July 17, 1997 CONGRESSIONAL RECORD — SENATE S7669 I suggest the absence of a quorum. AMENDMENT NO. 931 Klein nomination, the Senate proceed The PRESIDING OFFICER. The (Purpose: To amend the Federal Election to a vote on calendar No. 139, the nomi- clerk will call the roll. Campaign Act) nation of Eric Holder. The legislative clerk proceeded to Mr. CAMPBELL. Mr. President, I I further ask unanimous consent call the roll. now send an amendment to the desk on that, immediately following the vote Mr. CAMPBELL. Mr. President, I ask behalf of the majority leader, Senator on the Holder nomination, the motions unanimous consent that the order for LOTT, and the minority leader, Senator to reconsider be laid upon the table; the quorum call be rescinded. DASCHLE, and ask for its immediate that any statements relating to either The PRESIDING OFFICER. Without consideration. of these nominations appear at the ap- The PRESIDING OFFICER. The objection, it is so ordered. propriate place in the RECORD; that the clerk will report. Mr. CAMPBELL. Mr. President, I ask President be immediately notified of The assistant legislative clerk read the Senate’s action; and that the Sen- unanimous consent that the Senate as follows. now resume consideration of amend- ate then return to legislative session. The Senator from Colorado [Mr. CAMP- The PRESIDING OFFICER. Is there ment No. 929 by Senator THOMAS and BELL], for Mr. LOTT, for himself and Mr. ask that the yeas and nays be vitiated. objection? Without objection, it is so DASCHLE, proposes an amendment numbered ordered. The PRESIDING OFFICER. Without 931. f objection, it is so ordered. Mr. CAMPBELL. Mr. President, I ask Is there further debate on the amend- unanimous consent that the amend- RECESS UNTIL 5 P.M. ment? If not, the question is on agree- ment not be read at length. ing to the amendment. The PRESIDING OFFICER. Under The PRESIDING OFFICER. Without the previous order, the Senate stands The amendment (No. 929), as modi- objection, it is so ordered. in recess until the hour of 5 p.m. fied, was agreed to. The amendment is as follows: Thereupon, at 4:49 p.m., the Senate Mr. CAMPBELL. Mr. President, I At the appropriate place, insert the follow- recessed until 5 p.m.; whereupon, the move to reconsider the vote. ing: Senate reassembled when called to SEC. . Section 302(g)(1) of the Federal Mr. KOHL. I move to lay that motion order by the Presiding Officer [Ms. on the table. Election Campaign Act of 1971 (2 U.S.C. 432(g)(1)) is amended— COLLINS]. The motion to lay on the table was (1) by striking ‘‘and’’ after ‘‘Senator,’’; and f agreed to. (2) by inserting after ‘‘candidate,’’ the fol- Mr. CAMPBELL. Mr. President, I lowing: ‘‘and by the Republican and Demo- EXECUTIVE SESSION cratic Senatorial Campaign Committees’’. suggest the absence of a quorum. The PRESIDING OFFICER. Under The PRESIDING OFFICER. The Mr. CAMPBELL. I ask the Senate the previous order, the Senate will now clerk will call the roll. adopt this amendment. go into executive session. The PRESIDING OFFICER. The The legislative clerk proceeded to f call the roll. question is on agreeing to the amend- Mr. CAMPBELL. Mr. President, I ask ment. NOMINATION OF JOEL I. KLEIN, OF unanimous consent that the order for The amendment (No. 931) was agreed THE DISTRICT OF COLUMBIA, TO the quorum call be rescinded. to. BE AN ASSISTANT ATTORNEY The PRESIDING OFFICER. Without Mr. CAMPBELL. Mr. President, I GENERAL objection, it is so ordered. move to reconsider the vote. Mr. KOHL. I move to lay that motion The bill clerk read the nomination of Mr. CAMPBELL. Mr. President, I ask on the table. Joel I. Klein, of the District of Colum- unanimous consent that the following The motion to lay on the table was bia, to be an Assistant Attorney Gen- be the only remaining first-degree agreed to. eral. amendments other than the pending Mr. CAMPBELL. I suggest the ab- Mr. ALLARD addressed the Chair. amendments and that they be subject sence of a quorum, Mr. President. The PRESIDING OFFICER. The Sen- to relevant second-degree amendments. The PRESIDING OFFICER. The ator from Colorado is recognized. They are an amendment by Senator clerk will call the roll. Mr. ALLARD. I suggest the absence FAIRCLOTH, two by Senator HUTCHISON, The legislative clerk proceeded to of a quorum. three amendments by Senator call the roll. The PRESIDING OFFICER. The COVERDELL, one by Senator ABRAHAM, Mr. CAMPBELL. Mr. President, I ask clerk will call the roll. one by Senator DEWINE, one by Sen- unanimous consent that the order for The bill clerk proceeded to call the ator CHAFEE, one by Senator COLLINS, the quorum call be rescinded. roll. one by Senator GRASSLEY, one by Sen- The PRESIDING OFFICER. Without Mr. HATCH. Madam President, I ask ator HATCH, one by Senator DASCHLE, objection, it is so ordered. unanimous consent that the order for one by Senators LOTT and DASCHLE, Mr. CAMPBELL. Mr. President, I ask the quorum call be rescinded. one by Senator CLELAND, one man- unanimous consent that when the The PRESIDING OFFICER. Without agers’ amendment, one by Senator House companion measure is passed by objection, it is so ordered. KOHL, one by Senator GRAHAM of Flor- the Senate, pursuant to the previous Mr. HATCH. Madam President, I ida, one by Senator BINGAMAN, one by order, that the passage of S. 1023 be vi- would like to comment just briefly Senator DODD, and two by Senator tiated and that S. 1023 be indefinitely here on the nomination of Mr. Joel FEINSTEIN. postponed. Klein, who has been nominated for the I further ask that following the dis- The PRESIDING OFFICER. Without position of Assistant Attorney General position of the above-listed amend- objection, it is so ordered. of the Antitrust Division of the Depart- ments, the bill be advanced to third f ment of Justice. reading and final passage occur, and Last Friday, I spoke on this floor in when the Senate receives the House UNANIMOUS-CONSENT AGREE- support of Mr. Klein and urged my col- companion bill, all after the enacting MENT—NOMINATIONS OF JOEL I. leagues to support his nomination. I clause be stricken and the text of the KLEIN AND ERIC H. HOLDER, JR. certainly continue wholeheartedly to Senate bill be inserted, the bill be ad- Mr. CAMPBELL. Mr. President, I ask support Mr. Joel Klein. And I continue vanced to third reading and passed, and unanimous consent that the Senate to urge my colleagues to join me. the Senate insist on its amendments stand in recess until 5 p.m., and at 5 I will not repeat today all that I had and request a conference with the p.m., the Senate proceed to executive to say last week on Mr. Klein’s behalf, House, and the Chair be authorized to session for the consideration of the but I would like to reiterate that sup- appoint conferees. nomination of Joel Klein, with the pre- port and have my statement from last The PRESIDING OFFICER. Is there vious time limitations. Friday printed in the RECORD. I ask objection? Without objection, it is so I further ask unanimous consent that unanimous consent to have that state- ordered. immediately following the vote on the ment printed in the RECORD. S7670 CONGRESSIONAL RECORD — SENATE July 17, 1997 There being no objection, the mate- policymakers, and the health of competition with several Senators who have expressed rial was ordered to be printed in the in our economy and I look forward to work- opposition to the nomination of Joel Klein RECORD, as follows: ing with him in the coming years. to head the Antitrust Division at the Justice In what appears to be a last-ditch effort to Department. Mr. Klein should be confirmed STATEMENT OF SENATOR ORRIN HATCH ON THE scuttle Mr. Klein’s nomination, there are because he has all the qualities of leadership NOMINATION OF JOEL I. KLEIN TO BE ASSIST- some who have now floated an allegation and judgment to make an outstanding As- ANT ATTORNEY GENERAL OF THE ANTITRUST that the nominee’s participation in a par- sistant Attorney General. In fact, the rea- DIVISION OF THE DEPARTMENT OF JUSTICE, ticular merger decision was somehow im- sons why his detractors have put his nomina- JULY 11, 1997 proper. Upon examination, let me say that it tion on ‘‘hold’’ actually support the case for Mr. President, I rise today on behalf of Mr. appears to me that these reports are wholly his nomination. The objections to his nomi- Joel Klein, who has been nominated for the unfounded and provide no basis whatsoever nation stem not from concern about his position of Assistant Attorney General of for questioning the nominees conduct. I un- qualifications, but from a difference of opin- the Antitrust Division of the Department of derstand that, with respect to the matter at ion over the best way to ensure competitive Justice. Mr. Klein was reported out of the issue, Mr. Klein consulted with the proper markets in telecommunications. Judiciary Committee unanimously on May 5. ethics officials and was assured that his par- The Antitrust Division was created to As his record and testimony reflect, Mr. ticipation raised no conflict of interest or function as a specialist agency with the ex- Klein is a fine nominee for this position, and even the appearance thereof. Based on what pertise and experience essential to making I am pleased that his nomination has finally we know, this judgment appears sound, and I sound antitrust enforcement decisions. been brought before the full Senate today. am confident that the nominee has con- Quick, intuitive judgments based upon an in- He has my strong support. ducted himself appropriately. I should hope complete understanding of either the facts or I believe Mr. Klein is as fine a lawyer as that nobody in this body will use this extra- the law can easily lead to incorrect deci- any nominee who has come before this com- neous, ill-founded notion as an eleventh hour sions. Critics of Mr. Klein’s recent decisions mittee. He graduated magna cum laude from basis for opposing Mr. Klein’s nomination. I are at a disadvantage because they cannot Harvard Law School before clerking for am confident that Mr. Klein is a man of in- possibly have his detailed knowledge of the Chief Judge David Brazelon of the D.C. Cir- tegrity, and urge my colleagues to cast their facts. That is why Congress wisely entrusted cuit and then Supreme Court Justice Lewis votes in his favor. such decisions to an expert agency. In the Powell. Mr. Klein went on to practice public Some have suggested that Mr. Klein is past that trust has not been misplaced be- interest law and later formed his own law misapplying the Telecommunications Act cause the Division has been willing to take firm, in which he developed an outstanding and has taken questionable positions on par- an unpopular stand that it considered to be reputation as an appellate lawyer arguing— ticular mergers. I will refrain here from in the public interest—as it did in settling and winning—many important cases before passing judgment on any particular decision the AT&T case. the U.S. Supreme Court. For the past two and from engaging in a detailed debate on Mr. Klein’s willingness to reach a decision years, Mr. Klein has ably served as Principal Telecommunications antitrust policy. I fully on the Bell Atlantic merger indicates he has Deputy in the Justice Department’s Anti- recognize that there are some very, very im- the courage to make a fine Assistant Attor- trust Division, and for the past several portant issues at stake here, especially in ney General. He made a decision despite the months he has been the Acting Assistant At- light of a number of ambiguities left in the fact that whatever he decided to do was like- torney General for the Antitrust Division. wake of the Telecommunications Act. I also ly to offend someone who was considering his It is clear, both from his speeches and his recognize that there have been some con- nomination. No doubt Mr. Klein could have enforcement decisions, that Mr. Klein is troversial mergers in this area, and yet other found a way to delay a decision until after he within the mainstream of antitrust law and potentially landmark mergers which have was confirmed. Instead, he made what he be- doctrine and will be a stabilizing influence not come to pass. lieved was the correct decision from the per- at the Antitrust Division. While no one In short, telecommunications competition spective of the antitrust laws. Mr. Klein is doubts his willingness to take vigorous en- and antitrust policy is one of the most im- being criticized for doing his job. To sub- forcement actions when appropriate, it is a portant, yet somewhat unsettled, policy stitute the political process for the judgment credit to Mr. Klein that the U.S. Chamber of areas affecting our emerging, transforming of an expert enforcement agency in an area Commerce, the National Association of Man- economy. The looming policy decisions to be where both the facts and the law are remark- ufacturers and other business associations made in this area cannot be ignored and in- ably complicated would be a dangerous have written in strong support of his nomi- deed I plan to have the Judiciary Committee precedent that could only harm enforcement nation to lead the Antitrust Division. They and/or our Antitrust Subcommittee fully ex- of the antitrust laws in the future. We hope believe he will be good for American busi- plore these issues. that those who have expressed misgivings ness. And I think they are right. But I believe it is neither fair nor wise to about Mr. Klein’s nomination will soon allow At the same time, Mr. Klein has dem- hold a nominee hostage because of such con- it to come to a vote, so that Mr. Klein can be onstrated a sense of direction and a vision cerns. In my view, sound public policy is best confirmed—as he should be. for the Antitrust Division, which is impor- served by bringing this nominee up for a JAMES F. RILL. tant in a leader. He is committed to enforc- vote, permitting the Justice Department to JOHN H. SHENEFIELD. ing our Nation’s antitrust laws in order to proceed with a confirmed Chief of the Anti- Mr. Rill was Assistant Attorney General in uphold our cherished free enterprise system trust Division, and for us in Congress to charge of the Antitrust Division during the and protect consumers from cartels and move forward and work with the Department Bush Administration; Mr. Shenefield was As- other anticompetitive conduct. So, I am cer- and other involved agencies in the formula- sistant Attorney General in charge of the tain that Mr. Klein will also be good for con- tion and implementation of telecommuni- Antitrust Division during the Carter Admin- sumers. cations policies. istration. Antitrust doctrine has had its ups and I hope that all Senators, and especially Mr. HATCH. I am very pleased that downs over the years—although we may not those of the President’s own party, would all agree on which times were which. At this permit the administration’s nominee to be cloture was invoked last week with point, however, I am hopeful that antitrust voted on. such overwhelming support. I must is entering a more mature and more stable Mr. HATCH. I would also like to say, however, that I was quite sur- period. Although antitrust analysis is fact- point out that numerous past and prised, and disappointed even, to find intensive and will always contain gray areas, present Government officials and at- us in the position of voting on cloture I hope Mr. Klein will work to help make torneys have voiced strong support for for someone as good as Joel Klein. antitrust doctrine as clear and predictable as Even I, as chairman or ranking mem- possible so that companies know what is per- Mr. Klein, including James Rill and John Shenefield, who headed the Anti- ber of the Judiciary Committee, have mitted and what the Antitrust Division will not filibustered a single Clinton admin- challenge. This will help businesses compete trust Division during the Bush and istration nominee for the Justice De- vigorously without the worry and chilling ef- Carter administrations respectively. fects that result from uncertainty. I would I also ask unanimous consent that a partment or the Federal courts. I am suggest that the Division’s goal should be to letter to the New York Times editor not saying I will not in the future, but avoid burdens on lawful business activities from Messrs. Rill and Shenefield be I will say that I have not up until now. while appropriately enforcing the law Indeed, the last filibuster of a Justice printed in the RECORD. against those who clearly violate it. Department nominee was over the Finally, I would like to add that I person- There being no objection, the mate- rial was ordered to be printed in the nomination of Walter Dellinger to head ally have been very impressed with Mr. the Department’s Office of Legal Coun- RECORD, as follows: Klein. He strikes me as a person of strong in- sel back in October of 1993. Of all the tegrity, as a highly competent and talented WASHINGTON, DC, nominees I have seen in recent years, I lawyer who is well-suited to lead the Anti- July 11, 1997. trust Division. While I expect we may not al- The NEW YORK TIMES, must say that Joel Klein certainly ways agree on every issue, I believe that Mr. New York, NY. ranks among the very best of them. Klein’s skills and expertise will be a service TO THE EDITOR: We write to state our dis- Of course, I know my good colleague to the Department of Justice, to antitrust agreement with the New York Times and from South Carolina would not take July 17, 1997 CONGRESSIONAL RECORD — SENATE S7671 this step lightly and without what is, can also say, as someone who has had a debate before the unnecessary cloture in his view, adequate justification, but little experience in the law, that Mr. vote on Monday. That agreement was in fairness I think we must now move Klein will stack up with anybody. He is confirmed by the majority and minor- quickly to confirm this nominee who a fine nominee. I commend the Presi- ity leaders and pursuant thereto we are has been awaiting confirmation since dent for having made this choice, for debating the nomination today. May 5 of this year. having had the foresight to put some- In this regard, I note the consistent As I explained last Friday, I believe body like this into the Justice Depart- willingness of Senator HOLLINGS to de- it is critical for the Department of Jus- ment. bate and vote on this nomination from tice, and the business community gen- I commend Mr. Klein for the work the outset, and the sincere efforts of erally, to have a permanent, confirmed that he has done up to date, for his Senators DORGAN and KERREY to obtain antitrust chief. Until we do, any anti- fearless work and not waiting until he clarification of issues that concern trust matter before the Department of is confirmed to act as the acting person many of us. Justice will invite political maneuver- in that Department and for the work I have given a good deal of thought ing and gamesmanship by the affected he did prior to this nomination in that to this nomination. I believe that the parties, and any ultimate decision by Department. I commend him for a life- Antitrust Division and the Assistant the Department, no matter how justi- time of service to this country and to Attorney General who heads it are ex- fied on the merits, will unfairly be sub- his family and to the law firms that he tremely important to effective enforce- ject to criticism. has worked with. ment of our laws and protection of Mr. Klein has, to his credit, not per- There is no question he has the aca- American consumers. I have come to mitted the likelihood of such criticism demic and other credentials that far rely on them for advice as we draft leg- to deter him from leading the Depart- exceed the academic and other creden- islation and develop policies to foster ment to bring closure on critical mat- tials of many others who served with competition. ters pending before the Antitrust Divi- distinction, who served in the Govern- I hope to continue to do so. I believe sion. I believe it is most unfortunate ment of the United States, and particu- that the President is to be given sig- that, because of this body’s, the U.S. larly in the Justice Department. nificant deference on his selections for So I am very happy to support his Senate’s, delay, Mr. Klein has been un- his Administration team. The Attorney nomination. I hope that today every- fairly criticized for such decisions. General has contacted us in support of body will support his nomination. I This does a disservice to the Depart- Mr. Klein and his interpretation of the think it is the right thing to do. ment as well as to those who come be- law, and that means a good deal to me. Again, I say, my colleague from fore it. As I consider the legal interpretations By urging that we move to confirm South Carolina is sincere and dedicated and policies in question, I do not find Mr. Klein, and in expressing my sup- in his effort, but I hope he will see fit myself in total agreement with the port for this fine nominee, I intend in to support this nomination as well, on Acting Assistant Attorney General. no way to diminish the important is- the basis that he has made his case, he Nonetheless, I will vote to confirm sues raised by my colleague from has made his arguments, he has stood him. South Carolina, and others, regarding up for what he believes his principles competition and antitrust policy in the are, and now it is time to support the Unlike some who have spoken in op- telecommunications field. Quite the President’s nominee for this particular, position to this nomination, I feel that contrary, it is my belief that tele- important position in the Antitrust Di- a good deal of the fault I find with Mr. communications competition and anti- vision. Klein’s positions stems from the Tele- trust policy is one of the most impor- Mr. LEAHY. Madam President, it is communications Act of 1996. I worked tant, yet somewhat unsettled, policy my hope that Joel Klein will be a hard to correct and improve that act’s areas affecting our emerging and trans- strong and effective advocate for com- weak and deferential standards for en- forming economy. petition and the interests of consumers suring competition. In some measure In fact, I announce today that I plan when he is confirmed as Assistant At- we succeeded in strengthening the act, to work in coordination with Senator torney General for the Antitrust Divi- but other significant provisions that I DEWINE, who chairs the Judiciary sion of the Department of Justice. supported to foster competition and Committee’s Antitrust Subcommittee, I had a close working relationship protect consumers were rejected. That to explore the looming policy decisions with his predecessor, Anne Bingaman. I was a principal factor in my decision to in this area and the role of the Depart- hope that we can develop that kind of vote against that act—the bill was not ment of Justice in the telecommuni- relationship, as well. strong enough. cations arena. In my view, there are Mr. Klein has been buffeted a good Others predicted that passage of the few competitive issues which are more bit since being nominated. He had to Telecommunications Act would launch worthy of examination than this one. answer some tough questions during an era of competition in which cable Notwithstanding the tremendous im- his nomination hearing about approv- companies would compete with the re- port of the issues raised by some of my ing the Bell Atlantic-NYNEX merger gional Bell operating companies for colleagues, I believe it is neither fair without conditions. After the Judiciary local phone service, long distance com- nor wise to hold this nominee and the Committee reported his nomination to panies would compete with the Bells in Antitrust Division hostage because of the Senate on May 8, he responded to a both local and long distance services, concerns about his potential positions letter from Senator BURNS and suc- and regional Bell operating companies in this very turbulent area of the law. ceeded in convincing our colleague to would compete against each other. The In my view, sound public policy is best remove his hold on this nomination. promise of competition was a sales served by bringing this nominee up for That letter and an addendum filed by pitch but has not materialized to bene- a vote, permitting the Justice Depart- Mr. Klein as Acting Assistant Attorney fit American consumers. Instead of ment to proceed with a confirmed Chief in connection with the application of competition, we see entrenchment, of the Antitrust Division, and for us in SBC Communications before the FCC mega-mergers, consolidation, and the Congress to move forward and work raised serious concerns for a number of divvying up of markets. with the Department and other in- other Senators, however. I, too, hoped that the Justice Depart- volved agencies in the formulation and Last week the Senate proceeded by ment Antitrust Division would act ag- implementation of telecommunications unanimous consent to consideration of gressively to protect consumers and policies. this nomination. Until that moment, I foster competition. I have noted my So, I urge my colleagues on both understood there to have been Repub- concerns during Mr. Klein’s confirma- sides of the aisle to vote to confirm lican holds against this nominee. Why tion hearing in my questioning of his Joel Klein as Assistant Attorney Gen- the Republican leadership proceeded unconditional approval of the Bell At- eral for the Antitrust Division. immediately upon calling up this nom- lantic-NYNEX merger. If the current I have known Mr. Klein for quite a ination to file a cloture petition, they law only serves to protect against while, and I have to say I know him will have to explain. In fact, we had mergers that tend to diminish competi- well. I also know his abilities well. I worked out a time agreement for the tion where it already exists, it may be S7672 CONGRESSIONAL RECORD — SENATE July 17, 1997 time to amend the law to foster com- Judiciary Committee over the last sev- where his actions seem to be very, very petition where none has existed. I hope eral weeks. much procompetitor—my hope is that that Joel Klein will help us do that. Some wrongly view confirmation as Mr. Klein is. As the head of the Anti- I was taken aback by the language the end of the nominee’s work with the trust Division of Justice—I can read Mr. Klein used in his May 20 letter to Senate. I hope that this is just the be- the tea leaves earlier on the cloture Senator BURNS by which he ‘‘specifi- ginning of Assistant Attorney General vote and would expect he will receive a cally rejected the suggestion in the Joel Klein’s work with us to protect fairly substantial vote, a resounding conference report’’ on the Tele- consumers and foster competition. This vote of support. My hope is I am wrong. communications Act that the 8(c) test is an awesome responsibility. This morning in the Omaha World be employed. But the more that I re- Mr. HATCH. I suggest the absence of Herald this article appeared. The head- viewed the matter, the more I realized a quorum. line says, ‘‘So Far, Consumers the Los- that much of the fault lies with the The PRESIDING OFFICER. The ers in Battle for Dial-Tone Dollars.’’ conference report itself and the Tele- clerk will call the roll. Madam President, this is what Mem- communications Act’s failure to pro- The bill clerk proceeded to call the bers should be concerned about, not vide a definitive test. roll. just the Antitrust Division of Justice I was not appointed to serve on that Mr. HATCH. I ask unanimous consent but they should also be concerned conference committee, although I was that the call of the quorum be re- about the nominees for the Federal serving as the ranking Democrat on scinded. Communications Commission and what the Antitrust Subcommittee on the Ju- The PRESIDING OFFICER. Without they intend to do, how they intend to diciary Committee at the time. I would objection, it is so ordered. vote, how they intend to make certain Mr. KERREY addressed the Chair. have wanted to help that conference in- that we have competition, because un- The PRESIDING OFFICER. The Sen- corporate a stronger test into the law. less we get competition at the local ator from Nebraska is recognized. That did not happen. level, unless there is competition at Mr. KERREY. Madam President, I It is my hope that working with the that local level for that local dial tone, had a conversation with the distin- Department of Justice we can now help indeed for all information and services guished Senator from Utah who en- ensure that the test the Attorney Gen- at the local level, it is not likely the couraged me to throw my entire pre- eral has adopted—that the local mar- consumers will benefit in the same pared remarks away and take a gentle- ket be fully and irreversibly open to ways that consumers benefited after di- manly course and support the nomina- competition—is a meaningful standard vestiture in 1982. Divestiture produced tion of Joel Klein. I have chosen not to and strong enforcement tool. If not, competition in long distance. That do that. I have great respect for the Congress should revisit it and strength- competition resulted in a reduction of Senator from Utah, and I have chosen en it. price to the consumer and an improve- I do think that Senator HOLLINGS is to continue to offer to my colleagues ment of quality, as competition almost correct when he criticizes the adden- reasons why I have chosen to vote always does. dum to the Justice Department’s sub- against Joel Klein, why I have chosen mission in connection with the SBC to oppose the nomination. Without precedent, this legislation Communications application. Both I like the man, I respect him, I be- proposes to move us from a monopoly at the local level—which we still have Senator HOLLINGS and Congressman lieve he is a good individual, and I for most residential customers—from a BLILEY concur as principal drafters of don’t like coming here opposing a the law regarding their intent and its nominee that President Clinton sent to monopoly to a competitive environ- meaning. I trust that the Antitrust Di- the Congress for confirmation. I would ment. We are not there yet. We still vision will review its position on the like very much to give him my un- have a monopoly. That monopoly can proper meaning of section 271 of the qualified support, but I simply, Madam always, if there is only one choice that Telecommunications Act and its re- President, cannot. the consumer has, can always basically quirement for competing service pro- About a year and a half ago, many of charge whatever they want to charge. viders to offer facilities-based services. us in this Chamber who participated in This new legislation preempts States In opening the debate on this nomi- this debate over the Telecommuni- authorities from being able to do many nation, Senator HATCH cited ‘‘ambigu- cations Act—and I must say, Madam of the things they had done in the past. ities left in the wake of the Tele- President, one of the reasons I found There are 358,000 residential lines in communications law’’ and ‘‘unsettled myself in opposition to Mr. Klein is I the regional Bell company serving policy areas’’ and said: led him to get the Department a role in Omaha, NE. The present rate for that But I believe it is neither fair nor wise to the Telecommunications Act so that local residential service is proposed to hold a nominee hostage because of such con- they would have some voice in deter- be $16.35, from a current rate of $14.90, cerns, especially one as competent and de- mining whether or not there could be a 9.7-percent increase, almost a 10-per- cent as Joel Klein. In my view, sound public competition prior to approving the cent increase from another local com- policy is best served by bringing this nomi- moving of entry from one sector to an- pany that is also being proposed. They nee up for a vote permitting the Justice De- have that authority, now Madam Presi- partment to proceed with a confirmed chief other. I fought for that, and many op- posed that. We ended the day and pre- dent, to be able to come and raise these of the Antitrust Division, and for us in Con- residential rates. gress to move forward and work with the De- vailed here on the floor, prevailed in partment and other involved agencies in the conference, and prevailed for final pas- It is going to be a problem for all of formulation and implementation of tele- sage. It was signed and made a part of us if we do not get, in as expeditious a communications policies. the law. way as possible, competition down to I agree. I look forward to the Judici- Mr. Klein, in response to a question the local level. What will happen, all of ary Committee and our Antitrust Sub- raised by a Member of this body who us will have to be explaining why it committee exploring these important actually opposed that, it seems to me was, in 1996 when we debated this bill, competition and antitrust policy mat- in a letter gives away Justice’s role. why it was that we all promised this ters. I will likewise expect Senator Now the Attorney General, Janet Reno, would be great for the consumers—re- HATCH to support other Administration has written in response to our asking duction in price, improvement in qual- nominees for areas in which policies her if she thinks Justice has a role, has ity of service—why it is that they are are in controversy. written a letter saying, indeed, she be- not seeing this reduction in price, why Now that the majority leader has lieves Justice does have a role, and she it is they are seeing an increase in moved to implement his new hold pol- intends to exercise the authority the price instead of a promised reduction. icy of proceeding on nominations, I law gives her. The answer will be, we don’t have com- trust he will not delay any further the Indeed, Madam President, Mr. Klein, petition yet. nomination of Eric Holder to be Dep- in meetings with me and with others My belief is that the Congress is uty Attorney General and that he will who were concerned about the remarks going to have to think in a very hard promptly move to consideration of the he made in this letter, has given me as- and clear fashion what it is we have to judicial nominations reported by the surance and pointed to several cases do in order to make certain that we July 17, 1997 CONGRESSIONAL RECORD — SENATE S7673 have competition. I remember the dis- Klein says today, ‘‘Well, I didn’t really the 1960’s, 1970’s and early 1980’s was a tinguished Senator from Arizona, Sen- mean all those things. I intend to be a terrible monopolistic control of Amer- ator MCCAIN, as he debated this bill, very forceful advocate for competi- ican Telephone & Telegraph. The fact and I believe he ended up voting tion.’’ of the matter was that they had some against it for precisely the same rea- Madam President, I don’t believe 12 particular rulings by the Federal sons I am talking about now. He actu- that is likely to happen. Mr. Klein ap- Communications Commission. But the ally talked about lots of regulatory re- proved the Bell Atlantic NYNEX merg- smart lawyers for the AT&T group quirements that didn’t necessarily er. There were a lot of people, when would always put those on appeal, seek mean that we would get competition. this bill was being debated, that would further delay, further consideration. He favored, as I heard him at the time, not have stood up and said, ‘‘The rea- While there were 12 orders on course at something that actually had great ap- son I am supporting this is because I the Federal Communications Commis- peal to me, which is forget all the regu- hope what we get is the regional Bell sion, mind you me, none of them could latory requirements, let’s have almost operating companies merging with one get enforced. We were in an outrageous a Le Mans racing start. Set a time cer- another. I hope that happens. I hope we standoff in the courts and at the Com- tain when everybody can compete, re- get mergers because that is exactly mission and, yes, an outrageous stand- gardless of who they were, in every- what we need in order to get more off in the Congress itself. We could not body else’s market—let’s have that. choice.’’ I don’t know how that pro- get a bill passed. They have that much As my colleagues will probably recall duces more choice for the residential political power. There isn’t any ques- in 1996 when we were having our de- consumers in this new expanded area tion about it. bate, the prediction was that what we that now a single company will have. I So, a very brilliant and dedicated ju- would have is the regional Bell compa- see decreased choice. rist, Harold Greene of the circuit court nies competing against one another in I heard a lot of people coming down here in Washington, DC, took this mat- individual markets, that we would and saying in fact what we are likely ter over on a petition from the Justice have the cable companies then compet- to see is the large local monopolies Department for the AT&T breakup. In ing. Since that time, what we have competing with one another for serv- 1984, the modified final judgment was seen is a significant amount of merg- ice. Though we are seeing some of it, I handed down and the Bell companies ers, and I don’t believe the kind of don’t believe we are seeing anywhere were spun off on their own to begin movement needed, with the single ex- near what we promised we were going competition, and AT&T itself was ception of a few companies. We have to see, and unless we get a vigorous ad- opened up for competition. That wasn’t seen Ameritech moving aggressively to vocate for competition in the Depart- easy. I wish my friend, Bill McGowan open their market and try to get ap- ment of Justice, unless we get, as well, of MCI was here because it was 30 years proval, as well to get into long dis- on the Federal Communications Com- ago, practically, that he, with a little tance. That is the transaction that the mission, appointees who will do the two-floor apartment down in George- law provides for—open up your local same, as I said, Madam President, town, with a little aerial on top and market and then you can go into long there will be a lot of people in this Sen- three assistants, started to try to get distance service. That is the idea of the ate as well as in the House of Rep- into long distance. Very interestingly, law. But it isn’t happening very fast. resentatives having to explain to their the Farmer’s Home finally gave him a As a consequence, I don’t think I will consumers, to their residential con- loan. Can you imagine that? Competi- be the only Member who opens up their sumers, just what exactly did you tion started with a Farmer’s Home hometown newspaper and looks at the think was going to happen back in loan. With that little bank, so to headline and sees, ‘‘So far consumers 1996? speak, he worked and brought some the losers in battle for dial-tone dol- So I hope that my colleagues, when cases, he began nibbling away at the lars.’’ The reason the consumers will be they come down here to make a deci- magnificent monopoly of AT&T in long the losers is that the consumers in sion about whether or not they will distance. Omaha, NE, the residential consumers, vote yes or no for the man who will Since that time, of course, the long when it comes to dial tone, they have have a very significant role in deter- distance market has opened up. You’ve two choices—take it or leave it. If you mining whether or not we were right or got MCI, Sprint, GTE, and the Brits don’t like the increase you can buy wrong in 1996, I hope they give very se- are coming in, and the Germans, and your local service from nobody else. rious consideration to whether or not all are participating—the Canadians, You really only have one choice. they believe that this individual is and otherwise. And so you have a very I say, Madam President, I will not be going to be able to do what we all dynamic long distance market. supporting the nomination of Mr. promised we were going to try to do However, the monopolies at the local Klein. I will be voting against Mr. when we voted for and took credit for level persisted, and those monopolies Klein. I hope that other Members who this very significant piece of legisla- were intended for the ‘‘public conven- are wondering what this debate is tion in 1996. ience and necessity’’—that is a phrase about will give it some very serious I yield the floor. hardly heard in the halls of our Na- thought. They will, as well, be hearing Mr. HOLLINGS. Madam President, tional Government—in order for the from consumers in the not-too-distant let me first thank my colleague, the advantages, the services, the oppor- future, if they haven’t already, ‘‘I re- distinguished Senator from Nebraska. tunity, the advancements to be member, Senator, when you were de- He has been very, very participatory brought onto the market and enjoyed bating this. Didn’t I recall you issued a over the years. It actually took us by the public, we instituted the Fed- press release saying that this legisla- about 4 years to get the Telecommuni- eral Communications Commission. We tion was going to produce lots of new cations Act of 1996 to a vote. On both had the old rulings coming out with re- competition and reduction in price, and sides of the Capitol and both sides of spect to getting licenses to carry, and improvement and quality of service? the aisle we had a very, very deliberate otherwise, at the State level, at ‘‘pub- Where is the competition? I still don’t discussion and treatment of the par- lic convenience and necessity.’’ And we see it. Where is the promised price re- ticular issues involved. No one under- intentionally gave these seven Bell op- duction? Where is the promised bene- stood better the thrust of trying to de- erating companies a monopoly. We fits to the consumers that were sup- regulate and bring about competition said: You provide the services and we posed to be coming our way at a thea- than Senator KERREY of Nebraska. I will protect you so that you are not ter near you?’’ Instead, what we have is praise him publicly, once again, for his bothered with the competition. On the price increases. leadership and the inclusions that he contrary, if you get those services to Mr. Klein, in his rather unfortunate, had contained in the final act itself. the people, we will give you a profit as he describes it, letter in response to Referring to that final act, Senator that averages around 12 percent. Some- a question by a Member who opposed KERREY tells exactly what is at stake times, in hearings, it went above that. giving the Justice Department author- here—this institution. The U.S. Senate You find them now to have made one ity over antitrust matters when it seemingly has no historical memory. heck of a lot of money. But my crowd came to telecommunications, Mr. What we really had on course during is down in Buenos Aires, and I just read S7674 CONGRESSIONAL RECORD — SENATE July 17, 1997 this past week that Bell South is in- and I got everything I wanted. Well, You get Senators running around, ‘‘I vesting in Brazil, which has some 20 this was December 1995, right after don’t know what is the matter with our million people. That is way more than that 1994 election. Speaker GINGRICH on bill. We want to open up the market. the 3.6 million that we have in my lit- the House side said, ‘‘If he got every- Let market forces operate.’’ You have tle State of South Carolina. So more thing he wanted, that bill is deader monopolies determined. Here is an- power to them. They have been well- than Elvis.’’ The leader on the Senate other reason here how SBC keeps rivals operated. They have that monopoly. side, Senator Robert Dole, said, ‘‘I am away. ‘‘In Oklahoma, competitors must That was a big headache that we had in not going to call it.’’ pay $19.13 per line for SBC’s unbundled trying to bring about deregulation, de- Of course, I had the duty, during the network, but SBC’s retail rates are regulation, deregulation. ensuing weeks through into Christmas $14.34 a month.’’ This crowd up here in the House and and Christmas week, and all through So, if they are going to charge 20 per- Senate have no idea of the struggle the month of January, of holding the cent again more than anybody coming that we had and the expertise that line. in the market, anybody coming in the went into the drafting of this particu- I describe that to my colleagues be- market is going broke, and there is a lar Telecommunications Act of 1996, to cause I want them to know that every loss by another long distance carrier. make sure that that monopolistic con- little thing in that bill was worked out AT&T is trying to get in this market. trol, that checkpoint, that bottleneck, with everyone and to their satisfaction MCI is trying to get in the other long that choke-point was broken up, so and, finally, of course, to the Speaker distance market. They are losing al- that competition really could ensue. and the Majority Leader Dole, because ready $800 million trying to just break And we had what we call the ‘‘check- the bills were called in February of last it. list.’’ And I can see that being worked year and passed both Houses and were Third, legal attacks. How SBC keeps on late nights around the clock, over signed by the President. rivals away. Legal attacks. SBC has Thanksgiving holidays, working, of Now, in coming about the breakup of appealed even basic decisions by State course, with the Bell operating compa- the monopolies, to make sure—because regulators. For example, SBC appealed nies, we would meet—I forgot my days you can’t get competition going unless a Texas decision to let Teleport Com- now— there was one on Friday and the Bell companies go along. I can tell munications Group provide competing long distance on Monday. The long dis- you here and now, if I ran a monopoly, local service. SBC contends Teleport tance may have been on Friday and the I would continue investing in Buenos had not met State standards. Bell operating companies on Monday. Aires and all like that for my stock- Madam President, I cite this from But I set up a system, those years holders, and what have you, and mak- this particular article because it’s mo- back, as the chairman of the Commit- ing money, and just hold on and appeal mentary, it’s timely. What really hap- tee of Commerce, Science, and Trans- and drag feet and everything else. pens is not just MCI and AT&T, but portation, whereby everything would Let me emphasize that is just exactly others in these monopolies, with their be operated on top of the table. We what has happened, why this particular lawyers, are bringing cases to test the would bring all sides in. They would all nomination ought to really be rejected. constitutionality of the Telecommuni- cations Act of 1996. The one thing they be considered and they would be told It is a sort of sad day when you work said, ‘‘Let’s stop the bickering. Can’t where we were and what we were nego- as hard as you do to get something we work in a bipartisan nature and get tiating and why. done for the administration, and the I deemed that nothing was going to administration sends up an appoint- things done?’’ The one thing done this be done, because there were all kinds of ment of this kind that upsets the en- past Congress on a bipartisan basis was attempts during the 1970’s and 1980’s— tire apple cart. a 95 to 4 vote for the Telecommuni- and I had learned from hard experience Let me tell you, Madam President, cations Act of 1996—totally bipartisan. that you had to have a bipartisan bill here it is, just last weekend, ‘‘MCI Wid- I think those things ought to be under- and you had to have all the parties in, ens Local Market; Loss Estimate,’’ in stood and how they came about, and and no last minute surprises, or any- the July 11 Wall Street Journal. Some how long and hard we worked over thing of that kind. So credit must be $800 million—saying its losses from en- them. Now, in getting about this particular given to the various staffs on the Re- tering that business could total $800 task, I communicated with President publican and Democratic sides, work- million this year, more than double its Clinton and the White House and asked ing around the clock, to fathom the original estimate. Why? Because here him if he could note in a letter just ex- particular provisions that are in issue is an analysis right here again in the actly what his concerns were. I want to in this particular appointment. Wall Street Journal, over the weekend, I know that some don’t want to hear, when they announced that their shares make sure staff gets copies of every and others don’t care and they don’t dropped 17 percent. I only quote Chris one of these because they are not get- listen to this particular background. Mines, senior analyst of Forester Re- ting my file. And every time I get But it is a very interesting thing be- search, Inc., in Cambridge, MA, who ready to talk, I just need a few notes. cause it was worked out and finally said, ‘‘MCI’s complaints are totally jus- I can’t even get a few notes. They are voted upon by 95 Republican and Demo- tified. In general, I think local carriers back there hidden away. So you get cratic Senators when it passed. There are dragging their feet, using every your copies. Remember this: I have a White House was a strong majority over on the means at their disposal to protect their letter, Madam President, dated October House side. monopolies.’’ 26, 1995, from President Clinton. I ask It was a bill that, interestingly, when Now, Madam President, it is just not unanimous consent that this letter be we finally agreed in December of 1995, the news articles in the Wall Street printed in the RECORD. our distinguished friend, the Vice Journal. Take this week’s Business There being no objection, the mate- President of the United States, heard Week magazine, on page 33, ‘‘Why SBC rial was ordered to be printed in the that we in conference had gotten an Shouldn’t be the First Bell in Long RECORD, as follows: agreement, and he came on the NBC Distance.’’ Rather than reading the en- Evening News program right in the tire article, little squibs encapsulate THE WHITE HOUSE, Washington, DC, October 26, 1995. middle of the news program. I hap- those reasons. ‘‘How SBC keeps rivals Hon. ERNEST F. HOLLINGS, pened to be listening when I had gotten away: one, excess charges. AT&T need- Ranking Member, Committee on Commerce, back to the office. What occurred was ed customized routing to provide direc- Science, and Transportation, U.S. Senate, that Tom Brokaw said, ‘‘Wait a tory assistance to its customers in Washington, DC. minute, ladies and gentlemen, we have SBC’s territory. SBC’s initial quote is DEAR FRITZ: I enjoyed our telephone con- a newsbreak from the Vice President of $300 million. AT&T says other Bells versation today regarding the upcoming con- the United States.’’ I was worried that charge $1 million to $2 million.’’ That ference on the telecommunications reform something may have occurred to the bill and would like to follow-up on your re- is rather than the $300 million. quest regarding the specific issues of concern President, but it was not that at all. He So it is perfectly obvious that they to me in the proposed legislation. came on and said, ‘‘We finally got my sit there and make this outrageous As I said in our discussion, I am committed information superhighway agreed upon charge and that holds up everything. to promoting competition in every aspect of July 17, 1997 CONGRESSIONAL RECORD — SENATE S7675 the telecommunications and information in- Attorney General’’—whatever you and Phil Verveer for having invited me. I can dustries. I believe that the legislation should want to call Mr. Joel Klein—‘‘in our tell from reading the program and looking at protect and promote diversity of ownership camp, rather we can hold on and con- the impressive array of speakers that this and opinions in the mass media, should pro- has been a comprehensive and informative tect consumers from unjustified rate in- tinue making out like gangbusters for conference on some cutting-edge issues in creases for cable and telephone services, and, years to come.’’ the communications industry. In fact, when in particular, should include a test specifi- Now, as a result of the President’s I realized that I was going to be the last per- cally designed to ensure that the Bell compa- letter, we finally have section son to speak I was reminded of Adlai nies entering into long distance markets will 271(c)(1)(A) of the Telecommunications Stevenson’s quip in a similar situation when not impede competition. Act, and I ask that the statement he said, ‘‘We’re at the point in the program Earlier this year, my Administration pro- under ‘‘presence of the facilities-based where everything that could be said has been vided comments on S. 652 and H.R. 1555 as competitor, including both residential said but, unfortunately, not everyone has passed. I remain concerned that neither bill had a chance to say it.’’ So, I’m especially provides a meaningful role for the Depart- and business subscribers, having a fa- appreciative that so many of you have ment of Justice in safeguarding competition cilities-based competitor for both busi- stayed around to hear my closing remarks before local telephone companies enter new ness and residential’’—which was pro- and I hope that, despite the odds, I may be markets. I continue to be concerned that the scribed in this law, and there are no ifs, able to add something to the overall discus- bills allow too much concentration within ands and buts how it is written—I ask sion. the mass media and in individual markets, unanimous consent that it be printed Let me start by stating the obvious: what which could reduce the diversity of news and we’re going through right now in the com- in the RECORD, just that section is nec- information available to the public. I also munications field is truly extraordinary. believe that the provisions allowing mergers essary and not the entire act, of Technology, globalization, and last year’s of cable and telephone companies are overly course. legislative, executive, and administrative ac- broad. In addition, I oppose deregulating There being no objection, the mate- tions have come together to create an envi- cable programming services and equipment rial was ordered to be printed in the ronment of rapid change, great opportunity, rates before cable operators face real com- RECORD, as follows: and considerable risk. We all know that ten petition. I remain committed, as well, to the (A) PRESENCE OF A FACILITIES-BASED COM- years from now things will be very different other concerns contained in those earlier PETITOR.—A Bell operating company meets in the communications industry; we just statements on the two bills. the requirements of this subparagraph if it don’t know how they’ll differ. From our per- I applaud the Senate and the House for in- has entered into one or more binding agree- spective at the Antitrust Division, we have cluding provisions requiring all new tele- ments that have been approved under section one, overarching goal—to maximize competi- visions to contain technology that will allow 252 specifying the terms and conditions tion. To be more concrete about that, as I parents to block out programs with violent under which the Bell operating company is see it, the ideal result would be a variety of or objectionable content. I strongly support providing access and interconnection to its different conduits—be it wire, wireless, retention in the final bill of the Snowe- network facilities for the network facilities cable, or what have you—that link people Rockefeller provision that will ensure that of one or more unaffiliated competing pro- with all kinds of content—be it voice, video, schools, libraries and hospitals have access viders of telephone exchange service (as de- audio, computer, and so on. But envisioning to advanced telecommunications services. fined in section 3(47)(A), but excluding ex- an ultimately desirable competitive market I look forward to working with you and change access) to residential and business structure is not the difficult part here: your colleagues during the conference to subscribers. For the purpose of this subpara- what’s really hard is how we get there in a produce legislation that effectively addresses graph, such telephone exchange service may market that’s transitioning from regulation these concerns. be offered by such competing providers ei- to competition. And that is the journey that Sincerely, ther exclusively over their own telephone ex- we in the Antitrust Division have embarked BILL CLINTON. change service facilities or predominantly upon—at a somewhat dizzying pace. I might Mr. HOLLINGS. Madam President, I over their own telephone exchange facilities add, since the passage of the 1996 Telecom in combination with the resale of the tele- Act a little more than a year ago. quote the second paragraph: Before I focus in on some of the specifics, communications services of another carrier. As I said in our discussion, I am committed let me give you a sense of the breadth of For the purpose of this subparagraph, serv- to promoting competition in every aspect of what we’re dealing with. In the first place, ices provided pursuant to subpart K of part the telecommunications and information in- we’ve seen a flood of radio mergers now that 22 of the Commission’s regulations (47 C.F.R. dustries. I believe that the legislation should the 1996 Act has authorized far more liberal 22.901 et seq.) shall not be considered to be protect and promote diversity of ownership ownership rules. I’m advised that there have telephone exchange services. and opinions in the mass media, should pro- been over a thousand such mergers in the tect consumers from unjustified rate in- Mr. HOLLINGS. Madam President, past year and about 150 of them have been creases for cable and telephone services and, we had a glowing candidate for the brought before the Division, principally in particular, should include a test specifi- Acting Assistant Attorney General in through the hart-Scott-Rodino process, but cally designed to ensure that the bell compa- Joel Klein on March 11, 1997. He went also through independent inquiry in several nies entering into long distance markets will non-reportable transactions. We’ve con- not impede competition. down to a class, a legal work seminar, on March 11, and the title of the semi- ducted extensive investigations in many of I emphasize this because I had the nar was ‘‘Preparing for Competition in these cases and, to date, we’ve sought charge from the President himself. divestitures in a handful of mergers. And a Deregulated Telecommunications Now you have the President’s nominee while that’s important in terms of the econ- Market.’’ omy the real story here is how much con- coming and refuting all of that, be- Joel Klein, on page 9, I read here, and cause if you want to know where rates centration is occurring. In short, the con- I quote: ‘‘Now let me add a few words centration envisioned by Congress is taking will increase, instead of competition, about how we will apply this standard place, no doubt allowing the industry to we are going to get consolidation, and to our BOC applications under section achieve some important efficiencies. And so instead of a competitive place in the 271 of the act. Our preference, though long as this consolidation doesn’t erode com- market, you are going to get fixes all we recognize that it may not always petitive opportunities in any market—and, around. This crowd has been operating occur, is to see actual broad-based with the application of sound antitrust prin- ciples as a guide. I don’t think it will—then monopolies for, lo, decades upon dec- business and residential entry into a ades. They know how to do it. They these mergers may ultimately strengthen local market.’’ the position of radio in the overall commu- have a hard time learning. I ask unanimous consent that this AT&T in the 1980’s pared down by a nications industry. And, frankly, that’s all particular speech be printed in the to the good. third the size of AT&T after the modi- RECORD in its entirety. So I am not Beyond radio, we’re also experiencing con- fied final judgment in 1984. But they quoting out of context. solidation in other areas of the communica- made twice the profit after they finally There being no objection, the mate- tions industry. The FCC is still evaluating learned how to compete. Our friends, rial was ordered to be printed in the what limits to place on broadcast ownership the Bells, have yet to come and learn but, in other areas, we’ve already seen sig- RECORD, as follows: nificant movement. There’s been a major that. In fact, I strongly advised from PREPARING FOR COMPETITION IN A these happenings that they have no Bell Company/cable merger—U.S. West/Con- DEREGULATED TELECOMMUNICATIONS MARKET tinental Cable—which the Division cleared idea of competing; they have every (By Joel I. Klein, Acting Assistant Attorney with some modification to the original deal. idea of holding onto the monopoly as General, Antitrust Division, U.S. Depart- And we’ve also seen three major telephone long as they can. ment of Justice) mergers—SBC/Pactel, which we cleared with- Madam President, ‘‘If we can get an First, I want to say that I’m delighted to out objection several months ago, and Bell Assistant Attorney General or Deputy be here today and I’m grateful to Joe Sims Atlantic/NYNEX and MCI/British Telecom, S7676 CONGRESSIONAL RECORD — SENATE July 17, 1997 which are both still pending before us. These ence of several states in paving the way for time when action is complete. It is one of the cases raise important questions about poten- competition in the market for local tele- consequences of the limitations of the tial competition, and also about inter- phone service. Building on that experience in human intellect and of the denial to legisla- national interconnection where market con- 1995, the Antitrust Division, along with tors and judges of infinite prevision.’ ’’ 1 ditions may differ significantly in different Ameritech, AT&T, and many other parties Against the backdrop of this call for hu- countries and we have expended, and will proposed, on a trial basis, a waiver of the mility, let me now go on to highlight the continue to expend, considerable time and MFJ, allowing Ameritech to offer in-region, problems in making the necessary regu- energy analyzing them and other such merg- long distance service in return for compli- latory judgments by examining the four ers that may come before us in the future. ance with some measures designed to open transitional steps that I just mentioned. Now, in the time that remains, I’d like to its local market to competition and a dem- First, in order to get even some local com- focus in on one particularly challenging as- onstration that actual competitive opportu- petition, at least for some period of time, pect of this journey through the communica- nities were expanding. This proposed waiver, competing carriers will have to either pur- tions industry and that is the deregulation like the 1996 Act, contemplated the creation chase service from the LEC at wholesale and of telephone services in this country. This of new, facilities-based, local service as a attempt to compete with the same LEC by was probably the most significant part of the way to bring real competition to the local reselling at retail or it will have to use the 1996 Act and it raises enormously difficult telephone market. The Act seeks to do this LEC’s facilities—switches, loops, and the questions, questions that we at the Division on a much broader scale, and in so doing, like—in whole or in part. In either case, have, to some degree, been dealing with calls for a series of transitional steps. Get- someone has to set a price for the product— under the Modified Final Judgment, or the ting these steps right is no easy task, and al- be it wholesale service or the unbundled ele- ‘‘MFJ,’’ that resulted in the break-up of though they may not immediately lead to ments. That price in turn can have impor- AT&T and the creation of seven Regional the type of comprehensive facilities-based tant repercussions—set too high, it can un- Bell Operating Companies, or ‘‘RBOCs,’’ as service that we hope to see over time, we all fairly burden new entrants and make local they are called, with severe restrictions on realize that we should not let the perfect be competition impossible; and set too low, it what they could do beyond providing local the enemy of the good here. can give new entrants a competitive advan- telephony within their own service areas. As As I see it then, implementing the deregu- tage at the expense of the incumbent LEC. a result of that lawsuit, there can be little latory vision set out in the 1996 Act involves What this all means is not just that one of doubt that the Nation has seen significantly four basic things: (1) a set of rules that will these companies may make a little (or even improved long distance competition, accom- allow new entrants into local markets—the a lot) more than the other but that long- panied by the innovation and downward pres- so-called interconnection rules adopted by term competitive conditions can be seriously sure on prices that results from such com- the FCC last August and which have now affected by these pricing decisions. This par- petition. That is not to say that everything’s been stayed in significant part by the Eighth ticular concern has led to the Eighth Circuit perfect in long distance—even more competi- Circuit: (2) another set of provisions that es- litigation in which the incumbent LECs are tion would certainly be welcome—but it’s tablish the criteria necessary to facilitate challenging the FCC’s pricing methodology important to recognize how far we have local competition and with which the RBOCs (as well as the Commission’s authority to come when we have three well-established must comply before they are allowed to pro- impose a certain pricing methodology to competitors, hundreds of other resellers, and vide long distance and one-stop shopping begin with). Fortunately, at least from our four fiber-optic systems wiring the country, services: (3) access reform, designed to re- point of view, most of the States have fol- with a fifth in progress. I can tell you from duce the price paid to local carriers for origi- lowed the Commission’s pricing methodology my personal dealings with officials from nating and terminating long distance calls and so, while the litigation goes forward, the other countries that, as a result of the AT&T so that this price will reflect the actual cost actual prices for wholesale and unbundled case, the U.S. is positioned for global com- of providing the service: and (4) a universal elements may not be materially different re- petition in a way that is the envy of our cur- service plan that will eventually replace the gardless of who ultimately prevails in the rent trading partners—whose telephone com- implicit subsidies contained within the cur- Eighth Circuit. I say that’s fortunate from panies will be our future competitors, I rent regulated telephone service system with our point of view because we supported the might add. explicit and competitively neutral subsidies. FCC’s approach as a sound pricing methodol- But now we are charged with taking the As to this last point, I should quickly ex- ogy for stimulating efficient local entry. next steps—in particular, the Congress, to- plain that the current system requires some The second area where some difficult regu- gether with the leadership provided by the users to pay above-cost rates to subsidize latory decisions must be made in this de- Clinton Administration, established a statu- other users who are served at rates below regulatory process has to do with the issue of tory framework that is designed to open up cost: the 1996 Act calls for these implicit sub- when a particular RBOC is permitted to local telephone markets to competition and sidies to be made explicit and to be paid for enter the long distance market. Under the that would allow the local companies to through a competitively neutral universal statute, this is a state-by-state determina- move into in-region, long distance service service fund. Until we fully implement this tion, made by the FCC, with key inputs from for the first time. The goal of this process is mandate, some local exchange carriers (or the state regulatory agencies and the De- to have full-scale competition in telephony LECs, as they are called) may be required to partment of Justice. Here, too, you can read- throughout the nation. In a nutshell, con- bear the costs of serving these customers at ily see the significance of the trade-offs in sumers should have as many as possible, but uneconomic rates and/or we will continue to the regulatory decision. If you let the RBOC at least several local options, long distance see inefficient pricing and entry signals into long distance prematurely, two bad options, and, ultimately, combined local and which will tend to distort competitive oppor- things can happen. First, you may under- long distance options (one-stop shopping, if tunities and thereby hurt consumers. mine the chance to ensure a competitive you will). Once again, knowing where we Now, as I see it, the paradox of this kind of local market since once in long distance, the want to get is the easy part: it’s getting deregulatory effort is that it depends upon a RBOC’s incentive to cooperate with its com- there that’s hard. And to accomplish that series of regulatory steps—all taken, to be petitors will diminish—if not altogether, at goal, the statute puts in place a variety of sure, in the name of deregulation—and those least significantly. And second and deriva- interrelated steps and assigns responsibility regulatory steps, in turn, can significantly tively, a premature entry into in-region, to three separate agencies—the FCC, the var- affect the long-term prospects for full-scale long distance service gives the RBOC an un- ious state regulatory commissions, and the competition in telephony. There is no for- fair advantage in the offering of one-stop Department of Justice. This mix of players, mula or equation that one can look to in shopping since it can readily combine its I would suggest, sensibly reflects the fact order to get these things right. They involve local service with one of several long dis- that telephone regulation has historically the exercise of discretion by government tance services easily available to it in the been a shared function of the FCC and the agencies, which in turn requires careful, marketplace, while its potential competitors state agencies and, quite naturally, both of sound judgments. And, given that these pre- may not have nearly so easy a time combin- them are necessary to the deregulatory proc- dictive judgments are necessarily based on ing their long distance service with local ess as well. And we also belong there, essen- incomplete information, we should all be service that has heretofore been unavailable tially because the goal of the process is com- somewhat humble in second-guessing those to them. On the other hand, if you keep the petition and we have expertise in that area who have to make the calls. Interestingly, RBOC out of long distances for too long a pe- generally and with respect to telephony, in the Fifth Circuit, quoting Justice Cardozo, riod, you risk giving the long distance car- particular, because of our extensive involve- made just this point about a quarter of a riers an undue competitive benefit, since ment in the AT&T case. century ago in a case evaluating an FCC reg- only they are able to offer customers both The vision of the 1996 Act was premised on ulation prohibiting telephone companies local and long distance service for the period a simple formula: if the regulatory environ- from offering cable service in their regions, of time that the RBOC is denied entry, there- ment were different, the market for local explaining that: ‘‘[i]n a complex and dy- by giving them a first mover advantage. Not telephone service—previously thought to be namic industry such as the communications surprisingly in this environment both kinds a ‘‘natural monopoly’’—would be subject to field, it cannot be expected that the agency the discipline of competition, bringing down charged with its regulation will have perfect 1 General Telephone Co. of Southwest v. United prices and increasing quality and choices for clairvoyance. Indeed, Justice Cardozo once States, 449 F.2d 846, 863 (5th Cir. 1971) (quoting Ben- consumers. On this point, there was wide- said, ‘Hardship must at times result from jamin Cardozo. The Nature of the Judicial Process spread agreement, supported by the experi- postponement of the rule of action till a 145 (1921)). July 17, 1997 CONGRESSIONAL RECORD — SENATE S7677 of carriers—local and long distance—feel needs any services, such as repair of her priate action. We don’t have any dog in this very strongly about the timing of RBOC phone line, she gets it from the RBOC in a fight—just a desire to ensure full-scale com- entry into long distance, even to the point of timely and effective manner. The truth is petition in telephony in an enduring fashion. purchasing significant advertising to make that, no matter how effectively systems are Once that occurs, the market can pick the their respective cases. designed and even assuming complete good winners and losers. For our part at the Antirust Division the faith on the part of the RBOC, this kind of Let me now quickly turn to the last couple issue of RBOC entry into long distance has transition can have a lot of bugs in it. Once pieces of this deregulatory puzzle—access re- been a special focus. Under the statute, we we see successful full-scale entry, however, form and universal service. These areas, are expressly charged with evaluating each then we will have reason to believe that the which are related, also raise long-term com- of the fifty state applications and our com- local market is open to competition. This petitive concerns. Lowering access charges petitive assessment must be given ‘‘substan- approach doesn’t require the shift of any par- to cost is desirable in a competitive market tial weight’’ by the FCC. What is probably ticular amount of market share; nor should but, in the process, there are at least a cou- most notable about the process is that we it take very long once there is true broad- ple of things you need to be alert to—first, are authorized to make our assessment based entry into the RBOC’s market. Rather, you want to ensure that no one gets an ‘‘using any standard the Attorney General using a metaphor that I’ve become quite undue competitive advantage during the considers appropriate.’’ Now, given that fond of, we just want to make sure that gas transition process: and second, you need to broad swath the first thing we needed to do actually can flow through the pipeline; and make sure that the incumbent LEC is fairly is to establish a concrete standard so that the best way to do that is to see it happen. compensation for any implicit subsidies in applicants would know in advance how we’d This approach—i.e., looking for tangible the system that it has to bear and which be evaluating them. We also needed to relate entry—also has two additional virtues: first, have previously been supported by above- our standard to the other, specific provisions once there is such entry, the new entrant cost access charges. That is where the uni- of the statute—such as the 14-point checklist certainly should have an incentive to make versal service funding system kicks in. It is the Section 272 separate-subsidiary require- the process work, since any new customers designed to pick up these kinds of subsidies ments, and the Track A and Track B entry that are ill-served will blame the new en- so that, as I said earlier, competition can go provisions, as well as the public interest test trant. This will mean that the new entrant is forward without unfairly burdening those that the FCC is charged with applying. In not likely to be gaming the system and, if players that have to bear the costs of such order to meet this challenge, we engaged in there are problems, the reason will be that subsidies. an extensive inquiry, soliciting comments the local market, for some real-world rea- These kinds of issues can be enormously from all interested parties and meeting with son—malign or benign—just isn’t ready for complex—first, how do you sort out implicit virtually all the affected players. We re- competition yet. And second, if broad-based subsidies as well as any historic costs that a ceived almost seventy-five comments and competition appears to be working smooth- LEC is entitled to recover in a way that is have met with countless industry officials. ly, as we certainly hope it does, it will estab- fair and, second, how do you then collect the The upshot of this process has been to lish a benchmark against which future, post- money necessary to pay these costs through reach the following conclusion: Our basic RBOC entry into long distance, performance a competitively neutral system. If you’ve standard is that before an RBOC should be can be measured. In other words, if competi- seen the FCC’s Notice of Proposed Rule- allowed to enter long distance, it must be tors can obtain what they need, and what making on Access Charges—a rulemaking able to demonstrate that its market is truly they are legally entitled to get from the that is ongoing as we speak—you probably open (which, I should make clear, is different RBOC prior to its entry into long distance, have some idea of how complicated this from saying its market is fully competitive). but not after it then we will have reason to whole process is. The Commission has raised Before I put meat on the bones of that stand- suspect that something is wrong and we will important questions about rate structure, ard let me first say how we think it inte- be able to pursue appropriate remedial ac- about rate levels—including possible mar- grates with the remainder of Section 271. We tion. ket-based as well as prescriptive methods for believe that the other provisions—the check- Now, an even harder problem arises when dealing with these levels—and about rate de- list the facilities-based requirement the sep- the RBOC claims that it’s done everything it averaging, which means allowing different arate-subsidiary requirement and the option can to make entry opportunities fully avail- access charges for different customers. Any- of Track B—are all necessary, though not able but, for some reasons, no new entrant way, the trick is to do this in a way that sufficient, to support entry. These require- has decided to go forward in a significant hastens competitive opportunities but that ments, almost as their names imply, in- way. In these circumstances, we will attempt is fair to all parties. I am confident that the volves fixed points but, by themselves are to determine what the problem is. And, pure- Commission will do just that. not sufficiently dynamic to ensure that real ly at the level of speculation, one could One final point to remember as we move competition can take place. That’s where we imagine a variety of explanations. For exam- into a deregulated environment is that the think our approach comes into play; we view ple, the prices being charged by the RBOC Telecom Act explicitly keeps the antitrust it as the dynamic part of the equation look- could be too high to allow effective competi- laws in force. This serves not only to guard ing to ensure that the wholesale support sys- tion any time soon or its systems may be too against any anticompetitive consolidation, tems for opening up local markets are not uncertain for the new entrant to take the but also against any other practices that simply claimed to be in place, but that they risk of large-scale entry, or the RBOC may violate the antitrust laws. Once regulation will actually work in fact are scalable, and not be cooperating with its competitors by begins moving off center stage, we are pre- have been beachmarked, so that competition providing the necessary wholesale support pared for the possibility that antitrust en- will be real and not marely theortical. We systems. One the other hand, it may be that, forcement may be necessary to ensure full think this approach is the best way to ensure despite reasonable interconnection terms, and fair competition in these markets. Espe- competitive effectiveness which we take to fully available support systems, and so on, it cially in network industries, questions of ex- be our express charge under the statute and simply may not make economic sense for a clusive dealing, control over essential facili- we think it dovetails nicely with the ‘‘public new entrant to come into any given market ties and the use of market power can raise interest’’ standard that the FCC is charged on a large-scale basis. Or, a more elaborate significant antitrust concerns. As a result I with applying in making the ultimate deci- version of this problem may be that, if the intend to make sure that the Division keeps sion under 271 whether to approve a particu- long distance carriers think they are better fully abreast of the developments in the mar- lar application. More broadly, we believe off preventing the new competition by the ketplace and is ready to take any action nec- that our approach fits well within the over- RBOC in their market and also think that essary to prevent abuses of market power or all statutory scheme adopted by Congress, the best way to achieve this result is to stay other anticompetitive practices. nicely blending the fixed and dynamic re- out of the local markets, they may simply Let me close my emphasizing that while quirements to reach an effective result. choose not to enter. On the third hand, if you I’ve tried to accurately portray at least some Now, let me add a few words about how we will, it may be that some other factor—such of the difficulties set in motion by last will apply this standard to RBOC applica- as a state statute or local regulation—is year’s Telcom Act I’m very optimistic about tions under Section 271 of the Act Our pref- making large-scale entry infeasible or, at the endeavor we have embarked upon. I’ve erence, though we recognize that it may not least, very unattractive. These are some pos- seen some recent stories in the press com- always occur, is to see actual broad-based— sibilities, and I’m sure there are others as plaining that consumers haven’t yet received ie, business and residential—entry into a well. the benefits of the 1996 Act but frankly, I local market. This kind of entry requires not In any event, we will carefully examine the think such expectations are unrealistic. only appropriate agreements between the facts in any case where there isn’t full-scale We’ve had a regulated system of telephony in RBOCs and their potential competitors, but entry to determine what’s actually going on. this country for over a century; it won’t be also the wholesale support systems nec- In such circumstances, of course, we will ul- deregulated in a year and even after it is de- essary to ensure that when a current cus- timately have to make a fact-based deter- regulated, it’ll take time for competition to tomer is switched from the RBOC to the new mination on a case-by-case basis. But I want wring all the fat out of the system so that competitor, the switching process occurs to be very clear about one thing: we will pay consumers truly get the best service at the quickly and effectively, so that the customer careful attention to see whether any party is lowest prices. But, if we stay the course, I’m is satisfied and its new phone company is not trying to game the system for its own paro- confident that we will ultimately realize how blamed for messing up the transfer—or that, chial reasons. And, if we think that’s what’s wise this legislation was and how much it after a customer has been switched and she going on, be assured that we’ll take appro- will benefit our people. I say that because S7678 CONGRESSIONAL RECORD — SENATE July 17, 1997 history has taught us, time and time again, You have suggested that Section 271 gives FCC should reject that application? If so, that deregulation is difficult and transitions you ‘‘broad swath’’ to urge whatever position wouldn’t that give the Department’s rec- can be costly, but if our Nation’s economy is the Antitrust Division likes. Congress, how- ommendation ‘‘preclusive effect,’’ something to be as strong as it can be—indeed, as ever, gave the Attorney General a role in ad- that the Act specifically prohibited? strong as it must be in an increasingly vising the FCC with respect to public inter- 12. You have also stated that the checklist, globalized market—deregulation is not only est issues because of the Department’s anti- the facilities-based requirement, the sepa- desirable, it’s essential. In short, history is trust expertise. See, for example, Sen. Conf. rate subsidiary requirement and the option on our side. A little patience is all that’s Rep. 104–230 for a list of some antitrust of ‘‘Track B’’ (the statement of terms and needed. standards that might be used. A ‘‘gas in the conditions) are all ‘‘necessary, though not Mr. HOLLINGS. I thank the distin- pipeline’’ standard is plainly unrelated to sufficient, to support entry. What more must guished Chair. the antitrust laws and, even worse, violates a BOC demonstrate to obtain the Depart- Madam President, it is very interest- congressional intent that the checklist ment’s support? should be the only measure of when local ing. I want to refer back to this be- 13. Do you believe that Track B can be used markets are open. Simply stated, the Attor- only if no one has requested interconnection cause that is in regular type. ‘‘Though ney General’s consultation on antitrust is- under Track A? we may recognize that it may not al- sues must be framed by the specific statu- 14. Can a BOC rely on Track B if it has re- ways occur’’—‘‘though we recognize tory standards for BOC entry, which pre- ceived interconnection requests from poten- that it may not always occur.’’ We are clude anything approaching a ‘‘metric test’’ tial competitors but faces no ‘‘competing going to refer back to that in just a few like the one Congress rejected. provider’’ which is actually providing tele- More fundamentally, the basic point of the phone exchange service to residential and minutes because our distinguished Telecommunications Act is that regulators chairman of the Communications Sub- business customers predominantly over its should stand aside and let market forces own facilities? committee, Senator CONRAD BURNS, of work once fair competition is possible. Hold- 15. What if requesting interconnectors Montana, wrote Mr. Joel Klein on May ing up competition in one market because under Track A do not ask for, or wish to pay 15, 1997. there is not enough competition in another for, all of the items in the checklist? Can the I ask unanimous consent that a copy market makes no sense. It is particularly BOC satisfy the entry test by supplementing of this letter be printed in the RECORD harmful in this context, for local telephone their interconnection agreements with a fil- in its entirety. competition may be slow in coming to rural ing under Track B to cover at least all re- states for reasons that have nothing to do There being no objection, the mate- maining items in the checklist? with BOCs’ steps to satisfy the checklist. If Your prompt attention to these questions rial was ordered to be printed in the so, your approach would prevent rural con- would be helpful to the Subcommittee. RECORD, as follows: sumers from realizing the benefits of long Sincerely, U.S. SENATE, distance competition that will be available CONRAD BURNS, Washington, DC, May 15, 1997. to residents of urban states, just because po- Chairman, Mr. JOEL I. KLEIN, tential local competitors want to enter prof- Senate Subcommittee on Communications. Acting Assistant Attorney General, itable urban markets first. Antitrust Division, As you prepare to discharge your respon- Mr. HOLLINGS. Madam President, Department of Justice, sibilities under the Act, I would appreciate you can read the entire letter. But I Washington, DC. your answers to the following questions. can see the thrust of the letter by this DEAR MR. KLEIN: I have written to the Sen- This will enable the Subcommittee on Com- language here, and I quote on page 2. ate Majority Leader requesting that a hold munications to carefully monitor implemen- Congress, however, gave the Attorney Gen- be placed on your nomination to be Assist- tation of this portion of the Telecommuni- eral a role in advising the FCC with respect ant Attorney General of the Justice Depart- cations Act. to public interest issues because of the De- ment’s Antitrust Division. I have concerns 1. In your speech you used the following partment’s antitrust expertise. See, for ex- as to whether your views of the implementa- terms—‘‘real’’ and ‘‘broad-based competi- ample, House conference report 104–458 for a tion of the Telecommunications Act of 1996 tions’’, ‘‘actual, broad-based entry’’, ‘‘true list of some antitrust standards that might are in accordance with Congressional intent. broad-based-entry’’, ‘‘tangible entry’’, Section 271(d)(2)(A) of the Telecommuni- ‘‘large-scale entry’’, and entry on a ‘‘large- be used. A gas-in-the-pipeline standard is cations Act of 1996 gives the Department of scale basis’’. What do these terms mean to plainly unrelated to antitrust laws, and, Justice a consultative role when the Federal the Department? even worse, violates Congressional intent Communications Commission considers peti- 2. How many residential customers have to that the checklist should be the only meas- tions filed by the Bell Operating Companies be served by a competitor to meet the De- ure of when local markets are open. (BOCs) for authorization to provide in-region partment’s entry test? We in the majority who wrote this interLATA service. This summer the FCC 3. How many business customers have to be particular bill would demur very, very served by a competitor to meet the Depart- will begin ruling on these applications and I strongly from that wording by our dis- have several concerns about how both the ment’s entry test? 4. Does there have to be more than one tinguished friend, the Senator from Department and the FCC will implement Montana, in this particular letter. Section 271 of the Act. As you know, both competitor in the local exchange market to the House and the Senate, in establishing a meet the Department’s entry test? What occurred is that the nominee, 5. Does a BOC have to face competition test for BOC entry into the interLATA busi- Joel Klein, in the talk, he talked about from AT&T, MCI or, Sprint to meet the De- ness, rejected the imposition of any require- you can see when competition is partment’s entry test? ment that a BOC must face ‘‘actual and de- 6. How do you reconcile Congress’ rejection present, when you get to see the gas monstrable competition’’ in the local ex- of a metric test for BOC entry into the long coming through the pipeline. He al- change market before obtaining relief. While distance market with our statement that ludes to the anecdotal situation of gas the statute allows the Department to apply ‘‘successful full-scale entry’’ is necessary in pipeline cases. ‘‘any standard the Attorney General consid- order for the Department to ‘‘believe the But Senator BURNS differs with that. ers appropriate’’, a speech you gave in March local market is open to competition?’’ raises fears the Department and the FCC He says you are supposed to handle this 7. You have used the metaphor that the De- antitrust, and don’t give us anything may attempt to resurrect this test that was partment ‘‘want(s) to make sure that gas ac- rejected in Congress. tually can flow through the pipeline’’ before about when competition starts. You My concern arises particularly from your allowing interLATA entry. How many orders can tell his displeasure because, along March 11 speech announcing the Antitrust for resold services must be processed by a with the letter, he put a hold on the Division’s position regarding implementa- BOC in order to satisfy this standard? Joel Klein nomination. You have a tion of Section 271 of the Telecommuni- 8. How many orders for unbundled network hold on the nomination by the chair- cations Act of 1996 (47 U.S.C. Section 271). elements must be processed by a BOC to sat- man of the Communications Sub- You stated that the Division would take the isfy this standard? position that the BOCs should be forbidden 9. How much market share must a BOC committee, and you got a strong letter to enter long distance under Section 271 lose to its competitors to demonstrate that with a questionnaire that is included, until there is ‘‘successful full-scale entry’’ ‘‘gas can flow through the pipeline?’’ because I have included it in its en- into the local market. As you put it, the 10. FCC Chairman Reed Hundt testified on tirety in the RECORD. point of this requirement is to be sure that March 12, 1997, before the Senate Commerce So 5 days later, on May 20, the De- with respect to local telephone services, ‘‘gas Committee that a BOC that satisfied the partment of Justice, Acting Assistant naturally can flow through the pipeline.’’ I checklist but did not have an actual com- Attorney General Joel Klein sends a also read your speech as suggesting that petitor in its market would meet the entry letter to Senator BURNS. where there has not been full-scale entry, standard. Do you agree with Chairman you would oppose BOC entry unless the BOC Hundt? Madam President, I quote: could show that its competitors are ‘‘gaming 11. If the Department opposes a BOC To begin with, I wholeheartedly agree with the system.’’ interLATA application, do you believe the your statement that the basic point of the July 17, 1997 CONGRESSIONAL RECORD — SENATE S7679 Telecommunications Act is that regulators Judge Greene had what we call in the Senator from Nebraska. And they have should stand aside and let market forces trade ‘‘the VIII(c) test’’—that they talked with the gentleman, Mr. Klein, work once fair competition is possible. I couldn’t enter these markets until— and have asked him. And he has yet to want to assure you that the Department of Justice shares that view. this is the one rejected by Joel Klein— come and elaborate about what is more ‘‘there is no substantial possibility ‘‘sensitive.’’ He says this is ‘‘insuffi- Well, both distinguished gentlemen that the Bell Operating Company or its ciently sensitive.’’ We have yet to find are writing and speaking colloquially. another. One wants to tell you that competition affiliates could use its monopoly power to impede competition in the market I have met twice with Joel Klein. is present when you can see the gas And he said I was right. He was there coming through the pipeline, or smell such company seeks to do enter.’’ Madam President, with that particu- with the Attorney General. He under- the gas if you can’t see it. Otherwise, stood, and he would get some ensuing the Acting Assistant Attorney General lar VIII(c) test, that is how competi- opinion, or letter, or some note that he said, ‘‘Oh, yes, I want to let’’ —in the tion starts in long distance that we understood, and he could read the lan- Conrad letter, all these expressions have today. We don’t have any in the local. Ninety-eight percent of the local guage, and it was going to be corrected. about ‘‘let market forces.’’ What we Madam President, let’s turn the page are trying to do is ‘‘let market forces.’’ calls are still controlled by the local Bell Operating Company. They have and go to Senator CONRAD BURNS’ ques- He said, ‘‘I agree with you. We have to tions and answers, and go to that ques- stand aside and let market forces the monopoly. But this really genius test, the VIII(c) test, became the stand- tion. Here is what Senator BURNS ques- work.’’ tioned, and I quote. That, Madam President, is not the ard of the discipline, the standard of duty of the Acting Attorney General of the industry. In your speech, you use the following terms: ‘‘Real and broad-based competition,’’ the United States. He is supposed to In one hearing, as chairman of the Communications Subcommittee—the ‘‘actual broad-based entry,’’ ‘‘true broad- stand there by that market and watch based entry,’’ ‘‘tangible entry,’’ ‘‘large-scale it day in and day out. Because there is Commerce, Science, and Transpor- entry,’’ and ‘‘entry on a large-scale basis.’’ one thing that will occur if you let tation hearing—I had the seven Bells What do those terms mean to the depart- market forces work freely, and that is, attest. And we will put that in the ment? monopolies will develop. Consolida- RECORD, if necessary. They agreed with And I could read it all. The entire tions and mergers you see afoot right this particular test. You have the Bell letter has been included. But let me now are occurring every day, and Operating Companies agreeing to that read this last sentence. money is talking. People are not suf- particular test, and that is why we Thus, in my March 11th speech— fering yet, but when they get into that kept it in there. We didn’t write it into The Acting Attorney General, he monopolistic position, they will, be- the formal statute because one former knows what we are talking about. He cause there won’t be any of the rules colleague on the House side had held refers to that speech. and regulations, and they will be in up. He had tremendous influence, Jack In my March 11th speech to which you re- their own private businesses. Fields of Texas. So we put it in the lan- ferred, I stated that ‘‘our preference, though This group up here that continues to guage. But you follow the course or we recognize that it may not always occur, talk about ‘‘let market forces’’ oper- talk to any of the conferees, you talk is to see actual broad based, that is, business ate, this tells me, one, I have a ques- to any of the House and Senate Mem- and residential, entry into a local market.’’ tionable candidate for the Antitrust bers, they will tell you the VIII(c) test Now, Madam President, for all of Department of the Office of the Attor- was the test, and we couldn’t think of those unstudied in trying cases with ney General of the United States when a better one. lawyers, watch this particular lan- he starts chanting about monopolies. Here comes nominee Joel Klein, stat- guage because it has the regular lan- Reading on page 2, again, from the ing categorically here in May, ‘‘In for- guage and regular print but he high- Joel Klein letter, I read on page 2, one mulating this standard, I specifically lights with italic the phrase: ‘‘Our pref- sentence: rejected using the suggestion in the erence, though we recognize that it In order to accomplish these goals, almost conference report that the Department may not always occur.’’ immediately after I became Acting Assistant analyze BOC applications employing Now, that is in italic, not the rest of Attorney last October, I asked all of the the standard used’’—the VIII(c) stand- it. So the distinguished chairman of BOCs [the Bell Operating Companies] as well as any other interested party, to give me ard. the communications subcommittee is their views of the appropriate competition Madam President, when you work given a signal. Watch the play. And standards under section 271. this long and you know the industry, then comes the play. We set it out. We set out our report. you know the monopolies, you know Madam President, on May 21, the We didn’t need an Assistant Attorney how Judge Greene held control and op- next day, he doesn’t delay. Oh, that General running around rewriting the erated as well as he did, and commu- Acting Attorney General for antitrust law. He is talking about, ‘‘Oh, I got nications prospered, expanded, and that held up for weeks the answer to them all in. I am going to start devel- competition burst out all over in the the Dorgan letter and the Kerrey let- oping policy.’’ The Congress developed long distance field with this particular ter, he was prompt; he answered that the policy. It took us 4 years to do it. standard, and then have a gentleman letter of Senator BURNS in 5 days, gave Here, he says gratuitously in the come in totally green and just write the signal with the italics. next sentence on the bottom of page back, just as he got a letter from the (Mr. BENNETT assumed the Chair.) 2—this is Joel Klein, the nominee: chairman who put a hold on his nomi- Mr. HOLLINGS. Mr. President, I ask In formulating this standard, I specifically nation, and said ‘‘I threw that out.’’ unanimous consent that this docket rejected using the suggestion in the con- The Bell Operating Companies tried to No. 97–121, in the matter of the applica- ference report that the Department analyze throw it out, and they couldn’t. They tion of SBC Communications, be print- Bell Operating Company applications em- know it because they had already testi- ed in the RECORD. ploying the standard used in the AT&T con- fied in behalf of it. There being no objection, the mate- sent decree objecting to the Bell Operating He goes on to say that ‘‘the VIII(c) rial was ordered to be printed in the Company in regional long distance entry RECORD, as follows: ‘‘unless there is no substantial possibility standard which has barred Bell Operat- [Before the Federal Communications Com- that the Bell Operating Company or its af- ing Company entry into long distance mission, Washington, DC, CC Docket No. filiates could use its monopoly power to im- since their divestiture from AT&T, 97–121] pede competition in the market such com- struck me as insufficiently sensitive to pany seeks to enter.’’ the market conditions, and I was con- In the Matter of Application of SBC Com- munications Inc. et al. Pursuant to Section Bear with me a minute. I know this cerned that it would bar Bell Operating 271 of the Telecommunications Act of 1996 to thing sounds complicated. And those Company entry even where it would be Provide In-Region, InterLATA Services in who want to watch a good, loud show competitively warranted.’’ the State of Oklahoma. they put on around the world, or what- I want him to describe that. My un- ADDENDUM TO THE EVALUATION OF THE UNITED ever the dickens they put on in the derstanding is that another Senator, STATES DEPARTMENT OF JUSTICE afternoon, go ahead and turn to it. But my distinguished colleague from North Several parties have informally asked the this is very, very important. Dakota—and also I was talking to the Department to clarify its views concerning S7680 CONGRESSIONAL RECORD — SENATE July 17, 1997 two issues that have arisen in connection that the BOCs truly opened up their local to ensure that the BOC continues to meet its with this proceeding: (1) whether we agree networks to competitors, Congress required established performance benchmarks. Fi- with the argument made by some that any BOC qualifying for Track A consid- nally, we acknowledge that there may be commentors that under Section 271(c)(1)(A) eration wait until a facilities-based competi- areas in which the present industry stand- (‘‘Track A’’), each separate class of subscrib- tor became operational—provided that there ards will be updated, requiring new levels of ers that must be served to satisfy that entry is at least one potential competitor proceed- performance. Accordingly, the Department track, i.e., residential and business, must be ing toward that goal in a timely fashion—be- will also focus on the importance of commit- served ‘‘exclusively . . . or predominantly’’ fore that BOC could satisfy the statute’s in- ments by BOCs to adhere to ‘‘performance over the telephone exchange facilities of an region interLATA entry requirements. In standards,’’ even when they will be imposed unaffiliated provider; 1 and (2) the impor- mandating that such a facilities-based com- upon it post-entry. tance (and meaning) of ‘‘performance bench- petitor offer both residential and business FOOTNOTES marks’’ in assessing whether BOC in-region service, Congress ensured both that (1) facili- 1 interLATA entry would be in the public in- ties-based entry path is being used wherever See, e.g., Opposition of Brooks Fiber Properties, Inc. to Application of SBC Communications, Inc., CC terest. To address any confusion on these requested; and (2) at least one facilities- Docket No. 97–121, at 8–9 (May 1, 1997). points, the Department now files this adden- based competitor is offering service to resi- 2 To reflect this typology, our evaluation should be dum. dential, as well as business, subscribers. See modified as follows: I. Section 271(c)(1)(A) does not require that both SBC Evaluation at 14–17. Once those two Page 45 line 2 of heading ‘‘b.’’ (and Table of Con- residential and business customers be served basic conditions have been satisfied, how- tents), ‘‘standards’’ to ‘‘benchmarks’’; over the facilities-based competitors’ own fa- ever, there is no reason to delay BOC entry Page 47 line 3, ‘‘measures’’ to ‘‘benchmarks’’; into interLATA markets simply because Page 47 line 5, ‘‘measures’’ to ‘‘benchmarks’’; cilities Page 48 line 9, ‘‘measures’’ to ‘‘benchmarks’’ and Section 271(c)(1) requires that a BOC’s ap- competitors that have a demonstrated abil- add ‘‘as well as its commitment to adhere to certain plication to provide in-region interLATA ity to operate as facilities-based competi- performance standards’’ to the end of the sentence; services proceed under one of two distinct tors, and that are in fact providing service Page 60 line 9, ‘‘measures’’ to ‘‘benchmarks’’; and tracks. As our evaluation explained, SBC’s predominantly over their own facilities, find Page 60 line 11, 15, 18 ‘‘measures’’ to ‘‘bench- application is governed by the standards of it most advantageous to serve one class of marks’’ Track A. 47 U.S.C. § 271(c)(1)(A). See SBC customers on a resale basis. Imposing this Respectfully submitted, Evaluation at 9–20. Under Track A, a BOC requirement would tip unnecessarily the Donald Russell, Chief; Joel I. Klein, Act- must be providing ‘‘access and interconnec- statute’s balance between facilitating local ing Assistant Attorney General, Anti- tion to its network facilities for the network entry and providing for additional competi- trust Division; Andrew S. Joskow, Dep- facilities of one or more unaffiliated compet- tion in interLATA services by adding an un- uty Assistant Attorney General, Anti- ing providers of telephone exchange service necessary prerequisite to Track A that trust Division; Lawrence J. Fullerton, .. . to residential and business subscribers.’’ might foreclose entry in certain cases for no Deputy Assistant Attorney General, The statute further specifies that ‘‘such tele- beneficial competitive purpose. Cf. id. at 22. Antitrust Division; Philip J. Weiser, phone exchange service may be offered by II. The Importance of performance benchmarks Senior Counsel, Antitrust Division; such competing providers either exclusively In articulating the Department’s approach Carl Willner, Jonathan D. Lee, Stuart over their own telephone exchange service to assessing BOC applications for in-region, H. Kupinsky: Attorneys, Telecommuni- facilities or predominantly over their own interLATA authority, we stated that the ex- cations Task Force; Gerald B. Lumer, telephone exchange service facilities in com- istence of ‘‘performance benchmarks’’ serves Economist, Competition Policy Sec- bination with the resale of the telecommuni- an important purpose in demonstrating that tion; Antitrust Division, U.S. Depart- cations services of another carrier.’’ 47 the market has been ‘‘irreversibly opened to ment of Justice, 555 4th Street, N.W., U.S.C. § 271(c)(1)(A). As we explained in our competition.’’ To better explain the role of Room 8104, Washington, D.C. 20001. evaluation, SBC does not meet the standards ‘‘performance benchmarks,’’ ‘‘performance Certificate of Service of Track A because there is no facilities- standards,’’ and ‘‘performance measures’’ in I hereby certify that I am an Attorney for based competitor offering service to residen- our analysis, we have outlined further the the United States in this proceeding, and tial subscribers. See SBC Evaluation at 20– definition and importance of these concepts have caused a true and accurate copy of the 21. Brooks Fiber, to which SBC points as a below.2 foregoing Addendum to the Evaluation of the residential service provider, is merely test- At bottom, a ‘‘performance benchmark’’ is United States Department of Justice to be ing its ability to offer residential service by a level of performance to which regulators served on all petitioners in this proceeding providing uncompensated service to four em- and competitors will be able to hold a BOC and other interested parties as indicated on ployees; thus, it does not compete with SBC after it receives in-region interLATA author- the attached service list, by first class mail, to serve any residential ‘‘subscribers.’’ See ity. The most effective benchmarks are those on May 21, 1997. id. based on a ‘‘track record’’ of reliable service JONATHAN D. LEE, Some parties have pressed for rejection of established by the BOC. Such benchmarks Attorney, Telecommunications Task Force, SBC’s application on the additional ground may reflect either the BOC’s performance of Antitrust Division, U.S. Department of that Brooks does not provide residential a wholesale support function for a competi- Justice. service to anyone, including its four employ- tor, or, in areas where the BOC performs the Service List ees, over its own facilities. In their view, same function for its competitors as it does Track A requires, among other things, that for its own retail operations, a benchmark Richard Metzger, General Counsel, Asso- residential service is being provided com- may also be established by the BOC’s service ciation for Local Telecommunications Serv- pletely or predominantly over a competitor’s to its own retail operations. In instances ices, 1200 19th Street, NW., Washington, DC own facilities. We disagree. where neither type of benchmark is avail- 20036. The statute requires that both business able, the Department will consider other al- John Lenahan, Ameritech Corporation, 30 and residential subscribers be served by a ternatives that would ensure a consistent South Wacker Drive, Chicago, IL 60606. competing provider, and that such provider level of performance, such as, for example, a Mark Rosenblum, AT&T Corporation, 295 must be exclusively or predominantly facili- commitment to adhere to certain industry North Maple Ave., Basking Ridge, NJ 07920. ties-based. It does not, however, require that performance standards and/or an audit of the Susan Miller, Esq., ATIS, 1200 G Street, each class of customers (i.e., business and BOC’s systems by a neutral third party. Such NW., Suite 500, Washington, DC 20005. residential) must be served over a facilities- benchmarks are significant because they James R. Young, Bell Atlantic, 1320 N. based competitor’s own facilities. To the demonstrate the ability of the BOC to per- Courthouse Road, 8th Floor, Arlington, VA contrary, Congress expressly provided that form a critical function—for example, the 22201. the competitor may be providing services provisioning of an unbundled loop within a Walter Alford, BellSouth, 1155 Peachtree ‘‘predominantly’’ over its own facilities ‘‘in measurable period of time. Thus, bench- Street, NE., Atlanta, GA 30367. combination with the resale of’’ BOC serv- marks serve, as explained in our evaluation, Edward J. Cadieux, Director, Regulatory ices. 47 U.S.C. § 271(c)(1)(A). Thus, it does not the important purpose of foreclosing post- Affairs—Central Region, Brooks Fiber Prop- matter whether the competitor reaches one entry BOC claims that the delay or with- erties, Inc., 425 Woods Mill Road South, class of customers—e.g., residential—only holding of services needed by its competitors Town and Country, MO 63017. through resale, provided that the competi- should be excused on the ground that the John Windhausen, Jr., General Counsel, tor’s local exchange services as a whole are services or performance levels demanded by Competition Policy Institute, 1156 15th provided ‘‘predominantly’’over its own facili- competitors are technically infeasible. See Street, NW., Suite 310, Washington, DC 20005. ties. SBC Evaluation at 45–48. Genevieve Morelli, Executive Vice Presi- This reading is not only consistent with To make ‘‘performance benchmarks’’ a dent and General Counsel, The Competitive the language of the statute, but also serves useful tool for post-entry oversight, we also Telecommunications Association, 1900 M Congress’ twin purposes of maximizing com- expect the BOC to adopt the specific means Street, NW., Suite 800, Washington, DC 20036. petition in local exchange and interexchange and mechanisms necessary to measure its Laura Phillips, Dow, Lohnes, and Albert- telecommunications markets. To ensure performance—i.e., ‘‘performance measures.’’ son, PLLC, 1200 New Hampshire Ave., NW., That is, if there are no such systems in Suite 800, Washington, DC 20036, Counsel for Footnotes at end of article. place, it will be considerably more difficult Cox Communications. July 17, 1997 CONGRESSIONAL RECORD — SENATE S7681 Russell M. Blau, Swidler & Berlin, char- distinguished Senator from Montana pertise, which explains why Congress gave tered, 3000 K Street, NW., Suite 300, Washing- got what they wanted in black and you and your colleagues—and no one else— ton, DC 20007–5116, Counsel for Dobson Wire- white. They just totally refuted 4 years the ultimate authority to make important decisions, such as the decision to interpret less. of work, the most important part of Gregory M. Casey, LCI International section 271. I remind you that the Depart- Telecom Corp., 8180 Greensboro Drive, Suite the checklist, the most important part ment’s role in this matter is a consultative 800, McLean, VA 22102. that provided for competition in the one, and should be treated as such. Rocky Unruh, Morgenstein & Jubelirer, long distance market, the most impor- Let me conclude by noting that, while this One Market, Spear Street Tower, 32d Floor, tant part that we included. We talked letter focuses exclusively on Department’s San Francisco, CA 94105, Counsel for LCI about it. We discussed it. We debated interpretation of section 271(c)(1)(A), it Telecom Group. should not be construed to mean that the it. I was in these conferences. They balance of the Department’s comments were Anthony Epstein, Jenner & Block, 601 13th were in the conferences, like I tried to Street, NW., Washington, DC 20005, Counsel either consistent or inconsistent with Con- for MCI. emphasize. The Bell Companies met all gressional intent. Susan Jin Davis, MCI Telecommunications one day with our staffs on both sides Sincerely, Corporation, 1801 Pennsylvania Ave., NW., and the long distance companies met TOM BLILEY, Washington, DC 20006. all one day, and it was worked out. But Chairman. Daniel Brenner, National Cable Television do not take the word of the Senator Mr. HOLLINGS. This is dated June Association, 1724 Massachusetts Ave., NW., from South Carolina. 20, 1997. Washington, DC 20036. Mr. President, I ask unanimous con- Dear Chairman Hunt: NYNEX Telephone Companies, Saul Fish- sent that a letter to the Honorable I recently read with interest and dismay er, 1095 Ave. of the Americas, New York, NY the Department of Justice’s additional com- 10036. Reed Hunt, Chairman of the Federal Communications Commission, from ments regarding SBC Communications’ ap- Cody L. Graves, Chairman, Oklahoma Cor- plication to provide in-region interLATA poration Commission, Jim Thorpe Building, Chairman TOM BLILEY, Congressman services in the State of Oklahoma. The de- Post Office Box 52000–2000, Oklahoma City, from Virginia, and chairman of the partment therein clarified its views on sec- OK 73152–2000. Commerce Committee over on the tion 271(c)(1)(A) of the Communications Act, Mickey S. Moon, Assistant Attorney Gen- House side, be printed in the RECORD. as amended. As a primary author— eral, Oklahoma Attorney General’s Office, There being no objection, the letter Let me emphasize that. This is Chair- 2300 North Lincoln Boulevard, Room 112, was ordered to be printed in the State Capitol, Oklahoma City, OK 73105–4894. man BLILEY— Robert Hoggarth, Senior Vice President, RECORD, as follows: As a primary author of this provision, I Paging and Narrowband PCS Alliance, 500 U.S. HOUSE OF REPRESENTATIVES, feel compelled to inform you that the de- Montgomery Street, Suite 700, Alexandria, COMMITTEE ON COMMERCE, partment misread the statute’s plain lan- VA 22314–1561. Washington, DC, June 20, 1997. guage. As you rule on SBC’s application and James D. Ellis, Paul K. Mancini, SBC Com- Hon. REED HUNDT, future Bell Operating Company applications, munications, Inc., 175 E. Houston, Room 1260, Chairman, Federal Communications Commis- you should not overlook the clear meaning San Antonio, TX 78205. sion, Washington, DC. of section 271 or its legislative history. The Philip L. Verveer, Wilkie, Farr & Galla- DEAR CHAIRMAN HUNDT: I recently read Department argued that a Bell Operating gher, 1155 21st Street, NW., Washington, DC with interest and dismay the Department of Company should be allowed to enter the in- 20036, Counsel for Sprint. Justice’s additional comments regarding region interLATA market under track A, Richard Karre, U S West, 1020 19th Street, SBC Communications Inc.’s (SBC’s) applica- that is, section 271(c)(1)(A) if a competing NW., Suite 700, Washington, DC 20036. tion to provide in-region, interLATA serv- service provides office facilities based serv- Charles D. Land, P.E., Executive Director, ices in the State of Oklahoma. The Depart- ices to business customers and resale serv- Texas Association of Long Distance Tele- ment therein clarified its views on section ices to residential customers, so long as the phone Companies, 503 W. 17th Street, Suite 271(c)(1)(A) of the Communications Act, as combined provision of both services is pre- 200, Austin, TX 78701–1236. amended. As the primary author of this pro- dominantly over the competing service pro- David Poe, LeBoeuf, Lamb, Greene & vision. I feel compelled to inform you that vider’s facilities. In other words, the Department wrongly MacRae, LLP, 1875 Connecticut Ave., NW., the Department misread the statute’s plain takes the view that section 271(c)(1)(A) is Suite 1200, Washington, DC 20009, Counsel for language. As you rule on SBC’s application satisfied if a competitor is serving either res- Time Warner. and future BOC applications, you should not idential or business customers over its own Janis Stahlhut, Time Warner Communica- overlook the clear meaning of section 271 or facilities. Section 271(c)(1)(a), however, tions Holdings, Inc., 300 First Stamford its legislative history. clearly requires a different interpretation. Place, Stamford, CT 06902–6732. The Department argued that a BOC should To quote the statute, ‘‘A competing service Danny Adams, Kelley, Drye & Warren LLP, be allowed to enter the in-region, interLATA provider must offer telephone exchange serv- 1200 19th Street, NW., Suite 500, Washington, market under ‘‘Track A’’ (i.e., section ice to residential and business subscribers ei- DC 20036, Counsel for USLD. 271(1)(A)) if a competing service provider of- ther exclusively over their own telephone ex- Catherine Sloan, WorldCom, Inc., 1120 Con- fers facilities-based services to business cus- change service facilities or predominantly necticut Ave., NW., Washington, DC 20036– tomers and resale services to residential cus- over their own telephone exchange service 3902. tomers, so long as the combined provision of both services is predominantly over the com- facilities. Track A is thus satisfied if and Charles Hunter, Hunter Communications only if a Bell Operating Company faces fa- Law Group, 1620 I Street, NW., Suite 701, peting service provider’s facilities. In other words, the Department wrongly takes the cilities based competition in both residential Washington, DC 20006, Counsel for Tele- and business markets. Neither the statute communications Resellers Association. view that section 271(c)(1)(A) is satisfied if a competitor is serving either residential or nor its legislative history permits any other Mr. HOLLINGS. I thank the distin- business customers over its own facilities. interpretation. I know this because I drafted guished Chair. And again now on page Section 271(c)(1)(A), however, clearly re- both texts. 3 here the fellow has gotten the signal, quires a different interpretation. To quote Mr. President, that is Chairman BLI- and I read on page 3—the entire matter the statute, a competing service provider LEY. I do not know how you can make is in the RECORD. must offer telephone exchange service to it more clear. He talks of the history. It does not, however, require that each ‘‘residential and business subscribers . . . ei- He talks of the conference report. He class of customers, business and residential, ther exclusively over their own telephone ex- talks of the actual language. And any- must be served over a facilities based com- change service facilities or predominantly over their own telephone exchange service body reading it can see exactly that. In petitor’s own facilities. To the contrary, essence, Mr. Klein sort of quietly ac- Congress expressly provided that the com- facilities.’’ Track A is thus satisfied if—and only if—a BOC faces facilities-based competi- knowledged it. I was waiting because I petitor may be providing services predomi- met with him individually and then I nantly over its own facilities in combination tion in both residential and business mar- with the resale of Bell Operating Company kets. Neither the statute nor its legislative met with him with the Attorney Gen- services (47 USC 271 (c)(1)(A)). Thus, it does history permits any other interpretation; I eral, I can tell you here and now for not matter whether the competitor reaches know this because I drafted both texts. those who watch this and follow it. And In the end, the Department’s recent mis- one class of customers, namely residential, I ask unanimous consent the recent interpretation of section 271 reinforces a only through resale provided that the com- editorial in the New York Times enti- point I frequently made during Congres- petitor’s local exchange services as a whole sional debate over the Telecommunications tled ‘‘A Weak Antitrust Nominee’’ be are provided predominantly over its own fa- Act of 1996: the Department of Justice does printed in the RECORD. cilities. not have the expertise to make important There being no objection, the article Well, Mr. President, there it was. telecommunications policy decisions. The was ordered to be printed in the Bell Operating Companies through the FCC, by contrast, does have the necessary ex- RECORD, as follows: S7682 CONGRESSIONAL RECORD — SENATE July 17, 1997 [From the New York Times, July 11, 1997] Acting Assistant Attorney General for would want to learn and they would A WEAK ANTITRUST NOMINEE Antitrust Joel Klein bears significant re- want to understand. But evidently the The next head of the Justice Department’s sponsibility for these unintended, monopolis- jury has been fixed. antitrust division will have a lot to say tic results. Unless you demand that the Jus- Mr. President, I ask unanimous con- about whether the 1996 Telecommunications tice Department’s Antitrust Division reverse sent that two letters, one by Senator course and engage in strict antitrust en- Act breaks the monopoly chokehold that KERREY to the Attorney General dated Bell companies exert over local phone cus- forcement (see attached New York Times editorial: ‘‘A Weak Antitrust Nominee’’), June 23, and the letter back from the tomers. He will rule on mergers among tele- Office of the Attorney General dated communications companies and advise the consumers will face vastly inflated telephone Federal Communications Commission on ap- and cable rates from increasingly entrenched July 14 to Senator DORGAN be printed plications by Bell companies to enter long- monopolies. in the RECORD. distance markets. Thus it is disheartening After antitrust officials allowed the seven There being no objection, the letters and disqualifying that President Clinton’s local Bell telephone monopolies to consoli- were ordered to be printed in the date into four bigger monopolies; permitted nominee, Joel Klein, is scheduled to come up RECORD, as follows: for confirmation today in the Senate with a Time Warner and TeleCommunications Inc. (TCI) to unite companies service almost one- U.S. SENATE, record that suggests he might knuckle under Washington, DC, June 23, 1997. to the powerful Bell companies and the poli- half of all cable customers through a com- bination with Turner Broadcasting; and ap- Hon. JANET RENO, ticians who do their bidding. U.S. Department of Justice, Senators Bob Kerrey, Ernest Hollings and proved hundreds of radio mergers, consumers are seeing no appreciable increase in either Washington, DC. Byron Dorgan have threatened to block the DEAR MADAM ATTORNEY GENERAL: Not too vote today and put off until next week a competition or pocketbook savings from the Telecommunications Act. long ago, I met Joel Klein and found him to final determination of Mr. Klein’s fate. But be an intelligent, talented attorney and a the Administration would do its own tele- While Acting Assistant Attorney General Joel Klein described some of this activity as dedicated public servant. I would like very communications policy a favor by withdraw- much to support his nomination for Assist- ing the nomination and finding a stronger, ‘‘the concentration envisioned by Congress’’ (remarks to Glasser Legalworks Seminar, ant Attorney General for Antitrust but have more aggressive successor. some very serious concerns about the Ad- Mr. Klein, who has been serving as the March 11, 1997), we believe you were hoping antitrust enforcement would foster increased ministration’s telecommunications policies Government’s acting Assistant Attorney and Mr. Klein’s interpretation of the Tele- General for Antitrust, demonstrated his in- competition rather than concentration. Contrary to promises they made to Con- communications Act of 1996. I am hopeful clinations when he overrode objections of you can clarify the Department’s official some of his staff and approved uncondition- gress in return for more market freedom, large cable, telephone and other tele- views for me. ally the merger of Bell Atlantic and Nynex. I am particularly concerned about recent communications companies are not vigor- That merger will remove Bell Atlantic as a comments made by Acting Assistant Attor- ously entering each other’s markets: potential competitor for Nynex’s many dis- ney General Klein regarding the Department AT&T appears to be throwing in the towel satisfied customers. Mr. Klein refused even of Justice’s (DOJ) role in facilitating com- on the notion of competing with the local to impose conditions that would have made petition in the wake of the Telecommuni- Bell monopolies, as it pursues mergers with it easier for state and Federal regulators to cations Act of 1996. As you know, my support the Bell companies. pry open Nynex’s markets to rivals such as of the Telecommunications Act was contin- AT&T. MCI is losing money hand-over-fist in its failed efforts to jump-start local phone com- gent upon a strong role for DOJ in shaping a Worse, Mr. Klein sent a letter to Chairman competitive telecommunications market. I Conrad Burns of the Senate communications petition. After failing to start a competitive sat- did not stop the work of the United States subcommittee, who runs political inter- Senate with a filibuster in order for the De- ference for the Bell companies, that commit- ellite alternative to cable monopolies, Ru- pert Murdoch decided to join forces with the partment of Justice to take its responsibil- ted the antitrust division to pro-Bell posi- ities lightly. In the contrary, I expected DOJ tions in defiance of the 1996 act. cable giants through deals with TCI’s John Malone, Primestar and Cablevision. to use every ounce of its authority, including That act invites the Bell companies to pro- those powers granted outside of the Tele- vide long-distance service, but only if the Finally, local phone companies have pulled the plug on most of their grandiose efforts to communications Act, to ensure the competi- Bells first open their systems to rivals that tive integrity of the new telecommuni- want to compete for local customers. Yet in enter the cable business, and cable compa- nies have retreated just as quickly from en- cations market. the letter to Mr. Burns, Mr. Klein explicitly In response to questions by the Chairman tering the phone business. rejected Congress’s interpretation of require- of the Senate Communications Subcommit- And while all this market entrenchment ments to be imposed on the Bells in favor of tee, Mr. Klein said that he ‘‘specifically re- goes on, cable rates are skyrocketing and his own, weaker standard. jected using the suggestion in the Conference many local phone companies seek a doubling In a subsequent submission to the Federal Report that the Department analyze Bell Op- of local phone rates in anticipation of ‘‘com- Communications Commission, Mr. Klein fur- erating Company (BOC) applications employ- petition.’’ ther weakened a requirement that before the ing the standard used in the AT&T consent Bells enter long-distance service they face a It is more obvious than ever before that the Telecommunications Act will be an ab- decree’’. This standard would reject BOC competitor that is serious enough to build entry into in-region long distance unless its own switches and wires. Mr. Klein has ject failure unless Congress makes sure that the Antitrust Division reverses course and ‘‘there is a substantial possibility that the also upset some senators by seeming to mini- BOC or its affiliates could use its monopoly mize the importance, provided in the 1996 reinvigorates its enforcement practices. Sincerely, power to impede competition in the market Telecommunications Act, of Justice’s advice such company seeks to enter.’’ The Tele- HOWARD M. METZENBAUM, to the F.C.C. on applications by Bell compa- communications Act gave you the authority nies to enter long-distance. Chairman, Consumer Federation of America, to choose any standard you see fit to evalu- True, Mr. Klein has blocked applications ate BOC entry into in-region service. Win- by two Bell companies, SBC and Ameritech, former chairman, Senate Subcommittee on ning that discretion was a hard fought bat- to offer long-distance service before they had tle. Is the Department using its discretion to opened their local markets to competition. Antitrust, Business Rights and Competition. chose a weak standard? Does Mr. Klein’s But by pandering to Mr. Burns, he has cre- statement mean that a Bell Operating Com- GENE KIMMELMAN, ated strong doubts that he can provide ag- pany should be allowed to enter the in-region gressive antitrust leadership. Co-Director, Consum- ers Union. long distance market even if there is a ‘‘sub- Mr. HOLLINGS. I ask unanimous stantial possibility that he BOC or its affili- DR. MARK COOPER, consent that the Consumer Federation Research Director, ates could use monopoly power to impede of America letter of July 14, 1997, on Consumer Federa- competition?’’ Mr. Klein’s comment to the Chairman that this score be printed in the RECORD. tion of America. ‘‘we think that the openness of a local mar- There being no objection, the letter Mr. HOLLINGS. Consumer Federa- ket can be best assessed by the discretionary was ordered to be printed in the tion and others who have followed this authority of the FCC, relying in part on the RECORD, as follows: thing have been on the phone and oth- Department of Justice’s competitive assess- CONSUMER FEDERATION OF AMERICA, erwise just fighting to make sure that ment, and based on the evaluation of the July 14, 1997. this was really held up and defeated. particular circumstances in an individual DEAR SENATOR: With cable rates rising al- And in all fairness, I am sorry, after we state.’’ I fought hard to include DOJ in this most three times faster than inflation and process because of the legal and economic massive consolidation in cable, radio and see the exchange of letters here re- expertise of the Antitrust Division. Is the telecommunications markets, your efforts to cently, that I did not fight this nomi- Department abdicating its role in this area? promote competition through the 1996 Tele- nation. I put a hold on it. I thought The Federal Communications Commission communications Act are backfiring. that Members would listen, that they (FCC) is not the only agency equipped to July 17, 1997 CONGRESSIONAL RECORD — SENATE S7683 make decisions about the openness of mar- Telecommunications Act of 1996 extremely wrote a letter, and we were waiting for kets. Can a market be competitive if it is not seriously. We have devoted substantial re- a letter back and we had to wait sev- open? The Department’s responsibility under sources to preliminary investigations all eral weeks. Not the Senator from Mon- the act and the nation’s antitrust laws is across the nation on a state-by-state basis to tana. His letter and addendum and most serious and should be aggressively pur- understand the competitive conditions in sued by the Antitrust Division. Although the each state. We have devoted even more re- opinion were all put out immediately. ultimate decision lies with the FCC, the De- sources to our review and evaluation of spe- But when Senators who worked on the partment should accept its important role as cific Section 271 applications. We prepared bill as diligently as we did tried to the expert in competition and market power extensive, even exhaustive, analyses of SBC’s meet with him and then put down in and adopt a meaningful entry standard based Section 271 application for in-region long black and white our misgivings, write on pro-competitive principles. I am not con- distance authority in Oklahoma and the Attorney General’s department and vinced that the Department has done that. Ameritech’s Section 271 application for in- ask, please, now, let’s see your position On a separate but equally important com- region long distance authority in Michigan. here on the plain, clear language, they Our actions in these matters make abso- petition issue, I remain very concerned write back—‘‘I believe in competition.’’ about recent mergers between large tele- lutely clear that the Department is firmly communications providers. The decision by committed to ensuring that local markets Just two pages of nothing. I have that Justice to approve the Bell Atlantic/NYNEX are fully and irreversibly open, so that com- in the RECORD. merger without any conditions is troubling. petition can take hold there and flourish, Mr. President, I should have, like I I am also concerned about rumors circulat- and that long distance markets are as com- say, politicked this nomination for its ing about a possible reconstruction of the old petitive as possible. We share your view that defeat. Bell system. Reports of AT&T efforts to this is crucial for consumers in this country. Let me ask unanimous consent that bring two BOC’s back into its fold should To this end, we have adopted a procom- the ‘‘Dear Colleague’’ letter of July 10 give everyone pause. Such a merger will petitive standard for evaluating Section 271 by Senator DORGAN of North Dakota applications, and we are providing the FCC likely lead to a new round of large tele- and myself be printed in the RECORD. communications mergers which could great- with meaningful guidance on competition There being no objection, the letter policy in specific cases. The FCC relied heav- ly reduce any chance for the swift adoption was ordered to be printed in the of a vibrant, competitive telecommuni- ily on our analysis in its only decision to RECORD, as follows: cations market. Competitive entry could be date, its recent decision denying SBC’s appli- U.S. SENATE, COMMITTEE ON COM- frozen while real and potential competitors cation. MERCE, SCIENCE, AND TRANSPOR- court, woo and marry each other. You have specific questions regarding the Finally, I am pleased with Mr. Klein’s em- standard used by the Department in evaluat- TATION, phasis on ensuring that the BOC’s take the ing Bell Operating Company (BOC) FCC ap- Washington, DC, July 10, 1997. DEAR COLLEAGUE: The Senate may soon necessary steps to allow competition in their plications to provide in-region long distance move to consider the nomination of Joel markets. The Department of Justice should service. After a careful evaluation of public input, Klein to be the Assistant Attorney General use its authority to ensure that no one cre- in charge of the Antitrust Division. Because ates or uses artificial impediments to block the Department adopted a standard that the local market had to be ‘‘fully and irrevers- of statements and actions by Mr. Klein in his competitive entry. Interconnection agree- acting capacity at the Department of Justice ments are pending in all fifty states, but at ibly open to competition.’’ I assure you that this is not a weak standard. It is a meaning- we are very concerned with the direction of this time no significant competition has de- the Administration’s policies with respect to veloped. The era of telecommunications mo- ful standard based on strong procompetitive principles and is designed to ensure and pro- its interpretation of certain provisions of the nopolies should be over, not recreated. Mar- Telecommunications Act of 1996. We believe ket forces, not market power should moti- tect competition in both local and long-dis- tance markets. It ensures that no one can that these issues need clarification before vate all telecommunications carriers to Mr. Klein’s nomination should be brought to create artificial impediments to entry, and work night and day to win and keep cus- a vote in the Senate. We urge you to support it ensures that BOCs are not able to provide tomers. Interconnection should be made as us in our desire to resolve the issues sur- in-region long distance service prematurely, simple and efficient as possible. It should be rounding Mr. Klein’s actions before his nomi- when they might have unfair competitive ad- very easy for a telecommunications entre- nation is brought to the Senate floor for de- vantages over competitors. Otherwise, the preneur to gather a group of customers and bate. easily, efficiently and expeditiously begin promise of fully competitive local and long Whether or not robust competition devel- providing them service through interconnec- distance markets would be delayed. ops in the local telephone service market de- As demonstrated by our evaluations of tion or resale. pends upon the Administration’s commit- SBC’s Section 271 Oklahoma application in The telecommunications industry is at a ment to vigorously enforce these critical May, and of Ameritech’s Section 271 Michi- critical point in its history. The Depart- provisions of the Telecommunications Act. ment’s commitment to using its full author- gan application in late June, we will not sup- Unfortunately, while serving as acting chief ity to promote competition is important to port long distance entry until local markets of the Antitrust Division, Mr. Klein has ex- achieving an environment where consumers are fully and irreversibly open to competi- plicitly contradicted specific statutory man- come first and entrepreneurs are encouraged tion. Our position (and our standard) is one dates and conference report directions that to challenge the status quo. Thank you for that is tough but fair and designed to pro- we, working with the White House, fought your careful consideration of my concerns mote the maximum amount of competition again all odds to have added to the Tele- and would appreciate your views on these in all markets. The Department is fully com- communications Act of 1996. We have asked matters. I look forward to your response. mitted to ensuring that all telecommuni- Mr. Klein, Attorney General Reno, and the Sincerely, cations markets become as competitive as White House to review our concerns and J. ROBERT KERREY. possible. demonstrate that the Antitrust Division will In closing, let me say Joel Klein is an ex- follow the explicit meaning of the Tele- OFFICE OF THE ATTORNEY GENERAL, tremely intelligent and talented attorney communications Act. So far, we have not re- Washington, DC, July 14, 1997. and a dedicated public servant. The Presi- ceived a satisfactory response to our con- Hon. BYRON L. DORGAN, dent and I hope he is rapidly confirmed by cerns. U.S. Senate, the United States Senate to be the Assistant Our misgivings about Mr. Klein go to the Washington, DC. Attorney General for Antitrust. very heart of whether the Telecommuni- DEAR SENATOR DORGAN: The President has Sincerely, cations Act achieves its goal of promoting requested that I respond to your recent let- JANET RENO. more competition and lower prices for con- ter to him regarding the nomination of Joel Mr. HOLLINGS. Now, you see every sumers. In response to White House requests Klein to be Assistant Attorney General for effort has been made to try to clear (and a very specific veto threat) we made Antitrust and the Administration’s tele- that record, and you can read the At- sure that nothing in the Telecommuni- communications policies. torney General’s letter, and for the cations act in any way undermined the anti- At the outset, I want to emphasize my ap- trust laws. In fact, to address these concerns, preciation and that of the Department as a purposes at hand it is not worth the we gave the Justice Department new author- whole for your strong and unwavering sup- paper it is written on. You can throw it ity to rule on mergers of telecommuni- port for the important role provided for the away. It says nothing—that she be- cations common carriers (power previously Department in the implementation of the lieves in competition. Now, she is a reserved for the Federal Communications Telecommunications Act of 1996. I remember lawyer. She knows how to read empha- Commission), and we gave the Justice De- how hard we fought together to secure the sized italics language. She saw the partment a substantial role in determining DOJ role. As a consequence, I share with you pitch. I told her about the pitch and when a local Bell telephone monopoly could enter the long distance market because it a keen interest in ensuring that the Depart- how it occurred. I showed her the talk ment carries out its role under the Tele- had sufficiently opened its market to com- communications Act effectively. that Klein made. We went down the petition. However, under the leadership of Let me begin by assuring you that the De- whole thing. So Senator KERREY, and I Mr. Klein, the Justice Department has abdi- partment of Justice takes its role under the understand, of course, Senator DORGAN cated its responsibility and failed to use S7684 CONGRESSIONAL RECORD — SENATE July 17, 1997 these tools to promote the level of competi- you want to be identified as the one antitrust law and doctrine, and will ex- tion that we and the Clinton Administration having the hold, I said absolutely. I am ercise his responsibilities fairly and believed should be developing in tele- not playing games, tricks or anything within the dictates of the law. He is communications markets. By interpreting the Telecommunications of that kind. I would be glad if you committed to upholding our free enter- Act in a manner that fails to ensure that called it this afternoon. That was prise system and to protecting consum- both consumers and businesses receive com- weeks ago where I would have a chance ers from anti-competitive conduct. petitive choices from separate local phone to explain exactly what occurred. But, Under Chairman HATCH’s distin- companies; by abandoning the Department of of course, you can see what has oc- guished leadership, the Judiciary Com- Justice’s traditional standard for measuring curred. They have politically worked mittee held a hearing on Mr. Klein’s competition to make it easier for the Bell it, got the votes, got cloture. Don’t nomination in April, and his nomina- companies to enter long distance; and by ap- tion was reported out of the Committee proving the largest merger in telecommuni- waste time. Let us get on with this. And then when the rates go up, when unanimously in May. cations history without even a policing In short, I strongly believe that Mr. mechanism to ensure that competition you get consolidation instead of com- would be enhanced, Mr. Klein has sent the petition and those rates go up, and you Klein is a man of unquestioned integ- wrong signal to the marketplace and under- don’t get competition in the local mar- rity and great ability. I urge my col- mined the core principles that are the foun- ket and you don’t get what we intended leagues to vote in favor of this nomina- dation upon which the Telecommunications in the Telecommunications Act, don’t tion. Act was constructed. come around like in Gramm–Rudman- Mr. President, in closing I want to In a letter describing his final concerns commend Senator HATCH, the able about our bill and the bill passed by our col- Hollings and say it didn’t work. Gramm–Rudman-Hollings worked up chairman of the Judiciary Committee leagues in the House, President Clinton for the position he has taken on this wrote that the final bill ‘‘should include a until 1990 when they went out to An- test specifically designed to ensure that the drews Air Base and they put in the cat- particular nomination. Mr. President, I yield the floor. Bell companies entering into long distance egories and so-called ceilings—we Mr. KOHL. Mr. President, let me markets will not impede competition.’’ This haven’t reached those ceilings yet—and make a few brief points. First, it is test described by President Clinton is actu- repealed the across-the-board cuts, the kind of ironic that Joel Klein’s nomi- ally a stronger test than the VIII(c) test con- sequester language. On October 21 at tained within the Modified Final Judgment. nation has nearly universal Republican 1:40 a.m. I made the point of order that Yet, Mr. Klein rejected both these tests re- support, but has divided many Demo- cently and decided to develop his own lesser you are now repealing the thrust of crats. After all, he is the President’s standard of ‘‘irreversibly open to competi- Gramm–Rudman-Hollings. Today, this choice for the job and any Presidential tion.’’ afternoon, I am making the same nominee for an executive branch ap- In another more compelling matter, Mr. point. You are repealing the competi- pointment—Democrat or Republican— Klein has turned the statute on its head in tive feature of the Telecommuncations his interpretation of the facilities-based deserves the benefit of the doubt. More Act of 1996. than that, Mr. Klein has the support of entry test for long distance. The statute re- I hope the nomination is defeated and quires that a facilities-based provider serve many prominent Democrats, among both business and residential customers be- we get somebody here who can read. them Judge Abner Mikva, Former Dep- fore the Bell company can enter long dis- I yield the floor. The PRESIDING OFFICER. The Sen- uty Attorney General Jamie Gorelick, tance. Mr. Klein, however, believes the stat- Lloyd Cutler, and others. I ask unani- ute can be interpreted to mean that a facili- ator from Utah. Mr. HATCH. Mr. President, I yield 4 mous consent that a letter from ties-based carrier need only provide service them—and from prominent Repub- to business or residential customers. Yet minutes to the distinguished Senator again, another instance where Mr. Klein has from South Carolina. licans—in support of Joel Klein be weakened the protections that the Congress The PRESIDING OFFICER. The Sen- printed in the RECORD. fought hard to enact into law to protect con- ator from South Carolina. There being no objection, the letters sumers from premature entry into long dis- Mr. THURMOND. Mr. President, I were ordered to be printed in the tance. rise today in support of the nomination RECORD, as follows: We will insist that any Administration JULY 14, 1997. nominee support the consumer protection we of Joel I. Klein to serve as Assistant Attorney General for the Antitrust Di- Hon. TRENT LOTT, fought hard to put into place. Mr. Klein’s in- Senate Majority Leader, Washington, DC. terpretation of the law will result in more vision of the Department of Justice. consolidation, less choice and higher costs to Mr. Klein is a fine man and is an out- Hon. TOM DASCHLE, consumers. We therefore want to ensure that standing nominee for this important Senate Minority Leader, Washington, DC. this or any Administration nominee imple- DEAR SENATOR LOTT AND SENATOR position. I am pleased to support him. DASCHLE: We are lawyers, academics, and ment the letter of the law and follow the Mr. Klein achieved an excellent aca- steps that we and the Administration out- former government officials with differing demic record at both Columbia College views on various legal and public policy is- lined in achieving a consensus during delib- sues. We are united, however, in our belief erations on the Telecommunications Act’s in New York and Harvard Law School. that Joel I. Klein is a superbly and uniquely conference report. He then served as a law clerk for the qualified nominee to be the Assistant Attor- Sincerely, Chief Judge of the D.C. Circuit Court of ney General for Antitrust at the Department BYRON L. DORGAN. Appeals and later for U.S. Supreme of Justice. We are confident that as Assist- ERNEST F. HOLLINGS. Court Justice Lewis Powell. Afterward, ant Attorney General Joel Klein would vig- Mr. HOLLINGS. It is not my intent he developed a distinguished reputa- orously enforce the nation’s antitrust laws to take further time. I can tell that tion in private practice, where he ar- and effectively serve the public interest. We this was called. I had checked after the gued important cases before the U.S. urge the Senate to act upon this nomination last rollcall. They said it wasn’t going Supreme Court. promptly and confirm Mr. Klein to this im- to be called until after 6 o’clock. When For the past several months, he has portant post. they filed it, they filed cloture imme- served as the Acting Assistant Attor- Sincerely, diately before there was any kind of de- ney General for the Antitrust Division. Donald B. Ayer, Former Deputy Attor- During that time, he has shown that he ney General, Former Deputy Solicitor bate whatever. They have not only lost General; Warren Christopher, Former their senses with respect to reality, is firmly committed to enforcing our Secretary of State, Former Deputy At- calling deficits listed in the document nation’s antitrust laws. For example, torney General; Lloyd N. Cutler, as $179.3 billion as balanced, but they under his leadership, the Antitrust Di- Former Counsel to the President; Alan have lost their manners and their cour- vision has greatly increased its collec- Dershowitz, Professor of Law, Harvard tesy. Usually you have the Senator tion of criminal fines. Thus far this fis- Law School; Peter Edelman, Professor who had the hold and caused the par- cal year, which almost coincides with of Law, Georgetown Law Center; Elea- ticular confusion put on notice, but I Joel Klein’s tenure, the Antitrust Divi- nor Fox, Professor of Law, NYU Law had a staffer watching the TV and saw sion has collected over $192 million dol- School; Jamie Gorelick, Former Dep- uty Attorney General; Carla A. Hills, our friend from Utah, Senator HATCH, lars in criminal fines, compared to Former United States Trade Rep- was talking. So there we are, just right only about $27 million for all of fiscal resentative, Former Secretary of Hous- in the middle. year 1996. ing and Urban Development; Charles You did not need cloture. At the time Mr. President, I am confident that James, Former Assistant Attorney we put on a hold and were asked: Do Mr. Klein is within the mainstream of General, Antitrust Division. July 17, 1997 CONGRESSIONAL RECORD — SENATE S7685 Harry McPherson, Former Counsel to the they clearly want someone in charge of ing action on other nominees for the President; Abner J. Mikva, Former the Antitrust Division who will bring Department of Justice, and for long Counsel to the President, Former Chief about the kind of competition prom- overdue bipartisan action on judicial Judge, United States Court of Appeals ised in—but not yet delivered by—the nominations as well. for the District of Columbia, Former Member of Congress; Newton N. Minow, Telecommunications Act. They have Mr. WYDEN. Mr. President, the posi- Former Chairman, Federal Commu- sent a strong message to Joel Klein on tion of Assistant Attorney General for nications Commission; Leon E. Pa- how to interpret Section 271 of the Act, Anti-Trust is one of the most critical netta, Former White House Chief of and I believe he understands that mes- to assuring American consumers enjoy Staff, Former Member of Congress; sage and will work hard to promote the benefits of competition. The deci- Deval Patrick, Former Assistant At- vigorous competition in the telephone sions made by the individual who holds torney General, Civil Rights Division; industry—and all other industries. this title affect billions of dollars and Robert B. Reich, Former Secretary of My hope is that Joel Klein, as a con- the ability of our companies to com- Labor; James Rill, Former Assistant Attorney General, Antitrust Division; firmed appointee, will surprise his crit- pete in the global economy. They af- Richard E. Wiley, Former Chairman, ics and please his supporters in his en- fect corporate profit and loss sheets Federal Communications Commission. forcement of the antitrust laws. I urge and the course of the stock market. my colleagues to support him. But most importantly, they affect the Senator ORRIN HATCH, Mr. KENNEDY. Mr. President, I give prices consumers pay for basic services, U.S. Senate. my strong support to Joel Klein’s nom- from telephone calls to transportation We are writing to express our support for ination to serve as Assistant Attorney and television. the nomination of Joel Klein as Assistant General of the Antitrust Division at No area holds more promise for com- Attorney General for Antitrust. We are a group of economists who are the Department of Justice. Mr. Klein’s petition than communications, and working actively to help break down entry background and experience have pre- that was the major impetus for the 1996 barriers and bring competition in the tele- pared him well to serve the country in Telecommunications Act. The Act was communications sector, as Congress in- this capacity. intended to eliminate monopolies, spur tended in passing the Telecommunications After graduating magna cum laude new entrants and bring down prices. Act of 1996. Collectively, we have served as from Columbia University and Harvard Eighteen months later, we have seen economic experts for interexchange carriers, Law School, Mr. Klein served as a law wireless companies, and Bell operating com- pitifully little progress. The Adminis- panies. The signatories below include four clerk for both D.C. Circuit Judge David tration has not moved aggressively to recent Economics Deputies from the Anti- Bazelon and Supreme Court Justice promote competition. The vote I will trust Division and the two most recent Chief Lewis Powell. He later served with cast today is meant to send a signal to Economists at the Federal Communications great distinction as a public interest the Administration that those of us in Commission. lawyer, Deputy White House Counsel, Congress who supported the 1996 Tele- Although we have our differences in the in- and Principal Deputy of the Antitrust communications Act want to see com- terpretation of various economic evidence, and in our recommendations for tele- Division where he is now the Acting petition rather than concentration. communications policies, we all believe that Assistant Attorney General. As a member of the Commerce Com- Joel Klein will make an excellent Assistant Mr. Klein’s work in the Antitrust Di- munications Subcommittee, I had Attorney General. He is fair and thoughtful, vision has earned wide praise. Leading hoped the 1996 Telecommunications he understands and uses economic argu- economists, including two former Chief Act would unleash a torrent of com- ments and analysis effectively, and he is Economists of the Federal Communica- petition. Instead, we have seen prices dedicated to enforcing our antitrust laws and tions Commission, believe that he will outpace inflation in many areas. Each promoting competition in our economy. be an excellent Assistant Attorney day the paper seems to carry yet an- Sincerely yours, General who is ‘‘dedicated to enforcing other announcement of one giant com- JOSEPH FARRELL, Prof. of Economics, our antitrust laws and promoting com- pany’s plans to merge with another. U. of California at petition in our economy.’’ Mr. Klein Companies are spending millions of Berkeley. wins similar high praise from State dollars on litigation and negative ad- MICHAEL KATZ, and Federal officials and many mem- vertising. The situation reminds me of Prof. of Business Ad- bers of the American Bar Association the African proverb: when elephants ministration, U. of active in the Section of Antitrust Law. fight, the grass gets trampled. The California at This praise is well deserved. Mr. grass here is the American consumer. Berkeley. Klein has won substantial criminal Perhaps the overwhelming array of CARL SHAPIRO, Prof. of Business fines against large companies guilty of choices has lulled the consumer into a Strategy, U. of price-fixing. He has challenged anti- sense of complacency. We hear about California at competitive practices and anticompeti- 500 channel broadcast satellite and Berkeley. tive mergers that harm consumers. He video-on-demand. We see pages and RICHARD GILBERT, has given new emphasis to antitrust pages of advertisements for cellular Prof. of Economics, enforcement overseas to help open phones and CD ROM’s, interactive com- U. of California at more markets for U.S. businesses. puters and digital cameras. The pace of Berkeley. I have had the opportunity to work progress is incredible. JANUSZ ORDOVER, closely with Mr. Klein on several is- Prof. of Economics, But if one peeks behind the New York U. sues, including a recent ‘‘East-West smorgasboard, there is a very disturb- ROBERT WILLIG, Initiative,’’ which brought together ing trend. The trend is toward con- Prof. of Economics business leaders, government officials, centration and media mega-mergers. and Public Affairs, and Republican and Democratic Sen- Today’s competitors are becoming to- Princeton U. ators from Massachusetts, North Caro- morrow’s partners. Mr. KOHL. Second, while it is unfor- lina, Washington, Utah, and California Mr. President, this is why the posi- tunate that Eric Holder is being held to discuss cooperative efforts by gov- tion of Assistant Attorney General for ‘‘hostage’’ to Joel Klein’s nomination, ernment and business to help consum- Anti-Trust is so crucial. The individual the truth is that the sooner we confirm ers. Mr. Klein’s participation in this ef- who sits in that office plays a pivotal Mr. Klein, the sooner we can move for- fort was key to its success, and I have role in assuring our anti-trust laws ward and confirm Eric Holder. The De- the greatest respect for his ability and produce robust competition rather partment of Justice, and the American his commitment to public service. than rogue concentration. Consumers people, will be better off with a con- I urge the Senate to approve his nom- need a champion for choice in commu- firmed Deputy Attorney General. ination. His outstanding record makes nications. Third, I respect the efforts of my col- him an excellent nominee for this posi- I like Mr. Klein personally and be- leagues, Senator HOLLINGS, Senator tion. I hope that the strong bipartisan lieve him to be a skilled lawyer. It is DORGAN and Senator KERREY, who have support already expressed by many the Administration’s failure to move fought long and hard for consumers on Senators on both sides of the aisle will aggressively to promote competition telecommunications matters. Like me, lead to further cooperation in expedit- that disturbs me. I hope my vote today S7686 CONGRESSIONAL RECORD — SENATE July 17, 1997 sends a clear message to the Adminis- nation of Joel Klein to assume the po- of these issues that almost no one un- tration that the trend toward increased sition of Assistant Attorney General of derstands. They seem not very impor- communications concentration needs the Antitrust Division of the U.S. De- tant to many, I am sure. I suppose to be thorougly examined and chal- partment of Justice. most who would listen to this would lenged. For this reason, Mr. President, There has been much debate here this think it incredibly boring. But, in fact, I will not be able to support the Ad- evening over my letter to Mr. Klein it is very, very important. We have a ministration on this vote. dated May 15, 1997, and his subsequent market system in this country that Mr. TORRICELLI. Mr. President, I letter in response dated May 20, 1997. works only when there is competition. rise in support of the nomination of I’d like to take this opportunity to When you don’t have competition, the Joel Klein because of my confidence in offer my two cents. market system doesn’t work. his ability to be the kind of antitrust When Mr. Klein’s nomination was We have something called a referee law enforcer the Justice Department first reported out of the Judiciary several places in this Government: One and the country need to protect con- Committee, I was concerned for three at Justice, in the Antitrust Division; sumers and ensure vigorous competi- primary reasons. First, I had recently we have a referee function in the Fed- tion. read Mr. Klein’s paper entitled ‘‘Pre- eral Trade Commission. In fact, we My confidence comes from Mr. paring for Competition in a Deregu- have 1,000 attorneys, roughly, I under- Klein’s record of great success during lated Telecommunications Market,’’ stand, whose job it is to deal with anti- the past nine months during which he which he presented at the Willard trust issues and the issues of monopoly has headed the Antitrust Division. He Inter-Continental Hotel in Washington, and so on. The purpose is to make sure has proven to be a strong advocate in DC, on March 11, 1997, and his interpre- that we don’t have enterprises, where promotion of competition. His accom- tation in that paper of Section 271 of people come in and grab markets and plishments include suing Rochster Gas the Telecommunications Act of 1996 develop trusts or monopolies and ex- and Electric for impeding competition troubled me. Because I chair the Sub- tract from the consumers a price that for electric power, suing to block a hos- committee on Communications, I felt is unfair, a price that is not set in an pital merger that would have raised that I could not, in good conscience, open market or an open competition. prices for patients on Long Island, NY, allow his nomination to move forward; That is what this antitrust enforce- ment is about. obtaining indictments of an insulation consequently, I placed a hold upon his Mr. Joel Klein is, by all accounts, ca- company executive for price fixing, nomination and sent a letter to him pable, smart, and a fellow with a dis- asking him to explain his statements blocking an acquisition that would tinguished career. I have met him. I concerning 271 applications. He have created a dominant provider of as- think he is a nice fellow. We should not phalt concrete in New Hampshire and promptly responded with a comprehen- be voting on this nomination at this Vermont, and blocking an acquisition sive explanation of his statements, point. We should not have been voting by Gulfstar Communications that and, while I did not at that time nor do on a cloture motion on this nomination would have created unacceptable media I now, necessarily agree with his as- either, as we did a week ago. Why? Be- concentration. sessment of the DoJ’s role in the 271 cause there are substantial questions His record also includes numerous application process, I understood the that a number of us have raised about guilty pleas and fines and settlements basis of his convictions. the nomination of Mr. Klein that have from antitrust violators, including a Second, in addition to the questions not been answered. I feel I must vote record $5.6 million penalty from Ger- raised in my letter, I also telephoned against this nomination. I don’t like man and Brazilian companies for vio- him and expressed concern over what that position, but I don’t intend to vote lating pre-merger notification rules. had been reported to me—both by press for a nomination with the kind of ques- With an already strong record in an accounts and by a wide range of indus- tions that remain about a number of acting capacity, we can look forward to try representatives—as a total failure positions that have been taken, a num- great things from Mr. Klein should he on the part of the Antitrust Division to ber of things that have been written be confirmed by the Senate. investigate allegations that Microsoft and said by this potential nominee on Mr. HATCH. Mr. President, I must Corporation was in violation of the antitrust issues, that give me great say I find some irony in the criticisms Consent Decree entered into with the concern. I am hearing today regarding Mr. Department of Justice on August 21, I intend to speak only briefly because Klein’s efforts to implement the Tele- 1995. I have here one of several news- I think my colleagues have covered communications Act. In essence, it is paper articles detailing these allega- this subject. After I complete my pres- being suggested that Mr. Klein’s inter- tions and seek unanimous consent for entation I will yield back the remain- pretation of the Act would permit local its introduction into the RECORD. Sub- der of our time. But I want to make a Bell companies to enter the long dis- sequently, I met with Mr. Klein and he couple of important points. tance market prematurely, or too eas- assured me that he would investigate The fight on the Telecommunications ily. these allegations. Act, which was the first major reform In fact, however, Mr. Klein has Finally, I had been contacted by a of the telecommunications laws in this weighed in against Bell entry into long number of radio broadcasters who had country in five or six decades, was a distance in the 2 applications that complained that the Antitrust Division substantial battle between behemoths have, to date, come before him—that was misinterpreting the radio owner- in our country—organizations that pro- is, the SBC and Ameritech applica- ship provisions of the Telecommuni- vided local service that are collecting tions. So it is curious to me that, while cations Act, but, after meeting with tens and tens of billions of dollars of Mr. Klein’s only actions in this regard Mr. Klein, and discussing the issue at revenue, and organizations that are in- have been contrary to the Bells, his length, I was satisfied with his ap- volved in long distance telephone serv- confirmation is being opposed on the proach in this matter. ice that are just as big. These titans ground that he is being too lax on the Consequently, based upon both his then clashed as we wrote a Tele- Bells. This puzzles me. written and verbal responses to my communications Act. One of my con- But the broader point here is that concerns. I am satisfied that he will be cerns as we wrote this act was that we Mr. Klein has demonstrated a studied, a fine Assistant Attorney General for would end up, not with more competi- fair approach to interpreting the law, the Antitrust Division, and I support tion, but, instead, with more con- as a general matter. his nomination. centration. If you have less competi- I may well disagree with particular The PRESIDING OFFICER. The Sen- tion and more concentration you will decisions Mr. Klein makes, but I am ator from North Dakota. have higher prices. persuaded he will make a top-flight Mr. DORGAN. Mr. President, if there My colleague from Nebraska held up antitrust chief. So I urge my col- is a cure for insomnia, as I said the something that was in the paper this leagues to join me in supporting this other day, this kind of debate surely morning in Nebraska, ‘‘So Far, Con- nomination. must be it. This is so arcane and tech- sumers Losers in Battle for Dial-Tone Mr. BURNS. Mr. President, I rise this nical, to be talking about antitrust is- Dollars; basic rates for telephone serv- evening to offer may support for nomi- sues and VIII(C) and section 271, and all ice are up for 93 percent of Nebraska July 17, 1997 CONGRESSIONAL RECORD — SENATE S7687 residential customers the past year.’’ I specific analysis from you on how the ‘‘irre- companies become—let’s have mergers, don’t know much about Nebraska, but versibly open to competition’’ standard re- let them go off and get married—it is I fear what will happen if we don’t have lates to the VIII(C) standard, which was rec- just terrific.’’ That is what the bill aggressive antitrust enforcement at ommended in the Conference Report on the was. So I offered an amendment on the Telecommunications Act of 1996. How does the Justice Department, something I the ‘‘irreversibly open to competition’’ floor of the Senate and said, ‘‘Let’s put fought very hard for, as did the Sen- standard differ from the VIII(C) standard these limits back on at this point.’’ I ator from South Carolina, as did the with respect to assessing adequate local don’t support taking the limits off how Senator from Nebraska, when we competition and the impact of RBOC entry many television stations you can own, passed the Telecommunications Act. into long distance services on long distance how many radio stations you can own. We were the ones standing out here on competition. We had a vote and guess what? Guess the floor talking about the VIII(C) test. In our meeting last week, you said that the who won? I won. My amendment pre- We are the ones who fought for a role standard that you and the Antitrust Division vailed. I was so surprised I could hardly for the Justice Department in all of have developed is stronger than the VIII(C) stand, and it was about 4 o’clock in the standard, and more appropriate in your afternoon. The then-majority leader these issues. Were it not for us, it judgement. I would like your analysis why would not have been there. this is the case. I want to assure you that I did not support my position. He was on Now, the Justice Department role is have an open mind on this subject. My posi- the opposite side. He changed his critical, as is the role of the Federal tion is not absolutely wedded to the VIII(C) vote—had another Member change his Communications Commission. If we standard as the only test for evaluation of a vote, and asked for reconsideration have a Federal Communications Com- Section 271 application by an RBOC. Rather, after dinner, 3 hours later. And do you mission that does the wrong thing, or I become concerned when an Administration know what happened? There were four, we have a Justice Department that official adopts a position that differs from five, or six Members of the Senate that doesn’t do the right thing in antitrust previous Administration policy—which I went out to have dinner—Lord only fought for in the debate over the Tele- enforcement, I guarantee the result of communications Act—and I would like to knows what they ate—they came back the Telecommunications Act last year better understand the new position. and 3 hours later they had some sort of will not be more competition and lower As I said on the Senate floor last Friday, I epiphany that allowed them to vote prices, it will be more concentration, do not doubt your abilities nor your integ- against my amendment, so I lost. fewer companies, and higher prices. I rity. I simply would like some clarification I learned that winning around here guarantee it. on some issues that I fought hard to secure sometimes means you only win for 3 This is important. This is about bil- in the Telecommunications Act at the re- hours. It felt good from 4 to 7, but the lions and billions and billions of dollars quest of the Administration before the Sen- fact is I lost. Then the bill went to con- of additional charges that consumers ate votes on your nomination to be Assistant ference and the bill had enough in it to Attorney General for the Antitrust Division. may or may not have to pay in the fu- Thank you for your assistance and co- make me feel that maybe we will move ture, depending on antitrust enforce- operation. in the right direction. But I would rue ment in the Justice Department and on Sincerely, the day of supporting any portion of thoughtful, responsible decisions in the BYRON L. DORGAN, this telecommunications act if we Federal Communications Commission U.S. Senate. don’t have the most aggressive anti- that properly implement the Tele- Mr. DORGAN. I have sent Mr. Klein trust enforcement and the best deci- communications Act. There will be this letter. sions, the most thoughtful decisions more discussion about that because we Let me say this. It may well be that comporting with what we decide is in also have some disagreements about the irreversibly open to competition this act from the Federal Communica- nominations to the Federal Commu- standard is a tougher standard, as they tions Commission. nications Commission. allege. I don’t have the foggiest idea. I I have a lot more to say but I know Mr. President, I ask unanimous con- don’t know. Nobody knows. And I am there are other times when Members sent to have printed in the RECORD at not prepared to have someone say, ‘‘I will be anxious to hear it, and I will this point a letter that I have written reject the standard that Congress de- save it for those times. to Mr. Joel Klein dated July 15, asking termined to be the standard when it Let me compliment the Senator from some questions about the interpreta- passed the Telecommunications Act, South Carolina and the Senator from tions that have been made on the and I create my own standard,’’ and Nebraska. Let me say a word, finally to the VIII(C) test—the VIII(C) standards, none of us know what that means nominee. I expect the Senate will cast rather, relative to the new standard here—I am not prepared to say, ‘‘Yes, a favorable vote for this nominee. I called ‘‘irreversibly open to competi- let me sign up for that. Let me be a hope this nominee succeeds. I hope this tion.’’ partner in that process.’’ I am not will- nominee proves that the standard that There being no objection, the letter ing to do it. he has developed is a tough, no-non- was ordered to be printed in the It may be, at the end stage of this sense standard. If he does, I will come RECORD, as follows: process, maybe it is proven to us that to the floor at some point in the future U.S. SENATE, Mr. Klein was right. I hope so. I hope and say, ‘‘Hurrah for you. I support Washington, DC, July 15, 1997. that is the case. But if he is not right, what you have done.’’ I think we Mr. JOEL KLEIN, if we are right, what is going to happen should not be voting on this nominee Acting Assistant Attorney General, U.S. Depart- is everybody in this country who uses a ment of Justice, Washington, DC. today. I wish we had more time. If we telephone, everybody in this country DEAR MR. KLEIN: Last night, I received a had more time, maybe some of these who is a consumer of telecommuni- letter from Attorney General Janet Reno re- votes would have been different. sponding to a letter I sent to President Clin- cations services, is going to end up Mr. President, I yield the floor and ton relating to issues that I have with re- paying higher prices. That’s the test. yield the remainder of our time. spect to your nomination. While I appreciate Mr. President, one final point and the fact that the Administration has acted The PRESIDING OFFICER. The Sen- then I will conclude. During the debate ator from Utah. to respond to my inquiry, the response was on the Telecommunications Act, some- very general and lacks sufficient specificity Mr. HATCH. Mr. President, do I un- to alleviate my concerns. thing happened to me that was a real derstand the other side is willing to I expect that you will be confirmed by the learning experience. All of us in the yield back the remainder of their time Senate on Thursday. However, before I can Senate have learning experiences, de- and we are prepared to yield back the vote in your favor, I still need to resolve spite the fact that some say we never remainder of our time? some concerns with respect to the role of the seem to be able to learn. Mr. HOLLINGS. Mr. President, we Justice Department in the antitrust aspects I offered an amendment on the floor yield the remainder of our time. of telecommunications policy. In particular, of this Senate on the issue of con- The PRESIDING OFFICER. The Sen- your assurance to other Senators that you centration, because the bill that came reject the VIII(C) standard with respect to ator from Utah. the Justice Department’s evaluation of a to the Senate said, ‘‘Let’s take the lim- Mr. HATCH. Mr. President, I yield Section 271 application by a Regional Bell its off. Let’s let these companies marry back the remainder of our time. I ask Operating Company (RBOC) needs further ex- up. The more weddings the better. Let unanimous consent that upon the com- planation. I would like a more detailed and three companies become one. Let two pletion of debate or the yielding back S7688 CONGRESSIONAL RECORD — SENATE July 17, 1997 of time on the Klein nomination, we NOMINATION OF ERIC H. HOLDER, the highest level of professionalism proceed to a rollcall vote on the nomi- JR., TO BE DEPUTY ATTORNEY and independence in its commitment nation and then, after that vote we GENERAL to enforcing our Nation’s laws. I have proceed to vote on Executive Calendar Mr. HATCH. Mr. President, I am spoken with Mr. Holder on numerous No. 139, the nomination of Eric Holder pleased today that we are finally vot- occasions since his nomination, and am to be Deputy Attorney General of the ing on the nomination of Mr. Eric struck that, in addition to being emi- United States. Holder, nominated to serve as Deputy nently qualified for this position, he is The PRESIDING OFFICER. Is there Attorney General. Mr. Holder was re- a candid, forthright individual of char- objection? Without objection, it is so ported out of the Judiciary Committee acter and integrity who will be a posi- ordered. unanimously on June 24. I support Mr. tive force in steering the Justice De- partment and in seeing to it that our Mr. LEAHY. May I ask for the yeas Holder for this position, and I urge my laws our faithfully and impartially en- and nays on both. colleagues to vote in favor of his con- forced. The Nation expects and de- Mr. HATCH. On both nominees. firmation. This is a position which is vitally im- serves nothing less, and I believe they The PRESIDING OFFICER. Is there a portant to the efficient and effective will get as much from Mr. Holder. sufficient second? management of the Justice Depart- While I have often given Attorney There is a sufficient second. ment, as well as to this committee and General Reno due credit for the fine The yeas and nays were ordered. its many dealings with the Depart- work and accomplishments of the Jus- tice Department, not the least of which Mr. LEAHY. I ask unanimous con- ment. The Deputy Attorney General is the recent trial and conviction of sent the yeas and nays be ordered on plays a critical role in the day-to-day Timothy McVeigh, the Department, both. oversight, management, and adminis- tration of the Justice Department, like any large agency, also has its The PRESIDING OFFICER. Is there share of problems, many of which fall objection to the ordering of the yeas typically handling the Department’s most important and sensitive matters. on the Deputy Attorney General’s and nays on the second nomination? The deputy has ultimate responsibility desk. Without objection, it is so ordered. Is for the office of the Solicitor General, Moreover, the Department has been, there a sufficient second? who represents the United States be- and inevitably will be, the subject of There is a sufficient second. fore the Supreme Court, as well as all some rather intense political pressure, The yeas and nays were ordered. of the Department’s civil and criminal and, quite frankly, I am somewhat dis- turbed by a growing sense that, in a Mr. HATCH. I yield the remainder of divisions, including, for example, the number of instances, there is at least my time. civil rights, tax and antitrust divi- the appearance that political pressures The PRESIDING OFFICER. The sions, the criminal division, the Fed- eral Bureau of Investigation, and all may have won out over the fair and im- question is, Will the Senate advise and partial enforcement of the law. After a consent to the nomination of Joel L. U.S. attorneys. In short, a broad array of policy and law-enforcement deci- rather public display by the White Klein, of the District of Columbia, to House of its displeasure that the Attor- be an Assistant Attorney General. On sions that are critical not just to our legal system but to the Nation as a ney General had previously sought the this question the yeas and nays have appointment of four independent coun- been ordered. The clerk will call the whole, ultimately pass through the Deputy Attorney General. sels, we now see the Attorney General roll. Mr. Holder comes to us with a distin- steadfastly refusing to appoint an inde- The yeas and nays have been ordered. guished record in the law and in the ad- pendent counsel to conduct the cam- The clerk will call the roll. ministration of justice. After graduat- paign finance investigation—the one The legislative clerk called the roll. ing from Columbia Law School in 1976, case where an independent counsel is The result was announced, yeas 88, he served for 12 years as a prosecutor most called for to ensure public con- nays 12, as follows: in the public integrity section of Jus- fidence in the investigation and the De- tice Department’s Criminal Division, partment itself. And, after the Attor- [Rollcall Vote No. 187 Ex.] after which he served for 5 years as a ney General expressly adopted one in- YEAS—88 associate judge for the District of Co- terpretation of the independent counsel Abraham Frist McConnell lumbia Superior Court. Since 1993, Mr. statute, and I challenged that interpre- Akaka Glenn Mikulski Holder has served as U.S. attorney for tation, we now receive a letter explain- Allard Gorton Moseley-Braun Ashcroft Graham Moynihan the District of Columbia, our Nation’s ing that she has, notwithstanding Baucus Gramm Murkowski largest U.S. Attorney’s Office, which statements to the contrary, been ap- Bennett Grams Murray employs over 300 attorneys and pros- plying the same standard I articulated. Biden Grassley Nickles The Justice Department issues bizarre Bingaman Gregg Reed ecutes over 10,000 cases each year. I be- Bond Hagel Reid lieve these positions provide especially statements seeking to put particular Boxer Hatch Robb useful experience for a person who spins on information disclosed by Breaux Helms Roberts would serve as Deputy Attorney Gen- Chairman Thompson in connection Brownback Hutchinson Rockefeller Bryan Hutchison Roth eral. with the campaign fundraising hear- Burns Inhofe Santorum I would like to emphasize how impor- ings. The Justice Department has filed Campbell Jeffords Sarbanes tant it is to the Senate and the Judici- briefs taking rather dubious positions Chafee Johnson Sessions ary Committee in particular, on both in politically sensitive cases, including Coats Kempthorne Shelby Cochran Kennedy Smith (NH) sides of the aisle, to have a close and its appeal brief in the litigation over Collins Kerry Smith (OR) cooperative working relationship with California’s proposition 209, and its Coverdell Kohl Snowe the Deputy Attorney General. I believe very recent brief defending Mrs. Clin- Craig Kyl Specter D’Amato Landrieu Stevens that one of the Department’s greatest ton’s invocation of a governmental at- Daschle Lautenberg Thomas assets over the past several years has torney client privilege in response to DeWine Leahy Thompson been its former deputy, Jamie independent counsel Starr’s request for Dodd Levin Thurmond Gorelick, who successfully fostered and certain documents. And the FBI Direc- Domenici Lieberman Torricelli Durbin Lott Warner maintained a cooperative, honest, and tor is in the position of refusing to Enzi Lugar Wellstone responsive relationship with this com- brief the White House on national secu- Faircloth Mack mittee. I cannot overestimate how val- rity matters because of its pending in- Feinstein McCain uable this relationship has been in the vestigation. While each of these in- NAYS—12 virtually daily interactions between stances, standing alone, might have a Bumpers Dorgan Hollings the committee and the Department, legitimate explanation, taken together Byrd Feingold Inouye and I am hopeful, and confident, that they create an appearance that politics Cleland Ford Kerrey Eric Holder will, like his predecessor, is influencing what should be a neutral, Conrad Harkin Wyden work closely with the committee to en- independent enforcement of our Na- The nomination was confirmed. sure that the Department maintains tion’s laws.