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company in New York, example, has already indicated a rate filing of probably $1 billion.

There are winners. They're the large corporate users of telecommunications and many suppliers of the services and equipment. We have been active in trying to get the Congress to enact legislation to help the employees who were harmed by the AT&T breakup, identical to H.R. 2828 which was introduced in the last Congress. Representative Al Swift is working today to include the provisions of that bill in the MFJ legislation now before the House.

We have supported and continue to support allowing the Bell operating companies to enter information services since they are uniquely situated to be in that business. We hope the parties can work out the necessary safeguards. However, information services allowed should be provided domestically and not offshore. In the event the Bell companies are allowed to enter manufacturing, we strongly urge the Congress to set conditions to require that the research and development and the fabrication be done in the United States.

The present language of H.R. 2140 would, of course, allow overseas manufacturing of such equipment. Last week, Senator Hollings conducted hearings on high definition TV, to establish a requirement that to share in Federal funding, a company must be committed to having substantial R&D commitment in the United States and committed to job creation in the United States. We applaud the Senator and believe this subcommittee should be driven by a policy that creates jobs in the United States as you in the Congress tackle telephone legislation. Thank you very much.

Mr. Bahr's prepared statement follows:]

Mr. MAZZOLI. Mr. Bahr, I guess, is not here. I understand that you're appearing for him.

Ms. EASTERLING. I'm appearing for him.
Mr. MAZZOLI. And you are?

Ms. EASTERLING. I'm Barbara Easterling. I'm the executive vice
president for the Communication Workers of America.
Mr. MAZZOLI. Thank you very much.
STATEMENT OF BARBARA EASTERLING, EXECUTIVE VICE

PRESIDENT, COMMUNICATIONS WORKERS OF AMERICA Ms. EASTERLING. I would first like to apologize for President Bahr. He's been serving on a Department of Labor Commission, which is finalizing its report today, so he was unable to remain. Since our text has been submitted, we'd like to just highlight several concerns of our union. Mr. McGowan said consumers and employees have suffered confusion as a result of the AT&T divesti ture, but it was worth it.

Of course, that depends on who is viewing that situation. CWA represents 550,000 telecommunications workers and those are the very people who built the system that operated so well. We want to share with this subcommittee what we have shared with your colleagues on other committees. The MFJ was structured without any concern for its impact on the employees. In the last 5 years, we have seen 100,000 good jobs disappear. Thousands of workers have been laid off. Thousands of others were transferred only to be laid off then in a strange city. Family problems, including drug and alcohol abuse, divorce, and even suicides have resulted.

We are concerned that any modification of the MFJ through legislation should keep these human tragedies in mind. The breakup also was accomplished without concern for the Nation's trade situation. From a $1 billion trade surplus in telecommunications equipment in 1982, we have gone to a $3 billion trade deficit last year. This means many lost American jobs and the outflow of our Nation's resources to other countries. The losers were the employees and the companies which had been producing goods in the United States for this market.

Mr. Mazzoli, you indicated that most equipment is manufactured abroad. While this is true, it is not true for AT&T. Very little of what had been manufactured in the United States has been moved offshore. I also would like to indicate to you that we have seen AT&T close five plants around the country, and this has created additional hardships on our members. The reason the plants have closed was due to the fact that the Bell operating companies began to purchase from foreign companies and this, along with the fact that AT&T is not permitted access to this same foreign market, have resulted in the shutting down of such plants.

You also said that 80 to 90 percent of your constituents would like to re-create the old Bell System, and you are correct, since the ordinary consumer also must be considered a loser from the breakup. Local service bills have, in many cases, doubled since the breakup was agreed to in 1982. While it's true, as Mr. Fish said, that rates have leveled, that is about to end, and your telephone company in New York, example, has already indicated a rate filing of probably $1 billion.

There are winners. They're the large corporate users of telecommunications and many suppliers of the services and equipment. We have been active in trying to get the Congress to enact legislation to help the employees who were harmed by the AT&T breakup, identical to H.R. 2828 which was introduced in the last Congress. Representative Al Swift is working today to include the provisions of that bill in the MFJ legislation now before the House.

We have supported and continue to support allowing the Bell operating companies to enter information services since they are uniquely situated to be in that business. We hope the parties can work out the necessary safeguards. However, information services allowed should be provided domestically and not offshore. In the event the Bell companies are allowed to enter manufacturing, we strongly urge the Congress to set conditions to require that the research and development and the fabrication be done in the United States.

The present language of H.R. 2140 would, of course, allow overseas manufacturing of such equipment. Last week, Senator Hollings conducted hearings on high definition TV, to establish a requirement that to share in Federal funding, a company must be committed to having substantial R&D commitment in the United States and committed to job creation in the United States. We applaud the Senator and believe this subcommittee should be driven by a policy that creates jobs in the United States as you in the Congress tackle telephone legislation. Thank you very much.

Mr. Bahr's prepared statement follows:]

TESTIMONY

OR
MORTON BAHR, PRESIDENT
COMMUNICATIONS WORKERS OF AMERICA

When the AT&T breakup was agreed to in January 1982, the key idea

was to end the ceaseless litigation by separating the monopoly and

competitive aspects of that company's telecommunications business. Today, we have vigorous competition in the telecommunications industry, benefiting some, but not all, users.

On behalf of the Communications Workers of America, I want to

commend the Subcommittee for holding its first inquiry since early

1982 on the consent decree which led to the AT&T breakup.

with 5

1/2 years of experience after the divestiture, it now 18 possible

to make informed judgments on many policy issues.

Was the breakup sound public policy?

The responses are mixed.

Residential users commonly have had their local rates doubled in

five years; it 18 beside the point to cite the lower long distance

rates, which are a function of competition.

We are here today in the latest session of the last 15 years

discussing the nation's telecommunications policy, and how it is

to be set.

For these last 15 years, we have heard near-total

agreement with the following sentence: "The Congress should set

the communications policy."

Bitter and rancorous disagreement

sets in at the sentence coming after that.

Beginning about 20 years ago, the Federal Communications

Commission began infusing what it described as "competition" in

the common carrier industry; it was not true competition, but

merely a contrivance allowing some companies to find small

"niches" which they could serve.

The "monopoly" telephone

carriers were then and still are required to provide unbiquitous

service to all.

This dichotomy between "niche" offerings

undertaken selectively

and the mandated universality led to a

caustic, litigious period in our industry, a period in which the

men and women employed by regulated companies began to experience

economic disadvantages.

Before going on, let me offer a word about the ordinary consumer:

this hapless individual has yet to experience any benefit from the

"competition" which has arrived.

This ordinary user has

experienced a doubling of local rates, has found installation and

repair service either gone or "repriced" to become prohibitive,

and has fallen victim to many other gimmicks.

Perhaps the most

insidious gimmick foisted on the ordinary user, courtesy of the

contrived competition, 18 "alternative operator services,"

or

AOS.

The ordinary consumer in a hotel or hospital room, at an

airport, at some payphones, or in college dormitories, can be

served by a carrier not of his or her choice but which will

overcharge by as much as $10 in the price of a single telephone

message.

The FCC has let AOS carriers come into existence, and only

recently in the wake of thousands of irate complaints imposed some

weak rules to give consumers a small amount of protection

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