[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 652 Reported in Senate (RS)]





                                                        Calendar No. 45

104th CONGRESS

  1st Session

                                 S. 652

                          [Report No. 104-23]

_______________________________________________________________________

                                 A BILL

    To provide for a pro-competitive, de-regulatory national policy 
 framework designed to accelerate rapidly private sector deployment of 
 advanced telecommunications and information technologies and services 
     to all Americans by opening all telecommunications markets to 
                  competition, and for other purposes.

_______________________________________________________________________

               March 30 (legislative day, March 27), 1995

                 Read twice and placed on the calendar
                                                        Calendar No. 45
104th CONGRESS
  1st Session
                                 S. 652

                          [Report No. 104-23]

    To provide for a pro-competitive, de-regulatory national policy 
 framework designed to accelerate rapidly private sector deployment of 
 advanced telecommunications and information technologies and services 
     to all Americans by opening all telecommunications markets to 
                  competition, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               March 30 (legislative day, March 27), 1995

      Mr. Pressler, from the Committee on Commerce, Science, and 
 Transportation, reported the following original bill; which was read 
                    twice and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
    To provide for a pro-competitive, de-regulatory national policy 
 framework designed to accelerate rapidly private sector deployment of 
 advanced telecommunications and information technologies and services 
     to all Americans by opening all telecommunications markets to 
                  competition, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Telecommunications Competition and 
Deregulation Act of 1995''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:
                                                               Page
                            Sec. 1. Short title............       2
                            Sec. 2. Table of contents......       2
                            Sec. 3. Purpose................       3
                            Sec. 4. Goals..................       3
                            Sec. 5. Findings...............       4
                            Sec. 6. Amendment of                  8
                                Communications Act of 1934.
                            Sec. 7. Effect on other laws...       8
                            Sec. 8. Definitions............       9

            Title I--Transition to Competition

                            Sec. 101. Interconnection            14
                                requirements.
                            Sec. 102. Separate subsidiary        28
                                and safeguard requirements.
                            Sec. 103. Universal service....      36
                            Sec. 104. Essential 
                                        telecommunications 
    carriers.                                                    43
                            Sec. 105. Foreign investment         48
                                and ownership reform.
                            Sec. 106. Infrastructure             50
                                sharing.

            Title II--Removal of Restrictions to 
                Competition

                    Subtitle A--Removal of Restrictions

                            Sec. 201. Removal of entry           54
                                barriers.
                            Sec. 202. Limitation on State        57
                                and local taxation of 
                                direct-to-home satellite 
                                services.
                            Sec. 203. Elimination of cable 
                                and telephone company 
                                           cross-ownership 
    restriction.                                                 63
                            Sec. 204. Cable Act reform.....      69
                            Sec. 205. Pole attachments.....      71
                            Sec. 206. Entry by utility           73
                                companies.
                            Sec. 207. Broadcast reform.....      76

                    Subtitle B--Termination of Modification 
                        of Final Judgment

                            Sec. 221. Removal of long            82
                                distance restrictions.
                            Sec. 222. Removal of                 99
                                manufacturing restrictions.
                            Sec. 223. Existing activities..     105
                            Sec. 224. Enforcement..........     106
                            Sec. 225. Alarm monitoring          108
                                services.

            Title III--An End to Regulation

                            Sec. 301. Transition to             113
                                competitive pricing.
                            Sec. 302. Biennial review of        117
                                regulations.
                            Sec. 303. Regulatory                118
                                forbearance.
                            Sec. 304. Advanced                  120
                                telecommunications 
                                incentives.
                            Sec. 305. Regulatory parity....     122
                            Sec. 306. Automated ship 
                                       distress and safety 
    systems.                                                    123
                            Sec. 307. Telecommunications        123
                                numbering administration.
                            Sec. 308. Access by persons         124
                                with disabilities.
                            Sec. 309. Rural markets........     129
                            Sec. 310. Telecommunications        131
                                services for health care 
                                providers for rural areas, 
                                educational providers, and 
                                libraries.
                            Sec. 311. Provision of payphone     135
                                service and telemessaging 
                                service.

            Title IV--Obscene, Harassing, and Wrongful 
                Utilization of Telecommunications 
                Facilities
                            Sec. 401. Short title..........     137
                            Sec. 402. Obscene or harassing      137
                                use of telecommunications 
                                facilities under the 
                                Communications Act of 1934.
                            Sec. 403. Obscene programming       143
                                on cable television.
                            Sec. 404. Broadcasting obscene      143
                                language on radio.
                            Sec. 405. Interception and          144
                                disclosure of electronic 
                                communications.
                            Sec. 406. Additional                144
                                prohibition on billing for 
                                toll-free telephone calls.
                            Sec. 407. Scrambling of cable 
                                              channels for 
    nonsubscribers.                                             145
                            Sec. 408. Cable operator            146
                                refusal to carry certain 
                                programs.

SEC. 3. PURPOSE.

    It is the purpose of this Act to increase competition in all 
telecommunications markets and provide for an orderly transition from 
regulated markets to competitive and deregulated telecommunications 
markets consistent with the public interest, convenience, and 
necessity.

SEC. 4. GOALS.

    This Act is intended to establish a national policy framework 
designed to accelerate rapidly the private sector deployment of 
advanced telecommunications and information technologies and services 
to all Americans by opening all telecommunications markets to 
competition, and to meet the following goals:
            (1) To promote and encourage advanced telecommunications 
        networks, capable of enabling users to originate and receive 
        affordable, high-quality voice, data, image, graphic, and video 
        telecommunications services.
            (2) To improve international competitiveness markedly.
            (3) To spur economic growth, create jobs, and increase 
        productivity.
            (4) To deliver a better quality of life through the 
        preservation and advancement of universal service to allow the 
        more efficient delivery of educational, health care, and other 
        social services.

SEC. 5. FINDINGS.

    The Congress makes the following findings:
            (1) Competition, not regulation, is the best way to spur 
        innovation and the development of new services. A competitive 
        market place is the most efficient way to lower prices and 
        increase value for consumers. In furthering the principle of 
        open and full competition in all telecommunications markets, 
        however, it must be recognized that some markets are more open 
        than others.
            (2) Local telephone service is predominantly a monopoly 
        service. Although business customers in metropolitan areas may 
        have alternative providers for exchange access service, 
        consumers do not have a choice of local telephone service. Some 
        States have begun to open local telephone markets to 
        competition. A national policy framework is needed to 
        accelerate the process.
            (3) Because of their monopoly status, local telephone 
        companies and the Bell operating companies have been prevented 
        from competing in certain markets. It is time to eliminate 
        these restrictions. Nonetheless, transition rules designed to 
        open monopoly markets to competition must be in place before 
        certain restrictions are lifted.
            (4) Transition rules must be truly transitional, not 
        protectionism for certain industry segments or artificial 
        impediments to increased competition in all markets. Where 
        possible, transition rules should create investment incentives 
        through increased competition. Regulatory safeguards should be 
        adopted only where competitive conditions would not prevent 
        anticompetitive behavior.
            (5) More competitive American telecommunications markets 
        will promote United States technological advances, domestic job 
        and investment opportunities, national competitiveness, 
        sustained economic development, and improved quality of 
        American life more effectively than regulation.
            (6) Congress should establish clear statutory guidelines, 
        standards, and time frames to facilitate more effective 
        communications competition and, by so doing, will reduce 
        business and customer uncertainty, lessen regulatory processes, 
        court appeals, and litigation, and thus encourage the business 
        community to focus more on competing in the domestic and 
        international communications marketplace.
            (7) Where competitive markets are demonstrably inadequate 
        to safeguard important public policy goals, such as the 
        continued universal availability of telecommunications services 
        at reasonable and affordable prices, particularly in rural 
        America, Congress should establish workable regulatory 
        procedures to advance those goals, provided that in any 
        proceeding undertaken to ensure universal availability, 
        regulators shall seek to choose the most procompetitive and 
        least burdensome alternative.
            (8) Competitive communications markets, safeguarded by 
        effective Federal and State antitrust enforcement, and strong 
        economic growth in the United States which such markets will 
        foster are the most effective means of assuring that all 
        segments of the American public command access to advanced 
        telecommunications technologies.
            (9) Achieving full and fair competition requires strict 
        parity of marketplace opportunities and responsibilities on the 
        part of incumbent telecommunications service providers as well 
        as new entrants into the telecommunications marketplace, 
        provided that any responsibilities placed on providers should 
        be the minimum required to advance a clearly defined public 
        policy goal.
            (10) Congress should not cede its constitutional 
        responsibility regarding interstate and foreign commerce in 
        communications to the Judiciary through the establishment of 
        procedures which will encourage or necessitate judicial 
        interpretation or intervention into the communications 
        marketplace.
            (11) Ensuring that all Americans, regardless of where they 
        may work, live, or visit, ultimately have comparable access to 
        the full benefits of competitive communications markets 
        requires Federal and State authorities to work together 
        affirmatively to minimize and remove unnecessary institutional 
        and regulatory barriers to new entry and competition.
            (12) Effectively competitive communications markets will 
        ensure customers the widest possible choice of services and 
        equipment, tailored to individual desires and needs, and at 
        prices they are willing to pay.
            (13) Investment in and deployment of existing and future 
        advanced, multipurpose technologies will best be fostered by 
        minimizing government limitations on the commercial use of 
        those technologies.
            (14) The efficient development of competitive United States 
        communications markets will be furthered by policies which aim 
        at ensuring reciprocal opening of international investment 
        opportunities.

SEC. 6. AMENDMENT OF COMMUNICATIONS ACT OF 1934.

    Except as otherwise expressly provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Communications Act of 
1934 (47 U.S.C. 151 et seq.).

SEC. 7. EFFECT ON OTHER LAW.

    (a) Antitrust Laws.--Except as provided in subsections (b) and (c), 
nothing in this Act shall be construed to modify, impair, or supersede 
the applicability of any antitrust law.
    (b) Modification of Final Judgment.--This Act shall supersede the 
Modification of Final Judgment to the extent that it is inconsistent 
with this Act.
    (c) Transfer of MFJ and GTE Consent Decrees.--After the date of 
enactment of this Act, the Commission shall administer the GTE Consent 
Decree and any provision of the Modification of Final Judgment not 
overridden or superseded by this Act. The District Court for the 
District of Columbia shall have no further jurisdiction over any 
provision of the Modification of Final Judgment, or the GTE Consent 
Decree, administered by the Commission under this Act.

SEC. 8. DEFINITIONS.

    (a) Terms Used In This Act.--As used in this Act--
            (1) Commission.--The term `Commission' means the Federal 
        Communications Commission.
            (2) Modification of final judgment.--The term `Modification 
        of Final Judgment' means the decree entered on August 24, 1982, 
        in United States v. Western Electric Civil Action No. 82-0192 
        (United States District Court, District of Columbia), and 
        includes any judgment or order with respect to such action 
        entered on or after August 24, 1982, and before the date of 
        enactment of this Act.
            (3) GTE consent decree.--The term ``GTE Consent Decree'' 
        means the order entered on December 21, 1984, as restated 
        January 11, 1985, in United States v. GTE Corporation, Civil 
        Action No. 83-1298 (United States District Court, District of 
        Columbia), and includes any judgment or order with respect to 
        such action entered on or after January 11, 1985, and before 
        the date of enactment of this Act.
            (4) Integrated telecommunications service provider.--The 
        term ``integrated telecommunications service provider'' means 
        any person engaged in the provision of multiple services, such 
        as voice, data, image, graphics, and video services, which make 
        common use of all or part of the same transmission facilities, 
        switches, signalling, or control devices.
    (b) Terms Used in the Communications Act of 1934.--Section 3 (47 
U.S.C. 153) is amended by adding at the end thereof the following:
    ``(gg) `Modification of Final Judgment' means the decree entered on 
August 24, 1982, in United States v. Western Electric Civil Action No. 
82-0192 (United States District Court, District of Columbia), and 
includes any judgment or order with respect to such action entered on 
or after August 24, 1982, and before the date of enactment of the 
Telecommunications Competition and Deregulation Act of 1995.
    ``(hh) `Bell operating company' means those companies listed in 
appendix A of the Modification of Final Judgment, and includes any 
successor or assign of any such company, but does not include any 
affiliate of such company.
    ``(ii) `Affiliate' means a person that (directly or indirectly) 
owns or controls, is owned or controlled by, or is under common 
ownership or control with, another person. For purposes of this 
paragraph, the term `own' means to own an equity interest (or the 
equivalent thereof) of more than 10 percent.
    ``(jj) `Telecommunications Act of 1995' means the 
Telecommunications Competition and Deregulation Act of 1995.
    ``(kk) `Local exchange carrier' means a provider of telephone 
exchange service or exchange access service.
    ``(ll) `Telecommunications' means the transmission, between or 
among points specified by the user, of information of the user's 
choosing, including voice, data, image, graphics, and video, without 
change in the form or content of the information, as sent and received, 
with or without benefit of any closed transmission medium.
    ``(mm) `Telecommunications service' means the offering of 
telecommunications for a fee directly to the public, or to such classes 
of users as to be effectively available to the public, regardless of 
the facilities used to transmit the telecommunications service. The 
term includes the transmission, without change in the form or content, 
of information services and cable services, but does not include the 
offering of those services.
    ``(nn) `Telecommunications carrier' means any provider of 
telecommunications services, except that such term does not include 
hotels, motels, hospitals, and other aggregators of telecommunications 
services (as defined in section 226). A telecommunications carrier 
shall be treated as a common carrier under this Act to the extent that 
it is engaged in providing telecommunications services.
    ``(oo) `Telecommunications number portability' means the ability of 
users of telecommunications services to retain, at the same location, 
existing telecommunications numbers without impairment of quality, 
reliability, or convenience when switching from one telecommunications 
carrier to another.
    ``(pp) `Information service' means the offering of services that--
            ``(1) employ computer processing applications that act on 
        the format, content, code, protocol, or similar aspects of the 
        subscriber's transmitted information;
            ``(2) provide the subscriber additional, different, or 
        restructured information; or
            ``(3) involve subscriber interaction with stored 
        information.
    ``(qq) `Cable service' means cable service as defined in section 
602.
    ``(rr) `Rural telephone company' means a telecommunications carrier 
operating entity to the extent that such entity provides telephone 
exchange service, including access service subject to part 69 of the 
Commission's rules (47 C.F.R. 69.1 et seq.), to--
            ``(1) any service area that does not include either--
                    ``(A) any incorporated place of 10,000 inhabitants 
                or more, or any part thereof, based on the most recent 
                population statistics of the Bureau of the Census; or
                    ``(B) any territory, incorporated or 
                unincorporated, included in an urbanized area, as 
                defined by the Bureau of the Census as of January 1, 
                1995; or
            ``(2) fewer than 100,000 access lines within a State.
    ``(ss) `Service area' means a geographic area established by the 
Commission and the States for the purpose of determining universal 
service obligations and support mechanisms. In the case of an area 
served by a rural telephone company, `service area' means such 
company's `study area' unless and until the Commission and the States, 
after taking into account recommendations of a Federal-State Joint 
Board instituted under section 410(c), establish a different definition 
of service area for such company.''.

                   TITLE I--TRANSITION TO COMPETITION

SEC. 101. INTERCONNECTION REQUIREMENTS.

    (a) Required Interconnection.--Title II (47 U.S.C. 201 et seq.) is 
amended by inserting after section 228 the following:

              ``Part II--Competition in Telecommunications

``SEC. 251. INTERCONNECTION.

    ``(a) Duty to Provide Interconnection.--
            ``(1) In general.--A local exchange carrier, or class of 
        local exchange carriers, determined by the Commission to have 
        market power in providing telephone exchange service or 
        exchange access service has a duty under this Act, upon 
        request--
                    ``(A) to enter into good faith negotiations with 
                any telecommunications carrier requesting 
                interconnection between the facilities and equipment of 
                the requesting telecommunications carrier and the 
                carrier, or class of carriers, of which the request was 
                made for the purpose of permitting the 
                telecommunications carrier to provide telephone 
                exchange or exchange access service; and
                    ``(B) to provide such interconnection, at rates 
                that are reasonable and nondiscriminatory, according to 
                the terms of the agreement and in accordance with the 
                requirements of this section.
            ``(2) Initiation.--A local exchange carrier, or class of 
        carriers, described in paragraph (1) shall commence good faith 
        negotiations to conclude an agreement, whether through 
        negotiation under subsection (c) or arbitration or intervention 
        under subsection (d), within 15 days after receiving a request 
        from any telecommunications carrier seeking to provide 
        telephone exchange or exchange access service. Nothing in this 
        Act shall prohibit multilateral negotiations between or among a 
        local exchange carrier or class of carriers and a 
        telecommunications carrier or class of carriers seeking 
        interconnection under subsection (c) or subsection (d). At the 
        request of any of the parties to a negotiation, a State may 
        participate in the negotiation of any portion of an agreement 
        under subsection (c).
            ``(3) Market power.--For the purpose of determining whether 
        a carrier has market power under paragraph (1), the relevant 
        market shall include all providers of telephone exchange or 
        exchange access services in a local area, regardless of the 
        technology used by any such provider.
    ``(b) Minimum Standards.--An interconnection agreement entered into 
under this section shall, if requested by a telecommunications carrier 
requesting interconnection, provide for--
            ``(1) nondiscriminatory access on an unbundled basis to the 
        network functions and services of the local exchange carrier's 
        telecommunications network (including switching software);
            ``(2) nondiscriminatory access on an unbundled basis to any 
        of the local exchange carrier's telecommunications facilities 
        and information, including databases and signaling, necessary 
        to the transmission and routing of any telephone exchange 
        service or exchange access service and the interoperability of 
        both carriers' networks;
            ``(3) interconnection to the local exchange carrier's 
        telecommunications facilities and services at any technically 
        feasible point within the carrier's network;
            ``(4) interconnection that is at least equal in type, 
        quality, and price (on a per unit basis or otherwise) to that 
        provided by the local exchange carrier to itself or to any 
        subsidiary, affiliate, or any other party to which the carrier 
        provides interconnection;
            ``(5) nondiscriminatory access to the poles, ducts, 
        conduits, and rights-of-way owned or controlled by the local 
        exchange carrier;
            ``(6) the local exchange carrier to take whatever action 
        under its control is necessary, as soon as is technically 
        feasible, to provide telecommunications number portability and 
        local dialing parity in a manner that--
                    ``(A) permits consumers to be able to dial the same 
                number of digits when using any telecommunications 
                carrier providing telephone exchange service or 
                exchange access service in the market served by the 
                local exchange carrier;
                    ``(B) permits all such carriers to have 
                nondiscriminatory access to telephone numbers, operator 
                services, directory assistance, and directory listing 
                with no unreasonable dialing delays; and
                    ``(C) provides for a reasonable allocation of costs 
                among the parties to the agreement;
            ``(7) telecommunications services and network functions of 
        the local exchange carrier to be available to the 
        telecommunications carrier on an unbundled basis without any 
        unreasonable conditions on the resale or sharing of those 
        services or functions, including the origination, transport, 
        and termination of such telecommunications services, other than 
        reasonable conditions required by a State; and for purposes of 
        this paragraph, it is not an unreasonable condition for a State 
        to limit the resale--
                    ``(A) of services included in the definition of 
                universal service to a telecommunications carrier who 
                resells that service to a category of customers 
                different from the category of customers being offered 
                that universal service by such carrier if the State 
                orders a carrier to provide the same service to 
                different categories of customers at different prices 
                necessary to promote universal service; or
                    ``(B) of subsidized universal service in a manner 
                that allows companies to charge another carrier rates 
                which reflect the actual cost of such services, 
                exclusive of any universal service support received for 
                providing such services;
            ``(8) reciprocal compensation arrangements for the 
        origination and termination of telecommunications;
            ``(9) reasonable public notice of changes in the 
        information necessary for the transmission and routing of 
        services using that local exchange carrier's facilities or 
        networks, as well as of any other changes that would affect the 
        interoperability of those facilities and networks; and
            ``(10) a schedule of itemized charges and conditions for 
        each service, facility, or function provided under the 
        agreement.
    ``(c) Agreements Arrived at Through Negotiation.--Upon receiving a 
request for interconnection, a local exchange carrier may meet its 
interconnection obligations under this section by negotiating and 
entering into a binding agreement with the telecommunications carrier 
seeking interconnection without regard to the standards set forth in 
subsection (b). The agreement shall include a schedule of itemized 
charges for each service, facility, or function included in the 
agreement. The agreement, including any interconnection agreement 
negotiated before the date of enactment of the Telecommunications Act 
of 1995, shall be submitted to the State under subsection (e).
    ``(d) Agreements Arrived at Through Arbitration or Intervention.--
            ``(1) In general.--Any party negotiating an interconnection 
        agreement under this section may, at any point in the 
        negotiation, ask a State to participate in the negotiation and 
        to arbitrate any differences arising in the course of the 
        negotiation. The refusal of any other party to the negotiation 
        to participate further in the negotiations, to cooperate with 
        the State in carrying out its function as a arbitrator, or to 
        continue to negotiate in good faith in the presence, or with 
        the assistance, of the State shall be considered a failure to 
        negotiate in good faith.
            ``(2) Intervention.--If any issues remain open in a 
        negotiation commenced under this section more than 135 days 
        after the date upon which the local exchange carrier received 
        the request for such negotiation, then the carrier or any other 
        party to the negotiation may petition a State to intervene in 
        the negotiations for purposes of resolving any such remaining 
        open issues. Any such request must be made during the 25-day 
        period that begins 135 days after the carrier receives the 
        request for such negotiation and ends 160 days after that date.
            ``(3) Duty of petitioner.--
                    ``(A) A party that petitions a State under 
                paragraph (2) shall, within 15 days after the State 
                receives the petition, provide the State all relevant 
                documentation concerning the negotiations necessary to 
                understand--
                            ``(i) the unresolved issues;
                            ``(ii) the position of each of the parties 
                        with respect to those issues; and
                            ``(iii) any other issue discussed and 
                        resolved by the parties.
                    ``(B) A party petitioning a State under paragraph 
                (2) shall notify the other party of its petition not 
                later than the day on which the State receives the 
                petition.
            ``(4) Opportunity to respond.--A party to a negotiation 
        under this section with respect to which the other party has 
        petitioned a State under paragraph (2) may respond to the other 
        party's petition and provide such additional information as it 
        wishes within 25 days after the State receives the petition.
            ``(5) Action by state.--
                    ``(A) A State proceeding to consider a petition 
                under this subsection shall be conducted in accordance 
                with the rules promulgated by the Commission under 
                subsection (i). The State shall limit its consideration 
                of any petition under paragraph (2) (and any response 
                thereto) to the issues set forth in the petition and in 
                the response, if any, filed under paragraph (4).
                    ``(B) The State may require the petitioning party 
                and the responding party to provide such information as 
                may be necessary for the State to reach a decision on 
                the unresolved issues. If either party refuses or fails 
                unreasonably to respond on a timely basis to any 
                reasonable request from the State, then the State may 
                proceed on the basis of the best information available 
                to it from whatever source derived.
                    ``(C) The State shall resolve each issue set forth 
                in the petition and the response, if any, by imposing 
                appropriate conditions upon the parties to the 
                agreement, and shall conduct the review of the 
                agreement (including the issues resolved by the State) 
                not later than 10 months after the date on which the 
                local exchange carrier received the request for 
                interconnection under this section.
                    ``(D) In resolving any open issues and imposing 
                conditions upon the parties to the agreement, a State 
                shall ensure that the requirements of this section are 
                met by the solution imposed by the State and are 
                consistent with the Commission's rules defining minimum 
                standards.
            ``(6) Charges.--If the amount charged by a local exchange 
        carrier, or class of local exchange carriers, for an unbundled 
        element of the interconnection provided under subsection (b) is 
        determined by arbitration or intervention under this 
        subsection, then the charge--
                    ``(A) shall be
                            ``(i) based on the cost (determined without 
                        reference to a rate-of-return or other rate-
                        based proceeding) of providing the unbundled 
                        element,
                            ``(ii) nondiscriminatory, and
                            ``(iii) individually priced to the smallest 
                        element that is technically and economically 
                        reasonable to provide; and
                    ``(B) may include a reasonable profit.
    ``(e) Approval by State.--Any interconnection agreement under this 
section shall be submitted for approval to the State. A State to which 
an agreement is submitted shall approve or reject the agreement, with 
written findings as to any deficiencies. The State may only reject--
            ``(1) an agreement under subsection (c) if it finds that 
        the agreement discriminates against a telecommunications 
        carrier not a party to the agreement; and
            ``(2) an agreement under subsection (d) if it finds that--
                    ``(B) the agreement does not meet the standards set 
                forth in subsection (b), or
                    ``(B) the implementation of the agreement is not in 
                the public interest.
If the State does not act to approve or reject the agreement within 90 
days after receiving the agreement, or 30 days in the case of an 
agreement negotiated under subsection (c), the agreement shall be 
deemed approved. No State court shall have jurisdiction to review the 
action of a State in approving or rejecting an agreement under this 
section.
    ``(f) Filing Required.--A State shall make a copy of each agreement 
approved under subsection (e) available for public inspection and 
copying within 10 days after the agreement is approved. The State may 
charge a reasonable and nondiscriminatory fee to the parties to the 
agreement to cover the costs of approving and filing such agreement.
    ``(g) Availability to Other Telecommunications Carriers.--A local 
exchange carrier shall make available any service, facility, or 
function provided under an interconnection agreement to which it is a 
party to any other telecommunications carrier that requests such 
interconnection upon the same terms and conditions as those provided in 
the agreement.
    ``(h) Collocation.--A State may require telecommunications carriers 
to provide for actual collocation of equipment necessary for 
interconnection at the premises of the carrier at reasonable charges, 
if the State finds actual collocation to be in the public interest.
    ``(i) Implementation.--
            ``(1) Rules and standards.--The Commission shall promulgate 
        rules to implement the requirements of this section within 6 
        months after the date of enactment of the Telecommunications 
        Act of 1995. In establishing the standards for determining what 
        facilities and information are necessary for purposes of 
        subsection (b)(2), the Commission shall consider, at a minimum, 
        whether--
                    ``(A) access to such facilities and information 
                that are proprietary in nature is necessary; and
                    ``(B) the failure to provide access to such 
                facilities and information would impair the ability of 
                the telecommunications carrier seeking interconnection 
                to provide the services that it seeks to offer.
            ``(2) Commission to act if state will not act.--If a State, 
        through action or inaction, fails to carry out its 
        responsibility under this section in accordance with the rules 
        prescribed by the Commission under paragraph (1) in any 
        proceeding or other matter under this section, then the 
        Commission shall issue an order preempting the State's 
        jurisdiction of that proceeding or matter within 90 days after 
        being notified (or taking notice) of such failure, and shall 
        assume the responsibility of the State under this section with 
        respect to the proceeding or matter and act for the State.
            ``(3) Waivers and modifications for rural carriers.--The 
        Commission or a State shall, upon petition or on its own 
        initiative, waive or modify the requirements of subsection (b) 
        for a rural telephone company or companies, and may waive or 
        modify the requirements of subsection (b) for local exchange 
        carriers with fewer than 2 percent of the Nation's subscriber 
        lines installed in the aggregate nationwide, to the extent that 
        the Commission or a State determines that such requirements 
        would result in unfair competition, impose a significant 
        adverse economic impact on users of telecommunications 
        services, be technically infeasible, or otherwise not be in the 
        public interest. The Commission or a State shall act upon any 
        petition filed under this paragraph within 180 days of 
        receiving such petition. Pending such action, the Commission or 
        a State may suspend enforcement of the requirement or 
        requirements to which the petition applies with respect to the 
        petitioning carrier or carriers.
    ``(j) State Requirements.--Nothing in this section precludes a 
State from imposing requirements on a telecommunications carrier for 
intrastate services that are necessary to further competition in the 
provision of telephone exchange service or exchange access service, as 
long as the State's requirements are not inconsistent with the 
Commission's regulations to implement this section.
    ``(k) Access Charge Rules.--Nothing in this section shall affect 
the Commission's interexchange-to-local exchange access charge rules 
for local exchange carriers or interexchange carriers in effect on the 
date of enactment of the Telecommunications Act of 1995.''.
    (c) Technical Amendments.--
            (1) Title II (47 U.S.C. 201 et seq.) is amended by 
        inserting before section 201 the following:

                    ``Part I--General Provisions''.

            (2) Section 2(b) (47 U.S.C. 152(b)) is amended by striking 
        ``sections 223 through 227, inclusive, and section 332,'' and 
        inserting ``section 214(d), sections 223 through 227, part II 
        of title II, and section 332,''.

SEC. 102. SEPARATE SUBSIDIARY AND SAFEGUARD REQUIREMENTS.

    (a) In General.--Part II of title II (47 U.S.C. 251 et seq.), as 
added by section 101 of this Act, is amended by inserting after section 
251 the following new section:

``SEC. 252. SEPARATE SUBSIDIARY; SAFEGUARDS.

    ``(a) Separate Subsidiary Required For Competitive Activities.--
            ``(1) In general.--A Bell operating company (including its 
        subsidiaries and affiliates) which provides telephone exchange 
        service may not provide any service described in paragraph (2) 
        unless it provides that service through a subsidiary that--
                    ``(A) is separate from any operating company entity 
                that provides telephone exchange service; and
                    ``(B) meets the requirements of subsection (b).
            ``(2) Services for which a separate subsidiary is 
        required.--The services for which a separate subsidiary is 
        required by paragraph (1) are:
                    ``(A) Information services, including cable 
                services and alarm monitoring services, other than any 
                information service a Bell operating company was 
                authorized to provide before July 24, 1991.
                    ``(B) Manufacturing services.
                    ``(C) InterLATA services other than--
                            ``(i) incidental services, not including 
                        information services;
                            ``(ii) out-of-region services; or
                            ``(iii) services authorized under an order 
                        entered by the United States District Court for 
                        the District of Columbia pursuant to the 
                        Modification of Final Judgment before the date 
                        of enactment of the Telecommunications Act of 
                        1995.
    ``(b) Structural and Transactional Requirements.--The separate 
subsidiary required by this section--
            ``(1) shall maintain books, records, and accounts in the 
        manner prescribed by the Commission which shall be separate 
        from the books, records, and accounts maintained by the Bell 
        operating company of which it is a subsidiary and any other 
        subsidiary or affiliate of such company;
            ``(2) shall have separate officers, directors, and 
        employees from the Bell operating company of which it is a 
        subsidiary or any other subsidiary or affiliate of such 
        company;
            ``(3) may not obtain credit under any arrangement that 
        would permit a creditor, upon default, to have recourse to the 
        assets of the Bell operating company entity that provides 
        telephone exchange service; and
            ``(4) shall conduct all transactions with the Bell 
        operating company of which it is a subsidiary and any other 
        subsidiary or affiliate of such company on an arm's length 
        basis with any such transactions reduced to writing and 
        available for public inspection.
  ``(c) Nondiscrimination Safeguards.--In its dealings with its 
subsidiary described in subsection (a) a Bell operating company, and 
any other subsidiary or affiliate of such company--
            ``(1) may not discriminate between that company, its 
        subsidiaries or affiliates, and any other entity in the 
        provision or procurement of goods, services, facilities, and 
        information, or in the establishment of standards;
            ``(2) may not provide any goods, services, facilities, or 
        information to such company, its subsidiaries or affiliates, 
        unless the goods, services, facilities, or information are made 
        available to other persons on reasonable and nondiscriminatory 
        terms and conditions; and
            ``(3) shall account for all transactions with a subsidiary 
        described in subsection (a) in accordance with generally 
        accepted accounting principles.
    ``(d) Joint Marketing.--
            ``(1) A Bell operating company subsidiary required by this 
        section may not market or sell telephone exchange services 
        provided by the Bell operating company unless that company 
        permits other entities offering the same or similar service to 
        market and sell its telephone exchange services.
            ``(2) A Bell operating company may not market or sell any 
        service provided by a subsidiary required by this section until 
        that company has been authorized to provide interLATA services 
        under section 255.
            ``(3) The joint marketing and sale of services permitted 
        under this subsection shall not be considered to violate the 
        nondiscrimination provisions of subsection (c).
    ``(e) Additional Requirements for Provision of InterLATA 
Services.--A Bell operating company--
            ``(1) shall fulfill any requests from an unaffiliated 
        entity for exchange access service within a period no longer 
        than that in which it provides such exchange access service to 
        itself or to its affiliates;
            ``(2) shall fulfill any such requests with exchange access 
        service of a quality that meets or exceeds the quality of 
        exchange access service provided by the Bell operating company 
        or its affiliates to itself or its affiliate;
            ``(3) shall provide exchange access service to all carriers 
        at rates that are just, reasonable, not unreasonably 
        discriminatory, and based on costs;
            ``(4) shall not provide any facilities, services, or 
        information concerning its provision of exchange access service 
        to the subsidiary described in subsection (a) unless such 
        facilities, services, or information are made available to 
        other providers of interLATA services in that market on the 
        same terms and conditions; and
            ``(5) shall charge the subsidiary described in subsection 
        (a), and impute to itself or any intraLATA interexchange 
        affiliate, the same rates for access to its telephone exchange 
        service and exchange access service that it charges 
        unaffiliated interexchange carriers for such service.
    ``(f) Proprietary Information.--
            ``(1) In general.--In complying with the requirements of 
        this section, each Bell operating company and any subsidiary or 
        affiliate of such company has a duty to protect the 
        confidentiality of propriety information relating to other 
        common carriers, to equipment manufacturers, and to customers. 
        A Bell operating company may not share customer proprietary 
        information in aggregate form with its subsidiaries and 
        affiliates unless such aggregate information is available to 
        other carriers or persons under the same terms and conditions. 
        Individually identifiable customer proprietary information and 
        other proprietary information may be--
                    ``(A) shared only with the consent of the person to 
                which such information relates or from which it was 
                obtained (including other carriers); or
                    ``(B) disclosed to appropriate authorities pursuant 
                to court order.
            ``(2) Exceptions.--Paragraph (1) does not limit the 
        disclosure of individually identifiable customer proprietary 
        information by each Bell operating company as necessary--
                    ``(A) to initiate, render, bill, and collect for 
                telephone exchange service, interexchange service, or 
                telecommunications service requested by a customer; or
                    ``(B) to protect the rights or property of the 
                carrier, or to protect users of any of those services 
                and other carriers from fraudulent, abusive, or 
                unlawful use of, or subscription to, any such service.
    ``(g) Commission May Grant Exceptions.--The Commission may grant an 
exception from compliance with any requirement of this section upon a 
showing that the exception is necessary for the public interest, 
convenience, and necessity.
    ``(h) Application to Utility Companies.--
            ``(1) Public utility holding companies.--For purposes of 
        this section, a public utility company which is a registered 
        holding company (as defined in section 2 of the Public Utility 
        Holding Company Act of 1935 (15 U.S.C. 79b)) that provides 
        telecommunications service shall provide that service through a 
        separate subsidiary. The provisions of subsection (b)(4) and 
        (c)(1) apply to the provision of telecommunications service by 
        such a company through a separate subsidiary as if such company 
        were a Bell operating company.
            ``(2) Other utility companies.--Each State shall determine 
        whether a public utility company subject to its jurisdiction 
        that--
                    ``(A) is not a registered holding company (as so 
                defined), and
                    ``(B) provides telecommunications service,
        is required to provide that service through a separate 
        subsidiary.
            ``(3) Savings provision.--Nothing in this paragraph 
        prohibits a public utility company from engaging in any 
        activity in which it is legally engaged on the date of 
        enactment of the Telecommunications Act of 1995.
    ``(i) Separate Subsidiary May Be Subsidiary of Holding Company.--
For purposes of meeting the requirements of this section, and of any 
other provision of this Act that requires a separate subsidiary that 
meets the requirements of this section, a company (other than the Bell 
operating company) that is a subsidiary of the same company of which a 
Bell operating company is a subsidiary shall be considered to meet the 
separate subsidiary requirement.''.
    (b) Implementation.--The Commission shall promulgate any 
regulations necessary to implement section 252 of the Communications 
Act of 1934 (as added by subsection (a)) within 9 months after the date 
of enactment of this Act. Any separate subsidiary established or 
designated for purposes of section 252(a) of the Communications Act of 
1934 before the regulations have been issued in final form shall be 
restructured or otherwise modified, if necessary, to meet the 
requirements of those regulations.
    (c) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of enactment of this Act.

SEC. 103. UNIVERSAL SERVICE.

    (a) Federal-State Joint Board on Universal Service.--
            (1) Within one month after the date of enactment of this 
        Act, the Commission shall institute and refer to a Federal-
        State Joint Board under section 410(c) of the Communications 
        Act of 1934 a proceeding to recommend rules regarding the 
        implementation of section 253 of that Act, including the 
        definition of universal service. The Joint Board shall, after 
        notice and public comment, make its recommendations to the 
        Commission no later than 9 months after the date of enactment 
        of this Act.
            (2) The Commission may periodically, but no less than once 
        every 4 years, institute and refer to the Joint Board a 
        proceeding to review the implementation of section 253 of that 
        Act and to make new recommendations, as necessary, with respect 
        to any modifications or additions that may be needed. As part 
        of any such proceeding the Joint Board shall review the 
        definition of, and adequacy of support for, universal service 
        and shall evaluate the extent to which universal service has 
        been protected and advanced.
    (b) Commission Action.--The Commission shall initiate a single 
proceeding to implement recommendations from the initial Joint Board 
required by subsection (a) and shall complete such proceeding within 1 
year after the date of enactment of this Act. Thereafter, the 
Commission shall complete any proceeding to implement recommendations 
from any further Joint Board required under subsection (a) within one 
year after receiving such recommendations.
    (c) Separations Rules.--Nothing in the amendments made by this Act 
to the Communications Act of 1934 shall affect the Commission's 
separations rules for local exchange carriers or interexchange carriers 
in effect on the date of enactment of this Act.
    (d) Amendment of Communications Act.--Part II of title II (47 
U.S.C. 251 et seq.), as added by this Act, is amended by inserting 
after section 252 the following new section:

``SEC. 253. UNIVERSAL SERVICE.

    ``(a) Universal Service Principles.--The Joint Board and the 
Commission shall base policies for the preservation and advancement of 
universal service on the following principles:
            ``(1) Quality services are to be provided at just, 
        reasonable, and affordable rates.
            ``(2) Access to advanced telecommunications and information 
        services should be provided in all regions of the Nation.
            ``(3) Consumers in rural and high cost areas should have 
        access to telecommunications and information services, 
        including interexchange services, reasonably comparable to 
        those services provided in urban areas.
            ``(4) Consumers in rural and high cost areas should have 
        access to telecommunications and information services at rates 
        that are reasonably comparable to rates charged for similar 
        services in urban areas.
            ``(5) Citizens in rural and high cost areas should have 
        access to the benefits of advanced telecommunications and 
        information services for health care, education, economic 
        development, and other public purposes.
            ``(6) There should be a coordinated Federal-State universal 
        service system to preserve and advance universal service using 
        specific and predictable Federal and State mechanisms 
        administered by independent, non-governmental entities.
            ``(7) Elementary and secondary schools and classrooms 
        should have access to advanced telecommunications services.
    ``(b) Definition.--Universal service is an evolving level of 
intrastate and interstate telecommunications services that the 
Commission, based on recommendations from the public, Congress, and the 
Federal-State Joint Board periodically convened under section 103 of 
the Telecommunications Act of 1995, and taking into account advances in 
telecommunications and information technologies and services, 
determines should be provided at just, reasonable, and affordable rates 
to all Americans, including those in rural and high-cost areas and 
those with disabilities, to enable them to participate effectively in 
the economic, academic, medical, and democratic processes of the 
Nation. At a minimum, universal service shall include any 
telecommunications services that the Commission determines have, 
through the operation of market choices by customers, been subscribed 
to by a substantial majority of residential customers.
    ``(c) All Telecommunications Providers Contribute.--Every 
telecommunications carrier engaged in intrastate, interstate, or 
foreign communication shall contribute on an equitable and 
nondiscriminatory basis, in a manner that is reasonably necessary to 
preserve and advance universal service. Any other provider of 
telecommunications may be required to contribute to the preservation 
and advancement of universal service, if the public interest so 
requires.
    ``(d) Enforcement.--In adopting rules to enforce subsection (c), 
the Commission and the States may impose or require service 
obligations, financial or other forms of contributions, sharing of 
equipment and services, discounted rates, or other mechanisms.
    ``(e) State Authority.--A State may adopt regulations to implement 
this section, or to provide for additional definitions, mechanisms, and 
standards to preserve and advance universal service within that State, 
to the extent that such regulations do not conflict with the 
Commission's rules to implement this section.
    ``(f) Eligibility for Universal Service Support.--If the Commission 
adopts rules for the distribution of support payments for the 
preservation and advancement of universal service, only 
telecommunications carriers which are designated as essential 
telecommunications carriers under section 214(d) shall be eligible to 
receive those support payments. The support payments shall accurately 
reflect the amount reasonably necessary to preserve and advance 
universal service.
    ``(g) Amount of Universal Service Support.--The Commission and the 
States shall base the amount of support payments, if any, on the 
difference between the actual costs of providing universal service and 
the revenues from providing that service. The Commission and the States 
shall have as their goal the need to make any universal support 
explicit and targeted to those carriers that serve areas for which 
support is necessary. A carrier that receives any such support shall 
use that support only for the maintenance and upgrading of facilities 
and services for which the support is intended.
    ``(h) Interexchange Service.--The rates charged by providers of 
interexchange telecommunications service to consumers in rural and high 
cost areas shall be maintained at levels no higher than those charged 
by each such provider to its consumers in urban areas.
    ``(i) Subsidy of Competitive Services Prohibited.--
Telecommunications carriers may not subsidize competitive services with 
revenues from services that are not competitive. The Commission, with 
respect to interstate services, and the States, with respect to 
intrastate services, shall establish any necessary cost allocation 
rules, accounting safeguards, and guidelines to ensure that services 
included in universal service bear no more than a reasonable share (and 
may, in the public interest, bear less than a reasonable share or no 
share) of the joint and common costs of facilities used to provide 
those services.
    ``(j) Effective Date.--This section takes effect on the date of 
enactment of the Telecommunications Act of 1995, except for subsections 
(c), (e), (f), and (g), which take effect one year after the date of 
enactment of that Act.''.

SEC. 104. ESSENTIAL TELECOMMUNICATIONS CARRIERS.

    (a) In General.--Section 214(d) (47 U.S.C. 214(d)) is amended--
            (1) by inserting ``(1) Adequate facilities required.--'' 
        before ``The Commission''; and
            (2) by adding at the end thereof the following:
    ``(2) Designation of essential carrier.-- If one or more common 
carriers provide telecommunications service to a geographic area, and 
no common carrier will provide universal service to an unserved 
community or any portion thereof that requests such service within such 
area, then the Commission, with respect to interstate services, or a 
State, with respect to intrastate services, shall determine which 
common carrier serving that area is best able to provide universal 
service to the requesting unserved community or portion thereof, and 
shall designate that common carrier as an essential telecommunications 
carrier for that unserved community or portion thereof.
    ``(3) Essential carrier obligations.--A common carrier may be 
designated by the Commission, or by a State, as appropriate, as an 
essential telecommunications carrier for a specific service area and 
become eligible to receive any universal support payments the 
Commission may allow under section 253. A carrier designated as an 
essential telecommunications carrier shall--
            ``(A) provide through its own facilities or through a 
        combination of its own facilities and resale of services using 
        another carrier's facilities, universal service and any 
        additional service (such as 911 service) required by the 
        Commission or the State, to any community or portion thereof 
        which requests such service;
            ``(B) offer such services at nondiscriminatory rates 
        established by the Commission, for interstate services, and the 
        State, for intrastate services, throughout the service area; 
        and
            ``(C) advertise throughout the service area the 
        availability of such services and the rates for such services 
        using media of general distribution.
    ``(4) Multiple essential carriers.--If the Commission, with respect 
to interstate services, or a State, with respect to intrastate 
services, designates more than one common carrier as an essential 
telecommunications carrier for a specific service area, such carrier 
shall meet the service, rate, and advertising requirements imposed by 
the Commission or State on any other essential telecommunications 
carrier for that service area. A State may require that, before 
designating an additional essential telecommunications carrier, the 
State agency authorized to make the designation shall find that--
            ``(A) the designation of an additional essential 
        telecommunications carrier is in the public interest and that 
        there will not be a significant adverse impact on users of 
        telecommunications services or on the provision of universal 
        service;
            ``(B) the designation encourages the development and 
        deployment of advanced telecommunications infrastructure and 
        services in rural areas; and
            ``(C) the designation protects the public safety and 
        welfare, ensures the continued quality of telecommunications 
        services, or safeguards the rights of consumers.
    ``(5) Resale of universal service.--The Commission, for interstate 
services, and the States, for intrastate services, shall establish 
rules to govern the resale of universal service to allocate any support 
received for the provision of such service in a manner that ensures 
that the carrier whose facilities are being resold is adequately 
compensated for their use, taking into account the impact of the resale 
on that carrier's ability to maintain and deploy its network as a 
whole. The Commission shall also establish, based on the 
recommendations of the Federal-State Joint Board instituted to 
implement this section, rules to permit a carrier designated as an 
essential telecommunications carrier to relinquish that designation for 
a specific service area if another telecommunications carrier is also 
designated as an essential telecommunications carrier for that area. 
The rules--
            ``(A) shall ensure that all customers served by the 
        relinquishing carrier continue to be served, and shall require 
        sufficient notice to permit the purchase or construction of 
        adequate facilities by any remaining essential 
        telecommunications carrier if such remaining carrier provided 
        universal service through resale of the facilities of the 
        relinquishing carrier; and
            ``(B) shall establish criteria for determining when a 
        carrier which intends to utilize resale to meet the 
        requirements for designation under this subsection has adequate 
        resources to purchase, construct, or otherwise obtain the 
        facilities necessary to meet its obligation if the reselling 
        carrier is no longer able or obligated to resell the service.
    ``(6) Enforcement.--A common carrier designated by the Commission 
or a State as an essential telecommunications carrier that refuses to 
provide universal service within a reasonable period to an unserved 
community or portion thereof which requests such service shall forfeit 
to the United States, in the case of interstate services, or the State, 
in the case of intrastate services, a fine of up to $10,000 for each 
day that such carrier refuses to provide such service. In establishing 
a reasonable period the Commission or the State, as appropriate, shall 
consider the nature of any construction required to serve such 
requesting unserved community or portion thereof, as well as the 
construction intervals normally attending such construction, and shall 
allow adequate time for regulatory approvals and acquisition of 
necessary financing.
    ``(7) Interexchange services.--The Commission, for interstate 
services, or a State, for intrastate services, shall designate an 
essential telecommunications carrier for interexchange services for any 
unserved community or portion thereof requesting such services. Any 
common carrier designated as an essential telecommunications carrier 
for interexchange services under this paragraph shall provide 
interexchange services included in universal service to any unserved 
community or portion thereof which requests such service. The service 
shall be provided at nationwide geographically averaged rates for 
interstate interexchange services and at geographically averaged rates 
for intrastate interexchange services, and shall be just and reasonable 
and not unjustly or unreasonably discriminatory. A common carrier 
designated as an essential telecommunications carrier for interexchange 
services under this paragraph that refuses to provide interexchange 
service in accordance with this paragraph to an unserved community or 
portion thereof that requests such service within 180 days of such 
request shall forfeit to the United States a fine of $50,000 for each 
day that such carrier refuses to provide such service. The Commission 
or the State, as appropriate, may extend the 180-day period for 
providing interexchange service upon a showing by the common carrier of 
good faith efforts to comply within such period.
    ``(8) Implementation.--The Commission may, by regulation, establish 
guidelines by which States may implement the provisions of this 
section.''.
    (b) Conforming Amendment.--The heading for section 214 is amended 
by inserting a semicolon and ``essential telecommunications carriers'' 
after ``lines''.

SEC. 105. FOREIGN INVESTMENT AND OWNERSHIP REFORM.

    (a) In General.--Section 310 (47 U.S.C. 310) is amended by adding 
at the end thereof the following new subsection:
    ``(f) Termination of Foreign Ownership Restrictions.--
            ``(1) Restriction not to apply where reciprocity found.--
        Subsection (b) shall not apply to any common carrier license 
        held, or for which application is made, after the date of 
        enactment of the Telecommunications Act of 1995 with respect to 
        any alien (or representative thereof), corporation, or foreign 
        government (or representative thereof) if the Commission 
        determines that the foreign country of which such alien is a 
        citizen, in which such corporation is organized, or in which 
        such foreign government is in control provides equivalent 
        market opportunities for common carriers to citizens of the 
        United States (or their representatives), corporations 
        organized in the United States, and the United States 
        Government (or its representative). The determination of 
        whether market opportunities are equivalent shall be made on a 
        market segment specific basis.
            ``(2) Snapback for reciprocity failure.--If the Commission 
        determines that any foreign country with respect to which it 
        has made a determination under paragraph (1) ceases to meet the 
        requirements for that determination, then--
                    ``(A) subsection (b) shall apply with respect to 
                such aliens, corporations, and government (or their 
                representatives) on the date on which the Commission 
                publishes notice of its determination under this 
                paragraph, and
                    ``(B) any license held, or application filed, which 
                could not be held or granted under subsection (b) shall 
                be withdrawn, or denied, as the case may be, by the 
                Commission under the provisions of subsection (b).''.
    (b) Conforming Amendment.--Section 332(c)(6) (47 U.S.C. 332(c)(6)) 
is amended by adding at the end thereof the following:
        ``This paragraph does not apply to any foreign ownership 
        interest or transfer of ownership to which section 310(b) does 
        not apply because of section 310(f).''.

SEC. 106. INFRASTRUCTURE SHARING.

    (a) Regulations Required.--The Commission shall prescribe, within 
one year after the date of enactment of this Act, regulations that 
require local exchange carriers that were subject to Part 69 of the 
Commission's rules on or before that date to make available to any 
qualifying carrier such public switched network infrastructure, 
technology, information, and telecommunications facilities and 
functions as may be requested by such qualifying carrier for the 
purpose of enabling such qualifying carrier to provide 
telecommunications services, or to provide access to information 
services, in the service area in which such qualifying carrier has 
requested and obtained designation as an essential telecommunications 
carrier under section 214(d).
    (b) Terms and Conditions of Regulations.--The regulations 
prescribed by the Commission pursuant to this section shall--
            (1) not require a local exchange carrier to which this 
        section applies to take any action that is economically 
        unreasonable or that is contrary to the public interest;
            (2) permit, but shall not require, the joint ownership or 
        operation of public switched network infrastructure and 
        services by or among such local exchange carrier and a 
        qualifying carrier;
            (3) ensure that such local exchange carrier will not be 
        treated by the Commission or any State as a common carrier for 
        hire or as offering common carrier services with respect to any 
        infrastructure, technology, information, facilities, or 
        functions made available to a qualifying carrier in accordance 
        with regulations issued pursuant to this section;
            (4) ensure that such local exchange carrier makes such 
        infrastructure, technology, information, facilities, or 
        functions available to a qualifying carrier on just and 
        reasonable terms and conditions that permit such qualifying 
        carrier to fully benefit from the economies of scale and scope 
        of such local exchange carrier, as determined in accordance 
        with guidelines prescribed by the Commission in regulations 
        issued pursuant to this section;
            (5) establish conditions that promote cooperation between 
        local exchange carriers to which this section applies and 
        qualifying carriers;
            (6) not require a local exchange carrier to which this 
        section applies to engage in any infrastructure sharing 
        agreement for any services or access which are to be provided 
        or offered to consumers by the qualifying carrier in such local 
        exchange carrier's telephone exchange area; and
            ``(7) require that such local exchange carrier file with 
        the Commission or State for public inspection, any tariffs, 
        contracts, or other arrangements showing the rates, terms, and 
        conditions under which such carrier is making available public 
        switched network infrastructure and functions under this 
        section.
    (c) Information Concerning Deployment of New Services and 
Equipment.--A local exchange carrier to which this section applies that 
has entered into an infrastructure sharing agreement under this section 
shall provide to each party to such agreement timely information on the 
planned deployment of telecommunications services and equipment, 
including any software or upgrades of software integral to the use or 
operation of such telecommunications equipment.
    (d) Definitions.--For purposes of this section--
            (1) Qualifying carrier.--The term ``qualifying carrier'' 
        means a telecommunications carrier that--
                    (A) lacks economies of scale or scope, as 
                determined in accordance with regulations prescribed by 
                the Commission pursuant to this section; and
                    (B) is a common carrier which offers telephone 
                exchange service, exchange access service, and any 
                other service that is included in universal service, to 
                all consumers without preference throughout the service 
                area for which such carrier has been designated as an 
                essential telecommunications carrier under section 
                214(d) of the Communications Act of 1934.
            (2) Other terms.--Any term used in this section that is 
        defined in the Communications Act of 1934 has the same meaning 
        as it has in that Act.

            TITLE II--REMOVAL OF RESTRICTIONS TO COMPETITION

                  Subtitle A--Removal of Restrictions

SEC. 201. REMOVAL OF ENTRY BARRIERS.

    (a) Preemption of State Rules.--Part II of title II (47 U.S.C. 251 
et seq.), as added by this Act, is amended by inserting after section 
253 the following:

``SEC. 254. REMOVAL OF BARRIERS TO ENTRY.

    ``(a) In General.--No State or local statute or regulation, or 
other State or local legal requirement, may prohibit or have the effect 
of prohibiting the ability of any entity to provide any interstate or 
intrastate telecommunications services.
    ``(b) State Regulatory Authority.--Nothing in this section shall 
affect the ability of a State to impose, on a competitively neutral 
basis and consistent with section 253, requirements necessary to 
preserve and advance universal service, protect the public safety and 
welfare, ensure the continued quality of telecommunications services, 
and safeguard the rights of consumers.
    ``(c) Local Government Authority.--Nothing in this section affects 
the authority of a local government to manage the public rights-of-way 
or to require fair and reasonable compensation from telecommunications 
providers, on a competitively neutral and nondiscriminatory basis, for 
use of public rights-of-way on a nondiscriminatory basis, if the 
compensation required is publicly disclosed by such government.
    ``(d) Preemption.--If, after notice and an opportunity for public 
comment, the Commission determines that a State or local government has 
permitted or imposed any statute, regulation, or legal requirement that 
violates or is inconsistent with this section, the Commission shall 
immediately preempt the enforcement of such statute, regulation, or 
legal requirement to the extent necessary to correct such violation or 
inconsistency.
    ``(e) Commercial mobile services providers.--Nothing in this 
section shall affect the application of section 332(c)(3) to commercial 
mobile services providers.''.
    (b) Provision of Telecommunications Services by a Cable Operator.--
            (1) Jurisdiction of franchising authority.--Section 621(b) 
        (47 U.S.C. 541(b)) is amended by adding at the end thereof the 
        following new paragraph:
            ``(3)(A) To the extent that a cable operator or affiliate 
        thereof is engaged in the provision of telecommunications 
        services--
                    ``(i) such cable operator or affiliate shall not be 
                required to obtain a franchise under this title; and
                    ``(ii) the provisions of this title shall not apply 
                to such cable operator or affiliate.
            ``(B) A franchising authority may not order a cable 
        operator or affiliate thereof to discontinue the provision of a 
        telecommunications service.
            ``(C) A franchising authority may not require a cable 
        operator to provide any telecommunications service or 
        facilities as a condition of the initial grant of a franchise, 
        franchise renewal, or transfer of a franchise.
            ``(D) Nothing in this paragraph affects existing Federal or 
        State authority with respect to telecommunications services.''.
            (2) Franchise fees.--Section 622(b) (47 U.S.C. 542(b)) is 
        amended by inserting ``to provide cable services'' immediately 
        before the period at the end of the first sentence.
    (c) State and Local Tax Laws.--Except as provided in section 202, 
nothing in this Act (or in the Communications Act of 1934 as amended by 
this Act) shall be construed to modify, impair, or supersede, or 
authorize the modification, impairment, or supersession of, any State 
or local law pertaining to taxation that is consistent with the 
requirements of the Constitution of the United States, this Act, the 
Communications Act of 1934, or any other applicable Federal law.
    (d) Effective Date.--The amendments made by this section take 
effect on the date of enactment of this Act.

SEC. 202. LIMITATION ON STATE AND LOCAL TAXATION OF DIRECT-TO-HOME 
              SATELLITE SERVICES.

    (a) Authority to Impose Taxes and Fees on Direct-to-Home Satellite 
Services.--
            (1) In general.--A State may require a direct-to-home 
        satellite service provider who is subject to the personal 
        jurisdiction of the State to collect and remit a State sales 
        tax, a local sales tax, or both, with respect to direct-to-home 
        satellite services, if--
                    (A) the destination of such services is in the 
                State, and
                    (B) in a State in which both State and local sales 
                taxes are imposed, the State, in accordance with the 
                requirements of this section--
                            (i) requires the collection and remittance 
                        of any applicable local sales taxes with 
                        respect to direct-to-home satellite services, 
                        and
                            (ii) collects and administers the local 
                        sales taxes with respect to direct-to-home 
                        satellite services, except in those local 
                        taxing jurisdictions described in paragraph 
                        (2)(A).
            (2) Local taxing jurisdiction.--
                    (A) A State that exercises authority under this 
                section may require a direct-to-home satellite service 
                provider to collect and remit local sales taxes to the 
                local taxing jurisdiction if--
                            (i) as of the effective date of this 
                        section, the local taxing jurisdiction imposes 
                        and administers a local sales tax separate from 
                        the sales tax imposed by the State, or
                            (ii) after the effective date of this 
                        section, a local jurisdiction that does not 
                        impose any local sales taxes as of the 
                        effective date of this section is authorized to 
                        impose a local sales tax.
                    (B) If, after the effective date of this section, a 
                local jurisdiction is authorized to administer a local 
                sales tax that the State is administering as of that 
                date, the State shall continue to collect and remit the 
                local sales tax authorized under this section in 
                accordance with paragraph (1)(B)(ii).
            (3) Distribution of local sales taxes.--A State shall 
        distribute the local sales tax collected under the authority 
        granted by this section to local jurisdictions in accordance 
        with the requirements of State law governing the distribution 
        of local sales taxes.
    (b) State and Local Law; Nondiscrimination.--
            (1) State and local law.--A State may require a direct-to-
        home satellite service provider to collect and remit State and 
        local sales taxes with respect to direct-to-home satellite 
        services only where the applicable law of the State or local 
        taxing jurisdiction imposes a sales tax.
            (2) Nondiscrimination.--Except as otherwise provided in 
        this section, a State that exercises authority under this 
        section shall allow to direct-to-home satellite service 
        providers exemptions or other exceptions to State and local 
        sales taxes that the State or local taxing jurisdiction allows 
        under similar circumstances to persons located within the State 
        or local taxing jurisdiction.
    (c) Exemption.--
            (1) Exemption of other local tax or fee for services.--A 
        direct-to-home satellite service provider and its 
        representatives for the sale or distribution of direct-to-home 
        satellite services shall be exempt from collecting and 
        remitting any other local tax or fee (as defined by subsection 
        (d)(9)) imposed on direct-to-home satellite services in any 
        local taxing jurisdiction in which, during the 1-year period 
        ending on September 30 of the calendar year preceding the 
        calendar year in which the provision of direct-to-home 
        satellite services occurs, the direct-to-home satellite service 
        provider does not own or hold any interest in property or 
        maintain an office, and limits its business activities to no 
        more than--
                    (A) providing direct-to-home satellite services to 
                subscribers in the local taxing jurisdiction, and the 
                billing for and collection of the fees for such 
                services occur outside the local taxing jurisdiction; 
                and
                    (B) soliciting and placing orders for the sale of 
                direct-to-home satellite services through contractual 
                arrangements with, and on the premises of, retail 
                outlets and establishments, which orders are filled and 
                billed for from a point outside the local taxing 
                jurisdiction, regardless of where the subscriber makes 
                an initial payment for an initial subscription.
            (2) No other effect.--Except as provided herein, this 
        section does not affect the authority of any State or local 
        taxing jurisdiction of any State otherwise to adopt, apply, and 
        administer any tax or method of taxation.
    (d) Definitions.--For purposes of this section--
            (1) Compensating use tax.--The term ``compensating use 
        tax'' means a tax imposed on or incident to the use or 
        consumption of direct-to-home satellite services within a State 
        or a local jurisdiction or other area of a State.
            (2) Destination.--The term ``destination'' means the State 
        or local jurisdiction to which the direct-to-home satellite 
        service is delivered for viewing or other activity to which the 
        service is directed.
            (3) Direct-to-home satellite service provider.--The term 
        ``direct-to-home satellite service provider'' means a person 
        who provides direct-to-home satellite services.
            (4) Direct-to-home satellite services.--The term ``direct-
        to-home satellite services'' means the distribution or 
        broadcasting of programming or services by satellite directly 
        to the subscriber's premises without the use of ground 
        receiving or distribution equipment, except at the subscriber's 
        premises, or used in the initial uplink process to the direct-
        to-home satellite.
            (5) Local taxing jurisdiction.--The term ``local taxing 
        jurisdiction'' means any municipality, city, county, township, 
        parish, transportation district, or assessment jurisdiction, or 
        any other political subdivision with the authority to impose a 
        tax or fee.
            (6) Local sales tax.--The term ``local sales tax'' means a 
        sales or compensating use tax imposed by a local taxing 
        jurisdiction, whether administered by the State or the local 
        taxing jurisdiction.
            (7) Sales tax.--The term ``sales tax'' means a tax, 
        including a compensating use tax, that is--
                    (A) imposed on or incident to the sale, purchase, 
                consumption, distribution, or other use of direct-to-
                home satellite services as may be defined or specified 
                under the law imposing such tax, and
                    (B) measured by the amount of the sales price, 
                cost, charge, or gross receipts, or other value of or 
                for the services.
            (8) State.--Notwithstanding any provision to the contrary 
        in this section, the term ``State'' means any of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, and any territory or possession of 
        the United States.
            (9) Other local tax or fee.--The term ``other local tax or 
        fee'' means any local tax or fee that is not a sales tax, as 
        defined in paragraph (6) or (7), including such locally imposed 
        taxes and fees as an intangible tax, income tax, business 
        license tax, utility tax, privilege tax, gross receipts tax, 
        excise tax, franchise fees, telecommunications tax, or other 
        tax, license, or fee.
    (e) Effective Date.--This section shall take effect on the date of 
enactment of this Act.

SEC. 203. ELIMINATION OF CABLE AND TELEPHONE COMPANY CROSS-OWNERSHIP 
              RESTRICTION.

    (a) In General.--Section 613(b) (47 U.S.C. 533(b)) is amended to 
read as follows:
    ``(b) Video Programming and Cable Services.--
            ``(1) Distinction between video platform and cable 
        service.--To the extent that any telecommunications carrier 
        carries video programming provided by others, or provides video 
        programming directly to subscribers, through a common carrier 
        video platform, neither the telecommunications carrier nor any 
        video programming provider making use of such platform shall be 
        deemed to be a cable operator providing cable service. To the 
        extent that any telecommunications carrier provides video 
        programming directly to subscribers through a cable system, the 
        carrier shall be deemed to be a cable operator providing cable 
        service.
            ``(2) Bell operating company activities.--
                    ``(A) Notwithstanding the provisions of section 
                252, to the extent that a Bell operating company 
                carries or provides video programming over a common 
                carrier video platform, it need not use a separate 
                subsidiary if--
                            ``(i) the carrier provides facilities, 
                        services, or information to all programmers on 
                        the same terms and conditions as it provides 
                        such facilities, services, or information to 
                        its own video programming operations, and
                            ``(ii) the carrier does not subsidize its 
                        provision of video programming with revenues 
                        from its telecommunications services.
                    ``(B) To the extent that a Bell operating company 
                provides cable service as a cable operator, it shall 
                provide such service through a subsidiary that meets 
                the requirements of section 252, and shall meet the 
                requirements of clauses (i) and (ii) of subparagraph 
                (A).
                    ``(C) Upon a finding by the Commission that the 
                requirement of a separate subsidiary under the 
                preceding subparagraph is no longer necessary to 
                protect consumers, competition, or the public interest, 
                the Commission shall exempt a Bell operating company 
                from that requirement.
            ``(3) Common carrier video platform.--Nothing in this Act 
        precludes a telecommunications carrier from carrying video 
        programming provided by others directly to subscribers over a 
        common carrier video platform.
            ``(4) Rates; access.--Notwithstanding paragraph (2)(A)(i), 
        a provider of common carrier video platform services shall 
        provide local broadcast stations, and to those public, 
        educational, and governmental entities required by local 
        franchise authorities to be given access to cable systems 
        operating in the same market as the video platform, with access 
        to the video platform for the transmission of television 
        broadcast programming at rates no higher than the incremental-
        cost-based rates of providing such access. Local broadcast 
        stations shall be entitled to obtain access on the first tier 
        of programming on the video platform.
            ``(5) Competitive neutrality.--A provider of video 
        programming may be required to pay fees in lieu of franchise 
        fees (as defined in section 622(g)(1)) if the fees--
                    ``(A) are competitively neutral; and
                    ``(B) are separately identified in consumer 
                billing.''.
    (b) No Permit Required for Video Programming Services.--Section 214 
(47 U.S.C. 214) is amended by adding at the end thereof the following:
    ``(e) Special Rule.--No certificate is required under this section 
for a carrier to construct facilities to provide video programming 
services.''.
    (c) Safeguards.--Within one year after the date of enactment of 
this Act, the Commission shall prescribe regulations that--
            (1) require a telecommunications carrier that provides 
        video programming directly to subscribers to ensure that 
        subscribers are offered the means to obtain access to the 
        signals of broadcast television stations as readily as they are 
        today;
            (2) require such a carrier to display clearly and 
        prominently at the beginning of any program guide or menu of 
        program offerings the identity of any signal of any television 
        broadcast station that is carried by the carrier;
            (3) require such a carrier to ensure that viewers are able 
        to access the signal of any television broadcast station that 
        is carried by that carrier without first having to view 
        advertising or promotional material, or a navigational device, 
        guide, or menu that omits broadcasting services as an available 
        option;
            (4) except as required by paragraphs (1) through (3), 
        prohibit such carrier and a multichannel video programming 
        distributor using the facilities of such carrier from 
        discriminating among video programming providers with respect 
        to material or information provided by the carrier to 
        subscribers for the purposes of selecting programming, or in 
        the way such material or information is presented to 
        subscribers;
            (5) require such carrier and a multichannel video 
        programming distributor using the facilities of such carrier to 
        ensure that video programming providers or copyright holders 
        (or both) are able suitably and uniquely to identify their 
        programming services to subscribers;
            (6) if such identification is transmitted as part of the 
        programming signal, require a telecommunications carrier that 
        provides video programming directly to subscribers and a 
        multichannel video programming distributor using the facilities 
        of such carrier to transmit such identification without change 
        or alteration;
            (7) consistent with the other provisions of title VI of the 
        Communications Act of 1934 (47 U.S.C. 521 et seq.) prohibit 
        such carrier from discriminating among video programming 
        providers with regard to carriage and ensure that the rates, 
        terms, and conditions for such carriage are just, reasonable, 
        and nondiscriminatory;
            (8) extend to such carriers and multichannel video 
        programming distributors using the facilities of such carrier 
        the Commission's regulations concerning network nonduplication 
        (47 C.F.R. 76.92 et seq.) and syndicated exclusivity (47 C.F.R. 
        76.171 et seq.); and
            (9) extend to such carriers and multichannel video 
        programming distributors using the facilities of such carrier 
        the protections afforded to local broadcast signals in section 
        614(b)(3), 614(b)(4)(A), and 615(g)(1) and (2) of such Act (47 
        U.S.C. 534(b)(3), 534(b)(4)(A), and 535(g)(1) and (2)).
    (d) Enforcement.--The Commission shall resolve disputes under 
subsection (c) and the regulations prescribed under that subsection. 
Any such dispute shall be resolved with 180 days after notice of the 
dispute is submitted to the Commission. At that time, or subsequently 
in a separate proceeding, the Commission may award damages sustained in 
consequence of any violation of this section to any person denied 
carriage, or require carriage, or both. Any aggrieved party may also 
seek any other remedy available under the law.
    (e) Effective Dates.--The amendment made by subsection (a) takes 
effect on the date of enactment of this Act. The amendment made by 
subsection (b) takes effect 1 year after that date.

SEC. 204. CABLE ACT REFORM.

    (a) Rate Deregulation.--
            (1) Section 623(c) (47 U.S.C. 543(c)) is amended--
                    (A) by striking ``subscriber,'' and the comma after 
                ``authority'' in paragraph (1)(B);
                    (B) by striking paragraph (2) and inserting the 
                following:
            ``(2) Standard for unreasonable rates.--The Commission may 
        only consider a rate for cable programming services to be 
        unreasonable if it substantially exceeds the national average 
        rate for comparable cable programming services.''.
            (2) Section 623(l)(1) (47 U.S.C. 543(l)(1)) is amended--
                    (A) by striking ``or'' at the end of subparagraph 
                (B);
                    (B) by striking the period at the end of 
                subparagraph (C) and inserting a semicolon and ``or''; 
                and
                    (C) by adding at the end the following:
                    ``(D) a local exchange carrier offers video 
                programming services directly to subscribers, either 
                over a common carrier video platform or as a cable 
                operator, in the franchise area of an unaffiliated 
                cable operator which is providing cable service in that 
                franchise area.''.
    (b) Discriminatory Programming Rates.--Section 628(c)(2)(B)(iii) 
(47 U.S.C. 548(c)(2)(B)(iii)) is amended by striking ``scale, cost 
savings, or other direct and legitimate economic benefits'' and 
inserting ``scale or cost savings''.
    (c) Effective Date.--The amendments made by this section take 
effect on the date of enactment of this Act.

SEC. 205. POLE ATTACHMENTS.

    (a) In General.--Section 224 (47 U.S.C. 224) is amended--
            (1) by inserting after ``utility'' in subsection (a)(4) a 
        comma and the following: ``which attachment may be used by that 
        cable television system to provide cable service or any other 
        telecommunications service''; and
            (2) by redesignating subsections (b), (c), and (d) as (c), 
        (d), and (e), respectively, and inserting the following after 
        subsection (a):
    ``(b)(1) A utility shall provide a cable television system with 
nondiscriminatory access to any pole, duct, conduit, or right-of-way 
owned or controlled by it.
    ``(2) For purposes of paragraph (1), the Commission shall, not 
later than 1 year after the date of enactment of the Telecommunications 
Act of 1995, prescribe regulations for ensuring that utilities charge 
just, reasonable, and nondiscriminatory rates for pole attachments 
provided to all telecommunications carriers and cable operators, 
including such attachments used by cable television systems to provide 
telecommunications services. The regulations--
            ``(A) shall recognize that the entire pole, duct, conduit, 
        or right-of-way other than the usable space is of equal benefit 
        to all attachments of entities that hold an ownership interest 
        in the pole, duct, conduit, or right-of-way and therefore 
        apportion the cost of the space other than the usable space 
        equally among all such attachments; and
            ``(B) shall recognize that an entity that obtains an 
        attachment through a license or other similar arrangement 
        benefits from the entire pole, duct, conduit, or right-of-way 
        other than the usable space in the same proportion as it 
        benefits from the usable space and therefore apportion to such 
        entity a portion of the cost of the space other than the usable 
        space in the same manner as the cost of usable space is 
        apportioned to such entity.''.
    (b) Conforming Amendments.--Section 224 (47 U.S.C. 224), as amended 
by subsection (a), is amended--
            (1) by striking ``subsection (c)'' in subsection (c), as 
        redesignated by subsection (a)(3), and inserting ``subsection 
        (d)''; and
            (2) by striking ``subsection (b)'' in subsection (e), as so 
        redesignated, and inserting ``subsection (c)''.

SEC. 206. ENTRY BY UTILITY COMPANIES.

    (a) In General.--
            (1) Authorized activities of utilities.--Notwithstanding 
        any other provision of law to the contrary (including the 
        Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et 
        seq.)), an electric, gas, water, or steam utility, and any 
        subsidiary company, affiliate, or associate company of such a 
        utility, other than a public utility holding company that is an 
        associate company of a registered holding company, may engage, 
        directly or indirectly, in any activity whatsoever, wherever 
        located, necessary or appropriate to the provision of--
                    (A) telecommunications services,
                    (B) information services,
                    (C) other services or products subject to the 
                jurisdiction of the Federal Communications Commission 
                under the Communications Act of 1934 (47 U.S.C. 151 et 
                seq.), or
                    (D) products or services that are related or 
                incidental to a product or service described in 
                subparagraph (A), (B), or (C).
            (2) SEC jurisdiction limited.--The Securities and Exchange 
        Commission has no jurisdiction under the Public Utility Holding 
        Company Act of 1935 (15 U.S.C. 79a et seq.) over a holding 
        company, or a subsidiary company, affiliate, or associate 
        company of a holding company, engaged in any activity described 
        in paragraph (1) to enforce any requirement with respect to 
        that Act, or approve or otherwise review any such activity, 
        including financing, investing in, acquiring, or maintaining 
        any interest in, or entering into affiliate transactions or 
        contracts.
    (b) Prohibition of Cross-Subsidization.--Nothing in this section 
precludes the Federal Energy Regulatory Commission or a State 
commission from exercising its jurisdiction to the extent otherwise 
authorized under applicable law with respect to prohibiting cross-
subsidization of any activity described in subsection (a)(1) by a 
public-utility company which is an associate company of a registered 
holding company.
    (c) Separate Books Required.--Any subsidiary company, affiliate, or 
associate company that is an associate company of a registered holding 
company engaged in any activity described in subsection (a)(1)--
            (1) shall maintain separate books, records, and accounts 
        that identify all transactions involving such activity; and
            (2) shall provide access to those books, records, and 
        accounts to State commissions and the Federal Energy Regulatory 
        Commission.
    (d) Independent Audit Authority for State Commissions.--
            (1) State may request audit.--Any State commission with 
        jurisdiction over a public-utility company that--
                    (A) is an associate company of a registered holding 
                company, and
                    (B) transacts business with a subsidiary company, 
                affiliate, or associate company of that holding company 
                engaged in any activity described in subsection (a)(1),
        may request that it have an independent audit performed, no 
        more frequently than on an annual basis, of transactions 
        between the public-utility company and the subsidiary company, 
        affiliate, or associate company engaged in that activity.
            (2) Compliance by company required.--If a State commission 
        makes such a request, the company engaged in the activity shall 
        select an independent auditor and bear the costs of having the 
        audit performed.
            (3) Availability of auditor's report.--The auditor's report 
        shall be provided to the State commission within 6 months after 
        the request for the audit was made by the State commission.
    (e) Definitions.--Any term used in this section that is defined in 
the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et seq.) 
has the same meaning as it has in that Act.
    (f) Effective Date.--This section takes effect on the date of 
enactment of this Act.

SEC. 207. BROADCAST REFORM.

    (a) Spectrum Reform.--
            (1) Advanced television spectrum services.--If the 
        Commission by rule permits licensees to provide advanced 
        television services, then--
                    (A) it shall adopt regulations that allow such 
                licensees to make use of the advanced television 
                spectrum for the transmission of ancillary or 
                supplementary services if the licensees provide without 
                charge to the public at least one advanced television 
                program service as prescribed by the Commission that is 
                intended for and available to the general public on the 
                advanced television spectrum; and
                    (B) it shall apply similar rules to use of existing 
                television spectrum.
            (2) Commission to collect fees.--To the extent that a 
        television broadcast licensee provides ancillary or 
        supplementary services using existing or advanced television 
        spectrum--
                    (A) for which payment of a subscription fee is 
                required in order to receive such services, or
                    (B) for which the licensee directly or indirectly 
                receives compensation from a third party in return for 
                transmitting material furnished by such third party, 
                other than payments to broadcast stations by third 
                parties for transmission of program material or 
                commercial advertising,
        the Commission may collect from each such licensee an annual 
        fee to the extent the existing or advanced television spectrum 
        is used for such ancillary or supplementary services. In 
        determining the amount of such fees, the Commission shall take 
        into account the portion of the licensee's total existing or 
        advanced television spectrum which is used for such services 
        and the amount of time such services are provided. The amount 
        of such fees to be collected for any such service shall not, in 
        any event, exceed an amount equivalent on an annualized basis 
        to the amount paid by providers of a competing service on 
        spectrum subject to auction under section 309(j) of the 
        Communications Act of 1934 (47 U.S.C. 309(j)).
            (3) Public interest requirement.--Nothing in this section 
        shall be construed as relieving a television broadcasting 
        station from its obligation to serve the public interest, 
        convenience, and necessity. In the Commission's review of any 
        application for renewal of a broadcast license for a television 
        station that provides ancillary or supplementary services, the 
        television licensee shall establish that its program service 
        which is intended for and available to the general public on 
        the existing or advanced television spectrum is in the public 
        interest. Any violation of the Commission rules applicable to 
        ancillary or supplementary services may reflect upon the 
        licensee's qualifications for renewal of its license.
            (4) Definitions.--As used in this subsection--
                    (A) The term ``advanced television services'' means 
                television services provided using digital or other 
                advanced technology to enhance audio quality and video 
                resolution.
                    (B) The term ``existing'' means spectrum generally 
                in use for television broadcast purposes on the date of 
                enactment of this Act.
    (b) Ownership Reform.--
            (1) In general.--The Commission shall modify its rules for 
        multiple ownership set forth in 47 CFR 73.3555 by changing the 
        percentage set forth in subdivision (e)(2)(ii) from 25 percent 
        to 35 percent.
            (2) Statutory restrictions.--Section 613 (47 U.S.C. 533) is 
        amended by striking subsection (a) and inserting the following:
    ``(a) The Commission shall review its ownership rules biennially as 
part of its regulatory reform review under section 259.''.
            (3) Conforming changes.--The Commission shall amend its 
        rules to make any changes necessary to reflect the effect of 
        this section on its rules.
            (4) Effective date.--The Commission shall make the 
        modification required by paragraph (1) effective on the date of 
        enactment of this Act.
    (c) Term of Licenses.--Section 307(c) (47 U.S.C. 307(c)) is amended 
by striking the first four sentences and inserting the following:
    ``No license shall be granted for a term longer than 10 years. Upon 
application, a renewal of such license may be granted from time to time 
for a term of not to exceed 10 years, if the Commission finds that the 
public interest, convenience, and necessity would be served thereby.''.
    (d) Broadcast License Renewal Procedures.--
            (1) Section 309 (47 U.S.C. 309) is amended by adding at the 
        end thereof the following:
    ``(k)(1)(A) Notwithstanding subsections (c) and (d), if the 
licensee of a broadcast station submits an application to the 
Commission for renewal of such license, the Commission shall grant the 
application if it finds, after notice and opportunity for comment (and 
a hearing on the record if it finds that there are credible allegations 
of serious violations by the licensee of this Act or the Commission's 
rules or regulations), with respect to that station during the 
preceding term of its license, that--
            ``(i) the station has served the public interest, 
        convenience, and necessity;
            ``(ii) there have been no serious violations by the 
        licensee of this Act or the rules and regulations of the 
        Commission; and
            ``(iii) there have been no other violations by the licensee 
        of this Act or the rules and regulations of the Commission 
        which, taken together, would constitute a pattern of abuse.
    ``(B) If any licensee of a broadcast station fails to meet the 
requirements of this subsection, the Commission may deny the 
application for renewal in accordance with paragraph (2), or grant such 
application on appropriate terms and conditions, including renewal for 
a term less than the maximum otherwise permitted.
    ``(2) If the Commission determines that a licensee has failed to 
meet the requirements specified in paragraph (1)(A) and that no 
mitigating factors justify the imposition of lesser sanctions, the 
Commission shall--
            ``(A) issue an order denying the renewal application filed 
        by such licensee under section 308; and
            ``(B) only thereafter accept and consider such applications 
        for a construction permit as may be filed under section 308 
        specifying the channel or broadcasting facilities of the former 
        licensee.
    ``(3) In making the determinations specified in paragraphs (1) or 
(2)(A), the Commission shall not consider whether the public interest, 
convenience, and necessity might be served by the grant of a license to 
a person other than the renewal applicant.''.
            (2) Section 309(d) (47 U.S.C. 309(d)) is amended by 
        inserting ``(or subsection (k) in the case of renewal of any 
        broadcast station license)'' after ``with subsection (a)'' each 
        place it appears.

       Subtitle B--Termination of Modification of Final Judgment

SEC. 221. REMOVAL OF LONG DISTANCE RESTRICTIONS.

    (a) In General.--Part II of title II (47 U.S.C. 251 et seq.), as 
added by this Act, is amended by inserting after section 254 the 
following new section:

``SEC. 255. INTEREXCHANGE TELECOMMUNICATIONS SERVICES.

    ``(a) In General.--Notwithstanding any restriction or obligation 
imposed before the date of enactment of the Telecommunications Act of 
1995 under section II(D) of the Modification of Final Judgment, a Bell 
operating company, or any subsidiary or affiliate of a Bell operating 
company, that meets the requirements of this section may provide--
            ``(1) interLATA telecommunications services originating in 
        any region in which it is the dominant provider of wireline 
        telephone exchange service or exchange access service after the 
        Commission determines that it has fully implemented the 
        competitive checklist found in subsection (b)(2) in the area in 
        which it seeks to provide interLATA telecommunications 
        services, in accordance with the provisions of subsection (c);
            ``(2) interLATA telecommunications services originating in 
        any area where that company is not the dominant provider of 
        wireline telephone exchange service or exchange access service 
        in accordance with the provisions of subsection (d); and
            ``(3) interLATA services that are incidental services in 
        accordance with the provisions of subsection (e).
    ``(b) Specific InterLATA Interconnection Requirements.--
            ``(1) In general.--A Bell operating company may provide 
        interLATA services in accordance with this section only if that 
        company has reached an interconnection agreement under section 
        251 and that agreement provides, at a minimum, for 
        interconnection that meets the competitive checklist 
        requirements of paragraph (2).
            ``(2) Competitive checklist.--Interconnection provided by a 
        Bell operating company to other telecommunications carriers 
        under section 251 shall include:
                    ``(A) Nondiscriminatory access on an unbundled 
                basis to the network functions and services of the Bell 
                operating company's telecommunications network that is 
                at least equal in type, quality, and price to the 
                access the Bell operating company affords to itself or 
                any other entity.
                    ``(B) The capability to exchange telecommunications 
                between customers of the Bell operating company and the 
                telecommunications carrier seeking interconnection.
                    ``(C) Nondiscriminatory access to the poles, ducts, 
                conduits, and rights-of-way owned or controlled by the 
                Bell operating company where it has the legal authority 
                to permit such access.
                    ``(D) Local loop transmission from the central 
                office to the customer's premises, unbundled from local 
                switching or other services.
                    ``(E) Local transport from the trunk side of a 
                wireline local exchange carrier switch unbundled from 
                switching or other services.
                    ``(F) Local switching unbundled from transport, 
                local loop transmission, or other services.
                    ``(G) Nondiscriminatory access to--
                            ``(i) 911 and E911 services;
                            ``(ii) directory assistance services to 
                        allow the other carrier's customers to obtain 
                        telephone numbers; and
                            ``(iii) operator call completion services.
                    ``(H) White pages directory listings for customers 
                of the other carrier's telephone exchange service.
                    ``(I) Until the date by which neutral telephone 
                number administration guidelines, plan, or rules are 
                established, nondiscriminatory access to telephone 
                numbers for assignment to the other carrier's telephone 
                exchange service customers. After that date, compliance 
                with such guidelines, plan, or rules.
                    ``(J) Nondiscriminatory access to databases and 
                associated signaling, including signaling links, 
                signaling service control points, and signaling service 
                transfer points, necessary for call routing and 
                completion.
                    ``(K) Until the date by which the Commission 
                determines that final telecommunications number 
                portability is technically feasible and must be made 
                available, interim telecommunications number 
                portability through remote call forwarding, direct 
                inward dialing trunks, or other comparable 
                arrangements, with as little impairment of functioning, 
                quality, reliability, and convenience as possible. 
                After that date, full compliance with final 
                telecommunications number portability.
                    ``(L) Nondiscriminatory access to whatever services 
                or information may be necessary to allow the requesting 
                carrier to implement local dialing parity in a manner 
                that permits consumers to be able to dial the same 
                number of digits when using any telecommunications 
                carrier providing telephone exchange service or 
                exchange access service.
                    ``(M) Reciprocal compensation arrangements on a 
                nondiscriminatory basis for the origination and 
                termination of telecommunications.
                    ``(N) Telecommunications services and network 
                functions provided on an unbundled basis without any 
                conditions or restrictions on the resale or sharing of 
                those services or functions, including both origination 
                and termination of telecommunications services, other 
                than reasonable conditions required by the Commission 
                or a State. For purposes of this subparagraph, it is 
                not an unreasonable condition for the Commission or a 
                State to limit the resale--
                            ``(i) of services included in the 
                        definition of universal service to a 
                        telecommunications carrier who intends to 
                        resell that service to a category of customers 
                        different from the category of customers being 
                        offered that universal service by such carrier 
                        if the Commission or State orders a carrier to 
                        provide the same service to different 
                        categories of customers at different prices 
                        necessary to promote universal service; or
                            ``(ii) of subsidized universal service in a 
                        manner that allows companies to charge another 
                        carrier rates which reflect the actual cost of 
                        such services, exclusive of any universal 
                        service support received for providing such 
                        services.
            ``(3) Joint marketing of local and long distance 
        services.--Until a Bell operating company is authorized to 
        provide interLATA services in a telephone exchange area, a 
        telecommunications carrier may not jointly market telephone 
        exchange service or exchange access service purchased from such 
        company with interexchange services offered by that 
        telecommunications carrier.
            ``(4) Commission may not expand competitive checklist.--The 
        Commission may not, by rule or otherwise, limit or extend the 
        terms used in the competitive checklist.
    ``(c) In-Region Services.--
            ``(1) Application.--Upon the enactment of the 
        Telecommunications Act of 1995, a Bell operating company or its 
        subsidiary or affiliate may apply to the Commission for 
        authorization notwithstanding the Modification of Final 
        Judgment to provide interLATA telecommunications service 
        originating in any area where such Bell operating company is 
        the dominant provider of wireline telephone exchange service or 
        exchange access service. The application shall describe with 
        particularity the nature and scope of the activity and of each 
        product market or service market, and each geographic market 
        for which authorization is sought.
            ``(2) Determination by commission.--
                    ``(A) Determination.--Not later than 90 days after 
                receiving an application under paragraph (1), the 
                Commission shall issue a written determination, on the 
                record after a hearing and opportunity for comment, 
                granting or denying the application in whole or in 
                part. Before making any determination under this 
                subparagraph, the Commission shall consult with the 
                Attorney General regarding the application. In 
                consulting with the Commission under this subparagraph, 
                the Attorney General may apply any appropriate 
                standard.
                    ``(B) Approval.--The Commission may only approve 
                the authorization requested in an application submitted 
                under paragraph (1) if it finds that--
                            ``(i) the petitioning Bell operating 
                        company has fully implemented the competitive 
                        checklist found in subsection (b)(2); and
                            ``(ii) the requested authority will be 
                        carried out in accordance with the requirements 
                        of section 252,
                and if the Commission determines that the requested 
                authorization is consistent with the public interest, 
                convenience, and necessity. If the Commission does not 
                approve an application under this subparagraph, it 
                shall state the basis for its denial of the 
                application.
            ``(3) Publication.--Not later than 10 days after issuing a 
        determination under paragraph (2), the Commission shall publish 
        in the Federal Register a brief description of the 
        determination.
            ``(4) Judicial review.--
                    ``(A) Commencement of action.--Not later than 45 
                days after a determination by the Commission is 
                published under paragraph (3), the Bell operating 
                company or its subsidiary or affiliate that applied to 
                the Commission under paragraph (1), or any person who 
                would be threatened with loss or damage as a result of 
                the determination regarding such company's engaging in 
                the activity described in its application, may commence 
                an action in any United States Court of Appeals against 
                the Commission for judicial review of the determination 
                regarding the application.
                    ``(B) Judgment.--
                            ``(i) The Court shall enter a judgment 
                        after reviewing the determination in accordance 
                        with section 706 of title 5 of the United State 
                        Code.
                            ``(ii) A judgment--
                                    ``(I) affirming any part of the 
                                determination that approves granting 
                                all or part of the requested 
                                authorization, or
                                    ``(II) reversing any part of the 
                                determination that denies all or part 
                                of the requested authorization,
                        shall describe with particularity the nature 
                        and scope of the activity, and of each product 
                        market or service market, and each geographic 
                        market, to which the affirmance or reversal 
                        applies.
            ``(5) Requirements relating to separate subsidiary; 
        safeguards; and intralata toll dialing parity.--
                    ``(A) Separate subsidiary; safeguards.--Other than 
                interLATA services authorized by an order entered by 
                the United States District Court for the District of 
                Columbia pursuant to the Modification of Final Judgment 
                before the date of enactment of the Telecommunications 
                Act of 1995, a Bell operating company, or any 
                subsidiary or affiliate of such a company, providing 
                interLATA services authorized under this subsection may 
                provide such interLATA services in that market only in 
                accordance with the requirements of section 252.
                    ``(B) Intralata toll dialing parity.--
                            ``(i) A Bell operating company granted 
                        authority to provide interLATA services under 
                        this subsection shall provide intraLATA toll 
                        dialing parity throughout that market 
                        coincident with its exercise of that authority. 
                        If the Commission finds that such a Bell 
                        operating company has provided interLATA 
                        service authorized under this clause before its 
                        implementation of intraLATA toll dialing parity 
                        throughout that market, or fails to maintain 
                        intraLATA toll dialing parity throughout that 
                        market, the Commission, except in cases of 
                        inadvertent interruptions or other events 
                        beyond the control of the Bell operating 
                        company, shall suspend the authority to provide 
                        interLATA service for that market until the 
                        Commission determines that intraLATA toll 
                        dialing parity is implemented or reinstated.
                            ``(ii) A State may not order the 
                        implementation of toll dialing parity in an 
                        intraLATA area before a Bell operating company 
                        has been granted authority under this 
                        subsection to provide interLATA services in 
                        that area.
    ``(d) Out-of-Region Services.--A Bell operating company or its 
subsidiary or affiliate may provide interLATA telecommunications 
services originating in any area where such company is not the dominant 
provider of wireline telephone exchange service or exchange access 
service upon the date of enactment of the Telecommunications Act of 
1995.
    ``(e) Incidental Services.--
            ``(1) In general.--A Bell operating company may provide 
        interLATA services that are incidental to the purposes of--
                    ``(A)(i) providing audio programming, video 
                programming, or other programming services to 
                subscribers of such company,
                    ``(ii) providing the capability for interaction by 
                such subscribers to select or respond to such audio 
                programming, video programming, or other programming 
                services, to order, or control transmission of the 
                programming, polling or balloting, and ordering other 
                goods or services, or
                    ``(iii) providing to distributors audio programming 
                or video programming that such company owns, controls, 
                or is licensed by the copyright owner of such 
                programming, or by an assignee of such owner, to 
                distribute,
                    ``(B) providing a telecommunications service, using 
                the transmission facilities of a cable system that is 
                an affiliate of such company, between LATAs within a 
                cable system franchise area in which such company is 
                not, on the date of enactment of the Telecommunications 
                Act of 1995, a provider of wireline telephone exchange 
                service,
                    ``(C) providing a commercial mobile service except 
                where such service is a replacement for land line 
                telephone exchange service for a substantial portion of 
                the land line telephone exchange service in a State in 
                accordance with section 332(c) of this Act and with the 
                regulations prescribed by the Commission,
                    ``(D) providing a service that permits a customer 
                that is located in one LATA to retrieve stored 
                information from, or file information for storage in, 
                information storage facilities of such company that are 
                located in another LATA area, so long as the customer 
                acts affirmatively to initiate the storage or retrieval 
                of information, except that--
                            ``(i) such service shall not cover any 
                        service that establishes a direct connection 
                        between end users or any real-time voice and 
                        data transmission,
                            ``(ii) such service shall not include 
                        voice, data, or facsimile distribution services 
                        in which the Bell operating company or 
                        affiliate forwards customer-supplied 
                        information to customer- or carrier-selected 
                        recipients;
                            ``(iii) such service shall not include any 
                        service in which the Bell operating company or 
                        affiliate searches for and connects with the 
                        intended recipient of information, or any 
                        service in which the Bell operating company or 
                        affiliate automatically forwards stored 
                        voicemail or other information to the intended 
                        recipient; and
                            ``(iv) customers of such service shall not 
                        be billed a separate charge for the interLATA 
                        telecommunications furnished in conjunction 
                        with the provision of such service;
                    ``(E) providing signaling information used in 
                connection with the provision of telephone exchange 
                service or exchange access service to another local 
                exchange carrier; or
                    ``(F) providing network control signaling 
                information to, and receiving such signaling 
                information from, interexchange carriers at any 
                location within the area in which such company provides 
                telephone exchange service or exchange access service.
            ``(2) Limitations.--The provisions of paragraph (1) are 
        intended to be narrowly construed. The transmission facilities 
        used by a Bell operating company or affiliate thereof to 
        provide interLATA telecommunications under subparagraphs (C) 
        and (D) of paragraph (1) shall be leased by that company from 
        unaffiliated entities on terms and conditions (including price) 
        no more favorable than those available to the competitors of 
        that company until that Bell operating company receives 
        authority to provide interLATA services under subsection (c). 
        The interLATA services provided under paragraph (1)(A) are 
        limited to those interLATA transmissions incidental to the 
        provision by a Bell operating company or its affiliate of 
        video, audio, and other programming services that the company 
        or its affiliate is engaged in providing to the public. A Bell 
        operating company may not provide telecommunications services 
        not described in paragraph (1) without receiving the approvals 
        required by subsection (c). The provision of services 
        authorized under this subsection by a Bell operating company or 
        its affiliate shall not adversely affect telephone exchange 
        ratepayers or competition in any telecommunications market.
    ``(f) Definitions.--As used in this section--
            ``(1) LATA.--The term `LATA' means a local access and 
        transport area as defined in United States v. Western Electric 
        Co., 569 F. Supp. 990 (United States District Court, District 
        of Columbia) and subsequent judicial orders relating thereto.
            ``(2) Audio programming services.--The term `audio 
        programming services' means programming provided by, or 
        generally considered to be comparable to programming provided 
        by, a radio broadcast station.
            ``(3) Video programming services; other programming 
        services.--The terms `video programming service' and `other 
        programming services' have the same meanings as such terms have 
        under section 602 of this Act.''.
    (b) Long Distance Access for Commercial Mobile Services.--
Notwithstanding any restriction or obligation imposed pursuant to the 
Modification of Final Judgment prior to the date of enactment of this 
Act, a person engaged in the provision of commercial mobile services, 
insofar as such person is so engaged, shall not be required to provide 
equal access to interexchange telecommunications carriers unless 
required to do so under the Communications Act of 1934. In connection 
with the provision of two-way switched voice service, such a person 
shall not block a subscriber from obtaining access to the provider of 
interexchange services of the subscriber's choice through the use of 
the access code assigned by the Commission to each such provider.

SEC. 222. REMOVAL OF MANUFACTURING RESTRICTIONS.

    (a) In General.--Part II of title II (47 U.S.C. 251 et seq.), as 
added by this Act, is amended by inserting after section 255 the 
following new section:

``SEC. 256. REGULATION OF MANUFACTURING BY BELL OPERATING COMPANIES.

    ``(a) Authorization.--
            ``(1) In general.--Notwithstanding any restriction or 
        obligation imposed before the date of enactment of the 
        Telecommunications Act of 1995 pursuant to the Modification of 
        Final Judgment on the lines of business in which a Bell 
        operating company may engage, if the Commission authorizes a 
        Bell operating company to provide interLATA services under 
        section 255, then that company may be authorized by the 
        Commission to manufacture and provide telecommunications 
        equipment, and to manufacture customer premises equipment, at 
        any time after that determination is made, subject to the 
        requirements of this section and the regulations prescribed 
        thereunder.
            ``(2) Certain research and design arrangements; royalty 
        agreements.--Upon the enactment of the Telecommunications Act 
        of 1995, a Bell operating company may--
                    ``(A) engage in research and design activities 
                related to manufacturing, and
                    ``(B) enter into royalty agreements with 
                manufacturers of telecommunications equipment.
    ``(b) Separate Subsidiary; Safeguards.--Any manufacturing or 
provision of equipment authorized under subsection (a) shall be 
conducted in accordance with the requirements of section 252.
    ``(c) Protection of Small Telephone Company Interests.--
            ``(1) Equipment to be made available to others.--A 
        manufacturing subsidiary of a Bell operating company shall make 
        available, without discrimination or self-preference as to 
        price, delivery, terms, or conditions, to all local exchange 
        carriers, for use with the public telecommunications network, 
        any telecommunications equipment, including software integral 
        to such telecommunications equipment, including upgrades, 
        manufactured by such subsidiary if each such purchasing 
        carrier--
                    ``(A) does not manufacture telecommunications 
                equipment or have a subsidiary which manufactures 
                telecommunications equipment; or
                    ``(B) agrees to make available, to the Bell 
                operating company that is the parent of the 
                manufacturing subsidiary or any of the local exchange 
                carrier affiliates of such Bell company, any 
                telecommunications equipment, including software 
                integral to such telecommunications equipment, 
                including upgrades, manufactured for use with the 
                public telecommunications network by such purchasing 
                carrier or by any entity or organization with which 
                such purchasing carrier is affiliated.
            ``(2) Sales to other local exchange carriers.--
                    ``(A) A Bell operating company and any entity 
                acting on its behalf shall make procurement decisions 
                and award all supply contracts for equipment, services, 
                and software on the basis of open, competitive bidding, 
                and an objective assessment of price, quality, 
                delivery, and other commercial factors.
                    ``(B) A Bell operating company and any entity it 
                owns or otherwise controls shall permit any person to 
                participate fully on a non-discriminatory basis in the 
                process of establishing standards and certifying 
                equipment used in or interconnected to the public 
                telecommunications network.
                    ``(C) A manufacturing subsidiary of a Bell 
                operating company may not restrict sales to any local 
                exchange carrier of telecommunications equipment, 
                including software integral to the operation of such 
                equipment and related upgrades.
                    ``(D) A Bell operating company and any entity it 
                owns or otherwise controls shall protect the 
                proprietary information submitted with contract bids 
                and in the standards and certification processes from 
                release not specifically authorized by the owner of 
                such information.
    ``(d) Collaboration with Other Manufacturers.--A Bell operating 
company and its subsidiaries or affiliates may engage in close 
collaboration with any manufacturer of customer premises equipment or 
telecommunications equipment not affiliated with a Bell operating 
company during the design and development of hardware, software, or 
combinations thereof relating to such equipment.
    ``(e) Additional Rules and Regulations.--The Commission may 
prescribe such additional rules and regulations as the Commission 
determines are necessary to carry out the provisions of this section.
    ``(f) Administration and Enforcement.--
            ``(1) Commission authority.--For the purposes of 
        administering and enforcing the provisions of this section and 
        the regulations prescribed under this section, the Commission 
        shall have the same authority, power, and functions with 
        respect to any Bell operating company as the Commission has in 
        administering and enforcing the provisions of this title with 
        respect to any common carrier subject to this Act.
            ``(2) Civil actions by injured carriers.--Any local 
        exchange carrier injured by an act or omission of a Bell 
        operating company or its manufacturing subsidiary or affiliate 
        which violates the requirements of paragraph (1) or (2) of 
        subsection (c), or the Commission's regulations implementing 
        such paragraphs, may initiate an action in a district court of 
        the United States to recover the full amount of damages 
        sustained in consequence of any such violation and obtain such 
        orders from the court as are necessary to terminate existing 
        violations and to prevent future violations; or such local 
        exchange carrier may seek relief from the Commission pursuant 
        to sections 206 through 209.
    ``(g) Application to Bell Communications Research.--Nothing in this 
section--
            ``(1) provides any authority for Bell Communications 
        Research, or any successor entity, to manufacture or provide 
        telecommunications equipment or to manufacture customer 
        premises equipment; or
            ``(2) prohibits Bell Communications Research, or any 
        successor entity, from engaging in any activity in which it is 
        lawfully engaged on the date of enactment of the 
        Telecommunications Act of 1995, including providing a 
        centralized organization for the provision of engineering, 
        administrative, and other services (including serving as a 
        single point of contact for coordination of the Bell operating 
        companies to meet national security and emergency preparedness 
        requirements).
    ``(h) Definitions.--As used in this section--
            ``(1) The term `customer premises equipment' means 
        equipment employed on the premises of a person (other than a 
        carrier) to originate, route, or terminate telecommunications.
            ``(2) The term `manufacturing' has the same meaning as such 
        term has in the Modification of Final Judgment.
            ``(3) The term `telecommunications equipment' means 
        equipment, other than customer premises equipment, used by a 
        carrier to provide telecommunications services.''.
    (b) Effect on Pre-existing Manufacturing Authority.--Nothing in 
this section, or in section 256 of the Communications Act of 1934 as 
added by this section, prohibits any Bell operating company from 
engaging, directly or through any subsidiary or affiliate, in any 
manufacturing activity in which any Bell operating company, subsidiary, 
or affiliate was authorized to engage on the date of enactment of this 
Act.

SEC. 223. EXISTING ACTIVITIES.

    Nothing in this Act, or any amendment made by this Act, prohibits a 
Bell operating company from engaging, at any time after the date of 
enactment of this Act, in any activity authorized by an order entered 
by the United States District Court for the District of Columbia 
pursuant to section VII or VIII(C) of the Modification of Final 
Judgment, if such order was entered on or before the date of enactment 
of this Act.

SEC. 224. ENFORCEMENT.

    (a) In General.--Part II of title II (47 U.S.C. 251 et seq.), as 
added by this Act, is amended by inserting after section 256 the 
following:

``SEC. 257. ENFORCEMENT.

    ``(a) In General.--In addition to any penalty, fine, or other 
enforcement remedy under this Act, the failure by a telecommunications 
carrier to implement the requirements of section 251 or 255, including 
a failure to comply with the terms of an interconnection agreement 
approved under section 251, is punishable by a civil penalty of not to 
exceed $1,000,000 per offense. Each day of a continuing offense shall 
be treated as a separate violation for purposes of levying any penalty 
under this subsection.
    ``(b) Noncompliance with Interconnection or Separate Subsidiary 
Requirements.--
            ``(1) A Bell operating company that repeatedly, knowingly, 
        and without reasonable cause fails to implement an 
        interconnection agreement approved under section 251, to comply 
        with the requirements of such agreement after implementing 
        them, or to comply with the separate subsidiary requirements of 
        this part may be fined up to $500,000,000 by a district court 
        of the United States of competent jurisdiction.
            ``(2) A Bell operating company that repeatedly, knowingly, 
        and without reasonable cause fails to meet its obligations 
        under section 255 for the provision of interLATA service may 
        have its authority to provide any service the right to provide 
        which is conditioned upon meeting such obligations 
        suspended.''.
    ``(c) Enforcement by Private Right of Action.--
            ``(1) Damages.--Any person who is injured in its business 
        or property by reason of a violation of this section may bring 
        a civil action in any district court of the United States in 
        the district in which the defendant resides or is found or has 
        an agent, without respect to the amount in controversy.
            ``(2) Interest.--The court may award under this section, 
        pursuant to a motion by such person promptly made, simple 
        interest on actual damages for the period beginning on the date 
        of service of such person's pleading setting forth a claim 
        under this title and ending on the date of judgment, or for any 
        shorter period therein, if the court finds that the award of 
        such interest for such period is just in the circumstances.''.
    (b) Certain Broadcasts.--Section 1307(a)(2) of title 18, United 
States Code, is amended--
            (1) by striking ``or'' after the semicolon at the end of 
        subparagraph (A);
            (2) by striking the period at the end of subparagraph (B) 
        and inserting a semicolon and ``or''; and
            (3) by adding at the end thereof the following:
                    ``(C) conducted by a commercial organization and is 
                contained in a publication published in a State in 
                which such activities or the publication of such 
                activities are authorized or not otherwise prohibited, 
                or broadcast by a radio or television station licensed 
                in a State in which such activities or the broadcast of 
                such activities are authorized or not otherwise 
                prohibited.''.

SEC. 225. ALARM MONITORING SERVICES.

    Part II of title II (47 U.S.C. 251 et seq.), as added by this Act, 
is amended by inserting after section 257 the following new section:

``SEC. 258. REGULATION OF ENTRY INTO ALARM MONITORING SERVICES.

    ``(a) In General.--Except as provided in this section, a Bell 
operating company, or any subsidiary or affiliate of that company, may 
not provide alarm monitoring services for the protection of life, 
safety, or property. A Bell operating company may transport alarm 
monitoring service signals on a common carrier basis only.
    ``(b) Authority To Provide Alarm Monitoring Services.--Beginning 3 
years after the date of enactment of the Telecommunications Act of 
1995, a Bell operating company may provide alarm monitoring services 
for the protection of life, safety, or property if it has been 
authorized to provide interLATA services under section 255 unless the 
Commission finds that the provision of alarm monitoring services by 
such company is not in the public interest. The Commission may not find 
that provision of alarm monitoring services by a Bell operating company 
is in the public interest until it finds that it has the capability 
effectively to enforce any requirements, limitations, or conditions 
that may be placed upon a Bell operating company in the provision of 
alarm monitoring services, including the regulations prescribed under 
subsection (c).
    ``(c) Regulations Required.--
            ``(1) Not later than 1 year after the date of enactment of 
        the Telecommunications Act of 1995, the Commission shall 
        prescribe regulations--
                    ``(A) to establish such requirements, limitations, 
                or conditions as are--
                            ``(i) necessary and appropriate in the 
                        public interest with respect to the provision 
                        of alarm monitoring services by Bell operating 
                        companies and their subsidiaries and 
                        affiliates, and
                            ``(ii) effective at such time as a Bell 
                        operating company or any of its subsidiaries or 
                        affiliates is authorized to provide alarm 
                        monitoring services; and
                    ``(B) to establish procedures for the receipt and 
                review of complaints concerning violations by such 
                companies of such regulations, or of any other 
                provision of this Act or the regulations thereunder, 
                that result in material financial harm to a provider of 
                alarm monitoring services.
            ``(2) A Bell operating company, its subsidiaries and 
        affiliates, and any local exchange carrier are prohibited from 
        recording or using in any fashion the occurrence or contents of 
        calls received by providers of alarm monitoring services for 
        the purposes of marketing such services on behalf of the Bell 
        operating company, any of its subsidiaries or affiliates, the 
        local exchange carrier, or any other entity. Any regulations 
        necessary to enforce this paragraph shall be issued initially 
        within 6 months after the date of enactment of the 
        Telecommunications Act of 1995.
            ``(d) Expedited Consideration Of Complaints.--The 
        procedures established under subsection (c) shall ensure that 
        the Commission will make a final determination with respect to 
        any complaint described in such subsection within 120 days 
        after receipt of the complaint. If the complaint contains an 
        appropriate showing that the alleged violation occurred, as 
        determined by the Commission in accordance with such 
        regulations, the Commission shall, within 60 days after receipt 
        of the complaint, issue a cease and desist order to prevent the 
        Bell operating company and its subsidiaries and affiliates from 
        continuing to engage in such violation pending such final 
        determination.
    ``(e) Remedies.--The Commission may use any remedy available under 
title V of this Act to terminate and punish violations described in 
subsection (c). Such remedies may include, if the Commission determines 
that such violation was willful or repeated, ordering the Bell 
operating company or its subsidiary or affiliate to cease offering 
alarm monitoring services.
    ``(f) Savings Provision.--Subsections (a) and (b) do not prohibit 
or limit the provision of alarm monitoring services by a Bell operating 
company that was engaged in providing those services as of December 31, 
1994, to the extent that such company--
            ``(1) continues to provide those services through the 
        subsidiary or affiliate through which it was providing them on 
        that date; and
            ``(2) does not acquire, directly or indirectly, an equity 
        interest in another entity engaged in providing alarm 
        monitoring services, and does not acquire, or enter into an 
        agreement to provide, the alarm monitoring service activities 
        of another entity.
    ``(g) Alarm Monitoring Services Defined.--As used in this section, 
the term `alarm monitoring services' means services that detect threats 
to life, safety, or property by burglary, fire, vandalism, bodily 
injury, or other emergency through the use of devices that transmit 
signals to a central point in a customer's residence, place of 
business, or other fixed premises which--
            ``(1) retransmits such signals to a remote monitoring 
        center by means of telecommunications facilities of the Bell 
        operating company and any subsidiary or affiliate; and
            ``(2) serves to alert persons at the monitoring center of 
        the need to inform customers, other persons, or police, fire, 
        rescue, or other security or public safety personnel of the 
        threat at such premises.
Such term does not include medical monitoring devices attached to 
individuals for the automatic surveillance of ongoing medical 
conditions.''.

                    TITLE III--AN END TO REGULATION

SEC. 301. TRANSITION TO COMPETITIVE PRICING.

    (a) Pricing Flexibility.--
            (1) In general.--The Commission and the States shall 
        provide to telecommunications carriers price flexibility in the 
        rates charged consumers for the provision of telecommunications 
        services within one year after the date of enactment of this 
        Act. The Commission or a State may establish the rate consumers 
        may be charged for services included in the definition of 
        universal service, as well as the contribution, if any, that 
        all carriers must contribute for the preservation and 
        advancement of universal service.
            (2) Consumer protection.--The Commission and the States 
        shall ensure that rates for residential telephone service 
        remain just, reasonable, and affordable as competition develops 
        for telephone exchange service and telephone exchange access 
        service. Where only a single carrier provides a service in a 
        market, the Commission or a State may establish the rate that a 
        carrier may charge for any such service if such rate is 
        necessary for the protection of consumers. Any such rate shall 
        cease to be regulated whenever the Commission or a State 
        determines that it is no longer necessary for the protection of 
        consumers. The Commission shall establish cost allocation 
        guidelines for facilities owned by an essential 
        telecommunications carrier that are used for the provision of 
        both services included in the definition of universal service 
        and video programming sold by such carrier directly to 
        subscribers, if such allocation is necessary for the protection 
        of consumers.
            (3) Rate-of-return regulation eliminated.--
                    (A) In instituting the price flexibility required 
                under paragraph (1) the Commission and the States shall 
                establish alternative forms of regulation for Tier 1 
                telecommunications carriers that do not include 
                regulation of the rate of return earned by such carrier 
                as part of a plan that provides for any or all of the 
                following--
                            (i) the advancement of competition in the 
                        provision of telecommunications services;
                            (ii) improvements in productivity;
                            (iii) improvements in service quality;
                            (iv) measures to ensure customers of non-
                        competitive services do not bear the risks 
                        associated with the provision of competitive 
                        services;
                            (v) enhanced telecommunications services 
                        for educational institutions; or
                            (vi) any other measures Commission or a 
                        State, as appropriate, determines to be in the 
                        public interest.
                    (B) The Commission or a State, as appropriate, may 
                apply such alternative forms of regulation to any other 
                telecommunications carrier that is subject to rate of 
                return regulation under this Act.
                    (C) Any such alternative form of regulation--
                            (i) shall be consistent with the objectives 
                        of preserving and advancing universal service, 
                        guaranteeing high quality service, ensuring 
                        just, reasonable, and affordable rates, and 
                        encouraging economic efficiency; and
                            (ii) shall meet such other criteria as the 
                        Commission or a State, as appropriate, finds to 
                        be consistent with the public interest, 
                        convenience, and necessity.
    (b) Transition Plan Required.--If the Commission or a State adopts 
rules for the distribution of support payments under section 253 of the 
Communications Act of 1934, as amended by this Act, such rules shall 
include a transition plan to allow essential telecommunications 
carriers to provide for an orderly transition from the universal 
service support mechanisms in existence upon the date of enactment of 
this Act and the support mechanisms established by the Commission and 
the States under this Act or the Communications Act of 1934 as amended 
by this Act. Any such transition plan shall--
            (1) provide a phase-in of the price flexibility 
        requirements under subsection (a) for an essential 
        telecommunications carrier that is also a rural telephone 
        company; and
            (2) require the United States Government and the States, 
        where permitted by law, to modify any regulatory requirements 
        (including conditions for the repayment of loans and the 
        depreciation of assets) applicable to carriers designated as 
        essential telecommunications carriers in order to more 
        accurately reflect the conditions that would be imposed in a 
        competitive market for similar assets or services.
    (c) Duty to Provide Subscriber List Information.--
            (1) In general.--A carrier that provides local exchange 
        telephone service shall provide subscriber list information 
        gathered in its capacity as a provider of such service on a 
        timely and unbundled basis, under nondiscriminatory and 
        reasonable rates, terms, and conditions, to any person upon 
        request.
            (2) Subscriber list information defined.--As used in this 
        subsection, the term ``subscriber list information'' means any 
        information--
                    (A) identifying the listed names of subscribers of 
                a carrier and such subscribers' listed telephone 
                numbers, addresses, or primary advertising 
                classifications, as such classifications are assigned 
                at the time of the establishment of service, or any 
                combination of such names, numbers, addresses, or 
                classifications; and
                    (B) that the carrier or an affiliate has published, 
                caused to be published, or accepted for publication in 
                a directory in any format.

SEC. 302. BIENNIAL REVIEW OF REGULATIONS.

    Part II of title II (47 U.S.C. 251 et seq.), as added by this Act, 
is amended by inserting after section 258 the following new section:

``SEC. 259. REGULATORY REFORM.

    ``(a) Biennial Review of Regulations.--In every odd-numbered year 
(beginning with 1997), the Commission, with respect to its regulations 
under this Act, and a Federal-State Joint Board established under 
section 410, for State regulations--
            ``(1) shall review all regulations issued under this Act, 
        or under State law, in effect at the time of the review that 
        apply to operations or activities of providers of any 
        telecommunications services; and
            ``(2) shall determine whether any such regulation is no 
        longer necessary in the public interest as the result of 
        meaningful economic competition between the providers of such 
        service.
    ``(b) Effect of Determination.--The Commission shall repeal any 
regulation it determines to be no longer necessary in the public 
interest. The Joint Board shall notify the Governor of any State of any 
State regulation it determines to be no longer necessary in the public 
interest.''.

SEC. 303. REGULATORY FORBEARANCE.

    Part II of title II (47 U.S.C. 251 et seq.), as added by this Act, 
is amended by inserting after section 259 the following new section:

``SEC. 260. COMPETITION IN PROVISION OF TELECOMMUNICATIONS SERVICE.

    ``(a) Regulatory flexibility.--The Commission may forbear from 
applying any regulation or any provision of this Act to a 
telecommunications carrier or service, or class of carriers or 
services, in any or some of its or their geographic markets if the 
Commission determines that--
            ``(1) enforcement of such regulation or provision is not 
        necessary to ensure that the charges, practices, 
        classifications, or regulations by, for, or in connection with 
        that carrier or service are just and reasonable and are not 
        unjustly or unreasonably discriminatory;
            ``(2) enforcement of such regulation or provision is not 
        necessary for the protection of consumers; and
            ``(3) forbearance from applying such regulation or 
        provision is consistent with the public interest.
    ``(b) Competitive Effect to Be Weighed.--In making the 
determination under subsection (a)(3), the Commission shall consider 
whether forbearance from enforcing the regulation or provision will 
promote competitive market conditions, including the extent to which 
such forbearance will enhance competition among providers of 
telecommunications services. If the Commission determines that such 
forbearance will promote competition among providers of 
telecommunications services, that determination may be the basis for a 
Commission finding that forbearance is in the public interest.
    ``(c) Limitation.--Except as provided in section 251(i)(3), the 
Commission may not waive the unbundling requirements of section 251(b) 
or 255(b)(2) under subsection (a) until it determines that those 
requirements have been fully implemented.''.

SEC. 304. ADVANCED TELECOMMUNICATIONS INCENTIVES.

    (a) In General.--The Commission and each State commission with 
regulatory jurisdiction over telecommunications services shall 
encourage the deployment on a reasonable and timely basis of advanced 
telecommunications capability to all Americans (including, in 
particular, elementary and secondary schools and classrooms) by 
utilizing, in a manner consistent with the public interest, 
convenience, and necessity, price cap regulation, regulatory 
forbearance, or other regulating methods that remove barriers to 
infrastructure investment.
    (b) Inquiry.--The Commission shall, within 2 years after the date 
of enactment of this Act, and regularly thereafter, initiate a notice 
of inquiry concerning the availability of advanced telecommunications 
capability to all Americans (including, in particular, elementary and 
secondary schools and classrooms) and shall complete the inquiry within 
180 days after its initiation. In the inquiry, the Commission shall 
determine whether advanced telecommunications capability is being 
deployed to all Americans in a reasonable and timely fashion. If the 
Commission's determination is negative, it shall take immediate action 
under this section, and it may preempt State commissions that fail to 
act to ensure such availability.
    (c) Definitions.--For purposes of this section--
            (1) Communications act terms.--Any term used in this 
        section which is defined in the Communications Act of 1934 
        shall have the same meaning as it has in that Act.
            (2) Advanced telecommunications capability.--The term 
        ``advanced telecommunications capability'' means high-speed, 
        switched, broadband telecommunications capability that enables 
        users to originate and receive high-quality voice, data, 
        graphics, and video telecommunications.
            (3) Elementary and secondary schools.--The term 
        ``elementary and secondary schools'' means elementary schools 
        and secondary schools, as defined in paragraphs (14) and (25), 
        respectively, of section 10401 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 8801).

SEC. 305. REGULATORY PARITY.

    Within 3 years after the date of enactment of this Act, and 
periodically thereafter, the Commission shall--
            (1) issue such modifications or terminations of the 
        regulations applicable to persons offering telecommunications 
        or information services under title II, III, or VI of the 
        Communications Act of 1934 as are necessary to implement the 
        changes in such Act made by this Act;
            (2) in the regulations that apply to integrated 
        telecommunications service providers, take into account the 
        unique and disparate histories associated with the development 
        and relative market power of such providers, making such 
        modifications and adjustments as are necessary in the 
        regulation of such providers as are appropriate to enhance 
        competition between such providers in light of that history; 
        and
            (3) provide for periodic reconsideration of any 
        modifications or terminations made to such regulations, with 
        the goal of applying the same set of regulatory requirements to 
        all integrated telecommunications service providers, regardless 
        of which particular telecommunications or information service 
        may have been each provider's original line of business.

SEC. 306. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.

    Notwithstanding any provision of the Communications Act of 1934 or 
any other provision of law or regulation, a ship documented under the 
laws of the United States operating in accordance with the Global 
Maritime Distress and Safety System provisions of the Safety of Life at 
Sea Convention shall not be required to be equipped with a radio 
telegraphy station operated by one or more radio officers or operators.

SEC. 307. TELECOMMUNICATIONS NUMBERING ADMINISTRATION.

    Part II of title II (47 U.S.C. 251 et seq.), as added by this Act, 
is amended by inserting after section 260 the following new section:

``SEC. 261. TELECOMMUNICATIONS NUMBERING ADMINISTRATION.

    ``(a) Interim Number Portability.--In connection with any 
interconnection agreement reached under section 251 of this Act, a 
local exchange carrier shall make available interim telecommunications 
number portability, upon request, beginning on the date of enactment of 
the Telecommunications Act of 1995.
    ``(b) Final Number Portability.--In connection with any 
interconnection agreement reached under section 251 of this Act, a 
local exchange carrier shall make available final telecommunications 
number portability, upon request, when the Commission determines that 
final telecommunications number portability is technically feasible.
    ``(c) Neutral Administration of Numbering Plans.--
            ``(1) Nationwide neutral number system compliance.-- A 
        telecommunications carrier providing telephone exchange service 
        shall comply with the guidelines, plan, or rules established by 
        an impartial entity designated by the Commission for the 
        administration of a nationwide neutral number system.
            ``(2) Overlay of area codes not permitted.--All 
        telecommunications carriers providing telephone exchange 
        service in the same telephone service area shall be assigned 
        the same numbering plan area code under such guideline, plan, 
        or rules.
    ``(d) Costs.--The cost of establishing neutral number 
administration arrangements and number portability shall be borne by 
all telecommunications carriers on a competitively neutral basis.''.

SEC. 308. ACCESS BY PERSONS WITH DISABILITIES.

    (a) In General.--Part II of title II (47 U.S.C. 251 et seq.), as 
added by this Act, is amended by inserting after section 261 the 
following new section:

``SEC. 262. ACCESS BY PERSONS WITH DISABILITIES.

    ``(a) Definitions.--As used in this section--
            ``(1) Disability.--The term `disability' has the meaning 
        given to it by section 3(2)(A) of the Americans with 
        Disabilities Act of 1990 (42 U.S.C. 12102(2)(A)).
            ``(2) Readily achievable.--The term `readily achievable' 
        has the meaning given to it by section 301(9) of that Act (42 
        U.S.C. 12181(9)).
    ``(b) Manufacturing.--A manufacturer of telecommunications 
equipment and customer premises equipment shall ensure that the 
equipment is designed, developed, and fabricated to be accessible to 
and usable by individuals with disabilities, if readily achievable.
    ``(c) Telecommunications Services.--A provider of 
telecommunications service shall ensure that the service is accessible 
to and usable by individuals with disabilities, if readily achievable.
    ``(d) Compatibility.--Whenever the requirements of subsections (b) 
and (c) are not readily achievable, such a manufacturer or provider 
shall ensure that the equipment or service is compatible with existing 
peripheral devices or specialized customer premises equipment commonly 
used by individuals with disabilities to achieve access, if readily 
achievable.
    ``(e) Standards.--Within 1 year after the date of enactment of the 
Telecommunications Act of 1995, the Architectural and Transportation 
Barriers Compliance Board described in section 504 of the Americans 
with Disabilities Act of 1990 (42 U.S.C. 12204) shall develop standards 
for accessibility of telecommunications equipment, customer premises 
equipment, and telecommunications services, in conjunction with the 
National Telecommunications and Information Administration and the 
National Institute of Standards and Technology. The Board shall review 
and update the standards periodically.
    ``(f) Closed Captioning.--
            ``(1) In general.--The Commission shall ensure that--
                    ``(A) video programming is accessible through 
                closed captions, if readily achievable, except as 
                provided in paragraph (2); and
                    ``(B) video programming providers or owners 
                maximize the accessibility of video programming 
                previously published or exhibited through the provision 
                of closed captions, if readily achievable, except as 
                provided in paragraph (2).
            ``(2) Exemptions.--Notwithstanding paragraph (1)--
                    ``(A) the Commission may exempt programs, classes 
                of programs, locally produced programs, providers, 
                classes of providers, or services for which the 
                Commission has determined that the provision of closed 
                captioning would not be readily achievable to the 
                provider or owner of such programming;
                    ``(B) a provider of video programming or the owner 
                of any program carried by the provider shall not be 
                obligated to supply closed captions if such action 
                would be inconsistent with a binding contract in effect 
                on the date of enactment of the Telecommunications Act 
                of 1995 for the remaining term of that contract 
                (determined without regard to any extension of such 
                term), except that nothing in this subparagraph 
                relieves a video programming provider of its obligation 
                to provide services otherwise required by Federal law; 
                and
                    ``(C) a provider of video programming or a program 
                owner may petition the Commission for an exemption from 
                the requirements of this section, and the Commission 
                may grant such a petition upon a showing that the 
                requirements contained in this section would not be 
                readily achievable.
            ``(3) Studies.--The Commission shall undertake studies of 
        the current extent (as of the date of enactment of the 
        Telecommunications Act of 1995) of--
                    ``(A) closed captioning of video programming and of 
                previously published video programming;
                    ``(B) providers of video programming;
                    ``(C) the cost and market for closed captioning;
                    ``(D) strategies to improve competition and 
                innovation in the provision of closed captioning; and
                    ``(E) such other matters as the Commission 
                considers relevant.
    ``(g) Regulations.--The Commission shall, not later than 18 months 
after the date of enactment of the Telecommunications Act of 1995, 
prescribe regulations to implement this section. The regulations shall 
be consistent with the standards developed by the Architectural and 
Transportation Barriers Compliance Board in accordance with subsection 
(e).
    ``(h) Enforcement.--The Commission shall enforce this section. The 
Commission shall resolve, by final order, a complaint alleging a 
violation of this section within 180 days after the date on which the 
complaint is filed with the Commission.''.
    (b) Video Description.--Within 6 months after the date of enactment 
of this Act, the Commission shall undertake a study of the feasibility 
of requiring the use of video descriptions on video programming in 
order to ensure the accessibility of video programming to individuals 
with visual impairments. For purposes of this subsection, the term 
``video description'' means the insertion of audio narrative 
descriptions of a television program's key visual elements into natural 
pauses between the program's dialogue.

SEC. 309. RURAL MARKETS.

    Part II of title II (47 U.S.C. 251 et seq.), as added by this Act, 
is amended by inserting after section 262 the following new section:

``SEC. 263. RURAL MARKETS.

    ``(a) State Authority in Rural Markets.--Except as provided in 
section 251(i)(3), a State may not waive or modify any requirements of 
section 251, but may adopt statutes or regulations that are no more 
restrictive than--
            ``(1) to require an enforceable commitment by each 
        competing provider of telecommunications service to offer 
        universal service comparable to that offered by the rural 
        telephone company currently providing service in that service 
        area, and to make such service available within 24 months of 
        the approval date to all consumers throughout that service area 
        on a common carrier basis, either using the applicant's 
        facilities or through its own facilities and resale of services 
        using another carrier's facilities (including the facilities of 
        the rural telephone company), and subject to the same terms, 
        conditions, and rate structure requirements as those applicable 
        to the rural telephone company currently providing universal 
        service;
            ``(2) to require that the State must approve an application 
        by a competing telecommunications carrier to provide services 
        in a market served by a rural telephone company and that 
        approval be based on sufficient written public findings and 
        conclusions to demonstrate that such approval is in the public 
        interest and that there will not be a significant adverse 
        impact on users of telecommunications services or on the 
        provision of universal service;
            ``(3) to encourage the development and deployment of 
        advanced telecommunications and information infrastructure and 
        services in rural areas; or
            ``(4) to protect the public safety and welfare, ensure the 
        continued quality of telecommunications and information 
        services, or safeguard the rights of consumers.
    ``(b) Preemption.--Upon a proper showing, the Commission may 
preempt any State statute or regulation that the Commission finds to be 
inconsistent with the Commission's regulations implementing this 
section, or an arbitrary or unreasonably discriminatory application of 
such statute or regulation. The Commission shall act upon any bona fide 
petition filed under this subsection within 180 days of receiving such 
petition. Pending such action, the Commission may, in the public 
interest, suspend or modify application of any statute or regulation to 
which the petition applies.''.

SEC. 310. TELECOMMUNICATIONS SERVICES FOR HEALTH CARE PROVIDERS FOR 
              RURAL AREAS, EDUCATIONAL PROVIDERS, AND LIBRARIES.

    Part II of title II (47 U.S.C. 251 et seq.), as added by this Act, 
is amended by inserting after section 263 the following:

``SEC. 264. TELECOMMUNICATIONS SERVICES FOR CERTAIN PROVIDERS.

    ``(a) In General.--
            ``(1) Health care providers for rural areas.--A 
        telecommunications carrier designated as an essential 
        telecommunications carrier under section 214(d) shall, upon 
        receiving a bona fide request, provide telecommunications 
        services which are necessary for the provision of health care 
        services, including instruction relating to such service, at 
        rates that are reasonably comparable to rates charged for 
        similar services in urban areas to any public or nonprofit 
        health care provider that serves persons who reside in rural 
        areas.
            ``(2) Educational providers and libraries.--Any 
        telecommunications carrier shall, upon receiving a bona fide 
        request, provide universal service (as defined under section 
        253) at rates that are affordable and not higher than the 
        incremental cost thereof to elementary schools, secondary 
        schools, and libraries for telecommunications services that 
        permit such schools and libraries to provide or receive 
        educational services.
    ``(b) Support Payments.--If the Commission adopts rules for the 
distribution of support payments for the preservation and advancement 
of universal service, the Commission shall include the amount of the 
support payments reasonably necessary to provide universal service 
(including any costs related to the provision of comparable rates under 
subsection (a)(1)) to public institutional telecommunications users in 
any universal service support mechanism it may establish under section 
253.
    ``(c) Advanced Services.--The Commission shall establish rules--
            ``(1) to enhance, to the extent technically feasible and 
        economically reasonable, the availability of advanced 
        telecommunications and information services to all public and 
        nonprofit elementary and secondary school classrooms, health 
        care providers, and libraries;
            ``(2) to ensure that appropriate functional requirements or 
        performance standards, or both, including interconnection 
        standards, are established for telecommunications carriers that 
        connect such public institutional telecommunications users with 
        the public switched network;
            ``(3) to define the circumstances under which a 
        telecommunications carrier may be required to connect its 
        network to such public institutional telecommunications users; 
        and
            ``(4) to address other matters as the Commission may 
        determine.
    ``(d) Definitions.--
            ``(1) Elementary and secondary schools.--The term 
        `elementary and secondary schools' means elementary schools and 
        secondary schools, as defined in paragraphs (14) and (25), 
        respectively, of section 14101 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 8801).
            ``(2) Universal service.--The Commission may in the public 
        interest provide a separate definition of universal service 
        under section 253(b) for application only to public 
        institutional telecommunications users.
            ``(3) Health care provider.--The term `health care 
        provider' means--
                    ``(A) Post-secondary educational institutions, 
                teaching hospitals, and medical schools.
                    ``(B) Community health centers or health centers 
                providing health care to migrants.
                    ``(C) Local health departments or agencies.
                    ``(D) Community mental health centers.
                    ``(E) Not-for-profit hospitals.
                    ``(F) Rural health clinics.
                    ``(G) Consortia of health care providers consisting 
                of one or more entities described in subparagraphs (A) 
                through (F).
            ``(4) Public institutional telecommunications user.--The 
        term `public institutional telecommunications user' means an 
        elementary or secondary school, a library, or a health care 
        provider as those terms are defined in this subsection.''.

SEC. 311. PROVISION OF PAYPHONE SERVICE AND TELEMESSAGING SERVICE.

    Part II of title II (47 U.S.C. 251 et seq.), as added by this Act, 
is amended by adding after section 264 the following new section:

``SEC. 265. PROVISION OF PAYPHONE SERVICE AND TELEMESSAGING SERVICE.

    ``(a) Nondiscrimination Safeguards.--Any Bell operating company 
that provides payphone service or telemessaging service--
            ``(1) shall not subsidize its payphone service or 
        telemessaging service directly or indirectly with revenue from 
        its telephone exchange service or its exchange access service; 
        and
            ``(2) shall not prefer or discriminate in favor of its 
        payphone service or telemessaging service.
    ``(b) Definitions.--As used in this section--
            ``(1) The term `payphone service' means the provision of 
        telecommunications service through public or semi-public pay 
        telephones, and includes the provision of service to inmates in 
        correctional institutions.
            ``(2) The term `telemessaging service' means voice mail and 
        voice storage and retrieval services, any live operator 
        services used to record, transcribe, or relay messages (other 
        than telecommunications relay services), and any ancillary 
        services offered in combination with these services.
    ``(c) Regulations.--Not later than 18 months after the date of 
enactment of the Telecommunications Act of 1995, the Commission shall 
complete a rulemaking proceeding to prescribe regulations to carry out 
this section. In that rulemaking proceeding, the Commission shall 
determine whether, in order to enforce the requirements of this 
section, it is appropriate to require the Bell operating companies to 
provide payphone service or telemessaging service through a separate 
subsidiary that meets the requirements of section 252.''.

      TITLE IV--OBSCENE, HARRASSING, AND WRONGFUL UTILIZATION OF 
                     TELECOMMUNICATIONS FACILITIES

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Communications Decency Act of 
1995''.

SEC. 402. OBSCENE OR HARASSING USE OF TELECOMMUNICATIONS FACILITIES 
              UNDER THE COMMUNICATIONS ACT OF 1934.

    (a) Offenses.--Section 223 (47 U.S.C. 223) is amended--
            (1) in subsection (a)(1)--
                    (A) by striking out ``telephone'' in the matter 
                above subparagraph (A) and inserting 
                ``telecommunications device'';
                    (B) by striking out subparagraph (A) and inserting 
                the following:
                    ``(A) knowingly--
                            ``(i) makes, creates, or solicits, and
                            ``(ii) initiates the transmission of,
                any comment, request, suggestion, proposal, image, or 
                other communication which is obscene, lewd, lascivious, 
                filthy, or indecent;'';
                    (C) by striking out subparagraph (B) and inserting 
                the following:
                    ``(B) makes a telephone call or utilizes a 
                telecommunications device, whether or not conversation 
                or communications ensues, without disclosing his 
                identity and with intent to annoy, abuse, threaten, or 
                harass any person at the called number or who receives 
                the communication;'' and
                    (D) by striking out subparagraph (D) and inserting 
                the following:
                    ``(D) makes repeated telephone calls or repeatedly 
                initiates communication with a telecommunications 
                device, during which conversation or communication 
                ensues, solely to harass any person at the called 
                number or who receives the communication; or'';
            (2) in subsection (a)(2), by striking ``telephone'' and 
        inserting ``telecommunications'' and by striking ``section'' 
        and inserting ``subsection'';
            (3) in subsection (b)(1)--
                    (A) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) within the United States, by means of a 
                telecommunications device--
                            ``(i) makes, creates, or solicits, and
                            ``(ii) purposefully makes available,
                any obscene communication for commercial purposes to 
                any person, regardless of whether the maker of such 
                communication placed the call or initiated the 
                communication; or''; and
                    (B) in subparagraph (B), by striking ``telephone 
                facility'' and inserting ``telecommunications 
                facility''; and
            (4) in subsection (b)(2)--
                    (A) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) within the United States, by means of 
                telephone or telecommunications device,
                            ``(i) makes, creates, or solicits, and
                            ``(ii) purposefully makes available 
                        (directly or by recording device),
                any indecent communication for commercial purposes 
                which is available to any person under 18 years of age 
                or to any other person without that person's consent, 
                regardless of whether the maker of such communication 
                placed the call; or''; and
                    (B) in subparagraph (B), by striking ``telephone 
                facility'' and inserting in lieu thereof 
                ``telecommunications facility''.
    (b) Penalties.--Section 223 (47 U.S.C. 223) is amended--
            (1) by striking out ``$50,000'' each place it appears and 
        inserting ``$100,000''; and
            (2) by striking ``six months'' each place it appears and 
        inserting ``2 years''.
    (c) Prohibition on Provision of Access.--Section 223(c)(1) (47 
U.S.C. 223(c)(1)) is amended by striking ``telephone'' and inserting 
``telecommunications device''.
    (d) Additional Defenses.--Section 223 (47 U.S.C. 223) is amended by 
adding at the end the following:
    ``(d) Additional Defenses; Restrictions on Access; Judicial 
Remedies Respecting Restrictions.--
            ``(1) No person shall be held to have violated this section 
        with respect to any action by that person or a system under his 
        control that is limited solely to the provision of access, 
        including transmission, downloading, intermediate storage, 
        navigational tools, and related capabilities not involving the 
        creation or alteration of the content of the communications, 
        for another person's communications to or from a service, 
        facility, system, or network not under that person's control.
            ``(2) It is a defense to prosecution under subsections 
        (a)(2), (b)(1)(B), and (b)(2)(B) that a defendant lacked 
        editorial control over the communication specified in this 
        section.
            ``(3) It is a defense to prosecution under subsections 
        (a)(2), (b)(1)(B), and (b)(2)(B) that a defendant has taken 
        good faith, reasonable steps, as appropriate--
                    ``(A) to provide users with the means to restrict 
                access to communications described in this section;
                    ``(B) provide users with warnings concerning the 
                potential for access to such communications;
                    ``(C) to respond to complaints from those who are 
                subjected to such communications;
                    ``(D) to provide mechanisms to enforce a provider's 
                terms of service governing such communications; or
                    ``(E) to implement such other measures as the 
                Commission may prescribe to carry out the purposes of 
                this paragraph. Nothing in this section in and of 
                itself shall be construed to treat enhanced information 
                services as common carriage.
            ``(4) In addition to other defenses authorized under this 
        section, it shall be a defense to prosecution under subsection 
        (b) that a defendant is not engaged in a commercial activity 
        that has as a predominant purpose an activity specified in that 
        subsection.
            ``(5) No cause of action may be brought in any court or 
        administrative agency against any person on account of any 
        action which the person has taken in good faith to implement a 
        defense authorized under this section or otherwise to restrict 
        or prevent the transmission of, or access to, a communication 
        specified in this section. The preceding sentence shall not 
        apply where the good faith defenses under subsection (c)(2) 
        apply.
            ``(6) No State or local government may impose any liability 
        in connection with a violation described in subsection (a)(2), 
        (b)(1)(B), (b)(2)(B) that is inconsistent with the treatment of 
        those violations under this section provided, however, that 
        nothing herein shall preclude any State or local government 
        from enacting and enforcing complementary oversight, liability, 
        and regulatory systems, procedures, and requirements, so long 
        as such systems, procedures, and requirements govern only 
        intrastate services and do not result in the imposition of 
        inconsistent obligations on the provision of interstate 
        services.
    ``(e) Knowingly Defined.--For purposes of subsections (a) and (b), 
the term `knowingly' means an intentional act with actual knowledge of 
the specific content of the communication specified in this section to 
another person.''.
    (e) Conforming Amendment.--The section heading for section 223 is 
amended to read as follows:

``SEC. 223. OBSCENE OR HARASSING UTILIZATION OF TELECOMMUNICATIONS 
              DEVICES AND FACILITIES IN THE DISTRICT OF COLUMBIA OR IN 
              INTERSTATE OR FOREIGN COMMUNICATIONS''.

SEC. 403. OBSCENE PROGRAMMING ON CABLE TELEVISION.

    Section 639 (47 U.S.C. 559) is amended by striking ``$10,000'' and 
inserting ``$100,000''.

SEC. 404. BROADCASTING OBSCENE LANGUAGE ON RADIO.

    Section 1464 of title 18, United States Code, is amended by 
striking out ``$10,000'' and inserting ``$100,000''.

SEC. 405. INTERCEPTION AND DISCLOSURE OF ELECTRONIC COMMUNICATIONS.

    Section 2511 of title 18, United States Code, is amended--
            (1) in paragraph (1)--
                    (A) by striking ``wire, oral, or electronic 
                communication'' each place it appears and inserting 
                ``wire, oral, electronic, or digital communication'', 
                and
                    (B) in subdivision (b), by striking ``oral 
                communication'' in the matter above clause (i) and 
                inserting ``communication''; and
            (2) in paragraph (2)(a), by striking ``wire or electronic 
        communication service'' each place it appears (other than in 
        the second sentence) and inserting ``wire, electronic, or 
        digital communication service''.

SEC. 406. ADDITIONAL PROHIBITION ON BILLING FOR TOLL-FREE TELEPHONE 
              CALLS.

    Section 228(c)(7) (47 U.S.C. 228(c)(7)) is amended--
            (1) by striking ``or'' at the end of subparagraph (C);
            (2) by striking the period at the end of subparagraph (D) 
        and inserting a semicolon and ``or''; and
            (3) by adding at the end thereof the following:
                    ``(E) the calling party being assessed, by virtue 
                of being asked to connect or otherwise transfer to a 
                pay-per-call service, a charge for the call.''.

SEC. 407. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.

    Part IV of title VI (47 U.S. C. 551 et seq.) is amended by adding 
at the end the following:

    ``SEC. 640. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.

    ``(a) Requirement.--In providing video programming unsuitable for 
children to any subscriber through a cable system, a cable operator 
shall fully scramble or otherwise fully block the video and audio 
portion of each channel carrying such programming upon subscriber 
request and without any charge so that one not a subscriber does not 
receive it.
    ``(b) Definition.--As used in this section, the term `scramble' 
means to rearrange the content of the signal of the programming so that 
the programming cannot be received by persons unauthorized to receive 
the programming.''.

SEC. 408. CABLE OPERATOR REFUSAL TO CARRY CERTAIN PROGRAMS.

    (a) Public, Educational, and Governmental Channels.--Section 611(e) 
(47 U.S.C. 531(e)) is amended by inserting before the period the 
following: ``, except a cable operator may refuse to transmit any 
public access program or portion of a public access program which 
contains obscenity, indecency, or nudity''.
    (b) Cable Channels for Commercial Use.--Section 612(c)(2) (47 
U.S.C. 532(c)(2)) is amended by striking ``an operator'' and inserting 
``a cable operator may refuse to transmit any leased access program or 
portion of a leased access program which contains obscenity, indecency, 
or nudity''.