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[Page: S8085] GPO's PDF---
By Mr. HOLLINGS:
S. 1312. A bill to ensure full and expeditious enforcement of the provisions of the Communications Act of 1934 that seek to bring about competition in local telecommunications markets, and for other purposes; to the Committee on Commerce, Science, and Transportation.
THE TELECOMMUNICATIONS COMPETITION ENFORCEMENT ACT OF 1999
Mr. HOLLINGS. Mr. President, I rise to introduce, S. 1312, the Telecommunications Competition Enforcement Act of 1999.
The United States has a telecommunications system that is unequaled. We have worked hard to ensure that consumers in all parts of the country have access to this system and enjoy services at an affordable price. Therefore, when the Bell companies asked us to allow them to enter the long distance market, it was with great caution that we began to develop policies that would change the existing framework. We did not want to jeopardize existing service as we phased in competition into local markets and allowed local phone companies to enter the long distance market.
Bell companies worked with Congress to create the fourteen point checklist and they celebrated the passage of the 1996 Act . They then filed applications with the Federal Communications Commission (FCC) to enter the long distance market. However, the FCC found that the Bell companies had not opened their local markets to competition, and therefore, under the 1996 Act , could not enter the long distance market. Once the Bell companies realized that they were not going to get into the long distance market before they complied with the 1996 Act , they began a strategy of litigation to delay competition into their local markets and hold on to their monopolies. They appealed the FCC's decisions to the Court of Appeals and challenged the constitutionality of the Act taking their case to the Supreme Court. Having lost in those forums they have now come to Congress seeking changes to the Act that only three years ago they championed. As a result bills have been introduced in the Senate and the House that significantly amend the 1996 Act , harm competition in the local markets, and slow the delivery of advanced, affordable services to consumers.
Therefore, I introduce this legislation as part of a continuing effort to promote competition in the local telecommunications markets. I am frustrated by the broken promises of the Bell companies given that not a single Bell company has adequately opened its local phone market to competition since the enactment of the Telecommunications Act of 1996 . According to wall street analysts, as of the end of last year new entrants had only 2.5 percent of all access lines while Bell companies and incumbent local exchange carriers continued to control over 97 percent of those lines into the home.
Three years ago when we passed the 1996 Act , Bell companies proclaimed that they would open their markets immediately and begin competing. In fact, they and their lawyers helped write the 14 point checklist--their roadmap into the long distance market in their region. All these companies have to do to provide long distance service in their regions is to follow that roadmap and meet the requirements of Section 271.
I remember the excitement by the local phone companies at the time of the 1996 Act . On March 5, 1996 , Bell South-Alabama President, Neal Travis, stated that the ``Telecommunications Act now means that consumers will have more choices ..... We are going full speed ahead ..... and within a year or so we can offer [long distance] to our residential and business wireline customers.''
And, on February 8, 1996 , USWest's President of Long Distance, Richard Coleman, issued this statement: ``The Inter-LATA long distance potential is a tremendous business opportunity for USWest. Customers have made it clear they want one-stop shopping for both their local and long distance service. We are preparing to give them exactly what they've been asking for.'' He went on to predict that USWest would meet the 14 point checklist in a majority of its states within 12-18 months.
Ameritech's chief executive office, Richard Notebaert February 1, 1996 ,
[Page: S8086] GPO's PDF
Those were the statements of the local phone companies in 1996 . What has happened since then? The answer is very little. In fact, rather than meet their promises, the local phone companies were in federal court challenging the FCC's implementation of the Act less than one year after its enactment. In addition, only five applications for Section 271 relief have been filed at the FCC--and none have met the requirements of section 271. On more than one occasion, the FCC's decision to deny a 271 application has been upheld by the D.C. Circuit Court. One of the regional Bell companies even challenged the constitutionality of section 271--a challenge the court of appeals denied and the Supreme Court refused to hear. Today, there are no 271 applications on file at the FCC and not a single application has been presented to the FCC since July 1998.
What this means for the customer is that the choice and the local competition we tried to create with the passage of the Telecommunications Act has been thwarted by the very companies that promised to compete. Instead, they have chosen to litigate, complain, and combine. Just two days ago, the Chairman of the FCC decided to grant SBC and Ameritech approval to merge their operations. In permitting the merger to go forward, the FCC has conditioned approval on future performance--performance which SBC has not met in the three years since the passage of the 1996
Act . In fact, on the same day conditional approval of the SBC and Ameritech merger was announced, SBC agreed to pay $1.3 million to settle disputes surrounding alleged violations of sections of the 1996 Act dealing with the provision of long distance service. One company will now control one-third of all access lines in the United States even though its market is not open to competition. Competition again becomes a casualty of the unwillingness of Bell companies, to open their markets and let go of their monopolies.
Today, there are companies seeking to connect to the Bell networks and provide service to consumers. However, these companies often times experience significant difficulties in obtaining access to these networks. Thus, while I applaud the efforts of the competitive local exchange carriers, long distance carriers, and the cable industry to provide facilities-based local competition, I must express my disappointment that not a single regional bell operating company has sufficiently opened its markets to competition.
Since the beginning of this Congress, many of the Bell companies have been meeting with Senators and Representatives, often accompanied by the same lawyers who helped write the Telecommunications Act . But this time their message is different. They are asking us to change the rules of the game. They now want to offer lucrative high-speed data services for long distance customers without first having to open their local markets to competition. They maintain that they should be permitted to continue their hold on the local customer as they provide data services because the 1996 Act did not contemplate the provision of such services. To state it plainly--they are wrong. The Telecommunications Act clearly contemplated the provision of advanced services--data and otherwise. In fact, the Act had an entire section dedicated to promoting the development and deployment of advanced services. To quote the Act , ``advanced telecommunications capability'' is defined as ``high-speed switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology.''
Regardless, nothing in the 1996 Act prevents phone companies from providing high speed data services to consumers inside and outside their region. They are already providing DSL service to customers inside their region. And, under the 1996 Act , Bell companies can provide long distance service in their region once they open their local markets. We must hold to this principle if we want consumers to have a choice of service providers. In fact, a number of Bell companies are working to meet Section 271 requirements. I applaud those attempts which, if successful, will ultimately provide new and innovative services at low prices to consumers.
Therefore, I reject their proposed legislative solutions, and instead, forward a different proposal. By 2001, five years will have passed since the Telecommunications Act became law. I believe, it is reasonable to expect Bell companies to have at least one-half of their markets in their region open to competition by 2001 and all of their markets in their region open to competition by 2003. The legislation that I introduce today accomplishs just that. My bill requires the Federal Communications Commission to assess a forfeiture penalty of $100,000 per day if a Bell operating company has not met the section 271 checklist in at least half of the states in its region by February 8, 2001--the five year anniversary of President Clinton signing the Telecommunications Act into law. Moreover, if the FCC finds that a Bell operating company has not met the section 271 checklist throughout its region by February 8, 2003, the Commission is required to order the company to divest its telecommunications network facilities within six months, in states in which it is not in compliance with the checklist.
With respect to non-Bell incumbent local exchange carriers with more than 5 percent of the access lines in the nation, the Commission, upon the petition of any interested party, is required to investigate whether the carrier's markets are open to competition to determine whether such carrier has complied with the interconnection requirements of the Act . A determination that such an incumbent local exchange company has not opened its markets shall result in a $50,000 per day forfeiture penalty, to be imposed by the FCC, if the company does not come into compliance within 60 days. In addition, the FCC shall order the company to cease and desist in marketing and selling long distance services to new customers, if it has not complied within the 60 day grace period.
Lastly, to protect competition once the Bell companies have met the section 271 checklist requirements, this bill provides the FCC with additional enforcement tools. If, at some point after meeting the checklist requirements, a Bell company fails to meet one or more provisions of the checklist, the FCC shall impose a forfeiture penalty of $100,000 for each day of the continuing violation. Moreover, if, after meeting the checklist requirements, the Bell company willfully, knowing, and repeatedly fails to meet one or more provisions of the checklist, the FCC shall require the Bell company, within 180 days, to divest its telecommunications network facilities in states in which the repeated violations have occurred.
While these penalties may appear severe, severe action needs to be taken to force dominant market providers to open their markets to competition. During the debate over the Telecommunications Act , we did not include such a strong approach. Rather, we settled on a rational and reasonable set of procedures--endorsed by the local phone monoplies--that provided incentives to open their local markets while preserving the integrity of the premier communications networks in the world.
That approach seemed particularly palatable in light of the statements issued at the time of enactment of the 1996 Act by the local phone companies promising an early opening of the local phone market pursuant to the requirements of the Section 271 checklist.
Today, our communications networks remain the envy of the world and the development of innovative advanced services is accelerating rapidly. Unfortunately, the rollout of those services on a competitive basis to all Americans is being thwarted by the failure of Bell companies to open their markets to competition. Those same monopolists told us their markets
[Page: S8087] GPO's PDF
I ask consent that a summary of the bill be printed in the RECORD.
There being no objection, the summary was ordered to be printed in the RECORD, as follows:
The Telecommunications Competition Enforcement Act of 1999
SUMMARY
A Bell Operating Company (BOC) is required to meet the market opening requirements of the section 271 checklist of the Telecommunications Act of 1996 for half of the states in its region by February 8, 2001. The FCC is required to assess a forfeiture penalty of $100,000 for each day a BOC is in violation of this requirement.
A BOC is required to meet the market opening requirements of the section 271 checklist of the Telecommunications Act of 1996 for all the states in its region by February 8, 2003. The FCC is required to order a BOC to divest its telecommunications network facilities within 180 days in which it is in violation of this requirement.
Upon petition by any interested party, the FCC is directed to investigate whether incumbent local exchange carriers (ILEC) with more than 5 percent of the nation's access lines (that are not Bell Companies) have opened their markets to competition pursuant to Section 251(c) of the Telecommunications Act of 1996 .
Upon a determination that such ILECs are not in full compliance with Section 251(c), the FCC shall set forth the reasons for non-compliance and grant 60 days for the ILEC to come into full compliance. Absent such compliance after that 60 day period, the FCC is required to assess a civil forfeiture penalty of $50,000 for each day of the continuing violation and order the company to cease and desist in marketing and selling long distance services to new customers.
If upon meeting the checklist requirements, a BOC fails to meet one or more provisions of the checklist, the FCC shall impose a forfeiture of $100,000 for each day of the continuing violation. If upon meeting the checklist requirements, the BOC knowingly, willfully, and repeatedly fails to meet one or more provisions of the checklist, the FCC shall require the BOC, to divest its telecommunications network facilities, within 180 days, in states in which repeated violations have occurred.
JUSTIFICATION
The Telecommunications Act of 1996 required Bell Operating Companies (BOCs) to open their markets to competition. Yet, not a single BOC has met the market opening requirements of the Section 271 checklist. No Section 271 applications have been filed at the FCC since July of 1998. Only five applications have been filed since 1996 --none of which complied with Section 271.
In the three years since enactment, however, the BOCs have pursued a strategy of stonewalling and litigation that has delayed implementation of the critical interconnection, unbundling, collocation, and resale requirements of the Act .
Now, BOCs are seeking legislative relief from the pro-competitive provisions of the Telecommunications Act . They argue that they will provide rural America with advanced communications services, but only if they are allowed to provide long distance service to their current customers. The truth is that BOCs can provide advanced services today. However, to get into the long distance market, they must open their local markets to competition. This bill provides an incentive for them to do just that.
By requiring a date certain by which the local phone monopolies must open their markets, and by accompanying that requirement with federal enforcement authority, we can be assured that American consumers will obtain the benefits of local competition.
By Mr. LEAHY (for himself, Mr. DEWINE, and Mr. ROBB):
S. 1314. A bill to establish a grant program to assist State and local law enforcement in deterring, investigating, and prosecuting computer crimes; to the Committee on the Judiciary.
COMPUTER CRIME ENFORCEMENT ACT
Mr. LEAHY. Mr. President, today I rise to introduce the Computer Crime Enforcement Act . This legislation establishes a Department of Justice grant program to support state and local law enforcement officers and prosecutors to prevent, investigate and prosecute computer crime. I am pleased that Senator DEWINE, with whom I worked closely and successfully last year on the Crime Identification Technology Act , and Senator ROBB, who has long been a leader on law enforcement issues, support this bill as original cosponsors.
Computer crime is quickly emerging as one of today's top challenges for state and local law enforcement officials. A recent survey by the FBI and the Computer Security Institute found that 62% of information security professionals reported computer security breaches in the past year. These breaches in computer security resulted in financial losses of more than $120 million from fraud, theft of proprietary information, sabotage, computer viruses and stolen laptops. Computer crime has become a multi-billion dollar problem.
I am proud to report that the States, including my home state of Vermont, are reacting to the increase in computer crime by enacted tough computer crime control laws. For example, Vermont's new law makes certain acts against computers illegal, such as: accessing any computer system or data without permission; accessing a computer to commit fraud, remove, destroy or copy data or deny access to the data; damaging or interfering with the operation of the computer system or data; and stealing or destroying any computer data or system. These state laws establish a firm groundwork for electronic commerce, an increasingly important sector of the Vermont economy and of the nation's economy. Now all fifty states have enacted some type of computer crime statute.
Unfortunately, too many state and local law enforcement agencies are struggling to afford the high cost of enforcing their state computer crime statute. The Computer Crime Enforcement Act would provide a helping hand by authorizing a $25 million grant program to help the states receive Federal funding for improved education, training, enforcement and prosecution of computer crime. Our bill will help states take a byte out of computer crime.
Congress has recognized the importance of providing state and local law enforcement officers with the means necessary to prevent and combat cyber attacks and other computer crime through the FBI's Computer Analysis and Response Team (CART) Program and the National Infrastructure Protection Center. Our legislation would enhance that Federal role by providing each state with much-needed resources to join Federal law enforcement officials in collaborative efforts to fight computer crime.
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