Statement on Signing the Telecommunications Act of 1996

Today I have signed into law S. 652, the "Telecommunications Act of 1996." This landmark legislation fulfills my Administration's promise to reform our telecommunications laws in a manner that leads to competition and private investment, promotes universal service and open access to information networks, and provides for flexible government regulation. The Act opens up competition between local telephone companies, long distance providers and cable companies; expands the reach of advanced telecommunications services to schools, libraries, and hospitals; and requires the use of new Vchip technology to enable families to exercise greater control over the television programming that comes into their homes.

For nearly two decades, Vice President Gore has worked to spur the creation of a national information superhighway. This Act lays the foundation for the robust investment and development that will create such a superhighway to serve both the private sector and the public interest.

Over the past 3 years, my Administration has worked vigorously to produce legislation that would provide consumers greater choices and better quality in their telephone, cable, and information services. This legislation puts us squarely on the road to a brighter, more productive future.

In the world of the mass media, this Act seeks to remove unnecessary regulation and open the way for freer markets. I support that philosophy. At the same time, however, my Administration has opposed measures that would allow undue concentration in the mass media. I am very pleased that this Act retains reasonable limits on the ability of one company or individual to own television, radio, and newspaper properties in local markets and retains national ownership limits on television stations. My Administration will continue its efforts to ensure that the American public has access to many different sources of news and information in their communities.

The Act increases from 25 to 35 percent the cap on the amount of the national audience that television stations owned by one person or entity can reach. This cap will prevent a single broadcast group owner from dominating the national media market.

While the Act removes the statutory ban on ownership of a cable system and a broadcast station in the same local market, it does not eliminate the Federal Communications Commission's (FCC) regulatory ban on such cross-ownership. This ownership restriction continues to be very important in maintaining competition in local markets and should be maintained by the FCC. In addition, while certain regulatory cross-ownership bans are no longer necessary and have been eliminated, others that are critical to maintaining the diversity of local news and information sources have been retained. For example, the Act maintains the regulatory ban on common ownership of a newspaper and a broadcast television or radio station.

With regard to the ban on ownership of more than one television station in a local market, the Act directs the FCC to conduct a rulemaking to review its regulation and its waiver policy. Currently, the FCC allows ownership of more than one television station only in narrow and compelling circumstances, such as when a station would otherwise go dark, and where local diversity would not be reduced. Any changes in this policy should allow ownership of two stations only when doing so would clearly not reduce the diversity of independent outlets of news and information in a community. My Administration will continue to support a fair balance between economic viability and diversity.

Rates for cable programming services and equipment used solely to receive such services will, in general, be deregulated in about 3 years. Cable rates will be deregulated more quickly in communities where a phone company offers programming to a comparable number of households, providing effective competition to the cable operator. In such circumstances, consumers will be protected from price hikes because the cable system faces real competition.

This legislation also places a strong emphasis on competition in both local and long distance telephone markets, making it possible for the regional Bell companies to offer long distance service, provided that, in the judgment of the FCC, they have opened up their local networks to competitors such as long distance companies, cable operators and others.

To protect the public, the FCC must evaluate any application for entry into the long distance business in light of its public interest test, which gives the FCC discretion to consider a broad range of issues, such as the adequacy of interconnection arrangements to permit vigorous competition. Moreover, in deciding whether to grant the application of a regional Bell company to offer long distance service, the FCC must accord "substantial weight" to the views of the Attorney General. This special legal standard, which I consider essential, ensures that the FCC and the courts will accord full weight to the special competition expertise of the Justice Department's Antitrust Division—especially its expertise in making predictive judgments about the effect that entry by a Bell company into long distance may have on competition in local and long distance markets. This Act also allows the Attorney General to use any available evidence, including evidence acquired under the Modified Final Judgment, and make a recommendation under any legal standard the Attorney General considers appropriate.

Further, when a regional Bell company establishes a long distance or manufacturing affiliate, the Act bars it from discriminating in favor of its own affiliates and against the interests of competing long distance providers or manufacturers, when such outside companies seek to do business with the regional Bell's local network.

The Act's emphasis on competition is also reflected in its antitrust savings clause. This clause ensures that even for activities allowed under or required by the legislation, or activities resulting from FCC rulemakings or orders, the antitrust laws continue to apply fully.

I am also pleased that the Act requires interstate telecommunications carriers to contribute to a fund to preserve and advance universal service. The fund would be spent to provide and upgrade facilities and services, as prescribed by the FCC. And carriers would receive credit toward their contribution by providing discount service to schools, libraries, and health care providers in rural areas. In addition, equipment manufacturers and service providers would be required to address the needs of individuals with disabilities if readily achievable.

I am especially pleased that the Act requires new televisions to be outfitted with the V-chip, which will empower families to choose the kind of programming suitable for their children. The V-chip provision relies on the broadcast networks to produce a rating system and to implement the system in a manner compatible with V-chip technology. By relying on the television industry to establish and implement the ratings, the Act serves the interest of families without infringing on the First Amendment rights of the television programmers and producers.

I do object to the provision in the Act concerning the transmittal of abortion-related speech and information. Current law, 18 U.S.C. 1462, prohibits transmittal of this information by certain means, and the Act would extend that law to cover transmittal by interactive computer services. The Department of Justice has advised me of its long-standing policy that this and related abortion provisions in current law are unconstitutional and will not be enforced because they violate the First Amendment. The Department has reviewed this provision of S. 652 and advises me that it provides no basis for altering that policy. Therefore, the Department will continue to decline to enforce that provision of current law, amended by this legislation, as applied to abortion-related speech.

The Telecommunications Act of 1996 will strengthen our economy, our society, our families, and our democracy. It promotes competition as the key to opening new markets and new opportunities. It will help connect every classroom in America to the information superhighway by the end of the decade. It will protect consumers by regulating the remaining monopolies for a time and by providing a roadmap for deregulation in the future. I am pleased to have signed this historic legislation.

WILLIAM J. CLINTON

The White House, February 8, 1996.