Address by Sen. Ernest Hollings (D-SC) in the Senate.
Date: February 25, 2002.
Re: Opposition to HR 1542, the Tauzin Dingell bill.
Source: Congressional Record, Feb. 25, 2002, at pages S995-6.

Madam President, the communications bill by Congressmen TAUZIN and DINGELL that the House will vote on this week is blasphemy. Hailed as a way to enhance competition, it eliminates it. Touted as a way to enhance broadband communications, it merely allows the Bell companies to extend their local monopoly into broadband.

I know the Bells' tricks, based on past performance. In 1984 when Judge Harold Green broke up AT&T's monopoly in long distance, he required AT&T to sell long distance services at wholesale. This resulted in brisk new competition among MCI, Sprint, and GTE that lowered prices for consumers. AT&T's local business was split into seven Bell companies. But they retained their monopoly in local service, guaranteeing no competition, but a guaranteed profit for them.

In the early 1990s the Bells decided they, too, wanted to compete in long distance. Congress agreed in the 1996 Telecommunications Act, but first we employed the Judge Green approach by requiring access to the Bell network by competitors. For one full year, the Bell lawyers hammered out a step-by-step process how to open their networks. They came up with a 14-point checklist, and once they complied, the Bells could offer long distance in their region. They were so eager, they told us they would comply within a year. Thus, the 1996 Act passed in the Senate by a vote of 91 to 5 and in the House by a vote of 414 to 16.

But instead of moving into long distance, the Bells immediately launched a 6-year stonewalling in the courts against competition. First, they claimed unconstitutional what their lawyers had just written. They lost at the Supreme Court. And instead of competing, they extended their monopoly by combining: Southwest Bell bought Pacific Bell and Ameritech calling it SBC; Qwest bought US West, Bell Atlantic bought NYNEX and GTE calling it Verizon; and BellSouth joined in holding off competition.

Time and again the FCC and State commissions fined the Bells for violating the checklist they wrote. So far they have been fined upwards of $1.8 billion. But what do they care? The Bells merely write off these fines in their rates and continue their monopolistic conduct.

To their credit, Verizon and SBC moved to qualify for long distance in a few States, but today the Bells control roughly 93 percent of the last lines for communication into every home and business in America. They contend that they are forced to provide access to their network while cable is not. But the move should be toward competition, not monopolization; and the Bells should simply comply with the law they wrote.

Now comes the Bells' grand maneuver--Tauzin-Dingell. It veritably repeals access requirements and the roadmap for opening the Bell markets to competition. Worse, the FCC and all State commissions' safeguards as to pricing and service by the Bell companies are repealed, further strengthening their monopoly control.

Pass Tauzin-Dingell and long distance companies will have to either submit or sell to the local Bell monopoly. The competitors spawned by the 1996 Act are already on the ropes. Just the threat of enactment of Tauzin-Dingell has caused the capital markets to freeze their financing, and some 200 companies have dropped like flies. Passage of Tauzin-Dingell will squash them totally and the country will return to an AT&T-like monopoly control of communications.

At present, there is no legal restriction upon the Bells or anyone from providing broadband. The problem is not availability, but demand. In fact, broadband is already available to 80 percent of Americans.

But only one in four Americans who have Internet in their homes are signed up for broadband. Who wants to pay $50 a month for faster access to their e-mail? Content providers are awaiting copyright protection legislation before they render more content for broadband users, and the lack of legislation protecting privacy on the Internet keeps users away.

Where there is an availability problem, of course Congress should assist in extending broadband to rural and economically depressed areas. Bills for rural subsidies and tax credits are now pending in Congress. But the first order of business is to defeat the monopoly grab of Tauzin-Dingell, and then enforce the intent of the 1996 Telecommunications Act.