[Congressional Record Volume 142, Number 13 (Wednesday, January 31, 1996)]
[House]
[Pages H1078-H1136]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      CONFERENCE REPORT ON S. 652, TELECOMMUNICATIONS ACT OF 1996

  Mr. BLILEY submitted the following conference report and statement on 
the Senate bill (S. 652) to provide for a pro-competitive, deregulatory 
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:

                  Conference Report (H. Rept. 104-458)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendments of the House to the bill (S. 
     652), 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, having met, after full and free 
     conference, have agreed to recommend and do recommend to 
     their respective Houses as follows:
       That the Senate recede from its disagreement to the 
     amendment of the House to the text of the bill and agree to 
     the same with an amendment as follows:
       In lieu of the matter proposed to be inserted by the House 
     amendment, insert the following:

     SECTION 1. SHORT TITLE; REFERENCES.

       (a) Short Title.--This Act may be cited as the 
     ``Telecommunications Act of 1996''.
       (b) References.--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. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title; references.
Sec. 2. Table of contents.
Sec. 3. Definitions.

                  TITLE I--TELECOMMUNICATION SERVICES

                Subtitle A--Telecommunications Services

Sec. 101. Establishment of part II of title II.

             ``Part II--Development of Competitive Markets

``Sec. 251. Interconnection.
``Sec. 252. Procedures for negotiation, arbitration, and approval of 
              agreements.
``Sec. 253. Removal of barriers to entry.
``Sec. 254. Universal service.
``Sec. 255. Access by persons with disabilities.
``Sec. 256. Coordination for interconnectiv- ity.
``Sec. 257. Market entry barriers proceeding.
``Sec. 258. Illegal changes in subscriber carrier selections.
``Sec. 259. Infrastructure sharing.
``Sec. 260. Provision of telemessaging service.
``Sec. 261. Effect on other requirements.''
Sec. 102. Eligible telecommunications carriers.
Sec. 103. Exempt telecommunications companies.
Sec. 104. Nondiscrimination principle.

   Subtitle B--Special Provisions Concerning Bell Operating Companies

Sec. 151. Bell operating company provisions.

   ``Part III--Special Provisions Concerning Bell Operating Companies

``Sec. 271. Bell operating company entry into interLATA services.
``Sec. 272. Separate affiliate; safeguards.
``Sec. 273. Manufacturing by Bell operating companies.
``Sec. 274. Electronic publishing by Bell operating companies.
``Sec. 275. Alarm monitoring services.
``Sec. 276. Provision of payphone service.''

                      TITLE II--BROADCAST SERVICES

Sec. 201. Broadcast spectrum flexibility.
``Sec. 336. Broadcast spectrum flexibility.''
Sec. 202. Broadcast ownership.
Sec. 203. Term of licenses.
Sec. 204. Broadcast license renewal procedures.
Sec. 205. Direct broadcast satellite service.
Sec. 206. Automated ship distress and safety systems.
``Sec. 365. Automated ship distress and safety systems.''
Sec. 207. Restrictions on over-the-air reception devices.

                       TITLE III--CABLE SERVICES

Sec. 301. Cable Act reform.
Sec. 302. Cable service provided by telephone companies.

  ``Part V--Video Programming Services Provided by Telephone Companies

``Sec. 651. Regulatory treatment of video programming services.
``Sec. 652. Prohibition on buy outs.

[[Page H1079]]

``Sec. 653. Establishment of open video systems.''
Sec. 303. Preemption of franchising authority regulation of 
              telecommunications services.
Sec. 304. Competitive availability of navigation devices.
``Sec. 629. Competitive availability of navigation devices.''
Sec. 305. Video programming accessibility.
``Sec. 713. Video programming accessibility.''

                      TITLE IV--REGULATORY REFORM

Sec. 401. Regulatory forbearance.
``Sec. 10. Competition in provision of telecommunications service.''
Sec. 402. Biennial review of regulations; regulatory relief.
``Sec. 11. Regulatory reform.''
Sec. 403. Elimination of unnecessary Commission regulations and 
              functions.

                    TITLE V--OBSCENITY AND VIOLENCE

      Subtitle A--Obscene, Harassing, and Wrongful Utilization of 
                     Telecommunications Facilities

Sec. 501. Short title.
Sec. 502. Obscene or harassing use of telecommunications facilities 
              under the Communications Act of 1934.
Sec. 503. Obscene programming on cable television.
Sec. 504. Scrambling of cable channels for nonsubscribers.
``Sec. 640. Scrambling of cable channels for nonsubscribers.''
Sec. 505. Scrambling of sexually explicit adult video service 
              programming.
``Sec. 641. Scrambling of sexually explicit adult video service 
              programming.''
Sec. 506. Cable operator refusal to carry certain programs.
Sec. 507. Clarification of current laws regarding communication of 
              obscene materials through the use of computers.
Sec. 508. Coercion and enticement of minors.
Sec. 509. Online family empowerment.
``Sec. 230. Protection for private blocking and screening of offensive 
              material.''

                          Subtitle B--Violence

Sec. 551. Parental choice in television programming.
Sec. 552. Technology fund.

                      Subtitle C--Judicial Review

Sec. 561. Expedited review.

                     TITLE VI--EFFECT ON OTHER LAWS

Sec. 601. Applicability of consent decrees and other law.
Sec. 602. Preemption of local taxation with respect to direct-to-home 
              services.

                  TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 701. Prevention of unfair billing practices for information or 
              services provided over toll-free telephone calls.
Sec. 702. Privacy of customer information.
``Sec. 222. Privacy of customer information.''
Sec. 703. Pole attachments.
Sec. 704. Facilities siting; radio frequency emission standards.
Sec. 705. Mobile services direct access to long distance carriers.
Sec. 706. Advanced telecommunications incentives.
Sec. 707. Telecommunications Development Fund.
``Sec. 714. Telecommunications Development Fund.''
Sec. 708. National Education Technology Funding Corporation.
Sec. 709. Report on the use of advanced telecommunications services for 
              medical purposes.
Sec. 710. Authorization of appropriations.

     SEC. 3. DEFINITIONS.

       (a) Additional Definitions.--Section 3 (47 U.S.C. 153) is 
     amended--
       (1) in subsection (r)--
       (A) by inserting ``(A)'' after ``means''; and
       (B) by inserting before the period at the end the 
     following: ``, or (B) comparable service provided through a 
     system of switches, transmission equipment, or other 
     facilities (or combination thereof) by which a subscriber can 
     originate and terminate a telecommunications service''; and
       (2) by adding at the end thereof the following:
       ``(33) Affiliate.--The term `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.
       ``(34) AT&T consent decree.--The term `AT&T Consent Decree' 
     means the order entered August 24, 1982, in the antitrust 
     action styled United States v. Western Electric, Civil Action 
     No. 82-0192, in the United States District Court for the 
     District of Columbia, and includes any judgment or order with 
     respect to such action entered on or after August 24, 1982.
       ``(35) Bell operating company.--The term `Bell operating 
     company'--
       ``(A) means any of the following companies: Bell Telephone 
     Company of Nevada, Illinois Bell Telephone Company, Indiana 
     Bell Telephone Company, Incorporated, Michigan Bell Telephone 
     Company, New England Telephone and Telegraph Company, New 
     Jersey Bell Telephone Company, New York Telephone Company, U 
     S West Communications Company, South Central Bell Telephone 
     Company, Southern Bell Telephone and Telegraph Company, 
     Southwestern Bell Telephone Company, The Bell Telephone 
     Company of Pennsylvania, The Chesapeake and Potomac Telephone 
     Company, The Chesapeake and Potomac Telephone Company of 
     Maryland, The Chesapeake and Potomac Telephone Company of 
     Virginia, The Chesapeake and Potomac Telephone Company of 
     West Virginia, The Diamond State Telephone Company, The Ohio 
     Bell Telephone Company, The Pacific Telephone and Telegraph 
     Company, or Wisconsin Telephone Company; and
       ``(B) includes any successor or assign of any such company 
     that provides wireline telephone exchange service; but
       ``(C) does not include an affiliate of any such company, 
     other than an affiliate described in subparagraph (A) or (B).
       ``(36) Cable service.--The term `cable service' has the 
     meaning given such term in section 602.
       ``(37) Cable system.--The term `cable system' has the 
     meaning given such term in section 602.
       ``(38) Customer premises equipment.--The term `customer 
     premises equipment' means equipment employed on the premises 
     of a person (other than a carrier) to originate, route, or 
     terminate telecommunications.
       ``(39) Dialing parity.--The term `dialing parity' means 
     that a person that is not an affiliate of a local exchange 
     carrier is able to provide telecommunications services in 
     such a manner that customers have the ability to route 
     automatically, without the use of any access code, their 
     telecommunications to the telecommunications services 
     provider of the customer's designation from among 2 or more 
     telecommunications services providers (including such local 
     exchange carrier).
       ``(40) Exchange access.--The term `exchange access' means 
     the offering of access to telephone exchange services or 
     facilities for the purpose of the origination or termination 
     of telephone toll services.
       ``(41) Information service.--The term `information service' 
     means the offering of a capability for generating, acquiring, 
     storing, transforming, processing, retrieving, utilizing, or 
     making available information via telecommunications, and 
     includes electronic publishing, but does not include any use 
     of any such capability for the management, control, or 
     operation of a telecommunications system or the management of 
     a telecommunications service.
       ``(42) Interlata service.--The term `interLATA service' 
     means telecommunications between a point located in a local 
     access and transport area and a point located outside such 
     area.
       ``(43) Local access and transport area.--The term `local 
     access and transport area' or `LATA' means a contiguous 
     geographic area--
       ``(A) established before the date of enactment of the 
     Telecommunications Act of 1996 by a Bell operating company 
     such that no exchange area includes points within more than 1 
     metropolitan statistical area, consolidated metropolitan 
     statistical area, or State, except as expressly permitted 
     under the AT&T Consent Decree; or
       ``(B) established or modified by a Bell operating company 
     after such date of enactment and approved by the Commission.
       ``(44) Local exchange carrier.--The term `local exchange 
     carrier' means any person that is engaged in the provision of 
     telephone exchange service or exchange access. Such term does 
     not include a person insofar as such person is engaged in the 
     provision of a commercial mobile service under section 
     332(c), except to the extent that the Commission finds that 
     such service should be included in the definition of such 
     term.
       ``(45) Network element.--The term `network element' means a 
     facility or equipment used in the provision of a 
     telecommunications service. Such term also includes features, 
     functions, and capabilities that are provided by means of 
     such facility or equipment, including subscriber numbers, 
     databases, signaling systems, and information sufficient for 
     billing and collection or used in the transmission, routing, 
     or other provision of a telecommunications service.
       ``(46) Number portability.--The term `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.
       ``(47) Rural telephone company.--The term `rural telephone 
     company' means a local exchange carrier operating entity to 
     the extent that such entity--
       ``(A) provides common carrier service to any local exchange 
     carrier study area that does not include either--
       ``(i) any incorporated place of 10,000 inhabitants or more, 
     or any part thereof, based on the most recently available 
     population statistics of the Bureau of the Census; or
       ``(ii) any territory, incorporated or unincorporated, 
     included in an urbanized area, as defined by the Bureau of 
     the Census as of August 10, 1993;
       ``(B) provides telephone exchange service, including 
     exchange access, to fewer than 50,000 access lines;
       ``(C) provides telephone exchange service to any local 
     exchange carrier study area with fewer than 100,000 access 
     lines; or
       ``(D) has less than 15 percent of its access lines in 
     communities of more than 50,000 on the date of enactment of 
     the Telecommunications Act of 1996.
       ``(48) Telecommunications.--The term `telecommunications' 
     means the transmission, between or among points specified by 
     the user, of information of the user's choosing, without 
     change in the form or content of the information as sent and 
     received.
       ``(49) Telecommunications carrier.--The term 
     `telecommunications carrier' means any provider of 
     telecommunications services, except that such term does not 
     include aggregators of telecommunications services (as 
     defined in section 226). A telecommunications carrier shall 
     be treated as a common carrier under this Act only 

[[Page H1080]]
     to the extent that it is engaged in providing telecommunications 
     services, except that the Commission shall determine whether 
     the provision of fixed and mobile satellite service shall be 
     treated as common carriage.
       ``(50) Telecommunications equipment.--The term 
     `telecommunications equipment' means equipment, other than 
     customer premises equipment, used by a carrier to provide 
     telecommunications services, and includes software integral 
     to such equipment (including upgrades).
       ``(51) Telecommunications service.--The term 
     `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 directly 
     to the public, regardless of the facilities used.''.
       (b) Common Terminology.--Except as otherwise provided in 
     this Act, the terms used in this Act have the meanings 
     provided in section 3 of the Communications Act of 1934 (47 
     U.S.C. 153), as amended by this section.
       (c) Stylistic Consistency.--Section 3 (47 U.S.C. 153) is 
     amended--
       (1) in subsections (e) and (n), by redesignating clauses 
     (1), (2) and (3), as clauses (A), (B), and (C), respectively;
       (2) in subsection (w), by redesignating paragraphs (1) 
     through (5) as subparagraphs (A) through (E), respectively;
       (3) in subsections (y) and (z), by redesignating paragraphs 
     (1) and (2) as subparagraphs (A) and (B), respectively;
       (4) by redesignating subsections (a) through (ff) as 
     paragraphs (1) through (32);
       (5) by indenting such paragraphs 2 em spaces;
       (6) by inserting after the designation of each such 
     paragraph--
       (A) a heading, in a form consistent with the form of the 
     heading of this subsection, consisting of the term defined by 
     such paragraph, or the first term so defined if such 
     paragraph defines more than one term; and
       (B) the words ``The term'';
       (7) by changing the first letter of each defined term in 
     such paragraphs from a capital to a lower case letter (except 
     for ``United States'', ``State'', ``State commission'', and 
     ``Great Lakes Agreement''); and
       (8) by reordering such paragraphs and the additional 
     paragraphs added by subsection (a) in alphabetical order 
     based on the headings of such paragraphs and renumbering such 
     paragraphs as so reordered.
       (d) Conforming Amendments.--The Act is amended--
       (1) in section 225(a)(1), by striking ``section 3(h)'' and 
     inserting ``section 3'';
       (2) in section 332(d), by striking ``section 3(n)'' each 
     place it appears and inserting ``section 3''; and
       (3) in sections 621(d)(3), 636(d), and 637(a)(2), by 
     striking ``section 3(v)'' and inserting ``section 3''.
                  TITLE I--TELECOMMUNICATION SERVICES
                Subtitle A--Telecommunications Services

     SEC. 101. ESTABLISHMENT OF PART II OF TITLE II.

       (a) Amendment.--Title II is amended by inserting after 
     section 229 (47 U.S.C. 229) the following new part:

             ``PART II--DEVELOPMENT OF COMPETITIVE MARKETS

     ``SEC. 251. INTERCONNECTION.

       ``(a) General Duty of Telecommunications Carriers.--Each 
     telecommunications carrier has the duty--
       ``(1) to interconnect directly or indirectly with the 
     facilities and equipment of other telecommunications 
     carriers; and
       ``(2) not to install network features, functions, or 
     capabilities that do not comply with the guidelines and 
     standards established pursuant to section 255 or 256.
       ``(b) Obligations of All Local Exchange Carriers.--Each 
     local exchange carrier has the following duties:
       ``(1) Resale.--The duty not to prohibit, and not to impose 
     unreasonable or discriminatory conditions or limitations on, 
     the resale of its telecommunications services.
       ``(2) Number portability.--The duty to provide, to the 
     extent technically feasible, number portability in accordance 
     with requirements prescribed by the Commission.
       ``(3) Dialing parity.--The duty to provide dialing parity 
     to competing providers of telephone exchange service and 
     telephone toll service, and the duty to permit all such 
     providers to have nondiscriminatory access to telephone 
     numbers, operator services, directory assistance, and 
     directory listing, with no unreasonable dialing delays.
       ``(4) Access to rights-of-way.--The duty to afford access 
     to the poles, ducts, conduits, and rights-of-way of such 
     carrier to competing providers of telecommunications services 
     on rates, terms, and conditions that are consistent with 
     section 224.
       ``(5) Reciprocal compensation.--The duty to establish 
     reciprocal compensation arrangements for the transport and 
     termination of telecommunications.
       ``(c) Additional Obligations of Incumbent Local Exchange 
     Carriers.--In addition to the duties contained in subsection 
     (b), each incumbent local exchange carrier has the following 
     duties:
       ``(1) Duty to negotiate.--The duty to negotiate in good 
     faith in accordance with section 252 the particular terms and 
     conditions of agreements to fulfill the duties described in 
     paragraphs (1) through (5) of subsection (b) and this 
     subsection. The requesting telecommunications carrier also 
     has the duty to negotiate in good faith the terms and 
     conditions of such agreements.
       ``(2) Interconnection.--The duty to provide, for the 
     facilities and equipment of any requesting telecommunications 
     carrier, interconnection with the local exchange carrier's 
     network--
       ``(A) for the transmission and routing of telephone 
     exchange service and exchange access;
       ``(B) at any technically feasible point within the 
     carrier's network;
       ``(C) that is at least equal in quality 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; and
       ``(D) on rates, terms, and conditions that are just, 
     reasonable, and nondiscriminatory, in accordance with the 
     terms and conditions of the agreement and the requirements of 
     this section and section 252.
       ``(3) Unbundled access.--The duty to provide, to any 
     requesting telecommunications carrier for the provision of a 
     telecommunications service, nondiscriminatory access to 
     network elements on an unbundled basis at any technically 
     feasible point on rates, terms, and conditions that are just, 
     reasonable, and nondiscriminatory in accordance with the 
     terms and conditions of the agreement and the requirements of 
     this section and section 252. An incumbent local exchange 
     carrier shall provide such unbundled network elements in a 
     manner that allows requesting carriers to combine such 
     elements in order to provide such telecommunications service.
       ``(4) Resale.--The duty--
       ``(A) to offer for resale at wholesale rates any 
     telecommunications service that the carrier provides at 
     retail to subscribers who are not telecommunications 
     carriers; and
       ``(B) not to prohibit, and not to impose unreasonable or 
     discriminatory conditions or limitations on, the resale of 
     such telecommunications service, except that a State 
     commission may, consistent with regulations prescribed by the 
     Commission under this section, prohibit a reseller that 
     obtains at wholesale rates a telecommunications service that 
     is available at retail only to a category of subscribers from 
     offering such service to a different category of subscribers.
       ``(5) Notice of changes.--The duty to provide 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.
       ``(6) Collocation.--The duty to provide, on rates, terms, 
     and conditions that are just, reasonable, and 
     nondiscriminatory, for physical collocation of equipment 
     necessary for interconnection or access to unbundled network 
     elements at the premises of the local exchange carrier, 
     except that the carrier may provide for virtual collocation 
     if the local exchange carrier demonstrates to the State 
     commission that physical collocation is not practical for 
     technical reasons or because of space limitations.
       ``(d) Implementation.--
       ``(1) In general.--Within 6 months after the date of 
     enactment of the Telecommunications Act of 1996, the 
     Commission shall complete all actions necessary to establish 
     regulations to implement the requirements of this section.
       ``(2) Access standards.--In determining what network 
     elements should be made available for purposes of subsection 
     (c)(3), the Commission shall consider, at a minimum, 
     whether--
       ``(A) access to such network elements as are proprietary in 
     nature is necessary; and
       ``(B) the failure to provide access to such network 
     elements would impair the ability of the telecommunications 
     carrier seeking access to provide the services that it seeks 
     to offer.
       ``(3) Preservation of state access regulations.--In 
     prescribing and enforcing regulations to implement the 
     requirements of this section, the Commission shall not 
     preclude the enforcement of any regulation, order, or policy 
     of a State commission that--
       ``(A) establishes access and interconnection obligations of 
     local exchange carriers;
       ``(B) is consistent with the requirements of this section; 
     and
       ``(C) does not substantially prevent implementation of the 
     requirements of this section and the purposes of this part.
       ``(e) Numbering Administration.--
       ``(1) Commission authority and jurisdiction.--The 
     Commission shall create or designate one or more impartial 
     entities to administer telecommunications numbering and to 
     make such numbers available on an equitable basis. The 
     Commission shall have exclusive jurisdiction over those 
     portions of the North American Numbering Plan that pertain to 
     the United States. Nothing in this paragraph shall preclude 
     the Commission from delegating to State commissions or other 
     entities all or any portion of such jurisdiction.
       ``(2) Costs.--The cost of establishing telecommunications 
     numbering administration arrangements and number portability 
     shall be borne by all telecommunications carriers on a 
     competitively neutral basis as determined by the Commission.
       ``(f) Exemptions, Suspensions, and Modifications.--
       ``(1) Exemption for certain rural telephone companies.--
       ``(A) Exemption.--Subsection (c) of this section shall not 
     apply to a rural telephone company until (i) such company has 
     received a bona fide request for interconnection, services, 
     or network elements, and (ii) the State commission determines 
     (under subparagraph (B)) that such request is not unduly 
     economically burdensome, is technically feasible, and is 
     consistent with section 254 (other than subsections (b)(7) 
     and (c)(1)(D) thereof).
       ``(B) State termination of exemption and implementation 
     schedule.--The party making a bona fide request of a rural 
     telephone company for interconnection, services, or network 
     elements shall submit a notice of its request to the State 
     commission. The State commission shall conduct an inquiry for 
     the purpose of determining whether to terminate the exemption 


[[Page H1081]]
     under subparagraph (A). Within 120 days after the State commission 
     receives notice of the request, the State commission shall 
     terminate the exemption if the request is not unduly 
     economically burdensome, is technically feasible, and is 
     consistent with section 254 (other than subsections (b)(7) 
     and (c)(1)(D) thereof). Upon termination of the exemption, a 
     State commission shall establish an implementation schedule 
     for compliance with the request that is consistent in time 
     and manner with Commission regulations.
       ``(C) Limitation on exemption.--The exemption provided by 
     this paragraph shall not apply with respect to a request 
     under subsection (c) from a cable operator providing video 
     programming, and seeking to provide any telecommunications 
     service, in the area in which the rural telephone company 
     provides video programming. The limitation contained in this 
     subparagraph shall not apply to a rural telephone company 
     that is providing video programming on the date of enactment 
     of the Telecommunications Act of 1996.
       ``(2) Suspensions and modifications for rural carriers.--A 
     local exchange carrier with fewer than 2 percent of the 
     Nation's subscriber lines installed in the aggregate 
     nationwide may petition a State commission for a suspension 
     or modification of the application of a requirement or 
     requirements of subsection (b) or (c) to telephone exchange 
     service facilities specified in such petition. The State 
     commission shall grant such petition to the extent that, and 
     for such duration as, the State commission determines that 
     such suspension or modification--
       ``(A) is necessary--
       ``(i) to avoid a significant adverse economic impact on 
     users of telecommunications services generally;
       ``(ii) to avoid imposing a requirement that is unduly 
     economically burdensome; or
       ``(iii) to avoid imposing a requirement that is technically 
     infeasible; and
       ``(B) is consistent with the public interest, convenience, 
     and necessity.
     The State commission shall act upon any petition filed under 
     this paragraph within 180 days after receiving such petition. 
     Pending such action, the State commission may suspend 
     enforcement of the requirement or requirements to which the 
     petition applies with respect to the petitioning carrier or 
     carriers.
       ``(g) Continued Enforcement of Exchange Access and 
     Interconnection Requirements.--On and after the date of 
     enactment of the Telecommunications Act of 1996, each local 
     exchange carrier, to the extent that it provides wireline 
     services, shall provide exchange access, information access, 
     and exchange services for such access to interexchange 
     carriers and information service providers in accordance with 
     the same equal access and nondiscriminatory interconnection 
     restrictions and obligations (including receipt of 
     compensation) that apply to such carrier on the date 
     immediately preceding the date of enactment of the 
     Telecommunications Act of 1996 under any court order, consent 
     decree, or regulation, order, or policy of the Commission, 
     until such restrictions and obligations are explicitly 
     superseded by regulations prescribed by the Commission after 
     such date of enactment. During the period beginning on such 
     date of enactment and until such restrictions and obligations 
     are so superseded, such restrictions and obligations shall be 
     enforceable in the same manner as regulations of the 
     Commission.
       ``(h) Definition of Incumbent Local Exchange Carrier.--
       ``(1) Definition.--For purposes of this section, the term 
     `incumbent local exchange carrier' means, with respect to an 
     area, the local exchange carrier that--
       ``(A) on the date of enactment of the Telecommunications 
     Act of 1996, provided telephone exchange service in such 
     area; and
       ``(B)(i) on such date of enactment, was deemed to be a 
     member of the exchange carrier association pursuant to 
     section 69.601(b) of the Commission's regulations (47 C.F.R. 
     69.601(b)); or
       ``(ii) is a person or entity that, on or after such date of 
     enactment, became a successor or assign of a member described 
     in clause (i).
       ``(2) Treatment of comparable carriers as incumbents.--The 
     Commission may, by rule, provide for the treatment of a local 
     exchange carrier (or class or category thereof) as an 
     incumbent local exchange carrier for purposes of this section 
     if--
       ``(A) such carrier occupies a position in the market for 
     telephone exchange service within an area that is comparable 
     to the position occupied by a carrier described in paragraph 
     (1);
       ``(B) such carrier has substantially replaced an incumbent 
     local exchange carrier described in paragraph (1); and
       ``(C) such treatment is consistent with the public 
     interest, convenience, and necessity and the purposes of this 
     section.
       ``(i) Savings Provision.--Nothing in this section shall be 
     construed to limit or otherwise affect the Commission's 
     authority under section 201.

     ``SEC. 252. PROCEDURES FOR NEGOTIATION, ARBITRATION, AND 
                   APPROVAL OF AGREEMENTS.

       ``(a) Agreements Arrived at Through Negotiation.--
       ``(1) Voluntary negotiations.--Upon receiving a request for 
     interconnection, services, or network elements pursuant to 
     section 251, an incumbent local exchange carrier may 
     negotiate and enter into a binding agreement with the 
     requesting telecommunications carrier or carriers without 
     regard to the standards set forth in subsections (b) and (c) 
     of section 251. The agreement shall include a detailed 
     schedule of itemized charges for interconnection and each 
     service or network element included in the agreement. The 
     agreement, including any interconnection agreement negotiated 
     before the date of enactment of the Telecommunications Act of 
     1996, shall be submitted to the State commission under 
     subsection (e) of this section.
       ``(2) Mediation.--Any party negotiating an agreement under 
     this section may, at any point in the negotiation, ask a 
     State commission to participate in the negotiation and to 
     mediate any differences arising in the course of the 
     negotiation.
       ``(b) Agreements Arrived at Through Compulsory 
     Arbitration.--
       ``(1) arbitration.--During the period from the 135th to the 
     160th day (inclusive) after the date on which an incumbent 
     local exchange carrier receives a request for negotiation 
     under this section, the carrier or any other party to the 
     negotiation may petition a State commission to arbitrate any 
     open issues.
       ``(2) Duty of petitioner.--
       ``(A) A party that petitions a State commission under 
     paragraph (1) shall, at the same time as it submits the 
     petition, provide the State commission all relevant 
     documentation concerning--
       ``(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 commission under 
     paragraph (1) shall provide a copy of the petition and any 
     documentation to the other party or parties not later than 
     the day on which the State commission receives the petition.
       ``(3) Opportunity to respond.--A non-petitioning party to a 
     negotiation under this section may respond to the other 
     party's petition and provide such additional information as 
     it wishes within 25 days after the State commission receives 
     the petition.
       ``(4) Action by state commission.--
       ``(A) The State commission shall limit its consideration of 
     any petition under paragraph (1) (and any response thereto) 
     to the issues set forth in the petition and in the response, 
     if any, filed under paragraph (3).
       ``(B) The State commission may require the petitioning 
     party and the responding party to provide such information as 
     may be necessary for the State commission to reach a decision 
     on the unresolved issues. If any party refuses or fails 
     unreasonably to respond on a timely basis to any reasonable 
     request from the State commission, then the State commission 
     may proceed on the basis of the best information available to 
     it from whatever source derived.
       ``(C) The State commission shall resolve each issue set 
     forth in the petition and the response, if any, by imposing 
     appropriate conditions as required to implement subsection 
     (c) upon the parties to the agreement, and shall conclude the 
     resolution of any unresolved issues not later than 9 months 
     after the date on which the local exchange carrier received 
     the request under this section.
       ``(5) Refusal to negotiate.--The refusal of any other party 
     to the negotiation to participate further in the 
     negotiations, to cooperate with the State commission in 
     carrying out its function as an arbitrator, or to continue to 
     negotiate in good faith in the presence, or with the 
     assistance, of the State commission shall be considered a 
     failure to negotiate in good faith.
       ``(c) Standards for Arbitration.--In resolving by 
     arbitration under subsection (b) any open issues and imposing 
     conditions upon the parties to the agreement, a State 
     commission shall--
       ``(1) ensure that such resolution and conditions meet the 
     requirements of section 251, including the regulations 
     prescribed by the Commission pursuant to section 251;
       ``(2) establish any rates for interconnection, services, or 
     network elements according to subsection (d); and
       ``(3) provide a schedule for implementation of the terms 
     and conditions by the parties to the agreement.
       ``(d) Pricing Standards.--
       ``(1) Interconnection and network element charges.--
     Determinations by a State commission of the just and 
     reasonable rate for the interconnection of facilities and 
     equipment for purposes of subsection (c)(2) of section 251, 
     and the just and reasonable rate for network elements for 
     purposes of subsection (c)(3) of such section--
       ``(A) shall be--
       ``(i) based on the cost (determined without reference to a 
     rate-of-return or other rate-based proceeding) of providing 
     the interconnection or network element (whichever is 
     applicable), and
       ``(ii) nondiscriminatory, and
       ``(B) may include a reasonable profit.
       ``(2) Charges for transport and termination of traffic.--
       ``(A) In general.--For the purposes of compliance by an 
     incumbent local exchange carrier with section 251(b)(5), a 
     State commission shall not consider the terms and conditions 
     for reciprocal compensation to be just and reasonable 
     unless--
       ``(i) such terms and conditions provide for the mutual and 
     reciprocal recovery by each carrier of costs associated with 
     the transport and termination on each carrier's network 
     facilities of calls that originate on the network facilities 
     of the other carrier; and
       ``(ii) such terms and conditions determine such costs on 
     the basis of a reasonable approximation of the additional 
     costs of terminating such calls.
       ``(B) Rules of construction.--This paragraph shall not be 
     construed--
       ``(i) to preclude arrangements that afford the mutual 
     recovery of costs through the offsetting of reciprocal 
     obligations, including arrangements that waive mutual 
     recovery (such as bill-and-keep arrangements); or
       ``(ii) to authorize the Commission or any State commission 
     to engage in any rate regulation proceeding to establish with 
     particularity the additional costs of transporting or 
     terminating calls, or to require carriers to maintain records 
     with respect to the additional costs of such calls.
     
[[Page H1082]]

       ``(3) Wholesale prices for telecommunications services.--
     For the purposes of section 251(c)(4), a State commission 
     shall determine wholesale rates on the basis of retail rates 
     charged to subscribers for the telecommunications service 
     requested, excluding the portion thereof attributable to any 
     marketing, billing, collection, and other costs that will be 
     avoided by the local exchange carrier.
       ``(e) Approval by State Commission.--
       ``(1) Approval required.--Any interconnection agreement 
     adopted by negotiation or arbitration shall be submitted for 
     approval to the State commission. A State commission to which 
     an agreement is submitted shall approve or reject the 
     agreement, with written findings as to any deficiencies.
       ``(2) Grounds for rejection.--The State commission may only 
     reject--
       ``(A) an agreement (or any portion thereof) adopted by 
     negotiation under subsection (a) if it finds that--
       ``(i) the agreement (or portion thereof) discriminates 
     against a telecommunications carrier not a party to the 
     agreement; or
       ``(ii) the implementation of such agreement or portion is 
     not consistent with the public interest, convenience, and 
     necessity; or
       ``(B) an agreement (or any portion thereof) adopted by 
     arbitration under subsection (b) if it finds that the 
     agreement does not meet the requirements of section 251, 
     including the regulations prescribed by the Commission 
     pursuant to section 251, or the standards set forth in 
     subsection (d) of this section.
       ``(3) Preservation of authority.--Notwithstanding paragraph 
     (2), but subject to section 253, nothing in this section 
     shall prohibit a State commission from establishing or 
     enforcing other requirements of State law in its review of an 
     agreement, including requiring compliance with intrastate 
     telecommunications service quality standards or requirements.
       ``(4) Schedule for decision.--If the State commission does 
     not act to approve or reject the agreement within 90 days 
     after submission by the parties of an agreement adopted by 
     negotiation under subsection (a), or within 30 days after 
     submission by the parties of an agreement adopted by 
     arbitration under subsection (b), the agreement shall be 
     deemed approved. No State court shall have jurisdiction to 
     review the action of a State commission in approving or 
     rejecting an agreement under this section.
       ``(5) Commission to act if state will not act.--If a State 
     commission fails to act to carry out its responsibility under 
     this section in any proceeding or other matter under this 
     section, then the Commission shall issue an order preempting 
     the State commission'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 commission under this section with respect to the 
     proceeding or matter and act for the State commission.
       ``(6) Review of state commission actions.--In a case in 
     which a State fails to act as described in paragraph (5), the 
     proceeding by the Commission under such paragraph and any 
     judicial review of the Commission's actions shall be the 
     exclusive remedies for a State commission's failure to act. 
     In any case in which a State commission makes a determination 
     under this section, any party aggrieved by such determination 
     may bring an action in an appropriate Federal district court 
     to determine whether the agreement or statement meets the 
     requirements of section 251 and this section.
       ``(f) Statements of Generally Available Terms.--
       ``(1) In general.--A Bell operating company may prepare and 
     file with a State commission a statement of the terms and 
     conditions that such company generally offers within that 
     State to comply with the requirements of section 251 and the 
     regulations thereunder and the standards applicable under 
     this section.
       ``(2) State commission review.--A State commission may not 
     approve such statement unless such statement complies with 
     subsection (d) of this section and section 251 and the 
     regulations thereunder. Except as provided in section 253, 
     nothing in this section shall prohibit a State commission 
     from establishing or enforcing other requirements of State 
     law in its review of such statement, including requiring 
     compliance with intrastate telecommunications service quality 
     standards or requirements.
       ``(3) Schedule for review.--The State commission to which a 
     statement is submitted shall, not later than 60 days after 
     the date of such submission--
       ``(A) complete the review of such statement under paragraph 
     (2) (including any reconsideration thereof), unless the 
     submitting carrier agrees to an extension of the period for 
     such review; or
       ``(B) permit such statement to take effect.
       ``(4) Authority to continue review.--Paragraph (3) shall 
     not preclude the State commission from continuing to review a 
     statement that has been permitted to take effect under 
     subparagraph (B) of such paragraph or from approving or 
     disapproving such statement under paragraph (2).
       ``(5) Duty to negotiate not affected.--The submission or 
     approval of a statement under this subsection shall not 
     relieve a Bell operating company of its duty to negotiate the 
     terms and conditions of an agreement under section 251.
       ``(g) Consolidation of State Proceedings.--Where not 
     inconsistent with the requirements of this Act, a State 
     commission may, to the extent practical, consolidate 
     proceedings under sections 214(e), 251(f), 253, and this 
     section in order to reduce administrative burdens on 
     telecommunications carriers, other parties to the 
     proceedings, and the State commission in carrying out its 
     responsibilities under this Act.
       ``(h) Filing Required.--A State commission shall make a 
     copy of each agreement approved under subsection (e) and each 
     statement approved under subsection (f) available for public 
     inspection and copying within 10 days after the agreement or 
     statement is approved. The State commission may charge a 
     reasonable and nondiscriminatory fee to the parties to the 
     agreement or to the party filing the statement to cover the 
     costs of approving and filing such agreement or statement.
       ``(i) Availability to Other Telecommunications Carriers.--A 
     local exchange carrier shall make available any 
     interconnection, service, or network element provided under 
     an agreement approved under this section to which it is a 
     party to any other requesting telecommunications carrier upon 
     the same terms and conditions as those provided in the 
     agreement.
       ``(j) Definition of Incumbent Local Exchange Carrier.--For 
     purposes of this section, the term `incumbent local exchange 
     carrier' has the meaning provided in section 251(h).

     ``SEC. 253. 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 
     service.
       ``(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 254, 
     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) State and Local Government Authority.--Nothing in 
     this section affects the authority of a State or 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 subsection (a) 
     or (b), the Commission shall preempt the enforcement of such 
     statute, regulation, or legal requirement to the extent 
     necessary to correct such violation or inconsistency.
       ``(e) Commercial mobile service providers.--Nothing in this 
     section shall affect the application of section 332(c)(3) to 
     commercial mobile service providers.
       ``(f) Rural Markets.--It shall not be a violation of this 
     section for a State to require a telecommunications carrier 
     that seeks to provide telephone exchange service or exchange 
     access in a service area served by a rural telephone company 
     to meet the requirements in section 214(e)(1) for designation 
     as an eligible telecommunications carrier for that area 
     before being permitted to provide such service. This 
     subsection shall not apply--
       ``(1) to a service area served by a rural telephone company 
     that has obtained an exemption, suspension, or modification 
     of section 251(c)(4) that effectively prevents a competitor 
     from meeting the requirements of section 214(e)(1); and
       ``(2) to a provider of commercial mobile services.

     ``SEC. 254. UNIVERSAL SERVICE.

       ``(a) Procedures to Review Universal Service 
     Requirements.--
       ``(1) Federal-state joint board on universal service.--
     Within one month after the date of enactment of the 
     Telecommunications Act of 1996, the Commission shall 
     institute and refer to a Federal-State Joint Board under 
     section 410(c) a proceeding to recommend changes to any of 
     its regulations in order to implement sections 214(e) and 
     this section, including the definition of the services that 
     are supported by Federal universal service support mechanisms 
     and a specific timetable for completion of such 
     recommendations. In addition to the members of the Joint 
     Board required under section 410(c), one member of such Joint 
     Board shall be a State-appointed utility consumer advocate 
     nominated by a national organization of State utility 
     consumer advocates. The Joint Board shall, after notice and 
     opportunity for public comment, make its recommendations to 
     the Commission 9 months after the date of enactment of the 
     Telecommunications Act of 1996.
       ``(2) Commission action.--The Commission shall initiate a 
     single proceeding to implement the recommendations from the 
     Joint Board required by paragraph (1) and shall complete such 
     proceeding within 15 months after the date of enactment of 
     the Telecommunications Act of 1996. The rules established by 
     such proceeding shall include a definition of the services 
     that are supported by Federal universal service support 
     mechanisms and a specific timetable for implementation. 
     Thereafter, the Commission shall complete any proceeding to 
     implement subsequent recommendations from any Joint Board on 
     universal service within one year after receiving such 
     recommendations.
       ``(b) 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 and rates.--Quality services should be 
     available at just, reasonable, and affordable rates.
       ``(2) Access to advanced services.--Access to advanced 
     telecommunications and information services should be 
     provided in all regions of the Nation.
       ``(3) Access in rural and high cost areas.--Consumers in 
     all regions of the Nation, including low-income consumers and 
     those in rural, 

[[Page H1083]]
     insular, and high cost areas, should have access to telecommunications 
     and information services, including interexchange services 
     and advanced telecommunications and information services, 
     that are reasonably comparable to those services provided in 
     urban areas and that are available at rates that are 
     reasonably comparable to rates charged for similar services 
     in urban areas.
       ``(4) Equitable and nondiscriminatory contributions.--All 
     providers of telecommunications services should make an 
     equitable and nondiscriminatory contribution to the 
     preservation and advancement of universal service.
       ``(5) Specific and predictable support mechanisms.--There 
     should be specific, predictable and sufficient Federal and 
     State mechanisms to preserve and advance universal service.
       ``(6) Access to advanced telecommunications services for 
     schools, health care, and libraries.--Elementary and 
     secondary schools and classrooms, health care providers, and 
     libraries should have access to advanced telecommunications 
     services as described in subsection (h).
       ``(7) Additional principles.--Such other principles as the 
     Joint Board and the Commission determine are necessary and 
     appropriate for the protection of the public interest, 
     convenience, and necessity and are consistent with this Act.
       ``(c) Definition.--
       ``(1) In general.--Universal service is an evolving level 
     of telecommunications services that the Commission shall 
     establish periodically under this section, taking into 
     account advances in telecommunications and information 
     technologies and services. The Joint Board in recommending, 
     and the Commission in establishing, the definition of the 
     services that are supported by Federal universal service 
     support mechanisms shall consider the extent to which such 
     telecommunications services--
       ``(A) are essential to education, public health, or public 
     safety;
       ``(B) have, through the operation of market choices by 
     customers, been subscribed to by a substantial majority of 
     residential customers;
       ``(C) are being deployed in public telecommunications 
     networks by telecommunications carriers; and
       ``(D) are consistent with the public interest, convenience, 
     and necessity.
       ``(2) Alterations and modifications.--The Joint Board may, 
     from time to time, recommend to the Commission modifications 
     in the definition of the services that are supported by 
     Federal universal service support mechanisms.
       ``(3) Special services.--In addition to the services 
     included in the definition of universal service under 
     paragraph (1), the Commission may designate additional 
     services for such support mechanisms for schools, libraries, 
     and health care providers for the purposes of subsection (h).
       ``(d) Telecommunications Carrier Contribution.--Every 
     telecommunications carrier that provides interstate 
     telecommunications services shall contribute, on an equitable 
     and nondiscriminatory basis, to the specific, predictable, 
     and sufficient mechanisms established by the Commission to 
     preserve and advance universal service. The Commission may 
     exempt a carrier or class of carriers from this requirement 
     if the carrier's telecommunications activities are limited to 
     such an extent that the level of such carrier's contribution 
     to the preservation and advancement of universal service 
     would be de minimis. Any other provider of interstate 
     telecommunications may be required to contribute to the 
     preservation and advancement of universal service if the 
     public interest so requires.
       ``(e) Universal Service Support.--After the date on which 
     Commission regulations implementing this section take effect, 
     only an eligible telecommunications carrier designated under 
     section 214(e) shall be eligible to receive specific Federal 
     universal service support. A carrier that receives such 
     support shall use that support only for the provision, 
     maintenance, and upgrading of facilities and services for 
     which the support is intended. Any such support should be 
     explicit and sufficient to achieve the purposes of this 
     section.
       ``(f) State Authority.--A State may adopt regulations not 
     inconsistent with the Commission's rules to preserve and 
     advance universal service. Every telecommunications carrier 
     that provides intrastate telecommunications services shall 
     contribute, on an equitable and nondiscriminatory basis, in a 
     manner determined by the State to the preservation and 
     advancement of universal service in that State. A State may 
     adopt regulations to provide for additional definitions and 
     standards to preserve and advance universal service within 
     that State only to the extent that such regulations adopt 
     additional specific, predictable, and sufficient mechanisms 
     to support such definitions or standards that do not rely on 
     or burden Federal universal service support mechanisms.
       ``(g) Interexchange and Interstate Services.--Within 6 
     months after the date of enactment of the Telecommunications 
     Act of 1996, the Commission shall adopt rules to require that 
     the rates charged by providers of interexchange 
     telecommunications services to subscribers in rural and high 
     cost areas shall be no higher than the rates charged by each 
     such provider to its subscribers in urban areas. Such rules 
     shall also require that a provider of interstate 
     interexchange telecommunications services shall provide such 
     services to its subscribers in each State at rates no higher 
     than the rates charged to its subscribers in any other State.
       ``(h) Telecommunications Services for Certain Providers.--
       ``(1) In general.--
       ``(A) Health care providers for rural areas.--A 
     telecommunications carrier shall, upon receiving a bona fide 
     request, provide telecommunications services which are 
     necessary for the provision of health care services in a 
     State, including instruction relating to such services, to 
     any public or nonprofit health care provider that serves 
     persons who reside in rural areas in that State at rates that 
     are reasonably comparable to rates charged for similar 
     services in urban areas in that State. A telecommunications 
     carrier providing service under this paragraph shall be 
     entitled to have an amount equal to the difference, if any, 
     between the rates for services provided to health care 
     providers for rural areas in a State and the rates for 
     similar services provided to other customers in comparable 
     rural areas in that State treated as a service obligation as 
     a part of its obligation to participate in the mechanisms to 
     preserve and advance universal service.
       ``(B) Educational providers and libraries.--All 
     telecommunications carriers serving a geographic area shall, 
     upon a bona fide request for any of its services that are 
     within the definition of universal service under subsection 
     (c)(3), provide such services to elementary schools, 
     secondary schools, and libraries for educational purposes at 
     rates less than the amounts charged for similar services to 
     other parties. The discount shall be an amount that the 
     Commission, with respect to interstate services, and the 
     States, with respect to intrastate services, determine is 
     appropriate and necessary to ensure affordable access to and 
     use of such services by such entities. A telecommunications 
     carrier providing service under this paragraph shall--
       ``(i) have an amount equal to the amount of the discount 
     treated as an offset to its obligation to contribute to the 
     mechanisms to preserve and advance universal service, or
       ``(ii) notwithstanding the provisions of subsection (e) of 
     this section, receive reimbursement utilizing the support 
     mechanisms to preserve and advance universal service.
       ``(2) Advanced services.--The Commission shall establish 
     competitively neutral rules--
       ``(A) to enhance, to the extent technically feasible and 
     economically reasonable, access to advanced 
     telecommunications and information services for all public 
     and nonprofit elementary and secondary school classrooms, 
     health care providers, and libraries; and
       ``(B) to define the circumstances under which a 
     telecommunications carrier may be required to connect its 
     network to such public institutional telecommunications 
     users.
       ``(3) Terms and conditions.--Telecommunications services 
     and network capacity provided to a public institutional 
     telecommunications user under this subsection may not be 
     sold, resold, or otherwise transferred by such user in 
     consideration for money or any other thing of value.
       ``(4) Eligibility of users.--No entity listed in this 
     subsection shall be entitled to preferential rates or 
     treatment as required by this subsection, if such entity 
     operates as a for-profit business, is a school described in 
     paragraph (5)(A) with an endowment of more than $50,000,000, 
     or is a library not eligible for participation in State-based 
     plans for funds under title III of the Library Services and 
     Construction Act (20 U.S.C. 335c et seq.).
       ``(5) Definitions.--For purposes of this subsection:
       ``(A) 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).
       ``(B) Health care provider.--The term `health care 
     provider' means--
       ``(i) post-secondary educational institutions offering 
     health care instruction, teaching hospitals, and medical 
     schools;
       ``(ii) community health centers or health centers providing 
     health care to migrants;
       ``(iii) local health departments or agencies;
       ``(iv) community mental health centers;
       ``(v) not-for-profit hospitals;
       ``(vi) rural health clinics; and
       ``(vii) consortia of health care providers consisting of 
     one or more entities described in clauses (i) through (vi).
       ``(C) 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 paragraph.
       ``(i) Consumer Protection.--The Commission and the States 
     should ensure that universal service is available at rates 
     that are just, reasonable, and affordable.
       ``(j) Lifeline Assistance.--Nothing in this section shall 
     affect the collection, distribution, or administration of the 
     Lifeline Assistance Program provided for by the Commission 
     under regulations set forth in section 69.117 of title 47, 
     Code of Federal Regulations, and other related sections of 
     such title.
       ``(k) Subsidy of Competitive Services Prohibited.--A 
     telecommunications carrier may not use services that are not 
     competitive to subsidize services that are subject to 
     competition. 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 the definition of universal service bear 
     no more than a reasonable share of the joint and common costs 
     of facilities used to provide those services.

     ``SEC. 255. 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 or customer 

[[Page H1084]]
     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) Guidelines.--Within 18 months after the date of 
     enactment of the Telecommunications Act of 1996, the 
     Architectural and Transportation Barriers Compliance Board 
     shall develop guidelines for accessibility of 
     telecommunications equipment and customer premises equipment 
     in conjunction with the Commission. The Board shall review 
     and update the guidelines periodically.
       ``(f) No Additional Private Rights Authorized.--Nothing in 
     this section shall be construed to authorize any private 
     right of action to enforce any requirement of this section or 
     any regulation thereunder. The Commission shall have 
     exclusive jurisdiction with respect to any complaint under 
     this section.

     ``SEC. 256. COORDINATION FOR INTERCONNECTIVITY.

       ``(a) Purpose.--It is the purpose of this section--
       ``(1) to promote nondiscriminatory accessibility by the 
     broadest number of users and vendors of communications 
     products and services to public telecommunications networks 
     used to provide telecommunications service through--
       ``(A) coordinated public telecommunications network 
     planning and design by telecommunications carriers and other 
     providers of telecommunications service; and
       ``(B) public telecommunications network interconnectivity, 
     and interconnectivity of devices with such networks used to 
     provide telecommunications service; and
       ``(2) to ensure the ability of users and information 
     providers to seamlessly and transparently transmit and 
     receive information between and across telecommunications 
     networks.
       ``(b) Commission Functions.--In carrying out the purposes 
     of this section, the Commission--
       ``(1) shall establish procedures for Commission oversight 
     of coordinated network planning by telecommunications 
     carriers and other providers of telecommunications service 
     for the effective and efficient interconnection of public 
     telecommunications networks used to provide 
     telecommunications service; and
       ``(2) may participate, in a manner consistent with its 
     authority and practice prior to the date of enactment of this 
     section, in the development by appropriate industry 
     standards-setting organizations of public telecommunications 
     network interconnectivity standards that promote access to--
       ``(A) public telecommunications networks used to provide 
     telecommunications service;
       ``(B) network capabilities and services by individuals with 
     disabilities; and
       ``(C) information services by subscribers of rural 
     telephone companies.
       ``(c) Commission's Authority.--Nothing in this section 
     shall be construed as expanding or limiting any authority 
     that the Commission may have under law in effect before the 
     date of enactment of the Telecommunications Act of 1996.
       ``(d) Definition.--As used in this section, the term 
     `public telecommunications network interconnectivity' means 
     the ability of two or more public telecommunications networks 
     used to provide telecommunications service to communicate and 
     exchange information without degeneration, and to interact in 
     concert with one another.

     ``SEC. 257. MARKET ENTRY BARRIERS PROCEEDING.

       ``(a) Elimination of Barriers.--Within 15 months after the 
     date of enactment of the Telecommunications Act of 1996, the 
     Commission shall complete a proceeding for the purpose of 
     identifying and eliminating, by regulations pursuant to its 
     authority under this Act (other than this section), market 
     entry barriers for entrepreneurs and other small businesses 
     in the provision and ownership of telecommunications services 
     and information services, or in the provision of parts or 
     services to providers of telecommunications services and 
     information services.
       ``(b) National Policy.--In carrying out subsection (a), the 
     Commission shall seek to promote the policies and purposes of 
     this Act favoring diversity of media voices, vigorous 
     economic competition, technological advancement, and 
     promotion of the public interest, convenience, and necessity.
       ``(c) Periodic Review.--Every 3 years following the 
     completion of the proceeding required by subsection (a), the 
     Commission shall review and report to Congress on--
       ``(1) any regulations prescribed to eliminate barriers 
     within its jurisdiction that are identified under subsection 
     (a) and that can be prescribed consistent with the public 
     interest, convenience, and necessity; and
       ``(2) the statutory barriers identified under subsection 
     (a) that the Commission recommends be eliminated, consistent 
     with the public interest, convenience, and necessity.

     ``SEC. 258. ILLEGAL CHANGES IN SUBSCRIBER CARRIER SELECTIONS.

       ``(a) Prohibition.--No telecommunications carrier 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 such verification 
     procedures as the Commission shall prescribe. Nothing in this 
     section shall preclude any State commission from enforcing 
     such procedures with respect to intrastate services.
       ``(b) Liability for Charges.--Any telecommunications 
     carrier that violates the verification procedures described 
     in subsection (a) and that collects charges for telephone 
     exchange service or telephone toll service from a subscriber 
     shall be liable to the carrier previously selected by the 
     subscriber in an amount equal to all charges paid by such 
     subscriber after such violation, in accordance with such 
     procedures as the Commission may prescribe. The remedies 
     provided by this subsection are in addition to any other 
     remedies available by law.

     ``SEC. 259. INFRASTRUCTURE SHARING.

       ``(a) Regulations Required.--The Commission shall 
     prescribe, within one year after the date of enactment of the 
     Telecommunications Act of 1996, regulations that require 
     incumbent local exchange carriers (as defined in section 
     251(h)) 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 eligible telecommunications carrier under section 214(e).
       ``(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) Definition.--For purposes of this section, the term 
     `qualifying carrier' means a telecommunications carrier 
     that--
       ``(1) lacks economies of scale or scope, as determined in 
     accordance with regulations prescribed by the Commission 
     pursuant to this section; and
       ``(2) offers telephone exchange service, exchange access, 
     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 
     eligible telecommunications carrier under section 214(e).

     ``SEC. 260. PROVISION OF TELEMESSAGING SERVICE.

       ``(a) Nondiscrimination Safeguards.--Any local exchange 
     carrier subject to the requirements of section 251(c) that 
     provides telemessaging service--
       ``(1) shall not subsidize its telemessaging service 
     directly or indirectly from its telephone exchange service or 
     its exchange access; and
       ``(2) shall not prefer or discriminate in favor of its 
     telemessaging service operations in its provision of 
     telecommunications services.
       ``(b) Expedited Consideration of Complaints.--The 
     Commission shall establish procedures for the receipt and 
     review of complaints concerning violations of subsection (a) 
     or the regulations thereunder that result in material 
     financial harm to a provider of telemessaging service. Such 
     procedures shall ensure that the Commission will make a final 
     determination with respect to any such complaint within 120 
     days after receipt of the complaint. If the complaint 
     contains an appropriate showing that the alleged violation 
     occurred, the Commission shall, within 60 days after receipt 
     of the complaint, order the local exchange carrier and any 
     affiliates to cease engaging in such violation pending such 
     final determination.
     
[[Page H1085]]

       ``(c) Definition.--As used in this section, 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.

     ``SEC. 261. EFFECT ON OTHER REQUIREMENTS.

       ``(a) Commission Regulations.--Nothing in this part shall 
     be construed to prohibit the Commission from enforcing 
     regulations prescribed prior to the date of enactment of the 
     Telecommunications Act of 1996 in fulfilling the requirements 
     of this part, to the extent that such regulations are not 
     inconsistent with the provisions of this part.
       ``(b) Existing State Regulations.--Nothing in this part 
     shall be construed to prohibit any State commission from 
     enforcing regulations prescribed prior to the date of 
     enactment of the Telecommunications Act of 1996, or from 
     prescribing regulations after such date of enactment, in 
     fulfilling the requirements of this part, if such regulations 
     are not inconsistent with the provisions of this part.
       ``(c) Additional State Requirements.--Nothing in this part 
     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, as long as the 
     State's requirements are not inconsistent with this part or 
     the Commission's regulations to implement this part.''.
       (b) Designation of Part I.--Title II of the Act is further 
     amended by inserting before the heading of section 201 the 
     following new heading:

                 ``PART I--COMMON CARRIER REGULATION''

       (c) Stylistic Consistency.--The Act is amended so that--
       (1) the designation and heading of each title of the Act 
     shall be in the form and typeface of the designation and 
     heading of this title of this Act; and
       (2) the designation and heading of each part of each title 
     of the Act shall be in the form and typeface of the 
     designation and heading of part I of title II of the Act, as 
     amended by subsection (a).

     SEC. 102. ELIGIBLE TELECOMMUNICATIONS CARRIERS.

       (a) In General.--Section 214 (47 U.S.C. 214) is amended by 
     adding at the end thereof the following new subsection:
       ``(e) Provision of Universal Service.--
       ``(1) Eligible telecommunications carriers.--A common 
     carrier designated as an eligible telecommunications carrier 
     under paragraph (2) or (3) shall be eligible to receive 
     universal service support in accordance with section 254 and 
     shall, throughout the service area for which the designation 
     is received--
       ``(A) offer the services that are supported by Federal 
     universal service support mechanisms under section 254(c), 
     either using its own facilities or a combination of its own 
     facilities and resale of another carrier's services 
     (including the services offered by another eligible 
     telecommunications carrier); and
       ``(B) advertise the availability of such services and the 
     charges therefor using media of general distribution.
       ``(2) Designation of eligible telecommunications 
     carriers.--A State commission shall upon its own motion or 
     upon request designate a common carrier that meets the 
     requirements of paragraph (1) as an eligible 
     telecommunications carrier for a service area designated by 
     the State commission. Upon request and consistent with the 
     public interest, convenience, and necessity, the State 
     commission may, in the case of an area served by a rural 
     telephone company, and shall, in the case of all other areas, 
     designate more than one common carrier as an eligible 
     telecommunications carrier for a service area designated by 
     the State commission, so long as each additional requesting 
     carrier meets the requirements of paragraph (1). Before 
     designating an additional eligible telecommunications carrier 
     for an area served by a rural telephone company, the State 
     commission shall find that the designation is in the public 
     interest.
       ``(3) Designation of eligible telecommunications carriers 
     for unserved areas.--If no common carrier will provide the 
     services that are supported by Federal universal service 
     support mechanisms under section 254(c) to an unserved 
     community or any portion thereof that requests such service, 
     the Commission, with respect to interstate services, or a 
     State commission, with respect to intrastate services, shall 
     determine which common carrier or carriers are best able to 
     provide such service to the requesting unserved community or 
     portion thereof and shall order such carrier or carriers to 
     provide such service for that unserved community or portion 
     thereof. Any carrier or carriers ordered to provide such 
     service under this paragraph shall meet the requirements of 
     paragraph (1) and shall be designated as an eligible 
     telecommunications carrier for that community or portion 
     thereof.
       ``(4) Relinquishment of universal service.--A State 
     commission shall permit an eligible telecommunications 
     carrier to relinquish its designation as such a carrier in 
     any area served by more than one eligible telecommunications 
     carrier. An eligible telecommunications carrier that seeks to 
     relinquish its eligible telecommunications carrier 
     designation for an area served by more than one eligible 
     telecommunications carrier shall give advance notice to the 
     State commission of such relinquishment. Prior to permitting 
     a telecommunications carrier designated as an eligible 
     telecommunications carrier to cease providing universal 
     service in an area served by more than one eligible 
     telecommunications carrier, the State commission shall 
     require the remaining eligible telecommunications carrier or 
     carriers to ensure that all customers served by the 
     relinquishing carrier will continue to be served, and shall 
     require sufficient notice to permit the purchase or 
     construction of adequate facilities by any remaining eligible 
     telecommunications carrier. The State commission shall 
     establish a time, not to exceed one year after the State 
     commission approves such relinquishment under this paragraph, 
     within which such purchase or construction shall be 
     completed.
       ``(5) Service area defined.--The term `service area' means 
     a geographic area established by a State commission 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.''.

     SEC. 103. EXEMPT TELECOMMUNICATIONS COMPANIES.

       The Public Utility Holding Company Act of 1935 (15 U.S.C. 
     79 and following) is amended by redesignating sections 34 and 
     35 as sections 35 and 36, respectively, and by inserting the 
     following new section after section 33:

     ``SEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES.

       ``(a) Definitions.--For purposes of this section--
       ``(1) Exempt Telecommunications Company.--The term `exempt 
     telecommunications company' means any person determined by 
     the Federal Communications Commission to be engaged directly 
     or indirectly, wherever located, through one or more 
     affiliates (as defined in section 2(a)(11)(B)), and 
     exclusively in the business of providing---
       ``(A) telecommunications services;
       ``(B) information services;
       ``(C) other services or products subject to the 
     jurisdiction of the Federal Communications Commission; or
       ``(D) products or services that are related or incidental 
     to the provision of a product or service described in 
     subparagraph (A), (B), or (C).
     No person shall be deemed to be an exempt telecommunications 
     company under this section unless such person has applied to 
     the Federal Communications Commission for a determination 
     under this paragraph. A person applying in good faith for 
     such a determination shall be deemed an exempt 
     telecommunications company under this section, with all of 
     the exemptions provided by this section, until the Federal 
     Communications Commission makes such determination. The 
     Federal Communications Commission shall make such 
     determination within 60 days of its receipt of any such 
     application filed after the enactment of this section and 
     shall notify the Commission whenever a determination is made 
     under this paragraph that any person is an exempt 
     telecommunications company. Not later than 12 months after 
     the date of enactment of this section, the Federal 
     Communications Commission shall promulgate rules implementing 
     the provisions of this paragraph which shall be applicable to 
     applications filed under this paragraph after the effective 
     date of such rules.
       ``(2) Other terms.--For purposes of this section, the terms 
     `telecommunications services' and `information services' 
     shall have the same meanings as provided in the 
     Communications Act of 1934.
       ``(b) State Consent for Sale of Existing Rate-Based 
     Facilities.--If a rate or charge for the sale of electric 
     energy or natural gas (other than any portion of a rate or 
     charge which represents recovery of the cost of a wholesale 
     rate or charge) for, or in connection with, assets of a 
     public utility company that is an associate company or 
     affiliate of a registered holding company was in effect under 
     the laws of any State as of December 19, 1995, the public 
     utility company owning such assets may not sell such assets 
     to an exempt telecommunications company that is an associate 
     company or affiliate unless State commissions having 
     jurisdiction over such public utility company approve such 
     sale. Nothing in this subsection shall preempt the otherwise 
     applicable authority of any State to approve or disapprove 
     the sale of such assets. The approval of the Commission under 
     this Act shall not be required for the sale of assets as 
     provided in this subsection.
       ``(c) Ownership of ETCS by Exempt Holding Companies.--
     Notwithstanding any provision of this Act, a holding company 
     that is exempt under section 3 of this Act shall be 
     permitted, without condition or limitation under this Act, to 
     acquire and maintain an interest in the business of one or 
     more exempt telecommunications companies.
       ``(d) Ownership of ETCS by Registered Holding Companies.--
     Notwithstanding any provision of this Act, a registered 
     holding company shall be permitted (without the need to apply 
     for, or receive, approval from the Commission, and otherwise 
     without condition under this Act) to acquire and hold the 
     securities, or an interest in the business, of one or more 
     exempt telecommunications companies.
       ``(e) Financing and Other Relationships Between ETCS and 
     Registered Holding Companies.--The relationship between an 
     exempt telecommunications company and a registered holding 
     company, its affiliates and associate companies, shall remain 
     subject to the jurisdiction of the Commission under this Act: 
     Provided, That--
       ``(1) section 11 of this Act shall not prohibit the 
     ownership of an interest in the business of one or more 
     exempt telecommunications companies by a registered holding 
     company (regardless of activities engaged in or where 
     facilities owned or operated by such exempt 
     telecommunications companies are located), and such ownership 
     by a registered holding company shall be 

[[Page H1086]]
     deemed consistent with the operation of an integrated public utility 
     system;
       ``(2) the ownership of an interest in the business of one 
     or more exempt telecommunications companies by a registered 
     holding company (regardless of activities engaged in or where 
     facilities owned or operated by such exempt 
     telecommunications companies are located) shall be considered 
     as reasonably incidental, or economically necessary or 
     appropriate, to the operations of an integrated public 
     utility system;
       ``(3) the Commission shall have no jurisdiction under this 
     Act over, and there shall be no restriction or approval 
     required under this Act with respect to (A) the issue or sale 
     of a security by a registered holding company for purposes of 
     financing the acquisition of an exempt telecommunications 
     company, or (B) the guarantee of a security of an exempt 
     telecommunications company by a registered holding company; 
     and
       ``(4) except for costs that should be fairly and equitably 
     allocated among companies that are associate companies of a 
     registered holding company, the Commission shall have no 
     jurisdiction under this Act over the sales, service, and 
     construction contracts between an exempt telecommunications 
     company and a registered holding company, its affiliates and 
     associate companies.
       ``(f) Reporting Obligations Concerning Investments and 
     Activities of Registered Public-Utility Holding Company 
     Systems.--
       ``(1) Obligations to report information.--Any registered 
     holding company or subsidiary thereof that acquires or holds 
     the securities, or an interest in the business, of an exempt 
     telecommunications company shall file with the Commission 
     such information as the Commission, by rule, may prescribe 
     concerning--
       ``(A) investments and activities by the registered holding 
     company, or any subsidiary thereof, with respect to exempt 
     telecommunications companies, and
       ``(B) any activities of an exempt telecommunications 
     company within the holding company system,

     that are reasonably likely to have a material impact on the 
     financial or operational condition of the holding company 
     system.
       ``(2) Authority to require additional information.--If, 
     based on reports provided to the Commission pursuant to 
     paragraph (1) of this subsection or other available 
     information, the Commission reasonably concludes that it has 
     concerns regarding the financial or operational condition of 
     any registered holding company or any subsidiary thereof 
     (including an exempt telecommunications company), the 
     Commission may require such registered holding company to 
     make additional reports and provide additional information.
       ``(3) Authority to limit disclosure of information.--
     Notwithstanding any other provision of law, the Commission 
     shall not be compelled to disclose any information required 
     to be reported under this subsection. Nothing in this 
     subsection shall authorize the Commission to withhold the 
     information from Congress, or prevent the Commission from 
     complying with a request for information from any other 
     Federal or State department or agency requesting the 
     information for purposes within the scope of its 
     jurisdiction. For purposes of section 552 of title 5, United 
     States Code, this subsection shall be considered a statute 
     described in subsection (b)(3)(B) of such section 552.
       ``(g) Assumption of Liabilities.--Any public utility 
     company that is an associate company, or an affiliate, of a 
     registered holding company and that is subject to the 
     jurisdiction of a State commission with respect to its retail 
     electric or gas rates shall not issue any security for the 
     purpose of financing the acquisition, ownership, or operation 
     of an exempt telecommunications company. Any public utility 
     company that is an associate company, or an affiliate, of a 
     registered holding company and that is subject to the 
     jurisdiction of a State commission with respect to its retail 
     electric or gas rates shall not assume any obligation or 
     liability as guarantor, endorser, surety, or otherwise by the 
     public utility company in respect of any security of an 
     exempt telecommunications company.
       ``(h) Pledging or Mortgaging of Assets.--Any public utility 
     company that is an associate company, or affiliate, of a 
     registered holding company and that is subject to the 
     jurisdiction of a State commission with respect to its retail 
     electric or gas rates shall not pledge, mortgage, or 
     otherwise use as collateral any assets of the public utility 
     company or assets of any subsidiary company thereof for the 
     benefit of an exempt telecommunications company.
       ``(i) Protection Against Abusive Affiliate Transactions.--A 
     public utility company may enter into a contract to purchase 
     services or products described in subsection (a)(1) from an 
     exempt telecommunications company that is an affiliate or 
     associate company of the public utility company only if--
       ``(1) every State commission having jurisdiction over the 
     retail rates of such public utility company approves such 
     contract; or
       ``(2) such public utility company is not subject to State 
     commission retail rate regulation and the purchased services 
     or products--
       ``(A) would not be resold to any affiliate or associate 
     company; or
       ``(B) would be resold to an affiliate or associate company 
     and every State commission having jurisdiction over the 
     retail rates of such affiliate or associate company makes the 
     determination required by subparagraph (A).

     The requirements of this subsection shall not apply in any 
     case in which the State or the State commission concerned 
     publishes a notice that the State or State commission waives 
     its authority under this subsection.
       ``(j) Nonpreemption of Rate Authority.--Nothing in this Act 
     shall preclude the Federal Energy Regulatory Commission or a 
     State commission from exercising its jurisdiction under 
     otherwise applicable law to determine whether a public 
     utility company may recover in rates the costs of products or 
     services purchased from or sold to an associate company or 
     affiliate that is an exempt telecommunications company, 
     regardless of whether such costs are incurred through the 
     direct or indirect purchase or sale of products or services 
     from such associate company or affiliate.
       ``(k) Reciprocal Arrangements Prohibited.--Reciprocal 
     arrangements among companies that are not affiliates or 
     associate companies of each other that are entered into in 
     order to avoid the provisions of this section are prohibited.
       ``(l) Books and Records.--(1) Upon written order of a State 
     commission, a State commission may examine the books, 
     accounts, memoranda, contracts, and records of--
       ``(A) a public utility company subject to its regulatory 
     authority under State law;
       ``(B) any exempt telecommunications company selling 
     products or services to such public utility company or to an 
     associate company of such public utility company; and
       ``(C) any associate company or affiliate of an exempt 
     telecommunications company which sells products or services 
     to a public utility company referred to in subparagraph (A),

     wherever located, if such examination is required for the 
     effective discharge of the State commission's regulatory 
     responsibilities affecting the provision of electric or gas 
     service in connection with the activities of such exempt 
     telecommunications company.
       ``(2) Where a State commission issues an order pursuant to 
     paragraph (1), the State commission shall not publicly 
     disclose trade secrets or sensitive commercial information.
       ``(3) Any United States district court located in the State 
     in which the State commission referred to in paragraph (1) is 
     located shall have jurisdiction to enforce compliance with 
     this subsection.
       ``(4) Nothing in this section shall--
       ``(A) preempt applicable State law concerning the provision 
     of records and other information; or
       ``(B) in any way limit rights to obtain records and other 
     information under Federal law, contracts, or otherwise.
       ``(m) Independent Audit Authority for State Commissions.--
       ``(1) State may order 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, directly or indirectly, with a 
     subsidiary company, an affiliate or an associate company that 
     is an exempt telecommunications company,
     may order an independent audit to be performed, no more 
     frequently than on an annual basis, of all matters deemed 
     relevant by the selected auditor that reasonably relate to 
     retail rates: Provided, That such matters relate, directly or 
     indirectly, to transactions or transfers between the public 
     utility company subject to its jurisdiction and such exempt 
     telecommunications company.
       ``(2) Selection of firm to conduct audit.--(A) If a State 
     commission orders an audit in accordance with paragraph (1), 
     the public utility company and the State commission shall 
     jointly select, within 60 days, a firm to perform the audit. 
     The firm selected to perform the audit shall possess 
     demonstrated qualifications relating to--
       ``(i) competency, including adequate technical training and 
     professional proficiency in each discipline necessary to 
     carry out the audit; and
       ``(ii) independence and objectivity, including that the 
     firm be free from personal or external impairments to 
     independence, and should assume an independent position with 
     the State commission and auditee, making certain that the 
     audit is based upon an impartial consideration of all 
     pertinent facts and responsible opinions.
       ``(B) The public utility company and the exempt 
     telecommunications company shall cooperate fully with all 
     reasonable requests necessary to perform the audit and the 
     public utility company shall bear all costs of having the 
     audit performed.
       ``(3) Availability of auditor's report.--The auditor's 
     report shall be provided to the State commission not later 
     than 6 months after the selection of the auditor, and 
     provided to the public utility company not later than 60 days 
     thereafter.
       ``(n) Applicability of Telecommunications Regulation.--
     Nothing in this section shall affect the authority of the 
     Federal Communications Commission under the Communications 
     Act of 1934, or the authority of State commissions under 
     State laws concerning the provision of telecommunications 
     services, to regulate the activities of an exempt 
     telecommunications company.''.

     SEC. 104. NONDISCRIMINATION PRINCIPLE.

        Section 1 (47 U.S.C. 151) is amended by inserting after 
     ``to all the people of the United States'' the following: ``, 
     without discrimination on the basis of race, color, religion, 
     national origin, or sex,''.
   Subtitle B--Special Provisions Concerning Bell Operating Companies

     SEC. 151. BELL OPERATING COMPANY PROVISIONS.

       (a) Establishment of Part III of Title II.--Title II is 
     amended by adding at the end of part II (as added by section 
     101) the following new part:
     
[[Page H1087]]


   ``PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES

     ``SEC. 271. BELL OPERATING COMPANY ENTRY INTO INTERLATA 
                   SERVICES.

       ``(a) General Limitation.--Neither a Bell operating 
     company, nor any affiliate of a Bell operating company, may 
     provide interLATA services except as provided in this 
     section.
       ``(b) InterLATA Services to Which This Section Applies.--
       ``(1) In-region services.--A Bell operating company, or any 
     affiliate of that Bell operating company, may provide 
     interLATA services originating in any of its in-region States 
     (as defined in subsection (i)) if the Commission approves the 
     application of such company for such State under subsection 
     (d)(3).
       ``(2) Out-of-region services.--A Bell operating company, or 
     any affiliate of that Bell operating company, may provide 
     interLATA services originating outside its in-region States 
     after the date of enactment of the Telecommunications Act of 
     1996, subject to subsection (j).
       ``(3) Incidental interlata services.--A Bell operating 
     company, or any affiliate of a Bell operating company, may 
     provide incidental interLATA services (as defined in 
     subsection (g)) originating in any State after the date of 
     enactment of the Telecommunications Act of 1996.
       ``(4) Termination.--Nothing in this section prohibits a 
     Bell operating company or any of its affiliates from 
     providing termination for interLATA services, subject to 
     subsection (j).
       ``(c) Requirements for Providing Certain In-Region 
     InterLATA Services.--
       ``(1) Agreement or statement.--A Bell operating company 
     meets the requirements of this paragraph if it meets the 
     requirements of subparagraph (A) or subparagraph (B) of this 
     paragraph for each State for which the authorization is 
     sought.
       ``(A) Presence of a facilities-based competitor.--A Bell 
     operating company meets the requirements of this subparagraph 
     if it has entered into one or more binding agreements that 
     have been approved under section 252 specifying the terms and 
     conditions under which the Bell operating company is 
     providing access and interconnection to its network 
     facilities for the network facilities of one or more 
     unaffiliated competing providers of telephone exchange 
     service (as defined in section 3(47)(A), but excluding 
     exchange access) to residential and business subscribers. For 
     the purpose of this subparagraph, such telephone exchange 
     service may be offered by such competing providers either 
     exclusively over their own telephone exchange service 
     facilities or predominantly over their own telephone exchange 
     service facilities in combination with the resale of the 
     telecommunications services of another carrier. For the 
     purpose of this subparagraph, services provided pursuant to 
     subpart K of part 22 of the Commission's regulations (47 
     C.F.R. 22.901 et seq.) shall not be considered to be 
     telephone exchange services.
       ``(B) Failure to request access.--A Bell operating company 
     meets the requirements of this subparagraph if, after 10 
     months after the date of enactment of the Telecommunications 
     Act of 1996, no such provider has requested the access and 
     interconnection described in subparagraph (A) before the date 
     which is 3 months before the date the company makes its 
     application under subsection (d)(1), and a statement of the 
     terms and conditions that the company generally offers to 
     provide such access and interconnection has been approved or 
     permitted to take effect by the State commission under 
     section 252(f). For purposes of this subparagraph, a Bell 
     operating company shall be considered not to have received 
     any request for access and interconnection if the State 
     commission of such State certifies that the only provider or 
     providers making such a request have (i) failed to negotiate 
     in good faith as required by section 252, or (ii) violated 
     the terms of an agreement approved under section 252 by the 
     provider's failure to comply, within a reasonable period of 
     time, with the implementation schedule contained in such 
     agreement.
       ``(2) Specific interconnection requirements.--
       ``(A) Agreement required.--A Bell operating company meets 
     the requirements of this paragraph if, within the State for 
     which the authorization is sought--
       ``(i)(I) such company is providing access and 
     interconnection pursuant to one or more agreements described 
     in paragraph (1)(A), or
       ``(II) such company is generally offering access and 
     interconnection pursuant to a statement described in 
     paragraph (1)(B), and
       ``(ii) such access and interconnection meets the 
     requirements of subparagraph (B) of this paragraph.
       ``(B) Competitive checklist.--Access or interconnection 
     provided or generally offered by a Bell operating company to 
     other telecommunications carriers meets the requirements of 
     this subparagraph if such access and interconnection includes 
     each of the following:
       ``(i) Interconnection in accordance with the requirements 
     of sections 251(c)(2) and 252(d)(1).
       ``(ii) Nondiscriminatory access to network elements in 
     accordance with the requirements of sections 251(c)(3) and 
     252(d)(1).
       ``(iii) Nondiscriminatory access to the poles, ducts, 
     conduits, and rights-of-way owned or controlled by the Bell 
     operating company at just and reasonable rates in accordance 
     with the requirements of section 224.
       ``(iv) Local loop transmission from the central office to 
     the customer's premises, unbundled from local switching or 
     other services.
       ``(v) Local transport from the trunk side of a wireline 
     local exchange carrier switch unbundled from switching or 
     other services.
       ``(vi) Local switching unbundled from transport, local loop 
     transmission, or other services.
       ``(vii) 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.

       ``(viii) White pages directory listings for customers of 
     the other carrier's telephone exchange service.
       ``(ix) Until the date by which telecommunications numbering 
     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.
       ``(x) Nondiscriminatory access to databases and associated 
     signaling necessary for call routing and completion.
       ``(xi) Until the date by which the Commission issues 
     regulations pursuant to section 251 to require number 
     portability, 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 such 
     regulations.
       ``(xii) Nondiscriminatory access to such services or 
     information as are necessary to allow the requesting carrier 
     to implement local dialing parity in accordance with the 
     requirements of section 251(b)(3).
       ``(xiii) Reciprocal compensation arrangements in accordance 
     with the requirements of section 252(d)(2).
       ``(xiv) Telecommunications services are available for 
     resale in accordance with the requirements of sections 
     251(c)(4) and 252(d)(3).
       ``(d) Administrative Provisions.--
       ``(1) Application to commission.--On and after the date of 
     enactment of the Telecommunications Act of 1996, a Bell 
     operating company or its affiliate may apply to the 
     Commission for authorization to provide interLATA services 
     originating in any in-region State. The application shall 
     identify each State for which the authorization is sought.
       ``(2) Consultation.--
       ``(A) Consultation with the attorney general.--The 
     Commission shall notify the Attorney General promptly of any 
     application under paragraph (1). Before making any 
     determination under this subsection, the Commission shall 
     consult with the Attorney General, and if the Attorney 
     General submits any comments in writing, such comments shall 
     be included in the record of the Commission's decision. In 
     consulting with and submitting comments to the Commission 
     under this paragraph, the Attorney General shall provide to 
     the Commission an evaluation of the application using any 
     standard the Attorney General considers appropriate. The 
     Commission shall give substantial weight to the Attorney 
     General's evaluation, but such evaluation shall not have any 
     preclusive effect on any Commission decision under paragraph 
     (3).
       ``(B) Consultation with state commissions.--Before making 
     any determination under this subsection, the Commission shall 
     consult with the State commission of any State that is the 
     subject of the application in order to verify the compliance 
     of the Bell operating company with the requirements of 
     subsection (c).
       ``(3) Determination.--Not later than 90 days after 
     receiving an application under paragraph (1), the Commission 
     shall issue a written determination approving or denying the 
     authorization requested in the application for each State. 
     The Commission shall not approve the authorization requested 
     in an application submitted under paragraph (1) unless it 
     finds that--
       ``(A) the petitioning Bell operating company has met the 
     requirements of subsection (c)(1) and--
       ``(i) with respect to access and interconnection provided 
     pursuant to subsection (c)(1)(A), has fully implemented the 
     competitive checklist in subsection (c)(2)(B); or
       ``(ii) with respect to access and interconnection generally 
     offered pursuant to a statement under subsection (c)(1)(B), 
     such statement offers all of the items included in the 
     competitive checklist in subsection (c)(2)(B);
       ``(B) the requested authorization will be carried out in 
     accordance with the requirements of section 272; and
       ``(C) the requested authorization is consistent with the 
     public interest, convenience, and necessity.
     The Commission shall state the basis for its approval or 
     denial of the application.
       ``(4) Limitation on commission.--The Commission may not, by 
     rule or otherwise, limit or extend the terms used in the 
     competitive checklist set forth in subsection (c)(2)(B).
       ``(5) Publication.--Not later than 10 days after issuing a 
     determination under paragraph (3), the Commission shall 
     publish in the Federal Register a brief description of the 
     determination.
       ``(6) Enforcement of conditions.--
       ``(A) Commission authority.--If at any time after the 
     approval of an application under paragraph (3), the 
     Commission determines that a Bell operating company has 
     ceased to meet any of the conditions required for such 
     approval, the Commission may, after notice and opportunity 
     for a hearing--
       ``(i) issue an order to such company to correct the 
     deficiency;
       ``(ii) impose a penalty on such company pursuant to title 
     V; or
       ``(iii) suspend or revoke such approval.
       ``(B) Receipt and review of complaints.--The Commission 
     shall establish procedures for the review of complaints 
     concerning failures by Bell operating companies to meet 
     conditions required for approval under paragraph (3). Unless 
     the parties otherwise agree, the Commission shall act on such 
     complaint within 90 days.
       ``(e) Limitations.--
       ``(1) Joint marketing of local and long distance 
     services.--Until a Bell operating company is authorized 
     pursuant to subsection (d) to 

[[Page H1088]]
     provide interLATA services in an in-region State, or until 36 months 
     have passed since the date of enactment of the 
     Telecommunications Act of 1996, whichever is earlier, a 
     telecommunications carrier that serves greater than 5 percent 
     of the Nation's presubscribed access lines may not jointly 
     market in such State telephone exchange service obtained from 
     such company pursuant to section 251(c)(4) with interLATA 
     services offered by that telecommunications carrier.
       ``(2) IntraLATA toll dialing parity.--
       ``(A) Provision required.--A Bell operating company granted 
     authority to provide interLATA services under subsection (d) 
     shall provide intraLATA toll dialing parity throughout that 
     State coincident with its exercise of that authority.
       ``(B) Limitation.--Except for single-LATA States and States 
     that have issued an order by December 19, 1995, requiring a 
     Bell operating company to implement intraLATA toll dialing 
     parity, a State may not require a Bell operating company to 
     implement intraLATA toll dialing parity in that State before 
     a Bell operating company has been granted authority under 
     this section to provide interLATA services originating in 
     that State or before 3 years after the date of enactment of 
     the Telecommunications Act of 1996, whichever is earlier. 
     Nothing in this subparagraph precludes a State from issuing 
     an order requiring intraLATA toll dialing parity in that 
     State prior to either such date so long as such order does 
     not take effect until after the earlier of either such dates.
       ``(f) Exception for Previously Authorized Activities.--
     Neither subsection (a) nor section 273 shall prohibit a Bell 
     operating company or affiliate from engaging, at any time 
     after the date of enactment of the Telecommunications Act of 
     1996, in any activity to the extent authorized by, and 
     subject to the terms and conditions contained in, an order 
     entered by the United States District Court for the District 
     of Columbia pursuant to section VII or VIII(C) of the AT&T 
     Consent Decree if such order was entered on or before such 
     date of enactment, to the extent such order is not reversed 
     or vacated on appeal. Nothing in this subsection shall be 
     construed to limit, or to impose terms or conditions on, an 
     activity in which a Bell operating company is otherwise 
     authorized to engage under any other provision of this 
     section.
       ``(g) Definition of Incidental InterLATA Services.--For 
     purposes of this section, the term `incidental interLATA 
     services' means the interLATA provision by a Bell operating 
     company or its affiliate--
       ``(1)(A) of audio programming, video programming, or other 
     programming services to subscribers to such services of such 
     company or affiliate;
       ``(B) of the capability for interaction by such subscribers 
     to select or respond to such audio programming, video 
     programming, or other programming services;
       ``(C) to distributors of audio programming or video 
     programming that such company or affiliate owns or controls, 
     or is licensed by the copyright owner of such programming (or 
     by an assignee of such owner) to distribute; or
       ``(D) of alarm monitoring services;
       ``(2) of two-way interactive video services or Internet 
     services over dedicated facilities to or for elementary and 
     secondary schools as defined in section 254(h)(5);
       ``(3) of commercial mobile services in accordance with 
     section 332(c) of this Act and with the regulations 
     prescribed by the Commission pursuant to paragraph (8) of 
     such section;
       ``(4) of 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;
       ``(5) of signaling information used in connection with the 
     provision of telephone exchange services or exchange access 
     by a local exchange carrier; or
       ``(6) of network control signaling information to, and 
     receipt of such signaling information from, common carriers 
     offering interLATA services at any location within the area 
     in which such Bell operating company provides telephone 
     exchange services or exchange access.
       ``(h) Limitations.--The provisions of subsection (g) are 
     intended to be narrowly construed. The interLATA services 
     provided under subparagraph (A), (B), or (C) of subsection 
     (g)(1) 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. The Commission shall ensure that the provision of 
     services authorized under subsection (g) by a Bell operating 
     company or its affiliate will not adversely affect telephone 
     exchange service ratepayers or competition in any 
     telecommunications market.
       ``(i) Additional Definitions.--As used in this section--
       ``(1) In-region state.--The term `in-region State' means a 
     State in which a Bell operating company or any of its 
     affiliates was authorized to provide wireline telephone 
     exchange service pursuant to the reorganization plan approved 
     under the AT&T Consent Decree, as in effect on the day before 
     the date of enactment of the Telecommunications Act of 1996.
       ``(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.
       ``(j) Certain Service Applications Treated as In-Region 
     Service Applications.--For purposes of this section, a Bell 
     operating company application to provide 800 service, private 
     line service, or their equivalents that--
       ``(1) terminate in an in-region State of that Bell 
     operating company, and
       ``(2) allow the called party to determine the interLATA 
     carrier,
     shall be considered an in-region service subject to the 
     requirements of subsection (b)(1).

     ``SEC. 272. SEPARATE AFFILIATE; SAFEGUARDS.

       ``(a) Separate Affiliate Required for Competitive 
     Activities.--
       ``(1) In general.--A Bell operating company (including any 
     affiliate) which is a local exchange carrier that is subject 
     to the requirements of section 251(c) may not provide any 
     service described in paragraph (2) unless it provides that 
     service through one or more affiliates that--
       ``(A) are separate from any operating company entity that 
     is subject to the requirements of section 251(c); and
       ``(B) meet the requirements of subsection (b).
       ``(2) Services for which a separate affiliate is 
     required.--The services for which a separate affiliate is 
     required by paragraph (1) are:
       ``(A) Manufacturing activities (as defined in section 
     273(h)).
       ``(B) Origination of interLATA telecommunications services, 
     other than--
       ``(i) incidental interLATA services described in paragraphs 
     (1), (2), (3), (5), and (6) of section 271(g);
       ``(ii) out-of-region services described in section 
     271(b)(2); or
       ``(iii) previously authorized activities described in 
     section 271(f).
       ``(C) InterLATA information services, other than electronic 
     publishing (as defined in section 274(h)) and alarm 
     monitoring services (as defined in section 275(e)).
       ``(b) Structural and Transactional Requirements.--The 
     separate affiliate required by this section--
       ``(1) shall operate independently from the Bell operating 
     company;
       ``(2) 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 an affiliate;
       ``(3) shall have separate officers, directors, and 
     employees from the Bell operating company of which it is an 
     affiliate;
       ``(4) 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; and
       ``(5) shall conduct all transactions with the Bell 
     operating company of which it is an affiliate 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 affiliate described in subsection (a), a Bell operating 
     company--
       ``(1) may not discriminate between that company or 
     affiliate and any other entity in the provision or 
     procurement of goods, services, facilities, and information, 
     or in the establishment of standards; and
       ``(2) shall account for all transactions with an affiliate 
     described in subsection (a) in accordance with accounting 
     principles designated or approved by the Commission.
       ``(d) Biennial Audit.--
       ``(1) General requirement.--A company required to operate a 
     separate affiliate under this section 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, and particularly whether such company has 
     complied with the separate accounting requirements under 
     subsection (b).
       ``(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 accounts 
     and records of each 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.
       ``(e) Fulfillment of Certain Requests.--A Bell operating 
     company and an affiliate that is subject to the requirements 
     of section 251(c)--
       ``(1) shall fulfill any requests from an unaffiliated 
     entity for telephone exchange service and exchange access 
     within a period no longer than the period in which it 
     provides such telephone exchange service and exchange access 
     to itself or to its affiliates;
       ``(2) shall not provide any facilities, services, or 
     information concerning its provision of exchange access to 
     the affiliate 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;
       ``(3) shall charge the affiliate described in subsection 
     (a), or impute to itself (if using the 

[[Page H1089]]
     access for its provision of its own services), an amount for access to 
     its telephone exchange service and exchange access that is no 
     less than the amount charged to any unaffiliated 
     interexchange carriers for such service; and
       ``(4) may provide any interLATA or intraLATA facilities or 
     services to its interLATA affiliate if such services or 
     facilities are made available to all carriers at the same 
     rates and on the same terms and conditions, and so long as 
     the costs are appropriately allocated.
       ``(f) Sunset.--
       ``(1) Manufacturing and long distance.--The provisions of 
     this section (other than subsection (e)) shall cease to apply 
     with respect to the manufacturing activities or the interLATA 
     telecommunications services of a Bell operating company 3 
     years after the date such Bell operating company or any Bell 
     operating company affiliate is authorized to provide 
     interLATA telecommunications services under section 271(d), 
     unless the Commission extends such 3-year period by rule or 
     order.
       ``(2) InterLATA information services.--The provisions of 
     this section (other than subsection (e)) shall cease to apply 
     with respect to the interLATA information services of a Bell 
     operating company 4 years after the date of enactment of the 
     Telecommunications Act of 1996, unless the Commission extends 
     such 4-year period by rule or order.
       ``(3) Preservation of existing authority.--Nothing in this 
     subsection 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.
       ``(g) Joint Marketing.--
       ``(1) Affiliate sales of telephone exchange services.--A 
     Bell operating company affiliate 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) Bell operating company sales of affiliate services.--
     A Bell operating company may not market or sell interLATA 
     service provided by an affiliate required by this section 
     within any of its in-region States until such company is 
     authorized to provide interLATA services in such State under 
     section 271(d).
       ``(3) Rule of construction.--The joint marketing and sale 
     of services permitted under this subsection shall not be 
     considered to violate the nondiscrimination provisions of 
     subsection (c).
       ``(h) Transition.--With respect to any activity in which a 
     Bell operating company is engaged on the date of enactment of 
     the Telecommunications Act of 1996, such company shall have 
     one year from such date of enactment to comply with the 
     requirements of this section.

     ``SEC. 273. MANUFACTURING BY BELL OPERATING COMPANIES.

       ``(a) Authorization.--A Bell operating company may 
     manufacture and provide telecommunications equipment, and 
     manufacture customer premises equipment, if the Commission 
     authorizes that Bell operating company or any Bell operating 
     company affiliate to provide interLATA services under section 
     271(d), subject to the requirements of this section and the 
     regulations prescribed thereunder, except that neither a Bell 
     operating company nor any of its affiliates may engage in 
     such manufacturing in conjunction with a Bell operating 
     company not so affiliated or any of its affiliates.
       ``(b) Collaboration; Research and Royalty Agreements.--
       ``(1) Collaboration.--Subsection (a) shall not prohibit a 
     Bell operating company from engaging in close collaboration 
     with any manufacturer of customer premises equipment or 
     telecommunications equipment during the design and 
     development of hardware, software, or combinations thereof 
     related to such equipment.
       ``(2) Certain research arrangements; royalty agreements.--
     Subsection (a) shall not prohibit a Bell operating company 
     from--
       ``(A) engaging in research activities related to 
     manufacturing, and
       ``(B) entering into royalty agreements with manufacturers 
     of telecommunications equipment.
       ``(c) Information Requirements.--
       ``(1) Information on protocols and technical 
     requirements.--Each Bell operating company shall, in 
     accordance with regulations prescribed by the Commission, 
     maintain and file with the Commission full and complete 
     information with respect to the protocols and technical 
     requirements for connection with and use of its telephone 
     exchange service facilities. Each such company shall report 
     promptly to the Commission any material changes or planned 
     changes to such protocols and requirements, and the schedule 
     for implementation of such changes or planned changes.
       ``(2) Disclosure of information.--A Bell operating company 
     shall not disclose any information required to be filed under 
     paragraph (1) unless that information has been filed 
     promptly, as required by regulation by the Commission.
       ``(3) Access by competitors to information.--The Commission 
     may prescribe such additional regulations under this 
     subsection as may be necessary to ensure that manufacturers 
     have access to the information with respect to the protocols 
     and technical requirements for connection with and use of 
     telephone exchange service facilities that a Bell operating 
     company makes available to any manufacturing affiliate or any 
     unaffiliated manufacturer.
       ``(4) Planning information.--Each Bell operating company 
     shall provide, to interconnecting carriers providing 
     telephone exchange service, timely information on the planned 
     deployment of telecommunications equipment.
       ``(d) Manufacturing Limitations for Standard-Setting 
     Organizations.--
       ``(1) Application to bell communications research or 
     manufacturers.--Bell Communications Research, Inc., or any 
     successor entity or affiliate--
       ``(A) shall not be considered a Bell operating company or a 
     successor or assign of a Bell operating company at such time 
     as it is no longer an affiliate of any Bell operating 
     company; and
       ``(B) notwithstanding paragraph (3), shall not engage in 
     manufacturing telecommunications equipment or customer 
     premises equipment as long as it is an affiliate of more than 
     1 otherwise unaffiliated Bell operating company or successor 
     or assign of any such company.
     Nothing in this subsection prohibits Bell Communications 
     Research, Inc., 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 1996. Nothing 
     provided in this subsection shall render Bell Communications 
     Research, Inc., or any successor entity, a common carrier 
     under title II of this Act. Nothing in this subsection 
     restricts any manufacturer from engaging in any activity in 
     which it is lawfully engaged on the date of enactment of the 
     Telecommunications Act of 1996.
       ``(2) Proprietary information.--Any entity which 
     establishes standards for telecommunications equipment or 
     customer premises equipment, or generic network requirements 
     for such equipment, or certifies telecommunications equipment 
     or customer premises equipment, shall be prohibited from 
     releasing or otherwise using any proprietary information, 
     designated as such by its owner, in its possession as a 
     result of such activity, for any purpose other than purposes 
     authorized in writing by the owner of such information, even 
     after such entity ceases to be so engaged.
       ``(3) Manufacturing safeguards.--(A) Except as prohibited 
     in paragraph (1), and subject to paragraph (6), any entity 
     which certifies telecommunications equipment or customer 
     premises equipment manufactured by an unaffiliated entity 
     shall only manufacture a particular class of 
     telecommunications equipment or customer premises equipment 
     for which it is undertaking or has undertaken, during the 
     previous 18 months, certification activity for such class of 
     equipment through a separate affiliate.
       ``(B) Such separate affiliate shall--
       ``(i) maintain books, records, and accounts separate from 
     those of the entity that certifies such equipment, consistent 
     with generally acceptable accounting principles;
       ``(ii) not engage in any joint manufacturing activities 
     with such entity; and
       ``(iii) have segregated facilities and separate employees 
     with such entity.
       ``(C) Such entity that certifies such equipment shall--
       ``(i) not discriminate in favor of its manufacturing 
     affiliate in the establishment of standards, generic 
     requirements, or product certification;
       ``(ii) not disclose to the manufacturing affiliate any 
     proprietary information that has been received at any time 
     from an unaffiliated manufacturer, unless authorized in 
     writing by the owner of the information; and
       ``(iii) not permit any employee engaged in product 
     certification for telecommunications equipment or customer 
     premises equipment to engage jointly in sales or marketing of 
     any such equipment with the affiliated manufacturer.
       ``(4) Standard-setting entities.--Any entity that is not an 
     accredited standards development organization and that 
     establishes industry-wide standards for telecommunications 
     equipment or customer premises equipment, or industry-wide 
     generic network requirements for such equipment, or that 
     certifies telecommunications equipment or customer premises 
     equipment manufactured by an unaffiliated entity, shall--
       ``(A) establish and publish any industry-wide standard for, 
     industry-wide generic requirement for, or any substantial 
     modification of an existing industry-wide standard or 
     industry-wide generic requirement for, telecommunications 
     equipment or customer premises equipment only in compliance 
     with the following procedure:
       ``(i) such entity shall issue a public notice of its 
     consideration of a proposed industry-wide standard or 
     industry-wide generic requirement;
       ``(ii) such entity shall issue a public invitation to 
     interested industry parties to fund and participate in such 
     efforts on a reasonable and nondiscriminatory basis, 
     administered in such a manner as not to unreasonably exclude 
     any interested industry party;
       ``(iii) such entity shall publish a text for comment by 
     such parties as have agreed to participate in the process 
     pursuant to clause (ii), provide such parties a full 
     opportunity to submit comments, and respond to comments from 
     such parties;
       ``(iv) such entity shall publish a final text of the 
     industry-wide standard or industry-wide generic requirement, 
     including the comments in their entirety, of any funding 
     party which requests to have its comments so published; and
       ``(v) such entity shall attempt, prior to publishing a text 
     for comment, to agree with the funding parties as a group on 
     a mutually satisfactory dispute resolution process which such 
     parties shall utilize as their sole recourse in the event of 
     a dispute on technical issues as to which there is 
     disagreement between any funding party and the entity 
     conducting such activities, except that if no dispute 
     resolution process is agreed to by all the parties, a funding 
     party may utilize the dispute resolution procedures 
     established pursuant to paragraph (5) of this subsection;
       ``(B) engage in product certification for 
     telecommunications equipment or customer premises equipment 
     manufactured by unaffiliated entities only if--
       ``(i) such activity is performed pursuant to published 
     criteria;
       ``(ii) such activity is performed pursuant to auditable 
     criteria; and
     
[[Page H1090]]

       ``(iii) such activity is performed pursuant to available 
     industry-accepted testing methods and standards, where 
     applicable, unless otherwise agreed upon by the parties 
     funding and performing such activity;
       ``(C) not undertake any actions to monopolize or attempt to 
     monopolize the market for such services; and
       ``(D) not preferentially treat its own telecommunications 
     equipment or customer premises equipment, or that of its 
     affiliate, over that of any other entity in establishing and 
     publishing industry-wide standards or industry-wide generic 
     requirements for, and in certification of, telecommunications 
     equipment and customer premises equipment.
       ``(5) Alternate dispute resolution.--Within 90 days after 
     the date of enactment of the Telecommunications Act of 1996, 
     the Commission shall prescribe a dispute resolution process 
     to be utilized in the event that a dispute resolution process 
     is not agreed upon by all the parties when establishing and 
     publishing any industry-wide standard or industry-wide 
     generic requirement for telecommunications equipment or 
     customer premises equipment, pursuant to paragraph (4)(A)(v). 
     The Commission shall not establish itself as a party to the 
     dispute resolution process. Such dispute resolution process 
     shall permit any funding party to resolve a dispute with the 
     entity conducting the activity that significantly affects 
     such funding party's interests, in an open, 
     nondiscriminatory, and unbiased fashion, within 30 days after 
     the filing of such dispute. Such disputes may be filed within 
     15 days after the date the funding party receives a response 
     to its comments from the entity conducting the activity. The 
     Commission shall establish penalties to be assessed for 
     delays caused by referral of frivolous disputes to the 
     dispute resolution process.
       ``(6) Sunset.--The requirements of paragraphs (3) and (4) 
     shall terminate for the particular relevant activity when the 
     Commission determines that there are alternative sources of 
     industry-wide standards, industry-wide generic requirements, 
     or product certification for a particular class of 
     telecommunications equipment or customer premises equipment 
     available in the United States. Alternative sources shall be 
     deemed to exist when such sources provide commercially viable 
     alternatives that are providing such services to customers. 
     The Commission shall act on any application for such a 
     determination within 90 days after receipt of such 
     application, and shall receive public comment on such 
     application.
       ``(7) Administration and enforcement authority.--For the 
     purposes of administering this subsection and the regulations 
     prescribed thereunder, the Commission shall have the same 
     remedial authority as the Commission has in administering and 
     enforcing the provisions of this title with respect to any 
     common carrier subject to this Act.
       ``(8) Definitions.--For purposes of this subsection:
       ``(A) The term `affiliate' shall have the same meaning as 
     in section 3 of this Act, except that, for purposes of 
     paragraph (1)(B)--
       ``(i) an aggregate voting equity interest in Bell 
     Communications Research, Inc., of at least 5 percent of its 
     total voting equity, owned directly or indirectly by more 
     than 1 otherwise unaffiliated Bell operating company, shall 
     constitute an affiliate relationship; and
       ``(ii) a voting equity interest in Bell Communications 
     Research, Inc., by any otherwise unaffiliated Bell operating 
     company of less than 1 percent of Bell Communications 
     Research's total voting equity shall not be considered to be 
     an equity interest under this paragraph.
       ``(B) The term `generic requirement' means a description of 
     acceptable product attributes for use by local exchange 
     carriers in establishing product specifications for the 
     purchase of telecommunications equipment, customer premises 
     equipment, and software integral thereto.
       ``(C) The term `industry-wide' means activities funded by 
     or performed on behalf of local exchange carriers for use in 
     providing wireline telephone exchange service whose combined 
     total of deployed access lines in the United States 
     constitutes at least 30 percent of all access lines deployed 
     by telecommunications carriers in the United States as of the 
     date of enactment of the Telecommunications Act of 1996.
       ``(D) The term `certification' means any technical process 
     whereby a party determines whether a product, for use by more 
     than one local exchange carrier, conforms with the specified 
     requirements pertaining to such product.
       ``(E) The term `accredited standards development 
     organization' means an entity composed of industry members 
     which has been accredited by an institution vested with the 
     responsibility for standards accreditation by the industry.
       ``(e) Bell Operating Company Equipment Procurement and 
     Sales.--
       ``(1) Nondiscrimination standards for manufacturing.--In 
     the procurement or awarding of supply contracts for 
     telecommunications equipment, a Bell operating company, or 
     any entity acting on its behalf, for the duration of the 
     requirement for a separate subsidiary including manufacturing 
     under this Act--
       ``(A) shall consider such equipment, produced or supplied 
     by unrelated persons; and
       ``(B) may not discriminate in favor of equipment produced 
     or supplied by an affiliate or related person.
       ``(2) Procurement standards.--Each Bell operating company 
     or any entity acting on its behalf shall make procurement 
     decisions and award all supply contracts for equipment, 
     services, and software on the basis of an objective 
     assessment of price, qualify, delivery, and other commercial 
     factors.
       ``(3) Network planning and design.--A Bell operating 
     company shall, to the extent consistent with the antitrust 
     laws, engage in joint network planning and design with local 
     exchange carriers operating in the same area of interest. No 
     participant in such planning shall be allowed to delay the 
     introduction of new technology or the deployment of 
     facilities to provide telecommunications services, and 
     agreement with such other carriers shall not be required as a 
     prerequisite for such introduction or deployment.
       ``(4) Sales restrictions.--Neither a Bell operating company 
     engaged in manufacturing nor a manufacturing affiliate of 
     such a company shall restrict sales to any local exchange 
     carrier of telecommunications equipment, including software 
     integral to the operation of such equipment and related 
     upgrades.
       ``(5) Protection of proprietary information.--A Bell 
     operating company and any entity it owns or otherwise 
     controls shall protect the proprietary information submitted 
     for procurement decisions from release not specifically 
     authorized by the owner of such information.
       ``(f) Administration and Enforcement Authority.--For the 
     purposes of administering and enforcing the provisions of 
     this section and the regulations prescribed thereunder, the 
     Commission shall have the same authority, power, and 
     functions with respect to any Bell operating company or any 
     affiliate thereof as the Commission has in administering and 
     enforcing the provisions of this title with respect to any 
     common carrier subject to this Act.
       ``(g) 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, and otherwise to prevent 
     discrimination and cross-subsidization in a Bell operating 
     company's dealings with its affiliate and with third parties.
       ``(h) Definition.--As used in this section, the term 
     `manufacturing' has the same meaning as such term has under 
     the AT&T Consent Decree.

     ``SEC. 274. ELECTRONIC PUBLISHING BY BELL OPERATING 
                   COMPANIES.

       ``(a) Limitations.--No Bell operating company or any 
     affiliate may engage in the provision of electronic 
     publishing that is disseminated by means of such Bell 
     operating company's or any of its affiliates' basic telephone 
     service, except that nothing in this section shall prohibit a 
     separated affiliate or electronic publishing joint venture 
     operated in accordance with this section from engaging in the 
     provision of electronic publishing.
       ``(b) Separated Affiliate or Electronic Publishing Joint 
     Venture Requirements.--A separated affiliate or electronic 
     publishing joint venture shall be operated independently from 
     the Bell operating company. Such separated affiliate or joint 
     venture and the Bell operating company with which it is 
     affiliated shall--
       ``(1) maintain separate books, records, and accounts and 
     prepare separate financial statements;
       ``(2) not incur debt in a manner that would permit a 
     creditor of the separated affiliate or joint venture upon 
     default to have recourse to the assets of the Bell operating 
     company;
       ``(3) carry out transactions (A) in a manner consistent 
     with such independence, (B) pursuant to written contracts or 
     tariffs that are filed with the Commission and made publicly 
     available, and (C) in a manner that is auditable in 
     accordance with generally accepted auditing standards;
       ``(4) value any assets that are transferred directly or 
     indirectly from the Bell operating company to a separated 
     affiliate or joint venture, and record any transactions by 
     which such assets are transferred, in accordance with such 
     regulations as may be prescribed by the Commission or a State 
     commission to prevent improper cross subsidies;
       ``(5) between a separated affiliate and a Bell operating 
     company--
       ``(A) have no officers, directors, and employees in common 
     after the effective date of this section; and
       ``(B) own no property in common;
       ``(6) not use for the marketing of any product or service 
     of the separated affiliate or joint venture, the name, 
     trademarks, or service marks of an existing Bell operating 
     company except for names, trademarks, or service marks that 
     are owned by the entity that owns or controls the Bell 
     operating company;
       ``(7) not permit the Bell operating company--
       ``(A) to perform hiring or training of personnel on behalf 
     of a separated affiliate;
       ``(B) to perform the purchasing, installation, or 
     maintenance of equipment on behalf of a separated affiliate, 
     except for telephone service that it provides under tariff or 
     contract subject to the provisions of this section; or
       ``(C) to perform research and development on behalf of a 
     separated affiliate;
       ``(8) each have performed annually a compliance review--
       ``(A) that is conducted by an independent entity for the 
     purpose of determining compliance during the preceding 
     calendar year with any provision of this section; and
       ``(B) the results of which are maintained by the separated 
     affiliate or joint venture and the Bell operating company for 
     a period of 5 years subject to review by any lawful 
     authority; and
       ``(9) within 90 days of receiving a review described in 
     paragraph (8), file a report of any exceptions and corrective 
     action with the Commission and allow any person to inspect 
     and copy such report subject to reasonable safeguards to 
     protect any proprietary information contained in such report 
     from being used for purposes other than to enforce or pursue 
     remedies under this section.
       ``(c) Joint Marketing.--
       ``(1) In general.--Except as provided in paragraph (2)--
       ``(A) a Bell operating company shall not carry out any 
     promotion, marketing, sales, or advertising for or in 
     conjunction with a separated affiliate; and
     
[[Page H1091]]

       ``(B) a Bell operating company shall not carry out any 
     promotion, marketing, sales, or advertising for or in 
     conjunction with an affiliate that is related to the 
     provision of electronic publishing.
       ``(2) Permissible joint activities.--
       ``(A) Joint telemarketing.--A Bell operating company may 
     provide inbound telemarketing or referral services related to 
     the provision of electronic publishing for a separated 
     affiliate, electronic publishing joint venture, affiliate, or 
     unaffiliated electronic publisher, provided that if such 
     services are provided to a separated affiliate, electronic 
     publishing joint venture, or affiliate, such services shall 
     be made available to all electronic publishers on request, on 
     nondiscriminatory terms.
       ``(B) Teaming arrangements.--A Bell operating company may 
     engage in nondiscriminatory teaming or business arrangements 
     to engage in electronic publishing with any separated 
     affiliate or with any other electronic publisher if (i) the 
     Bell operating company only provides facilities, services, 
     and basic telephone service information as authorized by this 
     section, and (ii) the Bell operating company does not own 
     such teaming or business arrangement.
       ``(C) Electronic publishing joint ventures.--A Bell 
     operating company or affiliate may participate on a 
     nonexclusive basis in electronic publishing joint ventures 
     with entities that are not a Bell operating company, 
     affiliate, or separated affiliate to provide electronic 
     publishing services, if the Bell operating company or 
     affiliate has not more than a 50 percent direct or indirect 
     equity interest (or the equivalent thereof) or the right to 
     more than 50 percent of the gross revenues under a revenue 
     sharing or royalty agreement in any electronic publishing 
     joint venture. Officers and employees of a Bell operating 
     company or affiliate participating in an electronic 
     publishing joint venture may not have more than 50 percent of 
     the voting control over the electronic publishing joint 
     venture. In the case of joint ventures with small, local 
     electronic publishers, the Commission for good cause shown 
     may authorize the Bell operating company or affiliate to have 
     a larger equity interest, revenue share, or voting control 
     but not to exceed 80 percent. A Bell operating company 
     participating in an electronic publishing joint venture may 
     provide promotion, marketing, sales, or advertising personnel 
     and services to such joint venture.
       ``(d) Bell Operating Company Requirement.--A Bell operating 
     company under common ownership or control with a separated 
     affiliate or electronic publishing joint venture shall 
     provide network access and interconnections for basic 
     telephone service to electronic publishers at just and 
     reasonable rates that are tariffed (so long as rates for such 
     services are subject to regulation) and that are not higher 
     on a per-unit basis than those charged for such services to 
     any other electronic publisher or any separated affiliate 
     engaged in electronic publishing.
       ``(e) Private Right of Action.--
       ``(1) Damages.--Any person claiming that any act or 
     practice of any Bell operating company, affiliate, or 
     separated affiliate constitutes a violation of this section 
     may file a complaint with the Commission or bring suit as 
     provided in section 207 of this Act, and such Bell operating 
     company, affiliate, or separated affiliate shall be liable as 
     provided in section 206 of this Act; except that damages may 
     not be awarded for a violation that is discovered by a 
     compliance review as required by subsection (b)(7) of this 
     section and corrected within 90 days.
       ``(2) Cease and desist orders.--In addition to the 
     provisions of paragraph (1), any person claiming that any act 
     or practice of any Bell operating company, affiliate, or 
     separated affiliate constitutes a violation of this section 
     may make application to the Commission for an order to cease 
     and desist such violation or may make application in any 
     district court of the United States of competent jurisdiction 
     for an order enjoining such acts or practices or for an order 
     compelling compliance with such requirement.
       ``(f) Separated Affiliate Reporting Requirement.--Any 
     separated affiliate under this section shall file with the 
     Commission annual reports in a form substantially equivalent 
     to the Form 10-K required by regulations of the Securities 
     and Exchange Commission.
       ``(g) Effective Dates.--
       ``(1) Transition.--Any electronic publishing service being 
     offered to the public by a Bell operating company or 
     affiliate on the date of enactment of the Telecommunications 
     Act of 1996 shall have one year from such date of enactment 
     to comply with the requirements of this section.
       ``(2) Sunset.--The provisions of this section shall not 
     apply to conduct occurring after 4 years after the date of 
     enactment of the Telecommunications Act of 1996.
       ``(h) Definition of Electronic Publishing.--
       ``(1) In general.--The term `electronic publishing' means 
     the dissemination, provision, publication, or sale to an 
     unaffiliated entity or person, of any one or more of the 
     following: news (including sports); entertainment (other than 
     interactive games); business, financial, legal, consumer, or 
     credit materials; editorials, columns, or features; 
     advertising; photos or images; archival or research material; 
     legal notices or public records; scientific, educational, 
     instructional, technical, professional, trade, or other 
     literary materials; or other like or similar information.
       ``(2) Exceptions.--The term `electronic publishing' shall 
     not include the following services:
       ``(A) Information access, as that term is defined by the 
     AT&T Consent Decree.
       ``(B) The transmission of information as a common carrier.
       ``(C) The transmission of information as part of a gateway 
     to an information service that does not involve the 
     generation or alteration of the content of information, 
     including data transmission, address translation, protocol 
     conversion, billing management, introductory information 
     content, and navigational systems that enable users to access 
     electronic publishing services, which do not affect the 
     presentation of such electronic publishing services to users.
       ``(D) Voice storage and retrieval services, including voice 
     messaging and electronic mail services.
       ``(E) Data processing or transaction processing services 
     that do not involve the generation or alteration of the 
     content of information.
       ``(F) Electronic billing or advertising of a Bell operating 
     company's regulated telecommunications services.
       ``(G) Language translation or data format conversion.
       ``(H) The provision of information necessary for the 
     management, control, or operation of a telephone company 
     telecommunications system.
       ``(I) The provision of directory assistance that provides 
     names, addresses, and telephone numbers and does not include 
     advertising.
       ``(J) Caller identification services.
       ``(K) Repair and provisioning databases and credit card and 
     billing validation for telephone company operations.
       ``(L) 911-E and other emergency assistance databases.
       ``(M) Any other network service of a type that is like or 
     similar to these network services and that does not involve 
     the generation or alteration of the content of information.
       ``(N) Any upgrades to these network services that do not 
     involve the generation or alteration of the content of 
     information.
       ``(O) Video programming or full motion video entertainment 
     on demand.
       ``(i) Additional Definitions.--As used in this section--
       ``(1) The term `affiliate' means any entity that, directly 
     or indirectly, owns or controls, is owned or controlled by, 
     or is under common ownership or control with, a Bell 
     operating company. Such term shall not include a separated 
     affiliate.
       ``(2) The term `basic telephone service' means any wireline 
     telephone exchange service, or wireline telephone exchange 
     service facility, provided by a Bell operating company in a 
     telephone exchange area, except that such term does not 
     include--
       ``(A) a competitive wireline telephone exchange service 
     provided in a telephone exchange area where another entity 
     provides a wireline telephone exchange service that was 
     provided on January 1, 1984, or
       ``(B) a commercial mobile service.
       ``(3) The term `basic telephone service information' means 
     network and customer information of a Bell operating company 
     and other information acquired by a Bell operating company as 
     a result of its engaging in the provision of basic telephone 
     service.
       ``(4) The term `control' has the meaning that it has in 17 
     C.F.R. 240.12b-2, the regulations promulgated by the 
     Securities and Exchange Commission pursuant to the Securities 
     Exchange Act of 1934 (15 U.S.C. 78a et seq.) or any successor 
     provision to such section.
       ``(5) The term `electronic publishing joint venture' means 
     a joint venture owned by a Bell operating company or 
     affiliate that engages in the provision of electronic 
     publishing which is disseminated by means of such Bell 
     operating company's or any of its affiliates' basic telephone 
     service.
       ``(6) The term `entity' means any organization, and 
     includes corporations, partnerships, sole proprietorships, 
     associations, and joint ventures.
       ``(7) The term `inbound telemarketing' means the marketing 
     of property, goods, or services by telephone to a customer or 
     potential customer who initiated the call.
       ``(8) The term `own' with respect to an entity means to 
     have a direct or indirect equity interest (or the equivalent 
     thereof) of more than 10 percent of an entity, or the right 
     to more than 10 percent of the gross revenues of an entity 
     under a revenue sharing or royalty agreement.
       ``(9) The term `separated affiliate' means a corporation 
     under common ownership or control with a Bell operating 
     company that does not own or control a Bell operating company 
     and is not owned or controlled by a Bell operating company 
     and that engages in the provision of electronic publishing 
     which is disseminated by means of such Bell operating 
     company's or any of its affiliates' basic telephone service.
       ``(10) The term `Bell operating company' has the meaning 
     provided in section 3, except that such term includes any 
     entity or corporation that is owned or controlled by such a 
     company (as so defined) but does not include an electronic 
     publishing joint venture owned by such an entity or 
     corporation.

     ``SEC. 275. ALARM MONITORING SERVICES.

       ``(a) Delayed Entry Into Alarm Monitoring.--
       ``(1) Prohibition.--No Bell operating company or affiliate 
     thereof shall engage in the provision of alarm monitoring 
     services before the date which is 5 years after the date of 
     enactment of the Telecommunications Act of 1996.
       ``(2) Existing activities.--Paragraph (1) does not prohibit 
     or limit the provision, directly or through an affiliate, of 
     alarm monitoring services by a Bell operating company that 
     was engaged in providing alarm monitoring services as of 
     November 30, 1995, directly or through an affiliate. Such 
     Bell operating company or affiliate may not acquire any 
     equity interest in, or obtain financial control of, any 
     unaffiliated alarm monitoring service entity after November 
     30, 1995, and until 5 years after the date of enactment of 
     the Telecommunications Act of 1996, except that this sentence 
     shall not prohibit an exchange of customers for the customers 
     of an unaffiliated alarm monitoring service entity.
       ``(b) Nondiscrimination.--An incumbent local exchange 
     carrier (as defined in section 

[[Page H1092]]
     251(h)) engaged in the provision of alarm monitoring services shall--
       ``(1) provide nonaffiliated entities, upon reasonable 
     request, with the network services it provides to its own 
     alarm monitoring operations, on nondiscriminatory terms and 
     conditions; and
       ``(2) not subsidize its alarm monitoring services either 
     directly or indirectly from telephone exchange service 
     operations.
       ``(c) Expedited Consideration of Complaints.--The 
     Commission shall establish procedures for the receipt and 
     review of complaints concerning violations of subsection (b) 
     or the regulations thereunder that result in material 
     financial harm to a provider of alarm monitoring service. 
     Such procedures shall ensure that the Commission will make a 
     final determination with respect to any such complaint 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, order the incumbent local exchange 
     carrier (as defined in section 251(h)) and its affiliates to 
     cease engaging in such violation pending such final 
     determination.
       ``(d) Use of Data.--A local exchange carrier may not record 
     or use 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 such local 
     exchange carrier, or any other entity. Any regulations 
     necessary to enforce this subsection shall be issued 
     initially within 6 months after the date of enactment of the 
     Telecommunications Act of 1996.
       ``(e) Definition of Alarm Monitoring service.--The term 
     `alarm monitoring service' means a service that uses a device 
     located at a residence, place of business, or other fixed 
     premises--
       ``(1) to receive signals from other devices located at or 
     about such premises regarding a possible threat at such 
     premises to life, safety, or property, from burglary, fire, 
     vandalism, bodily injury, or other emergency, and
       ``(2) to transmit a signal regarding such threat by means 
     of transmission facilities of a local exchange carrier or one 
     of its affiliates to a remote monitoring center to alert a 
     person at such center of the need to inform the customer or 
     another person or police, fire, rescue, security, or public 
     safety personnel of such threat,
     but does not include a service that uses a medical monitoring 
     device attached to an individual for the automatic 
     surveillance of an ongoing medical condition.

     ``SEC. 276. PROVISION OF PAYPHONE SERVICE.

       ``(a) Nondiscrimination Safeguards.--After the effective 
     date of the rules prescribed pursuant to subsection (b), any 
     Bell operating company that provides payphone service--
       ``(1) shall not subsidize its payphone service directly or 
     indirectly from its telephone exchange service operations or 
     its exchange access operations; and
       ``(2) shall not prefer or discriminate in favor of its 
     payphone service.
       ``(b) Regulations.--
       ``(1) Contents of regulations.--In order to promote 
     competition among payphone service providers and promote the 
     widespread deployment of payphone services to the benefit of 
     the general public, within 9 months after the date of 
     enactment of the Telecommunications Act of 1996, the 
     Commission shall take all actions necessary (including any 
     reconsideration) to prescribe regulations that--
       ``(A) establish a per call compensation plan to ensure that 
     all payphone service providers are fairly compensated for 
     each and every completed intrastate and interstate call using 
     their payphone, except that emergency calls and 
     telecommunications relay service calls for hearing disabled 
     individuals shall not be subject to such compensation;
       ``(B) discontinue the intrastate and interstate carrier 
     access charge payphone service elements and payments in 
     effect on such date of enactment, and all intrastate and 
     interstate payphone subsidies from basic exchange and 
     exchange access revenues, in favor of a compensation plan as 
     specified in subparagraph (A);
       ``(C) prescribe a set of nonstructural safeguards for Bell 
     operating company payphone service to implement the 
     provisions of paragraphs (1) and (2) of subsection (a), which 
     safeguards shall, at a minimum, include the nonstructural 
     safeguards equal to those adopted in the Computer Inquiry-III 
     (CC Docket No. 90-623) proceeding;
       ``(D) provide for Bell operating company payphone service 
     providers to have the same right that independent payphone 
     providers have to negotiate with the location provider on the 
     location provider's selecting and contracting with, and, 
     subject to the terms of any agreement with the location 
     provider, to select and contract with, the carriers that 
     carry interLATA calls from their payphones, unless the 
     Commission determines in the rulemaking pursuant to this 
     section that it is not in the public interest; and
       ``(E) provide for all payphone service providers to have 
     the right to negotiate with the location provider on the 
     location provider's selecting and contracting with, and, 
     subject to the terms of any agreement with the location 
     provider, to select and contract with, the carriers that 
     carry intraLATA calls from their payphones.
       ``(2) Public interest telephones.--In the rulemaking 
     conducted pursuant to paragraph (1), the Commission shall 
     determine whether public interest payphones, which are 
     provided in the interest of public health, safety, and 
     welfare, in locations where there would otherwise not be a 
     payphone, should be maintained, and if so, ensure that such 
     public interest payphones are supported fairly and equitably.
       ``(3) Existing contracts.--Nothing in this section shall 
     affect any existing contracts between location providers and 
     payphone service providers or interLATA or intraLATA carriers 
     that are in force and effect as of the date of enactment of 
     the Telecommunications Act of 1996.
       ``(c) State Preemption.--To the extent that any State 
     requirements are inconsistent with the Commission's 
     regulations, the Commission's regulations on such matters 
     shall preempt such State requirements.
       ``(d) Definition.--As used in this section, the term 
     `payphone service' means the provision of public or semi-
     public pay telephones, the provision of inmate telephone 
     service in correctional institutions, and any ancillary 
     services.''.
       (b) Review of Entry Decisions.--Section 402(b) (47 U.S.C. 
     402(b)) is amended--
       (1) in paragraph (6), by striking ``(3), and (4)'' and 
     inserting ``(3), (4), and (9)''; and
       (2) by adding at the end the following new paragraph:
       ``(9) By any applicant for authority to provide interLATA 
     services under section 271 of this Act whose application is 
     denied by the Commission.''.
                      TITLE II--BROADCAST SERVICES

     SEC. 201. BROADCAST SPECTRUM FLEXIBILITY.

       Title III is amended by inserting after section 335 (47 
     U.S.C. 335) the following new section:

     ``SEC. 336. BROADCAST SPECTRUM FLEXIBILITY.

       ``(a) Commission Action.--If the Commission determines to 
     issue additional licenses for advanced television services, 
     the Commission--
       ``(1) should limit the initial eligibility for such 
     licenses to persons that, as of the date of such issuance, 
     are licensed to operate a television broadcast station or 
     hold a permit to construct such a station (or both); and
       ``(2) shall adopt regulations that allow the holders of 
     such licenses to offer such ancillary or supplementary 
     services on designated frequencies as may be consistent with 
     the public interest, convenience, and necessity.
       ``(b) Contents of Regulations.--In prescribing the 
     regulations required by subsection (a), the Commission 
     shall--
       ``(1) only permit such licensee or permittee to offer 
     ancillary or supplementary services if the use of a 
     designated frequency for such services is consistent with the 
     technology or method designated by the Commission for the 
     provision of advanced television services;
       ``(2) limit the broadcasting of ancillary or supplementary 
     services on designated frequencies so as to avoid derogation 
     of any advanced television services, including high 
     definition television broadcasts, that the Commission may 
     require using such frequencies;
       ``(3) apply to any other ancillary or supplementary service 
     such of the Commission's regulations as are applicable to the 
     offering of analogous services by any other person, except 
     that no ancillary or supplementary service shall have any 
     rights to carriage under section 614 or 615 or be deemed a 
     multichannel video programming distributor for purposes of 
     section 628;
       ``(4) adopt such technical and other requirements as may be 
     necessary or appropriate to assure the quality of the signal 
     used to provide advanced television services, and may adopt 
     regulations that stipulate the minimum number of hours per 
     day that such signal must be transmitted; and
       ``(5) prescribe such other regulations as may be necessary 
     for the protection of the public interest, convenience, and 
     necessity.
       ``(c) Recovery of License.--If the Commission grants a 
     license for advanced television services to a person that, as 
     of the date of such issuance, is licensed to operate a 
     television broadcast station or holds a permit to construct 
     such a station (or both), the Commission shall, as a 
     condition of such license, require that either the additional 
     license or the original license held by the licensee be 
     surrendered to the Commission for reallocation or 
     reassignment (or both) pursuant to Commission regulation.
       ``(d) 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 all of 
     its program services on the existing or advanced television 
     spectrum are in the public interest. Any violation of the 
     Commission rules applicable to ancillary or supplementary 
     services shall reflect upon the licensee's qualifications for 
     renewal of its license.
       ``(e) Fees.--
       ``(1) Services to which fees apply.--If the regulations 
     prescribed pursuant to subsection (a) permit a licensee to 
     offer ancillary or supplementary services on a designated 
     frequency--
       ``(A) for which the 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 commercial advertisements used to support broadcasting 
     for which a subscription fee is not required),
     the Commission shall establish a program to assess and 
     collect from the licensee for such designated frequency an 
     annual fee or other schedule or method of payment that 
     promotes the objectives described in subparagraphs (A) and 
     (B) of paragraph (2).
       ``(2) Collection of fees.--The program required by 
     paragraph (1) shall--
       ``(A) be designed (i) to recover for the public a portion 
     of the value of the public spectrum resource made available 
     for such commercial use, and (ii) to avoid unjust enrichment 
     through the method employed to permit such uses of that 
     resource;
       ``(B) recover for the public an amount that, to the extent 
     feasible, equals but does not exceed 

[[Page H1093]]
     (over the term of the license) the amount that would have been 
     recovered had such services been licensed pursuant to the 
     provisions of section 309(j) of this Act and the Commission's 
     regulations thereunder; and
       ``(C) be adjusted by the Commission from time to time in 
     order to continue to comply with the requirements of this 
     paragraph.
       ``(3) Treatment of revenues.--
       ``(A) General rule.--Except as provided in subparagraph 
     (B), all proceeds obtained pursuant to the regulations 
     required by this subsection shall be deposited in the 
     Treasury in accordance with chapter 33 of title 31, United 
     States Code.
       ``(B) Retention of revenues.--Notwithstanding subparagraph 
     (A), the salaries and expenses account of the Commission 
     shall retain as an offsetting collection such sums as may be 
     necessary from such proceeds for the costs of developing and 
     implementing the program required by this section and 
     regulating and supervising advanced television services. Such 
     offsetting collections shall be available for obligation 
     subject to the terms and conditions of the receiving 
     appropriations account, and shall be deposited in such 
     accounts on a quarterly basis.
       ``(4) Report.--Within 5 years after the date of enactment 
     of the Telecommunications Act of 1996, the Commission shall 
     report to the Congress on the implementation of the program 
     required by this subsection, and shall annually thereafter 
     advise the Congress on the amounts collected pursuant to such 
     program.
       ``(f) Evaluation.--Within 10 years after the date the 
     Commission first issues additional licenses for advanced 
     television services, the Commission shall conduct an 
     evaluation of the advanced television services program. Such 
     evaluation shall include--
       ``(1) an assessment of the willingness of consumers to 
     purchase the television receivers necessary to receive 
     broadcasts of advanced television services;
       ``(2) an assessment of alternative uses, including public 
     safety use, of the frequencies used for such broadcasts; and
       ``(3) the extent to which the Commission has been or will 
     be able to reduce the amount of spectrum assigned to 
     licensees.
       ``(g) Definitions.--As used in this section:
       ``(1) Advanced television services.--The term `advanced 
     television services' means television services provided using 
     digital or other advanced technology as further defined in 
     the opinion, report, and order of the Commission entitled 
     `Advanced Television Systems and Their Impact Upon the 
     Existing Television Broadcast Service', MM Docket 87-268, 
     adopted September 17, 1992, and successor proceedings.
       ``(2) Designated frequencies.--The term `designated 
     frequency' means each of the frequencies designated by the 
     Commission for licenses for advanced television services.
       ``(3) High definition television.--The term `high 
     definition television' refers to systems that offer 
     approximately twice the vertical and horizontal resolution of 
     receivers generally available on the date of enactment of the 
     Telecommunications Act of 1996, as further defined in the 
     proceedings described in paragraph (1) of this subsection.''.

     SEC. 202. BROADCAST OWNERSHIP.

       (a) National Radio Station Ownership Rule Changes 
     Required.--The Commission shall modify section 73.3555 of its 
     regulations (47 C.F.R. 73.3555) by eliminating any provisions 
     limiting the number of AM or FM broadcast stations which may 
     be owned or controlled by one entity nationally.
       (b) Local Radio Diversity.--
       (1) Applicable caps.--The Commission shall revise section 
     73.3555(a) of its regulations (47 C.F.R. 73.3555) to provide 
     that--
       (A) in a radio market with 45 or more commercial radio 
     stations, a party may own, operate, or control up to 8 
     commercial radio stations, not more than 5 of which are in 
     the same service (AM or FM);
       (B) in a radio market with between 30 and 44 (inclusive) 
     commercial radio stations, a party may own, operate, or 
     control up to 7 commercial radio stations, not more than 4 of 
     which are in the same service (AM or FM);
       (C) in a radio market with between 15 and 29 (inclusive) 
     commercial radio stations, a party may own, operate, or 
     control up to 6 commercial radio stations, not more than 4 of 
     which are in the same service (AM or FM); and
       (D) in a radio market with 14 or fewer commercial radio 
     stations, a party may own, operate, or control up to 5 
     commercial radio stations, not more than 3 of which are in 
     the same service (AM or FM), except that a party may not own, 
     operate, or control more than 50 percent of the stations in 
     such market.
       (2) Exception.--Notwithstanding any limitation authorized 
     by this subsection, the Commission may permit a person or 
     entity to own, operate, or control, or have a cognizable 
     interest in, radio broadcast stations if the Commission 
     determines that such ownership, operation, control, or 
     interest will result in an increase in the number of radio 
     broadcast stations in operation.
       (c) Television Ownership Limitations.--
       (1) National ownership limitations.--The Commission shall 
     modify its rules for multiple ownership set forth in section 
     73.3555 of its regulations (47 C.F.R. 73.3555)--
       (A) by eliminating the restrictions on the number of 
     television stations that a person or entity may directly or 
     indirectly own, operate, or control, or have a cognizable 
     interest in, nationwide; and
       (B) by increasing the national audience reach limitation 
     for television stations to 35 percent.
       (2) Local ownership limitations.--The Commission shall 
     conduct a rulemaking proceeding to determine whether to 
     retain, modify, or eliminate its limitations on the number of 
     television stations that a person or entity may own, operate, 
     or control, or have a cognizable interest in, within the same 
     television market.
       (d) Relaxation of One-To-A-Market.--With respect to its 
     enforcement of its one-to-a-market ownership rules under 
     section 73.3555 of its regulations, the Commission shall 
     extend its waiver policy to any of the top 50 markets, 
     consistent with the public interest, convenience, and 
     necessity.
       (e) Dual Network Changes.--The Commission shall revise 
     section 73.658(g) of its regulations (47 C.F.R. 658(g)) to 
     permit a television broadcast station to affiliate with a 
     person or entity that maintains 2 or more networks of 
     television broadcast stations unless such dual or multiple 
     networks are composed of--
       (1) two or more persons or entities that, on the date of 
     enactment of the Telecommunications Act of 1996, are 
     ``networks'' as defined in section 73.3613(a)(1) of the 
     Commission's regulations (47 C.F.R. 73.3613(a)(1)); or
       (2) any network described in paragraph (1) and an English-
     language program distribution service that, on such date, 
     provides 4 or more hours of programming per week on a 
     national basis pursuant to network affiliation arrangements 
     with local television broadcast stations in markets reaching 
     more than 75 percent of television homes (as measured by a 
     national ratings service).
       (f) Cable Cross Ownership.--
       (1) Elimination of restrictions.--The Commission shall 
     revise section 76.501 of its regulations (47 C.F.R. 76.501) 
     to permit a person or entity to own or control a network of 
     broadcast stations and a cable system.
       (2) Safeguards against discrimination.--The Commission 
     shall revise such regulations if necessary to ensure 
     carriage, channel positioning, and nondiscriminatory 
     treatment of nonaffiliated broadcast stations by a cable 
     system described in paragraph (1).
       (g) Local Marketing Agreements.--Nothing in this section 
     shall be construed to prohibit the origination, continuation, 
     or renewal of any television local marketing agreement that 
     is in compliance with the regulations of the Commission.
       (h) Further Commission Review.--The Commission shall review 
     its rules adopted pursuant to this section and all of its 
     ownership rules biennially as part of its regulatory reform 
     review under section 11 of the Communications Act of 1934 and 
     shall determine whether any of such rules are necessary in 
     the public interest as the result of competition. The 
     Commission shall repeal or modify any regulation it 
     determines to be no longer in the public interest.
       (i) Elimination of Statutory Restriction.--Section 613(a) 
     (47 U.S.C. 533(a)) is amended--
       (1) by striking paragraph (1);
       (2) by redesignating paragraph (2) as subsection (a);
       (3) by redesignating subparagraphs (A) and (B) as 
     paragraphs (1) and (2), respectively;
       (4) by striking ``and'' at the end of paragraph (1) (as so 
     redesignated);
       (5) by striking the period at the end of paragraph (2) (as 
     so redesignated) and inserting ``; and''; and
       (6) by adding at the end the following new paragraph:
       ``(3) shall not apply the requirements of this subsection 
     to any cable operator in any franchise area in which a cable 
     operator is subject to effective competition as determined 
     under section 623(l).''.

     SEC. 203. TERM OF LICENSES.

       Section 307(c) (47 U.S.C. 307(c)) is amended to read as 
     follows:
       ``(c) Terms of Licenses.--
       ``(1) Initial and renewal licenses.--Each license granted 
     for the operation of a broadcasting station shall be for a 
     term of not to exceed 8 years. Upon application therefor, a 
     renewal of such license may be granted from time to time for 
     a term of not to exceed 8 years from the date of expiration 
     of the preceding license, if the Commission finds that public 
     interest, convenience, and necessity would be served thereby. 
     Consistent with the foregoing provisions of this subsection, 
     the Commission may by rule prescribe the period or periods 
     for which licenses shall be granted and renewed for 
     particular classes of stations, but the Commission may not 
     adopt or follow any rule which would preclude it, in any case 
     involving a station of a particular class, from granting or 
     renewing a license for a shorter period than that prescribed 
     for stations of such class if, in its judgment, the public 
     interest, convenience, or necessity would be served by such 
     action.
       ``(2) Materials in application.--In order to expedite 
     action on applications for renewal of broadcasting station 
     licenses and in order to avoid needless expense to applicants 
     for such renewals, the Commission shall not require any such 
     applicant to file any information which previously has been 
     furnished to the Commission or which is not directly material 
     to the considerations that affect the granting or denial of 
     such application, but the Commission may require any new or 
     additional facts it deems necessary to make its findings.
       ``(3) Continuation pending decision.--Pending any hearing 
     and final decision on such an application and the disposition 
     of any petition for rehearing pursuant to section 405, the 
     Commission shall continue such license in effect.''.

     SEC. 204. BROADCAST LICENSE RENEWAL PROCEDURES.

       (a) Renewal Procedures.--
       (1) Amendment.--Section 309 (47 U.S.C. 309) is amended by 
     adding at the end thereof the following new subsection:
       ``(k) Broadcast Station Renewal Procedures.--
       ``(1) Standards for renewal.--If the licensee of a 
     broadcast station submits an application to the Commission 
     for renewal of such license, the 

[[Page H1094]]
     Commission shall grant the application if it finds, with respect to 
     that station, during the preceding term of its license--
       ``(A) the station has served the public interest, 
     convenience, and necessity;
       ``(B) there have been no serious violations by the licensee 
     of this Act or the rules and regulations of the Commission; 
     and
       ``(C) 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.
       ``(2) Consequence of failure to meet standard.--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 (3), or 
     grant such application on terms and conditions as are 
     appropriate, including renewal for a term less than the 
     maximum otherwise permitted.
       ``(3) Standards for denial.--If the Commission determines, 
     after notice and opportunity for a hearing as provided in 
     subsection (e), that a licensee has failed to meet the 
     requirements specified in paragraph (1) 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.
       ``(4) Competitor consideration prohibited.--In making the 
     determinations specified in paragraph (1) or (2), 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) Conforming amendment.--Section 309(d) (47 U.S.C. 
     309(d)) is amended by inserting after ``with subsection (a)'' 
     each place it appears the following: ``(or subsection (k) in 
     the case of renewal of any broadcast station license)''.
       (b) Summary of Complaints on Violent Programming.--Section 
     308 (47 U.S.C. 308) is amended by adding at the end the 
     following new subsection:
       ``(d) Summary of Complaints.--Each applicant for the 
     renewal of a commercial or noncommercial television license 
     shall attach as an exhibit to the application a summary of 
     written comments and suggestions received from the public and 
     maintained by the licensee (in accordance with Commission 
     regulations) that comment on the applicant's programming, if 
     any, and that are characterized by the commentor as 
     constituting violent programming.''.
       (c) Effective Date.--The amendments made by this section 
     apply to applications filed after May 1, 1995.

     SEC. 205. DIRECT BROADCAST SATELLITE SERVICE.

       (a) DBS Signal Security.--Section 705(e)(4) (47 U.S.C. 
     605(e)(4)) is amended by inserting ``or direct-to-home 
     satellite services,'' after ``programming,''.
       (b) FCC Jurisdiction Over Direct-to-Home Satellite 
     Services.--Section 303 (47 U.S.C. 303) is amended by adding 
     at the end thereof the following new subsection:
       ``(v) Have exclusive jurisdiction to regulate the provision 
     of direct-to-home satellite services. As used in this 
     subsection, 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 in the 
     uplink process to the satellite.''.

     SEC. 206. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.

       Part II of title III is amended by inserting after section 
     364 (47 U.S.C. 362) the following new section:

     ``SEC. 365. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.

       ``Notwithstanding any provision of this Act 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. This section shall take 
     effect for each vessel upon a determination by the United 
     States Coast Guard that such vessel has the equipment 
     required to implement the Global Maritime Distress and Safety 
     System installed and operating in good working condition.''.

     SEC. 207. RESTRICTIONS ON OVER-THE-AIR RECEPTION DEVICES.

       Within 180 days after the date of enactment of this Act, 
     the Commission shall, pursuant to section 303 of the 
     Communications Act of 1934, promulgate regulations to 
     prohibit restrictions that impair a viewer's ability to 
     receive video programming services through devices designed 
     for over-the-air reception of television broadcast signals, 
     multichannel multipoint distribution service, or direct 
     broadcast satellite services.
                       TITLE III--CABLE SERVICES

     SEC. 301. CABLE ACT REFORM.

       (a) Definitions.--
       (1) Definition of cable service.--Section 602(6)(B) (47 
     U.S.C. 522(6)(B)) is amended by inserting ``or use'' after 
     ``the selection''.
       (2) Change in definition of cable system.--Section 602(7) 
     (47 U.S.C. 522(7)) is amended by striking ``(B) a facility 
     that serves only subscribers in 1 or more multiple unit 
     dwellings under common ownership, control, or management, 
     unless such facility or facilities uses any public right-of-
     way;'' and inserting ``(B) a facility that serves subscribers 
     without using any public right-of-way;''.
       (b) Rate Deregulation.--
       (1) Upper tier regulation.--Section 623(c) (47 U.S.C. 
     543(c)) is amended--
       (A) in paragraph (1)(B), by striking ``subscriber, 
     franchising authority, or other relevant State or local 
     government entity'' and inserting ``franchising authority (in 
     accordance with paragraph (3))'';
       (B) in paragraph (1)(C), by striking ``such complaint'' and 
     inserting ``the first complaint filed with the franchising 
     authority under paragraph (3)''; and
       (C) by striking paragraph (3) and inserting the following:
       ``(3) Review of rate changes.--The Commission shall review 
     any complaint submitted by a franchising authority after the 
     date of enactment of the Telecommunications Act of 1996 
     concerning an increase in rates for cable programming 
     services and issue a final order within 90 days after it 
     receives such a complaint, unless the parties agree to extend 
     the period for such review. A franchising authority may not 
     file a complaint under this paragraph unless, within 90 days 
     after such increase becomes effective it receives subscriber 
     complaints.
       ``(4) Sunset of upper tier rate regulation.--This 
     subsection shall not apply to cable programming services 
     provided after March 31, 1999.''.
       (2) Sunset of uniform rate structure in markets with 
     effective competition.--Section 623(d) (47 U.S.C. 543(d)) is 
     amended by adding at the end thereof the following: ``This 
     subsection does not apply to (1) a cable operator with 
     respect to the provision of cable service over its cable 
     system in any geographic area in which the video programming 
     services offered by the operator in that area are subject to 
     effective competition, or (2) any video programming offered 
     on a per channel or per program basis. Bulk discounts to 
     multiple dwelling units shall not be subject to this 
     subsection, except that a cable operator of a cable system 
     that is not subject to effective competition may not charge 
     predatory prices to a multiple dwelling unit. Upon a prima 
     facie showing by a complainant that there are reasonable 
     grounds to believe that the discounted price is predatory, 
     the cable system shall have the burden of showing that its 
     discounted price is not predatory.''.
       (3) Effective competition.--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 ``; or''; and
       (C) by adding at the end the following:
       ``(D) a local exchange carrier or its affiliate (or any 
     multichannel video programming distributor using the 
     facilities of such carrier or its affiliate) offers video 
     programming services directly to subscribers by any means 
     (other than direct-to-home satellite services) in the 
     franchise area of an unaffiliated cable operator which is 
     providing cable service in that franchise area, but only if 
     the video programming services so offered in that area are 
     comparable to the video programming services provided by the 
     unaffiliated cable operator in that area.''
       (c) Greater Deregulation for Smaller Cable Companies.--
     Section 623 (47 U.S.C 543) is amended by adding at the end 
     thereof the following:
       ``(m) Special Rules for Small Companies.--
       ``(1) In general.--Subsections (a), (b), and (c) do not 
     apply to a small cable operator with respect to--
       ``(A) cable programming services, or
       ``(B) a basic service tier that was the only service tier 
     subject to regulation as of December 31, 1994,
     in any franchise area in which that operator services 50,000 
     or fewer subscribers.
       ``(2) Definition of small cable operator.--For purposes of 
     this subsection, the term `small cable operator' means a 
     cable operator that, directly or through an affiliate, serves 
     in the aggregate fewer than 1 percent of all subscribers in 
     the United States and is not affiliated with any entity or 
     entities whose gross annual revenues in the aggregate exceed 
     $250,000,000.''.
       (d) Market Determinations.--
       (1) Market determinations; expedited decisionmaking.--
     Section 614(h)(1)(C) (47 U.S.C. 534(h)(1)(C)) is amended--
       (A) by striking ``in the manner provided in section 
     73.3555(d)(3)(i) of title 47, Code of Federal Regulations, as 
     in effect on May 1, 1991,'' in clause (i) and inserting ``by 
     the Commission by regulation or order using, where available, 
     commercial publications which delineate television markets 
     based on viewing patterns,''; and
       (B) by striking clause (iv) and inserting the following:
       ``(iv) Within 120 days after the date on which a request is 
     filed under this subparagraph (or 120 days after the date of 
     enactment of the Telecommunications Act of 1996, if later), 
     the Commission shall grant or deny the request.''.
       (2) Application to pending requests.--The amendment made by 
     paragraph (1) shall apply to--
       (A) any request pending under section 614(h)(1)(C) of the 
     Communications Act of 1934 (47 U.S.C. 534(h)(1)(C)) on the 
     date of enactment of this Act; and
       (B) any request filed under that section after that date.
       (e) Technical Standards.--Section 624(e) (47 U.S.C. 544(e)) 
     is amended by striking the last two sentences and inserting 
     the following: ``No State or franchising authority may 
     prohibit, condition, or restrict a cable system's use of any 
     type of subscriber equipment or any transmission 
     technology.''.
       (f) Cable Equipment Compatibility.--Section 624A (47 U.S.C. 
     544A) is amended--
       (1) in subsection (a) by striking ``and'' at the end of 
     paragraph (2), by striking the period at the end of paragraph 
     (3) and inserting ``; and''; and by adding at the end the 
     following new paragraph:
     
[[Page H1095]]

       ``(4) compatibility among televisions, video cassette 
     recorders, and cable systems can be assured with narrow 
     technical standards that mandate a minimum degree of common 
     design and operation, leaving all features, functions, 
     protocols, and other product and service options for 
     selection through open competition in the market.'';
       (2) in subsection (c)(1)--
       (A) by redesignating subparagraphs (A) and (B) as 
     subparagraphs (B) and (C), respectively; and
       (B) by inserting before such redesignated subparagraph (B) 
     the following new subparagraph:
       ``(A) the need to maximize open competition in the market 
     for all features, functions, protocols, and other product and 
     service options of converter boxes and other cable converters 
     unrelated to the descrambling or decryption of cable 
     television signals;''; and
       (3) in subsection (c)(2)--
       (A) by redesignating subparagraphs (D) and (E) as 
     subparagraphs (E) and (F), respectively; and
       (B) by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) to ensure that any standards or regulations developed 
     under the authority of this section to ensure compatibility 
     between televisions, video cassette recorders, and cable 
     systems do not affect features, functions, protocols, and 
     other product and service options other than those specified 
     in paragraph (1)(B), including telecommunications interface 
     equipment, home automation communications, and computer 
     network services;''.
       (g) Subscriber Notice.--Section 632 (47 U.S.C. 552) is 
     amended--
       (1) by redesignating subsection (c) as subsection (d); and
       (2) by inserting after subsection (b) the following new 
     subsection:
       ``(c) Subscriber Notice.--A cable operator may provide 
     notice of service and rate changes to subscribers using any 
     reasonable written means at its sole discretion. 
     Notwithstanding section 623(b)(6) or any other provision of 
     this Act, a cable operator shall not be required to provide 
     prior notice of any rate change that is the result of a 
     regulatory fee, franchise fee, or any other fee, tax, 
     assessment, or charge of any kind imposed by any Federal 
     agency, State, or franchising authority on the transaction 
     between the operator and the subscriber.''.
       (h) Program Access.--Section 628 (47 U.S.C. 548) is amended 
     by adding at the end the following:
       ``(j) Common Carriers.--Any provision that applies to a 
     cable operator under this section shall apply to a common 
     carrier or its affiliate that provides video programming by 
     any means directly to subscribers. Any such provision that 
     applies to a satellite cable programming vendor in which a 
     cable operator has an attributable interest shall apply to 
     any satellite cable programming vendor in which such common 
     carrier has an attributable interest. For the purposes of 
     this subsection, two or fewer common officers or directors 
     shall not by itself establish an attributable interest by a 
     common carrier in a satellite cable programming vendor (or 
     its parent company).''.
       (i) Antitrafficking.--Section 617 (47 U.S.C. 537) is 
     amended--
       (1) by striking subsections (a) through (d); and
       (2) in subsection (e), by striking ``(e)'' and all that 
     follows through ``a franchising authority'' and inserting ``A 
     franchising authority''.
       (j) Aggregation of Equipment Costs.--Section 623(a) (47 
     U.S.C. 543(a)) is amended by adding at the end the following 
     new paragraph:
       ``(7) Aggregation of equipment costs.--
       ``(A) In general.--The Commission shall allow cable 
     operators, pursuant to any rules promulgated under subsection 
     (b)(3), to aggregate, on a franchise, system, regional, or 
     company level, their equipment costs into broad categories, 
     such as converter boxes, regardless of the varying levels of 
     functionality of the equipment within each such broad 
     category. Such aggregation shall not be permitted with 
     respect to equipment used by subscribers who receive only a 
     rate regulated basic service tier.
       ``(B) Revision to commission rules; forms.--Within 120 days 
     of the date of enactment of the Telecommunications Act of 
     1996, the Commission shall issue revisions to the appropriate 
     rules and forms necessary to implement subparagraph (A).''.
       (k) Treatment of Prior Year Losses.--
       (1) Amendment.--Section 623 (48 U.S.C. 543) is amended by 
     adding at the end thereof the following:
       ``(n) Treatment of Prior Year Losses.--Notwithstanding any 
     other provision of this section or of section 612, losses 
     associated with a cable system (including losses associated 
     with the grant or award of a franchise) that were incurred 
     prior to September 4, 1992, with respect to a cable system 
     that is owned and operated by the original franchisee of such 
     system shall not be disallowed, in whole or in part, in the 
     determination of whether the rates for any tier of service or 
     any type of equipment that is subject to regulation under 
     this section are lawful.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of enactment of this Act and 
     shall be applicable to any rate proposal filed on or after 
     September 4, 1993, upon which no final action has been taken 
     by December 1, 1995.

     SEC. 302. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES.

       (a) Provisions for Regulation of Cable Service Provided by 
     Telephone Companies.--Title VI (47 U.S.C. 521 et seq.) is 
     amended by adding at the end the following new part:

  ``PART V--VIDEO PROGRAMMING SERVICES PROVIDED BY TELEPHONE COMPANIES

     ``SEC. 651. REGULATORY TREATMENT OF VIDEO PROGRAMMING 
                   SERVICES.

       ``(a) Limitations on Cable Regulation.--
       ``(1) Radio-based systems.--To the extent that a common 
     carrier (or any other person) is providing video programming 
     to subscribers using radio communication, such carrier (or 
     other person) shall be subject to the requirements of title 
     III and section 652, but shall not otherwise be subject to 
     the requirements of this title.
       ``(2) Common carriage of video traffic.--To the extent that 
     a common carrier is providing transmission of video 
     programming on a common carrier basis, such carrier shall be 
     subject to the requirements of title II and section 652, but 
     shall not otherwise be subject to the requirements of this 
     title. This paragraph shall not affect the treatment under 
     section 602(7)(C) of a facility of a common carrier as a 
     cable system.
       ``(3) Cable systems and open video systems.--To the extent 
     that a common carrier is providing video programming to its 
     subscribers in any manner other than that described in 
     paragraphs (1) and (2)--
       ``(A) such carrier shall be subject to the requirements of 
     this title, unless such programming is provided by means of 
     an open video system for which the Commission has approved a 
     certification under section 653; or
       ``(B) if such programming is provided by means of an open 
     video system for which the Commission has approved a 
     certification under section 653, such carrier shall be 
     subject to the requirements of this part, but shall be 
     subject to parts I through IV of this title only as provided 
     in 653(c).
       ``(4) Election to operate as open video system.--A common 
     carrier that is providing video programming in a manner 
     described in paragraph (1) or (2), or a combination thereof, 
     may elect to provide such programming by means of an open 
     video system that complies with section 653. If the 
     Commission approves such carrier's certification under 
     section 653, such carrier shall be subject to the 
     requirements of this part, but shall be subject to parts I 
     through IV of this title only as provided in 653(c).
       ``(b) Limitations on Interconnection Obligations.--A local 
     exchange carrier that provides cable service through an open 
     video system or a cable system shall not be required, 
     pursuant to title II of this Act, to make capacity available 
     on a nondiscriminatory basis to any other person for the 
     provision of cable service directly to subscribers.
       ``(c) Additional Regulatory Relief.--A common carrier shall 
     not be required to obtain a certificate under section 214 
     with respect to the establishment or operation of a system 
     for the delivery of video programming.

     ``SEC. 652. PROHIBITION ON BUY OUTS.

       ``(a) Acquisitions by Carriers.--No local exchange carrier 
     or any affiliate of such carrier owned by, operated by, 
     controlled by, or under common control with such carrier may 
     purchase or otherwise acquire directly or indirectly more 
     than a 10 percent financial interest, or any management 
     interest, in any cable operator providing cable service 
     within the local exchange carrier's telephone service area.
       ``(b) Acquisitions by Cable Operators.--No cable operator 
     or affiliate of a cable operator that is owned by, operated 
     by, controlled by, or under common ownership with such cable 
     operator may purchase or otherwise acquire, directly or 
     indirectly, more than a 10 percent financial interest, or any 
     management interest, in any local exchange carrier providing 
     telephone exchange service within such cable operator's 
     franchise area.
       ``(c) Joint Ventures.--A local exchange carrier and a cable 
     operator whose telephone service area and cable franchise 
     area, respectively, are in the same market may not enter into 
     any joint venture or partnership to provide video programming 
     directly to subscribers or to provide telecommunications 
     services within such market.
       ``(d) Exceptions.--
       ``(1) Rural systems.--Notwithstanding subsections (a), (b), 
     and (c) of this section, a local exchange carrier (with 
     respect to a cable system located in its telephone service 
     area) and a cable operator (with respect to the facilities of 
     a local exchange carrier used to provide telephone exchange 
     service in its cable franchise area) may obtain a controlling 
     interest in, management interest in, or enter into a joint 
     venture or partnership with the operator of such system or 
     facilities for the use of such system or facilities to the 
     extent that--
       ``(A) such system or facilities only serve incorporated or 
     unincorporated--
       ``(i) places or territories that have fewer than 35,000 
     inhabitants; and
       ``(ii) are outside an urbanized area, as defined by the 
     Bureau of the Census; and
       ``(B) in the case of a local exchange carrier, such system, 
     in the aggregate with any other system in which such carrier 
     has an interest, serves less than 10 percent of the 
     households in the telephone service area of such carrier.
       ``(2) Joint use.--Notwithstanding subsection (c), a local 
     exchange carrier may obtain, with the concurrence of the 
     cable operator on the rates, terms, and conditions, the use 
     of that part of the transmission facilities of a cable system 
     extending from the last multi-user terminal to the premises 
     of the end user, if such use is reasonably limited in scope 
     and duration, as determined by the Commission.
       ``(3) Acquisitions in competitive markets.--Notwithstanding 
     subsections (a) and (c), a local exchange carrier may obtain 
     a controlling interest in, or form a joint venture or other 
     partnership with, or provide financing to, a cable system 
     (hereinafter in this paragraph referred to as `the subject 
     cable system'), if--
       ``(A) the subject cable system operates in a television 
     market that is not in the top 25 markets, 

[[Page H1096]]
     and such market has more than 1 cable system operator, and the subject 
     cable system is not the cable system with the most 
     subscribers in such television market;
       ``(B) the subject cable system and the cable system with 
     the most subscribers in such television market held on May 1, 
     1995, cable television franchises from the largest 
     municipality in the television market and the boundaries of 
     such franchises were identical on such date;
       ``(C) the subject cable system is not owned by or under 
     common ownership or control of any one of the 50 cable system 
     operators with the most subscribers as such operators existed 
     on May 1, 1995; and
       ``(D) the system with the most subscribers in the 
     television market is owned by or under common ownership or 
     control of any one of the 10 largest cable system operators 
     as such operators existed on May 1, 1995.
       ``(4) Exempt cable systems.--Subsection (a) does not apply 
     to any cable system if--
       ``(A) the cable system serves no more than 17,000 cable 
     subscribers, of which no less than 8,000 live within an urban 
     area, and no less than 6,000 live within a nonurbanized area 
     as of June 1, 1995;
       ``(B) the cable system is not owned by, or under common 
     ownership or control with, any of the 50 largest cable system 
     operators in existence on June 1, 1995; and
       ``(C) the cable system operates in a television market that 
     was not in the top 100 television markets as of June 1, 1995.
       ``(5) Small cable systems in nonurban areas.--
     Notwithstanding subsections (a) and (c), a local exchange 
     carrier with less than $100,000,000 in annual operating 
     revenues (or any affiliate of such carrier owned by, operated 
     by, controlled by, or under common control with such carrier) 
     may purchase or otherwise acquire more than a 10 percent 
     financial interest in, or any management interest in, or 
     enter into a joint venture or partnership with, any cable 
     system within the local exchange carrier's telephone service 
     area that serves no more than 20,000 cable subscribers, if no 
     more than 12,000 of those subscribers live within an 
     urbanized area, as defined by the Bureau of the Census.
       ``(6) Waivers.--The Commission may waive the restrictions 
     of subsections (a), (b), or (c) only if--
       ``(A) the Commission determines that, because of the nature 
     of the market served by the affected cable system or 
     facilities used to provide telephone exchange service--
       ``(i) the affected cable operator or local exchange carrier 
     would be subjected to undue economic distress by the 
     enforcement of such provisions;
       ``(ii) the system or facilities would not be economically 
     viable if such provisions were enforced; or
       ``(iii) the anticompetitive effects of the proposed 
     transaction are clearly outweighed in the public interest by 
     the probable effect of the transaction in meeting the 
     convenience and needs of the community to be served; and
       ``(B) the local franchising authority approves of such 
     waiver.
       ``(e) Definition of Telephone Service Area.--For purposes 
     of this section, the term `telephone service area' when used 
     in connection with a common carrier subject in whole or in 
     part to title II of this Act means the area within which such 
     carrier provided telephone exchange service as of January 1, 
     1993, but if any common carrier after such date transfers its 
     telephone exchange service facilities to another common 
     carrier, the area to which such facilities provide telephone 
     exchange service shall be treated as part of the telephone 
     service area of the acquiring common carrier and not of the 
     selling common carrier.

     ``SEC. 653. ESTABLISHMENT OF OPEN VIDEO SYSTEMS.

       ``(a) Open Video Systems.--
       ``(1) Certificates of compliance.--A local exchange carrier 
     may provide cable service to its cable service subscribers in 
     its telephone service area through an open video system that 
     complies with this section. To the extent permitted by such 
     regulations as the Commission may prescribe consistent with 
     the public interest, convenience, and necessity, an operator 
     of a cable system or any other person may provide video 
     programming through an open video system that complies with 
     this section. An operator of an open video system shall 
     qualify for reduced regulatory burdens under subsection (c) 
     of this section if the operator of such system certifies to 
     the Commission that such carrier complies with the 
     Commission's regulations under subsection (b) and the 
     Commission approves such certification. The Commission shall 
     publish notice of the receipt of any such certification and 
     shall act to approve or disapprove any such certification 
     within 10 days after receipt of such certification.
       ``(2) Dispute resolution.--The Commission shall have the 
     authority to resolve disputes under this section and the 
     regulations prescribed thereunder. Any such dispute shall be 
     resolved within 180 days after notice of such dispute is 
     submitted to the Commission. At that time or subsequently in 
     a separate damages proceeding, the Commission may, in the 
     case of any violation of this section, require carriage, 
     award damages to any person denied carriage, or any 
     combination of such sanctions. Any aggrieved party may seek 
     any other remedy available under this Act.
       ``(b) Commission Actions.--
       ``(1) Regulations required.--Within 6 months after the date 
     of enactment of the Telecommunications Act of 1996, the 
     Commission shall complete all actions necessary (including 
     any reconsideration) to prescribe regulations that--
       ``(A) except as required pursuant to section 611, 614, or 
     615, prohibit an operator of an open video system from 
     discriminating among video programming providers with regard 
     to carriage on its open video system, and ensure that the 
     rates, terms, and conditions for such carriage are just and 
     reasonable, and are not unjustly or unreasonably 
     discriminatory;
       ``(B) if demand exceeds the channel capacity of the open 
     video system, prohibit an operator of an open video system 
     and its affiliates from selecting the video programming 
     services for carriage on more than one-third of the activated 
     channel capacity on such system, but nothing in this 
     subparagraph shall be construed to limit the number of 
     channels that the carrier and its affiliates may offer to 
     provide directly to subscribers;
       ``(C) permit an operator of an open video system to carry 
     on only one channel any video programming service that is 
     offered by more than one video programming provider 
     (including the local exchange carrier's video programming 
     affiliate), provided that subscribers have ready and 
     immediate access to any such video programming service;
       ``(D) extend to the distribution of video programming over 
     open video systems the Commission's regulations concerning 
     sports exclusivity (47 C.F.R. 76.67), network nonduplication 
     (47 C.F.R. 76.92 et seq.), and syndicated exclusivity (47 
     C.F.R. 76.151 et seq.); and
       ``(E)(i) prohibit an operator of an open video system from 
     unreasonably discriminating in favor of the operator or its 
     affiliates with regard to material or information (including 
     advertising) provided by the operator to subscribers for the 
     purposes of selecting programming on the open video system, 
     or in the way such material or information is presented to 
     subscribers;
       ``(ii) require an operator of an open video system to 
     ensure that video programming providers or copyright holders 
     (or both) are able suitably and uniquely to identify their 
     programming services to subscribers;
       ``(iii) if such identification is transmitted as part of 
     the programming signal, require the carrier to transmit such 
     identification without change or alteration; and
       ``(iv) prohibit an operator of an open video system from 
     omitting television broadcast stations or other unaffiliated 
     video programming services carried on such system from any 
     navigational device, guide, or menu.
       ``(2) Consumer access.--Subject to the requirements of 
     paragraph (1) and the regulations thereunder, nothing in this 
     section prohibits a common carrier or its affiliate from 
     negotiating mutually agreeable terms and conditions with 
     over-the-air broadcast stations and other unaffiliated video 
     programming providers to allow consumer access to their 
     signals on any level or screen of any gateway, menu, or other 
     program guide, whether provided by the carrier or its 
     affiliate.
       ``(c) Reduced Regulatory Burdens for Open Video Systems.--
       ``(1) In general.--Any provision that applies to a cable 
     operator under--
       ``(A) sections 613 (other than subsection (a) thereof), 
     616, 623(f), 628, 631, and 634 of this title, shall apply,
       ``(B) sections 611, 614, and 615 of this title, and section 
     325 of title III, shall apply in accordance with the 
     regulations prescribed under paragraph (2), and
       ``(C) sections 612 and 617, and parts III and IV (other 
     than sections 623(f), 628, 631, and 634), of this title shall 
     not apply,
     to any operator of an open video system for which the 
     Commission has approved a certification under this section.
       ``(2) Implementation.--
       ``(A) Commission action.--In the rulemaking proceeding to 
     prescribe the regulations required by subsection (b)(1), the 
     Commission shall, to the extent possible, impose obligations 
     that are no greater or lesser than the obligations contained 
     in the provisions described in paragraph (1)(B) of this 
     subsection. The Commission shall complete all action 
     (including any reconsideration) to prescribe such regulations 
     no later than 6 months after the date of enactment of the 
     Telecommunications Act of 1996.
       ``(B) Fees.--An operator of an open video system under this 
     part may be subject to the payment of fees on the gross 
     revenues of the operator for the provision of cable service 
     imposed by a local franchising authority or other 
     governmental entity, in lieu of the franchise fees permitted 
     under section 622. The rate at which such fees are imposed 
     shall not exceed the rate at which franchise fees are imposed 
     on any cable operator transmitting video programming in the 
     franchise area, as determined in accordance with regulations 
     prescribed by the Commission. An operator of an open video 
     system may designate that portion of a subscriber's bill 
     attributable to the fee under this subparagraph as a separate 
     item on the bill.
       ``(3) Regulatory streamlining.--With respect to the 
     establishment and operation of an open video system, the 
     requirements of this section shall apply in lieu of, and not 
     in addition to, the requirements of title II.
       ``(4) Treatment as cable operator.--Nothing in this Act 
     precludes a video programming provider making use of a open 
     video system from being treated as an operator of a cable 
     system for purposes of section 111 of title 17, United States 
     Code.
       ``(d) Definition of Telephone Service Area.--For purposes 
     of this section, the term `telephone service area' when used 
     in connection with a common carrier subject in whole or in 
     part to title II of this Act means the area within which such 
     carrier is offering telephone exchange service.''.
       (b) Conforming and Technical Amendments.--
       (1) Repeal.--Subsection (b) of section 613 (47 U.S.C. 
     533(b)) is repealed.
       (2) Definitions.--Section 602 (47 U.S.C. 531) is amended--
       (A) in paragraph (7), by striking ``, or (D)'' and 
     inserting the following: ``, unless the extent of such use is 
     solely to provide interactive on-

[[Page H1097]]
     demand services; (D) an open video system that complies with section 
     653 of this title; or (E)'';
       (B) by redesignating paragraphs (12) through (19) as 
     paragraphs (13) through (20), respectively; and
       (C) by inserting after paragraph (11) the following new 
     paragraph:
       ``(12) the term `interactive on-demand services' means a 
     service providing video programming to subscribers over 
     switched networks on an on-demand, point-to-point basis, but 
     does not include services providing video programming 
     prescheduled by the programming provider;''.
       (3) Termination of video-dialtone regulations.--The 
     Commission's regulations and policies with respect to video 
     dialtone requirements issued in CC Docket No. 87-266 shall 
     cease to be effective on the date of enactment of this Act. 
     This paragraph shall not be construed to require the 
     termination of any video-dialtone system that the Commission 
     has approved before the date of enactment of this Act.

     SEC. 303. PREEMPTION OF FRANCHISING AUTHORITY REGULATION OF 
                   TELECOMMUNICATIONS SERVICES.

       (a) Provision of Telecommunications Services by a Cable 
     Operator.--Section 621(b) (47 U.S.C. 541(b)) is amended by 
     adding at the end thereof the following new paragraph:
       ``(3)(A) If 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 for the 
     provision of telecommunications services; and
       ``(ii) the provisions of this title shall not apply to such 
     cable operator or affiliate for the provision of 
     telecommunications services.
       ``(B) A franchising authority may not impose any 
     requirement under this title that has the purpose or effect 
     of prohibiting, limiting, restricting, or conditioning the 
     provision of a telecommunications service by a cable operator 
     or an affiliate thereof.
       ``(C) A franchising authority may not order a cable 
     operator or affiliate thereof--
       ``(i) to discontinue the provision of a telecommunications 
     service, or
       ``(ii) to discontinue the operation of a cable system, to 
     the extent such cable system is used for the provision of a 
     telecommunications service, by reason of the failure of such 
     cable operator or affiliate thereof to obtain a franchise or 
     franchise renewal under this title with respect to the 
     provision of such telecommunications service.
       ``(D) Except as otherwise permitted by sections 611 and 
     612, a franchising authority may not require a cable operator 
     to provide any telecommunications service or facilities, 
     other than institutional networks, as a condition of the 
     initial grant of a franchise, a franchise renewal, or a 
     transfer of a franchise.''.
       (b) 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 thereof.

     SEC. 304. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

       Part III of title VI is amended by inserting after section 
     628 (47 U.S.C. 548) the following new section:

     ``SEC. 629. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

       ``(a) Commercial Consumer Availability of Equipment Used To 
     Access Services Provided by Multichannel Video Programming 
     Distributors.--The Commission shall, in consultation with 
     appropriate industry standard-setting organizations, adopt 
     regulations to assure the commercial availability, to 
     consumers of multichannel video programming and other 
     services offered over multichannel video programming systems, 
     of converter boxes, interactive communications equipment, and 
     other equipment used by consumers to access multichannel 
     video programming and other services offered over 
     multichannel video programming systems, from manufacturers, 
     retailers, and other vendors not affiliated with any 
     multichannel video programming distributor. Such regulations 
     shall not prohibit any multichannel video programming 
     distributor from also offering converter boxes, interactive 
     communications equipment, and other equipment used by 
     consumers to access multichannel video programming and other 
     services offered over multichannel video programming systems, 
     to consumers, if the system operator's charges to consumers 
     for such devices and equipment are separately stated and not 
     subsidized by charges for any such service.
       ``(b) Protection of System Security.--The Commission shall 
     not prescribe regulations under subsection (a) which would 
     jeopardize security of multichannel video programming and 
     other services offered over multichannel video programming 
     systems, or impede the legal rights of a provider of such 
     services to prevent theft of service.
       ``(c) Waiver.--The Commission shall waive a regulation 
     adopted under subsection (a) for a limited time upon an 
     appropriate showing by a provider of multichannel video 
     programming and other services offered over multichannel 
     video programming systems, or an equipment provider, that 
     such waiver is necessary to assist the development or 
     introduction of a new or improved multichannel video 
     programming or other service offered over multichannel video 
     programming systems, technology, or products. Upon an 
     appropriate showing, the Commission shall grant any such 
     waiver request within 90 days of any application filed under 
     this subsection, and such waiver shall be effective for all 
     service providers and products in that category and for all 
     providers of services and products.
       ``(d) Avoidance of Redundant Regulations.--
       ``(1) Commercial availability determinations.--
     Determinations made or regulations prescribed by the 
     Commission with respect to commercial availability to 
     consumers of converter boxes, interactive communications 
     equipment, and other equipment used by consumers to access 
     multichannel video programming and other services offered 
     over multichannel video programming systems, before the date 
     of enactment of the Telecommunications Act of 1996 shall 
     fulfill the requirements of this section.
       ``(2) Regulations.--Nothing in this section affects section 
     64.702(e) of the Commission's regulations (47 C.F.R. 
     64.702(e)) or other Commission regulations governing 
     interconnection and competitive provision of customer 
     premises equipment used in connection with basic common 
     carrier communications services.
       ``(e) Sunset.--The regulations adopted under this section 
     shall cease to apply when the Commission determines that--
       ``(1) the market for the multichannel video programming 
     distributors is fully competitive;
       ``(2) the market for converter boxes, and interactive 
     communications equipment, used in conjunction with that 
     service is fully competitive; and
       ``(3) elimination of the regulations would promote 
     competition and the public interest.
       ``(f) Commission's Authority.--Nothing in this section 
     shall be construed as expanding or limiting any authority 
     that the Commission may have under law in effect before the 
     date of enactment of the Telecommunications Act of 1996.''.

     SEC. 305. VIDEO PROGRAMMING ACCESSIBILITY.

       Title VII is amended by inserting after section 712 (47 
     U.S.C. 612) the following new section:

     ``SEC. 713. VIDEO PROGRAMMING ACCESSIBILITY.

       ``(a) Commission Inquiry.--Within 180 days after the date 
     of enactment of the Telecommunications Act of 1996, the 
     Federal Communications Commission shall complete an inquiry 
     to ascertain the level at which video programming is closed 
     captioned. Such inquiry shall examine the extent to which 
     existing or previously published programming is closed 
     captioned, the size of the video programming provider or 
     programming owner providing closed captioning, the size of 
     the market served, the relative audience shares achieved, or 
     any other related factors. The Commission shall submit to the 
     Congress a report on the results of such inquiry.
       ``(b) Accountability Criteria.--Within 18 months after such 
     date of enactment, the Commission shall prescribe such 
     regulations as are necessary to implement this section. Such 
     regulations shall ensure that--
       ``(1) video programming first published or exhibited after 
     the effective date of such regulations is fully accessible 
     through the provision of closed captions, except as provided 
     in subsection (d); and
       ``(2) video programming providers or owners maximize the 
     accessibility of video programming first published or 
     exhibited prior to the effective date of such regulations 
     through the provision of closed captions, except as provided 
     in subsection (d).
       ``(c) Deadlines for Captioning.--Such regulations shall 
     include an appropriate schedule of deadlines for the 
     provision of closed captioning of video programming.
       ``(d) Exemptions.--Notwithstanding subsection (b)--
       ``(1) the Commission may exempt by regulation programs, 
     classes of programs, or services for which the Commission has 
     determined that the provision of closed captioning would be 
     economically burdensome to the provider or owner of such 
     programming;
       ``(2) 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 contracts in effect on the date of enactment of the 
     Telecommunications Act of 1996, except that nothing in this 
     section shall be construed to relieve a video programming 
     provider of its obligations to provide services required by 
     Federal law; and
       ``(3) a provider of video programming or program owner may 
     petition the Commission for an exemption from the 
     requirements of this section, and the Commission may grant 
     such petition upon a showing that the requirements contained 
     in this section would result in an undue burden.
       ``(e) Undue Burden.--The term `undue burden' means 
     significant difficulty or expense. In determining whether the 
     closed captions necessary to comply with the requirements of 
     this paragraph would result in an undue economic burden, the 
     factors to be considered include--
       ``(1) the nature and cost of the closed captions for the 
     programming;
       ``(2) the impact on the operation of the provider or 
     program owner;
       ``(3) the financial resources of the provider or program 
     owner; and
       ``(4) the type of operations of the provider or program 
     owner.
       ``(f) Video Descriptions Inquiry.--Within 6 months after 
     the date of enactment of the Telecommunications Act of 1996, 
     the Commission shall commence an inquiry to examine the use 
     of video descriptions on video programming in order to ensure 
     the accessibility of video programming to persons with visual 
     impairments, and report to Congress on its findings. The 
     Commission's report shall assess appropriate methods and 
     schedules for phasing video descriptions into the 
     marketplace, technical and quality standards for video 
     descriptions, a definition of programming for which video 
     descriptions would apply, and other technical and legal 
     issues that the Commission deems appropriate.
       ``(g) Video Description.--For purposes of this section, 
     `video description' means the insertion of audio narrated 
     descriptions of a television program's key visual elements 
     into natural pauses between the program's dialogue. 
     
[[Page H1098]]

       ``(h) Private Rights of Actions Prohibited.--Nothing in 
     this section shall be construed to authorize any private 
     right of action to enforce any requirement of this section or 
     any regulation thereunder. The Commission shall have 
     exclusive jurisdiction with respect to any complaint under 
     this section.''.
                      TITLE IV--REGULATORY REFORM

     SEC. 401. REGULATORY FORBEARANCE.

       Title I is amended by inserting after section 9 (47 U.S.C. 
     159) the following new section:

     ``SEC. 10. COMPETITION IN PROVISION OF TELECOMMUNICATIONS 
                   SERVICE.

       ``(a) Regulatory flexibility.--Notwithstanding section 
     332(c)(1)(A) of this Act, the Commission shall forbear from 
     applying any regulation or any provision of this Act to a 
     telecommunications carrier or telecommunications service, or 
     class of telecommunications carriers or telecommunications 
     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 telecommunications carrier or telecommunications 
     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 provision or 
     regulation 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 provision or 
     regulation 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) Petition for Forbearance.--Any telecommunications 
     carrier, or class of telecommunications carriers, may submit 
     a petition to the Commission requesting that the Commission 
     exercise the authority granted under this section with 
     respect to that carrier or those carriers, or any service 
     offered by that carrier or carriers. Any such petition shall 
     be deemed granted if the Commission does not deny the 
     petition for failure to meet the requirements for forbearance 
     under subsection (a) within one year after the Commission 
     receives it, unless the one-year period is extended by the 
     Commission. The Commission may extend the initial one-year 
     period by an additional 90 days if the Commission finds that 
     an extension is necessary to meet the requirements of 
     subsection (a). The Commission may grant or deny a petition 
     in whole or in part and shall explain its decision in 
     writing.
       ``(d) Limitation.--Except as provided in section 251(f), 
     the Commission may not forbear from applying the requirements 
     of section 251(c) or 271 under subsection (a) of this section 
     until it determines that those requirements have been fully 
     implemented.
       ``(e) State Enforcement After Commission Forbearance.--A 
     State commission may not continue to apply or enforce any 
     provision of this Act that the Commission has determined to 
     forbear from applying under subsection (a).''.

     SEC. 402. BIENNIAL REVIEW OF REGULATIONS; REGULATORY RELIEF.

       (a) Biennial Review.--Title I is amended by inserting after 
     section 10 (as added by section 401) the following new 
     section:

     ``SEC. 11. REGULATORY REFORM.

       ``(a) Biennial Review of Regulations.--In every even-
     numbered year (beginning with 1998), the Commission--
       ``(1) shall review all regulations issued under this Act in 
     effect at the time of the review that apply to the operations 
     or activities of any provider of telecommunications service; 
     and
       ``(2) shall determine whether any such regulation is no 
     longer necessary in the public interest as the result of 
     meaningful economic competition between providers of such 
     service.
       ``(b) Effect of Determination.--The Commission shall repeal 
     or modify any regulation it determines to be no longer 
     necessary in the public interest.''.
       (b) Regulatory Relief.--
       (1) Streamlined procedures for changes in charges, 
     classifications, regulations, or practices.--
       (A) Section 204(a) (47 U.S.C. 204(a)) is amended--
       (i) by striking ``12 months'' the first place it appears in 
     paragraph (2)(A) and inserting ``5 months'';
       (ii) by striking ``effective,'' and all that follows in 
     paragraph (2)(A) and inserting ``effective.''; and
       (iii) by adding at the end thereof the following:
       ``(3) A local exchange carrier may file with the Commission 
     a new or revised charge, classification, regulation, or 
     practice on a streamlined basis. Any such charge, 
     classification, regulation, or practice shall be deemed 
     lawful and shall be effective 7 days (in the case of a 
     reduction in rates) or 15 days (in the case of an increase in 
     rates) after the date on which it is filed with the 
     Commission unless the Commission takes action under paragraph 
     (1) before the end of that 7-day or 15-day period, as is 
     appropriate.''.
       (B) Section 208(b) (47 U.S.C. 208(b)) is amended--
       (i) by striking ``12 months'' the first place it appears in 
     paragraph (1) and inserting ``5 months''; and
       (ii) by striking ``filed,'' and all that follows in 
     paragraph (1) and inserting ``filed.''.
       (2) Extensions of lines under section 214; armis reports.--
     The Commission shall permit any common carrier--
       (A) to be exempt from the requirements of section 214 of 
     the Communications Act of 1934 for the extension of any line; 
     and
       (B) to file cost allocation manuals and ARMIS reports 
     annually, to the extent such carrier is required to file such 
     manuals or reports.
       (3) Forbearance authority not limited.--Nothing in this 
     subsection shall be construed to limit the authority of the 
     Commission to waive, modify, or forbear from applying any of 
     the requirements to which reference is made in paragraph (1) 
     under any other provision of this Act or other law.
       (4) Effective date of amendments.--The amendments made by 
     paragraph (1) of this subsection shall apply with respect to 
     any charge, classification, regulation, or practice filed on 
     or after one year after the date of enactment of this Act.
       (c) Classification of Carriers.--In classifying carriers 
     according to section 32.11 of its regulations (47 C.F.R. 
     32.11) and in establishing reporting requirements pursuant to 
     part 43 of its regulations (47 C.F.R. part 43) and section 
     64.903 of its regulations (47 C.F.R. 64.903), the Commission 
     shall adjust the revenue requirements to account for 
     inflation as of the release date of the Commission's Report 
     and Order in CC Docket No. 91-141, and annually thereafter. 
     This subsection shall take effect on the date of enactment of 
     this Act.

     SEC. 403. ELIMINATION OF UNNECESSARY COMMISSION REGULATIONS 
                   AND FUNCTIONS.

       (a) Modification of Amateur Radio Examination Procedures.--
     Section 4(f)(4) (47 U.S.C. 154(f)(4)) is amended--
       (1) in subparagraph (A)--
       (A) by inserting ``or administering'' after ``for purposes 
     of preparing'';
       (B) by inserting ``of'' after ``than the class''; and
       (C) by inserting ``or administered'' after ``for which the 
     examination is being prepared'';
       (2) by striking subparagraph (B);
       (3) in subparagraph (H), by striking ``(A), (B), and (C)'' 
     and inserting ``(A) and (B)'';
       (4) in subparagraph (J)--
       (A) by striking ``or (B)''; and
       (B) by striking the last sentence; and
       (5) by redesignating subparagraphs (C) through (J) as 
     subparagraphs (B) through (I), respectively.
       (b) Authority To Designate Entities To Inspect.--Section 
     4(f)(3) (47 U.S.C. 154(f)(3)) is amended by inserting before 
     the period at the end the following: ``: And provided 
     further, That, in the alternative, an entity designated by 
     the Commission may make the inspections referred to in this 
     paragraph''.
       (c) Expediting Instructional Television Fixed Service 
     Processing.--Section 5(c)(1) (47 U.S.C. 155(c)(1)) is amended 
     by striking the last sentence and inserting the following: 
     ``Except for cases involving the authorization of service in 
     the instructional television fixed service, or as otherwise 
     provided in this Act, nothing in this paragraph shall 
     authorize the Commission to provide for the conduct, by any 
     person or persons other than persons referred to in paragraph 
     (2) or (3) of section 556(b) of title 5, United States Code, 
     of any hearing to which such section applies.''.
       (d) Repeal Setting of Depreciation Rates.--The first 
     sentence of section 220(b) (47 U.S.C. 220(b)) is amended by 
     striking ``shall prescribe for such carriers'' and inserting 
     ``may prescribe, for such carriers as it determines to be 
     appropriate,''.
       (e) Use of Independent Auditors.--Section 220(c) (47 U.S.C. 
     220(c)) is amended by adding at the end thereof the 
     following: ``The Commission may obtain the services of any 
     person licensed to provide public accounting services under 
     the law of any State to assist with, or conduct, audits under 
     this section. While so employed or engaged in conducting an 
     audit for the Commission under this section, any such person 
     shall have the powers granted the Commission under this 
     subsection and shall be subject to subsection (f) in the same 
     manner as if that person were an employee of the 
     Commission.''.
       (f) Delegation of Equipment Testing and Certification to 
     Private Laboratories.--Section 302 (47 U.S.C. 302) is amended 
     by adding at the end the following:
       ``(e) The Commission may--
       ``(1) authorize the use of private organizations for 
     testing and certifying the compliance of devices or home 
     electronic equipment and systems with regulations promulgated 
     under this section;
       ``(2) accept as prima facie evidence of such compliance the 
     certification by any such organization; and
       ``(3) establish such qualifications and standards as it 
     deems appropriate for such private organizations, testing, 
     and certification.''.
       (g) Making License Modification Uniform.--Section 303(f) 
     (47 U.S.C. 303(f)) is amended by striking ``unless, after a 
     public hearing,'' and inserting ``unless''.
       (h) Eliminate FCC Jurisdiction Over Government-Owned Ship 
     Radio Stations.--
       (1) Section 305 (47 U.S.C. 305) is amended by striking 
     subsection (b) and redesignating subsections (c) and (d) as 
     (b) and (c), respectively.
       (2) Section 382(2) (47 U.S.C. 382(2)) is amended by 
     striking ``except a vessel of the United States Maritime 
     Administration, the Inland and Coastwise Waterways Service, 
     or the Panama Canal Company,''.
       (i) Permit Operation of Domestic Ship and Aircraft Radios 
     Without License.--Section 307(e) (47 U.S.C. 307(e)) is 
     amended to read as follows:
       ``(e)(1) Notwithstanding any license requirement 
     established in this Act, if the Commission 

[[Page H1099]]
     determines that such authorization serves the public interest, 
     convenience, and necessity, the Commission may by rule 
     authorize the operation of radio stations without individual 
     licenses in the following radio services: (A) the citizens 
     band radio service; (B) the radio control service; (C) the 
     aviation radio service for aircraft stations operated on 
     domestic flights when such aircraft are not otherwise 
     required to carry a radio station; and (D) the maritime radio 
     service for ship stations navigated on domestic voyages when 
     such ships are not otherwise required to carry a radio 
     station.
       ``(2) Any radio station operator who is authorized by the 
     Commission to operate without an individual license shall 
     comply with all other provisions of this Act and with rules 
     prescribed by the Commission under this Act.
       ``(3) For purposes of this subsection, the terms `citizens 
     band radio service', `radio control service', `aircraft 
     station' and `ship station' shall have the meanings given 
     them by the Commission by rule.''.
       (j) Expedited Licensing for Fixed Microwave Service.--
     Section 309(b)(2) (47 U.S.C. 309(b)(2)) is amended by 
     striking subparagraph (A) and redesignating subparagraphs (B) 
     through (G) as subparagraphs (A) through (F), respectively.
       (k) Foreign Directors.--Section 310(b) (47 U.S.C. 310(b)) 
     is amended--
       (1) in paragraph (3), by striking ``of which any officer or 
     director is an alien or''; and
       (2) in paragraph (4), by striking ``of which any officer or 
     more than one-fourth of the directors are aliens, or''.
       (l) Limitation on Silent Station Authorizations.--Section 
     312 (47 U.S.C. 312) is amended by adding at the end the 
     following:
       ``(g) If a broadcasting station fails to transmit broadcast 
     signals for any consecutive 12-month period, then the station 
     license granted for the operation of that broadcast station 
     expires at the end of that period, notwithstanding any 
     provision, term, or condition of the license to the 
     contrary.''.
       (m) Modification of Construction Permit Requirement.--
     Section 319(d) is amended by striking the last two sentences 
     and inserting the following: ``With respect to any 
     broadcasting station, the Commission shall not have any 
     authority to waive the requirement of a permit for 
     construction, except that the Commission may by regulation 
     determine that a permit shall not be required for minor 
     changes in the facilities of authorized broadcast stations. 
     With respect to any other station or class of stations, the 
     Commission shall not waive the requirement for a construction 
     permit unless the Commission determines that the public 
     interest, convenience, and necessity would be served by such 
     a waiver.''.
       (n) Conduct of Inspections.--Section 362(b) (47 U.S.C. 
     362(b)) is amended to read as follows:
       ``(b) Every ship of the United States that is subject to 
     this part shall have the equipment and apparatus prescribed 
     therein inspected at least once each year by the Commission 
     or an entity designated by the Commission. If, after such 
     inspection, the Commission is satisfied that all relevant 
     provisions of this Act and the station license have been 
     complied with, the fact shall be so certified on the station 
     license by the Commission. The Commission shall make such 
     additional inspections at frequent intervals as the 
     Commission determines may be necessary to ensure compliance 
     with the requirements of this Act. The Commission may, upon a 
     finding that the public interest could be served thereby--
       ``(1) waive the annual inspection required under this 
     section for a period of up to 90 days for the sole purpose of 
     enabling a vessel to complete its voyage and proceed to a 
     port in the United States where an inspection can be held; or
       ``(2) waive the annual inspection required under this 
     section for a vessel that is in compliance with the radio 
     provisions of the Safety Convention and that is operating 
     solely in waters beyond the jurisdiction of the United 
     States, provided that such inspection shall be performed 
     within 30 days of such vessel's return to the United 
     States.''.
       (o) Inspection by Other Entities.--Section 385 (47 U.S.C. 
     385) is amended--
       (1) by inserting ``or an entity designated by the 
     Commission'' after ``The Commission''; and
       (2) by adding at the end thereof the following: ``In 
     accordance with such other provisions of law as apply to 
     Government contracts, the Commission may enter into contracts 
     with any person for the purpose of carrying out such 
     inspections and certifying compliance with those 
     requirements, and may, as part of any such contract, allow 
     any such person to accept reimbursement from the license 
     holder for travel and expense costs of any employee 
     conducting an inspection or certification.''.
                    TITLE V--OBSCENITY AND VIOLENCE
      Subtitle A--Obscene, Harassing, and Wrongful Utilization of 
                     Telecommunications Facilities

     SEC. 501. SHORT TITLE.

       This title may be cited as the ``Communications Decency Act 
     of 1996''.

     SEC. 502. OBSCENE OR HARASSING USE OF TELECOMMUNICATIONS 
                   FACILITIES UNDER THE COMMUNICATIONS ACT OF 
                   1934.

       Section 223 (47 U.S.C. 223) is amended--
       (1) by striking subsection (a) and inserting in lieu 
     thereof:
       ``(a) Whoever--
       ``(1) in interstate or foreign communications--
       ``(A) by means of a telecommunications device 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, with intent to annoy, abuse, threaten, or harass 
     another person;
       ``(B) by means of a telecommunications device knowingly--
       ``(i) makes, creates, or solicits, and
       ``(ii) initiates the transmission of,
     any comment, request, suggestion, proposal, image, or other 
     communication which is obscene or indecent, knowing that the 
     recipient of the communication is under 18 years of age, 
     regardless of whether the maker of such communication placed 
     the call or initiated the communication;
       ``(C) makes a telephone call or utilizes a 
     telecommunications device, whether or not conversation or 
     communication ensues, without disclosing his identity and 
     with intent to annoy, abuse, threaten, or harass any person 
     at the called number or who receives the communications;
       ``(D) makes or causes the telephone of another repeatedly 
     or continuously to ring, with intent to harass any person at 
     the called number; or
       ``(E) 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) knowingly permits any telecommunications facility 
     under his control to be used for any activity prohibited by 
     paragraph (1) with the intent that it be used for such 
     activity,

     shall be fined under title 18, United States Code, or 
     imprisoned not more than two years, or both.''; and
       (2) by adding at the end the following new subsections:
       ``(d) Whoever--
       ``(1) in interstate or foreign communications knowingly--
       ``(A) uses an interactive computer service to send to a 
     specific person or persons under 18 years of age, or
       ``(B) uses any interactive computer service to display in a 
     manner available to a person under 18 years of age,

     any comment, request, suggestion, proposal, image, or other 
     communication that, in context, depicts or describes, in 
     terms patently offensive as measured by contemporary 
     community standards, sexual or excretory activities or 
     organs, regardless of whether the user of such service placed 
     the call or initiated the communication; or
       ``(2) knowingly permits any telecommunications facility 
     under such person's control to be used for an activity 
     prohibited by paragraph (1) with the intent that it be used 
     for such activity,

     shall be fined under title 18, United States Code, or 
     imprisoned not more than two years, or both.
       ``(e) In addition to any other defenses available by law:
       ``(1) No person shall be held to have violated subsection 
     (a) or (d) solely for providing access or connection to or 
     from a facility, system, or network not under that person's 
     control, including transmission, downloading, intermediate 
     storage, access software, or other related capabilities that 
     are incidental to providing such access or connection that 
     does not include the creation of the content of the 
     communication.
       ``(2) The defenses provided by paragraph (1) of this 
     subsection shall not be applicable to a person who is a 
     conspirator with an entity actively involved in the creation 
     or knowing distribution of communications that violate this 
     section, or who knowingly advertises the availability of such 
     communications.
       ``(3) The defenses provided in paragraph (1) of this 
     subsection shall not be applicable to a person who provides 
     access or connection to a facility, system, or network 
     engaged in the violation of this section that is owned or 
     controlled by such person.
       ``(4) No employer shall be held liable under this section 
     for the actions of an employee or agent unless the employee's 
     or agent's conduct is within the scope of his or her 
     employment or agency and the employer (A) having knowledge of 
     such conduct, authorizes or ratifies such conduct, or (B) 
     recklessly disregards such conduct.
       ``(5) It is a defense to a prosecution under subsection 
     (a)(1)(B) or (d), or under subsection (a)(2) with respect to 
     the use of a facility for an activity under subsection 
     (a)(1)(B) that a person--
       ``(A) has taken, in good faith, reasonable, effective, and 
     appropriate actions under the circumstances to restrict or 
     prevent access by minors to a communication specified in such 
     subsections, which may involve any appropriate measures to 
     restrict minors from such communications, including any 
     method which is feasible under available technology; or
       ``(B) has restricted access to such communication by 
     requiring use of a verified credit card, debit account, adult 
     access code, or adult personal identification number.
       ``(6) The Commission may describe measures which are 
     reasonable, effective, and appropriate to restrict access to 
     prohibited communications under subsection (d). Nothing in 
     this section authorizes the Commission to enforce, or is 
     intended to provide the Commission with the authority to 
     approve, sanction, or permit, the use of such measures. The 
     Commission shall have no enforcement authority over the 
     failure to utilize such measures. The Commission shall not 
     endorse specific products relating to such measures. The use 
     of such measures shall be admitted as evidence of good faith 
     efforts for purposes of paragraph (5) in any action arising 
     under subsection (d). Nothing in this section shall be 
     construed to treat interactive computer services as common 
     carriers or telecommunications carriers.
       ``(f)(1) No cause of action may be brought in any court or 
     administrative agency against any person on account of any 
     activity that is not in violation of any law punishable by 
     criminal or 

[[Page H1100]]
     civil penalty, and that 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.
       ``(2) No State or local government may impose any liability 
     for commercial activities or actions by commercial entities, 
     nonprofit libraries, or institutions of higher education in 
     connection with an activity or action described in subsection 
     (a)(2) or (d) that is inconsistent with the treatment of 
     those activities or actions 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 rights, duties or 
     obligations on the provision of interstate services. Nothing 
     in this subsection shall preclude any State or local 
     government from governing conduct not covered by this 
     section.
       ``(g) Nothing in subsection (a), (d), (e), or (f) or in the 
     defenses to prosecution under (a) or (d) shall be construed 
     to affect or limit the application or enforcement of any 
     other Federal law.
       ``(h) For purposes of this section--
       ``(1) The use of the term `telecommunications device' in 
     this section--
       ``(A) shall not impose new obligations on broadcasting 
     station licensees and cable operators covered by obscenity 
     and indecency provisions elsewhere in this Act; and
       ``(B) does not include an interactive computer service.
       ``(2) The term `interactive computer service' has the 
     meaning provided in section 230(e)(2).
       ``(3) The term `access software' means software (including 
     client or server software) or enabling tools that do not 
     create or provide the content of the communication but that 
     allow a user to do any one or more of the following:
       ``(A) filter, screen, allow, or disallow content;
       ``(B) pick, choose, analyze, or digest content; or
       ``(C) transmit, receive, display, forward, cache, search, 
     subset, organize, reorganize, or translate content.
       ``(4) The term `institution of higher education' has the 
     meaning provided in section 1201 of the Higher Education Act 
     of 1965 (20 U.S.C. 1141).
       ``(5) The term `library' means a library eligible for 
     participation in State-based plans for funds under title III 
     of the Library Services and Construction Act (20 U.S.C. 355e 
     et seq.).''.

     SEC. 503. OBSCENE PROGRAMMING ON CABLE TELEVISION.

       Section 639 (47 U.S.C. 559) is amended by striking ``not 
     more than $10,000'' and inserting ``under title 18, United 
     States Code,''.

     SEC. 504. 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) Subscriber Request.--Upon request by a cable service 
     subscriber, a cable operator shall, without charge, fully 
     scramble or otherwise fully block the audio and video 
     programming of each channel carrying such programming 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 viewed or 
     heard in an understandable manner.''.

     SEC. 505. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE 
                   PROGRAMMING.

       (a) Requirement.--Part IV of title VI (47 U.S.C. 551 et 
     seq.), as amended by this Act, is further amended by adding 
     at the end the following:

     ``SEC. 641. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO 
                   SERVICE PROGRAMMING.

       ``(a) Requirement.--In providing sexually explicit adult 
     programming or other programming that is indecent on any 
     channel of its service primarily dedicated to sexually-
     oriented programming, a multichannel video programming 
     distributor shall fully scramble or otherwise fully block the 
     video and audio portion of such channel so that one not a 
     subscriber to such channel or programming does not receive 
     it.
       ``(b) Implementation.--Until a multichannel video 
     programming distributor complies with the requirement set 
     forth in subsection (a), the distributor shall limit the 
     access of children to the programming referred to in that 
     subsection by not providing such programming during the hours 
     of the day (as determined by the Commission) when a 
     significant number of children are likely to view it.
       ``(c) 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 viewed or 
     heard in an understandable manner.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect 30 days after the date of enactment of this 
     Act.

     SEC. 506. 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 and''.

     SEC. 507. CLARIFICATION OF CURRENT LAWS REGARDING 
                   COMMUNICATION OF OBSCENE MATERIALS THROUGH THE 
                   USE OF COMPUTERS.

       (a) Importation or Transportation.--Section 1462 of title 
     18, United States Code, is amended--
       (1) in the first undesignated paragraph, by inserting ``or 
     interactive computer service (as defined in section 230(e)(2) 
     of the Communications Act of 1934)'' after ``carrier''; and
       (2) in the second undesignated paragraph--
       (A) by inserting ``or receives,'' after ``takes'';
       (B) by inserting ``or interactive computer service (as 
     defined in section 230(e)(2) of the Communications Act of 
     1934)'' after ``common carrier''; and
       (C) by inserting ``or importation'' after ``carriage''.
       (b) Transportation for Purposes of Sale or Distribution.--
     The first undesignated paragraph of section 1465 of title 18, 
     United States Code, is amended--
       (1) by striking ``transports in'' and inserting 
     ``transports or travels in, or uses a facility or means 
     of,'';
       (2) by inserting ``or an interactive computer service (as 
     defined in section 230(e)(2) of the Communications Act of 
     1934) in or affecting such commerce'' after ``foreign 
     commerce'' the first place it appears;
       (3) by striking ``, or knowingly travels in'' and all that 
     follows through ``obscene material in interstate or foreign 
     commerce,'' and inserting ``of''.
       (c) Interpretation.--The amendments made by this section 
     are clarifying and shall not be interpreted to limit or 
     repeal any prohibition contained in sections 1462 and 1465 of 
     title 18, United States Code, before such amendment, under 
     the rule established in United States v. Alpers, 338 U.S. 680 
     (1950).

     SEC. 508. COERCION AND ENTICEMENT OF MINORS.

       Section 2422 of title 18, United States Code, is amended--
       (1) by inserting ``(a)'' before ``Whoever knowingly''; and
       (2) by adding at the end the following:
       ``(b) Whoever, using any facility or means of interstate or 
     foreign commerce, including the mail, or within the special 
     maritime and territorial jurisdiction of the United States, 
     knowingly persuades, induces, entices, or coerces any 
     individual who has not attained the age of 18 years to engage 
     in prostitution or any sexual act for which any person may be 
     criminally prosecuted, or attempts to do so, shall be fined 
     under this title or imprisoned not more than 10 years, or 
     both.''.

     SEC. 509. ONLINE FAMILY EMPOWERMENT.

       Title II of the Communications Act of 1934 (47 U.S.C. 201 
     et seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 230. PROTECTION FOR PRIVATE BLOCKING AND SCREENING OF 
                   OFFENSIVE MATERIAL.

       ``(a) Findings.--The Congress finds the following:
       ``(1) The rapidly developing array of Internet and other 
     interactive computer services available to individual 
     Americans represent an extraordinary advance in the 
     availability of educational and informational resources to 
     our citizens.
       ``(2) These services offer users a great degree of control 
     over the information that they receive, as well as the 
     potential for even greater control in the future as 
     technology develops.
       ``(3) The Internet and other interactive computer services 
     offer a forum for a true diversity of political discourse, 
     unique opportunities for cultural development, and myriad 
     avenues for intellectual activity.
       ``(4) The Internet and other interactive computer services 
     have flourished, to the benefit of all Americans, with a 
     minimum of government regulation.
       ``(5) Increasingly Americans are relying on interactive 
     media for a variety of political, educational, cultural, and 
     entertainment services.
       ``(b) Policy.--It is the policy of the United States--
       ``(1) to promote the continued development of the Internet 
     and other interactive computer services and other interactive 
     media;
       ``(2) to preserve the vibrant and competitive free market 
     that presently exists for the Internet and other interactive 
     computer services, unfettered by Federal or State regulation;
       ``(3) to encourage the development of technologies which 
     maximize user control over what information is received by 
     individuals, families, and schools who use the Internet and 
     other interactive computer services;
       ``(4) to remove disincentives for the development and 
     utilization of blocking and filtering technologies that 
     empower parents to restrict their children's access to 
     objectionable or inappropriate online material; and
       ``(5) to ensure vigorous enforcement of Federal criminal 
     laws to deter and punish trafficking in obscenity, stalking, 
     and harassment by means of computer.
       ``(c) Protection for `Good Samaritan' Blocking and 
     Screening of Offensive Material.--
       ``(1) Treatment of publisher or speaker.--No provider or 
     user of an interactive computer service shall be treated as 
     the publisher or speaker of any information provided by 
     another information content provider.
       ``(2) Civil liability.--No provider or user of an 
     interactive computer service shall be held liable on account 
     of--
       ``(A) any action voluntarily taken in good faith to 
     restrict access to or availability of material that the 
     provider or user considers to be obscene, lewd, lascivious, 
     filthy, excessively violent, harassing, or otherwise 
     objectionable, 

[[Page H1101]]
     whether or not such material is constitutionally protected; or
       ``(B) any action taken to enable or make available to 
     information content providers or others the technical means 
     to restrict access to material described in paragraph (1).
       ``(d) Effect on Other Laws.--
       ``(1) No effect on criminal law.--Nothing in this section 
     shall be construed to impair the enforcement of section 223 
     of this Act, chapter 71 (relating to obscenity) or 110 
     (relating to sexual exploitation of children) of title 18, 
     United States Code, or any other Federal criminal statute.
       ``(2) No effect on intellectual property law.--Nothing in 
     this section shall be construed to limit or expand any law 
     pertaining to intellectual property.
       ``(3) State law.--Nothing in this section shall be 
     construed to prevent any State from enforcing any State law 
     that is consistent with this section. No cause of action may 
     be brought and no liability may be imposed under any State or 
     local law that is inconsistent with this section.
       ``(4) No effect on communications privacy law.--Nothing in 
     this section shall be construed to limit the application of 
     the Electronic Communications Privacy Act of 1986 or any of 
     the amendments made by such Act, or any similar State law.
       ``(e) Definitions.--As used in this section:
       ``(1) Internet.--The term `Internet' means the 
     international computer network of both Federal and non-
     Federal interoperable packet switched data networks.
       ``(2) Interactive computer service.--The term `interactive 
     computer service' means any information service, system, or 
     access software provider that provides or enables computer 
     access by multiple users to a computer server, including 
     specifically a service or system that provides access to the 
     Internet and such systems operated or services offered by 
     libraries or educational institutions.
       ``(3) Information content provider.--The term `information 
     content provider' means any person or entity that is 
     responsible, in whole or in part, for the creation or 
     development of information provided through the Internet or 
     any other interactive computer service.
       ``(4) Access software provider.--The term `access software 
     provider' means a provider of software (including client or 
     server software), or enabling tools that do any one or more 
     of the following:
       ``(A) filter, screen, allow, or disallow content;
       ``(B) pick, choose, analyze, or digest content; or
       ``(C) transmit, receive, display, forward, cache, search, 
     subset, organize, reorganize, or translate content.''.
                          Subtitle B--Violence

     SEC. 551. PARENTAL CHOICE IN TELEVISION PROGRAMMING.

       (a) Findings.--The Congress makes the following findings:
       (1) Television influences children's perception of the 
     values and behavior that are common and acceptable in 
     society.
       (2) Television station operators, cable television system 
     operators, and video programmers should follow practices in 
     connection with video programming that take into 
     consideration that television broadcast and cable programming 
     has established a uniquely pervasive presence in the lives of 
     American children.
       (3) The average American child is exposed to 25 hours of 
     television each week and some children are exposed to as much 
     as 11 hours of television a day.
       (4) Studies have shown that children exposed to violent 
     video programming at a young age have a higher tendency for 
     violent and aggressive behavior later in life than children 
     not so exposed, and that children exposed to violent video 
     programming are prone to assume that acts of violence are 
     acceptable behavior.
       (5) Children in the United States are, on average, exposed 
     to an estimated 8,000 murders and 100,000 acts of violence on 
     television by the time the child completes elementary school.
       (6) Studies indicate that children are affected by the 
     pervasiveness and casual treatment of sexual material on 
     television, eroding the ability of parents to develop 
     responsible attitudes and behavior in their children.
       (7) Parents express grave concern over violent and sexual 
     video programming and strongly support technology that would 
     give them greater control to block video programming in the 
     home that they consider harmful to their children.
       (8) There is a compelling governmental interest in 
     empowering parents to limit the negative influences of video 
     programming that is harmful to children.
       (9) Providing parents with timely information about the 
     nature of upcoming video programming and with the 
     technological tools that allow them easily to block violent, 
     sexual, or other programming that they believe harmful to 
     their children is a nonintrusive and narrowly tailored means 
     of achieving that compelling governmental interest.
       (b) Establishment of Television Rating Code.--
       (1) Amendment.--Section 303 (47 U.S.C. 303) is amended by 
     adding at the end the following:
       ``(w) Prescribe--
       ``(1) on the basis of recommendations from an advisory 
     committee established by the Commission in accordance with 
     section 551(b)(2) of the Telecommunications Act of 1996, 
     guidelines and recommended procedures for the identification 
     and rating of video programming that contains sexual, 
     violent, or other indecent material about which parents 
     should be informed before it is displayed to children, 
     provided that nothing in this paragraph shall be construed to 
     authorize any rating of video programming on the basis of its 
     political or religious content; and
       ``(2) with respect to any video programming that has been 
     rated, and in consultation with the television industry, 
     rules requiring distributors of such video programming to 
     transmit such rating to permit parents to block the display 
     of video programming that they have determined is 
     inappropriate for their children.''.
       (2) Advisory committee requirements.--In establishing an 
     advisory committee for purposes of the amendment made by 
     paragraph (1) of this subsection, the Commission shall--
       (A) ensure that such committee is composed of parents, 
     television broadcasters, television programming producers, 
     cable operators, appropriate public interest groups, and 
     other interested individuals from the private sector and is 
     fairly balanced in terms of political affiliation, the points 
     of view represented, and the functions to be performed by the 
     committee;
       (B) provide to the committee such staff and resources as 
     may be necessary to permit it to perform its functions 
     efficiently and promptly; and
       (C) require the committee to submit a final report of its 
     recommendations within one year after the date of the 
     appointment of the initial members.
       (c) Requirement for Manufacture of Televisions That Block 
     Programs.--Section 303 (47 U.S.C. 303), as amended by 
     subsection (a), is further amended by adding at the end the 
     following:
       ``(x) Require, in the case of an apparatus designed to 
     receive television signals that are shipped in interstate 
     commerce or manufactured in the United States and that have a 
     picture screen 13 inches or greater in size (measured 
     diagonally), that such apparatus be equipped with a feature 
     designed to enable viewers to block display of all programs 
     with a common rating, except as otherwise permitted by 
     regulations pursuant to section 330(c)(4).''.
       (d) Shipping of Televisions That Block Programs.--
       (1) Regulations.--Section 330 (47 U.S.C. 330) is amended--
       (A) by redesignating subsection (c) as subsection (d); and
       (B) by adding after subsection (b) the following new 
     subsection (c):
       ``(c)(1) Except as provided in paragraph (2), no person 
     shall ship in interstate commerce or manufacture in the 
     United States any apparatus described in section 303(x) of 
     this Act except in accordance with rules prescribed by the 
     Commission pursuant to the authority granted by that section.
       ``(2) This subsection shall not apply to carriers 
     transporting apparatus referred to in paragraph (1) without 
     trading in it.
       ``(3) The rules prescribed by the Commission under this 
     subsection shall provide for the oversight by the Commission 
     of the adoption of standards by industry for blocking 
     technology. Such rules shall require that all such apparatus 
     be able to receive the rating signals which have been 
     transmitted by way of line 21 of the vertical blanking 
     interval and which conform to the signal and blocking 
     specifications established by industry under the supervision 
     of the Commission.
       ``(4) As new video technology is developed, the Commission 
     shall take such action as the Commission determines 
     appropriate to ensure that blocking service continues to be 
     available to consumers. If the Commission determines that an 
     alternative blocking technology exists that--
       ``(A) enables parents to block programming based on 
     identifying programs without ratings,
       ``(B) is available to consumers at a cost which is 
     comparable to the cost of technology that allows parents to 
     block programming based on common ratings, and
       ``(C) will allow parents to block a broad range of programs 
     on a multichannel system as effectively and as easily as 
     technology that allows parents to block programming based on 
     common ratings,

     the Commission shall amend the rules prescribed pursuant to 
     section 303(x) to require that the apparatus described in 
     such section be equipped with either the blocking technology 
     described in such section or the alternative blocking 
     technology described in this paragraph.''.
       (2) Conforming amendment.--Section 330(d), as redesignated 
     by subsection (d)(1)(A), is amended by striking ``section 
     303(s), and section 303(u)'' and inserting in lieu thereof 
     ``and sections 303(s), 303(u), and 303(x)''.
       (e) Applicability and Effective Dates.--
       (1) Applicability of rating provision.--The amendment made 
     by subsection (b) of this section shall take effect 1 year 
     after the date of enactment of this Act, but only if the 
     Commission determines, in consultation with appropriate 
     public interest groups and interested individuals from the 
     private sector, that distributors of video programming have 
     not, by such date--
       (A) established voluntary rules for rating video 
     programming that contains sexual, violent, or other indecent 
     material about which parents should be informed before it is 
     displayed to children, and such rules are acceptable to the 
     Commission; and
       (B) agreed voluntarily to broadcast signals that contain 
     ratings of such programming.
       (2) Effective date of manufacturing provision.--In 
     prescribing regulations to implement the amendment made by 
     subsection (c), the Federal Communications Commission shall, 
     after consultation with the television manufacturing 
     industry, specify the effective date for the applicability of 
     the requirement to the apparatus covered by such amendment, 
     which date shall not be less than two years after the date of 
     enactment of this Act.

     SEC. 552. TECHNOLOGY FUND.

       It is the policy of the United States to encourage 
     broadcast television, cable, satellite, syndication, other 
     video programming distributors, and relevant related 
     industries (in consultation with appropriate public interest 
     groups and interested individuals from the private sector) 
     to--
     
[[Page H1102]]

       (1) establish a technology fund to encourage television and 
     electronics equipment manufacturers to facilitate the 
     development of technology which would empower parents to 
     block programming they deem inappropriate for their children 
     and to encourage the availability thereof to low income 
     parents;
       (2) report to the viewing public on the status of the 
     development of affordable, easy to use blocking technology; 
     and
       (3) establish and promote effective procedures, standards, 
     systems, advisories, or other mechanisms for ensuring that 
     users have easy and complete access to the information 
     necessary to effectively utilize blocking technology and to 
     encourage the availability thereof to low income parents.
                      Subtitle C--Judicial Review

     SEC. 561. EXPEDITED REVIEW.

       (a) Three-Judge District Court Hearing.--Notwithstanding 
     any other provision of law, any civil action challenging the 
     constitutionality, on its face, of this title or any 
     amendment made by this title, or any provision thereof, shall 
     be heard by a district court of 3 judges convened pursuant to 
     the provisions of section 2284 of title 28, United States 
     Code.
       (b) Appellate Review.--Notwithstanding any other provision 
     of law, an interlocutory or final judgment, decree, or order 
     of the court of 3 judges in an action under subsection (a) 
     holding this title or an amendment made by this title, or any 
     provision thereof, unconstitutional shall be reviewable as a 
     matter of right by direct appeal to the Supreme Court. Any 
     such appeal shall be filed not more than 20 days after entry 
     of such judgment, decree, or order.
                     TITLE VI--EFFECT ON OTHER LAWS

     SEC. 601. APPLICABILITY OF CONSENT DECREES AND OTHER LAW.

       (a) Applicability of Amendments to Future Conduct.--
       (1) AT&T consent decree.--Any conduct or activity that was, 
     before the date of enactment of this Act, subject to any 
     restriction or obligation imposed by the AT&T Consent Decree 
     shall, on and after such date, be subject to the restrictions 
     and obligations imposed by the Communications Act of 1934 as 
     amended by this Act and shall not be subject to the 
     restrictions and the obligations imposed by such Consent 
     Decree.
       (2) GTE consent decree.--Any conduct or activity that was, 
     before the date of enactment of this Act, subject to any 
     restriction or obligation imposed by the GTE Consent Decree 
     shall, on and after such date, be subject to the restrictions 
     and obligations imposed by the Communications Act of 1934 as 
     amended by this Act and shall not be subject to the 
     restrictions and the obligations imposed by such Consent 
     Decree.
       (3) McCaw consent decree.--Any conduct or activity that 
     was, before the date of enactment of this Act, subject to any 
     restriction or obligation imposed by the McCaw Consent Decree 
     shall, on and after such date, be subject to the restrictions 
     and obligations imposed by the Communications Act of 1934 as 
     amended by this Act and subsection (d) of this section and 
     shall not be subject to the restrictions and the obligations 
     imposed by such Consent Decree.
       (b) Antitrust Laws.--
       (1) Savings clause.--Except as provided in paragraphs (2) 
     and (3), nothing in this Act or the amendments made by this 
     Act shall be construed to modify, impair, or supersede the 
     applicability of any of the antitrust laws.
       (2) Repeal.--Subsection (a) of section 221 (47 U.S.C. 
     221(a)) is repealed.
       (3) Clayton act.--Section 7 of the Clayton Act (15 U.S.C. 
     18) is amended in the last paragraph by striking ``Federal 
     Communications Commission,''.
       (c) Federal, State, and Local Law.--
       (1) No implied effect.--This Act and the amendments made by 
     this Act shall not be construed to modify, impair, or 
     supersede Federal, State, or local law unless expressly so 
     provided in such Act or amendments.
       (2) State tax savings provision.--Notwithstanding paragraph 
     (1), nothing in this Act or the amendments made 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, except as 
     provided in sections 622 and 653(c) of the Communications Act 
     of 1934 and section 602 of this Act.
       (d) Commercial Mobile Service Joint Marketing.--
     Notwithstanding section 22.903 of the Commission's 
     regulations (47 C.F.R. 22.903) or any other Commission 
     regulation, a Bell operating company or any other company 
     may, except as provided in sections 271(e)(1) and 272 of the 
     Communications Act of 1934 as amended by this Act as they 
     relate to wireline service, jointly market and sell 
     commercial mobile services in conjunction with telephone 
     exchange service, exchange access, intraLATA 
     telecommunications service, interLATA telecommunications 
     service, and information services.
       (e) Definitions.--As used in this section:
       (1) AT&T consent decree.--The term ``AT&T Consent Decree'' 
     means the order entered August 24, 1982, in the antitrust 
     action styled United States v. Western Electric, Civil Action 
     No. 82-0192, in the United States District Court for the 
     District of Columbia, and includes any judgment or order with 
     respect to such action entered on or after August 24, 1982.
       (2) GTE consent decree.--The term ``GTE Consent Decree'' 
     means the order entered December 21, 1984, as restated 
     January 11, 1985, in the action styled United States v. GTE 
     Corp., Civil Action No. 83-1298, in the United States 
     District Court for the District of Columbia, and any judgment 
     or order with respect to such action entered on or after 
     December 21, 1984.
       (3) McCaw consent decree.--The term ``McCaw Consent 
     Decree'' means the proposed consent decree filed on July 15, 
     1994, in the antitrust action styled United States v. AT&T 
     Corp. and McCaw Cellular Communications, Inc., Civil Action 
     No. 94-01555, in the United States District court for the 
     District of Columbia. Such term includes any stipulation that 
     the parties will abide by the terms of such proposed consent 
     decree until it is entered and any order entering such 
     proposed consent decree.
       (4) Antitrust laws.--The term ``antitrust laws'' has the 
     meaning given it in subsection (a) of the first section of 
     the Clayton Act (15 U.S.C. 12(a)), except that such term 
     includes the Act of June 19, 1936 (49 Stat. 1526; 15 U.S.C. 
     13 et seq.), commonly known as the Robinson-Patman Act, and 
     section 5 of the Federal Trade Commission Act (15 U.S.C. 45) 
     to the extent that such section 5 applies to unfair methods 
     of competition.

     SEC. 602. PREEMPTION OF LOCAL TAXATION WITH RESPECT TO 
                   DIRECT-TO-HOME SERVICES.

       (a) Preemption.--A provider of direct-to-home satellite 
     service shall be exempt from the collection or remittance, or 
     both, of any tax or fee imposed by any local taxing 
     jurisdiction on direct-to-home satellite service.
       (b) Definitions.--For the purposes of this section--
       (1) Direct-to-home satellite service.--The term ``direct-
     to-home satellite service'' means only programming 
     transmitted or broadcast by satellite directly to the 
     subscribers' premises without the use of ground receiving or 
     distribution equipment, except at the subscribers' premises 
     or in the uplink process to the satellite.
       (2) Provider of direct-to-home satellite service.--For 
     purposes of this section, a ``provider of direct-to-home 
     satellite service'' means a person who transmits, broadcasts, 
     sells, or distributes direct-to-home satellite service.
       (3) Local taxing jurisdiction.--The term ``local taxing 
     jurisdiction'' means any municipality, city, county, 
     township, parish, transportation district, or assessment 
     jurisdiction, or any other local jurisdiction in the 
     territorial jurisdiction of the United States with the 
     authority to impose a tax or fee, but does not include a 
     State.
       (4) State.--The term ``State'' means any of the several 
     States, the District of Columbia, or any territory or 
     possession of the United States.
       (5) Tax or fee.--The terms ``tax'' and ``fee'' mean any 
     local sales tax, local use tax, local intangible tax, local 
     income tax, business license tax, utility tax, privilege tax, 
     gross receipts tax, excise tax, franchise fees, local 
     telecommunications tax, or any other tax, license, or fee 
     that is imposed for the privilege of doing business, 
     regulating, or raising revenue for a local taxing 
     jurisdiction.
       (c) Preservation of State Authority.--This section shall 
     not be construed to prevent taxation of a provider of direct-
     to-home satellite service by a State or to prevent a local 
     taxing jurisdiction from receiving revenue derived from a tax 
     or fee imposed and collected by a State.
                  TITLE VII--MISCELLANEOUS PROVISIONS

     SEC. 701. PREVENTION OF UNFAIR BILLING PRACTICES FOR 
                   INFORMATION OR SERVICES PROVIDED OVER TOLL-FREE 
                   TELEPHONE CALLS.

       (a) Prevention of Unfair Billing Practices.--
       (1) In general.--Section 228(c) (47 U.S.C. 228(c)) is 
     amended--
       (A) by striking out subparagraph (C) of paragraph (7) and 
     inserting in lieu thereof the following:
       ``(C) the calling party being charged for information 
     conveyed during the call unless--
       ``(i) the calling party has a written agreement (including 
     an agreement transmitted through electronic medium) that 
     meets the requirements of paragraph (8); or
       ``(ii) the calling party is charged for the information in 
     accordance with paragraph (9); or'';
       (B)(i) by striking ``or'' at the end of subparagraph (C) of 
     such paragraph;
       (ii) by striking the period at the end of subparagraph (D) 
     of such paragraph and inserting a semicolon and ``or''; and
       (iii) 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.''; and
       (C) by adding at the end the following new paragraphs:
       ``(8) Subscription agreements for billing for information 
     provided via toll-free calls.--
       ``(A) In general.--For purposes of paragraph (7)(C)(i), a 
     written subscription does not meet the requirements of this 
     paragraph unless the agreement specifies the material terms 
     and conditions under which the information is offered and 
     includes--
       ``(i) the rate at which charges are assessed for the 
     information;
       ``(ii) the information provider's name;
       ``(iii) the information provider's business address;
       ``(iv) the information provider's regular business 
     telephone number;
       ``(v) the information provider's agreement to notify the 
     subscriber at least one billing cycle in advance of all 
     future changes in the rates charged for the information; and
       ``(vi) the subscriber's choice of payment method, which may 
     be by direct remit, debit, prepaid account, phone bill, or 
     credit or calling card.
       ``(B) Billing arrangements.--If a subscriber elects, 
     pursuant to subparagraph (A)(vi), to pay by means of a phone 
     bill--
       ``(i) the agreement shall clearly explain that the 
     subscriber will be assessed for calls made to the information 
     service from the subscriber's phone line;
       ``(ii) the phone bill shall include, in prominent type, the 
     following disclaimer:

       `Common carriers may not disconnect local or long distance 
     telephone service for failure to pay disputed charges for 
     information services.'; and
     
[[Page H1103]]


       ``(iii) the phone bill shall clearly list the 800 number 
     dialed.
       ``(C) Use of pins to prevent unauthorized use.--A written 
     agreement does not meet the requirements of this paragraph 
     unless it--
       ``(i) includes a unique personal identification number or 
     other subscriber-specific identifier and requires a 
     subscriber to use this number or identifier to obtain access 
     to the information provided and includes instructions on its 
     use; and
       ``(ii) assures that any charges for services accessed by 
     use of the subscriber's personal identification number or 
     subscriber-specific identifier be assessed to subscriber's 
     source of payment elected pursuant to subparagraph (A)(vi).
       ``(D) Exceptions.--Notwithstanding paragraph (7)(C), a 
     written agreement that meets the requirements of this 
     paragraph is not required--
       ``(i) for calls utilizing telecommunications devices for 
     the deaf;
       ``(ii) for directory services provided by a common carrier 
     or its affiliate or by a local exchange carrier or its 
     affiliate; or
       ``(iii) for any purchase of goods or of services that are 
     not information services.
       ``(E) Termination of service.--On receipt by a common 
     carrier of a complaint by any person that an information 
     provider is in violation of the provisions of this section, a 
     carrier shall--
       ``(i) promptly investigate the complaint; and
       ``(ii) if the carrier reasonably determines that the 
     complaint is valid, it may terminate the provision of service 
     to an information provider unless the provider supplies 
     evidence of a written agreement that meets the requirements 
     of this section.
       ``(F) Treatment of remedies.--The remedies provided in this 
     paragraph are in addition to any other remedies that are 
     available under title V of this Act.
       ``(9) Charges by credit, prepaid, debit, charge, or calling 
     card in absence of agreement.--For purposes of paragraph 
     (7)(C)(ii), a calling party is not charged in accordance with 
     this paragraph unless the calling party is charged by means 
     of a credit, prepaid, debit, charge, or calling card and the 
     information service provider includes in response to each 
     call an introductory disclosure message that--
       ``(A) clearly states that there is a charge for the call;
       ``(B) clearly states the service's total cost per minute 
     and any other fees for the service or for any service to 
     which the caller may be transferred;
       ``(C) explains that the charges must be billed on either a 
     credit, prepaid, debit, charge, or calling card;
       ``(D) asks the caller for the card number;
       ``(E) clearly states that charges for the call begin at the 
     end of the introductory message; and
       ``(F) clearly states that the caller can hang up at or 
     before the end of the introductory message without incurring 
     any charge whatsoever.
       ``(10) Bypass of introductory disclosure message.--The 
     requirements of paragraph (9) shall not apply to calls from 
     repeat callers using a bypass mechanism to avoid listening to 
     the introductory message, provided that information providers 
     shall disable such a bypass mechanism after the institution 
     of any price increase and for a period of time determined to 
     be sufficient by the Federal Trade Commission to give callers 
     adequate and sufficient notice of a price increase.
       ``(11) Definition of calling card.--As used in this 
     subsection, the term `calling card' means an identifying 
     number or code unique to the individual, that is issued to 
     the individual by a common carrier and enables the individual 
     to be charged by means of a phone bill for charges incurred 
     independent of where the call originates.''.
       (2) Regulations.--The Federal Communications Commission 
     shall revise its regulations to comply with the amendment 
     made by paragraph (1) not later than 180 days after the date 
     of enactment of this Act.
       (3) Effective date.--The amendments made by paragraph (1) 
     shall take effect on the date of enactment of this Act.
       (b) Clarification of ``Pay-Per-Call Services''.--
       (1) Telephone disclosure and dispute resolution act.--
     Section 204(1) of the Telephone Disclosure and Dispute 
     Resolution Act (15 U.S.C. 5714(1)) is amended to read as 
     follows:
       ``(1) The term `pay-per-call services' has the meaning 
     provided in section 228(i) of the Communications Act of 1934, 
     except that the Commission by rule may, notwithstanding 
     subparagraphs (B) and (C) of section 228(i)(1) of such Act, 
     extend such definition to other similar services providing 
     audio information or audio entertainment if the Commission 
     determines that such services are susceptible to the unfair 
     and deceptive practices that are prohibited by the rules 
     prescribed pursuant to section 201(a).''.
       (2) Communications act.--Section 228(i)(2) (47 U.S.C. 
     228(i)(2)) is amended by striking ``or any service the charge 
     for which is tariffed,''.

     SEC. 702. PRIVACY OF CUSTOMER INFORMATION.

       Title II is amended by inserting after section 221 (47 
     U.S.C. 221) the following new section:

     ``SEC. 222. PRIVACY OF CUSTOMER INFORMATION.

       ``(a) In General.--Every telecommunications carrier has a 
     duty to protect the confidentiality of proprietary 
     information of, and relating to, other telecommunication 
     carriers, equipment manufacturers, and customers, including 
     telecommunication carriers reselling telecommunications 
     services provided by a telecommunications carrier.
       ``(b) Confidentiality of Carrier Information.--A 
     telecommunications carrier that receives or obtains 
     proprietary information from another carrier for purposes of 
     providing any telecommunications service shall use such 
     information only for such purpose, and shall not use such 
     information for its own marketing efforts.
       ``(c) Confidentiality of Customer Proprietary Network 
     Information.--
       ``(1) Privacy requirements for telecommunications 
     carriers.--Except as required by law or with the approval of 
     the customer, a telecommunications carrier that receives or 
     obtains customer proprietary network information by virtue of 
     its provision of a telecommunications service shall only use, 
     disclose, or permit access to individually identifiable 
     customer proprietary network information in its provision of 
     (A) the telecommunications service from which such 
     information is derived, or (B) services necessary to, or used 
     in, the provision of such telecommunications service, 
     including the publishing of directories.
       ``(2) Disclosure on request by customers.--A 
     telecommunications carrier shall disclose customer 
     proprietary network information, upon affirmative written 
     request by the customer, to any person designated by the 
     customer.
       ``(3) Aggregate customer information.--A telecommunications 
     carrier that receives or obtains customer proprietary network 
     information by virtue of its provision of a 
     telecommunications service may use, disclose, or permit 
     access to aggregate customer information other than for the 
     purposes described in paragraph (1). A local exchange carrier 
     may use, disclose, or permit access to aggregate customer 
     information other than for purposes described in paragraph 
     (1) only if it provides such aggregate information to other 
     carriers or persons on reasonable and nondiscriminatory terms 
     and conditions upon reasonable request therefor.
       ``(d) Exceptions.--Nothing in this section prohibits a 
     telecommunications carrier from using, disclosing, or 
     permitting access to customer proprietary network information 
     obtained from its customers, either directly or indirectly 
     through its agents--
       ``(1) to initiate, render, bill, and collect for 
     telecommunications services;
       ``(2) to protect the rights or property of the carrier, or 
     to protect users of those services and other carriers from 
     fraudulent, abusive, or unlawful use of, or subscription to, 
     such services; or
       ``(3) to provide any inbound telemarketing, referral, or 
     administrative services to the customer for the duration of 
     the call, if such call was initiated by the customer and the 
     customer approves of the use of such information to provide 
     such service.
       ``(e) Subscriber List Information.--Notwithstanding 
     subsections (b), (c), and (d), a telecommunications carrier 
     that provides telephone exchange 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 for the purpose of 
     publishing directories in any format.
       ``(f) Definitions.--As used in this section:
       ``(1) Customer proprietary network information.--The term 
     `customer proprietary network information' means--
       ``(A) information that relates to the quantity, technical 
     configuration, type, destination, and amount of use of a 
     telecommunications service subscribed to by any customer of a 
     telecommunications carrier, and that is made available to the 
     carrier by the customer solely by virtue of the carrier-
     customer relationship; and
       ``(B) information contained in the bills pertaining to 
     telephone exchange service or telephone toll service received 
     by a customer of a carrier;
     except that such term does not include subscriber list 
     information.
       ``(2) Aggregate information.--The term `aggregate customer 
     information' means collective data that relates to a group or 
     category of services or customers, from which individual 
     customer identities and characteristics have been removed.
       ``(3) Subscriber list information.--The term `subscriber 
     list information' means any information--
       ``(A) identifying the listed names of subscribers of a 
     carrier and such subscribers' telephone numbers, addresses, 
     or primary advertising classifications (as such 
     classifications are assigned at the time of the establishment 
     of such service), or any combination of such listed names, 
     numbers, addresses, or classifications; and
       ``(B) that the carrier or an affiliate has published, 
     caused to be published, or accepted for publication in any 
     directory format.''.

     SEC. 703. POLE ATTACHMENTS.

       Section 224 (47 U.S.C. 224) is amended--
       (1) in subsection (a)(1), by striking the first sentence 
     and inserting the following: ``The term `utility' means any 
     person who is a local exchange carrier or an electric, gas, 
     water, steam, or other public utility, and who owns or 
     controls poles, ducts, conduits, or rights-of-way used, in 
     whole or in part, for any wire communications.'';
       (2) in subsection (a)(4), by inserting after ``system'' the 
     following: ``or provider of telecommunications service'';
       (3) by inserting after subsection (a)(4) the following:
       ``(5) For purposes of this section, the term 
     `telecommunications carrier' (as defined in section 3 of this 
     Act) does not include any incumbent local exchange carrier as 
     defined in section 251(h).'';
       (4) by inserting after ``conditions'' in subsection (c)(1) 
     a comma and the following: ``or access to poles, ducts, 
     conduits, and rights-of-way as provided in subsection (f),'':
       (5) in subsection (c)(2)(B), by striking ``cable television 
     services'' and inserting ``the services offered via such 
     attachments'';
       (6) by inserting after subsection (d)(2) the following:
     
[[Page H1104]]

       ``(3) This subsection shall apply to the rate for any pole 
     attachment used by a cable television system solely to 
     provide cable service. Until the effective date of the 
     regulations required under subsection (e), this subsection 
     shall also apply to the rate for any pole attachment used by 
     a cable system or any telecommunications carrier (to the 
     extent such carrier is not a party to a pole attachment 
     agreement) to provide any telecommunications service.''; and
       (7) by adding at the end thereof the following:
       ``(e)(1) The Commission shall, no later than 2 years after 
     the date of enactment of the Telecommunications Act of 1996, 
     prescribe regulations in accordance with this subsection to 
     govern the charges for pole attachments used by 
     telecommunications carriers to provide telecommunications 
     services, when the parties fail to resolve a dispute over 
     such charges. Such regulations shall ensure that a utility 
     charges just, reasonable, and nondiscriminatory rates for 
     pole attachments.
       ``(2) A utility shall apportion the cost of providing space 
     on a pole, duct, conduit, or right-of-way other than the 
     usable space among entities so that such apportionment equals 
     two-thirds of the costs of providing space other than the 
     usable space that would be allocated to such entity under an 
     equal apportionment of such costs among all attaching 
     entities.
       ``(3) A utility shall apportion the cost of providing 
     usable space among all entities according to the percentage 
     of usable space required for each entity.
       ``(4) The regulations required under paragraph (1) shall 
     become effective 5 years after the date of enactment of the 
     Telecommunications Act of 1996. Any increase in the rates for 
     pole attachments that result from the adoption of the 
     regulations required by this subsection shall be phased in 
     equal annual increments over a period of 5 years beginning on 
     the effective date of such regulations.
       ``(f)(1) A utility shall provide a cable television system 
     or any telecommunications carrier with nondiscriminatory 
     access to any pole, duct, conduit, or right-of-way owned or 
     controlled by it.
       ``(2) Notwithstanding paragraph (1), a utility providing 
     electric service may deny a cable television system or any 
     telecommunications carrier access to its poles, ducts, 
     conduits, or rights-of-way, on a non-discriminatory basis 
     where there is insufficient capacity and for reasons of 
     safety, reliability and generally applicable engineering 
     purposes.
       ``(g) A utility that engages in the provision of 
     telecommunications services or cable services shall impute to 
     its costs of providing such services (and charge any 
     affiliate, subsidiary, or associate company engaged in the 
     provision of such services) an equal amount to the pole 
     attachment rate for which such company would be liable under 
     this section.
       ``(h) Whenever the owner of a pole, duct, conduit, or 
     right-of-way intends to modify or alter such pole, duct, 
     conduit, or right-of-way, the owner shall provide written 
     notification of such action to any entity that has obtained 
     an attachment to such conduit or right-of-way so that such 
     entity may have a reasonable opportunity to add to or modify 
     its existing attachment. Any entity that adds to or modifies 
     its existing attachment after receiving such notification 
     shall bear a proportionate share of the costs incurred by the 
     owner in making such pole, duct, conduit, or right-of-way 
     accessible.
       ``(i) An entity that obtains an attachment to a pole, 
     conduit, or right-of-way shall not be required to bear any of 
     the costs of rearranging or replacing its attachment, if such 
     rearrangement or replacement is required as a result of an 
     additional attachment or the modification of an existing 
     attachment sought by any other entity (including the owner of 
     such pole, duct, conduit, or right-of-way).''.

     SEC. 704. FACILITIES SITING; RADIO FREQUENCY EMISSION 
                   STANDARDS.

       (a) National Wireless Telecommunications Siting Policy.--
     Section 332(c) (47 U.S.C. 332(c)) is amended by adding at the 
     end the following new paragraph:
       ``(7) Preservation of local zoning authority.--
       ``(A) General authority.--Except as provided in this 
     paragraph, nothing in this Act shall limit or affect the 
     authority of a State or local government or instrumentality 
     thereof over decisions regarding the placement, construction, 
     and modification of personal wireless service facilities.
       ``(B) Limitations.--
       ``(i) The regulation of the placement, construction, and 
     modification of personal wireless service facilities by any 
     State or local government or instrumentality thereof--

       ``(I) shall not unreasonably discriminate among providers 
     of functionally equivalent services; and
       ``(II) shall not prohibit or have the effect of prohibiting 
     the provision of personal wireless services.

       ``(ii) A State or local government or instrumentality 
     thereof shall act on any request for authorization to place, 
     construct, or modify personal wireless service facilities 
     within a reasonable period of time after the request is duly 
     filed with such government or instrumentality, taking into 
     account the nature and scope of such request.
       ``(iii) Any decision by a State or local government or 
     instrumentality thereof to deny a request to place, 
     construct, or modify personal wireless service facilities 
     shall be in writing and supported by substantial evidence 
     contained in a written record.
       ``(iv) No State or local government or instrumentality 
     thereof may regulate the placement, construction, and 
     modification of personal wireless service facilities on the 
     basis of the environmental effects of radio frequency 
     emissions to the extent that such facilities comply with the 
     Commission's regulations concerning such emissions.
       ``(v) Any person adversely affected by any final action or 
     failure to act by a State or local government or any 
     instrumentality thereof that is inconsistent with this 
     subparagraph may, within 30 days after such action or failure 
     to act, commence an action in any court of competent 
     jurisdiction. The court shall hear and decide such action on 
     an expedited basis. Any person adversely affected by an act 
     or failure to act by a State or local government or any 
     instrumentality thereof that is inconsistent with clause (iv) 
     may petition the Commission for relief.
       ``(C) Definitions.--For purposes of this paragraph--
       ``(i) the term `personal wireless services' means 
     commercial mobile services, unlicensed wireless services, and 
     common carrier wireless exchange access services;
       ``(ii) the term `personal wireless service facilities' 
     means facilities for the provision of personal wireless 
     services; and
       ``(iii) the term `unlicensed wireless service' means the 
     offering of telecommunications services using duly authorized 
     devices which do not require individual licenses, but does 
     not mean the provision of direct-to-home satellite services 
     (as defined in section 303(v)).''.
       (b) Radio Frequency Emissions.--Within 180 days after the 
     enactment of this Act, the Commission shall complete action 
     in ET Docket 93-62 to prescribe and make effective rules 
     regarding the environmental effects of radio frequency 
     emissions.
       (c) Availability of Property.--Within 180 days of the 
     enactment of this Act, the President or his designee shall 
     prescribe procedures by which Federal departments and 
     agencies may make available on a fair, reasonable, and 
     nondiscriminatory basis, property, rights-of-way, and 
     easements under their control for the placement of new 
     telecommunications services that are dependent, in whole or 
     in part, upon the utilization of Federal spectrum rights for 
     the transmission or reception of such services. These 
     procedures may establish a presumption that requests for the 
     use of property, rights-of-way, and easements by duly 
     authorized providers should be granted absent unavoidable 
     direct conflict with the department or agency's mission, or 
     the current or planned use of the property, rights-of-way, 
     and easements in question. Reasonable fees may be charged to 
     providers of such telecommunications services for use of 
     property, rights-of-way, and easements. The Commission shall 
     provide technical support to States to encourage them to make 
     property, rights-of-way, and easements under their 
     jurisdiction available for such purposes.

     SEC. 705. MOBILE SERVICES DIRECT ACCESS TO LONG DISTANCE 
                   CARRIERS.

       Section 332(c) (47 U.S.C. 332(c)) is amended by adding at 
     the end the following new paragraph:
       ``(8) Mobile services access.--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 common carriers for the provision of telephone toll 
     services. If the Commission determines that subscribers to 
     such services are denied access to the provider of telephone 
     toll services of the subscribers' choice, and that such 
     denial is contrary to the public interest, convenience, and 
     necessity, then the Commission shall prescribe regulations to 
     afford subscribers unblocked access to the provider of 
     telephone toll services of the subscribers' choice through 
     the use of a carrier identification code assigned to such 
     provider or other mechanism. The requirements for unblocking 
     shall not apply to mobile satellite services unless the 
     Commission finds it to be in the public interest to apply 
     such requirements to such services.''.

     SEC. 706. 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, measures that promote 
     competition in the local telecommunications market, or other 
     regulating methods that remove barriers to infrastructure 
     investment.
       (b) Inquiry.--The Commission shall, within 30 months 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 to accelerate 
     deployment of such capability by removing barriers to 
     infrastructure investment and by promoting competition in the 
     telecommunications market.
       (c) Definitions.--For purposes of this subsection:
       (1) Advanced telecommunications capability.--The term 
     ``advanced telecommunications capability'' is defined, 
     without regard to any transmission media or technology, as 
     high-speed, switched, broadband telecommunications capability 
     that enables users to originate and receive high-quality 
     voice, data, graphics, and video telecommunications using any 
     technology.
       (2) Elementary and secondary schools.--The term 
     ``elementary and secondary schools'' 

[[Page H1105]]
     means elementary 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).

     SEC. 707. TELECOMMUNICATIONS DEVELOPMENT FUND.

       (a) Deposit and Use of Auction Escrow Accounts.--Section 
     309(j)(8) (47 U.S.C. 309(j)(8)) is amended by adding at the 
     end the following new subparagraph:
       ``(C) Deposit and use of auction escrow accounts.--Any 
     deposits the Commission may require for the qualification of 
     any person to bid in a system of competitive bidding pursuant 
     to this subsection shall be deposited in an interest bearing 
     account at a financial institution designated for purposes of 
     this subsection by the Commission (after consultation with 
     the Secretary of the Treasury). Within 45 days following the 
     conclusion of the competitive bidding--
       ``(i) the deposits of successful bidders shall be paid to 
     the Treasury;
       ``(ii) the deposits of unsuccessful bidders shall be 
     returned to such bidders; and
       ``(iii) the interest accrued to the account shall be 
     transferred to the Telecommunications Development Fund 
     established pursuant to section 714 of this Act.''.
       (b) Establishment and Operation of Fund.--Title VII is 
     amended by inserting after section 713 (as added by section 
     305) the following new section:

     ``SEC. 714. TELECOMMUNICATIONS DEVELOPMENT FUND.

       ``(a) Purpose of Section.--It is the purpose of this 
     section--
       ``(1) to promote access to capital for small businesses in 
     order to enhance competition in the telecommunications 
     industry;
       ``(2) to stimulate new technology development, and promote 
     employment and training; and
       ``(3) to support universal service and promote delivery of 
     telecommunications services to underserved rural and urban 
     areas.
       ``(b) Establishment of Fund.--There is hereby established a 
     body corporate to be known as the Telecommunications 
     Development Fund, which shall have succession until 
     dissolved. The Fund shall maintain its principal office in 
     the District of Columbia and shall be deemed, for purposes of 
     venue and jurisdiction in civil actions, to be a resident and 
     citizen thereof.
       ``(c) Board of Directors.--
       ``(1) Composition of board; chairman.--The Fund shall have 
     a Board of Directors which shall consist of 7 persons 
     appointed by the Chairman of the Commission. Four of such 
     directors shall be representative of the private sector and 
     three of such directors shall be representative of the 
     Commission, the Small Business Administration, and the 
     Department of the Treasury, respectively. The Chairman of the 
     Commission shall appoint one of the representatives of the 
     private sector to serve as chairman of the Fund within 30 
     days after the date of enactment of this section, in order to 
     facilitate rapid creation and implementation of the Fund. The 
     directors shall include members with experience in a number 
     of the following areas: finance, investment banking, 
     government banking, communications law and administrative 
     practice, and public policy.
       ``(2) Terms of appointed and elected members.--The 
     directors shall be eligible to serve for terms of 5 years, 
     except of the initial members, as designated at the time of 
     their appointment--
       ``(A) 1 shall be eligible to service for a term of 1 year;
       ``(B) 1 shall be eligible to service for a term of 2 years;
       ``(C) 1 shall be eligible to service for a term of 3 years;
       ``(D) 2 shall be eligible to service for a term of 4 years; 
     and
       ``(E) 2 shall be eligible to service for a term of 5 years 
     (1 of whom shall be the Chairman).

     Directors may continue to serve until their successors have 
     been appointed and have qualified.
       ``(3) Meetings and functions of the board.--The Board of 
     Directors shall meet at the call of its Chairman, but at 
     least quarterly. The Board shall determine the general 
     policies which shall govern the operations of the Fund. The 
     Chairman of the Board shall, with the approval of the Board, 
     select, appoint, and compensate qualified persons to fill the 
     offices as may be provided for in the bylaws, with such 
     functions, powers, and duties as may be prescribed by the 
     bylaws or by the Board of Directors, and such persons shall 
     be the officers of the Fund and shall discharge all such 
     functions, powers, and duties.
       ``(d) Accounts of the Fund.--The Fund shall maintain its 
     accounts at a financial institution designated for purposes 
     of this section by the Chairman of the Board (after 
     consultation with the Commission and the Secretary of the 
     Treasury). The accounts of the Fund shall consist of--
       ``(1) interest transferred pursuant to section 309(j)(8)(C) 
     of this Act;
       ``(2) such sums as may be appropriated to the Commission 
     for advances to the Fund;
       ``(3) any contributions or donations to the Fund that are 
     accepted by the Fund; and
       ``(4) any repayment of, or other payment made with respect 
     to, loans, equity, or other extensions of credit made from 
     the Fund.
       ``(e) Use of the Fund.--All moneys deposited into the 
     accounts of the Fund shall be used solely for--
       ``(1) the making of loans, investments, or other extensions 
     of credits to eligible small businesses in accordance with 
     subsection (f);
       ``(2) the provision of financial advice to eligible small 
     businesses;
       ``(3) expenses for the administration and management of the 
     Fund (including salaries, expenses, and the rental or 
     purchase of office space for the fund);
       ``(4) preparation of research, studies, or financial 
     analyses; and
       ``(5) other services consistent with the purposes of this 
     section.
       ``(f) Lending and Credit Operations.--Loans or other 
     extensions of credit from the Fund shall be made available in 
     accordance with the requirements of the Federal Credit Reform 
     Act of 1990 (2 U.S.C. 661 et seq.) and any other applicable 
     law to an eligible small business on the basis of--
       ``(1) the analysis of the business plan of the eligible 
     small business;
       ``(2) the reasonable availability of collateral to secure 
     the loan or credit extension;
       ``(3) the extent to which the loan or credit extension 
     promotes the purposes of this section; and
       ``(4) other lending policies as defined by the Board.
       ``(g) Return of Advances.--Any advances appropriated 
     pursuant to subsection (d)(2) shall be disbursed upon such 
     terms and conditions (including conditions relating to the 
     time or times of repayment) as are specified in any 
     appropriations Act providing such advances.
       ``(h) General Corporate Powers.--The Fund shall have 
     power--
       ``(1) to sue and be sued, complain and defend, in its 
     corporate name and through its own counsel;
       ``(2) to adopt, alter, and use the corporate seal, which 
     shall be judicially noticed;
       ``(3) to adopt, amend, and repeal by its Board of 
     Directors, bylaws, rules, and regulations as may be necessary 
     for the conduct of its business;
       ``(4) to conduct its business, carry on its operations, and 
     have officers and exercise the power granted by this section 
     in any State without regard to any qualification or similar 
     statute in any State;
       ``(5) to lease, purchase, or otherwise acquire, own, hold, 
     improve, use, or otherwise deal in and with any property, 
     real, personal, or mixed, or any interest therein, wherever 
     situated, for the purposes of the Fund;
       ``(6) to accept gifts or donations of services, or of 
     property, real, personal, or mixed, tangible or intangible, 
     in aid of any of the purposes of the Fund;
       ``(7) to sell, convey, mortgage, pledge, lease, exchange, 
     and otherwise dispose of its property and assets;
       ``(8) to appoint such officers, attorneys, employees, and 
     agents as may be required, to determine their qualifications, 
     to define their duties, to fix their salaries, require bonds 
     for them, and fix the penalty thereof; and
       ``(9) to enter into contracts, to execute instruments, to 
     incur liabilities, to make loans and equity investment, and 
     to do all things as are necessary or incidental to the proper 
     management of its affairs and the proper conduct of its 
     business.
       ``(i) Accounting, Auditing, and Reporting.--The accounts of 
     the Fund shall be audited annually. Such audits shall be 
     conducted in accordance with generally accepted auditing 
     standards by independent certified public accountants. A 
     report of each such audit shall be furnished to the Secretary 
     of the Treasury and the Commission. The representatives of 
     the Secretary and the Commission shall have access to all 
     books, accounts, financial records, reports, files, and all 
     other papers, things, or property belonging to or in use by 
     the Fund and necessary to facilitate the audit.
       ``(j) Report on Audits by Treasury.--A report of each such 
     audit for a fiscal year shall be made by the Secretary of the 
     Treasury to the President and to the Congress not later than 
     6 months following the close of such fiscal year. The report 
     shall set forth the scope of the audit and shall include a 
     statement of assets and liabilities, capital and surplus or 
     deficit; a statement of surplus or deficit analysis; a 
     statement of income and expense; a statement of sources and 
     application of funds; and such comments and information as 
     may be deemed necessary to keep the President and the 
     Congress informed of the operations and financial condition 
     of the Fund, together with such recommendations with respect 
     thereto as the Secretary may deem advisable.
       ``(k) Definitions.--As used in this section:
       ``(1) Eligible small business.--The term `eligible small 
     business' means business enterprises engaged in the 
     telecommunications industry that have $50,000,000 or less in 
     annual revenues, on average over the past 3 years prior to 
     submitting the application under this section.
       ``(2) Fund.--The term `Fund' means the Telecommunications 
     Development Fund established pursuant to this section.
       ``(3) Telecommunications industry.--The term 
     `telecommunications industry' means communications businesses 
     using regulated or unregulated facilities or services and 
     includes broadcasting, telecommunications, cable, computer, 
     data transmission, software, programming, advanced messaging, 
     and electronics businesses.''.

     SEC. 708. NATIONAL EDUCATION TECHNOLOGY FUNDING CORPORATION.

       (a) Findings; Purpose.--
       (1) Findings.--The Congress finds as follows:
       (A) Corporation.--There has been established in the 
     District of Columbia a private, nonprofit corporation known 
     as the National Education Technology Funding Corporation 
     which is not an agency or independent establishment of the 
     Federal Government.
       (B) Board of directors.--The Corporation is governed by a 
     Board of Directors, as prescribed in the Corporation's 
     articles of incorporation, consisting of 15 members, of 
     which--
       (i) five members are representative of public agencies 
     representative of schools and public libraries;
       (ii) five members are representative of State government, 
     including persons knowledgeable about State finance, 
     technology and education; and
     
[[Page H1106]]

       (iii) five members are representative of the private 
     sector, with expertise in network technology, finance and 
     management.
       (C) Corporate purposes.--The purposes of the Corporation, 
     as set forth in its articles of incorporation, are--
       (i) to leverage resources and stimulate private investment 
     in education technology infrastructure;
       (ii) to designate State education technology agencies to 
     receive loans, grants or other forms of assistance from the 
     Corporation;
       (iii) to establish criteria for encouraging States to--

       (I) create, maintain, utilize and upgrade interactive high 
     capacity networks capable of providing audio, visual and data 
     communications for elementary schools, secondary schools and 
     public libraries;
       (II) distribute resources to assure equitable aid to all 
     elementary schools and secondary schools in the State and 
     achieve universal access to network technology; and
       (III) upgrade the delivery and development of learning 
     through innovative technology-based instructional tools and 
     applications;

       (iv) to provide loans, grants and other forms of assistance 
     to State education technology agencies, with due regard for 
     providing a fair balance among types of school districts and 
     public libraries assisted and the disparate needs of such 
     districts and libraries;
       (v) to leverage resources to provide maximum aid to 
     elementary schools, secondary schools and public libraries; 
     and
       (vi) to encourage the development of education 
     telecommunications and information technologies through 
     public-private ventures, by serving as a clearinghouse for 
     information on new education technologies, and by providing 
     technical assistance, including assistance to States, if 
     needed, to establish State education technology agencies.
       (2) Purpose.--The purpose of this section is to recognize 
     the Corporation as a nonprofit corporation operating under 
     the laws of the District of Columbia, and to provide 
     authority for Federal departments and agencies to provide 
     assistance to the Corporation.
       (b) Definitions.--For the purpose of this section--
       (1) the term ``Corporation'' means the National Education 
     Technology Funding Corporation described in subsection 
     (a)(1)(A);
       (2) the terms ``elementary school'' and ``secondary 
     school'' have the same meanings given such terms in section 
     14101 of the Elementary and Secondary Education Act of 1965; 
     and
       (3) the term ``public library'' has the same meaning given 
     such term in section 3 of the Library Services and 
     Construction Act.
       (c) Assistance for Education Technology Purposes.--
       (1) Receipt by corporation.--Notwithstanding any other 
     provision of law, in order to carry out the corporate 
     purposes described in subsection (a)(1)(C), the Corporation 
     shall be eligible to receive discretionary grants, contracts, 
     gifts, contributions, or technical assistance from any 
     Federal department or agency, to the extent otherwise 
     permitted by law.
       (2) Agreement.--In order to receive any assistance 
     described in paragraph (1) the Corporation shall enter into 
     an agreement with the Federal department or agency providing 
     such assistance, under which the Corporation agrees--
       (A) to use such assistance to provide funding and technical 
     assistance only for activities which the Board of Directors 
     of the Corporation determines are consistent with the 
     corporate purposes described in subsection (a)(1)(C);
       (B) to review the activities of State education technology 
     agencies and other entities receiving assistance from the 
     Corporation to assure that the corporate purposes described 
     in subsection (a)(1)(C) are carried out;
       (C) that no part of the assets of the Corporation shall 
     accrue to the benefit of any member of the Board of Directors 
     of the Corporation, any officer or employee of the 
     Corporation, or any other individual, except as salary or 
     reasonable compensation for services;
       (D) that the Board of Directors of the Corporation will 
     adopt policies and procedures to prevent conflicts of 
     interest;
       (E) to maintain a Board of Directors of the Corporation 
     consistent with subsection (a)(1)(B);
       (F) that the Corporation, and any entity receiving the 
     assistance from the Corporation, are subject to the 
     appropriate oversight procedures of the Congress; and
       (G) to comply with--
       (i) the audit requirements described in subsection (d); and
       (ii) the reporting and testimony requirements described in 
     subsection (e).
       (3) Construction.--Nothing in this section shall be 
     construed to establish the Corporation as an agency or 
     independent establishment of the Federal Government, or to 
     establish the members of the Board of Directors of the 
     Corporation, or the officers and employees of the 
     Corporation, as officers or employees of the Federal 
     Government.
       (d) Audits.--
       (1) Audits by independent certified public accountants.--
       (A) In general.--The Corporation's financial statements 
     shall be audited annually in accordance with generally 
     accepted auditing standards by independent certified public 
     accountants who are certified by a regulatory authority of a 
     State or other political subdivision of the United States. 
     The audits shall be conducted at the place or places where 
     the accounts of the Corporation are normally kept. All books, 
     accounts, financial records, reports, files, and all other 
     papers, things, or property belonging to or in use by the 
     Corporation and necessary to facilitate the audit shall be 
     made available to the person or persons conducting the 
     audits, and full facilities for verifying transactions with 
     the balances or securities held by depositories, fiscal 
     agents, and custodians shall be afforded to such person or 
     persons.
       (B) Reporting requirements.--The report of each annual 
     audit described in subparagraph (A) shall be included in the 
     annual report required by subsection (e)(1).
       (2) Recordkeeping requirements; audit and examination of 
     books.--
       (A) Recordkeeping requirements.--The Corporation shall 
     ensure that each recipient of assistance from the Corporation 
     keeps--
       (i) separate accounts with respect to such assistance;
       (ii) such records as may be reasonably necessary to fully 
     disclose--

       (I) the amount and the disposition by such recipient of the 
     proceeds of such assistance;
       (II) the total cost of the project or undertaking in 
     connection with which such assistance is given or used; and
       (III) the amount and nature of that portion of the cost of 
     the project or undertaking supplied by other sources; and

       (iii) such other records as will facilitate an effective 
     audit.
       (B) Audit and examination of books.--The Corporation shall 
     ensure that the Corporation, or any of the Corporation's duly 
     authorized representatives, shall have access for the purpose 
     of audit and examination to any books, documents, papers, and 
     records of any recipient of assistance from the Corporation 
     that are pertinent to such assistance. Representatives of the 
     Comptroller General shall also have such access for such 
     purpose.
       (e) Annual Report; Testimony to the Congress.--
       (1) Annual report.--Not later than April 30 of each year, 
     the Corporation shall publish an annual report for the 
     preceding fiscal year and submit that report to the President 
     and the Congress. The report shall include a comprehensive 
     and detailed evaluation of the Corporation's operations, 
     activities, financial condition, and accomplishments under 
     this section and may include such recommendations as the 
     Corporation deems appropriate.
       (2) Testimony before congress.--The members of the Board of 
     Directors, and officers, of the Corporation shall be 
     available to testify before appropriate committees of the 
     Congress with respect to the report described in paragraph 
     (1), the report of any audit made by the Comptroller General 
     pursuant to this section, or any other matter which any such 
     committee may determine appropriate.

     SEC. 709. REPORT ON THE USE OF ADVANCED TELECOMMUNICATIONS 
                   SERVICES FOR MEDICAL PURPOSES.

       The Secretary of Commerce, in consultation with the 
     Secretary of Health and Human Services and other appropriate 
     departments and agencies, shall submit a report to the 
     Committee on Commerce of the House of Representatives and the 
     Committee on Commerce, Science and Transportation of the 
     Senate concerning the activities of the Joint Working Group 
     on Telemedicine, together with any findings reached in the 
     studies and demonstrations on telemedicine funded by the 
     Public Health Service or other Federal agencies. The report 
     shall examine questions related to patient safety, the 
     efficacy and quality of the services provided, and other 
     legal, medical, and economic issues related to the 
     utilization of advanced telecommunications services for 
     medical purposes. The report shall be submitted to the 
     respective Committees by January 31, 1997.

     SEC. 710. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--In addition to any other sums authorized 
     by law, there are authorized to be appropriated to the 
     Federal Communications Commission such sums as may be 
     necessary to carry out this Act and the amendments made by 
     this Act.
       (b) Effect on Fees.--For the purposes of section 9(b)(2) 
     (47 U.S.C. 159(b)(2)), additional amounts appropriated 
     pursuant to subsection (a) shall be construed to be changes 
     in the amounts appropriated for the performance of activities 
     described in section 9(a) of the Communications Act of 1934.
       (c) Funding Availability.--Section 309(j)(8)(B) (47 U.S.C. 
     309(j)(8)(B)) is amended by adding at the end the following 
     new sentence: ``Such offsetting collections are authorized to 
     remain available until expended.''.
       And the House agree to the same.

     From the Committee on Commerce, for consideration of the 
     Senate bill, and the House amendment, and modifications 
     committed to conference:
     Tom Bliley,
     Jack Fields,
     Michael G. Oxley,
     Rick White,
     John D. Dingell,
     Edward J. Markey,
     Rick Boucher,
     Anna G. Eshoo,
     Bobby L. Rush,
     Provided, Mr. Pallone is appointed in lieu of Mr. Boucher 
     solely for consideration of sec. 205 of the Senate bill:
     Frank Pallone, Jr.,
     As additional conferees, for consideration of secs. 1-6, 101-
     04, 106-07, 201, 204-05, 221-25, 301-05, 307-11, 401-02, 405-
     06, 410, 601-06, 703, and 705 of the Senate bill, and title I 
     of the House amendment, and modifications committed to 
     conference:
     Dan Schaefer,
     Joe Barton,
     J. Dennis Hastert,
     Bill Paxon,
     Scott Klug,
     Dan Frisa,
     Cliff Stearns,
     Sherrod Brown,
     
[[Page H1107]]

     Bart Gordon,
     Blanche Lambert Lincoln,
     As additional conferees, for consideration of secs. 102, 202-
     03, 403, 407-09, and 706 of the Senate bill, and title II of 
     the House amendment, and modifications committed to 
     conference:
     Dan Schaefer,
     J. Dennis Hastert,
     Dan Frisa,
     As additional conferees, for consideration of secs. 105, 206, 
     302, 306, 312, 501-05, and 701-02 of the Senate bill, and 
     title III of the House amendment, and modifications committed 
     to conference:
     Cliff Stearns,
     Bill Paxon,
     Scott Klug,
     As additional conferees, for consideration of secs. 7-8, 226, 
     404, and 704 of the Senate bill, and titles IV-V of the House 
     amendment, and modifications committed to conference:
     Dan Schaefer,
     J. Dennis Hastert,
     Scott Klug,
     As additional conferees, for consideration of title VI of the 
     House amendment, and modifications committed to conference:
     Dan Schaefer,
     Joe Barton,
     Scott Klug,
     As additional conferees from the Committee on the Judiciary, 
     for consideration of the Senate bill (except secs. 1-6, 101-
     04, 106-07, 201, 204-05, 221-25, 301-05, 307-11, 401-02, 405-
     06, 410, 601-06, 703, and 705), and of the House amendment 
     (except title I), and modifications committed to conference:
     Henry Hyde,
     Carlos J. Moorhead,
     Bob Goodlatte,
     Steve Buyer,
     Mike Flanagan,
     As additional conferees, for consideration of secs. 1-6, 101-
     04, 106-07, 201, 204-05, 221-25, 301-05, 307-11, 401-02, 405-
     06, 410, 601-06, 703, and 705 of the Senate bill, and title I 
     of the House amendment, and modifications committed to 
     conference:
     Henry Hyde,
     Carlos J. Moorhead,
     Bob Goodlatte,
     Steve Buyer,
     Mike Flanagan,
     Elton Gallegly,
     Bob Barr,
     Martin R. Hoke,
     Howard L. Berman,
                                Managers on the Part of the House.

     Larry Pressler,
     Ted Stevens,
     Slade Gorton,
     Trent Lott,
     Fritz Hollings,
     Daniel K. Inouye,
     Wendell Ford,
     J.J. Exon,
     Jay Rockefeller,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendments of the House to the bill S. 652, to provide for a 
     procompetitive, 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, submit the 
     following joint statement to the House and the Senate in 
     explanation of the effect of the action agreed upon by the 
     managers and recommended in the accompanying conference 
     report:
       The House amendment to the text of the bill struck all of 
     the Senate bill after the enacting clause and inserted a 
     substitute text.
       The Senate recedes from its disagreement to the amendment 
     of the House with an amendment that is a substitute for the 
     Senate bill and the House amendment. The differences between 
     the Senate bill, the House amendment, and the substitute 
     agreed to in conference are noted below, except for clerical 
     corrections, conforming changes made necessary by agreements 
     reached by the conferees, and minor drafting and clerical 
     changes.

       Joint Explanatory Statement of the Committee of Conference


                       Section 1--Short Title and

                      Section 2--Table of Contents

     Senate bill
       Section 1 provides that the bill may be cited as the 
     ``Telecommunications Competition and Deregulation Act of 
     1995.'' Section 2 contains a table of contents for the Senate 
     bill.
     House amendment
       Section 1 designates the short title as the 
     ``Communications Act of 1995.'' Section 2 contains a table of 
     contents for the House amendment.
     Conference agreement
       Section 1 designates the title of the bill as the 
     ``Telecommunications Act of 1996.'' Section 2 contains a 
     table of contents for the conference agreement.


                         Section 3--Definitions

     Senate bill
       Section 8(a) includes definitions of the Modification of 
     the Final Judgment (MFJ), the GTE Consent Decree, and an 
     ``integrated telecommunications service provider.'' An 
     ``integrated telecommunications service provider'' means a 
     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, signaling, or control devices.
       Section 8(b) adds several definitions to section 3 of the 
     Communications Act of 1934 (47 U.S.C. 153) (``the 
     Communications Act'') including definitions for ``local 
     exchange carrier,'' ``telecommunications'' 
     ``telecommunications service,'' ``telecommunications 
     carrier,'' ``telecommunications number portability.'' 
     ``information service,'' ``rural telephone company,'' and 
     ``service area.''
       New subsection (kk) defines ``local exchange carrier'' to 
     mean a provider of telephone exchange service or exchange 
     access service. ``Telephone exchange service'' is already 
     defined in section 3 of the Communications Act.
       ``Telecommunications'' is defined in new subsection (ll) to 
     mean 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.
       The term ``telecommunications service'' defined in new 
     subsection (mm) of section 3 of the communications Act 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. This definition is 
     intended to include commercial mobile service (``CMS''), 
     competitive access service, and alternative local 
     telecommunications services to the extent they are offered to 
     the public or to such classes of users as to be effectively 
     available to the public.
       Subsection (nn) defines ``telecommunications carrier'' to 
     mean any provider of telecommunications service, except that 
     the term does not include aggregator of telecommunications 
     services as defined in section 226 of the Communications Act. 
     The definition amends the Communications Act to explicitly 
     provide that a ``telecommunications carrier'' shall be 
     treated as a common carrier for purposes of the 
     Communications Act, but only to the extent that it is engaged 
     in providing telecommunications services.
       New subsection (oo) defines ``telecommunications number 
     portability'' to mean 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. Number portability 
     allows consumers remaining at the same location to retain 
     their existing telephone number when switching from one 
     telecommunications carrier to another.
       New subsection (pp) defines ``information service'' similar 
     to the Federal Communications Commission's (``the 
     Commission'') definition of ``enhanced services.'' The Senate 
     intends that the Commission would have the continued 
     flexibility to modify its definition and rules pertaining to 
     enhanced services as technology changes
       Subsection (rr) adds a definition of ``rural telephone 
     company'' that includes companies that (i) do not serve areas 
     containing any part of an incorporated place of 10,000 or 
     more inhabitants, or any incorporated or unincorporated 
     territory in an urbanized area, or (ii) have fewer than 
     100,000 access lines in a State.
       New subsection (ss) adds to the Communications Act a 
     definition of ``service area.'' ``Service area'' means a 
     geographic area established by the Commission and the State 
     for the purpose of determining universal service obligations 
     and support mechanisms. The Service are of a rural telephone 
     company means such company's study are until the Commission 
     and State, based on a recommendation of a Federal-State Joint 
     Board, establish a different definition.
     House amendment
       Subsection (a) of section 501 adds new definitions, 
     including for ``information service'' ``telecommunications.'' 
     ``telecommunications service,'' ``telecommunications 
     equipment,'' ``local exchange carrier,'' ``affiliate,'' 
     ``customer premises equipment,'' ``electronic publishing,'' 
     ``exchange area,'' and ``rural telephone company.'' 
     ``Information service'' and ``telecommunications'' are 
     defined based on the definition used in the Modification of 
     Final Judgment. The definition of ``telecommunications'' 
     refers to transmission ``by means of an electromagnetic 
     transmission medium.
       The term ``local exchange carrier'' does not include a 
     person insofar as such person is engaged in the provision of 
     CMS under section 332(c) of the Communications Act, except to 
     the extent that the Commission finds that such service as 
     provided by such persons in State is a replacement for a 
     substantial portion of the wireless telephone exchange 
     service within such State.
       The term ``telecommunication service'' is defined as those 
     services and facilities offered on a ``common carrier'' 
     basis, recognizing the distinction between common carrier 
     offerings that are provided to the public or to such classes 
     of users as to be effectively available to a substantial 
     portion of the public, and private services.
       This section defines the term ``rural telephone company'' 
     to means a local exchange 

[[Page H1108]]
     carrier (LEC) to the extent that such carrier services an 
     unincorporated area of less than 10,000 residents, or any 
     territory defined by the Bureau of the Census as a rural 
     area; or if such carrier has fewer than 50,000 access lines; 
     or if such carrier provides telephone exchange service to a 
     local study area with fewer than 100,000 access lines; or if 
     such carrier has less than 15 percent of the access lines in 
     communities of more than 50,000 residents.
       The definition of a ``Bell Operating Company'' does not 
     include an entity that owns a former Bell Operating Company's 
     wireless operations that are no longer affiliated with a Bell 
     Operating Company's wireline exchange facilities.
     Conference agreement
       Section 3(a) of the conference agreement both amends and 
     adds definitions to section 3 of the Communications Act. The 
     Senate recedes to the House with respect to the definitions 
     of ``cable system,'' ``customer premises equipment,'' 
     ``dialing parity,'' ``interLATA service,'' ``LATA,'' ``rural 
     telephone company,'' and ``telecommunications equipment,'' as 
     well as on the House amendment to the existing definition of 
     ``telephone exchange service.'' The Senate recedes to the 
     House with amendments regarding the definitions of ``Bell 
     Operating Company,'' ``exchange access,'' ``information 
     service,'' and ``local exchange carrier.''
       The Senate definition of ``Bell Operating Company'' was 
     included; however, the conference agreement included the 
     language in the House amendment clarifying that the term the 
     ``successor and assign'' is limited to those providing 
     wireline telephone exchange service so that Airtouch 
     Communications, a former affiliate of Pacific Telesis that 
     does not provide wireline telephone exchange service, or any 
     other similarly situated former affiliate of a Bell Operating 
     Company (``BOC''), is not included in that definition. The 
     Senate definition of ``local exchange carrier'' was included 
     to ensure that the Commission could, if future circumstances 
     warrant, include CMS providers which provide telephone 
     exchange service or exchange access in the definition of 
     ``local exchange carrier.''
       The House recedes to the Senate with respect to the 
     definitions of ``affiliate'' and ``cable service.'' The House 
     recedes to the Senate with amendments with respect to the 
     definitions of ``number portability,'' 
     ``telecommunications,'' ``telecommunications carrier,'' and 
     ``telecommunications service.''
       The conference agreement includes two new definitions to 
     clarify certain provisions in the Senate bill and the House 
     amendment. The term ``AT&T Consent Decree'' was substituted 
     for ``Modification of Final Judgment'' in order to 
     characterize more accurately the intent of the Senate bill 
     and House amendment with respect to the supersession issues 
     addressed in title VI. The term ``network element'' was 
     included to describe the facilities, such as local loops, 
     equipment, such as switching, and the features, functions, 
     and capabilities that a local exchange carrier must provide 
     for certain purposes under other sections of the conference 
     agreement.
       The House recedes to the Senate with an amendment with 
     respect to new subsection 3(b) of the conference agreement, 
     which provides that, except where otherwise provided, the 
     terms used in the conference agreement have the same meaning 
     as those terms have in the Communications Act.
       The Senate recedes to the House amendment with respect to 
     new subsection 3(c) of the conference agreement, which amends 
     section 3 of the Communications Act to reorder the 
     definitions in that section alphabetically and to make other 
     stylistic changes.

                  TITLE I--TELECOMMUNICATIONS SERVICES

                Subtitle A--Telecommunications Services


                      section 101--interconnection

     Senate bill
       The Senate bill creates new sections of the Communications 
     Act to create competitive markets.
     House amendment
       The House amendment creates new sections of the 
     Communications Act to create competitive markets.
     Conference agreement
       Section 101 of the conference agreement establishes a new 
     ``Part II'' of title II of the Communications Act. Part II 
     contains new sections 251-261 of the Communications Act to 
     create competitive communications markets.


                    new section 251--interconnection

     Senate bill
       New subsection 251(a) imposes a duty on local exchange 
     carriers possessing market power in the provision of 
     telephone exchange service or exchange access service in a 
     particular local area to negotiate in good faith and to 
     provide interconnection with other telecommunications 
     carriers that have requested interconnection for the purpose 
     of providing telephone exchange service or exchange access 
     service. The obligations and procedures prescribed in this 
     section do not apply to interconnection arrangements between 
     local exchange carriers and telecommunications carriers under 
     section 201 of the Communications Act for the purpose of 
     providing interexchange service, and nothing in this section 
     is intended to affect the Commission's access charge rules. 
     Local exchange carriers with market power are required to 
     provide interconnection at reasonable and nondiscriminatory 
     rates.
       The Commission will determine which local exchange carriers 
     have market power for purposes of this section. In 
     determining market power, the relevant market shall include 
     all providers of telephone exchange service or exchange 
     access service in a local service area, regardless of the 
     technology used to provide such service.
       The obligation to negotiate interconnection shall apply to 
     a local exchange carrier or a class of local exchange 
     carriers that are determined by the Commission to have market 
     power in providing exchange services. The references to a 
     ``class'' of carriers are intended to relieve the Commission 
     of the need to make a separate market power determination for 
     each individual carrier. These references are not intended to 
     require the local exchange carriers to engage in negotiations 
     as a class, although subsection 251(a)(2) provides that 
     multilateral negotiations are permitted. However, a local 
     exchange carrier that chooses to participate in multilateral 
     negotiations will be subject to an individual obligation to 
     negotiate in good faith and will remain subject to the time 
     limitations contained in this and other provisions of section 
     251.
       New section 251 provides two alternative methods for 
     reaching interconnection agreements.
       New subsection 251(b) provides a list of minimum standards 
     relating to types of interconnection the local exchange 
     carrier must agree to provide, if sought by the 
     telecommunications carrier requesting interconnection. The 
     minimum standards include unbundled access to the network 
     functions and services of the local exchange carrier's 
     network, and unbundled access to the local exchange carrier's 
     telecommunications facilities and information, including 
     databases and signaling, that are necessary for transmission 
     and routing and the interoperability of both carriers' 
     networks. The negotiation process established by this section 
     is intended to resolve questions of economic reasonableness 
     with respect to the interconnection requirements. That is, 
     either the parties resolve the issue or the State will impose 
     conditions for interconnection consistent with section 251 
     and the Commission's rules.
       The minimum standards also require interconnection to the 
     local exchange carrier's network that is at least equal in 
     type, quality, and price to the interconnection the carrier 
     provides to any other party, including itself or affiliated 
     companies. At a minimum, the Senate intends that any 
     technically feasible point would be any point at which the 
     local exchange carrier provides access to any other party, 
     including itself or any affiliated entry. Access to poles, 
     ducts, conduits, and rights-of-way owned or controlled by the 
     local exchange carrier is also a minimum standard.
       Number portability and local dialing parity are included in 
     the minimum standards of subsection 251(b). If requested, a 
     local exchange carrier must take any action under its control 
     to provide interim or final number portability as soon as it 
     is technically feasible. Section 307 of the bill adds new 
     section 261 of the Communications Act which establishes a 
     neutral telecommunications numbering administration and 
     defines interim and final number portability. The Commission 
     will determine when final number portability is technically 
     feasible. A similar requirement applies to local dialing 
     parity.
       The minimum standards also cover resale or sharing of the 
     local exchange carrier's unbundled telecommunications 
     services and network functions. The carrier is not permitted 
     to attach unreasonable conditions to the resale or sharing of 
     those services or functions. Subsection 251(b) provides 
     certain circumstances where it would not be unreasonable for 
     a State to limit the resale of services included within the 
     definition of universal service.
       Additional minimum standards relate to reciprocal 
     compensation arrangements, including in-kind exchange of 
     traffic or traffic balance measures, reasonable notice of 
     changes in the information necessary for transmission and 
     routing of services over the carrier's network, and schedules 
     of itemized charges and conditions.
       Subsection 251(i) requires the Commission to promulgate 
     rules to implement section 251 within 6 months after 
     enactment. If a State fails to carry out its responsibilities 
     under section 251 in accordance with the rules promulgated by 
     the Commission, the Senate intends that the Commission assume 
     the responsibilities of the State in the applicable 
     proceeding or matter.
       Subsection 251(i) also requires the Commission or a State 
     to waive or modify the requirements of the minimum standards 
     of subsection 251(b) in the case of a rural telephone 
     company, and allows the Commission or a State to waive or 
     modify those requirements in the case of a local exchange 
     carrier with fewer than two percent of the nation's 
     subscriber lines installed in the aggregate nationwide. In 
     order to waive or modify the requirements of subsection 
     251(b) for such companies or carriers, the Commission or a 
     State must determine that the application of 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 Senate intends 
     that the Commission or a State shall, consistent with the 
     protection of consumers and allowing for competition, use 
     this authority to provide a level playing 

[[Page H1109]]
     field, particularly when a company or carrier to which this subsection 
     applies faces competition from a telecommunications carrier 
     that is a large global or nationwide entity that has 
     financial or technological resources that are significantly 
     greater than the resources of the company or carrier.
       New subsection 251(j) provides that nothing in section 251 
     precludes a State from imposing requirements on 
     telecommunications carriers with respect to intrastate 
     services that the State determines are necessary to further 
     competition in the provision of telephone exchange service or 
     exchange access service, so long as any such requirements are 
     not inconsistent with the Commission's rules to implement 
     section 251.
       New subsection 251(k) provides that nothing in section 251 
     is intended to change or modify the Commission's rules at 47 
     CFR 69 et seq. regarding the charges that an interexchange 
     carrier pays to local exchange carriers for access to the 
     local exchange carrier's network. The Senate also does not 
     intend that section 251 should affect regulations implemented 
     under section 201 with respect to interconnection between 
     interexchange carriers and local exchange carriers.
       Section 307 of the bill adds a new section 261 to the 
     Communications Act. New section 261 requires local exchange 
     carriers to provide for number portability and also requires 
     the neutral administration of a nationwide telephone 
     numbering system.
       Subsection 261(a) requires that, as of the date of 
     enactment, interconnection agreements reached under section 
     251 must, if requested, provide for interim number 
     portability.
       Interim number portability may require that calls to or 
     from the subscriber be routed through the local exchange 
     carrier's switch. Some method of call forwarding or similar 
     arrangement could be used to satisfy this requirement. The 
     method of providing interim number portability and the amount 
     of compensation, if any, for providing such service is 
     subject to the negotiated interconnection agreement, pursuant 
     to section 251.
       Subsection 261(b) provides that final number portability 
     shall be made available, upon request, when the Commission 
     determines that final telecommunications portability is 
     technically feasible. Subsection 261(d) states that the cost 
     of such number portability shall be borne by all providers on 
     a competitively neutral basis.
       Subsection 261(c) of new section 261 requires that all 
     providers of telephone exchange service or exchange access 
     service comply with the guidelines, rules, or plans, of the 
     entity or entities responsible for administering a nationwide 
     neutral number system. This provision is not intended to 
     affect the Commission's ongoing proceeding on numbering 
     administration.
       Subsection 261(c)(2) requires that all telecommunications 
     carriers which provide local exchange or exchange access 
     service in the same telephone service area be assigned the 
     same numbering plan area code.
     House amendment
       Section 241 of section 101 of the House amendment restates 
     the obligation contained in section 201(a) of the 
     Communications Act on all common carriers to interconnect 
     with the facilities and equipment of other providers of 
     telecommunications services and information services.
       Section 242(a)(1) sets out the specific requirements of 
     openness and accessibility that apply to LECs as competitors 
     enter the local market and seek access to, and 
     interconnection with, the incumbent's network facilities. 
     Under section 242(a)(2), LECs have the duty to offer 
     unbundled services, elements, features, functions, and 
     capabilities whenever technically feasible. Section 242(a)(3) 
     imposes the duty to offer resale at wholesale rates, which 
     are defined as retail, less the avoided costs. Section 
     242(a)(4) sets out the duty to provide number portability, to 
     the extent technically feasible. Section 242(a)(5) sets out 
     the duty to provide dialing parity. Section 242(a)(6) sets 
     out the duty to afford access to the poles, ducts, conduits, 
     and rights-of-way of the incumbent carrier, as provided under 
     the pole attachment provisions of the Communications Act. 
     Section 242(a)(7) places the responsibility on local 
     telephone companies not to install network features, 
     functions, and capabilities that violate the requirement of 
     network functionality and accessibility. Section 242(a)(8) 
     places a duty on both parties to negotiate in good faith on 
     all requirements relating to interconnection agreements.
       Section 242(b)(1) describes the specific terms and 
     conditions for interconnection, compensation, and equal 
     access, which are integral to a competing provider seeking to 
     offer local telephone services over its own facilities. Under 
     section 242(b)(2), any interconnection agreement entered into 
     must provide for mutual and reciprocal recovery of costs, and 
     may include a range of compensation schemes, such as an in-
     kind exchange of traffic without cash payment (known as bill-
     and-keep arrangements). Under section 242(b)(3), the LEC has 
     a responsibility to offer reasonable and nondiscriminatory 
     access on an unbundled basis ``that is equal in type and 
     quality'' to that which it affords itself or any other 
     person. Section 242(b)(4) directs the Commission to establish 
     regulations requiring actual collocation, or physicial 
     collocation, of equipment necessary for interconnection at 
     the premises of a LEC, except that virtual collocation is 
     permitted where the LEC demonstrates that actual collocation 
     is not practical for technical reasons or because of space 
     limitations.
       This section also directs the Commission to establish 
     regulations requiring full compensation to the LEC for costs 
     of providing services services to equal access, 
     interconnection, number portability, and unbundling and 
     requires a carrier, to the extent it provides a 
     telecommunications service or an information service over its 
     own network, to impute to itself the charge for access and 
     interconnection that it charges other persons for providing 
     such services. Subsection 242(c) mandates the manner in which 
     number portability and dialing parity must be provided. This 
     section does not require intraLATA toll dialing parity until 
     a BOC is authorized to offer long distance service.
       Section 242(d)(1) prohibits a provider from joint marketing 
     of local and interLATA toll service until the BOC in that 
     State is authorized to provide long distance service pursuant 
     to section 245. Section 242(d)(2) grandfathers joint 
     marketing arrangements in place before the date of enactment. 
     Section 242(e) grants to the Commission the authority to 
     waive or modify, in whole or in part, the requirements of 
     section 242 for any carrier that has, in the aggregate 
     nationwide, fewer than 500,000 access lines installed, to the 
     extent that the Commission determines the effect of the 
     requirements would be economically burdensome, or 
     technologically infeasible. Section 242(f) gives State 
     commissions the authority to waive section 242 requirements 
     with respect to rural telephone companies, and subsection 
     242(g) sets out the time and manner for compliance if the 
     State determines that the exemption should not apply.
     Conference agreement
       The conference agreement adopts a new model for 
     interconnection that incorporates provisions from both the 
     Senate bill and House amendment in a new section 251 of the 
     Communications Act. New section 251(a) imposes a general duty 
     to interconnect directly or indirectly between all 
     telecommunications carriers and the duty not to install 
     network features and functions that do not comply with the 
     guidelines and standards established under new sections 255 
     and 256 of the Communications Act.
       New section 251(b) imposes several duties on all local 
     exchange carriers, including the ``new entrants'' into the 
     local exchange market. These include the duties: (1) not to 
     prohibit resale of their service; (2) to provide number 
     portability; (3) to provide dialing parity; (4) to afford 
     access to poles, ducts, conduits, and rights-of-way 
     consistent with the pole attachment provisions in section 224 
     of the Communications Act; and (5) to establish reciprocal 
     compensation arrangements for the transport and termination 
     of traffic. The conferees note that the duties imposed under 
     new section 251(b) make sense only in the context of a 
     specific request from another telecommunications carrier or 
     any other person who actually seeks to connect with or 
     provide services using the LEC's network.
       New section 251(c) imposes several additional obligations 
     on incumbent LECs. These include the duties: (1) to negotiate 
     in good faith, subject to the provisions of section 252, 
     binding agreements to provide all of the obligations imposed 
     in new sections 251(b) and 251(c); (2) to provide 
     interconnection at any technically feasible point of the same 
     type and quality it provides to itself, on just, reasonable, 
     and nondiscriminatory terms and conditions; (3) to provide 
     access to network elements on an unbundled basis; (4) to 
     offer resale of its telecommunications services at wholesale 
     rates; (5) to provide reasonable public notice of changes to 
     its network; and (6) to provide physical collocation, or 
     virtual collocation if physical collocation is not practical.
       New section 251(d) requires the Commission to adopt 
     regulations to implement new section 251 within 6 months, and 
     states that nothing precludes the enforcement of State 
     regulations that are consistent with the requirements of new 
     section 251. New section 251(e) clarifies the Commission's 
     authority for numbering administration. The costs for 
     numbering administration and number portability shall be 
     borne by all providers on a competitively neutral basis.
       New section 251(f)(1) provides for the exemption of rural 
     telephone companies from the requirements of new subsection 
     (c) until a bona fide request is received that the State 
     commission determines is not unduly economically burdensome, 
     is technically feasible, and is consistent with the universal 
     service provisions of new section 254, except the specific 
     public interest determinations thereunder. The State 
     commission receiving notice of a bona fide request must rule 
     on it within 120 days and, if no exemption is granted, shall 
     establish a schedule for compliance with the request. The 
     exemption is not available where an incumbent cable operator 
     makes a request to an incumbent telephone company providing 
     video programming in the same service area, except where 
     rural telephone companies offer video programming directly to 
     subscribers on the date of enactment.
       New section 251(f)(2) allows a local exchange carrier with 
     less than 2% of the subscribed access lines nationwide to 
     petition for a suspension or modification of the requirements 
     under new sections 251(b) and 251(c) for the telephone 
     exchange service facilities specified in the petition. The 
     State commission shall grant the petition to the 

[[Page H1110]]
     extent that it is necessary to avoid significant adverse impacts on 
     consumers, imposing an undue economic burden or a technically 
     infeasible requirement on the incumbent, and provided that 
     the modification or suspension is in the public interest.
       The approach of both the Senate bill and the House 
     amendment assumed that Bell Operating Companies (``BOCs'') 
     would be required to continue to provide equal access and 
     nondiscrimination to interexchange carriers and information 
     service providers under those parts of the AT&T Consent 
     Decree that would have remained in effect under either 
     approach. Because the new approach completely eliminates the 
     prospective effect of the AT&T Consent Decree, some provision 
     is necessary to keep these requirements in place. By the same 
     token, although not specifically addressed in either the 
     Senate bill or the House amendment, some provision is also 
     needed to ensure that the GTE Operating Companies that 
     provide local exchange services continue to provide equal 
     access and nondiscrimination to interexchange carriers and 
     information service providers.
       Accordingly, the conference agreement includes a new 
     section 251(g). This section provides that, on and after the 
     date of enactment, each local exchange carrier, to the extent 
     that it provides wireline services, shall have a statutory 
     duty to provide equal access and nondiscrimination to 
     interexchange carriers and information service providers. In 
     the interim, between the date of enactment and the date the 
     Commission promulgate new regulations under this section, the 
     substance of this new statutory duty shall be the equal 
     access and nondiscrimination restrictions and obligations, 
     including receipt of compensation, that applied to the local 
     exchange carrier immediately prior to the date of enactment, 
     regardless of the source. When the Commission promulgates its 
     new regulations, the conferees expect that the commission 
     will explicitly identify those parts of the interim 
     restrictions and obligations that it is superseding so that 
     there is no confusion as to what restrictions and obligations 
     remain in effect. These interim restrictions and obligations 
     shall be enforceable in the same manner as Commission 
     regulations.
       Even though the substance of the interim restrictions and 
     obligations on the BOCs and GTE Operating Companies will be 
     taken from the respective consent decrees, these restrictions 
     and obligations shall not be enforceable under either consent 
     decree because the provisions of section 601(a) of the bill 
     eliminate the prospective effect of both consent decrees. The 
     use of the provisions of the respective consent decrees to 
     provide, on an interim basis, the substance of the new 
     statutory duty in no way revives the consent decrees. In 
     particular, the use of the provisions of the GTE consent 
     decree relating to equal access and nondiscrimination on this 
     interim basis should not be construed in any way as 
     recreating or continuing the GTE Consent Decree's prohibition 
     on GTE's or the GTE Operating Companies' entry into the 
     interexchange market.
       The old consent decree obligations no longer exist with 
     respect to post-enactment conduct, and the new obligations 
     flow only from the statute. These new statutory obligations 
     shall be enforceable only through the means provided under 
     law for the enforcement of Commission regulations. Nothing in 
     this section should be construed as providing any authority 
     for the enforcement of these statutory obligations under 
     either of the consent decrees from which their substance will 
     be taken. Nothing in this section should be construed as 
     requiring any parties to renegotiate any agreements currently 
     in existence unless the new Commission regulations under this 
     section require such renegotiation.
       New subsection 251(h) provides the definition of 
     ``incumbent local telephone carrier.''
       New subsection 251(i) makes clear the conferees' intent 
     that the provisions of new section 251 are in addition to, 
     and in no way limit or affect, the Commission's existing 
     authority regarding interconnection under section 201 of the 
     Communications Act.


new section 252--procedures for negotiation, arbitration, and approval 
                             of agreements

     Senate bill
       Section 251(c) makes clear that a local exchange carrier 
     may meet its section 251 interconnection obligations by 
     negotiating and entering into a binding agreement that does 
     not reflect the minimum standards listed in section 251(b). 
     Each such negotiated interconnection agreement must include a 
     schedule of itemized charges for each service, facility, or 
     function included in the agreement, and must be submitted to 
     a State under section 251(e).
       Section 251(d) provides procedures under which any party 
     negotiating an interconnection agreement may ask the State to 
     participate in the negotiations and to arbitrate any 
     differences arising in the negotiations. A State may be asked 
     to arbitrate at any point in the negotiations.
       In addition to the possibility of arbitration by the State, 
     section 251(d) provides a more formal remedy under which any 
     party may petition the State to intervene in the 
     negotiations. If issues remain unresolved more than 135 days 
     after the date the local exchange carrier received the 
     request to negotiate, any party to the negotiations may 
     petition the State to intervene for the purpose of resolving 
     any issues that remain open in the negotiation. Requests to 
     the State to intervene must be made during the 25 day period 
     that begins 135 days after the local exchange carrier 
     received the negotiation request. The State is required to 
     resolve any open issues and conduct its review of the 
     agreement under section 251(e) not later than 10 months after 
     the date the local exchange carrier received the request to 
     negotiate. I resolving any open issues the solution imposed 
     by a State must be consistent with the Commission's rules to 
     implement this section, the minimum standards required under 
     section 251(b) and the provisions of section 351(d)(6) with 
     respect to any charges imposed.
       Section 251(e) requires that any interconnection agreement 
     under section 251 must be submitted to the State for 
     approval. The State must approve or reject the agreement and 
     make written findings as to any deficiencies in the 
     agreement. An agreement successfully negotiated under 
     subsection (c) by the parties without regard to the minimum 
     standards set forth in section 251(b) may only be rejected if 
     the State finds the agreement discriminates against a 
     telecommunications carrier that is not a party to the 
     agreement. The State may reject interconnection agreements 
     negotiated under subsection (d) if the State finds the 
     agreement does not meet the minimum standards set forth in 
     subsection 251(b), or if the State finds that implementation 
     of the agreement is not in the public interest.
       Section 251(f) requires a State to make a copy of each 
     agreement approved by the State under section 251(e) 
     available for public inspection and copying within 10 days 
     after the agreement is approved.
       Section 251(g) requires a local exchange carrier to make 
     available any service, facility, or function provided under 
     an interconnection agreement to which that local exchange 
     carrier is a party to any other telecommunications carrier 
     that requests such service, facility, or function on the same 
     terms and conditions as are provided in that agreement.
       Section 251(i) provides that if a State fails to carry out 
     its responsibilities under section 251 in accordance with the 
     rules promulgated by the Commission, the Commission shall 
     assume the responsibilities of the State in the applicable 
     proceeding or matter.
     House amendment
       Section 244 of the House amendment requires, within 
     eighteen months, an exchange carrier to file with the State 
     commission in that State in which it is offering service, and 
     with the Commission for interstate services, a statement of 
     terms and conditions confirming that it is in compliance with 
     the section 242 requirements.
       Section 244(b)(1) provides for State commission review of 
     an exchange carrier's statement and permits a State to impose 
     its own intrastate service standards. Paragraph (2) requires 
     the Commission to conduct a similar review. Under section 
     244(c), both reviews must be completed within 60 days of the 
     submission of statements to the respective regulatory 
     authorities, or simply be allowed to take effect, as commonly 
     occurs at present with most tariffs. Section 244(c)(2) 
     clarifies that the authority to review the statements does 
     not terminate once they take effect.
       Section 244(d) allows an exchange carrier to file an 
     agreement as a statement of services under section 244(a). It 
     also permits exchange carriers to enter into subsequent 
     agreements on different terms and conditions, but with two 
     caveats. First, the subsequent agreement must undergo the 
     same review process, and second, it may not be discriminatory 
     with respect to other agreements it has entered into.
       Finally, subsection (e) sunsets the requirement of filing 
     statements of terms and conditions once the local exchange 
     market is deemed competitive.
     Conference agreement
       In new section 252(a), the House recedes to the Senate with 
     an amendment to provide that any party may ask the State to 
     participate during a voluntary negotiation period in the 
     mediation of agreements. Agreements arrived at voluntarily do 
     not need to meet the requirements of new section 251 (b) and 
     (c).
       The House recedes to the Senate on new section 252(b), with 
     an amendment to clarify the role of a State commission in 
     arbitrating and resolving agreements at the request of any of 
     the parties.
       New section 252(c) requires a State commission to ensure 
     that any resolution of unresolved issues in a negotiation 
     meets the requirements of new section 251 and any regulations 
     to implement that section. To the extent that a State 
     establishes the rates for specific provisions of an 
     agreement, it must do so according to new section 252(d). In 
     addition, a State must provide a schedule for implementation 
     of the terms of the agreement.
       New section 252(d) combines the pricing standards in the 
     Senate bill and the House amendment. Charges for 
     interconnection under new section 251(c)(2) and for network 
     elements under new section 251(c)(3) are to be determined 
     based on cost and may include a reasonable profit. Charges 
     for transport and termination of traffic pursuant to new 
     section 251(b)(5) are to be based on reciprocal compensation. 
     The wholesale rate for resold telecommunications services 
     under new section 251(c)(4) is to be determined by the State 
     commission on the basis of the retail rate charged to 
     subscribers of such telecommunications services, excluding 
     costs 

[[Page H1111]]
     that will be avoided by the incumbent carrier.
       The House recedes to the Senate on new section 252(e). 
     Agreements arrived at through voluntary negotiation or 
     compulsory arbitration must be approved by the State 
     commission under new section 252(e), which provides a 
     specific timetable for State action, provides Commission 
     authority to act if a State does not, and preserves State 
     authority to enforce State law requirements in agreements 
     approved under this section.
       The Senate recedes to the House with an amendment to new 
     section 252(f), which permits a BOC to file a statement of 
     the terms and conditions under which it generally offers 
     interconnection and access to network elements. Any such 
     statement must be approved by the State commission.
       New section 252(g) was included by the conferees to permit 
     a State commission, to the extent practical, to consolidate 
     certain proceedings required under the Communications Act to 
     promote administrative efficiency.
       New section 252(h) requires that all agreements or 
     statements approved by a State commission be available from 
     such commission for public inspection and copying.
       New section 252(i) requires a local exchange carrier to 
     make available on the same terms and conditions to any 
     telecommunications carrier that requests it any 
     interconnection, service, or network element that the local 
     exchange carrier provides to any other party under an 
     approved agreement or statement.
       New section 252(j) states that the term ``incumbent local 
     exchange carrier'' has the same meaning as that term has in 
     new section 251(h).


             new section 253--removal of barriers to entry

     Senate bill
       Section 201(a) adds a new section 254 to the Communications 
     Act and is intended to remove all barriers to entry in the 
     provision of telecommunications services.
       Subsection (a) of new section 254 preempts any State and 
     local statutes and regulations, or other State and local 
     legal requirements, that may prohibit or have the effect of 
     prohibiting any entity from providing interstate or 
     intrastate telecommunications services.
       Subsection (b) of section 254 preserves a State's authority 
     to impose, on a competitively neutral basis and consistent 
     with universal service provisions, 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. States may not exercise this authority in a way 
     that has the effect of imposing entry barriers or other 
     prohibitions preempted by new section 254(a).
       Subsection (c) of new section 254 provides that nothing in 
     new section 254 affects the authority of States or local 
     governments to manage the public rights-of-way or to require, 
     on a competitively neutral and nondiscriminatory basis, fair 
     and reasonable compensation for the use of public rights-of-
     way, on a nondiscriminatory basis, provided any compensation 
     required is publicly disclosed.
       Subsection (d) requires the Commission, after notice and an 
     opportunity for public comment, to preempt the enforcement of 
     any State or local statutes, regulations or legal 
     requirements that violate or are inconsistent with the 
     prohibition on entry barriers contained in subsections (a) or 
     (b) of section 254.
       Subsection (e) of new section 254 simply clarifies that new 
     section 254 does not affect the application of section 
     332(c)(3) of the Communications Act to CMS providers.
       Section 309 adds a new section 263 to the Communications 
     Act and is intended to permit States to adopt certain 
     statutes or regulations regarding the provision of service by 
     competing telecommunications carriers in rural markets. Such 
     statutes or regulations may be no more restrictive than the 
     criteria set forth in section 309. The Commission is 
     authorized to preempt any State statute or regulation that is 
     inconsistent with the Commission's regulations implementing 
     this section.
     House amendment
       The House provisions are identical or similar to 
     subsections 254(a), (b) and (c). The House amendment does not 
     have a similar provision (d) requiring the Commission to 
     preempt State or local barriers to entry, if it makes a 
     determination that they have been erected.
     Conference agreement
       The conference agreement adopts the Senate provisions.
       New section 253(b) clarifies that nothing in this section 
     shall affect the ability of a State to safeguard the rights 
     of consumers. In addition to consumers of telecommunications 
     services, the conferees intend that this includes the 
     consumers of electric, gas, water or steam utilities, to the 
     extent such utilities choose to provide telecommunications 
     services. Existing State laws or regulations that reasonably 
     condition telecommunications activities of a monopoly utility 
     and are designed to protect captive utility ratepayers from 
     the potential harms caused by such activities are not 
     preempted under this section. However, explicit prohibitions 
     on entry by a utility into telecommunications are preempted 
     under this section.
       The rural markets provision in section 309 of the Senate 
     bill is simplified and moved to this section. The 
     modification clarifies that, without violating the 
     prohibition on barriers to entry, a State may require a 
     competitor seeking to provide service in a rural market to 
     meet the requirements for designation as an eligible 
     telecommunications carrier. That is, the State may require 
     the competitor to offer service and advertise throughout the 
     service area served by a rural telephone company. The 
     provision would not apply if the rural telephone company has 
     obtained an exemption, suspension, or modification under new 
     section 251(f) that effectively prevents a competitor from 
     meeting the eligible telecommunications carrier requirements. 
     In addition, the provision would not apply to providers of 
     CMS.


                   new section 254--Universal Service

     Senate bill
       Section 103 of the bill establishes a Federal-State Joint 
     Board to review existing universal service support mechanisms 
     and make recommendations regarding steps necessary to 
     preserve and advance this fundamental communications policy 
     goal. Section 103 also adds a new section 253, entitled 
     ``Universal Service,'' to the Communications Act. As new 
     section 253 explicitly provides, the Senate intends that 
     States shall continue to have the primary role in 
     implementing universal service for intrastate services, so 
     long as the level of universal service provided by each State 
     meets the minimum definition of universal service established 
     under new section 253(b) and a State does not take any action 
     inconsistent with the obligation for all telecommunications 
     carriers to contribute to the preservation and advancement of 
     universal service under new section 253(c).
       Section 103(a) of the bill requires the Commission to 
     institute a Federal-State Joint Board under section 410(c) of 
     the Communications Act to recommend within 9 months of the 
     date of enactment new rules regarding implementation of 
     universal service.
       Section 103(a) also provides that at least once every four 
     years the Commission is required to institute a new Joint 
     Board proceeding to review the implementation of new section 
     253 regarding universal service, and to make recommendations 
     regarding any changes that are needed.
       Section 103(b) of the bill requires the Commission to 
     complete any proceeding to implement the recommendations of 
     the initial Joint Board within one year of the date of 
     enactment of the bill, any other Joint Board on universal 
     service matters within one year of receiving such 
     recommendations.
       Section 103(c) of the bill simply clarifies that the 
     amendments to the Communications act made by the Senate bill 
     do not necessarily affect the Commission's existing 
     separations rules for local exchange or interexchange 
     carriers. However, this subsection does not prohibit or 
     restrict the Commission's ability to change those separations 
     rules through an appropriate proceeding.
       Section 103(d) establishes new section 253 in the 
     Communications Act. New section 253(a) establishes seven 
     principles on which the Joint Board and the Commission shall 
     base policies for the preservation and advancement of 
     universal service.
       Subsection (b) of new section 253 provides that the 
     Commission shall define universal service, based on 
     recommendations from the public, Congress, and the Joint 
     Board. To ensure that the definition of universal service 
     evolves over time to keep pace with modern life, the 
     subsection requires the Commission to include, at a minimum, 
     any telecommunications service that is subscribed to by a 
     substantial majority of residential customers.
       Subsection (c) of new section 253 requires all 
     telecommunications carriers to contribute on an equitable and 
     nondiscriminatory basis to the preservation and advancement 
     of universal service. The Commission or a State may require 
     any other telecommunications provider, such as private 
     telecommunications providers, to contribute to the 
     preservation and advancement of universal service, if the 
     public interest so requires.
       Subsection (d) of new section 253 provides that a State may 
     adopt additional definitions, mechanisms, and standards to 
     preserve and advance universal service within such State, 
     provided that they are not inconsistent with the regulations 
     of the Commission. A State must adopt separate support 
     mechanisms for any additional standards or definitions 
     required by the State.
       Subsection (e) of new section 253 provides that only 
     telecommunications carriers that are designated as essential 
     telecommunications carriers under new section 214(d) shall be 
     eligible to receive support payments, if any, established by 
     the Commission or a State to preserve and advance universal 
     service. Any such support payment must accurately reflect the 
     amount reasonably necessary to preserve and advance universal 
     service.
       Subsection (e) is not intended to prohibit support 
     mechanisms that directly help individuals afford universal 
     service.
       Subsection (f) of new section 253 directs the Commission 
     and the States to make universal service support explicit and 
     to ensure that essential telecommunications carriers are able 
     to provide universal service at just, reasonable and 
     affordable rates. Carriers receiving such support must use it 
     to provide service in the area for which the support was 
     received.
       Subsection (g) of new section 253 simply incorporates in 
     the Communications Act the existing practice of geographic 
     rate averaging and rate integration for interexchange, or 
     long distance, telecommunications rates 

[[Page H1112]]
     to ensure that rural customers continue to receive such service at 
     rates that are comparable to those charged to urban 
     customers. States shall continue to be responsible for 
     enforcing this subsection with respect to intrastate 
     interexchange services, so long as the State rules are not 
     inconsistent with Commission rules and policies on rate 
     averaging.
       Subsection (h) of new section 253 prohibits 
     telecommunications carriers from subsidizing competitive 
     services with revenues from non-competitive services. The 
     Commission and the States are required to establish any 
     necessary cost allocation rules, accounting safeguards, and 
     other guidelines to ensure that universal service bears no 
     more than a reasonable share (and may bear less than a 
     reasonable share) of the joint and common costs of facilities 
     used to provide both competitive and noncompetitive services.
       Subsection (i) of new section 253 requires the Commission 
     to submit a report to Congress prior to increasing support 
     for universal service or requiring increased participation by 
     telecommunications carriers. Any such increase cannot take 
     effect until 120 days after the report is submitted to 
     Congress.
       Subsection (j) of new section 253 states that nothing in 
     new section 253 limits or expands the Commission's authority 
     with respect to universal service.
       Subsection (k) of new section 253 states that the 
     subsections that provide that all telecommunications carriers 
     shall contribute to universal service, preserve the States' 
     authority to adopt their own definitions and mechanisms, 
     establish eligibility for universal service support, and 
     control the level of universal service support shall take 
     effect one year after the date of enactment of this bill.
       Section 310 of the Senate bill, known as the Snowe-
     Rockefeller-Exon-Kerrey Amendment, provides for preferential 
     rates to schools, libraries and rural health care facilities.
     House amendment
       Section 247(a) establishes a Federal-State Joint Board, 
     pursuant to section 410(c) of the Communications Act, for the 
     purpose of recommending actions the Commission and the States 
     should take to preserve universal service.
       Section 247(b) sets forth six principles upon which the 
     Board shall base its policies for the preservation of 
     universal service.
       Section 247(b)(1) states that any plan adopted should 
     maintain just and reasonable rates. Section 247(b)(2) states 
     that the Joint Board should recommend a definition of the 
     nature and extent of services included within the carriers' 
     obligations to provide universal service. Section 247(b) (3) 
     and (4) state that the plan should provide adequate and 
     sustainable support mechanisms and require equitable and non-
     discriminatory contributions from all providers to support 
     the plan. The plan should also seek to promote access to 
     advanced telecommunications services and reasonably 
     comparable services between rural and urban areas. Section 
     247(b)(5) directs that the plan include recommendations to 
     ensure access to advanced telecommunications services for 
     students in elementary and secondary schools.
       Section 247(c) requires the Joint Board, in defining 
     carrier obligations with respect to universal service 
     pursuant to subsection (b)(2), to consider several factors: 
     (1) the extent to which a telecommunications service has been 
     subscribed to by customers; (2) whether such service is 
     essential to public health, safety, or the public interest; 
     (3) whether such service is deployed in the public switched 
     network; and (4) whether inclusion of such service is 
     otherwise consistent with the public interest, convenience, 
     and necessity.
       Section 247(d) requires that the Joint Board be convened 
     and report its recommendations within 270 days after 
     enactment. The Commission is required to act on the 
     recommendations within one year.
       Section 247(e) makes clear that States are free to adopt 
     regulations imposing universal service obligations on 
     intrastate services.
       Section 247(f) sunsets the Joint Board created by this 
     section five years after enactment.
     Conference agreement
       The conference agreement amends the Communications Act to 
     add a new section 254 entitled ``Universal Service.'' The 
     House recedes to the Senate with modifications. New section 
     254(a) incorporates the provisions of section 103(a) of the 
     Senate bill, with the addition of a State-appointed utility 
     consumer advocate to the Joint Board. The conferees intend 
     that, in making its recommendations to the Commission, the 
     Joint Board will thoroughly review the existing system of 
     Federal universal service support.
       To the extent possible, the conferees intend that any 
     support mechanisms continued or created under new section 254 
     should be explicit, rather than implicit as many support 
     mechanisms are today. In addition, the conferees do not view 
     the existing proceeding under Common Carrier Docket 80-286 
     (regarding Amendment of Part 36 of the Commission's Rules and 
     appointment of a Joint Board) as an appropriate foundation on 
     which to base the proceeding required by new section 254(a).
       New section 254(b) combines the principles found in both 
     the Senate bill and the House amendment, with the addition of 
     ``insular areas'' (such as the Pacific Island territories) 
     and ``low-income consumers'' to the list of consumers to whom 
     access to telecommunications and information services should 
     be provided.
       New section 254(c) defines universal service as ``an 
     evolving level of telecommunications services'' established 
     periodically by the Commission. The definition is to take 
     into account advances in telecommunications and information 
     technology, and should be based on a consideration of the 
     four criteria set forth in the subsection. The Commission is 
     given specific authority to alter the definition from time to 
     time, and to provide a different definition for schools, 
     libraries, and health care facilities.
       New section 254(d) requires that all telecommunications 
     carriers providing interstate telecommunications services 
     shall contribute to the preservation and advancement of 
     universal service. The Commission is given specific authority 
     to exempt a telecommunications carrier or class of 
     telecommunications carriers from this requirement if their 
     contribution would be ``de minimis.'' The conferees intend 
     that this authority would only be used in cases where the 
     administrative cost of collecting contributions from a 
     carrier or carriers would exceed the contribution that 
     carrier would otherwise have to make under the formula for 
     contributions selected by the Commission. This section 
     preserves the Commission's authority to require all providers 
     of intestate telecommunications to contribute, if the public 
     interest requires it, to preserve and advance universal 
     service.
       New section 254(e) provides that only eligible 
     telecommunications carriers designated under new section 
     214(e) shall be eligible to receive specific Federal 
     universal service support. Any eligible telecommunications 
     carrier that receives such support shall only use that 
     support to provide, maintain, and upgrade facilities and 
     services for universal service in the area for which the 
     support is received. In keeping with the conferees' intent 
     that all universal service support should be clearly 
     identified, this subsection states that such support should 
     be made explicit and should be sufficient to achieve the 
     purposes of new section 254. The conferees intend that only 
     eligible telecommunications carriers should receive support 
     from specific Federal universal service support mechanisms; 
     however, this restriction should not be construed to prohibit 
     any telecommunications carrier from using any particular 
     method to establish rates or charges for its services to 
     other telecommunications carriers, to the extent such rates 
     or charges are otherwise permissible under the Communications 
     Act or other law.
       State authority with respect to universal service is 
     specifically preserved under new section 254(f). A State may 
     adopt any measure with respect to universal service that is 
     not inconsistent with the Commission's rules. This subsection 
     also requires all providers of intrastate telecommunications 
     to contribute to universal service within a State in an 
     equitable and non-discriminatory manner, as determined by the 
     State. A State may adopt additional requirements with respect 
     to universal service in that State, so long as those 
     additional requirements do not rely upon or burden Federal 
     universal service support mechanisms.
       New section 254(g) is intended to incorporate the policies 
     of geographic rate averaging and rate integration of 
     interexchange services in order to ensure that subscribers in 
     rural and high cost areas throughout the Nation are able to 
     continue to receive both intrastate and interstate 
     interexchange services at rates no higher than those paid by 
     urban subscribers. The conferees intend the Commission's 
     rules to require geographic rate averaging and rate 
     integration, and to incorporate the policies contained in the 
     Commission's proceeding entitled ``Integration of Rates and 
     Services for the Provision of Communications by Authorized 
     Common Carriers between the United States Mainland and the 
     Offshore Points of Hawaii, Alaska and Puerto Rico/Virgin 
     Islands (61 FCC2d 380 (1976)). The conferees are aware that 
     the Commission has permitted interexchange providers to offer 
     non-averaged rates for specific services in limited 
     circumstances (such as services offered under Tariff 12 
     contracts), and intend that the Commission, where 
     appropriate, could continue to authorize limited exceptions 
     to the general geographic rate averaging policy using the 
     authority provided by new section 10 of the Communications 
     Act. Further, the conferees expect that the Commission will 
     continue to require that geographically averaged and rate 
     integrated services, and any services for which an exception 
     is granted, be generally available in the area served by a 
     particular provider. In addition, the conferees do not intend 
     that this subsection would require the renegotiation of 
     existing contracts for the provision of telecommunications 
     services.
       New subsection 254(h) incorporates, with modifications, the 
     provisions of section 310 of the Senate bill. New subsection 
     (h) of section 254 is intended to ensure that health care 
     providers for rural areas, elementary and secondary school 
     classrooms, and libraries have affordable access to modern 
     telecommunications services that will enable them to provide 
     medical and educational services to all parts of the Nation.
       The ability of K-12 classrooms, libraries and rural health 
     care providers to obtain access to advanced 
     telecommunications services is critical to ensuring that 
     these services are available on a universal basis. The 
     provisions of subsection (h) will help open 

[[Page H1113]]
     new worlds of knowledge, learning and education to all Americans--rich 
     and poor, rural and urban. They are intended, for example, to 
     provide the ability to browse library collections, review the 
     collections of museums, or find new information on the 
     treatment of an illness, to Americans everywhere via schools 
     and libraries. This universal access will assure that no one 
     is barred from benefiting from the power of the Information 
     Age.
       New subsection (h)(1)(A) provides that any 
     telecommunications carrier shall, upon a bona fide request, 
     provide telecommunications services necessary for the 
     provision of health care services to any health care provider 
     serving persons who reside in rural areas. The rates charged 
     for the service shall be rates that are reasonably comparable 
     to rates charged for similar services in urban areas. It is 
     intended that the rural health care provider receive an 
     affordable rate for the services necessary for the purposes 
     of telemedicine and instruction relating to such services.
       New subsection (h)(1)(B) requires that any 
     telecommunications carrier shall, upon a bona fide request, 
     provide services for educational purposes included in the 
     definition of universal service under new subsection (c)(3) 
     for elementary and secondary schools and libraries at rates 
     that are less than the amounts charged for similar services 
     to other parties, and are necessary to ensure affordable 
     access to and use of such telecommunications services.
       A telecommunications carrier providing service under new 
     subsection (h)(1)(B) is permitted either to have the amount 
     of the discount treated as an offset to its obligation to 
     contribute to the mechanisms to preserve and advance 
     universal service; or, to receive reimbursement utilizing the 
     support mechanisms to preserve and advance universal service.
       Pursuant to new subsection (c)(3), the Commission is 
     authorized to designate a separate definition of universal 
     service applicable only to public institutional 
     telecommunications users. In so doing, the conferees expect 
     the Commission and the Joint Board to take into account the 
     particular needs of hospitals, K-12 schools and libraries.
       New subsection (h)(2) requires the Commission to establish 
     rules to enhance the availability of advanced 
     telecommunications and information services to public 
     institutional telecommunications users. For example, the 
     Commission could determine that telecommunications and 
     information services that constitute universal service for 
     classrooms and libraries shall include dedicated data links 
     and the ability to obtain access to educational materials, 
     research information, statistics, information on Government 
     services, reports developed by Federal, State, and local 
     governments, and information services which can be carried 
     over the Internet. The Commission also is required to 
     determine under what circumstances a telecommunications 
     carrier may be required to connect public institutional 
     telecommunications users to its network.
       New subsection (h)(3) clarifies that telecommunications 
     services and network capacity provided to health care 
     providers, schools and libraries may not be resold or 
     transferred for monetary gain.
       New subsection (h)(4) specifies that the following entities 
     are not eligible to receive discounted rates under this 
     section: for-profit businesses, elementary and secondary 
     schools with endowments of more than $50,000,000, and 
     libraries that are not eligible to participate in Statebased 
     applications for Library Services and Technology Funds.
       New subsection (h)(5) defines the terms ``elementary and 
     secondary schools,'' ``health care provider.'' and ``public 
     institutional telecommunications user'' as used throughout 
     this subsection. The conferees intend that consortiums of 
     educational institutions providing distance learning to 
     elementary and secondary schools be considered an educational 
     provider for purposes of this section.
       New subsection (i) states that the Commission and the 
     States should ensure that universal service is available at 
     rates that are just, reasonable and affordable.
       New subsection 254(j) has been added to clarify that this 
     section is not intended to alter the existing provision of 
     Lifeline Service to needy consumers.
       The House recedes to the Senate with minor technical 
     modifications on new subsection 254(k), which prohibits 
     cross-subsidization and permits the Commission and the States 
     to establish cost allocation rules for facilities used in the 
     provision of services supported through Federal universal 
     support mechanisms.


          New Section 255--Access By Persons With Disabilities

     Senate bill
       Section 308(a) of the Senate bill adds a new section 262 to 
     the Communications Act to require that manufacturers of 
     telecommunications equipment and customer premises equipment 
     ensure that equipment is designed, developed, and fabricated 
     to be accessible and usable by individuals with disabilities, 
     if readily achievable.
       Similarly, providers of telecommunications services must 
     ensure that telecommunications services are accessible to and 
     usable by individuals with disabilities, if readily 
     achievable. In addition, the Commission is required to 
     undertake a study of closed captioning and to promulgate 
     rules to implement section 262. Section 308(b) adds a 
     Commission study of video description.
       Section 262(a) defines the terms used in this section.
       New section 262(b) requires manufacturers of 
     telecommunications and customer premises equipment to ensure 
     that such equipment is designed, developed, and fabricated to 
     be accessible to and usable by individuals with disabilities, 
     if readily achievable.
       New section 262(c) requires providers of telecommunications 
     service to ensure that such service be accessible to and 
     usable by individuals with disabilities, if readily 
     achievable.
       New section 262(d) requires that whenever the provisions of 
     subsections (b) and (c) are not readily achievable, the 
     manufacturer of telecommunications and customer premises 
     equipment, or the provider of telecommunications service, 
     shall ensure that such 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.
       New section 262(e) requires the Architectural and 
     Transportation Barriers Compliance Board (``Board'') to 
     develop guidelines for accessibility of telecommunications 
     and customer premises equipment and telecommunication 
     service, as lead agency in consultation with the National 
     Telecommunications and Information Administration (NTIA) and 
     the National Institute of Standards and Technology (NIST), 
     within 1 year of enactment of this Act. The Board shall 
     periodically review and update such guidelines. The Senate 
     has elsewhere assigned responsibility for promulgating 
     regulations for this new section to the Commission.
     House amendment
       Section 249(c) of section 101 directs the Commission within 
     one year to establish regulations designed to make network 
     capabilities and services accessible to individuals with 
     disabilities. Section 249(d) prohibits private rights of 
     action, and mandates that all remedies are available only 
     through the Communications Act.
     Conference agreement
       The conferees adopt the Senate provisions with several 
     modifications as a new section 255 of the Communications Act. 
     Specifically, the conferees adopted the provisions of 
     subsections (a), (b), (c), (d) and (e) of new section 262 of 
     the Communications Act, as added by the Senate bill. The 
     conferees deleted the provision in subsection (e) of the 
     Senate bill creating roles for NTIA and NIST. In addition, 
     the conferees adopted the provisions of section 249(d) of the 
     House amendment, which states that nothing in this section 
     authorizes any private rights of action. The remedies 
     available under the Communications Act, including the 
     provisions of sections 207 and 208, are available to enforce 
     compliance with the provisions of section 255.


          New Section 256--Coordination for Interconnectivity

     Senate bill
       Section 107 of the Senate bill concerns the coordination 
     for telecommunications network-level interoperability. The 
     provision permits the Commission to participate, in a manner 
     consistent with its authority and practice prior to the date 
     of enactment of this Act in the development of voluntary 
     industry standards-setting organizations to promote 
     interoperability. The purpose of the provision is to promote 
     nondiscriminatory access to telecommunications networks by 
     the broadest number of users and vendors of communications 
     products and services.
     House amendment
       Section 249(a) reaffirms the duty of all common carriers to 
     ensure network functionality. Section 249(b) directs the 
     Commission to establish procedures for Commission oversight 
     of coordinated network planning by common carriers and other 
     providers of telecommunications services. However, the 
     Commission is not given authority to set standards for 
     interconnection. Instead, voluntary industry standard-setting 
     organizations shall establish any standards. The standard-
     setting process described in this provision applies to 
     interconnection of the public's switched telecommunications 
     networks. It is not intended to apply to telephone equipment 
     or other customer premises equipment (CPE). Nothing in 
     section 249(b) should be construed as limiting or superseding 
     these interconnectivity requirements or the existing 
     authority and responsibilities of the Commission in enforcing 
     them.
     Conference agreement
       The conference agreement adopts the Senate provision with 
     minor modifications as a new section 256 of the 
     Communications Act.


           New Section 257--Market Entry Barriers Proceeding

     Senate bill
       No provision.
     House amendment
       Section 250 requires the Commission to adopt rules that 
     identify and eliminate market entry barriers for 
     entrepreneurs and small businesses in the provision and 
     ownership of telecommunications and information services. The 
     Commission must review these rules and report to Congress 
     every three years on how it might prescribe or eliminate 
     rules to promote the purposes of this section.
     Conference agreement
       The conference agreement adopts the House provisions with 
     minor modifications 

[[Page H1114]]
     as a new section 257 of the Communications Act.


   New Section 258--Illegal Changes in Subscriber Carrier Selections

     Senate bill
       No provision.
     House amendment
       Section 251 requires the Commission to adopt rules to 
     prevent illegal changes in subscriber selections, a practice 
     known as ``slamming.'' The Commission has adopted rules to 
     address problems in the long distance industry of 
     unauthorized changes of a consumer's long distance carrier. 
     The House provision is designed to extend the protections of 
     the current rule to local exchange carriers as well.
     Conference agreement
       The conferees adopt the House provision as a new section 
     258 of the Communications Act. It is the understanding of the 
     conferees that in addition to requiring that the carrier 
     violating the Commission's procedures must reimburse the 
     original carrier for forgone revenues, the Commission's rules 
     should also provide that consumers are made whole. 
     Specifically, the Commission's rules should require that 
     carriers guilty of ``slamming'' should be held liable for 
     premiums, including travel bonuses, that would otherwise have 
     been earned by telephone subscribers but were not earned due 
     to the violation of the Commission's rules under this 
     section.


                New Section 259--Infrastructure Sharing

     Senate bill
       Section 106(a) of the Senate bill requires that within one 
     year of the date of enactment, the Commission shall prescribe 
     rules requiring local exchange carriers that were subject to 
     Part 69 of the Commission's rules on the date of enactment to 
     share network facilities, technology, and information with 
     qualifying carriers. The qualifying carrier may request such 
     sharing for the purpose of providing telecommunications 
     services or access to information services in areas where the 
     carrier is designated as an essential telecommunications 
     carrier under new section 214(d). The bill does not grant 
     immunity from the antitrust laws for activities undertaken 
     pursuant to this section.
       Section 106(b) establishes the terms and conditions of the 
     Commission's regulations. Such regulations shall:
       (1) not require a local exchange carrier to take any action 
     that is economically unreasonable or contrary to public 
     interest;
       (2) permit, but not require, joint ownership of facilities 
     among local exchange carriers and qualifying carriers;
       (3) ensure that the local exchange carrier not be treated 
     as a common carrier for hire with respect to technology, 
     information or facilities shared with the qualifying carrier 
     under this section;
       (4) ensure that qualifying carriers benefit fully from 
     sharing;
       (5) establish conditions to promote cooperation;
       (6) not require a local exchange carrier to share in areas 
     where the local exchange carrier provides telephone exchange 
     service or exchange access service; and
       (7) require the local exchange carrier to file with the 
     Commission or State, any tariffs, contract or other 
     arrangement showing the rate, terms, and conditions under 
     which such local exchange carrier is complying with the 
     sharing requirements of this section.
       Subsection (c) requires that local exchange carriers 
     sharing infrastructure must provide information to sharing 
     parties about deployment of services and equipment, including 
     software.
       Subsection (d) defines those carriers eligible to request 
     infrastructure sharing under this section.
     House amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provisions as a 
     new section 259 of the Communications Act.


          New Section 260--Provision of Telemessaging Service

     Senate bill
       Section 311 of the Senate bill adds a new section 265 to 
     the Communications Act, to address certain practices of the 
     BOCs with regard to telemessaging. This section is designed 
     to prohibit cross-subsidization between a BOC's telephone 
     exchange or exchange access services and its telemessaging 
     services.
       This section prohibits a BOC from discriminating between 
     affiliated and nonaffiliated telemessaging services, under 
     rules set forth by the Commission. If, however, the 
     Commission finds that these safeguards are insufficient, the 
     Commission may require the BOC's to provide telemessaging 
     services through a separate subsidiary.
       New section 265 directs the Commission to complete, within 
     18 months after the date of enactment of the bill, a 
     rulemaking proceeding to prescribe regulations to carry out 
     this new section. The Commission also is directed to 
     determine whether, in order to enforce the requirements of 
     section 265, it is appropriate to require the BOCs to provide 
     telemessaging services through a separate subsidiary that 
     meets the requirements of new section 252, as added to the 
     Communications Act by section 102 of the bill.
     House amendment
       Section 273(b) prohibits discrimination by a telephone 
     company in the provision of telemessaging services, either by 
     refusing to provide its competitors with the same network 
     services it provides itself, or by cross-subsidizing from its 
     local telephone service.
       Section 273(c) establishes procedures for expedited 
     consideration of complaints of violations of subsection (b), 
     requiring the Commission to make a final determination within 
     120 days after the receipt of a complaint. If a violation is 
     found, the Commission is required to issue a cease and desist 
     order within 60 days.
       Section 601 establishes a new complaint procedure for 
     violations of the Communications Act and Commission rules and 
     regulations for providers of telemessaging service, or other 
     small businesses providing information or telecommunications 
     services. This section defines a small business as any 
     business entity, including any affiliate or subsidiary, with 
     fewer than 300 employees.
     Conference agreement
       The conference agreement creates a new section 260 in the 
     Communications Act relating specifically to the provision of 
     telemessaging services. This section prohibits local exchange 
     carriers subject to new section 251(c) that are engaged in 
     telemessaging from subsidizing their telemessaging services, 
     either directly or indirectly, from telephone exchange 
     service operations or revenues. It also prohibits such 
     carriers from discriminating against nonaffiliated entities 
     with respect to the terms and conditions of any network 
     services they provide to their own telemessaging operations. 
     This section requires the Commission to establish procedures 
     or regulations thereunder for the expedited receipt and 
     review of complaints alleging discrimination or cross-
     subsidization that result in material financial harm to 
     providers of telemessaging services. Such procedures shall 
     ensure that the Commission makes a determination regarding 
     any such complaint within 120 days. If the complaint contains 
     an appropriate showing that the alleged violation occurred, 
     the Commission shall, within 60 days of receipt, order such 
     local exchange carrier to cease engaging in such violation.


             New Section 261--Effect on Other Requirements

     Senate bill
       The Senate bill contains several savings clauses.
     House amendment
       The House amendment contains several savings clauses.
     Conference agreement
       The conferees included new section 261 of the 
     Communications Act to consolidate savings clauses found in 
     both the Senate bill and the House amendment. New section 
     261(a) makes clear that the Commission may continue to 
     enforce its existing regulations in fulfilling new part II of 
     title II of the Communications Act, provided they are not 
     inconsistent with that part. New sections 261(b) and (c) 
     preserve State authority to enforce existing regulations and 
     to prescribe additional requirements, so long as those 
     regulations and requirements are not inconsistent with the 
     Communications Act.


           Section 102--Eligible Telecommunications Carriers

     Senate bill
       Section 104 of the Senate bill amends section 214(d) of the 
     Communications Act by designating the existing text of 
     section 214(d) as paragraph (1) and by adding seven new 
     paragraphs regarding designation of essential 
     telecommunications carriers. The bill provides that the 
     Commission shall designate essential telecommunications 
     carriers for interstate services and the States shall 
     designate such carriers for intrastate services.
       New paragraph (2) of section 214(d) makes explicit the 
     implicit authority of the Commission or a State to require a 
     common carrier to provide service to any community or portion 
     of a community that requests such service. In the event that 
     more than one common carrier provides service in an area, and 
     none of the carrier will provide service to a community or 
     portion thereof in that area which requests service, this 
     paragraph gives the Commission or a State the authority to 
     decide which common carrier is best suited to provide such 
     service. If the Commission or a State orders a carrier to 
     provide service to a community or portion thereof under this 
     paragraph, it shall designate such carrier an essential 
     telecommunications carrier.
       Paragraph (3) of section 214(d) provides that the 
     Commission or a State may designate a common carrier as an 
     essential telecommunications carrier for a particular service 
     area, thus making that carrier eligible for support payments 
     to preserve and advance universal service, if any such 
     payments are established under new section 253 of the 
     Communications Act. Any carrier designated as an essential 
     telecommunications carrier must provide universal service and 
     any additional services specified by the Commission or a 
     State throughout the service area for which the designation 
     is made. In addition, these services must be offered 
     throughout that service area at nondiscriminatory rates 
     established by the Commission or a State, and the carrier 
     must advertise those rates using media of general 
     distribution.
       New paragraph (4) of section 214(d) allows the Commission 
     to designate more than one 

[[Page H1115]]
     common carrier as a communications carrier for a particular service 
     area. In addition, the bill requires a State to make 
     additional findings before designating more than one carrier 
     as an essential telecommunications carrier.
       To the extent that more than one common carrier is 
     designated as an essential telecommunications carrier, each 
     additional carrier so designated must meet the same 
     requirements with respect to service throughout the same 
     service area at nondiscriminatory rates established by the 
     Commission or a State, as well as the advertisement of those 
     rates.
       New paragraph (5) of section 214(d) requires the Commission 
     and States to establish rules governing the use of resale by 
     a carrier to meet the requirements for designation as an 
     essential telecommunications carrier, as well as rules to 
     permit a carrier that has been designated as an essential 
     telecommunications carrier to relinquish that designation so 
     long as at least one other carrier also has been designated 
     as an essential telecommunications carrier for that area. 
     Paragraph (5) also requires the Commission and the States to 
     provide appropriate rules to govern how quickly an essential 
     telecommunications carrier whose services are to be resold 
     may cease service to an area, in order to provide other 
     essential telecommunications carriers adequate notice to 
     extend facilities or to arrange for the purchase of 
     replacement facilities or services.
       New paragraph (6) of section 214(d) sets forth the 
     penalties applicable to an essential telecommunications 
     carrier with respect to a Commission or State order to 
     provide universal service within a reasonable period of time. 
     In determining what constitutes a reasonable period of time, 
     the bill provides that the Commission or a State must 
     consider the nature of the construction required to provide 
     such service, the time interval that normally would attend 
     such construction and the time needed to obtain regulatory or 
     financial approval.
       New paragraph (7) of section 214(d) of the Communications 
     Act requires the Commission or a State to designate an 
     essential telecommunications carrier for interexchange 
     services for any unserved community or portion thereof that 
     requests such service. An essential telecommunications 
     carrier designated under this paragraph must provide service 
     at nationwide geographically averaged rates, in the case of 
     interstate services, and geographically averaged rates in the 
     case of intrastate services. The Commission or a State may 
     allow a carrier designated under this paragraph to receive 
     support payments, if any, that may be provided under section 
     253.
       New paragraph (8) of section 214(d) grants the Commission 
     authority to promulgate guidelines for the States to 
     implement this section.
     House amendment
       No provision.
     Conference agreement
       The House recedes to the Senate with an amendment. The 
     conference agreement amends section 214 of the Communications 
     Act by adding a new subsection (e) regarding the provision of 
     universal service and the designation of carriers which are 
     eligible to receive support through the specific Federal 
     universal support mechanisms established under new section 
     254 of the Communications Act.
       New section 214(e)(1) states that a common carrier 
     designated as an ``eligible telecommunications carrier'' 
     shall offer the services included in the definition of 
     universal service throughout the area specified by the State 
     commission, and that such services must be advertised 
     generally throughout that area. Upon designation, a carrier 
     is eligible for any specific support provided under new 
     section 254 for the provision of universal service in the 
     area for which that carrier is designated.
       Upon its own motion or upon request, a State commission is 
     required under new section 214(e)(2) to designate a common 
     carrier that meets the requirements of new section 214(e)(1) 
     as an eligible telecommunications carrier. If more than one 
     common carrier that meets the requirements of new section 
     214(e)(1) requests designation as an eligible 
     telecommunications carrier in a particular area, the State 
     commission shall, in the case of areas not served by a rural 
     telephone company, designate all such carriers as eligible. 
     If the area for which a second carrier requests designation 
     as an eligible telecommunications carrier is served by a 
     rural telephone company, then the State commission may only 
     designate an additional carrier as an eligible 
     telecommunications carrier if the State commission first 
     determines that such additional designation is in the public 
     interest.
       If no common carrier will provide universal service to a 
     community or portion of a community that requests such 
     service, new section 214(e)(3) makes explicit the implicit 
     authority of the Commission, with respect to interstate 
     services, and a State, with respect to intrastate services, 
     to order a common carrier to provide such service. If more 
     than one common carrier provides service in an area and none 
     of those carriers will provide service to a community or 
     portion thereof, this provision gives the Commission or a 
     State the authority to decide which common carrier is best 
     suited to provide service. Any carrier required to provide 
     service under this paragraph shall be designated as an 
     eligible telecommunications carrier under new section 
     214(e)(1) for the community or portion thereof such carrier 
     is required to serve. For purposes of new section 214(e)(1), 
     the conferees intend that the service area for a carrier 
     designated by the Commission or a State under section 
     214(e)(3) shall be the community or portion thereof that 
     requests service and for which that carrier is ordered to 
     provide service.
       New section 214(e)(4) establishes rules for the 
     relinquishment by a carrier of its designation as an eligible 
     telecommunications carrier. A state commission must permit an 
     eligible telecommunications carrier to relinquish that 
     designation if more than one eligible telecommunications 
     carrier serves an area, and must require that the remaining 
     eligible telecommunications carrier or carriers continue to 
     offer universal service to all consumers in that area. The 
     conferees note that a carrier must be permitted to relinquish 
     the designation within one year after the State commission 
     approves the request, and expect that the Commission and the 
     States will adopt appropriate mechanisms to ensure that any 
     additional carrier designated as an eligible 
     telecommunications carrier will be able to acquire or 
     construct any necessary facilities for that area within the 
     time limit set in new section 214(e)(4).
       New Section 214(e)(5) provides the definition of ``service 
     area,'' which in general is determined by a State commission.


            Section 103--Exempt Telecommunications Companies

     Senate bill
       Sections 102 and 205 contained provisions pertaining to the 
     entry by utility companies into telecommunications and 
     related businesses, and exempting the telecommunications 
     activities of registered holding companies from the Public 
     Utility Holding Company Act (PUHCA).
     House amendment
       No provision.
     Conference agreement
       The conference agreement amends PUHCA to allow registered 
     holding companies to divesify into telecommunications, 
     information and related services and products. The Commission 
     must determine that a registered holding company is providing 
     telecommunications services, information services and other 
     related services through a single purpose subsidiary, 
     designated an ``exempt telecommunications company'' (ETC). 
     Prior State approval is required before any utility that is 
     associated with a registered holding company may sell to an 
     ETC any asset in the retail rates of that utility as of 
     December 19, 1995. State approval is also required for a 
     contract when a public utility company seeks to purchase 
     telecommunications products or services from an ETC that is 
     an associate company or affiliate of such public utility 
     unless the State or State commission waives such requirement.
       The financing and other relationships between ETCs and 
     registered holding companies shall not be subject to prior 
     approval or other restriction by the Securities and Exchange 
     Commission (SEC). However, the SEC shall continue to have 
     jurisdiction to find violations of the federal securities 
     laws (including PUHCA) and to bring enforcement actions 
     related to such violations. The section provides reporting 
     requirements concerning investments and activities of 
     registered public utility holding company systems. Public 
     utility companies are prohibited from assuming the 
     liabilities of an ETC and from pledging or mortgaging the 
     assets of a utility for the benefit of an ETC. State 
     commissions may examine the books and records of the ETC and 
     any public utility company, associate company or affiliate in 
     the registered holding company system as they relate to the 
     activities of the ETC. States may also order an audit of a 
     public utility company that is an associate of an ETC. 
     Nothing in this section affects the ability of the FCC or a 
     State commission to regulate the activities of an ETC. 
     Nothing in PUHCA shall preclude the rate review authority of 
     the Federal Energy Regulatory Commission or a State 
     commission with respect to purchases from or sale to an ETC.
       The relevant portion of section 102 of the Senate bill is 
     deleted from the conference agreement.


                Section 104--Nondiscrimination Principle

     Senate bill
       Subsection 103(f) adds new section 253A to the 
     Communications Act concerning exclusion of telecommunications 
     services. New subsection (a) directs the Commission to 
     prohibit any telecommunications carrier from excluding from 
     its services any high-cost area, any rural location or any 
     resident based on the person's income, provided that a 
     carrier may exclude an area if the carrier demonstrates that 
     there will be insufficient demand for the carrier to earn a 
     return over the long term and that providing a service to 
     such area will be less profitable for the carrier than 
     providing the service in areas to which the carrier is 
     already providing or has proposed to provide service. New 
     subsection (b) would direct the Commission to provide for 
     public comment on the adequacy of the carrier's proposed 
     service area.
     House amendment
       Section 201 of the House amendment adds new section 
     653(b)(1) to the Communications Act concerning safeguards on 
     video platforms. Subparagraph (G) of that section prohibits a 
     common carrier from excluding areas from its video platform 
     service area on the basis of the ethnicity, race, or income 
     of 

[[Page H1116]]
     the residents of that area, and provides for public comments on the 
     adequacy of the proposed service area on the basis of the 
     standards.
     Conference agreement
       The conference agreement in section 104 amends section 1 of 
     the Communications Act by adding a new provision to make 
     clear that a purpose of the Communications Act is to make 
     available service to all the people of the United States 
     ``without discrimination on the basis of race, color, 
     religion, national origin, or sex.'' This amendment to 
     section 1 applies to all entities covered by the 
     Communications Act.

   Subtitle B--Special Provisions Concerning Bell Operating Companies


             Section 151--Bell Operating Company Provisions

     Senate bill
       The Senate bill creates new sections of the Communications 
     Act with respect to special provisions applicable to BOCs.
     House amendment
       The House amendment creates new sections of the 
     Communications Act with respect to special provisions 
     applicable to BOCs.
     Conference agreement
       Section 151 of the conference agreement establishes a new 
     ``Part III'' of title II of the Communications Act. Part III 
     contains new sections 271-276 of the Communications Act with 
     respect to special provisions applicable to BOCs.


 New Section 271--Bell Operating Company Entry Into InterLATA Services

     Senate bill
       Section 221(a) of the Senate bill adds a new section 255 to 
     the Communications Act. Subsection (a) of new section 255 
     establishes the general requirements for the three different 
     categories of service: in region interLATA; out of region 
     interLATA; and incidental services.
       New section 255(b) establishes specific interLATA 
     interconnection requirements that must be fully implemented 
     in order for the Commission to provide authorization for a 
     BOC to provide in region interLATA services. The Commission 
     is specifically prohibited from limiting or extending the 
     terms of the ``competitive checklist'' contained in 
     subsection (b)(2). The competitive checklist is not intended 
     to be a limitation on the interconnection requirements 
     contained in section 251, but rather, at a minimum, be 
     provided by a BOC in any interconnection agreement approved 
     under section 251 to which that company is a party (assuming 
     the other party or parties to that agreement have requested 
     the items included in the checklist) before the Commission 
     may authorize the BOC to provide in region interLATA 
     services.
       Finally, section 255(b) includes a restriction on the 
     ability of telecommunications carriers that serve greater 
     than five percent of the nation's presubscribed access lines 
     to jointly market local exchange service purchased from a BOC 
     and interLATA service offered by the telecommunications 
     carrier until such time as the BOC is authorized to provide 
     interLATA services in that telephone exchange area or until 
     three years after the date of enactment, whichever is 
     earlier. New subsection 255(c) provides the process for 
     application by a BOC to provide in region interLATA services, 
     as well as the process for approval or rejection of that 
     application by the Commission and for review by the courts. 
     The application by the BOC must state with particularity the 
     nature and scope of the activity and each product market or 
     service market, as well as the geographic market for which in 
     region interLATA authorization is sought. Within 90 days of 
     receiving an application, the Commission must issue a written 
     determination, after notice and opportunity for a hearing on 
     the record, granting or denying the application in whole or 
     in part. The Commission is required to consult with the 
     Attorney General regarding the application during that 90 day 
     period. The Attorney General may analyze a BOC application 
     under any legal standard (including the Clayton Act, Sherman 
     Act, other antitrust laws, section VIII(C) of the MFJ, 
     Robinson-Patman Act or any other standard).
       The Commission may only grant an application, or any part 
     of an application, if the Commission finds that the 
     petitioning BOC has fully implemented the competitive 
     checklist in new section 255(b)(2), that the interLATA 
     services will be provided through a separate subsidiary that 
     meets the requirements of new section 252, and that the 
     provision of the requested interLATA services is consistent 
     with the public interest, convenience, and necessity. As 
     noted earlier, the Commission is specifically prohibited from 
     limiting or extending the terms used in the competitive 
     checklist, and the Senate intends that the determination of 
     whether the checklist has been fully implemented should be a 
     straightforward analysis based on ascertainable facts. 
     Likewise, the Senate believes that the Commission should be 
     able to readily determine if the requested services will or 
     will not be provided through a separate subsidiary that meets 
     all of the requirements of section 252. Finally, the Senate 
     notes that the Commission's determination of whether the 
     provision of the requested interLATA services is consistent 
     with the public interest, convenience, and necessity must be 
     based on substantial evidence on the record as a whole.
       Subsection (c) also requires a BOC which is authorized to 
     provide interLATA services under this subsection to provide 
     intraLATA toll dialing parity throughout the market in which 
     that company is authorized to provide interLATA service. In 
     the event that the Commission finds that the BOC has not 
     provided the required intraLATA toll dialing parity, or fails 
     to continue to provide that parity (except for inadvertent 
     interruptions that are beyond the control of the BOC), then 
     the Commission shall suspend the authorization to provide 
     interLATA services in that market until that company provides 
     or restores the required intraLATA toll dialing parity. 
     Lastly, subsection (c) provides that a State may not order a 
     BOC to provide intraLATA toll dialing parity before the 
     company is authorized to provide interLATA services in that 
     area or until three years after the date of enactment, 
     whichever is earlier. However, this restriction does not 
     apply to single LATA States or States that have ordered 
     intraLATA toll dialing in that State prior to June 1, 1995.
       BOC's (including any subsidiary or affiliate) are permitted 
     under new section 255(d) to provide interLATA 
     telecommunications services immediately upon the date of 
     enactment of the bill if those services originate in any area 
     in which that BOC is not the dominant provider of wireline 
     telephone exchange service or exchange access service.
       New subsection 255(e) establishes the rules for the 
     provision by a BOC of in-region interLATA services that are 
     incidental to the provision of specific services listed in 
     paragraph (1) of subsection (e). This list of specific 
     services is intended to be narrowly construed by the 
     Commission. A BOC must first obtain authorization under new 
     section 255(c) before it may provide any in region InterLATA 
     services not listed in subsection (e)(1). In addition, the 
     BOC may only provide the services specified in subparagraphs 
     (C) and (D) of subsection (e)(1), which in general are 
     information storage and retrieval services, through the use 
     of telecommunications facilities that are leased from an 
     unaffiliated provider of those services until the BOC 
     receives authority to provide InterLATA services under 
     subsection (c). Finally, subsection (e) requires that the 
     provision of incidental services by the BOC shall not 
     adversely affect telephone exchange ratepayers or competition 
     in any telecommunications market. The Senate intends that the 
     Commission will ensure that these requirements are met.
       New section 255(f) provides that a BOC may provide 
     interLATA service in connection with CMS upon the date of 
     enactment.
       The terms ``interLATA,'' ``audio programming services,'' 
     ``video programming services,'' and ``other programming 
     services'' are defined in new section 255(g).
     House amendment
       Section 245 provides the method by which a BOC may seek 
     entry to offer interLATA or long distance, service on a 
     State-by-State basis. Section 245(a) provides that a BOC may 
     file a verification of access and interconnection compliance 
     anytime after six months after the date of enactment. The 
     verification must include, under section 245(a)(1), a State 
     certification of ``openness'' or the so-called ``checklist'' 
     requirements, and under section 245(a)(2), either of the 
     following pursuant to section 245(a)(2)(A), the presence of a 
     facilities-based competitor; or pursuant to section 
     245(a)(2)(B), a statement of the terms and conditions the BOC 
     would make available under section 244, if no provider had 
     requested access and interconnection within three (3) months 
     prior to the BOC filing under section 245. For purposes of 
     section 245(a)(2)(B), a BOC shall not be considered to have 
     received a request for access and interconnection if a 
     requesting provider failed to bargain in good faith, as 
     required under section 242(a)(8), or if the provider failed 
     to comply, within a reasonable time period, with the 
     requirements under section 242(a)(1) to implement the 
     schedule contained in its access and interconnection 
     agreement.
       Section 245(b) sets out the ``checklist'' requirements that 
     must be included in the State certification that the BOC 
     files with the Commission as part of its verification. These 
     checklist requirements include the following: (1) 
     interconnection; (2) unbundling of network elements; (3) 
     resale; (4) number portability; (5) dialing parity; (6) 
     access to conduits and rights-of-way; (7) no State or local 
     barriers to entry; (8) network functionality and 
     accessibility; and (9) good faith negotiations by the BOC. 
     Section 245(c)(1) sets out the Commission review process for 
     interLATA authorization on a Statewide, permanent basis. 
     Under section 245(c)(2), the Commission may conduct a de nova 
     review only if a State commission lacks, under relevant State 
     law, the jurisdiction or authority to make the required 
     certification, fails to act within ninety (90) days of 
     receiving a BOC request for certification, or has attempted 
     to impose a term or condition that exceeds its authority, as 
     limited in section 243. Under section 245(c)(3), the 
     Commission has ninety (90) days to approve, disapprove, or 
     approve with conditions the BOC request, unless the BOC 
     consents to a longer period of time. Under Section 245(c)(4), 
     the Commission must determine that the BOC has complied with 
     each and every one of the requirements. As mandated in 
     section 245(d), the Commission has continuing authority after 
     approving a BOC's application for entry into long distance to 
     review a BOC's compliance with the certification requirements 
     under this section.
     
[[Page H1117]]

       Section 245(f) prohibits a BOC from providing interLATA 
     service, unless authorized by the Commission. Section 245(f) 
     grandfathers any activity authorized by court order or 
     pending before the court prior to the date of enactment, 
     Section 245(g) creates exceptions for the provision of 
     incidental services.
       Section 245(g)(1) permits a BOC to engage in interLATA 
     activities related to the provision of cable services. 
     Section 245(g)(2) permits a BOC to offer interLATA services 
     over cable system facilities located outside the BOC's 
     region. Section 245(g)(3) allows a BOC to offer CMS, as 
     defined in section 332(d)(1) of the Communications Act. 
     Section 245(g)(4) allows a BOC to engage in interLATA 
     services relevant to the provision of information services 
     from a central computer. Section 245(g)(5) and (6) allow a 
     BOC to engage in interLATA services related to signaling 
     information integral to the internal operation of the 
     telephone network.
       Notwithstanding the dialing parity requirements of section 
     242(a)(5), as provided in section 245(i), a BOC is not 
     required to provide dialing parity for intraLATA toll service 
     (``short haul'' long distance) before the BOC is authorized 
     to provide long distance service in that State. Section 
     245(j) prohibits the Commission from exercising the general 
     authority to forbear from regulation granted to the 
     Commission under section 230 until five years after the date 
     of enactment. Section 245(k) sunsets this section once the 
     Commission and State commission, in the relevant local 
     exchange market, determine that the BOC has become subject to 
     full and open competition.
     Conference agreement
       The conference agreement adds a new section 271 to the 
     Communications Act relating to BOC entry into the interLATA 
     market. New section 271(b)(1) requires a BOC to obtain 
     Commission authorization prior to offering interLATA services 
     within its region unless those services are previously 
     authorized, as defined in new section 271(f), or 
     ``incidental'' to the provision of another service, as 
     defined in new section 271(g), in which case, the interLATA 
     service may be offered after the date of enactment. New 
     section 271(b)(2) permits a BOC to offer out-of-region 
     services immediately after the date of enactment.
       New section 271(c) sets out the requirements for a BOC's 
     provision of interLATA services originating in an in-region 
     State (as defined in new section 271(i)). In addition to 
     complying with the specific interconnection requirements 
     under new section 271(c)(2), a BOC must satisfy the ``in-
     region'' test by virtue of the presence of a facilities-based 
     competitor or competitors under new section 271(c)(1)(A), or 
     by the failure of a facilities-based competitor to request 
     access or interconnection (under new section 251) as required 
     under new section 271(c)(1)(B). This test that the conference 
     agreement adopts comes virtually verbatim from the House 
     amendment.
       With respect to the facilities-based competitor 
     requirement, the presence of a competitor offering the 
     following services specifically does not suffice to meet the 
     requirement: (1) exchange access; (2) telephone exchange 
     service offered exclusively through the resale of the BOC's 
     telephone exchange service; and (3) cellular service. The 
     competitor must offer telephone exchange service either 
     exclusively over its own facilities or predominantly over its 
     own facilities in combination with the resale of another 
     carrier's service.
       This conference agreement recognizes that it is unlikely 
     that competitors will have a fully redundant network in place 
     when they initially offer local service, because the 
     investment necessary is so significant. Some facilities and 
     capabilities (e.g., central office switching) will likely 
     need to be obtained from the incumbent local exchange carrier 
     as network elements pursuant to new section 251. Nonetheless, 
     the conference agreement includes the ``predominantly over 
     their own telephone exchange service facilities'' requirement 
     to ensure a competitor offering service exclusively through 
     the resale of the BOC's telephone exchange service does not 
     qualify, and that an unaffiliated competing provider is 
     present in the market.
       The House has specifically considered how to describe the 
     facilities-based competitor in new subsection 271(c)(1)(A). 
     While the definition of facilities-based competition has 
     evolved through the legislative process in the House, the 
     Commerce Committee Report (House Report 104-204 part I) that 
     accompanied H.R. 1555 pointed out that meaningful facilities-
     based competition is possible, given that cable services are 
     available to more than 95% of United States homes. Some of 
     the initial forays of cable companies into the field of local 
     telephony therefore hold the promise of providing the sort of 
     local residential competition that has consistently been 
     contemplated. For example, large, well established companies 
     such as Time Warner and Jones Intercable are actively 
     pursuing plans to offer local telephone service in 
     significant markets. Similarly. Cablevision has recently 
     entered into an interconnection agreement with New York 
     Telephone with the goal of offering telephony on Long Island 
     to its 650,000 cable subscribers.
       For purposes of new section 271(c)(1)(A), the BOC must have 
     entered into one or more binding agreements under which it is 
     providing access and interconnection to one or more 
     competitors providing telephone exchange service to 
     residential and business subscribers. The requirement that 
     the BOC ``is providing access and interconnection'' means 
     that the competitor has implemented the agreement and the 
     competitor is operational. This requirement is important 
     because it will assist the appropriate State commission in 
     providing its consultation and in the explicit factual 
     determination by the Commission under new section 
     271(d)(2)(B) that the requesting BOC has fully implemented 
     the interconnection agreement elements set out in the 
     ``checklist'' under new section 271(c)(2).
       New section 271(c)(1)(B) also is adopted from the House 
     amendment, and it is intended to ensure that a BOC is not 
     effectively prevented from seeking entry into the interLATA 
     services market simply because no facilities-based competitor 
     that meets the criteria set out in new section 271(c)(1)(A) 
     has sought to enter the market. The conference agreement 
     stipulates that a BOC may seek entry under new section 
     271(c)(1)(B) at any time following 10 months after the date 
     of enactment, provided no qualifying facilities-based 
     competitor has requested access and interconnection under new 
     section 251 by the date that is 3 months prior to the date 
     that the BOC seeks interLATA authorization. Consequently, it 
     is important that the Commission rules to implement new 
     section 251 be promulgated within 6 months after the date of 
     enactment, so that potential competitors will have the 
     benefit of being informed of the Commission rules in 
     requesting access and interconnection before the statutory 
     window in new section 271(c)(1)(B) shuts.
       New section 271(c)(2) sets out the specific interconnection 
     requirements that comprise the ``checklist'' that a BOC must 
     satisfy as part of its entry test.
       New section 271(d), the conference agreement adopts the 
     basic structure of the Senate bill concerning authorization 
     of BOC entry by the Commission, with a modification to permit 
     the BOC to apply on a State-by-State basis.
       New section 271(d) sets forth administrative provisions 
     regarding applications for BOC entry under this section. In 
     making an evaluation, the Attorney General may use any 
     appropriate standard, including: (1) the standard included in 
     the House amendment, whether there is a dangerous probability 
     that the BOC or its affiliates would successfully use market 
     power to substantially impede competition in the market such 
     company seeks to enter; (2) the standard contained in section 
     VIII(C) of the AT&T Consent Decree, whether there is no 
     substantial possibility that the BOC or its affiliates could 
     use monopoly power to impede competition in the market such 
     company seeks to enter; or (3) any other standard the 
     Attorney General deems appropriate.
       New section 271(e)(1) prohibits joint marketing of local 
     services obtained from the BOC under new section 251(c)(4) 
     and long distance service within a State by 
     telecommunications carriers with more than five percent of 
     the Nation's presubscribed access lines for three years after 
     the date of enactment, or until a BOC is authorized to offer 
     interLATA services within that State, whichever is earlier.
       New section 271(e)(2) requires any BOC authorized to offer 
     interLATA services to provide intraLATA toll dialing parity 
     coincident with its exercise of that interLATA authority. 
     States may not order a BOC to implement toll dialing parity 
     prior to its entry into interLATA service. Any single-LATA 
     State or any State that has issued an order by December 19, 
     1995, requiring a BOC to implement intraLATA toll dialing 
     parity is grandfathered under this Act. The prohibition 
     against ``non-grandfathered'' States expires three years 
     after the date of enactment.
       The conference agreement in new section 271(f) adopts the 
     House provision grandfathering activities under existing 
     waivers. Both the House and Senate bill included separate 
     grandfather provisions for manufacturing in the manufacturing 
     section. The conference agreement combines these separate 
     provisions into one provision covering both interLATA 
     services and manufacturing, and that provision is included in 
     the interLATA section. Because of the new approach to the 
     supersession of the AT&T Consent Decree described below, this 
     section was modified to clarify that requests for waivers 
     pending with the court on the date of enactment are no longer 
     included within this section. Instead, only those waiver 
     requests that have been acted on before the date of enactment 
     will be included. All conduct occurring after the date of 
     enactment will no longer be subject to the AT&T Consent 
     Decree and will be subject to the Communications Act, as 
     amended by the conference agreement.
       New section 271(g) sets out the ``incidental'' interLATA 
     activities that the BOCs are permitted to provide upon the 
     date of enactment.


            new section 272--separate affiliate; safeguards

     Senate bill
       Section 102 of the Senate bill amends the Communications 
     Act to add a new section 252 to impose separate subsidiary 
     and other safeguards on certain activities of the BOCs. 
     Section 102 requires that to the extent a BOC engages in 
     certain businesses, it must do so through an entity that is 
     separate from any entities that provide telephone exchange 
     service. Subsection 252(b) spell out the structural and 
     transactional requirements that 

[[Page H1118]]
     apply to the separate subsidiary, section 252(c) details the 
     nondiscrimination safeguards, section 252(d) requires a 
     biennial audit of compliance with the separate subsidiary 
     requirements, sections 252(e) imposes restrictions on joint 
     marketing, and subsection 252(f) sets forth additional 
     requirements with respect to the provision of interLATA 
     services.
       The activities that must be separated from the entity 
     providing telephone exchange service include 
     telecommunications equipment manufacturing and interLATA 
     telecommunications services, except our-of-region and 
     incidental services (not including information services) and 
     interLATA services that have been authorized by the MFJ 
     court. A BOC also would have to provide alarm monitoring 
     services and certain information services through a separate 
     subsidiary, including cable services and information services 
     which the company was not permitted to offer before July 24, 
     1991. In a related provision, section 203 of the bill 
     provides that a BOC need not use a separate affiliate to 
     provide video programming services over a common carrier 
     video platform if it complies with certain obligations.
       Under section 252(e) of this section the BOC entity that 
     provides telephone exchange service may not jointly market 
     the services required to be provided through a separate 
     subsidiary with telephone exchange service in an area until 
     that company is authorized to provide interLATA service under 
     new section 255. In addition, a separate subsidiary required 
     under this section may not jointly market its services with 
     the telephone exchange service provided by its affiliated BOC 
     entity unless such entity allows other unaffiliated entities 
     that offer the same or similar services to those that are 
     offered by the separate subsidiary to also market its 
     telephone exchange services.
       Additional requirements for the provision of interLATA 
     services are included in new section 252(f). These provisions 
     are intended to reduce litigation by establishing in advance 
     the standard to which a BOC entity that provides telephone 
     exchange service or exchange access service must comply in 
     providing interconnection to an unaffiliated entity.
       Section 252(g) establishes rules to ensure that the BOC 
     protect the confidentiality of proprietary information they 
     receive and to prohibit the sharing of such information in 
     aggregate form with any subsidiary or affiliate unless that 
     information is available to all other persons on the same 
     terms and conditions. In general, a BOC may not share with 
     anyone customer-specific proprietary information without the 
     consent of the person to whom it relates. Exceptions to this 
     general rule permit disclosure in response to a court order 
     or to initiate, render, bill and collect for 
     telecommunications services.
       New subsection 252(h) provides that the Commission may 
     grant exceptions to the requirements of section 252 upon a 
     showing that granting of such exception is necessary for the 
     public interest, convenience, and necessity. The Senate 
     intends this exception authority to be used whenever a 
     requirement of this section is not necessary to protect 
     consumers or to prevent anti-competitive behavior. However, 
     the Senate does not intend that the Commission would grant an 
     exception to the basic separate subsidiary requirements of 
     this section for any service prior to authorizing the 
     provision of linterLATA service under section 255 by the BOC 
     seeking the exception to a requirement of this section.
       Public utility holding companies that engage in the 
     provision of telecommunications services are required to do 
     so through a separate subsidiary under new section 252(i). In 
     addition, a State may require a public utility company that 
     provides telecommunications services to do so through a 
     separate subsidiary. The separate subsidiary for public 
     utility holding companies is required to meet some, but not 
     all, of the structural separation and nondiscriminatory 
     safeguard provisions that are applicable to BOC subsidiaries. 
     Section 252(i) provides that a public utility holding company 
     shall be treated as a BOC for the purpose of those provisions 
     of section 252 that subsection (i) applies to those holding 
     companies.
       Subsection (b) of section 102 requires the Commission to 
     promulgate any regulations necessary to implement new section 
     252 of the Communications Act within nine months of the date 
     of enactment of this bill. The subsection also provides that 
     any separate subsidiary established or designated by a BOC 
     for purposes of complying with new section 252(a) prior to 
     the issuance of the regulations shall be required to comply 
     with the regulations when they are issued.
       Section 102(c) provides that the amendment to the 
     Communications Act made by this section takes effect on the 
     date of enactment of this bill.
     House amendment
       Section 246(a) creates a separate subsidiary requirement 
     for the BOC provision of interLATA telecommunications or 
     information services. Section 246(b) requires transactions 
     between a BOC and its subsidiary to be on an arm's length 
     basis. Sections 246(c) and (d) mandates fully separate 
     operations and property, including books, records, and 
     accounts between the BOC and its subsidiary. Sections 246(e) 
     and (f) prohibit discrimination and cross-subsidies, 
     respectively. Under section 246(k), this provision sunsets 
     eighteen months after the date of enactment.
     Conference agreement
       The conference agreement adopts the Senate provisions with 
     several modifications. New section 272 of the Communications 
     Act does not contain the provision in the Senate bill 
     requiring that alarm monitoring services, and the interLATA 
     services that are incidental thereto, be provided through the 
     separate affiliate required by this section. The conferees 
     also accepted the provision in the House amendment that 
     requires a separate affiliate for interLATA information 
     services, other than electronic publishing and alarm 
     monitoring, which permit a customer 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.
       The conferees deleted the Senate provision providing for 
     Commission exceptions to the requirements of this section. 
     Instead, the conferees adopted a three year ``sunset'' of the 
     separate affiliate requirement for interLATA services and 
     manufacturing activities. The three year period commences on 
     the date on which the BOC is authorized to offer interLATA 
     services. In addition, the conference agreement provides that 
     the separate affiliate requirement for interLATA information 
     services ``sunsets'' four years after the date of enactment 
     of the Telecommunications Act of 1996.
       In any case, the Commission is given authority to extend 
     the separate affiliate requirement by rule or order.
       New section 272(g)(1) permits the separate affiliate 
     required by this section to jointly market any of its 
     services in conjunction with the telephone exchange services 
     and other services of the BOC so long as the BOC permits 
     other entities offering the same or similar services to sell 
     and market the BOC's telephone exchange services.
       New section 272(g)(2) permits a BOC, once it has been 
     authorized to provide interLATA service pursuant to new 
     section 271(d), to jointly market its telephone exchange 
     services in conjunction with the interLATA service being 
     offered by the separate affiliate in that State required by 
     this section.
       New section 272(g)(3) provides that the joint marketing 
     authorized by new sections 272(g)(1) and (g)(2) does not 
     violate the nondiscrimination safeguards in new subsection 
     (e).


       New Section 273--Manufacturing by Bell Operating Companies

     Senate bill
       Section 222 of the Senate bill adds a new section 256 to 
     the Communications Act to remove the restrictions on 
     manufacturing imposed by the MFJ on the BOCs under certain 
     conditions, and allows those companies to engage in 
     manufacturing subject to certain safeguards.
       New section 256(a) permits a BOC, through a separate 
     subsidiary that meets the requirements of new section 252, to 
     engage in the manufacture and provision of telecommunications 
     equipment and the manufacture of customer premises equipment 
     (CPE) as soon as that company receives authorization to 
     provide in region interLATA services under new section 
     255(c).
       Subsection (b) of new section 256 requires that a BOC 
     engaged in manufacturing may only do so through a separate 
     subsidiary that meets the requirements of new section 252.
       New section 256(c) requires that a BOC make available to 
     local exchange carriers telecommunications equipment and any 
     software integral to that equipment that is manufactured by 
     the BOC's affiliate under certain conditions. The 
     manufacturing subsidiary has the obligation to sell 
     telecommunications equipment to an unaffiliated local 
     telephone exchange carrier. This obligation may only be 
     enforced on the manufacturing subsidiary if the local 
     telephone company either does not manufacture equipment (by 
     itself or through an affiliated entity), or it agrees to make 
     available to the BOC any telecommunications equipment 
     (including software integral to such equipment) that the 
     local telephone company manufactures (by itself or through an 
     affiliated entity) without discrimination or self-preference 
     as to price, delivery, germs, or conditions.
       In addition, subsection (c) prohibits a BOC from 
     discriminating with respect to bids for services or 
     equipment, establishing standards or certifying equipment, or 
     the sale of telecommunications equipment and software. A BOC 
     and any entity that the company owns or controls also is 
     required to protect any proprietary information submitted to 
     it with contract bids or with respect to establishing 
     standards or certifying equipment, and may not release that 
     information to anyone unless specifically authorized to do so 
     by the owner of the proprietary information.
       New section 256(d) permits a BOC or its subsidiaries or 
     affiliates to engage in close collaboration with any 
     manufacturer of customer premises equipment or 
     telecommunications equipment not affiliated with the BOC 
     during the design and development of hardware, software, 
     equipment.
       Subsection (e) requires the Commission to prescribe 
     regulations to require each BOC to file information 
     concerning technical requirements concerning its telephone 
     exchange facilities.
       Subsection (f) of new section 256 simply authorizes the 
     Commission to prescribe such additional rules and regulations 
     as the Commission determines necessary to carry out the 
     provisions and purposes of section 256.
     
[[Page H1119]]

       Administration and enforcement of new section 256 are 
     provided for in subsection (g) of that section. Paragraph (1) 
     of new subsection 256(g) makes clear that the Commission has 
     the same authority, power, and functions with respect to the 
     BOC as it has with respect to enforcement or administration 
     of title II for any other common carrier subject to the 
     Communications Act. Paragraph (2) allows any injured party by 
     an act or omission of the BOC or its manufacturing subsidiary 
     which violates the requirements of new section 256 to bring a 
     civil action in any U.S. District Court to recover the full 
     amount of any damages and to obtain any appropriate court 
     order to remedy the violation. In the alternative, the party 
     may seek relief from the Commission pursuant to sections 206 
     through 209 of the Communications Act.
       New section 256(h) makes clear that nothing in new section 
     256 is intended to change the status of Bell Communications 
     Research (Bellcore). Subsection (h) specifically states that 
     nothing in this section permits Bellcore or any successor 
     entity that is jointly owned by any of the BOCs to 
     manufacture or provide telecommunications equipment or 
     manufacture CPE.
       Subsection (b) of section 222 of the bill permits the BOCs 
     to continue to engage in activities in which they were 
     authorized to engage prior to the date of enactment of the 
     bill.
     House amendment
       Section 271(a) allows a BOC to engage in equipment 
     manufacturing when the Commission has approved verifications 
     that a parent BOC, and each BOC within the parent company's 
     region, are in compliance with the access and interconnection 
     requirements of section 242. A BOC may engage in 
     manufacturing only through a separate subsidiary for the 
     first eighteen months after it is authorized.
       Section 271(b) allows a BOC to engage in close 
     collaboration with manufacturers during the design and 
     development of hardware and software. Notwithstanding 
     subsection (a), a BOC may engage in research and enter 
     royalty agreements.
       Section 271(c) requires a BOC to file at the Commission all 
     protocol and technical requirements relating to connection 
     with and proposed changes to the network. The BOCs must 
     provide access to this information on a non-discriminatory 
     basis.
       Section 271(d) prohibits Bell Communications Research, or 
     ``Bellcore,'' from engaging in manufacturing so long as 
     Bellcore is owned by one or more BOC or is involved in 
     equipment standard setting or product certification 
     activities.
       Section 271(e) requires BOCs to make equipment procurement 
     decisions based on objective commercial criteria, such as 
     price, quality, delivery, and other commercial factors.
       Section 271(e)(2) prohibits each BOC from restricting sales 
     to any other local telephone company. Section 271(e)(3) 
     requires that the proprietary information which vendors share 
     with BOCs as their transactions are carried out is protected 
     from release not specifically authorized by the owner of such 
     information.
       Section 271(f) provides the Commission with the same 
     enforcement authority with respect to a BOC as with any 
     common carrier.
       Section 271(g) grandfathers all previously authorized 
     manufacturing related activities.
     Conference agreement
       The conference agreement adopts the Senate provisions with 
     modifications as a new section 273 of the Communications Act. 
     The agreement permits a BOC to engage in manufacturing after 
     the Commission authorizes the company to provide interLATA 
     services under new section 271(d) in any in-region State. A 
     BOC and its affiliates may not engage in manufacturing in 
     conjunction with another unaffiliated BOC or any of its 
     affiliates. BOCs may engage in research and enter royalty 
     agreements.
       The conference agreement includes provisions governing a 
     standards-setting organization such as Bellcore. 
     Additionally, the overall intent of establishing a dispute 
     resolution provision, as contained in new subsection 
     273(d)(5), is to enable all interested parties to influence 
     the final resolution of the dispute without significantly 
     impairing the efficiency, timeliness, and technical quality 
     of the activity.
       Further, under new section 273, a BOC may not discriminate 
     in favor of equipment produced or supplied by an affiliate 
     for the duration of a requirement for a manufacturing 
     separate subsidiary under this Act. Each BOC shall make 
     procurement decisions on the basis of an objective assessment 
     of price, quality, delivery, and other commercial factors.


   new section 274--electronic publishing by bell operating companies

     Senate bill
       The Senate bill included electronic publishing in the 
     provisions applicable to information services under the 
     separate affiliate requirements of section 252 of the Senate 
     bill.
     House amendment
       Section 272 sets forth regulatory requirements for BOC 
     participation in electronic publishing. Subsection (a) of 
     this section states generally that a BOC or any affiliate may 
     only engage in electronic publishing through a separate 
     affiliate or an electronic publishing joint venture.
       Subsection (b)(1) requires the separate affiliate or 
     electronic publishing joint venture to maintain books, 
     records, and accounts separately from those of the BOC. Under 
     subsection (b)(2), the affiliate is prohibited from incurring 
     debt in a manner that would permit a creditor upon default to 
     have recourse to the assets of the BOC. Subsections (b)(3) 
     and (b)(4) govern the manner in which transactions by the 
     affiliate must be carried out, so as to ensure that they are 
     fully auditable. These subsections also govern the valuation 
     of assets transferred to the affiliate to prevent cross 
     subsidies. Subsection (b)(5) prohibits the affiliate and the 
     BOC from having corporate officers or property in common.
       Under subsection (b)(6), the affiliate is prohibited from 
     using the name or trademarks of the affiliated BOC except 
     where used in common with the entity that owns or controls 
     the BOC. Subsection (b)(7) prohibits a BOC from performing a 
     number of activities on behalf of the affiliate, including 
     the hiring or training of personnel, the provision of 
     equipment, and research and development (R&D). Subsection 
     (b)(8) and (b)(9) require the separate affiliate to have an 
     annual compliance review performed for five years and to file 
     a report of any exceptions and the corrective action taken. 
     These reviews are to be conducted by an independent entity.
       Subsection (c)(1) prohibits a BOC from engaging in joint 
     marketing of any promotion, marketing, sales or advertising 
     with its affiliate, with certain exceptions. Subsection 
     (c)(2) permits three types of joint activities between a BOC 
     and its electronic publishing affiliate, under specified 
     conditions. Subsection (c)(2)(A) permits a BOC to provide 
     inbound telemarketing or referral services related to the 
     provision of electronic publishing, if the BOC provides the 
     same service on the same terms and conditions, and prices to 
     non-affiliates as to its affiliates. The term ``inbound 
     telemarketing or referral services'' is defined in subsection 
     (i)(7) to mean ``the marketing of property, goods, or 
     services by telephone to a customer or potential customer who 
     initiated the call.'' Subsection (c)(2)(B) permits a BOC to 
     engage in nondiscriminatory teaming or business arrangements. 
     Subsection (c)(2)(C) permits a BOC to participate in 
     electronic publishing joint ventures, provided that the BOC 
     or affiliate has not more than a 50% (or for small 
     publishers, 80%) direct or indirect equity interest in the 
     publishing joint venture.
       Subsection (d) provides that a BOC that enters the 
     electronic publishing business through a separated affiliate 
     or joint venture must provide network access and 
     interconnection to electronic publishers at just and 
     reasonable rates that are not higher on a per-unit basis than 
     those charged to any other electronic publisher or any 
     separated affiliate engaged in electronic publishing. 
     Subsection (e) entitles a person claiming a violation of this 
     section to file a complaint with the Commission or to bring a 
     suit as provided in section 207 of the Communications Act. 
     The BOC, affiliate, or separate affiliate is liable for 
     damages for any violation found, unless it is discovered 
     first through the internal compliance review process and 
     corrected within 90 days of such discovery. A person may 
     apply for a cease and desist order, or apply to a district 
     court of the United States for an injunction. Subsection (f) 
     requires separated affiliates to file annual reports with the 
     Commission similar to Form 10-K. Subsection (g)(1) gives the 
     BOC one year from the date of enactment to comply with the 
     requirements of this section. Subsection (g)(2) provides that 
     the provisions of this section cease to apply after June 30, 
     2000.
     Conference agreement
       The conference agreement adopts the House provisions with 
     modifications as a new section 274 of the Communications Act. 
     Subsection (b)(6) of the House provisions, relating to use of 
     trademarks, was modified to make it clear that the separate 
     affiliate or electronic publishing joint venture may not use 
     for marketing the name, trademarks, or service marks of an 
     existing BOC except for names, trademarks, or service marks 
     that are owned by the entity that owns or controls the BOC. 
     Subsection (g)(2) was modified so that the sunset date will 
     be four years after the date of enactment rather than June 
     30, 2000.


               new section 275--alarm monitoring services

     Senate bill
       Section 225 of the Senate bill adds a new section 258 to 
     the Communications Act authorizing a BOC to provide alarm 
     monitoring services four years after the date of enactment if 
     the BOC has been authorized by the Commission to provide in-
     region interLATA service unless the Commission finds that 
     such provision is not in the public interest. It requires the 
     Commission to establish rules governing the provision of 
     alarm services by a BOC. It provides for expedited 
     consideration of complaints and allows the Commission to use 
     title V remedies.
       The one exception to this general rule is contained in 
     section 258(f). It provides that the limitations of 
     subsections (a) and (b) do not apply to any alarm monitoring 
     services provided by a BOC that was in that business as of 
     June 1, 1995, as long as certain conditions specified in that 
     subsection are met.
     House amendment
       Section 273(a) prohibits a BOC from offering alarm service 
     until six (6) years after the date of enactment, unless a BOC 
     was already providing such service on January 1, 1995.
       Section 273(b) prohibits discrimination by a telephone 
     company in the provision of 

[[Page H1120]]
     alarm services, either by refusing to provide its competitors with the 
     same network services it provides itself, or by cross-
     subsidizing from its local telephone service.
       Section 273(c) establishes procedures for expedited 
     consideration of complaints of violations of subsection (b), 
     requiring the Commission to make a final determination within 
     120 days after the receipt of a complaint. If a violation is 
     found, the Commission is required to issue a cease and desist 
     order within 60 days.
     Conference agreement
       The conference agreement adopts the House provisions with 
     modifications as a new section 275 of the Communications Act. 
     The prohibition on BOC entry is shortened to 5 years. The 
     grandfather provision is modified to clarify that new 
     subsection (a) does not prohibit or limit the provision, 
     directly or through an affiliate, of alarm monitoring 
     services by a BOC that was engaged in providing alarm 
     monitoring services as of November 30, 1995, directly or 
     through an affiliate. However, such a BOC may not acquire an 
     equity interest in or obtain financial control of any 
     unaffiliated alarm monitoring services entities from November 
     30, 1995, until five years after the date of enactment. This 
     section further provides that nothing in the language 
     prohibiting acquisitions or control should be construed to 
     prevent the exchange of customer accounts and related assets 
     with unaffiliated alarm monitoring services entities.
       The House nondiscrimination provisions are adopted with the 
     clarification that they apply to incumbent local exchange 
     carriers rather than all common carriers. The House 
     provisions on expedited consideration of complaints are 
     adopted with the clarification that they apply to incumbent 
     local telephone carriers rather than all common carriers. The 
     Senate provisions on the use of data by local exchange 
     carriers are adopted with the clarification that they apply 
     to all local exchange carriers. The House definition of 
     ``alarm monitoring service'' is adopted with the 
     clarification that the definition applies to the transmission 
     of signals by means of the facilities of any local exchange 
     carrier rather than just those of a BOC.


            New Section 276--Provision of Payphone Services

     Senate bill
       Section 311 of the Senate bill adds a new section 265 to 
     the Communications Act, to address certain practices of the 
     BOCs with regard to telemessaging and payphone services. This 
     section is designed to prohibit cross-subsidization between a 
     BOC's telephone exchange or exchange access services and its 
     payphone and telemessaging services. Existing joint-cost 
     rules are not adequate to prevent such activities.
       This section prohibits a BOC from discriminating between 
     affiliated and nonaffiliated payphone and telemessaging 
     services, under rules set forth by the Commission. If, 
     however, the Commission finds that these safeguards are 
     insufficient, the Commission may require the BOCs to provide 
     telemessaging services through a separate subsidiary.
       New section 265 directs the Commission to complete, within 
     18 months after the date of enactment of the bill, a 
     rulemaking proceeding to prescribe regulations to carry out 
     this new section. The Commission also is directed to 
     determine whether, in order to enforce the requirements of 
     section 265, it is appropriate to require the BOCs to provide 
     payphone service or telemessaging services through a separate 
     subsidiary that meets the requirements of new section 252.
       Payphone services are defined to include the provision of 
     telecommunications service through public or semipublic pay 
     telephones, and includes the provision of inmate phone 
     service in correctional institutions. Semipublic payphones 
     are also included within the definition of payphone services.
       New section 265 prohibits the BOCs from cross-subsidizing 
     and from preferring or discriminating in favor of their own 
     payphone operations. The Commission is directed to conduct 
     rulemaking proceedings to implement new section 265.
       Nothing in section 265 is intended to limit the authority 
     of the commission to address these structural issues, or 
     other payphone related issues, under the existing provisions 
     of the Communications Act.
     House amendment
       Section 274 directs the Commission to adopt rules that 
     eliminate all discrimination between BOC and independent 
     payphones and all subsidies or cost recovery for BOC 
     payphones from regulated interstate or intrastate exchange or 
     exchange access revenue. The BOC payphone operations will be 
     transferred, at an appropriate valuation, from the regulated 
     accounts associated with local exchange services to the BOC's 
     unregulated books. The Commission's implementing safeguards 
     must be at least equal to those adopted in the Commission's 
     Computer III proceedings. In place of the existing regulatory 
     structure, the Commission is directed to establish a new 
     system whereby all payphone service providers are fairly 
     compensated for every interstate and intrastate call made 
     using their payphones, including, for example, ``toll-free'' 
     calls to subscribers to 800 and new 888 services and calls 
     dialed by means of carrier access codes. In crafting 
     implementing rules, the commission is not bound to adhere to 
     existing mechanisms or procedures established for general 
     regulatory purposes in other provisions of the Communications 
     Act.
       Section 274(b)(1)(D) also makes it possible for independent 
     payphone service providers, as well as BOCs, in all 
     jurisdictions, to select the intraLATA carriers service their 
     payphones. However, existing contracts and agreements between 
     location providers and payphone service providers, interLATA, 
     or intraLATA carriers are grandfathered. Location providers 
     prospectively also have control over the ultimate choice of 
     interLATA and intraLATA carriers in connection with their 
     choice of payphone service providers.
       Section 274(b)(2) directs the Commission to determine 
     whether it is necessary to support the maintenance of 
     ``public interest payphones.'' This term refers to payphones 
     at locations where payphone service would not otherwise be 
     available as a result of the operation of the market. Thus, 
     the term does not apply to a payphone located near other 
     payphones, or to a payphone that, even though unprofitable by 
     itself, is provided for a location provider with whom the 
     payphone provider has a contract.
       Section 274(c) authorizes the Commission to preempt State 
     regulations that are inconsistent with the commission's 
     regulations under section 274.
     Conference agreement
       The conference agreement adopts the House provision with 
     some modifications and a clarification as a new section 276 
     of the Communications Act. The conferees added to subsection 
     (b)(1)(D) the phrase ``unless the Commission determines in 
     the rulemaking that it is not in the public interest.'' This 
     modification would allow the Commission, if it determines 
     that it is in the public interest, not to allow the BOCs to 
     have the same rights as independent payphone providers in 
     negotiating with the interLATA carriers for their payphones. 
     In addition, the conferees clarify in subsection (b)(1)(E) 
     that the location provider has the ultimate decision-making 
     authority in determining interLATA services in connection 
     with the choice of payphone providers.

                      TITLE II--BROADCAST SERVICES


             section 201--broadcaster spectrum flexibility

     Senate bill
       If the Commission, by rule, permits a licensee to provide 
     advanced television services, subsection (a) of section 207 
     of the Senate bill requires the Commission to adopt rules to 
     permit broadcasters flexibility to use the advanced 
     television spectrum for ancillary or supplementary services. 
     The broadcaster must provide at least one free, over-the-air 
     advanced television broadcast service on that spectrum. 
     Similar rules for existing broadcast spectrum must also be 
     adopted.
       Paragraph (2) requires that if the licensee offers 
     ancillary or supplementary service for which payment of a 
     subscription fee is required, or is compensated for 
     transmitting material furnished by a third party, then the 
     Commission will collect an annual fee from the licensee. The 
     fee shall be based, in part, on the licensee's total amount 
     of spectrum, and the amount of spectrum used and the amount 
     of time the spectrum is used for those ancillary and 
     supplementary services. The fee, however, cannot exceed the 
     amount, on an annualized basis, paid by licensees providing 
     competing services on spectrum subject to auction.
       Paragraph (3) states that licensees are not relieved of 
     their public interest requirements. Paragraph (4) defines 
     ``advanced television services'' as a television service 
     using digital or other advanced technology to enhance audio 
     quality and visual resolution. The paragraph also defines 
     ``existing'' spectrum as that spectrum used for television 
     broadcast purposes as of the date of enactment.
     House amendment
       Section 301 of the House amendment directs the Commission, 
     if the Commission issues licenses for advanced television 
     services, to limit the initial eligibility for such licenses 
     to incumbent broadcast licensees and permittees and 
     authorizes the Commission to adopt regulations that would 
     permit broadcasters to use such spectrum for ancillary or 
     supplementary services. Apart from the restrictions contained 
     herein, this section leaves the final determination of the 
     uses of spectrum assigned to the broadcasters. This section 
     restricts any potential use of spectrum apart from the main 
     channel signal to ``ancillary and supplementary'' uses, 
     provided the use of a designated frequency for such services 
     is consistent with the technology or method designated by the 
     Commission for the provision of advanced television services.
       Paragraph (b)(2) requires the Commission to prescribe 
     regulations that avoid the derogation of any advanced 
     television services, including high definition television 
     (HDTV) services.
       Paragraph (b)(3) clarifies the regulation of ancillary and 
     supplementary services. It requires that Commission 
     regulations that are applicable to such services be 
     applicable to the offering of analogous services by any other 
     person. This section, however, specifically does not confer 
     ``must carry'' status on any of these ancillary or 
     supplementary services.
       Paragraph (b)(4) requires the Commission to adopt any 
     technical or other requirements necessary to assure signal 
     quality for ATV services and provides, inter alia, that the 
     Commission may review and update its requirements concerning 
     minimum broadcast 

[[Page H1121]]
     hours for television broadcasters for both NTSC and ATV services.
       Subsection (c) provides that if the Commission issues 
     licenses for advanced television services, it shall 
     precondition such issuance on the requirement that one or the 
     other of the licenses be surrendered to the Commission 
     pursuant to its regulations. Subsection (c) also requires 
     that any license surrendered must be reassigned through 
     competitive bidding. This provision is designed to ensure 
     that licensees' use of 12 megahertz would be for temporary 
     simulcast purposes only, and that, in due course, one of the 
     licensed channels will revert to the Commission for 
     assignment by competitive bidding. Subsection (c) also 
     requires that the Commission must base its decision regarding 
     the surrender of the license on public acceptance of the new 
     technology through obtaining television receivers capable of 
     receiving an ATV signal or on the potential loss of reception 
     for a substantial portion of the public.
       Subsection (d) requires the Commission to establish a fee 
     program for any ancillary or supplementary services if 
     subscription fees or any other compensation fees apart from 
     commercial advertisements are required in order to receive 
     such services.
       Subsecion (e) requires the Commission to conduct an 
     evaluation within 10 years after the date it issues its 
     licenses for advanced television services.
       In subsection (f), the House adopts the Commission's 
     definition of high definition television
     Conference agreement
       The conference agreement adopts the House amendment with 
     modifications. The conference agreement retains the 
     requirement in the House amendment that the Commission 
     condition the issuance of a new license of the return, after 
     some period, of either the original broadcast license or the 
     new license. However, the conference agreement leaves to the 
     Commission the determination of when such licenses shall be 
     returned and how to reallocate returned spectrum. With 
     respect to paragraph (b)(3), the conferees do not intend this 
     paragraph to confer must carry status on advanced television 
     or other video services offered on designated frequencies. 
     Under the 1992 Cable Act, that issue is to be the subject of 
     a Commission proceeding under section 614(b)(4)(B) of the 
     Communications Act. Further, the conference agreement also 
     adopts the Senate language that the Act's public interest 
     obligations extend to the new licenses and services. The 
     conference agreement modifies the House amendment to provide 
     that if the Commission decides to issue additional licenses 
     for ATV services, it should limit the initial eligibility to 
     broadcast licensees.


                    section 202--broadcast ownership

     Senate bill
       Section 207(b) of the Senate bill requires the Commission 
     to changes its rules regarding the amount of national 
     audience a single broadcast licensee may reach. The current 
     cap is 25% of the nation's television households. The Senate 
     bill raises that to 35%. Section 207 directs the Commission 
     to eliminate its rules regarding the number of radio stations 
     one entity may own, either nationally or within a particular 
     market. The Commission may refuse a transfer of a radio 
     license if it would result in an undue concentration of 
     control or would thereby harm competition. Section 207(b)(3) 
     grandfathers existing television local marketing agreements 
     (LMAs). Section 207(b)(4) eliminates the cable-broadcast 
     crossownership ban in section 613(a) of the Communications 
     Act, and the Commission is also required to review its 
     ownership rules biennially, as part of its overall regulatory 
     review required by new section 259 of the Communications Act. 
     This provision is effective upon enactment.
     House amendment
       Section 302 of the House amendment adds a new section 337 
     to the Communications Act addressing broadcast ownership. 
     Section 337, subject to specified restrictions and consistent 
     with the cross-ownership restrictions of section 613(a) of 
     the Communications Act, prohibits the Commission from 
     prescribing or enforcing any regulation which prohibits or 
     limits, on a national or local basis, a licensee from holding 
     any form of ownership or other interest in two or more 
     broadcast stations or in a broadcast station and any other 
     medium of mass communication. This section also prohibits the 
     Commission from prescribing or enforcing any regulation which 
     prohibits a person or entity from owning, operating, or 
     controlling two or more networks of broadcast stations or 
     from owning, operating, or controlling a network of broadcast 
     stations and any other medium of mass communications. Section 
     337(b)(1) eliminates current limits placed on television 
     audience nationwide and places new limits on ownership of 
     television stations by a single entity at a national audience 
     reach exceeding 35 percent for the year following enactment 
     of this section. This section directs the Commission to 
     conduct a study of the operation of these national ownership 
     limitations and to submit a report to Congress on the 
     development of competition in the television marketplace and 
     the need, if any, to revisit these limitations.
       Section 337(b)(2) sets forth the circumstances under which 
     one entity may own or operate two television stations in a 
     local market. Subparagraph (B) creates a presumption in favor 
     of UHF/UHF and UHF/VHF combinations. Subparagraph (C) 
     clarifies that the Commission may also permit VHF/VHF 
     combinations where it determines that doing so will not harm 
     competition and diversity.
       Subsection (c) permits the Commission, under certain 
     circumstances, to consider concentrations of local media 
     interests in proceedings to grant, renew or authorize the 
     assignment of station licenses. In a proceeding to grant, 
     renew, or authorize the assignment of any station license 
     under this title, the Commission may deny the application if 
     the Commission determines that the combination of such 
     station and more than one other non-broadcast media of mass 
     communication would result in an undue concentration of media 
     voices in the respective local market. The Commission shall 
     not grant applications that would result in two or fewer 
     persons or entities controlling all the media of mass 
     communications in the market. There is no requirement that 
     any existing interests be divested, but the Commission may 
     condition the grant of an application to acquire additional 
     media interests.
       Subsection (d) clarifies that any Commission rule 
     prescribed prior to the date of enactment of this legislation 
     that is inconsistent with the requirements of this section is 
     repealed on the date of enactment. Nothing in subsection (d) 
     is to be construed to prohibit the continuation or renewal of 
     any television local marketing agreement in effect on the 
     date of enactment.
     Conference agreement
       Section 202(a) of the conference agreement directs the 
     Commission to modify its multiple ownership rules to 
     eliminate its limitations on the number of radio stations 
     which may be owned or controlled nationally. New subsection 
     (b) directs the Commission to further modify its rules with 
     respect to the radio stations a party may own, operate or 
     control in a local market. Subsection (b)(2) provides an 
     exception to the local market limits, where the acquisition 
     or interest in a radio station will result in an increase in 
     the number of radio stations.
       Subsection 202(c)(1) directs the Commission to modify its 
     multiple ownership rules to eliminate the number of 
     television stations which may be owned or controlled 
     nationally and to increase the national audience reach 
     limitation for television stations to 35 percent. Subsection 
     (c)(2) directs the Commission to conduct a rulemaking 
     proceeding to determine whether its rules restricting 
     ownership of more than one television station in a local 
     market should be retained, modified or eliminated. It is the 
     intention of conferees that, if the Commission revises the 
     multiple ownership rules, it shall permit VHF-VHF 
     combinations only in compelling circumstances.
       Section 202(d) directs the Commission to extend its waiver 
     policy with respect to its one to a market ownership rules to 
     any of the top fifty markets. The Commission now generally 
     bans crossownerships of radio and television stations in the 
     same market, but has implemented a waiver policy which 
     recognizes the potential for public interest benefits of such 
     combinations when bedrock diversity interested are not 
     threatened. The conferees in adopting subsection (d), intend 
     to extend the benefits of this policy to the top fifty 
     markets. Also, in the Commission's proceeding to review its 
     television ownership rules generally, the Commission is 
     considering whether generally to allow such local 
     crossownerships, including combinations of a television 
     station and more than one radio station in the same service. 
     The conferees expect that the Commission's future 
     implementation of its current radio-television waiver policy, 
     as well as any changes to its rules it may adopt in its 
     pending review, will take into account the increased 
     competition and the need for diversity in today's radio 
     marketplace that is the rationale for subsection (d).
       Subsection (e) directs the Commission to revise its rules 
     at 47 CFR 73.658(g) to permit a television station to 
     affiliate with a person or entity that maintains two or more 
     networks unless such dual or multiple networks are composed 
     of (1) two or more of the four existing networks (ABC, CBS, 
     NBC, FOX) or, (2) any of the four existing networks and one 
     of the two emerging networks, (WBTN, UPN). The conferees do 
     not intend these limitations to apply if such networks are 
     not operated simultaneously, or if there is no substantial 
     overlap in the territory served by the group of stations 
     comprising each such networks.
       Subsection (f) directs the Commission to revise its rules 
     to permit crossownership interests between a broadcast 
     network and a cable system. If necessary, the Commission is 
     directed to revise its rules to ensure carriage, channel 
     positioning and nondiscriminatory treatment of non-affiliated 
     broadcast stations by cable systems affiliated with a 
     broadcast network.
       Subsection (g) grandfathers LMAs currently in existence 
     upon enactment of this legislation and allows LMAs in the 
     future, consistent with the Commission's rules. The conferees 
     note the positive contributions of television LMAs and this 
     subsection assures that this legislation does not deprive the 
     public of the benefits of existing LMAs that were otherwise 
     in compliance with Commission regulations on the date of 
     enactment.
       Subsection (h) directs the Commission to review its rules 
     adopted under section 202 and all of its ownership rules 
     biennially. In its review, the Commission shall determine 
     whether any of its ownership rules, including those adopted 
     pursuant to this section, are 

[[Page H1122]]
     necessary in the public interest as the result of competition. Based on 
     its findings in such a review, the Commission is directed to 
     repeal or modify any regulation it determines is no longer in 
     the public interest. Apart from the biennial review required 
     by subsection (h), the conferees are aware that the 
     Commission already has several broadcast deregulation 
     proceedings underway. It is the intention of the conferees 
     that the Commission continue with these proceedings and 
     conclude them in a timely manner.
       Subsection (i) amends section 613(a) of the Communications 
     Act by repealing the restriction on broadcast-cable 
     crossownership. The conferees do not intend that this repeal 
     of the statutory prohibition should prejudge the outcome of 
     any review by the Commission of its rules. Subsection (i) 
     also amends 613(a) by revising the cable-MMDS crossownership 
     restriction so that it does not apply in any franchise area 
     in which a cable operator faces effective competition.


                     Section 203--Terms of Licenses

     Senate bill
       Section 207 of the Senate bill amends section 307(c) of the 
     Communications Act to increase the term of license renewal 
     for television licenses from five to ten years and for radio 
     licenses from seven to ten years.
     House amendment
       Section 306 of the House amendment contains a similar 
     provision but amends section 307(c) of the Communications Act 
     to provide for a seven year license term for all broadcast 
     licenses.
     Conference agreement
       The conference agreement adopts the House provisions but 
     extends the license term for broadcast licensees to eight 
     years for both television and radio.


           Section 204--Broadcast License Renewal Procedures

     Senate bill
       Subsection (d) of section 207 amends the broadcast license 
     renewal procedures. This subsection amends section 309 of the 
     Communications Act by adding a new subsection (k) which gives 
     the incumbent broadcaster the ability to apply for its 
     license renewal without competing applications. A broadcaster 
     would apply for its renewal, and the Commission would grant 
     such a renewal, if, during the preceding term of its license 
     the station has served the public interest, convenience, and 
     necessity, has not made any serious violations of the 
     Communications Act or of the Commission's rules, and has not, 
     through other violations, shown a pattern of abuse.
       The Commission may not consider whether the granting of a 
     license to a person other than the renewal applicant might 
     serve the public interest, convenience, and necessity prior 
     to its decision to approve or deny the renewal application. 
     Under this section, the Commission has discretion to consider 
     what is a serious violation of the Communications Act. If a 
     licensee does not meet those criteria, the Commission may 
     either deny the renewal, or impose conditions on the renewal. 
     Once the Commission, after conducting a hearing on the 
     record, denies an application for renewal, it is then able to 
     accept applications for a construction permit for the channel 
     or facilities of the former licensee.
       Subparagraph (4) would require broadcast licensees to 
     attach a summary of comments regarding violent programming to 
     its renewal application.
     House amendment
       Section 305 of the House amendment similarly amends section 
     309 of the Communications Act by adding a new subsection (k) 
     mandating a change in the manner in which broadcast license 
     renewal applications are processed. Subsection (k) allows for 
     Commission consideration of the renewal application of the 
     incumbent broadcast licensee without the contemporaneous 
     consideration of competing applications. Under this 
     subsection, the Commission would grant a renewal application 
     if it finds that the station, during its term, had served the 
     public interest, convenience, and necessity; there had been 
     no serious violations by the licensee of the Communications 
     Act or Commission rules; and there had been no other 
     violations of the Communications Act or Commission rules 
     which, taken together, indicate a pattern of abuse. If the 
     Commission finds that the licensee has failed to meet these 
     requirements, it could deny the renewal application or grant 
     a conditional approval, including renewal for a lesser term. 
     Only after denying a renewal application could the Commission 
     accept and consider competing applications for the license.
     Conference agreement
       The conference agreement adopts the House provisions with 
     modifications to include the Senate provision requiring a 
     renewal applicant to attach to its application a summary of 
     comments regarding violent programming. The conference 
     agreement sets the effective date for this section at May 1, 
     1995.


            section 205--direct broadcast satellite service

     Senate bill
       Section 312(a) of the Senate bill amends section 705(e)(4) 
     of the Communications Act to extend the current legal 
     protection against signal piracy to direct-broadcast 
     services.
       Section 312(b) amends section 303 of the Communications Act 
     to clarify that the Commission has exclusive jurisdiction 
     over the regulation of direct broadcast satellite (DBS) 
     service.
     House amendment
       The House has identical provisions in sections 308 and 311 
     of the House amendment.
     Conference agreement
       The conference agreement adopts the Senate provision with a 
     conforming change to the definition of ``direct-to-home.''


        section 206--automated ship distress and safety systems

     Senate bill
       Section 306 of the Senate bill provides that 
     notwithstanding any other provision of the Communications 
     Act, any 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 is not required to be equipped with a radio 
     telegraphy station operated by one or more radio officers or 
     operators.
     House amendment
       This House provision is identical.
     Conference agreement
       The conference agreement adopts the Senate provision with a 
     modification placing the provision as an amendment to section 
     364 of the Communications Act. This provision permits a ship 
     that fully complies with the Global Maritime Distress and 
     Safety System (GMDSS) provisions of the Safety of Life at Sea 
     Convention to be exempted from requirements to carry a radio 
     telegraph station operated by one or more radio operators. 
     Due to the conferees' concern about the proper implementation 
     of the GMDSS, the provision specifies that this exemption 
     shall only take effect upon the United States Coast Guard's 
     determination that the system is fully installed, maintained, 
     and is operating properly on each vessel.


      section 207--restrictions on over-the-air reception devices

     Senate bill
       No provision.
     House amendment
       Section 308 of the House amendment directs the Commission 
     to promulgate rules prohibiting restrictions which inhibit a 
     viewer's ability to receive video programming from over-the-
     air broadcast stations or direct broadcast satellite 
     services.
     Conference agreement
       The conference agreement adopts the House provision with 
     modifications to extend the prohibition to devices that 
     permit reception of multichannel multipoint distribution 
     services.

                       TITLE III--CABLE SERVICES


                     section 301--Cable Act Reform

     Senate bill
       Section 203(a) of the Senate bill amends the definition of 
     ``cable system'' in section 602 of the Communications Act.
       Section 203(b) of section 204 of the bill limits the rate 
     regulations currently imposed by the 1992 Cable Act.
       Paragraph (1) amends the rate regulation provisions of 
     section 623 of the Communications Act for the expanded tier. 
     First, it eliminates the ability of a single subscriber to 
     initiate a rate complaint proceeding at the Commission. 
     Franchising authorities are the relevant State and local 
     government entities that still retain the ability to initiate 
     a rate proceeding. Second, rates for cable programming 
     services will only be considered unreasonable, and subject to 
     regulation, if the rates substantially exceed the national 
     average for comparable cable programming services.
       Paragraph (2) amends the definition of effective 
     competition in section 623(l)(1) to allow the provision of 
     video services by a local exchange carrier either through a 
     common carrier video platform, or as a cable operator, in an 
     unaffiliated cable operator's franchise area to satisfy the 
     effective competition test.
       Section 203(c) eliminates cable rate regulation for small 
     cable operators serving areas of 35,000 or fewer subscribers.
       Section 203(d) provides that any programming access rules 
     that apply to a cable operator under section 628 of the 
     Communications Act also apply to a telecommunications carrier 
     or its affiliate that provides video programming directly to 
     subscribers.
       Section 203(e) provides for expedited decisions by the 
     Commission regarding market determinations under section 614 
     of the Communications Act.
       Section 203(f) provides that the provisions of this section 
     take effect on the date of enactment.
     House amendment
       Section 307(a) of the House amendment amends the definition 
     of ``cable service'' in section 602(6) of the Communications 
     Act by adding ``or use'' to the definition, reflecting the 
     evolution of video programming toward interactive services.
       Subsection (b) prohibits the Commission from requiring the 
     divestiture of, or preventing or restricting the acquisition 
     of, any cable system based solely on the geographic location 
     of the system.
       Subsection (c) amends section 623(a) of the Communications 
     Act to deregulate equipment, installations, and additional 
     connections furnished to subscribers that receive more than 
     basic cable service when a cable system has effective 
     competition pursuant to section 623(l)(1)(b).
       Subsection (d) amends section 623(a) of the Communications 
     Act to limit basic tier rate 

[[Page H1123]]
     increases by a cable operator to once every six months and permits 
     cable operators to implement such increases after 30 days 
     notice. Subsection (d) limits the franchising authority's 
     scope of review to the incremental change in the basic tier 
     rate effected by a rate increase.
       Subsection (e) amends section 623(a) of the Communications 
     Act to promote the development of a broadband, two-way 
     telecommunications infrastructure. Under this paragraph, 
     cable operators are permitted to aggregate equipment costs 
     broadly. However, subsection (e) does not permit averaging 
     for equipment used by consumers that subscribe only to basic 
     service tier. Subsection (e) directs the Commission to 
     complete its revisions to current rules necessary to 
     implement this subsection within 120 days.
       Subsection (f) amends section 623(c) of the Communications 
     Act governing review of complaints by inserting a new 
     paragraph (3) requiring that the Commission receive 
     complaints from three percent of a system's subscribers, or 
     10 subsecribers, whichever is greater, before it initiates a 
     rate case.
       Subsection (f) extends from 45 days to 90 days the amount 
     of time after a cable programming service rate increase goes 
     into effect that during which subscribers may file a 
     complaint. Pending rate cases will be subject to the new 
     complaint threshold and complaining parties are granted a 90-
     day extension to bring complaints into conformance with the 
     new complaint threshold requirement. Subsection (f) clarifies 
     that the Commission 's scope of review is limited to the last 
     incremental consumer programming service rate increase 
     consistent with the intent of the 1992 Cable Act.
       Subsection (g) clarifies that a cable operator must comply 
     with the uniform rate structure requirement in section 623(d) 
     of the 1992 Cable Act only with respect to regulated 
     services. Subsection (g) also amends section 623(d) of the 
     Communications Act to exempt bulk discounts to multiple 
     dwelling units (``MDUs'') from the uniform rate requirement.
       Subsection (h) amends section 623(l)(1) of the 
     Communications Act by adding a fourth effective competition 
     test. Under this new test, effective competition for cable 
     programming service tier and subscriber equipment (other than 
     that necessary for receiving the basic service tier) is 
     present: (1) where a common carrier has been authorized to 
     provide video dialtone service in the cable franchise area; 
     (2) where a common carrier has been authorized by the 
     Commission or pursuant to a franchise to provide video 
     programming directly to subscribers in the cable franchise 
     area; or (3) when the Commission completes all actions 
     necessary to prescribe the video platform rules pursuant to 
     section 653(b)(1). When any of these events occurs, the rates 
     for a cable system's cable programming services, as well as 
     equipment, installations, and additional television 
     connections are deregulated.
       Subsection (h) does not apply to basic cable service. Basic 
     service, including all equipment, additional television 
     connections, and installations furnished to basic-only 
     subscribers, remains subject to regulation until the cable 
     operator meets one of the effective competition tests 
     contained in section 623(l)(1)(A), (B), and (C) of the 
     Communications Act.
       Subsection (i) amends section 623 of the Communications Act 
     to deregulate the rates for the cable programming service 
     tiers of small companies and the rates for the basic service 
     tier of small company systems that offered only a single tier 
     of service as of December 31, 1994. Subsection (i) does not 
     deregulate the basic tier of small cable systems that offer 
     multiple tiers of cable service.
       In order to qualify as a ``small cable operator,'' a cable 
     operator must: (1) directly, or through an affiliate, serve 
     in the aggregate fewer than one percent of all cable 
     subscribers nationwide; and (2) not be affiliated with any 
     entity whose annual gross revenues in the aggregate exceed 
     $250,000,000.
       Subsection (j) amends section 624(e) of the Communications 
     Act by prohibiting States or franchising authorities from 
     regulating in the areas of technical standards, customer 
     equipment, and transmission technologies.
       Subsection (k) amends section 624A(b)(2) of the 
     Communications Act and directs that no Federal agency, State, 
     or franchising authority may prohibit a cable operator's use 
     of any security system, including scrambling, but permits the 
     Commission to prohibit scrambling of video programming on the 
     broadcast-basic service tier unless scrambling is necessary 
     to prevent signal piracy.
       Subsection (l) amends section 624A of the Communications 
     Act to direct the Commission to set only minimal standards 
     when implementing regulations to assure compatibility between 
     cable ``set-top'' boxes, televisions, and video cassette 
     recorders, and to rely on the marketplace for other features, 
     services, and functions to ensure basic compatibility. This 
     subsection clarifies section 624(c)(1)(A) further to ensure 
     that Commission efforts with respect to cable compatibility 
     do not affect unrelated markets, such as computers or home 
     automation communications, or result in a preference for one 
     home automation protocol over another.
       Subsection (m) amends section 625(d) of the Communications 
     Act by clarifying that a cable operator may move any service 
     off the basic service tier at its discretion, other than the 
     local broadcast signals and access channels required to be 
     carried on the basic service tier under section 623(b)(7)(A) 
     of the Communications Act.
       Subsection (n) amends section 632 of the Communications Act 
     to provide cable operators with flexibility to use 
     ``reasonable'' written means to convey rate and service 
     changes to consumers. Notice need not be inserted in the 
     subscriber's bill.
       Subsection (n) also provides that prior notice is not 
     required for any rate change that is the result of a 
     regulatory fee, franchise fee, or any other fee, tax, 
     assessment or change of any kind imposed by the Government on 
     the transaction between a cable operator and a subscriber.
       Subsection (o) amends section 623 of the Communications Act 
     to clarify that losses incurred prior to the enactment of the 
     1992 Cable Act by a cable system owned and operated by the 
     original franchisee may not be disallowed in determination of 
     rate regulation.
     Conference agreement
       The conference agreement adopts the House provisions with 
     modifications. It adopts the House provision amending the 
     definition of cable service. The conferees intend the 
     amendment to reflect the evolution of cable to include 
     interactive services such as game channels and information 
     services made available to subscribers by the cable operator, 
     as well as enhanced services. This amendment is not intended 
     to affect Federal or State regulation of telecommunications 
     service offered through cable system facilities, or to cause 
     dial-up access to information services over telephone lines 
     to be classified as a cable service. The conference agreement 
     adopts the Senate provision amending the definition of cable 
     system to clarify that the term does not include a facility 
     that serves subscribers without using any public right-of-
     way.
       The conference agreement sunsets regulation of the cable 
     programming services tier on March 31, 1999. The agreement 
     directs the Commission to review a rate increase for an 
     operator's cable programming services tier within 90 days of 
     a complaint.
       The conference agreement amends the Communications Act's 
     requirements for a uniform rate structure to clarify that 
     such requirements do not apply to (1) a cable operator with 
     respect to the provision of cable service over its cable 
     system in any geographic area in which the video programming 
     services offered by the operator in that area are subject to 
     effective competition, or (2) any video programming offered 
     on a per channel or per program basis. Bulk discounts to 
     multiple dwelling units shall not be subject to the uniform 
     rate requirement except that a cable operator may not charge 
     predatory prices to a multiple dwelling unit. Upon a prima 
     facie showing by a complainant that there are reasonable 
     grounds to believe that the discounted price is predatory, 
     the cable system shall have the burden of showing that its 
     discounted price is not predatory.
       The conference agreement adopts an amendment to section 
     623(l) of the Communications Act to expand the effective 
     competition test for deregulating both basic and cable 
     programming service tiers. The test provides that effective 
     competition exists when a telephone company or any 
     multichannel video programming distributor is offering video 
     programming services directly to subscribers by any means in 
     the franchise area of an unaffiliated cable operator. ``By 
     any means,'' includes any medium (other than direct-to-home 
     satellite service) for the delivery of comparable 
     programming, including MMDS, LMDS, an open video system, or a 
     cable system. For purposes of section 623(l)(1)(D) of the 
     Communications Act, ``offer'' has the same meaning given that 
     term in the Commission's rules as in effect on the date of 
     enactment of the bill. See 47 CFR 76.905(e). The conferees 
     intend that ``comparable'' requires that the video 
     programming services should include access to at least 12 
     channels of programming, at least some of which are 
     television broadcasting signals. See 47 CFR 76.905(g).
       The conference agreement adopts the Senate provision with 
     respect to deregulation of small cable systems with the 
     modification that the franchise area served by such system 
     must reach 50,000 or fewer subscribers. The agreement adopts 
     the House provisions on market determinations, technical 
     standards, cable equipment compatibility, and subscriber 
     notices. The agreement amends section 628 of the 
     Communications Act to extend the program access requirements 
     to satellite cable programming vendors in which a common 
     carrier providing video programming by any means has an 
     attributable interest. This provision clarifies that such 
     common carrier shall not be deemed to have an attributable 
     interest in such programming vendor (or its parent company) 
     solely as a result of the common carrier's holding, or having 
     the right to appoint or elect, two or fewer common officers 
     or directors. The conference agreement amends section 617 of 
     the Communications Act to repeal the anti-trafficking 
     restrictions. The conference agreement adopts the House 
     provisions on equipment aggregation and treatment of prior 
     year losses.
       The conference agreement also adopts the House provision on 
     cable equipment compatibility. As used in section 624A of the 
     Communications Act, the term ``affect'' means to produce a 
     material influence upon, or alteration in, such features, 
     functions, protocols, and other product and service options. 
     The conferees intend that the Commission should promptly 
     complete its pending rulemaking on cable equipment 
     compatibility, but not at 

[[Page H1124]]
     the risk that premature or overbroad Government standards may interfere 
     in the market-driven process of standardization in technology 
     intensive markets.


       Section 302--Cable Service Provided by Telephone Companies

     Senate bill
       The Senate bill creates new sections of the Communications 
     Act to provide for the provision of video programming by 
     telephone companies.
     House amendment
       The House amendment creates new sections of the 
     Communications Act to provide for the provision of video 
     programming by telephone companies.
     Conference agreement
       Section 302 of the conference agreement establishes a new 
     ``Part V'' of title VI of the Communications Act. Part V 
     contains new sections 651-653 to provide for the provision of 
     video programming by telephone companies.


  New Section 651--Regulatory Treatment of Video Programming Services

     Senate bill
       Section 202 of the Senate bill eliminates the cable/
     telephone cross ownership restriction and grants telephone 
     companies the option of providing video programming to 
     subscribers over a cable system or over a video platform. It 
     also states that a BOC need not use a separate affiliate if 
     it provides facilities, services or information to all 
     programmers on the same terms and conditions as it provides 
     to its own operations, and if it does not use 
     telecommunications services to subsidize the provision of 
     video programming. In addition, it states that when a BOC 
     provides cable service as a cable operator, it must do so 
     through a separate affiliate, except that if the cable 
     service is provided using the company's own telephone 
     exchange facilities, it is not required to make capacity 
     available on a nondiscriminatory basis to other video service 
     providers because of such use.
     House amendment
       Section 201 of the House amendment permits a common carrier 
     that provides video programming directly to subscribers in 
     its telephone service area, to do so either over a video 
     platform or over a cable system. In addition, it requires the 
     carrier to provide notice to programming providers and to 
     submit detailed information to the Commission concerning its 
     intention to establish capacity for the provision of video 
     programming. Carriers are required to establish channel 
     capacity sufficient to meet all bona fide demand and to 
     expand capacity in response to demand for additional 
     capacity.
     Conference agreement
       New section 651 of the Communications Act specifically 
     addresses the regulatory treatment of video programming 
     services provided by telephone companies. Recognizing that 
     there can be different strategies, services and technologies 
     for entering video markets, the conferees agree to multiple 
     entry options to promote competition, to encourage investment 
     in new technologies and to maximize consumer choice of 
     services that best meet their information and entertainment 
     needs.
       New section 651(a)(1) states that common carriers, or other 
     persons, that use radio communication to provide video 
     programming will be regulated under title III of the 
     Communications Act, and are subject to the requirements of 
     new section 652 of the Communications Act but are not 
     otherwise subject to the requirements of title VI. This will 
     create parity among providers of services using radio 
     communication.
       New section 651(a)(2) states that when common carriers 
     provide only video transmission on a common carrier basis, 
     they are subject only to title II and to new section 652, and 
     are not otherwise subject to the requirements of title VI 
     merely by engaging in common carrier transport of video 
     programming.
       New section 651(a)(3) states that common carriers providing 
     video programming to subscribers by any means other than 
     those described in new section 651(a)(1) or (a)(2), are 
     subject to the requirements of title VI, unless such 
     programming is provided by means of an open video system that 
     has been certified by the Commission. New section 651(a)(3) 
     also states that carriers that provide programming using a 
     certified open video system are subject to the requirements 
     of part V, and only those provisions of parts I through IV of 
     title VI as are specifically provided in new section 653(c). 
     Open video systems are not subject to the requirements of 
     title II for the provision of video programming or cable 
     services.
       Common carriers that provide video programming using radio 
     communication or using common carriage transmission, or a 
     combination of those services, also may choose to provide an 
     open video system. New section 651(a)(4) provides that such 
     systems are subject to the same requirements as other open 
     video systems.
       New section 651(b) states that a local exchange carrier 
     that provides cable service by means of an open video system, 
     or by means of an integrated cable system utilizing its own 
     telephone exchange facilities, is not required by title II to 
     also make transmission capacity and related services 
     available on a nondiscriminatory basis to any other person 
     for the provision of cable service or video programming 
     directly to subscribers. This provision clarifies that the 
     open video system operator's obligation to provide system 
     capacity and facilities to others is limited to, and governed 
     by, part V and the other requirements specifically provided 
     in new section 653(c). Likewise, a local exchange carrier 
     that utilizes its own telephone exchange facilities and 
     services to provide cable services other than through an open 
     video system is required by such use only to make cable and 
     video programming capacity and facilities available to others 
     for the provision of cable service to the extent provided in 
     parts I through IV of title VI, regardless of whether those 
     facilities also are used to provide telephone exchange 
     service under title II. Similarly, under new section 651(c) 
     common carriers that establish video delivery systems, 
     including cable and open video systems, are not required to 
     obtain section 214 authority prior to establishing or 
     operating such systems. This requirement has served as an 
     obstacle to competitive entry and has disproportionately 
     disadvantaged new competitors. Eliminating this barrier to 
     entry will hasten the development of video competition and 
     will provide consumers with increased program choice.


                new section 652--prohibition on buyouts

     Senate bill
       Section 202 of the Senate bill adds to section 613(b) of 
     the Communications Act several provisions restricting the 
     ability of a local exchange carrier to acquire more than a 10 
     percent financial interest or any management interest in a 
     cable operator in its telephone service area and restricting 
     the ability of a cable operator to acquire similar interests 
     in a local exchange carrier in the cable operator's franchise 
     area. It includes certain exceptions for acquisitions in non-
     urban areas with less than 50,000 inhabitants, and it 
     authorizes the Commission to grant waivers for economic 
     distress, economic viability of the cable system, or where 
     any anticompetitive effects of the proposed transaction are 
     clearly outweighed by the public interest, and where the 
     local franchising authority approves the waiver. The bill 
     directs the Commission to act on such waiver requests within 
     180 days of filing. The Senate provisions also permit a local 
     exchange carrier, if certain conditions are met, to use 
     excess capacity of a cable company for that portion of the 
     transmission facilities of the cable operator from the last 
     multi-user terminal to the premises of the end user.
       Section 706 of the Senate bill authorizes a local exchange 
     carrier or any of its affiliates to purchase or otherwise 
     acquire more than 10 percent of the financial interest or any 
     management interest in any cable system in its telephone 
     service area so long as (1) the cable system serves no more 
     than 20,000 cable subscribers and (2) no more than 12,000 of 
     those cable subscribers live in an urbanized area
     House amendment
       Section 655 of the House amendment contains a general 
     prohibition on buy-outs by a common carrier of a cable system 
     within its service territory. Subsection (b) provides 
     exceptions that would permit a common carrier to purchase a 
     cable system or systems under circumstances including the 
     following: (1) the cable system serves a rural area; (2) the 
     total number of subscribers served by such systems adds up to 
     less than ten percent of the households served by the carrier 
     in the telephone service area, and no such system or systems 
     serve a franchise area with more than 35,000 inhabitants for 
     an affiliated system, or more than 50,000 inhabitants for any 
     system that is not affiliated with any system whose franchise 
     area is contiguous; and (3) the exemption would permit a 
     carrier to obtain, by contract with a cable operator, use of 
     the ``drop'' from the curb to the home that is controlled by 
     the cable company, if such use was reasonably limited in 
     scope and duration as determined by the Commission.
       The exception under subparagraph (4) is intended to address 
     a market situation where a dominant cable operator that is a 
     large multiple systems operator (MSO) shares a market with a 
     small independent cable system.
       Subsection (c) also contains the waiver process for the 
     buy-out provision under which the Commission may grant a 
     waiver upon a showing of undue economic distress by the owner 
     of the cable system if a sale to a telephone company is 
     blocked. The Commission is directed to act on a waiver 
     application within 180 days after it is filed.
     Conference agreement
       The conference agreement adopts the provisions of the 
     Senate bill limiting acquisitions and prohibiting joint 
     ventures between local exchange companies and cable operators 
     that operate in the same market to provide video programming 
     to subscribers or to provide telecommunications services in 
     such market. Such carriers or cable operators may enter into 
     a joint venture or partnership for other purposes, including 
     the construction of facilities for the provision of such 
     programming or services. With respect to exceptions to these 
     general rules contained in new section 652(a), (b), and (c), 
     the conferees agreed, in general, to take the most 
     restrictive provisions of both the Senate bill and the House 
     amendment in order to maximize competition between local 
     exchange carriers and cable operators within local markets.
       In new section 652(d)(1) the conference agreement allows a 
     local exchange carrier to obtain a controlling interest in, 
     management interest in, or a joint venture or partnership 
     with a cable system operator for the use of 

[[Page H1125]]
     such system located within its telephone service area to the extent 
     that such system or facilities only serve places or 
     territories that have fewer than 35,000 inhabitants and are 
     outside urbanized areas. The agreement further stipulates 
     that such systems in the aggregate serve less than 10 percent 
     of the households in the telephone service area of such local 
     exchange carrier. New section 652(d)(1) also permits a cable 
     operator to obtain a controlling interest in, management 
     interest in, or a joint venture or partnership with a local 
     exchange carrier for the sue of such carrier's facilities if 
     such facilities serve places or territories that have fewer 
     than 35,000 inhabitants and are outside of urbanized areas. 
     The agreement contains other very limited exceptions to the 
     general rules contained in new section 652(a), (b), and (c). 
     In new section 652(d)(3) acquisitions would be permitted in 
     competitive markets where a local exchange carrier seeking to 
     obtain a controlling interest or form a joint venture with a 
     cable system may do so if narrowly drawn requirements are 
     met. New section 652(d)(4) provides that new section 652(a) 
     shall not apply to certain cable systems serving less than 
     17,000 subscribers outside of the top television markets. New 
     section 652(d)(5) of the conference agreement allows a non-
     Tier I local exchange carrier to obtain more than a ten 
     percent interest in, or to form a joint venture or 
     partnership with, a small cable system that serves no more 
     than 20,000 cable subscribers within the telephone company's 
     service territory, provided that no more than 12,000 of those 
     subscribers live within an urbanized area.
       The conference agreement also allows for limited joint use 
     of certain cable system facilities. In new section 652(d)(2) 
     the agreement adopts language from the Senate bill that will 
     allow a local exchange carrier to obtain, with the 
     concurrence of the cable operator on the rates, terms and 
     conditions, the use of that part of the transmission 
     facilities of a cable system extending from the last multi-
     user terminal to the premises of the end user. The agreement 
     stipulates that such joint use is permitted if such use is 
     reasonably limited in scope and duration as determined by the 
     Commission.
       The conferees also provided for the establishment of a 
     waiver process of the statutory rules. In new section 
     652(d)(6), the conferees give specific guidance to the 
     Commission with respect to granting waivers. In that regard, 
     the conferees allow the Commission to waive the various 
     restrictions in this section if: the cable company or 
     telephone company would be subjected to undue economic 
     stress, the cable system of local exchange facilities would 
     not be economically viable, the anticompetitive effects of 
     the proposed transaction are clearly outweighed by the public 
     interest, and the local franchising authority approves of 
     such waiver.
       Finally, new section 652(e) contains a definition of 
     telephone service area for the purposes of this section.


          New Section 653--Establishment of Open Video Systems

     Senate bill
       Section 202 of the Senate bill amends section 613(b) of the 
     Communications Act to state that nothing precludes a 
     telecommunications carrier from carrying video programming 
     provided by others directly to subscribers over a common 
     carrier video platform. It also states that nothing precludes 
     a video program provider that makes use of a common carrier 
     video platform from being treated as an operator of a cable 
     system for purposes of section 111 of title 17, U.S.C.
       It also requires providers of common carrier video platform 
     services to provide local broadcast stations, and public, 
     educational and governmental entities, access to platforms 
     for the purpose of transmission of television broadcast 
     programming at rates no higher than the incremental-cost-
     based rates of providing such access.
       It state that video program providers may be required to 
     pay fees in the lieu of franchise fees, if the fees are 
     competitively neutral and are separately identified in 
     consumer billing. It also states that common carries are not 
     required to obtain certificates under section 214 in order to 
     construct facilities to provide video programming services. 
     Within 1 year after enactment, the Commission must prescribe 
     regulations that set forth a number of safeguards. Finally, 
     it specifies that the amendment made by subsection (a) takes 
     effect on the date enactment, while the amendment made by 
     subsection (b) (which states that no section 214 is required 
     to build platform facilities) takes effect 1 year after 
     enactment.
     House amendment
       Section 201 of the House amendment adds new section 653 to 
     the Communications Act. Section 653 permits common carriers 
     to establish video platforms but requires them to notify the 
     Commission of their intent to do so; it also specifies the 
     information that must be included in such notification. 
     Carriers establishing platforms are required to establish 
     channel capacity for the provision of video programming in 
     response to bona fide requests for capacity and must notify 
     the Commission if there is a delay in or denial of capacity 
     and are required to construct additional capacity to meet 
     excess demand. The Commission is required to resolve disputes 
     arising from requests for capacity within 180 days of notice 
     of such a dispute.
       The Commission is given 6 months from the date of enactment 
     to complete all actions necessary (including any 
     reconsideration) to prescribe regulations that--prohibit 
     carriers from discriminating among video programming 
     providers with regard to carriage on the platform; determine 
     what constitutes a bona fide request for capacity; permit 
     channel sharing; extend regulations concerning sports 
     exclusivity, network nonduplication and syndicated 
     exclusivity to video platforms; require platforms to provide 
     service, transmission and interconnection to unaffiliated 
     programmers that is equivalent to that provided to the common 
     carrier's video affiliate; prohibit unreasonable 
     discrimination in favor of the common carrier's video 
     affiliate concerning material or information needed to select 
     programming; and, prohibit a common carrier from excluding 
     areas from its video platform service area on the basis of 
     ethnicity, race or income.
       Section 656, as added by the House amendment, set forth the 
     applicability of parts I through IV of title VI to any video 
     programming affiliate established by a common carrier in 
     accordance with the requirements of part V. Subsection (a) 
     states that, in general, any provision that applies to a 
     cable operator under the following sections also applies to 
     such affiliate--section 613 (other than subsection (a)(2)), 
     616, 617, 628, 631 632 and 643 of title VI. Sections 611, 
     612, 614 and 615 of title VI and section 325 of title III 
     also apply to such affiliates in accordance with the 
     regulations prescribed under subsection (b). Parts III and IV 
     (other than sections 628, 631, 632 and 634) of title VI to 
     apply to such affiliates.
       Subsection (b) addresses implementation. The Commission is 
     required to prescribe regulations to ensure that common 
     carriers that operate video platforms provide: capacity, 
     services, facilities and equipment for public, educational 
     and governmental use; capacity for commercial use; capacity 
     for broadcast television stations; and, an opportunity for 
     commercial broadcast stations to choose between mandatory 
     carriage and reimbursement for retransmission. It also 
     directs the Commission to impose obligations that are no 
     greater or lesser than the corresponding cable operator 
     obligations referenced in subsection (a)(2) of section 656.
       Finally, this subsection also states that video programming 
     affiliates of common carriers that establish platforms, and 
     multichannel video programming distributors that use such 
     platforms to offer competing service, are subject to the 
     payment of local franchise fees. It adds that such fees are 
     in lieu of fees imposed under section 622 and that the rate 
     of such fees may not exceed the rate at which franchise fees 
     are imposed on cable operators in the same franchise area.
     Conference agreement
       The conference agreement adds a new section 653 to the 
     Communications Act. The conferees recognize that telephone 
     companies need to be able to choose from among multiple video 
     entry options to encourage entry, and so systems under this 
     section allowed to tailor services to meet the unique 
     competitive and consumer needs of individual markets. New 
     section 653(a) focuses on the establishment of open video 
     systems by local exchange carriers and provides for reduced 
     regulatory burdens subject to compliance with the provisions 
     of new section 653(b) and Commission certification of a 
     carrier's intent to comply. New section 653(a) also gives the 
     Commission authority to resolve disputes (and award damages), 
     but requires such resolution to occur within 180 days after 
     notice of the dispute is submitted to the Commission.
       New section 653(b) gives the Commission six months from the 
     date of enactment to complete all actions necessary, 
     including any reconsideration, to prescribe regulations to 
     accomplish the following--
       except as required by section 611, 614 or 615, to prohibit 
     open video system operators from discriminating among video 
     programmers with regard to carriage, and ensure that the 
     rates, terms and conditions for carriage are just and 
     reasonable and are not unjustly or unreasonably 
     discriminatory;
       if demand exceeds channel capacity, to prohibit an open 
     video system operator and its affiliates from selecting the 
     video programming services that occupy more than one-third of 
     the activated channel capacity of the system; but this 
     limitation does not in any way limit the number of channels a 
     carrier and its affiliates may offer to provide directly to 
     subscribers;
       to permit an open video system operator to require channel 
     sharing; that is, to carry only one channel of any video 
     programming service that is offered by more than one video 
     programming provider (including the local exchange carrier's 
     video programming affiliate), provided that subscribers have 
     ready and immediate access to any such video programming 
     service;
       to extend the Commission's regulations concerning sports 
     exclusivity, network nonduplication and syndicated 
     exclusivity to the distribution of video programming over 
     open video systems, must carry for commercial and 
     noncommercial broadcast stations, and retransmission content; 
     and,
       to prohibit an open video system operator from unreasonably 
     discriminating in favor of itself and its affiliates with 
     regard to material or information provided for the purpose of 
     selecting programming or presenting information to 
     subscribers; to require an open video system operator to 
     ensure that video programming providers or copyright holders 
     are able to identify their programming services to 
     subscribers; to require the operator to transmit such 
     identification without change 

[[Page H1126]]
     or alteration; and to prohibit an open video system operator from 
     omitting television broadcasters or other unaffiliated video 
     programming services from carriage on any navigational 
     device, guide, or menu.
       New section 653(c) sets forth the reduced regulatory 
     burdens imposed on open video systems. There are several 
     reasons for streamlining the regulatory obligations of such 
     systems. First, the conferees hope that this approach will 
     encourage common carriers to deploy open video systems and 
     introduce vigorous competition in entertainment and 
     information markets. Second, the conferees recognize that 
     common carriers that deploy open systems will be ``new'' 
     entrants in established markets and deserve lighter 
     regulatory burdens to level the playing field. Third, the 
     development of competition and the operation of market forces 
     mean that government oversight and regulation can and should 
     be reduced.
       New section 653(c)(1)(A) states that the following 
     provisions that apply to cable operators also apply to 
     certified operators of open video systems--sections 613 
     (other than subsection (a)(2) thereof), 616, 623(f), 628, 
     631, and 634; new section 653(c)(1)(B) states that the 
     following sections--611, 612, 614, and 615, and section 325 
     of title III--apply in accordance with regulations prescribed 
     under paragraph (2); and, new section 653(c)(1)(C) states 
     that sections 612 and 617, and parts III and IV (other than 
     sections 623(f), 628, 631, and 634), of this title do not 
     apply.
       With respect to the rulemaking proceeding required by new 
     section 653(b)(1), new section 653(c)(2)(A) requires that the 
     Commission shall, to the extent possible, impose obligations 
     that are no greater or lesser than the obligations contained 
     in the provisions described in new section 653(c)(1)(B).
       New section 653(c)(2)(B) states that open video system 
     operators may be subject to fees imposed by local franchising 
     authorities, but that such fees are in lieu of fees required 
     under section 622. A State governmental authority could also 
     impose taxes, fees or other assessments in lieu of franchise 
     or franchise-like fees imposed by municipalities. In another 
     effort to ensure parity among video providers, the conferees 
     state that such fees may only be assessed on revenues derived 
     from comparable cable services and the rate at which such 
     fees are imposed on operators of open video systems may not 
     exceed the rate at which franchise fees are imposed on any 
     cable operator in the corresponding franchise area. Open 
     system operators would have the same flexibility as their 
     cable operator competitors to state separately these fees on 
     their customer bills.
       The conferees intend that an operator of an open video 
     system under this part shall be subject, to the extent 
     permissible under State and local law, to the authority of a 
     local government to manage its public rights-of-way in a 
     nondiscriminatory and competitively neutral manner.
       New section 653(c)(3) is a further attempt to ensure that 
     operators of open video systems are not burdened with 
     unreasonable regulatory obligations. It states that the 
     requirements of new section 653 are intended to operate in 
     lieu of, and not in addition to, the requirements of title 
     II. The conferees do not intend that the Commission impose 
     title II-like regulation under the authority of this section.
       Rules and regulations adopted by the Commission pursuant to 
     its jurisdiction under title II should not be merged with or 
     added to the rules and regulations governing open video 
     systems, which will be subject to new section 653, not title 
     II. Section 302(b)(3) of the conference agreement 
     specifically repeals the Commission's video dialtone rules. 
     Those rules implemented a rigid common carrier regime, 
     including the Commission's customer premises equipment and 
     Computer III rules, and thereby created substantial obstacles 
     to the actual operation of open video systems.
       New section 653(c)(4) provides that nothing in the 
     Communications Act precludes a video programming provider 
     making use of an open video system from being treated as an 
     operator of a cable system for purposes of section 111 of 
     title 17, United States Code.
       New section 653(d) contains the definition of the term 
     ``telephone service area'' to be used in conjunction with the 
     provisions of new section 653.
       Section 302(b) of the conference agreement contains 
     technical and conforming amendments. Paragraph (1) repeals 
     subsection (b) of section 613 of the Communications Act (47 
     U.S.C. 533(b)). Paragraph (2) amends paragraph (7) of section 
     602 of the Communications Act to clarify that the provision 
     solely of interactive on-demand services over a common 
     carrier facility or the provision of an open video system 
     does not render the facility a cable system and redesignates 
     paragraphs (12) through (19) as (13) through (20) and, 
     inserts paragraph (12), defining ``interactive on-demand 
     services.'' Paragraph (3), as noted previously, provides that 
     the Commission's video dialtone regulations, adopted in CC 
     Docket No. 87-266, are repealed on the date of enactment and 
     shall not apply to the operation of an open video system. 
     Repeal of the Commission's video dialtone regulations is not 
     intended to alter the status of any video dialtone service 
     offered before the regulations required by this section 
     become effective.


    section 303--preemption of franchising authority regulation of 
                      telecommunications services

     Senate bill
       Subsection 201(b) of the Senate bill establishes the 
     principles applicable to the provision of telecommunications 
     by a cable operator. Paragraph (1) of this subsection adds a 
     news paragraph 3(A) to section 62 1(b) of the Communications 
     Act, which sets forth the jurisdiction of and limitations on 
     franchising authorities over cable operators engaged in the 
     provision of telecommunications services. Specifically, a 
     cable operator or affiliate engaged in the provision of 
     telecommunications services is not required to obtain a 
     franchise under title VI of the Communications Act, nor do 
     the provisions of title VI apply to a cable operator or 
     affiliate to the extent they are engaged in the provision of 
     telecommunications services. Franchising authorities are 
     prohibited from ordering a cable operator or affiliate to 
     discontinue the provision of telecommunications service, 
     requiring cable operators to obtain a franchise to provide 
     telecommunications services, or requiring a cable operator to 
     provide telecommunications services or facilities as a 
     condition of initial grant of franchise, franchise renewal, 
     or transfer of a franchise. However, the Senate intends that 
     telecommunications services provided by a cable company shall 
     be subject to the authority of a local government to manage 
     its public rights of way in a non-discriminatory and 
     competitively neutral manner and to charge fair and 
     reasonable fees for its use. These changes do not affect 
     existing Federal or State authority with respect to 
     telecommunications services.
     House amendment
       Section 106 of the House amendment creates a new section 
     621(b)(3)(A) of the Communications Act that provides that, to 
     the extent a cable operator is engaged in providing a 
     telecommunications service other than cable service, it shall 
     not be required to obtain a franchise, and the provisions of 
     title VI of the Communications Act shall not apply. 
     Subparagraph (B) provides that a franchising authority may 
     not impose any requirement that has the effect of prohibiting 
     or limiting the provision of telecommunications service by a 
     cable operator.
       Subparagraph (C) provides that a franchising authority may 
     not terminate an operator's offering of a telecommunications 
     service or cable service because of the failure of the 
     operator to obtain a franchise for the provision of 
     telecommunications services. Subparagraph (D) establishes 
     that franchising authorities may not require a cable operator 
     to provide any telecommunications service or facilities, 
     other than intergovernmental services, as a condition of the 
     initial grant of a franchise or renewal.
       Subsection (b) amends section 622(b) of the Communications 
     Act by inserting the phrase ``to provide cable services.'' 
     This amendment makes clear that the franchise fee provision 
     is not intended to reach revenues that a cable operator 
     derives for providing new telecommunications services over 
     its system, but only the operators cable-related revenues.
     Conference agreement
       The conference agreement adopts the House provision with 
     some minor, technical modifications. The conferees intend 
     that, to the extent permissible under State and local law, 
     telecommunications services, including those provided by a 
     cable company, shall be subject to the authority of a local 
     government to, in a nondiscriminatory and competitively 
     neutral way, manage its public rights-of-way and charge fair 
     and reasonable fees.


      section 304--competitive availability of navigation devices

     Senate bill
       No provision.
     House amendment
       Section 203 of the House amendment directs the Commission 
     to adopt regulations to assure the competitive availability 
     to consumers of converter boxes, interactive communications 
     devices, and other customer premises equipment from 
     manufacturers, retailers, and other vendors not affiliated 
     with a telecommunications operator. Section 203 does not 
     prohibit telecommunications system operators from also 
     offering navigation devices and other customer premise 
     equipment to customers provided that the system operators' 
     charges for navigation devices and equipment are separately 
     stated, and are not subsidized by the charges for the network 
     service.
       Section 203 specifically recognizes that cable and other 
     telecommunications system operators have a valid interest, 
     which the Commission should continue to protect, in system or 
     signal security and in preventing theft of service and, 
     therefore, the Commission may not prescribe regulations which 
     would jeopardize signal security or impede the legal rights 
     of a provision to preempt theft of service.
       Section 203 directs the Commission to waive a regulation 
     for a limited time where the telecommunications system 
     operator has shown that the waiver is necessary to the 
     introduction of a new telecommunications subscription 
     service.
       Section 203(f) sunsets the regulations adopted pursuant to 
     this section when the Commission determines that the market 
     for customer premises equipment, including navigation 
     devises, has become competitive.
     Conference agreement
       The conference agreement adopts the House provision with 
     modifications as a new 

[[Page H1127]]
     section 629 of the Communications Act. The scope of the regulations are 
     narrowed to include only equipment used to access services 
     provided by multichannel video programming distributors. In 
     prescribing regulations to ensure the commercial availability 
     of such equipment to consumers, the Commission is directed to 
     consult with private standard-setting organizations, such as 
     IEEE, DAVIC (Digital Audio Video Council), MPEG, ANSI and 
     other appropriate bodies. The conferees intend that the 
     Commission avoid actions which could have the effect of 
     freezing or chilling the development of new technologies and 
     services. One purpose of this section is to help ensure that 
     consumers are not forced to purchase or lease a specific, 
     proprietary converter box, interactive device or other 
     equipment from the cable system or network operator. Thus, in 
     implementing this section, the Commission should take 
     cognizance of the current state of the marketplace and 
     consider the results of private standards setting activities.
       The conference agreement also directs the Commission to act 
     on waiver requests within 90 days. The agreement sunsets the 
     regulations when the Commission determines the following: the 
     market for the multichannel video programming distributors is 
     competitive, the market for equipment used in conjunction 
     with the services is competitive; and elimination of the 
     regulations are in the public interest and would promote 
     competition. The agreement makes clear that nothing in this 
     section expands or limits current Commission authority.


              Section 305--Video Programming Accessibility

     Senate bill
       Section 308 of the Senate bill adds a new section 262 to 
     the Communications Act in part to require the Commission to 
     ensure that video programming is accessible through closed 
     captions and that video programming providers or owners 
     maximize the accessibility of video programming previously 
     published or exhibited through the provision of closed 
     captions. New section 262(f) further provides the Commission 
     with authority to exempt various program and providers of 
     video programs from this requirement. In addition, a provider 
     of video programming or program owner may petition the 
     Commission for an exemption from the requirements of this 
     subsection.
       Section 252(f) also requires the Commission to undertake a 
     study of the current extent of closed captioning of video 
     programming and of previously published video programming; 
     providers of video programming; the cost and market for 
     closed captioning; strategies to improve competition and 
     innovation in the provision of closed captioning; and such 
     other matters as the Commission considers relevant.
       New section 262(g) requires the Commission to prescribe 
     regulations to implement all provisions of this new section, 
     not later than eighteen (18) months after the date of 
     enactment of this Act. As noted above, such regulations shall 
     be consistent with the standards developed by the Board in 
     accordance with section 262(e) of this new section.
       New section 262(h) authorizes the Commission to enforce 
     this new section. The Commission shall resolve, by final 
     order, a complaint alleging a violation of this section 
     within 180 days after the date such complaint is filed.
       Subsection (b) section 308 requires that the Commission 
     undertake within 6 months of enactment of this Act 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.
     House amendment
       Section 204 of the House amendment is designed to ensure 
     that video services are accessible to hearing impaired and 
     visually impaired individuals. Subsection (a) requires the 
     Commission to complete an inquiry within 180 days of 
     enactment of this section to ascertain the level at which 
     video programming is closed captioned. In its inquiry, the 
     Commission should examine the level of closed captioning for 
     live and prerecorded programming, the extent to which 
     existing or previously published programming is closed 
     captioned, the type and size of the provider or owner 
     providing the closed captioning, the size of the markets 
     served, the relative audience shares achieved, and any other 
     relevant factors. The Commission also should examine the 
     quality of closed captioning and the style and standards 
     which are appropriate for the particular type of programming. 
     Finally, the Commission should examine the costs of closed 
     captioning to programs and program providers.
       Subsection (b) provides that, consistent with the results 
     of its inquiry, the Commission is instructed to establish an 
     appropriate schedule of deadlines and technical requirements 
     regarding closed captioning of programming. Accordingly, the 
     Commission shall establish reasonable timetables and 
     exceptions for implementing this section. Such schedules 
     should not be economically burdensome on program providers, 
     distributors or the owners of such programs.
       Section 204(d) allows the Commission to exempt specific 
     programs, or classes of programs, or entire services from 
     captioning requirements. Any exemption should be granted 
     using the information collected during the inquiry, and 
     should be based on a finding that the provision of closed 
     captioning would be economically burdensome to the provider 
     or owner of such programs.
       The term ``provider'' contained throughout section 204(d) 
     refers to the specific television station, cable operator, 
     cable network or other service that provides programming to 
     the public. When considering such exemptions, the Commission 
     should focus on the individual outlet and not on the 
     financial conditions of that outlet's corporate parent, nor 
     on the resources of other business units within the parent's 
     corporate structure.
       When considering exemptions under paragraph (d)(1), the 
     Commission shall consider several factors, including but not 
     limited to: (1) the nature and cost of providing closed 
     captions; (2) the impact on the operations of the program 
     provider, distributor, or owner; (3) the financial resources 
     of the program provider, distributor, or owner and the 
     financial impact of the program; (4) the cost of the 
     captioning, considering the relative size of the market 
     served or the audience share; (5) the cost of the captioning, 
     considering whether the program is locally or regionally 
     produced and distributed; (6) the non-profit status of the 
     provider; and (7) the existence of alternative means of 
     providing access to the hearing impaired, such as signing.
       Paragraph (d)(2) recognizes that closed captioning should 
     not be required where it would be inconsistent with 
     programming contracts between program owners, distributors, 
     or providers, already in effect as of the date of enactment 
     of this section, or inconsistent in effect as of the date of 
     enactment of this section, or inconsistent with copyright 
     law. In addition, cable operators and common carriers 
     establishing video platforms may not refuse to carry 
     programming or services which are required to be carried 
     under the carriage provisions of title VI of the 
     Communications Act or pursuant to retransmission consent 
     obligations due to closed captioning requirements.
       Paragraph (d)(3) authorizes the Commission to grant 
     additional exemptions, on a case-by-case basis, where 
     providing closed captions would constitute an undue burden. 
     In making such determinations, the Commission shall balance 
     the need for closed captioned programming against the 
     potential for hindering the production and distribution of 
     programming.
       Subsection (f) directs the Commission to initiate an 
     inquiry within six months of the date of enactment, regarding 
     the use of video descriptions on video programming in order 
     to ensure the accessibility of video programming to persons 
     with visual impairments. The Commission shall report to 
     Congress on its findings. The report shall assess appropriate 
     methods for phasing video descriptions into the marketplace, 
     technical and quality standards for video descriptions, a 
     definition of programming for which video descriptions would 
     apply, and other technical and legal issues. Following the 
     completion of this inquiry the Commission may adopt 
     regulations it deems necessary to promote the accessibility 
     of video programming to persons with visual impairments. It 
     is the goal of the House to ensure that all Americans 
     ultimately have access to video services and programs, 
     particularly as video programming becomes an increasingly 
     important part of the home, school and workplace. 
     Subparagraph (h) makes clear that the Commission has 
     exclusive jurisdiction over complaints arising under this 
     section.
     Conference agreement
       The conference agreement adopts the House provision with 
     modifications which are incorporated as new section 713 of 
     the Communications Act. The agreement deletes the House 
     provision referencing a Commission rulemaking with respect to 
     video description. The remedies available under the 
     Communications Act, including the provisions of sections 207 
     and 208, are available to enforce compliance with the 
     provisions of section 713.

                      TITLE IV--REGULATORY REFORM


                  SECTION 401--REGULATORY FORBEARANCE

     Senate bill
       Section 303 of the Senate bill adds a new section 260 of 
     the Communications Act, under which the Commission must 
     forbear from regulation of a carrier or a service if it 
     determines that enforcement is not necessary to ensure that 
     charges are just and reasonable and not unjustly or 
     unreasonably discriminatory or to protect consumers, and that 
     forbearance is consistent with the public interest. In making 
     the determination to forbear, the Commission shall consider 
     whether forbearance would promote competition. This section 
     allows a carrier to petition the Commission to request that 
     the Commission exercise the authority granted by this 
     section, and such petition shall be deemed granted if the 
     Commission does not deny the petition within 90 days (unless 
     extended for an additional 60 day period). The Commission may 
     grant the petition in whole or in part, and must justify its 
     decision in writing.
     House amendment
       Section 103 of the House amendment adds new section 230 to 
     the Communications Act. Section 230 requires that the 
     Commission forbear from applying regulation from part I or 
     part II of title II (except for sections 201, 202, 208, 243, 
     and 248) to a common carrier or service unless it determines 
     that enforcement is necessary to ensure that the charges are 
     reasonable and not unjustly or unreasonably discriminatory or 
     to protect consumers, or that forbearance is inconsistent 
     with the public interest. In making the determination to 
     forbear, the Commission shall consider 

[[Page H1128]]
     whether forbearance would promote competition.
       Section 230 allows joint marketing of mobile services in 
     connection with telephone exchange service, exchange access, 
     intra- and interLATA telecommunication service and 
     information services.
     Conference agreement
       The conferees agree to create a new section 10 in title I 
     of the Communications Act. New subsection (a) of section 10 
     requires the Commission to forbear from applying any 
     provision of the Communications Act or from applying any of 
     its regulations to a telecommunications carrier or 
     telecommunications service, if the Commission determines that 
     enforcement is not necessary to:
         ensure that charges, practices, classifications or 
     regulations for such carrier or service are just and 
     reasonable, and not unjustly or unreasonably discriminatory;
         protect consumers; and
         protect the public interest.
       In making its public interest determinations, the 
     Commission under new subsection (b) of section 10 shall 
     consider whether or not forbearance will promote competition.
       New subsection (c) permits carriers to petition for 
     forbearance and these petitions shall be deemed granted if 
     the Commission does not deny such petition within one year of 
     the Commission's receipt of the petition. The Commission may 
     only extend this one-year time period for 90 days. The 
     Commission can also approve or deny the petition in whole or 
     in part.
       New subsection (d) provides that the Commission may not 
     forbear from applying the requirements of new sections 251(c) 
     or 271 until the Commission determines that those 
     requirements have been fully implemented.
       New subsection (e) provides that a State may not continue 
     to apply or enforce any provision of the Communications Act 
     that the Commission has determined to forbear from applying 
     under new subsection (a). This new subsection is not intended 
     to limit or preempt State enforcement of State statutes or 
     regulations.


     section 402--biennial review of regulations; regulatory relief

     Senate bill
       Section 302 of the Senate bill adds a new section 259 of 
     the Communications Act, under which every two years the 
     Commission and a Federal-State Joint Board must review all 
     regulations issued under the Communications Act or any State 
     legislation to determine whether they are still necessary in 
     the public interest as a result of meaningful competition. 
     The Commission is required to repeal any of its regulations 
     found to be no longer necessary.
     House amendment
       No provision.
     Conference agreement
       The conferees agree to create a new section 11 in title I 
     of the Communications Act. New subsection (a) of section 11 
     requires the Commission, beginning in 1998 and in every even 
     numbered year thereafter, to review all of its regulations 
     that apply to the operations and activities of providers of 
     telecommunications services and determine whether any of 
     these regulations are no longer in the public interest 
     because competition between providers renders the regulation 
     no longer meaningful.
       New subsection (b) of section 11 requires the Commission to 
     eliminate the regulations that it determines are no longer in 
     the public interest.
       New subsection (b) of section 402 of the conference 
     agreement addresses regulatory relief that streamlines the 
     procedures for revision by local exchange carriers of 
     charges, classifications and practices under section 204 of 
     the Communications Act. New subsection (b) of section 402 
     also eliminates the section 214 approval requirement for 
     extension of lines and permits carriers to file ARMIS reports 
     annually.
       New subsection (c) of section 402 of the conference 
     agreement requires the Commission in classifying carriers 
     according to 47 CFR 32.11, and in establishing reporting 
     requirements pursuant to 47 CFR part 43 and 47 CFR 64.903, to 
     adjust revenue requirements to account for inflation as of 
     the date the Commission's Report and Order on Docket No. CC 
     91-141 was released, and annually thereafter.


  Section 403--Elimination of Unnecessary Commission Regulations and 
                               Functions

     Senate bill
       Section 302(b) of the Senate bill is intended to eliminate 
     unnecessary Commission regulations and functions. Subsection 
     (b)(1) repeals the current requirement that the Commission 
     set depreciation rates for common carriers, thus allowing the 
     Commission flexibility to assess whether doing so would serve 
     the public interest.
       Subsection (b)(2) authorizes the Commission to hire 
     outside, independent licensed CPA's to audit 
     telecommunications carriers and vests those outsiders with 
     the same authority as Commission staff auditors.
       Subsection (b)(3) streamlines the Federal-State 
     coordination process by allowing states and the Commission to 
     select the least formal method appropriate in revolving 
     specific regulatory issues.
       Subsection (b)(4) allows for inspection of ship radio 
     stations by private entities and provides the Commission with 
     authority to waive the current mandatory annual inspection 
     while providing greater flexibility in scheduling ship 
     inspections.
       Subsection (b)(5) would give the Commission flexibility in 
     determining whether broadcast construction permits are 
     required where the likelihood of interference is minimal or 
     does not exist.
       Subsection (b)(6) allows automatic cancellation of a 
     broadcaster's license if the station doe not transmit for 12 
     consecutive months.
       Subsection (b)(7) provides Commission staff with authority 
     to process routine comparative ITFS applications.
       Subsection (b)(8) permits the Commission to delegate, 
     subject to established Commission standards, testing and 
     certification of telecommunications devices and home 
     electronics equipment to private laboratories.
       Subsection (b)(9) eliminates the requirement that a public 
     hearing be held for a station to make routine changes in 
     frequency, hours of operation, and authorized power.
       Section (b)(10) also eliminates the individual licensing 
     requirement currently imposed on domestic ships and aircraft, 
     citizens band radio and personal radio services, if the 
     Commission determines it is in the public interest.
       Subsection (b)(11) expedites the licensing of fixed 
     microwave service by eliminating the requirement that 30 days 
     public notice be given prior to granting these licenses.
       Subsection (b)(12) also ends redundant Commission 
     jurisdiction over ship radios owned by other government 
     agencies.
       Subsection (b)(13) broadens the number of individuals 
     authorized to administer amateur radio examinations and 
     reduces the amount of paperwork that must be kept.
       Subsection (b)(14) authorizes the Commission to streamline 
     and reduce its renewal procedures for non-broadcast radio 
     license renewal applicants such as cellular licensees.
     House amendment
       The House has no comparable provisions, except for the 
     provision delegating equipment testing authority.
     Conference agreement
       The conference agreement adopts the Senate provisions, 
     except for subsection (b)(3), with modifications. 
     Specifically, subsections (b)(4), (b)(7), (b)(10) and (b)(11) 
     of the Senate bill have been modified to incorporate 
     provisions as passed in the House budget reconciliation 
     legislation (House Report 104-280).
       The conference agreement also amends section 310(b) of the 
     Communications Act to remove the restrictions on corporations 
     having foreign officers or directors.

                    TITLE V--OBSCENITY AND VIOLENCE

      Subtitle A--Obscene, Harassing, and Wrongful Utilization of 
                     Telecommunications Facilities


section 502--obscene or harassing use of telecommunications facilities 
                  under the communications act of 1934

     Senate bill
       Section 401 of the Senate bill updates section 223(a) of 
     the Communications Act by using the term ``telecommunications 
     service'' as a replacement for or in addition to 
     ``telephone'' references in the present law. The term 
     ``communication'' is added to current law references to 
     ``conversation.'' An intent requirement is added to section 
     223(a)(1)(A) that liability is incurred for ``obscene, lewd, 
     lascivious, filthy, or indecent'' communications with the 
     intent to ``annoy, abuse, threaten, or harass another 
     person.''
       Current law ``Dial-a-Porn'' provisions (sections 223 (b) 
     and (c)) are untouched by the Senate bill.
       A new section 223(e) is added to prohibit the use of a 
     telecommunications device to make or make available an 
     obscene communication.
       A new section 223(e) is added to prohibit the use of a 
     telecommunications device to make or make available an 
     indecent communications to minors.
       New defenses are provided to assure that the mere provision 
     of access to an interactive computer service does not create 
     liability. The access providers provision is not available to 
     one who provides access to a system with which they conspire 
     or own or control. Employers are provided a defense for 
     actions by employees unless the employee's conduct is within 
     the scope of employment and is known, authorized, or ratified 
     by the employer. A good faith defense is provided for 
     ``reasonable, effective, and appropriate'' measures to 
     restrict access to prohibited communications. The word 
     ``effective'' is given its common meaning and does not 
     require an absolute 100 percent restriction of access to be 
     judged ``effective.''
       Nothing in the defenses to section 223 are intended to 
     narrow or effect the application of the existing dial-a-porn 
     law or other Federal criminal law or to provide a defense for 
     the person who created and sent a prohibited communication.
       The use of the good faith defenses which are otherwise 
     legal shall not expose an individual to liability and the 
     States may not impose obligations for commercial activities 
     which are inconsistent with the treatment of activities or 
     actions described in this section.
     House amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provisions with 
     modifications. New subsection 223(d)(1) applies to content 
     providers who send prohibited material to a specific 

[[Page H1129]]
     person or persons under 18 years of age. Its ``display'' prohibition 
     applies to content providers who post indecent material for 
     online display without taking precautions that shield that 
     material from minors.
       New section 223(d)(1) codifies the definition of indecency 
     from FCC v. Pacifica Foundation, 438 U.S. 726 (1978). 
     Defenses to violations of the new sections assure that 
     attention is focused on bad actors and not those who lack 
     knowledge of a violation or whose actions are equivalent to 
     those of common carriers.
       The conferees intend that the term indecency (and the 
     rendition of the definition of that term in new section 502) 
     has the same meaning as established in FCC v. Pacifica 
     Foundation, 438 U.S. 726 (1978), and Sable Communications of 
     California, Inc. v. FCC, 492 U.S. 115 (1989). These cases 
     clearly establish the principle that the federal government 
     has a compelling interest in shielding minors from indecency. 
     Moreover, these cases firmly establish the principle that the 
     indecency standard is fully consistent with the Constitution 
     and specifically limited in its reach so that the term is not 
     unconstitutionally vague. See also Action for Children's 
     Television v. FCC, 58 F. 3d 654, 662-63 (en banc) (D.C. Cir. 
     1995), cert. denied, 64 U.S.L.W. 3465 (1996); Alliance For 
     Community Media v. FCC, 56 F. 3d 105, 1124-25 (D.C. Cir. 
     1995) cert. granted sub. nom., Denver Area Education 
     Telecommunications Consortium v. FCC, 116 S.CT. 471 (1995), 
     Dial Information Services Corp. of New York v. Thornburgh, 
     938 F.2d 1535, 1540-41 (2d Cir. 1991) cert. denied sub. nom., 
     Dial Information Services Corp. of New York v. Barr, 502 U.S. 
     1072 (1992); Action for Children's Television v. FCC, 932 F. 
     2d 1504, 1508 (D.C. Cir. 1991).
       The precise contours of the definition of indecency have 
     varied slightly depending on the communications medium to 
     which it has been applied. The essence of the phrase--
     patently offensive descriptions of sexual and excretory 
     activities--has remained constant, however. At the time of 
     this writing, the Supreme Court will consider at least one 
     constitutional challenge to federal indecency statutes. 
     Importantly, the question whether indecency is overly broad 
     or unconstitutionally vague is not seriously at issue in that 
     challenge. See Alliance for Community Media, supra, (whether 
     State action exists as to private decisions by cable 
     operators). There is little doubt that indecency can be 
     applied to computer-mediated communications consistent with 
     constitutional strictures, insofar as it has already been 
     applied without rejection in other media contexts, including 
     telephone, cable, and broadcast radio.
       The conferees considered, but rejected, the so-called 
     ``harmful to minors'' standard. See Ginsberg v. New York, 390 
     U.S. 629, 641-43 (1968). The proponents of the ``harmful to 
     minors'' standard contended that that standard contains an 
     exemption for material with ``serious literary, artistic, 
     political, and scientific value,'' and therefore was the 
     better of the two alternative standards. (``Harmful to 
     minors'' laws use the ``variable obscenity'' test and 
     prohibit the sale, and sometimes the display, of certain 
     sexually explicit material to minors.) This assertion 
     misapprehends the indecency standard itself, and disregards 
     the Supreme Court's various rulings on this issue. See 
     Pacifica, 438 U.S. at 743, n. 18, and its progeny.
       The gravamen of the indecency concept is ``patent 
     offensiveness.'' Such a determination cannot be made without 
     a consideration of the context of the description or 
     depiction at issue. It is the understanding of the conferees 
     that, as applied, the patent offensiveness inquiry involves 
     two distinct elements: the intention to be patently 
     offensive, and a patently offensive result. In the Matter of 
     Sagittarius Broadcasting Corp. et al, 7 FCC Rcd. 6873, 6875, 
     (1992); In the Matter of Audio Enterprises, Inc., 3 FCC Rcd. 
     930, 932 (1987). Material with serious redeeming value is 
     quite obviously intended to edify and educate, not to offend. 
     Therefore, it will be imperative to consider the context and 
     the nature of the material in question when determining its 
     ``patent offensiveness.''
       In view of the solid constitutional pedigree of the 
     indecency standard (see Pacifica), 438 U.S. at 743 
     (describing indecency as low value and marginally protected 
     by the First Amendment)), use of the indecency standard poses 
     no significant risk to the free-wheeling and vibrant nature 
     of discourse or to serious, literary, and artistic works that 
     currently can be found on the Internet, and which is expected 
     to continue and grow. As the Supreme Court itself noted when 
     upholding the constitutionality of indecency prohibitions, 
     prohibiting indecency merely focuses speakers to re-cast 
     their message into less offensive terms, but does not 
     prohibit or disfavor the essential meaning of the 
     communication. Pacifica, 438 U.S. at 743, n. 18. Likewise, 
     requiring that access restrictions be imposed to protect 
     minors from exposure to indecent material does not prohibit 
     or disfavor the essential meaning of the indecent 
     communication, it merely puts it in its appropriate place: 
     away from children.
       Violators of this section shall be fined under title 18, 
     U.S. Code, or imprisoned not more than two years, or both.
       Each intentional act of posting indecent content for 
     display shall be considered a separate violation of this 
     subsection, rather than each occasion upon which indecent 
     material is accessed or downloaded from an interactive 
     computer service or posted without the content provider's 
     knowledge on such a service. New subsection 223(d)(2) sets 
     forth the standard of liability for facilities providers who 
     intentionally permit their facilities to be used for an 
     activity prohibited by new subsection 223(d)(1).
       New subsection 223(e) includes statutory defenses for 
     violations of new sections 223 (a) and (d) that supplement 
     other defenses available at law, such as common law defenses. 
     New subsections 223(e)(1), (e)(2) and (e)(3) set forth the 
     ``access provider'' defense. The defense protects entities 
     from liability for providing access or connection to or from 
     a facility, network or system not under their control. The 
     defense covers provision of related capabilities incidental 
     to providing access, such as server and software functions, 
     that do not involve the creation of content.
       The defense does not apply to entities that conspire with 
     entities actively involved in the creation of content 
     prohibited by this section, or who advertise that they offer 
     access to prohibited content. Nor does it apply to provision 
     of access or connection to a facility, system or network that 
     engages in violations of this section and that is owned or 
     controlled by the access provider. In the absence of these 
     conditions, commercial and non-profit Internet operators who 
     provide access to the Internet and other interactive computer 
     services shall not be liable for indecent material accessed 
     by means of their services. This provision is designed to 
     target the criminal penalties of new sections 223(a) and (d) 
     at content providers who violate this section and persons who 
     conspire with such content providers, rather than entities 
     that simply offer general access to the Internet and other 
     online content. The conferees intend that this defense be 
     construed broadly to avoid impairing the growth of online 
     communications through a regime of vicarious liability.
       New subsection 223(e)(4) provides a defense to employers 
     whose employees or agents make unauthorized use of office 
     communications systems. This defense is intended to limit 
     vicarious or imputed liability of employers for actions of 
     their employees or agents. To be outside the defense, the 
     prohibited action must be within the scope of the employee's 
     or agent's employment. In addition, the employer must either 
     have knowledge of the prohibited action and affirmately act 
     to authorize or ratify it, or recklessly disregard the 
     action. Both conditions must be met in order for employers to 
     be held liable for the actions of an employee or agent.
       The good faith defenses set forth in new subsection 
     223(e)(5) are provided for ``reasonable, effective, and 
     appropriate'' measures to restrict access to prohibited 
     communications. The word ``effective'' is given its common 
     meaning and does not require an absolute 100% restriction of 
     access to be judged effective. The managers acknowledge that 
     content selection standards, and other technologies that 
     enable restriction of minors from prohibited communications, 
     which are currently under development, might qualify as 
     reasonable, effective, and appropriate access restriction 
     devices if they are effective at protecting minors from 
     exposure to indecent material via the Internet.
       New subsection 223(e)(6) permits the Commission to describe 
     its view of what constitute ``reasonable, effective and 
     appropriate'' measures and provides that use of such measures 
     shall be admissible as evidence that the defendant qualifies 
     for the good faith defense. This new subsection grants no 
     further authority to the Commission over interactive computer 
     services and should be narrowly construed.
       New subsection 223(f)(1) supplements, without in any way 
     limiting, the ``Good Samaritan'' liability protections of new 
     section 230.
       New subsection 223(f)(2) preempts inconsistent State and 
     local regulations of activities and actions described in new 
     subsections 223(a)(2) and (d). This provision is intended to 
     establish a uniform national standard of content regulation 
     for a national, and indeed a global, medium, in which content 
     is transmitted instantaneously in point-to-point, and point-
     to-multipoint communications. As originally passed by the 
     Senate, this subsection excluded non-commercial content 
     providers. The conferees have expanded this section to 
     provide for consistent national and State and local content 
     regulation of both commercial and non-commercial providers. 
     The conferees recognize and wish to protect the important 
     work of nonprofit libraries and higher educational 
     institutions in providing the public with both access to 
     electronic communications networks like the Internet, and 
     valuable content which they are uniquely well-positioned to 
     provide. Accordingly, nonprofit libraries and educational 
     institutions, like commercial entities, are assured by this 
     provision that they will not be subjected to liability at the 
     State or local level in a manner inconsistent with the 
     treatment of their activities or actions under this 
     legislation.
       The conferees also recognize the critical importance of 
     access software in making the Internet and other interactive 
     computer services accessible to Americans who are not 
     computer experts. Accordingly, provisions of ``access 
     software'' is included within the access provider defense. As 
     defined in new subsection 223(h)(3), in term includes 
     software that enables a user to do any of an enumerated list 
     of functions that are set forth in technical language. It 
     includes client and server software, such as proxy server 
     software that downloads and caches popular web pages to 
     reduce the load of traffic on the Internet and to permit 
     faster retrieval. The definition distinguishes between 
     software that actually creates or includes prohibited content 
     and software that allows the user to access content provided 
     by others.
     
[[Page H1130]]



          section 503--obscene programming on cable television

     Senate bill
       Section 403 of the Senate bill amends section 639 of the 
     Communications Act to increase the maximum fine for 
     transmitting obscene programming on cable television from 
     $10,000 to $100,000.
     House amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provision with 
     modifications, $10,000 is struck from the current law and 
     ``under title 18, United States Code'' is inserted.


      section 504--scrambling of cable channels for nonsubscribers

     Senate bill
       Section 407 of the Senate bill adds a new section 640 to 
     the Communications Act requiring cable television operators 
     to fully scramble or otherwise block upon subscriber request 
     and at no charge to the subscriber, the audio and video 
     portions of programming not specifically subscribed to by a 
     household and unsuitable for children in the judgment of the 
     subscriber.
     House amendment
       No provision.
     Conference agreement.
       The conference agreement adopts the Senate provision with 
     modifications as a new section 640 of the Communications Act. 
     The ``unsuitable for children'' standard is dropped. 
     Programming not subscribed to by a household shall be blocked 
     on request without charge.


   section 505--scrambling of sexually explicit adult video service 
                              programming

     Senate bill
       Section 408 of the Senate bill requires that cable 
     operators offering sexually explicit adult programming or 
     other programming that is indecent on any channel of its 
     service primarily dedicated to sexually-oriented programming 
     fully scramble or block the video and audio portions of such 
     channel or channels so that one not a subscriber does not 
     receive it.
     House amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provision with 
     modifications as a new section 641 of the Communications Act.


     Section 506--Cable Operator Refusal to Carry Certain Programs

     Senate bill
       Section 408 of the Senate bill amends title VI of the 
     Communications Act to allow cable operators to refuse to 
     transmit any public access or leased access program or 
     portion of a program which contains obscenity, indecency, or 
     nudity.
     House amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provision.


  Section 507--Protection of Minors and Clarification of Current Laws 
    Regarding Communication of Obscene Materials Through the Use of 
                               Computers.

     Senate bill
       No provision.
     House amendment
       Section 403(a)(2) of the House amendment made conforming 
     and clarifying amendments to sections 1462, 1467, and 1469 of 
     title 18, United States Code. Those statutes currently 
     prohibit the interstate transportation of obscenity for the 
     purpose of sale or distribution, whether commercial or non-
     commercial in nature. These statutes outlaw the importation 
     of obscenity, by whatever means. These provisions were 
     intended to simply clarify sections 1462, 1465, and 1467 of 
     title 18, U.S. Code.
     Confernce agreement
       The Senate recedes to the House with modifications. Section 
     507 simply clarifies that the current obscenity statutes, in 
     fact, do prohibit using a computer to import and receive an 
     importation of, and transport to sell or distribute, 
     ``obscene'' material.
       The amendments made by this section are clarifying and 
     shall not be interpreted to limit or repeal any prohibition 
     contained in sections 1462 or 1465 of title 18, United States 
     Code, before such amendment, sunder the rule established in 
     United States v. Alpers, 338 U.S. 680 (1950).


             section 508--coercion and enticement of minors

     Senate bill
       Several provisions of the Senate bill protect children from 
     harassing, indecent or obscene communications.
     House amendment
       Several provisions of the House amendment protect children 
     from obscene or indecent communications.
     Confernce agreement
       Section 508 would amend section 2422 of title 18 to 
     prohibit the use of a facility of interstate commerce which 
     includes telecommunications devices and other forms of 
     communication for the purpose of luring, enticing, or 
     coercing a minor into prostitution or a sexual crime for 
     which a person could be held criminally liable, or attempt to 
     do so. On July 24, 1995, the Senate Judiciary Committee held 
     a hearing on online indecency, obscenity, and child 
     endangerment. The record of this hearing supports the need 
     for Congress to take effective action to protect children and 
     families from online harm.


                 section 509--online family empowerment

     Senate bill
       No provision.
     House amendment
       Section 104 of the House amendment protects from civil 
     liability those providers and users of interactive computer 
     services for actions to restrict or to enable restriction of 
     access to objectionable online material.
     Conference agreement
       The conference agreement adopts the House provision with 
     minor modifications as a new section 230 of the 
     Communications Act. This section provides ``Good Samaritan'' 
     protections from civil liability for providers or users of an 
     interactive computer service for actions to restrict or to 
     enable restriction of access to objectionable online 
     material. One of the specific purposes of this section is to 
     overrule Stratton-Oakmont v. Prodigy and any other similar 
     decisions which have treated such providers and users as 
     publishers or speakers of content that is not their own 
     because they have restricted access to objectionable 
     material. The conferees believe that such decisions create 
     serious obstacles to the important federal policy of 
     empowering parents to determine the content of communications 
     their children receive through interactive computer services.
       These protections apply to all interactive computer 
     services, as defined in new subsection 230(e)(2), including 
     non-subscriber systems such as those operated by many 
     businesses for employee use. They also apply to all access 
     software providers, as defined in new section 230(e)(5), 
     including providers of proxy server software.
       The conferees do not intend, however, that these 
     protections from civil liability apply to so-called 
     ``cancelbotting,'' in which recipients of a message respond 
     by deleting the message from the computer systems of others 
     without the consent of the originator or without having the 
     right to do so.

                          Subtitle B--Violence


         section 551--parental choice in television programming

     Senate bill
       Sections 501-505 of Senate bill gives the industry one year 
     to voluntarily develop a ratings system for TV programs. If 
     the industry fails to do so, a Federal TV Ratings Commission 
     would set the ratings. The Commission would be appointed by 
     the President, subject to confirmation by the Senate and 
     would establish rules for rating the level of violence and 
     other objectionable content in programs. The Board would also 
     establish rules for TV broadcasters and cable systems to 
     transmit the ratings to viewers. The Commission would be 
     authorized funds necessary to carry out its duties. The 
     Senate bill requires TV manufacturers to equip all 13 inch or 
     greater TV sets with circuitry to block rated shows.
     House amendment
       Section 305 of the House amendment gives the cable and 
     broadcast industries one year to develop voluntary ratings 
     for video programming containing violence, sex and other 
     indecent materials and to agree voluntarily to broadcast 
     signals containing such ratings. If the industry fails to 
     come up with an acceptance plan, the Commission must develop 
     guidelines for rating programs based on recommendations from 
     an advisory committee that is fairly balanced politically. If 
     a program is rated, the broadcasters must transmit the signal 
     of the rating. The House amendment requires TV manufacturers 
     to equip 13 inch or greater sets with circuitry that will 
     enable the set to block out all programs with a common 
     rating.
     Conference agreement
       The conference agreement adopts the House provisions with 
     modifications. In subsection (a), Congress makes findings 
     concerning the adverse impact of violent and indecent video 
     programming on children, the compelling interest of the 
     government in addressing this problem, and the promise of 
     technological tools that allow parents to protect their 
     children by blocking harmful programming on their television 
     sets.
       In subsection (b), Congress provides the Commission the 
     authority to set up an advisory committee to recommend a 
     system for rating video programming that contains sexual, 
     violent or other indecent material about which parents should 
     be informed before it is displayed to children. It also 
     provides the Commission with authority to prescribe rules 
     requiring a distributor to transmit a rating if the 
     distributor has decided to rate a video program. However, in 
     subsection (e), Congress delays the Commission's exercise of 
     this authority to no sooner than one year after the date of 
     enactment, and only if it determines that distributors of 
     video programming have not established an acceptable 
     voluntary system for rating programming nor agreed 
     voluntarily to broadcast signals that contain ratings of such 
     programming.
       In subsection (b)(1), the Commission is authorized to 
     prescribe guidelines and recommended procedures for a rating 
     system based on the recommendations from the advisory 
     committee. Nothing in this language is intended to preclude 
     publishing the rating in print advertisements or on the air, 
     but under this subsection the distributor must include the 
     electronic transmission of the rating as an additional method 
     of empowering parents to block programming carrying the 
     rating. 
     
[[Page H1131]]

       The rules prescribed for transmitting a rating are 
     requirements. In contrast, the guidelines and recommended 
     procedures for a rating system are not rules and do not 
     include requirements. They are intended to provide industry 
     with a carefully considered and practical system for rating 
     programs if industry does not develop such a system itself. 
     However, nothing in subsection (b)(1) authorizes, and the 
     conferees do not intend that, the Commission require the 
     adoption of the recommended rating system nor that any 
     particular program be rated.
       In subsection (b)(2), Congress directs the Commission to 
     ensure that the advisory committee is composed of 
     representatives from the private sector and be fairly 
     balanced in terms of political affiliation, the points of 
     view represented, and the functions to be performed by the 
     committee. It also direct the Commission to provide to the 
     committee such staff and resources as may be necessary and 
     require the committee to submit a final report no later than 
     one year after the appointment of its members.
       In new subsections (c) and (d), the conferees have removed 
     language from the House amendment concerning the importation 
     of televisions, and clarified that the requirements of these 
     subsections apply to all televisions above a certain size 
     shipped in interstate commerce (regardless of where they were 
     manufactured) or televisions manufactured in the United 
     States. Such sets are required by these two subsections to 
     include a feature designed to enable viewers to block display 
     of programs carrying a common rating in compliance with rules 
     prescribed by the Commission. Under subsection (c)(4), the 
     Commission is authorized to amend these rules as appropriate 
     to allow set manufacturers to comply with this subsection 
     using alternative technology that meets certain standards of 
     cost, effectiveness and ease of use.
       Under subsection (e)(1), the effective date for subsection 
     (b) (regarding the appointment of an advisory committee to 
     recommend a rating system and the rules for transmitting a 
     rating) is no less than one year after the date of enactment. 
     The actual effective date has also been made contingent on a 
     determination by the Commission that distributors of video 
     programming have not, by such date, established a voluntary 
     system for rating video programming and such programming is 
     acceptable to the Commission and have also agreed to include 
     ratings in the transmission of signals to television sets for 
     blocking.
       Under subsection (e)(2), the effective date for subsection 
     (c) (regarding the rules for the manufacture of television 
     sets capable of blocking) is no less than two years after the 
     date of enactment. The conferees intend that the actual 
     effective date be specified by the Commission after 
     consultation with the television manufacturing industry.


                      Section 552--Technology Fund

     Senate bill
       No provision.
     House amendment
       Section 304 of the House amendment encourages broadcast, 
     cable, satellite, syndication, and other video programming 
     distributors to establish a technology fund to encourage TV 
     and electronics equipment manufacturers to facilitate the 
     development of blocking technology that would empower parents 
     to block TV programming they deem inappropriate for their 
     children.
     Conference agreement
       The conference agreement adopts the House provision with 
     modifications to encourage the availability of blocking 
     technology to low income families.

                      Subtitle C--Judicial Review


                     section 561--expedited Review

     Conference agreement
       The conference agreement adds new language to provide for 
     expedited judicial review of the indecency, obscenity and 
     violence provisions of this title. In any civil action in 
     which a party makes a facial challenge to these provisions, 
     the challenge shall be heard by a three-judge district court 
     convened under 28 U.S.C. Sec. 2284. Any decision of the 
     three-judge district court holding a provision 
     unconstitutional shall be directly appealable to the Supreme 
     Court as a matter of right. However, the direct right of 
     appeal provided in subsection (b) in this limited 
     circumstance does not limit any appeal rights applicable to 
     other circumstances under general statutes.
       The conferees emphasize that these provisions are limited 
     in several ways. They apply only in civil actions. If a party 
     makes a facial challenge in a criminal context, that party 
     would not be able to use the procedures provided in this 
     section. These provisions apply only to facial challenges. 
     These provisions do not apply to actions in which the party 
     only challenges the provision as applied to the particular 
     party involved. However, the three-judge district court could 
     hear both a facial challenge and an ``as applied'' challenge 
     if they were combined in the same action, and facial validity 
     had not yet been determined. Thus, the conferees intend that 
     these provisions should be invoked in only the limited number 
     of cases necessary to determine the facial validity of these 
     provisions. If that facial validity is upheld by the courts, 
     these provisions may not be used in every ``as applied'' 
     challenge brought thereafter.

                     TITLE VI--EFFECT ON OTHER LAWS


      section 601--Applicability of Consent Decrees and Other Law

     Senate bill
       Section 7(a) of the Senate bill provides that except for 
     the supersession of the Modification of Final Judgment, 
     nothing in the Communications Act shall be construed to 
     modify, impair, or supersede the applicability of any 
     antitrust law. Section 7(b) provides that the Communications 
     Act shall supersede the Modification of Final Judgment to the 
     extent that it is inconsistent with the Communications Act. 
     Section 7(c) of the bill transfers jurisdiction of any parts 
     of the Modification of Final Judgment which are not 
     superseded to the Commission. Section 7(d) supersedes the GTE 
     consent decree.
       Section 201(c) of the Senate bill provides that except as 
     provided in section 202, nothing in the Communications Act 
     shall be construed to modify, impair, or supersede any State 
     or local tax law.
       Section 226 of the Senate bill provides that 
     notwithstanding any other provision of law or any judicial 
     order, no person shall be subject to the provisions of the 
     Modification of Final Judgment solely by reason by having 
     acquired CMS or private mobile service assets or operations 
     previously owned by a BOC or an affiliate of a BOC.
     House amendment
       Section 401(a) of the House amendment provides that certain 
     specified sections of the Modification of Final Judgment are 
     superseded. Section 401(b) provides that nothing in the 
     Communications Act or the amendments made by the conference 
     agreement shall be construed to modify, impair, or supersede 
     any of the antitrust laws. Section 401(c)(1) provides that 
     parts II and III of title II of the Communications Act shall 
     not be construed to modify, impair, or supersede Federal, 
     State, or local law unless expressly so provided in such 
     part. Section 401(c)(2) provides that notwithstanding section 
     401(c)(1), nothing in the Communications Act or the 
     amendments made by the conference agreement shall be 
     construed to modify, impair, or supersede any State or local 
     tax law except as provided in sections 243(e) and 622 of the 
     Communications Act and section 402 of this Act.
       Section 401(d) of the House amendment provides that the GTE 
     consent decree is superseded. Section 401(e) provides that no 
     person shall be considered an affiliate, successor, or an 
     assign of a BOC under section III of the Modification of 
     Final Judgment by reason of having acquired wireless exchange 
     assets or operations previously owned by a BOC or an 
     affiliate of a BOC. Section 401(f) defines the term 
     ``antitrust laws'' as used in section 401. Section 401(g) 
     provides that for the purposes of this section, the terms 
     ``Modification of Final Judgment'' and ``Bell Operating 
     Company'' have the same meanings provided such terms in 
     section 3 of the Communications Act.
     Conference agreement
       The conference agreement adopts a new approach to the 
     supersession of the Modification of Final Judgment (now 
     called the AT&T Consent Decree in the conference agreement) 
     and the GTE consent decree, and it adds language superseding 
     the AT&T-McCaw Consent Decree (``McCaw Consent Decree''). The 
     conferees sought to avoid any possibility that the language 
     in the conference agreement might be interpreted as impinging 
     on the judicial power. Congress may not by legislation 
     retroactively overturn a final judgment. Plaut v. Spendthrift 
     Farm, Inc., 115 S.Ct. 1447 (1995). On the other hand, 
     Congress may by legislation modify or eliminate the 
     prospective effect of a continuing injunction. Robertson v. 
     Seattle Audubon Society, 503 U.S. 429 (1992); Plaut, 115 
     S.Ct. 1447; Pennsylvania v. Wheeling & Belmont Bridge Co., 59 
     U.S. 421 (1856).
       The conferees believe that the AT&T Consent Decree, the GTE 
     Consent Decree, and the McCaw Consent Decree are continuing 
     injunctions rather than final judgments. The Committee has 
     chosen to use the term ``AT&T Consent Decree'' rather than 
     ``Modification of Final Judgment'' to emphasize that point.
       To avoid any possible constitutional problem, the conferees 
     adopted the following new approach. Rather than 
     ``superseding'' all or part of these continuing injunctions, 
     the conference agreement simply provides that all conduct or 
     activities that are currently subject to these consent 
     decrees shall, on and after the date of enactment, become 
     subject to the requirements and obligations of the 
     Communications Act and shall no longer be subject to the 
     restrictions and obligations of the respective consent 
     decrees.
       The conferees intend that the court shall retain 
     jurisdiction over the three consent decrees for the limited 
     purpose of dealing with any conduct or activity occurring 
     before the date of enactment. Nothing in the language 
     eliminating the prospective effect of the three consent 
     decrees should be construed as eliminating the jurisdiction 
     of the Court to deal with preenactment conduct or activities 
     under the consent decrees.
       At the time of the divestiture of AT&T under the AT&T 
     Consent Decree, AT&T and the BOCs entered into a number of 
     long-term contracts that dealt with pensions, contingent 
     liabilities, and the like. These contracts are not 
     incorporated by reference in the AT&T Consent Decree, and 
     nothing in the language eliminating the prospective effect of 
     the AT&T Consent Decree should be construed as affecting 
     these contracts.
       By eliminating the prospective effect of the GTE Consent 
     Decree, this language removes entirely the GTE Consent 
     Decree's 

[[Page H1132]]
     prohibition on GTE's and the GTE Operating Companies' entry into the 
     interexchange market. No provision in the Communications Act 
     should be construed as creating or continuing in any way the 
     GTE Consent Decree's prohibition on GTE or its operating 
     companies' entry into the interexchange market.
       Language explicitly overturning the McCaw Consent Decree 
     was not included in either bill. However, the new approach to 
     the AT&T and GTE Consent Decrees, as well as intervening 
     events, justify the overturning of the McCaw Consent Decree 
     in the conference agreement.
       The McCaw Consent Decree includes three major elements: (1) 
     equal access and interconnection requirements for AT&T's 
     cellular business, (2) restrictions on AT&T's manufacturing 
     business, and (3) a separate subsidiary requirement for 
     AT&T's cellular business. Both bills contained language that 
     would have overturned the equal access and interconnection 
     requirements for all cellular businesses, and that language 
     is included in the conference agreement. Since the passage of 
     the original bills in both the House and Senate, AT&T has 
     announced that it will spin off its manufacturing business, 
     and so the manufacturing aspects of the decrees will soon 
     become moot. Finally, a recent decision of the Sixth Circuit, 
     Cincinnati Bell Tel. Co., v. FCC, 69 F.3d 752 (6th Cir. 
     1995), may lead to the removal of the separate subsidiary 
     requirement for other cellular businesses. Accordingly, there 
     is little reason to keep the McCaw Consent Decree in place.
       The McCaw Consent Decree presents a slightly different 
     problem than the other two consent decrees because it has not 
     yet been formally entered by the court. The parties agreed to 
     the McCaw Consent Decree and filed it with the court on July 
     15, 1994. AT&T entered into a stipulation to abide by the 
     proposed consent decree until the court completed its review 
     under the Tunney Act. That review is still continuing. 
     Nonetheless, the conferees believe that the same basic 
     principles of law set forth above relating to modifying the 
     prospective effect of injunctions apply to the McCaw Consent 
     Decree, which is defined to include the stipulation.
       The new approach adopted in the Committee required that 
     several new provisions be added to the conference agreement. 
     Two of these provisions are described below. Two other 
     provisions, relating to equal access and nondiscrimination 
     for interexchange carriers and existing activities under 
     consent decree waivers, are also related to this change and 
     they are described in the appropriate sections of this Joint 
     Statement.
       Both the Senate bill and the House amendment specifically 
     provided that a company would not be considered a successor 
     to a BOC or otherwise subject to restrictions imposed on BOCs 
     solely because the company acquired (by spinoff, transfer, or 
     any other manner) wireless exchange assets or operations from 
     a BOC. The language of these provisions provided this 
     protection under the AT&T Consent Decree. Because of the new 
     approach to the AT&T Consent Decree, the language in the 
     bills no longer worked to provide the protection that was 
     intended. For that reason, those specific provisions in both 
     bills are omitted from the conference agreement.
       In lieu of those provisions, the conference agreement 
     modifies the definition of BOC so that successors or assigns 
     of the listed BOC's fall within the definition only if they 
     provide wireline telephone exchange service. This change of 
     definition is intended to provide the same protection that 
     the provisions in the two bills provided--that a successor to 
     a BOC's wireless assets shall not be treated as a BOC simply 
     because of the acquisition of those assets.
       The conference agreement adopts the House antitrust savings 
     clause with modifications. The antitrust savings clause 
     provides that except as provided in paragraphs two and three, 
     nothing in this Act or the amendments made by the conference 
     agreement shall be construed to modify, impair, or supersede 
     the applicability of any of the antitrust laws. The clause 
     was modified to include the repeal of section 221(a) of the 
     Communications Act (47 U.S.C. Sec. 221(a)). Congress enacted 
     section 221(a) in the days when local telephone service was 
     viewed as a natural monopoly. Its purpose was to allow 
     competing local telephone companies to merge without facing 
     antitrust scrutiny. Thus, the statute provides that when any 
     two telephone companies merge, the Commission should 
     determine whether the merger will be ``of advantage to the 
     persons to whom service is to be rendered and in the public 
     interest.'' If so, the Commission can render the transaction 
     immune from ``any Act or Acts of Congress making the proposed 
     transaction unlawful.'' In a world of regulated monopolies, 
     this idea made sense.
       However, section 221(a) could inadvertently undercut 
     several of the provisions of the Telecommunciations Act of 
     1996. The problem arises for at least two reasons. First, the 
     critical term ``telephone company'' is not defined. In the 
     old world of regulated monopolies, a definition probably was 
     not necessary. However, in the new world of competition, many 
     companies will be able to argue plausibly that they are 
     telephone companies.
       Second, section 221(a) allows the Commission to confer 
     immunity from any Act of Congress (including the 
     Telecommunications Act of 1996) after performing a public 
     interest review. Section 221(a) could be used to avoid the 
     cable-telco buyout provisions of the Telecommunications Act 
     of 1996. Any cable company that owned any telephone assets 
     could become a telephone company and be bought out by a BOC 
     by applying for immunity under this section.
       In addition, if immunity were conferred under section 
     221(a), it would allow mergers between telecommunications 
     giants to go forward without any antitrust or securities 
     review. In the old world, the statute was usually used to 
     confer immunity on mergers between non-competing Bell 
     operating subsidiaries or mergers between Bells and small 
     independents within their territories. Neither of these 
     situations involved competitive considerations.
       However, in the future, the conferees anticipate that cable 
     companies will be providing local telephone service and the 
     BOCs will be providing cable service. Mergers between these 
     kinds of companies should not be allowed to go through 
     without a thorough antitrust review under the normal Hart-
     Scott-Rodino process. The new language contains a conforming 
     change to clarify that these mergers will now be subject to 
     Hart-Scott-Rodino review. By returning review of mergers in a 
     competitive industry to the DOJ, this repeal would be 
     consistent with one of the underlying themes of the bill--to 
     get both agencies back to their proper roles and to end 
     government by consent decree. The Commission should be 
     carrying out the policies of the Communications Act, and the 
     DOJ should be carrying out the policies of the antitrust 
     laws. The repeal would not affect the Commission's ability to 
     conduct any review of a merger for Communications Act 
     purposes, e.g. transfer of licenses. Rather, it would simply 
     end the Commission's ability to confer antitrust immunity.
       The conference agreement adopts the House provision stating 
     that the bill does not have any effect on any other Federal, 
     State, or local law unless the bill expressly so provides. 
     This provision prevents affected parties from asserting that 
     the bill impliedly preempts other laws.
       The conference agreement adopts the House version of the 
     State tax savings clause with a modification to clarify that 
     fees for open video systems are excluded from the savings 
     clause.


  section 602--preemption of local taxation with respect to direct-to-
                             home services

     Senate bill
       No provision.
     House amendment
       Section 402 of the House amendment preempts local taxation 
     on the provision of direct-to-home (DTH) satellite services. 
     This section exempts DTH satellite service providers and 
     their sales and distribution agents and representatives from 
     collecting and remitting local taxes on satellite-delivered 
     programming services. Section 402 does not preempt local 
     taxes on the sale of the equipment needed to receive these 
     services.
     Conference agreement
       The conference agreement adopts the House provisions with 
     modifications. This section exempts DTH satellite service 
     providers from collecting and remitting local taxes and fees 
     on DTH satellite services. DTH satellite service is 
     programming delivered via satellite directly to subscribers 
     equipped with satellite receivers at their premises; it does 
     not require the use of public rights-of-way or the physical 
     facilities or services of a community.
       The conferees adopt the House language, but narrow the 
     language to ensure that the exemption is only provided for 
     the actual sale of the programming delivered by the direct-
     to-home satellite service. The conference agreement amends 
     the House provisions to clarify that the exemption applies to 
     taxes ``on'' direct-to-home satellite service rather than 
     ``with respect to the provision of'' such service. The 
     conference agreement deletes the language specifying that the 
     sale of equipment was not within the exemption. The 
     conference agreement amends the definition of ``direct-to-
     home satellite service'' so that it includes only programming 
     transmitted or broadcast by satellite.
       The intent of these amendments is to clarify that the 
     exemption applies only to the programming provided by the 
     direct-to-home satellite service. To give two illustrative 
     examples, the exemption does not apply to the sale of 
     equipment; that language was deleted only because it could 
     have created a negative implication that the exemption was 
     broader than intended. In addition, the exemption does not 
     apply to real estate taxes that are otherwise applicable when 
     the provider owns or leases real estate in a jurisdiction. 
     Also, States are free to tax the sale of the service and they 
     may rebate some or all of those monies to localities if they 
     so desire.

                  TITLE VII--MISCELLANEOUS PROVISIONS


Section 701--Prevention of Unfair Billing Practices for Information or 
            Services Provided Over Toll-free Telephone Calls

     Senate bill
       Section 406 of the Senate bill amends section 228(c) of the 
     Communications Act to add protection against the use of toll 
     free telephone numbers to connect an individual to a ``pay-
     per-call'' service. Published reports have indicated that 
     toll free numbers have been used to defeat the blocking of 
     ``pay-per-call'' numbers by connecting a caller to a ``pay-
     per-call'' service after a toll free connection has been 
     made. Households, businesses and other institutions have been 
     billed for ``pay-per-call'' charges even though ``pay-per-
     call'' blocking techniques were 

[[Page H1133]]
     used. This provision is intended to stop that practice.
       Section 703 of the Senate bill also amends section 228(c) 
     of the Communications Act to clarify that subscribers who 
     call an 800 number or other toll-free numbers shall not be 
     charged for the calls unless the calling party agrees to be 
     charged under a written subscription agreement or other 
     appropriate means. Section 703(a) enumerates findings made by 
     Congress concerning the prevention of unfair billing 
     practices for information or services provided over toll-free 
     telephone calls.
     House amendment
       Section 110 protects unsuspecting caller from being charged 
     for 800 calls that they expect to be toll-free--thereby 
     preserving the toll-free status and integrity of the 800 
     number exchange and $8 billion industry--by requiring strict 
     cost disclosure requirements to ensure that consumers clearly 
     know when there is a charge for a call, how much the charge 
     will be, and how they will be billed.
       Pursuant to the provisions of this section, information 
     providers must obtain legal, informed consent from a caller 
     through either a written pre-authorized contract between the 
     information providers and the caller, or through the use of 
     an instructive preamble at the start of all non-free 800 
     calls. Both of these options ensure that consumers know there 
     is a charge for the information service and that they are 
     giving their consent to be charged.
     Conference agreement
       The conference agreement adopts the Senate provisions with 
     modifications. The conferees agreed to close a loophole in 
     current law, which permits information providers to evade the 
     restrictions of section 228 by filing tariffs for the 
     provision of information services. Many information providers 
     have taken advantage of this exemption by filing tariffs--
     especially for 1-500, 1-700 and 10XXX numbers--and charging 
     customers high prices for the services. This exemption has 
     proven to be a problem because consumers have none of the 
     protections that were enacted as part of the Telephone 
     Disclosure and Dispute Resolution Act (P.L. 102-556). Section 
     701(b) of the conference agreement closes that loophole.


              Section 702--Privacy of Customer Information

     Senate bill
       Section 102 of the Senate bill amends the Communications 
     Act to add a new section 252 to impose separate affiliate and 
     other safeguards on certain activities of the BOCs. 
     Subsection (g) of new section 252 establishes rules to ensure 
     that the BOCs protect the confidentiality of proprietary 
     information they receive and to prohibit the sharing of such 
     information in aggregate form with any subsidiary or 
     affiliate unless that information is a vaialble to all other 
     persons on the same terms and conditions. In general, a BOC 
     may not share with anyone customer-specific proprietary 
     information without the consent of the person to whom it 
     relates. Exceptions to this general rule permit disclosure in 
     response to a court order or to initiate, render, bill and 
     collect for telecommunications services. For purposes of this 
     subsection the term ``customer proprietary information'' does 
     not include subscriber list information.
       Subsection 301(c) of the Senate bill defines the term 
     ``subscriber list information'' and requires local exchange 
     carriers to provide subscriber list information on a timely 
     and unbundled basis and at nondiscriminatory and reasonable 
     rates, terms and conditions to anyone upon request for the 
     purpose of publishing directories in any format.
       Subsection 301(d) provides that telecommunications carriers 
     have a duty to protect the confidentiality of proprietary 
     information of other common carriers and customers, including 
     resellers. A telecommunications carrier that receives such 
     from another carrier may not use such information for its own 
     marketing efforts.
     House amendment
       Section 105 of the House amendment adds a new section 222 
     to the Communications Act. Section 222 establishes privacy 
     protections for customer proprietary network information 
     (CPNI). Section 222(a) imposes on carriers a statutory duty 
     to provide subscriber list information on a timely basis, 
     under nondiscriminatory and reasonable rates, terms and 
     conditions, to any publisher of directories upon request.
       Section 222(b)(1)(B) prohibits the use of CPNI ``in the 
     identifications or solicitation of potential customers for 
     any service other than the service from which such 
     information is derived.''
       With respect to section 222(b)(2), the House recognizes 
     that carriers are likely to incur some costs in complying 
     with the customer-requested disclosures contemplated by this 
     section. This section does not preclude a carrier from being 
     reimbursed by the customers of third parties for the costs 
     associated with making such disclosures. In addition, the 
     disclosures described in this section include only the 
     information provided to the carrier by the customer. A 
     carrier is not required to disclose any of its work product 
     based on such information.
       In section 222(b)(3), the term ``aggregate information'' 
     should not be construed as a mechanism whereby carriers are 
     forced to disclose sensitive information to their 
     competitors. Indeed, the key component of ``aggregate 
     information'' is that such information would have to be able 
     to be disclosed only to those persons who have the approval 
     of the customer. Thus, the House intends that the use of 
     ``aggregate information'' would be rather limited or 
     restricted
       Section 222(c) states that this section shall not prevent 
     the use of CPNI to combat toll fraud or to bill and collect 
     for services requested by the customers.
       Section 222(d) allows the Commission to exempt from its 
     requirements of subsection (b) carriers with fewer than 
     500,000 access lines, if the Commission determines either 
     that such an exemption is in the public interest or that 
     compliance would impose an undue burden.
       Section 222(e) defines terms used in this section.
       Section 104(b) directs the Commission to review the impact 
     of converging communications technologies on customer 
     privacy. This section requires the Commission to commence a 
     proceeding within one year after the date of enactment to 
     examine the impact of converging technologies and 
     globalization of communications networks has on the privacy 
     rights of consumers and possible remedies to protect them. 
     This section also directs changes in the Commission's 
     regulations to ensure that customer privacy rights are 
     considered in the introduction of new telecommunications 
     service and directs the Commission to correct any defects in 
     its privacy regulations that are identified pursuant to this 
     section. The Commission is also directed to make any 
     recommendations to Congress for any legislative changes 
     required to correct such defects within 18 months after the 
     date of enactment of this Act.
       This section defines three fundamental principles to 
     protect all consumers. These principles are: (1) the right of 
     consumers to know the specific information that is being 
     collected about them; (2) the right of consumers to have 
     proper notice that such information is being used for other 
     purposes; and (3) the right of consumers to stop the reuse or 
     sale of that information.
     Conference agreement
       The conference agreement adopts the Senate provisions with 
     modifications. Section 702 of the conference agreement amends 
     title II of the Communications Act by adding a new section 
     222.
       In general, the new section 222 strives to balance both 
     competitive and consumer privacy interests with respect to 
     CPNI. New subsection 222(a) stipulates that it is the duty of 
     every telecommunications carrier to protect the 
     confidentiality of proprietary information of and relating to 
     other carriers, equipment manufacturers and customers, 
     including carriers reselling telecommunications services 
     provided by a telecommunications carrier.
       New subsection 222(b) provides that a telecommunications 
     carrier that receives or obtains proprietary information from 
     another carrier for purposes of providing any 
     telecommunications service shall use such information only 
     for such purpose and shall not use such information for its 
     own marketing efforts.
       In new subsection 222(c) use of CPNI by telecommunications 
     carriers is limited, except as provided by law or with the 
     approval of the customer. New subsection (c) specifies that 
     telecommunications carriers shall only use, disclose, or 
     permit access to individually identifiable CPNI in its 
     provision of the telecommunications service for which such 
     information is derived or in its provision of services 
     necessary to or used in the provision of such 
     telecommunications service, including directory services. The 
     conferees also agreed upon a provision that will require 
     disclosure of CPNI by a telecommunications carrier upon 
     affirmative written request by the customer, to any person 
     designated by the customer.
       The conference agreement also asserts carriers' rights in 
     new subsection 222(d) to use CPNI to initiate, render, bill, 
     and collect for telecommunications service. New subsection 
     (d) also allows use of CPNI to protect the rights or property 
     of the carrier. The conferees intend new subsection 222(d)(2) 
     to allow carriers to use CPNI in limited fashion for credit 
     evaluation to protect themselves from fraudulent operators 
     who subscribe to telecommunications services, run up large 
     bills, and then change carriers without payment.
       New subsection 222(e) stipulates that subscriber list 
     information shall be made available by telecommunications 
     carriers that provide telephone exchange service on a timely 
     and unbundled basis to any person upon request for the 
     purpose of publishing directories in any format. The 
     subscriber list information provision guarantees independent 
     publishers access to subscriber list information at 
     reasonable and nondiscriminatory rates, terms and conditions 
     from any provider of local telephone service.
       New subsection 222(f) contains definitions of CPNI, 
     aggregate information and subscriber list information.


                      secton 703--pole attachments

     Senate bill
       Section 204 of the Senate bill amends section 224 of the 
     Communications Act. Section 204 requires that poles, ducts, 
     conduits and rights-of-way controlled by utilities are made 
     available to cable television systems at the rates, terms and 
     conditions that are just and reasonable regardless of whether 
     the cable system is providing cable television services or 
     telecommunications services. Section 204 further requires the 
     Commission 

[[Page H1134]]
     to prescribe additional regulations to establish rates for attachments 
     by telecommunications carriers. Such rates will take effect 
     five years from date of enactment and be phased in over a 
     five year period.
     House amendment
       Section 105 of the House amendment is intended to remedy 
     the inequity of charges for pole attachments among providers 
     of telecommunications services. First, it expands the scope 
     of the coverage of section 224 of the Communications Act. 
     Under current law, section 224(a)(4) currently defines ``pole 
     attachment'' to mean any attachment by a cable television 
     system to a pole, conduit, or right of way owned or 
     controlled by a utility. This section expands the definition 
     of ``pole attachment'' to include attachments by all 
     providers of telecommunications services.
       Second, it amends section 224 to direct the Commission, no 
     later than one year after the date of enactment of the 
     Communications Act of 1995, to prescribe regulations for 
     ensuring that utilities charge just and reasonable and 
     nondiscriminatory rates for pole attachments to all providers 
     of telecommunications services, including such attachments 
     used by cable television systems to provide 
     telecommunications services.
       The new provision directs the Commission to regulate pole 
     attachment rates based on a ``fully allocated cost'' formula. 
     In prescribing pole attachment rates, the Commission shall: 
     (1) recognize that the entire pole, duct, conduit, or right-
     of-way other than the usable space is of equal benefit to all 
     entities attaching to the pole and therefore apportion the 
     cost of the space other than the usable space equally among 
     all such attachments; (2) recognize that the usable space is 
     of proportional benefit to all entities attaching to the 
     pole, duct, conduit, or right-of-way and therefore apportion 
     the cost of the usable space according to the percentage of 
     usable space required for each entity; and (3) allow for 
     reasonable terms and conditions relating to health, safety, 
     and the provision of reliable utility service.
       This new provision further provides that, to the extent 
     that a company seeks pole attachment for a wire used solely 
     to provide cable television services (as defined by section 
     602(6) of the Communications Act), that cable company will 
     continue to pay the rate authorized under current law (as set 
     forth in subparagraph (d)(1) of the 1978 Act). If, however, a 
     cable television system also provides telecommunications 
     services, then that company shall instead pay the pole 
     attachment rate prescribed by the Commission pursuant to the 
     fully allocated cost formula.
       Finally, the new provision requires that whenever the owner 
     of a conduit or right-of-way intends to modify or to alter 
     such conduit or right-of-way, the owner shall provide written 
     notification of such action to any entity that has obtained 
     an attachment so that such entity may have a reasonable 
     opportunity to add to or modify its existing attachment. Any 
     entity that adds to or modifies its existing attachment after 
     receiving such notification shall bear a proportionate share 
     of the costs incurred by the owner in making such conduit or 
     right-of-way accessible.
     Conference agreement
       The conference agreement adopts the Senate provision with 
     modifications. The conference agreement section 224 of the 
     Communications Act by adding new subsection (e)(1) to allow 
     parties to negotiate the rates, terms, and conditions for 
     attaching to poles, ducts, conduits, and rights-of-way owned 
     or controlled by utilities. New subsection 224(e)(2) 
     establishes a new rate formula charged to telecommunications 
     carriers for the non-useable space of each pole. Such rate 
     shall be based upon the number of attaching entities. The 
     conferees also agree to three additional provisions from the 
     House amendment. First, subsection (g) requires utilities 
     that engage in the provision of telecommunications services 
     or cable services to impute to its costs of providing such 
     service an equal amount to the pole attachment rate for which 
     such company would be liable under section 224. Second, new 
     subsection 224(h) requires utilities to provide written 
     notification to attaching entities of any plans to modify or 
     alter its poles, ducts, conduit, or rights-of-way. New 
     subsection 224(h) also requires any attaching entity that 
     takes advantage of such opportunity to modify its own 
     attachments shall bear a proportionate share of the costs of 
     such alterations. Third, new subsection 224(i) prevents a 
     utility from imposing the cost of rearrangements to other 
     attaching entities if done solely for the benefit of the 
     utility.


   section 704--facilities siting; radio frequency emission standards

     Senate bill
       No provision.
     House amendment
       Section 108 of the House amendment required the Commission 
     to issue regulations within 180 days of enactment for siting 
     of CMS. A negotiated rulemaking committee comprised of State 
     and local governments, public safety agencies and the 
     affected industries were to have attempted to develop a 
     uniform policy to propose to the Commission for the siting of 
     wireless tower sites.
       The House amendment also required the Commission to 
     complete its pending Radio Frequency (RF) emission exposure 
     standards within 180 days of enactment. The siting of 
     facilities could not be denied on the basis of RF emission 
     levels for facilities that were in compliance with the 
     Commission standard.
       The House amendment also required that to the greatest 
     extent possible the Federal government make available to use 
     of Federal property, rights-of-way, easements and any other 
     physical instruments in the siting of wireless 
     telecommunications facilities.
     Conference agreement
       The conference agreement creates a new section 704 which 
     prevents Commission preemption of local and State land use 
     decisions and preserves the authority of State and local 
     governments over zoning and land use matters except in the 
     limited circumstances set forth in the conference agreement. 
     The conference agreement also provides a mechanism for 
     judicial relief from zoning decisions that fail to comply 
     with the provisions of this section. It is the intent of the 
     conferees that other than under section 332(c)(7)(B)(iv) of 
     the Communications Act of 1934 as amended by this Act and 
     section 704 of the Telecommunications Act of 1996 the courts 
     shall have exclusive jurisdiction over all other disputes 
     arising under this section. Any pending Commission rulemaking 
     concerning the preemption of local zoning authority over the 
     placement, construction or modification of CMS facilities 
     should be terminated.
       When utilizing the term ``functionally equivalent 
     services'' the conferees are referring only to personal 
     wireless services as defined in this section that directly 
     compete against one another. The intent of the conferees is 
     to ensure that a State or local government does not in making 
     a decision regarding the placement, construction and 
     modification of facilities of personal wireless services 
     described in this section unreasonably favor one competitor 
     over another. The conferees also intend that the phrase 
     ``unreasonably discriminate among providers of functionally 
     equivalent services'' will provide localities with the 
     flexibility to treat facilities that create different visual, 
     aesthetic, or safety concerns differently to the extent 
     permitted under generally applicable zoning requirements even 
     if those facilities provide functionally equivalent services. 
     For example, the conferees do not intend that if a State or 
     local government grants a permit in a commercial district, it 
     must also grant a permit for a competitor's 50-foot tower in 
     a residential district.
       Actions taken by State or local governments shall not 
     prohibit or have the effect of prohibiting the placement, 
     construction or modification of personal wireless services. 
     It is the intent of this section that bans or policies that 
     have the effect of banning personal wireless services or 
     facilities not be allowed and that decisions be made on a 
     case-by-case basis.
       Under subsection (c)(7)(B)(ii), decisions are to be 
     rendered in a reasonable period of time, taking into account 
     the nature and scope of each request. If a request for 
     placement of a personal wireless service facility involves a 
     zoning variance or a public hearing or comment process, the 
     time period for rendering a decision will be the usual period 
     under such circumstances. It is not the intent of this 
     provision to give preferential treatment to the personal 
     wireless service industry in the processing of requests, or 
     to subject their requests to any but the generally applicable 
     time frames for zoning decision.
       The phrase ``substantial evidence contained in a written 
     record'' is the traditional standard used for judicial review 
     of agency actions.
       The conferees intend section 332(c)(7)(B)(iv) to prevent a 
     State or local government or its instrumentalities from 
     basing the regulation of the placement, construction or 
     modification of CMS facilities directly or indirectly on the 
     environmental effects of radio frequency emissions if those 
     facilities comply with the Commission's regulations adopted 
     pursuant to section 704(b) concerning such emissions.
       The limitations on the role and powers of the Commission 
     under this subparagraph relate to local land use regulations 
     and are not intended to limit or affect the Commission's 
     general authority over radio telecommunications, including 
     the authority to regulate the construction, modification and 
     operation of radio facilities.
       The conferees intend that the court to which a party 
     appeals a decision under section 332(c)(7)(B)(v) may be the 
     Federal district court in which the facilities are located or 
     a State court of competent jurisdiction, at the option of the 
     party making the appeal, and that the courts act 
     expeditiously in deciding such cases. The term ``final 
     action'' of that new subparagraph means final administrative 
     action at the State or local government level so that a party 
     can commence action under the subparagraph rather than 
     waiting for the exhaustion of any independent State court 
     remedy otherwise required.
       With respect to the availability of Federal property for 
     the use of wireless telecommunications infrastructure sites 
     under section 704(c), the conferees generally adopt the House 
     provisions, but substitute the President or his designee for 
     the Commission.
       It should be noted that the provisions relating to 
     telecommunications facilities are not limited to commercial 
     mobile radio licensees, but also will include other 
     Commission licensed wireless common carriers such as point to 
     point microwave in the extremely high frequency portion of 
     the electromagnetic spectrum which rely on line of sight for 
     transmitting communication services.
     
[[Page H1135]]



  section 705--mobile service direct access to long distance carriers

     Senate bill
       Subsection (b) of section 221 of the Senate bill, as 
     passed, states that notwithstanding the MFJ or any other 
     consent decree, no CMS provider will be required by court 
     order or otherwise to provide long distance equal access. The 
     Commission may only order equal access if a CMS provider is 
     subject to the interconnection obligations of section 251 and 
     if the Commission finds that such a requirement is in the 
     public interest. CMS providers shall ensure that its 
     subscribers can obtain unblocked access to the interexchange 
     carrier of their choice through the use of interexchange 
     carrier identification codes, except that the unblocking 
     requirement shall not apply to mobile satellite services 
     unless the Commission finds it is in the public interest.
     House amendment
       Under section 109 of the House amendment, the Commission 
     shall require providers of two-way switched voice CMS to 
     allow their subscribers to access the telephone toll services 
     provider of their choice through the use of carrier 
     identification codes. The Commission rules will supersede the 
     equal access, balloting and prescription requirements imposed 
     by the MFJ and the AT&T-McCaw consent decree. The Commission 
     may exempt carriers or classes of carriers from the 
     requirements of this section if it is consistent with the 
     public interest, convenience, and necessity, and the 
     provision of mobile services by satellite is specifically 
     exempt from this section.
     Conference agreement
       The conference agreement adopts the House provision with 
     modifications as a new paragraph (8) of section 332 of the 
     Communications Act. Specifically, no CMS provider is required 
     to provide equal access to common carriers providing 
     telephone toll services. However, the Commission may impose 
     rules to require unblocked access through the use of 
     mechanisms such as carrier identification codes or toll-free 
     numbers, if it determines that customers are being denied 
     access to the telephone toll service provider of their 
     choice, and such denial is contrary to the public interest, 
     convenience, and necessity. The requirements for unblocked 
     access to providers of telephone toll service shall not apply 
     to mobile satellite services unless the Commission finds it 
     to be in the public interest.


          section 706--advanced telecommunications incentives

     Senate bill
       Section 304 of the Senate bill ensures that advanced 
     telecommunications capability is promptly deployed by 
     requiring the Commission to initiate and complete regular 
     inquiries to determine whether advanced telecommunications 
     capability, particularly to schools and classrooms, is being 
     deployed in a ``reasonable and timely fashion.'' Such 
     determinations shall include an assessment by the Commission 
     of the availability, at reasonable cost, of equipment needed 
     to deliver advanced broadband capability. If the Commission 
     makes a negative determination, it is required to take 
     immediate action to accelerate deployment. Measures to be 
     used include: price cap regulation, regulatory forbearance, 
     and other methods that remove barriers and provide the proper 
     incentives for infrastructure investment. The Commission may 
     preempt State commissions if they fail to act to ensure 
     reasonable and timely access.
     House amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provision with a 
     modification.


            section 707--telecommunications development fund

     Senate bill
       No provision.
     House amendment
       Section 112 creates the Telecommunications Development Fund 
     (TDF). The TDF is an organization to provide funds for small 
     businesses involved in telecommunications application. The 
     TDF is formulated to serve as a quasi-governmental entity 
     that will provide low interest loans as well as financial 
     guarantees. The capital for the Fund will be derived from the 
     deposit of up-front payments for spectrum auctions into an 
     interest bearing account.
       Businesses with gross assets of less that $50 million will 
     be eligible to receive loans, based upon an assessment of 
     their loan application. The fund will be administered as a 
     not-for-profit organization, and funds will be disbursed on a 
     race and gender neutral basis. The board of directors will 
     consist of seven members: four from the private sector, and 
     one from three Federal agencies (the Commission, Department 
     of Treasury, and the Small Business Administration).
       The fund will provide for reinvestment, create jobs, and 
     promote technological innovation in the telecommunications 
     industry. A unique aspect of the Fund is that it will promote 
     public/private sector partnerships to enhance fund assets, 
     and promote technology development and transfer.
     Conference agreement
       The conference agreement adopts the House provision as a 
     new section 714 of the Communications Act.


     section 708--national education technology funding corporation

     Senate bill
       Title VI of the Senate bill adds the National Education 
     Technology Funding Corporation Act of 1995. The provisions of 
     this title authorize a corporation, established in the 
     District of Columbia as a private, nonprofit corporation 
     which is not an agency or independent establishment of the 
     Federal Government, to receive financial assistance from 
     Federal departments and agencies. The Corporation will 
     receive such assistance to leverage resources and stimulate 
     private investment in education technology infrastructure, to 
     encourage States to create and upgrade interactive high 
     capacity networks for elementary schools, secondary schools 
     and public libraries, to provide loans, grants and other 
     forms of assistance to State education technology agencies, 
     and other educational purposes. The Corporation's financial 
     statements shall be audited annually, and the Corporation 
     shall publish an annual report to the President and the 
     Congress.
     House amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provision.


section 709--report on the use of advanced telecommunications services 
                          for medical purposes

     Senate bill
       No provision.
     House amendment
       The House amendment directs the Assistant Secretary of 
     Commerce for Communications and Information, in consultation 
     with the Secretary of Health and Human Services, to submit a 
     report on telemedicine grant programs conducted by the 
     government.
     Conference agreement
       The conference agreement adopts the House provision.


              section 710--authorization of appropriations

     Senate bill
       No provision.
     House amendment
       This section authorizes appropriations for the Commission 
     of such sums as may be necessary to carry out this Act, and 
     provides that additional amounts appropriated to carry out 
     this Act shall be construed to be changes in the amounts 
     appropriated for the performance of the activities described 
     in section 9(a) of the Communications Act.
     Conference agreement
       The conference agreement adopts the House provision with a 
     technical modification to section 309(j)(8)(B) of the 
     Communications Act.
       From the Committee on Commerce, for consideration of the 
     Senate bill, and the House amendment, and modifications 
     committed to conference:
     Tom Bliley,
     Jack Fields,
     Michael G. Oxley,
     Rick White,
     John D. Dingell,
     Edward J. Markey,
     Rick Boucher,
     Anna G. Eshoo,
     Bobby L. Rush,
       Provided, Mr. Pallone is appointed in lieu of Mr. Boucher 
     solely for consideration of sec. 205 of the Senate bill:
     Frank Pallone, Jr.,
       As additional conferees, for consideration of secs. 1-6, 
     101-04, 106-07, 201, 204-05, 221-25, 301-05, 307-11, 401-02, 
     405-06, 410, 601-06, 703, and 705 of the Senate bill, and 
     title I of the House amendment, and modifications committed 
     to conference:
     Dan Schaefer,
     Joe Barton,
     J. Dennis Hastert,
     Bill Paxon,
     Scott Klug,
     Dan Frisa,
     Cliff Stearns,
     Sherrod Brown,
     Bart Gordon,
     Blanche Lambert Lincoln,
       As additional conferees, for consideration of secs. 102, 
     202-03, 403, 407-09, and 706 of the Senate bill, and title II 
     of the House amendment, and modifications committed to 
     conference:
     Dan Schaefer,
     J. Dennis Hastert,
     Dan Frisa,
       As additional conferees, for consideration of secs. 105, 
     206, 302, 306, 312, 501-05, and 701-02 of the Senate bill, 
     and title III of the House amendment, and modifications 
     committed to conference:
     Cliff Stearns,
     Bill Paxon,
     Scott Klug,
       As additional conferees, for consideration of secs. 7-8, 
     226, 404, and 704 of the Senate bill, and titles IV-V of the 
     House amendment, and modifications committed to conference:
     Dan Schaefer,
     J. Dennis Hastert,
     Scott Klug,
       As additional conferees, for consideration of title IV of 
     the House amendment, and modifications committed to 
     conference:
     Dan Schaefer,
     Joe Barton,
     Scott Klug,
      As additional conferees from the Committee on the Judiciary, 
     for consideration of the 

[[Page H1136]]
     Senate bill (except secs. 1-6, 101-04, 106-07, 201, 204-05, 221-25, 
     301-05, 307-11, 401-02, 405-06, 410, 601-06, 703, and 705), 
     and of the House amendment (except title I), and 
     modifications committed to conference:
     Henry Hyde,
     Carlos J. Moorhead,
     Bob Goodlatte,
     Steve Buyer,
     Mike Flanagan,
      As additional conferees, for consideration of secs. 1-6, 
     101-04, 106-07, 201, 204-05, 221-25, 301-05, 307-11, 401-02, 
     405-06, 410, 601-06, 703, and 705 of the Senate bill, and 
     title I of the House amendment, and modifications committed 
     to conference:
     Henry Hyde,
     Carlos J. Moorhead,
     Bob Goodlatte,
     Steve Buyer,
     Mike Flanagan,
     Elton Gallegly,
     Bob Barr,
     Martin R. Hoke,
     Howard L. Berman,
                                Managers on the Part of the House.

     Larry Pressler,
     Ted Stevens,
     Slade Gorton,
     Trent Lott,
     Fritz Hollings,
     Daniel K. Inouye,
     Wendell Ford,
     J.J. Exon,
     Jay Rockefeller,
     Managers on the Part of the Senate.

                          ____________________