May 2, 1995 CONGRESSIONAL RECORD— SENATE S5975 7 In re Illinois Bell Telephone Company Proposed Introduction of a Trial of Ameritech’s Customers First 

Plan is Illinois, Dkt. No. 94–0096, slip op. at 97 (Ill. 

Commerce Comm’n, Apr. 7, 1995) [hereinafter ‘‘ICC 

order’’] [Appendix, Tab 7]. 8A Blueprint for Action, supra note 1, Tab 3 at 2 

[Appendix, Tab 1]. A similar telephone survey was 

conducted in January 1994, by First Market Research Corporation, for a study sponsored by AT&T, 

MCI, and CompTel. That survey found that in the 

absence of number portability, the number of respondents interested in changing to a cable TV company for local telephone service in response to a 20% 

discount fell from 32.8% to 22.6%. Corresponding figures for a 10% discount and for no discount were a 

drop from 18% to 12.6% and from 8.7% to zero, respectively. Economics & Technology, Inc, & Hatfield 

Associates, Inc., The Enduring Local Bottleneck 

108–10 (February 1994) [Appendix, Tab 8]. 9 Initially, the Trial Territory would consists of 

the portion of the Chicago LATA that is located in 

the state of Illinois and the Grand Rapids LATA in 

the state of Michigan. The two LATAs could begin 

their interexchange trials at different times, and the 

Trial Territory could have eventually be expanded 

to include other portions of those two states (but 

only those two states) if those portions met the 

competitive standards set out in the proposed order. 10 Regulatory consideration of such issues is already well underway in the trial states. In Michigan, 

the Michigan PSC adopted on an interim basis a 

pricing scheme for unbundled loops that was proposed by City Signal, a CAP which in 1994 was granted a license to provide local service in the Grand 

Rapids LATA. Under the interim scheme, Ameritech 

will charge City Signal $8 for a residential loop and 

$11 for a business loop. The Commission will further 

address these issues in an upcoming generic proceeding, to commence June 1, 1995, and to be completed no later than nine months thereafter. In the 

matter of the Application of City Signal, Inc., for an 

Order Establishing and Approving Interconnection Arrangements with Ameritech Michigan, Case No. U–

10647, at 85–95 (Mich. Pub. Serv. Comm’n, Feb. 23, 

1995) [hereinafter ‘‘City Signal Order’’] [Appendix, 

Tab 9]. 

In Illinois, the Illinois Commerce Commission 

heard extensive testimony on Ameritech’s proposed 

pricing of unbundled loops and ports, disapproved 

certain aspects of that pricing, and required that 

Ameritech file new tariffs to ensure that the sum of 

prices for unbundled network functions not exceed 

the price of bundled functions and to reduce and 

equalize the contribution that those prices would 

make to common costs. ICC Order, supra note 7, at 

60–61 [Appendix, Tab 7]. 

11The issue of ‘‘sub-loop unbundling’’ is dealt with 

in similar fashion. AT&T and others have contended 

that merely unbundling loops from ports does not go 

far enough. Instead, AT&T contends that local service should be unbundled into at least twelve basic 

network elements: distribution, concentration, feeding, end office switching, dedicated line transport, 

common transport, tandem switching, databases 

used in signaling, packet switching of signaling 

from the originating central office, packet switching 

of signaling at the destination, links from the packet switches to data processors and storage points, 

and operator services. Affidavit of Lawrence A. Sullivan, submitted by AT&T in its Opposition to Original Proposal, at 29–30 (filed with the Department of 

Justice on Feb. 15, 1994) [Appendix, Tab 10]. Advocates for this position argue, for example, that a 

provider of personal communications services 

(‘‘PCS’’) might be able to provide a witness connection from the home to a neighborhood node, and 

then use Ameritech facilities to get from the neighborhood node to the central office. Testimony of Dr. 

Mark T. Bryant on behalf of MCI before the Illinois 

Commerce Commission, at 10–11 (Dkt. No. 94–0048, 

Aug. 8, 1994) [Appendix, Tab 11]. Ameritech responds 

that such an approach could lead to the uneconomic 

stranding of significant amounts of its investment, 

to no real purpose since the facilities can be made 

available to competitors on a nondiscriminatory 

basis and since continued use of Ameritech facilities 

whose costs are already sunk would be in the interests of consumers. The proposed order does not require sub-loop unbundling, but makes clear that this 

resolution is without prejudice to the power of a 

state to require such further unbundling. (Proposed 

Order, T 1(m).) Moreover, it makes clear that the Department may consider the competitive effects of 

such unbundling (or lack thereof). (Id.). 12State law or regulatory requirements intended 

to benefit competition in the intraLATA toll market may require Ameritech to implement 

intraLATA toll dialing parity before Ameritech has 

met the conditions in T 11 of the proposed order. In 

that case, intraLATA toll dialing parity would come 

into effect before Ameritech commences interexchange service. 

13The proposed order does not displace state regulation, however. (See Proposed Order, T 3.) State regulators may choose to regulate arrangements even 

when consented to by the carriers involved. 

In allowing paragraph 9(e) to be satisfied by consent of the other exchange carriers, we recognize 

that unequal bargaining power may lead a competitive exchange carrier to agree to unsatisfactory 

terms. That is precisely why the provisions of paragraph 9 are not a checklist that will lead automatically to Ameritech’s entry into interexchange service. The ultimate issue will always be the competitive results of the negotiated arrangements, as tested against actual marketplace facts. (See Section 

III.B.) Thus, because the proposed order requires 

that the Department analyze market facts and assess competitive circumstances, the proposed order 

gives Ameritech the incentive to negotiate in good 

faith and arrive at a procompetitive agreement with 

competitive exchange carriers. 14Of course, the reasons advanced by a competing 

carrier as to why the proffered interconnection arrangements are inadequate may have a bearing on 

any assessment of competitive circumstances. 15See, e.g., A Blueprint for Action, supra note 1, Tab 

3 at 5–19 (discussing shortcomings of interim number 

portability) [Appendix, Tab 1]. 16The compliance plan, which deals principally 

with post-entry safeguards, is discussed in more detail in Section III.C, below. 17The Department is currently investigating 

claims that regulation and post-entry safeguards are 

sufficient to ensure that there is no substantial possibility that an RBOC could engage in anticompetitive conduct, without the market-opening measures 

contemplated in the proposed order, in connection 

with the Motion of Bell Atlantic Corporation, 

BellSouth Corporation, NYNEX Corporation, and 

Southwestern Bell Corporation to Vacate the Decree. (Bell Atlantic has since withdrawn from that 

motion.) Ameritech is not advancing that proposition at this time, however, and the proposed trial 

is not designed to test such claims. 18The staff of the Michigan PSC, in its comments 

on an earlier version of the proposal, urged the Department to include the Detroit and Lansing LATAs 

in the Trial Territory. Revised Comments of the 

Staff of the Michigan Public Service Commission 

(Mar. 22, 1995) [Appendix, Tab 15]. The Department 

does not believe this change to be appropriate, because it is too early to tell how widely different 

areas of the state will vary in the availability of 

competitive alternatives and the ability of such alternatives to guard against harm to competition in 

the interexchange market. We stress, however, that 

the modification provisions of the proposed order establish sufficient flexibility to deal appropriately 

with whatever competitive conditions should arise. 19The FCC’s order removing structural separation 

requirements was vacated and remanded by the 

Ninth Circuit. California v. FCC, 39 F.3d 919 (9th Cir. 

1994), cert. denied, 63 U.S.L.W. 3721 (U.S. April 3, 

1995). Further proceedings on remand are pending at 

the FCC. 20Even under the FCC’s Computer Inquiry II approach, certain kinds of services can be shared between the interexchange subsidiary and other affiliates. These are enumerated in T 20(g). To the extent 

that any such sharing is carried out in a way that 

harms competition, the Department and the Court 

retain the power to take corrective action under TT 

15–16, as well as to take that fact into account in 

evaluating the progress of the trail under T 18. 21The proposed order calls for ‘‘equivalent’’ rather 

than identical order, maintenance, and support systems, to account for the possibility that access to 

such systems may involve the use of different interfaces because of the different requirements of different carriers’ computer systems and because of 

Ameritech’s need to protect the security of its systems. The access must, however, be equivalently 

convenient; the provision would not be satisfied by 

providing electronic connections to Ameritech’s 

interexchange subsidiary but only fax machines to 

its competitors. 22 Among the restrictions on access to customer information is a provision that the Ameritech interexchange subsidiary may not have access to customer proprietary network information (‘‘CPNI’’) as 

defined by the FCC, except in the same manner that 

CPNI is available to unaffiliated carriers. This 

would mean, for example, that unlike the Ameritech 

local exchange operations, the Ameritech interexchange subsidiary would have to obtain the affirmative consent of the local exchange operations’

customers in order to get local and intraLATA toll 

usage patterns of those customers. At one point, 

Ameritech expressed concern that this restriction 

would put it at a marketing disadvantage compared 

to AT&T, which could target the marketing of onestop shopping services to its more lucrative interexchange customers, based on their long-distance 

usage patterns, which would be available to AT&T 

without such affirmative consent because they 

would relate to services as to which AT&T was the 

subscribers’ provider. Ameritech concluded, however, that it could overcome this disadvantage if it 

could start seeking such affirmative consent from 

Ameritech local exchange customers as soon as possible. Since nothing in the existing Decree would appear to prohibit the seeking of such consent before 

the trial begins or even before the proposed order is 

entered, so long as customers are not misled as to 

the actual extent of Ameritech’s authority to offer 

interexchange service, Ameritech withdrew this concern. 23 In some cases, such as the provision of interexchange and intraLATA toll services by the interexchange subsidiary (TT 41, 45) and the provision of 

Centrex service to business customers (T 43), the proposed order provides for the offering of such services 

immediately upon the commencement of 

Ameritech’s authority to offer interexchange telecommunications, because other carriers are already 

offering such services on a ‘‘one-stop-shopping’’

basis. 

The PRESIDING OFFICER. The Senator from North Dakota. 

Mr. DORGAN. Madam President, I 

ask unanimous consent that my remarks appear as in morning business. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

TRADE POLICY 

Mr. DORGAN. Madam President, I 

was very interested to hear the comments by Senator BYRD and Senator 

HOLLINGS today on the issue of trade. I 

think the three of us, with perhaps one 

or two others, are the only Members of 

the Senate who come and speak about 

the issue of trade. There is almost a 

conspiracy of silence in this Senate, in 

the entire Congress, and in this town, 

especially, on the issue of trade. 

U.S. TRADE POLICY

We have the largest trade deficit in 

human history in this country now. We 

have a lot of hand wringing about the 

fiscal policy deficits, and they are dangerous and troublesome. We must deal 

with them. But no one speaks about 

the trade deficit and what causes it and 

what it means for our country. I hope 

one day soon that will change, because 

today’s trade deficits will be repaid in 

the future with a lower standard of living in this country. We must get rid of 

these terrible, terrible trade deficits 

that are going to ruin this country’s 

future. 

Beginning on Friday this week, I am 

going to make about four presentations 

on the floor of the Senate over the period of the next couple of weeks, talking about the last 50 years. I want to 

start with post-Second World War 

trade strategy, which was really foreign policy, in which we were linked to 

other countries try to strengthen others around the world who had been suffering from the ravages of war. During 

that period of time, there was general 

expansion in world trade and general 

expansion of prosperity. Our allies 

prospered and so did we. We prospered 

in output. We saw higher wages. Our 

country generally, in the first 25 years, 

did well. 

You look at the last 25 years and you 

will see, even as others began to compete with us very aggressively, we 

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S5976 CONGRESSIONAL RECORD— SENATE May 2, 1995 

clung to the same strategy. And what 

have we seen for it? We have seen a 

lower standard of living in this country 

generally, lower wages, and we have 

seen American jobs move overseas. 

That has been the result of this strategy. It is a strategy that hurts this 

country, and it is a strategy that must 

be changed. 

We must get to a point where, if you 

close your eyes and simply listen, you 

can hear a difference between what 

people are saying on trade policy. You 

cannot anymore. There is no difference 

between what the Republicans say and 

what the Democrats say on trade. It 

sounds all the same to me. 

Oh, Senator HOLLINGS sounds different to me because he is talking a 

different kind of strategy—plus he 

comes from a different part of the 

country. And Senator BYRD sounds different because he is talking about 

trade in a completely different way. 

But it is very unusual, and we need to 

create a national debate on this subject. We need to do it soon. The merchandise trade deficit last year was 

$166 billion, the highest in history. 

Jobs left our country. Wages in this 

country were down. 

Our current strategy says to American workers they can now compete 

with 2 or 3 billion others in the world, 

some of whom are willing to work for 

12 cents an hour at the age of 12, for 12 

hours a day. That ought not be the 

competition for the American worker. 

No one should produce a product that 

enters our marketplace under those 

conditions. And we must, posthaste, 

create a national debate about trade 

strategy, looking out for the best interests of this country. 

I do not want a trade war. That does 

not serve anybody’s interests. But I do 

want our country to stand up for its 

own economic interests for a change. 

Can we not, for a change, just for once, 

have a trade negotiation that we win, 

or at least come out even on? We lose 

every time we pull up to the table. We 

lost on NAFTA; we lost on Canada; we 

lost on GATT. We can go all the way 

back. It is time for this country to 

stand up for its economic interests. 

f 

MEDICARE AND TAX CUTS FOR 

THE RICH 

Mr. DORGAN. I did not come to 

speak about trade, but I wanted to say 

something about what I saw this weekend—the Speaker of the House, the majority leader of the Senate, and now 

today I see the chairman of the Ways 

and Means Committee of the other 

body, all talking about Medicare. 

It was interesting to me. I was thinking about these old movies I used to see 

when I was a kid, when all these cowboys would whistle when they go into a 

box canyon and then when the trouble 

would start, they would start jumping 

off their horses, trying to find a place 

to hide. 

This is kind of a box canyon we have 

created in the last couple of months, 

just riding in, whistling all the way, 

with the Contract With America, saying: Do you know what we can do? We 

can balance the Federal budget easily. 

We can do it before lunch. We will not 

even break a sweat. We will just 

change the U.S. Constitution and use 

$1.3 trillion in the Social Security 

trust funds to offset against other revenues. We will balance the budget. 

Plus we will do more than that. We 

will promise you American people we 

will not only balance the budget, we 

will give you a tax cut. In fact, we will 

call it a middle-class tax cut. We will 

do all of that, and we will tame this 

Medicare and Medicaid problem. We 

will cut money out of Medicare and 

Medicaid and we will solve that problem. 

Then what happened? I think this 

weekend somehow these folks that rode 

into this box canyon understood the 

trouble they were in because, all of a 

sudden, the three dismounted and are 

scurrying in every direction. 

I noticed today the Ways and Means 

Committee in the House was asking 

the administration to give them advice 

on how to solve the Medicare and Medicaid problem. They were not asking 

for any advice when they talked about 

the tax cut bill or the welfare reform 

bill that they moved through there 

quickly. They did not need any advice 

then. But all of a sudden they find out 

their promises are coming home to 

pinch. What they are worried about is 

that the American people might see 

what has been created—a promise of 

tax cuts for the middle class that looks 

like this: 

This is the middle-class tax cut for 

those middle-class folks who live on 

Rodeo Drive. At least it must be Rodeo 

Drive because how else could you explain this chart? Who benefits from the 

tax bill? If you earn $30,000 or below, as 

an average family, you get an enormous tax cut, $134 a year. If your income is $200,000 or above as an American family, you get a check back for 

your tax bill, a tax cut of $11,266. 

I was on a radio talk show with a 

conservative host, somebody who believes in all of this, who said, ‘‘Well, 

Senator DORGAN, what do you think 

about this middle-income tax cut?’’ I 

said, ‘‘What middle-income tax cut? 

What on Earth are you talking about?’’

He said, ‘‘The one just passed by the 

House of Representatives which benefits the middle-income folks.’’ I said, 

‘‘Really? Do you understand it? Have 

you really seen the results of it?’’ I 

said, ‘‘If you are over $200,000, you get 

a $11,200 tax break; $30,000 or under, 

you get $134. That is middle income?’’

Not in my hometown, it is not middle 

income. 

But you know what has happened 

here. You know what the box canyon 

is—people are going to look and say, 

‘‘Gee. Now if we have a big deficit and 

we have economic troubles in our country and we are trying to reduce the 

budget deficit and give a $11,200 tax cut 

to families over $200,000 a year, and 

then the same folks who want to do it 

come along and say, ‘‘Do you know how 

we can pay for all of this? We can take 

a $300 billion or $400 billion out of 

Medicare and Medicaid. That is how we 

can pay for this.’’

All of a sudden I think a light bulb 

went on in the minds of some of these 

architects who said maybe we will get 

blamed for taking money away from 

people who are elderly or poor for their 

health care and using it to give a tax 

cut to those who are wealthy. Will not 

that be unfair for those of us who know 

the facts to stand up and talk about 

those folks? So all of a sudden we have 

seen in the last 48 hours, 72 hours, folks 

scurrying around town here saying, 

‘‘Wait a second. Do not be so quick on 

Medicare and Medicaid. That is not 

really what we meant. That is not what 

we said.’’

We do not really know what they 

mean because those same folks who 

were out here in an enormous hurry to 

change the U.S. Constitution were not 

in a very big hurry on April 1 when the 

law said they were required to bring a 

budget to the floor of the Senate. 

You see, you cannot change the Constitution and alter the deficit. If you 

change the Constitution with a constitutional amendment to require a 

balanced budget, you will not change 

the deficit by one nickel. What changes 

the budget deficit is when we bring a 

budget to the floor and make decisions. 

They were in a big hurry to change 

the Constitution, but somehow this 

enormous need to move quickly has 

left them. Now they simply cannot 

seem to get over here. The law says 

April 1 they should be here with their 

budget. Then it says by April 15 we 

should have a conference report. Well, 

April 1 came and went. April 15 is here 

and gone. May 1 is here and gone. No 

budget. But we have tax cuts for the 

big folks. 

If you make half a million dollars 

sitting there clipping coupons, using 

that channel changer to search to see 

what entertainment is on tonight for 

you, boy, you can look at this Congress, and, say, ‘‘What a Congress. 

What a bunch of folks those folks are. 

$11,000 I have to spend. I can buy some 

more radio equipment. In fact, I can 

probably lease a Rolls Royce for 6 or 8 

months, or lease a Mercedes Benz.’’

Could you not with $11,000 lease a Mercedes Benz for a year? Then you say to 

the person that is making $20,000 or 

$25,000 a year, maybe a hubcap. Maybe 

you will not be able to afford the hubcap. Maybe a radiator cap, but certainly not the Mercedes Benz we are 

going to give to the big folks. 

Here we are. No budget; got a tax cut, 

not middle-class tax cut, a tax cut that 

gives the bulk of the benefits to the 

wealthiest. It is the old cake and 

crumbs theory. Give the cake to the 

big shots. Leave a few crumbs to the 

rest and say everybody got something. 

It is like somebody going to Camden 

Yards and saying, ‘‘You know something. I am going to give away $100 

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