[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1364 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1364
To ensure full and expeditious enforcement of the provisions of the
Communications Act of 1934 that seek to bring about competition in
local telecommunications markets, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 3, 2001
Mr. Hollings (for himself, Mr. Inouye, and Mr. Stevens) introduced the
following bill; which was read twice and referred to the Committee on
Commerce, Science, and Transportation
_______________________________________________________________________
A BILL
To ensure full and expeditious enforcement of the provisions of the
Communications Act of 1934 that seek to bring about competition in
local telecommunications markets, 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 Fair Competition
Enforcement Act of 2001''.
SEC. 2. FINDINGS.
The Congress finds:
(1) The Telecommunications Act of 1996 put in place the
proper framework to achieve competition in local
telecommunications markets.
(2) The Telecommunications Act of 1996 recognized that
local exchange facilities are essential facilities and required
that all incumbent local exchange carriers open their markets
to competition by interconnecting with and providing network
access to new entrants, a process to be overseen by Federal and
State regulators.
(3) To increase the incentives of the Bell operating
companies to open their local networks to competition, the
Telecommunications Act of 1996 allows the Bell operating
companies to provide interLATA voice and data services in their
service region only after opening their local networks to
competition.
(4) While some progress has been made in opening local
telecommunications markets, the Federal Communications
Commission has determined that, 6 years after passage of the
Telecommunications Act of 1996, the Bell operating companies
have met the market opening requirements of that Act in only 5
States.
(5) It is apparent that the incumbent local exchange
carriers do not have adequate incentives to cooperate in this
process and that regulators have not exercised their
enforcement authority to require compliance.
(6) By improving mandatory penalties on Bell operating
companies and their affiliates that have not opened their
network to competition, there will be greater assurance that
local telecommunications markets will be opened more
expeditiously and, as a result, American consumers will obtain
the full benefits of competition.
(7) Competitive carriers continue to experience great
difficulty in gaining access to the Bell network, and, 5 years
after enactment of the Telecommunications Act of 1996, Bell
operating companies continue to control over 92 percent of all
access lines nationwide.
SEC. 3. PURPOSES.
The purposes of this Act are--
(1) to improve and strengthen the enforcement of the
Telecommunications Act of 1996, in order to ensure that local
telecommunications markets are opened more rapidly to full,
robust, and sustainable competition; and
(2) to provide an alternative dispute resolution process
for expeditious resolution of disputes concerning
interconnection agreements.
SEC. 4. ENFORCEMENT OF COMPETITION.
Title II of the Communications Act of 1934 (47 U.S.C. 201 et seq.)
is amended by adding at the end the following:
``PART IV--ENFORCEMENT
``SEC. 291. SHARED JURISDICTION OVER CERTAIN DISPUTES.
``(a) Violations of Sections 251, 252, 271, and 272.--A complaint
under section 208 alleging that a specific act or practice or failure
to act, of a Bell operating company or its affiliate, constitutes a
violation of section 251, 252, 271, or 272 may be filed at the
Commission or at a State commission.
``(b) Enforcement of Interconnection Agreements.--An action to
enforce compliance by a Bell operating company or its affiliate with an
interconnection agreement entered into under section 252 may be
initiated at the Commission or at a State Commission.
``(c) Initiating Party.--A complaint described in subsection (a) or
an enforcement action described in subsection (b) may be brought by a
telecommunications carrier or by the Commission or a State commission
on its own motion.
``SEC. 292. EXPEDITED CONSIDERATION OF INTERCONNECTION, INTERLATA, AND
SEPARATE AFFILIATE COMPLAINTS AND ENFORCEMENT ACTIONS.
``(a) In General.--The Commission shall make a final determination
with respect to any complaint described in section 291(a) or an
enforcement action described in section 291(b) within 90 days after the
date on which the complaint, or the filing initiating the action, is
received by the Commission.
``(b) Interim Relief.--
``(1) Violations of act.--Within 30 days after a complaint
described in section 291(a) has been filed with the Commission,
the Commission shall issue an order to the Bell operating
company or its affiliate named in the complaint directing it to
cease the act or practice that constitutes the alleged
violation, or initiate an act or practice to correct the
alleged violation, pending a final determination by the
Commission if--
``(A) the complaint contains a prima facie showing
that the alleged violation occurred or is occurring;
``(B) the complaint describes with specificity the
act or practice, or failure to act, that constitutes
the alleged violation; and
``(C) it appears from specific facts shown by the
complaint or an accompanying affidavit that substantial
injury, loss, or damage will result to the complainant
before the 90-day period in subsection (a) expires if
the order is not issued.
``(2) Interconnection agreements.--Within 30 days after an
enforcement action described in section 291(b) has been
initiated at the Commission by a telecommunications carrier,
the Commission shall issue an order to the Bell operating
company or its affiliate named in the action directing it to
cease the act or practice that constitutes the alleged
noncompliance with the interconnection agreement, or initiate
an act or practice to correct the alleged noncompliance,
pending a final determination by the Commission if--
``(A) the filing initiating the action contains a
prima facie showing that the alleged noncompliance
occurred or is occurring;
``(B) the filing describes with specificity the act
or practice, or failure to act, that constitutes the
alleged noncompliance; and
``(C) it appears from specific facts shown by the
filing or an accompanying affidavit that substantial
injury, loss, or damage will result to the
telecommunications carrier before the 90-day period in
subsection (a) expires if the order is not issued.
``(c) Burden of Proof.--In any proceeding under this part with
respect to a complaint described in section 291(a), or an enforcement
action described in section 291(b), by a telecommunications carrier
against a Bell operating company or its affiliate, and upon a prima
facie showing by a carrier that there are reasonable grounds to believe
that there is a violation or noncompliance, the burden of proof shall
be on such Bell operating company or its affiliate to demonstrate its
compliance with the section allegedly violated, or with the terms of
such agreement, as the case may be.
``SEC. 293. ALTERNATIVE DISPUTE RESOLUTION OF INTERCONNECTION
COMPLAINTS.
``(a) Interconnection Agreements.--A party to an interconnection
agreement entered into under section 252 may submit a dispute under the
agreement to the alternative dispute resolution process established by
subsection (b). An action brought under this section may be brought in
lieu of an action described in section 291(b) at the Commission or at a
State commission.
``(b) Alternative Dispute Resolution Process.--
``(1) Commission to prescribe process.--Within 180 days
after the date of enactment of the Telecommunications Fair
Competition Enforcement Act of 2001, the Commission shall,
after notice and opportunity for public comment, issue a final
rule implementing an alternative dispute resolution process for
the resolution of disputes under interconnection agreements
entered into under section 252. The process shall be available
to any party to such an agreement, including agreements entered
into prior to the date of enactment of that Act, unless such
prior agreement specifically precludes the use of alternative
dispute resolution.
``(2) Process requirements.--In carrying out paragraph (1),
the Commission shall prescribe a process that--
``(A) provides for binding private commercial
arbitration of disputes in an open, nondiscriminatory,
and unbiased forum;
``(B) ensures that a dispute submitted to the
process can be resolved within 45 days after the date
on which the dispute is filed; and
``(C) requires any decision reached under the
process to be in writing, available to the public, and
posted on the Internet.
``(3) Requests for information.--Any person or panel
conducting an arbitration under this subsection may require any
party to the dispute to provide such information as may be
necessary to enable that person or panel to reach a decision
with respect to the dispute. If the party that receives such a
request for information fails to comply with such a request for
information within 7 business days after the date on which the
request was made, then, unless that party shows that the
failure to comply was due to extenuating circumstances, the
person or panel conducting the arbitration shall render a
decision or award in favor of the other party to the
arbitration within 14 business days after the date on which the
request was made. The decision or award in favor of a party
shall not apply if the party in whose favor a decision or award
would be rendered under the preceding sentence is not in
compliance with a request for information from the person or
panel conducting the arbitration.
``(4) Remedies and authority of arbitrator.--Any person or
panel conducting an arbitration under this subsection may grant
to the prevailing party any relief available in law or equity,
including remedies available under this Act, injunctive relief,
specific performance, monetary awards, and direct,
consequential, and compensatory damages.
``(5) Arbitration award and enforcement.--A final decision
or award made by a person or panel conducting an arbitration
under this subsection shall be binding upon the parties and is
not subject to appeal by the parties or review by the
Commission, a State commission, or any Federal or State court.
A decision or award under the process may be enforced in any
district court of the United States having jurisdiction under
sections 9 through 13 of title 9, United States Code.
``SEC. 294. ENFORCEMENT OF PERFORMANCE STANDARDS.
``(a) Commission To Prescribe Performance Standards for Compliance
With Interconnection Agreements.--Not later than 180 days after the
date of enactment of the Telecommunications Fair Competition
Enforcement Act of 2001 the Commission shall, after notice and
opportunity for public comment, issue final rules for performance
standards, data validation procedures, and audit requirements to ensure
prompt and verifiable implementation of interconnection agreements
entered into under section 252 and for the purposes of sections 251,
252, 271, and 272. At a minimum, the rules shall include the most
rigorous performance standards, data validation procedures, and audit
requirements for such agreements adopted by the Commission or any State
commission before the date of enactment of the Telecommunications Fair
Competition Enforcement Act of 2001, as well as any new performance
standards, data validation procedures, and audit requirements needed to
ensure full compliance with the requirements of this Act for the
opening of local telecommunications markets to competition. In
establishing performance standards, data validation procedures, and
audit requirements under this section, the Commission shall ensure that
such standards, procedures, and requirements are quantifiable and
sufficient to determine ongoing compliance by incumbent local exchange
carriers with the requirements of their interconnection agreements,
including the provision of operating support systems, special access,
and retail and wholesale customer service standards, and for the
purposes of enforcing sections 251, 252, 271, and 272.
``(b) Specific Requirement for Provision of Local Loops.--A Bell
operating company or its affiliate which has not been granted an
exemption, suspension, or modification under section 251(f) of the
requirement to provide access to local loops (including subloop
elements to the extent required under section 251(d)(2)) as an
unbundled network element under section 251(c)(3) shall provide any
such local loop to a requesting telecommunications carrier with which
such Bell operating company or affiliate has an interconnection
agreement entered into under section 252 within 5 business days after
receiving a request for a specific local loop.
``(c) Enforcement of Performance Metrics.--Any violation of this
section, or the rules adopted hereunder, shall be a violation of
section 251.
``SEC. 295. FORFEITURES; DAMAGES; ATTORNEYS FEES.
``(a) In General.--The forfeitures provided in this section are in
addition to any other requirements, forfeitures, and penalties that may
be imposed under any other provision of this Act, any other law, or by
a State commission or court.
``(b) Forfeitures for Violation of Sections 251, 252, 271, or
272.--
``(1) In general.--The Commission shall impose a forfeiture
of $10,000,000 for each violation by a Bell operating company
or any affiliate of such company of section 251, 252, 271, or
272, and a forfeiture of $2,000,000 for each day on which the
violation continues.
``(2) Forfeiture increased threefold for repeat
violations.--The forfeiture under paragraph (1) shall be
increased threefold for a repeated violation of any such
section by a Bell operating company or its affiliate.
``(c) Compensatory and Punitive Damages; Costs and Attorney's
Fees.--
``(1) In general.--In any civil action brought by a
telecommunications carrier against a Bell operating company or
any affiliate of such company for damages for a violation of
section 251, 252, 271, or 272, or violation of any
interconnection agreement entered into under section 252 by a
Bell operating company, the carrier may be awarded--
``(A) both compensatory and punitive damages; and
``(B) reasonable attorney fees and costs incurred
in bringing the action.
``(2) Treble damages.--In any such action, the
telecommunications carrier may be awarded treble damages for a
repeated violation of any such section or interconnection
agreement by a Bell operating company or its affiliate.
``(d) Forfeiture for Failure to Comply With Order Granting Interim
Relief.--If the Bell operating company or its affiliate to which an
order is issued under section 292(b) does not comply with the order
within 7 days after the date on which the Commission releases the
order, and the Commission makes a final determination that the Bell
operating company or affiliate is in violation of section 251, 252,
271, or 272, or violation of an interconnection agreement entered into
under section 252, then the Commission shall impose a forfeiture of
$10,000,000 for each such violation, and a forfeiture of $2,000,000 for
each day on which the violation continued after issuance of the order.
``(e) Attorneys Fees.--The Commission, a State commission, a court,
or person conducting an arbitration under section 293 may award
reasonable attorney fees and costs to the prevailing party in an action
commenced by a complaint described in section 291(a), an enforcement
action described in section 291(b), or an alternative dispute
resolution proceeding under section 293, respectively.
``(f) Forfeitures Divided Between Complainants and Commission.--Any
forfeiture imposed under subsection (b) or (d) shall be paid to the
Commission and divided equally between--
``(1) either--
``(A) the party whose complaint commenced the
action that resulted in the determination by the
Commission, if the Commission's determination was made
in response to a complaint; or
``(B) the party against which the violation was
committed, if the action that resulted in the
determination by the Commission was commenced by the
Commission or a State commission; and
``(2) the Commission for use by its Enforcement Bureau for
the purpose of enforcing parts II and III of title II of the
Communications Act of 1934 (47 U.S.C. 251 et seq. and 271 et
seq.) and carrying out part IV of title II of that Act.
``(g) Adjustment for Inflation.--The amount of each forfeiture
provided for under subsections (b) and (d) shall be increased for
violations during each calendar year beginning with 2004 by a
percentage amount equal to the percentage increase (if any) in the CPI
for the preceding year over the CPI for 2001. For purposes of this
subsection, the CPI for any year is the average for the 12 months of
the year of the Consumer Price Index for all-urban consumers published
by the Department of Labor.
``SEC. 296. SAVINGS CLAUSES.
``(a) Other Remedies Under Act.--The remedies in this part are in
addition to any other requirements or penalties available under this
Act or any other law.
``(b) Antitrust Laws.--Nothing in this part modifies, impairs, or
supersedes the applicability of any antitrust law, except that a
violation by an incumbent local exchange carrier of section 251 or 252
shall also be a violation of the Act of July 2, 1890, commonly known as
the Sherman Anti-Trust Act (15 U.S.C. 1 et seq.).''.
SEC. 5. RATEPAYER PROTECTION.
The Commission shall not forbear from, or modify, any cost
allocation rules, accounting safeguards, or other requirements in a
manner that reduces its ability to enforce the provisions of this Act.
SEC. 6. STATUTE OF LIMITATIONS EXTENDED TO 3 YEARS.
Section 503(b)(6) of the Communications Act of 1934 (47 U.S.C.
503(b)(6)) is amended by striking ``1 year'' each place it appears and
inserting ``5 years''.
SEC. 7. STATE COMMISSIONS MAY USE FEDERAL FORFEITURES.
In any action brought before a State commission to enforce
compliance with section 251, 252, 271, or 272 of the Communications Act
of 1934 (47 U.S.C. 251, 252, 271, or 272) or an interconnection
agreement entered into under section 252, the State commission may
apply to the Federal Communications Commission requesting that the
Commission impose a forfeiture under section 295 of that Act in
addition to any relief granted by the State commission in that action.
The Federal Communications Commission may impose a forfeiture under
section 295 of that Act upon application by a State commission under
this section if it determines that the State commission proceeding was
conducted in accordance with the requirements of State law.
SEC. 8. SEPARATION OF RETAIL AND WHOLESALE FUNCTIONS.
(a) In General.--Title II of the Communications Act of 1934 (47
U.S.C. 201 et seq.) is amended by adding at the end the following:
``SEC. 277. FUNCTIONAL SEPARATION OF RETAIL SERVICES.
``(a) In General.--A Bell operating company may only provide retail
service--
``(1) through a division that is legally separate from the
part of the Bell operating company that provides wholesale
services; and
``(2) in a manner that is consistent with the Code of
Conduct described in subsection (b).
``(b) Code of Conduct.--The Code of Conduct for the provision of
retail service by a Bell operating company is as follows:
``(1) A Bell operating company shall transfer to its retail
division all relationships with retail customers, including
customer interfaces and retail billing and all development,
marketing, and pricing of retail services.
``(2) A Bell operating company shall transfer to its retail
division all accounts for retail services and all assets,
systems, and personnel used by the Bell operating company to
carry out the business functions described in paragraph (1).
``(3) The retail division required by this section--
``(A) shall be operated independently from the
wholesale services and functions of the Bell operating
company of which it is a division;
``(B) shall maintain books, records, and accounts
separate from those maintained by other departments,
divisions, sections, affiliates, or units of the Bell
operating company of which it is a division;
``(C) shall have separate employees and office
space from the wholesale services and functions of the
Bell operating company of which it is a division;
``(D) shall tie its management compensation only to
the performance of the retail division;
``(E) may not own any telecommunications facilities
or equipment jointly with the Bell operating company of
which it is a division;
``(F) shall not engage in any joint marketing with
the wholesale services department, division, section,
affiliate, or unit of the Bell operating company of
which it is a division;
``(G) shall conduct all wholesale transactions with
the Bell operating company of which it is a division on
a fully compensatory, arms-length basis, in accordance
with part 32 of the Commission's rules (part 32 of
title 47, Code of Federal Regulations);
``(H) shall offer retail telecommunications service
solely at rates set by tariff; and
``(I) shall also offer all of its retail
telecommunications services to telecommunications
carriers for wholesale purchase at the avoided cost
discount as established pursuant to sections 251(c)(4)
and 252(d)(3).
``(4) A Bell operating company shall provide services,
facilities, and network elements to any requesting carrier,
including its retail division solely at rates, terms, and
conditions set by tariff; shall offer physical and virtual
collocation pursuant to tariffs; shall not provide any retail
service except through its retail division; and shall not grant
its retail division any preferential intellectual property
rights. The Bell operating company shall conduct any business
with unaffiliated persons in the same manner as it conducts
business with its retail division, and shall not prefer, or
discriminate in favor of, such retail division in the rates,
terms, or conditions offered to the retail division,
including--
``(A) fulfilling any requests from unaffiliated
persons for ordering, maintenance, and repair of
unbundled network elements and services provided for
resale, within a period no longer than that in which it
fulfills such requests from its retail division;
``(B) utilizing the same operating support systems
for dealings with unaffiliated persons providing
telecommunications service as it uses with its retail
division;
``(C) providing any customer or network information
to unaffiliated persons providing retail services on
the same terms and conditions as it provides such
information to its retail division;
``(D) fulfilling any requests from an unaffiliated
person for exchange access within a period no longer
than that in which it fulfills requests for exchange
access from its retail division; and
``(E) fulfilling any such requests in subparagraph
(D) with service of a quality that meets or exceeds the
quality of exchange access it provides to its retail
division.
``(c) Biennial Audit.--
``(1) General requirement.--A Bell operating company shall
obtain and pay for a joint Federal/State audit every 2 years
which shall be conducted by an independent auditor to determine
whether such company has complied with this section and the
regulations promulgated to implement this section.
``(2) Results submitted to commission; state commissions.--
The auditor described in paragraph (1) shall submit the results
of the audit to the Commission and to the State commission of
each State in which the company audited provides service, and
the Commission shall make such results available for public
inspection. Any party may submit comments on the final audit
report.
``(3) Access to documents.--For purposes of conducting
audits and reviews under this subsection--
``(A) the independent auditor, the Commission, and
the State commission shall have access to the financial
books, records, and accounts of each Bell operating
company and its retail division necessary to verify
transactions conducted with that company that are
relevant to the specific activities permitted under
this section and that are necessary for the regulation
of rates;
``(B) the Commission and the State commission shall
have access to the working papers and supporting
materials of any auditor who performs an audit under
this section; and
``(C) the State commission shall implement
appropriate procedures to ensure the protection of any
proprietary information submitted to it under this
section.
``(d) Transition.--
``(1) A Bell operating company shall have one year from the
date of enactment of the Telecommunications Fair Competition
Enforcement Act of 2001 to comply with subsections (a) and (b).
``(2) Until such time as the Bell operating company
complies with the requirements of subsection (a), it shall file
quarterly reports demonstrating how it is implementing
compliance with the nondiscrimination requirements of
subsection (b)(4).
``(e) Ratepayer Protection.--The Commission shall not relax any
cost allocation rules, accounting safeguards, or other requirements in
a manner that reduces its ability to enforce the provisions of this
section.
``(f) Definitions.--In this section:
``(1) Bell operating company.--Notwithstanding section
3(4)(C), the term `Bell operating company' includes any
affiliate of such company other than its retail division.
``(2) Retail devision.--The term `retail division' means
the division required by this section.
``(3) Retail service.--The term `retail service' means any
telecommunications or information service offered to a person
other than a common carrier or other provider of
telecommunications.
``(g) Report on Violations.--Until December 31, 2010, the
Commission shall report to Congress annually on the amount and nature
of any violations of sections 251, 252, 271, and 272 by each Bell
Operating Company.
``(h) Preservation of Existing Authority.--Nothing in this section
shall be construed to limit the authority of the Commission under any
other section of this Act to prescribe additional safeguards consistent
with the public interest, convenience, and necessity.
``SEC. 278. SEPARATE RETAIL AFFILIATE.
``(a) Repeated Violations.--If, beginning 2 years after enactment
of the Telecommunications Fair Competition Enforcement Act of 2001, the
Commission finds that a Bell operating company willfully or knowingly
violated the requirements of sections 251, 252, 271, or 272 of this
Act, the Commission may require the Bell Operating Company to implement
structural separation under this section.
``(b) In General.--If the Commission requires a Bell operating
company to implement structural separation under this section, then
that Bell operating company may provide retail services only through a
separate affiliate. A Bell operating company and a separate affiliate
established under this section shall not engage in any joint marketing
of retail services, notwithstanding section 272(g).
``(c) Structural Separation of Business.--A Bell operating company
shall comply with subsection (b) by transferring the following business
functions to its retail affiliate, at the higher of book value or
market value:
``(1) all relationships with retail customers, including
customer interfaces and retail billing; and
``(2) all development, marketing, and pricing of retail
services.
``(d) Structural Separation of Assets.--
``(1) A Bell operating company shall comply with subsection
(b) by transferring the following assets to its retail
affiliate at the higher of book or market value:
``(A) all accounts for retail services, subject to
the requirements of subsection (j); and
``(B) all assets, systems, and personnel used by
the Bell operating company to carry out the business
functions described in subsection (c).
``(2) The price, terms, and conditions of the transfer of
assets required by paragraph (1) shall be made publicly
available.
``(e) Separate Subsidiary Safeguards.--The separate affiliate
required by this section--
``(1) shall operate independently from the Bell operating
company;
``(2) shall maintain books, records, and accounts separate
from those maintained by the Bell operating company of which it
is an affiliate;
``(3) shall have separate officers and directors from the
Bell operating company of which it is an affiliate;
``(4) shall have separate capital stock, the outstanding
shares of which may not be held by the Bell operating company
in any amount exceeding four times the amount of shares held by
unaffiliated persons;
``(5) shall have separate employees and separate employee
benefit plans from the Bell operating company of which it is an
affiliate;
``(6) 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;
``(7) may not own any telecommunications facilities or
equipment;
``(8) shall conduct all transactions with the Bell
operating company of which it is an affiliate on an arms'
length basis, with any such transactions reduced to writing and
available for public inspection;
``(9) shall offer retail telecommunications service solely
at rates set by tariff;
``(10) shall offer all of its retail telecommunications
services for wholesale purchase at the avoided cost discount as
established pursuant to sections 251(c)(4) and 252(d)(3);
``(11) shall have separate office space from the wholesale
services and functions of the Bell operating company of which
it is an affiliate;
``(12) shall tie its management compensation only to the
performance of the retail affiliate; and
``(13) shall conduct all wholesale transactions with the
Bell operating company of which it is an affiliate on a fully
compensatory basis, in accordance with part 32 of the
Commission's rules (part 32 of title 47, Code of Federal
Regulations).
``(f) Nondiscrimination Safeguards.--A Bell operating company--
``(1) shall provide services, facilities and network
elements to any requesting carrier, including its retail
affiliate, solely at rates set by tariff;
``(2) shall conduct any business with unaffiliated entities
in the same manner as it conducts business with its retail
affiliate, and shall not prefer, or discriminate in favor of,
such retail affiliate in the rates, terms, or conditions
offered to the retail affiliate, including--
``(A) fulfilling any requests from an unaffiliated
entity for exchange access service within a period no
longer than that in which it fulfills requests for
exchange access service from its retail affiliate;
``(B) fulfilling any such requests with service of
a quality that meets or exceeds the quality of exchange
access services it provides to its retail affiliate;
``(C) fulfilling any requests from an unaffiliated
entity for ordering, maintenance and repair of
unbundled network elements and services provided for
resale, within a period no longer than that in which it
fulfills such requests from its retail affiliate;
``(D) utilizing the same operating support systems
for dealings with unaffiliated entities providing
telecommunications service as it uses with its retail
affiliate; and
``(E) providing any customer or network information
to unaffiliated entities providing telecommunications
services on the same terms and conditions as it
provides such information to its retail affiliate;
``(3) shall not offer physical and virtual collocation
other than pursuant to generally available tariffs;
``(4) shall not grant its retail affiliate any preferential
intellectual property rights; and
``(5) shall not provide any retail service for its own use,
but shall procure such services from a carrier other than its
retail affiliate.
``(g) Biennial Audit.--
``(1) General requirement.--A Bell operating company shall
obtain and pay for a joint Federal/State audit every 2 years
conducted by an independent auditor to determine whether such
company has complied with this section and the regulations
promulgated under this section.
``(2) Results submitted to commission; state commissions.--
The auditor described in paragraph (1) shall submit the results
of the audit to the Commission and to the State commission of
each State in which the company audited provides service, which
shall make such results available for public inspection. Any
party may submit comments on the final audit report.
``(3) Access to documents.--For purposes of conducting
audits and reviews under this subsection--
``(A) the independent auditor, the Commission, and
the State commission shall have access to the financial
books, records, and accounts of each Bell operating
company and of its affiliates necessary to verify
transactions conducted with that company that are
relevant to the specific activities permitted under
this section and that are necessary for the regulation
of rates;
``(B) the Commission and the State commission shall
have access to the working papers and supporting
materials of any auditor who performs an audit under
this section; and
``(C) the State commission shall implement
appropriate procedures to ensure the protection of any
proprietary information submitted to it under this
section.
``(h) Preservation of Existing Authority.--Nothing in this section
shall be construed to limit the authority of the Commission under any
other section of this Act to prescribe safeguards consistent with the
public interest, convenience, and necessity.
``(i) Presubscription.--Concurrent with the establishment of the
separate retail affiliate required by this section, in any local
calling area served by a Bell operating company, consumers shall have
the opportunity to select their provider of telephone exchange service
by means of a balloting process established by rule by the Commission.
``(j) Ratepayer Protection.--The Commission shall not relax any
cost allocation rules, accounting safeguards, or other requirements in
a manner that reduces its ability to enforce the provisions of this
section.
``(k) Definitions.--In this section:
``(1) Bell operating company.--Notwithstanding section
3(4)(C), the term `Bell operating company' includes any
affiliate of such company other than its retail affiliate.
``(2) Retail affiliate.--The term `retail affiliate' means
the affiliate required by this section.
``(3) Retail service.--The term `retail service' means any
telecommunications or information service offered to a person
other than a common carrier or other provider of
telecommunications.''.
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