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  THE CONGRESS CAN BREAK THE TELECOMMUNICATIONS POLICY STALEMATE (Senate -
                              March 09, 1995)

                                [Page: S3693]

Mr. BREAUX. Mr. President, for more than 10 years the Congress has deferred
to Federal courts on making and shaping telecommunications policy. Antitrust
law intended to remedy anticompetitive practices when AT&T dominated all
facets of America's telecommu nications services is the basis of court
controlled communications policy. The resulting breakup of AT&T in 1983-84
under Judge Greene's modified final judgment is still the policy basis for
keeping the brakes on the future development of this critical in dustry:
Telecommunications is the engine of America's continuing race into the
information age.

Technical complexities and the massive scale of economic returns for
potential competitors in the industry have made it difficult to arrive at
any industry-led agreement on fair and just terms for bringing full
competition to reality. Certainly such an ag reement would simplify
congressional efforts to unleash the industry from Federal court edicts so
that the benefits of open competition will bring new and lower cost
services, increased employment, and a continually improved
telecommunications infrastruct ure.

Right now, Mr. President, between 50 and 65 percent of all U.S. jobs involve
information processing, goods, or services; 90 percent of jobs created over
the last 10 years were information related.

But there is more to come if we in the Congress can fashion reasonable
legislation for evenhanded treatment of potential major competitors. Telecom
giants are poised to spend billions over the coming 10 years to restructure
their networks. One estimate of capital spending by the Bell companies alone
on the information highway for equipment and infrastructure between 1994 and
1998 is $25 to $50 billion.

Mr. President, I believe that we can supercharge and sustain this potential
growth if we fashion communications laws that will assure all
telecommunications competitors that each of them will have a fair chance to
thrive in fully competitive markets. We h ave a situation now in which each
competitor is fearful of a law that will give an unfair advantage to equally
powerful competitors.

As I see it, Mr. President, the key to establishing open competition in
telecommunications is to deliver a fair process for freeing the grip that
Bell operating companies now have on the local exchange system. Ideally, Mr.
President, if any telecom carrie r can have interference-free, open access
to the local exchange to fully compete for the delivery of
telecommunications, video, and information services to homes and businesses
and at the same time allow for the regional Bells to have access to and the
ab ility to provide long distance service for their customers, we would have
created the stimulus for maximum growth in this industry.

But the Bell operating companies, Mr. President, are understandably
reluctant about engaging in a process of enabling open access to the local
exchange if it means tying their hands while equally strong competitors are
raiding their customer bases. I am c onsidering legislation that would
require the Bells to provide to competitors interconnection to Bell company
local exchange switches; provide access to network features on an itemized
basis; provide technology that will allow consumers to move to a compe titor
and keep the same telephone number, and take other steps to assure State and
Federal regulators that their systems are open to full competition.

The Bells are concerned, Mr. President, that this process of opening up the
local loop under some legislative proposals will not be satisfied until
competitors: Long distance, cable television, electric utility companies
with massive capital, and customer bases of their own will have permanently
eroded Bell Co. customer bases. This is not a situation, Mr. President, of a
world-dominant AT&T competition with and upstart, customer-poor MCI in the
early 1980's. Major Bell company competitors are customer are customer rich,
and they are capital rich. They are more than capable, Mr. President, of
competing on a level playing field.

I have discussed these issues and my suggestions with the Long Distance
Companies Coalition, with cable television representatives, and with Bell
company executives, and they agree that my idea offers a possible compromise
and is worth further discussion.

I believe that if we can assure each competitor, region by region, that none
of them is to have a headstart or an unfair advantage in the race to acquire
customers for new services, that we can reach an accommodation that will
lead to the passage of impor tant and far-reaching telecommunications
legislation in 1995.

I believe that we can do this, and I believe it is urgent that the Congress
direct our attention to this in this session. I urge my colleagues to help
and join me in crafting a workable telecommunication fair competition
amendment. I think my suggestion i s one that can be ultimately agreed to by
both the long distance carriers, the cable companies, as well as the
regional Bells. It is an idea and a concept that needs further discussion,
further debate, and further exploration by the various interests that are
going to be affected by it. I think it does provide us an opening which I
think is significant and one that hopefully the companies and people
affected will take advantage of.

Mr. President, I yield the floor.

                                [Page: S3694]

Mr. REID addressed the Chair.

The PRESIDING OFFICER. The Senator from Nevada.


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