[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3888 Engrossed in House (EH)]


  2d Session

                               H. R. 3888

_______________________________________________________________________

                                 AN ACT

 To amend the Communications Act of 1934 to improve the protection of 
consumers against ``slamming'' by telecommunications carriers, and for 
                            other purposes.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
105th CONGRESS
  2d Session
                                H. R. 3888

_______________________________________________________________________

                                 AN ACT


 
 To amend the Communications Act of 1934 to improve the protection of 
consumers against ``slamming'' by telecommunications carriers, 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 
Consumer Protection Act of 1998''.

                           TITLE I--SLAMMING

SEC. 101. IMPROVED PROTECTION FOR CONSUMERS.

    (a) Consumer Protection Practices.--Section 258 of the 
Communications Act of 1934 (47 U.S.C. 258) is amended to read as 
follows:

``SEC. 258. ILLEGAL CHANGES IN SUBSCRIBER SELECTIONS OF CARRIERS.

    ``(a) Alternative Modes of Regulation.--
            ``(1) Industry/commission code.--Within 180 days after the 
        date of enactment of the Telecommunications Competition and 
        Consumer Protection Act of 1998, the Commission, after 
        consulting with the Federal Trade Commission and 
        representatives of telecommunications carriers providing 
        telephone toll service and telephone exchange service, State 
        commissions, and consumers, and considering any proposals 
        developed by such representatives, shall prescribe, after 
        notice and public comment and in accordance with subsection 
        (b), a Code of Subscriber Protection Practices (hereinafter in 
        this section referred as the `Code') governing changes in a 
        subscriber's selection of a provider of telephone exchange 
        service or telephone toll service.
            ``(2) Obligation to comply.--No telecommunications carrier 
        (including a reseller of telecommunications services) shall 
        submit or execute a change in a subscriber's selection of a 
        provider of telephone exchange service or telephone toll 
        service except in accordance with--
                    ``(A) the Code, if such carrier elects to comply 
                with the Code in accordance with subsection (b)(2); or
                    ``(B) the requirements of subsection (c), if--
                            ``(i) the carrier does not elect to comply 
                        with the Code under subsection (b)(2); or
                            ``(ii) such election is revoked or 
                        withdrawn.
    ``(b) Minimum Provisions of the Code.--
            ``(1) Subscriber protection practices.--The Code required 
        by subsection (a)(1) shall include provisions addressing the 
        following:
                    ``(A) In general.--A telecommunications carrier 
                (including a reseller of telecommunications services) 
                electing to comply with the Code shall submit or 
                execute a change in a subscriber's selection of a 
                provider of telephone exchange service or telephone 
                toll service only in accordance with the provisions of 
                the Code.
                    ``(B) Negative option.--A telecommunications 
                carrier shall not use negative option marketing.
                    ``(C) Verification.--A telecommunications carrier 
                that submits the change to an executing carrier, or 
                that is both a submitting and an executing carrier, 
                shall verify the subscriber's selection of the carrier 
                in accordance with procedures specified in the Code.
                    ``(D) Unfair and deceptive acts and practices.--No 
                telecommunications carrier, nor any person acting on 
                behalf of any such carrier, shall engage in any unfair 
                or deceptive acts or practices in connection with the 
                solicitation of a change in a subscriber's selection of 
                a telecommunications carrier.
                    ``(E) Notification and rights.--A 
                telecommunications carrier shall provide timely and 
                accurate notification to the subscriber in accordance 
                with procedures specified in the Code.
                    ``(F) Slamming liability and remedies.--
                            ``(i) Required reimbursement and credit.--A 
                        telecommunications carrier that has improperly 
                        changed the subscriber's selection of a 
                        telecommunications carrier without 
                        authorization, shall at a minimum--
                                    ``(I) reimburse the subscriber for 
                                the fees associated with switching the 
                                subscriber back to their original 
                                carrier; and
                                    ``(II) provide a credit for any 
                                telecommunications charges incurred by 
                                the subscriber during the period, not 
                                to exceed 30 days, while that 
                                subscriber was improperly 
                                presubscribed.
                            ``(ii) Procedures.--The Code shall 
                        prescribe procedures by which--
                                    ``(I) a subscriber may make an 
                                allegation of a violation under clause 
                                (i);
                                    ``(II) the telecommunications 
                                carrier may rebut such allegation;
                                    ``(III) the subscriber may, without 
                                undue delay, burden, or expense, 
                                challenge the rebuttal; and
                                    ``(IV) resolve any administrative 
                                review of such an allegation within 75 
                                days after receipt of an appeal.
                    ``(G) Recordkeeping.--A telecommunications carrier 
                shall make and maintain a record of the verification 
                process and shall provide a copy to the subscriber 
                immediately upon request.
                    ``(H) Quality control.--A telecommunications 
                carrier shall institute a quality control program to 
                prevent inadvertent changes in a subscriber's selection 
                of a carrier.
                    ``(I) Independent audits.--A telecommunications 
                carrier shall provide the Commission with an 
                independent audit regarding its compliance with the 
                Code at intervals prescribed by the Code. The 
                Commission may require a telecommunications carrier to 
                provide an independent audit on a more frequent basis 
                if there is evidence that such telecommunications 
                carrier is violating the Code.
            ``(2) Election by carriers.--Each telecommunications 
        carrier electing to comply with the Code shall file with the 
        Commission within 20 days after the adoption of the Code, or 
        within 20 days after commencing operations as a 
        telecommunications carrier, a statement electing the Code to 
        govern such carrier's submission or execution of a change in a 
        customer's selection of a provider of telephone exchange 
        service or telephone toll service. Such election by a carrier 
        may not be revoked or withdrawn unless the Commission finds 
        that there is good cause therefor, including a determination 
        that the carrier has failed to adhere in good faith to the 
        applicable provisions of the Code, and that the revocation or 
        withdrawal is in the public interest. Any telecommunications 
        carrier that fails to elect to comply with the Code shall be 
        deemed to have elected to be governed by the subsection (c) and 
        the Commission's regulations thereunder.
    ``(c) Regulations of Carriers Not Complying With Code.--
            ``(1) In general.--A telecommunications carrier (including 
        a reseller of telecommunications services) that has not elected 
        to comply with the Code under subsection (b), or as to which 
        the election has been withdrawn or revoked, shall not submit or 
        execute a change in a subscriber's selection of a provider of 
        telephone exchange service or telephone toll service except in 
        accordance with this subsection and such verification 
        procedures as the Commission shall prescribe.
            ``(2) Verification.--
                    ``(A) In general.--In order to verify a 
                subscriber's selection of a telephone exchange service 
                or telephone toll service provider under this 
                subsection, the telecommunications carrier submitting 
                the change to an executing carrier shall, at a minimum, 
                require the subscriber--
                            ``(i) to affirm that the subscriber is 
                        authorized to select the provider of that 
                        service for the telephone number in question;
                            ``(ii) to acknowledge the type of service 
                        to be changed as a result of the selection;
                            ``(iii) to affirm the subscriber's intent 
                        to select the provider as the provider of that 
                        service;
                            ``(iv) to acknowledge that the selection of 
                        the provider will result in a change in 
                        providers of that service; and
                            ``(v) to provide such other information as 
                        the Commission considers appropriate for the 
                        protection of the subscriber.
                    ``(B) Additional requirements.--The procedures 
                prescribed by the Commission to verify a subscriber's 
                selection of a provider shall--
                            ``(i) preclude the use of negative option 
                        marketing;
                            ``(ii) provide for a complete copy of 
                        verification of a change in telephone exchange 
                        service or telephone toll service provider in 
                        oral, written, or electronic form;
                            ``(iii) require the retention of such 
                        verification in such manner and form and for 
                        such time as the Commission considers 
                        appropriate;
                            ``(iv) mandate that verification occur in 
                        the same language as that in which the change 
                        was solicited; and
                            ``(v) provide for verification to be made 
                        available to a subscriber on request.
                    ``(C) Notice to subscriber.--Whenever a 
                telecommunication carrier submits a change in a 
                subscriber's selection of a provider of telephone 
                exchange service or telephone toll service, such 
                telecommunications carrier shall clearly notify the 
                subscriber in writing, not more than 15 days after the 
                change is submitted to the executing carrier--
                            ``(i) of the subscriber's new carrier; and
                            ``(ii) that the subscriber may request 
                        information regarding the date on which the 
                        change was agreed to and the name of the 
                        individual who authorized the change.
            ``(3) Liability for violations.--
                    ``(A) Notification of change.--The first bill 
                issued after the effective date of a change in a 
                subscriber's provider of telephone exchange service or 
                telephone toll service by the executing carrier for 
                such change shall--
                            ``(i) prominently disclose the change in 
                        provider and the effective date of such change;
                            ``(ii) contain the name and toll-free 
                        number of any telecommunications carrier for 
                        such new service; and
                            ``(iii) direct the subscriber to contact 
                        the executing carrier if the subscriber 
                        believes that such change was not authorized 
                        and that the change was made in violation of 
                        this subsection, and contain the toll-free 
                        number by which to make such contact.
                    ``(B) Automatic switch-back of service and credit 
                to consumer of charges.--
                            ``(i) Obligations of executing carrier.--If 
                        a subscriber of telephone exchange service or 
                        telephone toll service makes an allegation, 
                        orally or in writing, to the executing carrier 
                        that a violation of this subsection has 
                        occurred with respect to such subscriber--
                                    ``(I) the executing carrier shall, 
                                without charge to the subscriber, 
                                execute an immediate change in the 
                                provider of the telephone service that 
                                is the subject of the allegation to 
                                restore the previous provider of such 
                                service for the subscriber;
                                    ``(II) the executing carrier shall 
                                provide an immediate credit to the 
                                subscriber's account for any charges 
                                for executing the original change of 
                                service provider;
                                    ``(III) if the executing carrier 
                                conducts billing for the carrier that 
                                is the subject of the allegation, the 
                                executing carrier shall provide an 
                                immediate credit to the subscriber's 
                                account for such service, in an amount 
                                equal to any charges for the telephone 
                                service that is the subject of the 
                                allegation incurred during the period--
                                            ``(aa) beginning upon the 
                                        date of the change of service 
                                        that is the subject of the 
                                        allegation; and
                                            ``(bb) ending on the 
                                        earlier of the date that the 
                                        subscriber is restored to the 
                                        previous provider, or 30 days 
                                        after the date the bill 
                                        described in subparagraph (A) 
                                        is issued; and
                                    ``(IV) the executing carrier shall 
                                recover the costs of executing the 
                                change in provider to restore the 
                                previous provider, and any credits 
                                provided under subclause (II) and 
                                (III), by recourse to the provider that 
                                is the subject of the allegation.
                            ``(ii) Obligations of carriers not billing 
                        through executing carriers.--If a subscriber of 
                        telephone exchange service or telephone toll 
                        service transmits, orally or in writing, to any 
                        carrier that does not use an executing carrier 
                        to conduct billing an allegation that a 
                        violation of this subsection has occurred with 
                        respect to such subscriber, the carrier shall 
                        provide an immediate credit to the subscriber's 
                        account for such service, and the subscriber 
                        shall, except as provided in subparagraph 
                        (C)(iii), be discharged from liability, for an 
                        amount equal to any charges for the telephone 
                        service that is the subject of the allegation 
                        incurred during the period--
                                    ``(I) beginning upon the date of 
                                the change of service that is the 
                                subject of the allegation; and
                                    ``(II) ending on the earlier of the 
                                date that the subscriber is restored to 
                                the previous provider, or 30 days after 
                                the date the bill described in 
                                paragraph (1) is issued.
                            ``(iii) Time limitation.--This subparagraph 
                        shall apply only to allegations made by 
                        subscribers before the expiration of the 1-year 
                        period that begins on the issuance of the bill 
                        described in subparagraph (A).
                    ``(C) Procedure for carrier remedy.--
                            ``(i) In general.--The Commission shall, by 
                        rule, establish a procedure for rendering 
                        determinations with respect to violations of 
                        this subsection. Such procedure shall permit 
                        such determinations to be made upon the filing 
                        of (I) a complaint by a telecommunications 
                        carrier that was providing telephone exchange 
                        service or telephone toll service to a 
                        subscriber before the occurrence of an alleged 
                        violation, and seeking damages under clause 
                        (ii), or (II) a complaint by a 
                        telecommunications carrier that was providing 
                        services after the alleged violation, and 
                        seeking a reinstatement of charges under clause 
                        (iii). Either such complaint shall be filed not 
                        later than 6 months after the date on which any 
                        subscriber whose allegation is included in the 
                        complaint submitted an allegation of the 
                        violation to the executing carrier under 
                        subparagraph (B)(ii). Either such complaint may 
                        seek determinations under this paragraph with 
                        respect to multiple alleged violations in 
                        accordance with such procedures as the 
                        Commission shall establish in the rules 
                        prescribed under this subparagraph.
                            ``(ii) Determination of violation and 
                        remedies.--In a proceeding under this 
                        subparagraph, if the Commission determines that 
                        a violation of this subsection has occurred, 
                        other than an inadvertent or unintentional 
                        violation, the Commission shall award damages--
                                    ``(I) to the telecommunications 
                                carrier filing the complaint, in an 
                                amount equal to the sum of (aa) the 
                                gross amount of charges that the 
                                carrier would have received from the 
                                subscriber during the violation, and 
                                (bb) $500 per violation; and
                                    ``(II) to the subscriber that was 
                                subjected to the violation, in the 
                                amount of $500.
                            ``(iii) Determination of no violation.--If 
                        the Commission determines that a violation of 
                        this subsection has not occurred, the 
                        Commission shall order that any credit provided 
                        to the subscriber under subparagraph (B)(ii) be 
                        reversed, or that the carrier may resubmit a 
                        bill for the amount of the credit to the 
                        subscriber notwithstanding any discharge under 
                        subparagraph (B)(ii).
                            ``(iv) Speedy resolution of complaints.--
                        The procedure established under this 
                        subparagraph shall provide for a determination 
                        of each complaint filed under the procedure not 
                        later than 6 months after filing.
                    ``(D) Maintenance of information.--
                            ``(i) In general.--The Commission shall, by 
                        rule, require each executing carrier to 
                        maintain information regarding each alleged 
                        violation of this subsection of which the 
                        carrier has been notified.
                            ``(ii) Contents.--The information required 
                        to be maintained pursuant to this paragraph 
                        shall include, for each alleged violation of 
                        this subsection, the effective date of the 
                        change of service involved in the alleged 
                        violation, the name of the provider of the 
                        service to which the change was made, the name, 
                        address, and telephone number of the subscriber 
                        who was subject to the alleged violation, and 
                        the amount of any credit provided under 
                        subparagraph (B)(ii).
                            ``(iii) Form.--The Commission shall 
                        prescribe one or more computer data formats for 
                        the maintenance of information under this 
                        paragraph, which shall be designed to 
                        facilitate submission and compilation pursuant 
                        to this subparagraph.
                            ``(iv) Monthly reports.--Each executing 
                        carrier shall, on not less than a monthly 
                        basis, submit the information maintained 
                        pursuant to this subparagraph to the 
                        Commission.
                            ``(v) Access to information.--The 
                        Commission shall make the information submitted 
                        pursuant to clause (iv) available upon request 
                        to any telecommunications carrier. Any 
                        telecommunications carrier obtaining access to 
                        such information shall use such information 
                        exclusively for the purposes of investigating, 
                        filing, or resolving complaints under this 
                        section.
            ``(4) Civil penalties.--Unless the Commission determines 
        that there are mitigating circumstances, violation of this 
        subsection is punishable by a forfeiture of not less than 
        $40,000 for the first offense, and not less than $150,000 for 
        each subsequent offense.
            ``(5) Recovery of forfeitures.--The Commission may take 
        such action as may be necessary--
                    ``(A) to collect any forfeitures it imposes under 
                this subsection; and
                    ``(B) on behalf of any subscriber, to collect any 
                damages awarded the subscriber under this subsection.
    ``(d) Application to Wireless.--This section does not apply to a 
provider of commercial mobile service.
    ``(e) Commission Requirements.--
            ``(1) Semiannual reports.--Every 6 months, the Commission 
        shall compile and publish a report ranking telecommunications 
        carriers by the percentage of verified complaints, excluding 
        those generated by the carrier's unaffiliated resellers, 
        compared to the number of the carrier's changes in a 
        subscriber's selection of a provider of telephone exchange 
        service and telephone toll service.
            ``(2) Investigation.--If a telecommunications carrier is 
        listed among the 5 worst performers based upon the percentage 
        of verified complaints, excluding those generated by the 
        carrier's unaffiliated resellers, compared to its number of 
        carrier selection changes in the semiannual reports 3 times in 
        succession, the Commission shall investigate the carrier's 
        practices regarding subscribers' selections of providers of 
        telephone exchange service and telephone toll service. If the 
        Commission finds that the carrier is misrepresenting adherence 
        to the Code or is willfully and repeatedly changing 
        subscribers' selections of providers, it shall find such 
        carrier to be in violation of this section and shall fine the 
        carrier up to $1,000,000.
            ``(3) Code review.--Every 2 years, the Commission shall 
        review the Code to ensure its requirements adequately protect 
        subscribers from improper changes in a subscriber's selection 
        of a provider of telephone exchange service and telephone toll 
        service.
    ``(f) Actions by States.--
            ``(1) In general.--Whenever an attorney general of any 
        State has reason to believe that the interests of the residents 
        of that State have been or are being threatened or adversely 
        affected because any person has violated the Code or subsection 
        (c), or any rule or regulation prescribed by the Commission 
        under subsection (c), the State may bring a civil action on 
        behalf of its residents in an appropriate district court of the 
        United States to enjoin such violation, to enforce compliance 
        with such Code, subsection, rule, or regulation, to obtain 
        damages on behalf of their residents, or to obtain such further 
        and other relief as the court may deem appropriate.
            ``(2) Notice.--The State shall serve prior written notice 
        of any civil action under paragraph (1) upon the Commission and 
        provide the Commission with a copy of its complaint, except 
        that if it is not feasible for the State to provide such prior 
        notice, the State shall serve such notice immediately upon 
        instituting such action. Upon receiving a notice respecting a 
        civil action, the Commission shall have the right (A) to 
        intervene in such action, (B) upon so intervening, to be heard 
        on all matters arising therein, and (C) to file petitions for 
        appeal.
            ``(3) Venue.--Any civil action brought under this section 
        in a district court of the United States may be brought in the 
        district wherein the defendant is found or is an inhabitant or 
        transacts business or wherein the violation occurred or is 
        occurring, and process in such cases may be served in any 
        district in which the defendant is an inhabitant or wherever 
        the defendant may be found.
            ``(4) Investigatory powers.--For purposes of bringing any 
        civil action under this section, nothing in this Act shall 
        prevent the attorney general from exercising the powers 
        conferred on the attorney general by the laws of such State to 
        conduct investigations or to administer oaths or affirmations 
        or to compel the attendance of witnesses or the production of 
        documentary and other evidence.
            ``(5) Effect on state court proceedings.--Nothing contained 
        in this subsection shall prohibit an authorized State official 
        from proceeding in State court on the basis of an alleged 
        violation of any general civil or criminal statute of such 
        State.
            ``(6) Limitation.--Whenever the Commission has instituted a 
        civil action for violation of this section or any rule or 
        regulation thereunder, no State may, during the pendency of 
        such action instituted by the Commission, subsequently 
        institute a civil action against any defendant named in the 
        Commission's complaint for violation of any rule as alleged in 
        the Commission's complaint.
            ``(7) Actions by other state officials.--In addition to 
        actions brought by an attorney general of a State under 
        paragraph (1), such an action may be brought by officers of 
        such State who are authorized by the State to bring actions in 
        such State for protection of consumers.
    ``(g) State Law Not Preempted.--
            ``(1) In general.--Nothing in this section or in the 
        regulations prescribed under this section shall preempt any 
        State law that imposes requirements, regulations, damages, 
        costs, or penalties on changes in a subscriber's selection of a 
        provider of telephone exchange service or telephone toll 
        service that--
                    ``(A) are less restrictive than those imposed under 
                this section; or
                    ``(B) are not inconsistent with those imposed under 
                this section, and were enacted prior to the date of 
                enactment of the Telecommunications Competition and 
                Consumer Protection Act of 1998.
            ``(2) Effect on state court proceedings.--Except as 
        provided in subsection (f)(6), nothing contained in this 
        section shall be construed to prohibit an authorized State 
        official from proceeding in State court on the basis of an 
        alleged violation of any general civil or criminal statute of 
        such State or any specific civil or criminal statute of such 
        State not preempted by this section.
    ``(h) Rules of Construction.--
            ``(1) Change includes initial selection.--For purposes of 
        this section, the initiation of telephone toll service to a 
        subscriber by a telecommunications carrier shall be treated as 
        achange in selection of a provider of telephone toll service.
            ``(2) Action by unaffiliated reseller not imputed to 
        carrier.--No telecommunications carrier may be found in 
        violation of this section solely on the basis of a violation of 
        this section by an unaffiliated reseller of that carrier's 
        services or facilities.
    ``(i) Definitions.--For purposes of this section:
            ``(1) Subscriber.--The term `subscriber' means the person 
        named on the billing statement or account, or any other person 
        authorized to make changes in the providers of telephone 
        exchange service or telephone toll service.
            ``(2) Executing carrier.--The term `executing carrier' 
        means, with respect to any change in the provider of local 
        exchange service or telephone toll service, the local exchange 
        carrier that executed such change.
            ``(3) Attorney general.--The term `attorney general' means 
        the chief legal officer of a State.''.
    (b) NTIA Study of Third-Party Administration.--Within 180 days of 
enactment of this Act, the National Telecommunications and Information 
Administration shall report to the Committee on Commerce of the House 
of Representatives and the Committee on Commerce, Science, and 
Transportation of the Senate on the feasibility and desirability of 
establishing a neutral third-party administration system to prevent 
illegal changes in telephone subscriber carrier selections. The study 
shall include--
            (1) an analysis of the cost of establishing a single 
        national or several independent databases or clearinghouses to 
        verify and submit changes in carrier selections;
            (2) the additional cost to carriers, per change in carrier 
        selection, to fund the ongoing operation of any or all such 
        independent databases or clearinghouses; and
            (3) the advantages and disadvantages of utilizing 
        independent databases or clearinghouses for verifying and 
        submitting carrier selection changes.

                           TITLE II--SPAMMING

SEC. 201. SENSE OF THE CONGRESS.

    It is the sense of the Congress that--
            (1) in order to avoid interference with the rapid 
        development and expansion of commerce over the Internet, the 
        Congress should decline to enact regulatory legislation with 
        respect to unfair or intrusive practices on the Internet that 
        the private sector can, given a sufficient opportunity, deter 
        or prevent; and
            (2) it is the responsibility of the private sector to use 
        that opportunity promptly to adopt, implement, and enforce 
        measures to deter and prevent the improper use of unsolicited 
        commercial electronic mail.

                    TITLE III--GWCS AUCTION DEADLINE

SEC. 301. ELIMINATION OF ARBITRARY AUCTION DEADLINE.

    Section 309(j)(9) of the Communications Act of 1934 (47 U.S.C. 
309(j)(9)) is amended by striking ``, not later than 5 years after the 
date of enactment of this subsection,''.

             TITLE IV--REINSTATEMENT OF CERTAIN APPLICANTS

SEC. 401. REINSTATEMENT OF APPLICANTS AS TENTATIVE SELECTEES.

    (a) In General.--Notwithstanding the order of the Federal 
Communications Commission in the proceeding described in subsection 
(b), the Commission shall--
            (1) reinstate each applicant as a tentative selectee under 
        the covered rural service area licensing proceeding; and
            (2) permit each applicant to amend its application, to the 
        extent necessary to update factual information and to comply 
        with the rules of the Commission, at any time before the 
        Commission's final licensing action in the covered rural 
        service area licensing proceeding.
    (b) Exemption From Petitions to Deny.--For purposes of the amended 
applications filed pursuant to section 501(a)(2), the provisions of 
section 309(d)(1) of the Communications Act of 1934 (47 U.S.C. 
309(d)(1)) shall not apply.
    (c) Proceeding.--The proceeding described in this subsection is the 
proceeding of the Commission In re Applications of Cellwave Telephone 
Services L.P, Futurewave General Partners L.P., and Great Western 
Cellular Partners, 7 FCC Rcd No. 19 (1992).

SEC. 402. CONTINUATION OF LICENSE PROCEEDING; FEE ASSESSMENT.

    (a) Award of Licenses.--The Commission shall award licenses under 
the covered rural service area licensing proceeding within 90 days 
after the date of the enactment of this title.
    (b) Service Requirements.--The Commission shall provide that, as a 
condition of an applicant receiving a license pursuant to the covered 
rural service area licensing proceeding, the applicant shall provide 
cellular radiotelephone service to subscribers in accordance with 
sections 22.946 and 22.947 of the Commission's rules (47 CFR 22.946, 
22.947); except that the time period applicable under section 22.947 of 
the Commission's rules (or any successor rule) to the applicants 
identified in subparagraphs (A) and (B) of section 404(1) shall be 3 
years rather than 5 years and the waiver authority of the Commission 
shall apply to such 3-year period.
    (c) Calculation of License Fee.--
            (1) Fee required.--The Commission shall establish a fee for 
        each of the licenses under the covered rural service area 
        licensing proceeding. In determining the amount of the fee, the 
        Commission shall consider--
                    (A) the average price paid per person served in the 
                Commission's Cellular Unserved Auction (Auction No. 
                12); and
                    (B) the settlement payments required to be paid by 
                the permittees pursuant to the consent decree set forth 
                in the Commission's order, In re the Tellesis Partners 
                (7 FCC Rcd 3168 (1992)), multiplying such payments by 
                two.
            (2) Notice of fee.--Within 30 days after the date an 
        applicant files the amended application permitted by section 
        501(a)(2), the Commission shall notify each applicant of the 
        fee established for the license associated with its 
        application.
    (d) Payment for Licenses.--No later than May 31, 2000, each 
applicant shall pay to the Commission the fee established pursuant to 
subsection (c) of this section for the license granted under subsection 
(a).
    (e) Auction Authority.--If, after the amendment of an application 
pursuant to section 401(a)(2) of this title, the Commission finds that 
the applicant is ineligible for grant of a license to provide cellular 
radiotelephone services for a rural service area or the applicant does 
not meet the requirements under subsection (b) of this section, the 
Commission shall grant the license for which the applicant is the 
tentative selectee (pursuant to section 401(a)(1)) by competitive 
bidding pursuant to section 309(j) of the Communications Act of 1934 
(47 U.S.C. 309(j)).

SEC. 403. PROHIBITION OF TRANSFER.

    During the 5-year period that begins on the date that an applicant 
is granted any license pursuant to section 401, the Commission may not 
authorize the transfer or assignment of that license under section 310 
of the Communications Act of 1934 (47 U.S.C. 310). Nothing in this 
title may be construed to prohibit any applicant granted a license 
pursuant to section 401 from contracting with other licensees to 
improve cellular telephone service.

SEC. 404. DEFINITIONS.

    For the purposes of this title, the following definitions shall 
apply:
            (1) Applicant.--The term ``applicant'' means--
                    (A) Great Western Cellular Partners, a California 
                general partnership chosen by the Commission as 
                tentative selectee for RSA #492 on May 4, 1989;
                    (B) Monroe Telephone Services L.P., a Delaware 
                limited partnership chosen by the Commission as 
                tentative selectee for RSA #370 on August 24, 1989 
                (formerly Cellwave Telephone Services L.P.); and
                    (C) FutureWave General Partners L.P., a Delaware 
                limited partnership chosen by the Commission as 
                tentative selectee for RSA #615 on May 25, 1990.
            (2) Commission.--The term ``Commission'' means the Federal 
        Communications Commission.
            (3) Covered rural service area licensing proceeding.--The 
        term ``covered rural service area licensing proceeding'' means 
        the proceeding of the Commission for the grant of cellular 
        radiotelephone licenses for rural service areas #492 (Minnesota 
        11), #370 (Florida 11), and #615 (Pennsylvania 4).
            (4) Tentative selectee.--The term ``tentative selectee'' 
        means a party that has been selected by the Commission under a 
        licensing proceeding for grant of a license, but has not yet 
        been granted the license because the Commission has not yet 
        determined whether the party is qualified under the 
        Commission's rules for grant of the license.

            Passed the House of Representatives October 12, 1998.

            Attest:

                                                                 Clerk.