Congressional Record, Volume 146 Issue 47 (Thursday, April 13, 2000)

[Congressional Record Volume 146, Number 47 (Thursday, April 13, 2000)]
[House]
[Pages H2283-H2302]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

RURAL LOCAL BROADCAST SIGNAL ACT

Mr. GOODLATTE. Mr. Speaker, pursuant to the order of the House of
today, I call up the bill (H.R. 3615) to amend the Rural
Electrification Act of 1936 to ensure improved access to the signals of
local television stations by multichannel video providers to all
households which desire such service in unserved and underserved rural
areas by December 31, 2006, and ask for its immediate consideration.
The Clerk read the title of the bill.
Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that the
amendment in the nature of a substitute considered as adopted to H.R.
3615 under the order of the House of earlier today be an amendment in
the nature of a substitute that I have now placed at the desk which
shall be considered as read.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
Mr. STENHOLM. Mr. Speaker, reserving the right to object, I
understand that this version of the substitute has been changed in
section 4 from the version of the substitute approved by the Committee
on Rules.
Mr. Speaker, can the gentleman from Virginia (Mr. Goodlatte) please
reassure me that cooperative lenders, such as CoBank and the National
Rural Utilities Cooperative Finance Corporation, are still eligible to
participate in the loan program under this bill?
Mr. GOODLATTE. Mr. Speaker, will the gentleman yield?
Mr. STENHOLM. I yield to the gentleman from Virginia.
Mr. GOODLATTE. Mr. Speaker, the gentleman is correct. CFC is
specifically eligible to participate under the terms of the revised
bill, and CoBank is an eligible participant for loans made in
accordance with the regulations of the Federal Farm Credit
Administration and its governing statute.
Mr. STENHOLM. Mr. Speaker, reclaiming my time, I thank the gentleman
very much for that assurance.
Mr. Speaker, I am pleased that these cooperative lenders are eligible
to participate. Their demonstrated expertise, capacity, capital
strength, and experience in providing financing to rural utility bars
should help to make this program a success.
Mr. Speaker, I withdraw my reservation of objection.

{time} 1645

The SPEAKER pro tempore (Mr. Hastings of Washington). Is there
objection to the request of the gentleman from Virginia?
Mr. LARGENT. Mr. Speaker, I object.
The SPEAKER pro tempore. Objection is heard.
Pursuant to the order of the House of today, the bill is considered
read for amendment.
The text of H.R. 3615 is as follows:

H.R. 3615

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Rural Local Broadcast Signal
Act''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) In 1936, most of the rural United States did not have
access to electrical service enjoyed by the rest of the
United States, and this lack of electrical service inhibited
economic development in the rural areas of the United States.
(2) In response to this lack of service, Congress enacted
the Rural Electrification Act of 1936 (also known as the
Norris-Rayburn Rural Electrification Act) which established
the Rural Electric Administration to ensure that all
Americans have access to electrical service and to promote
rural development.
(3) The program under the Rural Electrification Act of 1936
has successfully brought electricity to all parts of the
rural United States and has stimulated rural development
throughout the United States.
(4) In 1949, most of the rural United States did not have
access to telephone service enjoyed by the rest of the United
States, and this lack of electrical service inhibited
economic development in the rural areas of the United States.
(5) In response to this lack of service, Congress amended
the Rural Electrification Act of 1936 to assure that the
rural United States has access to telecommunications
services, including telephone services, distance learning,
and telemedicine in order to promote rural development.
(6) The programs under these amendments have successfully
brought telecommunications to all parts of the United States
and has stimulated rural development throughout the United
States.
(7) Public Law 93-32 amended the Rural Electrification Act
of 1936 to establish a revolving fund for insured and
guaranteed loans.
(8) The reorganization of the Department of Agriculture by
Public Law 103-354 created the Rural Utilities Service (RUS)
within the Department of Agriculture and assigned it the
responsibility for administering programs of federally-
guaranteed loans.
(9) The Rural Utilities Service now manages a portfolio of
federally-guaranteed loans in excess of $42,000,000,000.
(10) The Rural Utilities Service has granted loans for the
purpose of telecommunications services to more than 800
borrowers, including telephone and electricity cooperatives,
in all States of the United States.
(11) Local television coverage is vitally important for
rural development efforts.
(12) Local television programming broadcasts crop reports,
local news, weather reports, public service announcements,
and advertisements by local businesses, all of which are
important for rural development.
(13) In today's age of modern communications, rural
communities often receive the majority of their information
from satellite platforms.
(14) The rest of the United States, including most of the
rural United States, is not able to receive local television
signals via satellite.
(15) Without access to local television signals, the
development of the rural United States is greatly inhibited.
(16) Just as important public purposes were served by
bringing electricity to the rural United States and then by
bringing telephone service to the rural United States, so the
United States would be served by ensuring that the rural
United States can receive local television signals via
satellite.
(17) It is in the public interest that the Rural Utilities
Service of the Department of Agriculture utilize existing and
new loan guarantee programs to promote rural development by
ensuring that the rural United States has access to the
signals of local television stations by multichannel video
providers.

SEC. 3. RURAL LOCAL TELEVISION SIGNALS.

The Rural Electrification Act of 1936 (7 U.S.C. 901 et
seq.) is amended by adding at the end the following:

``TITLE VI--RURAL LOCAL TELEVISION SIGNALS

``SEC. 501. DEFINITIONS.

``In this title:
``(1) Administrator.--The term `Administrator' means the
Administrator of the Rural Utilities Service.
``(2) Affiliate.--The term `affiliate' means any person or
entity that controls, or is controlled by, or is under common
control with, another person or entity.
``(3) Borrower.--The term `borrower' means any person or
entity receiving a loan guarantee under this title.
``(4) Cost.--
``(A) In general.--The term `cost' means the estimated
long-term cost to the Government of a loan guarantee or
modification thereof, calculated on a net present value
basis, excluding administrative costs and any incidental
effects on governmental receipts or outlays.
``(B) Loan guarantees.--For purposes of this paragraph the
cost of a loan guarantee--
``(i) shall be the net present value, at the time when the
guaranteed loan is disbursed, of the estimated cash flows
of--

``(I) payments by the Government to cover defaults and
delinquencies, interest subsidies, or other payments; and
``(II) payments to the Government, including origination
and other fees, penalties, and recoveries; and

``(ii) shall include the effects of changes in loan terms
resulting from the exercise by the guaranteed lender of an
option included in

[[Page H2284]]

the loan guarantee contract, or by the borrower of an option
included in the guaranteed loan contract.
``(C) Cost of modification.--The cost of the modification
shall be the difference between the current estimate of the
net present value of the remaining cash flows under the terms
of a loan guarantee contract, and the current estimate of the
net present value of the remaining cash flows under the terms
of the contract, as modified.
``(D) Discount rate.--In estimating net present value, the
discount rate shall be the average interest rate on
marketable Treasury securities of similar maturity to the
cash flows of the guarantee for which the estimate is being
made.
``(E) Fiscal year assumptions.--When funds of a loan
guarantee under this title are obligated, the estimated cost
shall be based on the current assumptions, adjusted to
incorporate the terms of the loan contract, for the fiscal
year in which the funds are obligated.
``(5) Current.--The term `current' has the meaning given
that term in section 250(c)(9) of the Balanced Budget and
Emergency Deficit Control Act of 1985.
``(6) Designated market area.--The term `designated market
area' has the meaning given that term in section 122(j) of
title 17, United States Code.
``(7) Loan guarantee.--The term `loan guarantee' means any
guarantee, insurance, or other pledge with respect to the
payment of all or part of the principal or interest on any
debt obligation of a non-Federal borrower to the Federal
Financing Bank or a non-Federal lender, but does not include
the insurance of deposits, shares, or other withdrawable
accounts in financial institutions.
``(8) Modification.--The term `modification' means any
Government action that alters the estimated cost of an
outstanding loan guarantee (or loan guarantee commitment)
from the current estimate of cash flows, including the sale
of loan assets, with or without recourse, and the purchase of
guaranteed loans.
``(9) Common terms.--Except as provided in paragraphs (1)
through (9), any term used in this title that is defined in
the Communications Act of 1934 (47 U.S.C. 151 et seq.) has
the meaning given the term in that Act.

``SEC. 502. LOAN GUARANTEES.

``(a) Purpose.--The purpose of this title is to enable the
Administrator to provide such loan guarantees as are
necessary to ensure improved access to the signals of local
television stations by multichannel video providers to all
households which desire such service in unserved and
underserved rural areas by December 31, 2006.
``(b) Assistance to Borrowers.--Subject to the
appropriations limitation under subsection (c)(2), the
Administrator may provide loan guarantees to borrowers to
finance projects to provide local television broadcast
signals by providers of multichannel video services including
direct broadcast satellite licensees and licensees of
multichannel multipoint distribution systems, to areas that
do not receive local television broadcast signals over
commercial for-profit direct-to-home satellite distribution
systems. A borrower that receives a loan guarantee under this
title may not transfer any part of the proceeds of the monies
from the loans guaranteed under this program to an affiliate
of the borrower.
``(c) Underwriting Criteria; Prerequisites.--
``(1) In general.--The Administrator shall administer the
underwriting criteria developed under subsection (f)(1) to
determine which loans are eligible for a guarantee under this
title.
``(2) Authority to make loan guarantees.--The Administrator
shall be authorized to guarantee loans under this title only
to the extent provided for in advance by appropriations Acts.
``(3) Prerequisites.--In addition to meeting the
underwriting criteria under paragraph (1), a loan is not
eligible for a loan guarantee under this title unless--
``(A) the loan is made to finance the acquisition,
improvement, enhancement, construction, deployment, launch,
or rehabilitation of the means by which local television
broadcast signals will be delivered to an area not receiving
such signals over commercial for-profit direct-to-home
satellite distribution systems;
``(B) the proceeds of the loan will not be used for
operating expenses;
``(C) the total amount of all such loans may not exceed in
the aggregate $1,250,000,000;
``(D) the loan does not exceed $100,000,000, except that 1
loan under this title may exceed $100,000,000, but shall not
exceed $625,000,000;
``(E) the loan bears interest and penalties which, in the
Administrator's judgment, are not unreasonable, taking into
consideration the prevailing interest rates and customary
fees incurred under similar obligations in the private
capital market; and
``(F) the Administrator determines that taking into account
the practices of the private capital markets with respect to
the financing of similar projects, the security of the loan
is adequate.
``(4) Additional criteria.--In addition to the requirements
of paragraphs (1), (2), and (3), a loan for which a guarantee
is sought under this title shall meet any additional criteria
promulgated under subsection (f)(1).
``(d) Additional Requirements.--The Administrator may not
make a loan guarantee under this title unless--
``(1) repayment of the obligation is required to be made
within a term of the lesser of--
``(A) 25 years from the date of its execution; or
``(B) the useful life of the primary assets used in the
delivery of relevant signals;
``(2) the Administrator has been given the assurances and
documentation necessary to review and approve the guaranteed
loans; and
``(3) the Administrator makes a determination in writing
that--
``(A) the applicant has given reasonable assurances that
the assets, facilities, or equipment will be utilized
economically and efficiently;
``(B) necessary and sufficient regulatory approvals,
spectrum rights, and delivery permissions have been received
by project participants to assure the project's ability to
repay obligations under this title; and
``(C) repayment of the obligation can reasonably be
expected, including the use of an appropriate combination of
credit risk premiums and collateral offered by the applicant
to protect the Federal Government.
``(e) Approval of NTIA Required.--
``(1) In general.--The Administrator may not issue a loan
guarantee under this title unless the National
Telecommunications and Information Administration consults
with the Administrator and certifies that the issuance of the
loan guarantee is consistent with subsection (a).
``(2) Certification.--The Administrator shall provide the
appropriate information on each loan guarantee application
recommended by the Administrator to the National
Telecommunications and Information Administration for
certification. The National Telecommunications and
Information Administration shall make the determination
required under this subsection within 90 days, without regard
to the provision of chapter 5 of title 5, United States Code,
and sections 10 and 11 of the Federal Advisory Committee Act
(5 U.S.C. App.).
``(f) Requirements.--
``(1) In general.--Not later than 180 days after the date
of enactment of this title, the Administrator shall consult
with an independent public accounting firm to develop
underwriting criteria relating to the issuance of loan
guarantees, appropriate collateral and cash flow levels for
the types of loan guarantees that might be issued under this
title, and such other matters as the Administrator determines
appropriate.
``(2) Authority of administrator.--In lieu of or in
combination with appropriations of budget authority to cover
the costs of loan guarantees as required under section
504(b)(1) of the Federal Credit Reform Act of 1990, the
Administrator may accept on behalf of an applicant for
assistance under this title a commitment from a non-Federal
source to fund in whole or in part the credit risk premiums
with respect to the applicant's loan. The aggregate of
appropriations of budget authority and credit risk premiums
described in this paragraph with respect to a loan guarantee
may not be less than the cost of that loan guarantee.
``(3) Credit risk premium amount.--The Administrator shall
determine the amount required for credit risk premiums under
this subsection on the basis of--
``(A) the circumstances of the applicant, including the
amount of collateral offered;
``(B) the proposed schedule of loan disbursements;
``(C) the borrower's business plans for providing service;
``(D) financial commitment from the broadcast signal
provider; and
``(E) any other factors the Administrator considers
relevant.
``(4) Payment of premiums.--Credit risk premiums under this
subsection shall be paid to an account established in the
Treasury which shall accrue interest and such interest shall
be retained by the account, subject to paragraph (5).
``(5) Cohorts of loans.--In order to maintain sufficient
balances of credit risk premiums to adequately protect the
Federal Government from risk of default, while minimizing the
length of time the Government retains possession of those
balances, the Administrator in consultation with the Office
of Management and Budget shall establish cohorts of loans.
When all obligations attached to a cohort of loans have been
satisfied, credit risk premiums paid for the cohort, and
interest accrued thereon, which were not used to mitigate
losses shall be returned to the original source on a pro rata
basis.
``(g) Conditions of Assistance.--A borrower shall agree to
such terms and conditions as are sufficient, in the judgment
of the Administrator to ensure that, as long as any principal
or interest is due and payable on such obligation, the
borrower--
``(1) will maintain assets, equipment, facilities, and
operations on a continuing basis;
``(2) will not make any discretionary dividend payments
that reduce the ability to repay obligations incurred under
this section; and
``(3) will remain sufficiently capitalized.
``(h) Lien on Interests in Assets.--Upon providing a loan
guarantee to a borrower under this title, the Administrator
shall have liens which shall be superior to all other liens
on assets of the borrower equal to the unpaid balance of the
loan subject to such guarantee.

[[Page H2285]]

``(i) Perfected Interest.--The Administrator and the lender
shall have a perfected security interest in those assets of
the borrower fully sufficient to protect the Administrator
and the lender.
``(j) Insurance Policies.--In accordance with practices of
private lenders, as determined by the Administrator, the
borrower shall obtain, at its expense, insurance sufficient
to protect the interests of the Federal Government, as
determined by the Administrator.
``(k) Authorization of Appropriations.--For the additional
costs of the loans guaranteed under this title, including the
cost of modifying the loans as defined in section 502 of the
Congressional Budget Act of 1974 (2 U.S.C. 661(a)), there are
authorized to be appropriated for fiscal years 2000 through
2006, such amounts as may be necessary. In addition there are
authorized to be appropriated such sums as may be necessary
to administer this title. Any amounts appropriated under this
subsection shall remain available until expended.

``SEC. 503. ADMINISTRATION OF LOAN GUARANTEES.

``(a) Applications.--The Administrator shall prescribe the
form and contents for an application for a loan guarantee
under section 502.
``(b) Assignment of Loan Guarantees.--The holder of a loan
guaranteed under this title may assign the loan guarantee in
whole or in part, subject to such requirements as the
Administrator may prescribe.
``(c) Modifications.--The Administrator may approve the
modification of any term or condition of a loan guarantee
including the rate of interest, time of payment of interest
or principal, or security requirements, if the Administrator
finds in writing that--
``(1) the modification is equitable and is in the overall
best interests of the United States;
``(2) consent has been obtained from the borrower and the
lender;
``(3) the modification is consistent with the objective
underwriting criteria developed in consultation with an
independent public accounting firm under section 502(f);
``(4) the modification does not adversely affect the
Federal Government's interest in the entity's assets or loan
collateral;
``(5) the modification does not adversely affect the
entity's ability to repay the loan; and
``(6) the National Telecommunications and Information
Administration does not object to the modification on the
ground that it is inconsistent with the certification under
section 502(e).
``(d) Priority Markets.--
``(1) In general.--To the maximum extent practicable, the
Administrator shall give priority to projects which serve the
most underserved rural markets, as determined by the
Administrator. In making prioritization determinations, the
Administrator shall consider prevailing market conditions,
feasibility of providing service, population, terrain, and
other factors the Administrator determines appropriate.
``(2) Priority relating to consumer costs and separate tier
of signals.--The Administrator shall give priority to
projects that--
``(A) offer a separate tier of local broadcast signals; and
``(B) provide lower projected costs to consumers of such
separate tier.
``(3) Performance schedules.--Applicants for priority
projects under this section shall enter into stipulated
performance schedules with the Administrator.
``(4) Penalty.--The Administrator may assess a borrower a
penalty not to exceed 3 times the interest due on the
guaranteed loan, if the borrower fails to meet its stipulated
performance schedule. The penalty shall be paid to the
account established under section 502.
``(5) Limitation on consideration of most populated
areas.--The Administrator shall not provide a loan guarantee
for a project that is primarily designed to serve the 40 most
populated designated market areas and shall take into
consideration the importance of serving rural markets that
are not likely to be otherwise offered service under section
122 of title 17, United States Code, except through the loan
guarantee program under this title.
``(e) Compliance.--The Administrator shall enforce
compliance by an applicant and any other party to the loan
guarantee for whose benefit assistance is intended, with
the provisions of this title, regulations issued
hereunder, and the terms and conditions of the loan
guarantee, including through regular periodic inspections
and audits.
``(f) Commercial Validity.--For purposes of claims by any
party other than the Administrator, a loan guarantee or loan
guarantee commitment shall be conclusive evidence that the
underlying obligation is in compliance with the provisions of
the title, and that such obligation has been approved and is
legal as to principal, interest, and other terms. Such a
guarantee or commitment shall be valid and incontestable in
the hands of a holder thereof, including the original lender
or any other holder, as of the date when the Administrator
granted the application therefore, except as to fraud or
material misrepresentation by such holder.
``(g) Defaults.--The Administrator shall prescribe
regulations governing a default on a loan guaranteed under
this title.
``(h) Rights of the Administrator.--
``(1) Subrogation.--If the Administrator authorizes payment
to a holder, or a holder's agent, under subsection (g) in
connection with a loan guarantee made under section 502, the
Administrator shall be subrogated to all of the rights of the
holder with respect to the obligor under the loan.
``(2) Disposition of property.--The Administrator may
complete, recondition, reconstruct, renovate, repair,
maintain, operate, rent, sell, or otherwise dispose of any
property or other interests obtained under this section in a
manner that maximizes taxpayer return and is consistent with
the public convenience and necessity.
``(i) Action Against Obligor.--The Administrator may bring
a civil action in an appropriate district court of the United
States in the name of the United States or of the holder of
the obligation in the event of a default on a loan guaranteed
under this title. The holder of a guarantee shall make
available to the Administrator all records and evidence
necessary to prosecute the civil action. The Administrator
may accept property in full or partial satisfaction of any
sums owed as a result of default. If the Administrator
receives, through the sale or other disposition of such
property, an amount greater than the aggregate of--
``(1) the amount paid to the holder of a guarantee under
subsection (g); and
``(2) any other cost to the United States of remedying the
default, the Administrator shall pay such excess to the
obligor.
``(j) Breach of Conditions.--The Attorney General shall
commence a civil action in a court of appropriate
jurisdiction to enjoin any activity which the Administrator
finds is in violation of this title, regulations issued
hereunder, or any conditions which were duly agreed to, and
to secure any other appropriate relief, including relief
against any affiliate of the borrower.
``(k) Attachment.--No attachment or execution may be issued
against the Administrator or any property in the control of
the Administrator prior to the entry of final judgment to
such effect in any State, Federal, or other court.
``(l) Investigation Charge and Fees.--
``(1) Appraisal fee.--The Administrator may charge and
collect from an applicant a reasonable fee for appraisal for
the value of the equipment or facilities for which the loan
guarantee is sought, and for making necessary determinations
and findings. The fee may not, in the aggregate, be more than
one-half of one percent of the principal amount of the
obligation. The fee imposed under this paragraph shall be
used to offset the administrative costs of the program.
``(2) Loan origination fee.--The Administrator may charge a
loan origination fee.
``(m) Annual Audit.--The Comptroller General of the United
States shall annually audit the administration of this title
and report the results of the audit to the Committee on
Agriculture, Nutrition, and Forestry of the Senate and the
Committee on Agriculture of the House of Representatives.
``(n) Indemnification.--An affiliate of the borrower shall
indemnify the Government for any losses it incurs as a result
of--
``(1) a judgment against the borrower;
``(2) any breach by the borrower of its obligations under
the loan guarantee agreement;
``(3) any violation of the provisions of this title by the
borrower;
``(4) any penalties incurred by the borrower for any
reason, including the violation of the stipulated
performance; and
``(5) any other circumstances that the Administrator
determines to be appropriate.
``(o) Sunset.--The Administrator may not approve a loan
guarantee under this title after December 31, 2006.

``SEC. 504. RETRANSMISSION OF LOCAL TELEVISION BROADCAST
STATIONS.

``A borrower shall be subject to applicable rights,
obligations, and limitations of title 17, United States Code.
If a local broadcast station requests carriage of its signal
and is located in a market not served by a satellite carrier
providing service under a statutory license under section 122
of title 17, United States Code, the borrower shall carry the
signal of that station without charge and shall be subject to
the applicable rights, obligations, and limitations of
sections 338, 614, and 615 of the Communications Act of
1934.''.

The SPEAKER pro tempore. The amendment now at the desk is adopted in
lieu of the amendment printed in the bill.
The text of H.R. 3615, as amended, is as follows:

Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Rural
Local Broadcast Signal Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purpose.
Sec. 3. Rural television loan guarantee board.
Sec. 4. Approval of loan guarantees.
Sec. 5. Administration of loan guarantees.
Sec. 6. Prohibition on use of funds for spectrum auctions.
Sec. 7. Prohibition on use of funds by incumbent cable operators.
Sec. 8. Annual audit.
Sec. 9. Exemption from must carry requirements.
Sec. 10. Additional availability of broadcast signals in rural areas.
Sec. 11. Improved cellular service in rural areas.
Sec. 12. Technical amendment.
Sec. 13. Definitions.

[[Page H2286]]

Sec. 14. Authorizations of appropriations.
Sec. 15. Sunset.

SEC. 2. PURPOSE.

The purpose of this Act is to facilitate access, on a
technologically neutral basis and by December 31, 2006, to
signals of local television stations for households located
in unserved areas and underserved areas.

SEC. 3. RURAL TELEVISION LOAN GUARANTEE BOARD.

(a) Establishment.--There is established the Rural
Television Loan Guarantee Board (in this Act referred to as
the ``Board'').
(b) Members.--
(1) In general.--Subject to paragraph (2), the Board shall
consist of the following members:
(A) The Secretary of the Treasury, or the designee of the
Secretary.
(B) The Secretary of Agriculture, or the designee of the
Secretary.
(C) The Secretary of Commerce, or the designee of the
Secretary.
(2) Requirement as to designees.--An individual may not be
designated a member of the Board under paragraph (1) unless
the individual is an officer of the United States pursuant to
an appointment by the President, by and with the advice and
consent of the Senate.
(c) Functions of the Board.--
(1) In general.--The Board shall determine whether or not
to approve loan guarantees under this Act. The Board shall
make such determinations consistent with the purpose of this
Act and in accordance with this subsection and section 4 of
this Act.
(2) Consultation authorized.--
(A) In general.--In carrying out its functions under this
Act, the Board shall consult with such departments and
agencies of the Federal Government as the Board considers
appropriate, including the Department of Commerce, the
Department of Agriculture, the Department of the Treasury,
the Department of Justice, the Department of the Interior,
the Board of Governors of the Federal Reserve System, the
Federal Communications Commission, the Federal Trade
Commission, and the National Aeronautics and Space
Administration.
(B) Response.--A department or agency consulted by the
Board under subparagraph (A) shall provide the Board such
expertise and assistance as the Board requires to carry out
its functions under this Act.
(3) Approval by majority vote.--The determination of the
Board to approve a loan guarantee under this Act shall be by
a vote of a majority of the Board.

SEC. 4. APPROVAL OF LOAN GUARANTEES.

(a) Authority To Approve Loan Guarantees.--Subject to the
provisions of this section and consistent with the purpose of
this Act, the Board may approve loan guarantees under this
Act.
(b) Regulations.--
(1) Requirements.--The Administrator (as defined in section
5 of this Act), under the direction of and for approval by
the Board, shall prescribe regulations to implement the
provisions of this Act and shall do so not later than 120
days after funds authorized to be appropriated under section
15 of this Act have been appropriated in a bill signed into
law.
(2) Elements.--The regulations prescribed under paragraph
(1) shall--
(A) set forth the form of any application to be submitted
to the Board under this Act;
(B) set forth time periods for the review and consideration
by the Board of applications to be submitted to the Board
under this Act, and for any other action to be taken by the
Board with respect to such applications;
(C) provide appropriate safeguards against the evasion of
the provisions of this Act;
(D) set forth the circumstances in which an applicant,
together with any affiliate of an applicant, shall be treated
as an applicant for a loan guarantee under this Act;
(E) include requirements that appropriate parties submit to
the Board any documents and assurances that are required for
the administration of the provisions of this Act; and
(F) include such other provisions consistent with the
purpose of this Act as the Board considers appropriate.
(3) Construction.--(A) Nothing in this Act shall be
construed to prohibit the Board from requiring, to the extent
and under circumstances considered appropriate by the Board,
that affiliates of an applicant be subject to certain
obligations of the applicant as a condition to the approval
or maintenance of a loan guarantee under this Act.
(B) If any provision of this Act or the application of such
provision to any person or entity or circumstance is held to
be invalid by a court of competent jurisdiction, the
remainder of this Act, or the application of such provision
to such person or entity or circumstance other than those as
to which it is held invalid, shall not be affected thereby.
(c) Authority Limited by Appropriations Acts.--The Board
may approve loan guarantees under this Act only to the extent
provided for in advance in appropriations Acts.
(d) Requirements and Criteria Applicable to Approval.--
(1) In general.--The Board shall utilize the underwriting
criteria developed under subsection (g), and any relevant
information provided by the departments and agencies with
which the Board consults under section 3, to determine which
loans may be eligible for a loan guarantee under this Act.
(2) Prerequisites.--In addition to meeting the underwriting
criteria under paragraph (1), a loan may not be guaranteed
under this Act unless--
(A) the loan is made to finance the acquisition,
improvement, enhancement, construction, deployment, launch,
or rehabilitation of the means by which local television
broadcast signals will be delivered principally to an
unserved area or an underserved area (or both);
(B) the proceeds of the loan will not be used for
operating, advertising, or promotion expenses;
(C) the proposed project, as determined by the National
Telecommunications and Information Administration, is not
likely to have a substantial adverse impact on competition
that outweighs the benefits of improving access to the
signals of a local television station in an unserved area or
an underserved area (or both), and is commercially viable;
(D) the loan is provided by--
(i) an insured depository institution (as that term is
defined in section 3 of the Federal Deposit Insurance Act)
that is acceptable to the Board;
(ii) a lender that is acceptable to the Board, and--

(I) has not fewer than one issue of outstanding debt that
is related within the highest three rating categories of a
nationally recognized statistical rating agency; or
(II) has provided financing to entities with outstanding
debt from the Rural Utilities Service and which possess, in
the judgment of the Board, the expertise, capacity, and
capital strength to provide financing pursuant to this Act;
or

(iii) a nonprofit corporation, including the National Rural
Utilities Cooperative Finance Corporation, engaged primarily
in commercial lending, if the Board determines that such
nonprofit corporation has one or more issues of outstanding
long-term debt that is rated within the highest 3 rating
categories of a nationally recognized statistical rating
organization, and, if the Board determines that the making of
the loan by such nonprofit corporation will cause a decline
in the debt rating mentioned above, the Board at its
discretion may disapprove the loan guarantee on this basis;
(E) the loan (including Other Debt as defined in subsection
(f)(2)(B)) is not provided by a lender that is a governmental
entity, the Federal Agricultural Mortgage Corporation, any
institution supervised by the Office of Federal Housing
Enterprise Oversight, the Federal Housing Finance Board, or
any affiliate of any such entity;
(F) the loan has terms, in the judgment of the Board, that
are consistent in material respects with the terms of similar
obligations in the private capital market;
(G) repayment of the loan is required to be made within a
term of the lesser of--
(i) 25 years from the date of the execution of the loan; or
(ii) the economically useful life, as determined by the
Board or in consultation with persons or entities deemed
appropriate by the Board, of the primary assets to be used in
the delivery of the signals concerned; and
(H) the loan meets any additional criteria developed under
subsection (g).
(3) Protection of united states financial interests.--The
Board may not approve the guarantee of a loan under this Act
unless--
(A) the Board has been given documentation, assurances, and
access to information, persons, and entities necessary, as
determined by the Board, to address issues relevant to the
review of the loan by the Board for purposes of this Act; and
(B) the Board makes a determination in writing that--
(i) to the best of its knowledge upon due inquiry, the
assets, facilities, or equipment covered by the loan will be
utilized economically and efficiently;
(ii) the terms, conditions, security, and schedule and
amount of repayments of principal and the payment of interest
with respect to the loan protect the financial interests of
the United States and are reasonable;
(iii) to the extent possible, the value of collateral
provided by an applicant is at least equal to the unpaid
balance of the loan amount covered by the loan guarantee (the
``Amount'' for purposes of this clause); and if the value of
collateral provided by an applicant is less than the Amount,
the additional required collateral is provided by any
affiliate of the applicant; and if the combined value of
collateral provided by an applicant and any affiliate is not
at least equal to the Amount, the collateral from such
affiliate represents all of such affiliate's assets;
(iv) all necessary and required regulatory and other
approvals, spectrum rights, and delivery permissions have
been received for the loan, the project under the loan, and
the Other Debt, if any, under subsection (f)(2)(B);
(v) the loan would not be available on reasonable terms and
conditions without a loan guarantee under this Act; and
(vi) repayment of the loan can reasonably be expected.
(e) Considerations.--
(1) Type of market.--
(A) Priority considerations.--To the maximum extent
practicable, the Board shall give priority in the approval of
loan guarantees under this Act in the following order: First,
to projects that will serve the greatest number of households
in unserved areas and the number of States (including
noncontiguous States); and second, to projects that will
serve the greatest number of households in underserved areas.
In each instance, the Board shall consider the project's
estimated cost per household to be served.

[[Page H2287]]

(B) Prohibition.--The Board may not approve a loan
guarantee under this Act for a project that is designed
primarily to serve 1 or more of the 40 most populated
designated market areas (as that term is defined in section
122(j) of title 17, United States Code).
(2) Other considerations.--The Board shall consider other
factors, which shall include projects that would--
(A) offer a separate tier of local broadcast signals;
(B) provide lower projected costs to consumers of such
separate tier; and
(C) enable the delivery of local broadcast signals
consistent with the purpose of this Act by a means reasonably
compatible with existing systems or devices predominantly in
use.
(f) Guarantee Limits.--
(1) Limitation on aggregate value of loans.--The aggregate
value of all loans for which loan guarantees are issued under
this Act (including the unguaranteed portion of loans issued
under paragraph (2)(A)) and Other Debt under paragraph (2)(B)
may not exceed $1,250,000,000.
(2) Guarantee level.--A loan guarantee issued under this
Act--
(A) may not exceed an amount equal to 80 percent of a loan
meeting in its entirety the requirements of subsection
(d)(2)(A). If only a portion of a loan meets the requirements
of that subsection, the Board shall determine that percentage
of the loan meeting such requirements (the ``applicable
portion'') and may issue a loan guarantee in an amount not
exceeding 80 percent of the applicable portion; or
(B) may, as to a loan meeting in its entirety the
requirements of subsection (d)(2)(A), cover the amount of
such loan only if that loan is for an amount not exceeding 80
percent of the total debt financing for the project, and
other debt financing (also meeting in its entirety the
requirements of subsection (d)(2)(A)) from the same source
for a total amount not less than 20 percent of the total debt
financing for the project (``Other Debt'') has been approved.
(g) Underwriting Criteria.--Within the period provided for
under subsection (b)(1), the Board shall, in consultation
with the Director of the Office of Management and Budget and
an independent public accounting firm, develop underwriting
criteria relating to the guarantee of loans that are
consistent with the purpose of this Act, including
appropriate collateral and cash flow levels for loans
guaranteed under this Act, and such other matters as the
Board considers appropriate.
(h) Credit Risk Premiums.--
(1) Establishment and acceptance.--The Board may establish
and approve the acceptance of credit risk premiums with
respect to a loan guarantee under this Act in order to cover
the cost, as determined under section 504(b)(1) of the
Federal Credit Reform Act of 1990, of the loan guarantee. To
the extent that appropriations of budget authority are
insufficient to cover the cost, as so determined, of a loan
guarantee under this Act, credit risk premiums shall be
accepted from a non-Federal source under this subsection on
behalf of the applicant for the loan guarantee.
(2) Credit risk premium amount.--
(A) In general.--The Board shall determine the amount of
any credit risk premium to be accepted with respect to a loan
guarantee under this Act on the basis of--
(i) the financial and economic circumstances of the
applicant for the loan guarantee, including the amount of
collateral offered;
(ii) the proposed schedule of loan disbursements;
(iii) the business plans of the applicant for providing
service;
(iv) any financial commitment from a broadcast signal
provider; and
(v) the concurrence of the Director of the Office of
Management and Budget as to the amount of the credit risk
premium.
(B) Proportionality.--To the extent that appropriations of
budget authority are sufficient to cover the cost, as
determined under section 504(b)(1) of the Federal Credit
Reform Act of 1990, of loan guarantees under this Act, the
credit risk premium with respect to each loan guarantee shall
be reduced proportionately.
(C) Payment of premiums.--Credit risk premiums under this
subsection shall be paid to an account (the ``Escrow
Account'') established in the Treasury which shall accrue
interest and such interest shall be retained by the account,
subject to subparagraph (D).
(D) Deductions from escrow account.--If a default occurs
with respect to any loan guaranteed under this Act and the
default is not cured in accordance with the terms of the
underlying loan or loan guarantee agreement, the
Administrator, in accordance with subsections (h) and (i) of
section 5 of this Act, shall liquidate, or shall cause to be
liquidated, all assets collateralizing such loan as to which
it has a lien or security interest. Any shortfall between the
proceeds of the liquidation net of costs and expenses
relating to the liquidation, and the guarantee amount paid
pursuant to this Act shall be deducted from funds in the
Escrow Account and credited to the Administrator for payment
of such shortfall. At such time as determined under
subsection (d)(2)(G) when all loans guaranteed under this Act
have been repaid or otherwise satisfied in accordance with
this Act and the regulations promulgated hereunder, remaining
funds in the Escrow Account, if any, shall be refunded, on a
pro rata basis, to applicants whose loans guaranteed under
this Act were not in default, or where any default was cured
in accordance with the terms of the underlying loan or loan
guarantee agreement.
(i) Judicial Review.--The decision of the Board to approve
or disapprove the making of a loan guarantee under this Act
shall not be subject to judicial review.

SEC. 5. ADMINISTRATION OF LOAN GUARANTEES.

(a) In General.--The Administrator of the Rural Utilities
Service (in this Act referred to as the ``Administrator'')
shall issue and otherwise administer loan guarantees that
have been approved by the Board in accordance with sections 3
and 4 of this Act.
(b) Security for Protection of United States Financial
Interests.--
(1) Terms and conditions.--An applicant shall agree to such
terms and conditions as are satisfactory, in the judgment of
the Board, to ensure that, as long as any principal or
interest is due and payable on a loan guaranteed under this
Act, the applicant--
(A) shall maintain assets, equipment, facilities, and
operations on a continuing basis;
(B) shall not make any discretionary dividend payments that
impair its ability to repay obligations guaranteed under this
Act;
(C) shall remain sufficiently capitalized; and
(D) shall submit to, and cooperate fully with, any audit of
the applicant under section 8(a)(2) of this Act.
(2) Collateral.--
(A) Existence of adequate collateral.--An applicant shall
provide the Board such documentation as is necessary, in the
judgment of the Board, to provide satisfactory evidence that
appropriate and adequate collateral secures a loan guaranteed
under this Act.
(B) Form of collateral.--Collateral required by
subparagraph (A) shall consist solely of assets of the
applicant, any affiliate of the applicant, or both (whichever
the Board considers appropriate), including primary assets to
be used in the delivery of signals for which the loan is
guaranteed.
(C) Review of valuation.--The value of collateral securing
a loan guaranteed under this Act may be reviewed by the
Board, and may be adjusted downward by the Board if the Board
reasonably believes such adjustment is appropriate.
(3) Lien on interests in assets.--Upon the Board's approval
of a loan guarantee under this Act, the Administrator shall
have liens on assets securing the loan, which shall be
superior to all other liens on such assets, and the value of
the assets (based on a determination satisfactory to the
Board) subject to the liens shall be at least equal to the
unpaid balance of the loan amount covered by the loan
guarantee, or that value approved by the Board under section
4(d)(3)(B)(iii) of this Act.
(4) Perfected security interest.--With respect to a loan
guaranteed under this Act, the Administrator and the lender
shall have a perfected security interest in assets securing
the loan that are fully sufficient to protect the financial
interests of the United States and the lender.
(5) Insurance.--In accordance with practices in the private
capital market, as determined by the Board, the applicant for
a loan guarantee under this Act shall obtain, at its expense,
insurance sufficient to protect the financial interests of
the United States, as determined by the Board.
(c) Assignment of Loan Guarantees.--The holder of a loan
guarantee under this Act may assign the loan guaranteed under
this Act in whole or in part, subject to such requirements as
the Board may prescribe.
(d) Modification.--The Board may approve the modification
of any term or condition of a loan guarantee or a loan
guaranteed under this Act, including the rate of interest,
time of payment of principal or interest, or security
requirements only if--
(1) the modification is consistent with the financial
interests of the United States;
(2) consent has been obtained from the parties to the loan
agreement;
(3) the modification is consistent with the underwriting
criteria developed under section 4(g) of this Act;
(4) the modification does not adversely affect the interest
of the Federal Government in the assets or collateral of the
applicant;
(5) the modification does not adversely affect the ability
of the applicant to repay the loan; and
(6) the National Telecommunications and Information
Administration has been consulted by the Board regarding the
modification.
(e) Performance Schedules.--
(1) Performance schedules.--An applicant for a loan
guarantee under this Act for a project covered by section
4(e)(1) of this Act shall enter into stipulated performance
schedules with the Administrator with respect to the signals
to be provided through the project.
(2) Penalty.--The Administrator may assess against and
collect from an applicant described in paragraph (1) a
penalty not to exceed 3 times the interest due on the
guaranteed loan of the applicant under this Act if the
applicant fails to meet its stipulated performance schedule
under that paragraph.
(f) Compliance.--The Administrator, in cooperation with the
Board and as the regulations of the Board may provide, shall
enforce compliance by an applicant, and any other party to a
loan guarantee for whose benefit assistance under this Act is
intended, with

[[Page H2288]]

the provisions of this Act, any regulations under this Act,
and the terms and conditions of the loan guarantee, including
through the submittal of such reports and documents as the
Board may require in regulations prescribed by the Board and
through regular periodic inspections and audits.
(g) Commercial Validity.--A loan guarantee under this Act
shall be incontestable--
(1) in the hands of an applicant on whose behalf the loan
guarantee is made, unless the applicant engaged in fraud or
misrepresentation in securing the loan guarantee; and
(2) as to any person or entity (or their respective
successor in interest) who makes or contracts to make a loan
to the applicant for the loan guarantee in reliance thereon,
unless such person or entity (or respective successor in
interest) engaged in fraud or misrepresentation in making or
contracting to make such loan.
(h) Defaults.--The Board shall prescribe regulations
governing defaults on loans guaranteed under this Act,
including the administration of the payment of guaranteed
amounts upon default.
(i) Recovery of Payments.--
(1) In general.--The Administrator shall be entitled to
recover from an applicant for a loan guarantee under this Act
the amount of any payment made to the holder of the guarantee
with respect to the loan.
(2) Subrogation.--Upon making a payment described in
paragraph (1), the Administrator shall be subrogated to all
rights of the party to whom the payment is made with respect
to the guarantee which was the basis for the payment.
(3) Disposition of property.--
(A) Sale or disposal.--The Administrator shall, in an
orderly and efficient manner, sell or otherwise dispose of
any property or other interests obtained under this Act in a
manner that maximizes taxpayer return and is consistent with
the financial interests of the United States.
(B) Maintenance.--The Administrator shall maintain in a
cost-effective and reasonable manner any property or other
interests pending sale or disposal of such property or other
interests under subparagraph (A).
(j) Action Against Obligor.--
(1) Authority to bring civil action.--The Administrator may
bring a civil action in an appropriate district court of the
United States in the name of the United States or of the
holder of the obligation in the event of a default on a loan
guaranteed under this Act. The holder of a loan guarantee
shall make available to the Administrator all records and
evidence necessary to prosecute the civil action.
(2) Fully satisfying obligations owed the united states.--
The Administrator may accept property in satisfaction of any
sums owed the United States as a result of a default on a
loan guaranteed under this Act, but only to the extent that
any cash accepted by the Administrator is not sufficient to
satisfy fully the sums owed as a result of the default.
(k) Breach of Conditions.--The Administrator shall commence
a civil action in a court of appropriate jurisdiction to
enjoin any activity which the Board finds is in violation of
this Act, the regulations under this Act, or any conditions
which were duly agreed to, and to secure any other
appropriate relief, including relief against any affiliate of
the applicant.
(l) Attachment.--No attachment or execution may be issued
against the Administrator or any property in the control of
the Administrator pursuant to this Act before the entry of a
final judgment (as to which all rights of appeal have
expired) by a Federal, State, or other court of competent
jurisdiction against the Administrator in a proceeding for
such action.
(m) Fees.--
(1) Application fee.--The Board shall charge and collect
from an applicant for a loan guarantee under this Act a fee
to cover the cost of the Board in making necessary
determinations and findings with respect to the loan
guarantee application under this Act. The amount of the fee
shall be reasonable.
(2) Loan guarantee origination fee.--The Board shall
charge, and the Administrator may collect, a loan guarantee
origination fee with respect to the issuance of a loan
guarantee under this Act.
(3) Use of fees collected.--Any fee collected under this
subsection shall be used to offset administrative costs under
this Act, including costs of the Board and of the
Administrator.
(n) Requirements Relating to Affiliates.--
(1) Indemnification.--The United States shall be
indemnified by any affiliate (acceptable to the Board) of an
applicant for a loan guarantee under this Act for any losses
that the United States incurs as a result of--
(A) a judgment against the applicant or any of its
affiliates;
(B) any breach by the applicant or any of its affiliates of
their obligations under the loan guarantee agreement;
(C) any violation of the provisions of this Act, and the
regulations prescribed under this Act, by the applicant or
any of its affiliates;
(D) any penalties incurred by the applicant or any of its
affiliates for any reason, including violation of a
stipulated performance schedule under subsection (e); and
(E) any other circumstances that the Board considers
appropriate.
(2) Limitation on transfer of loan proceeds.--An applicant
for a loan guarantee under this Act may not transfer any part
of the proceeds of the loan to an affiliate.
(o) Effect of Bankruptcy.--(1) Notwithstanding any other
provision of law, whenever any person or entity is indebted
to the United States as a result of any loan guarantee issued
under this Act and such person or entity is insolvent or is a
debtor in a case under title 11, United States Code, the
debts due to the United States shall be satisfied first.
(2) A discharge in bankruptcy under title 11, United States
Code, shall not release a person or entity from an obligation
to the United States in connection with a loan guarantee
under this Act.

SEC. 6. PROHIBITION ON USE OF FUNDS FOR SPECTRUM AUCTIONS.

Notwithstanding any other provision of this Act, no loan
guarantee under this Act may be granted or used to provide
funds for the acquisition of licenses for the use of spectrum
in any competitive bidding under section 309(j) of the
Communications Act of 1934 (47 U.S.C. 309(j)).

SEC. 7. PROHIBITION ON USE OF FUNDS BY INCUMBENT CABLE
OPERATORS.

Notwithstanding any other provision of this Act, no loan
guarantee under this Act may be granted or used to provide
funds for--
(1) the extension of any cable system to any area or areas
for which the cable operator of such cable system has a cable
franchise, if such franchise obligates the operator to extend
such system to such area or areas; or
(2) the upgrading or enhancement of the services provided
over any cable system, unless such upgrading or enhancement
is principally undertaken to extend services to areas outside
of the previously existing franchise area of the cable
operator.

SEC. 8. ANNUAL AUDIT.

(a) Requirement.--The Comptroller General of the United
States shall conduct on an annual basis an audit of--
(1) the administration of the provisions of this Act; and
(2) the financial position of each applicant who receives a
loan guarantee under this Act, including the nature, amount,
and purpose of investments made by the applicant.
(b) Report.--The Comptroller General shall submit to the
Congress a report on each audit conducted under subsection
(a).

SEC. 9. EXEMPTION FROM MUST CARRY REQUIREMENTS.

A facility of a satellite carrier, cable system, or other
multichannel video programming distributor that is financed
with a loan guaranteed under this Act and that delivers local
broadcast signals in a television market pursuant to the
provisions of section 338, 614, or 615 of the Communications
Act of 1934 (47 U.S.C. 338, 534, or 535) shall not be
required to carry in such market a greater number of local
broadcast signals than the number of such signals that is
carried by the cable system serving the largest number of
subscribers in such market.

SEC. 10. ADDITIONAL AVAILABILITY OF BROADCAST SIGNALS IN
RURAL AREAS.

(a) Opening of Filing for Additional Translator and Low-
Power Stations.--The Federal Communications Commission shall,
in accordance with its regulations, open a filing period
window for the acceptance of applications for television
translator stations and low-power television stations in
rural areas.
(b) Deadlines for Notice.--The Commission shall announce
the filing period window no less than 90 days prior to the
commencement of the window.

SEC. 11. IMPROVED CELLULAR SERVICE IN RURAL AREAS.

(a) Reinstatement of Applicants as Tentative Selectees.--
(1) In General.--Notwithstanding the order of the Federal
Communications Commission in the proceeding described in
paragraph (3), the Commission shall--
(A) reinstate each applicant as a tentative selectee under
the covered rural service area licensing proceeding; and
(B) permit each applicant to amend its application, to the
extent necessary to update factual information and to comply
with the rules of the Commission, at any time before the
Commission's final licensing action in the covered rural
service area licensing proceeding.
(2) Exemption from petitions to deny.--For purposes of the
amended applications filed pursuant to paragraph (1)(B), the
provisions of section 309(d)(1) of the Communications Act of
1934 (47 U.S.C. 309(d)(1)) shall not apply.
(3) Proceeding.--The proceeding described in this paragraph
is the proceeding of the Commission In re Applications of
Cellwave Telephone Services L.P, Futurewave General Partners
L.P., and Great Western Cellular Partners, 7 FCC Rcd No. 19
(1992).
(b) Continuation of License Proceeding; Fee Assessment.--
(1) Award of licenses.--The Commission shall award licenses
under the covered rural service area licensing proceeding
within 90 days after the date of the enactment of this Act.
(2) Service requirements.--The Commission shall provide
that, as a condition of an applicant receiving a license
pursuant to the covered rural service area licensing
proceeding, the applicant shall provide cellular
radiotelephone service to subscribers in accordance with
sections 22.946 and 22.947 of the Commission's rules (47 CFR
22.946, 22.947); except that the time period applicable under

[[Page H2289]]

section 22.947 of the Commission's rules (or any successor
rule) to the applicants identified in subparagraphs (A) and
(B) of subsection (d)(1) shall be 3 years rather than 5 years
and the waiver authority of the Commission shall apply to
such 3-year period.
(3) Calculation of license fee.--
(A) Fee required.--The Commission shall establish a fee for
each of the licenses under the covered rural service area
licensing proceeding. In determining the amount of the fee,
the Commission shall consider--
(i) the average price paid per person served in the
Commission's Cellular Unserved Auction (Auction No. 12); and
(ii) the settlement payments required to be paid by the
permittees pursuant to the consent decree set forth in the
Commission's order, In re the Tellesis Partners (7 FCC Rcd
3168 (1992)), multiplying such payments by two.
(B) Notice of fee.--Within 30 days after the date an
applicant files the amended application permitted by
subsection (a)(1)(B), the Commission shall notify each
applicant of the fee established for the license associated
with its application.
(4) Payment for licenses.--No later than 18 months after
the date that an applicant is granted a license, each
applicant shall pay to the Commission the fee established
pursuant to paragraph (3) for the license granted to the
applicant under paragraph (1).
(5) Auction authority.--If, after the amendment of an
application pursuant to subsection (a)(1)(B), the Commission
finds that the applicant is ineligible for grant of a license
to provide cellular radiotelephone services for a rural
service area or the applicant does not meet the requirements
under paragraph (2) of this subsection, the Commission shall
grant the license for which the applicant is the tentative
selectee (pursuant to subsection (a)(1)(B) by competitive
bidding pursuant to section 309(j) of the Communications Act
of 1934 (47 U.S.C. 309(j)).
(c) Prohibition of Transfer.--During the 5-year period that
begins on the date that an applicant is granted any license
pursuant to subsection (a), the Commission may not authorize
the transfer or assignment of that license under section 310
of the Communications Act of 1934 (47 U.S.C. 310). Nothing in
this Act may be construed to prohibit any applicant granted a
license pursuant to subsection (a) from contracting with
other licensees to improve cellular telephone service.
(d) Definitions.--For the purposes of this section, the
following definitions shall apply:
(1) Applicant.--The term ``applicant'' means--
(A) Great Western Cellular Partners, a California general
partnership chosen by the Commission as tentative selectee
for RSA #492 on May 4, 1989;
(B) Monroe Telephone Services L.P., a Delaware limited
partnership chosen by the Commission as tentative selectee
for RSA #370 on August 24, 1989 (formerly Cellwave Telephone
Services L.P.); and
(C) FutureWave General Partners L.P., a Delaware limited
partnership chosen by the Commission as tentative selectee
for RSA #615 on May 25, 1990.
(2) Commission.--The term ``Commission'' means the Federal
Communications Commission.
(3) Covered rural service area licensing proceeding.--The
term ``covered rural service area licensing proceeding''
means the proceeding of the Commission for the grant of
cellular radiotelephone licenses for rural service areas #492
(Minnesota 11), #370 (Florida 11), and #615 (Pennsylvania 4).
(4) Tentative selectee.--The term ``tentative selectee''
means a party that has been selected by the Commission under
a licensing proceeding for grant of a license, but has not
yet been granted the license because the Commission has not
yet determined whether the party is qualified under the
Commission's rules for grant of the license.

SEC. 12. TECHNICAL AMENDMENT.

Section 339(c) of the Communications Act of 1934 (47 U.S.C.
339(c)) is amended by adding at the end the following new
paragraph:
``(5) Definition.--Notwithstanding subsection (d)(4), for
purposes of paragraphs (2) and (4) of this subsection, the
term `satellite carrier' includes a distributor (as defined
in section 119(d)(1) of title 17, United States Code), but
only if the satellite distributor's relationship with the
subscriber includes billing, collection, service activation,
and service deactivation.''.

SEC. 13. DEFINITIONS.

In this Act:
(1) Affiliate.--The term ``affiliate''--
(A) means any person or entity that controls, or is
controlled by, or is under common control with, another
person or entity; and
(B) may include any individual who is a director or senior
management officer of an affiliate, a shareholder controlling
more than 25 percent of the voting securities of an
affiliate, or more than 25 percent of the ownership interest
in an affiliate not organized in stock form.
(2) Unserved area.--The term ``unserved area'' means any
area that--
(A) is outside the grade B contour (as determined using
standards employed by the Federal Communications Commission)
of the local television broadcast signals serving a
particular designated market area; and
(B) does not have access to local television broadcast
signals from any commercial, for-profit multichannel video
provider.
(3) Underserved area.--The term ``underserved area'' means
any area that--
(A) is outside the grade A contour (as determined using
standards employed by the Federal Communications Commission)
of the local television broadcast signals serving a
particular designated market area; and
(B) has access to local television broadcast signals from
not more than one commercial, for-profit multichannel video
provider.
(4) Common terms.--Except as provided in paragraphs (1)
through (4), any term used in this Act that is defined in the
Communications Act of 1934 (47 U.S.C. 151 et seq.) has the
meaning given that term in the Communications Act of 1934.

SEC. 14. AUTHORIZATIONS OF APPROPRIATIONS.

(a) Cost of Loan Guarantees.--For the cost of the loans
guaranteed under this Act, including the cost of modifying
the loans, as defined in section 502 of the Congressional
Budget Act of 1974 (2 U.S.C. 661a), there are authorized to
be appropriated for fiscal years 2001 through 2006, such
amounts as may be necessary.
(b) Cost of Administration.--There is hereby authorized to
be appropriated such sums as may be necessary to carry out
the provisions of this Act, other than to cover costs under
subsection (a).
(c) Availability.--Any amounts appropriated pursuant to the
authorizations of appropriations in subsections (a) and (b)
shall remain available until expended.

SEC. 16. SUNSET.

No loan guarantee may be approved under this Act after
December 31, 2006.

The SPEAKER pro tempore. The gentleman from Virginia (Mr. Goodlatte),
the gentleman from Texas (Mr. Stenholm), the gentleman from Louisiana
(Mr. Tauzin), and the gentleman from Massachusetts (Mr. Markey) each
will control 15 minutes.
The Chair recognizes the gentleman from Virginia (Mr. Goodlatte).
Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, like many of my colleagues here today, I represent a
congressional district that is not near a large urban center. The
largest city in my district, Roanoke, has a population of slightly more
than 100,000 people. However, folks in cities as large as Roanoke,
Virginia; Honolulu, Hawaii; and Springfield, Missouri, are unlikely to
benefit from the most important parts of legislation enacted last fall
known as the Satellite Home Viewer Act.
This legislation, which I served as a conferee on with many of my
colleagues here today, was designed to address a problem experienced by
thousands of Americans who are frustrated that they either could not
receive their local network signal or had to receive a poor quality
local network signal through a rooftop antenna rather than receive a
network signal through their satellite provider. The bill addressed
this by allowing direct broadcast satellite providers to immediately
begin retransmitting local television broadcast signals into the
broadcast station's area.
Consumers across the country expressed their support for this
legislation and the availability of ``local-into-local'' technology. I
know my office received thousands of letters and calls from
constituents concerned about this issue. This new law allows satellite
providers to become more effective competitors to cable operators who
have been able to provide local over-the-air broadcast stations to
their subscribers for years. It will also benefit American consumers in
markets where local TV via satellite is made available by offering them
full service digital television at an affordable price.
More importantly, these consumers will benefit from local news,
weather reports, information such as natural disasters or community
emergencies, local sports, politics and election information as well as
other information that is vital to the integrity of communities across
the country. Local TV via satellite is already available to satellite
subscribers in America's 20 largest television markets. In these
markets, DirecTV and Echostar, the existing satellite platform
providers, have begun retransmission of affiliates of the ABC, CBS,
NBC, and Fox broadcast networks. DirecTV and Echostar have also
announced their intention to begin retransmission of local TV stations
in an additional 20 or 30 television markets over the next 24 months.
Ultimately, the two existing satellite platform providers will
provide local TV via satellite to households in most if not all of the
50 largest television markets in the United States. However, there are
211 television markets in the United States, and in excess of 100
million U.S. TV households. As this chart illustrates, the red dots
indicate

[[Page H2290]]

cities that have been served effective January 31 of this year, and the
yellow dots are announced or probable cities. The rest of the country,
including 161 television markets, is not going to be served by the
legislation we passed last fall.
Therefore, if matters are left solely to the initiative of the
existing satellite platform providers, more than 50 percent of existing
satellite subscribers, over 6 million households, will continue to be
deprived of their local TV stations; more than 60 percent of existing
commercial television stations, over 1,000, will not be available via
satellite; and more than 30 million U.S. TV households will remain
beyond the reach of local TV via satellite. Put another way, local TV
via satellite will not be available in 27 States.
So while the law enacted last fall has eliminated the legal barriers
to delivery of local TV via satellite, it alone will not assure
delivery of local TV via satellite to the majority of local TV stations
and satellite subscribers. For that reason I have joined with my
colleagues in the House to introduce legislation that will assure that
all Americans, not just those in the most profitable urban markets, did
receive their local TV signals in a way that provides local information
in a competitive environment for consumers.
This legislation represents a hard-fought compromise between versions
reported by the House Agriculture and House Commerce Committees. I want
to express my appreciation to members of both committees for their
willingness to work together to reach this agreement. The substitute
authorizes the administrator of the Rural Utilities Service, with the
approval of the National Telecommunications and Information
Administration, to administer loan guarantees not exceeding $1.25
billion for providing local broadcast TV signals in unserved and
underserved markets.
The loan guarantees will be approved by a board consisting of the
Secretaries of Agriculture, Commerce and Treasury. The loan guarantee
may not exceed 80 percent of a loan, and the board may not approve a
loan guarantee for a project that is designed to serve primarily one or
more of the top 40 markets. The substitute also includes restrictions
on which lending institutions can qualify for loan guarantees. Under
this compromise, the board should give priority consideration first to
unserved areas, then to underserved areas.
Unserved areas are defined as areas outside Grade B where there is no
access to local signals from a for-profit multichannel video provider.
Underserved areas are defined as those areas outside Grade A where
there is no more than one for-profit multichannel video provider. In
addition, the compromise requires that the value of collateral provided
by the applicant must be at least equal to the unpaid balance of the
loan amount covered by the loan guarantee. The loan guarantee may not
be used for the acquisition of spectrum and funds cannot be used by
incumbent cable companies in their own franchise territories.
In addition, under the compromise, the system providing local signals
shall not be required to carry in a market a greater number of local
broadcast signals than the number of such signals that is carried by
the cable system serving the largest number of subscribers in that
market. This is different than the version of the legislation that I
introduced which applied full must-carry rules to the program.
Mr. Speaker, legislation similar to this bill was sponsored by
Senators Gramm and Burns and passed the Senate on March 30 by a vote of
97-0. I want to particularly thank Senator Gramm and Senator Burns for
their help. Senator Burns represents the State of Montana, a rural area
that is vitally impacted by this legislation; and he is to be commended
for his leadership in the Senate as is Senator Gramm for his leadership
in getting this, legislation passed through the United States Senate.
The bill is crucial for Americans in rural and smaller markets who
rely on their local television stations for news, politics, weather,
sports, and emergency information. Local television is often the only
lifeline folks have in cases of natural disasters such as hurricanes,
tornadoes, blizzards, earthquakes, or flooding. The bill's language to
encourage the delivery of local television signals to these
constituents in America will not only benefit consumers, it will save
lives.
Mr. Speaker, in closing, I want to thank several individuals here,
most importantly my colleague from my adjoining district in Virginia
(Mr. Boucher) whose leadership both in the conference last year and
getting us to this point in this legislative process today has been
absolutely vital. He too has a district like mine that badly needs this
legislation, but he too recognizes the importance of this to all of
America. I also want to thank the gentleman from Louisiana (Mr.
Tauzin), the chairman of the subcommittee, who has been vitally
important in crafting good legislation in the Committee on Commerce and
his full committee chairman, the gentleman from Virginia (Mr. Bliley),
for their input. In the Committee on the Judiciary, the gentleman from
North Carolina (Mr. Coble) and the gentleman from Illinois (Mr. Hyde)
have made a great contribution. And then the primary committee, the
Committee on Agriculture, the gentleman from Texas (Mr. Combest) and
the gentleman from Texas (Mr. Stenholm), have also provided valuable
support for this legislation. I thank them all.
Mr. Speaker, I reserve the balance of my time.
Mr. STENHOLM. Mr. Speaker, I yield myself 3 minutes.
Mr. Speaker, I rise in support of H.R. 3615. H.R. 3615 was introduced
on February 10, 2000, and was referred to three different committees,
Judiciary, Commerce and Agriculture. The House Committee on Agriculture
unanimously approved this bill on February 16. The Committee on
Commerce approved their version on March 29. The Committee on the
Judiciary was discharged from consideration on March 31. The
legislation before us today is a compromise between the agriculture and
commerce committees. The bill establishes a loan guarantee program
within the United States Department of Agriculture Rural Utilities
Service for the purpose of providing local broadcast television
signals.
This bill under consideration today was originally included as a
provision in the Satellite Home Viewer Improvement Act that was enacted
last year. Unfortunately, these provisions were deleted from the final
version of the bill. The Satellite Home Viewer Improvement Act permits
satellite companies to retransmit local network signals back into its
local market area and gives consumers greater access to network
television stations by allowing satellite television companies to
effectively compete with cable television providers.
Today's rural Americans do not benefit from the competition provided
in the Satellite Home Viewer Improvement Act. DirecTV and Echostar, the
U.S.'s only satellite television providers, will not offer local-into-
local broadcast television service in rural television markets. The
loan guarantee proposed by H.R. 3615 will make it technologically and
financially feasible for entities to develop technologies that will
bring local-into-local broadcast television service to smaller rural
television markets.
I am pleased that cooperative lenders such as CoBank and the National
Rural Utilities Cooperative Finance Corporation are eligible to
participate in the loan guarantee program under section 4(d) of the
bill. Their expertise, capacity, capital strength, and experience in
providing financing to rural utility service borrowers should help to
make this program a success. People living in rural areas need to have
access to their local broadcasters' programming, local news, weather,
sports, and, most importantly, emergency information services. Local
television is one of our most vital safety information sources in times
of natural disasters or other emergencies. This legislation promises to
both improve consumer quality of life and more importantly save lives.
Mr. Speaker, I urge my colleagues to support this legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. TAUZIN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in strong support of this bill and urge my
colleagues to do so, too. Last year this Congress passed a bill that
would enable satellite carriers to provide consumers with access to
their local broadcast

[[Page H2291]]

signals, but there is a problem. It is because satellite carriers by
their own admission have no capacity and no plans to offer this new
local-into-local service to the Nation's smallest markets. They plan to
offer them to the top 70 markets approximately, serving about 70
percent of American television households. That leaves out 30 percent
of American households and well over 100 smaller markets.
Now, this bill will remedy that. The bill authorizes the Department
of Agriculture to provide up to $1.25 billion in loan guarantees, not
loans, loan guarantees, to cable and satellite companies that plan to
offer this local-into-local broadcast service to rural consumers across
America. It is important to note that while local-into-local satellite
technology is an important step, it is not the only technology that
might be capable of achieving this objective. A variety of terrestrial
services, for example, both wireless and wired can serve the same goal
and hopefully will.
It is for this reason that in the Committee on Commerce, we worked to
ensure that the bill was technologically neutral. We should not and we
do not in this bill pick the winners and the losers. The bill is about
enabling everyone the same opportunity to receive multichannel access
to broadcast signals. From here on out, it is up to the marketplace to
decide who wins and who loses.
Let me also say that on the Committee on Commerce my colleagues and I
made a number of other changes to the bill that protect the interest of
taxpayers here. For example, we designated an interagency board that
will approve the loans under this program. We also capped the loans to
80 percent of the amount borrowed, so the guarantee is only up to 80
percent. We ensure that the American taxpayer's lien would be superior
to any other lien that might be against the property of a borrower. On
balance, this is indeed a bill worthy of my colleagues' support. It is
balanced and fiscally responsible. I urge its adoption.
Mr. Speaker, I reserve the balance of my time.
Mr. MARKEY. Mr. Speaker, I yield myself 1 minute.
Mr. Speaker, this is a bill that has some good parts and some not so
good parts. It does seek to advance the goal of ensuring that there is
access to satellite-delivered local TV stations in every community in
the United States.

{time} 1700

Without question, as it came out of committee, there were provisions
that would have really hurt other competing companies, such as North
Point, that have, thank goodness been removed. As well, the loans
cannot be utilized to go bid at FCC auctions, and there are other
provisions which ensure that the loans cannot be used for operating,
advertising, or for promotional expenses. So there are some safeguards
which have been built in here.
I think that the bill can be further protected. My hope is that
between now and the conclusion of the conference committee, that we
will be able to achieve the goal of ensuring that this bill advances
solely competitive purposes, and is not used for any other purpose.
Mr. GOODLATTE. Mr. Speaker, I am pleased to yield 2 minutes to the
gentleman from North Carolina (Mr. Coble).
Mr. COBLE. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, as many know, this was an important part of the
legislation from last session concerning the Satellite Home Viewers
Act. I believe the citizens in rural areas, particularly those in the
Sixth District of North Carolina, deserve the same opportunities others
have to be served by local broadcasters.
It is important to proliferate local stations serving local areas so
all can receive their local news, local community service and
particularly emergency weather updates for that area. To demonstrate
how important this is, you only have to ask my fellow citizens from
eastern North Carolina who were victimized by those tragic floods just
last year. It is my hope that this legislation serves as a catalyst,
Mr. Speaker, for accomplishing that goal.
It is my further hope that the Senate will take the bill and enact
it. If it does not, any conference may be tempted to expand the reach
of the current legislation.
I am glad the Committee on the Judiciary was able to assist in moving
this bill quickly, and I reiterate the interest of the gentleman from
Illinois (Chairman Hyde) in our participation in any such conference,
but hope we can move it quickly into law.
Finally, Mr. Speaker, I think the gentleman from Virginia (Mr.
Boucher) and the gentleman from Virginia (Mr. Goodlatte) were the lead
dogs, if you will, on this legislation. They were tireless in their
efforts, and I commend them for that.
Mr. STENHOLM. Mr. Speaker, I yield 4 minutes to the gentlewoman from
North Carolina (Mrs. Clayton).
Mrs. CLAYTON. Mr. Speaker, I thank the gentleman for yielding me
time.
Mr. Speaker, I live in rural America, and I represent a predominantly
rural district. I also cochair the Congressional Rural Caucus. This is
an issue that is critical to rural America, and, indeed, critical to
all Americans.
It is essential that rural Americans not be treated as second-class
citizens who are denied access to local television stations for news,
weather, sports, and emergency information. Indeed, one need not look
further than my own district in eastern North Carolina to see the
critical role that local television news play when disasters such as
hurricane, tornadoes, blizzards, earthquakes, or floods strike.
Last winter a fast-moving snowstorm with near-blizzard conditions
left a record snowfall of 23 inches in parts of my district. Last fall,
three hurricanes and a subsequent 500-year flood left flood waters that
covered nearly 20,000 square miles of North Carolina, a land mass
greater than the size of the State of Maryland. It took weeks for the
flood waters to recede, and disaster relief efforts are still going on
to date.
Local news provides vital information on safety procedures, emergency
shelter, location, and how to obtain assistance. In addition, local
television broadcasts of crop reports, local news, weather reports,
public service announcements, and advertisements by local business are
important to rural development.
Let me repeat that rural citizens in North Carolina, in fact, rural
citizens in America, should not be disadvantaged and must have access
to the same network and local television service at the same affordable
prices as citizens in urban and suburban areas.
The Rural Local Broadcast Signal Act established a $1.2 billion loan
guarantee to help finance satellite companies in unserved and
underserved rural areas. It is clear that without this financial
incentive of a loan guarantee program, many rural markets of the
country would not have access to local television signals via
satellite.
The economy of scale in rural areas has to be compensated because the
private sector will not and cannot provide the expensive initial
investment needed. A Federal loan guarantee program will enable
affordable capital to be available to finance satellite systems for the
delivery of local television signals. I am pleased that the committee
saw fit to exclude a potentially damaging amendment that would have
delayed the entire loan program for 90 days pending certain testing.
Such an amendment would have been unnecessary and harmful.
I am also pleased that the cooperative lenders such as CoBank and the
National Rural Utilities Cooperative Finance Corporation are eligible
to participate in the loan guarantee program under section 4(d) of the
bill. Their expertise, capacity, capital strength, and experience in
providing financial assistance to rural utility service borrowers
should be used and has been valuable in the past.
Mr. Speaker, I support the establishment of a loan guarantee program,
and I urge all of our colleagues to support this very necessary
legislation.
Mr. TAUZIN. Mr. Speaker, I am pleased to yield 2 minutes to my friend
and mentor, the gentleman from New York (Mr. Gilman).
(Mr. GILMAN asked and was given permission to revise and extend his
remarks.)
Mr. GILMAN. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, permit me to take this opportunity to thank the
gentleman from Louisiana (Mr. Tauzin), the distinguished subcommittee
chairman, and the gentleman from Virginia (Mr.

[[Page H2292]]

Goodlatte) for bringing this measure to the floor at this time and
permitting me to speak in support of this legislation.
H.R. 3615, the Rural Local Broadcast Signal Act, was introduced in
response to the announcement by the major satellite carriers that,
following enactment of the Satellite Home Viewer Act last fall,
satellite carriers would be providing only newly authorized local
network TV broadcast services in the largest markets, rather than the
more rural areas. These satellite providers have stated it is not
economically feasible to provide such service to our rural areas. Since
many rural areas of our Nation are not served by broadcast TV or cable
service, legislation is necessary to encourage the delivery of local
network TV service to our rural Americans. This legislation amends the
Rural Electrification Act of 1936 in order to provide local TV networks
to rural satellite customers.
Mr. Speaker, the purpose of this bill is to ensure improved access of
local TV signals into unserved or underserved rural areas by December
31, 2006. The bill is languaged to provide local TV signals to rural
Americans, which will not only benefit consumers, but it can save
lives.
Mr. Speaker, I thank the gentleman from Louisiana (Mr. Tauzin) and
the gentleman from Virginia (Mr. Goodlatte) for introducing this
important measure and affording me the opportunity to include my
legislation, H.R. 1817, as a provision of the bill.
Accordingly, I urge our colleagues to fully support this important
measure for all the rural communities throughout our Nation.
Mr. TAUZIN. Mr. Speaker, I yield 5 minutes to the gentleman from
Virginia (Mr. Boucher), the ``lead dog'' on the Democratic side on this
bill.
Mr. BOUCHER. Mr. Speaker, I thank my friend from Massachusetts for
yielding me time.
Mr. Speaker, I rise in strong support of this measure in which I am
pleased to join my colleague, the gentleman from Virginia (Mr.
Goodlatte), as principal cosponsor. The passage of this legislation is
urgently needed. It offers the only opportunity for residents of
medium-sized and small cities and virtually all of rural America to
benefit from the new service that delivers local television signals to
homes with satellite dishes.
Last year we enacted a new law which, for the first time, enabled
satellite television companies to deliver to satellite dish owners
local television signals in addition to the national programming that
these companies have traditionally offered. That was the good news.
The somewhat less than good news is that those companies have decided
that they can only make a profit by offering the new local into local
service in the largest cities. Accordingly, medium-sized and small
cities and rural portions of the Nation will not be served by the
commercial companies.
Of the 211 local television markets in the Nation, at most 67 will
receive the commercially provided local into local satellite television
service. The bill that the gentleman from Virginia (Mr. Goodlatte) and
I have put forward is designed to fill the gap. Our intent is to create
a means for every person who desires the service to have access to his
local television stations delivered by satellite. Then, for the first
time, there will be on a nationwide basis a truly viable competitive
alternative to cable television. With the addition of the local TV
service, satellite companies will be able to offer exactly the same
programs, including local broadcast signals, that cable television has
traditionally offered.
For the first time, cable rates will be set through a competitive
market and will be restrained. For the first time, the residents of
many rural regions, such as the mountainous portion of Virginia that
the gentleman from Virginia (Mr. Goodlatte) and I represent, who are
blocked from the receipt of local TV signals because of mountainous
terrain, will be able to view with a clear digital signal the local
stations which are broadcast in their area.
We will achieve these goals by providing a Federal loan guarantee in
the amount of $1.25 billion through which a self-sustaining affordable
service offering local TV signals by satellite can be launched on a
nationwide basis. By this means, the residents of all 211 local
television markets in the Nation will soon receive the new local into
local satellite delivered television service.
I want to commend my friend and colleague from Virginia (Mr.
Goodlatte) for his leadership, as together we have structured this
approach and brought the bill to the point of passage in the House
today. It is a pleasure to work with the gentleman as we advance the
interests of all rural Americans.
I also want to thank the chairmen and ranking members of the
Committee on Commerce and the Committee on Agriculture for their
excellent cooperation in bringing the measure to the floor. With the
step that we are taking, we can assure that local news, sports,
emergency announcements, weather reports, and community service
programming that contribute to the broad popularity of local television
broadcasts are available, not just in the largest cities, but in all
television markets throughout the Nation.
Mr. Speaker, I am pleased to join with the gentleman from Virginia
(Mr. Goodlatte) and others who will speak in urging the approval of
this measure by the House today.

amendment in the nature of a substitute offered by mr. goodlatte.

Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that the
amendment in the nature of a substitute considered as adopted to H.R.
3615 under the order of the House of earlier today be the amendment in
the nature of a substitute that I have now placed at the desk, which
shall be considered as read.
The SPEAKER pro tempore (Mr. Hastings of Washington). Is there
objection to the request of the gentleman from Virginia?
Mr. STENHOLM. Mr. Speaker, reserving the right to object, I do so for
purposes of clarifying if the original colloquy that I had a moment ago
still applies to the amendment in the nature of a substitute that you
have placed at the desk?
Mr. GOODLATTE. Mr. Speaker, will the gentleman yield?
Mr. STENHOLM. I yield to the gentleman from Virginia.
Mr. GOODLATTE. Mr. Speaker, the gentleman is correct.
Mr. STENHOLM. Mr. Speaker, I withdraw my reservation of objection.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
The text of the amendment in the nature of a substitute is as
follows:

Amendment in the Nature of a Substitute Offered by Mr. Goodlatte

Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Rural
Local Broadcast Signal Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

SEC. 2. PURPOSE.

SEC. 3. RURAL TELEVISION LOAN GUARANTEE BOARD.

[[Page H2293]]

pursuant to an appointment by the President, by and with the
advice and consent of the Senate.
(c) Functions of the Board.--
(1) In general.--The Board shall determine whether or not
to approve loan guarantees under this Act. The Board shall
make such determinations consistent with the purpose of this
Act and in accordance with this subsection and section 4 of
this Act.
(2) Consultation authorized.--
(A) In general.--In carrying out its functions under this
Act, the Board shall consult with such departments and
agencies of the Federal Government as the Board considers
appropriate, including the Department of Commerce, the
Department of Agriculture, the Department of the Treasury,
the Department of Justice, the Department of the Interior,
the Board of Governors of the Federal Reserve System, the
Federal Communications Commission, the Federal Trade
Commission, and the National Aeronautics and Space
Administration.
(B) Response.--A department or agency consulted by the
Board under subparagraph (A) shall provide the Board such
expertise and assistance as the Board requires to carry out
its functions under this Act.
(3) Approval by majority vote.--The determination of the
Board to approve a loan guarantee under this Act shall be by
a vote of a majority of the Board.

SEC. 4. APPROVAL OF LOAN GUARANTEES.

(a) Authority To Approve Loan Guarantees.--Subject to the
provisions of this section and consistent with the purpose of
this Act, the Board may approve loan guarantees under this
Act.
(b) Regulations.--
(1) Requirements.--The Administrator (as defined in section
5 of this Act), under the direction of and for approval by
the Board, shall prescribe regulations to implement the
provisions of this Act and shall do so not later than 120
days after funds authorized to be appropriated under section
15 of this Act have been appropriated in a bill signed into
law.
(2) Elements.--The regulations prescribed under paragraph
(1) shall--
(A) set forth the form of any application to be submitted
to the Board under this Act;
(B) set forth time periods for the review and consideration
by the Board of applications to be submitted to the Board
under this Act, and for any other action to be taken by the
Board with respect to such applications;
(C) provide appropriate safeguards against the evasion of
the provisions of this Act;
(D) set forth the circumstances in which an applicant,
together with any affiliate of an applicant, shall be treated
as an applicant for a loan guarantee under this Act;
(E) include requirements that appropriate parties submit to
the Board any documents and assurances that are required for
the administration of the provisions of this Act; and
(F) include such other provisions consistent with the
purpose of this Act as the Board considers appropriate.
(3) Construction.--(A) Nothing in this Act shall be
construed to prohibit the Board from requiring, to the extent
and under circumstances considered appropriate by the Board,
that affiliates of an applicant be subject to certain
obligations of the applicant as a condition to the approval
or maintenance of a loan guarantee under this Act.
(B) If any provision of this Act or the application of such
provision to any person or entity or circumstance is held to
be invalid by a court of competent jurisdiction, the
remainder of this Act, or the application of such provision
to such person or entity or circumstance other than those as
to which it is held invalid, shall not be affected thereby.
(c) Authority Limited by Appropriations Acts.--The Board
may approve loan guarantees under this Act only to the extent
provided for in advance in appropriations Acts.
(d) Requirements and Criteria Applicable to Approval.--
(1) In general.--The Board shall utilize the underwriting
criteria developed under subsection (g), and any relevant
information provided by the departments and agencies with
which the Board consults under section 3, to determine which
loans may be eligible for a loan guarantee under this Act.
(2) Prerequisites.--In addition to meeting the underwriting
criteria under paragraph (1), a loan may not be guaranteed
under this Act unless--
(A) the loan is made to finance the acquisition,
improvement, enhancement, construction, deployment, launch,
or rehabilitation of the means by which local television
broadcast signals will be delivered principally to an
unserved area or an underserved area (or both);
(B) the proceeds of the loan will not be used for
operating, advertising, or promotion expenses;
(C) the proposed project, as determined by the National
Telecommunications and Information Administration, is not
likely to have a substantial adverse impact on competition
that outweighs the benefits of improving access to the
signals of a local television station in an unserved area or
an underserved area (or both), and is commercially viable;
(D)(i) the loan (including Other Debt, as defined in
subsection (f)(2)(B))--
(I) is provided by any entity engaged in the business of
commercial lending--

(aa) if the loan is made in accordance with loan-to-one-
borrower and affiliate transaction restrictions to which the
entity is subject under applicable law; or
(bb) if item (aa) does not apply, the loan is made only to
a borrower that is not an affiliate of the entity and only if
the amount of the loan and all outstanding loans by that
entity to that borrower and any of its affiliates does not
exceed 10 percent of the net equity of the entity; or

(II) is provided by a nonprofit corporation, including the
National Rural Utilities Cooperative Finance Corporation,
engaged primarily in commercial lending, if the Board
determines that such nonprofit corporation has one or more
issues of outstanding long-term debt that is rated within the
highest 3 rating categories of a nationally recognized
statistical rating organization, and, if the Board determines
that the making of the loan by such nonprofit corporation
will cause a decline in the debt rating mentioned above, the
Board at its discretion may disapprove the loan guarantee on
this basis;
(ii)(I) no loan (including Other Debt as defined in
subsection (f)(2)(B)) may be made for purposes of this Act by
a governmental entity or affiliate thereof, or by the Federal
Agricultural Mortgage Corporation, or any institution
supervised by the Office of Federal Housing Enterprise
Oversight, the Federal Housing Finance Board, or any
affiliate of such entities;
(II) any loan (including Other Debt as defined in
subsection (f)(2)(B)) must have terms, in the judgment of the
Board, that are consistent in material respects with the
terms of similar obligations in the private capital market;
(III) for purposes of clause (i)(I)(bb), the term ``net
equity'' means the value of the total assets of the entity,
less the total liabilities of the entity, as recorded under
generally accepted accounting principles for the fiscal
quarter ended immediately prior to the date on which the
subject loan is approved; and
(E) repayment of the loan is required to be made within a
term of the lesser of--
(i) 25 years from the date of the execution of the loan; or
(ii) the economically useful life, as determined by the
Board or in consultation with persons or entities deemed
appropriate by the Board, of the primary assets to be used in
the delivery of the signals concerned; and
(F) the loan meets any additional criteria developed under
subsection (g).
(3) Protection of united states financial interests.--The
Board may not approve the guarantee of a loan under this Act
unless--
(A) the Board has been given documentation, assurances, and
access to information, persons, and entities necessary, as
determined by the Board, to address issues relevant to the
review of the loan by the Board for purposes of this Act; and
(B) the Board makes a determination in writing that--
(i) to the best of its knowledge upon due inquiry, the
assets, facilities, or equipment covered by the loan will be
utilized economically and efficiently;
(ii) the terms, conditions, security, and schedule and
amount of repayments of principal and the payment of interest
with respect to the loan protect the financial interests of
the United States and are reasonable;
(iii) to the extent possible, the value of collateral
provided by an applicant is at least equal to the unpaid
balance of the loan amount covered by the loan guarantee (the
``Amount'' for purposes of this clause); and if the value of
collateral provided by an applicant is less than the Amount,
the additional required collateral is provided by any
affiliate of the applicant; and if the combined value of
collateral provided by an applicant and any affiliate is not
at least equal to the Amount, the collateral from such
affiliate represents all of such affiliate's assets;
(iv) all necessary and required regulatory and other
approvals, spectrum rights, and delivery permissions have
been received for the loan, the project under the loan, and
the Other Debt, if any, under subsection (f)(2)(B);
(v) the loan would not be available on reasonable terms and
conditions without a loan guarantee under this Act; and
(vi) repayment of the loan can reasonably be expected.
(e) Considerations.--
(1) Type of market.--
(A) Priority considerations.--To the maximum extent
practicable, the Board shall give priority in the approval of
loan guarantees under this Act in the following order: First,
to projects that will serve the greatest number of households
in unserved areas and the number of States (including
noncontiguous States); and second, to projects that will
serve the greatest number of households in underserved areas.
In each instance, the Board shall consider the project's
estimated cost per household to be served.
(B) Prohibition.--The Board may not approve a loan
guarantee under this Act for a project that is designed
primarily to serve 1 or more of the 40 most populated
designated market areas (as that term is defined in section
122(j) of title 17, United States Code).
(2) Other considerations.--The Board shall consider other
factors, which shall include projects that would--
(A) offer a separate tier of local broadcast signals;
(B) provide lower projected costs to consumers of such
separate tier; and
(C) enable the delivery of local broadcast signals
consistent with the purpose of this Act by a means reasonably
compatible with

[[Page H2294]]

existing systems or devices predominantly in use.
(f) Guarantee Limits.--
(1) Limitation on aggregate value of loans.--The aggregate
value of all loans for which loan guarantees are issued under
this Act (including the unguaranteed portion of loans issued
under paragraph (2)(A)) and Other Debt under paragraph (2)(B)
may not exceed $1,250,000,000.
(2) Guarantee level.--A loan guarantee issued under this
Act--
(A) may not exceed an amount equal to 80 percent of a loan
meeting in its entirety the requirements of subsection
(d)(2)(A). If only a portion of a loan meets the requirements
of that subsection, the Board shall determine that percentage
of the loan meeting such requirements (the ``applicable
portion'') and may issue a loan guarantee in an amount not
exceeding 80 percent of the applicable portion; or
(B) may, as to a loan meeting in its entirety the
requirements of subsection (d)(2)(A), cover the amount of
such loan only if that loan is for an amount not exceeding 80
percent of the total debt financing for the project, and
other debt financing (also meeting in its entirety the
requirements of subsection (d)(2)(A)) from the same source
for a total amount not less than 20 percent of the total debt
financing for the project (``Other Debt'') has been approved.
(g) Underwriting Criteria.--Within the period provided for
under subsection (b)(1), the Board shall, in consultation
with the Director of the Office of Management and Budget and
an independent public accounting firm, develop underwriting
criteria relating to the guarantee of loans that are
consistent with the purpose of this Act, including
appropriate collateral and cash flow levels for loans
guaranteed under this Act, and such other matters as the
Board considers appropriate.
(h) Credit Risk Premiums.--
(1) Establishment and acceptance.--The Board may establish
and approve the acceptance of credit risk premiums with
respect to a loan guarantee under this Act in order to cover
the cost, as determined under section 504(b)(1) of the
Federal Credit Reform Act of 1990, of the loan guarantee. To
the extent that appropriations of budget authority are
insufficient to cover the cost, as so determined, of a loan
guarantee under this Act, credit risk premiums shall be
accepted from a non-Federal source under this subsection on
behalf of the applicant for the loan guarantee.
(2) Credit risk premium amount.--
(A) In general.--The Board shall determine the amount of
any credit risk premium to be accepted with respect to a loan
guarantee under this Act on the basis of--
(i) the financial and economic circumstances of the
applicant for the loan guarantee, including the amount of
collateral offered;
(ii) the proposed schedule of loan disbursements;
(iii) the business plans of the applicant for providing
service;
(iv) any financial commitment from a broadcast signal
provider; and
(v) the concurrence of the Director of the Office of
Management and Budget as to the amount of the credit risk
premium.
(B) Proportionality.--To the extent that appropriations of
budget authority are sufficient to cover the cost, as
determined under section 504(b)(1) of the Federal Credit
Reform Act of 1990, of loan guarantees under this Act, the
credit risk premium with respect to each loan guarantee shall
be reduced proportionately.
(C) Payment of premiums.--Credit risk premiums under this
subsection shall be paid to an account (the ``Escrow
Account'') established in the Treasury which shall accrue
interest and such interest shall be retained by the account,
subject to subparagraph (D).
(D) Deductions from escrow account.--If a default occurs
with respect to any loan guaranteed under this Act and the
default is not cured in accordance with the terms of the
underlying loan or loan guarantee agreement, the
Administrator, in accordance with subsections (h) and (i) of
section 5 of this Act, shall liquidate, or shall cause to be
liquidated, all assets collateralizing such loan as to which
it has a lien or security interest. Any shortfall between the
proceeds of the liquidation net of costs and expenses
relating to the liquidation, and the guarantee amount paid
pursuant to this Act shall be deducted from funds in the
Escrow Account and credited to the Administrator for payment
of such shortfall. At such time as determined under
subsection (d)(2)(E) when all loans guaranteed under this Act
have been repaid or otherwise satisfied in accordance with
this Act and the regulations promulgated hereunder, remaining
funds in the Escrow Account, if any, shall be refunded, on a
pro rata basis, to applicants whose loans guaranteed under
this Act were not in default, or where any default was cured
in accordance with the terms of the underlying loan or loan
guarantee agreement.
(i) Judicial Review.--The decision of the Board to approve
or disapprove the making of a loan guarantee under this Act
shall not be subject to judicial review.

SEC. 5. ADMINISTRATION OF LOAN GUARANTEES.

[[Page H2295]]

the loan guarantee in reliance thereon, unless such person or
entity (or respective successor in interest) engaged in fraud
or misrepresentation in making or contracting to make such
loan.
(h) Defaults.--The Board shall prescribe regulations
governing defaults on loans guaranteed under this Act,
including the administration of the payment of guaranteed
amounts upon default.
(i) Recovery of Payments.--
(1) In general.--The Administrator shall be entitled to
recover from an applicant for a loan guarantee under this Act
the amount of any payment made to the holder of the guarantee
with respect to the loan.
(2) Subrogation.--Upon making a payment described in
paragraph (1), the Administrator shall be subrogated to all
rights of the party to whom the payment is made with respect
to the guarantee which was the basis for the payment.
(3) Disposition of property.--
(A) Sale or disposal.--The Administrator shall, in an
orderly and efficient manner, sell or otherwise dispose of
any property or other interests obtained under this Act in a
manner that maximizes taxpayer return and is consistent with
the financial interests of the United States.
(B) Maintenance.--The Administrator shall maintain in a
cost-effective and reasonable manner any property or other
interests pending sale or disposal of such property or other
interests under subparagraph (A).
(j) Action Against Obligor.--
(1) Authority to bring civil action.--The Administrator may
bring a civil action in an appropriate district court of the
United States in the name of the United States or of the
holder of the obligation in the event of a default on a loan
guaranteed under this Act. The holder of a loan guarantee
shall make available to the Administrator all records and
evidence necessary to prosecute the civil action.
(2) Fully satisfying obligations owed the united states.--
The Administrator may accept property in satisfaction of any
sums owed the United States as a result of a default on a
loan guaranteed under this Act, but only to the extent that
any cash accepted by the Administrator is not sufficient to
satisfy fully the sums owed as a result of the default.
(k) Breach of Conditions.--The Administrator shall commence
a civil action in a court of appropriate jurisdiction to
enjoin any activity which the Board finds is in violation of
this Act, the regulations under this Act, or any conditions
which were duly agreed to, and to secure any other
appropriate relief, including relief against any affiliate of
the applicant.
(l) Attachment.--No attachment or execution may be issued
against the Administrator or any property in the control of
the Administrator pursuant to this Act before the entry of a
final judgment (as to which all rights of appeal have
expired) by a Federal, State, or other court of competent
jurisdiction against the Administrator in a proceeding for
such action.
(m) Fees.--
(1) Application fee.--The Board shall charge and collect
from an applicant for a loan guarantee under this Act a fee
to cover the cost of the Board in making necessary
determinations and findings with respect to the loan
guarantee application under this Act. The amount of the fee
shall be reasonable.
(2) Loan guarantee origination fee.--The Board shall
charge, and the Administrator may collect, a loan guarantee
origination fee with respect to the issuance of a loan
guarantee under this Act.
(3) Use of fees collected.--Any fee collected under this
subsection shall be used to offset administrative costs under
this Act, including costs of the Board and of the
Administrator.
(n) Requirements Relating to Affiliates.--
(1) Indemnification.--The United States shall be
indemnified by any affiliate (acceptable to the Board) of an
applicant for a loan guarantee under this Act for any losses
that the United States incurs as a result of--
(A) a judgment against the applicant or any of its
affiliates;
(B) any breach by the applicant or any of its affiliates of
their obligations under the loan guarantee agreement;
(C) any violation of the provisions of this Act, and the
regulations prescribed under this Act, by the applicant or
any of its affiliates;
(D) any penalties incurred by the applicant or any of its
affiliates for any reason, including violation of a
stipulated performance schedule under subsection (e); and
(E) any other circumstances that the Board considers
appropriate.
(2) Limitation on transfer of loan proceeds.--An applicant
for a loan guarantee under this Act may not transfer any part
of the proceeds of the loan to an affiliate.
(o) Effect of Bankruptcy.--(1) Notwithstanding any other
provision of law, whenever any person or entity is indebted
to the United States as a result of any loan guarantee issued
under this Act and such person or entity is insolvent or is a
debtor in a case under title 11, United States Code, the
debts due to the United States shall be satisfied first.
(2) A discharge in bankruptcy under title 11, United States
Code, shall not release a person or entity from an obligation
to the United States in connection with a loan guarantee
under this Act.

SEC. 6. PROHIBITION ON USE OF FUNDS FOR SPECTRUM AUCTIONS.

SEC. 7. PROHIBITION ON USE OF FUNDS BY INCUMBENT CABLE
OPERATORS.

SEC. 8. ANNUAL AUDIT.

SEC. 9. EXEMPTION FROM MUST CARRY REQUIREMENTS.

SEC. 10. ADDITIONAL AVAILABILITY OF BROADCAST SIGNALS IN
RURAL AREAS.

SEC. 11. IMPROVED CELLULAR SERVICE IN RURAL AREAS.

[[Page H2296]]

(ii) the settlement payments required to be paid by the
permittees pursuant to the consent decree set forth in the
Commission's order, In re the Tellesis Partners (7 FCC Rcd
3168 (1992)), multiplying such payments by two.
(B) Notice of fee.--Within 30 days after the date an
applicant files the amended application permitted by
subsection (a)(1)(B), the Commission shall notify each
applicant of the fee established for the license associated
with its application.
(4) Payment for licenses.--No later than 18 months after
the date that an applicant is granted a license, each
applicant shall pay to the Commission the fee established
pursuant to paragraph (3) for the license granted to the
applicant under paragraph (1).
(5) Auction authority.--If, after the amendment of an
application pursuant to subsection (a)(1)(B), the Commission
finds that the applicant is ineligible for grant of a license
to provide cellular radiotelephone services for a rural
service area or the applicant does not meet the requirements
under paragraph (2) of this subsection, the Commission shall
grant the license for which the applicant is the tentative
selectee (pursuant to subsection (a)(1)(B) by competitive
bidding pursuant to section 309(j) of the Communications Act
of 1934 (47 U.S.C. 309(j)).
(c) Prohibition of Transfer.--During the 5-year period that
begins on the date that an applicant is granted any license
pursuant to subsection (a), the Commission may not authorize
the transfer or assignment of that license under section 310
of the Communications Act of 1934 (47 U.S.C. 310). Nothing in
this Act may be construed to prohibit any applicant granted a
license pursuant to subsection (a) from contracting with
other licensees to improve cellular telephone service.
(d) Definitions.--For the purposes of this section, the
following definitions shall apply:
(1) Applicant.--The term ``applicant'' means--
(A) Great Western Cellular Partners, a California general
partnership chosen by the Commission as tentative selectee
for RSA #492 on May 4, 1989;
(B) Monroe Telephone Services L.P., a Delaware limited
partnership chosen by the Commission as tentative selectee
for RSA #370 on August 24, 1989 (formerly Cellwave Telephone
Services L.P.); and
(C) FutureWave General Partners L.P., a Delaware limited
partnership chosen by the Commission as tentative selectee
for RSA #615 on May 25, 1990.
(2) Commission.--The term ``Commission'' means the Federal
Communications Commission.
(3) Covered rural service area licensing proceeding.--The
term ``covered rural service area licensing proceeding''
means the proceeding of the Commission for the grant of
cellular radiotelephone licenses for rural service areas #492
(Minnesota 11), #370 (Florida 11), and #615 (Pennsylvania 4).
(4) Tentative selectee.--The term ``tentative selectee''
means a party that has been selected by the Commission under
a licensing proceeding for grant of a license, but has not
yet been granted the license because the Commission has not
yet determined whether the party is qualified under the
Commission's rules for grant of the license.

SEC. 12. TECHNICAL AMENDMENT.

SEC. 13. DEFINITIONS.

SEC. 14. AUTHORIZATIONS OF APPROPRIATIONS.

SEC. 16. SUNSET.

No loan guarantee may be approved under this Act after
December 31, 2006.

Mr. GOODLATTE. Mr. Speaker, I yield 1 minute to the gentleman from
Illinois (Mr. Shimkus).
Mr. SHIMKUS. Mr. Speaker, I do want to commend my colleagues from
Virginia for this work. A requirement on local broadcasters to obtain a
license is to operate in the public interest. Emergency broadcasts and
coverage is an example of their importance.
The great flood of 1993 is an example of local broadcasters covering
emergencies, covering the levees, around the clock, notifying the
public when levees broke so that lives could be saved.
In this new era of technology, last year we passed the Satellite Home
Viewers Act to ensure that local broadcasts occur in local areas
through direct satellite. Dropped on the cutting room floor was an
assistance needed to assure local into local reaches all Americans.
Rural America cannot be left behind. I am proud to be a cosponsor, have
worked for its passage on the committee, and speak in support of the
passage of this bill.

{time} 1715

Mr. GOODLATTE. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman
from South Dakota (Mr. Thune).
Mr. THUNE. Mr. Speaker, I thank the gentleman for yielding time to
me, and also I want to recognize the gentleman for the great work that
he did to bring this issue to the floor and for his leadership on the
issue.
I am an original cosponsor of the Rural Local Broadcast Signal Act.
This takes us one step closer to closing the digital divide. Nearly
55,000 households in my home State of South Dakota receive their
programming from satellite dishes. Over the last 2 years, I have heard
from 1,400 of my fellow South Dakotans on this issue.
At the end of the last session when the loan guarantees were stripped
from the Satellite Home Viewers Improvement Act, many people were left
without reliable access to quality local television. For many who live
in rural areas, satellite service is the only option. Now we have a
chance to correct that and provide every rural viewer the opportunity
to receive a clear, reliable signal from his or her local station.
Like so many of my colleagues, my State is prone to natural
disasters, tornadoes, hailstorms, blizzards, and flash floods. Local
broadcasters are civic-minded and provide emergency information for
emergency situations. South Dakotans rely on those broadcasters for
important weather-related information as well.
Local broadcast signals can save lives. While local television may
not save every life, it often provides the very precious few seconds
that are necessary to grab our loved ones and take cover. We owe it to
rural Americans to make sure that they have the same quality access to
telecommunications as those in urban areas.
No one wants to watch a network signal with poor quality. With
today's technological innovations, no one should have to. On behalf of
the 150 South Dakotans who rely on satellite television, I urge the
passage of this important legislation and quick consideration in the
conference.
Mr. TAUZIN. Mr. Speaker, I am pleased to yield 3 minutes to my
friend, the gentleman from Oklahoma (Mr. Largent).
Mr. LARGENT. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, do not be fooled into thinking that this is not a
controversial issue. This is. For those who are listening to the debate
that we are having on the floor, it would seem that

[[Page H2297]]

this thing is going to just steamroll through, but do not think there
is not controversy surrounding this particular issue.
Let me read a couple of headlines about this particular bill that we
are working on today. Here is one from the Washington Times, an
editorial: ``Rural Rip-off.'' This is the bill we are voting on today,
described as a ``rural rip-off'' in the Washington Times.
The Wall Street Journal says, ``Rural Utilities Invest Funds in
Markets Instead of Local Projects, Audit Says.'' These are the people
who are going to be applying for this $1.25 billion government
subsidized loan guarantee.
In an editorial in the USA Today it is referred to as ``The Taxpayer
Rip-off in Progress.'' That is the bill we are discussing here this
evening.
Let me read just a few of the comments in these articles. First of
all, let me say that this is a program designed to give loan guarantees
to people who do not need it to fund projects that are not needed.
We have heard a variety of speakers speak on the floor today and talk
about, this is to provide local service. Not true. Local into local is
the term. That is not true. The definition in the bill says that all
these loans are available, as long as they do not have access to local
television broadcast signals from not more than one commercial for-
profit multi-channel video provider.
So if one already gets local into local through the cable service,
these monies are still available to them, so they can have local into
local that is providing the local weather, the local crop reports, and
so forth, and still be eligible to receive this money.
What this is really about, and Members need to understand this, this
is very important, what it really is about is providing government
subsidies to create competition with the private sector. That may be an
unintended consequence, but that definitely will be a consequence if
this bill goes through, which I anticipate it will.
We will be subsidizing businesses with government loan guarantees so
they can compete against people in the private sector. That should send
a chill throughout Congress and the rest of the United States, that
here we have the United States Congress getting ready to vote on a bill
that provides $1.25 billion of taxpayer loan guarantees to subsidize
business to go out and compete with the private sector.
That is a problem. That is a real problem. All who own small
businesses or own big businesses, how would they like the government
jumping into their business, subsidizing some competition for them?
That is not the intention, I do not believe, the Founders of the
Constitution had. I do not think it is necessarily the intent of the
authors of this bill, but it will be the unintended consequence of the
bill.
I would urge my colleagues to vote no.
Mr. MARKEY. Mr. Speaker, I yield 2 minutes to the gentlewoman from
California (Mrs. Capps).
Mrs. CAPPS. Mr. Speaker, I thank my colleague for yielding time to
me.
Mr. Speaker, I rise in support of this legislation. As an original
cosponsor of this bill, I know how important it is that everyone have
access to their local TV stations. Locally-broadcast TV is most
Americans' primary source of news, weather, and emergency information.
But in my district and in rural areas across this country, many people
cannot watch their own local stations. The hills and valleys in Santa
Barbara and San Luis Obispo Counties preclude thousands of my
constituents from receiving local TV over the air.
Some of my constituents do not have affordable access to cable, or
they want a different choice. Many of them turn to satellite TV, but
they could not get their local stations over the satellite.
So last year we passed legislation allowing so-called local into
local broadcasting. But we knew then what we know now, most markets in
the country will not be covered. Outside the top 40 media markets,
local into local broadcasting is not going to happen because there is
not enough money in it.
Citizens in places like the Central Coast of California still will
not have access to their local stations through satellite TV, and local
broadcasters still will not be able to get their signals to people who
need them most, the folks in their own communities.
This is simply unfair to my constituents and to millions of other
Americans in rural and underserved areas. The loan program that this
bill sets up will help to bridge this gap, so I urge my colleagues to
support this critically important bill. Our constituents in rural
America deserve access to their local stations.
This bill is fair, this bill is just, it is worthy of our support.
Mr. MARKEY. Mr. Speaker, I yield 1 minute to the gentleman from
Wisconsin (Mr. Kind).
Mr. STENHOLM. Mr. Speaker, I yield 1 additional minute to the
gentleman from Wisconsin.
The SPEAKER pro tempore. The gentleman from Wisconsin (Mr. Kind) is
recognized for 2 minutes.
(Mr. KIND asked and was given permission to revise and extend his
remarks.)
Mr. KIND. Mr. Speaker, I thank the gentlemen for yielding time to me.
Mr. Speaker, I rise today as a strong supporter of H.R. 3615. I
commend my colleagues on the compromise that they reached and worked
out in this legislation, especially the two gentlemen from Virginia,
the respective chairs and ranking members of the committees.
This legislation is vitally important for my constituents because it
is vitally important to rural America. My congressional district is
predominantly rural, with a population in the largest city of about
55,000 people.
Western Wisconsin has numerous small towns, villages, and individual
farms nestled in the valleys of its rolling hills and bluffs. Due to
poor reception with normal antennas, many constituents purchase
satellite dishes for television reception. Unfortunately, these local
satellite dishes do not provide local television coverage.
Farmers in rural areas rely on their local news to provide weather
forecasts, parents rely on local news to alert them to school closings,
every constituent relies on local news to warn them of impending
weather emergencies. In my district, access to local news through
satellite television is not a luxury, it is oftentimes a matter of life
and death.
Passage of the Home Satellite Viewers Act last year was a big step
towards ensuring local access for my constituents who rely on satellite
dishes. Unfortunately, it was incomplete. H.R. 3615 creates an 80
percent loan guaranty program that will help satellite or other
technology companies build the infrastructure to guarantee local access
to rural areas.
My colleagues in urban communities are already seeing local access
because it is cost-effective to provide it in those areas. It is not,
however, cost-effective in rural America. That is why this legislation
here today is vitally important to the people I represent.
I urge passage of H.R. 3615.
Mr. TAUZIN. Mr. Speaker, I am pleased to yield 2 minutes to the
gentlewoman from Wyoming (Mrs. Cubin).
Mrs. CUBIN. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, as an original cosponsor of the loan guarantee program,
I am particularly pleased with the bill's fiscally responsible plan
that will ensure that all consumers, specifically those in medium and
small markets, will have access to local broadcast signals. The only
cities that will enjoy local network broadcasting over their satellite
systems under the current system will be those with millions of
television households.
As we all know, the largest TV markets are currently enjoying local
into local service over their satellite systems because of the hard
work of the Committee on Commerce in passing the Satellite Home Viewers
Act. The legislation before us today allows Congress to finish the job
by providing that same service to rural Americans.
Wyoming is a perfect example of why we need to pass this legislation.
The two largest TV markets in Wyoming are Cheyenne and Casper. They
rank number 196 and 199, respectively. Even under the most optimistic
local into local plans, Wyoming television viewers would probably never
receive local into local service without the loan guarantee provision
that is included in this bill.
I can only say that in lieu of mandating that satellite and cable
providers serve rural areas, this is our only option. I am committed to
moving this piece of legislation so that rural television customers can
enjoy the same local television programming as our urban friends.

[[Page H2298]]

Mr. MARKEY. Mr. Speaker, I yield myself 2 minutes.
Mr. Speaker, I do believe that this bill, in its present form, has
yet to reach its pluperfect form of acceptability. However, I think
that for the time being, as it moves through this floor consideration,
that it perhaps does merit the support of the Members.
However, just so that the Members can understand, this bill does not
require some of the largest corporations in America to actually first
have gone into the financial marketplace and established that they
cannot obtain these loans from a commercial financial institution.
Instead, what it does is it assumes that they cannot receive them.
One of the things that we I think should think about before we
finally return from a conference with the Senate is whether or not we
just might want to ensure that some of these huge corporations, if they
can find the financing on their own, should not be able to avail
themselves of publicly guaranteed funding, even if it would be at
better interest rates than they could get in the free market.
I think that is something that we are going to have to consider,
because these are some of the most well known corporations in America
that we are putting this bill through to guarantee that they are going
to be subsidized. In other words, we are not taking care of small
farmers here, we are talking here about large multinationals.
That is something that I think at the end of the day we can find a
resolution for; that we do not, in other words, reenact mistakes in the
past where we wind up subsidizing those that do not need it and,
unfortunately, in other bills that pass through this body, we wind up
not giving any kind of help to those that are most in need in our
country.
Hopefully, as the process evolves and as we seek to perfect this
legislation through the conference committee, we will be able to
achieve those ends.
Mr. Speaker, I reserve the balance of my time.
Mr. TAUZIN. Mr. Speaker, I am pleased to yield 3 minutes to the
gentleman from California (Mr. Cox).
Mr. MARKEY. Mr. Speaker, I yield 1 additional minute to the gentleman
from California.
The SPEAKER pro tempore (Mr. Hastings of Washington). The gentleman
from California (Mr. Cox) is recognized for 4 minutes.
Mr. COX. Mr. Speaker, I thank both of my colleagues for yielding time
to me.
Mr. Speaker, I share the goals of the sponsors of this legislation.
The fundamental problem is simple: There are, according to the
Congressional Budget Office, 3 million people in America who do not get
over the air free television and who do not get cable, so they cannot
get their local TV, 3 million people.

{time} 1730

Now, until 1999, Congress made it illegal for satellite TV providers
to put local stations into the homes of those people. We fixed that
with SHVA, with the Satellite Home Viewer Act, a short while ago; but
there remains a catch. In order to deliver even one local station into
a market, the satellite provider has to deliver all of the locally
originated stations.
Now naturally, the satellite providers trying to make money are going
to start with the big markets like Los Angeles and New York, and in my
TV market of southern California, where Los Angeles dominates, there
are so many locally originated TV stations, scores of them, that it
fills up all the satellite capacity.
What we have essentially said, by way of Federal regulation, is that
it is more important for people who live in big TV markets, in big
cities, to get all of the locally-originated TV stations, even if they
do not have any local content by the way, than it is for people who
live in rural America to get just one. We are doing nothing about that
unfair mandate in this bill.
Now, I want to draw the attention of my colleagues to the fact that
the procedure that we are using to pass this bill today does not permit
any amendments. In the Committee on Commerce, where we worked very hard
on this issue, I offered an amendment that passed in subcommittee that
would have addressed the very reason that rural America is not getting
service from satellite TV today. We passed that amendment in
subcommittee. We lost it in full committee. I would like to have
brought it to the floor and directly address the problem that we are
facing in America today, and that is not enough local TV for this group
of 3 million people.
But instead of lifting that Federal mandate, which the satellite
providers tell us would permit them to get 80 million more people,
instead of doing that we are going to create a brand new Federal
program. We are going to take one of the oldest, stodgiest, failing
bureaucracies that we have in Washington, the former Rural
Electrification Administration, which is on a covert mission now that
we will not recognize it to change its name to the Rural Utilities
Service, and get a new lease on life, we are going to give them a
billion dollars to go help these 3 million people. We are going to put
them in the business of trying to compete with for-profit satellite TV
companies, and one of the two biggest in America still is not making
money.
The Congressional Budget Office tells us that the Rural Utilities
Service is writing off billions of dollars in their existing loan
portfolio left and right, at taxpayer expense, and that about 30 to 40
percent of the loans that are going to get made under this program are
likely to be written off. So one can look at the cost of this program
right up front is about $400 million.
The Rural Utilities Service, which we are putting in charge of this,
does not know anything about which technology, which TV technology, to
invest in. They may know something about agriculture. They are part of
the Department of Agriculture. But they certainly do not know anything
about which technology to bet on.
The loans that we are going to be providing have a term of 25 years.
Does anybody in this Chamber understand what the digital information
marketplace is going to look like 25 years from now? Would someone want
to make a competitive bet to go into this market in competition with
the Federal Government, with the Department of Agriculture, on their
side? That is what we are doing in this legislation.
It is an extremely unlikely assumption that the Federal Government is
going to make money in the satellite TV business, but one thing we know
for sure nobody who lives in a rural area is going to get anything but
pay TV under this proposal. Free, over-the-air TV, which the Government
usually subsidizes, is not helped by this proposal.
I urge my colleagues to take a hard look at this, to ask why it is
that it is being rushed through here without any opportunity to amend
it; why we are giving a 70-year-old bureaucracy so much power, and I
ask my colleagues to vote it down.
Mr. STENHOLM. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Missouri (Mrs. Emerson).
Mrs. EMERSON. Mr. Speaker, I just want to take a few minutes to thank
the gentleman from Virginia (Mr. Goodlatte) and the gentleman from
Virginia (Mr. Boucher) and the chairpeople of the respective committees
for the great work that they have done. I have heard what the gentleman
from California (Mr. Cox) has said and the gentleman from Oklahoma
about the fact that this might not be the best means by which to give
people who have no access to any kind of signal at all the opportunity
to find out if they have emergency flooding, whether a tornado is
coming, whether like where I live an earthquake is perhaps going to
happen. I just cannot tell the folks in my district, which is very,
very rural and very remote in some areas, that it is not fair that
people who live in big cities can get access to their local news; they
can get it, but you cannot have it because nobody wants to come and
give it to you.
I do not know how to answer the thousands of questions that I have
gotten about this without giving them the opportunity to have their
local news provided by satellite, because they do not have any other
way to get it, Mr. Speaker. So I would just ask my colleagues who come
from more metropolitan areas to try to understand what it is like for
those of us who represent people who not only do not have access to
satellite and/or cable, certainly cannot get any local news because
there are not any local news stations within 200 or 300 miles, but a
lot of these people do not even have running water in

[[Page H2299]]

their homes. They deserve to have a break and they deserve to be on a
level playing field with all of our folks in the cities, and I am just
very happy that we are going to pass today, I hope, a bill to give all
Americans an equal shake.
The SPEAKER pro tempore (Mr. Hastings of Washington). The Chair would
remind Members that the gentleman from Virginia (Mr. Goodlatte) has
2\1/2\ minutes remaining, the gentleman from Texas (Mr. Stenholm) has
6\1/2\ minutes remaining, the gentleman from Louisiana (Mr. Tauzin) has
3 minutes remaining, and the gentleman from Massachusetts (Mr. Markey)
has 4 minutes remaining.
Mr. STENHOLM. Mr. Speaker, might I inquire what would be the order of
closing.
The SPEAKER pro tempore. The order of close would be the gentleman
from Massachusetts (Mr. Markey), the gentleman from Louisiana (Mr.
Tauzin), the gentleman from Texas (Mr. Stenholm), the gentleman from
Virginia (Mr. Goodlatte).
Mr. GOODLATTE. Mr. Speaker, I yield 1 minute to the gentleman from
Kansas (Mr. Moran).
Mr. MORAN of Kansas. Mr. Speaker, I commend the chairmen of a number
of committees that have had jurisdiction over this issue. I co-chair
with the gentleman from Louisiana (Mr. Tauzin) a task force on rural
technology and have taken a long interest and a strongly held belief
that if rural America is going to survive, it is going to be because we
have equal access to technology and telecommunications.
One of the issues that has impacted the constituents of Kansas
greatly is this issue of whether or not they can receive local
programming, local-to-local programming, on their satellite networks. A
typical constituent letter: We live in Madison. We are unable to
receive network programming, ABC, CBS, NBC or Fox, with a rooftop
antenna that would be suitable to watch. For 20 years we have received
our programming through a satellite dish. We now get network coverage
from cities like Denver, Chicago, Dallas, and New York; but here is the
problem: We cannot even qualify to access local broadcasting because we
are in a designated marketing area that is too close to have local
television.
It matters to Kansans as a matter of public safety. Weather is
important to us and agriculture, and I urge the passage of this bill
and appreciate the consideration that our committees have given to this
topic.
Mr. MARKEY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, this satellite revolution is something that is changing
the very face of the video marketplace in the United States. Back in
1992 when we passed the programming access provision, the gentleman
from Louisiana (Mr. Tauzin) and I and others were out here on the floor
arguing that if we passed that that we would create a revolution,
create an 18-inch dish that one could buy and put out between the
petunias and bring down hundreds of television stations; and through
the years now we have seen this revolution change how suburban and
urban America relate to their cable companies.
This legislation is directed towards the last remaining pocket of
resistance, that is, rural America. It is meant to remedy a problem
that we think that we dealt with last year when we made it possible for
urban and suburban television stations to beam up their local TV
stations and then beam them right back down into the same marketplace.
That is more difficult in rural America.
It is wise for us to look at this digital divide to make sure that
rural America is taken care of. At the same time, it is also important
for us to make sure that we do not subsidize that which would
ultimately happen anyway in the private marketplace, and that is a very
delicate, very thin line for us to be walking. I support this
legislation at this time, but I hope as we move it further through the
process that we have the willingness to be open-minded in terms of
ensuring that we build in the protections, that we do not subsidize
those that do not need subsidization, that we do not help those to
compete in the private market that could compete in the private market
on their own.
That said, it is important for rural America not to be left out. An
aye vote on this legislation at this time is, in fact, something that I
recommend.
Mr. TAUZIN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, the reason why the gentleman from Massachusetts (Mr.
Markey) and I and so many others came to the floor in 1992 to try to
create the capacity of direct broadcast satellite to bring television
programming to America was because at the time we had just gotten
through deregulating the cable companies. We in Congress had taken away
the power of local franchising authorities to regulate the monopoly
cable company. We thought it was pretty important if we were going to
be responsible for taking away the power of local governments to
regulate the monopoly cable company that we ought to make sure
consumers in America had a competitive choice. That is what it was all
about.
In 1992, we had to fight our way over a presidential veto to
accomplish that goal, but we accomplished it. We created the capacity
of television satellites to deliver satellite programming in
competition with cable, but we left one thing undone, and that was the
capacity of those satellites to include the local network programming
in the package.
So guess what? Satellites were born; direct broadcast satellite came
into being. But it was an imperfect competitor. So last year we tried
to perfect that 1992 legislation by giving the satellites the right to
carry the local network programming in the package; in short, to give
Americans a real choice.
Why? Because we had taken away the authority to regulate the
monopoly. Well, guess what? In March of last year, all the authority to
regulate from Washington monopoly cable ended. We allowed that to
happen, but across America, outside of the 70 major markets that will
be served by this new legislation last year, Americans will either have
no multichannel delivery or will be afflicted with a single channel
delivery system that is now unregulated.
We created, through this process of legislation, the possibility that
many Americans will have only one choice for television programming.
Today we cure that. Today we make sure that here in Washington we
provide the loan guarantees, not the loans. We are not giving anybody a
billion dollars. We are providing government-backed guarantees to make
sure that the rest of America, in addition to the 70 major markets, the
rest of America will have more than one choice.
Now that is the way we ought to behave. If we are going to take away
power to regulate monopolies, we ought to always ensure that consumers
have real choice because then consumers can regulate the companies by
choosing which they want to reward with their money and which they want
to punish by taking their business away.
With two providers in the marketplace, Americans will finally be
protected. They will have choice and with choice will come fair prices.
With choice will come fair packaging of products. With choice will come
consumer regulation of the marketplace. I hope we pass this good bill.
Mr. STENHOLM. Mr. Speaker, I yield myself the remainder of my time.
The SPEAKER pro tempore. The gentleman is recognized for 6\1/2\
minutes.
Mr. STENHOLM. Mr. Speaker, I rise again in support of the bill and
associate myself with the remarks of the gentleman from Louisiana (Mr.
Tauzin) regarding the intent and want to use this time to perhaps
clarify a few points that have been made, I believe, erroneously
through no intent.

{time} 1745

There has been a lot of quoting of newspaper articles and various
interpretations of an OIG report that wrongfully implied that electric
cooperatives were holding $11 billion in a portfolio consisting of
financial instruments which was interpreted to mean stocks, bonds, and
mutual funds.
There has also been an implying that the rural utility service has
not been a good steward of taxpayer dollars. If my colleagues will
check the record, they will find that the telecommunications program or
the rural utility service has never incurred a default regarding loss
of taxpayer funding. The electric distribution and water programs have
incurred write-offs of less than 1 percent over their entire history of
operation.

[[Page H2300]]

Let me just quickly talk about this $11 billion in cash or assets
that supposedly could be redirected and financed, in this case,
telecommunications. $2.5 billion of that is patronage capital. That is
monies owned by the members of the cooperatives that are invested in
the distribution and transmission lines that provide electricity and
telephone service.
$795 million are capital term certificates which form a pool of funds
for long-term loans for cooperative lending. $2.3 billion is in
accounts receivable which are bills issued by cooperatives that are not
yet paid by customers. $2 billion of this $11 billion is in operating
capital. It is deemed a minimum prudent reserve level by utility
accounting standards held by the distribution utilities. $2.8 billion
of this $11 billion alleged dollars is in operating capital that is
deemed a prudent reserve held by the power supply cooperatives.
These are just some of the investments that rural electrics and rural
telephone cooperatives have today. What are they doing with it? Nine
hundred and thirty electric cooperatives have invested $75 billion for
32,254 megawatts of generating capacity and 2,281,351 miles of line,
which accounts for approximately half of the distribution lines in the
United States.
I think it is grossly unfair of those who have been misinterpreting
an OIG report for purposes of this particular bill. This bill is good
in its intent. The rural utility service will continue to prudently
manage taxpayer dollars, and the rural communities will be benefited,
as has already been stated by this legislation.
Mr. Speaker, I yield back the balance of my time.
Mr. GOODLATTE. Mr. Speaker, I yield myself the balance of the time.
Mr. Speaker, in addition to all of those I thanked earlier, and there
are just too many to recite everyone, I want to also recognize the
gentlewoman from North Carolina (Mrs. Clayton), the ranking member of
my subcommittee; as well as the gentleman from Massachusetts (Mr.
Markey); and the gentleman from Michigan (Mr. Dingell), from the
Committee on Commerce, for their assistance in helping get this
legislation to this point.
But what I really want to do is thank the American people, because
they are the ones who have driven this legislation more than anyone
else. Many Members of Congress have received more mail, more phone
calls, more e-mails on this issue than any other legislative issue in
the time that they have served in Congress.
The reason is very simple. Look at the map. The red and yellow dots,
they are going to get taken care of. The rest of the United States is
not. Tulsa, Oklahoma is not going to get a local into local service
without this legislation; Lexington, Kentucky; Roanoke and Lynchburg,
Virginia, my communities in my district; Austin, Texas; Richmond,
Virginia; Knoxville, Tennessee; Honolulu, Hawaii; Des Moines, Iowa;
Green Bay, Wisconsin; Omaha, Nebraska; Spokane; Shreveport, Louisiana;
New Orleans, Louisiana; Rochester; Tucson; Springfield, Missouri;
Springfield, Massachusetts. The list goes on and on.
More than 160 television markets, more than 30 million households,
nearly 75 million Americans, more than 1,000 television stations in
those markets will not be served without the passage of this
legislation. I urge my colleagues to join me in passing this bill.
Mr. BEREUTER. Mr. Speaker, this Member rises today in strong support
of H.R. 3615, the Rural Local Broadcast Signal Act. This Member is
pleased to be a co-sponsor of this important legislation, which will
ensure improved access to local television signals in unserved or
under-served rural areas.
Many rural families either cannot receive their local broadcast
signals over the air, or are not offered cable service. It is important
that we address this problem. Particularly in rural areas, local
television broadcasts may be one of the few sources of emergency
warnings and local news. In addition, local television provides
weather, sports and special interest programming. Rural Americans, like
their urban counterparts, need access to this important information.
Last year, the House passed the Satellite Home Viewer Improvement
Act, which was ultimately signed into law. Satellite companies are now
allowed to offer local network television signals to their subscribers.
As a result of this bill, it is estimated that 70 percent of American
households will eventually receive local broadcast signals. The
remaining 30 percent of households, however, are found in sparsely
populated areas, which will likely not be served under existing
conditions. This legislation will ensure that these unserved or under-
served areas are able to receive access to local television signals.
This bill authorizes the Rural Utilities Service (RUS) to provide
loan guarantees to organizations for building or improving satellite,
cable television and multi-channel video distribution infrastructure in
under-served areas. The RUS will guarantee up to $1.25 billion in loans
to multi-channel video service providers, including direct broadcast
satellite licensees. Under the RUS, up to 80 percent of a private loan
may be guaranteed and loans will be payable in full within 25 years or
the useful life of the assets purchased. This bill also provides
standards to ensure that the loans will be promptly repaid and that the
borrower has adequate collateral and insurance to protect the interests
of the Federal government. Projects providing service to the most
under-served market areas will be given priority for these loans.
In closing, this Member encourages his colleagues to support H.R.
3615. This bill ensures that all Americans, including those in rural
areas, receive reliable access to their local broadcast stations.
Mr. LaFALCE. Mr. Speaker, today the House takes up a bill that, once
again, handpicks a specific industry in our economy, the satellite
television industry, to receive government assistance in the form of
loan guarantees. While the bill before us today represents an
improvement over the bill included in last year's Satellite Home Viewer
Improvement Act conference report, and largely reflects the bill
reported out by the Senate Banking Committee, and enacted by the full
Senate unanimously, I rise today to express strong concerns with the
process by which H.R. 3615 was brought to the House floor.
Last summer, I rose before this chamber, and was joined by the
Chairman of the Banking Committee, to oppose another government give-
away in the form of loan guarantees to the steel, oil, and gas
industries. I opposed that bill then because of its substantive flaws,
and because taxpayers were being placed at undue financial risk. I also
opposed the steel, oil, and gas loan guarantee program because this
House, in an open circumvention of its standing rules, brought the bill
to the floor without having first given the committees of jurisdiction
the right to review the legislation and to deliberate it on its merits.
The advantage of having committees of Congress examine legislation with
vast implications for our economy, the Federal government, and
taxpayers is that it prevents us from enacting bad laws that help an
industry in the short-term (sometimes unwisely) but ultimately harm the
taxpayers in the long-run, who end up having to bear the costs of
defaulted loans and unsound ventures.
Mr. Speaker, we cannot, and must not, allow this House to flagrantly
circumvent its own rules at the expense of the taxpayers.
Rule X, Clause 1(d)(5) of the Rules of the House of Representatives
stipulates that all bills, resolutions, and other matters related to
``Financial aid to commerce and industry (other than transportation)''
are under the jurisdiction of the Committee on Banking and Financial
Services. On November 18, 1999, the Majority Leader of this House
assured the gentleman from Virginia, Mr. Boucher, the chief Democratic
sponsor of this measure, on the House floor that ``It is my hope that
the relevant committees of jurisdiction will engage in a full debate
and discussion of the merits of this loan guarantee package and move
appropriate legislation forward expeditiously.'' I regret to mention
that H.R. 3615, which provides financial aid in the form of loan
guarantees to satellite companies, was not referred to a very relevant
committee of jurisdiction, the Banking Committee.
When H.R. 3615 was introduced on February 10th, 2000, its proponent
argued successfully that the loan guarantee program being proposed fell
strictly within the Rural Utilities Service of the U.S. Department of
Agriculture and that, therefore, the bill should not be referred to the
Banking Committee. While this is a technical and spurious argument, the
bottom line is that the Congress is acting on legislation to provide
financial aid to the satellite TV industry and the bill should have
therefore been referred to the Committee with clear jurisdiction over
these matters--the Banking Committee. I should remind my colleagues
that it was the Banking Committee that historically has enacted
successful, and strong loan guarantee programs that have been
profitable to the U.S. government--such as those for the Chrysler
Corporation, the City of New York, and the Lockheed Corporation.
Moreover, I should note that the Commerce Committee, unlike the
Agriculture Committee, added a Board to the legislation in an effort to
ensure the program's accountability to the taxpayers. That Board
includes the Secretary of

[[Page H2301]]

the Treasury as a member. For those who mistakenly questioned the need
to refer this bill to the Banking Committee because it was narrowly
tailored for the USDA's Rural Utilities Service, the inclusion of the
Secretary of the Treasury on the Board is reason enough for referral to
the Banking Committee.
Mr. Speaker, the other chamber reported out a bill that was conceived
in their Banking Committee. But in a truly ironic twist, and despite
action by the House Agriculture and Commerce Committees on this bill,
the bill we are considering today, with certain modifications made by
the Commerce Committee on telecommunications matters strictly within
their jurisdiction, is by-and-large the same product approved by the
other chamber. While I am encouraged by this development, only because
the substance of the Senate bill is an improvement over the originally
introduced version of H.R. 3615, this House would have been better
served by the advice, expertise, and input of its own Banking
Committee.
Mr. Speaker, none of us disagree with the intent of this
legislation--to make local TV signals available to rural areas via
satellite. In principle, I strongly support the notion of bringing
rural households the same information and access to telecommunications
that urban residents currently enjoy. However, the Office of Management
and Budget, which sets out requirements for Federal credit programs,
continues to have specific concerns with certain provisions of both
H.R. 3615 and S. 2097. Mr. Speaker, in order to protect the best
interests of the taxpayers, and to provide important and meaningful
input in the remainder of the process, I strongly urge inclusion of
Members of the House Banking Committee on the conference committee so
that our remaining concerns can be addressed.
Mr. MARKEY. Mr. Speaker, I rise in support of the bill. Mr. Speaker,
the bill before us is an amalgamation of several provisions from the
introduced bill, the bill reported by the Agriculture Committee and
that of the Commerce Committee.
The bill includes a number of provisions that make eminent sense,
such as prohibiting use of loans for operating, advertising or
promotional expenses. Loans cannot be utilized to go bid at FCC
auctions. Incumbent cable operators cannot obtain loans within their
existing franchise areas. The bill also stipulates that the government
guarantee may not exceed 80 percent of the loan amount. The bill on the
floor today also does not contain language that would have disrupted
plans for a promising new wireless technology pioneered by Northpoint
technology. I think this deletion is a wise decision, reflects the
desire of Congress that the FCC proceed consistent with provisions of
last Fall's Satellite Home Viewer Act, and reflects as well the desire
of Congress to promote ever more competition in our telecommunications
marketplace provided that no harmful interference is caused to existing
licenses.
Mr. Speaker, I rise in support of the bill despite some lingering
concerns about this loan guarantee program. I support competition and
increased consumer choice in telecommunications everywhere in America.
The bill before us proposes to establish a loan guarantee program,
based upon the historic initiatives to provide rural America with
electricity and telephone service, in order to provide subscription
local-to-local television service. I continue to have reservations that
providing local-to-local service is something that warrants a loan
guarantee program of the magnitude proposed in the bill.
I also believe the bill ought to have provisions that require large,
financially healthy, profitable companies to go to the commercial
capital markets first to try to obtain a loan without a government
guarantee before coming hat-in-hand to the government seeking a
taxpayer-backed subsidy.
Promoting competition to cable is a laudable goal for
telecommunications policy. Subsidizing competition to cable is
something else altogether, especially when you consider that we have
spent years trying to get subsidies out of our telecommunications
markets. My hope would be that in conference with the Senate that we
can further fine tune this bill and make it more market-oriented and
competition-based.
The SPEAKER pro tempore (Mr. Hastings of Washington). All time for
debate has expired.
Pursuant to the order of the House of today, the previous question is
ordered on the bill, as amended.
The question is on engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. COX. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 375,
nays 37, not voting 22, as follows:

[Roll No. 128]

YEAS--375

Abercrombie
Ackerman
Aderholt
Allen
Andrews
Baca
Bachus
Baird
Baldacci
Baldwin
Ballenger
Barcia
Barr
Barrett (NE)
Barrett (WI)
Bartlett
Barton
Bass
Bateman
Becerra
Bentsen
Bereuter
Berkley
Berman
Berry
Biggert
Bilbray
Bilirakis
Bishop
Blagojevich
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Boswell
Boucher
Boyd
Brady (PA)
Brady (TX)
Brown (FL)
Brown (OH)
Bryant
Burr
Burton
Buyer
Calvert
Camp
Campbell
Canady
Cannon
Capps
Cardin
Carson
Castle
Chambliss
Clayton
Clement
Clyburn
Coble
Combest
Condit
Conyers
Costello
Coyne
Cramer
Crane
Crowley
Cubin
Cummings
Cunningham
Danner
Davis (FL)
Davis (IL)
Davis (VA)
Deal
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Diaz-Balart
Dickey
Dicks
Dingell
Dixon
Doggett
Dooley
Dreier
Dunn
Edwards
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Everett
Ewing
Farr
Fattah
Filner
Fletcher
Foley
Forbes
Ford
Fowler
Franks (NJ)
Frost
Gejdenson
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green (TX)
Green (WI)
Greenwood
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Hastings (FL)
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (IN)
Hill (MT)
Hilleary
Hilliard
Hinchey
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Hooley
Horn
Hostettler
Hoyer
Hulshof
Hunter
Hutchinson
Hyde
Inslee
Isakson
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson, E. B.
Jones (NC)
Jones (OH)
Kanjorski
Kaptur
Kelly
Kennedy
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kingston
Klink
Knollenberg
Kolbe
Kucinich
Kuykendall
LaHood
Lampson
Lantos
Larson
Latham
Lazio
Leach
Lee
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Luther
Maloney (CT)
Maloney (NY)
Markey
Martinez
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McDermott
McGovern
McHugh
McIntyre
McKeon
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Metcalf
Mica
Millender-McDonald
Minge
Mink
Moakley
Mollohan
Moore
Moran (KS)
Moran (VA)
Morella
Murtha
Nadler
Napolitano
Neal
Nethercutt
Ney
Northup
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Ose
Owens
Oxley
Packard
Pallone
Pascrell
Pastor
Payne
Pease
Pelosi
Peterson (MN)
Peterson (PA)
Petri
Phelps
Pickering
Pickett
Pitts
Pombo
Pomeroy
Porter
Portman
Price (NC)
Pryce (OH)
Radanovich
Rahall
Ramstad
Rangel
Regula
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rogan
Rogers
Rothman
Roukema
Roybal-Allard
Rush
Ryan (WI)
Ryun (KS)
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Saxton
Scarborough
Schaffer
Schakowsky
Scott
Serrano
Sessions
Shaw
Sherman
Sherwood
Shimkus
Shows
Shuster
Simpson
Sisisky
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Souder
Spence
Spratt
Stabenow
Stenholm
Strickland
Stump
Stupak
Sweeney
Talent
Tancredo
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Thurman
Tiahrt
Tierney
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Visclosky
Vitter
Walden
Walsh
Wamp
Waters
Watkins
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (FL)
Weldon (PA)
Weller
Weygand
Whitfield
Wicker
Wilson
Wise
Wolf
Woolsey
Wynn
Young (AK)

NAYS--37

Archer
Armey
Capuano
Chabot
Chenoweth-Hage
Coburn
Collins
Cox
DeLay
DeMint
Doolittle
Duncan
Ehlers
Fossella
Frank (MA)

[[Page H2302]]

Frelinghuysen
Johnson, Sam
Kasich
Kleczka
LaFalce
Largent
Linder
Manzullo
Miller (FL)
Miller, Gary
Paul
Rohrabacher
Royce
Salmon
Sanford
Sensenbrenner
Shadegg
Shays
Stearns
Sununu
Toomey
Wu

NOT VOTING--22

Baker
Bliley
Borski
Callahan
Clay
Cook
Cooksey
Doyle
Gallegly
Ganske
Houghton
LaTourette
McInnis
McIntosh
Miller, George
Myrick
Quinn
Ros-Lehtinen
Stark
Vento
Wexler
Young (FL)

{time} 1810

Messrs. DeLAY, KASICH and ARMEY changed their vote from ``yea'' to
``nay.''
Messrs. DAVIS of Illinois, GUTIERREZ, CROWLEY and HULSHOF changed
their vote from ``nay'' to ``yea.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated against:
Mr. TANCREDO. Mr. Speaker, please let the Record reflect that on
rollcall vote 128, it was my intention to vote ``no.'' The vote,
``yes,'' was recorded in error.

____________________