Statement in Congressional Record by Sen. Pat Leahy (D-VT). Re: Introduction of S 1121, Antitrust Improvements Act. Date: May 25, 1999. Source: Congressional Record, May 25, 1999, Page S5962.

ANTITRUST IMPROVEMENTS ACT OF 1999

Mr. LEAHY. Mr. President, we are living in a time of mega-mergers, and they are coming from all directions. Chrysler and Daimler-Benz automobile companies finalized their merger last year. In the computer world, AOL completed its purchase of Netscape just a few months ago. And in the largest corporate merger ever, Exxon Corporation announced its plan to acquire Mobil at a price tag of over $75 billion, thus creating the world's biggest private oil company, Exxon Mobil Corporation.

While these mega-mergers have cut a swath across a number of industries, the consolidations that continue to raise the most questions in my mind are those that involve incumbent monopolies. For example, the mergers among Regional Bell Operating Companies, which continue to have a virtual stranglehold on the local telephone loop, pose a great threat to healthy competition in the telecommunications industry.

Indeed, incumbent telephone companies still control more than 99% of the local residential telephone markets.

As I said last Congress, and it is still the case today, at my farm in Middlesex and at my home here in Virginia, I have only one choice for dial-tone and local telephone service. That `choice' is the Bell operating company or no service at all.

The Telecommunications Act of 1996 passed with the promise of bringing competition to benefit American consumers. However, this promise has yet to materialize.

Since passage of the Telecommunications Act, Southwestern Bell has merged with PacTel into SBC Corporation, Bell Atlantic has merged into NYNEX, and AT&T has acquired IBM's Global Network, just to name a few. Just last week it was reported that U.S. West reached an agreement to merge with the telecommunications company Global Crossing.

The U.S. Justice Department didn't spend years dividing up Ma Bell just to see it grow back together again under the guise of the 1996 Telecommunications Act.

I am very concerned that the concentration of ownership in the telecommunications industry is proceeding faster than the growth of competition. Old monopolies are simply regrouping and getting bigger and bigger.

Before all the pieces of Ma Bell are put together again, Congress should revisit the Telecommunications Act. To ensure competition between Bell Operating Companies and long distance and other companies, as contemplated by passage of this law, we need clearer guidelines and better incentives. Specifically, we should ensure that Bell Operating Companies do not gain more concentrated control over huge percentages of the telephone access lines of this country through mergers, but only through robust competition.

Today I am reintroducing antitrust legislation that will bar future mergers between Bell Operating Companies or GTE, unless the federal requirements for opening the local loop to competition have been satisfied in at least half of the access lines in each State.

The bill provides that a `large local telephone company' may not merge with another large local telephone company unless the Attorney General finds that the merger will promote competition for telephone exchange services and exchange access services. Also, before a merger can take place, the Federal Communications Commission must find that each large local telephone company has for at least one-half of the access lines in each State served by such carrier, of which as least one-half are residential access lines, fully implemented the requirements of sections 251 and 252 of the Communications Act of 1934.

The bill requires that each large local telephone company that wishes to merge with another must file an application with the Attorney General and the FCC. A review of these applications will be subject to the same time limits set under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

The bill also provides that nothing in this Act shall be construed to modify, impair, or supersede the applicability of the antitrust laws of the United States, or any authority of the Federal Communications Commission, or any authority of the States with respect to mergers and acquisitions of large local telephone companies.

The bill is effective on enactment and has no retroactive effect. It is enforceable by the Attorney General in federal district courts.

This bill has the potential to make the 1996 Telecommunications Act finally live up to some of its promises.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.