This afternoon, I bring good news and bad. The bad news is that the 104th Congress has accomplished precious little of significance. The good news is that perhaps the only exception to that statement is our passage of the most important piece of telecommunications legislation in six decades.

There are solid reasons why the telecommunications reform bill may well be the exception to the rule of the 104th Congress. Our success on that bill should -- but probably won't -- offer some lessons to the majority.

The first lesson is that you don't have to reinvent the wheel. Contrary to the apparent belief of the Republican freshman class, the world did not begin in November of 1994.

When the President signed the "Telecommunications Act of 1996" into law on February 8, it was the culmination of nearly two decades of work.

My good friend and former colleague, Lionel Van Deerlin, began the effort in the 1970s. In response to efforts by the then-integrated Bell System to retain their monopoly status, Van commenced a "basement to attic" rewrite effort.

Many of you will remember those days in the late 70's. Certainly C.C.I.A. was an important player in the various rewrite efforts. And although Van was defeated in the Reagan landslide of 1980, efforts to reform the law continued.

In early 1982, the Justice Department and AT&T announced the proposed settlement of the antitrust litigation. The hiatus that followed -- divestiture; the birth of the so-called "Baby Bells", and the implementation of the access charge system -- put Congressional efforts on hold for a while. But by 1988, we were back on track, trying to build a consensus on how the laws should be reformed to reflect the development of new technologies and the advent of competition.

1992 was a watershed year. Late in the session, my good friend Jack Brooks succeeded in getting his telephone antitrust bill reported out of the Judiciary Committee. While time ran out before he could bring it up before the full House, it was clear to me that we on the Commerce Committee were going to have to work with Brooks if our efforts were to succeed. We commenced the effort to draft a Brooks/Dingell compromise early in 1993. And on the last day of the session in November, 1993, Brooks and I introduced H.R. 3626.

Our bill dealt primarily with the Consent Decree issues that were shared by our two Committees. And while we were working on our legislation, the Subcommittee Chairman, Ed Markey, and the ranking Republican, Jack Fields, were drafting a compromise bill of their own. Their bill was introduced the same night as ours, and was structured to break down many of the statutory barriers that impeded competition between telephone and cable companies.

Together, our two bills made a good fit. Each strove to foster competition. Each sought to put consumers in charge of the products and services that were available in the market. And each sought to remove the Government from the roll of managing a vibrant, high tech sector of our economy.

In the summer of 1994, both bills passed the House by huge margins. Unfortunately, too much time had passed for the Senate to complete work on its version of the legislation before the end of the session. In October, Congress adjourned without the Senate acting, dooming the bills for the year.

In November, of course, the electorate elected a Republican majority in both Houses for the first time in 40 years. My friend Brooks was defeated. When Congress convened in 1995, it was under the new leadership of Chairman Tom Bliley and Subcommittee Chairman Jack Fields.

That leads me to lesson number two: bipartisan legislation is better than no legislation at all.

With respect to the telecommunications bill, both Jack Fields and Tom Bliley distinguished themselves in the way they handled a complicated and technical piece of legislation. They were honorable in their dealings with me and the other Democrats on the Committee. And they maintained the tradition of bi-partisanship that has characterized Congressional consideration of telecommunications legislation for 20 years.

A corollary to lesson number two is that the Congressional leadership should trust the Committee system. Not every shot can be called by the leadership in the Capitol. The Committees do possess a fair amount of substantive knowledge and experience -- and those members of the Commerce Committee, at least, have a history of getting things done.

Now that the legislative effort is now over, the fun is just beginning at the Federal Communications Commission. For better or for worse, how the Commission deals with the transition to competition will be critical to the success of the new law.

To be very blunt about it, I have substantial concerns about the direction the Commission appears to be taking.

For example, we spent a lot of time working closely with the State Public Utility Commissioners. We wanted to be sure that the traditional division of authority between inter- and intra- state services was preserved. We wanted to be sure that local telephone rates remain affordable.

Yet the Commission's "Interconnection Notice" can be read to propose the "Federalization" of many aspects of local ratemaking that traditionally have been performed by the States.

I would have thought it obvious that Montana is different than New York, and Michigan is different than North Carolina. One size does not fit all -- and the Commission should not try to make it so.

It isn't just the Commission's Notice that gives me pause. It's also much of the rhetoric.

The people's representatives in Congress have made a decision that competitive markets will determine the services and prices available to the public -- not government regulators, or corporate executives operating in non-competitive markets.

Yet reports of what is being said by many Commission personnel lead me to wonder whether the FCC is willing to trust the American people.

In competitive markets, there are a couple of truisms. One is that customer demand determines the way that vendors behave in the market.

Another -- and important to this discussion -- is that in competitive markets, companies sometimes fail.

If the Commission adopts regulations that so tilt the playing field that failure is unlikely or impossible, it will have done the American people a disservice. Markets manipulated by regulators in Washington deny consumers the ability to demand of suppliers the products and services they want. An effort by the Commission to micromanage the transition to competition will deny the American consumer of his rightful place -- in the drivers seat.

Here we are not talking about whether businesses should be permitted to pollute, or to maintain unsafe conditions in the workplace. We are talking about having Government referee the economic relationships between competitors in the marketplace.

In my view, that is an inappropriate role for Government to play. It seems to me that Government's role is to protect the public -- keeping local rates affordable, and ensuring that universal service is preserved.

It seems to me that Time Warner, General Electric, Westinghouse, Disney, AT&T and MCI are big enough to take care of themselves, without the FCC handicapping the competition.

It is possible, of course, that the Commission's Notice will be modified substantially when the Report and Order is released later this summer. I can assure you that I will be working to achieve that goal between now and then. But if it is not, the benefits that the new law promises to bring to the American people may not materialize. Our twenty year effort to update the 1934 Act will have been in vain.

That would be a shame, because that legislation has great promise. It promises to end the balkanization of our telecommunications markets, and bring about competition in every aspect of the telecommunications business. Local telephone, long distance telephone, and cable television monopolies or cartels will be replaced by vigorous competition. Customer demand will dictate the products and services that suppliers offer, and prices will be regulated by competition.

There is one other benefit to the telecommunications legislation. It has also ended the meddling of the good Judge Greene, who for the last 15 years served as the micromanager of many telecommunications markets.

Thank you very much for inviting me to appear before you today. I would be happy to respond to any questions you might have.

Back to the Public Record Home Page