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An Endowed Chair 

Sen. John McCain's push for campaign-finance reform has helped his presidential bid. Donations from special interests haven't hurt, either.

Wednesday, Dec 15 1999

Page 4 of 5

Consumer groups oppose the measure, saying it would further limit the number of voices in the market; non-network affiliates don't like it, either.

But mega-companies like Viacom ($55,250) and Fox Broadcasting ($19,050) stand to benefit.

McCain isn't always decisive on telecommunications issues. Sometimes, he simply sits back and waits. That's the case with the continuing debate over how to fix the Telecommunications Act of 1996. The act was supposed to lower phone rates by encouraging competition among long distance carriers and the Baby Bells; instead, it has led to mergers among companies and resulted in higher cable and phone rates.

McCain, one of a handful to vote against the bill in 1996, has expressed concern over the ramifications of the new law -- but he hasn't suggested any legislative remedies. Instead, over the past several months he's held a series of hearings on the matter, summoning the CEOs of these communications Goliaths before him to testify.

Commerce Committee staff director Buse says McCain has been consistent on the issue.

"He's had a pretty constant mantra: 'I'll continue to hold hearings and look at how to improve the act so that American consumers get more choice.' He is very concerned over consolidation in the cable industry. He remains very concerned that the average consumer at home doesn't have lower prices on their telephone bills, on their cable bills. ... He will continue to investigate how we can open that up."

Buse is quick to point out that McCain invites all sides to testify. Gene Kimmelman of the Consumers Union (which publishes Consumer Reports) is a frequent witness.

At a hearing last month, Kimmelman told the committee, "Consumers are getting the short end of the stick -- higher fees, higher prices. Unless you're in the high end of the market, you're a high-volume customer, then you get choices. And so, I leave it for you, Mr. Chairman, should Congress allow consumers to be ripped off in a core market that has monopoly attributes, because that monopoly says I want to go somewhere else and compete? I don't think that's fair."

Kimmelman called on McCain to revamp the law to make it more fair. Buse says there is no time frame for doing so.

Railroads are not as high-profile as aviation or telecommunications, but they are frequently on the Senate Commerce Committee agenda -- and industry representatives have been generous to John McCain, contributing at least $97,110.

This figure does not count the flights McCain has taken on the private jets of rail corporations CSX Transportation and Union Pacific. McCain reimbursed the companies for the flights, but paid the cost of a first-class ticket on a commercial airliner -- far less than the real cost of such a ride. (Bell South has also given McCain rides on its jets.)

CSX and Union Pacific are two of the private freight companies that benefited from the Amtrak Reform and Accountability Act of 1997, which included provisions that limit the liability of companies that own the tracks used by the government railroad. The bill also capped, at $200,000, the total damages that can be paid to passengers in a single train wreck.

A 1991 train wreck in Florida cost CSX $50 million in punitive damages. The company's tracks had not been properly maintained and the company had recently cut its maintenance personnel in half.

Frank Clemente, director of Public Citizen, a Washington, D.C., consumer group, says the bill that was ultimately passed was much less onerous than the one that made it out of McCain's committee. That bill would have, in effect, forced Amtrak (i.e., the taxpayer) to pick up the tab for damages awarded in any crash, no matter how egregious the actions of the private company. The bill also would have further limited damages an individual could claim.

McCain abstained on the committee vote that sent the bill to the Senate floor. As committee chairman, he could have held the bill and let it die. He voted for the final version that became law.

Most experts agree that the Y2K scare is just that -- a scare. But high-tech special interests took no chances. They asked the Senate Commerce Committee and John McCain to protect them from liability in the event of product failure. The Y2K Dispute Resolution Bill addresses almost any catastrophe related to a Y2K computer crash.

Tom Bantle of CongressWatch, a Ralph Nader creation, calls the bill anti-consumer and says it benefits hardware and software manufacturers.

"It's particularly unusual," Bantle says of the bill, "because the Y2K defect was created by the computer companies -- in order to save themselves computer space and therefore money -- knowing that in the year 2000 it would be a problem. And while they've created it themselves, they came to Congress to say, 'Well, we created it, but you should now protect us from our own decision to put this defect into our products by making it harder for people who are hurt by it to get compensation.'"

Even though Y2K will likely be a "non-event," Bantle worries that the industry will use the legislative victory as a steppingstone toward additional liability exemptions. Already, he says, the computer industry is citing the bill "as an example of the types of things that we should do more often, so in that sense it's a very bad precedent."

Commerce Committee staff director Buse dismisses Bantle's concerns as more grousing from Nader, whose groups he says parrot trial lawyers who don't want to limit lawsuits.

Of the bill, Buse says, "It does not benefit any single industry of any kind. What it does benefit is society as a whole. I don't think that we'd want a bunch of frivolous lawsuits out there."

Companies and trade associations that supported the bill include: Intel ($5,100); IBM ($6,350); and Microsoft ($32,250).

About The Author

Amy Silverman


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