediate consideration.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, today, I am introducing the Inventor Protection Act of 1995, which is intended to plug a leak in the longrunning pipeline of American ingenuity, and to make sure that inventors are free to pursue their dreams, without losing their money to conartists. As Americans, we live in the most inventive society on Earth. From Franklin to Edison to Henry Ford and to Steven Jobs, we have a long tradition of dreamers, tinkerers and creators, working in basements and garages, motivated by the pervasive quest to build a better mousetrap. The very symbol of a new idea, which is the light bulb, is, of course, an American invention. The Founding Fathers even recognized, as we sometimes forget, the importance of protecting the inventive spirit. In article I, section 8 of the Constitution of the United States, they empowered Congress to create a Federal patent system to promote the progress of science and useful arts. Now, more than two centuries later, in an era of intense global competition, that mission has become even more important. We must do all we can to make sure good ideas get to market. Unfortunately, though, for too many inventors today, the path to commercialization is strewn with hazards. It has been said that a person seeking to build a better mousetrap today will probably run into capital and material shortages, patent infringement lawsuits, work stoppages, product liability suits, and the omnipresent burden of taxes. But there is another threat out there, one that is as resilient and longstanding as the American spirit of ingenuity, and that threat is the American scam artist. Each year thousands of inventors lose tens of millions of dollars to deceptive invention marketing companies that take advantage of their ideas and their dreams. Last year, as then-chairman of the Subcommittee on Regulation and Governmental Affairs, I held a hearing on the problems presented by the invention marketing industry. Witness after witness testified how dozens of companies, under broad claims of helping inventors, have actually set up schemes in which inventors spend thousands of dollars for services to market their invention--a service that companies regularly fail to provide. State and Federal laws have been vague and ineffective in this area, leaving consumers virtually helpless and lacking the information they need to make truly informed decision about how to develop and sell their idea. To understand the scope of the problem, let me describe how the fraud works: These companies attract inventors through ads that include a toll-free number that an inventor calls to request an invention evaluation form. The inventor returns the form, which includes a full description of their designs, with the expectation that it will be evaluated by qualified experts. In fact, according to hearing testimony by the FTC and the Patent and Trademark Office [PTO], no expert evaluation occurs. Instead, the form is referred to a salesperson who calls the inventor and tires to convince the inventor to purchase a product research report, which the inventor is led to believe will evaluate the patentability and commercial potential of the idea. The price for the product research report is generally around $500. Instead of an informative, indepth study, the inventor receives a boilerplate report of little value which invariably concludes that the idea is patentable. That statement typically is deceiving since almost any idea may be patented. However, the patent may merely protect the design of the idea, not the function or usefulness. Such a design patent is typically worthless in attempting to commercialize the product. The next step in the scheme involves convincing the inventor to purchase patent and marketing services. Again, the services are useless and quite expensive. The average charge is $7,000 and ranges as high as $10,000. For this sum, the inventor routinely receives a few generic press releases about the idea and a brief mention in catalogs exhibited at various trade shows. In almost every case, this marketing plan is essentially worthless. While there are no official figures available on how many people annually contract with invention marketers, one person who works at a legitimate non-profit center that helps inventors testified that he estimates the number to exceed 25,000. Given an average cost of $7,000 for services that companies charge, that would represent a total of $175 million in revenue for these companies, with virtually no benefit to inventors. [[Page S8115]] The legislation that I propose to crack down on these scam artists is simple, yet stringent. It uses a multi-faceted approach to separate the legitimate companies from the fraudulent and guarantee real protection for America's inventors. To start with, I propose requiring invention marketing companies to register with the U.S. Patent and Trademark Office. This registration requirement would be fully funded by fees paid by these companies, and would take advantage of the existing structure already set up for registering attorneys to administer it. As a result, no new Federal spending would be necessary, nor would any new bureaucracy need be created. The companies would also be required to provide a complete list of their officers so shady characters could not hide behind ever-changing corporate names. One former salesperson for an invention marketing company said his company changed names three times in less than 6 years: ``To evade consumer action, the MO was to frequently change company names * * * You forgot sometimes what company you are working for.'' Complaints against these companies will also be tracked. In addition, my bill creates standards for contracts between inventors and invention developers to help inventors in making informed decisions about developers. One of these standards would require companies to attach a cover sheet to every contract that lists the number of applicants the company has rejected, which is usually very small, and the number of customers who have actually earned a profit from their inventions, which is also usually very small. If the invention marketing company fails to meet the guidelines set forth in the bill, customers can void these contracts, and even sue for damages in Federal court. Mr. President, this legislation is just the type of law that Americans are clamoring for. It addresses a specific identified problem that can be best solved by the Federal Government and does so without creating a new bureaucracy. Although several States have passed legislation to address the problem, they have largely failed to wipe out this threat because the companies can simply move to States with weak laws and lax enforcement. Best of all, this legislation will not cost American taxpayers a cent; the entire burden will be covered by the registration fees called for in the bill. I urge my colleagues to support this bill to ensure that inventors as well as their ideas are protected. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I thank the Chair. Let me express my thanks and gratitude to the Senate majority leader, to the Democratic leader, the chairman of the Judiciary Committee, and to the ranking Democratic member for breaking what looked to be the coming of gridlock on an issue and a problem on which none of us want gridlock, and we should not allow it to exist. I think we have now limited the number of amendments, and we have clearly accepted some across party lines. And we are quite appropriately moving toward doing something to put us squarely against those who would terrorize America. Mr. President, when I came to the Senate, I got interested in this threat of terrorism because it seemed to me, particularly after the cold war ended, that we in America might surprisingly find our security threatened more directly, our lives threatened more directly by terrorists than we had enduring the long years of the cold war by a heavily armed enemy. The reason is that there are extremist movements throughout the world. There are, sadly, extremist movements within our own country who practice acts of terrorism either to carry out a political purpose or to create panic and insecurity and chaos in our society. I thought we ought to begin to act and do something about that. We conducted hearings and we visited with experts. Mr. President, these inquiries into the problem of terrorism led me to this sad conclusion, which is that it is very difficult to defend against terrorists in a way that gives absolute security in the sense that they, by their nature, as we have seen in our time, will strike at undefended targets. In the aftermath of the events in Oklahoma City, we might increase security at Federal and public buildings, and one could imagine that we can surround every public building in America with security guards, and yet the terrorist bent on destruction and chaos will tragically go down the street and strike at a public building or an office building or a place where people gather. So it seems to me that the best defense against terrorism, international and domestic, is an offense. And the offense is to be prepared, to keep an eye and an ear out for those who would commit terrorist acts. None of us wants to stop people from saying what they believe in this great democracy and writing and demonstrating what they believe. But when some group has indicated or given reason to law enforcement authorities to believe that they are capable of, or are planning or considering a criminal act, I want our Government to be there. I want our Government to be listening. I want our Government to have undercover agents there so that we can [[Page S7756]] strike to stop those terrorist acts, those violent acts, such as the awful assault in Oklahoma City, before they occur. Mr. President, that is the purpose of this amendment. Amendment No. 1215 to Amendment No. 1199 (Purpose: To amend the bill with respect to revisions of existing authority for multipoint wiretaps)

Mr. LIEBERMAN. Mr. President, first let me thank my friend from Utah for his support of the amendment. I appreciate the terms at which the support was given, that this is a balanced amendment. It gives extra authority to law enforcement to protect the rest of us, but does so in a way that gives proper regard to the liberties that we all cherish. Again, this extra wiretap authority cannot be used unless such judge has concluded there is probable cause to believe that the individual who will be the target of this multipoint tap is, in fact, committing a criminal act. Mr. President, I would be happy to yield back the time that I have remaining.

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

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

Mr. LIEBERMAN. Mr. President, this amendment deals with what in law enforcement circles is called a multipoint wiretap. It is a very rare kind of electronic surveillance that is tied to the movements of the suspected criminal rather than to the particular telephone line he or she is using. For all other wiretaps except these rare multipoint taps, law enforcement officers have to convince a court that there is probable cause to believe that a specific phone is being used to facilitate an ongoing crime, where a judge is persuaded that a criminal is moving around and using different phones or locations for the purpose, on the part of that person, to thwart interception, which is the wording in the law today. However, the judge may authorize a multipoint wiretap. With such a court order, the criminal's conversations can be listened to through wiretaps on those telephones that the criminal actually ends up using. Let me point out again that what has to be shown here is that the person is moving around and using different phones or locations for the purpose of thwarting electronic interception. Now, no interceptions may take place until a specifically named individual is using the phone. So law enforcement officers must first establish, through physical surveillance, through observation during the 30-day life of these orders--they are limited to 30 days--that the targeted individual is actually using the phone. If someone else begins to use the phone and the targeted individual is not part of that conversation, the wiretap must stop--even, surprisingly, if other criminal activity is being discussed. Now, because of these standards, these obstacles, these requirements, multipoint wiretaps are actually quite rarely used. They have, however, proved, according to testimony submitted by Deputy Attorney General Jamie Gorelick to the Judiciary Committee, highly effective tools in prosecuting today's highly mobile criminals who may switch phones frequently for many reasons. Some may move from one cellular phone to another in order to defraud the phone company. Others may switch from phone to phone because it is consistent with the kind of ruthless lives they lead. Others may be changing phones to avoid being tapped, and those are the people --particularly if they are considering carrying out a terrorist act of violence--that I am concerned about in introducing this amendment. Changes in technology make the likelihood that anyone, including criminals, of course, is going to use many different phone lines in the course of a day. Under current law, unless law enforcement can establish that criminals are switching phones with the specific intent to thwart detection, surveillance, a wiretap, a multipoint wiretap cannot be obtained from a court. That is the law. Proving specific intent in such a situation is very difficult--even where someone may be moving so frequently that a standard wiretap on a particular phone is effectively useless. So my amendment would allow courts to authorize multipoint wiretaps, either where law enforcement could persuade a judge that a criminal was changing phones frequently for the purpose of avoiding interception, or where the very fact that the criminal was moving around and changing phones had the effect of thwarting surveillance, regardless of why he or she is doing it. And that would ease the difficult task of proving the intention of the criminal to thwart detection. It captures situations also where the target is frequently moving and changes phones for any reason. Mr. President, my amendment does not change, in any respect, protections in existing law against abuse of these multipoint wiretaps. For instance, no application for a multipoint wiretap may be filed by any Federal law enforcement officer without the approval of top Justice Department officials. They have to go right to the top for approval. And, of course, a judge cannot authorize a multipoint tap without finding probable cause that a specific person is committing a crime or criminal act. So this is not going to invite any wanton abuse of wiretap authority. The wiretap cannot begin until law enforcement has verified that the target--even after the court orders it--is using the particular phone and only the communications of that person can be intercepted. If other conversations are heard and a conversation involving a target person, for instance, turns out to be personal, the tap has to be turned off. Given the highly secretive nature of most terrorists, given the fact that they are operating in a sophisticated way, and just as all the rest of us, moving around using phones, cellular phones, electronic surveillance is one of our best weapons once we have reason to believe that a criminal act, terrorist act, is being carried out, to find out what the intention of the perpetrator or terrorist is, and to stop that act before any innocent victims are hurt or, God forbid, killed. The amendment that I am offering was in the President's original bill. I think it is modest and narrowly circumscribed, but enhances the ability of law enforcement officers to help. Mr. President, how much of the 10 minutes remains?

Mr. LIEBERMAN. Mr. President, finally, under current law, let me say that these tools are used very sparingly but effectively. I certainly do not anticipate their being used very often in our battle against terrorism, whether the terrorists be domestically or internationally inspired. However, I do want to be sure that when our law enforcement officials--fighting and working to protect our safety--need these tools, that they will be ready and waiting so that swift and certain preventive action can be taken. We owe that to our law enforcement officials. But truly more to the point, we owe it to the millions and millions of Americans, innocent people going about their daily lives, who deserve as best we are able to be protected from the hard and thoughtless hand of death that terrorism would wreak upon them. Mr. President, that concludes my statement. I yield so much of the remainder of my time as desired by the distinguished ranking Democrat of the Judiciary Committee, the Senator from Delaware [Mr. Biden].