Larry Pressler

Mr. PRESSLER

Mr. PRESSLER. I am not trying to be difficult.

Mr. PRESSLER. Mr. President, we have no problem with the amendment and we are prepared to accept it.

Mr. PRESSLER. That is right.

Mr. PRESSLER. We are prepared to accept the amendment as it is written and drafted.

Mr. PRESSLER. Without modifications.

Mr. PRESSLER. No, no, I did not say that. I thought you had withdrawn your modification.

Mr. PRESSLER. Mr. President, I suggest the absence of a quorum.

Mr. PRESSLER. Madam President, I mentioned earlier that over 500 delegates of the, I think, about 1,600 or 1,700 delegates to the Small Business Conference going on now at the White House have written me letters--and also have written President Clinton--urging that he support the Senate version of the Telecommunications Competition and Deregulation Act and that the Senate pass it. I just pulled out of this packet of 500 letters, one letter from a Mr. Robbie Smith, Smith Communications in Chicago, IL. I do not know him, but he is a delegate to the Small Business Conference now going on at the White House. He wrote the following, and I think it is important, because it is illustrative that small business strongly supports this legislation. I am writing to urge you to support S. 652, the Telecommunications Competition and Deregulation Act, which would bring about changes in how telecommunications products and services are sold that would greatly benefit the small businesses of our state. A recent survey, sponsored by the National Federation of Independent Business Foundation, found that a full 86 percent of small business owners said they want the convenience of ``one-stop shopping'' for telecommunications services. S. 652 would bring us one-stop shopping. By creating a more competitive marketplace that will let local Bell companies and long-distance companies and cable companies all compete in each other's traditional businesses, it will provide small businesses with the convenience and lower prices we need. In enacting legislation, we urge Members of Congress to keep in mind ``Five Easy Pieces'' of guidance from small business on what constitutes good telecommunications policy. 1. For small businesses as customers, we need legislation that maximizes choice and affordability by simultaneously opening all telecommunications markets--at the earliest possible date--to full and equal competition among vendors. 2. For small businesses as customers, we need legislation that minimizes confusion and complexity by letting all vendors compete to offer us one-stop shopping for the full array of telecommunications products and services. 3. For all small businesses, we need legislation that maximizes flexibility and minimizes regulation, so introduction of new products and services can keep pace with rapid technological and market changes. 4. For small businesses as vendors, we need legislation that maximizes opportunities for us to create and sell innovative new products and services by removing regulatory constraints. 5. For small businesses in rural or high-cost areas, we need legislation that maximizes universal opportunity by insuring--through a fair system of cost sharing--that some parts of our country do not become too costly in which to operate, or technological backwaters. We believe S. 652 achieves these objectives. Please support

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

Mr. PRESSLER. We have no objection to this amendment being laid over until tomorrow. I ask unanimous consent that amendment No. 1325, as modified, be set aside until tomorrow.

Mr. PRESSLER

Mr. PRESSLER. Mr. President, today I am introducing the Rail Infrastructure Preservation Act of 1995. This legislation is designed to target rail freight investment needs in neglected regions of the country. I urge my colleagues to join me in supporting this legislation. The primary purpose of this bill is to provide a blueprint for rebuilding and improving the rail lines serving our smaller cities and rural areas. These lines, run mainly by short-line and regional railroads, are critical to the survival of rural America's economy. Yet, the capital needed to maintain these secondary rail lines is very limited. My colleagues may recall I introduced a similar bill during the last Congress. I continue to believe Federal involvement is necessary to preparing our Nation's rail transportation network for the next century. A national commitment to the future of rail freight service is critical to the advancement of our overall transportation system. Mr. President, we are facing very serious Federal budget constraints. I support comprehensive deficit reduction proposals and have backed that support with my voting record. I will continue to do so. In our efforts to tackle the deficit, it is important to allocate our limited tax dollars wisely. In my view, adequate investment in our Nation's transportation infrastructure provides for wise use of these dollars. However, as we consider national transportation infrastructure investment, we must not overlook one very critical transportation mode--rail freight service. During the 1970's and 1980's, the large railroads abandoned thousands of miles [[Page S8381]] of rail lines throughout the United States. Much of our former rail infrastructure has been abandoned. Fortunately, many independent regional and short-line railroads have filled the gap, keeping many essential rail lines in service. Despite the remarkable efforts by regional and short-line entrepreneurs to keep alive our Nation's secondary rail lines, the demand for capital investment to maintain these lines far out-paces supply. This situation keeps far too many rural communities on the brink of losing their rail service or having inadequate service due to unsound track conditions. Unfortunately, the Federal commitment to maintaining necessary rail lifelines has diminished almost to the point of nonexistence. It would help address the capital investment needs of our rail freight transportation system. Specifically, my legislation would permanently authorize the Local Rail Freight Assistance [LRFA] Program. However, due to legitimate funding constraints, my bill would reduce the authorization level by 17 percent from the amount approved by the Senate Commerce Committee during the last Congress. It also updates the existing section 511 railroad loan guarantee program as I first proposed in the last Congress. The LRFA Program has proven to play a vital role in our Nation's rail transportation system. Created in 1973, LRFA provides matching funds to help States save rail lines that otherwise would be abandoned. For instance, over the past few years, several rail improvement projects in my home State of South Dakota have been made possible through LRFA funding assistance. Without LRFA, our freight funding needs would go largely unmet. Of particular importance is how LRFA's matching requirements enable limited Federal, State, and local resources to be leveraged. Indeed, LRFA's success has been in part due to its ability to promote investment partnerships, thus, maximizing very limited Federal assistance. Historically, LRFA has received only a very modest level of Federal funding. For example, $17 million was provided for LRFA in fiscal year 1995. But a substantial portion of this very limited appropriation-- $6.5 million--was rescinded recently by Public Law 104-6. Yet, LRFA remains very popular since it has been the only Federal program that provides infrastructure investment in short-line and regional railroads in the absence of section 511 appropriations. For example, in fiscal year 1995, 31 States requested LRFA assistance for 59 projects, totaling more than $32 million in funding requests. Unfortunately, less than one-third of funding was available to meet these rail infrastructure needs. With continued railroad restructuring, these legitimate funding needs will only increase. LRFA is a worthy program and should be continued. In addition, adequate funding for the section 511 Loan Guarantee Program would permit high priority railroad transportation infrastructure investment on lines operated by short-line and regional railroads. In this era of significant budgetary pressures, the 511 program provides a cost effective method to insure modest infrastructure investment on a repayable basis. The 511 Program requires a processing fee paid to the Federal Government and the money borrowed is repaid with interest. The cost to the taxpayers should range from negligible to a positive return. In this time of fiscal pressure, we should support programs like the 511 Program and LRFA that provide excellent leverage of our limited Federal dollars. The 511 Railroad Loan Guarantee Program is permanently authorized at $1 billion, of which approximately $980 million currently is available for commitment. The Credit Reform Act rules require an appropriation for the 511 Loan Program to cover the anticipated loss to the Government over the life of each loan. Based on a fiscal year 1994 appropriation for a 511 project in New York State--the first 511 application processed under the rules of the Credit Reform Act--5 percent of the total obligation level must be appropriated. Several regional and short-line railroads are ready to submit loan applications as soon as the program is appropriated funding. For example, the Dakota, Minnesota & Eastern [DM&E] Railroad, headquartered in Brookings, SD, is prepared to file an application for a 511 loan guarantee as part of a project to be matched by financing from revenue bonds issued by the State of South Dakota. It also is important to note that recently the House Transportation and Infrastructure Railroad Subcommittee approved an Amtrak reauthorization bill that includes a 511 loan guarantee provision specifically permitting $50 million of the $1 billion authorized for the section 511 program to be available for Amtrak for fiscal years 1996 through 1999. Indeed, the 511 program is gaining increased Congressional attention and support. My legislation is intended to make the loan guarantee program more user friendly. My overall objective is to ensure the 511 Loan Program can best serve its customers. I am eager to explore all options to enable us to reach this goal. Mr. President, in my judgment, we need to help preserve our rural freight rail systems. Building up these systems would allow more freight to be shipped by rail and would help to alleviate highway traffic and congestion. Our national transportation needs can best be measured on this type of inter-modal perspective. Therefore, I urge my colleagues to support this legislation while we work to address the larger issues of transportation investment policy. Mr. President, I ask unanimous consent that the bill be printed in the Record.

Mr. PRESSLER

Mr. PRESSLER. Mr. President, I would like to say that I join in Senator Hollings' earlier remarks on manufacturing, and I thank my good friend from Virginia for reconsidering. I hope he will be able--this bill has been crafted in this area. I know that the Senator from South Carolina had the amendment a couple years ago about manufacturing. I know this has been worked on day and night during the drafting sessions, and of course all Senators are welcome to offer amendments, but I do hope and I should say that I would stand with the Senator from South Carolina, based on the information I have at this moment.

Mr. PRESSLER

Mr. PRESSLER. I suggest the absence of a quorum.

Mr. PRESSLER. Mr. President, I ask unanimous consent that the Stevens amendment No. 1301 be modified with the language I now send to the desk.

Mr. PRESSLER

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

Mr. PRESSLER

Mr. PRESSLER. Mr. President, I want to identify myself with the remarks of the Senator from Montana. I think Senator Burns is very accurate on this cable thing. As reported by the Commerce Committee on March 30, this bill would maintain regulation of basic cable rates until there is effective competition; deregulate upper tiers of cable programming services only if they do not ``substantially exceed'' the ``national average'' for comparable programming service and redefine the effective competition standard to include a telephone company offering video services. On June 9, the Senate adopted, 77 to 8, a Dole-Daschle leadership amendment, of which I was also a cosponsor, which met the concerns of those who believe that, despite the safeguards already contained in S. 652, it might lead to unreasonable rate increases by large cable operators. The Dole-Daschle amendment also deregulated small operators, a feature of the pending Lieberman amendment, which proposes to narrow the definition of effective competition and tie ``national average'' to systems that already face effective competition. As such, the Lieberman amendment is excessive and unwarranted. As modified by our amendment, S. 652 will now, first, establish a fixed date, June 1, 1995, for measuring the ``national average'' price for cable services and only allow adjustments every 2 years. This provision eliminates the possibility that large cable operators could collude to artificially inflate rates immediately following enactment of S. 652. The bill as amended, establishes a ``national average'' based on cable rates in effect prior to passage of S. 652, when rate regulation was in full force, and excludes rates charged by small cable operators in determining the ``national average'' rate for cable services. This provision addresses the concerns that deregulation of small system rates, which was included as part of the Dole-Daschle amendment to S. 652, would inflate the ``national average'' against which the rates of large cable companies would be measured. It specifies that ``national average'' rates are to be calculated on a per-channel basis. This provision ensures that ``national average'' is standardized, and takes into account variations in the number of channels offered by different companies as part of their expanded program packages. It specifies that a market is effectively competitive only when an alternative multichannel video provider offers services ``comparable'' to cable television service. prematurely deregulated under the effective competition provision if, for example, only a single channel of video programming is being delivered by telco, video, and dial tone providers in an operator's market. What the bill does: The basic tier, broadcast and PEG, remains regulated until, one, telco offers video programming, or, two, direct broadcast satellite, or any other competitor reaches 15 percent of the market penetration. I think that is very important because the basic tier remains regulated until the telco in the area has competition or until there is at least 15 percent of a direct broadcast satellite. The upper tiers of cable rates are subject to bad actor review when the price of program packages significantly exceeds the national average. I have been in some parts of the country where you see a cable rate that is much higher, sort out of the blue, and I think that under this legislation that could fall under the so-called bad actor provision of the legislation. The point we are making is that, as we move toward deregulation of these cable rates, there are safeguards built into this bill. I am very concerned that the Lieberman amendment would undo the carefully crafted compromise on cable deregulation that has been agreed to by Democrats and Republicans, and we have had several votes in committee and on the floor already. We have the leadership packet. This would tend to unravel all of that at this late moment. The fact of the matter is that rates continue to rise with regulation. Cable rates will continue to increase with regulations. Indeed, they have been increasing with regulations. The FCC rules allow rates to increase for inflation, added program costs, new equipment charges, and other factors. Actual and potential competition spurred by our bill will result in lower cable rates. I have said that, if we can pass this bill, we will have much lower cable rates than we would under a regulated system because we will have more providers, we will have direct broadcast satellite, we will have the video dial, and we will have the opportunity for utilities to come into the television market. We are really talking about, with this type of regulation, the 1950's and 1960's and 1970's when maybe you could conceivably say some of this was necessary when you just had one or two providers. But in the 1990's and on into the year 2000, we will have a broad range of competition. I hope that we can take advantage of that. It will result in lower cable rates. Regulation harms the cable industry. In 1994, for the first time ever, cable revenues remained flat--$23.021 billion in 1993, and $23 billion again in 1994. Cash flows for major companies declined. TCI, $60 billion; Time Warner Cable, $46 billion; Comcast, $30.1 billion; Cox, $27.2 billion. Cable stock values dropped 10.1 percent between December 1993 and April 1995 while the S&P and NASDAQ indexes rose by 12.2 percent and 14 percent, respectively. That is about a 20-percent spread. During the last year 16 major cable companies, representing 20 percent of the industry, serving 12 million subscribers have sold or announced their intentions to exit the industry. Capital raised for public debt and equity offerings declined 81 percent in 1994, $8.6 billion in 1993 to $1.6 billion in 1994. According to A.C. Nielsen, subscriber growth rates declined from 3.14 percent in 1993 to 2.85 percent in 1994. Existing and potential competition: Direct broadcast satellite is the fastest growing consumer electronics product in history with 2,000 new subscribers a day projected to grow to 2.2 million subscribers by year's end and over 5 million by 2000. Due to program access, direct broadcast satellite offers every program service available on cable plus exclusive direct broadcast satellite programming, such as movies and sports; for example, 400 NBA games this season and 700 games next season. Cable also faces competition from 4 million C-band dishes. Wireless cable has 600,000 subscribers, expected to grow 158 percent in 2 years to 1.5 million and to 3.4 million by 2000. Bell Atlantic, NYNEX, and PacTel have recently invested in wireless cable. So the point is there are new services being offered. There is new competition coming forward. Telcos have numerous video programming trials all over the United States. Meanwhile the Clinton/Gore administration continues to fight in court to keep the cable-telco ban firmly in place. Cable deregulation is a prerequisite for competition in telecommunications. A central goal of this bill is to create a competitive market for telecommunications services. Cable television companies are the most likely competitors to local phone monopolies, but in order to develop advanced, competitive telecommunications infrastructures, cable companies must invest billions in new technologies. Federal regulation of television has restricted the cable industry's access to capital, has made investors concerned about future investments in the capable industry, and reduced the ability of cable companies to invest in technology and programming. Concerns about cable rate increases should be mitigated by cable's new competitive pressures from direct broadcast satellite services and from telco-delivered video programming. Deregulation of cable television services is a prerequisite to bringing competition to telecommunications and is essential to making the competitive model embodied in S. 652 viable. Cable systems pass over 96 percent of Americans homes with coaxial cables that carry up to 900 times as much information as the local phone company's twisted pair. Cable companies are leaders in the use of fiber optics and digital compression technology. Cable's high-capacity systems will ultimately provide virtually every type of communication service conceivable and allow consumers to choose between competing providers of advanced voice, video, and data services. Mr. President, I feel very strongly that we have reached a proper balance regarding cable in this bill, and to adopt the Lieberman amendment would undo that package that has been worked out. I also feel very strongly that the American public will benefit from what we are doing here. I mentioned earlier that I have received 500 letters from the small business people at the White House Conference on Small Business who want to pass the Senate-passed bill and also urge President Clinton to endorse the Senate-passed bill. I think that we all want that procompetitive deregulatory environment. Everybody says that. But many of the folks out there are arguing to preserve regulation. I frequently see large companies using Government regulation to block out competition. I look upon this telecommunications area as a group of people in a room with a huge buffet of food stacked on the table. But they are all worried that somebody else is going to get an extra carrot. I think we are going to find there is plenty for all, and the consumers will benefit with lower telephone prices, lower cable prices, more services, more services for senior citizens, more services for farmers, and our small cities will be able to flourish. And it is my strongest feeling that we should continue, as we have done all day, to defeat these amendments tomorrow. We had a very good day today and yesterday in terms of holding this committee bill together. I see one of my colleagues is in the Chamber and wishes to speak. I am glad to have any speakers. We are trying to move forward. I thank you very much. I yield the floor.

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

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

Mr. PRESSLER. That amendment is acceptable to the ranking member and I. I commend the Senator from Alaska for his efforts.

Mr. PRESSLER. I suggest the absence of a quorum.

Mr. PRESSLER. Mr. President, I ask unanimous consent that the Senate now turn to the consideration of amendment 1280, that it be considered as read, adopted and the motion to reconsider be laid upon the table, all without intervening action or debate.

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

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

Mr. PRESSLER. I propose that, if we can, we adopt the amendments.

Mr. PRESSLER. Yes, we are prepared to do that. We thank the Senator for taking care of them in such a good manner.