THE WHITE HOUSE Office of the Press Secretary ________________________________________________________________________ For Immediate Release June 15, 1995 ADMINISTRATION STATEMENT ON SENATE PASSAGE OF S. 652 Although the Administration still has serious concerns that need to be addressed, important improvements were made in S.652 on the Senate floor. The Administration commends the hard work of the Senate and its leadership and looks forward to working with both houses of Congress to produce pro-competitive and pro-consumer final legislation that will bring greater choice and lower prices in communications for all Americans. Important improvements made to the committee-reported version include: -- a prohibition on mergers between cable companies and telephone companies in places with more than 50,000 residents and in all urban areas. Preventing mergers between cable and telephone companies in urban and suburban communities is fundamental to promoting broad competition in both these industries. -- some restraint on rate increases for cable programming received by most consumers. Cable companies will have some limits on their ability to continuously raise their rates. -- further opening our markets to investments in U.S. telecommunications firms by foreign corporations while providing for the President to reject certain applications based on national security concerns. -- requiring all new televisions to contain technology that will allow parents to block out programs with violent or objectionable content. -- a strong reaffirmation of the bill's provision to ensure that schools, hospitals and libraries have access to new, emerging telecommunications technologies. Despite this progress, it is very important that the legislation be improved further. For instance, the provisions allowing waiver of the cable-telco buyout provision are overly broad and the rural exemption is too high, thereby precluding competition in some rural areas where competition could be expected to develop. In addition, the Administration opposes deregulating cable rates on the date of enactment in those markets where competition has not yet arrived and supports meaningful protections for consumers served by monopoly systems. The foreign ownership provision does not provide authority to grant most-favored nation status for telecommunications, which is crucial to our success in multilateral negotiations. There are other important areas where no improvements at all were made by the Senate. The Administration continues to have the following serious concerns that need to be addressed: -- S. 652 does not continue any meaningful role for the Justice Department in safeguarding competition before local telephone companies are allowed to enter new markets. If monopolies are unleashed under the wrong circumstances, competition will be harmed. -- S. 652 allows dramatic concentration within the broadcast industry which could reduce the diversity of news and information available to the public. Many steps remain in the process before the telecommunications legislation can become law. Although we are encouraged that some progress has been made, more needs to be done to improve the legislation so that it will truly promote competition, benefit consumers and protect universal service. The Administration will continue to take every opportunity to work with Congress to make such improvements. The Administration's position on the final legislation will depend on the extent to which the Administration's concerns have been addressed satisfactorily during the course of the entire legislative process.