26878 EXTENSIONS OF REMARKS November 1, 1989 EXTENSIONS OF REMARKS

CELEBRATING 48 YEARS OF at the same time necessary. And he has done CONSUMERS ON HOLD: THE FUTURE COULD BE VISION AND VIGOR his part to insure that the United States re­ TODAY IF THE BABY BELLS WERE ALLOWED mained strong throughout a demanding time TO GROW UP HON. WM. S. BROOMFIELD in our history. (By Jerome Ellig) OF JAMIE WHITTEN' vision has encompassed In the not-so-distant future, nearly every IN THE HOUSE OF REPRESENTATIVES and elevated this whole Nation. This anniver­ household with telephone service could sary and this commemoration will not be the reach out and touch, and be touched by, Wednesday, November 1, 1989 last. He will continue to play a dynamic part in thousands of new consumer services Mr. BROOMFIELD. Mr. Speaker, on Satur­ the workings of this institution for many years through an inexpensive screen and key­ day, November 4, we will recognize another to come. board plugged right into the phone outlet. milestone in a remarkable public service Unfortunately, U.S. antitrust laws stand in career which spans over half a century. the way. My distinguished colleague from , CONSUMERS ON HOLD The federal court supervising the 1984 breakup of AT&T effectively banned the JAMIE L. WHITTEN, celebrates 48 years as a local phone company from providing a vari­ Congressman. According to the records, he HON.THOMASJ.TAUKE ety of services made possible by advances in was elected to the Mississippi Legislature at computer and telecommunications technolo­ 21, and elected district attorney of the 17th OF IOWA gy: District, a circuit of eight counties, at the age IN THE HOUSE OF REPRESENTATIVES Consumers who now fumble through of 23. thousand-page telephone books could view When JAMIE WHITTEN first came to Con­ Wednesday, November 1, 1989 the yellow pages on-screen and find business gress, Franklin D. Roosevelt was still in the Mr. TAUKE. Mr. Speaker, I have long been listings cross-indexed by dozens of different White House. We were finally emerging from concerned that the restrictions imposed on criteria. New businesses would not have to the Great Depression which tore at the will the seven Bell companies by the court presid­ wait for new phone books to be published and the very heart of America. In less than 2 ing over the AT&T divestiture case disserve before they could be listed. Big-city resi­ months America would enter the Second U.S. economic and technology interests. As dents would be spared the hassle of dealing with multivolume phone directories. World War. Those were incredible times. our economy transitions into the information Deaf people could use a screen and key­ It is Mr. WHITTEN who possesses our most age, virtually every sector will become in­ board to carry on private phone conversa­ complete institutional memory, extending back creasingly information-based. We will rely far tions. to 1941 . As the senior Republican in Con­ more heavily on telecommunications to be the Elderly people, shut-ins, two-career fami­ gress, I have seen a great deal of history engine of economic growth and productivity. lies, and others with limited mobility or unfold. Yet, I look back to my freshman term, And, since telecommunications equipment and time could compare prices for groceries and that was in 1957, and JAMIE WHITTEN was al­ services markets are becoming much more other goods, place orders, and have the ready a leading light on the Appropriations global in scope, it will be our ability to inno­ goods delivered without leaving home. Committee. vate superior technology in telecommunica­ Both businesses and labor unions could Respect is something which is hard to ac­ tions and related fields that will determine, to carry on detailed and regular communica­ tions with employees who choose to work at quire in the world of partisan politics, but once a large extent, our future competitiveness. home. it is achieved there can be no more effective The restrictions on the Bell companies essen­ Families buying homes could shop for the form of leadership. JAMIE WHITTEN'S leader­ tially warehouse over 60 percent of the U.S. best mortgage rates and apply instantly ship rests on this respect. He has built up a telecommunications industry's capital re­ without relying on a real estate agent. great amount of good will for close to five sources that could otherwise be used to fur­ Students, scientists, and other researchers decades. His old-fashioned hard work has ther our long term economic and technology could use an electronic screen to read books served this institution well. Again and again interests. located in libraries thousands of miles away. his leadership has produced appropriations For this reason, the judicial policy enforcing Many of these services, such as electronic bills on time and under budget. As someone them is in need of comprehensive review by directions and shopping, are already avail­ able in other countries. Some are also avail­ who shares the ideals of cooperation, perse­ the Congress. The court policy is based on able in the United States-to anyone who verance, and fiscal responsibility, I count antitrust concerns alone. These concerns, wants to invest a few thousand dollars or so myself lucky to have served alongside JAMIE however, were always highly theoretical in in a personal computer, modem, and soft­ WHITTEN for more than 30 years. During some nature and are even less relevant today be­ ware, then spend aggravating hours figuring very hard economic times, the American farm cause of regulatory checks and balances in out how to use all three. The National Tele­ has had a needed champion in JAMIE WHIT­ place at the FCC and the various State public communications and Information Adminis­ TEN. The environment and public works utility commissions. tration reports that approximately 1 million projects have also received strong encourage­ To help my colleagues sort through the anti­ individuals and businesses subscribed to ment under his chairmanship. He represents trust considerations that have served as the such services in 1987. But the average person who cannot afford a personal com­ the positive things our Federal dollars can basis for imposing the restrictions on the Bell puter has little hope of obtaining these serv­ achieve through jobs, infrastructure improve­ companies, I submit for the RECORD an article ices unless Congress or the courts lifts re­ ments, and economic safeguards. JAMIE by Jerome Ellig of citizens for a sound econo­ strictions that prevent local phone compa­ WHITTEN reminds us that the needs of a my entitled "Consumers on Hold: The Future nies from getting into this business. Member's district and the needs of the coun­ Could Be Today if the Baby Bells Were Al­ Companies currently offering "videotex" try as a whole often go hand in hand. lowed to Grow Up." Legislation I have co­ services (information services involving tele­ There are few instances where history sponsored, which would conditionally free the phone lines and video screens> include Lock­ touches our lives in a truly remarkable way. Bell companies from these restrictions, is now heed, Mead, IBM, Sears, J.C. Penney, Dow JAMIE WHITTEN's career is one of those in­ pending before the Telecommunications and Jones, and several major airlines. Many vi­ deotex customers are large businesses, stances. As a Congressman, he has grappled Finance Subcommittee, on which I serve. I am which have little trouble buying computers with great issues during the administrations of hopeful some version of the bill dealing with and other necessary equipment. Households 1O Presidents. He has seen this Nation and these most important policy issues will be re­ that subscribe have a median annual income the Federal Government experience profound ported out soon to the full Energy and Com­ of $50,000, according to the Videotex Indus­ change, change which often was painful, but merce Committee. try Association.

• This "bullet" symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

...... " . ' ~- .. November 1, 1989 EXTENSIONS OF REMARKS 26879 For most Americans, videotex remains phone companies, is not politically feasible. checks by independent auditors, it can pre­ only a dream, because District Court Judge Fortunately, neither is it necessary. For the vent such fraudulent accounting. But even Harold H. Greene, in his continuing control same reason that cellular telephone carriers this intense scrutiny would not be needed if of AT&T's breakup, is stymying develop­ have been reducing the costs of telephones, state regulators would change the way they ment of a market information services. the Baby Bells would be eager to provide vi­ regulate the Baby Bells. If cross-subsidiza­ The 1984 breakup of AT&T radically re­ deotex hardware if they could offer their tion is the worry, regulators could put caps structured the nation's telecommunications own information services. In addition to the on telephone rates, rather than picking industry. To settle an antitrust suit by the profits they would get from selling these some acceptable percentage of profit. This federal government 10 years earlier, the services, they would save the huge costs of would give the companies an incentive to monolithic Bell System was separated into printing telephone books. Indeed, the Baby cut costs to increase their return, rather AT&T and 22 local telephone companies, Bells are lobbying in Washington these days than to pad their expenses. most of which were organized into seven re­ not for subsidies but simply for permission Price caps are used extensively in Eng­ gional Bell operating companies. Each of to compete. land, and the FCC recently switched from the seven is a major corporation in its own Judge Greene continues to bar the Baby rate-of-return regulation to price caps for right, with revenues ranging last year from Bells from offering information services be­ AT&T's long-distance service. Already 18 $8.5 billion to $13.7 billion. The settlement cause he fears that they would engage in states have initiated price caps or other opened long-distance phone service to com­ three types of anticompetitive behavior: flexible-rate experiments for long-distance petition, but the Federal Communications predatory pricing, cross-subsidization, and service within their borders. Critics of this Commission continued to regulate discrimination against competitors. These approach believe that any benefits from long-distance phone rates. AT&T also re­ are all more theory than reality. lower costs will never be passed along to ceived permission to enter many unregulat­ "Predatory pricing" is antitrust lingo for a consumers. Neither regulator scheme-price ed businesses, such as computer sales. company selling its product below cost until caps or rate-of-return-is perfect, but price The 22 local phone companies, often it drives its competitors out of business, and caps could remove the threat of cross-subsi­ called the "Baby Bells," were supposed to then recouping its losses by charging mo­ dization. concentrate on offering local phone service, nopoly prices. Under this theory, for exam­ Like cross-subsidization, the third poten­ which is regulated by the states. To this ple, the Baby Bells might sell stock quota­ tial problem, discrimination, stems directly day, most states largely prohibit competi­ tions below cost and force Dow Jones' stock­ from the Baby Bells' local monopolies. In­ tion with these established companies. As quotation service to go out of business. formation-service providers must use the Jack High, an antitrust economist and direc­ Then the Baby Bells could jack up their local phone lines to reach most households tor of George Mason University's Center for own prices to make up for earlier losses­ and many businesses. But if the Baby Bells the Study of Market Processes, notes: "The and then some. are the only ones in the local telephone government was concerned with monopoly, There are a lot of problems with this business, and are also allowed to enter the but the real source of any monopoly power theory. The Baby Bells would have to be information business, they may use their that AT&T had was its local phone monop­ willing to take large losses on the gamble control over local lines to keep competing olies. Instead of pressing the states to pro­ that this predatory strategy would succeed, information providers from reaching cus­ mote competition locally, the federal gov­ during which time consumers enjoy fabu­ tomers. ernment broke up AT&T." lously low prices. And even if they could drive out Dow Jones, they would have to Here too the FCC believes that it can Also as part of the breakup agreement, figure out how to keep it and other competi­ solve the problem. Through an elaborate set the Baby Bells were forbidden from manu­ tors from reentering a profitable market. of rules, it prevents the Baby Bells from facturing telephone equipment, offering It's no wonder that in more than two dec­ using muscle tactics: denying competitors long-distance service, or providing informa­ ades of economic research in a wide variety access to the local phone lines, charging tion services such as videotex. In 1987 when of industries, predatory pricing has been them a higher price than they charge them­ it came time to review these three-year re­ found highly unlikely because it is generally selves, or giving competitors inferior service. strictions in the context of current circum­ unprofitable. In a 1982 University of Chica­ Regulation of the Baby Bells would per­ stances in the industry, both the Justice De­ go Law Review survey of economic studies haps become more difficult if they were al­ partment and the FCC urged the court to of alleged cases, including the famous lowed to enter the information business, but free the Baby Bells to make equipment and Standard Oil case of 1911, Judge Frank Eas­ certainly not impossible. Allowing the Baby provide information services. They based terbrook concluded that "the antitrust of­ Bells to develop this market, accompanied their recommendations in part on a massive, fense of predation should be forgotten." by regulation, is surely better for consumers 3112-pound report, The Geodesic Network, Similarly, when asked in 1986 if the Federal than a blanket prohibition. compiled in 1987 by engineer and lawyer Trade Commission should issue an annual The problem with regulation, of course, is Peter Huber for the Justice Department. report on predatory pricing, one commis­ that in an imperfect world it can always be Judge Greene refused to go that far, but sioner replied the FTC might just as well too much or too little. Fortunately, techno­ he did permit the Baby Bells to develop issue an annual report on unicorn sighting. logical developments may one day make "gateways," which let callers locate and use At first glance, "cross-subsidization" many local telephone monopolies-and thus a variety of information services by dialing a sounds similar to predatory pricing. Both in­ the need for regulation-obsolete. Peter single phone number. As part of a one-year volve selling below cost. Under the theory of Huber's 1987 report for the Justice Depart­ trial program in Pennsylvania, for example, cross-subsidization, however, the Baby Bells ment points clearly in that direction. customers of Bell Atlantic can call one would be content to sell stock quotations at To see how, it's important to realize that number and then select on their computer a loss forever and would make up their in the old days of integrated AT&T, most screens from a list of companies offering losses by charging higher prices for ordi­ callers reached out and touched Ma Bell the airline flight schedules, stock quotations, nary local phone service. minute they grabbed the phone. Local calls news, publications, legislative updates, and Why would the Baby Bells ever want to were routed through local switchboards op­ other information. Even though subscribers cross-suhsidize? It has to do with the way erated by AT&T-owned local phone compa­ may use services offered by several different local phone rates are regulated. In most nies. Even a call transferred by an employee companies, they will generally receive only cases, governments limit phone companies' on one floor of an office building to a co­ one monthly bill. The catch is that they return on their investment instead of the worker on another floor would be routed must have personal computers and modems. prices they charge. through AT&T equipment. Long-distance To create a mass market for information Economists have long recognized that a calls went through the local AT&T-owned services, the number of potential consumers company thus regulated can sometimes switchboard to AT&T's long-distance divi­ must be expanded beyond those who now make a greater profit by artificially inflat­ sion, which sent them to another AT&T­ own computers. Someone must widely dis­ ing the amount of capital it uses-the more owned local switchboard in the destination tribute simple, low-cost terminals-video capital the company employs, the larger will city. screens and keyboards-that plug into the be the total revenue generated by a given Nowadays, however, many business calls phone lines. In other countries, this some­ rate of return. One way to boost the capital pass through "private branch exchanges." one is the government. In France, which has base is to buy equipment to use in unregu­ Businesses have established their own the most widespread consumer videotex lated businesses, such as information serv­ phone networks to transfer calls among of­ system, the government has given away 3.7 ices, while claiming to use it in providing fices, different buildings, and even groups of million terminals. Thirteen percent of local telephone service. Local telephone cus­ buildings. In Baby Bell regions, the number French households are on-line. tomers then end up subsidizing information of phone lines served by private branch ex­ The idea of the U.S. government spending services, and the Baby Bells are permitted changes has more than doubled since 1982. millions of taxpayer dollars on a videotex­ by misled regulators to skim greater profits. More business phone lines are served by pri­ in-every-home program, which basically The FCC claims that with detailed stand­ vate branch exchanges than by the conven­ would help generate business for the tele- ards and requirements, including cross- tional local phone companies tive impact that he has had on so many im­ competing with the Baby Bells are also ex­ have pushed Congress to take up the issue, portant legislative victories and realizes that panding. introducing a concurrent resolution similar he will be missed. Callers on these alternative networks still to Dingell's last year, and Hollings may be Betty and I offer our sincere gratitude to him must use the Baby Bells for local calls to mollified somewhat by the impending resig­ telephones not connected to the same net­ nation of his chief nemesis at the FCC, and wish him a healthy and successful retire­ work. But for long-distance calls, they can Chairman Dennis Patrick. ment, that he so deserves. bypass the local phone company entirely. No doubt many legislators are prompted Private branch exchanges connected direct­ to action by the immense consumer benefits ly with AT&T, for example, now account promised by a less-regulated, high-tech tele­ DANIEL ORTEGA'S TRUE for as many phone lines as any one of the communications industry. Rep. Swift com­ COLORS seven Baby Bells. In short, the monopolistic mented last year: "The question we must part of the nation's telephone network is ask ourselves is whether existing govern­ HON. ILEANA ROS-LEHTINEN shrinking to a collection of local telephone ment policy provides adequate incentives to loops, and even callers in many of these U.S. industry to invest in this nation's eco­ OF FLORIDA loops have the alternative of building their nomic and technological future. The restric­ IN THE HOUSE OF REPRESENTATIVES own local network. tions imposed in the aftermath of the Wednesday, November 1, 1989 In the future the Baby Bells may also AT&T divestiture provide a negative answer have to deal with a giant intruding on their to this question. We believe we can do Mrs. ROS-LEHTINEN. Mr. Speaker, during turf: cable television companies. Some day better." the recent summit of inter-American Presi­ regulators may realize that two companies As long as legislators fail to act, they must dents at San Jose, Costa Rica, Mr. Daniel engaged in the business of running wires realize that federal courts and an independ­ Ortega, President of Nicaragua unveiled his into people's houses might also be able to ent regulatory agency, rather than Con­ compete with one another in offering both true colors by threatening to suspend the uni­ gress, are shaping the course of telecom­ lateral cease-fire that had previously been telephone and television service. munications policy. Congressional fear of Already, a political battle over this issue is losing control could we 11 be the strongest agreed upon as a must for the normal devel­ simmering. FCC regulations, along with nar­ force in making a wealth of information opment of the electoral process in that coun­ rower legislation passed in 1984, combine services available to every consumer. try. This morning he did stop the cease-fire. with the AT&T breakup agreement to keep The Sandinista government has not re­ telephone companies out of the cable televi­ sponded satisfactorily to the just demands of sion business. But the Baby Bells are pre­ TRIBUTE TO DICK SULLIVAN paring to fight the $14 billion cable industry the opposition political parties requesting the for a piece of this market. They have the restructure of the Supreme Board of Elec­ support of cable programming producers HON. DOUGLAS APPLEGATE tions, a general amnesty, the right to vote of such as the Motion Picture Association of OF OHIO Nicaraguan citizens abroad and other de­ America. Likewise, cable companies are well­ IN THE HOUSE OF REPRESENTATIVES mands. suited to offering phone service, especially I would like to denounce, Mr. Speaker, the since the fiber-optic cable that may help Wednesday, November 1, 1989 decision of Mr. Ortega to suspend the cease­ transmit a new generation of "high defini­ Mr. APPLEGATE. Mr. Speaker, it is with a tion" television signals would give cable fire and the lack of definite answers to the de­ companies the ability to transmit voice and deep sense of regret that I rise today to speak mands of the opposition as a clear intention data as well. of the retirement of Dick Sullivan. As a to violate the electoral process and to derail These developments suggest that the most member of the Public Works and Transporta­ the celebration of a clean and honest election economical telecommunications system of tion Committee, I have seen first-hand the ex­ in Nicaragua. the future will consist of a variety of com­ pertise, and dedication that Dick has always petitors in both local and long-distance serv­ given the committee. Dick's well-earned retire­ ice. Telecommunications companies capable ment is not only a personal loss for me, but CONEY ISLAND HOSPITAL: 80 of adapting to this new environment will YEARS OF CARING grow and prosper. Those artificially restrict­ for the entire House of Representatives. ed to offering only certain types of services Dick has been at the helm of the committee will lose markets to more-nimble competi­ throughout my tenure in the House. He has HON. STEPHEN J. SOLARZ tors. Huber suggests that if the Baby Bells diligently worked to secure final passage of OF NEW YORK are prohibited from entering new markets. major infrastrypture legislation, highway bills, IN THE HOUSE OF REPRESENTATIVES "it remains quite possible that Ctheyl will water resources development legislation, and become the U.S. Post Office of electronic environmental protection legislation. His insti­ Wednesday, November 1, .1989 telecommunications, absolutely essential to many, with steady or even growing traffic, tutional knowledge will be difficult, if not im­ Mr. SOLARZ. Mr. Speaker, it is with great but moribund nonetheless." No doubt such possible, to replace. The reauthorization of pleasure that I stand before you today to com­ a realization explains why the Baby Bells, the highway bill, Superfund, Motor Carrier memorate the 80th anniversary of Geney whose positive financial performance after Safety Act, and Hazardous Materials Trans­ Island Hospital, located in my congressional the breakup surprised many investment an­ portation Act will be made that much more dif­ district, and to pay tribute to the institution's alysts, are nevertheless scrambling to offer ficult without the involvement of Dick Sullivan. long record of impressive performance in more than local phone service. I have great respect for Dick's efforts on health care and community service. While the Baby Bells, federal agencies and consumer groups appeal Judge Green's behalf of the members of the committee. He A facility of the New York City Health and 1987 decision, Congress seems ready to take always worked with all members in order to Hospitals Corp., Coney Island Hospital is com­ matters into its own hands. Last year, Rep. build the kind of bipartisan effort that our com­ mitted to providing the highest quality medical (D-Mich.), powerful chairman mittee is well known for. He respected the po­ care to all who need it, regardless of a pa­ of the House Energy and Commerce Com­ sition of the members and was diligent about tient's ability to pay for services. Equipped mittee, introduced a concurrent resolution helping the members who came to him. He with 445 inpatient beds, the hospital provides endorsing the idea of allowing the Baby has been of tremendous assistance to me as primary care, emergency services, and a Bells to offer information services and man­ well as my district in the past, and I will cer­ broad range of inpatient services to a diverse ufacture telephone equipment. It had 205 cosponsors. In April of this year, Reps. Al tainly miss his first-hand knowledge of the population representative of a wide range of Swift issues and his leadership abilities. Not only incomes and ethnic groups including concen­ introduced legislation to remove the restric­ did he work with the members, but he made trations of the elderly, lower-income residents, tions. every effort to work with outside parties who immigrants, and young middle-income families. November 1, 1989 EXTENSIONS OF REMARKS 26881 In keeping with the times, the hospital has the hospital staff's sympathetic treatment to to their community spirit and an immeasurable acquired the best and most advanced medical the whole family was a great comfort to us all asset to the Bronx community. equipment available to meet the health needs in our time of distress, and for that we will of the large number of people it serves. A always be grateful. state-of-the-art emergency room, now under This milestone anniversary is confirmation construction and scheduled to be completed that the hospital has made a significant and in January, 1990, will be one of the most so­ enduring impact on the communities of south­ phisticated and advanced in the country and ern Brooklyn, and it is a mandate for the hos­ IMPACT II-THE TEACHERS will better enable the hospital staff to deal pital to continue its innovative approach to NETWORK with the over 80,000 patients it receives a health care and community service well into year, not to mention one of the highest rates the future. of ambulance arrivals in New York City. The HON. JOHN JOSEPH MOAKLEY Coney Island Hospital has stood as a model new emergency room was planned with an OF MASSACHUSETTS eye toward someday having the hospital a of successful and effective health care man­ trauma center in the HHC system, a cause agement and community service for 80 years, IN THE HOUSE OF REPRESENTATIVES championed by the hospital's current execu­ and on November 9, at a dinner commemorat­ Wednesday, November 1, .f 989 ing this momentous occasion, I will accept the tive director-and my good friend-Howard Mr. MOAKLEY. Mr. Speaker, over the next hospital's Community Health Services Award Cohen. 5 years, the United States will need more than Not only is Coney Island's professional staff with my colleague, the Honorable CHARLES a million new teachers. And if we continue on highly trained on the most up-to-date treat­ SCHUMER. When I take the podium at that our current path, we will only be training ments and research, the hospital's compas­ time, I will do so proudly knowing that I have 625,000 people to teach during that time­ sionate personnel strive to devote as much at­ contributed, even in a small way, to the ex­ and all of those may not choose to do so. tention to personalized care as to technical ceptional and humanitarian work of this fine The situation is even worse for science and skill and have a particular interest in seeing institution.O that patients are treated as humanely and as mathematics teachers. Only 1,500 education courteously as possible. majors qualified to teach math and science Every member of the Coney Island Hospital are graduating annually. That amounts to 1 for family has long held the philosophy that com­ every 1O school districts in the country. munity service is as vital to the community as The National Science Teachers Association health care, and I have witnessed with pride estimates that 300,000 new mathematics and the initiative the hospital's administration and science teachers will be needed by 1995. staff have shown in recognizing and solving THE lOOTH ANNIVERSARY OF That is more than the total number of math community problems and providing vital re­ THE BRONX YMCA and science teachers currently teaching. sources for preventive care and health educa­ Teacher salaries have increased in some tion. Not content with merely providing excel­ areas but they still aren't kaeping pace with lent health care, they have reached out to a HON. ELIOT L. ENGEL the cost of living. And while those who diverse, growing community and addressed OF NEW YORK choose teaching don't do it for the money, the needs of its residents as few public institu­ other working conditions are bad as well. tions have done. IN THE HOUSE OF REPRESENTATIVES Teachers work long hours, are viewed with The Ida G. Israel Coney Island Community Wednesday, November 1, 1989 little respect, and usually operate without an Health Center is just one example of the hos­ Mr. ENGEL Mr. Speaker, on November 17, pital's commitment to meet all of the health office, telephone, typewriter, or secretarial care needs of the community. The clinic, es­ the residents of the Bronx are taking part in a help. And in many areas, schools are lacking tablished in 1985, has enabled the hospital to very special event. The Bronx YMCA is mark­ in teaching materials, books, and laboratory provide comprehensive care-close to ing 100 years of faithful service to the commu­ supplies. home-to people unable to attain adequate nity in a celebration being dubbed "A Century So we need to find ways to encourage and services elsewhere. Through enterprises such of Commitment to the Bronx." reward those who-in spite of these difficul­ as this and the Coney Island Hospital Commu­ Commitment is truly the appropriate word to ties-make the decision to teach. nity Advisory Board, composed of residents of describe the work of the Bronx YMCA over IMPACT II is a program that does just that. the community, not only has the hospital been the years. From its humble beginnings in a IMPACT II is a unique nationwide, educa­ able to benefit internally from the insights and rented building on Willis Avenue through the tional nonprofit organization that recognizes suggestions of representatives of the constitu­ myriad of programs offered at various loca­ and rewards innovative teachers. IMPACT II ency it serves, it has made it possible for tions today, the YMCA has continued to pro­ provides teachers with grant money for the Coney Island's administrative and medical vide essential and innovative programs to the dissemination of fresh and creative in-school staff to turn their efforts outward and serve public. programs developed by teachers and then community residents beyond the hospital's The list of programs offered by the YMCA networks the programs to other interested doors. touches on every aspect of modern life, and teachers. Mr. Speaker, I am sure you can tell from the new programs are continually added as the IMPACT II began in 1979 as an experimen­ examples I have cited that Coney Island Hos­ YMCA grows and matures along with the tal pilot program codeveloped by the Exxon pital's record is indeed impressive, but I can community. The YMCA has been an innovator Education Foundation with the New York City think of no better example of its spectacular of child care and sports programs for our Board of Education. Today IMPACT II is a na­ work than one that is very close to my heart. I youth. The Bronx YMCA runs child care pro­ tional program with 30 sites and 15,000 par­ would certainly be remiss if I did not take this grams in eight public schools, as well as a ticipating teachers. opportunity to convey my personal thanks, preschool day care center. Its many youth and In Boston some of the many exciting pro­ and those of my entire family, to Howard teen activities stress proper education, recrea­ Cohen and all of the employees of Coney grams being taught include "The Constitution Island Hospital for the care they provided to tion, and community values. Senior citizens in Wins an Emmy," developed by Lambros Alex my mother-in-law, Theresa Koldin, when she the Bronx are also served by health services Pappas at the Eliot Elementary School; "Book became ill close to 5 years ago. The outstand­ and recreational programs at two senior citi­ in at the Constitution Hotel," developed by ing emergency medical attention that Mom re­ zen centers. Beth Tedoldi at the Farragut Elementary ceived was instrumental in enabling her to On this special occasion, I thank and con­ School; and "Keepers of the Earth," devel­ walk again, and the outpatient rehabilitative gratulate all of the people who have been oped by Barbara Ernst-DiGennaro at the care given to her by the folks at Coney Island active in the Bronx YMCA over the years. Blackstone Elementary School. My congratu­ Hospital helped her to live independently in Their dedication has been a positive influence lations to all of these hardworking and talent­ Brooklyn since her hospitalization. Moreover, in so many lives. Their commitment is a tribute ed individuals. 26882 EXTENSIONS OF REMARKS November 1, 1989 THE MOTION PICTURE During the past few years, the motion pic­ First. Congress has not hesitated in recent PROTECTION ACT ture industry has sought to protect its copy­ years to adapt the copyright laws to deal with rights by resorting to a process that is applied the challenges and opportunities presented by HON. HOWARD L. BERMAN to videocassettes as they are manufactured. It changing technology. To take the most recent OF CALIFORNIA adds a series of electronic pulses between example, last year's Satellite Home Viewer IN THE HOUSE OF REPRESENTATIVES the frames of the video that do not affect the Act addressed an analogous situation in which visible video picture, but do significantly de­ an anticopy system had been developed to Wednesday, November 1, 1989 grade any unauthorized copies. protect copyright, but was being thwarted by Mr. BERMAN. Mr. Speaker, today Repre­ The benefits of such an anticopy system resort to descrambling devices. In an infinitely sentative CARLOS MOORHEAD and I are intro­ are obvious. By encoding videocassettes at more complex situation, with a variety of com­ ducing the Motion Picture Copy Protection the time of manufacture, motion picture com­ peting interests, Congress intervened to Act, legislation which would amend the copy­ panies can protect their copyright without re­ ensure that the copyright holder's rights would right laws by establishing that it is copyright sorting to enforcement efforts destined to be be preserved against the pressure of chang­ infringement to manufacture, import, sell or ineffective or draconian. Virtually all the major ing technology. distribute equipment dedicated to defeating motion picture companies have turned to such Congress is not obligated to stay neutral copyright protection. a process; close to 80 percent of the new vid­ between technologies which protect copyright I am pleased to report that this effort has eocassette rentals released to the market are and those which violate it. As the House Judi­ the support of the Register of Copyrights, who so protected. ciary Committee noted in its report on the Sat­ has stated that "the fundamental approach of Unfortunately, the success of this anticopy ellite Act, "as has been the case for other the bill is compatible with U.S. copyright poli­ system has created a cottage industry dedi­ new technologies, it is appropriate for Con­ cies." I ask that the Register's letter to me cated to manufacturing black boxes which can gress to intercede and delineate this Nation's concerning the Motion Picture Copy Protection defeat it. The purposes of these black boxes intellectual property laws." Act be entered into the RECORD at the conclu­ are not hidden; the advertisement for one The Register of Copyrights has stated that sion of my remarks. begins with the question " Problems copying the legislation I am introducing today "links This bill would outlaw only equipment Movies?" Another notes that "neither the more closely to copyright law protection of a whose overriding purpose is to disable copy­ manufacturer nor our dealers encourage right protection that has been applied to people to use the macroliminator and two particular medium of communication which copies of motion pictures, principally to video­ VCR's to make superb copies of rental movies rightsholders use to exploit their works. We cassettes. I want to emphasize that this legis­ for their own personal use in the privacy of protect cable and pay television delivery sys­ lation in no way proscribes the current or their own homes." tems against misappropriation through the future technologies of VCR's, sound record­ If Congress is serious about protecting concept of theft of telecommunications serv­ ers, copiers or any other equipment with legiti­ copyright, we should not stand by and allow ices. We protect the right to encrypt telecom­ mate primary uses. the manufacture and marketing of devices munications distributions to prevent their un­ The Motion Picture Copy Protection Act re­ which have no other real purpose than to in­ authorized reception. Congress will soon be sponds to the threat posed to the video retail fringe copyright. considering the DAT copying question. The business by unauthorized duplication of copy­ The most obvious victims of unauthorized Motion Picture Copy Protection Act is in the righted motion pictures. The rental and sale of copying made possible by black boxes are the mainstream of these sorts of measures to videocassettes of motion pictures has evolved motion picture companies, who hold the copy­ make secure new channels of copyright com­ into an enormous business. In recent years, rights being violated. The loss to the industry merce." revenues for motion picture companies from from domestic piracy is estimated to be $600 Second. Until this legislaiton goes forward, the rental of cassettes-approaching $7 billion million per year. But the vast majority of the those who manufacture and market black for 1989-actually surpassed traditional reve­ video retailers who play by the rules suffer as boxes whose purpose and function it is to vio­ nues from theatrical showings and sales to well, because the dealer who makes the un­ late copyright can do so with virtual impunity. television. The success of the video retail lawful copies can attract more business by of­ It is extremely difficult for a copyright holder to business has benefited consumers, who can fering a wider selection without paying for it. meet the burden showing that a manufacturer rent and buy a wide choice of movies at their Video dealers also suffer lost revenue be­ or distributor of equipment is guilty of contribu­ convenience and at moderate prices, and cause they sell or rent fewer copies when tory copyright infringement. In the Supreme thousands of small business people who have customers copy rented cassettes for their li­ Court's decision in Sony Corporation v. Uni­ obtained the opportunity to manage video braries or their friends. The Video Software versal City Studios, 464 U.S. 417 (1984), the rental outlets around the country. Dealers Association [VSDA], has stated that Betamax case, the Court spelled out very This success is jeopardized, however, by "piracy is responsible for an average loss of strict standards for defining circumstances in large-scale violations of the copyrights of the $36,000 for every law abiding video dealer." which equipment that could be used to dupli­ motion pictures involved. Sometimes, this "Video Store, August 1989." cate copyright materials infringed copyright. In occurs when consumers who own two VCR's Nor do most customers benefit from 1.,1nau­ Betamax, the VCR was at issue; this equip­ rent a movie and decide to make a copy of it thorized copying. Frequently, they find them­ ment had many genuine noninfringing uses. for their own library. A more serious problem selves stuck with copies of inferior quality. In But the breadth of the language makes it diffi­ is the existence of certain video retail dealers a letter which appeared in the May 1987 issue cult for courts to find any equipment per se to who decide to buy one copy of a popular title, of Video magazine, the writer observed: be infringing. See also, Vault Corp. v. Quaid, and then use it to make multiple copies. Worst I have found that a third of the tapes I Software, 847 F. 2d 255 (5th Cir. 1988). of all, wholesale piracy takes place in major rent are not original copies but second or The Court's interpretation of the Copyright third generation copies. The picture is counterfeiting outfits, which turn out thou­ always inferior and the HI-FI tracks are Act creates an anomalous situation where sands of knockoffs of legitimate motion pic­ usually recorded in mono or absent. It black boxes are concerned. Under the copy­ ture rentals. It has been estimated that rough­ seems that many renters are removing the right law as written, a video dealer who is ly 10 percent of U.S. video outlets engage in shells from the cassettes and switching found using a black box and two VCR's to illegal copying of nevi titles, and large-scale cheap copies for $80 originals. make illegal copies would be an infringer of counterfeiting outfits are on the rise. "Variety, The legislation that I propose today would copyright. A company that manufactures, im­ August 23-29, 1989." amend the Copyright Act to provide that the ports, sells, distributes, or advertises 10,000 There have been some highly publicized manufacture, sale, importation, or distribution black boxes which will be used to infringe raids and arrests in the effort to combat piracy of equipment whose primary use is to defeat copyright would likely not be an infringer. That by unscrupulous dealers and counterfeiters. anticopy protection constitutes copyright in­ result is neither logical nor good law. It is also However, this kind of policing will reach only fringement. Such equipment would then be a formula for large-scale copyright violations, the tip of the iceberg. Given other pressing subject to the penalties currently included in which should be changed. priorities, significant law enforcement re­ the Copyright Act. Third. This legislation would add credibility sources will never be devoted to policing The case for this legislation rests on three to the U.S. argument that our intellectual prop­ bootlegged copies of rental movies. points. erty must be respected around the world. In November 1, 1989 EXTENSIONS OF REMARKS 26883 the past 2 years, there has been a surge of motion picture: to treat or authorize the ratical activities. Protecting such controls recognition that protecting U.S. intellectual treatment of copies of the work to prevent against disablement can be an appropriate property abroad is fundamentally important to or inhibit the making of reproductions from complementary step in the Federal effort such copies. Second, it would constitute an against the commercial infringement of our Nation's economic health and competitive infringement to import, manufacture, sell, copyright in motion pictures. future. Increasingly, as other nations have or distribute any kind of equipment the With regard to private copying, the ap­ matched and surpassed our capacity for man­ "primary use" of which is to permit copying proach of the draft bill seems also compati­ ufacturing in many sectors, our Nation's com­ a motion picture by defeating the process ble with basic U.S. copyright policies. Pri­ petitive advantage has evolved toward the which inhibits copying. Also infringing is vate copying of protected works-particular­ export and trade of copyrighted films and tele­ the intentional or knowing dealing in equip­ ly motion pictures and sound recordings-is vision programming, computer software, and ment to defeat copy-controls imbedded in a practice which contemporary American patended products like pharmaceuticals. Do­ copies of motion pictures, even where the copyright policy makers have nervously tol­ primary purpose of such equipment is not erated. They are aware of the potential dan­ mestic producers of films and videos, for ex­ related to defeating copy-control processes. gers to the legitimate commercial interests ample, had $2. 7 billion in foreign billings in Finally, "equipment" is defined to include of authors, proprietors, and commercial 1988, constituting one of the few U.S. exports tangible technologies as well as intangible users of works, but have been unable to with a consistent and growing surplus. techniques: any circuitry, process, technolo­ agree on an acceptable comprehensive statu­ At the same time, however, accumulating gy, or service. The effect of the definition is tory solution. evidence demonstrates enormous losses to include all means by which copy control­ The exclusive right of reproduction of around the world from piracy of U.S. intellec­ ling processes or treatments may be defeat­ protected works under the 1976 Copyright tual property. The nine largest motion picture ed. Act is broadly stated. It is not limited to cir­ This legislation points a significant new cumstances where an unauthorized copy of studios are losing $1.2 billion annually to for­ direction for copyright systems. While it a work is exploited commercially or other­ eign pirates. Losses for the computer software concerns processes and treatments of wise distributed to the public. It comes into industry have been estimated at more than $4 motion pictures which have been used com­ play at every point or reproduction, wherev­ billion per year. Infringement of U.S. patents mercially for some time, the legal step you er it takes place. Indeed, all unauthorized on prescription drugs has been even more propose is innovative. Industry figures sug­ reproductions are proscribed, except insofar costly. A Government study cited in the New gest upwards of 60% of legitimate theatrical as they are authorized by specific exception. York Times on November 21, 1988, estimated releases currently available in videocassette Additionally, the courts have created limit­ the annual loss for all U.S. companies at be­ format have been treated with a copy-inhib­ ed exceptions including the "time-shifting" iting process. The draft of a model copy­ user of broadcast programs involved in the tween $43 billion and $61 billion-a sum as right law now being studied in the World In­ Betamax case. staggering as it is unacceptable. tellectual Property Organization proposes In today's environment, where technol­ Prompted by a new recognition of the mag­ protection of such "self-help" measures, but ogies of performance and reproduction of nitude and urgency of the problem, the U.S. only one country, the United Kingdom, pro­ all sorts of works are owned by all kinds of Government has begun to press intellectual tects such processes under copyright law. ultimate consumers, the integrity of repro­ property issues as a prominent part of its This bill poses several major policy ques­ duction right is crucial both to authors' trade agenda. Under the "Special 301" provi­ tions: is the creation of this kind of exclu­ rights and entrepreneurial investment. The sions of the Trade Act, Ambassador Carla sive right and its associated remedies com­ U.S. copyright law has therefore drawn patible with the basic principles underlying short of creating broad exceptions to exclu­ Hills recently placed eight countries on a "Pri­ U.S. copyright law? Is the concept of the sive rights of reproduction, particularly in ority Watch List" as particular violators of U.S. bill an appropriate and balanced response to favor of what is thought of as private . the importance of English fluency, but also OF NEW YORK I hope these comments prove useful to recognizes the interdependent world in which you. In the event that you have any further IN THE HOUSE OF REPRESENTATIVES questions, please feel free to call me at any we live, and offers language classes in Span­ time. ish, French, and Italian. Wednesday, November 1, 1989 Sincerely, Mr. Speaker, I would like to congratulate the Mr. ENGEL. Mr. Speaker, on November 4, RALPH OMAN, principal of the school, Dr. Caridad Perez, and 1989, one of the oldest religious institutions in Register of Copyrights. the faculty of Edison Private School for the Co-op City, Temple Beth-El will be celebrating fine work they have done in teaching our chil­ its 20th anniversary. dren. As you can see Edison Private School TRIBUTE TO DOTTIE BEAM Temple Beth-El not only plays an important has been able to form a partnership with the role in the religious needs of its congregrants, community to provide the best legacy avail­ HON. DOUGLAS APPLEGATE able, a good education. but also involves itself in the general needs of OF OHIO the community. IN THE HOUSE OF REPRESENTATIVES Working with the Jewish Community Council TRIBUTE TO JIM GLYNN Wednesday, November 1, 1989 of Co-op City, the umbrella body for Jewish organizations in the community, members of Mr. APPLEGATE. Mr. Speaker, the Public HON. STEPHEN J. SOLARZ Temple Beth-El have worked on numerous Works Committee has lost a team that simply OF NEW YORK community service outreach programs direct­ cannot be replaced. The retirement of Dick IN THE HOUSE OF REPRESENTATIVES Sullivan and now Dottie Beam represents a ed at groups ranging from young people to deep sense of loss to me and the committee. Wednesday, November 1, 1989 senior citizens. Dottie Beam set an example on the virtues of Mr. SOLARZ. Mr. Speaker, it gives me great In addition, Temple Beth-El works with other loyalty, and dedication that few of us could pleasure to rise today to pay tribute to my Co-op City organizations on holiday projects ever hope to match. constituent, Jim Glynn, the developer and pro­ for the betterment of the entire community. How can you describe an individual who de­ ducer of the local television show, "Neighbor­ I join the members, friends, and the rest of voted 31 years of her life to the committee hoods Today," which airs back home in my the Co-op City community in congratulating and the vital issues that confronted it during congressional district in Brooklyn. Temple Beth-El, its rabbi, Lester Scharnberg, her tenure? The devotion and dedication of A visual artist, Jim Glynn documents for tel­ its cantor, Dennis Tobin and its president, Eric Dottie Beam is, in itself, an institution and I evision events in the lives of the residents of Weiner on the Temple's 20th anniversary. November 1, 1989 EXTENSIONS OF REMARKS 26885 SUPPORT FUNDS FOR DRUG war against drugs. The drug epidemic pounds of garbage a day-the highest in the WAR kills our youth, destroys our families, world and expected to nearly double by the and fills our prisons and mental hospi­ year 2000. We depend on three methods of trash dis­ HON. DAVID E. BONIOR tals. Still there is only one spot avail­ posal-landfill, incineration, and recycling. OF MICHIGAN able for every seven addicts seeking Landfilling, usually the cheapest way, ac­ IN THE HOUSE OF REPRESENTATIVES help at treatment centers. We must counts for about 70 percent of our nation's change this. That is why I strongly trash disposal. Yet of the 20,000 landfills es­ Wednesday, November 1, 1989 support the bill's increase in funding timated to have been operating in 1979, Mr. BONIOR. Mr. Speaker, I rise today in for drug abuse prevention and treat­ more than 13,000 had closed by 1986 and as support of the antidrug provisions in the ment programs. These programs few as 3,500 could remain by 1991. Even In­ Transportation Department appropriations bill. rescue drug addicts, rehabilitate them diana, which had 150 landfills in 1980, is ex­ We must help the children who learn the and return them to society. Some pro­ pected to be down to 53 landfills in three meaning of crack, ice, and dope before they years. One southern Indiana town sends its grams intervene with students who garbage 67 miles to be landfilled. Fewer ever learn the meaning of love, life, and hope. may be on the road to drug or alcohol landfills means higher costs for hauliI,lg We must help the elderly of this country who dependency. Prevention and treatment away trash. Ten years ago, trash haulers are afraid to walk out of their front doors. We programs are the most compassionate paid $5-10 per ton to unload; today, fees of must help the neighborhoods that are overrid­ and challenging response to the $50 per ton are common. Community efforts den by drug turf wars, and we must help the scourge of drug and alcohol abuse. Re­ to site new landfills are increasingly sty­ families who are being split apart because formed addicts can become productive mJ.ed, as public concerns about environmen­ loved ones become victims of drugs and alco­ citizens who contribute to their com­ tal contamination rises. Few landfills have hol. I urge my colleagues to join me in sup­ munity rather than drain it of its re­ installed safety features such as liners and porting this bill. water monitoring, and even facilities meet­ sources. ing federal standards are often viewed as po­ Our children and youth are the first priority The transportation appropriations tential environmental threats. in the war on drugs. We must protect them bill contains funding for all of our im­ The share of solid waste incinerated has from the horrors of life as a drug addict. We portant antidrug endeavors. It will increased from 6 percent in 1986 to about 15 must educate them and support them. To do ensure that Federal, State, and local percent in 1989. Most of these plants burn this, the bill would provide increased funding enforcement and education agencies garbage to produce energy for other uses. for drug education efforts. This funding would However, construction costs and environ­ can continue to fight drug traffickers mental concerns limit the appeal of inciner­ continue such important programs as the Drug and drug abuse. It will continue the Awareness Resistance Education [DARE] Pro­ ation. As federal and several state govern­ policies of compassion, justice and ments consider tightening emissions and ash gram which has been very effective in Michi­ interdiction that we began with the disposal rules, costs could increase signifi­ gan. The program delivers the message to 1986 and 1988 omnibus drug bills. It cantly. Even if all waste were incinerated, 60 youth that drugs kill. More important, though, will stop drugs from ruining the lives million tons per year of ash and non-com­ are the positive messages DARE delivers in of many Americans. bustibles