TELECOMMUNICATIONS COMPETITION AND DEREGULATION ACT

Senate - June 15, 1995

Mr. LEAHY. Mr. President, I want to note an important amendment that has been made to the telecommunications bill.

As introduced, the telecommunications bill modified our outdated law that bans cable companies and telephone companies from offering the service of the other. With digital and other new technologies being developed, the demarcations between the businesses of telephone and cable service is blurring.

It is about time for Congress to update the law to catch up with the new convergence in video, computer, and telephone technologies.

But by repealing the telco-cable cross-ownership ban altogether, the telecommunications bill, as reported, failed to impose any limits on the ability of telephone companies to buy out cable companies--their most likely competitor--in the telephone companies' local service areas. Allowing such mergers would destroy the best hope for developing competition in both local telephone service and cable television markets.

Without the protection of an antibuyout provision, consumers would be deprived of the lower cable and telephone prices that would result from two-wire competition.

Because of these concerns, the distinguished chairman of the Antitrust Subcommittee, Senator Thurmond, and I sent a letter to our colleagues a few weeks ago detailing the reasons why standard antitrust scrutiny would not be enough to preserve the potential competition between telephone and cable companies.

The leadership package of amendments adopted last Friday took seriously the concerns that we expressed, and provided some antibuyout restrictions to prevent telephone companies from merely substituting one video service monopoly for another.

The amendment restricting in-region buyouts improves this bill and promises to benefit consumers by promoting greater competition in the delivery of video services, increasing the diversity of video programming, and advancing the national communications infrastructure.

In particular, the amendment eliminates ambiguity and makes clear that the antitrust enforcement authorities will maintain their authority to challenge anticompetitive buyouts under the antitrust laws.

Even when the FCC has decided that from its perspective that the telco/cable buyout is acceptable, or when the buyout comes within the rural exception, standard antitrust scrutiny may still be applied.

The amendment maintains the specialization and expertise of the antitrust authorities--the Justice Department and the Federal Trade Commission, as well as State antitrust authorities--in determining whether a buyout would violate the antitrust laws and harm consumers.

This amendment is necessary to help promote the competition we want to develop between cable and phone companies, with the hope that prices for both services will be lowered for consumers, while their options and choices increase.