[House Report 104-458]
[From the U.S. Government Publishing Office]
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-458
_______________________________________________________________________
TELECOMMUNICATIONS ACT OF 1996
_______
January 31, 1996. Ordered to be printed
_______________________________________________________________________
Mr. Bliley, from the committee of conference, submitted the following
CONFERENCE REPORT
[To accompany S. 652]
The committee of conference on the disagreeing votes of
the two Houses on the amendments of the House to the bill (S.
652), to provide for a pro-competitive, de-regulatory national
policy framework designed to accelerate rapidly private sector
deployment of advanced telecommunications and information
technologies and services to all Americans by opening all
telecommunications markets to competition, and for other
purposes, having met, after full and free conference, have
agreed to recommend and do recommend to their respective Houses
as follows:
That the Senate recede from its disagreement to the
amendment of the House to the text of the bill and agree to the
same with an amendment as follows:
In lieu of the matter proposed to be inserted by the
House amendment, insert the following:
SECTION 1. SHORT TITLE; REFERENCES.
(a) Short Title.--This Act may be cited as the
``Telecommunications Act of 1996''.
(b) References.--Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a
section or other provision of the Communications Act of 1934
(47 U.S.C. 151 et seq.).
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title; references.
Sec. 2. Table of contents.
Sec. 3. Definitions.
TITLE I--TELECOMMUNICATION SERVICES
Subtitle A--Telecommunications Services
Sec. 101. Establishment of part II of title II.
``Part II--Development of Competitive Markets
``Sec. 251. Interconnection.
``Sec. 252. Procedures for negotiation, arbitration, and approval of
agreements.
``Sec. 253. Removal of barriers to entry.
``Sec. 254. Universal service.
``Sec. 255. Access by persons with disabilities.
``Sec. 256. Coordination for interconnectivity.
``Sec. 257. Market entry barriers proceeding.
``Sec. 258. Illegal changes in subscriber carrier selections.
``Sec. 259. Infrastructure sharing.
``Sec. 260. Provision of telemessaging service.
``Sec. 261. Effect on other requirements.''
Sec. 102. Eligible telecommunications carriers.
Sec. 103. Exempt telecommunications companies.
Sec. 104. Nondiscrimination principle.
Subtitle B--Special Provisions Concerning Bell Operating Companies
Sec. 151. Bell operating company provisions.
``Part III--Special Provisions Concerning Bell Operating Companies
``Sec. 271. Bell operating company entry into interLATA services.
``Sec. 272. Separate affiliate; safeguards.
``Sec. 273. Manufacturing by Bell operating companies.
``Sec. 274. Electronic publishing by Bell operating companies.
``Sec. 275. Alarm monitoring services.
``Sec. 276. Provision of payphone service.''
TITLE II--BROADCAST SERVICES
Sec. 201. Broadcast spectrum flexibility.
``Sec. 336. Broadcast spectrum flexibility.''
Sec. 202. Broadcast ownership.
Sec. 203. Term of licenses.
Sec. 204. Broadcast license renewal procedures.
Sec. 205. Direct broadcast satellite service.
Sec. 206. Automated ship distress and safety systems.
``Sec. 365. Automated ship distress and safety systems.''
Sec. 207. Restrictions on over-the-air reception devices.
TITLE III--CABLE SERVICES
Sec. 301. Cable Act reform.
Sec. 302. Cable service provided by telephone companies.
``Part V--Video Programming Services Provided by Telephone Companies
``Sec. 651. Regulatory treatment of video programming services.
``Sec. 652. Prohibition on buy outs.
``Sec. 653. Establishment of open video systems.''
Sec. 303. Preemption of franchising authority regulation of
telecommunications services.
Sec. 304. Competitive availability of navigation devices.
``Sec. 629. Competitive availability of navigation devices.''
Sec. 305. Video programming accessibility.
``Sec. 713. Video programming accessibility.''
TITLE IV--REGULATORY REFORM
Sec. 401. Regulatory forbearance.
``Sec. 10. Competition in provision of telecommunications service.''
Sec. 402. Biennial review of regulations; regulatory relief.
``Sec. 11. Regulatory reform.''
Sec. 403. Elimination of unnecessary Commission regulations and
functions.
TITLE V--OBSCENITY AND VIOLENCE
Subtitle A--Obscene, Harassing, and Wrongful Utilization of
Telecommunications Facilities
Sec. 501. Short title.
Sec. 502. Obscene or harassing use of telecommunications facilities
under the Communications Act of 1934.
Sec. 503. Obscene programming on cable television.
Sec. 504. Scrambling of cable channels for nonsubscribers.
``Sec. 640. Scrambling of cable channels for nonsubscribers.''
Sec. 505. Scrambling of sexually explicit adult video service
programming.
``Sec. 641. Scrambling of sexually explicit adult video service
programming.''
Sec. 506. Cable operator refusal to carry certain programs.
Sec. 507. Clarification of current laws regarding communication of
obscene materials through the use of computers.
Sec. 508. Coercion and enticement of minors.
Sec. 509. Online family empowerment.
``Sec. 230. Protection for private blocking and screening of
offensive material.''
Subtitle B--Violence
Sec. 551. Parental choice in television programming.
Sec. 552. Technology fund.
Subtitle C--Judicial Review
Sec. 561. Expedited review.
TITLE VI--EFFECT ON OTHER LAWS
Sec. 601. Applicability of consent decrees and other law.
Sec. 602. Preemption of local taxation with respect to direct-to-home
services.
TITLE VII--MISCELLANEOUS PROVISIONS
Sec. 701. Prevention of unfair billing practices for information or
services provided over toll-free telephone calls.
Sec. 702. Privacy of customer information.
``Sec. 222. Privacy of customer information.''
Sec. 703. Pole attachments.
Sec. 704. Facilities siting; radio frequency emission standards.
Sec. 705. Mobile services direct access to long distance carriers.
Sec. 706. Advanced telecommunications incentives.
Sec. 707. Telecommunications Development Fund.
``Sec. 714. Telecommunications Development Fund.''
Sec. 708. National Education Technology Funding Corporation.
Sec. 709. Report on the use of advanced telecommunications services for
medical purposes.
Sec. 710. Authorization of appropriations.
SEC. 3. DEFINITIONS.
(a) Additional Definitions.--Section 3 (47 U.S.C. 153) is
amended--
(1) in subsection (r)--
(A) by inserting ``(A)'' after ``means'';
and
(B) by inserting before the period at the
end the following: ``, or (B) comparable
service provided through a system of switches,
transmission equipment, or other facilities (or
combination thereof) by which a subscriber can
originate and terminate a telecommunications
service''; and
(2) by adding at the end thereof the following:
``(33) Affiliate.--The term `affiliate' means a
person that (directly or indirectly) owns or controls,
is owned or controlled by, or is under common ownership
or control with, another person. For purposes of this
paragraph, the term `own' means to own an equity
interest (or the equivalent thereof) of more than 10
percent.
``(34) AT&T consent decree.--The term `AT&T Consent
Decree' means the order entered August 24, 1982, in the
antitrust action styled United States v. Western
Electric, Civil Action No. 82-0192, in the United
States District Court for the District of Columbia, and
includes any judgment or order with respect to such
action entered on or after August 24, 1982.
``(35) Bell operating company.--The term `Bell
operating company'--
``(A) means any of the following companies:
Bell Telephone Company of Nevada, Illinois Bell
Telephone Company, Indiana Bell Telephone
Company, Incorporated, Michigan Bell Telephone
Company, New England Telephone and Telegraph
Company, New Jersey Bell Telephone Company, New
York Telephone Company, U S West Communications
Company, South Central Bell Telephone Company,
Southern Bell Telephone and Telegraph Company,
Southwestern Bell Telephone Company, The Bell
Telephone Company of Pennsylvania, The
Chesapeake and Potomac Telephone Company, The
Chesapeake and Potomac Telephone Company of
Maryland, The Chesapeake and Potomac Telephone
Company of Virginia, The Chesapeake and Potomac
Telephone Company of West Virginia, The Diamond
State Telephone Company, The Ohio Bell
Telephone Company, The Pacific Telephone and
Telegraph Company, or Wisconsin Telephone
Company; and
``(B) includes any successor or assign of
any such company that provides wireline
telephone exchange service; but
``(C) does not include an affiliate of any
such company, other than an affiliate described
in subparagraph (A) or (B).
``(36) Cable service.--The term `cable service' has
the meaning given such term in section 602.
``(37) Cable system.--The term `cable system' has
the meaning given such term in section 602.
``(38) Customer premises equipment.--The term
`customer premises equipment' means equipment employed
on the premises of a person (other than a carrier) to
originate, route, or terminate telecommunications.
``(39) Dialing parity.--The term `dialing parity'
means that a person that is not an affiliate of a local
exchange carrier is able to provide telecommunications
services in such a manner that customers have the
ability to route automatically, without the use of any
access code, their telecommunications to the
telecommunications services provider of the customer's
designation from among 2 or more telecommunications
services providers (including such local exchange
carrier).
``(40) Exchange access.--The term `exchange access'
means the offering of access to telephone exchange
services or facilities for the purpose of the
origination or termination of telephone toll services.
``(41) Information service.--The term `information
service' means the offering of a capability for
generating, acquiring, storing, transforming,
processing, retrieving, utilizing, or making available
information via telecommunications, and includes
electronic publishing, but does not include any use of
any such capability for the management, control, or
operation of a telecommunications system or the
management of a telecommunications service.
``(42) Interlata service.--The term `interLATA
service' means telecommunications between a point
located in a local access and transport area and a
point located outside such area.
``(43) Local access and transport area.--The term
`local access and transport area' or `LATA' means a
contiguous geographic area--
``(A) established before the date of
enactment of the Telecommunications Act of 1996
by a Bell operating company such that no
exchange area includes points within more than
1 metropolitan statistical area, consolidated
metropolitan statistical area, or State, except
as expressly permitted under the AT&T Consent
Decree; or
``(B) established or modified by a Bell
operating company after such date of enactment
and approved by the Commission.
``(44) Local exchange carrier.--The term `local
exchange carrier' means any person that is engaged in
the provision of telephone exchange service or exchange
access. Such term does not include a person insofar as
such person is engaged in the provision of a commercial
mobile service under section 332(c), except to the
extent that the Commission finds that such service
should be included in the definition of such term.
``(45) Network element.--The term `network element'
means a facility or equipment used in the provision of
a telecommunications service. Such term also includes
features, functions, and capabilities that are provided
by means of such facility or equipment, including
subscriber numbers, databases, signaling systems, and
information sufficient for billing and collection or
used in the transmission, routing, or other provision
of a telecommunications service.
``(46) Number portability.--The term `number
portability' means the ability of users of
telecommunications services to retain, at the same
location, existing telecommunications numbers without
impairment of quality, reliability, or convenience when
switching from one telecommunications carrier to
another.
``(47) Rural telephone company.--The term `rural
telephone company' means a local exchange carrier
operating entity to the extent that such entity--
``(A) provides common carrier service to
any local exchange carrier study area that does
not include either--
``(i) any incorporated place of
10,000 inhabitants or more, or any part
thereof, based on the most recently
available population statistics of the
Bureau of the Census; or
``(ii) any territory, incorporated
or unincorporated, included in an
urbanized area, as defined by the
Bureau of the Census as of August 10,
1993;
``(B) provides telephone exchange service,
including exchange access, to fewer than 50,000
access lines;
``(C) provides telephone exchange service
to any local exchange carrier study area with
fewer than 100,000 access lines; or
``(D) has less than 15 percent of its
access lines in communities of more than 50,000
on the date of enactment of the
Telecommunications Act of 1996.
``(48) Telecommunications.--The term
`telecommunications' means the transmission, between or
among points specified by the user, of information of
the user's choosing, without change in the form or
content of the information as sent and received.
``(49) Telecommunications carrier.--The term
`telecommunications carrier' means any provider of
telecommunications services, except that such term does
not include aggregators of telecommunications services
(as defined in section 226). A telecommunications
carrier shall be treated as a common carrier under this
Act only to the extent that it is engaged in providing
telecommunications services, except that the Commission
shall determine whether the provision of fixed and
mobile satellite service shall be treated as common
carriage.
``(50) Telecommunications equipment.--The term
`telecommunications equipment' means equipment, other
than customer premises equipment, used by a carrier to
provide telecommunications services, and includes
software integral to such equipment (including
upgrades).
``(51) Telecommunications service.--The term
`telecommunications service' means the offering of
telecommunications for a fee directly to the public, or
to such classes of users as to be effectively available
directly to the public, regardless of the facilities
used.''.
(b) Common Terminology.--Except as otherwise provided in
this Act, the terms used in this Act have the meanings provided
in section 3 of the Communications Act of 1934 (47 U.S.C. 153),
as amended by this section.
(c) Stylistic Consistency.--Section 3 (47 U.S.C. 153) is
amended--
(1) in subsections (e) and (n), by redesignating
clauses (1), (2) and (3), as clauses (A), (B), and (C),
respectively;
(2) in subsection (w), by redesignating paragraphs
(1) through (5) as subparagraphs (A) through (E),
respectively;
(3) in subsections (y) and (z), by redesignating
paragraphs (1) and (2) as subparagraphs (A) and (B),
respectively;
(4) by redesignating subsections (a) through (ff)
as paragraphs (1) through (32);
(5) by indenting such paragraphs 2 em spaces;
(6) by inserting after the designation of each such
paragraph--
(A) a heading, in a form consistent with
the form of the heading of this subsection,
consisting of the term defined by such
paragraph, or the first term so defined if such
paragraph defines more than one term; and
(B) the words ``The term'';
(7) by changing the first letter of each defined
term in such paragraphs from a capital to a lower case
letter (except for ``United States'', ``State'',
``State commission'', and ``Great Lakes Agreement'');
and
(8) by reordering such paragraphs and the
additional paragraphs added by subsection (a) in
alphabetical order based on the headings of such
paragraphs and renumbering such paragraphs as so
reordered.
(d) Conforming Amendments.--The Act is amended--
(1) in section 225(a)(1), by striking ``section
3(h)'' and inserting ``section 3'';
(2) in section 332(d), by striking ``section 3(n)''
each place it appears and inserting ``section 3''; and
(3) in sections 621(d)(3), 636(d), and 637(a)(2),
by striking ``section 3(v)'' and inserting ``section
3''.
TITLE I--TELECOMMUNICATION SERVICES
Subtitle A--Telecommunications Services
SEC. 101. ESTABLISHMENT OF PART II OF TITLE II.
(a) Amendment.--Title II is amended by inserting after
section 229 (47 U.S.C. 229) the following new part:
``PART II--DEVELOPMENT OF COMPETITIVE MARKETS
``SEC. 251. INTERCONNECTION.
``(a) General Duty of Telecommunications Carriers.--Each
telecommunications carrier has the duty--
``(1) to interconnect directly or indirectly with
the facilities and equipment of other
telecommunications carriers; and
``(2) not to install network features, functions,
or capabilities that do not comply with the guidelines
and standards established pursuant to section 255 or
256.
``(b) Obligations of All Local Exchange Carriers.--Each
local exchange carrier has the following duties:
``(1) Resale.--The duty not to prohibit, and not to
impose unreasonable or discriminatory conditions or
limitations on, the resale of its telecommunications
services.
``(2) Number portability.--The duty to provide, to
the extent technically feasible, number portability in
accordance with requirements prescribed by the
Commission.
``(3) Dialing parity.--The duty to provide dialing
parity to competing providers of telephone exchange
service and telephone toll service, and the duty to
permit all such providers to have nondiscriminatory
access to telephone numbers, operator services,
directory assistance, and directory listing, with no
unreasonable dialing delays.
``(4) Access to rights-of-way.--The duty to afford
access to the poles, ducts, conduits, and rights-of-way
of such carrier to competing providers of
telecommunications services on rates, terms, and
conditions that are consistent with section 224.
``(5) Reciprocal compensation.--The duty to
establish reciprocal compensation arrangements for the
transport and termination of telecommunications.
``(c) Additional Obligations of Incumbent Local Exchange
Carriers.--In addition to the duties contained in subsection
(b), each incumbent local exchange carrier has the following
duties:
``(1) Duty to negotiate.--The duty to negotiate in
good faith in accordance with section 252 the
particular terms and conditions of agreements to
fulfill the duties described in paragraphs (1) through
(5) of subsection (b) and this subsection. The
requesting telecommunications carrier also has the duty
to negotiate in good faith the terms and conditions of
such agreements.
``(2) Interconnection.--The duty to provide, for
the facilities and equipment of any requesting
telecommunications carrier, interconnection with the
local exchange carrier's network--
``(A) for the transmission and routing of
telephone exchange service and exchange access;
``(B) at any technically feasible point
within the carrier's network;
``(C) that is at least equal in quality to
that provided by the local exchange carrier to
itself or to any subsidiary, affiliate, or any
other party to which the carrier provides
interconnection; and
``(D) on rates, terms, and conditions that
are just, reasonable, and nondiscriminatory, in
accordance with the terms and conditions of the
agreement and the requirements of this section
and section 252.
``(3) Unbundled access.--The duty to provide, to
any requesting telecommunications carrier for the
provision of a telecommunications service,
nondiscriminatory access to network elements on an
unbundled basis at any technically feasible point on
rates, terms, and conditions that are just, reasonable,
and nondiscriminatory in accordance with the terms and
conditions of the agreement and the requirements of
this section and section 252. An incumbent local
exchange carrier shall provide such unbundled network
elements in a manner that allows requesting carriers to
combine such elements in order to provide such
telecommunications service.
``(4) Resale.--The duty--
``(A) to offer for resale at wholesale
rates any telecommunications service that the
carrier provides at retail to subscribers who
are not telecommunications carriers; and
``(B) not to prohibit, and not to impose
unreasonable or discriminatory conditions or
limitations on, the resale of such
telecommunications service, except that a State
commission may, consistent with regulations
prescribed by the Commission under this
section, prohibit a reseller that obtains at
wholesale rates a telecommunications service
that is available at retail only to a category
of subscribers from offering such service to a
different category of subscribers.
``(5) Notice of changes.--The duty to provide
reasonable public notice of changes in the information
necessary for the transmission and routing of services
using that local exchange carrier's facilities or
networks, as well as of any other changes that would
affect the interoperability of those facilities and
networks.
``(6) Collocation.--The duty to provide, on rates,
terms, and conditions that are just, reasonable, and
nondiscriminatory, for physical collocation of
equipment necessary for interconnection or access to
unbundled network elements at the premises of the local
exchange carrier, except that the carrier may provide
for virtual collocation if the local exchange carrier
demonstrates to the State commission that physical
collocation is not practical for technical reasons or
because of space limitations.
``(d) Implementation.--
``(1) In general.--Within 6 months after the date
of enactment of the Telecommunications Act of 1996, the
Commission shall complete all actions necessary to
establish regulations to implement the requirements of
this section.
``(2) Access standards.--In determining what
network elements should be made available for purposes
of subsection (c)(3), the Commission shall consider, at
a minimum, whether--
``(A) access to such network elements as
are proprietary in nature is necessary; and
``(B) the failure to provide access to such
network elements would impair the ability of
the telecommunications carrier seeking access
to provide the services that it seeks to offer.
``(3) Preservation of state access regulations.--In
prescribing and enforcing regulations to implement the
requirements of this section, the Commission shall not
preclude the enforcement of any regulation, order, or
policy of a State commission that--
``(A) establishes access and
interconnection obligations of local exchange
carriers;
``(B) is consistent with the requirements
of this section; and
``(C) does not substantially prevent
implementation of the requirements of this
section and the purposes of this part.
``(e) Numbering Administration.--
``(1) Commission authority and jurisdiction.--The
Commission shall create or designate one or more
impartial entities to administer telecommunications
numbering and to make such numbers available on an
equitable basis. The Commission shall have exclusive
jurisdiction over those portions of the North American
Numbering Plan that pertain to the United States.
Nothing in this paragraph shall preclude the Commission
from delegating to State commissions or other entities
all or any portion of such jurisdiction.
``(2) Costs.--The cost of establishing
telecommunications numbering administration
arrangements and number portability shall be borne by
all telecommunications carriers on a competitively
neutral basis as determined by the Commission.
``(f) Exemptions, Suspensions, and Modifications.--
``(1) Exemption for certain rural telephone
companies.--
``(A) Exemption.--Subsection (c) of this
section shall not apply to a rural telephone
company until (i) such company has received a
bona fide request for interconnection,
services, or network elements, and (ii) the
State commission determines (under subparagraph
(B)) that such request is not unduly
economically burdensome, is technically
feasible, and is consistent with section 254
(other than subsections (b)(7) and (c)(1)(D)
thereof).
``(B) State termination of exemption and
implementation schedule.--The party making a
bona fide request of a rural telephone company
for interconnection, services, or network
elements shall submit a notice of its request
to the State commission. The State commission
shall conduct an inquiry for the purpose of
determining whether to terminate the exemption
under subparagraph (A). Within 120 days after
the State commission receives notice of the
request, the State commission shall terminate
the exemption if the request is not unduly
economically burdensome, is technically
feasible, and is consistent with section 254
(other than subsections (b)(7) and (c)(1)(D)
thereof). Upon termination of the exemption, a
State commission shall establish an
implementation schedule for compliance with the
request that is consistent in time and manner
with Commission regulations.
``(C) Limitation on exemption.--The
exemption provided by this paragraph shall not
apply with respect to a request under
subsection (c) from a cable operator providing
video programming, and seeking to provide any
telecommunications service, in the area in
which the rural telephone company provides
video programming. The limitation contained in
this subparagraph shall not apply to a rural
telephone company that is providing video
programming on the date of enactment of the
Telecommunications Act of 1996.
``(2) Suspensions and modifications for rural
carriers.--A local exchange carrier with fewer than 2
percent of the Nation's subscriber lines installed in
the aggregate nationwide may petition a State
commission for a suspension or modification of the
application of a requirement or requirements of
subsection (b) or (c) to telephone exchange service
facilities specified in such petition. The State
commission shall grant such petition to the extent
that, and for such duration as, the State commission
determines that such suspension or modification--
``(A) is necessary--
``(i) to avoid a significant
adverse economic impact on users of
telecommunications services generally;
``(ii) to avoid imposing a
requirement that is unduly economically
burdensome; or
``(iii) to avoid imposing a
requirement that is technically
infeasible; and
``(B) is consistent with the public
interest, convenience, and necessity.
The State commission shall act upon any petition filed
under this paragraph within 180 days after receiving
such petition. Pending such action, the State
commission may suspend enforcement of the requirement
or requirements to which the petition applies with
respect to the petitioning carrier or carriers.
``(g) Continued Enforcement of Exchange Access and
Interconnection Requirements.--On and after the date of
enactment of the Telecommunications Act of 1996, each local
exchange carrier, to the extent that it provides wireline
services, shall provide exchange access, information access,
and exchange services for such access to interexchange carriers
and information service providers in accordance with the same
equal access and nondiscriminatory interconnection restrictions
and obligations (including receipt of compensation) that apply
to such carrier on the date immediately preceding the date of
enactment of the Telecommunications Act of 1996 under any court
order, consent decree, or regulation, order, or policy of the
Commission, until such restrictions and obligations are
explicitly superseded by regulations prescribed by the
Commission after such date of enactment. During the period
beginning on such date of enactment and until such restrictions
and obligations are so superseded, such restrictions and
obligations shall be enforceable in the same manner as
regulations of the Commission.
``(h) Definition of Incumbent Local Exchange Carrier.--
``(1) Definition.--For purposes of this section,
the term `incumbent local exchange carrier' means, with
respect to an area, the local exchange carrier that--
``(A) on the date of enactment of the
Telecommunications Act of 1996, provided
telephone exchange service in such area; and
``(B)(i) on such date of enactment, was
deemed to be a member of the exchange carrier
association pursuant to section 69.601(b) of
the Commission's regulations (47 C.F.R.
69.601(b)); or
``(ii) is a person or entity that, on or
after such date of enactment, became a
successor or assign of a member described in
clause (i).
``(2) Treatment of comparable carriers as
incumbents.--The Commission may, by rule, provide for
the treatment of a local exchange carrier (or class or
category thereof) as an incumbent local exchange
carrier for purposes of this section if--
``(A) such carrier occupies a position in
the market for telephone exchange service
within an area that is comparable to the
position occupied by a carrier described in
paragraph (1);
``(B) such carrier has substantially
replaced an incumbent local exchange carrier
described in paragraph (1); and
``(C) such treatment is consistent with the
public interest, convenience, and necessity and
the purposes of this section.
``(i) Savings Provision.--Nothing in this section shall be
construed to limit or otherwise affect the Commission's
authority under section 201.
``SEC. 252. PROCEDURES FOR NEGOTIATION, ARBITRATION, AND APPROVAL OF
AGREEMENTS.
``(a) Agreements Arrived at Through Negotiation.--
``(1) Voluntary negotiations.--Upon receiving a
request for interconnection, services, or network
elements pursuant to section 251, an incumbent local
exchange carrier may negotiate and enter into a binding
agreement with the requesting telecommunications
carrier or carriers without regard to the standards set
forth in subsections (b) and (c) of section 251. The
agreement shall include a detailed schedule of itemized
charges for interconnection and each service or network
element included in the agreement. The agreement,
including any interconnection agreement negotiated
before the date of enactment of the Telecommunications
Act of 1996, shall be submitted to the State commission
under subsection (e) of this section.
``(2) Mediation.--Any party negotiating an
agreement under this section may, at any point in the
negotiation, ask a State commission to participate in
the negotiation and to mediate any differences arising
in the course of the negotiation.
``(b) Agreements Arrived at Through Compulsory
Arbitration.--
``(1) arbitration.--During the period from the
135th to the 160th day (inclusive) after the date on
which an incumbent local exchange carrier receives a
request for negotiation under this section, the carrier
or any other party to the negotiation may petition a
State commission to arbitrate any open issues.
``(2) Duty of petitioner.--
``(A) A party that petitions a State
commission under paragraph (1) shall, at the
same time as it submits the petition, provide
the State commission all relevant documentation
concerning--
``(i) the unresolved issues;
``(ii) the position of each of the
parties with respect to those issues;
and
``(iii) any other issue discussed
and resolved by the parties.
``(B) A party petitioning a State
commission under paragraph (1) shall provide a
copy of the petition and any documentation to
the other party or parties not later than the
day on which the State commission receives the
petition.
``(3) Opportunity to respond.--A non-petitioning
party to a negotiation under this section may respond
to the other party's petition and provide such
additional information as it wishes within 25 days
after the State commission receives the petition.
``(4) Action by state commission.--
``(A) The State commission shall limit its
consideration of any petition under paragraph
(1) (and any response thereto) to the issues
set forth in the petition and in the response,
if any, filed under paragraph (3).
``(B) The State commission may require the
petitioning party and the responding party to
provide such information as may be necessary
for the State commission to reach a decision on
the unresolved issues. If any party refuses or
fails unreasonably to respond on a timely basis
to any reasonable request from the State
commission, then the State commission may
proceed on the basis of the best information
available to it from whatever source derived.
``(C) The State commission shall resolve
each issue set forth in the petition and the
response, if any, by imposing appropriate
conditions as required to implement subsection
(c) upon the parties to the agreement, and
shall conclude the resolution of any unresolved
issues not later than 9 months after the date
on which the local exchange carrier received
the request under this section.
``(5) Refusal to negotiate.--The refusal of any
other party to the negotiation to participate further
in the negotiations, to cooperate with the State
commission in carrying out its function as an
arbitrator, or to continue to negotiate in good faith
in the presence, or with the assistance, of the State
commission shall be considered a failure to negotiate
in good faith.
``(c) Standards for Arbitration.--In resolving by
arbitration under subsection (b) any open issues and imposing
conditions upon the parties to the agreement, a State
commission shall--
``(1) ensure that such resolution and conditions
meet the requirements of section 251, including the
regulations prescribed by the Commission pursuant to
section 251;
``(2) establish any rates for interconnection,
services, or network elements according to subsection
(d); and
``(3) provide a schedule for implementation of the
terms and conditions by the parties to the agreement.
``(d) Pricing Standards.--
``(1) Interconnection and network element
charges.--Determinations by a State commission of the
just and reasonable rate for the interconnection of
facilities and equipment for purposes of subsection
(c)(2) of section 251, and the just and reasonable rate
for network elements for purposes of subsection (c)(3)
of such section--
``(A) shall be--
``(i) based on the cost (determined
without reference to a rate-of-return
or other rate-based proceeding) of
providing the interconnection or
network element (whichever is
applicable), and
``(ii) nondiscriminatory, and
``(B) may include a reasonable profit.
``(2) Charges for transport and termination of
traffic.--
``(A) In general.--For the purposes of
compliance by an incumbent local exchange
carrier with section 251(b)(5), a State
commission shall not consider the terms and
conditions for reciprocal compensation to be
just and reasonable unless--
``(i) such terms and conditions
provide for the mutual and reciprocal
recovery by each carrier of costs
associated with the transport and
termination on each carrier's network
facilities of calls that originate on
the network facilities of the other
carrier; and
``(ii) such terms and conditions
determine such costs on the basis of a
reasonable approximation of the
additional costs of terminating such
calls.
``(B) Rules of construction.--This
paragraph shall not be construed--
``(i) to preclude arrangements that
afford the mutual recovery of costs
through the offsetting of reciprocal
obligations, including arrangements
that waive mutual recovery (such as
bill-and-keep arrangements); or
``(ii) to authorize the Commission
or any State commission to engage in
any rate regulation proceeding to
establish with particularity the
additional costs of transporting or
terminating calls, or to require
carriers to maintain records with
respect to the additional costs of such
calls.
``(3) Wholesale prices for telecommunications
services.--For the purposes of section 251(c)(4), a
State commission shall determine wholesale rates on the
basis of retail rates charged to subscribers for the
telecommunications service requested, excluding the
portion thereof attributable to any marketing, billing,
collection, and other costs that will be avoided by the
local exchange carrier.
``(e) Approval by State Commission.--
``(1) Approval required.--Any interconnection
agreement adopted by negotiation or arbitration shall
be submitted for approval to the State commission. A
State commission to which an agreement is submitted
shall approve or reject the agreement, with written
findings as to any deficiencies.
``(2) Grounds for rejection.--The State commission
may only reject--
``(A) an agreement (or any portion thereof)
adopted by negotiation under subsection (a) if
it finds that--
``(i) the agreement (or portion
thereof) discriminates against a
telecommunications carrier not a party
to the agreement; or
``(ii) the implementation of such
agreement or portion is not consistent
with the public interest, convenience,
and necessity; or
``(B) an agreement (or any portion thereof)
adopted by arbitration under subsection (b) if
it finds that the agreement does not meet the
requirements of section 251, including the
regulations prescribed by the Commission
pursuant to section 251, or the standards set
forth in subsection (d) of this section.
``(3) Preservation of authority.--Notwithstanding
paragraph (2), but subject to section 253, nothing in
this section shall prohibit a State commission from
establishing or enforcing other requirements of State
law in its review of an agreement, including requiring
compliance with intrastate telecommunications service
quality standards or requirements.
``(4) Schedule for decision.--If the State
commission does not act to approve or reject the
agreement within 90 days after submission by the
parties of an agreement adopted by negotiation under
subsection (a), or within 30 days after submission by
the parties of an agreement adopted by arbitration
under subsection (b), the agreement shall be deemed
approved. No State court shall have jurisdiction to
review the action of a State commission in approving or
rejecting an agreement under this section.
``(5) Commission to act if state will not act.--If
a State commission fails to act to carry out its
responsibility under this section in any proceeding or
other matter under this section, then the Commission
shall issue an order preempting the State commission's
jurisdiction of that proceeding or matter within 90
days after being notified (or taking notice) of such
failure, and shall assume the responsibility of the
State commission under this section with respect to the
proceeding or matter and act for the State commission.
``(6) Review of state commission actions.--In a
case in which a State fails to act as described in
paragraph (5), the proceeding by the Commission under
such paragraph and any judicial review of the
Commission's actions shall be the exclusive remedies
for a State commission's failure to act. In any case in
which a State commission makes a determination under
this section, any party aggrieved by such determination
may bring an action in an appropriate Federal district
court to determine whether the agreement or statement
meets the requirements of section 251 and this section.
``(f) Statements of Generally Available Terms.--
``(1) In general.--A Bell operating company may
prepare and file with a State commission a statement of
the terms and conditions that such company generally
offers within that State to comply with the
requirements of section 251 and the regulations
thereunder and the standards applicable under this
section.
``(2) State commission review.--A State commission
may not approve such statement unless such statement
complies with subsection (d) of this section and
section 251 and the regulations thereunder. Except as
provided in section 253, nothing in this section shall
prohibit a State commission from establishing or
enforcing other requirements of State law in its review
of such statement, including requiring compliance with
intrastate telecommunications service quality standards
or requirements.
``(3) Schedule for review.--The State commission to
which a statement is submitted shall, not later than 60
days after the date of such submission--
``(A) complete the review of such statement
under paragraph (2) (including any
reconsideration thereof), unless the submitting
carrier agrees to an extension of the period
for such review; or
``(B) permit such statement to take effect.
``(4) Authority to continue review.--Paragraph (3)
shall not preclude the State commission from continuing
to review a statement that has been permitted to take
effect under subparagraph (B) of such paragraph or from
approving or disapproving such statement under
paragraph (2).
``(5) Duty to negotiate not affected.--The
submission or approval of a statement under this
subsection shall not relieve a Bell operating company
of its duty to negotiate the terms and conditions of an
agreement under section 251.
``(g) Consolidation of State Proceedings.--Where not
inconsistent with the requirements of this Act, a State
commission may, to the extent practical, consolidate
proceedings under sections 214(e), 251(f), 253, and this
section in order to reduce administrative burdens on
telecommunications carriers, other parties to the proceedings,
and the State commission in carrying out its responsibilities
under this Act.
``(h) Filing Required.--A State commission shall make a
copy of each agreement approved under subsection (e) and each
statement approved under subsection (f) available for public
inspection and copying within 10 days after the agreement or
statement is approved. The State commission may charge a
reasonable and nondiscriminatory fee to the parties to the
agreement or to the party filing the statement to cover the
costs of approving and filing such agreement or statement.
``(i) Availability to Other Telecommunications Carriers.--A
local exchange carrier shall make available any
interconnection, service, or network element provided under an
agreement approved under this section to which it is a party to
any other requesting telecommunications carrier upon the same
terms and conditions as those provided in the agreement.
``(j) Definition of Incumbent Local Exchange Carrier.--For
purposes of this section, the term `incumbent local exchange
carrier' has the meaning provided in section 251(h).
``SEC. 253. REMOVAL OF BARRIERS TO ENTRY.
``(a) In General.--No State or local statute or regulation,
or other State or local legal requirement, may prohibit or have
the effect of prohibiting the ability of any entity to provide
any interstate or intrastate telecommunications service.
``(b) State Regulatory Authority.--Nothing in this section
shall affect the ability of a State to impose, on a
competitively neutral basis and consistent with section 254,
requirements necessary to preserve and advance universal
service, protect the public safety and welfare, ensure the
continued quality of telecommunications services, and safeguard
the rights of consumers.
``(c) State and Local Government Authority.--Nothing in
this section affects the authority of a State or local
government to manage the public rights-of-way or to require
fair and reasonable compensation from telecommunications
providers, on a competitively neutral and nondiscriminatory
basis, for use of public rights-of-way on a nondiscriminatory
basis, if the compensation required is publicly disclosed by
such government.
``(d) Preemption.--If, after notice and an opportunity for
public comment, the Commission determines that a State or local
government has permitted or imposed any statute, regulation, or
legal requirement that violates subsection (a) or (b), the
Commission shall preempt the enforcement of such statute,
regulation, or legal requirement to the extent necessary to
correct such violation or inconsistency.
``(e) Commercial mobile service providers.--Nothing in this
section shall affect the application of section 332(c)(3) to
commercial mobile service providers.
``(f) Rural Markets.--It shall not be a violation of this
section for a State to require a telecommunications carrier
that seeks to provide telephone exchange service or exchange
access in a service area served by a rural telephone company to
meet the requirements in section 214(e)(1) for designation as
an eligible telecommunications carrier for that area before
being permitted to provide such service. This subsection shall
not apply--
``(1) to a service area served by a rural telephone
company that has obtained an exemption, suspension, or
modification of section 251(c)(4) that effectively
prevents a competitor from meeting the requirements of
section 214(e)(1); and
``(2) to a provider of commercial mobile services.
``SEC. 254. UNIVERSAL SERVICE.
``(a) Procedures to Review Universal Service
Requirements.--
``(1) Federal-state joint board on universal
service.--Within one month after the date of enactment
of the Telecommunications Act of 1996, the Commission
shall institute and refer to a Federal-State Joint
Board under section 410(c) a proceeding to recommend
changes to any of its regulations in order to implement
sections 214(e) and this section, including the
definition of the services that are supported by
Federal universal service support mechanisms and a
specific timetable for completion of such
recommendations. In addition to the members of the
Joint Board required under section 410(c), one member
of such Joint Board shall be a State-appointed utility
consumer advocate nominated by a national organization
of State utility consumer advocates. The Joint Board
shall, after notice and opportunity for public comment,
make its recommendations to the Commission 9 months
after the date of enactment of the Telecommunications
Act of 1996.
``(2) Commission action.--The Commission shall
initiate a single proceeding to implement the
recommendations from the Joint Board required by
paragraph (1) and shall complete such proceeding within
15 months after the date of enactment of the
Telecommunications Act of 1996. The rules established
by such proceeding shall include a definition of the
services that are supported by Federal universal
service support mechanisms and a specific timetable for
implementation. Thereafter, the Commission shall
complete any proceeding to implement subsequent
recommendations from any Joint Board on universal
service within one year after receiving such
recommendations.
``(b) Universal Service Principles.--The Joint Board and
the Commission shall base policies for the preservation and
advancement of universal service on the following principles:
``(1) Quality and rates.--Quality services should
be available at just, reasonable, and affordable rates.
``(2) Access to advanced services.--Access to
advanced telecommunications and information services
should be provided in all regions of the Nation.
``(3) Access in rural and high cost areas.--
Consumers in all regions of the Nation, including low-
income consumers and those in rural, insular, and high
cost areas, should have access to telecommunications
and information services, including interexchange
services and advanced telecommunications and
information services, that are reasonably comparable to
those services provided in urban areas and that are
available at rates that are reasonably comparable to
rates charged for similar services in urban areas.
``(4) Equitable and nondiscriminatory
contributions.--All providers of telecommunications
services should make an equitable and nondiscriminatory
contribution to the preservation and advancement of
universal service.
``(5) Specific and predictable support
mechanisms.--There should be specific, predictable and
sufficient Federal and State mechanisms to preserve and
advance universal service.
``(6) Access to advanced telecommunications
services for schools, health care, and libraries.--
Elementary and secondary schools and classrooms, health
care providers, and libraries should have access to
advanced telecommunications services as described in
subsection (h).
``(7) Additional principles.--Such other principles
as the Joint Board and the Commission determine are
necessary and appropriate for the protection of the
public interest, convenience, and necessity and are
consistent with this Act.
``(c) Definition.--
``(1) In general.--Universal service is an evolving
level of telecommunications services that the
Commission shall establish periodically under this
section, taking into account advances in
telecommunications and information technologies and
services. The Joint Board in recommending, and the
Commission in establishing, the definition of the
services that are supported by Federal universal
service support mechanisms shall consider the extent to
which such telecommunications services--
``(A) are essential to education, public
health, or public safety;
``(B) have, through the operation of market
choices by customers, been subscribed to by a
substantial majority of residential customers;
``(C) are being deployed in public
telecommunications networks by
telecommunications carriers; and
``(D) are consistent with the public
interest, convenience, and necessity.
``(2) Alterations and modifications.--The Joint
Board may, from time to time, recommend to the
Commission modifications in the definition of the
services that are supported by Federal universal
service support mechanisms.
``(3) Special services.--In addition to the
services included in the definition of universal
service under paragraph (1), the Commission may
designate additional services for such support
mechanisms for schools, libraries, and health care
providers for the purposes of subsection (h).
``(d) Telecommunications Carrier Contribution.--Every
telecommunications carrier that provides interstate
telecommunications services shall contribute, on an equitable
and nondiscriminatory basis, to the specific, predictable, and
sufficient mechanisms established by the Commission to preserve
and advance universal service. The Commission may exempt a
carrier or class of carriers from this requirement if the
carrier's telecommunications activities are limited to such an
extent that the level of such carrier's contribution to the
preservation and advancement of universal service would be de
minimis. Any other provider of interstate telecommunications
may be required to contribute to the preservation and
advancement of universal service if the public interest so
requires.
``(e) Universal Service Support.--After the date on which
Commission regulations implementing this section take effect,
only an eligible telecommunications carrier designated under
section 214(e) shall be eligible to receive specific Federal
universal service support. A carrier that receives such support
shall use that support only for the provision, maintenance, and
upgrading of facilities and services for which the support is
intended. Any such support should be explicit and sufficient to
achieve the purposes of this section.
``(f) State Authority.--A State may adopt regulations not
inconsistent with the Commission's rules to preserve and
advance universal service. Every telecommunications carrier
that provides intrastate telecommunications services shall
contribute, on an equitable and nondiscriminatory basis, in a
manner determined by the State to the preservation and
advancement of universal service in that State. A State may
adopt regulations to provide for additional definitions and
standards to preserve and advance universal service within that
State only to the extent that such regulations adopt additional
specific, predictable, and sufficient mechanisms to support
such definitions or standards that do not rely on or burden
Federal universal service support mechanisms.
``(g) Interexchange and Interstate Services.--Within 6
months after the date of enactment of the Telecommunications
Act of 1996, the Commission shall adopt rules to require that
the rates charged by providers of interexchange
telecommunications services to subscribers in rural and high
cost areas shall be no higher than the rates charged by each
such provider to its subscribers in urban areas. Such rules
shall also require that a provider of interstate interexchange
telecommunications services shall provide such services to its
subscribers in each State at rates no higher than the rates
charged to its subscribers in any other State.
``(h) Telecommunications Services for Certain Providers.--
``(1) In general.--
``(A) Health care providers for rural
areas.--A telecommunications carrier shall,
upon receiving a bona fide request, provide
telecommunications services which are necessary
for the provision of health care services in a
State, including instruction relating to such
services, to any public or nonprofit health
care provider that serves persons who reside in
rural areas in that State at rates that are
reasonably comparable to rates charged for
similar services in urban areas in that State.
A telecommunications carrier providing service
under this paragraph shall be entitled to have
an amount equal to the difference, if any,
between the rates for services provided to
health care providers for rural areas in a
State and the rates for similar services
provided to other customers in comparable rural
areas in that State treated as a service
obligation as a part of its obligation to
participate in the mechanisms to preserve and
advance universal service.
``(B) Educational providers and
libraries.--All telecommunications carriers
serving a geographic area shall, upon a bona
fide request for any of its services that are
within the definition of universal service
under subsection (c)(3), provide such services
to elementary schools, secondary schools, and
libraries for educational purposes at rates
less than the amounts charged for similar
services to other parties. The discount shall
be an amount that the Commission, with respect
to interstate services, and the States, with
respect to intrastate services, determine is
appropriate and necessary to ensure affordable
access to and use of such services by such
entities. A telecommunications carrier
providing service under this paragraph shall--
``(i) have an amount equal to the
amount of the discount treated as an
offset to its obligation to contribute
to the mechanisms to preserve and
advance universal service, or
``(ii) notwithstanding the
provisions of subsection (e) of this
section, receive reimbursement
utilizing the support mechanisms to
preserve and advance universal service.
``(2) Advanced services.--The Commission shall
establish competitively neutral rules--
``(A) to enhance, to the extent technically
feasible and economically reasonable, access to
advanced telecommunications and information
services for all public and nonprofit
elementary and secondary school classrooms,
health care providers, and libraries; and
``(B) to define the circumstances under
which a telecommunications carrier may be
required to connect its network to such public
institutional telecommunications users.
``(3) Terms and conditions.--Telecommunications
services and network capacity provided to a public
institutional telecommunications user under this
subsection may not be sold, resold, or otherwise
transferred by such user in consideration for money or
any other thing of value.
``(4) Eligibility of users.--No entity listed in
this subsection shall be entitled to preferential rates
or treatment as required by this subsection, if such
entity operates as a for-profit business, is a school
described in paragraph (5)(A) with an endowment of more
than $50,000,000, or is a library not eligible for
participation in State-based plans for funds under
title III of the Library Services and Construction Act
(20 U.S.C. 335c et seq.).
``(5) Definitions.--For purposes of this
subsection:
``(A) Elementary and secondary schools.--
The term `elementary and secondary schools'
means elementary schools and secondary schools,
as defined in paragraphs (14) and (25),
respectively, of section 14101 of the
Elementary and Secondary Education Act of 1965
(20 U.S.C. 8801).
``(B) Health care provider.--The term
`health care provider' means--
``(i) post-secondary educational
institutions offering health care
instruction, teaching hospitals, and
medical schools;
``(ii) community health centers or
health centers providing health care to
migrants;
``(iii) local health departments or
agencies;
``(iv) community mental health
centers;
``(v) not-for-profit hospitals;
``(vi) rural health clinics; and
``(vii) consortia of health care
providers consisting of one or more
entities described in clauses (i)
through (vi).
``(C) Public institutional
telecommunications user.--The term `public
institutional telecommunications user' means an
elementary or secondary school, a library, or a
health care provider as those terms are defined
in this paragraph.
``(i) Consumer Protection.--The Commission and the States
should ensure that universal service is available at rates that
are just, reasonable, and affordable.
``(j) Lifeline Assistance.--Nothing in this section shall
affect the collection, distribution, or administration of the
Lifeline Assistance Program provided for by the Commission
under regulations set forth in section 69.117 of title 47, Code
of Federal Regulations, and other related sections of such
title.
``(k) Subsidy of Competitive Services Prohibited.--A
telecommunications carrier may not use services that are not
competitive to subsidize services that are subject to
competition. The Commission, with respect to interstate
services, and the States, with respect to intrastate services,
shall establish any necessary cost allocation rules, accounting
safeguards, and guidelines to ensure that services included in
the definition of universal service bear no more than a
reasonable share of the joint and common costs of facilities
used to provide those services.
``SEC. 255. ACCESS BY PERSONS WITH DISABILITIES.
``(a) Definitions.--As used in this section--
``(1) Disability.--The term `disability' has the
meaning given to it by section 3(2)(A) of the Americans
with Disabilities Act of 1990 (42 U.S.C. 12102(2)(A)).
``(2) Readily achievable.--The term `readily
achievable' has the meaning given to it by section
301(9) of that Act (42 U.S.C. 12181(9)).
``(b) Manufacturing.--A manufacturer of telecommunications
equipment or customer premises equipment shall ensure that the
equipment is designed, developed, and fabricated to be
accessible to and usable by individuals with disabilities, if
readily achievable.
``(c) Telecommunications Services.--A provider of
telecommunications service shall ensure that the service is
accessible to and usable by individuals with disabilities, if
readily achievable.
``(d) Compatibility.--Whenever the requirements of
subsections (b) and (c) are not readily achievable, such a
manufacturer or provider shall ensure that the equipment or
service is compatible with existing peripheral devices or
specialized customer premises equipment commonly used by
individuals with disabilities to achieve access, if readily
achievable.
``(e) Guidelines.--Within 18 months after the date of
enactment of the Telecommunications Act of 1996, the
Architectural and Transportation Barriers Compliance Board
shall develop guidelines for accessibility of
telecommunications equipment and customer premises equipment in
conjunction with the Commission. The Board shall review and
update the guidelines periodically.
``(f) No Additional Private Rights Authorized.--Nothing in
this section shall be construed to authorize any private right
of action to enforce any requirement of this section or any
regulation thereunder. The Commission shall have exclusive
jurisdiction with respect to any complaint under this section.
``SEC. 256. COORDINATION FOR INTERCONNECTIVITY.
``(a) Purpose.--It is the purpose of this section--
``(1) to promote nondiscriminatory accessibility by
the broadest number of users and vendors of
communications products and services to public
telecommunications networks used to provide
telecommunications service through--
``(A) coordinated public telecommunications
network planning and design by
telecommunications carriers and other providers
of telecommunications service; and
``(B) public telecommunications network
interconnectivity, and interconnectivity of
devices with such networks used to provide
telecommunications service; and
``(2) to ensure the ability of users and
information providers to seamlessly and transparently
transmit and receive information between and across
telecommunications networks.
``(b) Commission Functions.--In carrying out the purposes
of this section, the Commission--
``(1) shall establish procedures for Commission
oversight of coordinated network planning by
telecommunications carriers and other providers of
telecommunications service for the effective and
efficient interconnection of public telecommunications
networks used to provide telecommunications service;
and
``(2) may participate, in a manner consistent with
its authority and practice prior to the date of
enactment of this section, in the development by
appropriate industry standards-setting organizations of
public telecommunications network interconnectivity
standards that promote access to--
``(A) public telecommunications networks
used to provide telecommunications service;
``(B) network capabilities and services by
individuals with disabilities; and
``(C) information services by subscribers
of rural telephone companies.
``(c) Commission's Authority.--Nothing in this section
shall be construed as expanding or limiting any authority that
the Commission may have under law in effect before the date of
enactment of the Telecommunications Act of 1996.
``(d) Definition.--As used in this section, the term
`public telecommunications network interconnectivity' means the
ability of two or more public telecommunications networks used
to provide telecommunications service to communicate and
exchange information without degeneration, and to interact in
concert with one another.
``SEC. 257. MARKET ENTRY BARRIERS PROCEEDING.
``(a) Elimination of Barriers.--Within 15 months after the
date of enactment of the Telecommunications Act of 1996, the
Commission shall complete a proceeding for the purpose of
identifying and eliminating, by regulations pursuant to its
authority under this Act (other than this section), market
entry barriers for entrepreneurs and other small businesses in
the provision and ownership of telecommunications services and
information services, or in the provision of parts or services
to providers of telecommunications services and information
services.
``(b) National Policy.--In carrying out subsection (a), the
Commission shall seek to promote the policies and purposes of
this Act favoring diversity of media voices, vigorous economic
competition, technological advancement, and promotion of the
public interest, convenience, and necessity.
``(c) Periodic Review.--Every 3 years following the
completion of the proceeding required by subsection (a), the
Commission shall review and report to Congress on--
``(1) any regulations prescribed to eliminate
barriers within its jurisdiction that are identified
under subsection (a) and that can be prescribed
consistent with the public interest, convenience, and
necessity; and
``(2) the statutory barriers identified under
subsection (a) that the Commission recommends be
eliminated, consistent with the public interest,
convenience, and necessity.
``SEC. 258. ILLEGAL CHANGES IN SUBSCRIBER CARRIER SELECTIONS.
``(a) Prohibition.--No telecommunications carrier shall
submit or execute a change in a subscriber's selection of a
provider of telephone exchange service or telephone toll
service except in accordance with such verification procedures
as the Commission shall prescribe. Nothing in this section
shall preclude any State commission from enforcing such
procedures with respect to intrastate services.
``(b) Liability for Charges.--Any telecommunications
carrier that violates the verification procedures described in
subsection (a) and that collects charges for telephone exchange
service or telephone toll service from a subscriber shall be
liable to the carrier previously selected by the subscriber in
an amount equal to all charges paid by such subscriber after
such violation, in accordance with such procedures as the
Commission may prescribe. The remedies provided by this
subsection are in addition to any other remedies available by
law.
``SEC. 259. INFRASTRUCTURE SHARING.
``(a) Regulations Required.--The Commission shall
prescribe, within one year after the date of enactment of the
Telecommunications Act of 1996, regulations that require
incumbent local exchange carriers (as defined in section
251(h)) to make available to any qualifying carrier such public
switched network infrastructure, technology, information, and
telecommunications facilities and functions as may be requested
by such qualifying carrier for the purpose of enabling such
qualifying carrier to provide telecommunications services, or
to provide access to information services, in the service area
in which such qualifying carrier has requested and obtained
designation as an eligible telecommunications carrier under
section 214(e).
``(b) Terms and Conditions of Regulations.--The regulations
prescribed by the Commission pursuant to this section shall--
``(1) not require a local exchange carrier to which
this section applies to take any action that is
economically unreasonable or that is contrary to the
public interest;
``(2) permit, but shall not require, the joint
ownership or operation of public switched network
infrastructure and services by or among such local
exchange carrier and a qualifying carrier;
``(3) ensure that such local exchange carrier will
not be treated by the Commission or any State as a
common carrier for hire or as offering common carrier
services with respect to any infrastructure,
technology, information, facilities, or functions made
available to a qualifying carrier in accordance with
regulations issued pursuant to this section;
``(4) ensure that such local exchange carrier makes
such infrastructure, technology, information,
facilities, or functions available to a qualifying
carrier on just and reasonable terms and conditions
that permit such qualifying carrier to fully benefit
from the economies of scale and scope of such local
exchange carrier, as determined in accordance with
guidelines prescribed by the Commission in regulations
issued pursuant to this section;
``(5) establish conditions that promote cooperation
between local exchange carriers to which this section
applies and qualifying carriers;
``(6) not require a local exchange carrier to which
this section applies to engage in any infrastructure
sharing agreement for any services or access which are
to be provided or offered to consumers by the
qualifying carrier in such local exchange carrier's
telephone exchange area; and
``(7) require that such local exchange carrier file
with the Commission or State for public inspection, any
tariffs, contracts, or other arrangements showing the
rates, terms, and conditions under which such carrier
is making available public switched network
infrastructure and functions under this section.
``(c) Information Concerning Deployment of New Services and
Equipment.--A local exchange carrier to which this section
applies that has entered into an infrastructure sharing
agreement under this section shall provide to each party to
such agreement timely information on the planned deployment of
telecommunications services and equipment, including any
software or upgrades of software integral to the use or
operation of such telecommunications equipment.
``(d) Definition.--For purposes of this section, the term
`qualifying carrier' means a telecommunications carrier that--
``(1) lacks economies of scale or scope, as
determined in accordance with regulations prescribed by
the Commission pursuant to this section; and
``(2) offers telephone exchange service, exchange
access, and any other service that is included in
universal service, to all consumers without preference
throughout the service area for which such carrier has
been designated as an eligible telecommunications
carrier under section 214(e).
``SEC. 260. PROVISION OF TELEMESSAGING SERVICE.
``(a) Nondiscrimination Safeguards.--Any local exchange
carrier subject to the requirements of section 251(c) that
provides telemessaging service--
``(1) shall not subsidize its telemessaging service
directly or indirectly from its telephone exchange
service or its exchange access; and
``(2) shall not prefer or discriminate in favor of
its telemessaging service operations in its provision
of telecommunications services.
``(b) Expedited Consideration of Complaints.--The
Commission shall establish procedures for the receipt and
review of complaints concerning violations of subsection (a) or
the regulations thereunder that result in material financial
harm to a provider of telemessaging service. Such procedures
shall ensure that the Commission will make a final
determination with respect to any such complaint within 120
days after receipt of the complaint. If the complaint contains
an appropriate showing that the alleged violation occurred, the
Commission shall, within 60 days after receipt of the
complaint, order the local exchange carrier and any affiliates
to cease engaging in such violation pending such final
determination.
``(c) Definition.--As used in this section, the term
`telemessaging service' means voice mail and voice storage and
retrieval services, any live operator services used to record,
transcribe, or relay messages (other than telecommunications
relay services), and any ancillary services offered in
combination with these services.
``SEC. 261. EFFECT ON OTHER REQUIREMENTS.
``(a) Commission Regulations.--Nothing in this part shall
be construed to prohibit the Commission from enforcing
regulations prescribed prior to the date of enactment of the
Telecommunications Act of 1996 in fulfilling the requirements
of this part, to the extent that such regulations are not
inconsistent with the provisions of this part.
``(b) Existing State Regulations.--Nothing in this part
shall be construed to prohibit any State commission from
enforcing regulations prescribed prior to the date of enactment
of the Telecommunications Act of 1996, or from prescribing
regulations after such date of enactment, in fulfilling the
requirements of this part, if such regulations are not
inconsistent with the provisions of this part.
``(c) Additional State Requirements.--Nothing in this part
precludes a State from imposing requirements on a
telecommunications carrier for intrastate services that are
necessary to further competition in the provision of telephone
exchange service or exchange access, as long as the State's
requirements are not inconsistent with this part or the
Commission's regulations to implement this part.''.
(b) Designation of Part I.--Title II of the Act is further
amended by inserting before the heading of section 201 the
following new heading:
``PART I--COMMON CARRIER REGULATION''
(c) Stylistic Consistency.--The Act is amended so that--
(1) the designation and heading of each title of
the Act shall be in the form and typeface of the
designation and heading of this title of this Act; and
(2) the designation and heading of each part of
each title of the Act shall be in the form and typeface
of the designation and heading of part I of title II of
the Act, as amended by subsection (a).
SEC. 102. ELIGIBLE TELECOMMUNICATIONS CARRIERS.
(a) In General.--Section 214 (47 U.S.C. 214) is amended by
adding at the end thereof the following new subsection:
``(e) Provision of Universal Service.--
``(1) Eligible telecommunications carriers.--A
common carrier designated as an eligible
telecommunications carrier under paragraph (2) or (3)
shall be eligible to receive universal service support
in accordance with section 254 and shall, throughout
the service area for which the designation is
received--
``(A) offer the services that are supported
by Federal universal service support mechanisms
under section 254(c), either using its own
facilities or a combination of its own
facilities and resale of another carrier's
services (including the services offered by
another eligible telecommunications carrier);
and
``(B) advertise the availability of such
services and the charges therefor using media
of general distribution.
``(2) Designation of eligible telecommunications
carriers.--A State commission shall upon its own motion
or upon request designate a common carrier that meets
the requirements of paragraph (1) as an eligible
telecommunications carrier for a service area
designated by the State commission. Upon request and
consistent with the public interest, convenience, and
necessity, the State commission may, in the case of an
area served by a rural telephone company, and shall, in
the case of all other areas, designate more than one
common carrier as an eligible telecommunications
carrier for a service area designated by the State
commission, so long as each additional requesting
carrier meets the requirements of paragraph (1). Before
designating an additional eligible telecommunications
carrier for an area served by a rural telephone
company, the State commission shall find that the
designation is in the public interest.
``(3) Designation of eligible telecommunications
carriers for unserved areas.--If no common carrier will
provide the services that are supported by Federal
universal service support mechanisms under section
254(c) to an unserved community or any portion thereof
that requests such service, the Commission, with
respect to interstate services, or a State commission,
with respect to intrastate services, shall determine
which common carrier or carriers are best able to
provide such service to the requesting unserved
community or portion thereof and shall order such
carrier or carriers to provide such service for that
unserved community or portion thereof. Any carrier or
carriers ordered to provide such service under this
paragraph shall meet the requirements of paragraph (1)
and shall be designated as an eligible
telecommunications carrier for that community or
portion thereof.
``(4) Relinquishment of universal service.--A State
commission shall permit an eligible telecommunications
carrier to relinquish its designation as such a carrier
in any area served by more than one eligible
telecommunications carrier. An eligible
telecommunications carrier that seeks to relinquish its
eligible telecommunications carrier designation for an
area served by more than one eligible
telecommunications carrier shall give advance notice to
the State commission of such relinquishment. Prior to
permitting a telecommunications carrier designated as
an eligible telecommunications carrier to cease
providing universal service in an area served by more
than one eligible telecommunications carrier, the State
commission shall require the remaining eligible
telecommunications carrier or carriers to ensure that
all customers served by the relinquishing carrier will
continue to be served, and shall require sufficient
notice to permit the purchase or construction of
adequate facilities by any remaining eligible
telecommunications carrier. The State commission shall
establish a time, not to exceed one year after the
State commission approves such relinquishment under
this paragraph, within which such purchase or
construction shall be completed.
``(5) Service area defined.--The term `service
area' means a geographic area established by a State
commission for the purpose of determining universal
service obligations and support mechanisms. In the case
of an area served by a rural telephone company,
`service area' means such company's `study area' unless
and until the Commission and the States, after taking
into account recommendations of a Federal-State Joint
Board instituted under section 410(c), establish a
different definition of service area for such
company.''.
SEC. 103. EXEMPT TELECOMMUNICATIONS COMPANIES.
The Public Utility Holding Company Act of 1935 (15 U.S.C.
79 and following) is amended by redesignating sections 34 and
35 as sections 35 and 36, respectively, and by inserting the
following new section after section 33:
``SEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES.
``(a) Definitions.--For purposes of this section--
``(1) Exempt telecommunications company.--The term
`exempt telecommunications company' means any person
determined by the Federal Communications Commission to
be engaged directly or indirectly, wherever located,
through one or more affiliates (as defined in section
2(a)(11)(B)), and exclusively in the business of
providing---
``(A) telecommunications services;
``(B) information services;
``(C) other services or products subject to
the jurisdiction of the Federal Communications
Commission; or
``(D) products or services that are related
or incidental to the provision of a product or
service described in subparagraph (A), (B), or
(C).
No person shall be deemed to be an exempt
telecommunications company under this section unless
such person has applied to the Federal Communications
Commission for a determination under this paragraph. A
person applying in good faith for such a determination
shall be deemed an exempt telecommunications company
under this section, with all of the exemptions provided
by this section, until the Federal Communications
Commission makes such determination. The Federal
Communications Commission shall make such determination
within 60 days of its receipt of any such application
filed after the enactment of this section and shall
notify the Commission whenever a determination is made
under this paragraph that any person is an exempt
telecommunications company. Not later than 12 months
after the date of enactment of this section, the
Federal Communications Commission shall promulgate
rules implementing the provisions of this paragraph
which shall be applicable to applications filed under
this paragraph after the effective date of such rules.
``(2) Other terms.--For purposes of this section,
the terms `telecommunications services' and
`information services' shall have the same meanings as
provided in the Communications Act of 1934.
``(b) State Consent for Sale of Existing Rate-Based
Facilities.--If a rate or charge for the sale of electric
energy or natural gas (other than any portion of a rate or
charge which represents recovery of the cost of a wholesale
rate or charge) for, or in connection with, assets of a public
utility company that is an associate company or affiliate of a
registered holding company was in effect under the laws of any
State as of December 19, 1995, the public utility company
owning such assets may not sell such assets to an exempt
telecommunications company that is an associate company or
affiliate unless State commissions having jurisdiction over
such public utility company approve such sale. Nothing in this
subsection shall preempt the otherwise applicable authority of
any State to approve or disapprove the sale of such assets. The
approval of the Commission under this Act shall not be required
for the sale of assets as provided in this subsection.
``(c) Ownership of ETCS by Exempt Holding Companies.--
Notwithstanding any provision of this Act, a holding company
that is exempt under section 3 of this Act shall be permitted,
without condition or limitation under this Act, to acquire and
maintain an interest in the business of one or more exempt
telecommunications companies.
``(d) Ownership of ETCS by Registered Holding Companies.--
Notwithstanding any provision of this Act, a registered holding
company shall be permitted (without the need to apply for, or
receive, approval from the Commission, and otherwise without
condition under this Act) to acquire and hold the securities,
or an interest in the business, of one or more exempt
telecommunications companies.
``(e) Financing and Other Relationships Between ETCS and
Registered Holding Companies.--The relationship between an
exempt telecommunications company and a registered holding
company, its affiliates and associate companies, shall remain
subject to the jurisdiction of the Commission under this Act:
Provided, That--
``(1) section 11 of this Act shall not prohibit the
ownership of an interest in the business of one or more
exempt telecommunications companies by a registered
holding company (regardless of activities engaged in or
where facilities owned or operated by such exempt
telecommunications companies are located), and such
ownership by a registered holding company shall be
deemed consistent with the operation of an integrated
public utility system;
``(2) the ownership of an interest in the business
of one or more exempt telecommunications companies by a
registered holding company (regardless of activities
engaged in or where facilities owned or operated by
such exempt telecommunications companies are located)
shall be considered as reasonably incidental, or
economically necessary or appropriate, to the
operations of an integrated public utility system;
``(3) the Commission shall have no jurisdiction
under this Act over, and there shall be no restriction
or approval required under this Act with respect to (A)
the issue or sale of a security by a registered holding
company for purposes of financing the acquisition of an
exempt telecommunications company, or (B) the guarantee
of a security of an exempt telecommunications company
by a registered holding company; and
``(4) except for costs that should be fairly and
equitably allocated among companies that are associate
companies of a registered holding company, the
Commission shall have no jurisdiction under this Act
over the sales, service, and construction contracts
between an exempt telecommunications company and a
registered holding company, its affiliates and
associate companies.
``(f) Reporting Obligations Concerning Investments and
Activities of Registered Public-Utility Holding Company
Systems.--
``(1) Obligations to report information.--Any
registered holding company or subsidiary thereof that
acquires or holds the securities, or an interest in the
business, of an exempt telecommunications company shall
file with the Commission such information as the
Commission, by rule, may prescribe concerning--
``(A) investments and activities by the
registered holding company, or any subsidiary
thereof, with respect to exempt
telecommunications companies, and
``(B) any activities of an exempt
telecommunications company within the holding
company system,
that are reasonably likely to have a material impact on
the financial or operational condition of the holding
company system.
``(2) Authority to require additional
information.--If, based on reports provided to the
Commission pursuant to paragraph (1) of this subsection
or other available information, the Commission
reasonably concludes that it has concerns regarding the
financial or operational condition of any registered
holding company or any subsidiary thereof (including an
exempt telecommunications company), the Commission may
require such registered holding company to make
additional reports and provide additional information.
``(3) Authority to limit disclosure of
information.--Notwithstanding any other provision of
law, the Commission shall not be compelled to disclose
any information required to be reported under this
subsection. Nothing in this subsection shall authorize
the Commission to withhold the information from
Congress, or prevent the Commission from complying with
a request for information from any other Federal or
State department or agency requesting the information
for purposes within the scope of its jurisdiction. For
purposes of section 552 of title 5, United States Code,
this subsection shall be considered a statute described
in subsection (b)(3)(B) of such section 552.
``(g) Assumption of Liabilities.--Any public utility
company that is an associate company, or an affiliate, of a
registered holding company and that is subject to the
jurisdiction of a State commission with respect to its retail
electric or gas rates shall not issue any security for the
purpose of financing the acquisition, ownership, or operation
of an exempt telecommunications company. Any public utility
company that is an associate company, or an affiliate, of a
registered holding company and that is subject to the
jurisdiction of a State commission with respect to its retail
electric or gas rates shall not assume any obligation or
liability as guarantor, endorser, surety, or otherwise by the
public utility company in respect of any security of an exempt
telecommunications company.
``(h) Pledging or Mortgaging of Assets.--Any public utility
company that is an associate company, or affiliate, of a
registered holding company and that is subject to the
jurisdiction of a State commission with respect to its retail
electric or gas rates shall not pledge, mortgage, or otherwise
use as collateral any assets of the public utility company or
assets of any subsidiary company thereof for the benefit of an
exempt telecommunications company.
``(i) Protection Against Abusive Affiliate Transactions.--A
public utility company may enter into a contract to purchase
services or products described in subsection (a)(1) from an
exempt telecommunications company that is an affiliate or
associate company of the public utility company only if--
``(1) every State commission having jurisdiction
over the retail rates of such public utility company
approves such contract; or
``(2) such public utility company is not subject to
State commission retail rate regulation and the
purchased services or products--
``(A) would not be resold to any affiliate
or associate company; or
``(B) would be resold to an affiliate or
associate company and every State commission
having jurisdiction over the retail rates of
such affiliate or associate company makes the
determination required by subparagraph (A).
The requirements of this subsection shall not apply in any case
in which the State or the State commission concerned publishes
a notice that the State or State commission waives its
authority under this subsection.
``(j) Nonpreemption of Rate Authority.--Nothing in this Act
shall preclude the Federal Energy Regulatory Commission or a
State commission from exercising its jurisdiction under
otherwise applicable law to determine whether a public utility
company may recover in rates the costs of products or services
purchased from or sold to an associate company or affiliate
that is an exempt telecommunications company, regardless of
whether such costs are incurred through the direct or indirect
purchase or sale of products or services from such associate
company or affiliate.
``(k) Reciprocal Arrangements Prohibited.--Reciprocal
arrangements among companies that are not affiliates or
associate companies of each other that are entered into in
order to avoid the provisions of this section are prohibited.
``(l) Books and Records.--(1) Upon written order of a State
commission, a State commission may examine the books, accounts,
memoranda, contracts, and records of--
``(A) a public utility company subject to its
regulatory authority under State law;
``(B) any exempt telecommunications company selling
products or services to such public utility company or
to an associate company of such public utility company;
and
``(C) any associate company or affiliate of an
exempt telecommunications company which sells products
or services to a public utility company referred to in
subparagraph (A),
wherever located, if such examination is required for the
effective discharge of the State commission's regulatory
responsibilities affecting the provision of electric or gas
service in connection with the activities of such exempt
telecommunications company.
``(2) Where a State commission issues an order pursuant to
paragraph (1), the State commission shall not publicly disclose
trade secrets or sensitive commercial information.
``(3) Any United States district court located in the State
in which the State commission referred to in paragraph (1) is
located shall have jurisdiction to enforce compliance with this
subsection.
``(4) Nothing in this section shall--
``(A) preempt applicable State law concerning the
provision of records and other information; or
``(B) in any way limit rights to obtain records and
other information under Federal law, contracts, or
otherwise.
``(m) Independent Audit Authority for State Commissions.--
``(1) State may order audit.--Any State commission
with jurisdiction over a public utility company that--
``(A) is an associate company of a
registered holding company; and
``(B) transacts business, directly or
indirectly, with a subsidiary company, an
affiliate or an associate company that is an
exempt telecommunications company,
may order an independent audit to be performed, no more
frequently than on an annual basis, of all matters
deemed relevant by the selected auditor that reasonably
relate to retail rates: Provided, That such matters
relate, directly or indirectly, to transactions or
transfers between the public utility company subject to
its jurisdiction and such exempt telecommunications
company.
``(2) Selection of firm to conduct audit.--(A) If a
State commission orders an audit in accordance with
paragraph (1), the public utility company and the State
commission shall jointly select, within 60 days, a firm
to perform the audit. The firm selected to perform the
audit shall possess demonstrated qualifications
relating to--
``(i) competency, including adequate
technical training and professional proficiency
in each discipline necessary to carry out the
audit; and
``(ii) independence and objectivity,
including that the firm be free from personal
or external impairments to independence, and
should assume an independent position with the
State commission and auditee, making certain
that the audit is based upon an impartial
consideration of all pertinent facts and
responsible opinions.
``(B) The public utility company and the exempt
telecommunications company shall cooperate fully with
all reasonable requests necessary to perform the audit
and the public utility company shall bear all costs of
having the audit performed.
``(3) Availability of auditor's report.--The
auditor's report shall be provided to the State
commission not later than 6 months after the selection
of the auditor, and provided to the public utility
company not later than 60 days thereafter.
``(n) Applicability of Telecommunications Regulation.--
Nothing in this section shall affect the authority of the
Federal Communications Commission under the Communications Act
of 1934, or the authority of State commissions under State laws
concerning the provision of telecommunications services, to
regulate the activities of an exempt telecommunications
company.''.
SEC. 104. NONDISCRIMINATION PRINCIPLE.
Section 1 (47 U.S.C. 151) is amended by inserting after
``to all the people of the United States'' the following: ``,
without discrimination on the basis of race, color, religion,
national origin, or sex,''.
Subtitle B--Special Provisions Concerning Bell Operating Companies
SEC. 151. BELL OPERATING COMPANY PROVISIONS.
(a) Establishment of Part III of Title II.--Title II is
amended by adding at the end of part II (as added by section
101) the following new part:
``PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES
``SEC. 271. BELL OPERATING COMPANY ENTRY INTO INTERLATA SERVICES.
``(a) General Limitation.--Neither a Bell operating
company, nor any affiliate of a Bell operating company, may
provide interLATA services except as provided in this section.
``(b) InterLATA Services to Which This Section Applies.--
``(1) In-region services.--A Bell operating
company, or any affiliate of that Bell operating
company, may provide interLATA services originating in
any of its in-region States (as defined in subsection
(i)) if the Commission approves the application of such
company for such State under subsection (d)(3).
``(2) Out-of-region services.--A Bell operating
company, or any affiliate of that Bell operating
company, may provide interLATA services originating
outside its in-region States after the date of
enactment of the Telecommunications Act of 1996,
subject to subsection (j).
``(3) Incidental interlata services.--A Bell
operating company, or any affiliate of a Bell operating
company, may provide incidental interLATA services (as
defined in subsection (g)) originating in any State
after the date of enactment of the Telecommunications
Act of 1996.
``(4) Termination.--Nothing in this section
prohibits a Bell operating company or any of its
affiliates from providing termination for interLATA
services, subject to subsection (j).
``(c) Requirements for Providing Certain In-Region
InterLATA Services.--
``(1) Agreement or statement.--A Bell operating
company meets the requirements of this paragraph if it
meets the requirements of subparagraph (A) or
subparagraph (B) of this paragraph for each State for
which the authorization is sought.
``(A) Presence of a facilities-based
competitor.--A Bell operating company meets the
requirements of this subparagraph if it has
entered into one or more binding agreements
that have been approved under section 252
specifying the terms and conditions under which
the Bell operating company is providing access
and interconnection to its network facilities
for the network facilities of one or more
unaffiliated competing providers of telephone
exchange service (as defined in section
3(47)(A), but excluding exchange access) to
residential and business subscribers. For the
purpose of this subparagraph, such telephone
exchange service may be offered by such
competing providers either exclusively over
their own telephone exchange service facilities
or predominantly over their own telephone
exchange service facilities in combination with
the resale of the telecommunications services
of another carrier. For the purpose of this
subparagraph, services provided pursuant to
subpart K of part 22 of the Commission's
regulations (47 C.F.R. 22.901 et seq.) shall
not be considered to be telephone exchange
services.
``(B) Failure to request access.--A Bell
operating company meets the requirements of
this subparagraph if, after 10 months after the
date of enactment of the Telecommunications Act
of 1996, no such provider has requested the
access and interconnection described in
subparagraph (A) before the date which is 3
months before the date the company makes its
application under subsection (d)(1), and a
statement of the terms and conditions that the
company generally offers to provide such access
and interconnection has been approved or
permitted to take effect by the State
commission under section 252(f). For purposes
of this subparagraph, a Bell operating company
shall be considered not to have received any
request for access and interconnection if the
State commission of such State certifies that
the only provider or providers making such a
request have (i) failed to negotiate in good
faith as required by section 252, or (ii)
violated the terms of an agreement approved
under section 252 by the provider's failure to
comply, within a reasonable period of time,
with the implementation schedule contained in
such agreement.
``(2) Specific interconnection requirements.--
``(A) Agreement required.--A Bell operating
company meets the requirements of this
paragraph if, within the State for which the
authorization is sought--
``(i)(I) such company is providing
access and interconnection pursuant to
one or more agreements described in
paragraph (1)(A), or
``(II) such company is generally
offering access and interconnection
pursuant to a statement described in
paragraph (1)(B), and
``(ii) such access and
interconnection meets the requirements
of subparagraph (B) of this paragraph.
``(B) Competitive checklist.--Access or
interconnection provided or generally offered
by a Bell operating company to other
telecommunications carriers meets the
requirements of this subparagraph if such
access and interconnection includes each of the
following:
``(i) Interconnection in accordance
with the requirements of sections
251(c)(2) and 252(d)(1).
``(ii) Nondiscriminatory access to
network elements in accordance with the
requirements of sections 251(c)(3) and
252(d)(1).
``(iii) Nondiscriminatory access to
the poles, ducts, conduits, and rights-
of-way owned or controlled by the Bell
operating company at just and
reasonable rates in accordance with the
requirements of section 224.
``(iv) Local loop transmission from
the central office to the customer's
premises, unbundled from local
switching or other services.
``(v) Local transport from the
trunk side of a wireline local exchange
carrier switch unbundled from switching
or other services.
``(vi) Local switching unbundled
from transport, local loop
transmission, or other services.
``(vii) Nondiscriminatory access
to--
``(I) 911 and E911
services;
``(II) directory assistance
services to allow the other
carrier's customers to obtain
telephone numbers; and
``(III) operator call
completion services.
``(viii) White pages directory
listings for customers of the other
carrier's telephone exchange service.
``(ix) Until the date by which
telecommunications numbering
administration guidelines, plan, or
rules are established,
nondiscriminatory access to telephone
numbers for assignment to the other
carrier's telephone exchange service
customers. After that date, compliance
with such guidelines, plan, or rules.
``(x) Nondiscriminatory access to
databases and associated signaling
necessary for call routing and
completion.
``(xi) Until the date by which the
Commission issues regulations pursuant
to section 251 to require number
portability, interim telecommunications
number portability through remote call
forwarding, direct inward dialing
trunks, or other comparable
arrangements, with as little impairment
of functioning, quality, reliability,
and convenience as possible. After that
date, full compliance with such
regulations.
``(xii) Nondiscriminatory access to
such services or information as are
necessary to allow the requesting
carrier to implement local dialing
parity in accordance with the
requirements of section 251(b)(3).
``(xiii) Reciprocal compensation
arrangements in accordance with the
requirements of section 252(d)(2).
``(xiv) Telecommunications services
are available for resale in accordance
with the requirements of sections
251(c)(4) and 252(d)(3).
``(d) Administrative Provisions.--
``(1) Application to commission.--On and after the
date of enactment of the Telecommunications Act of
1996, a Bell operating company or its affiliate may
apply to the Commission for authorization to provide
interLATA services originating in any in-region State.
The application shall identify each State for which the
authorization is sought.
``(2) Consultation.--
``(A) Consultation with the attorney
general.--The Commission shall notify the
Attorney General promptly of any application
under paragraph (1). Before making any
determination under this subsection, the
Commission shall consult with the Attorney
General, and if the Attorney General submits
any comments in writing, such comments shall be
included in the record of the Commission's
decision. In consulting with and submitting
comments to the Commission under this
paragraph, the Attorney General shall provide
to the Commission an evaluation of the
application using any standard the Attorney
General considers appropriate. The Commission
shall give substantial weight to the Attorney
General's evaluation, but such evaluation shall
not have any preclusive effect on any
Commission decision under paragraph (3).
``(B) Consultation with state
commissions.--Before making any determination
under this subsection, the Commission shall
consult with the State commission of any State
that is the subject of the application in order
to verify the compliance of the Bell operating
company with the requirements of subsection
(c).
``(3) Determination.--Not later than 90 days after
receiving an application under paragraph (1), the
Commission shall issue a written determination
approving or denying the authorization requested in the
application for each State. The Commission shall not
approve the authorization requested in an application
submitted under paragraph (1) unless it finds that--
``(A) the petitioning Bell operating
company has met the requirements of subsection
(c)(1) and--
``(i) with respect to access and
interconnection provided pursuant to
subsection (c)(1)(A), has fully
implemented the competitive checklist
in subsection (c)(2)(B); or
``(ii) with respect to access and
interconnection generally offered
pursuant to a statement under
subsection (c)(1)(B), such statement
offers all of the items included in the
competitive checklist in subsection
(c)(2)(B);
``(B) the requested authorization will be
carried out in accordance with the requirements
of section 272; and
``(C) the requested authorization is
consistent with the public interest,
convenience, and necessity.
The Commission shall state the basis for its approval
or denial of the application.
``(4) Limitation on commission.--The Commission may
not, by rule or otherwise, limit or extend the terms
used in the competitive checklist set forth in
subsection (c)(2)(B).
``(5) Publication.--Not later than 10 days after
issuing a determination under paragraph (3), the
Commission shall publish in the Federal Register a
brief description of the determination.
``(6) Enforcement of conditions.--
``(A) Commission authority.--If at any time
after the approval of an application under
paragraph (3), the Commission determines that a
Bell operating company has ceased to meet any
of the conditions required for such approval,
the Commission may, after notice and
opportunity for a hearing--
``(i) issue an order to such
company to correct the deficiency;
``(ii) impose a penalty on such
company pursuant to title V; or
``(iii) suspend or revoke such
approval.
``(B) Receipt and review of complaints.--
The Commission shall establish procedures for
the review of complaints concerning failures by
Bell operating companies to meet conditions
required for approval under paragraph (3).
Unless the parties otherwise agree, the
Commission shall act on such complaint within
90 days.
``(e) Limitations.--
``(1) Joint marketing of local and long distance
services.--Until a Bell operating company is authorized
pursuant to subsection (d) to provide interLATA
services in an in-region State, or until 36 months have
passed since the date of enactment of the
Telecommunications Act of 1996, whichever is earlier, a
telecommunications carrier that serves greater than 5
percent of the Nation's presubscribed access lines may
not jointly market in such State telephone exchange
service obtained from such company pursuant to section
251(c)(4) with interLATA services offered by that
telecommunications carrier.
``(2) IntraLATA toll dialing parity.--
``(A) Provision required.--A Bell operating
company granted authority to provide interLATA
services under subsection (d) shall provide
intraLATA toll dialing parity throughout that
State coincident with its exercise of that
authority.
``(B) Limitation.--Except for single-LATA
States and States that have issued an order by
December 19, 1995, requiring a Bell operating
company to implement intraLATA toll dialing
parity, a State may not require a Bell
operating company to implement intraLATA toll
dialing parity in that State before a Bell
operating company has been granted authority
under this section to provide interLATA
services originating in that State or before 3
years after the date of enactment of the
Telecommunications Act of 1996, whichever is
earlier. Nothing in this subparagraph precludes
a State from issuing an order requiring
intraLATA toll dialing parity in that State
prior to either such date so long as such order
does not take effect until after the earlier of
either such dates.
``(f) Exception for Previously Authorized Activities.--
Neither subsection (a) nor section 273 shall prohibit a Bell
operating company or affiliate from engaging, at any time after
the date of enactment of the Telecommunications Act of 1996, in
any activity to the extent authorized by, and subject to the
terms and conditions contained in, an order entered by the
United States District Court for the District of Columbia
pursuant to section VII or VIII(C) of the AT&T Consent Decree
if such order was entered on or before such date of enactment,
to the extent such order is not reversed or vacated on appeal.
Nothing in this subsection shall be construed to limit, or to
impose terms or conditions on, an activity in which a Bell
operating company is otherwise authorized to engage under any
other provision of this section.
``(g) Definition of Incidental InterLATA Services.--For
purposes of this section, the term `incidental interLATA
services' means the interLATA provision by a Bell operating
company or its affiliate--
``(1)(A) of audio programming, video programming,
or other programming services to subscribers to such
services of such company or affiliate;
``(B) of the capability for interaction by such
subscribers to select or respond to such audio
programming, video programming, or other programming
services;
``(C) to distributors of audio programming or video
programming that such company or affiliate owns or
controls, or is licensed by the copyright owner of such
programming (or by an assignee of such owner) to
distribute; or
``(D) of alarm monitoring services;
``(2) of two-way interactive video services or
Internet services over dedicated facilities to or for
elementary and secondary schools as defined in section
254(h)(5);
``(3) of commercial mobile services in accordance
with section 332(c) of this Act and with the
regulations prescribed by the Commission pursuant to
paragraph (8) of such section;
``(4) of a service that permits a customer that is
located in one LATA to retrieve stored information
from, or file information for storage in, information
storage facilities of such company that are located in
another LATA;
``(5) of signaling information used in connection
with the provision of telephone exchange services or
exchange access by a local exchange carrier; or
``(6) of network control signaling information to,
and receipt of such signaling information from, common
carriers offering interLATA services at any location
within the area in which such Bell operating company
provides telephone exchange services or exchange
access.
``(h) Limitations.--The provisions of subsection (g) are
intended to be narrowly construed. The interLATA services
provided under subparagraph (A), (B), or (C) of subsection
(g)(1) are limited to those interLATA transmissions incidental
to the provision by a Bell operating company or its affiliate
of video, audio, and other programming services that the
company or its affiliate is engaged in providing to the public.
The Commission shall ensure that the provision of services
authorized under subsection (g) by a Bell operating company or
its affiliate will not adversely affect telephone exchange
service ratepayers or competition in any telecommunications
market.
``(i) Additional Definitions.--As used in this section--
``(1) In-region state.--The term `in-region State'
means a State in which a Bell operating company or any
of its affiliates was authorized to provide wireline
telephone exchange service pursuant to the
reorganization plan approved under the AT&T Consent
Decree, as in effect on the day before the date of
enactment of the Telecommunications Act of 1996.
``(2) Audio programming services.--The term `audio
programming services' means programming provided by, or
generally considered to be comparable to programming
provided by, a radio broadcast station.
``(3) Video programming services; other programming
services.--The terms `video programming service' and
`other programming services' have the same meanings as
such terms have under section 602 of this Act.
``(j) Certain Service Applications Treated as In-Region
Service Applications.--For purposes of this section, a Bell
operating company application to provide 800 service, private
line service, or their equivalents that--
``(1) terminate in an in-region State of that Bell
operating company, and
``(2) allow the called party to determine the
interLATA carrier,
shall be considered an in-region service subject to the
requirements of subsection (b)(1).
``SEC. 272. SEPARATE AFFILIATE; SAFEGUARDS.
``(a) Separate Affiliate Required for Competitive
Activities.--
``(1) In general.--A Bell operating company
(including any affiliate) which is a local exchange
carrier that is subject to the requirements of section
251(c) may not provide any service described in
paragraph (2) unless it provides that service through
one or more affiliates that--
``(A) are separate from any operating
company entity that is subject to the
requirements of section 251(c); and
``(B) meet the requirements of subsection
(b).
``(2) Services for which a separate affiliate is
required.--The services for which a separate affiliate
is required by paragraph (1) are:
``(A) Manufacturing activities (as defined
in section 273(h)).
``(B) Origination of interLATA
telecommunications services, other than--
``(i) incidental interLATA services
described in paragraphs (1), (2), (3),
(5), and (6) of section 271(g);
``(ii) out-of-region services
described in section 271(b)(2); or
``(iii) previously authorized
activities described in section 271(f).
``(C) InterLATA information services, other
than electronic publishing (as defined in
section 274(h)) and alarm monitoring services
(as defined in section 275(e)).
``(b) Structural and Transactional Requirements.--The
separate affiliate required by this section--
``(1) shall operate independently from the Bell
operating company;
``(2) shall maintain books, records, and accounts
in the manner prescribed by the Commission which shall
be separate from the books, records, and accounts
maintained by the Bell operating company of which it is
an affiliate;
``(3) shall have separate officers, directors, and
employees from the Bell operating company of which it
is an affiliate;
``(4) may not obtain credit under any arrangement
that would permit a creditor, upon default, to have
recourse to the assets of the Bell operating company;
and
``(5) shall conduct all transactions with the Bell
operating company of which it is an affiliate on an
arm's length basis with any such transactions reduced
to writing and available for public inspection.
``(c) Nondiscrimination Safeguards.--In its dealings with
its affiliate described in subsection (a), a Bell operating
company--
``(1) may not discriminate between that company or
affiliate and any other entity in the provision or
procurement of goods, services, facilities, and
information, or in the establishment of standards; and
``(2) shall account for all transactions with an
affiliate described in subsection (a) in accordance
with accounting principles designated or approved by
the Commission.
``(d) Biennial Audit.--
``(1) General requirement.--A company required to
operate a separate affiliate under this section shall
obtain and pay for a joint Federal/State audit every 2
years conducted by an independent auditor to determine
whether such company has complied with this section and
the regulations promulgated under this section, and
particularly whether such company has complied with the
separate accounting requirements under subsection (b).
``(2) Results submitted to commission; state
commissions.--The auditor described in paragraph (1)
shall submit the results of the audit to the Commission
and to the State commission of each State in which the
company audited provides service, which shall make such
results available for public inspection. Any party may
submit comments on the final audit report.
``(3) Access to documents.--For purposes of
conducting audits and reviews under this subsection--
``(A) the independent auditor, the
Commission, and the State commission shall have
access to the financial accounts and records of
each company and of its affiliates necessary to
verify transactions conducted with that company
that are relevant to the specific activities
permitted under this section and that are
necessary for the regulation of rates;
``(B) the Commission and the State
commission shall have access to the working
papers and supporting materials of any auditor
who performs an audit under this section; and
``(C) the State commission shall implement
appropriate procedures to ensure the protection
of any proprietary information submitted to it
under this section.
``(e) Fulfillment of Certain Requests.--A Bell operating
company and an affiliate that is subject to the requirements of
section 251(c)--
``(1) shall fulfill any requests from an
unaffiliated entity for telephone exchange service and
exchange access within a period no longer than the
period in which it provides such telephone exchange
service and exchange access to itself or to its
affiliates;
``(2) shall not provide any facilities, services,
or information concerning its provision of exchange
access to the affiliate described in subsection (a)
unless such facilities, services, or information are
made available to other providers of interLATA services
in that market on the same terms and conditions;
``(3) shall charge the affiliate described in
subsection (a), or impute to itself (if using the
access for its provision of its own services), an
amount for access to its telephone exchange service and
exchange access that is no less than the amount charged
to any unaffiliated interexchange carriers for such
service; and
``(4) may provide any interLATA or intraLATA
facilities or services to its interLATA affiliate if
such services or facilities are made available to all
carriers at the same rates and on the same terms and
conditions, and so long as the costs are appropriately
allocated.
``(f) Sunset.--
``(1) Manufacturing and long distance.--The
provisions of this section (other than subsection (e))
shall cease to apply with respect to the manufacturing
activities or the interLATA telecommunications services
of a Bell operating company 3 years after the date such
Bell operating company or any Bell operating company
affiliate is authorized to provide interLATA
telecommunications services under section 271(d),
unless the Commission extends such 3-year period by
rule or order.
``(2) InterLATA information services.--The
provisions of this section (other than subsection (e))
shall cease to apply with respect to the interLATA
information services of a Bell operating company 4
years after the date of enactment of the
Telecommunications Act of 1996, unless the Commission
extends such 4-year period by rule or order.
``(3) Preservation of existing authority.--Nothing
in this subsection shall be construed to limit the
authority of the Commission under any other section of
this Act to prescribe safeguards consistent with the
public interest, convenience, and necessity.
``(g) Joint Marketing.--
``(1) Affiliate sales of telephone exchange
services.--A Bell operating company affiliate required
by this section may not market or sell telephone
exchange services provided by the Bell operating
company unless that company permits other entities
offering the same or similar service to market and sell
its telephone exchange services.
``(2) Bell operating company sales of affiliate
services.--A Bell operating company may not market or
sell interLATA service provided by an affiliate
required by this section within any of its in-region
States until such company is authorized to provide
interLATA services in such State under section 271(d).
``(3) Rule of construction.--The joint marketing
and sale of services permitted under this subsection
shall not be considered to violate the
nondiscrimination provisions of subsection (c).
``(h) Transition.--With respect to any activity in which a
Bell operating company is engaged on the date of enactment of
the Telecommunications Act of 1996, such company shall have one
year from such date of enactment to comply with the
requirements of this section.
``SEC. 273. MANUFACTURING BY BELL OPERATING COMPANIES.
``(a) Authorization.--A Bell operating company may
manufacture and provide telecommunications equipment, and
manufacture customer premises equipment, if the Commission
authorizes that Bell operating company or any Bell operating
company affiliate to provide interLATA services under section
271(d), subject to the requirements of this section and the
regulations prescribed thereunder, except that neither a Bell
operating company nor any of its affiliates may engage in such
manufacturing in conjunction with a Bell operating company not
so affiliated or any of its affiliates.
``(b) Collaboration; Research and Royalty Agreements.--
``(1) Collaboration.--Subsection (a) shall not
prohibit a Bell operating company from engaging in
close collaboration with any manufacturer of customer
premises equipment or telecommunications equipment
during the design and development of hardware,
software, or combinations thereof related to such
equipment.
``(2) Certain research arrangements; royalty
agreements.--Subsection (a) shall not prohibit a Bell
operating company from--
``(A) engaging in research activities
related to manufacturing, and
``(B) entering into royalty agreements with
manufacturers of telecommunications equipment.
``(c) Information Requirements.--
``(1) Information on protocols and technical
requirements.--Each Bell operating company shall, in
accordance with regulations prescribed by the
Commission, maintain and file with the Commission full
and complete information with respect to the protocols
and technical requirements for connection with and use
of its telephone exchange service facilities. Each such
company shall report promptly to the Commission any
material changes or planned changes to such protocols
and requirements, and the schedule for implementation
of such changes or planned changes.
``(2) Disclosure of information.--A Bell operating
company shall not disclose any information required to
be filed under paragraph (1) unless that information
has been filed promptly, as required by regulation by
the Commission.
``(3) Access by competitors to information.--The
Commission may prescribe such additional regulations
under this subsection as may be necessary to ensure
that manufacturers have access to the information with
respect to the protocols and technical requirements for
connection with and use of telephone exchange service
facilities that a Bell operating company makes
available to any manufacturing affiliate or any
unaffiliated manufacturer.
``(4) Planning information.--Each Bell operating
company shall provide, to interconnecting carriers
providing telephone exchange service, timely
information on the planned deployment of
telecommunications equipment.
``(d) Manufacturing Limitations for Standard-Setting
Organizations.--
``(1) Application to bell communications research
or manufacturers.--Bell Communications Research, Inc.,
or any successor entity or affiliate--
``(A) shall not be considered a Bell
operating company or a successor or assign of a
Bell operating company at such time as it is no
longer an affiliate of any Bell operating
company; and
``(B) notwithstanding paragraph (3), shall
not engage in manufacturing telecommunications
equipment or customer premises equipment as
long as it is an affiliate of more than 1
otherwise unaffiliated Bell operating company
or successor or assign of any such company.
Nothing in this subsection prohibits Bell
Communications Research, Inc., or any successor entity,
from engaging in any activity in which it is lawfully
engaged on the date of enactment of the
Telecommunications Act of 1996. Nothing provided in
this subsection shall render Bell Communications
Research, Inc., or any successor entity, a common
carrier under title II of this Act. Nothing in this
subsection restricts any manufacturer from engaging in
any activity in which it is lawfully engaged on the
date of enactment of the Telecommunications Act of
1996.
``(2) Proprietary information.--Any entity which
establishes standards for telecommunications equipment
or customer premises equipment, or generic network
requirements for such equipment, or certifies
telecommunications equipment or customer premises
equipment, shall be prohibited from releasing or
otherwise using any proprietary information, designated
as such by its owner, in its possession as a result of
such activity, for any purpose other than purposes
authorized in writing by the owner of such information,
even after such entity ceases to be so engaged.
``(3) Manufacturing safeguards.--(A) Except as
prohibited in paragraph (1), and subject to paragraph
(6), any entity which certifies telecommunications
equipment or customer premises equipment manufactured
by an unaffiliated entity shall only manufacture a
particular class of telecommunications equipment or
customer premises equipment for which it is undertaking
or has undertaken, during the previous 18 months,
certification activity for such class of equipment
through a separate affiliate.
``(B) Such separate affiliate shall--
``(i) maintain books, records, and accounts
separate from those of the entity that
certifies such equipment, consistent with
generally acceptable accounting principles;
``(ii) not engage in any joint
manufacturing activities with such entity; and
``(iii) have segregated facilities and
separate employees with such entity.
``(C) Such entity that certifies such equipment
shall--
``(i) not discriminate in favor of its
manufacturing affiliate in the establishment of
standards, generic requirements, or product
certification;
``(ii) not disclose to the manufacturing
affiliate any proprietary information that has
been received at any time from an unaffiliated
manufacturer, unless authorized in writing by
the owner of the information; and
``(iii) not permit any employee engaged in
product certification for telecommunications
equipment or customer premises equipment to
engage jointly in sales or marketing of any
such equipment with the affiliated
manufacturer.
``(4) Standard-setting entities.--Any entity that
is not an accredited standards development organization
and that establishes industry-wide standards for
telecommunications equipment or customer premises
equipment, or industry-wide generic network
requirements for such equipment, or that certifies
telecommunications equipment or customer premises
equipment manufactured by an unaffiliated entity,
shall--
``(A) establish and publish any industry-
wide standard for, industry-wide generic
requirement for, or any substantial
modification of an existing industry-wide
standard or industry-wide generic requirement
for, telecommunications equipment or customer
premises equipment only in compliance with the
following procedure:
``(i) such entity shall issue a
public notice of its consideration of a
proposed industry-wide standard or
industry-wide generic requirement;
``(ii) such entity shall issue a
public invitation to interested
industry parties to fund and
participate in such efforts on a
reasonable and nondiscriminatory basis,
administered in such a manner as not to
unreasonably exclude any interested
industry party;
``(iii) such entity shall publish a
text for comment by such parties as
have agreed to participate in the
process pursuant to clause (ii),
provide such parties a full opportunity
to submit comments, and respond to
comments from such parties;
``(iv) such entity shall publish a
final text of the industry-wide
standard or industry-wide generic
requirement, including the comments in
their entirety, of any funding party
which requests to have its comments so
published; and
``(v) such entity shall attempt,
prior to publishing a text for comment,
to agree with the funding parties as a
group on a mutually satisfactory
dispute resolution process which such
parties shall utilize as their sole
recourse in the event of a dispute on
technical issues as to which there is
disagreement between any funding party
and the entity conducting such
activities, except that if no dispute
resolution process is agreed to by all
the parties, a funding party may
utilize the dispute resolution
procedures established pursuant to
paragraph (5) of this subsection;
``(B) engage in product certification for
telecommunications equipment or customer
premises equipment manufactured by unaffiliated
entities only if--
``(i) such activity is performed
pursuant to published criteria;
``(ii) such activity is performed
pursuant to auditable criteria; and
``(iii) such activity is performed
pursuant to available industry-accepted
testing methods and standards, where
applicable, unless otherwise agreed
upon by the parties funding and
performing such activity;
``(C) not undertake any actions to
monopolize or attempt to monopolize the market
for such services; and
``(D) not preferentially treat its own
telecommunications equipment or customer
premises equipment, or that of its affiliate,
over that of any other entity in establishing
and publishing industry-wide standards or
industry-wide generic requirements for, and in
certification of, telecommunications equipment
and customer premises equipment.
``(5) Alternate dispute resolution.--Within 90 days
after the date of enactment of the Telecommunications
Act of 1996, the Commission shall prescribe a dispute
resolution process to be utilized in the event that a
dispute resolution process is not agreed upon by all
the parties when establishing and publishing any
industry-wide standard or industry-wide generic
requirement for telecommunications equipment or
customer premises equipment, pursuant to paragraph
(4)(A)(v). The Commission shall not establish itself as
a party to the dispute resolution process. Such dispute
resolution process shall permit any funding party to
resolve a dispute with the entity conducting the
activity that significantly affects such funding
party's interests, in an open, nondiscriminatory, and
unbiased fashion, within 30 days after the filing of
such dispute. Such disputes may be filed within 15 days
after the date the funding party receives a response to
its comments from the entity conducting the activity.
The Commission shall establish penalties to be assessed
for delays caused by referral of frivolous disputes to
the dispute resolution process.
``(6) Sunset.--The requirements of paragraphs (3)
and (4) shall terminate for the particular relevant
activity when the Commission determines that there are
alternative sources of industry-wide standards,
industry-wide generic requirements, or product
certification for a particular class of
telecommunications equipment or customer premises
equipment available in the United States. Alternative
sources shall be deemed to exist when such sources
provide commercially viable alternatives that are
providing such services to customers. The Commission
shall act on any application for such a determination
within 90 days after receipt of such application, and
shall receive public comment on such application.
``(7) Administration and enforcement authority.--
For the purposes of administering this subsection and
the regulations prescribed thereunder, the Commission
shall have the same remedial authority as the
Commission has in administering and enforcing the
provisions of this title with respect to any common
carrier subject to this Act.
``(8) Definitions.--For purposes of this
subsection:
``(A) The term `affiliate' shall have the
same meaning as in section 3 of this Act,
except that, for purposes of paragraph (1)(B)--
``(i) an aggregate voting equity
interest in Bell Communications
Research, Inc., of at least 5 percent
of its total voting equity, owned
directly or indirectly by more than 1
otherwise unaffiliated Bell operating
company, shall constitute an affiliate
relationship; and
``(ii) a voting equity interest in
Bell Communications Research, Inc., by
any otherwise unaffiliated Bell
operating company of less than 1
percent of Bell Communications
Research's total voting equity shall
not be considered to be an equity
interest under this paragraph.
``(B) The term `generic requirement' means
a description of acceptable product attributes
for use by local exchange carriers in
establishing product specifications for the
purchase of telecommunications equipment,
customer premises equipment, and software
integral thereto.
``(C) The term `industry-wide' means
activities funded by or performed on behalf of
local exchange carriers for use in providing
wireline telephone exchange service whose
combined total of deployed access lines in the
United States constitutes at least 30 percent
of all access lines deployed by
telecommunications carriers in the United
States as of the date of enactment of the
Telecommunications Act of 1996.
``(D) The term `certification' means any
technical process whereby a party determines
whether a product, for use by more than one
local exchange carrier, conforms with the
specified requirements pertaining to such
product.
``(E) The term `accredited standards
development organization' means an entity
composed of industry members which has been
accredited by an institution vested with the
responsibility for standards accreditation by
the industry.
``(e) Bell Operating Company Equipment Procurement and
Sales.--
``(1) Nondiscrimination standards for
manufacturing.--In the procurement or awarding of
supply contracts for telecommunications equipment, a
Bell operating company, or any entity acting on its
behalf, for the duration of the requirement for a
separate subsidiary including manufacturing under this
Act--
``(A) shall consider such equipment,
produced or supplied by unrelated persons; and
``(B) may not discriminate in favor of
equipment produced or supplied by an affiliate
or related person.
``(2) Procurement standards.--Each Bell operating
company or any entity acting on its behalf shall make
procurement decisions and award all supply contracts
for equipment, services, and software on the basis of
an objective assessment of price, quality, delivery,
and other commercial factors.
``(3) Network planning and design.--A Bell
operating company shall, to the extent consistent with
the antitrust laws, engage in joint network planning
and design with local exchange carriers operating in
the same area of interest. No participant in such
planning shall be allowed to delay the introduction of
new technology or the deployment of facilities to
provide telecommunications services, and agreement with
such other carriers shall not be required as a
prerequisite for such introduction or deployment.
``(4) Sales restrictions.--Neither a Bell operating
company engaged in manufacturing nor a manufacturing
affiliate of such a company shall restrict sales to any
local exchange carrier of telecommunications equipment,
including software integral to the operation of such
equipment and related upgrades.
``(5) Protection of proprietary information.--A
Bell operating company and any entity it owns or
otherwise controls shall protect the proprietary
information submitted for procurement decisions from
release not specifically authorized by the owner of
such information.
``(f) Administration and Enforcement Authority.--For the
purposes of administering and enforcing the provisions of this
section and the regulations prescribed thereunder, the
Commission shall have the same authority, power, and functions
with respect to any Bell operating company or any affiliate
thereof as the Commission has in administering and enforcing
the provisions of this title with respect to any common carrier
subject to this Act.
``(g) Additional Rules and Regulations.--The Commission may
prescribe such additional rules and regulations as the
Commission determines are necessary to carry out the provisions
of this section, and otherwise to prevent discrimination and
cross-subsidization in a Bell operating company's dealings with
its affiliate and with third parties.
``(h) Definition.--As used in this section, the term
`manufacturing' has the same meaning as such term has under the
AT&T Consent Decree.
``SEC. 274. ELECTRONIC PUBLISHING BY BELL OPERATING COMPANIES.
``(a) Limitations.--No Bell operating company or any
affiliate may engage in the provision of electronic publishing
that is disseminated by means of such Bell operating company's
or any of its affiliates' basic telephone service, except that
nothing in this section shall prohibit a separated affiliate or
electronic publishing joint venture operated in accordance with
this section from engaging in the provision of electronic
publishing.
``(b) Separated Affiliate or Electronic Publishing Joint
Venture Requirements.--A separated affiliate or electronic
publishing joint venture shall be operated independently from
the Bell operating company. Such separated affiliate or joint
venture and the Bell operating company with which it is
affiliated shall--
``(1) maintain separate books, records, and
accounts and prepare separate financial statements;
``(2) not incur debt in a manner that would permit
a creditor of the separated affiliate or joint venture
upon default to have recourse to the assets of the Bell
operating company;
``(3) carry out transactions (A) in a manner
consistent with such independence, (B) pursuant to
written contracts or tariffs that are filed with the
Commission and made publicly available, and (C) in a
manner that is auditable in accordance with generally
accepted auditing standards;
``(4) value any assets that are transferred
directly or indirectly from the Bell operating company
to a separated affiliate or joint venture, and record
any transactions by which such assets are transferred,
in accordance with such regulations as may be
prescribed by the Commission or a State commission to
prevent improper cross subsidies;
``(5) between a separated affiliate and a Bell
operating company--
``(A) have no officers, directors, and
employees in common after the effective date of
this section; and
``(B) own no property in common;
``(6) not use for the marketing of any product or
service of the separated affiliate or joint venture,
the name, trademarks, or service marks of an existing
Bell operating company except for names, trademarks, or
service marks that are owned by the entity that owns or
controls the Bell operating company;
``(7) not permit the Bell operating company--
``(A) to perform hiring or training of
personnel on behalf of a separated affiliate;
``(B) to perform the purchasing,
installation, or maintenance of equipment on
behalf of a separated affiliate, except for
telephone service that it provides under tariff
or contract subject to the provisions of this
section; or
``(C) to perform research and development
on behalf of a separated affiliate;
``(8) each have performed annually a compliance
review--
``(A) that is conducted by an independent
entity for the purpose of determining
compliance during the preceding calendar year
with any provision of this section; and
``(B) the results of which are maintained
by the separated affiliate or joint venture and
the Bell operating company for a period of 5
years subject to review by any lawful
authority; and
``(9) within 90 days of receiving a review
described in paragraph (8), file a report of any
exceptions and corrective action with the Commission
and allow any person to inspect and copy such report
subject to reasonable safeguards to protect any
proprietary information contained in such report from
being used for purposes other than to enforce or pursue
remedies under this section.
``(c) Joint Marketing.--
``(1) In general.--Except as provided in paragraph
(2)--
``(A) a Bell operating company shall not
carry out any promotion, marketing, sales, or
advertising for or in conjunction with a
separated affiliate; and
``(B) a Bell operating company shall not
carry out any promotion, marketing, sales, or
advertising for or in conjunction with an
affiliate that is related to the provision of
electronic publishing.
``(2) Permissible joint activities.--
``(A) Joint telemarketing.--A Bell
operating company may provide inbound
telemarketing or referral services related to
the provision of electronic publishing for a
separated affiliate, electronic publishing
joint venture, affiliate, or unaffiliated
electronic publisher, provided that if such
services are provided to a separated affiliate,
electronic publishing joint venture, or
affiliate, such services shall be made
available to all electronic publishers on
request, on nondiscriminatory terms.
``(B) Teaming arrangements.--A Bell
operating company may engage in
nondiscriminatory teaming or business
arrangements to engage in electronic publishing
with any separated affiliate or with any other
electronic publisher if (i) the Bell operating
company only provides facilities, services, and
basic telephone service information as
authorized by this section, and (ii) the Bell
operating company does not own such teaming or
business arrangement.
``(C) Electronic publishing joint
ventures.--A Bell operating company or
affiliate may participate on a nonexclusive
basis in electronic publishing joint ventures
with entities that are not a Bell operating
company, affiliate, or separated affiliate to
provide electronic publishing services, if the
Bell operating company or affiliate has not
more than a 50 percent direct or indirect
equity interest (or the equivalent thereof) or
the right to more than 50 percent of the gross
revenues under a revenue sharing or royalty
agreement in any electronic publishing joint
venture. Officers and employees of a Bell
operating company or affiliate participating in
an electronic publishing joint venture may not
have more than 50 percent of the voting control
over the electronic publishing joint venture.
In the case of joint ventures with small, local
electronic publishers, the Commission for good
cause shown may authorize the Bell operating
company or affiliate to have a larger equity
interest, revenue share, or voting control but
not to exceed 80 percent. A Bell operating
company participating in an electronic
publishing joint venture may provide promotion,
marketing, sales, or advertising personnel and
services to such joint venture.
``(d) Bell Operating Company Requirement.--A Bell operating
company under common ownership or control with a separated
affiliate or electronic publishing joint venture shall provide
network access and interconnections for basic telephone service
to electronic publishers at just and reasonable rates that are
tariffed (so long as rates for such services are subject to
regulation) and that are not higher on a per-unit basis than
those charged for such services to any other electronic
publisher or any separated affiliate engaged in electronic
publishing.
``(e) Private Right of Action.--
``(1) Damages.--Any person claiming that any act or
practice of any Bell operating company, affiliate, or
separated affiliate constitutes a violation of this
section may file a complaint with the Commission or
bring suit as provided in section 207 of this Act, and
such Bell operating company, affiliate, or separated
affiliate shall be liable as provided in section 206 of
this Act; except that damages may not be awarded for a
violation that is discovered by a compliance review as
required by subsection (b)(7) of this section and
corrected within 90 days.
``(2) Cease and desist orders.--In addition to the
provisions of paragraph (1), any person claiming that
any act or practice of any Bell operating company,
affiliate, or separated affiliate constitutes a
violation of this section may make application to the
Commission for an order to cease and desist such
violation or may make application in any district court
of the United States of competent jurisdiction for an
order enjoining such acts or practices or for an order
compelling compliance with such requirement.
``(f) Separated Affiliate Reporting Requirement.--Any
separated affiliate under this section shall file with the
Commission annual reports in a form substantially equivalent to
the Form 10-K required by regulations of the Securities and
Exchange Commission.
``(g) Effective Dates.--
``(1) Transition.--Any electronic publishing
service being offered to the public by a Bell operating
company or affiliate on the date of enactment of the
Telecommunications Act of 1996 shall have one year from
such date of enactment to comply with the requirements
of this section.
``(2) Sunset.--The provisions of this section shall
not apply to conduct occurring after 4 years after the
date of enactment of the Telecommunications Act of
1996.
``(h) Definition of Electronic Publishing.--
``(1) In general.--The term `electronic publishing'
means the dissemination, provision, publication, or
sale to an unaffiliated entity or person, of any one or
more of the following: news (including sports);
entertainment (other than interactive games); business,
financial, legal, consumer, or credit materials;
editorials, columns, or features; advertising; photos
or images; archival or research material; legal notices
or public records; scientific, educational,
instructional, technical, professional, trade, or other
literary materials; or other like or similar
information.
``(2) Exceptions.--The term `electronic publishing'
shall not include the following services:
``(A) Information access, as that term is
defined by the AT&T Consent Decree.
``(B) The transmission of information as a
common carrier.
``(C) The transmission of information as
part of a gateway to an information service
that does not involve the generation or
alteration of the content of information,
including data transmission, address
translation, protocol conversion, billing
management, introductory information content,
and navigational systems that enable users to
access electronic publishing services, which do
not affect the presentation of such electronic
publishing services to users.
``(D) Voice storage and retrieval services,
including voice messaging and electronic mail
services.
``(E) Data processing or transaction
processing services that do not involve the
generation or alteration of the content of
information.
``(F) Electronic billing or advertising of
a Bell operating company's regulated
telecommunications services.
``(G) Language translation or data format
conversion.
``(H) The provision of information
necessary for the management, control, or
operation of a telephone company
telecommunications system.
``(I) The provision of directory assistance
that provides names, addresses, and telephone
numbers and does not include advertising.
``(J) Caller identification services.
``(K) Repair and provisioning databases and
credit card and billing validation for
telephone company operations.
``(L) 911-E and other emergency assistance
databases.
``(M) Any other network service of a type
that is like or similar to these network
services and that does not involve the
generation or alteration of the content of
information.
``(N) Any upgrades to these network
services that do not involve the generation or
alteration of the content of information.
``(O) Video programming or full motion
video entertainment on demand.
``(i) Additional Definitions.--As used in this section--
``(1) The term `affiliate' means any entity that,
directly or indirectly, owns or controls, is owned or
controlled by, or is under common ownership or control
with, a Bell operating company. Such term shall not
include a separated affiliate.
``(2) The term `basic telephone service' means any
wireline telephone exchange service, or wireline
telephone exchange service facility, provided by a Bell
operating company in a telephone exchange area, except
that such term does not include--
``(A) a competitive wireline telephone
exchange service provided in a telephone
exchange area where another entity provides a
wireline telephone exchange service that was
provided on January 1, 1984, or
``(B) a commercial mobile service.
``(3) The term `basic telephone service
information' means network and customer information of
a Bell operating company and other information acquired
by a Bell operating company as a result of its engaging
in the provision of basic telephone service.
``(4) The term `control' has the meaning that it
has in 17 C.F.R. 240.12b-2, the regulations promulgated
by the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.) or any successor provision to such section.
``(5) The term `electronic publishing joint
venture' means a joint venture owned by a Bell
operating company or affiliate that engages in the
provision of electronic publishing which is
disseminated by means of such Bell operating company's
or any of its affiliates' basic telephone service.
``(6) The term `entity' means any organization, and
includes corporations, partnerships, sole
proprietorships, associations, and joint ventures.
``(7) The term `inbound telemarketing' means the
marketing of property, goods, or services by telephone
to a customer or potential customer who initiated the
call.
``(8) The term `own' with respect to an entity
means to have a direct or indirect equity interest (or
the equivalent thereof) of more than 10 percent of an
entity, or the right to more than 10 percent of the
gross revenues of an entity under a revenue sharing or
royalty agreement.
``(9) The term `separated affiliate' means a
corporation under common ownership or control with a
Bell operating company that does not own or control a
Bell operating company and is not owned or controlled
by a Bell operating company and that engages in the
provision of electronic publishing which is
disseminated by means of such Bell operating company's
or any of its affiliates' basic telephone service.
``(10) The term `Bell operating company' has the
meaning provided in section 3, except that such term
includes any entity or corporation that is owned or
controlled by such a company (as so defined) but does
not include an electronic publishing joint venture
owned by such an entity or corporation.
``SEC. 275. ALARM MONITORING SERVICES.
``(a) Delayed Entry Into Alarm Monitoring.--
``(1) Prohibition.--No Bell operating company or
affiliate thereof shall engage in the provision of
alarm monitoring services before the date which is 5
years after the date of enactment of the
Telecommunications Act of 1996.
``(2) Existing activities.--Paragraph (1) does not
prohibit or limit the provision, directly or through an
affiliate, of alarm monitoring services by a Bell
operating company that was engaged in providing alarm
monitoring services as of November 30, 1995, directly
or through an affiliate. Such Bell operating company or
affiliate may not acquire any equity interest in, or
obtain financial control of, any unaffiliated alarm
monitoring service entity after November 30, 1995, and
until 5 years after the date of enactment of the
Telecommunications Act of 1996, except that this
sentence shall not prohibit an exchange of customers
for the customers of an unaffiliated alarm monitoring
service entity.
``(b) Nondiscrimination.--An incumbent local exchange
carrier (as defined in section 251(h)) engaged in the provision
of alarm monitoring services shall--
``(1) provide nonaffiliated entities, upon
reasonable request, with the network services it
provides to its own alarm monitoring operations, on
nondiscriminatory terms and conditions; and
``(2) not subsidize its alarm monitoring services
either directly or indirectly from telephone exchange
service operations.
``(c) Expedited Consideration of Complaints.--The
Commission shall establish procedures for the receipt and
review of complaints concerning violations of subsection (b) or
the regulations thereunder that result in material financial
harm to a provider of alarm monitoring service. Such procedures
shall ensure that the Commission will make a final
determination with respect to any such complaint within 120
days after receipt of the complaint. If the complaint contains
an appropriate showing that the alleged violation occurred, as
determined by the Commission in accordance with such
regulations, the Commission shall, within 60 days after receipt
of the complaint, order the incumbent local exchange carrier
(as defined in section 251(h)) and its affiliates to cease
engaging in such violation pending such final determination.
``(d) Use of Data.--A local exchange carrier may not record
or use in any fashion the occurrence or contents of calls
received by providers of alarm monitoring services for the
purposes of marketing such services on behalf of such local
exchange carrier, or any other entity. Any regulations
necessary to enforce this subsection shall be issued initially
within 6 months after the date of enactment of the
Telecommunications Act of 1996.
``(e) Definition of Alarm Monitoring Service.--The term
`alarm monitoring service' means a service that uses a device
located at a residence, place of business, or other fixed
premises--
``(1) to receive signals from other devices located
at or about such premises regarding a possible threat
at such premises to life, safety, or property, from
burglary, fire, vandalism, bodily injury, or other
emergency, and
``(2) to transmit a signal regarding such threat by
means of transmission facilities of a local exchange
carrier or one of its affiliates to a remote monitoring
center to alert a person at such center of the need to
inform the customer or another person or police, fire,
rescue, security, or public safety personnel of such
threat,
but does not include a service that uses a medical monitoring
device attached to an individual for the automatic surveillance
of an ongoing medical condition.
``SEC. 276. PROVISION OF PAYPHONE SERVICE.
``(a) Nondiscrimination Safeguards.--After the effective
date of the rules prescribed pursuant to subsection (b), any
Bell operating company that provides payphone service--
``(1) shall not subsidize its payphone service
directly or indirectly from its telephone exchange
service operations or its exchange access operations;
and
``(2) shall not prefer or discriminate in favor of
its payphone service.
``(b) Regulations.--
``(1) Contents of regulations.--In order to promote
competition among payphone service providers and
promote the widespread deployment of payphone services
to the benefit of the general public, within 9 months
after the date of enactment of the Telecommunications
Act of 1996, the Commission shall take all actions
necessary (including any reconsideration) to prescribe
regulations that--
``(A) establish a per call compensation
plan to ensure that all payphone service
providers are fairly compensated for each and
every completed intrastate and interstate call
using their payphone, except that emergency
calls and telecommunications relay service
calls for hearing disabled individuals shall
not be subject to such compensation;
``(B) discontinue the intrastate and
interstate carrier access charge payphone
service elements and payments in effect on such
date of enactment, and all intrastate and
interstate payphone subsidies from basic
exchange and exchange access revenues, in favor
of a compensation plan as specified in
subparagraph (A);
``(C) prescribe a set of nonstructural
safeguards for Bell operating company payphone
service to implement the provisions of
paragraphs (1) and (2) of subsection (a), which
safeguards shall, at a minimum, include the
nonstructural safeguards equal to those adopted
in the Computer Inquiry-III (CC Docket No. 90-
623) proceeding;
``(D) provide for Bell operating company
payphone service providers to have the same
right that independent payphone providers have
to negotiate with the location provider on the
location provider's selecting and contracting
with, and, subject to the terms of any
agreement with the location provider, to select
and contract with, the carriers that carry
interLATA calls from their payphones, unless
the Commission determines in the rulemaking
pursuant to this section that it is not in the
public interest; and
``(E) provide for all payphone service
providers to have the right to negotiate with
the location provider on the location
provider's selecting and contracting with, and,
subject to the terms of any agreement with the
location provider, to select and contract with,
the carriers that carry intraLATA calls from
their payphones.
``(2) Public interest telephones.--In the
rulemaking conducted pursuant to paragraph (1), the
Commission shall determine whether public interest
payphones, which are provided in the interest of public
health, safety, and welfare, in locations where there
would otherwise not be a payphone, should be
maintained, and if so, ensure that such public interest
payphones are supported fairly and equitably.
``(3) Existing contracts.--Nothing in this section
shall affect any existing contracts between location
providers and payphone service providers or interLATA
or intraLATA carriers that are in force and effect as
of the date of enactment of the Telecommunications Act
of 1996.
``(c) State Preemption.--To the extent that any State
requirements are inconsistent with the Commission's
regulations, the Commission's regulations on such matters shall
preempt such State requirements.
``(d) Definition.--As used in this section, the term
`payphone service' means the provision of public or semi-public
pay telephones, the provision of inmate telephone service in
correctional institutions, and any ancillary services.''.
(b) Review of Entry Decisions.--Section 402(b) (47 U.S.C.
402(b)) is amended--
(1) in paragraph (6), by striking ``(3), and (4)''
and inserting ``(3), (4), and (9)''; and
(2) by adding at the end the following new
paragraph:
``(9) By any applicant for authority to provide interLATA
services under section 271 of this Act whose application is
denied by the Commission.''.
TITLE II--BROADCAST SERVICES
SEC. 201. BROADCAST SPECTRUM FLEXIBILITY.
Title III is amended by inserting after section 335 (47
U.S.C. 335) the following new section:
``SEC. 336. BROADCAST SPECTRUM FLEXIBILITY.
``(a) Commission Action.--If the Commission determines to
issue additional licenses for advanced television services, the
Commission--
``(1) should limit the initial eligibility for such
licenses to persons that, as of the date of such
issuance, are licensed to operate a television
broadcast station or hold a permit to construct such a
station (or both); and
``(2) shall adopt regulations that allow the
holders of such licenses to offer such ancillary or
supplementary services on designated frequencies as may
be consistent with the public interest, convenience,
and necessity.
``(b) Contents of Regulations.--In prescribing the
regulations required by subsection (a), the Commission shall--
``(1) only permit such licensee or permittee to
offer ancillary or supplementary services if the use of
a designated frequency for such services is consistent
with the technology or method designated by the
Commission for the provision of advanced television
services;
``(2) limit the broadcasting of ancillary or
supplementary services on designated frequencies so as
to avoid derogation of any advanced television
services, including high definition television
broadcasts, that the Commission may require using such
frequencies;
``(3) apply to any other ancillary or supplementary
service such of the Commission's regulations as are
applicable to the offering of analogous services by any
other person, except that no ancillary or supplementary
service shall have any rights to carriage under section
614 or 615 or be deemed a multichannel video
programming distributor for purposes of section 628;
``(4) adopt such technical and other requirements
as may be necessary or appropriate to assure the
quality of the signal used to provide advanced
television services, and may adopt regulations that
stipulate the minimum number of hours per day that such
signal must be transmitted; and
``(5) prescribe such other regulations as may be
necessary for the protection of the public interest,
convenience, and necessity.
``(c) Recovery of License.--If the Commission grants a
license for advanced television services to a person that, as
of the date of such issuance, is licensed to operate a
television broadcast station or holds a permit to construct
such a station (or both), the Commission shall, as a condition
of such license, require that either the additional license or
the original license held by the licensee be surrendered to the
Commission for reallocation or reassignment (or both) pursuant
to Commission regulation.
``(d) Public Interest Requirement.--Nothing in this section
shall be construed as relieving a television broadcasting
station from its obligation to serve the public interest,
convenience, and necessity. In the Commission's review of any
application for renewal of a broadcast license for a television
station that provides ancillary or supplementary services, the
television licensee shall establish that all of its program
services on the existing or advanced television spectrum are in
the public interest. Any violation of the Commission rules
applicable to ancillary or supplementary services shall reflect
upon the licensee's qualifications for renewal of its license.
``(e) Fees.--
``(1) Services to which fees apply.--If the
regulations prescribed pursuant to subsection (a)
permit a licensee to offer ancillary or supplementary
services on a designated frequency--
``(A) for which the payment of a
subscription fee is required in order to
receive such services, or
``(B) for which the licensee directly or
indirectly receives compensation from a third
party in return for transmitting material
furnished by such third party (other than
commercial advertisements used to support
broadcasting for which a subscription fee is
not required),
the Commission shall establish a program to assess and
collect from the licensee for such designated frequency
an annual fee or other schedule or method of payment
that promotes the objectives described in subparagraphs
(A) and (B) of paragraph (2).
``(2) Collection of fees.--The program required by
paragraph (1) shall--
``(A) be designed (i) to recover for the
public a portion of the value of the public
spectrum resource made available for such
commercial use, and (ii) to avoid unjust
enrichment through the method employed to
permit such uses of that resource;
``(B) recover for the public an amount
that, to the extent feasible, equals but does
not exceed (over the term of the license) the
amount that would have been recovered had such
services been licensed pursuant to the
provisions of section 309(j) of this Act and
the Commission's regulations thereunder; and
``(C) be adjusted by the Commission from
time to time in order to continue to comply
with the requirements of this paragraph.
``(3) Treatment of revenues.--
``(A) General rule.--Except as provided in
subparagraph (B), all proceeds obtained
pursuant to the regulations required by this
subsection shall be deposited in the Treasury
in accordance with chapter 33 of title 31,
United States Code.
``(B) Retention of revenues.--
Notwithstanding subparagraph (A), the salaries
and expenses account of the Commission shall
retain as an offsetting collection such sums as
may be necessary from such proceeds for the
costs of developing and implementing the
program required by this section and regulating
and supervising advanced television services.
Such offsetting collections shall be available
for obligation subject to the terms and
conditions of the receiving appropriations
account, and shall be deposited in such
accounts on a quarterly basis.
``(4) Report.--Within 5 years after the date of
enactment of the Telecommunications Act of 1996, the
Commission shall report to the Congress on the
implementation of the program required by this
subsection, and shall annually thereafter advise the
Congress on the amounts collected pursuant to such
program.
``(f) Evaluation.--Within 10 years after the date the
Commission first issues additional licenses for advanced
television services, the Commission shall conduct an evaluation
of the advanced television services program. Such evaluation
shall include--
``(1) an assessment of the willingness of consumers
to purchase the television receivers necessary to
receive broadcasts of advanced television services;
``(2) an assessment of alternative uses, including
public safety use, of the frequencies used for such
broadcasts; and
``(3) the extent to which the Commission has been
or will be able to reduce the amount of spectrum
assigned to licensees.
``(g) Definitions.--As used in this section:
``(1) Advanced television services.--The term
`advanced television services' means television
services provided using digital or other advanced
technology as further defined in the opinion, report,
and order of the Commission entitled `Advanced
Television Systems and Their Impact Upon the Existing
Television Broadcast Service', MM Docket 87-268,
adopted September 17, 1992, and successor proceedings.
``(2) Designated frequencies.--The term `designated
frequency' means each of the frequencies designated by
the Commission for licenses for advanced television
services.
``(3) High definition television.--The term `high
definition television' refers to systems that offer
approximately twice the vertical and horizontal
resolution of receivers generally available on the date
of enactment of the Telecommunications Act of 1996, as
further defined in the proceedings described in
paragraph (1) of this subsection.''.
SEC. 202. BROADCAST OWNERSHIP.
(a) National Radio Station Ownership Rule Changes
Required.--The Commission shall modify section 73.3555 of its
regulations (47 C.F.R. 73.3555) by eliminating any provisions
limiting the number of AM or FM broadcast stations which may be
owned or controlled by one entity nationally.
(b) Local Radio Diversity.--
(1) Applicable caps.--The Commission shall revise
section 73.3555(a) of its regulations (47 C.F.R.
73.3555) to provide that--
(A) in a radio market with 45 or more
commercial radio stations, a party may own,
operate, or control up to 8 commercial radio
stations, not more than 5 of which are in the
same service (AM or FM);
(B) in a radio market with between 30 and
44 (inclusive) commercial radio stations, a
party may own, operate, or control up to 7
commercial radio stations, not more than 4 of
which are in the same service (AM or FM);
(C) in a radio market with between 15 and
29 (inclusive) commercial radio stations, a
party may own, operate, or control up to 6
commercial radio stations, not more than 4 of
which are in the same service (AM or FM); and
(D) in a radio market with 14 or fewer
commercial radio stations, a party may own,
operate, or control up to 5 commercial radio
stations, not more than 3 of which are in the
same service (AM or FM), except that a party
may not own, operate, or control more than 50
percent of the stations in such market.
(2) Exception.--Notwithstanding any limitation
authorized by this subsection, the Commission may
permit a person or entity to own, operate, or control,
or have a cognizable interest in, radio broadcast
stations if the Commission determines that such
ownership, operation, control, or interest will result
in an increase in the number of radio broadcast
stations in operation.
(c) Television Ownership Limitations.--
(1) National ownership limitations.--The Commission
shall modify its rules for multiple ownership set forth
in section 73.3555 of its regulations (47 C.F.R.
73.3555)--
(A) by eliminating the restrictions on the
number of television stations that a person or
entity may directly or indirectly own, operate,
or control, or have a cognizable interest in,
nationwide; and
(B) by increasing the national audience
reach limitation for television stations to 35
percent.
(2) Local ownership limitations.--The Commission
shall conduct a rulemaking proceeding to determine
whether to retain, modify, or eliminate its limitations
on the number of television stations that a person or
entity may own, operate, or control, or have a
cognizable interest in, within the same television
market.
(d) Relaxation of One-To-A-Market.--With respect to its
enforcement of its one-to-a-market ownership rules under
section 73.3555 of its regulations, the Commission shall extend
its waiver policy to any of the top 50 markets, consistent with
the public interest, convenience, and necessity.
(e) Dual Network Changes.--The Commission shall revise
section 73.658(g) of its regulations (47 C.F.R. 658(g)) to
permit a television broadcast station to affiliate with a
person or entity that maintains 2 or more networks of
television broadcast stations unless such dual or multiple
networks are composed of--
(1) two or more persons or entities that, on the
date of enactment of the Telecommunications Act of
1996, are ``networks'' as defined in section
73.3613(a)(1) of the Commission's regulations (47
C.F.R. 73.3613(a)(1)); or
(2) any network described in paragraph (1) and an
English-language program distribution service that, on
such date, provides 4 or more hours of programming per
week on a national basis pursuant to network
affiliation arrangements with local television
broadcast stations in markets reaching more than 75
percent of television homes (as measured by a national
ratings service).
(f) Cable Cross Ownership.--
(1) Elimination of restrictions.--The Commission
shall revise section 76.501 of its regulations (47
C.F.R. 76.501) to permit a person or entity to own or
control a network of broadcast stations and a cable
system.
(2) Safeguards against discrimination.--The
Commission shall revise such regulations if necessary
to ensure carriage, channel positioning, and
nondiscriminatory treatment of nonaffiliated broadcast
stations by a cable system described in paragraph (1).
(g) Local Marketing Agreements.--Nothing in this section
shall be construed to prohibit the origination, continuation,
or renewal of any television local marketing agreement that is
in compliance with the regulations of the Commission.
(h) Further Commission Review.--The Commission shall review
its rules adopted pursuant to this section and all of its
ownership rules biennially as part of its regulatory reform
review under section 11 of the Communications Act of 1934 and
shall determine whether any of such rules are necessary in the
public interest as the result of competition. The Commission
shall repeal or modify any regulation it determines to be no
longer in the public interest.
(i) Elimination of Statutory Restriction.--Section 613(a)
(47 U.S.C. 533(a)) is amended--
(1) by striking paragraph (1);
(2) by redesignating paragraph (2) as subsection
(a);
(3) by redesignating subparagraphs (A) and (B) as
paragraphs (1) and (2), respectively;
(4) by striking ``and'' at the end of paragraph (1)
(as so redesignated);
(5) by striking the period at the end of paragraph
(2) (as so redesignated) and inserting ``; and''; and
(6) by adding at the end the following new
paragraph:
``(3) shall not apply the requirements of this
subsection to any cable operator in any franchise area
in which a cable operator is subject to effective
competition as determined under section 623(l).''.
SEC. 203. TERM OF LICENSES.
Section 307(c) (47 U.S.C. 307(c)) is amended to read as
follows:
``(c) Terms of Licenses.--
``(1) Initial and renewal licenses.--Each license
granted for the operation of a broadcasting station
shall be for a term of not to exceed 8 years. Upon
application therefor, a renewal of such license may be
granted from time to time for a term of not to exceed 8
years from the date of expiration of the preceding
license, if the Commission finds that public interest,
convenience, and necessity would be served thereby.
Consistent with the foregoing provisions of this
subsection, the Commission may by rule prescribe the
period or periods for which licenses shall be granted
and renewed for particular classes of stations, but the
Commission may not adopt or follow any rule which would
preclude it, in any case involving a station of a
particular class, from granting or renewing a license
for a shorter period than that prescribed for stations
of such class if, in its judgment, the public interest,
convenience, or necessity would be served by such
action.
``(2) Materials in application.--In order to
expedite action on applications for renewal of
broadcasting station licenses and in order to avoid
needless expense to applicants for such renewals, the
Commission shall not require any such applicant to file
any information which previously has been furnished to
the Commission or which is not directly material to the
considerations that affect the granting or denial of
such application, but the Commission may require any
new or additional facts it deems necessary to make its
findings.
``(3) Continuation pending decision.--Pending any
hearing and final decision on such an application and
the disposition of any petition for rehearing pursuant
to section 405, the Commission shall continue such
license in effect.''.
SEC. 204. BROADCAST LICENSE RENEWAL PROCEDURES.
(a) Renewal Procedures.--
(1) Amendment.--Section 309 (47 U.S.C. 309) is
amended by adding at the end thereof the following new
subsection:
``(k) Broadcast Station Renewal Procedures.--
``(1) Standards for renewal.--If the licensee of a
broadcast station submits an application to the
Commission for renewal of such license, the Commission
shall grant the application if it finds, with respect
to that station, during the preceding term of its
license--
``(A) the station has served the public
interest, convenience, and necessity;
``(B) there have been no serious violations
by the licensee of this Act or the rules and
regulations of the Commission; and
``(C) there have been no other violations
by the licensee of this Act or the rules and
regulations of the Commission which, taken
together, would constitute a pattern of abuse.
``(2) Consequence of failure to meet standard.--If
any licensee of a broadcast station fails to meet the
requirements of this subsection, the Commission may
deny the application for renewal in accordance with
paragraph (3), or grant such application on terms and
conditions as are appropriate, including renewal for a
term less than the maximum otherwise permitted.
``(3) Standards for denial.--If the Commission
determines, after notice and opportunity for a hearing
as provided in subsection (e), that a licensee has
failed to meet the requirements specified in paragraph
(1) and that no mitigating factors justify the
imposition of lesser sanctions, the Commission shall--
``(A) issue an order denying the renewal
application filed by such licensee under
section 308; and
``(B) only thereafter accept and consider
such applications for a construction permit as
may be filed under section 308 specifying the
channel or broadcasting facilities of the
former licensee.
``(4) Competitor consideration prohibited.--In
making the determinations specified in paragraph (1) or
(2), the Commission shall not consider whether the
public interest, convenience, and necessity might be
served by the grant of a license to a person other than
the renewal applicant.''.
(2) Conforming amendment.--Section 309(d) (47
U.S.C. 309(d)) is amended by inserting after ``with
subsection (a)'' each place it appears the following:
``(or subsection (k) in the case of renewal of any
broadcast station license)''.
(b) Summary of Complaints on Violent Programming.--Section
308 (47 U.S.C. 308) is amended by adding at the end the
following new subsection:
``(d) Summary of Complaints.--Each applicant for the
renewal of a commercial or noncommercial television license
shall attach as an exhibit to the application a summary of
written comments and suggestions received from the public and
maintained by the licensee (in accordance with Commission
regulations) that comment on the applicant's programming, if
any, and that are characterized by the commentor as
constituting violent programming.''.
(c) Effective Date.--The amendments made by this section
apply to applications filed after May 1, 1995.
SEC. 205. DIRECT BROADCAST SATELLITE SERVICE.
(a) DBS Signal Security.--Section 705(e)(4) (47 U.S.C.
605(e)(4)) is amended by inserting ``or direct-to-home
satellite services,'' after ``programming,''.
(b) FCC Jurisdiction Over Direct-to-Home Satellite
Services.--Section 303 (47 U.S.C. 303) is amended by adding at
the end thereof the following new subsection:
``(v) Have exclusive jurisdiction to regulate the provision
of direct-to-home satellite services. As used in this
subsection, the term `direct-to-home satellite services' means
the distribution or broadcasting of programming or services by
satellite directly to the subscriber's premises without the use
of ground receiving or distribution equipment, except at the
subscriber's premises or in the uplink process to the
satellite.''.
SEC. 206. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.
Part II of title III is amended by inserting after section
364 (47 U.S.C. 362) the following new section:
``SEC. 365. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.
``Notwithstanding any provision of this Act or any other
provision of law or regulation, a ship documented under the
laws of the United States operating in accordance with the
Global Maritime Distress and Safety System provisions of the
Safety of Life at Sea Convention shall not be required to be
equipped with a radio telegraphy station operated by one or
more radio officers or operators. This section shall take
effect for each vessel upon a determination by the United
States Coast Guard that such vessel has the equipment required
to implement the Global Maritime Distress and Safety System
installed and operating in good working condition.''.
SEC. 207. RESTRICTIONS ON OVER-THE-AIR RECEPTION DEVICES.
Within 180 days after the date of enactment of this Act,
the Commission shall, pursuant to section 303 of the
Communications Act of 1934, promulgate regulations to prohibit
restrictions that impair a viewer's ability to receive video
programming services through devices designed for over-the-air
reception of television broadcast signals, multichannel
multipoint distribution service, or direct broadcast satellite
services.
TITLE III--CABLE SERVICES
SEC. 301. CABLE ACT REFORM.
(a) Definitions.--
(1) Definition of cable service.--Section 602(6)(B)
(47 U.S.C. 522(6)(B)) is amended by inserting ``or
use'' after ``the selection''.
(2) Change in definition of cable system.--Section
602(7) (47 U.S.C. 522(7)) is amended by striking ``(B)
a facility that serves only subscribers in 1 or more
multiple unit dwellings under common ownership,
control, or management, unless such facility or
facilities uses any public right-of-way;'' and
inserting ``(B) a facility that serves subscribers
without using any public right-of-way;''.
(b) Rate Deregulation.--
(1) Upper tier regulation.--Section 623(c) (47
U.S.C. 543(c)) is amended--
(A) in paragraph (1)(B), by striking
``subscriber, franchising authority, or other
relevant State or local government entity'' and
inserting ``franchising authority (in
accordance with paragraph (3))'';
(B) in paragraph (1)(C), by striking ``such
complaint'' and inserting ``the first complaint
filed with the franchising authority under
paragraph (3)''; and
(C) by striking paragraph (3) and inserting
the following:
``(3) Review of rate changes.--The Commission shall
review any complaint submitted by a franchising
authority after the date of enactment of the
Telecommunications Act of 1996 concerning an increase
in rates for cable programming services and issue a
final order within 90 days after it receives such a
complaint, unless the parties agree to extend the
period for such review. A franchising authority may not
file a complaint under this paragraph unless, within 90
days after such increase becomes effective it receives
subscriber complaints.
``(4) Sunset of upper tier rate regulation.--This
subsection shall not apply to cable programming
services provided after March 31, 1999.''.
(2) Sunset of uniform rate structure in markets
with effective competition.--Section 623(d) (47 U.S.C.
543(d)) is amended by adding at the end thereof the
following: ``This subsection does not apply to (1) a
cable operator with respect to the provision of cable
service over its cable system in any geographic area in
which the video programming services offered by the
operator in that area are subject to effective
competition, or (2) any video programming offered on a
per channel or per program basis. Bulk discounts to
multiple dwelling units shall not be subject to this
subsection, except that a cable operator of a cable
system that is not subject to effective competition may
not charge predatory prices to a multiple dwelling
unit. Upon a prima facie showing by a complainant that
there are reasonable grounds to believe that the
discounted price is predatory, the cable system shall
have the burden of showing that its discounted price is
not predatory.''.
(3) Effective competition.--Section 623(l)(1) (47
U.S.C. 543(l)(1)) is amended--
(A) by striking ``or'' at the end of
subparagraph (B);
(B) by striking the period at the end of
subparagraph (C) and inserting ``; or''; and
(C) by adding at the end the following:
``(D) a local exchange carrier or its
affiliate (or any multichannel video
programming distributor using the facilities of
such carrier or its affiliate) offers video
programming services directly to subscribers by
any means (other than direct-to-home satellite
services) in the franchise area of an
unaffiliated cable operator which is providing
cable service in that franchise area, but only
if the video programming services so offered in
that area are comparable to the video
programming services provided by the
unaffiliated cable operator in that area.''
(c) Greater Deregulation for Smaller Cable Companies.--
Section 623 (47 U.S.C 543) is amended by adding at the end
thereof the following:
``(m) Special Rules for Small Companies.--
``(1) In general.--Subsections (a), (b), and (c) do
not apply to a small cable operator with respect to--
``(A) cable programming services, or
``(B) a basic service tier that was the
only service tier subject to regulation as of
December 31, 1994,
in any franchise area in which that operator services
50,000 or fewer subscribers.
``(2) Definition of small cable operator.--For
purposes of this subsection, the term `small cable
operator' means a cable operator that, directly or
through an affiliate, serves in the aggregate fewer
than 1 percent of all subscribers in the United States
and is not affiliated with any entity or entities whose
gross annual revenues in the aggregate exceed
$250,000,000.''.
(d) Market Determinations.--
(1) Market determinations; expedited
decisionmaking.--Section 614(h)(1)(C) (47 U.S.C.
534(h)(1)(C)) is amended--
(A) by striking ``in the manner provided in
section 73.3555(d)(3)(i) of title 47, Code of
Federal Regulations, as in effect on May 1,
1991,'' in clause (i) and inserting ``by the
Commission by regulation or order using, where
available, commercial publications which
delineate television markets based on viewing
patterns,''; and
(B) by striking clause (iv) and inserting
the following:
``(iv) Within 120 days after the
date on which a request is filed under
this subparagraph (or 120 days after
the date of enactment of the
Telecommunications Act of 1996, if
later), the Commission shall grant or
deny the request.''.
(2) Application to pending requests.--The amendment
made by paragraph (1) shall apply to--
(A) any request pending under section
614(h)(1)(C) of the Communications Act of 1934
(47 U.S.C. 534(h)(1)(C)) on the date of
enactment of this Act; and
(B) any request filed under that section
after that date.
(e) Technical Standards.--Section 624(e) (47 U.S.C. 544(e))
is amended by striking the last two sentences and inserting the
following: ``No State or franchising authority may prohibit,
condition, or restrict a cable system's use of any type of
subscriber equipment or any transmission technology.''.
(f) Cable Equipment Compatibility.--Section 624A (47 U.S.C.
544A) is amended--
(1) in subsection (a) by striking ``and'' at the
end of paragraph (2), by striking the period at the end
of paragraph (3) and inserting ``; and''; and by adding
at the end the following new paragraph:
``(4) compatibility among televisions, video
cassette recorders, and cable systems can be assured
with narrow technical standards that mandate a minimum
degree of common design and operation, leaving all
features, functions, protocols, and other product and
service options for selection through open competition
in the market.'';
(2) in subsection (c)(1)--
(A) by redesignating subparagraphs (A) and
(B) as subparagraphs (B) and (C), respectively;
and
(B) by inserting before such redesignated
subparagraph (B) the following new
subparagraph:
``(A) the need to maximize open competition
in the market for all features, functions,
protocols, and other product and service
options of converter boxes and other cable
converters unrelated to the descrambling or
decryption of cable television signals;''; and
(3) in subsection (c)(2)--
(A) by redesignating subparagraphs (D) and
(E) as subparagraphs (E) and (F), respectively;
and
(B) by inserting after subparagraph (C) the
following new subparagraph:
``(D) to ensure that any standards or
regulations developed under the authority of
this section to ensure compatibility between
televisions, video cassette recorders, and
cable systems do not affect features,
functions, protocols, and other product and
service options other than those specified in
paragraph (1)(B), including telecommunications
interface equipment, home automation
communications, and computer network
services;''.
(g) Subscriber Notice.--Section 632 (47 U.S.C. 552) is
amended--
(1) by redesignating subsection (c) as subsection
(d); and
(2) by inserting after subsection (b) the following
new subsection:
``(c) Subscriber Notice.--A cable operator may provide
notice of service and rate changes to subscribers using any
reasonable written means at its sole discretion.
Notwithstanding section 623(b)(6) or any other provision of
this Act, a cable operator shall not be required to provide
prior notice of any rate change that is the result of a
regulatory fee, franchise fee, or any other fee, tax,
assessment, or charge of any kind imposed by any Federal
agency, State, or franchising authority on the transaction
between the operator and the subscriber.''.
(h) Program Access.--Section 628 (47 U.S.C. 548) is amended
by adding at the end the following:
``(j) Common Carriers.--Any provision that applies to a
cable operator under this section shall apply to a common
carrier or its affiliate that provides video programming by any
means directly to subscribers. Any such provision that applies
to a satellite cable programming vendor in which a cable
operator has an attributable interest shall apply to any
satellite cable programming vendor in which such common carrier
has an attributable interest. For the purposes of this
subsection, two or fewer common officers or directors shall not
by itself establish an attributable interest by a common
carrier in a satellite cable programming vendor (or its parent
company).''.
(i) Antitrafficking.--Section 617 (47 U.S.C. 537) is
amended--
(1) by striking subsections (a) through (d); and
(2) in subsection (e), by striking ``(e)'' and all
that follows through ``a franchising authority'' and
inserting ``A franchising authority''.
(j) Aggregation of Equipment Costs.--Section 623(a) (47
U.S.C. 543(a)) is amended by adding at the end the following
new paragraph:
``(7) Aggregation of equipment costs.--
``(A) In general.--The Commission shall
allow cable operators, pursuant to any rules
promulgated under subsection (b)(3), to
aggregate, on a franchise, system, regional, or
company level, their equipment costs into broad
categories, such as converter boxes, regardless
of the varying levels of functionality of the
equipment within each such broad category. Such
aggregation shall not be permitted with respect
to equipment used by subscribers who receive
only a rate regulated basic service tier.
``(B) Revision to commission rules;
forms.--Within 120 days of the date of
enactment of the Telecommunications Act of
1996, the Commission shall issue revisions to
the appropriate rules and forms necessary to
implement subparagraph (A).''.
(k) Treatment of Prior Year Losses.--
(1) Amendment.--Section 623 (48 U.S.C. 543) is
amended by adding at the end thereof the following:
``(n) Treatment of Prior Year Losses.--Notwithstanding any
other provision of this section or of section 612, losses
associated with a cable system (including losses associated
with the grant or award of a franchise) that were incurred
prior to September 4, 1992, with respect to a cable system that
is owned and operated by the original franchisee of such system
shall not be disallowed, in whole or in part, in the
determination of whether the rates for any tier of service or
any type of equipment that is subject to regulation under this
section are lawful.''.
(2) Effective date.--The amendment made by
paragraph (1) shall take effect on the date of
enactment of this Act and shall be applicable to any
rate proposal filed on or after September 4, 1993, upon
which no final action has been taken by December 1,
1995.
SEC. 302. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES.
(a) Provisions for Regulation of Cable Service Provided by
Telephone Companies.--Title VI (47 U.S.C. 521 et seq.) is
amended by adding at the end the following new part:
``PART V--VIDEO PROGRAMMING SERVICES PROVIDED BY TELEPHONE COMPANIES
``SEC. 651. REGULATORY TREATMENT OF VIDEO PROGRAMMING SERVICES.
``(a) Limitations on Cable Regulation.--
``(1) Radio-based systems.--To the extent that a
common carrier (or any other person) is providing video
programming to subscribers using radio communication,
such carrier (or other person) shall be subject to the
requirements of title III and section 652, but shall
not otherwise be subject to the requirements of this
title.
``(2) Common carriage of video traffic.--To the
extent that a common carrier is providing transmission
of video programming on a common carrier basis, such
carrier shall be subject to the requirements of title
II and section 652, but shall not otherwise be subject
to the requirements of this title. This paragraph shall
not affect the treatment under section 602(7)(C) of a
facility of a common carrier as a cable system.
``(3) Cable systems and open video systems.--To the
extent that a common carrier is providing video
programming to its subscribers in any manner other than
that described in paragraphs (1) and (2)--
``(A) such carrier shall be subject to the
requirements of this title, unless such
programming is provided by means of an open
video system for which the Commission has
approved a certification under section 653; or
``(B) if such programming is provided by
means of an open video system for which the
Commission has approved a certification under
section 653, such carrier shall be subject to
the requirements of this part, but shall be
subject to parts I through IV of this title
only as provided in 653(c).
``(4) Election to operate as open video system.--A
common carrier that is providing video programming in a
manner described in paragraph (1) or (2), or a
combination thereof, may elect to provide such
programming by means of an open video system that
complies with section 653. If the Commission approves
such carrier's certification under section 653, such
carrier shall be subject to the requirements of this
part, but shall be subject to parts I through IV of
this title only as provided in 653(c).
``(b) Limitations on Interconnection Obligations.--A local
exchange carrier that provides cable service through an open
video system or a cable system shall not be required, pursuant
to title II of this Act, to make capacity available on a
nondiscriminatory basis to any other person for the provision
of cable service directly to subscribers.
``(c) Additional Regulatory Relief.--A common carrier shall
not be required to obtain a certificate under section 214 with
respect to the establishment or operation of a system for the
delivery of video programming.
``SEC. 652. PROHIBITION ON BUY OUTS.
``(a) Acquisitions by Carriers.--No local exchange carrier
or any affiliate of such carrier owned by, operated by,
controlled by, or under common control with such carrier may
purchase or otherwise acquire directly or indirectly more than
a 10 percent financial interest, or any management interest, in
any cable operator providing cable service within the local
exchange carrier's telephone service area.
``(b) Acquisitions by Cable Operators.--No cable operator
or affiliate of a cable operator that is owned by, operated by,
controlled by, or under common ownership with such cable
operator may purchase or otherwise acquire, directly or
indirectly, more than a 10 percent financial interest, or any
management interest, in any local exchange carrier providing
telephone exchange service within such cable operator's
franchise area.
``(c) Joint Ventures.--A local exchange carrier and a cable
operator whose telephone service area and cable franchise area,
respectively, are in the same market may not enter into any
joint venture or partnership to provide video programming
directly to subscribers or to provide telecommunications
services within such market.
``(d) Exceptions.--
``(1) Rural systems.--Notwithstanding subsections
(a), (b), and (c) of this section, a local exchange
carrier (with respect to a cable system located in its
telephone service area) and a cable operator (with
respect to the facilities of a local exchange carrier
used to provide telephone exchange service in its cable
franchise area) may obtain a controlling interest in,
management interest in, or enter into a joint venture
or partnership with the operator of such system or
facilities for the use of such system or facilities to
the extent that--
``(A) such system or facilities only serve
incorporated or unincorporated--
``(i) places or territories that
have fewer than 35,000 inhabitants; and
``(ii) are outside an urbanized
area, as defined by the Bureau of the
Census; and
``(B) in the case of a local exchange
carrier, such system, in the aggregate with any
other system in which such carrier has an
interest, serves less than 10 percent of the
households in the telephone service area of
such carrier.
``(2) Joint use.--Notwithstanding subsection (c), a
local exchange carrier may obtain, with the concurrence
of the cable operator on the rates, terms, and
conditions, the use of that part of the transmission
facilities of a cable system extending from the last
multi-user terminal to the premises of the end user, if
such use is reasonably limited in scope and duration,
as determined by the Commission.
``(3) Acquisitions in competitive markets.--
Notwithstanding subsections (a) and (c), a local
exchange carrier may obtain a controlling interest in,
or form a joint venture or other partnership with, or
provide financing to, a cable system (hereinafter in
this paragraph referred to as `the subject cable
system'), if--
``(A) the subject cable system operates in
a television market that is not in the top 25
markets, and such market has more than 1 cable
system operator, and the subject cable system
is not the cable system with the most
subscribers in such television market;
``(B) the subject cable system and the
cable system with the most subscribers in such
television market held on May 1, 1995, cable
television franchises from the largest
municipality in the television market and the
boundaries of such franchises were identical on
such date;
``(C) the subject cable system is not owned
by or under common ownership or control of any
one of the 50 cable system operators with the
most subscribers as such operators existed on
May 1, 1995; and
``(D) the system with the most subscribers
in the television market is owned by or under
common ownership or control of any one of the
10 largest cable system operators as such
operators existed on May 1, 1995.
``(4) Exempt cable systems.--Subsection (a) does
not apply to any cable system if--
``(A) the cable system serves no more than
17,000 cable subscribers, of which no less than
8,000 live within an urban area, and no less
than 6,000 live within a nonurbanized area as
of June 1, 1995;
``(B) the cable system is not owned by, or
under common ownership or control with, any of
the 50 largest cable system operators in
existence on June 1, 1995; and
``(C) the cable system operates in a
television market that was not in the top 100
television markets as of June 1, 1995.
``(5) Small cable systems in nonurban areas.--
Notwithstanding subsections (a) and (c), a local
exchange carrier with less than $100,000,000 in annual
operating revenues (or any affiliate of such carrier
owned by, operated by, controlled by, or under common
control with such carrier) may purchase or otherwise
acquire more than a 10 percent financial interest in,
or any management interest in, or enter into a joint
venture or partnership with, any cable system within
the local exchange carrier's telephone service area
that serves no more than 20,000 cable subscribers, if
no more than 12,000 of those subscribers live within an
urbanized area, as defined by the Bureau of the Census.
``(6) Waivers.--The Commission may waive the
restrictions of subsections (a), (b), or (c) only if--
``(A) the Commission determines that,
because of the nature of the market served by
the affected cable system or facilities used to
provide telephone exchange service--
``(i) the affected cable operator
or local exchange carrier would be
subjected to undue economic distress by
the enforcement of such provisions;
``(ii) the system or facilities
would not be economically viable if
such provisions were enforced; or
``(iii) the anticompetitive effects
of the proposed transaction are clearly
outweighed in the public interest by
the probable effect of the transaction
in meeting the convenience and needs of
the community to be served; and
``(B) the local franchising authority
approves of such waiver.
``(e) Definition of Telephone Service Area.--For purposes
of this section, the term `telephone service area' when used in
connection with a common carrier subject in whole or in part to
title II of this Act means the area within which such carrier
provided telephone exchange service as of January 1, 1993, but
if any common carrier after such date transfers its telephone
exchange service facilities to another common carrier, the area
to which such facilities provide telephone exchange service
shall be treated as part of the telephone service area of the
acquiring common carrier and not of the selling common carrier.
``SEC. 653. ESTABLISHMENT OF OPEN VIDEO SYSTEMS.
``(a) Open Video Systems.--
``(1) Certificates of compliance.--A local exchange
carrier may provide cable service to its cable service
subscribers in its telephone service area through an
open video system that complies with this section. To
the extent permitted by such regulations as the
Commission may prescribe consistent with the public
interest, convenience, and necessity, an operator of a
cable system or any other person may provide video
programming through an open video system that complies
with this section. An operator of an open video system
shall qualify for reduced regulatory burdens under
subsection (c) of this section if the operator of such
system certifies to the Commission that such carrier
complies with the Commission's regulations under
subsection (b) and the Commission approves such
certification. The Commission shall publish notice of
the receipt of any such certification and shall act to
approve or disapprove any such certification within 10
days after receipt of such certification.
``(2) Dispute resolution.--The Commission shall
have the authority to resolve disputes under this
section and the regulations prescribed thereunder. Any
such dispute shall be resolved within 180 days after
notice of such dispute is submitted to the Commission.
At that time or subsequently in a separate damages
proceeding, the Commission may, in the case of any
violation of this section, require carriage, award
damages to any person denied carriage, or any
combination of such sanctions. Any aggrieved party may
seek any other remedy available under this Act.
``(b) Commission Actions.--
``(1) Regulations required.--Within 6 months after
the date of enactment of the Telecommunications Act of
1996, the Commission shall complete all actions
necessary (including any reconsideration) to prescribe
regulations that--
``(A) except as required pursuant to
section 611, 614, or 615, prohibit an operator
of an open video system from discriminating
among video programming providers with regard
to carriage on its open video system, and
ensure that the rates, terms, and conditions
for such carriage are just and reasonable, and
are not unjustly or unreasonably
discriminatory;
``(B) if demand exceeds the channel
capacity of the open video system, prohibit an
operator of an open video system and its
affiliates from selecting the video programming
services for carriage on more than one-third of
the activated channel capacity on such system,
but nothing in this subparagraph shall be
construed to limit the number of channels that
the carrier and its affiliates may offer to
provide directly to subscribers;
``(C) permit an operator of an open video
system to carry on only one channel any video
programming service that is offered by more
than one video programming provider (including
the local exchange carrier's video programming
affiliate), provided that subscribers have
ready and immediate access to any such video
programming service;
``(D) extend to the distribution of video
programming over open video systems the
Commission's regulations concerning sports
exclusivity (47 C.F.R. 76.67), network
nonduplication (47 C.F.R. 76.92 et seq.), and
syndicated exclusivity (47 C.F.R. 76.151 et
seq.); and
``(E)(i) prohibit an operator of an open
video system from unreasonably discriminating
in favor of the operator or its affiliates with
regard to material or information (including
advertising) provided by the operator to
subscribers for the purposes of selecting
programming on the open video system, or in the
way such material or information is presented
to subscribers;
``(ii) require an operator of an open video
system to ensure that video programming
providers or copyright holders (or both) are
able suitably and uniquely to identify their
programming services to subscribers;
``(iii) if such identification is
transmitted as part of the programming signal,
require the carrier to transmit such
identification without change or alteration;
and
``(iv) prohibit an operator of an open
video system from omitting television broadcast
stations or other unaffiliated video
programming services carried on such system
from any navigational device, guide, or menu.
``(2) Consumer access.--Subject to the requirements
of paragraph (1) and the regulations thereunder,
nothing in this section prohibits a common carrier or
its affiliate from negotiating mutually agreeable terms
and conditions with over-the-air broadcast stations and
other unaffiliated video programming providers to allow
consumer access to their signals on any level or screen
of any gateway, menu, or other program guide, whether
provided by the carrier or its affiliate.
``(c) Reduced Regulatory Burdens for Open Video Systems.--
``(1) In general.--Any provision that applies to a
cable operator under--
``(A) sections 613 (other than subsection
(a) thereof), 616, 623(f), 628, 631, and 634 of
this title, shall apply,
``(B) sections 611, 614, and 615 of this
title, and section 325 of title III, shall
apply in accordance with the regulations
prescribed under paragraph (2), and
``(C) sections 612 and 617, and parts III
and IV (other than sections 623(f), 628, 631,
and 634), of this title shall not apply,
to any operator of an open video system for which the
Commission has approved a certification under this
section.
``(2) Implementation.--
``(A) Commission action.--In the rulemaking
proceeding to prescribe the regulations
required by subsection (b)(1), the Commission
shall, to the extent possible, impose
obligations that are no greater or lesser than
the obligations contained in the provisions
described in paragraph (1)(B) of this
subsection. The Commission shall complete all
action (including any reconsideration) to
prescribe such regulations no later than 6
months after the date of enactment of the
Telecommunications Act of 1996.
``(B) Fees.--An operator of an open video
system under this part may be subject to the
payment of fees on the gross revenues of the
operator for the provision of cable service
imposed by a local franchising authority or
other governmental entity, in lieu of the
franchise fees permitted under section 622. The
rate at which such fees are imposed shall not
exceed the rate at which franchise fees are
imposed on any cable operator transmitting
video programming in the franchise area, as
determined in accordance with regulations
prescribed by the Commission. An operator of an
open video system may designate that portion of
a subscriber's bill attributable to the fee
under this subparagraph as a separate item on
the bill.
``(3) Regulatory streamlining.--With respect to the
establishment and operation of an open video system,
the requirements of this section shall apply in lieu
of, and not in addition to, the requirements of title
II.
``(4) Treatment as cable operator.--Nothing in this
Act precludes a video programming provider making use
of a open video system from being treated as an
operator of a cable system for purposes of section 111
of title 17, United States Code.
``(d) Definition of Telephone Service Area.--For purposes
of this section, the term `telephone service area' when used in
connection with a common carrier subject in whole or in part to
title II of this Act means the area within which such carrier
is offering telephone exchange service.''.
(b) Conforming and Technical Amendments.--
(1) Repeal.--Subsection (b) of section 613 (47
U.S.C. 533(b)) is repealed.
(2) Definitions.--Section 602 (47 U.S.C. 531) is
amended--
(A) in paragraph (7), by striking ``, or
(D)'' and inserting the following: ``, unless
the extent of such use is solely to provide
interactive on-demand services; (D) an open
video system that complies with section 653 of
this title; or (E)'';
(B) by redesignating paragraphs (12)
through (19) as paragraphs (13) through (20),
respectively; and
(C) by inserting after paragraph (11) the
following new paragraph:
``(12) the term `interactive on-demand services'
means a service providing video programming to
subscribers over switched networks on an on-demand,
point-to-point basis, but does not include services
providing video programming prescheduled by the
programming provider;''.
(3) Termination of video-dialtone regulations.--The
Commission's regulations and policies with respect to
video dialtone requirements issued in CC Docket No. 87-
266 shall cease to be effective on the date of
enactment of this Act. This paragraph shall not be
construed to require the termination of any video-
dialtone system that the Commission has approved before
the date of enactment of this Act.
SEC. 303. PREEMPTION OF FRANCHISING AUTHORITY REGULATION OF
TELECOMMUNICATIONS SERVICES.
(a) Provision of Telecommunications Services by a Cable
Operator.--Section 621(b) (47 U.S.C. 541(b)) is amended by
adding at the end thereof the following new paragraph:
``(3)(A) If a cable operator or affiliate thereof is
engaged in the provision of telecommunications services--
``(i) such cable operator or affiliate shall not be
required to obtain a franchise under this title for the
provision of telecommunications services; and
``(ii) the provisions of this title shall not apply
to such cable operator or affiliate for the provision
of telecommunications services.
``(B) A franchising authority may not impose any
requirement under this title that has the purpose or effect of
prohibiting, limiting, restricting, or conditioning the
provision of a telecommunications service by a cable operator
or an affiliate thereof.
``(C) A franchising authority may not order a cable
operator or affiliate thereof--
``(i) to discontinue the provision of a
telecommunications service, or
``(ii) to discontinue the operation of a cable
system, to the extent such cable system is used for the
provision of a telecommunications service, by reason of
the failure of such cable operator or affiliate thereof
to obtain a franchise or franchise renewal under this
title with respect to the provision of such
telecommunications service.
``(D) Except as otherwise permitted by sections 611 and
612, a franchising authority may not require a cable operator
to provide any telecommunications service or facilities, other
than institutional networks, as a condition of the initial
grant of a franchise, a franchise renewal, or a transfer of a
franchise.''.
(b) Franchise Fees.--Section 622(b) (47 U.S.C. 542(b)) is
amended by inserting ``to provide cable services'' immediately
before the period at the end of the first sentence thereof.
SEC. 304. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.
Part III of title VI is amended by inserting after section
628 (47 U.S.C. 548) the following new section:
``SEC. 629. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.
``(a) Commercial Consumer Availability of Equipment Used To
Access Services Provided by Multichannel Video Programming
Distributors.--The Commission shall, in consultation with
appropriate industry standard-setting organizations, adopt
regulations to assure the commercial availability, to consumers
of multichannel video programming and other services offered
over multichannel video programming systems, of converter
boxes, interactive communications equipment, and other
equipment used by consumers to access multichannel video
programming and other services offered over multichannel video
programming systems, from manufacturers, retailers, and other
vendors not affiliated with any multichannel video programming
distributor. Such regulations shall not prohibit any
multichannel video programming distributor from also offering
converter boxes, interactive communications equipment, and
other equipment used by consumers to access multichannel video
programming and other services offered over multichannel video
programming systems, to consumers, if the system operator's
charges to consumers for such devices and equipment are
separately stated and not subsidized by charges for any such
service.
``(b) Protection of System Security.--The Commission shall
not prescribe regulations under subsection (a) which would
jeopardize security of multichannel video programming and other
services offered over multichannel video programming systems,
or impede the legal rights of a provider of such services to
prevent theft of service.
``(c) Waiver.--The Commission shall waive a regulation
adopted under subsection (a) for a limited time upon an
appropriate showing by a provider of multichannel video
programming and other services offered over multichannel video
programming systems, or an equipment provider, that such waiver
is necessary to assist the development or introduction of a new
or improved multichannel video programming or other service
offered over multichannel video programming systems,
technology, or products. Upon an appropriate showing, the
Commission shall grant any such waiver request within 90 days
of any application filed under this subsection, and such waiver
shall be effective for all service providers and products in
that category and for all providers of services and products.
``(d) Avoidance of Redundant Regulations.--
``(1) Commercial availability determinations.--
Determinations made or regulations prescribed by the
Commission with respect to commercial availability to
consumers of converter boxes, interactive
communications equipment, and other equipment used by
consumers to access multichannel video programming and
other services offered over multichannel video
programming systems, before the date of enactment of
the Telecommunications Act of 1996 shall fulfill the
requirements of this section.
``(2) Regulations.--Nothing in this section affects
section 64.702(e) of the Commission's regulations (47
C.F.R. 64.702(e)) or other Commission regulations
governing interconnection and competitive provision of
customer premises equipment used in connection with
basic common carrier communications services.
``(e) Sunset.--The regulations adopted under this section
shall cease to apply when the Commission determines that--
``(1) the market for the multichannel video
programming distributors is fully competitive;
``(2) the market for converter boxes, and
interactive communications equipment, used in
conjunction with that service is fully competitive; and
``(3) elimination of the regulations would promote
competition and the public interest.
``(f) Commission's Authority.--Nothing in this section
shall be construed as expanding or limiting any authority that
the Commission may have under law in effect before the date of
enactment of the Telecommunications Act of 1996.''.
SEC. 305. VIDEO PROGRAMMING ACCESSIBILITY.
Title VII is amended by inserting after section 712 (47
U.S.C. 612) the following new section:
``SEC. 713. VIDEO PROGRAMMING ACCESSIBILITY.
``(a) Commission Inquiry.--Within 180 days after the date
of enactment of the Telecommunications Act of 1996, the Federal
Communications Commission shall complete an inquiry to
ascertain the level at which video programming is closed
captioned. Such inquiry shall examine the extent to which
existing or previously published programming is closed
captioned, the size of the video programming provider or
programming owner providing closed captioning, the size of the
market served, the relative audience shares achieved, or any
other related factors. The Commission shall submit to the
Congress a report on the results of such inquiry.
``(b) Accountability Criteria.--Within 18 months after such
date of enactment, the Commission shall prescribe such
regulations as are necessary to implement this section. Such
regulations shall ensure that--
``(1) video programming first published or
exhibited after the effective date of such regulations
is fully accessible through the provision of closed
captions, except as provided in subsection (d); and
``(2) video programming providers or owners
maximize the accessibility of video programming first
published or exhibited prior to the effective date of
such regulations through the provision of closed
captions, except as provided in subsection (d).
``(c) Deadlines for Captioning.--Such regulations shall
include an appropriate schedule of deadlines for the provision
of closed captioning of video programming.
``(d) Exemptions.--Notwithstanding subsection (b)--
``(1) the Commission may exempt by regulation
programs, classes of programs, or services for which
the Commission has determined that the provision of
closed captioning would be economically burdensome to
the provider or owner of such programming;
``(2) a provider of video programming or the owner
of any program carried by the provider shall not be
obligated to supply closed captions if such action
would be inconsistent with contracts in effect on the
date of enactment of the Telecommunications Act of
1996, except that nothing in this section shall be
construed to relieve a video programming provider of
its obligations to provide services required by Federal
law; and
``(3) a provider of video programming or program
owner may petition the Commission for an exemption from
the requirements of this section, and the Commission
may grant such petition upon a showing that the
requirements contained in this section would result in
an undue burden.
``(e) Undue Burden.--The term `undue burden' means
significant difficulty or expense. In determining whether the
closed captions necessary to comply with the requirements of
this paragraph would result in an undue economic burden, the
factors to be considered include--
``(1) the nature and cost of the closed captions
for the programming;
``(2) the impact on the operation of the provider
or program owner;
``(3) the financial resources of the provider or
program owner; and
``(4) the type of operations of the provider or
program owner.
``(f) Video Descriptions Inquiry.--Within 6 months after
the date of enactment of the Telecommunications Act of 1996,
the Commission shall commence an inquiry to examine the use of
video descriptions on video programming in order to ensure the
accessibility of video programming to persons with visual
impairments, and report to Congress on its findings. The
Commission's report shall assess appropriate methods and
schedules for phasing video descriptions into the marketplace,
technical and quality standards for video descriptions, a
definition of programming for which video descriptions would
apply, and other technical and legal issues that the Commission
deems appropriate.
``(g) Video Description.--For purposes of this section,
`video description' means the insertion of audio narrated
descriptions of a television program's key visual elements into
natural pauses between the program's dialogue.
``(h) Private Rights of Actions Prohibited.--Nothing in
this section shall be construed to authorize any private right
of action to enforce any requirement of this section or any
regulation thereunder. The Commission shall have exclusive
jurisdiction with respect to any complaint under this
section.''.
TITLE IV--REGULATORY REFORM
SEC. 401. REGULATORY FORBEARANCE.
Title I is amended by inserting after section 9 (47 U.S.C.
159) the following new section:
``SEC. 10. COMPETITION IN PROVISION OF TELECOMMUNICATIONS SERVICE.
``(a) Regulatory Flexibility.--Notwithstanding section
332(c)(1)(A) of this Act, the Commission shall forbear from
applying any regulation or any provision of this Act to a
telecommunications carrier or telecommunications service, or
class of telecommunications carriers or telecommunications
services, in any or some of its or their geographic markets, if
the Commission determines that--
``(1) enforcement of such regulation or provision
is not necessary to ensure that the charges, practices,
classifications, or regulations by, for, or in
connection with that telecommunications carrier or
telecommunications service are just and reasonable and
are not unjustly or unreasonably discriminatory;
``(2) enforcement of such regulation or provision
is not necessary for the protection of consumers; and
``(3) forbearance from applying such provision or
regulation is consistent with the public interest.
``(b) Competitive Effect To Be Weighed.--In making the
determination under subsection (a)(3), the Commission shall
consider whether forbearance from enforcing the provision or
regulation will promote competitive market conditions,
including the extent to which such forbearance will enhance
competition among providers of telecommunications services. If
the Commission determines that such forbearance will promote
competition among providers of telecommunications services,
that determination may be the basis for a Commission finding
that forbearance is in the public interest.
``(c) Petition for Forbearance.--Any telecommunications
carrier, or class of telecommunications carriers, may submit a
petition to the Commission requesting that the Commission
exercise the authority granted under this section with respect
to that carrier or those carriers, or any service offered by
that carrier or carriers. Any such petition shall be deemed
granted if the Commission does not deny the petition for
failure to meet the requirements for forbearance under
subsection (a) within one year after the Commission receives
it, unless the one-year period is extended by the Commission.
The Commission may extend the initial one-year period by an
additional 90 days if the Commission finds that an extension is
necessary to meet the requirements of subsection (a). The
Commission may grant or deny a petition in whole or in part and
shall explain its decision in writing.
``(d) Limitation.--Except as provided in section 251(f),
the Commission may not forbear from applying the requirements
of section 251(c) or 271 under subsection (a) of this section
until it determines that those requirements have been fully
implemented.
``(e) State Enforcement After Commission Forbearance.--A
State commission may not continue to apply or enforce any
provision of this Act that the Commission has determined to
forbear from applying under subsection (a).''.
SEC. 402. BIENNIAL REVIEW OF REGULATIONS; REGULATORY RELIEF.
(a) Biennial Review.--Title I is amended by inserting after
section 10 (as added by section 401) the following new section:
``SEC. 11. REGULATORY REFORM.
``(a) Biennial Review of Regulations.--In every even-
numbered year (beginning with 1998), the Commission--
``(1) shall review all regulations issued under
this Act in effect at the time of the review that apply
to the operations or activities of any provider of
telecommunications service; and
``(2) shall determine whether any such regulation
is no longer necessary in the public interest as the
result of meaningful economic competition between
providers of such service.
``(b) Effect of Determination.--The Commission shall repeal
or modify any regulation it determines to be no longer
necessary in the public interest.''.
(b) Regulatory Relief.--
(1) Streamlined procedures for changes in charges,
classifications, regulations, or practices.--
(A) Section 204(a) (47 U.S.C. 204(a)) is
amended--
(i) by striking ``12 months'' the
first place it appears in paragraph
(2)(A) and inserting ``5 months'';
(ii) by striking ``effective,'' and
all that follows in paragraph (2)(A)
and inserting ``effective.''; and
(iii) by adding at the end thereof
the following:
``(3) A local exchange carrier may file with the
Commission a new or revised charge, classification,
regulation, or practice on a streamlined basis. Any
such charge, classification, regulation, or practice
shall be deemed lawful and shall be effective 7 days
(in the case of a reduction in rates) or 15 days (in
the case of an increase in rates) after the date on
which it is filed with the Commission unless the
Commission takes action under paragraph (1) before the
end of that 7-day or 15-day period, as is
appropriate.''.
(B) Section 208(b) (47 U.S.C. 208(b)) is
amended--
(i) by striking ``12 months'' the
first place it appears in paragraph (1)
and inserting ``5 months''; and
(ii) by striking ``filed,'' and all
that follows in paragraph (1) and
inserting ``filed.''.
(2) Extensions of lines under section 214; armis
reports.--The Commission shall permit any common
carrier--
(A) to be exempt from the requirements of
section 214 of the Communications Act of 1934
for the extension of any line; and
(B) to file cost allocation manuals and
ARMIS reports annually, to the extent such
carrier is required to file such manuals or
reports.
(3) Forbearance authority not limited.--Nothing in
this subsection shall be construed to limit the
authority of the Commission to waive, modify, or
forbear from applying any of the requirements to which
reference is made in paragraph (1) under any other
provision of this Act or other law.
(4) Effective date of amendments.--The amendments
made by paragraph (1) of this subsection shall apply
with respect to any charge, classification, regulation,
or practice filed on or after one year after the date
of enactment of this Act.
(c) Classification of Carriers.--In classifying carriers
according to section 32.11 of its regulations (47 C.F.R. 32.11)
and in establishing reporting requirements pursuant to part 43
of its regulations (47 C.F.R. part 43) and section 64.903 of
its regulations (47 C.F.R. 64.903), the Commission shall adjust
the revenue requirements to account for inflation as of the
release date of the Commission's Report and Order in CC Docket
No. 91-141, and annually thereafter. This subsection shall take
effect on the date of enactment of this Act.
SEC. 403. ELIMINATION OF UNNECESSARY COMMISSION REGULATIONS AND
FUNCTIONS.
(a) Modification of Amateur Radio Examination Procedures.--
Section 4(f)(4) (47 U.S.C. 154(f)(4)) is amended--
(1) in subparagraph (A)--
(A) by inserting ``or administering'' after
``for purposes of preparing'';
(B) by inserting ``of'' after ``than the
class''; and
(C) by inserting ``or administered'' after
``for which the examination is being
prepared'';
(2) by striking subparagraph (B);
(3) in subparagraph (H), by striking ``(A), (B),
and (C)'' and inserting ``(A) and (B)'';
(4) in subparagraph (J)--
(A) by striking ``or (B)''; and
(B) by striking the last sentence; and
(5) by redesignating subparagraphs (C) through (J)
as subparagraphs (B) through (I), respectively.
(b) Authority To Designate Entities To Inspect.--Section
4(f)(3) (47 U.S.C. 154(f)(3)) is amended by inserting before
the period at the end the following: ``: And provided further,
That, in the alternative, an entity designated by the
Commission may make the inspections referred to in this
paragraph''.
(c) Expediting Instructional Television Fixed Service
Processing.--Section 5(c)(1) (47 U.S.C. 155(c)(1)) is amended
by striking the last sentence and inserting the following:
``Except for cases involving the authorization of service in
the instructional television fixed service, or as otherwise
provided in this Act, nothing in this paragraph shall authorize
the Commission to provide for the conduct, by any person or
persons other than persons referred to in paragraph (2) or (3)
of section 556(b) of title 5, United States Code, of any
hearing to which such section applies.''.
(d) Repeal Setting of Depreciation Rates.--The first
sentence of section 220(b) (47 U.S.C. 220(b)) is amended by
striking ``shall prescribe for such carriers'' and inserting
``may prescribe, for such carriers as it determines to be
appropriate,''.
(e) Use of Independent Auditors.--Section 220(c) (47 U.S.C.
220(c)) is amended by adding at the end thereof the following:
``The Commission may obtain the services of any person licensed
to provide public accounting services under the law of any
State to assist with, or conduct, audits under this section.
While so employed or engaged in conducting an audit for the
Commission under this section, any such person shall have the
powers granted the Commission under this subsection and shall
be subject to subsection (f) in the same manner as if that
person were an employee of the Commission.''.
(f) Delegation of Equipment Testing and Certification to
Private Laboratories.--Section 302 (47 U.S.C. 302) is amended
by adding at the end the following:
``(e) The Commission may--
``(1) authorize the use of private organizations
for testing and certifying the compliance of devices or
home electronic equipment and systems with regulations
promulgated under this section;
``(2) accept as prima facie evidence of such
compliance the certification by any such organization;
and
``(3) establish such qualifications and standards
as it deems appropriate for such private organizations,
testing, and certification.''.
(g) Making License Modification Uniform.--Section 303(f)
(47 U.S.C. 303(f)) is amended by striking ``unless, after a
public hearing,'' and inserting ``unless''.
(h) Eliminate FCC Jurisdiction Over Government-Owned Ship
Radio Stations.--
(1) Section 305 (47 U.S.C. 305) is amended by
striking subsection (b) and redesignating subsections
(c) and (d) as (b) and (c), respectively.
(2) Section 382(2) (47 U.S.C. 382(2)) is amended by
striking ``except a vessel of the United States
Maritime Administration, the Inland and Coastwise
Waterways Service, or the Panama Canal Company,''.
(i) Permit Operation of Domestic Ship and Aircraft Radios
Without License.--Section 307(e) (47 U.S.C. 307(e)) is amended
to read as follows:
``(e)(1) Notwithstanding any license requirement
established in this Act, if the Commission determines that such
authorization serves the public interest, convenience, and
necessity, the Commission may by rule authorize the operation
of radio stations without individual licenses in the following
radio services: (A) the citizens band radio service; (B) the
radio control service; (C) the aviation radio service for
aircraft stations operated on domestic flights when such
aircraft are not otherwise required to carry a radio station;
and (D) the maritime radio service for ship stations navigated
on domestic voyages when such ships are not otherwise required
to carry a radio station.
``(2) Any radio station operator who is authorized by the
Commission to operate without an individual license shall
comply with all other provisions of this Act and with rules
prescribed by the Commission under this Act.
``(3) For purposes of this subsection, the terms `citizens
band radio service', `radio control service', `aircraft
station' and `ship station' shall have the meanings given them
by the Commission by rule.''.
(j) Expedited Licensing for Fixed Microwave Service.--
Section 309(b)(2) (47 U.S.C. 309(b)(2)) is amended by striking
subparagraph (A) and redesignating subparagraphs (B) through
(G) as subparagraphs (A) through (F), respectively.
(k) Foreign Directors.--Section 310(b) (47 U.S.C. 310(b))
is amended--
(1) in paragraph (3), by striking ``of which any
officer or director is an alien or''; and
(2) in paragraph (4), by striking ``of which any
officer or more than one-fourth of the directors are
aliens, or''.
(l) Limitation on Silent Station Authorizations.--Section
312 (47 U.S.C. 312) is amended by adding at the end the
following:
``(g) If a broadcasting station fails to transmit broadcast
signals for any consecutive 12-month period, then the station
license granted for the operation of that broadcast station
expires at the end of that period, notwithstanding any
provision, term, or condition of the license to the
contrary.''.
(m) Modification of Construction Permit Requirement.--
Section 319(d) is amended by striking the last two sentences
and inserting the following: ``With respect to any broadcasting
station, the Commission shall not have any authority to waive
the requirement of a permit for construction, except that the
Commission may by regulation determine that a permit shall not
be required for minor changes in the facilities of authorized
broadcast stations. With respect to any other station or class
of stations, the Commission shall not waive the requirement for
a construction permit unless the Commission determines that the
public interest, convenience, and necessity would be served by
such a waiver.''.
(n) Conduct of Inspections.--Section 362(b) (47 U.S.C.
362(b)) is amended to read as follows:
``(b) Every ship of the United States that is subject to
this part shall have the equipment and apparatus prescribed
therein inspected at least once each year by the Commission or
an entity designated by the Commission. If, after such
inspection, the Commission is satisfied that all relevant
provisions of this Act and the station license have been
complied with, the fact shall be so certified on the station
license by the Commission. The Commission shall make such
additional inspections at frequent intervals as the Commission
determines may be necessary to ensure compliance with the
requirements of this Act. The Commission may, upon a finding
that the public interest could be served thereby--
``(1) waive the annual inspection required under
this section for a period of up to 90 days for the sole
purpose of enabling a vessel to complete its voyage and
proceed to a port in the United States where an
inspection can be held; or
``(2) waive the annual inspection required under
this section for a vessel that is in compliance with
the radio provisions of the Safety Convention and that
is operating solely in waters beyond the jurisdiction
of the United States, provided that such inspection
shall be performed within 30 days of such vessel's
return to the United States.''.
(o) Inspection by Other Entities.--Section 385 (47 U.S.C.
385) is amended--
(1) by inserting ``or an entity designated by the
Commission'' after ``The Commission''; and
(2) by adding at the end thereof the following:
``In accordance with such other provisions of law as
apply to Government contracts, the Commission may enter
into contracts with any person for the purpose of
carrying out such inspections and certifying compliance
with those requirements, and may, as part of any such
contract, allow any such person to accept reimbursement
from the license holder for travel and expense costs of
any employee conducting an inspection or
certification.''.
TITLE V--OBSCENITY AND VIOLENCE
Subtitle A--Obscene, Harassing, and Wrongful Utilization of
Telecommunications Facilities
SEC. 501. SHORT TITLE.
This title may be cited as the ``Communications Decency Act
of 1996''.
SEC. 502. OBSCENE OR HARASSING USE OF TELECOMMUNICATIONS FACILITIES
UNDER THE COMMUNICATIONS ACT OF 1934.
Section 223 (47 U.S.C. 223) is amended--
(1) by striking subsection (a) and inserting in
lieu thereof:
``(a) Whoever--
``(1) in interstate or foreign communications--
``(A) by means of a telecommunications
device knowingly--
``(i) makes, creates, or solicits,
and
``(ii) initiates the transmission
of,
any comment, request, suggestion, proposal,
image, or other communication which is obscene,
lewd, lascivious, filthy, or indecent, with
intent to annoy, abuse, threaten, or harass
another person;
``(B) by means of a telecommunications
device knowingly--
``(i) makes, creates, or solicits,
and
``(ii) initiates the transmission
of,
any comment, request, suggestion, proposal,
image, or other communication which is obscene
or indecent, knowing that the recipient of the
communication is under 18 years of age,
regardless of whether the maker of such
communication placed the call or initiated the
communication;
``(C) makes a telephone call or utilizes a
telecommunications device, whether or not
conversation or communication ensues, without
disclosing his identity and with intent to
annoy, abuse, threaten, or harass any person at
the called number or who receives the
communications;
``(D) makes or causes the telephone of
another repeatedly or continuously to ring,
with intent to harass any person at the called
number; or
``(E) makes repeated telephone calls or
repeatedly initiates communication with a
telecommunications device, during which
conversation or communication ensues, solely to
harass any person at the called number or who
receives the communication; or
``(2) knowingly permits any telecommunications
facility under his control to be used for any activity
prohibited by paragraph (1) with the intent that it be
used for such activity,
shall be fined under title 18, United States Code, or
imprisoned not more than two years, or both.''; and
(2) by adding at the end the following new
subsections:
``(d) Whoever--
``(1) in interstate or foreign communications
knowingly--
``(A) uses an interactive computer service
to send to a specific person or persons under
18 years of age, or
``(B) uses any interactive computer service
to display in a manner available to a person
under 18 years of age,
any comment, request, suggestion, proposal, image, or
other communication that, in context, depicts or
describes, in terms patently offensive as measured by
contemporary community standards, sexual or excretory
activities or organs, regardless of whether the user of
such service placed the call or initiated the
communication; or
``(2) knowingly permits any telecommunications
facility under such person's control to be used for an
activity prohibited by paragraph (1) with the intent
that it be used for such activity,
shall be fined under title 18, United States Code, or
imprisoned not more than two years, or both.
``(e) In addition to any other defenses available by law:
``(1) No person shall be held to have violated
subsection (a) or (d) solely for providing access or
connection to or from a facility, system, or network
not under that person's control, including
transmission, downloading, intermediate storage, access
software, or other related capabilities that are
incidental to providing such access or connection that
does not include the creation of the content of the
communication.
``(2) The defenses provided by paragraph (1) of
this subsection shall not be applicable to a person who
is a conspirator with an entity actively involved in
the creation or knowing distribution of communications
that violate this section, or who knowingly advertises
the availability of such communications.
``(3) The defenses provided in paragraph (1) of
this subsection shall not be applicable to a person who
provides access or connection to a facility, system, or
network engaged in the violation of this section that
is owned or controlled by such person.
``(4) No employer shall be held liable under this
section for the actions of an employee or agent unless
the employee's or agent's conduct is within the scope
of his or her employment or agency and the employer (A)
having knowledge of such conduct, authorizes or
ratifies such conduct, or (B) recklessly disregards
such conduct.
``(5) It is a defense to a prosecution under
subsection (a)(1)(B) or (d), or under subsection (a)(2)
with respect to the use of a facility for an activity
under subsection (a)(1)(B) that a person--
``(A) has taken, in good faith, reasonable,
effective, and appropriate actions under the
circumstances to restrict or prevent access by
minors to a communication specified in such
subsections, which may involve any appropriate
measures to restrict minors from such
communications, including any method which is
feasible under available technology; or
``(B) has restricted access to such
communication by requiring use of a verified
credit card, debit account, adult access code,
or adult personal identification number.
``(6) The Commission may describe measures which
are reasonable, effective, and appropriate to restrict
access to prohibited communications under subsection
(d). Nothing in this section authorizes the Commission
to enforce, or is intended to provide the Commission
with the authority to approve, sanction, or permit, the
use of such measures. The Commission shall have no
enforcement authority over the failure to utilize such
measures. The Commission shall not endorse specific
products relating to such measures. The use of such
measures shall be admitted as evidence of good faith
efforts for purposes of paragraph (5) in any action
arising under subsection (d). Nothing in this section
shall be construed to treat interactive computer
services as common carriers or telecommunications
carriers.
``(f)(1) No cause of action may be brought in any court or
administrative agency against any person on account of any
activity that is not in violation of any law punishable by
criminal or civil penalty, and that the person has taken in
good faith to implement a defense authorized under this section
or otherwise to restrict or prevent the transmission of, or
access to, a communication specified in this section.
``(2) No State or local government may impose any liability
for commercial activities or actions by commercial entities,
nonprofit libraries, or institutions of higher education in
connection with an activity or action described in subsection
(a)(2) or (d) that is inconsistent with the treatment of those
activities or actions under this section: Provided, however,
That nothing herein shall preclude any State or local
government from enacting and enforcing complementary oversight,
liability, and regulatory systems, procedures, and
requirements, so long as such systems, procedures, and
requirements govern only intrastate services and do not result
in the imposition of inconsistent rights, duties or obligations
on the provision of interstate services. Nothing in this
subsection shall preclude any State or local government from
governing conduct not covered by this section.
``(g) Nothing in subsection (a), (d), (e), or (f) or in the
defenses to prosecution under (a) or (d) shall be construed to
affect or limit the application or enforcement of any other
Federal law.
``(h) For purposes of this section--
``(1) The use of the term `telecommunications
device' in this section--
``(A) shall not impose new obligations on
broadcasting station licensees and cable
operators covered by obscenity and indecency
provisions elsewhere in this Act; and
``(B) does not include an interactive
computer service.
``(2) The term `interactive computer service' has
the meaning provided in section 230(e)(2).
``(3) The term `access software' means software
(including client or server software) or enabling tools
that do not create or provide the content of the
communication but that allow a user to do any one or
more of the following:
``(A) filter, screen, allow, or disallow
content;
``(B) pick, choose, analyze, or digest
content; or
``(C) transmit, receive, display, forward,
cache, search, subset, organize, reorganize, or
translate content.
``(4) The term `institution of higher education'
has the meaning provided in section 1201 of the Higher
Education Act of 1965 (20 U.S.C. 1141).
``(5) The term `library' means a library eligible
for participation in State-based plans for funds under
title III of the Library Services and Construction Act
(20 U.S.C. 355e et seq.).''.
SEC. 503. OBSCENE PROGRAMMING ON CABLE TELEVISION.
Section 639 (47 U.S.C. 559) is amended by striking ``not
more than $10,000'' and inserting ``under title 18, United
States Code,''.
SEC. 504. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.
Part IV of title VI (47 U.S.C. 551 et seq.) is amended by
adding at the end the following:
``SEC. 640. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.
``(a) Subscriber Request.--Upon request by a cable service
subscriber, a cable operator shall, without charge, fully
scramble or otherwise fully block the audio and video
programming of each channel carrying such programming so that
one not a subscriber does not receive it.
``(b) Definition.--As used in this section, the term
`scramble' means to rearrange the content of the signal of the
programming so that the programming cannot be viewed or heard
in an understandable manner.''.
SEC. 505. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE
PROGRAMMING.
(a) Requirement.--Part IV of title VI (47 U.S.C. 551 et
seq.), as amended by this Act, is further amended by adding at
the end the following:
``SEC. 641. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE
PROGRAMMING.
``(a) Requirement.--In providing sexually explicit adult
programming or other programming that is indecent on any
channel of its service primarily dedicated to sexually-oriented
programming, a multichannel video programming distributor shall
fully scramble or otherwise fully block the video and audio
portion of such channel so that one not a subscriber to such
channel or programming does not receive it.
``(b) Implementation.--Until a multichannel video
programming distributor complies with the requirement set forth
in subsection (a), the distributor shall limit the access of
children to the programming referred to in that subsection by
not providing such programming during the hours of the day (as
determined by the Commission) when a significant number of
children are likely to view it.
``(c) Definition.--As used in this section, the term
`scramble' means to rearrange the content of the signal of the
programming so that the programming cannot be viewed or heard
in an understandable manner.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect 30 days after the date of enactment of this
Act.
SEC. 506. CABLE OPERATOR REFUSAL TO CARRY CERTAIN PROGRAMS.
(a) Public, Educational, and Governmental Channels.--
Section 611(e) (47 U.S.C. 531(e)) is amended by inserting
before the period the following: ``, except a cable operator
may refuse to transmit any public access program or portion of
a public access program which contains obscenity, indecency, or
nudity''.
(b) Cable Channels for Commercial Use.--Section 612(c)(2)
(47 U.S.C. 532(c)(2)) is amended by striking ``an operator''
and inserting ``a cable operator may refuse to transmit any
leased access program or portion of a leased access program
which contains obscenity, indecency, or nudity and''.
SEC. 507. CLARIFICATION OF CURRENT LAWS REGARDING COMMUNICATION OF
OBSCENE MATERIALS THROUGH THE USE OF COMPUTERS.
(a) Importation or Transportation.--Section 1462 of title
18, United States Code, is amended--
(1) in the first undesignated paragraph, by
inserting ``or interactive computer service (as defined
in section 230(e)(2) of the Communications Act of
1934)'' after ``carrier''; and
(2) in the second undesignated paragraph--
(A) by inserting ``or receives,'' after
``takes'';
(B) by inserting ``or interactive computer
service (as defined in section 230(e)(2) of the
Communications Act of 1934)'' after ``common
carrier''; and
(C) by inserting ``or importation'' after
``carriage''.
(b) Transportation for Purposes of Sale or Distribution.--
The first undesignated paragraph of section 1465 of title 18,
United States Code, is amended--
(1) by striking ``transports in'' and inserting
``transports or travels in, or uses a facility or means
of,'';
(2) by inserting ``or an interactive computer
service (as defined in section 230(e)(2) of the
Communications Act of 1934) in or affecting such
commerce'' after ``foreign commerce'' the first place
it appears;
(3) by striking ``, or knowingly travels in'' and
all that follows through ``obscene material in
interstate or foreign commerce,'' and inserting ``of''.
(c) Interpretation.--The amendments made by this section
are clarifying and shall not be interpreted to limit or repeal
any prohibition contained in sections 1462 and 1465 of title
18, United States Code, before such amendment, under the rule
established in United States v. Alpers, 338 U.S. 680 (1950).
SEC. 508. COERCION AND ENTICEMENT OF MINORS.
Section 2422 of title 18, United States Code, is amended--
(1) by inserting ``(a)'' before ``Whoever
knowingly''; and
(2) by adding at the end the following:
``(b) Whoever, using any facility or means of interstate or
foreign commerce, including the mail, or within the special
maritime and territorial jurisdiction of the United States,
knowingly persuades, induces, entices, or coerces any
individual who has not attained the age of 18 years to engage
in prostitution or any sexual act for which any person may be
criminally prosecuted, or attempts to do so, shall be fined
under this title or imprisoned not more than 10 years, or
both.''.
SEC. 509. ONLINE FAMILY EMPOWERMENT.
Title II of the Communications Act of 1934 (47 U.S.C. 201
et seq.) is amended by adding at the end the following new
section:
``SEC. 230. PROTECTION FOR PRIVATE BLOCKING AND SCREENING OF OFFENSIVE
MATERIAL.
``(a) Findings.--The Congress finds the following:
``(1) The rapidly developing array of Internet and
other interactive computer services available to
individual Americans represent an extraordinary advance
in the availability of educational and informational
resources to our citizens.
``(2) These services offer users a great degree of
control over the information that they receive, as well
as the potential for even greater control in the future
as technology develops.
``(3) The Internet and other interactive computer
services offer a forum for a true diversity of
political discourse, unique opportunities for cultural
development, and myriad avenues for intellectual
activity.
``(4) The Internet and other interactive computer
services have flourished, to the benefit of all
Americans, with a minimum of government regulation.
``(5) Increasingly Americans are relying on
interactive media for a variety of political,
educational, cultural, and entertainment services.
``(b) Policy.--It is the policy of the United States--
``(1) to promote the continued development of the
Internet and other interactive computer services and
other interactive media;
``(2) to preserve the vibrant and competitive free
market that presently exists for the Internet and other
interactive computer services, unfettered by Federal or
State regulation;
``(3) to encourage the development of technologies
which maximize user control over what information is
received by individuals, families, and schools who use
the Internet and other interactive computer services;
``(4) to remove disincentives for the development
and utilization of blocking and filtering technologies
that empower parents to restrict their children's
access to objectionable or inappropriate online
material; and
``(5) to ensure vigorous enforcement of Federal
criminal laws to deter and punish trafficking in
obscenity, stalking, and harassment by means of
computer.
``(c) Protection for `Good Samaritan' Blocking and
Screening of Offensive Material.--
``(1) Treatment of publisher or speaker.--No
provider or user of an interactive computer service
shall be treated as the publisher or speaker of any
information provided by another information content
provider.
``(2) Civil liability.--No provider or user of an
interactive computer service shall be held liable on
account of--
``(A) any action voluntarily taken in good
faith to restrict access to or availability of
material that the provider or user considers to
be obscene, lewd, lascivious, filthy,
excessively violent, harassing, or otherwise
objectionable, whether or not such material is
constitutionally protected; or
``(B) any action taken to enable or make
available to information content providers or
others the technical means to restrict access
to material described in paragraph (1).
``(d) Effect on Other Laws.--
``(1) No effect on criminal law.--Nothing in this
section shall be construed to impair the enforcement of
section 223 of this Act, chapter 71 (relating to
obscenity) or 110 (relating to sexual exploitation of
children) of title 18, United States Code, or any other
Federal criminal statute.
``(2) No effect on intellectual property law.--
Nothing in this section shall be construed to limit or
expand any law pertaining to intellectual property.
``(3) State law.--Nothing in this section shall be
construed to prevent any State from enforcing any State
law that is consistent with this section. No cause of
action may be brought and no liability may be imposed
under any State or local law that is inconsistent with
this section.
``(4) No effect on communications privacy law.--
Nothing in this section shall be construed to limit the
application of the Electronic Communications Privacy
Act of 1986 or any of the amendments made by such Act,
or any similar State law.
``(e) Definitions.--As used in this section:
``(1) Internet.--The term `Internet' means the
international computer network of both Federal and non-
Federal interoperable packet switched data networks.
``(2) Interactive computer service.--The term
`interactive computer service' means any information
service, system, or access software provider that
provides or enables computer access by multiple users
to a computer server, including specifically a service
or system that provides access to the Internet and such
systems operated or services offered by libraries or
educational institutions.
``(3) Information content provider.--The term
`information content provider' means any person or
entity that is responsible, in whole or in part, for
the creation or development of information provided
through the Internet or any other interactive computer
service.
``(4) Access software provider.--The term `access
software provider' means a provider of software
(including client or server software), or enabling
tools that do any one or more of the following:
``(A) filter, screen, allow, or disallow
content;
``(B) pick, choose, analyze, or digest
content; or
``(C) transmit, receive, display, forward,
cache, search, subset, organize, reorganize, or
translate content.''.
Subtitle B--Violence
SEC. 551. PARENTAL CHOICE IN TELEVISION PROGRAMMING.
(a) Findings.--The Congress makes the following findings:
(1) Television influences children's perception of
the values and behavior that are common and acceptable
in society.
(2) Television station operators, cable television
system operators, and video programmers should follow
practices in connection with video programming that
take into consideration that television broadcast and
cable programming has established a uniquely pervasive
presence in the lives of American children.
(3) The average American child is exposed to 25
hours of television each week and some children are
exposed to as much as 11 hours of television a day.
(4) Studies have shown that children exposed to
violent video programming at a young age have a higher
tendency for violent and aggressive behavior later in
life than children not so exposed, and that children
exposed to violent video programming are prone to
assume that acts of violence are acceptable behavior.
(5) Children in the United States are, on average,
exposed to an estimated 8,000 murders and 100,000 acts
of violence on television by the time the child
completes elementary school.
(6) Studies indicate that children are affected by
the pervasiveness and casual treatment of sexual
material on television, eroding the ability of parents
to develop responsible attitudes and behavior in their
children.
(7) Parents express grave concern over violent and
sexual video programming and strongly support
technology that would give them greater control to
block video programming in the home that they consider
harmful to their children.
(8) There is a compelling governmental interest in
empowering parents to limit the negative influences of
video programming that is harmful to children.
(9) Providing parents with timely information about
the nature of upcoming video programming and with the
technological tools that allow them easily to block
violent, sexual, or other programming that they believe
harmful to their children is a nonintrusive and
narrowly tailored means of achieving that compelling
governmental interest.
(b) Establishment of Television Rating Code.--
(1) Amendment.--Section 303 (47 U.S.C. 303) is
amended by adding at the end the following:
``(w) Prescribe--
``(1) on the basis of recommendations from an
advisory committee established by the Commission in
accordance with section 551(b)(2) of the
Telecommunications Act of 1996, guidelines and
recommended procedures for the identification and
rating of video programming that contains sexual,
violent, or other indecent material about which parents
should be informed before it is displayed to children,
provided that nothing in this paragraph shall be
construed to authorize any rating of video programming
on the basis of its political or religious content; and
``(2) with respect to any video programming that
has been rated, and in consultation with the television
industry, rules requiring distributors of such video
programming to transmit such rating to permit parents
to block the display of video programming that they
have determined is inappropriate for their children.''.
(2) Advisory committee requirements.--In
establishing an advisory committee for purposes of the
amendment made by paragraph (1) of this subsection, the
Commission shall--
(A) ensure that such committee is composed
of parents, television broadcasters, television
programming producers, cable operators,
appropriate public interest groups, and other
interested individuals from the private sector
and is fairly balanced in terms of political
affiliation, the points of view represented,
and the functions to be performed by the
committee;
(B) provide to the committee such staff and
resources as may be necessary to permit it to
perform its functions efficiently and promptly;
and
(C) require the committee to submit a final
report of its recommendations within one year
after the date of the appointment of the
initial members.
(c) Requirement for Manufacture of Televisions That Block
Programs.--Section 303 (47 U.S.C. 303), as amended by
subsection (a), is further amended by adding at the end the
following:
``(x) Require, in the case of an apparatus designed to
receive television signals that are shipped in interstate
commerce or manufactured in the United States and that have a
picture screen 13 inches or greater in size (measured
diagonally), that such apparatus be equipped with a feature
designed to enable viewers to block display of all programs
with a common rating, except as otherwise permitted by
regulations pursuant to section 330(c)(4).''.
(d) Shipping of Televisions That Block Programs.--
(1) Regulations.--Section 330 (47 U.S.C. 330) is
amended--
(A) by redesignating subsection (c) as
subsection (d); and
(B) by adding after subsection (b) the
following new subsection (c):
``(c)(1) Except as provided in paragraph (2), no person
shall ship in interstate commerce or manufacture in the United
States any apparatus described in section 303(x) of this Act
except in accordance with rules prescribed by the Commission
pursuant to the authority granted by that section.
``(2) This subsection shall not apply to carriers
transporting apparatus referred to in paragraph (1) without
trading in it.
``(3) The rules prescribed by the Commission under this
subsection shall provide for the oversight by the Commission of
the adoption of standards by industry for blocking technology.
Such rules shall require that all such apparatus be able to
receive the rating signals which have been transmitted by way
of line 21 of the vertical blanking interval and which conform
to the signal and blocking specifications established by
industry under the supervision of the Commission.
``(4) As new video technology is developed, the Commission
shall take such action as the Commission determines appropriate
to ensure that blocking service continues to be available to
consumers. If the Commission determines that an alternative
blocking technology exists that--
``(A) enables parents to block programming based on
identifying programs without ratings,
``(B) is available to consumers at a cost which is
comparable to the cost of technology that allows
parents to block programming based on common ratings,
and
``(C) will allow parents to block a broad range of
programs on a multichannel system as effectively and as
easily as technology that allows parents to block
programming based on common ratings,
the Commission shall amend the rules prescribed pursuant to
section 303(x) to require that the apparatus described in such
section be equipped with either the blocking technology
described in such section or the alternative blocking
technology described in this paragraph.''.
(2) Conforming amendment.--Section 330(d), as
redesignated by subsection (d)(1)(A), is amended by
striking ``section 303(s), and section 303(u)'' and
inserting in lieu thereof ``and sections 303(s),
303(u), and 303(x)''.
(e) Applicability and Effective Dates.--
(1) Applicability of rating provision.--The
amendment made by subsection (b) of this section shall
take effect 1 year after the date of enactment of this
Act, but only if the Commission determines, in
consultation with appropriate public interest groups
and interested individuals from the private sector,
that distributors of video programming have not, by
such date--
(A) established voluntary rules for rating
video programming that contains sexual,
violent, or other indecent material about which
parents should be informed before it is
displayed to children, and such rules are
acceptable to the Commission; and
(B) agreed voluntarily to broadcast signals
that contain ratings of such programming.
(2) Effective date of manufacturing provision.--In
prescribing regulations to implement the amendment made
by subsection (c), the Federal Communications
Commission shall, after consultation with the
television manufacturing industry, specify the
effective date for the applicability of the requirement
to the apparatus covered by such amendment, which date
shall not be less than two years after the date of
enactment of this Act.
SEC. 552. TECHNOLOGY FUND.
It is the policy of the United States to encourage
broadcast television, cable, satellite, syndication, other
video programming distributors, and relevant related industries
(in consultation with appropriate public interest groups and
interested individuals from the private sector) to--
(1) establish a technology fund to encourage
television and electronics equipment manufacturers to
facilitate the development of technology which would
empower parents to block programming they deem
inappropriate for their children and to encourage the
availability thereof to low income parents;
(2) report to the viewing public on the status of
the development of affordable, easy to use blocking
technology; and
(3) establish and promote effective procedures,
standards, systems, advisories, or other mechanisms for
ensuring that users have easy and complete access to
the information necessary to effectively utilize
blocking technology and to encourage the availability
thereof to low income parents.
Subtitle C--Judicial Review
SEC. 561. EXPEDITED REVIEW.
(a) Three-Judge District Court Hearing.--Notwithstanding
any other provision of law, any civil action challenging the
constitutionality, on its face, of this title or any amendment
made by this title, or any provision thereof, shall be heard by
a district court of 3 judges convened pursuant to the
provisions of section 2284 of title 28, United States Code.
(b) Appellate Review.--Notwithstanding any other provision
of law, an interlocutory or final judgment, decree, or order of
the court of 3 judges in an action under subsection (a) holding
this title or an amendment made by this title, or any provision
thereof, unconstitutional shall be reviewable as a matter of
right by direct appeal to the Supreme Court. Any such appeal
shall be filed not more than 20 days after entry of such
judgment, decree, or order.
TITLE VI--EFFECT ON OTHER LAWS
SEC. 601. APPLICABILITY OF CONSENT DECREES AND OTHER LAW.
(a) Applicability of Amendments to Future Conduct.--
(1) AT&T consent decree.--Any conduct or activity
that was, before the date of enactment of this Act,
subject to any restriction or obligation imposed by the
AT&T Consent Decree shall, on and after such date, be
subject to the restrictions and obligations imposed by
the Communications Act of 1934 as amended by this Act
and shall not be subject to the restrictions and the
obligations imposed by such Consent Decree.
(2) GTE consent decree.--Any conduct or activity
that was, before the date of enactment of this Act,
subject to any restriction or obligation imposed by the
GTE Consent Decree shall, on and after such date, be
subject to the restrictions and obligations imposed by
the Communications Act of 1934 as amended by this Act
and shall not be subject to the restrictions and the
obligations imposed by such Consent Decree.
(3) McCaw consent decree.--Any conduct or activity
that was, before the date of enactment of this Act,
subject to any restriction or obligation imposed by the
McCaw Consent Decree shall, on and after such date, be
subject to the restrictions and obligations imposed by
the Communications Act of 1934 as amended by this Act
and subsection (d) of this section and shall not be
subject to the restrictions and the obligations imposed
by such Consent Decree.
(b) Antitrust Laws.--
(1) Savings clause.--Except as provided in
paragraphs (2) and (3), nothing in this Act or the
amendments made by this Act shall be construed to
modify, impair, or supersede the applicability of any
of the antitrust laws.
(2) Repeal.--Subsection (a) of section 221 (47
U.S.C. 221(a)) is repealed.
(3) Clayton act.--Section 7 of the Clayton Act (15
U.S.C. 18) is amended in the last paragraph by striking
``Federal Communications Commission,''.
(c) Federal, State, and Local Law.--
(1) No implied effect.--This Act and the amendments
made by this Act shall not be construed to modify,
impair, or supersede Federal, State, or local law
unless expressly so provided in such Act or amendments.
(2) State tax savings provision.--Notwithstanding
paragraph (1), nothing in this Act or the amendments
made by this Act shall be construed to modify, impair,
or supersede, or authorize the modification,
impairment, or supersession of, any State or local law
pertaining to taxation, except as provided in sections
622 and 653(c) of the Communications Act of 1934 and
section 602 of this Act.
(d) Commercial Mobile Service Joint Marketing.--
Notwithstanding section 22.903 of the Commission's regulations
(47 C.F.R. 22.903) or any other Commission regulation, a Bell
operating company or any other company may, except as provided
in sections 271(e)(1) and 272 of the Communications Act of 1934
as amended by this Act as they relate to wireline service,
jointly market and sell commercial mobile services in
conjunction with telephone exchange service, exchange access,
intraLATA telecommunications service, interLATA
telecommunications service, and information services.
(e) Definitions.--As used in this section:
(1) AT&T consent decree.--The term ``AT&T Consent
Decree'' means the order entered August 24, 1982, in
the antitrust action styled United States v. Western
Electric, Civil Action No. 82-0192, in the United
States District Court for the District of Columbia, and
includes any judgment or order with respect to such
action entered on or after August 24, 1982.
(2) GTE consent decree.--The term ``GTE Consent
Decree'' means the order entered December 21, 1984, as
restated January 11, 1985, in the action styled United
States v. GTE Corp., Civil Action No. 83-1298, in the
United States District Court for the District of
Columbia, and any judgment or order with respect to
such action entered on or after December 21, 1984.
(3) McCaw consent decree.--The term ``McCaw Consent
Decree'' means the proposed consent decree filed on
July 15, 1994, in the antitrust action styled United
States v. AT&T Corp. and McCaw Cellular Communications,
Inc., Civil Action No. 94-01555, in the United States
District court for the District of Columbia. Such term
includes any stipulation that the parties will abide by
the terms of such proposed consent decree until it is
entered and any order entering such proposed consent
decree.
(4) Antitrust laws.--The term ``antitrust laws''
has the meaning given it in subsection (a) of the first
section of the Clayton Act (15 U.S.C. 12(a)), except
that such term includes the Act of June 19, 1936 (49
Stat. 1526; 15 U.S.C. 13 et seq.), commonly known as
the Robinson-Patman Act, and section 5 of the Federal
Trade Commission Act (15 U.S.C. 45) to the extent that
such section 5 applies to unfair methods of
competition.
SEC. 602. PREEMPTION OF LOCAL TAXATION WITH RESPECT TO DIRECT-TO-HOME
SERVICES.
(a) Preemption.--A provider of direct-to-home satellite
service shall be exempt from the collection or remittance, or
both, of any tax or fee imposed by any local taxing
jurisdiction on direct-to-home satellite service.
(b) Definitions.--For the purposes of this section--
(1) Direct-to-home satellite service.--The term
``direct-to-home satellite service'' means only
programming transmitted or broadcast by satellite
directly to the subscribers' premises without the use
of ground receiving or distribution equipment, except
at the subscribers' premises or in the uplink process
to the satellite.
(2) Provider of direct-to-home satellite service.--
For purposes of this section, a ``provider of direct-
to-home satellite service'' means a person who
transmits, broadcasts, sells, or distributes direct-to-
home satellite service.
(3) Local taxing jurisdiction.--The term ``local
taxing jurisdiction'' means any municipality, city,
county, township, parish, transportation district, or
assessment jurisdiction, or any other local
jurisdiction in the territorial jurisdiction of the
United States with the authority to impose a tax or
fee, but does not include a State.
(4) State.--The term ``State'' means any of the
several States, the District of Columbia, or any
territory or possession of the United States.
(5) Tax or fee.--The terms ``tax'' and ``fee'' mean
any local sales tax, local use tax, local intangible
tax, local income tax, business license tax, utility
tax, privilege tax, gross receipts tax, excise tax,
franchise fees, local telecommunications tax, or any
other tax, license, or fee that is imposed for the
privilege of doing business, regulating, or raising
revenue for a local taxing jurisdiction.
(c) Preservation of State Authority.--This section shall
not be construed to prevent taxation of a provider of direct-
to-home satellite service by a State or to prevent a local
taxing jurisdiction from receiving revenue derived from a tax
or fee imposed and collected by a State.
TITLE VII--MISCELLANEOUS PROVISIONS
SEC. 701. PREVENTION OF UNFAIR BILLING PRACTICES FOR INFORMATION OR
SERVICES PROVIDED OVER TOLL-FREE TELEPHONE CALLS.
(a) Prevention of Unfair Billing Practices.--
(1) In general.--Section 228(c) (47 U.S.C. 228(c))
is amended--
(A) by striking out subparagraph (C) of
paragraph (7) and inserting in lieu thereof the
following:
``(C) the calling party being charged for
information conveyed during the call unless--
``(i) the calling party has a
written agreement (including an
agreement transmitted through
electronic medium) that meets the
requirements of paragraph (8); or
``(ii) the calling party is charged
for the information in accordance with
paragraph (9); or'';
(B)(i) by striking ``or'' at the end of
subparagraph (C) of such paragraph;
(ii) by striking the period at the end of
subparagraph (D) of such paragraph and
inserting a semicolon and ``or''; and
(iii) by adding at the end thereof the
following:
``(E) the calling party being assessed, by
virtue of being asked to connect or otherwise
transfer to a pay-per-call service, a charge
for the call.''; and
(C) by adding at the end the following new
paragraphs:
``(8) Subscription agreements for billing for
information provided via toll-free calls.--
``(A) In general.--For purposes of
paragraph (7)(C)(i), a written subscription
does not meet the requirements of this
paragraph unless the agreement specifies the
material terms and conditions under which the
information is offered and includes--
``(i) the rate at which charges are
assessed for the information;
``(ii) the information provider's
name;
``(iii) the information provider's
business address;
``(iv) the information provider's
regular business telephone number;
``(v) the information provider's
agreement to notify the subscriber at
least one billing cycle in advance of
all future changes in the rates charged
for the information; and
``(vi) the subscriber's choice of
payment method, which may be by direct
remit, debit, prepaid account, phone
bill, or credit or calling card.
``(B) Billing arrangements.--If a
subscriber elects, pursuant to subparagraph
(A)(vi), to pay by means of a phone bill--
``(i) the agreement shall clearly
explain that the subscriber will be
assessed for calls made to the
information service from the
subscriber's phone line;
``(ii) the phone bill shall
include, in prominent type, the
following disclaimer:
`Common carriers may not
disconnect local or long
distance telephone service for
failure to pay disputed charges
for information services.'; and
``(iii) the phone bill shall
clearly list the 800 number dialed.
``(C) Use of pins to prevent unauthorized
use.--A written agreement does not meet the
requirements of this paragraph unless it--
``(i) includes a unique personal
identification number or other
subscriber-specific identifier and
requires a subscriber to use this
number or identifier to obtain access
to the information provided and
includes instructions on its use; and
``(ii) assures that any charges for
services accessed by use of the
subscriber's personal identification
number or subscriber-specific
identifier be assessed to subscriber's
source of payment elected pursuant to
subparagraph (A)(vi).
``(D) Exceptions.--Notwithstanding
paragraph (7)(C), a written agreement that
meets the requirements of this paragraph is not
required--
``(i) for calls utilizing
telecommunications devices for the
deaf;
``(ii) for directory services
provided by a common carrier or its
affiliate or by a local exchange
carrier or its affiliate; or
``(iii) for any purchase of goods
or of services that are not information
services.
``(E) Termination of service.--On receipt
by a common carrier of a complaint by any
person that an information provider is in
violation of the provisions of this section, a
carrier shall--
``(i) promptly investigate the
complaint; and
``(ii) if the carrier reasonably
determines that the complaint is valid,
it may terminate the provision of
service to an information provider
unless the provider supplies evidence
of a written agreement that meets the
requirements of this section.
``(F) Treatment of remedies.--The remedies
provided in this paragraph are in addition to
any other remedies that are available under
title V of this Act.
``(9) Charges by credit, prepaid, debit, charge, or
calling card in absence of agreement.--For purposes of
paragraph (7)(C)(ii), a calling party is not charged in
accordance with this paragraph unless the calling party
is charged by means of a credit, prepaid, debit,
charge, or calling card and the information service
provider includes in response to each call an
introductory disclosure message that--
``(A) clearly states that there is a charge
for the call;
``(B) clearly states the service's total
cost per minute and any other fees for the
service or for any service to which the caller
may be transferred;
``(C) explains that the charges must be
billed on either a credit, prepaid, debit,
charge, or calling card;
``(D) asks the caller for the card number;
``(E) clearly states that charges for the
call begin at the end of the introductory
message; and
``(F) clearly states that the caller can
hang up at or before the end of the
introductory message without incurring any
charge whatsoever.
``(10) Bypass of introductory disclosure message.--
The requirements of paragraph (9) shall not apply to
calls from repeat callers using a bypass mechanism to
avoid listening to the introductory message, provided
that information providers shall disable such a bypass
mechanism after the institution of any price increase
and for a period of time determined to be sufficient by
the Federal Trade Commission to give callers adequate
and sufficient notice of a price increase.
``(11) Definition of calling card.--As used in this
subsection, the term `calling card' means an
identifying number or code unique to the individual,
that is issued to the individual by a common carrier
and enables the individual to be charged by means of a
phone bill for charges incurred independent of where
the call originates.''.
(2) Regulations.--The Federal Communications
Commission shall revise its regulations to comply with
the amendment made by paragraph (1) not later than 180
days after the date of enactment of this Act.
(3) Effective date.--The amendments made by
paragraph (1) shall take effect on the date of
enactment of this Act.
(b) Clarification of ``Pay-Per-Call Services''.--
(1) Telephone disclosure and dispute resolution
act.--Section 204(1) of the Telephone Disclosure and
Dispute Resolution Act (15 U.S.C. 5714(1)) is amended
to read as follows:
``(1) The term `pay-per-call services' has the
meaning provided in section 228(i) of the
Communications Act of 1934, except that the Commission
by rule may, notwithstanding subparagraphs (B) and (C)
of section 228(i)(1) of such Act, extend such
definition to other similar services providing audio
information or audio entertainment if the Commission
determines that such services are susceptible to the
unfair and deceptive practices that are prohibited by
the rules prescribed pursuant to section 201(a).''.
(2) Communications act.--Section 228(i)(2) (47
U.S.C. 228(i)(2)) is amended by striking ``or any
service the charge for which is tariffed,''.
SEC. 702. PRIVACY OF CUSTOMER INFORMATION.
Title II is amended by inserting after section 221 (47
U.S.C. 221) the following new section:
``SEC. 222. PRIVACY OF CUSTOMER INFORMATION.
``(a) In General.--Every telecommunications carrier has a
duty to protect the confidentiality of proprietary information
of, and relating to, other telecommunication carriers,
equipment manufacturers, and customers, including
telecommunication carriers reselling telecommunications
services provided by a telecommunications carrier.
``(b) Confidentiality of Carrier Information.--A
telecommunications carrier that receives or obtains proprietary
information from another carrier for purposes of providing any
telecommunications service shall use such information only for
such purpose, and shall not use such information for its own
marketing efforts.
``(c) Confidentiality of Customer Proprietary Network
Information.--
``(1) Privacy requirements for telecommunications
carriers.--Except as required by law or with the
approval of the customer, a telecommunications carrier
that receives or obtains customer proprietary network
information by virtue of its provision of a
telecommunications service shall only use, disclose, or
permit access to individually identifiable customer
proprietary network information in its provision of (A)
the telecommunications service from which such
information is derived, or (B) services necessary to,
or used in, the provision of such telecommunications
service, including the publishing of directories.
``(2) Disclosure on request by customers.--A
telecommunications carrier shall disclose customer
proprietary network information, upon affirmative
written request by the customer, to any person
designated by the customer.
``(3) Aggregate customer information.--A
telecommunications carrier that receives or obtains
customer proprietary network information by virtue of
its provision of a telecommunications service may use,
disclose, or permit access to aggregate customer
information other than for the purposes described in
paragraph (1). A local exchange carrier may use,
disclose, or permit access to aggregate customer
information other than for purposes described in
paragraph (1) only if it provides such aggregate
information to other carriers or persons on reasonable
and nondiscriminatory terms and conditions upon
reasonable request therefor.
``(d) Exceptions.--Nothing in this section prohibits a
telecommunications carrier from using, disclosing, or
permitting access to customer proprietary network information
obtained from its customers, either directly or indirectly
through its agents--
``(1) to initiate, render, bill, and collect for
telecommunications services;
``(2) to protect the rights or property of the
carrier, or to protect users of those services and
other carriers from fraudulent, abusive, or unlawful
use of, or subscription to, such services; or
``(3) to provide any inbound telemarketing,
referral, or administrative services to the customer
for the duration of the call, if such call was
initiated by the customer and the customer approves of
the use of such information to provide such service.
``(e) Subscriber List Information.--Notwithstanding
subsections (b), (c), and (d), a telecommunications carrier
that provides telephone exchange service shall provide
subscriber list information gathered in its capacity as a
provider of such service on a timely and unbundled basis, under
nondiscriminatory and reasonable rates, terms, and conditions,
to any person upon request for the purpose of publishing
directories in any format.
``(f) Definitions.--As used in this section:
``(1) Customer proprietary network information.--
The term `customer proprietary network information'
means--
``(A) information that relates to the
quantity, technical configuration, type,
destination, and amount of use of a
telecommunications service subscribed to by any
customer of a telecommunications carrier, and
that is made available to the carrier by the
customer solely by virtue of the carrier-
customer relationship; and
``(B) information contained in the bills
pertaining to telephone exchange service or
telephone toll service received by a customer
of a carrier;
except that such term does not include subscriber list
information.
``(2) Aggregate information.--The term `aggregate
customer information' means collective data that
relates to a group or category of services or
customers, from which individual customer identities
and characteristics have been removed.
``(3) Subscriber list information.--The term
`subscriber list information' means any information--
``(A) identifying the listed names of
subscribers of a carrier and such subscribers'
telephone numbers, addresses, or primary
advertising classifications (as such
classifications are assigned at the time of the
establishment of such service), or any
combination of such listed names, numbers,
addresses, or classifications; and
``(B) that the carrier or an affiliate has
published, caused to be published, or accepted
for publication in any directory format.''.
SEC. 703. POLE ATTACHMENTS.
Section 224 (47 U.S.C. 224) is amended--
(1) in subsection (a)(1), by striking the first
sentence and inserting the following: ``The term
`utility' means any person who is a local exchange
carrier or an electric, gas, water, steam, or other
public utility, and who owns or controls poles, ducts,
conduits, or rights-of-way used, in whole or in part,
for any wire communications.'';
(2) in subsection (a)(4), by inserting after
``system'' the following: ``or provider of
telecommunications service'';
(3) by inserting after subsection (a)(4) the
following:
``(5) For purposes of this section, the term
`telecommunications carrier' (as defined in section 3
of this Act) does not include any incumbent local
exchange carrier as defined in section 251(h).'';
(4) by inserting after ``conditions'' in subsection
(c)(1) a comma and the following: ``or access to poles,
ducts, conduits, and rights-of-way as provided in
subsection (f),'':
(5) in subsection (c)(2)(B), by striking ``cable
television services'' and inserting ``the services
offered via such attachments'';
(6) by inserting after subsection (d)(2) the
following:
``(3) This subsection shall apply to the rate for any pole
attachment used by a cable television system solely to provide
cable service. Until the effective date of the regulations
required under subsection (e), this subsection shall also apply
to the rate for any pole attachment used by a cable system or
any telecommunications carrier (to the extent such carrier is
not a party to a pole attachment agreement) to provide any
telecommunications service.''; and
(7) by adding at the end thereof the following:
``(e)(1) The Commission shall, no later than 2 years after
the date of enactment of the Telecommunications Act of 1996,
prescribe regulations in accordance with this subsection to
govern the charges for pole attachments used by
telecommunications carriers to provide telecommunications
services, when the parties fail to resolve a dispute over such
charges. Such regulations shall ensure that a utility charges
just, reasonable, and nondiscriminatory rates for pole
attachments.
``(2) A utility shall apportion the cost of providing space
on a pole, duct, conduit, or right-of-way other than the usable
space among entities so that such apportionment equals two-
thirds of the costs of providing space other than the usable
space that would be allocated to such entity under an equal
apportionment of such costs among all attaching entities.
``(3) A utility shall apportion the cost of providing
usable space among all entities according to the percentage of
usable space required for each entity.
``(4) The regulations required under paragraph (1) shall
become effective 5 years after the date of enactment of the
Telecommunications Act of 1996. Any increase in the rates for
pole attachments that result from the adoption of the
regulations required by this subsection shall be phased in
equal annual increments over a period of 5 years beginning on
the effective date of such regulations.
``(f)(1) A utility shall provide a cable television system
or any telecommunications carrier with nondiscriminatory access
to any pole, duct, conduit, or right-of-way owned or controlled
by it.
``(2) Notwithstanding paragraph (1), a utility providing
electric service may deny a cable television system or any
telecommunications carrier access to its poles, ducts,
conduits, or rights-of-way, on a non-discriminatory basis where
there is insufficient capacity and for reasons of safety,
reliability and generally applicable engineering purposes.
``(g) A utility that engages in the provision of
telecommunications services or cable services shall impute to
its costs of providing such services (and charge any affiliate,
subsidiary, or associate company engaged in the provision of
such services) an equal amount to the pole attachment rate for
which such company would be liable under this section.
``(h) Whenever the owner of a pole, duct, conduit, or
right-of-way intends to modify or alter such pole, duct,
conduit, or right-of-way, the owner shall provide written
notification of such action to any entity that has obtained an
attachment to such conduit or right-of-way so that such entity
may have a reasonable opportunity to add to or modify its
existing attachment. Any entity that adds to or modifies its
existing attachment after receiving such notification shall
bear a proportionate share of the costs incurred by the owner
in making such pole, duct, conduit, or right-of-way accessible.
``(i) An entity that obtains an attachment to a pole,
conduit, or right-of-way shall not be required to bear any of
the costs of rearranging or replacing its attachment, if such
rearrangement or replacement is required as a result of an
additional attachment or the modification of an existing
attachment sought by any other entity (including the owner of
such pole, duct, conduit, or right-of-way).''.
SEC. 704. FACILITIES SITING; RADIO FREQUENCY EMISSION STANDARDS.
(a) National Wireless Telecommunications Siting Policy.--
Section 332(c) (47 U.S.C. 332(c)) is amended by adding at the
end the following new paragraph:
``(7) Preservation of local zoning authority.--
``(A) General authority.--Except as
provided in this paragraph, nothing in this Act
shall limit or affect the authority of a State
or local government or instrumentality thereof
over decisions regarding the placement,
construction, and modification of personal
wireless service facilities.
``(B) Limitations.--
``(i) The regulation of the
placement, construction, and
modification of personal wireless
service facilities by any State or
local government or instrumentality
thereof--
``(I) shall not
unreasonably discriminate among
providers of functionally
equivalent services; and
``(II) shall not prohibit
or have the effect of
prohibiting the provision of
personal wireless services.
``(ii) A State or local government
or instrumentality thereof shall act on
any request for authorization to place,
construct, or modify personal wireless
service facilities within a reasonable
period of time after the request is
duly filed with such government or
instrumentality, taking into account
the nature and scope of such request.
``(iii) Any decision by a State or
local government or instrumentality
thereof to deny a request to place,
construct, or modify personal wireless
service facilities shall be in writing
and supported by substantial evidence
contained in a written record.
``(iv) No State or local government
or instrumentality thereof may regulate
the placement, construction, and
modification of personal wireless
service facilities on the basis of the
environmental effects of radio
frequency emissions to the extent that
such facilities comply with the
Commission's regulations concerning
such emissions.
``(v) Any person adversely affected
by any final action or failure to act
by a State or local government or any
instrumentality thereof that is
inconsistent with this subparagraph
may, within 30 days after such action
or failure to act, commence an action
in any court of competent jurisdiction.
The court shall hear and decide such
action on an expedited basis. Any
person adversely affected by an act or
failure to act by a State or local
government or any instrumentality
thereof that is inconsistent with
clause (iv) may petition the Commission
for relief.
``(C) Definitions.--For purposes of this
paragraph--
``(i) the term `personal wireless
services' means commercial mobile
services, unlicensed wireless services,
and common carrier wireless exchange
access services;
``(ii) the term `personal wireless
service facilities' means facilities
for the provision of personal wireless
services; and
``(iii) the term `unlicensed
wireless service' means the offering of
telecommunications services using duly
authorized devices which do not require
individual licenses, but does not mean
the provision of direct-to-home
satellite services (as defined in
section 303(v)).''.
(b) Radio Frequency Emissions.--Within 180 days after the
enactment of this Act, the Commission shall complete action in
ET Docket 93-62 to prescribe and make effective rules regarding
the environmental effects of radio frequency emissions.
(c) Availability of Property.--Within 180 days of the
enactment of this Act, the President or his designee shall
prescribe procedures by which Federal departments and agencies
may make available on a fair, reasonable, and nondiscriminatory
basis, property, rights-of-way, and easements under their
control for the placement of new telecommunications services
that are dependent, in whole or in part, upon the utilization
of Federal spectrum rights for the transmission or reception of
such services. These procedures may establish a presumption
that requests for the use of property, rights-of-way, and
easements by duly authorized providers should be granted absent
unavoidable direct conflict with the department or agency's
mission, or the current or planned use of the property, rights-
of-way, and easements in question. Reasonable fees may be
charged to providers of such telecommunications services for
use of property, rights-of-way, and easements. The Commission
shall provide technical support to States to encourage them to
make property, rights-of-way, and easements under their
jurisdiction available for such purposes.
SEC. 705. MOBILE SERVICES DIRECT ACCESS TO LONG DISTANCE CARRIERS.
Section 332(c) (47 U.S.C. 332(c)) is amended by adding at
the end the following new paragraph:
``(8) Mobile services access.--A person engaged in
the provision of commercial mobile services, insofar as
such person is so engaged, shall not be required to
provide equal access to common carriers for the
provision of telephone toll services. If the Commission
determines that subscribers to such services are denied
access to the provider of telephone toll services of
the subscribers' choice, and that such denial is
contrary to the public interest, convenience, and
necessity, then the Commission shall prescribe
regulations to afford subscribers unblocked access to
the provider of telephone toll services of the
subscribers' choice through the use of a carrier
identification code assigned to such provider or other
mechanism. The requirements for unblocking shall not
apply to mobile satellite services unless the
Commission finds it to be in the public interest to
apply such requirements to such services.''.
SEC. 706. ADVANCED TELECOMMUNICATIONS INCENTIVES.
(a) In General.--The Commission and each State commission
with regulatory jurisdiction over telecommunications services
shall encourage the deployment on a reasonable and timely basis
of advanced telecommunications capability to all Americans
(including, in particular, elementary and secondary schools and
classrooms) by utilizing, in a manner consistent with the
public interest, convenience, and necessity, price cap
regulation, regulatory forbearance, measures that promote
competition in the local telecommunications market, or other
regulating methods that remove barriers to infrastructure
investment.
(b) Inquiry.--The Commission shall, within 30 months after
the date of enactment of this Act, and regularly thereafter,
initiate a notice of inquiry concerning the availability of
advanced telecommunications capability to all Americans
(including, in particular, elementary and secondary schools and
classrooms) and shall complete the inquiry within 180 days
after its initiation. In the inquiry, the Commission shall
determine whether advanced telecommunications capability is
being deployed to all Americans in a reasonable and timely
fashion. If the Commission's determination is negative, it
shall take immediate action to accelerate deployment of such
capability by removing barriers to infrastructure investment
and by promoting competition in the telecommunications market.
(c) Definitions.--For purposes of this subsection:
(1) Advanced telecommunications capability.--The
term ``advanced telecommunications capability'' is
defined, without regard to any transmission media or
technology, as high-speed, switched, broadband
telecommunications capability that enables users to
originate and receive high-quality voice, data,
graphics, and video telecommunications using any
technology.
(2) Elementary and secondary schools.--The term
``elementary and secondary schools'' means elementary
and secondary schools, as defined in paragraphs (14)
and (25), respectively, of section 14101 of the
Elementary and Secondary Education Act of 1965 (20
U.S.C. 8801).
SEC. 707. TELECOMMUNICATIONS DEVELOPMENT FUND.
(a) Deposit and Use of Auction Escrow Accounts.--Section
309(j)(8) (47 U.S.C. 309(j)(8)) is amended by adding at the end
the following new subparagraph:
``(C) Deposit and use of auction escrow
accounts.--Any deposits the Commission may
require for the qualification of any person to
bid in a system of competitive bidding pursuant
to this subsection shall be deposited in an
interest bearing account at a financial
institution designated for purposes of this
subsection by the Commission (after
consultation with the Secretary of the
Treasury). Within 45 days following the
conclusion of the competitive bidding--
``(i) the deposits of successful
bidders shall be paid to the Treasury;
``(ii) the deposits of unsuccessful
bidders shall be returned to such
bidders; and
``(iii) the interest accrued to the
account shall be transferred to the
Telecommunications Development Fund
established pursuant to section 714 of
this Act.''.
(b) Establishment and Operation of Fund.--Title VII is
amended by inserting after section 713 (as added by section
305) the following new section:
``SEC. 714. TELECOMMUNICATIONS DEVELOPMENT FUND.
``(a) Purpose of Section.--It is the purpose of this
section--
``(1) to promote access to capital for small
businesses in order to enhance competition in the
telecommunications industry;
``(2) to stimulate new technology development, and
promote employment and training; and
``(3) to support universal service and promote
delivery of telecommunications services to underserved
rural and urban areas.
``(b) Establishment of Fund.--There is hereby established a
body corporate to be known as the Telecommunications
Development Fund, which shall have succession until dissolved.
The Fund shall maintain its principal office in the District of
Columbia and shall be deemed, for purposes of venue and
jurisdiction in civil actions, to be a resident and citizen
thereof.
``(c) Board of Directors.--
``(1) Composition of board; chairman.--The Fund
shall have a Board of Directors which shall consist of
7 persons appointed by the Chairman of the Commission.
Four of such directors shall be representative of the
private sector and three of such directors shall be
representative of the Commission, the Small Business
Administration, and the Department of the Treasury,
respectively. The Chairman of the Commission shall
appoint one of the representatives of the private
sector to serve as chairman of the Fund within 30 days
after the date of enactment of this section, in order
to facilitate rapid creation and implementation of the
Fund. The directors shall include members with
experience in a number of the following areas: finance,
investment banking, government banking, communications
law and administrative practice, and public policy.
``(2) Terms of appointed and elected members.--The
directors shall be eligible to serve for terms of 5
years, except of the initial members, as designated at
the time of their appointment--
``(A) 1 shall be eligible to service for a
term of 1 year;
``(B) 1 shall be eligible to service for a
term of 2 years;
``(C) 1 shall be eligible to service for a
term of 3 years;
``(D) 2 shall be eligible to service for a
term of 4 years; and
``(E) 2 shall be eligible to service for a
term of 5 years (1 of whom shall be the
Chairman).
Directors may continue to serve until their successors
have been appointed and have qualified.
``(3) Meetings and functions of the board.--The
Board of Directors shall meet at the call of its
Chairman, but at least quarterly. The Board shall
determine the general policies which shall govern the
operations of the Fund. The Chairman of the Board
shall, with the approval of the Board, select, appoint,
and compensate qualified persons to fill the offices as
may be provided for in the bylaws, with such functions,
powers, and duties as may be prescribed by the bylaws
or by the Board of Directors, and such persons shall be
the officers of the Fund and shall discharge all such
functions, powers, and duties.
``(d) Accounts of the Fund.--The Fund shall maintain its
accounts at a financial institution designated for purposes of
this section by the Chairman of the Board (after consultation
with the Commission and the Secretary of the Treasury). The
accounts of the Fund shall consist of--
``(1) interest transferred pursuant to section
309(j)(8)(C) of this Act;
``(2) such sums as may be appropriated to the
Commission for advances to the Fund;
``(3) any contributions or donations to the Fund
that are accepted by the Fund; and
``(4) any repayment of, or other payment made with
respect to, loans, equity, or other extensions of
credit made from the Fund.
``(e) Use of the Fund.--All moneys deposited into the
accounts of the Fund shall be used solely for--
``(1) the making of loans, investments, or other
extensions of credits to eligible small businesses in
accordance with subsection (f);
``(2) the provision of financial advice to eligible
small businesses;
``(3) expenses for the administration and
management of the Fund (including salaries, expenses,
and the rental or purchase of office space for the
fund);
``(4) preparation of research, studies, or
financial analyses; and
``(5) other services consistent with the purposes
of this section.
``(f) Lending and Credit Operations.--Loans or other
extensions of credit from the Fund shall be made available in
accordance with the requirements of the Federal Credit Reform
Act of 1990 (2 U.S.C. 661 et seq.) and any other applicable law
to an eligible small business on the basis of--
``(1) the analysis of the business plan of the
eligible small business;
``(2) the reasonable availability of collateral to
secure the loan or credit extension;
``(3) the extent to which the loan or credit
extension promotes the purposes of this section; and
``(4) other lending policies as defined by the
Board.
``(g) Return of Advances.--Any advances appropriated
pursuant to subsection (d)(2) shall be disbursed upon such
terms and conditions (including conditions relating to the time
or times of repayment) as are specified in any appropriations
Act providing such advances.
``(h) General Corporate Powers.--The Fund shall have
power--
``(1) to sue and be sued, complain and defend, in
its corporate name and through its own counsel;
``(2) to adopt, alter, and use the corporate seal,
which shall be judicially noticed;
``(3) to adopt, amend, and repeal by its Board of
Directors, bylaws, rules, and regulations as may be
necessary for the conduct of its business;
``(4) to conduct its business, carry on its
operations, and have officers and exercise the power
granted by this section in any State without regard to
any qualification or similar statute in any State;
``(5) to lease, purchase, or otherwise acquire,
own, hold, improve, use, or otherwise deal in and with
any property, real, personal, or mixed, or any interest
therein, wherever situated, for the purposes of the
Fund;
``(6) to accept gifts or donations of services, or
of property, real, personal, or mixed, tangible or
intangible, in aid of any of the purposes of the Fund;
``(7) to sell, convey, mortgage, pledge, lease,
exchange, and otherwise dispose of its property and
assets;
``(8) to appoint such officers, attorneys,
employees, and agents as may be required, to determine
their qualifications, to define their duties, to fix
their salaries, require bonds for them, and fix the
penalty thereof; and
``(9) to enter into contracts, to execute
instruments, to incur liabilities, to make loans and
equity investment, and to do all things as are
necessary or incidental to the proper management of its
affairs and the proper conduct of its business.
``(i) Accounting, Auditing, and Reporting.--The accounts of
the Fund shall be audited annually. Such audits shall be
conducted in accordance with generally accepted auditing
standards by independent certified public accountants. A report
of each such audit shall be furnished to the Secretary of the
Treasury and the Commission. The representatives of the
Secretary and the Commission shall have access to all books,
accounts, financial records, reports, files, and all other
papers, things, or property belonging to or in use by the Fund
and necessary to facilitate the audit.
``(j) Report on Audits by Treasury.--A report of each such
audit for a fiscal year shall be made by the Secretary of the
Treasury to the President and to the Congress not later than 6
months following the close of such fiscal year. The report
shall set forth the scope of the audit and shall include a
statement of assets and liabilities, capital and surplus or
deficit; a statement of surplus or deficit analysis; a
statement of income and expense; a statement of sources and
application of funds; and such comments and information as may
be deemed necessary to keep the President and the Congress
informed of the operations and financial condition of the Fund,
together with such recommendations with respect thereto as the
Secretary may deem advisable.
``(k) Definitions.--As used in this section:
``(1) Eligible small business.--The term `eligible
small business' means business enterprises engaged in
the telecommunications industry that have $50,000,000
or less in annual revenues, on average over the past 3
years prior to submitting the application under this
section.
``(2) Fund.--The term `Fund' means the
Telecommunications Development Fund established
pursuant to this section.
``(3) Telecommunications industry.--The term
`telecommunications industry' means communications
businesses using regulated or unregulated facilities or
services and includes broadcasting, telecommunications,
cable, computer, data transmission, software,
programming, advanced messaging, and electronics
businesses.''.
SEC. 708. NATIONAL EDUCATION TECHNOLOGY FUNDING CORPORATION.
(a) Findings; Purpose.--
(1) Findings.--The Congress finds as follows:
(A) Corporation.--There has been
established in the District of Columbia a
private, nonprofit corporation known as the
National Education Technology Funding
Corporation which is not an agency or
independent establishment of the Federal
Government.
(B) Board of directors.--The Corporation is
governed by a Board of Directors, as prescribed
in the Corporation's articles of incorporation,
consisting of 15 members, of which--
(i) five members are representative
of public agencies representative of
schools and public libraries;
(ii) five members are
representative of State government,
including persons knowledgeable about
State finance, technology and
education; and
(iii) five members are
representative of the private sector,
with expertise in network technology,
finance and management.
(C) Corporate purposes.--The purposes of
the Corporation, as set forth in its articles
of incorporation, are--
(i) to leverage resources and
stimulate private investment in
education technology infrastructure;
(ii) to designate State education
technology agencies to receive loans,
grants or other forms of assistance
from the Corporation;
(iii) to establish criteria for
encouraging States to--
(I) create, maintain,
utilize and upgrade interactive
high capacity networks capable
of providing audio, visual and
data communications for
elementary schools, secondary
schools and public libraries;
(II) distribute resources
to assure equitable aid to all
elementary schools and
secondary schools in the State
and achieve universal access to
network technology; and
(III) upgrade the delivery
and development of learning
through innovative technology-
based instructional tools and
applications;
(iv) to provide loans, grants and
other forms of assistance to State
education technology agencies, with due
regard for providing a fair balance
among types of school districts and
public libraries assisted and the
disparate needs of such districts and
libraries;
(v) to leverage resources to
provide maximum aid to elementary
schools, secondary schools and public
libraries; and
(vi) to encourage the development
of education telecommunications and
information technologies through
public-private ventures, by serving as
a clearinghouse for information on new
education technologies, and by
providing technical assistance,
including assistance to States, if
needed, to establish State education
technology agencies.
(2) Purpose.--The purpose of this section is to
recognize the Corporation as a nonprofit corporation
operating under the laws of the District of Columbia,
and to provide authority for Federal departments and
agencies to provide assistance to the Corporation.
(b) Definitions.--For the purpose of this section--
(1) the term ``Corporation'' means the National
Education Technology Funding Corporation described in
subsection (a)(1)(A);
(2) the terms ``elementary school'' and ``secondary
school'' have the same meanings given such terms in
section 14101 of the Elementary and Secondary Education
Act of 1965; and
(3) the term ``public library'' has the same
meaning given such term in section 3 of the Library
Services and Construction Act.
(c) Assistance for Education Technology Purposes.--
(1) Receipt by corporation.--Notwithstanding any
other provision of law, in order to carry out the
corporate purposes described in subsection (a)(1)(C),
the Corporation shall be eligible to receive
discretionary grants, contracts, gifts, contributions,
or technical assistance from any Federal department or
agency, to the extent otherwise permitted by law.
(2) Agreement.--In order to receive any assistance
described in paragraph (1) the Corporation shall enter
into an agreement with the Federal department or agency
providing such assistance, under which the Corporation
agrees--
(A) to use such assistance to provide
funding and technical assistance only for
activities which the Board of Directors of the
Corporation determines are consistent with the
corporate purposes described in subsection
(a)(1)(C);
(B) to review the activities of State
education technology agencies and other
entities receiving assistance from the
Corporation to assure that the corporate
purposes described in subsection (a)(1)(C) are
carried out;
(C) that no part of the assets of the
Corporation shall accrue to the benefit of any
member of the Board of Directors of the
Corporation, any officer or employee of the
Corporation, or any other individual, except as
salary or reasonable compensation for services;
(D) that the Board of Directors of the
Corporation will adopt policies and procedures
to prevent conflicts of interest;
(E) to maintain a Board of Directors of the
Corporation consistent with subsection
(a)(1)(B);
(F) that the Corporation, and any entity
receiving the assistance from the Corporation,
are subject to the appropriate oversight
procedures of the Congress; and
(G) to comply with--
(i) the audit requirements
described in subsection (d); and
(ii) the reporting and testimony
requirements described in subsection
(e).
(3) Construction.--Nothing in this section shall be
construed to establish the Corporation as an agency or
independent establishment of the Federal Government, or
to establish the members of the Board of Directors of
the Corporation, or the officers and employees of the
Corporation, as officers or employees of the Federal
Government.
(d) Audits.--
(1) Audits by independent certified public
accountants.--
(A) In general.--The Corporation's
financial statements shall be audited annually
in accordance with generally accepted auditing
standards by independent certified public
accountants who are certified by a regulatory
authority of a State or other political
subdivision of the United States. The audits
shall be conducted at the place or places where
the accounts of the Corporation are normally
kept. All books, accounts, financial records,
reports, files, and all other papers, things,
or property belonging to or in use by the
Corporation and necessary to facilitate the
audit shall be made available to the person or
persons conducting the audits, and full
facilities for verifying transactions with the
balances or securities held by depositories,
fiscal agents, and custodians shall be afforded
to such person or persons.
(B) Reporting requirements.--The report of
each annual audit described in subparagraph (A)
shall be included in the annual report required
by subsection (e)(1).
(2) Recordkeeping requirements; audit and
examination of books.--
(A) Recordkeeping requirements.--The
Corporation shall ensure that each recipient of
assistance from the Corporation keeps--
(i) separate accounts with respect
to such assistance;
(ii) such records as may be
reasonably necessary to fully
disclose--
(I) the amount and the
disposition by such recipient
of the proceeds of such
assistance;
(II) the total cost of the
project or undertaking in
connection with which such
assistance is given or used;
and
(III) the amount and nature
of that portion of the cost of
the project or undertaking
supplied by other sources; and
(iii) such other records as will
facilitate an effective audit.
(B) Audit and examination of books.--The
Corporation shall ensure that the Corporation,
or any of the Corporation's duly authorized
representatives, shall have access for the
purpose of audit and examination to any books,
documents, papers, and records of any recipient
of assistance from the Corporation that are
pertinent to such assistance. Representatives
of the Comptroller General shall also have such
access for such purpose.
(e) Annual Report; Testimony to the Congress.--
(1) Annual report.--Not later than April 30 of each
year, the Corporation shall publish an annual report
for the preceding fiscal year and submit that report to
the President and the Congress. The report shall
include a comprehensive and detailed evaluation of the
Corporation's operations, activities, financial
condition, and accomplishments under this section and
may include such recommendations as the Corporation
deems appropriate.
(2) Testimony before congress.--The members of the
Board of Directors, and officers, of the Corporation
shall be available to testify before appropriate
committees of the Congress with respect to the report
described in paragraph (1), the report of any audit
made by the Comptroller General pursuant to this
section, or any other matter which any such committee
may determine appropriate.
SEC. 709. REPORT ON THE USE OF ADVANCED TELECOMMUNICATIONS SERVICES FOR
MEDICAL PURPOSES.
The Secretary of Commerce, in consultation with the
Secretary of Health and Human Services and other appropriate
departments and agencies, shall submit a report to the
Committee on Commerce of the House of Representatives and the
Committee on Commerce, Science and Transportation of the Senate
concerning the activities of the Joint Working Group on
Telemedicine, together with any findings reached in the studies
and demonstrations on telemedicine funded by the Public Health
Service or other Federal agencies. The report shall examine
questions related to patient safety, the efficacy and quality
of the services provided, and other legal, medical, and
economic issues related to the utilization of advanced
telecommunications services for medical purposes. The report
shall be submitted to the respective Committees by January 31,
1997.
SEC. 710. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--In addition to any other sums authorized
by law, there are authorized to be appropriated to the Federal
Communications Commission such sums as may be necessary to
carry out this Act and the amendments made by this Act.
(b) Effect on Fees.--For the purposes of section 9(b)(2)
(47 U.S.C. 159(b)(2)), additional amounts appropriated pursuant
to subsection (a) shall be construed to be changes in the
amounts appropriated for the performance of activities
described in section 9(a) of the Communications Act of 1934.
(c) Funding Availability.--Section 309(j)(8)(B) (47 U.S.C.
309(j)(8)(B)) is amended by adding at the end the following new
sentence: ``Such offsetting collections are authorized to
remain available until expended.''.
And the House agree to the same.
From the Committee on Commerce, for
consideration of the Senate bill, and the House
amendment, and modifications committed to
conference:
Tom Bliley,
Jack Fields,
Michael G. Oxley,
Rick White,
John D. Dingell,
Edward J. Markey,
Rick Boucher,
Anna G. Eshoo,
Bobby L. Rush,
Provided, Mr. Pallone is appointed in lieu of
Mr. Boucher solely for consideration of sec.
205 of the Senate bill:
Frank Pallone, Jr.,
As additional conferees, for consideration of
secs. 1-6, 101-04, 106-07, 201, 204-05, 221-25,
301-05, 307-11, 401-02, 405-06, 410, 601-06,
703, and 705 of the Senate bill, and title I of
the House amendment, and modifications
committed to conference:
Dan Schaefer,
Joe Barton,
J. Dennis Hastert,
Bill Paxon,
Scott Klug,
Dan Frisa,
Cliff Stearns,
Sherrod Brown,
Bart Gordon,
Blanche Lambert Lincoln,
As additional conferees, for consideration of
secs. 102, 202-03, 403, 407-09, and 706 of the
Senate bill, and title II of the House
amendment, and modifications committed to
conference:
Dan Schaefer,
J. Dennis Hastert,
Dan Frisa,
As additional conferees, for consideration of
secs. 105, 206, 302, 306, 312, 501-05, and 701-
02 of the Senate bill, and title III of the
House amendment, and modifications committed to
conference:
Cliff Stearns,
Bill Paxon,
Scott Klug,
As additional conferees, for consideration of
secs. 7-8, 226, 404, and 704 of the Senate
bill, and titles IV-V of the House amendment,
and modifications committed to conference:
Dan Schaefer,
J. Dennis Hastert,
Scott Klug,
As additional conferees, for consideration of
title VI of the House amendment, and
modifications committed to conference:
Dan Schaefer,
Joe Barton,
Scott Klug,
As additional conferees from the Committee on
the Judiciary, for consideration of the Senate
bill (except secs. 1-6, 101-04, 106-07, 201,
204-05, 221-25, 301-05, 307-11, 401-02, 405-06,
410, 601-06, 703, and 705), and of the House
amendment (except title I), and modifications
committed to conference:
Henry Hyde,
Carlos J. Moorhead,
Bob Goodlatte,
Steve Buyer,
Mike Flanagan,
As additional conferees, for consideration of
secs. 1-6, 101-04, 106-07, 201, 204-05, 221-25,
301-05, 307-11, 401-02, 405-06, 410, 601-06,
703, and 705 of the Senate bill, and title I of
the House amendment, and modifications
committed to conference:
Henry Hyde,
Carlos J. Moorhead,
Bob Goodlatte,
Steve Buyer,
Mike Flanagan,
Elton Gallegly,
Bob Barr,
Martin R. Hoke,
Howard L. Berman,
Managers on the Part of the House.
Larry Pressler,
Ted Stevens,
Slade Gorton,
Trent Lott,
Fritz Hollings,
Daniel K. Inouye,
Wendell Ford,
J.J. Exon,
Jay Rockefeller,
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at
the conference on the disagreeing votes of the two Houses on
the amendments of the House to the bill S. 652, to provide for
a procompetitive, de-regulatory national policy framework
designed to accelerate rapidly private sector deployment of
advanced telecommunications and information technologies and
services to all Americans by opening all telecommunications
markets to competition, and for other purposes, submit the
following joint statement to the House and the Senate in
explanation of the effect of the action agreed upon by the
managers and recommended in the accompanying conference report:
The House amendment to the text of the bill struck all of
the Senate bill after the enacting clause and inserted a
substitute text.
The Senate recedes from its disagreement to the amendment
of the House with an amendment that is a substitute for the
Senate bill and the House amendment. The differences between
the Senate bill, the House amendment, and the substitute agreed
to in conference are noted below, except for clerical
corrections, conforming changes made necessary by agreements
reached by the conferees, and minor drafting and clerical
changes.
Joint Explanatory Statement of the Committee of Conference
Section 1--Short Title and
Section 2--Table of Contents
Senate bill
Section 1 provides that the bill may be cited as the
``Telecommunications Competition and Deregulation Act of
1995.'' Section 2 contains a table of contents for the Senate
bill.
House amendment
Section 1 designates the short title as the
``Communications Act of 1995.'' Section 2 contains a table of
contents for the House amendment.
Conference agreement
Section 1 designates the title of the bill as the
``Telecommunications Act of 1996.'' Section 2 contains a table
of contents for the conference agreement.
Section 3--Definitions
Senate bill
Section 8(a) includes definitions of the Modification of
the Final Judgment (MFJ), the GTE Consent Decree, and an
``integrated telecommunications service provider.'' An
``integrated telecommunications service provider'' means a
person engaged in the provision of multiple services, such as
voice, data, image, graphics, and video services, which make
common use of all or part of the same transmission facilities,
switches, signaling, or control devices.
Section 8(b) adds several definitions to section 3 of the
Communications Act of 1934 (47 U.S.C. 153) (``the
Communications Act'') including definitions for ``local
exchange carrier,'' ``telecommunications'' ``telecommunications
service,'' ``telecommunications carrier,'' ``telecommunications
number portability.'' ``information service,'' ``rural
telephone company,'' and ``service area.''
New subsection (kk) defines ``local exchange carrier'' to
mean a provider of telephone exchange service or exchange
access service. ``Telephone exchange service'' is already
defined in section 3 of the Communications Act.
``Telecommunications'' is defined in new subsection (ll)
to mean the transmission, between or among points specified by
the user, of information of the user's choosing including
voice, data, image, graphics, and video, without change in the
form or content of the information, as sent and received, with
or without benefit of any closed transmission medium.
The term ``telecommunications service'' defined in new
subsection (mm) of section 3 of the communications Act means
the offering of telecommunications for a fee directly to the
public or to such classes of users as to be effectively
available to the public, regardless of the facilities used to
transmit the telecommunications service. This definition is
intended to include commercial mobile service (``CMS''),
competitive access service, and alternative local
telecommunications services to the extent they are offered to
the public or to such classes of users as to be effectively
available to the public.
Subsection (nn) defines ``telecommunications carrier'' to
mean any provider of telecommunications service, except that
the term does not include aggregators of telecommunications
services as defined in section 226 of the Communications Act.
The definition amends the Communications Act to explicitly
provide that a ``telecommunications carrier'' shall be treated
as a common carrier for purposes of the Communications Act, but
only to the extent that it is engaged in providing
telecommunications services.
New subsection (oo) defines ``telecommunications number
portability'' to mean the ability of users of
telecommunications services to retain, at the same location,
existing telecommunications numbers without impairment of
quality, reliability, or convenience when switching from one
telecommunications carrier to another. Number portability
allows consumers remaining at the same location to retain their
existing telephone numbers when switching from one
telecommunications carrier to another.
New subsection (pp) defines ``information service''
similar to the Federal Communications Commission's (``the
Commission'') definition of ``enhanced services.'' The Senate
intends that the Commission would have the continued
flexibility to modify its definition and rules pertaining to
enhanced services as technology changes
Subsection (rr) adds a definition of ``rural telephone
company'' that includes companies that (i) do not serve areas
containing any part of an incorporated place of 10,000 or more
inhabitants, or any incorporated or unincorporated territory in
an urbanized area, or (ii) have fewer than 100,000 access lines
in a State.
New subsection (ss) adds to the Communications Act a
definition of ``service area.'' ``Service area'' means a
geographic area established by the Commission and the State for
the purpose of determining universal service obligations and
support mechanisms. The service area of a rural telephone
company means such company's study area until the Commission
and States, based on a recommendation of a Federal-State Joint
Board, establish a different definition.
House amendment
Subsection (a) of section 501 adds new definitions,
including for ``information service,'' ``telecommunications,''
``telecommunications service,'' ``telecommunications
equipment,'' ``local exchange carrier,'' ``affiliate,''
``customer premises equipment,'' ``electronic publishing,''
``exchange area,'' and ``rural telephone company.''
``Information service'' and ``telecommunications'' are defined
based on the definition used in the Modification of Final
Judgment. The definition of ``telecommunications'' refers to
transmission ``by means of an electromagnetic transmission
medium.''
The term ``local exchange carrier'' does not include a
person insofar as such person is engaged in the provision of
CMS under section 332(c) of the Communications Act, except to
the extent that the Commission finds that such service as
provided by such person in a State is a replacement for a
substantial portion of the wireless telephone exchange service
within such State.
The term ``telecommunications service'' is defined as
those services and facilities offered on a ``common carrier''
basis, recognizing the distinction between common carrier
offerings that are provided to the public or to such classes of
users as to be effectively available to a substantial portion
of the public, and private services.
This section defines the term ``rural telephone company''
to mean a local exchange carrier (LEC) to the extent that such
carrier an services unincorporated area of less than 10,000
residents, or any territory defined by the Bureau of the Census
as a rural area; or if such carrier has fewer than 50,000
access lines; or if such carrier provides telephone exchange
service to a local study area with fewer than 100,000 access
lines; or if such carrier has less than 15 percent of the
access lines in communities of more than 50,000 residents.
The definition of a ``Bell Operating Company'' does not
include an entity that owns a former Bell Operating Company's
wireless operations that are no longer affiliated with a Bell
Operating Company's wireline exchange facilities.
Conference agreement
Section 3(a) of the conference agreement both amends and
adds definitions to section 3 of the Communications Act. The
Senate recedes to the House with respect to the definitions of
``cable system,'' ``customer premises equipment,'' ``dialing
parity,'' ``interLATA service,'' ``LATA,'' ``rural telephone
company,'' and ``telecommunications equipment,'' as well as on
the House amendment to the existing definition of ``telephone
exchange service.'' The Senate recedes to the House with
amendments regarding the definitions of ``Bell Operating
Company,'' ``exchange access,'' ``information service,'' and
``local exchange carrier.''
The Senate definition of ``Bell Operating Company'' was
included; however, the conference agreement included the
language in the House amendment clarifying that the term the
``successor and assign'' is limited to those providing wireline
telephone exchange service so that Airtouch Communications, a
former affiliate of Pacific Telesis that does not provide
wireline telephone exchange service, or any other similarly
situated former affiliate of a Bell Operating Company
(``BOC''), is not included in that definition. The Senate
definition of ``local exchange carrier'' was included to ensure
that the Commission could, if future circumstances warrant,
include CMS providers which provide telephone exchange service
or exchange access in the definition of ``local exchange
carrier.''
The House recedes to the Senate with respect to the
definitions of ``affiliate'' and ``cable service.'' The House
recedes to the Senate with amendments with respect to the
definitions of ``number portability,'' ``telecommunications,''
``telecommunications carrier,'' and ``telecommunications
service.''
The conference agreement includes two new definitions to
clarify certain provisions in the Senate bill and the House
amendment. The term ``AT&T Consent Decree'' was substituted for
``Modification of Final Judgment'' in order to characterize
more accurately the intent of the Senate bill and House
amendment with respect to the supersession issues addressed in
title VI. The term ``network element'' was included to describe
the facilities, such as local loops, equipment, such as
switching, and the features, functions, and capabilities that a
local exchange carrier must provide for certain purposes under
other sections of the conference agreement.
The House recedes to the Senate with an amendment with
respect to new subsection 3(b) of the conference agreement,
which provides that, except where otherwise provided, the terms
used in the conference agreement have the same meaning as those
terms have in the Communications Act.
The Senate recedes to the House amendment with respect to
new subsection 3(c) of the conference agreement, which amends
section 3 of the Communications Act to reorder the definitions
in that section alphabetically and to make other stylistic
changes.
TITLE I--TELECOMMUNICATIONS SERVICES
Subtitle A--Telecommunications Services
section 101--interconnection
Senate bill
The Senate bill creates new sections of the
Communications Act to create competitive markets.
House amendment
The House amendment creates new sections of the
Communications Act to create competitive markets.
Conference agreement
Section 101 of the conference agreement establishes a new
``Part II'' of title II of the Communications Act. Part II
contains new sections 251-261 of the Communications Act to
create competitive communications markets.
new section 251--interconnection
Senate bill
New subsection 251(a) imposes a duty on local exchange
carriers possessing market power in the provision of telephone
exchange service or exchange access service in a particular
local area to negotiate in good faith and to provide
interconnection with other telecommunications carriers that
have requested interconnection for the purpose of providing
telephone exchange service or exchange access service. The
obligations and procedures prescribed in this section do not
apply to interconnection arrangements between local exchange
carriers and telecommunications carriers under section 201 of
the Communications Act for the purpose of providing
interexchange service, and nothing in this section is intended
to affect the Commission's access charge rules. Local exchange
carriers with market power are required to provide
interconnection at reasonable and nondiscriminatory rates.
The Commission will determine which local exchange
carriers have market power for purposes of this section. In
determining market power, the relevant market shall include all
providers of telephone exchange service or exchange access
service in a local service area, regardless of the technology
used to provide such service.
The obligation to negotiate interconnection shall apply
to a local exchange carrier or a class of local exchange
carriers that are determined by the Commission to have market
power in providing exchange services. The references to a
``class'' of carriers are intended to relieve the Commission of
the need to make a separate market power determination for each
individual carrier. These references are not intended to
require the local exchange carriers to engage in negotiations
as a class, although subsection 251(a)(2) provides that
multilateral negotiations are permitted. However, a local
exchange carrier that chooses to participate in multilateral
negotiations will be subject to an individual obligation to
negotiate in good faith and will remain subject to the time
limitations contained in this and other provisions of section
251.
New section 251 provides two alternative methods for
reaching interconnection agreements.
New subsection 251(b) provides a list of minimum
standards relating to types of interconnection the local
exchange carrier must agree to provide, if sought by the
telecommunications carrier requesting interconnection. The
minimum standards include unbundled access to the network
functions and services of the local exchange carrier's network,
and unbundled access to the local exchange carrier's
telecommunications facilities and information, including
databases and signaling, that are necessary for transmission
and routing and the interoperability of both carriers'
networks. The negotiation process established by this section
is intended to resolve questions of economic reasonableness
with respect to the interconnection requirements. That is,
either the parties resolve the issue or the State will impose
conditions for interconnection consistent with section 251 and
the Commission's rules.
The minimum standards also require interconnection to the
local exchange carrier's network that is at least equal in
type, quality, and price to the interconnection the carrier
provides to any other party, including itself or affiliated
companies. At a minimum, the Senate intends that any
technically feasible point would be any point at which the
local exchange carrier provides access to any other party,
including itself or any affiliated entry. Access to poles,
ducts, conduits, and rights-of-way owned or controlled by the
local exchange carrier is also a minimum standard.
Number portability and local dialing parity are included
in the minimum standards of subsection 251(b). If requested, a
local exchange carrier must take any action under its control
to provide interim or final number portability as soon as it is
technically feasible. Section 307 of the bill adds new section
261 of the Communications Act which establishes a neutral
telecommunications numbering administration and defines interim
and final number portability. The Commission will determine
when final number portability is technically feasible. A
similar requirement applies to local dialing parity.
The minimum standards also cover resale or sharing of the
local exchange carrier's unbundled telecommunications services
and network functions. The carrier is not permitted to attach
unreasonable conditions to the resale or sharing of those
services or functions. Subsection 251(b) provides certain
circumstances where it would not be unreasonable for a State to
limit the resale of services included within the definition of
universal service.
Additional minimum standards relate to reciprocal
compensation arrangements, including in-kind exchange of
traffic or traffic balance measures, reasonable notice of
changes in the information necessary for transmission and
routing of services over the carrier's network, and schedules
of itemized charges and conditions.
Subsection 251(i) requires the Commission to promulgate
rules to implement section 251 within 6 months after enactment.
If a State fails to carry out its responsibilities under
section 251 in accordance with the rules promulgated by the
Commission, the Senate intends that the Commission assume the
responsibilities of the State in the applicable proceeding or
matter.
Subsection 251(i) also requires the Commission or a State
to waive or modify the requirements of the minimum standards of
subsection 251(b) in the case of a rural telephone company, and
allows the Commission or a State to waive or modify those
requirements in the case of a local exchange carrier with fewer
than two percent of the nation's subscriber lines installed in
the aggregate nationwide. In order to waive or modify the
requirements of subsection 251(b) for such companies or
carriers, the Commission or a State must determine that the
application of such requirements would result in unfair
competition, impose a significant adverse economic impact on
users of telecommunications services, be technically
infeasible, or otherwise not be in the public interest. The
Senate intends that the Commission or a State shall, consistent
with the protection of consumers and allowing for competition,
use this authority to provide a level playing field,
particularly when a company or carrier to which this subsection
applies faces competition from a telecommunications carrier
that is a large global or nationwide entity that has financial
or technological resources that are significantly greater than
the resources of the company or carrier.
New subsection 251(j) provides that nothing in section
251 precludes a State from imposing requirements on
telecommunications carriers with respect to intrastate services
that the State determines are necessary to further competition
in the provision of telephone exchange service or exchange
access service, so long as any such requirements are not
inconsistent with the Commission's rules to implement section
251.
New subsection 251(k) provides that nothing in section
251 is intended to change or modify the Commission's rules at
47 CFR 69 et seq. regarding the charges that an interexchange
carrier pays to local exchange carriers for access to the local
exchange carrier's network. The Senate also does not intend
that section 251 should affect regulations implemented under
section 201 with respect to interconnection between
interexchange carriers and local exchange carriers.
Section 307 of the bill adds a new section 261 to the
Communications Act. New section 261 requires local exchange
carriers to provide for number portability and also requires
the neutral administration of a nationwide telephone numbering
system.
Subsection 261(a) requires that, as of the date of
enactment, interconnection agreements reached under section 251
must, if requested, provide for interim number portability.
Interim number portability may require that calls to or
from the subscriber be routed through the local exchange
carrier's switch. Some method of call forwarding or similar
arrangement could be used to satisfy this requirement. The
method of providing interim number portability and the amount
of compensation, if any, for providing such service is subject
to the negotiated interconnection agreement, pursuant to
section 251.
Subsection 261(b) provides that final number portability
shall be made available, upon request, when the Commission
determines that final telecommunications portability is
technically feasible. Subsection 261(d) states that the cost of
such number portability shall be borne by all providers on a
competitively neutral basis.
Subsection 261(c) of new section 261 requires that all
providers of telephone exchange service or exchange access
service comply with the guidelines, rules, or plans, of the
entity or entities responsible for administering a nationwide
neutral number system. This provision is not intended to affect
the Commission's ongoing proceeding on numbering
administration.
Subsection 261(c)(2) requires that all telecommunications
carriers which provide local exchange or exchange access
service in the same telephone service area be assigned the same
numbering plan area code.
House amendment
Section 241 of section 101 of the House amendment
restates the obligation contained in section 201(a) of the
Communications Act on all common carriers to interconnect with
the facilities and equipment of other providers of
telecommunications services and information services.
Section 242(a)(1) sets out the specific requirements of
openness and accessibility that apply to LECs as competitors
enter the local market and seek access to, and interconnection
with, the incumbent's network facilities. Under section
242(a)(2), LECs have the duty to offer unbundled services,
elements, features, functions, and capabilities whenever
technically feasible. Section 242(a)(3) imposes the duty to
offer resale at wholesale rates, which are defined as retail,
less the avoided costs. Section 242(a)(4) sets out the duty to
provide number portability, to the extent technically feasible.
Section 242(a)(5) sets out the duty to provide dialing parity.
Section 242(a)(6) sets out the duty to afford access to the
poles, ducts, conduits, and rights-of-way of the incumbent
carrier, as provided under the pole attachment provisions of
the Communications Act. Section 242(a)(7) places the
responsibility on local telephone companies not to install
network features, functions, and capabilities that violate the
requirement of network functionality and accessibility. Section
242(a)(8) places a duty on both parties to negotiate in good
faith on all requirements relating to interconnection
agreements.
Section 242(b)(1) describes the specific terms and
conditions for interconnection, compensation, and equal access,
which are integral to a competing provider seeking to offer
local telephone services over its own facilities. Under section
242(b)(2), any interconnection agreement entered into must
provide for mutual and reciprocal recovery of costs, and may
include a range of compensation schemes, such as an in-kind
exchange of traffic without cash payment (known as bill-and-
keep arrangements). Under section 242(b)(3), the LEC has a
responsibility to offer reasonable and nondiscriminatory access
on an unbundled basis ``that is equal in type and quality'' to
that which it affords itself or any other person. Section
242(b)(4) directs the Commission to establish regulations
requiring actual collocation, or physicial collocation, of
equipment necessary for interconnection at the premises of an
LEC, except that virtual collocation is permitted where the LEC
demonstrates that actual collocation is not practical for
technical reasons or because of space limitations.
This section also directs the Commission to establish
regulations requiring full compensation to the LEC for costs of
providing services related to equal access, interconnection,
number portability, and unbundling and requires a carrier, to
the extent it provides a telecommunications service or an
information service over its own network, to impute to itself
the charge for access and interconnection that it charges other
persons for providing such services. Subsection 242(c) mandates
the manner in which number portability and dialing parity must
be provided. This section does not require intraLATA toll
dialing parity until a BOC is authorized to offer long distance
service.
Section 242(d)(1) prohibits a provider from joint
marketing of local and interLATA toll service until the BOC in
that State is authorized to provide long distance service
pursuant to section 245. Section 242(d)(2) grandfathers joint
marketing arrangements in place before the date of enactment.
Section 242(e) grants to the Commission the authority to waive
or modify, in whole or in part, the requirements of section 242
for any carrier that has, in the aggregate nationwide, fewer
than 500,000 access lines installed, to the extent that the
Commission determines the effect of the requirements would be
economically burdensome, or technologically infeasible. Section
242(f) gives State commissions the authority to waive section
242 requirements with respect to rural telephone companies, and
subsection 242(g) sets out the time and manner for compliance
if the State determines that the exemption should not apply.
Conference agreement
The conference agreement adopts a new model for
interconnection that incorporates provisions from both the
Senate bill and House amendment in a new section 251 of the
Communications Act. New section 251(a) imposes a general duty
to interconnect directly or indirectly between all
telecommunications carriers and the duty not to install network
features and functions that do not comply with the guidelines
and standards established under new sections 255 and 256 of the
Communications Act.
New section 251(b) imposes several duties on all local
exchange carriers, including the ``new entrants'' into the
local exchange market. These include the duties: (1) not to
prohibit resale of their service; (2) to provide number
portability; (3) to provide dialing parity; (4) to afford
access to poles, ducts, conduits, and rights-of-way consistent
with the pole attachment provisions in section 224 of the
Communications Act; and (5) to establish reciprocal
compensation arrangements for the transport and termination of
traffic. The conferees note that the duties imposed under new
section 251(b) make sense only in the context of a specific
request from another telecommunications carrier or any other
person who actually seeks to connect with or provide services
using the LEC's network.
New section 251(c) imposes several additional obligations
on incumbent LEC's. These include the duties: (1) to negotiate
in good faith, subject to the provisions of section 252,
binding agreements to provide all of the obligations imposed in
new sections 251(b) and 251(c); (2) to provide interconnection
at any technically feasible point of the same type and quality
it provides to itself, on just, reasonable, and
nondiscriminatory terms and conditions; (3) to provide access
to network elements on an unbundled basis; (4) to offer resale
of its telecommunications services at wholesale rates; (5) to
provide reasonable public notice of changes to its network; and
(6) to provide physical collocation, or virtual collocation if
physical collocation is not practical.
New section 251(d) requires the Commission to adopt
regulations to implement new section 251 within 6 months, and
states that nothing precludes the enforcement of State
regulations that are consistent with the requirements of new
section 251. New section 251(e) clarifies the Commission's
authority for numbering administration. The costs for numbering
administration and number portability shall be borne by all
providers on a competitively neutral basis.
New section 251(f)(1) provides for the exemption of rural
telephone companies from the requirements of new subsection (c)
until a bona fide request is received that the State commission
determines is not unduly economically burdensome, is
technically feasible, and is consistent with the universal
service provisions of new section 254, except the specific
public interest determinations thereunder. The State commission
receiving notice of a bona fide request must rule on it within
120 days and, if no exemption is granted, shall establish a
schedule for compliance with the request. The exemption is not
available where an incumbent cable operator makes a request to
an incumbent telephone company providing video programming in
the same service area, except where rural telephone companies
offer video programming directly to subscribers on the date of
enactment.
New section 251(f)(2) allows a local exchange carrier
with less than 2% of the subscribed access lines nationwide to
petition for a suspension or modification of the requirements
under new sections 251(b) and 251(c) for the telephone exchange
service facilities specified in the petition. The State
commission shall grant the petition to the extent that it is
necessary to avoid significant adverse impacts on consumers,
imposing an undue economic burden or a technically infeasible
requirement on the incumbent, and provided that the
modification or suspension is in the public interest.
The approach of both the Senate bill and the House
amendment assumed that Bell Operating Companies (``BOCs'')
would be required to continue to provide equal access and
nondiscrimination to interexchange carriers and information
service providers under those parts of the AT&T Consent Decree
that would have remained in effect under either approach.
Because the new approach completely eliminates the prospective
effect of the AT&T Consent Decree, some provision is necessary
to keep these requirements in place. By the same token,
although not specifically addressed in either the Senate bill
or the House amendment, some provision is also needed to ensure
that the GTE Operating Companies that provide local exchange
services continue to provide equal access and nondiscrimination
to interexchange carriers and information service providers.
Accordingly, the conference agreement includes a new
section 251(g). This section provides that, on and after the
date of enactment, each local exchange carrier, to the extent
that it provides wireline services, shall have a statutory duty
to provide equal access and nondiscrimination to interexchange
carriers and information service providers. In the interim,
between the date of enactment and the date the Commission
promulgates new regulations under this section, the substance
of this new statutory duty shall be the equal access and
nondiscrimination restrictions and obligations, including
receipt of compensation, that applied to the local exchange
carrier immediately prior to the date of enactment, regardless
of the source. When the Commission promulgates its new
regulations, the conferees expect that the Commission will
explicitly identify those parts of the interim restrictions and
obligations that it is superseding so that there is no
confusion as to what restrictions and obligations remain in
effect. These interim restrictions and obligations shall be
enforceable in the same manner as Commission regulations.
Even though the substance of the interim restrictions and
obligations on the BOCs and GTE Operating Companies will be
taken from the respective consent decrees, these restrictions
and obligations shall not be enforceable under either consent
decree because the provisions of section 601(a) of the bill
eliminate the prospective effect of both consent decrees. The
use of the provisions of the respective consent decrees to
provide, on an interim basis, the substance of the new
statutory duty in no way revives the consent decrees. In
particular, the use of the provisions of the GTE consent decree
relating to equal access and nondiscrimination on this interim
basis should not be construed in any way as recreating or
continuing the GTE Consent Decree's prohibition on GTE's or the
GTE Operating Companies' entry into the interexchange market.
The old consent decree obligations no longer exist with
respect to post-enactment conduct, and the new obligations flow
only from the statute. These new statutory obligations shall be
enforceable only through the means provided under law for the
enforcement of Commission regulations. Nothing in this section
should be construed as providing any authority for the
enforcement of these statutory obligations under either of the
consent decrees from which their substance will be taken.
Nothing in this section should be construed as requiring any
parties to renegotiate any agreements currently in existence
unless the new Commission regulations under this section
require such renegotiation.
New subsection 251(h) provides the definition of
``incumbent local telephone carrier.''
New subsection 251(i) makes clear the conferees' intent
that the provisions of new section 251 are in addition to, and
in no way limit or affect, the Commission's existing authority
regarding interconnection under section 201 of the
Communications Act.
new section 252--procedures for negotiation, arbitration, and approval
of agreements
Senate bill
Section 251(c) makes clear that a local exchange carrier
may meet its section 251 interconnection obligations by
negotiating and entering into a binding agreement that does not
reflect the minimum standards listed in section 251(b). Each
such negotiated interconnection agreement must include a
schedule of itemized charges for each service, facility, or
function included in the agreement, and must be submitted to a
State under section 251(e).
Section 251(d) provides procedures under which any party
negotiating an interconnection agreement may ask the State to
participate in the negotiations and to arbitrate any
differences arising in the negotiations. A State may be asked
to arbitrate at any point in the negotiations.
In addition to the possibility of arbitration by the
State, section 251(d) provides a more formal remedy under which
any party may petition the State to intervene in the
negotiations. If issues remain unresolved more than 135 days
after the date the local exchange carrier received the request
to negotiate, any party to the negotiations may petition the
State to intervene for the purpose of resolving any issues that
remain open in the negotiation. Requests to the State to
intervene must be made during the 25 day period that begins 135
days after the local exchange carrier received the negotiation
request. The State is required to resolve any open issues and
conduct its review of the agreement under section 251(e) not
later than 10 months after the date the local exchange carrier
received the request to negotiate. In resolving any open issues
the solution imposed by a State must be consistent with the
Commission's rules to implement this section, the minimum
standards required under section 251(b) and the provisions of
section 251(d)(6) with respect to any charges imposed.
Section 251(e) requires that any interconnection
agreement under section 251 must be submitted to the State for
approval. The State must approve or reject the agreement and
make written findings as to any deficiencies in the agreement.
An agreement successfully negotiated under subsection (c) by
the parties without regard to the minimum standards set forth
in section 251(b) may only be rejected if the State finds the
agreement discriminates against a telecommunications carrier
that is not a party to the agreement. The State may reject
interconnection agreements negotiated under subsection (d) if
the State finds the agreement does not meet the minimum
standards set forth in subsection 251(b), or if the State finds
that implementation of the agreement is not in the public
interest.
Section 251(f) requires a State to make a copy of each
agreement approved by the State under section 251(e) available
for public inspection and copying within 10 days after the
agreement is approved.
Section 251(g) requires a local exchange carrier to make
available any service, facility, or function provided under an
interconnection agreement to which that local exchange carrier
is a party to any other telecommunications carrier that
requests such service, facility, or function on the same terms
and conditions as are provided in that agreement.
Section 251(i) provides that if a State fails to carry
out its responsibilities under section 251 in accordance with
the rules promulgated by the Commission, the Commission shall
assume the responsibilities of the State in the applicable
proceeding or matter.
House amendment
Section 244 of the House amendment requires, within
eighteen months, an exchange carrier to file with the State
commission in that State in which it is offering service, and
with the Commission for interstate services, a statement of
terms and conditions confirming that it is in compliance with
the section 242 requirements.
Section 244(b)(1) provides for State commission review of
an exchange carrier's statement and permits a State to impose
its own intrastate service standards. Paragraph (2) requires
the Commission to conduct a similar review. Under section
244(c), both reviews must be completed within 60 days of the
submission of statements to the respective regulatory
authorities, or simply be allowed to take effect, as commonly
occurs at present with most tariffs. Section 244(c)(2)
clarifies that the authority to review the statements does not
terminate once they take effect.
Section 244(d) allows an exchange carrier to file an
agreement as a statement of services under section 244(a). It
also permits exchange carriers to enter into subsequent
agreements on different terms and conditions, but with two
caveats. First, the subsequent agreement must undergo the same
review process, and second, it may not be discriminatory with
respect to other agreements it has entered into.
Finally, subsection (e) sunsets the requirement of filing
statements of terms and conditions once the local exchange
market is deemed competitive.
Conference agreement
In new section 252(a), the House recedes to the Senate
with an amendment to provide that any party may ask the State
to participate during a voluntary negotiation period in the
mediation of agreements. Agreements arrived at voluntarily do
not need to meet the requirements of new section 251(b) and
(c).
The House recedes to the Senate on new section 252(b),
with an amendment to clarify the role of a State commission in
arbitrating and resolving agreements at the request of any of
the parties.
New section 252(c) requires a State commission to ensure
that any resolution of unresolved issues in a negotiation meets
the requirements of new section 251 and any regulations to
implement that section. To the extent that a State establishes
the rates for specific provisions of an agreement, it must do
so according to new section 252(d). In addition, a State must
provide a schedule for implementation of the terms of the
agreement.
New section 252(d) combines the pricing standards in the
Senate bill and the House amendment. Charges for
interconnection under new section 251(c)(2) and for network
elements under new section 251(c)(3) are to be determined based
on cost and may include a reasonable profit. Charges for
transport and termination of traffic pursuant to new section
251(b)(5) are to be based on reciprocal compensation. The
wholesale rate for resold telecommunications services under new
section 251(c)(4) is to be determined by the State commission
on the basis of the retail rate charged to subscribers of such
telecommunications services, excluding costs that will be
avoided by the incumbent carrier.
The House recedes to the Senate on new section 252(e).
Agreements arrived at through voluntary negotiation or
compulsory arbitration must be approved by the State commission
under new section 252(e), which provides a specific timetable
for State action, provides Commission authority to act if a
State does not, and preserves State authority to enforce State
law requirements in agreements approved under this section.
The Senate recedes to the House with an amendment to new
section 252(f), which permits a BOC to file a statement of the
terms and conditions under which it generally offers
interconnection and access to network elements. Any such
statement must be approved by the State commission.
New section 252(g) was included by the conferees to
permit a State commission, to the extent practical, to
consolidate certain proceedings required under the
Communications Act to promote administrative efficiency.
New section 252(h) requires that all agreements or
statements approved by a State commission be available from
such commission for public inspection and copying.
New section 252(i) requires a local exchange carrier to
make available on the same terms and conditions to any
telecommunications carrier that requests it any
interconnection, service, or network element that the local
exchange carrier provides to any other party under an approved
agreement or statement.
New section 252(j) states that the term ``incumbent local
exchange carrier'' has the same meaning as that term has in new
section 251(h).
new section 253--removal of barriers to entry
Senate bill
Section 20(a) adds a new section 254 to the
Communications Act and is intended to remove all barriers to
entry in the provision of telecommunications services.
Subsection (a) of new section 254 preempts any State and
local statutes and regulations, or other State and local legal
requirements, that may prohibit or have the effect of
prohibiting any entity from providing interstate or intrastate
telecommunications services.
Subsection (b) of section 254 preserves a State's
authority to impose, on a competitively neutral basis and
consistent with universal service provisions, requirements
necessary to preserve and advance universal service, protect
the public safety and welfare, ensure the continued quality of
telecommunications services, and safeguard the rights of
consumers. States may not exercise this authority in a way that
has the effect of imposing entry barriers or other prohibitions
preempted by new section 254(a).
Subsection (c) of new section 254 provides that nothing
in new section 254 affects the authority of States or local
governments to manage the public rights-of-way or to require,
on a competitively neutral and nondiscriminatory basis, fair
and reasonable compensation for the use of public rights-of-
way, on a nondiscriminatory basis, provided any compensation
required is publicly disclosed.
Subsection (d) requires the Commission, after notice and
an opportunity for public comment, to preempt the enforcement
of any State or local statutes, regulations or legal
requirements that violate or are inconsistent with the
prohibition on entry barriers contained in subsections (a) or
(b) of section 254.
Subsection (e) of new section 254 simply clarifies that
new section 254 does not affect the application of section
332(c)(3) of the Communications Act to CMS providers.
Section 309 adds a new section 263 to the Communications
Act and is intended to permit States to adopt certain statutes
or regulations regarding the provision of service by competing
telecommunications carriers in rural markets. Such statutes or
regulations may be no more restrictive than the criteria set
forth in section 309. The Commission is authorized to preempt
any State statute or regulation that is inconsistent with the
Commission's regulations implementing this section.
House amendment
The House provisions are identical or similar to
subsections 254(a), (b) and (c). The House amendment does not
have a similar provision (d) requiring the Commission to
preempt State or local barriers to entry, if it makes a
determination that they have been erected.
Conference agreement
The conference agreement adopts the Senate provisions.
New section 253(b) clarifies that nothing in this section
shall affect the ability of a State to safeguard the rights of
consumers. In addition to consumers of telecommunications
services, the conferees intend that this includes the consumers
of electric, gas, water or steam utilities, to the extent such
utilities choose to provide telecommunications services.
Existing State laws or regulations that reasonably condition
telecommunications activities of a monopoly utility and are
designed to protect captive utility ratepayers from the
potential harms caused by such activities are not preempted
under this section. However, explicit prohibitions on entry by
a utility into telecommunications are preempted under this
section.
The rural markets provision in section 309 of the Senate
bill is simplified and moved to this section. The modification
clarifies that, without violating the prohibition on barriers
to entry, a State may require a competitor seeking to provide
service in a rural market to meet the requirements for
designation as an eligible telecommunications carrier. That is,
the State may require the competitor to offer service and
advertise throughout the service area served by a rural
telephone company. The provision would not apply if the rural
telephone company has obtained an exemption, suspension, or
modification under new section 251(f) that effectively prevents
a competitor from meeting the eligible telecommunications
carrier requirements. In addition, the provision would not
apply to providers of CMS.
new section 254--Universal Service
Senate bill
Section 103 of the bill establishes a Federal-State Joint
Board to review existing universal service support mechanisms
and make recommendations regarding steps necessary to preserve
and advance this fundamental communications policy goal.
Section 103 also adds a new section 253, entitled ``Universal
Service,'' to the Communications Act. As new section 253
explicitly provides, the Senate intends that States shall
continue to have the primary role in implementing universal
service for intrastate services, so long as the level of
universal service provided by each State meets the minimum
definition of universal service established under new section
253(b) and a State does not take any action inconsistent with
the obligation for all telecommunications carriers to
contribute to the preservation and advancement of universal
service under new section 253(c).
Section 103(a) of the bill requires the Commission to
institute a Federal-State Joint Board under section 410(c) of
the Communications Act to recommend within 9 months of the date
of enactment new rules regarding implementation of universal
service.
Section 103(a) also provides that at least once every
four years the Commission is required to institute a new Joint
Board proceeding to review the implementation of new section
253 regarding universal service, and to make recommendations
regarding any changes that are needed.
Section 103(b) of the bill requires the Commission to
complete any proceeding to implement the recommendations of the
initial Joint Board within one year of the date of enactment of
the bill, any other Joint Board on universal service matters
within one year of receiving such recommendations.
Section 103(c) of the bill simply clarifies that the
amendments to the Communications Act made by the Senate bill do
not necessarily affect the Commission's existing separations
rules for local exchange or interexchange carriers. However,
this subsection does not prohibit or restrict the Commission's
ability to change those separations rules through an
appropriate proceeding.
Section 103(d) establishes new section 253 in the
Communications Act. New section 253(a) establishes seven
principles on which the Joint Board and the Commission shall
base policies for the preservation and advancement of universal
service.
Subsection (b) of new section 253 provides that the
Commission shall define universal service, based on
recommendations from the public, Congress, and the Joint Board.
To ensure that the definition of universal service evolves over
time to keep pace with modern life, the subsection requires the
Commission to include, at a minimum, any telecommunications
service that is subscribed to by a substantial majority of
residential customers.
Subsection (c) of new section 253 requires all
telecommunications carriers to contribute on an equitable and
nondiscriminatory basis to the preservation and advancement of
universal service. The Commission or a State may require any
other telecommunications provider, such as private
telecommunications providers, to contribute to the preservation
and advancement of universal service, if the public interest so
requires.
Subsection (d) of new section 253 provides that a State
may adopt additional definitions, mechanisms, and standards to
preserve and advance universal service within such State,
provided that they are not inconsistent with the regulations of
the Commission. A State must adopt separate support mechanisms
for any additional standards or definitions required by the
State.
Subsection (e) of new section 253 provides that only
telecommunications carriers that are designated as essential
telecommunications carriers under new section 214(d) shall be
eligible to receive support payments, if any, established by
the Commission or a State to preserve and advance universal
service. Any such support payments must accurately reflect the
amount reasonably necessary to preserve and advance universal
service.
Subsection (e) is not intended to prohibit support
mechanisms that directly help individuals afford universal
service.
Subsection (f) of new section 253 directs the Commission
and the States to make universal service support explicit and
to ensure that essential telecommunications carriers are able
to provide universal service at just, reasonable and affordable
rates. Carriers receiving such support must use it to provide
service in the area for which the support was received.
Subsection (g) of new section 253 simply incorporates in
the Communications Act the existing practice of geographic rate
averaging and rate integration for interexchange, or long
distance, telecommunications rates to ensure that rural
customers continue to receive such service at rates that are
comparable to those charged to urban customers. States shall
continue to be responsible for enforcing this subsection with
respect to intrastate interexchange services, so long as the
State rules are not inconsistent with Commission rules and
policies on rate averaging.
Subsection (h) of new section 253 prohibits
telecommunications carriers from subsidizing competitive
services with revenues from non-competitive services. The
Commission and the States are required to establish any
necessary cost allocation rules, accounting safeguards, and
other guidelines to ensure that universal service bears no more
than a reasonable share (and may bear less than a reasonable
share) of the joint and common costs of facilities used to
provide both competitive and noncompetitive services.
Subsection (i) of new section 253 requires the Commission
to submit a report to Congress prior to increasing support for
universal service or requiring increased participation by
telecommunications carriers. Any such increase cannot take
effect until 120 days after the report is submitted to
Congress.
Subsection (j) of new section 253 states that nothing in
new section 253 limits or expands the Commission's authority
with respect to universal service.
Subsection (k) of new section 253 states that the
subsections that provide that all telecommunications carriers
shall contribute to universal service, preserve the States'
authority to adopt their own definitions and mechanisms,
establish eligibility for universal service support, and
control the level of universal service support shall take
effect one year after the date of enactment of this bill.
Section 310 of the Senate bill, known as the Snowe-
Rockefeller-Exon-Kerrey Amendment, provides for preferential
rates to schools, libraries and rural health care facilities.
House amendment
Section 247(a) establishes a Federal-State Joint Board,
pursuant to section 410(c) of the Communications Act, for the
purpose of recommending actions the Commission and the States
should take to preserve universal service.
Section 247(b) sets forth six principles upon which the
Board shall base its policies for the preservation of universal
service.
Section 247(b)(1) states that any plan adopted should
maintain just and reasonable rates. Section 247(b)(2) states
that the Joint Board should recommend a definition of the
nature and extent of services included within the carriers'
obligations to provide universal service. Section 247(b) (3)
and (4) state that the plan should provide adequate and
sustainable support mechanisms and require equitable and non-
discriminatory contributions from all providers to support the
plan. The plan should also seek to promote access to advanced
telecommunications services and reasonably comparable services
between rural and urban areas. Section 247(b)(5) directs that
the plan include recommendations to ensure access to advanced
telecommunications services for students in elementary and
secondary schools.
Section 247(c) requires the Joint Board, in defining
carrier obligations with respect to universal service pursuant
to subsection (b)(2), to consider several factors: (1) the
extent to which a telecommunications service has been
subscribed to by customers; (2) whether such service is
essential to public health, safety, or the public interest; (3)
whether such service is deployed in the public switched
network; and (4) whether inclusion of such service is otherwise
consistent with the public interest, convenience, and
necessity.
Section 247(d) requires that the Joint Board be convened
and report its recommendations within 270 days after enactment.
The Commission is required to act on the recommendations within
one year.
Section 247(e) makes clear that States are free to adopt
regulations imposing universal service obligations on
intrastate services.
Section 247(f) sunsets the Joint Board created by this
section five years after enactment.
Conference agreement
The conference agreement amends the Communications Act to
add a new section 254 entitled ``Universal Service.'' The House
recedes to the Senate with modifications. New section 254(a)
incorporates the provisions of section 103(a) of the Senate
bill, with the addition of a State-appointed utility consumer
advocate to the Joint Board. The conferees intend that, in
making its recommendations to the Commission, the Joint Board
will thoroughly review the existing system of Federal universal
service support.
To the extent possible, the conferees intend that any
support mechanisms continued or created under new section 254
should be explicit, rather than implicit as many support
mechanisms are today. In addition, the conferees do not view
the existing proceeding under Common Carrier Docket 80-286
(regarding Amendment of Part 36 of the Commission's Rules and
appointment of a Joint Board) as an appropriate foundation on
which to base the proceeding required by new section 254(a).
New section 254(b) combines the principles found in both
the Senate bill and the House amendment, with the addition of
``insular areas'' (such as the Pacific Island territories) and
``low-income consumers'' to the list of consumers to whom
access to telecommunications and information services should be
provided.
New section 254(c) defines universal service as ``an
evolving level of telecommunications services'' established
periodically by the Commission. The definition is to take into
account advances in telecommunications and information
technology, and should be based on a consideration of the four
criteria set forth in the subsection. The Commission is given
specific authority to alter the definition from time to time,
and to provide a different definition for schools, libraries,
and health care facilities.
New section 254(d) requires that all telecommunications
carriers providing interstate telecommunications services shall
contribute to the preservation and advancement of universal
service. The Commission is given specific authority to exempt a
telecommunications carrier or class of telecommunications
carriers from this requirement if their contribution would be
``de minimis.'' The conferees intend that this authority would
only be used in cases where the administrative cost of
collecting contributions from a carrier or carriers would
exceed the contribution that carrier would otherwise have to
make under the formula for contributions selected by the
Commission. This section preserves the Commission's authority
to require all providers of intestate telecommunications to
contribute, if the public interest requires it, to preserve and
advance universal service.
New section 254(e) provides that only eligible
telecommunications carriers designated under new section 214(e)
shall be eligible to receive specific Federal universal service
support. Any eligible telecommunications carrier that receives
such support shall only use that support to provide, maintain,
and upgrade facilities and services for universal service in
the area for which the support is received. In keeping with the
conferees' intent that all universal service support should be
clearly identified, this subsection states that such support
should be made explicit and should be sufficient to achieve the
purposes of new section 254. The conferees intend that only
eligible telecommunications carriers should receive support
from specific Federal universal service support mechanisms;
however, this restriction should not be construed to prohibit
any telecommunications carrier from using any particular method
to establish rates or charges for its services to other
telecommunications carriers, to the extent such rates or
charges are otherwise permissible under the Communications Act
or other law.
State authority with respect to universal service is
specifically preserved under new section 254(f). A State may
adopt any measure with respect to universal service that is not
inconsistent with the Commission's rules. This subsection also
requires all providers of intrastate telecommunications to
contribute to universal service within a State in an equitable
and non-discriminatory manner, as determined by the State. A
State may adopt additional requirements with respect to
universal service in that State, so long as those additional
requirements do not rely upon or burden Federal universal
service support mechanisms.
New section 254(g) is intended to incorporate the
policies of geographic rate averaging and rate integration of
interexchange services in order to ensure that subscribers in
rural and high cost areas throughout the Nation are able to
continue to receive both intrastate and interstate
interexchange services at rates no higher than those paid by
urban subscribers. The conferees intend the Commission's rules
to require geographic rate averaging and rate integration, and
to incorporate the policies contained in the Commission's
proceeding entitled ``Integration of Rates and Services for the
Provision of Communications by Authorized Common Carriers
between the United States Mainland and the Offshore Points of
Hawaii, Alaska and Puerto Rico/Virgin Islands (61 FCC2d 380
(1976)). The conferees are aware that the Commission has
permitted interexchange providers to offer non-averaged rates
for specific services in limited circumstances (such as
services offered under Tariff 12 contracts), and intend that
the Commission, where appropriate, could continue to authorize
limited exceptions to the general geographic rate averaging
policy using the authority provided by new section 10 of the
Communications Act. Further, the conferees expect that the
Commission will continue to require that geographically
averaged and rate integrated services, and any services for
which an exception is granted, be generally available in the
area served by a particular provider. In addition, the
conferees do not intend that this subsection would require the
renegotiation of existing contracts for the provision of
telecommunications services.
New subsection 254(h) incorporates, with modifications,
the provisions of section 310 of the Senate bill. New
subsection (h) of section 254 is intended to ensure that health
care providers for rural areas, elementary and secondary school
classrooms, and libraries have affordable access to modern
telecommunications services that will enable them to provide
medical and educational services to all parts of the Nation.
The ability of K-12 classrooms, libraries and rural
health care providers to obtain access to advanced
telecommunications services is critical to ensuring that these
services are available on a universal basis. The provisions of
subsection (h) will help open new worlds of knowledge, learning
and education to all Americans--rich and poor, rural and urban.
They are intended, for example, to provide the ability to
browse library collections, review the collections of museums,
or find new information on the treatment of an illness, to
Americans everywhere via schools and libraries. This universal
access will assure that no one is barred from benefiting from
the power of the Information Age.
New subsection (h)(1)(A) provides that any
telecommunications carrier shall, upon a bona fide request,
provide telecommunications services necessary for the provision
of health care services to any health care provider serving
persons who reside in rural areas. The rates charged for the
service shall be rates that are reasonably comparable to rates
charged for similar services in urban areas. It is intended
that the rural health care provider receive an affordable rate
for the services necessary for the purposes of telemedicine and
instruction relating to such services.
New subsection (h)(1)(B) requires that any
telecommunications carrier shall, upon a bona fide request,
provide services for educational purposes included in the
definition of universal service under new subsection (c)(3) for
elementary and secondary schools and libraries at rates that
are less than the amounts charged for similar services to other
parties, and are necessary to ensure affordable access to and
use of such telecommunications services.
A telecommunications carrier providing service under new
subsection (h)(1)(B) is permitted either to have the amount of
the discount treated as an offset to its obligation to
contribute to the mechanisms to preserve and advance universal
service; or, to receive reimbursement utilizing the support
mechanisms to preserve and advance universal service.
Pursuant to new subsection (c)(3), the Commission is
authorized to designate a separate definition of universal
service applicable only to public institutional
telecommunications users. In so doing, the conferees expect the
Commission and the Joint Board to take into account the
particular needs of hospitals, K-12 schools and libraries.
New subsection (h)(2) requires the Commission to
establish rules to enhance the availability of advanced
telecommunications and information services to public
institutional telecommunications users. For example, the
Commission could determine that telecommunications and
information services that constitute universal service for
classrooms and libraries shall include dedicated data links and
the ability to obtain access to educational materials, research
information, statistics, information on Government services,
reports developed by Federal, State, and local governments, and
information services which can be carried over the Internet.
The Commission also is required to determine under what
circumstances a telecommunications carrier may be required to
connect public institutional telecommunications users to its
network.
New subsection (h)(3) clarifies that telecommunications
services and network capacity provided to health care
providers, schools and libraries may not be resold or
transferred for monetary gain.
New subsection (h)(4) specifies that the following
entities are not eligible to receive discounted rates under
this section: for-profit businesses, elementary and secondary
schools with endowments of more than $50,000,000, and libraries
that are not eligible to participate in Statebased applications
for Library Services and Technology Funds.
New subsection (h)(5) defines the terms ``elementary and
secondary schools,'' ``health care provider.'' and ``public
institutional telecommunications user'' as used throughout this
subsection. The conferees intend that consortiums of
educational institutions providing distance learning to
elementary and secondary schools be considered an educational
provider for purposes of this section.
New subsection (i) states that the Commission and the
States should ensure that universal service is available at
rates that are just, reasonable and affordable.
New subsection 254(j) has been added to clarify that this
section is not intended to alter the existing provision of
Lifeline Service to needy consumers.
The House recedes to the Senate with minor technical
modifications on new subsection 254(k), which prohibits cross-
subsidization and permits the Commission and the States to
establish cost allocation rules for facilities used in the
provision of services supported through Federal universal
support mechanisms.
New Section 255--Access By Persons With Disabilities
Senate bill
Section 308(a) of the Senate bill adds a new section 262
to the Communications Act to require that manufacturers of
telecommunications equipment and customer premises equipment
ensure that equipment is designed, developed, and fabricated to
be accessible and usable by individuals with disabilities, if
readily achievable.
Similarly, providers of telecommunications services must
ensure that telecommunications services are accessible to and
usable by individuals with disabilities, if readily achievable.
In addition, the Commission is required to undertake a study of
closed captioning and to promulgate rules to implement section
262. Section 308(b) adds a Commission study of video
description.
Section 262(a) defines the terms used in this section.
New section 262(b) requires manufacturers of
telecommunications and customer premises equipment to ensure
that such equipment is designed, developed, and fabricated to
be accessible to and usable by individuals with disabilities,
if readily achievable.
New section 262(c) requires providers of
telecommunications service to ensure that such service be
accessible to and usable by individuals with disabilities, if
readily achievable.
New section 262(d) requires that whenever the provisions
of subsections (b) and (c) are not readily achievable, the
manufacturer of telecommunications and customer premises
equipment, or the provider of telecommunications service, shall
ensure that such equipment or service is compatible with
existing peripheral devices or specialized customer premises
equipment commonly used by individuals with disabilities to
achieve access, if readily achievable.
New section 262(e) requires the Architectural and
Transportation Barriers Compliance Board (``Board'') to develop
guidelines for accessibility of telecommunications and customer
premises equipment and telecommunication service, as lead
agency in consultation with the National Telecommunications and
Information Administration (NTIA) and the National Institute of
Standards and Technology (NIST), within 1 year of enactment of
this Act. The Board shall periodically review and update such
guidelines. The Senate has elsewhere assigned responsibility
for promulgating regulations for this new section to the
Commission.
House amendment
Section 249(c) of section 101 directs the Commission
within one year to establish regulations designed to make
network capabilities and services accessible to individuals
with disabilities. Section 249(d) prohibits private rights of
action, and mandates that all remedies are available only
through the Communications Act.
Conference agreement
The conferees adopt the Senate provisions with several
modifications as a new section 255 of the Communications Act.
Specifically, the conferees adopted the provisions of
subsections (a), (b), (c), (d) and (e) of new section 262 of
the Communications Act, as added by the Senate bill. The
conferees deleted the provision in subsection (e) of the Senate
bill creating roles for NTIA and NIST. In addition, the
conferees adopted the provisions of section 249(d) of the House
amendment, which states that nothing in this section authorizes
any private rights of action. The remedies available under the
Communications Act, including the provisions of sections 207
and 208, are available to enforce compliance with the
provisions of section 255.
New Section 256--Coordination for Interconnectivity
Senate bill
Section 107 of the Senate bill concerns the coordination
for telecommunications network-level interoperability. The
provision permits the Commission to participate, in a manner
consistent with its authority and practice prior to the date of
enactment of this Act in the development of voluntary industry
standards-setting organizations to promote interoperability.
The purpose of the provision is to promote nondiscriminatory
access to telecommunications networks by the broadest number of
users and vendors of communications products and services.
House amendment
Section 249(a) reaffirms the duty of all common carriers
to ensure network functionality. Section 249(b) directs the
Commission to establish procedures for Commission oversight of
coordinated network planning by common carriers and other
providers of telecommunications services. However, the
Commission is not given authority to set standards for
interconnection. Instead, voluntary industry standard-setting
organizations shall establish any standards. The standard-
setting process described in this provision applies to
interconnection of the public's switched telecommunications
networks. It is not intended to apply to telephone equipment or
other customer premises equipment (CPE). Nothing in section
249(b) should be construed as limiting or superseding these
interconnectivity requirements or the existing authority and
responsibilities of the Commission in enforcing them.
Conference agreement
The conference agreement adopts the Senate provision with
minor modifications as a new section 256 of the Communications
Act.
New Section 257--Market Entry Barriers Proceeding
Senate bill
No provision.
House amendment
Section 250 requires the Commission to adopt rules that
identify and eliminate market entry barriers for entrepreneurs
and small businesses in the provision and ownership of
telecommunications and information services. The Commission
must review these rules and report to Congress every three
years on how it might prescribe or eliminate rules to promote
the purposes of this section.
Conference agreement
The conference agreement adopts the House provisions with
minor modifications as a new section 257 of the Communications
Act.
New Section 258--Illegal Changes in Subscriber Carrier Selections
Senate bill
No provision.
House amendment
Section 251 requires the Commission to adopt rules to
prevent illegal changes in subscriber selections, a practice
known as ``slamming.'' The Commission has adopted rules to
address problems in the long distance industry of unauthorized
changes of a consumer's long distance carrier. The House
provision is designed to extend the protections of the current
rule to local exchange carriers as well.
Conference agreement
The conferees adopt the House provision as a new section
258 of the Communications Act. It is the understanding of the
conferees that in addition to requiring that the carrier
violating the Commission's procedures must reimburse the
original carrier for forgone revenues, the Commission's rules
should also provide that consumers are made whole.
Specifically, the Commission's rules should require that
carriers guilty of ``slamming'' should be held liable for
premiums, including travel bonuses, that would otherwise have
been earned by telephone subscribers but were not earned due to
the violation of the Commission's rules under this section.
New Section 259--Infrastructure Sharing
Senate bill
Section 106(a) of the Senate bill requires that within
one year of the date of enactment, the Commission shall
prescribe rules requiring local exchange carriers that were
subject to Part 69 of the Commission's rules on the date of
enactment to share network facilities, technology, and
information with qualifying carriers. The qualifying carrier
may request such sharing for the purpose of providing
telecommunications services or access to information services
in areas where the carrier is designated as an essential
telecommunications carrier under new section 214(d). The bill
does not grant immunity from the antitrust laws for activities
undertaken pursuant to this section.
Section 106(b) establishes the terms and conditions of
the Commission's regulations. Such regulations shall:
(1) not require a local exchange carrier to take
any action that is economically unreasonable or
contrary to public interest;
(2) permit, but not require, joint ownership of
facilities among local exchange carriers and qualifying
carriers;
(3) ensure that the local exchange carrier not be
treated as a common carrier for hire with respect to
technology, information or facilities shared with the
qualifying carrier under this section;
(4) ensure that qualifying carriers benefit fully
from sharing;
(5) establish conditions to promote cooperation;
(6) not require a local exchange carrier to share
in areas where the local exchange carrier provides
telephone exchange service or exchange access service;
and
(7) require the local exchange carrier to file with
the Commission or State, any tariffs, contract or other
arrangement showing the rate, terms, and conditions
under which such local exchange carrier is complying
with the sharing requirements of this section.
Subsection (c) requires that local exchange carriers
sharing infrastructure must provide information to sharing
parties about deployment of services and equipment, including
software.
Subsection (d) defines those carriers eligible to request
infrastructure sharing under this section.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provisions as
a new section 259 of the Communications Act.
New Section 260--Provision of Telemessaging Service
Senate bill
Section 311 of the Senate bill adds a new section 265 to
the Communications Act, to address certain practices of the
BOCs with regard to telemessaging. This section is designed to
prohibit cross-subsidization between a BOC's telephone exchange
or exchange access services and its telemessaging services.
This section prohibits a BOC from discriminating between
affiliated and nonaffiliated telemessaging services, under
rules set forth by the Commission. If, however, the Commission
finds that these safeguards are insufficient, the Commission
may require the BOC's to provide telemessaging services through
a separate subsidiary.
New section 265 directs the Commission to complete,
within 18 months after the date of enactment of the bill, a
rulemaking proceeding to prescribe regulations to carry out
this new section. The Commission also is directed to determine
whether, in order to enforce the requirements of section 265,
it is appropriate to require the BOCs to provide telemessaging
services through a separate subsidiary that meets the
requirements of new section 252, as added to the Communications
Act by section 102 of the bill.
House amendment
Section 273(b) prohibits discrimination by a telephone
company in the provision of telemessaging services, either by
refusing to provide its competitors with the same network
services it provides itself, or by cross-subsidizing from its
local telephone service.
Section 273(c) establishes procedures for expedited
consideration of complaints of violations of subsection (b),
requiring the Commission to make a final determination within
120 days after the receipt of a complaint. If a violation is
found, the Commission is required to issue a cease and desist
order within 60 days.
Section 601 establishes a new complaint procedure for
violations of the Communications Act and Commission rules and
regulations for providers of telemessaging service, or other
small businesses providing information or telecommunications
services. This section defines a small business as any business
entity, including any affiliate or subsidiary, with fewer than
300 employees.
Conference agreement
The conference agreement creates a new section 260 in the
Communications Act relating specifically to the provision of
telemessaging services. This section prohibits local exchange
carriers subject to new section 251(c) that are engaged in
telemessaging from subsidizing their telemessaging services,
either directly or indirectly, from telephone exchange service
operations or revenues. It also prohibits such carriers from
discriminating against nonaffiliated entities with respect to
the terms and conditions of any network services they provide
to their own telemessaging operations. This section requires
the Commission to establish procedures or regulations
thereunder for the expedited receipt and review of complaints
alleging discrimination or cross-subsidization that result in
material financial harm to providers of telemessaging services.
Such procedures shall ensure that the Commission makes a
determination regarding any such complaint within 120 days. If
the complaint contains an appropriate showing that the alleged
violation occurred, the Commission shall, within 60 days of
receipt, order such local exchange carrier to cease engaging in
such violation.
New Section 261--Effect on Other Requirements
Senate bill
The Senate bill contains several savings clauses.
House amendment
The House amendment contains several savings clauses.
Conference agreement
The conferees included new section 261 of the
Communications Act to consolidate savings clauses found in both
the Senate bill and the House amendment. New section 261(a)
makes clear that the Commission may continue to enforce its
existing regulations in fulfilling new part II of title II of
the Communications Act, provided they are not inconsistent with
that part. New sections 261(b) and (c) preserve State authority
to enforce existing regulations and to prescribe additional
requirements, so long as those regulations and requirements are
not inconsistent with the Communications Act.
Section 102--Eligible Telecommunications Carriers
Senate bill
Section 104 of the Senate bill amends section 214(d) of
the Communications Act by designating the existing text of
section 214(d) as paragraph (1) and by adding seven new
paragraphs regarding designation of essential
telecommunications carriers. The bill provides that the
Commission shall designate essential telecommunications
carriers for interstate services and the States shall designate
such carriers for intrastate services.
New paragraph (2) of section 214(d) makes explicit the
implicit authority of the Commission or a State to require a
common carrier to provide service to any community or portion
of a community that requests such service. In the event that
more than one common carrier provides service in an area, and
none of the carriers will provide service to a community or
portion thereof in that area which requests service, this
paragraph gives the Commission or a State the authority to
decide which common carrier is best suited to provide such
service. If the Commission or a State orders a carrier to
provide service to a community or portion thereof under this
paragraph, it shall designate such carrier an essential
telecommunications carrier.
Paragraph (3) of section 214(d) provides that the
Commission or a State may designate a common carrier as an
essential telecommunications carrier for a particular service
area, thus making that carrier eligible for support payments to
preserve and advance universal service, if any such payments
are established under new section 253 of the Communications
Act. Any carrier designated as an essential telecommunications
carrier must provide universal service and any additional
services specified by the Commission or a State throughout the
service area for which the designation is made. In addition,
these services must be offered throughout that service area at
nondiscriminatory rates established by the Commission or a
State, and the carrier must advertise those rates using media
of general distribution.
New paragraph (4) of section 214(d) allows the Commission
to designate more than one common carrier as a communications
carrier for a particular service area. In addition, the bill
requires a State to make additional findings before designating
more than one carrier as an essential telecommunications
carrier.
To the extent that more than one common carrier is
designated as an essential telecommunications carrier, each
additional carrier so designated must meet the same
requirements with respect to service throughout the same
service area at nondiscriminatory rates established by the
Commission or a State, as well as the advertisement of those
rates.
New paragraph (5) of section 214(d) requires the
Commission and States to establish rules governing the use of
resale by a carrier to meet the requirements for designation as
an essential telecommunications carrier, as well as rules to
permit a carrier that has been designated as an essential
telecommunications carrier to relinquish that designation so
long as at least one other carrier also has been designated as
an essential telecommunications carrier for that area.
Paragraph (5) also requires the Commission and the States to
provide appropriate rules to govern how quickly an essential
telecommunications carrier whose services are to be resold may
cease service to an area, in order to provide other essential
telecommunications carriers adequate notice to extend
facilities or to arrange for the purchase of replacement
facilities or services.
New paragraph (6) of section 214(d) sets forth the
penalties applicable to an essential telecommunications carrier
with respect to a Commission or State order to provide
universal service within a reasonable period of time. In
determining what constitutes a reasonable period of time, the
bill provides that the Commission or a State must consider the
nature of the construction required to provide such service,
the time interval that normally would attend such construction
and the time needed to obtain regulatory or financial approval.
New paragraph (7) of section 214(d) of the Communications
Act requires the Commission or a State to designate an
essential telecommunications carrier for interexchange services
for any unserved community or portion thereof that requests
such service. An essential telecommunications carrier
designated under this paragraph must provide service at
nationwide geographically averaged rates, in the case of
interstate services, and geographically averaged rates in the
case of intrastate services. The Commission or a State may
allow a carrier designated under this paragraph to receive
support payments, if any, that may be provided under section
253.
New paragraph (8) of section 214(d) grants the Commission
authority to promulgate guidelines for the States to implement
this section.
House amendment
No provision.
Conference agreement
The House recedes to the Senate with an amendment. The
conference agreement amends section 214 of the Communications
Act by adding a new subsection (e) regarding the provision of
universal service and the designation of carriers which are
eligible to receive support through the specific Federal
universal support mechanisms established under new section 254
of the Communications Act.
New section 214(e)(1) states that a common carrier
designated as an ``eligible telecommunications carrier'' shall
offer the services included in the definition of universal
service throughout the area specified by the State commission,
and that such services must be advertised generally throughout
that area. Upon designation, a carrier is eligible for any
specific support provided under new section 254 for the
provision of universal service in the area for which that
carrier is designated.
Upon its own motion or upon request, a State commission
is required under new section 214(e)(2) to designate a common
carrier that meets the requirements of new section 214(e)(1) as
an eligible telecommunications carrier. If more than one common
carrier that meets the requirements of new section 214(e)(1)
requests designation as an eligible telecommunications carrier
in a particular area, the State commission shall, in the case
of areas not served by a rural telephone company, designate all
such carriers as eligible. If the area for which a second
carrier requests designation as an eligible telecommunications
carrier is served by a rural telephone company, then the State
commission may only designate an additional carrier as an
eligible telecommunications carrier if the State commission
first determines that such additional designation is in the
public interest.
If no common carrier will provide universal service to a
community or portion of a community that requests such service,
new section 214(e)(3) makes explicit the implicit authority of
the Commission, with respect to interstate services, and a
State, with respect to intrastate services, to order a common
carrier to provide such service. If more than one common
carrier provides service in an area and none of those carriers
will provide service to a community or portion thereof, this
provision gives the Commission or a State the authority to
decide which common carrier is best suited to provide service.
Any carrier required to provide service under this paragraph
shall be designated as an eligible telecommunications carrier
under new section 214(e)(1) for the community or portion
thereof such carrier is required to serve. For purposes of new
section 214(e)(1), the conferees intend that the service area
for a carrier designated by the Commission or a State under
section 214(e)(3) shall be the community or portion thereof
that requests service and for which that carrier is ordered to
provide service.
New section 214(e)(4) establishes rules for the
relinquishment by a carrier of its designation as an eligible
telecommunications carrier. A State commission must permit an
eligible telecommunications carrier to relinquish that
designation if more than one eligible telecommunications
carrier serves an area, and must require that the remaining
eligible telecommunications carrier or carriers continue to
offer universal service to all consumers in that area. The
conferees note that a carrier must be permitted to relinquish
the designation within one year after the State commission
approves the request, and expect that the Commission and the
States will adopt appropriate mechanisms to ensure that any
additional carrier designated as an eligible telecommunications
carrier will be able to acquire or construct any necessary
facilities for that area within the time limit set in new
section 214(e)(4).
New Section 214(e)(5) provides the definition of
``service area,'' which in general is determined by a State
commission.
Section 103--Exempt Telecommunications Companies
Senate bill
Sections 102 and 205 contained provisions pertaining to
the entry by utility companies into telecommunications and
related businesses, and exempting the telecommunications
activities of registered holding companies from the Public
Utility Holding Company Act (PUHCA).
House amendment
No provision.
Conference agreement
The conference agreement amends PUHCA to allow registered
holding companies to diversify into telecommunications,
information and related services and products. The Commission
must determine that a registered holding company is providing
telecommunications services, information services and other
related services through a single purpose subsidiary,
designated an ``exempt telecommunications company'' (ETC).
Prior State approval is required before any utility that is
associated with a registered holding company may sell to an ETC
any asset in the retail rates of that utility as of December
19, 1995. State approval is also required for a contract when a
public utility company seeks to purchase telecommunications
products or services from an ETC that is an associate company
or affiliate of such public utility unless the State or State
commission waives such requirement.
The financing and other relationships between ETCs and
registered holding companies shall not be subject to prior
approval or other restriction by the Securities and Exchange
Commission (SEC). However, the SEC shall continue to have
jurisdiction to find violations of the federal securities laws
(including PUHCA) and to bring enforcement actions related to
such violations. The section provides reporting requirements
concerning investments and activities of registered public
utility holding company systems. Public utility companies are
prohibited from assuming the liabilities of an ETC and from
pledging or mortgaging the assets of a utility for the benefit
of an ETC. State commissions may examine the books and records
of the ETC and any public utility company, associate company or
affiliate in the registered holding company system as they
relate to the activities of the ETC. States may also order an
audit of a public utility company that is an associate of an
ETC. Nothing in this section affects the ability of the FCC or
a State commission to regulate the activities of an ETC.
Nothing in PUHCA shall preclude the rate review authority of
the Federal Energy Regulatory Commission or a State commission
with respect to purchases from or sale to an ETC.
The relevant portion of section 102 of the Senate bill is
deleted from the conference agreement.
Section 104--Nondiscrimination Principle
Senate bill
Subsection 103(f) adds new section 253A to the
Communications Act concerning exclusion of telecommunications
services. New subsection (a) directs the Commission to prohibit
any telecommunications carrier from excluding from its services
any high-cost area, any rural location or any resident based on
the person's income, provided that a carrier may exclude an
area if the carrier demonstrates that there will be
insufficient demand for the carrier to earn a return over the
long term and that providing a service to such area will be
less profitable for the carrier than providing the service in
areas to which the carrier is already providing or has proposed
to provide service. New subsection (b) would direct the
Commission to provide for public comment on the adequacy of the
carrier's proposed service area.
House amendment
Section 201 of the House amendment adds new section
653(b)(1) to the Communications Act concerning safeguards on
video platforms. Subparagraph (G) of that section prohibits a
common carrier from excluding areas from its video platform
service area on the basis of the ethnicity, race, or income of
the residents of that area, and provides for public comments on
the adequacy of the proposed service area on the basis of the
standards.
Conference agreement
The conference agreement in section 104 amends section 1
of the Communications Act by adding a new provision to make
clear that a purpose of the Communications Act is to make
available service to all the people of the United States
``without discrimination on the basis of race, color, religion,
national origin, or sex.'' This amendment to section 1 applies
to all entities covered by the Communications Act.
Subtitle B--Special Provisions Concerning Bell Operating Companies
Section 151--Bell Operating Company Provisions
Senate bill
The Senate bill creates new sections of the
Communications Act with respect to special provisions
applicable to BOCs.
House amendment
The House amendment creates new sections of the
Communications Act with respect to special provisions
applicable to BOCs.
Conference agreement
Section 151 of the conference agreement establishes a new
``Part III'' of title II of the Communications Act. Part III
contains new sections 271-276 of the Communications Act with
respect to special provisions applicable to BOCs.
New Section 271--Bell Operating Company Entry Into InterLATA Services
Senate bill
Section 221(a) of the Senate bill adds a new section 255
to the Communications Act. Subsection (a) of new section 255
establishes the general requirements for the three different
categories of service: in region interLATA; out of region
interLATA; and incidental services.
New section 255(b) establishes specific interLATA
interconnection requirements that must be fully implemented in
order for the Commission to provide authorization for a BOC to
provide in region interLATA services. The Commission is
specifically prohibited from limiting or extending the terms of
the ``competitive checklist'' contained in subsection (b)(2).
The competitive checklist is not intended to be a limitation on
the interconnection requirements contained in section 251, but
rather, at a minimum, be provided by a BOC in any
interconnection agreement approved under section 251 to which
that company is a party (assuming the other party or parties to
that agreement have requested the items included in the
checklist) before the Commission may authorize the BOC to
provide in region interLATA services.
Finally, section 255(b) includes a restriction on the
ability of telecommunications carriers that serve greater than
five percent of the nation's presubscribed access lines to
jointly market local exchange service purchased from a BOC and
interLATA service offered by the telecommunications carrier
until such time as the BOC is authorized to provide interLATA
services in that telephone exchange area or until three years
after the date of enactment, whichever is earlier. New
subsection 255(c) provides the process for application by a BOC
to provide in region interLATA services, as well as the process
for approval or rejection of that application by the Commission
and for review by the courts. The application by the BOC must
state with particularity the nature and scope of the activity
and each product market or service market, as well as the
geographic market for which in region interLATA authorization
is sought. Within 90 days of receiving an application, the
Commission must issue a written determination, after notice and
opportunity for a hearing on the record, granting or denying
the application in whole or in part. The Commission is required
to consult with the Attorney General regarding the application
during that 90 day period. The Attorney General may analyze a
BOC application under any legal standard (including the Clayton
Act, Sherman Act, other antitrust laws, section VIII(C) of the
MFJ, Robinson-Patman Act or any other standard).
The Commission may only grant an application, or any part
of an application, if the Commission finds that the petitioning
BOC has fully implemented the competitive checklist in new
section 255(b)(2), that the interLATA services will be provided
through a separate subsidiary that meets the requirements of
new section 252, and that the provision of the requested
interLATA services is consistent with the public interest,
convenience, and necessity. As noted earlier, the Commission is
specifically prohibited from limiting or extending the terms
used in the competitive checklist, and the Senate intends that
the determination of whether the checklist has been fully
implemented should be a straightforward analysis based on
ascertainable facts. Likewise, the Senate believes that the
Commission should be able to readily determine if the requested
services will or will not be provided through a separate
subsidiary that meets all of the requirements of section 252.
Finally, the Senate notes that the Commission's determination
of whether the provision of the requested interLATA services is
consistent with the public interest, convenience, and necessity
must be based on substantial evidence on the record as a whole.
Subsection (c) also requires a BOC which is authorized to
provide interLATA services under this subsection to provide
intraLATA toll dialing parity throughout the market in which
that company is authorized to provide interLATA service. In the
event that the Commission finds that the BOC has not provided
the required intraLATA toll dialing parity, or fails to
continue to provide that parity (except for inadvertent
interruptions that are beyond the control of the BOC), then the
Commission shall suspend the authorization to provide interLATA
services in that market until that company provides or restores
the required intraLATA toll dialing parity. Lastly, subsection
(c) provides that a State may not order a BOC to provide
intraLATA toll dialing parity before the company is authorized
to provide interLATA services in that area or until three years
after the date of enactment, whichever is earlier. However,
this restriction does not apply to single LATA States or States
that have ordered intraLATA toll dialing in that State prior to
June 1, 1995.
BOC's (including any subsidiary or affiliate) are
permitted under new section 255(d) to provide interLATA
telecommunications services immediately upon the date of
enactment of the bill if those services originate in any area
in which that BOC is not the dominant provider of wireline
telephone exchange service or exchange access service.
New subsection 255(e) establishes the rules for the
provision by a BOC of in-region InterLATA services that are
incidental to the provision of specific services listed in
paragraph (1) of subsection (e). This list of specific services
is intended to be narrowly construed by the Commission. A BOC
must first obtain authorization under new section 255(c) before
it may provide any in region InterLATA services not listed in
subsection (e)(1). In addition, the BOC may only provide the
services specified in subparagraphs (C) and (D) of subsection
(e)(1), which in general are information storage and retrieval
services, through the use of telecommunications facilities that
are leased from an unaffiliated provider of those services
until the BOC receives authority to provide InterLATA services
under subsection (c). Finally, subsection (e) requires that the
provision of incidental services by the BOC shall not adversely
affect telephone exchange ratepayers or competition in any
telecommunications market. The Senate intends that the
Commission will ensure that these requirements are met.
New section 255(f) provides that a BOC may provide
interLATA service in connection with CMS upon the date of
enactment.
The terms ``interLATA,'' ``audio programming services,''
``video programming services,'' and ``other programming
services'' are defined in new section 255(g).
House amendment
Section 245 provides the method by which a BOC may seek
entry to offer interLATA or long distance, service on a State-
by-State basis. Section 245(a) provides that a BOC may file a
verification of access and interconnection compliance anytime
after six months after the date of enactment. The verification
must include, under section 245(a)(1), a State certification of
``openness'' or the so-called ``checklist'' requirements, and
under section 245(a)(2), either of the following pursuant to
section 245(a)(2)(A), the presence of a facilities-based
competitor; or pursuant to section 245(a)(2)(B), a statement of
the terms and conditions the BOC would make available under
section 244, if no provider had requested access and
interconnection within three (3) months prior to the BOC filing
under section 245. For purposes of section 245(a)(2)(B), a BOC
shall not be considered to have received a request for access
and interconnection if a requesting provider failed to bargain
in good faith, as required under section 242(a)(8), or if the
provider failed to comply, within a reasonable time period,
with the requirements under section 242(a)(1) to implement the
schedule contained in its access and interconnection agreement.
Section 245(b) sets out the ``checklist'' requirements
that must be included in the State certification that the BOC
files with the Commission as part of its verification. These
checklist requirements include the following: (1)
interconnection; (2) unbundling of network elements; (3)
resale; (4) number portability; (5) dialing parity; (6) access
to conduits and rights-of-way; (7) no State or local barriers
to entry; (8) network functionality and accessibility; and (9)
good faith negotiations by the BOC. Section 245(c)(1) sets out
the Commission review process for interLATA authorization on a
Statewide, permanent basis. Under section 245(c)(2), the
Commission may conduct a de nova review only if a State
commission lacks, under relevant State law, the jurisdiction or
authority to make the required certification, fails to act
within ninety (90) days of receiving a BOC request for
certification, or has attempted to impose a term or condition
that exceeds its authority, as limited in section 243. Under
section 245(c)(3), the Commission has ninety (90) days to
approve, disapprove, or approve with conditions the BOC
request, unless the BOC consents to a longer period of time.
Under section 245(c)(4), the Commission must determine that the
BOC has complied with each and every one of the requirements.
As mandated in section 245(d), the Commission has continuing
authority after approving a BOC's application for entry into
long distance to review a BOC's compliance with the
certification requirements under this section.
Section 245(f) prohibits a BOC from providing interLATA
service, unless authorized by the Commission. Section 245(f)
grandfathers any activity authorized by court order or pending
before the court prior to the date of enactment. Section 245(g)
creates exceptions for the provision of incidental services.
Section 245(g)(1) permits a BOC to engage in interLATA
activities related to the provision of cable services. Section
245(g)(2) permits a BOC to offer interLATA services over cable
system facilities located outside the BOC's region. Section
245(g)(3) allows a BOC to offer CMS, as defined in section
332(d)(1) of the Communications Act. Section 245(g)(4) allows a
BOC to engage in interLATA services relevant to the provision
of information services from a central computer. Section 245(g)
(5) and (6) allow a BOC to engage in interLATA services related
to signaling information integral to the internal operation of
the telephone network.
Notwithstanding the dialing parity requirements of
section 242(a)(5), as provided in section 245(i), a BOC is not
required to provide dialing parity for intraLATA toll service
(``short haul'' long distance) before the BOC is authorized to
provide long distance service in that State. Section 245(j)
prohibits the Commission from exercising the general authority
to forbear from regulation granted to the Commission under
section 230 until five years after the date of enactment.
Section 245(k) sunsets this section once the Commission and
State commission, in the relevant local exchange market,
determine that the BOC has become subject to full and open
competition.
Conference agreement
The conference agreement adds a new section 271 to the
Communications Act relating to BOC entry into the interLATA
market. New section 271(b)(1) requires a BOC to obtain
Commission authorization prior to offering interLATA services
within its region unless those services are previously
authorized, as defined in new section 271(f), or ``incidental''
to the provision of another service, as defined in new section
271(g), in which case, the interLATA service may be offered
after the date of enactment. New section 271(b)(2) permits a
BOC to offer out-of-region services immediately after the date
of enactment.
New section 271(c) sets out the requirements for a BOC's
provision of interLATA services originating in an in-region
State (as defined in new section 271(i)). In addition to
complying with the specific interconnection requirements under
new section 271(c)(2), a BOC must satisfy the ``in-region''
test by virtue of the presence of a facilities-based competitor
or competitors under new section 271(c)(1)(A), or by the
failure of a facilities-based competitor to request access or
interconnection (under new section 251) as required under new
section 271(c)(1)(B). This test that the conference agreement
adopts comes virtually verbatim from the House amendment.
With respect to the facilities-based competitor
requirement, the presence of a competitor offering the
following services specifically does not suffice to meet the
requirement: (1) exchange access; (2) telephone exchange
service offered exclusively through the resale of the BOC's
telephone exchange service; and (3) cellular service. The
competitor must offer telephone exchange service either
exclusively over its own facilities or predominantly over its
own facilities in combination with the resale of another
carrier's service.
This conference agreement recognizes that it is unlikely
that competitors will have a fully redundant network in place
when they initially offer local service, because the investment
necessary is so significant. Some facilities and capabilities
(e.g., central office switching) will likely need to be
obtained from the incumbent local exchange carrier as network
elements pursuant to new section 251. Nonetheless, the
conference agreement includes the ``predominantly over their
own telephone exchange service facilities'' requirement to
ensure a competitor offering service exclusively through the
resale of the BOC's telephone exchange service does not
qualify, and that an unaffiliated competing provider is present
in the market.
The House has specifically considered how to describe the
facilities-based competitor in new subsection 271(c)(1)(A).
While the definition of facilities-based competition has
evolved through the legislative process in the House, the
Commerce Committee Report (House Report 104-204 Part I) that
accompanied H.R. 1555 pointed out that meaningful facilities-
based competition is possible, given that cable services are
available to more than 95 percent of United States homes. Some
of the initial forays of cable companies into the field of
local telephony therefore hold the promise of providing the
sort of local residential competition that has consistently
been contemplated. For example, large, well established
companies such as Time Warner and Jones Intercable are actively
pursuing plans to offer local telephone service in significant
markets. Similarly. Cablevision has recently entered into an
interconnection agreement with New York Telephone with the goal
of offering telephony on Long Island to its 650,000 cable
subscribers.
For purposes of new section 271(c)(1)(A), the BOC must
have entered into one or more binding agreements under which it
is providing access and interconnection to one or more
competitors providing telephone exchange service to residential
and business subscribers. The requirement that the BOC ``is
providing access and interconnection'' means that the
competitor has implemented the agreement and the competitor is
operational. This requirement is important because it will
assist the appropriate State commission in providing its
consultation and in the explicit factual determination by the
Commission under new section 271(d)(2)(B) that the requesting
BOC has fully implemented the interconnection agreement
elements set out in the ``checklist'' under new section
271(c)(2).
New section 271(c)(1)(B) also is adopted from the House
amendment, and it is intended to ensure that a BOC is not
effectively prevented from seeking entry into the interLATA
services market simply because no facilities-based competitor
that meets the criteria set out in new section 271(c)(1)(A) has
sought to enter the market. The conference agreement stipulates
that a BOC may seek entry under new section 271(c)(1)(B) at any
time following 10 months after the date of enactment, provided
no qualifying facilities-based competitor has requested access
and interconnection under new section 251 by the date that is 3
months prior to the date that the BOC seeks interLATA
authorization. Consequently, it is important that the
Commission rules to implement new section 251 be promulgated
within 6 months after the date of enactment, so that potential
competitors will have the benefit of being informed of the
Commission rules in requesting access and interconnection
before the statutory window in new section 271(c)(1)(B) shuts.
New section 271(c)(2) sets out the specific
interconnection requirements that comprise the ``checklist''
that a BOC must satisfy as part of its entry test.
In new section 271(d), the conference agreement adopts
the basic structure of the Senate bill concerning authorization
of BOC entry by the Commission, with a modification to permit
the BOC to apply on a State-by-State basis.
New section 271(d) sets forth administrative provisions
regarding applications for BOC entry under this section. In
making an evaluation, the Attorney General may use any
appropriate standard, including: (1) the standard included in
the House amendment, whether there is a dangerous probability
that the BOC or its affiliates would successfully use market
power to substantially impede competition in the market such
company seeks to enter; (2) the standard contained in section
VIII(C) of the AT&T Consent Decree, whether there is no
substantial possibility that the BOC or its affiliates could
use monopoly power to impede competition in the market such
company seeks to enter; or (3) any other standard the Attorney
General deems appropriate.
New section 271(e)(1) prohibits joint marketing of local
services obtained from the BOC under new section 251(c)(4) and
long distance service within a State by telecommunications
carriers with more than five percent of the Nation's
presubscribed access lines for three years after the date of
enactment, or until a BOC is authorized to offer interLATA
services within that State, whichever is earlier.
New section 271(e)(2) requires any BOC authorized to
offer interLATA services to provide intraLATA toll dialing
parity coincident with its exercise of that interLATA
authority. States may not order a BOC to implement toll dialing
parity prior to its entry into interLATA service. Any single-
LATA State or any State that has issued an order by December
19, 1995, requiring a BOC to implement intraLATA toll dialing
parity is grandfathered under this Act. The prohibition against
``non-grandfathered'' States expires three years after the date
of enactment.
The conference agreement in new section 271(f) adopts the
House provision grandfathering activities under existing
waivers. Both the House and Senate bill included separate
grandfather provisions for manufacturing in the manufacturing
section. The conference agreement combines these separate
provisions into one provision covering both interLATA services
and manufacturing, and that provision is included in the
interLATA section. Because of the new approach to the
supersession of the AT&T Consent Decree described below, this
section was modified to clarify that requests for waivers
pending with the court on the date of enactment are no longer
included within this section. Instead, only those waiver
requests that have been acted on before the date of enactment
will be included. All conduct occurring after the date of
enactment will no longer be subject to the AT&T Consent Decree
and will be subject to the Communications Act, as amended by
the conference agreement.
New section 271(g) sets out the ``incidental'' interLATA
activities that the BOCs are permitted to provide upon the date
of enactment.
new section 272--separate affiliate; safeguards
Senate bill
Section 102 of the Senate bill amends the Communications
Act to add a new section 252 to impose separate subsidiary and
other safeguards on certain activities of the BOCs. Section 102
requires that to the extent a BOC engages in certain
businesses, it must do so through an entity that is separate
from any entities that provide telephone exchange service.
Subsection 252(b) spell out the structural and transactional
requirements that apply to the separate subsidiary, section
252(c) details the nondiscrimination safeguards, section 252(d)
requires a biennial audit of compliance with the separate
subsidiary requirements, sections 252(e) imposes restrictions
on joint marketing, and subsection 252(f) sets forth additional
requirements with respect to the provision of interLATA
services.
The activities that must be separated from the entity
providing telephone exchange service include telecommunications
equipment manufacturing and interLATA telecommunications
services, except out-of-region and incidental services (not
including information services) and interLATA services that
have been authorized by the MFJ court. A BOC also would have to
provide alarm monitoring services and certain information
services through a separate subsidiary, including cable
services and information services which the company was not
permitted to offer before July 24, 1991. In a related
provision, section 203 of the bill provides that a BOC need not
use a separate affiliate to provide video programming services
over a common carrier video platform if it complies with
certain obligations.
Under section 252(e) of this section the BOC entity that
provides telephone exchange service may not jointly market the
services required to be provided through a separate subsidiary
with telephone exchange service in an area until that company
is authorized to provide interLATA service under new section
255. In addition, a separate subsidiary required under this
section may not jointly market its services with the telephone
exchange service provided by its affiliated BOC entity unless
such entity allows other unaffiliated entities that offer the
same or similar services to those that are offered by the
separate subsidiary to also market its telephone exchange
services.
Additional requirements for the provision of interLATA
services are included in new section 252(f). These provisions
are intended to reduce litigation by establishing in advance
the standard to which a BOC entity that provides telephone
exchange service or exchange access service must comply in
providing interconnection to an unaffiliated entity.
Section 252(g) establishes rules to ensure that the BOCs
protect the confidentiality of proprietary information they
receive and to prohibit the sharing of such information in
aggregate form with any subsidiary or affiliate unless that
information is available to all other persons on the same terms
and conditions. In general, a BOC may not share with anyone
customer-specific proprietary information without the consent
of the person to whom it relates. Exceptions to this general
rule permit disclosure in response to a court order or to
initiate, render, bill and collect for telecommunications
services.
New subsection 252(h) provides that the Commission may
grant exceptions to the requirements of section 252 upon a
showing that granting of such exception is necessary for the
public interest, convenience, and necessity. The Senate intends
this exception authority to be used whenever a requirement of
this section is not necessary to protect consumers or to
prevent anti-competitive behavior. However, the Senate does not
intend that the Commission would grant an exception to the
basic separate subsidiary requirements of this section for any
service prior to authorizing the provision of interLATA service
under section 255 by the BOC seeking the exception to a
requirement of this section.
Public utility holding companies that engage in the
provision of telecommunications services are required to do so
through a separate subsidiary under new section 252(i). In
addition, a State may require a public utility company that
provides telecommunications services to do so through a
separate subsidiary. The separate subsidiary for public utility
holding companies is required to meet some, but not all, of the
structural separation and nondiscriminatory safeguard
provisions that are applicable to BOC subsidiaries. Section
252(i) provides that a public utility holding company shall be
treated as a BOC for the purpose of those provisions of section
252 that subsection (i) applies to those holding companies.
Subsection (b) of section 102 requires the Commission to
promulgate any regulations necessary to implement new section
252 of the Communications Act within nine months of the date of
enactment of this bill. The subsection also provides that any
separate subsidiary established or designated by a BOC for
purposes of complying with new section 252(a) prior to the
issuance of the regulations shall be required to comply with
the regulations when they are issued.
Section 102(c) provides that the amendment to the
Communications Act made by this section takes effect on the
date of enactment of this bill.
House amendment
Section 246(a) creates a separate subsidiary requirement
for the BOC provision of interLATA telecommunications or
information services. Section 246(b) requires transactions
between a BOC and its subsidiary to be on an arm's length
basis. Sections 246(c) and (d) mandates fully separate
operations and property, including books, records, and accounts
between the BOC and its subsidiary. Sections 246(e) and (f)
prohibit discrimination and cross-subsidies, respectively.
Under section 246(k), this provision sunsets eighteen months
after the date of enactment.
Conference agreement
The conference agreement adopts the Senate provisions
with several modifications. New section 272 of the
Communications Act does not contain the provision in the Senate
bill requiring that alarm monitoring services, and the
interLATA services that are incidental thereto, be provided
through the separate affiliate required by this section. The
conferees also accepted the provision in the House amendment
that requires a separate affiliate for interLATA information
services, other than electronic publishing and alarm
monitoring, which permit a customer located in one LATA to
retrieve stored information from, or file information for
storage in, information storage facilities of such company that
are located in another LATA.
The conferees deleted the Senate provision providing for
Commission exceptions to the requirements of this section.
Instead, the conferees adopted a three year ``sunset'' of the
separate affiliate requirement for interLATA services and
manufacturing activities. The three year period commences on
the date on which the BOC is authorized to offer interLATA
services. In addition, the conference agreement provides that
the separate affiliate requirement for interLATA information
services ``sunsets'' four years after the date of enactment of
the Telecommunications Act of 1996.
In any case, the Commission is given authority to extend
the separate affiliate requirement by rule or order.
New section 272(g)(1) permits the separate affiliate
required by this section to jointly market any of its services
in conjunction with the telephone exchange services and other
services of the BOC so long as the BOC permits other entities
offering the same or similar services to sell and market the
BOC's telephone exchange services.
New section 272(g)(2) permits a BOC, once it has been
authorized to provide interLATA service pursuant to new section
271(d), to jointly market its telephone exchange services in
conjunction with the interLATA service being offered by the
separate affiliate in that State required by this section.
New section 272(g)(3) provides that the joint marketing
authorized by new sections 272(g)(1) and (g)(2) does not
violate the nondiscrimination safeguards in new subsection (e).
New Section 273--Manufacturing by Bell Operating Companies
Senate bill
Section 222 of the Senate bill adds a new section 256 to
the Communications Act to remove the restrictions on
manufacturing imposed by the MFJ on the BOC's under certain
conditions, and allows those companies to engage in
manufacturing subject to certain safeguards.
New section 256(a) permits a BOC, through a separate
subsidiary that meets the requirements of new section 252, to
engage in the manufacture and provision of telecommunications
equipment and the manufacture of customer premises equipment
(CPE) as soon as that company receives authorization to provide
in region interLATA services under new section 255(c).
Subsection (b) of new section 256 requires that a BOC
engaged in manufacturing may only do so through a separate
subsidiary that meets the requirements of new section 252.
New section 256(c) requires that a BOC make available to
local exchange carriers telecommunications equipment and any
software integral to that equipment that is manufactured by the
BOC's affiliate under certain conditions. The manufacturing
subsidiary has the obligation to sell telecommunications
equipment to an unaffiliated local telephone exchange carrier.
This obligation may only be enforced on the manufacturing
subsidiary if the local telephone company either does not
manufacture equipment (by itself or through an affiliated
entity), or it agrees to make available to the BOC any
telecommunications equipment (including software integral to
such equipment) that the local telephone company manufactures
(by itself or through an affiliated entity) without
discrimination or self-preference as to price, delivery, germs,
or conditions.
In addition, subsection (c) prohibits a BOC from
discriminating with respect to bids for services or equipment,
establishing standards or certifying equipment, or the sale of
telecommunications equipment and software. A BOC and any entity
that the company owns or controls also is required to protect
any proprietary information submitted to it with contract bids
or with respect to establishing standards or certifying
equipment, and may not release that information to anyone
unless specifically authorized to do so by the owner of the
proprietary information.
New section 256(d) permits a BOC or its subsidiaries or
affiliates to engage in close collaboration with any
manufacturer of customer premises equipment or
telecommunications equipment not affiliated with the BOC during
the design and development of hardware, software, or
combinations thereof related to customer premises equipment or
telecommunications equipment.
Subsection (e) requires the Commission to prescribe
regulations to require each BOC to file information concerning
technical requirements concerning its telephone exchange
facilities.
Subsection (f) of new section 256 simply authorizes the
Commission to prescribe such additional rules and regulations
as the Commission determines necessary to carry out the
provisions and purposes of section 256.
Administration and enforcement of new section 256 are
provided for in subsection (g) of that section. Paragraph (1)
of new subsection 256(g) makes clear that the Commission has
the same authority, power, and functions with respect to the
BOC as it has with respect to enforcement or administration of
title II for any other common carrier subject to the
Communications Act. Paragraph (2) allows any injured party by
an act or omission of the BOC or its manufacturing subsidiary
which violates the requirements of new section 256 to bring a
civil action in any U.S. District Court to recover the full
amount of any damages and to obtain any appropriate court order
to remedy the violation. In the alternative, the party may seek
relief from the Commission pursuant to sections 206 through 209
of the Communications Act.
New section 256(h) makes clear that nothing in new
section 256 is intended to change the status of Bell
Communications Research (Bellcore). Subsection (h) specifically
states that nothing in this section permits Bellcore or any
successor entity that is jointly owned by any of the BOCs to
manufacture or provide telecommunications equipment or
manufacture CPE.
Subsection (b) of section 222 of the bill permits the
BOCs to continue to engage in activities in which they were
authorized to engage prior to the date of enactment of the
bill.
House amendment
Section 271(a) allows a BOC to engage in equipment
manufacturing when the Commission has approved verifications
that a parent BOC, and each BOC within the parent company's
region, are in compliance with the access and interconnection
requirements of section 242. A BOC may engage in manufacturing
only through a separate subsidiary for the first eighteen
months after it is authorized.
Section 271(b) allows a BOC to engage in close
collaboration with manufacturers during the design and
development of hardware and software. Notwithstanding
subsection (a), a BOC may engage in research and enter royalty
agreements.
Section 271(c) requires a BOC to file at the Commission
all protocol and technical requirements relating to connection
with and proposed changes to the network. The BOCs must provide
access to this information on a non-discriminatory basis.
Section 271(d) prohibits Bell Communications Research, or
``Bellcore,'' from engaging in manufacturing so long as
Bellcore is owned by one or more BOC or is involved in
equipment standard setting or product certification activities.
Section 271(e) requires BOCs to make equipment
procurement decisions based on objective commercial criteria,
such as price, quality, delivery, and other commercial factors.
Section 271(e)(2) prohibits each BOC from restricting
sales to any other local telephone company. Section 271(e)(3)
requires that the proprietary information which vendors share
with BOCs as their transactions are carried out is protected
from release not specifically authorized by the owner of such
information.
Subection 271(f) provides the Commission with the same
enforcement authority with respect to a BOC as with any common
carrier.
Section 271(g) grandfathers all previously authorized
manufacturing related activities.
Conference agreement
The conference agreement adopts the Senate provisions
with modifications as a new section 273 of the Communications
Act. The agreement permits a BOC to engage in manufacturing
after the Commission authorizes the company to provide
interLATA services under new section 271(d) in any in-region
State. A BOC and its affiliates may not engage in manufacturing
in conjunction with another unaffiliated BOC or any of its
affiliates. BOCs may engage in research and enter royalty
agreements.
The conference agreement includes provisions governing a
standards-setting organization such as Bellcore. Additionally,
the overall intent of establishing a dispute resolution
provision, as contained in new subsection 273(d)(5), is to
enable all interested parties to influence the final resolution
of the dispute without significantly impairing the efficiency,
timeliness, and technical quality of the activity.
Further, under new section 273, a BOC may not
discriminate in favor of equipment produced or supplied by an
affiliate for the duration of a requirement for a manufacturing
separate subsidiary under this Act. Each BOC shall make
procurement decisions on the basis of an objective assessment
of price, quality, delivery, and other commercial factors.
new section 274--electronic publishing by bell operating companies
Senate bill
The Senate bill included electronic publishing in the
provisions applicable to information services under the
separate affiliate requirements of section 252 of the Senate
bill.
House amendment
Section 272 sets forth regulatory requirements for BOC
participation in electronic publishing. Subsection (a) of this
section states generally that a BOC or any affiliate may only
engage in electronic publishing through a separate affiliate or
an electronic publishing joint venture.
Subsection (b)(1) requires the separate affiliate or
electronic publishing joint venture to maintain books, records,
and accounts separately from those of the BOC. Under subsection
(b)(2), the affiliate is prohibited from incurring debt in a
manner that would permit a creditor upon default to have
recourse to the assets of the BOC. Subsections (b)(3) and
(b)(4) govern the manner in which transactions by the affiliate
must be carried out, so as to ensure that they are fully
auditable. These subsections also govern the valuation of
assets transferred to the affiliate to prevent cross subsidies.
Subsection (b)(5) prohibits the affiliate and the BOC from
having corporate officers or property in common.
Under subsection (b)(6), the affiliate is prohibited from
using the name or trademarks of the affiliated BOC except where
used in common with the entity that owns or controls the BOC.
Subsection (b)(7) prohibits a BOC from performing a number of
activities on behalf of the affiliate, including the hiring or
training of personnel, the provision of equipment, and research
and development (R&D). Subsection (b)(8) and (b)(9) require the
separate affiliate to have an annual compliance review
performed for five years and to file a report of any exceptions
and the corrective action taken. These reviews are to be
conducted by an independent entity.
Subsection (c)(1) prohibits a BOC from engaging in joint
marketing of any promotion, marketing, sales or advertising
with its affiliate, with certain exceptions. Subsection (c)(2)
permits three types of joint activities between a BOC and its
electronic publishing affiliate, under specified conditions.
Subsection (c)(2)(A) permits a BOC to provide inbound
telemarketing or referral services related to the provision of
electronic publishing, if the BOC provides the same service on
the same terms and conditions, and prices to non-affiliates as
to its affiliates. The term ``inbound telemarketing or referral
services'' is defined in subsection (i)(7) to mean ``the
marketing of property, goods, or services by telephone to a
customer or potential customer who initiated the call.''
Subsection (c)(2)(B) permits a BOC to engage in
nondiscriminatory teaming or business arrangements. Subsection
(c)(2)(C) permits a BOC to participate in electronic publishing
joint ventures, provided that the BOC or affiliate has not more
than a 50% (or for small publishers, 80%) direct or indirect
equity interest in the publishing joint venture.
Subsection (d) provides that a BOC that enters the
electronic publishing business through a separated affiliate or
joint venture must provide network access and interconnection
to electronic publishers at just and reasonable rates that are
not higher on a per-unit basis than those charged to any other
electronic publisher or any separated affiliate engaged in
electronic publishing. Subsection (e) entitles a person
claiming a violation of this section to file a complaint with
the Commission or to bring a suit as provided in section 207 of
the Communications Act. The BOC, affiliate, or separate
affiliate is liable for damages for any violation found, unless
it is discovered first through the internal compliance review
process and corrected within 90 days of such discovery. A
person may apply for a cease and desist order, or apply to a
district court of the United States for an injunction.
Subsection (f) requires separated affiliates to file annual
reports with the Commission similar to Form 10-K. Subsection
(g)(1) gives the BOC one year from the date of enactment to
comply with the requirements of this section. Subsection (g)(2)
provides that the provisions of this section cease to apply
after June 30, 2000.
Conference agreement
The conference agreement adopts the House provisions with
modifications as a new section 274 of the Communications Act.
Subsection (b)(6) of the House provisions, relating to use of
trademarks, was modified to make it clear that the separate
affiliate or electronic publishing joint venture may not use
for marketing the name, trademarks, or service marks of an
existing BOC except for names, trademarks, or service marks
that are owned by the entity that owns or controls the BOC.
Subsection (g)(2) was modified so that the sunset date will be
four years after the date of enactment rather than June 30,
2000.
new section 275--alarm monitoring services
Senate bill
Section 225 of the Senate bill adds a new section 258 to
the Communications Act authorizing a BOC to provide alarm
monitoring services four years after the date of enactment if
the BOC has been authorized by the Commission to provide in-
region interLATA service unless the Commission finds that such
provision is not in the public interest. It requires the
Commission to establish rules governing the provision of alarm
services by a BOC. It provides for expedited consideration of
complaints and allows the Commission to use title V remedies.
The one exception to this general rule is contained in
section 258(f). It provides that the limitations of subsections
(a) and (b) do not apply to any alarm monitoring services
provided by a BOC that was in that business as of June 1, 1995,
as long as certain conditions specified in that subsection are
met.
House amendment
Section 273(a) prohibits a BOC from offering alarm
service until six (6) years after the date of enactment, unless
a BOC was already providing such service on January 1, 1995.
Section 273(b) prohibits discrimination by a telephone
company in the provision of alarm services, either by refusing
to provide its competitors with the same network services it
provides itself, or by cross-subsidizing from its local
telephone service.
Section 273(c) establishes procedures for expedited
consideration of complaints of violations of subsection (b),
requiring the Commission to make a final determination within
120 days after the receipt of a complaint. If a violation is
found, the Commission is required to issue a cease and desist
order within 60 days.
Conference agreement
The conference agreement adopts the House provisions with
modifications as a new section 275 of the Communications Act.
The prohibition on BOC entry is shortened to 5 years. The
grandfather provision is modified to clarify that new
subsection (a) does not prohibit or limit the provision,
directly or through an affiliate, of alarm monitoring services
by a BOC that was engaged in providing alarm monitoring
services as of November 30, 1995, directly or through an
affiliate. However, such a BOC may not acquire an equity
interest in or obtain financial control of any unaffiliated
alarm monitoring services entities from November 30, 1995,
until five years after the date of enactment. This section
further provides that nothing in the language prohibiting
acquisitions or control should be construed to prevent the
exchange of customer accounts and related assets with
unaffiliated alarm monitoring services entities.
The House nondiscrimination provisions are adopted with
the clarification that they apply to incumbent local exchange
carriers rather than all common carriers. The House provisions
on expedited consideration of complaints are adopted with the
clarification that they apply to incumbent local telephone
carriers rather than all common carriers. The Senate provisions
on the use of data by local exchange carriers are adopted with
the clarification that they apply to all local exchange
carriers. The House definition of ``alarm monitoring service''
is adopted with the clarification that the definition applies
to the transmission of signals by means of the facilities of
any local exchange carrier rather than just those of a BOC.
New Section 276--Provision of Payphone Services
Senate bill
Section 311 of the Senate bill adds a new section 265 to
the Communications Act, to address certain practices of the
BOCs with regard to telemessaging and payphone services. This
section is designed to prohibit cross-subsidization between a
BOC's telephone exchange or exchange access services and its
payphone and telemessaging services. Existing joint-cost rules
are not adequate to prevent such activities.
This section prohibits a BOC from discriminating between
affiliated and nonaffiliated payphone and telemessaging
services, under rules set forth by the Commission. If, however,
the Commission finds that these safeguards are insufficient,
the Commission may require the BOCs to provide telemessaging
services through a separate subsidiary.
New section 265 directs the Commission to complete,
within 18 months after the date of enactment of the bill, a
rulemaking proceeding to prescribe regulations to carry out
this new section. The Commission also is directed to determine
whether, in order to enforce the requirements of section 265,
it is appropriate to require the BOCs to provide payphone
service or telemessaging services through a separate subsidiary
that meets the requirements of new section 252.
Payphone services are defined to include the provision of
telecommunications service through public or semipublic pay
telephones, and includes the provision of inmate phone service
in correctional institutions. Semipublic payphones are also
included within the definition of payphone services.
New section 265 prohibits the BOCs from cross-subsidizing
and from preferring or discriminating in favor of their own
payphone operations. The Commission is directed to conduct
rulemaking proceedings to implement new section 265.
Nothing in section 265 is intended to limit the authority
of the commission to address these structural issues, or other
payphone related issues, under the existing provisions of the
Communications Act.
House amendment
Section 274 directs the Commission to adopt rules that
eliminate all discrimination between BOC and independent
payphones and all subsidies or cost recovery for BOC payphones
from regulated interstate or intrastate exchange or exchange
access revenue. The BOC payphone operations will be
transferred, at an appropriate valuation, from the regulated
accounts associated with local exchange services to the BOC's
unregulated books. The Commission's implementing safeguards
must be at least equal to those adopted in the Commission's
Computer III proceedings. In place of the existing regulatory
structure, the Commission is directed to establish a new system
whereby all payphone service providers are fairly compensated
for every interstate and intrastate call made using their
payphones, including, for example, ``toll-free'' calls to
subscribers to 800 and new 888 services and calls dialed by
means of carrier access codes. In crafting implementing rules,
the commission is not bound to adhere to existing mechanisms or
procedures established for general regulatory purposes in other
provisions of the Communications Act.
Section 274(b)(1)(D) also makes it possible for
independent payphone service providers, as well as BOCs, in all
jurisdictions, to select the intraLATA carriers serving their
payphones. However, existing contracts and agreements between
location providers and payphone service providers, interLATA,
or intraLATA carriers are grandfathered. Location providers
prospectively also have control over the ultimate choice of
interLATA and intraLATA carriers in connection with their
choice of payphone service providers.
Section 274(b)(2) directs the Commission to determine
whether it is necessary to support the maintenance of ``public
interest payphones.'' This term refers to payphones at
locations where payphone service would not otherwise be
available as a result of the operation of the market. Thus, the
term does not apply to a payphone located near other payphones,
or to a payphone that, even though unprofitable by itself, is
provided for a location provider with whom the payphone
provider has a contract.
Section 274(c) authorizes the Commission to preempt State
regulations that are inconsistent with the commission's
regulations under section 274.
Conference agreement
The conference agreement adopts the House provision with
some modifications and a clarification as a new section 276 of
the Communications Act. The conferees added to subsection
(b)(1)(D) the phrase ``unless the Commission determines in the
rulemaking that it is not in the public interest.'' This
modification would allow the Commission, if it determines that
it is in the public interest, not to allow the BOCs to have the
same rights as independent payphone providers in negotiating
with the interLATA carriers for their payphones. In addition,
the conferees clarify in subsection (b)(1)(E) that the location
provider has the ultimate decision-making authority in
determining interLATA services in connection with the choice of
payphone providers.
TITLE II--BROADCAST SERVICES
section 201--broadcaster spectrum flexibility
Senate bill
If the Commission, by rule, permits a licensee to provide
advanced television services, subsection (a) of section 207 of
the Senate bill requires the Commission to adopt rules to
permit broadcasters flexibility to use the advanced television
spectrum for ancillary or supplementary services. The
broadcaster must provide at least one free, over-the-air
advanced television broadcast service on that spectrum. Similar
rules for existing broadcast spectrum must also be adopted.
Paragraph (2) requires that if the licensee offers
ancillary or supplementary service for which payment of a
subscription fee is required, or is compensated for
transmitting material furnished by a third party, then the
Commission will collect an annual fee from the licensee. The
fee shall be based, in part, on the licensee's total amount of
spectrum, and the amount of spectrum used and the amount of
time the spectrum is used for those ancillary and supplementary
services. The fee, however, cannot exceed the amount, on an
annualized basis, paid by licensees providing competing
services on spectrum subject to auction.
Paragraph (3) states that licensees are not relieved of
their public interest requirements. Paragraph (4) defines
``advanced television services'' as a television service using
digital or other advanced technology to enhance audio quality
and visual resolution. The paragraph also defines ``existing''
spectrum as that spectrum used for television broadcast
purposes as of the date of enactment.
House amendment
Section 301 of the House amendment directs the
Commission, if the Commission issues licenses for advanced
television services, to limit the initial eligibility for such
licenses to incumbent broadcast licensees and permittees and
authorizes the Commission to adopt regulations that would
permit broadcasters to use such spectrum for ancillary or
supplementary services. Apart from the restrictions contained
herein, this section leaves the final determination of the uses
of spectrum assigned to the broadcasters. This section
restricts any potential use of spectrum apart from the main
channel signal to ``ancillary and supplementary'' uses,
provided the use of a designated frequency for such services is
consistent with the technology or method designated by the
Commission for the provision of advanced television services.
Paragraph (b)(2) requires the Commission to prescribe
regulations that avoid the derogation of any advanced
television services, including high definition television
(HDTV) services.
Paragraph (b)(3) clarifies the regulation of ancillary
and supplementary services. It requires that Commission
regulations that are applicable to such services be applicable
to the offering of analogous services by any other person. This
section, however, specifically does not confer ``must carry''
status on any of these ancillary or supplementary services.
Paragraph (b)(4) requires the Commission to adopt any
technical or other requirements necessary to assure signal
quality for ATV services and provides, inter alia, that the
Commission may review and update its requirements concerning
minimum broadcast hours for television broadcasters for both
NTSC and ATV services.
Subsection (c) provides that if the Commission issues
licenses for advanced television services, it shall
precondition such issuance on the requirement that one or the
other of the licenses be surrendered to the Commission pursuant
to its regulations. Subsection (c) also requires that any
license surrendered must be reassigned through competitive
bidding. This provision is designed to ensure that licensees'
use of 12 megahertz would be for temporary simulcast purposes
only, and that, in due course, one of the licensed channels
will revert to the Commission for assignment by competitive
bidding. Subsection (c) also requires that the Commission must
base its decision regarding the surrender of the license on
public acceptance of the new technology through obtaining
television receivers capable of receiving an ATV signal or on
the potential loss of reception for a substantial portion of
the public.
Subsection (d) requires the Commission to establish a fee
program for any ancillary or supplementary services if
subscription fees or any other compensation fees apart from
commercial advertisements are required in order to receive such
services.
Subsection (e) requires the Commission to conduct an
evaluation within 10 years after the date it issues its
licenses for advanced television services.
In subsection (f), the House adopts the Commission's
definition of high definition television.
Conference agreement
The conference agreement adopts the House amendment with
modifications. The conference agreement retains the requirement
in the House amendment that the Commission condition the
issuance of a new license on the return, after some period, of
either the original broadcast license or the new license.
However, the conference agreement leaves to the Commission the
determination of when such licenses shall be returned and how
to reallocate returned spectrum. With respect to paragraph
(b)(3), the conferees do not intend this paragraph to confer
must carry status on advanced television or other video
services offered on designated frequencies. Under the 1992
Cable Act, that issue is to be the subject of a Commission
proceeding under section 614(b)(4)(B) of the Communications
Act. Further, the conference agreement also adopts the Senate
language that the Act's public interest obligations extend to
the new licenses and services. The conference agreement
modifies the House amendment to provide that if the Commission
decides to issue additional licenses for ATV services, it
should limit the initial eligibility to broadcast licensees.
section 202--broadcast ownership
Senate bill
Section 207(b) of the Senate bill requires the Commission
to change its rules regarding the amount of national audience a
single broadcast licensee may reach. The current cap is 25% of
the nation's television households. The Senate bill raises that
to 35%. Section 207 directs the Commission to eliminate its
rules regarding the number of radio stations one entity may
own, either nationally or within a particular market. The
Commission may refuse a transfer of a radio license if it would
result in an undue concentration of control or would thereby
harm competition. Section 207(b)(3) grandfathers existing
television local marketing agreements (LMAs). Section 207(b)(4)
eliminates the cable-broadcast crossownership ban in section
613(a) of the Communications Act, and the Commission is also
required to review its ownership rules biennially, as part of
its overall regulatory review required by new section 259 of
the Communications Act. This provision is effective upon
enactment.
House amendment
Section 302 of the House amendment adds a new section 337
to the Communications Act addressing broadcast ownership.
Section 337, subject to specified restrictions and consistent
with the cross-ownership restrictions of section 613(a) of the
Communications Act, prohibits the Commission from prescribing
or enforcing any regulation which prohibits or limits, on a
national or local basis, a licensee from holding any form of
ownership or other interest in two or more broadcast stations
or in a broadcast station and any other medium of mass
communication. This section also prohibits the Commission from
prescribing or enforcing any regulation which prohibits a
person or entity from owning, operating, or controlling two or
more networks of broadcast stations or from owning, operating,
or controlling a network of broadcast stations and any other
medium of mass communications. Section 337(b)(1) eliminates
current limits placed on television audience nationwide and
places new limits on ownership of television stations by a
single entity at a national audience reach exceeding 35 percent
for the year following enactment of this section. This section
directs the Commission to conduct a study of the operation of
these national ownership limitations and to submit a report to
Congress on the development of competition in the television
marketplace and the need, if any, to revisit these limitations.
Section 337(b)(2) sets forth the circumstances under
which one entity may own or operate two television stations in
a local market. Subparagraph (B) creates a presumption in favor
of UHF/UHF and UHF/VHF combinations. Subparagraph (C) clarifies
that the Commission may also permit VHF/VHF combinations where
it determines that doing so will not harm competition and
diversity.
Subsection (c) permits the Commission, under certain
circumstances, to consider concentrations of local media
interests in proceedings to grant, renew or authorize the
assignment of station licenses. In a proceeding to grant,
renew, or authorize the assignment of any station license under
this title, the Commission may deny the application if the
Commission determines that the combination of such station and
more than one other non-broadcast media of mass communication
would result in an undue concentration of media voices in the
respective local market. The Commission shall not grant
applications that would result in two or fewer persons or
entities controlling all the media of mass communications in
the market. There is no requirement that any existing interests
be divested, but the Commission may condition the grant of an
application to acquire additional media interests.
Subsection (d) clarifies that any Commission rule
prescribed prior to the date of enactment of this legislation
that is inconsistent with the requirements of this section is
repealed on the date of enactment. Nothing in subsection (d) is
to be construed to prohibit the continuation or renewal of any
television local marketing agreement in effect on the date of
enactment.
Conference agreement
Section 202(a) of the conference agreement directs the
Commission to modify its multiple ownership rules to eliminate
its limitations on the number of radio stations which may be
owned or controlled nationally. New subsection (b) directs the
Commission to further modify its rules with respect to the
number of radio stations a party may own, operate or control in
a local market. Subsection (b)(2) provides an exception to the
local market limits, where the acquisition or interest in a
radio station will result in an increase in the number of radio
stations.
Subsection 202(c)(1) directs the Commission to modify its
multiple ownership rules to eliminate the number of television
stations which may be owned or controlled nationally and to
increase the national audience reach limitation for television
stations to 35 percent. Subsection (c)(2) directs the
Commission to conduct a rulemaking proceeding to determine
whether its rules restricting ownership of more than one
television station in a local market should be retained,
modified or eliminated. It is the intention of conferees that,
if the Commission revises the multiple ownership rules, it
shall permit VHF-VHF combinations only in compelling
circumstances.
Section 202(d) directs the Commission to extend its
waiver policy with respect to its one to a market ownership
rules to any of the top fifty markets. The Commission now
generally bans crossownerships of radio and television stations
in the same market, but has implemented a waiver policy which
recognizes the potential for public interest benefits of such
combinations when bedrock diversity interested are not
threatened. The conferees in adopting subsection (d), intend to
extend the benefits of this policy to the top fifty markets.
Also, in the Commission's proceeding to review its television
ownership rules generally, the Commission is considering
whether generally to allow such local crossownerships,
including combinations of a television station and more than
one radio station in the same service. The conferees expect
that the Commission's future implementation of its current
radio-television waiver policy, as well as any changes to its
rules it may adopt in its pending review, will take into
account the increased competition and the need for diversity in
today's radio marketplace that is the rationale for subsection
(d).
Subsection (e) directs the Commission to revise its rules
at 47 CFR 73.658(g) to permit a television station to affiliate
with a person or entity that maintains two or more networks
unless such dual or multiple networks are composed of (1) two
or more of the four existing networks (ABC, CBS, NBC, FOX) or,
(2) any of the four existing networks and one of the two
emerging networks (WBTN, UPN). The conferees do not intend
these limitations to apply if such networks are not operated
simultaneously, or if there is no substantial overlap in the
territory served by the group of stations comprising each such
networks.
Subsection (f) directs the Commission to revise its rules
to permit crossownership interests between a broadcast network
and a cable system. If necessary, the Commission is directed to
revise its rules to ensure carriage, channel positioning and
nondiscriminatory treatment of non-affiliated broadcast
stations by cable systems affiliated with a broadcast network.
Subsection (g) grandfathers LMAs currently in existence
upon enactment of this legislation and allows LMAs in the
future, consistent with the Commission's rules. The conferees
note the positive contributions of television LMAs and this
subsection assures that this legislation does not deprive the
public of the benefits of existing LMAs that were otherwise in
compliance with Commission regulations on the date of
enactment.
Subsection (h) directs the Commission to review its rules
adopted under section 202 and all of its ownership rules
biennially. In its review, the Commission shall determine
whether any of its ownership rules, including those adopted
pursuant to this section, are necessary in the public interest
as the result of competition. Based on its findings in such a
review, the Commission is directed to repeal or modify any
regulation it determines is no longer in the public interest.
Apart from the biennial review required by subsection (h), the
conferees are aware that the Commission already has several
broadcast deregulation proceedings underway. It is the
intention of the conferees that the Commission continue with
these proceedings and conclude them in a timely manner.
Subsection (i) amends section 613(a) of the
Communications Act by repealing the restriction on broadcast-
cable crossownership. The conferees do not intend that this
repeal of the statutory prohibition should prejudge the outcome
of any review by the Commission of its rules. Subsection (i)
also amends 613(a) by revising the cable-MMDS crossownership
restriction so that it does not apply in any franchise area in
which a cable operator faces effective competition.
Section 203--Terms of Licenses
Senate bill
Section 207 of the Senate bill amends section 307(c) of
the Communications Act to increase the term of license renewal
for television licenses from five to ten years and for radio
licenses from seven to ten years.
House amendment
Section 306 of the House amendment contains a similar
provision but amends section 307(c) of the Communications Act
to provide for a seven year license term for all broadcast
licenses.
Conference agreement
The conference agreement adopts the House provisions but
extends the license term for broadcast licensees to eight years
for both television and radio.
Section 204--Broadcast License Renewal Procedures
Senate bill
Subsection (d) of section 207 amends the broadcast
license renewal procedures. This subsection amends section 309
of the Communications Act by adding a new subsection (k) which
gives the incumbent broadcaster the ability to apply for its
license renewal without competing applications. A broadcaster
would apply for its renewal, and the Commission would grant
such a renewal, if, during the preceding term of its license
the station has served the public interest, convenience, and
necessity, has not made any serious violations of the
Communications Act or of the Commission's rules, and has not,
through other violations, shown a pattern of abuse.
The Commission may not consider whether the granting of a
license to a person other than the renewal applicant might
serve the public interest, convenience, and necessity prior to
its decision to approve or deny the renewal application. Under
this section, the Commission has discretion to consider what is
a serious violation of the Communications Act. If a licensee
does not meet those criteria, the Commission may either deny
the renewal, or impose conditions on the renewal. Once the
Commission, after conducting a hearing on the record, denies an
application for renewal, it is then able to accept applications
for a construction permit for the channel or facilities of the
former licensee.
Subparagraph (4) would require broadcast licensees to
attach a summary of comments regarding violent programming to
its renewal application.
House amendment
Section 305 of the House amendment similarly amends
section 309 of the Communications Act by adding a new
subsection (k) mandating a change in the manner in which
broadcast license renewal applications are processed.
Subsection (k) allows for Commission consideration of the
renewal application of the incumbent broadcast licensee without
the contemporaneous consideration of competing applications.
Under this subsection, the Commission would grant a renewal
application if it finds that the station, during its term, had
served the public interest, convenience, and necessity; there
had been no serious violations by the licensee of the
Communications Act or Commission rules; and there had been no
other violations of the Communications Act or Commission rules
which, taken together, indicate a pattern of abuse. If the
Commission finds that the licensee has failed to meet these
requirements, it could deny the renewal application or grant a
conditional approval, including renewal for a lesser term. Only
after denying a renewal application could the Commission accept
and consider competing applications for the license.
Conference agreement
The conference agreement adopts the House provisions with
modifications to include the Senate provision requiring a
renewal applicant to attach to its application a summary of
comments regarding violent programming. The conference
agreement sets the effective date for this section at May 1,
1995.
section 205--direct broadcast satellite service
Senate bill
Section 312(a) of the Senate bill amends section
705(e)(4) of the Communications Act to extend the current legal
protection against signal piracy to direct-broadcast services.
Section 312(b) amends section 303 of the Communications
Act to clarify that the Commission has exclusive jurisdiction
over the regulation of direct broadcast satellite (DBS)
service.
House amendment
The House has identical provisions in sections 308 and
311 of the House amendment.
Conference agreement
The conference agreement adopts the Senate provision with
a conforming change to the definition of ``direct-to-home.''
section 206--automated ship distress and safety systems
Senate bill
Section 306 of the Senate bill provides that
notwithstanding any other provision of the Communications Act,
any ship documented under the laws of the United States
operating in accordance with the Global Maritime Distress and
Safety System provisions of the Safety of Life at Sea
Convention is not required to be equipped with a radio
telegraphy station operated by one or more radio officers or
operators.
House amendment
This House provision is identical.
Conference agreement
The conference agreement adopts the Senate provision with
a modification placing the provision as an amendment to section
364 of the Communications Act. This provision permits a ship
that fully complies with the Global Maritime Distress and
Safety System (GMDSS) provisions of the Safety of Life at Sea
Convention to be exempted from requirements to carry a radio
telegraph station operated by one or more radio operators. Due
to the conferees' concern about the proper implementation of
the GMDSS, the provision specifies that this exemption shall
only take effect upon the United States Coast Guard's
determination that the system is fully installed, maintained,
and is operating properly on each vessel.
section 207--restrictions on over-the-air reception devices
Senate bill
No provision.
House amendment
Section 308 of the House amendment directs the Commission
to promulgate rules prohibiting restrictions which inhibit a
viewer's ability to receive video programming from over-the-air
broadcast stations or direct broadcast satellite services.
Conference agreement
The conference agreement adopts the House provision with
modifications to extend the prohibition to devices that permit
reception of multichannel multipoint distribution services.
TITLE III--CABLE SERVICES
section 301--Cable Act Reform
Senate bill
Section 203(a) of the Senate bill amends the definition
of ``cable system'' in section 602 of the Communications Act.
Section 203(b) of section 204 of the bill limits the rate
regulations currently imposed by the 1992 Cable Act.
Paragraph (1) amends the rate regulation provisions of
section 623 of the Communications Act for the expanded tier.
First, it eliminates the ability of a single subscriber to
initiate a rate complaint proceeding at the Commission.
Franchising authorities are the relevant State and local
government entities that still retain the ability to initiate a
rate proceeding. Second, rates for cable programming services
will only be considered unreasonable, and subject to
regulation, if the rates substantially exceed the national
average for comparable cable programming services.
Paragraph (2) amends the definition of effective
competition in section 623(l)(1) to allow the provision of
video services by a local exchange carrier either through a
common carrier video platform, or as a cable operator, in an
unaffiliated cable operator's franchise area to satisfy the
effective competition test.
Section 203(c) eliminates cable rate regulation for small
cable operators serving areas of 35,000 or fewer subscribers.
Section 203(d) provides that any programming access rules
that apply to a cable operator under section 628 of the
Communications Act also apply to a telecommunications carrier
or its affiliate that provides video programming directly to
subscribers.
Section 203(e) provides for expedited decisions by the
Commission regarding market determinations under section 614 of
the Communications Act.
Section 203(f) provides that the provisions of this
section take effect on the date of enactment.
House amendment
Section 307(a) of the House amendment amends the
definition of ``cable service'' in section 602(6) of the
Communications Act by adding ``or use'' to the definition,
reflecting the evolution of video programming toward
interactive services.
Subsection (b) prohibits the Commission from requiring
the divestiture of, or preventing or restricting the
acquisition of, any cable system based solely on the geographic
location of the system.
Subsection (c) amends section 623(a) of the
Communications Act to deregulate equipment, installations, and
additional connections furnished to subscribers that receive
more than basic cable service when a cable system has effective
competition pursuant to section 623(l)(1)(b).
Subsection (d) amends section 623(a) of the
Communications Act to limit basic tier rate increases by a
cable operator to once every six months and permits cable
operators to implement such increases after 30 days notice.
Subsection (d) limits the franchising authority's scope of
review to the incremental change in the basic tier rate
effected by a rate increase.
Subsection (e) amends section 623(a) of the
Communications Act to promote the development of a broadband,
two-way telecommunications infrastructure. Under this
paragraph, cable operators are permitted to aggregate equipment
costs broadly. However, subsection (e) does not permit
averaging for equipment used by consumers that subscribe only
to basic service tier. Subsection (e) directs the Commission to
complete its revisions to current rules necessary to implement
this subsection within 120 days.
Subsection (f) amends section 623(c) of the
Communications Act governing review of complaints by inserting
a new paragraph (3) requiring that the Commission receive
complaints from three percent of a system's subscribers, or 10
subscribers, whichever is greater, before it initiates a rate
case.
Subsection (f) extends from 45 days to 90 days the amount
of time after a cable programming service rate increase goes
into effect that during which subscribers may file a complaint.
Pending rate cases will be subject to the new complaint
threshold and complaining parties are granted a 90-day
extension to bring complaints into conformance with the new
complaint threshold requirement. Subsection (f) clarifies that
the Commission 's scope of review is limited to the last
incremental consumer programming service rate increase
consistent with the intent of the 1992 Cable Act.
Subsection (g) clarifies that a cable operator must
comply with the uniform rate structure requirement in section
623(d) of the 1992 Cable Act only with respect to regulated
services. Subsection (g) also amends section 623(d) of the
Communications Act to exempt bulk discounts to multiple
dwelling units (``MDUs'') from the uniform rate requirement.
Subsection (h) amends section 623(l)(1) of the
Communications Act by adding a fourth effective competition
test. Under this new test, effective competition for cable
programming service tier and subscriber equipment (other than
that necessary for receiving the basic service tier) is
present: (1) where a common carrier has been authorized to
provide video dialtone service in the cable franchise area; (2)
where a common carrier has been authorized by the Commission or
pursuant to a franchise to provide video programming directly
to subscribers in the cable franchise area; or (3) when the
Commission completes all actions necessary to prescribe the
video platform rules pursuant to section 653(b)(1). When any of
these events occurs, the rates for a cable system's cable
programming services, as well as equipment, installations, and
additional television connections are deregulated.
Subsection (h) does not apply to basic cable service.
Basic service, including all equipment, additional television
connections, and installations furnished to basic-only
subscribers, remains subject to regulation until the cable
operator meets one of the effective competition tests contained
in section 623(l)(1)(A), (B), and (C) of the Communications
Act.
Subsection (i) amends section 623 of the Communications
Act to deregulate the rates for the cable programming service
tiers of small companies and the rates for the basic service
tier of small company systems that offered only a single tier
of service as of December 31, 1994. Subsection (i) does not
deregulate the basic tier of small cable systems that offer
multiple tiers of cable service.
In order to qualify as a ``small cable operator,'' a
cable operator must: (1) directly, or through an affiliate,
serve in the aggregate fewer than one percent of all cable
subscribers nationwide; and (2) not be affiliated with any
entity whose annual gross revenues in the aggregate exceed
$250,000,000.
Subsection (j) amends section 624(e) of the
Communications Act by prohibiting States or franchising
authorities from regulating in the areas of technical
standards, customer equipment, and transmission technologies.
Subsection (k) amends section 624A(b)(2) of the
Communications Act and directs that no Federal agency, State,
or franchising authority may prohibit a cable operator's use of
any security system, including scrambling, but permits the
Commission to prohibit scrambling of video programming on the
broadcast-basic service tier unless scrambling is necessary to
prevent signal piracy.
Subsection (l) amends section 624A of the Communications
Act to direct the Commission to set only minimal standards when
implementing regulations to assure compatibility between cable
``set-top'' boxes, televisions, and video cassette recorders,
and to rely on the marketplace for other features, services,
and functions to ensure basic compatibility. This subsection
clarifies section 624(c)(1)(A) further to ensure that
Commission efforts with respect to cable compatibility do not
affect unrelated markets, such as computers or home automation
communications, or result in a preference for one home
automation protocol over another.
Subsection (m) amends section 625(d) of the
Communications Act by clarifying that a cable operator may move
any service off the basic service tier at its discretion, other
than the local broadcast signals and access channels required
to be carried on the basic service tier under section
623(b)(7)(A) of the Communications Act.
Subsection (n) amends section 632 of the Communications
Act to provide cable operators with flexibility to use
``reasonable'' written means to convey rate and service changes
to consumers. Notice need not be inserted in the subscriber's
bill.
Subsection (n) also provides that prior notice is not
required for any rate change that is the result of a regulatory
fee, franchise fee, or any other fee, tax, assessment or change
of any kind imposed by the Government on the transaction
between a cable operator and a subscriber.
Subsection (o) amends section 623 of the Communications
Act to clarify that losses incurred prior to the enactment of
the 1992 Cable Act by a cable system owned and operated by the
original franchisee may not be disallowed in determination of
rate regulation.
Conference agreement
The conference agreement adopts the House provisions with
modifications. It adopts the House provision amending the
definition of cable service. The conferees intend the amendment
to reflect the evolution of cable to include interactive
services such as game channels and information services made
available to subscribers by the cable operator, as well as
enhanced services. This amendment is not intended to affect
Federal or State regulation of telecommunications service
offered through cable system facilities, or to cause dial-up
access to information services over telephone lines to be
classified as a cable service. The conference agreement adopts
the Senate provision amending the definition of cable system to
clarify that the term does not include a facility that serves
subscribers without using any public right-of-way.
The conference agreement sunsets regulation of the cable
programming services tier on March 31, 1999. The agreement
directs the Commission to review a rate increase for an
operator's cable programming services tier within 90 days of a
complaint.
The conference agreement amends the Communications Act's
requirements for a uniform rate structure to clarify that such
requirements do not apply to (1) a cable operator with respect
to the provision of cable service over its cable system in any
geographic area in which the video programming services offered
by the operator in that area are subject to effective
competition, or (2) any video programming offered on a per
channel or per program basis. Bulk discounts to multiple
dwelling units shall not be subject to the uniform rate
requirement except that a cable operator may not charge
predatory prices to a multiple dwelling unit. Upon a prima
facie showing by a complainant that there are reasonable
grounds to believe that the discounted price is predatory, the
cable system shall have the burden of showing that its
discounted price is not predatory.
The conference agreement adopts an amendment to section
623(l) of the Communications Act to expand the effective
competition test for deregulating both basic and cable
programming service tiers. The test provides that effective
competition exists when a telephone company or any multichannel
video programming distributor is offering video programming
services directly to subscribers by any means in the franchise
area of an unaffiliated cable operator. ``By any means,''
includes any medium (other than direct-to-home satellite
service) for the delivery of comparable programming, including
MMDS, LMDS, an open video system, or a cable system. For
purposes of section 623(l)(1)(D) of the Communications Act,
``offer'' has the same meaning given that term in the
Commission's rules as in effect on the date of enactment of the
bill. See 47 CFR 76.905(e). The conferees intend that
``comparable'' requires that the video programming services
should include access to at least 12 channels of programming,
at least some of which are television broadcasting signals. See
47 CFR 76.905(g).
The conference agreement adopts the Senate provision with
respect to deregulation of small cable systems with the
modification that the franchise area served by such system must
reach 50,000 or fewer subscribers. The agreement adopts the
House provisions on market determinations, technical standards,
cable equipment compatibility, and subscriber notices. The
agreement amends section 628 of the Communications Act to
extend the program access requirements to satellite cable
programming vendors in which a common carrier providing video
programming by any means has an attributable interest. This
provision clarifies that such common carrier shall not be
deemed to have an attributable interest in such programming
vendor (or its parent company) solely as a result of the common
carrier's holding, or having the right to appoint or elect, two
or fewer common officers or directors. The conference agreement
amends section 617 of the Communications Act to repeal the
anti-trafficking restrictions. The conference agreement adopts
the House provisions on equipment aggregation and treatment of
prior year losses.
The conference agreement also adopts the House provision
on cable equipment compatibility. As used in section 624A of
the Communications Act, the term ``affect'' means to produce a
material influence upon, or alteration in, such features,
functions, protocols, and other product and service options.
The conferees intend that the Commission should promptly
complete its pending rulemaking on cable equipment
compatibility, but not at the risk that premature or overbroad
Government standards may interfere in the market-driven process
of standardization in technology intensive markets.
Section 302--Cable Service Provided by Telephone Companies
Senate bill
The Senate bill creates new sections of the
Communications Act to provide for the provision of video
programming by telephone companies.
House amendment
The House amendment creates new sections of the
Communications Act to provide for the provision of video
programming by telephone companies.
Conference agreement
Section 302 of the conference agreement establishes a new
``Part V'' of title VI of the Communications Act. Part V
contains new sections 651-653 to provide for the provision of
video programming by telephone companies.
New Section 651--Regulatory Treatment of Video Programming Services
Senate bill
Section 202 of the Senate bill eliminates the cable/
telephone cross ownership restriction and grants telephone
companies the option of providing video programming to
subscribers over a cable system or over a video platform. It
also states that a BOC need not use a separate affiliate if it
provides facilities, services or information to all programmers
on the same terms and conditions as it provides to its own
operations, and if it does not use telecommunications services
to subsidize the provision of video programming. In addition,
it states that when a BOC provides cable service as a cable
operator, it must do so through a separate affiliate, except
that if the cable service is provided using the company's own
telephone exchange facilities, it is not required to make
capacity available on a nondiscriminatory basis to other video
service providers because of such use.
House amendment
Section 201 of the House amendment permits a common
carrier that provides video programming directly to subscribers
in its telephone service area, to do so either over a video
platform or over a cable system. In addition, it requires the
carrier to provide notice to programming providers and to
submit detailed information to the Commission concerning its
intention to establish capacity for the provision of video
programming. Carriers are required to establish channel
capacity sufficient to meet all bona fide demand and to expand
capacity in response to demand for additional capacity.
Conference agreement
New section 651 of the Communications Act specifically
addresses the regulatory treatment of video programming
services provided by telephone companies. Recognizing that
there can be different strategies, services and technologies
for entering video markets, the conferees agree to multiple
entry options to promote competition, to encourage investment
in new technologies and to maximize consumer choice of services
that best meet their information and entertainment needs.
New section 651 (a)(1) states that common carriers, or
other persons, that use radio communication to provide video
programming will be regulated under title III of the
Communications Act, and are subject to the requirements of new
section 652 of the Communications Act but are not otherwise
subject to the requirements of title VI. This will create
parity among providers of services using radio communication.
New section 651(a)(2) states that when common carriers
provide only video transmission on a common carrier basis, they
are subject only to title II and to new section 652, and are
not otherwise subject to the requirements of title VI merely by
engaging in common carrier transport of video programming.
New section 651(a)(3) states that common carriers
providing video programming to subscribers by any means other
than those described in new section 651(a)(1) or (a)(2), are
subject to the requirements of title VI, unless such
programming is provided by means of an open video system that
has been certified by the Commission. New section 651(a)(3)
also states that carriers that provide programming using a
certified open video system are subject to the requirements of
part V, and only those provisions of parts I through IV of
title VI as are specifically provided in new section 653(c).
Open video systems are not subject to the requirements of title
II for the provision of video programming or cable services.
Common carriers that provide video programming using
radio communication or using common carriage transmission, or a
combination of those services, also may choose to provide an
open video system. New section 651(a)(4) provides that such
systems are subject to the same requirements as other open
video systems.
New section 651(b) states that a local exchange carrier
that provides cable service by means of an open video system,
or by means of an integrated cable system utilizing its own
telephone exchange facilities, is not required by title II to
also make transmission capacity and related services available
on a nondiscriminatory basis to any other person for the
provision of cable service or video programming directly to
subscribers. This provision clarifies that the open video
system operator's obligation to provide system capacity and
facilities to others is limited to, and governed by, part V and
the other requirements specifically provided in new section
653(c). Likewise, a local exchange carrier that utilizes its
own telephone exchange facilities and services to provide cable
services other than through an open video system is required by
such use only to make cable and video programming capacity and
facilities available to others for the provision of cable
service to the extent provided in parts I through IV of title
VI, regardless of whether those facilities also are used to
provide telephone exchange service under title II. Similarly,
under new section 651(c) common carriers that establish video
delivery systems, including cable and open video systems, are
not required to obtain section 214 authority prior to
establishing or operating such systems. This requirement has
served as an obstacle to competitive entry and has
disproportionately disadvantaged new competitors. Eliminating
this barrier to entry will hasten the development of video
competition and will provide consumers with increased program
choice.
new section 652--prohibition on buyouts
Senate bill
Section 202 of the Senate bill adds to section 613(b) of
the Communications Act several provisions restricting the
ability of a local exchange carrier to acquire more than a 10
percent financial interest or any management interest in a
cable operator in its telephone service area and restricting
the ability of a cable operator to acquire similar interests in
a local exchange carrier in the cable operator's franchise
area. It includes certain exceptions for acquisitions in non-
urban areas with less than 50,000 inhabitants, and it
authorizes the Commission to grant waivers for economic
distress, economic viability of the cable system, or where any
anticompetitive effects of the proposed transaction are clearly
outweighed by the public interest, and where the local
franchising authority approves the waiver. The bill directs the
Commission to act on such waiver requests within 180 days of
filing. The Senate provisions also permit a local exchange
carrier, if certain conditions are met, to use excess capacity
of a cable company for that portion of the transmission
facilities of the cable operator from the last multi-user
terminal to the premises of the end user.
Section 706 of the Senate bill authorizes a local
exchange carrier or any of its affiliates to purchase or
otherwise acquire more than 10 percent of the financial
interest or any management interest in any cable system in its
telephone service area so long as (1) the cable system serves
no more than 20,000 cable subscribers and (2) no more than
12,000 of those cable subscribers live in an urbanized area.
House amendment
Section 655 of the House amendment contains a general
prohibition on buy-outs by a common carrier of a cable system
within its service territory. Subsection (b) provides
exceptions that would permit a common carrier to purchase a
cable system or systems under circumstances including the
following: (1) the cable system serves a rural area; (2) the
total number of subscribers served by such systems adds up to
less than ten percent of the households served by the carrier
in the telephone service area, and no such system or systems
serve a franchise area with more than 35,000 inhabitants for an
affiliated system, or more than 50,000 inhabitants for any
system that is not affiliated with any system whose franchise
area is contiguous; and (3) the exemption would permit a
carrier to obtain, by contract with a cable operator, use of
the ``drop'' from the curb to the home that is controlled by
the cable company, if such use was reasonably limited in scope
and duration as determined by the Commission.
The exception under subparagraph (4) is intended to
address a market situation where a dominant cable operator that
is a large multiple systems operator (MSO) shares a market with
a small independent cable system.
Subsection (c) also contains the waiver process for the
buy-out provision under which the Commission may grant a waiver
upon a showing of undue economic distress by the owner of the
cable system if a sale to a telephone company is blocked. The
Commission is directed to act on a waiver application within
180 days after it is filed.
Conference agreement
The conference agreement adopts the provisions of the
Senate bill limiting acquisitions and prohibiting joint
ventures between local exchange companies and cable operators
that operate in the same market to provide video programming to
subscribers or to provide telecommunications services in such
market. Such carriers or cable operators may enter into a joint
venture or partnership for other purposes, including the
construction of facilities for the provision of such
programming or services. With respect to exceptions to these
general rules contained in new section 652 (a), (b), and (c),
the conferees agreed, in general, to take the most restrictive
provisions of both the Senate bill and the House amendment in
order to maximize competition between local exchange carriers
and cable operators within local markets.
In new section 652(d)(1) the conference agreement allows
a local exchange carrier to obtain a controlling interest in,
management interest in, or a joint venture or partnership with
a cable system operator for the use of such system located
within its telephone service area to the extent that such
system or facilities only serve places or territories that have
fewer than 35,000 inhabitants and are outside urbanized areas.
The agreement further stipulates that such systems in the
aggregate serve less than 10 percent of the households in the
telephone service area of such local exchange carrier. New
section 652(d)(1) also permits a cable operator to obtain a
controlling interest in, management interest in, or a joint
venture or partnership with a local exchange carrier for the
use of such carrier's facilities if such facilities serve
places or territories that have fewer than 35,000 inhabitants
and are outside of urbanized areas. The agreement contains
other very limited exceptions to the general rules contained in
new section 652 (a), (b), and (c). In new section 652(d)(3)
acquisitions would be permitted in competitive markets where a
local exchange carrier seeking to obtain a controlling interest
or form a joint venture with a cable system may do so if
narrowly drawn requirements are met. New section 652(d)(4)
provides that new section 652(a) shall not apply to certain
cable systems serving less than 17,000 subscribers outside of
the top television markets. New section 652(d)(5) of the
conference agreement allows a non-Tier I local exchange carrier
to obtain more than a ten percent interest in, or to form a
joint venture or partnership with, a small cable system that
serves no more than 20,000 cable subscribers within the
telephone company's service territory, provided that no more
than 12,000 of those subscribers live within an urbanized area.
The conference agreement also allows for limited joint
use of certain cable system facilities. In new section
652(d)(2) the agreement adopts language from the Senate bill
that will allow a local exchange carrier to obtain, with the
concurrence of the cable operator on the rates, terms and
conditions, the use of that part of the transmission facilities
of a cable system extending from the last multi-user terminal
to the premises of the end user. The agreement stipulates that
such joint use is permitted if such use is reasonably limited
in scope and duration as determined by the Commission.
The conferees also provided for the establishment of a
waiver process of the statutory rules. In new section
652(d)(6), the conferees give specific guidance to the
Commission with respect to granting waivers. In that regard,
the conferees allow the Commission to waive the various
restrictions in this section if: the cable company or telephone
company would be subjected to undue economic stress, the cable
system of local exchange facilities would not be economically
viable, the anticompetitive effects of the proposed transaction
are clearly outweighed by the public interest, and the local
franchising authority approves of such waiver.
Finally, new section 652(e) contains a definition of
telephone service area for the purposes of this section.
New Section 653--Establishment of Open Video Systems
Senate bill
Section 202 of the Senate bill amends section 613(b) of
the Communications Act to state that nothing precludes a
telecommunications carrier from carrying video programming
provided by others directly to subscribers over a common
carrier video platform. It also states that nothing precludes a
video program provider that makes use of a common carrier video
platform from being treated as an operator of a cable system
for purposes of section 111 of title 17, U.S.C.
It also requires providers of common carrier video
platform services to provide local broadcast stations, and
public, educational and governmental entities, access to
platforms for the purpose of transmission of television
broadcast programming at rates no higher than the incremental-
cost-based rates of providing such access.
It states that video program providers may be required to
pay fees in the lieu of franchise fees, if the fees are
competitively neutral and are separately identified in consumer
billing. It also states that common carries are not required to
obtain certificates under section 214 in order to construct
facilities to provide video programming services. Within 1 year
after enactment, the Commission must prescribe regulations that
set forth a number of safeguards. Finally, it specifies that
the amendment made by subsection (a) takes effect on the date
enactment, while the amendment made by subsection (b) (which
states that no section 214 is required to build platform
facilities) takes effect 1 year after enactment.
House amendment
Section 201 of the House amendment adds new section 653
to the Communications Act. Section 653 permits common carriers
to establish video platforms but requires them to notify the
Commission of their intent to do so; it also specifies the
information that must be included in such notification.
Carriers establishing platforms are required to establish
channel capacity for the provision of video programming in
response to bona fide requests for capacity and must notify the
Commission if there is a delay in or denial of capacity and are
required to construct additional capacity to meet excess
demand. The Commission is required to resolve disputes arising
from requests for capacity within 180 days of notice of such a
dispute.
The Commission is given 6 months from the date of
enactment to complete all actions necessary (including any
reconsideration) to prescribe regulations that--prohibit
carriers from discriminating among video programming providers
with regard to carriage on the platform; determine what
constitutes a bona fide request for capacity; permit channel
sharing; extend regulations concerning sports exclusivity,
network nonduplication and syndicated exclusivity to video
platforms; require platforms to provide service, transmission
and interconnection to unaffiliated programmers that is
equivalent to that provided to the common carrier's video
affiliate; prohibit unreasonable discrimination in favor of the
common carrier's video affiliate concerning material or
information needed to select programming; and, prohibit a
common carrier from excluding areas from its video platform
service area on the basis of ethnicity, race or income.
Section 656, as added by the House amendment, set forth
the applicability of parts I through IV of title VI to any
video programming affiliate established by a common carrier in
accordance with the requirements of part V. Subsection (a)
states that, in general, any provision that applies to a cable
operator under the following sections also applies to such
affiliate--section 613 (other than subsection (a)(2)), 616,
617, 628, 631, 632 and 643 of title VI. Sections 611, 612, 614
and 615 of title VI and section 325 of title III also apply to
such affiliates in accordance with the regulations prescribed
under subsection (b). Parts III and IV (other than sections
628, 631, 632 and 634) of title VI to apply to such affiliates.
Subsection (b) addresses implementation. The Commission
is required to prescribe regulations to ensure that common
carriers that operate video platforms provide: capacity,
services, facilities and equipment for public, educational and
governmental use; capacity for commercial use; capacity for
broadcast television stations; and, an opportunity for
commercial broadcast stations to choose between mandatory
carriage and reimbursement for retransmission. It also directs
the Commission to impose obligations that are no greater or
lesser than the corresponding cable operator obligations
referenced in subsection (a)(2) of section 656.
Finally, this subsection also states that video
programming affiliates of common carriers that establish
platforms, and multichannel video programming distributors that
use such platforms to offer competing service, are subject to
the payment of local franchise fees. It adds that such fees are
in lieu of fees imposed under section 622 and that the rate of
such fees may not exceed the rate at which franchise fees are
imposed on cable operators in the same franchise area.
Conference agreement
The conference agreement adds a new section 653 to the
Communications Act. The conferees recognize that telephone
companies need to be able to choose from among multiple video
entry options to encourage entry, and so systems under this
section allowed to tailor services to meet the unique
competitive and consumer needs of individual markets. New
section 653(a) focuses on the establishment of open video
systems by local exchange carriers and provides for reduced
regulatory burdens subject to compliance with the provisions of
new section 653(b) and Commission certification of a carrier's
intent to comply. New section 653(a) also gives the Commission
authority to resolve disputes (and award damages), but requires
such resolution to occur within 180 days after notice of the
dispute is submitted to the Commission.
New section 653(b) gives the Commission six months from
the date of enactment to complete all actions necessary,
including any reconsideration, to prescribe regulations to
accomplish the following--
except as required by section 611, 614 or 615, to
prohibit open video system operators from
discriminating among video programmers with regard to
carriage, and ensure that the rates, terms and
conditions for carriage are just and reasonable and are
not unjustly or unreasonably discriminatory;
if demand exceeds channel capacity, to prohibit an
open video system operator and its affiliates from
selecting the video programming services that occupy
more than one-third of the activated channel capacity
of the system; but this limitation does not in any way
limit the number of channels a carrier and its
affiliates may offer to provide directly to
subscribers;
to permit an open video system operator to require
channel sharing; that is, to carry only one channel of
any video programming service that is offered by more
than one video programming provider (including the
local exchange carrier's video programming affiliate),
provided that subscribers have ready and immediate
access to any such video programming service;
to extend the Commission's regulations concerning
sports exclusivity, network nonduplication and
syndicated exclusivity to the distribution of video
programming over open video systems, must carry for
commercial and noncommercial broadcast stations, and
retransmission content; and,
to prohibit an open video system operator from
unreasonably discriminating in favor of itself and its
affiliates with regard to material or information
provided for the purpose of selecting programming or
presenting information to subscribers; to require an
open video system operator to ensure that video
programming providers or copyright holders are able to
identify their programming services to subscribers; to
require the operator to transmit such identification
without change or alteration; and to prohibit an open
video system operator from omitting television
broadcasters or other unaffiliated video programming
services from carriage on any navigational device,
guide, or menu.
New section 653(c) sets forth the reduced regulatory
burdens imposed on open video systems. There are several
reasons for streamlining the regulatory obligations of such
systems. First, the conferees hope that this approach will
encourage common carriers to deploy open video systems and
introduce vigorous competition in entertainment and information
markets. Second, the conferees recognize that common carriers
that deploy open systems will be ``new'' entrants in
established markets and deserve lighter regulatory burdens to
level the playing field. Third, the development of competition
and the operation of market forces mean that government
oversight and regulation can and should be reduced.
New section 653(c)(1)(A) states that the following
provisions that apply to cable operators also apply to
certified operators of open video systems--sections 613 (other
than subsection (a)(2) thereof), 616, 623(f), 628, 631, and
634; new section 653(c)(1)(B) states that the following
sections--611, 612, 614, and 615, and section 325 of title
III--apply in accordance with regulations prescribed under
paragraph (2); and, new section 653(c)(1)(C) states that
sections 612 and 617, and parts III and IV (other than sections
623(f), 628, 631, and 634), of this title do not apply.
With respect to the rulemaking proceeding required by new
section 653(b)(1), new section 653(c)(2)(A) requires that the
Commission shall, to the extent possible, impose obligations
that are no greater or lesser than the obligations contained in
the provisions described in new section 653(c)(1)(B).
New section 653(c)(2)(B) states that open video system
operators may be subject to fees imposed by local franchising
authorities, but that such fees are in lieu of fees required
under section 622. A State governmental authority could also
impose taxes, fees or other assessments in lieu of franchise or
franchise-like fees imposed by municipalities. In another
effort to ensure parity among video providers, the conferees
state that such fees may only be assessed on revenues derived
from comparable cable services and the rate at which such fees
are imposed on operators of open video systems may not exceed
the rate at which franchise fees are imposed on any cable
operator in the corresponding franchise area. Open system
operators would have the same flexibility as their cable
operator competitors to state separately these fees on their
customer bills.
The conferees intend that an operator of an open video
system under this part shall be subject, to the extent
permissible under State and local law, to the authority of a
local government to manage its public rights-of-way in a
nondiscriminatory and competitively neutral manner.
New section 653(c)(3) is a further attempt to ensure that
operators of open video systems are not burdened with
unreasonable regulatory obligations. It states that the
requirements of new section 653 are intended to operate in lieu
of, and not in addition to, the requirements of title II. The
conferees do not intend that the Commission impose title II-
like regulation under the authority of this section.
Rules and regulations adopted by the Commission pursuant
to its jurisdiction under title II should not be merged with or
added to the rules and regulations governing open video
systems, which will be subject to new section 653, not title
II. Section 302(b)(3) of the conference agreement specifically
repeals the Commission's video dialtone rules. Those rules
implemented a rigid common carrier regime, including the
Commission's customer premises equipment and Computer III
rules, and thereby created substantial obstacles to the actual
operation of open video systems.
New section 653(c)(4) provides that nothing in the
Communications Act precludes a video programming provider
making use of an open video system from being treated as an
operator of a cable system for purposes of section 111 of title
17, United States Code.
New section 653(d) contains the definition of the term
``telephone service area'' to be used in conjunction with the
provisions of new section 653.
Section 302(b) of the conference agreement contains
technical and conforming amendments. Paragraph (1) repeals
subsection (b) of section 613 of the Communications Act (47
U.S.C. 533(b)). Paragraph (2) amends paragraph (7) of section
602 of the Communications Act to clarify that the provision
solely of interactive on-demand services over a common carrier
facility or the provision of an open video system does not
render the facility a cable system and redesignates paragraphs
(12) through (19) as (13) through (20), and inserts paragraph
(12), defining ``interactive on-demand services.'' Paragraph
(3), as noted previously, provides that the Commission's video
dialtone regulations, adopted in CC Docket No. 87-266, are
repealed on the date of enactment and shall not apply to the
operation of an open video system. Repeal of the Commission's
video dialtone regulations is not intended to alter the status
of any video dialtone service offered before the regulations
required by this section become effective.
section 303--preemption of franchising authority regulation of
telecommunications services
Senate bill
Subsection 201(b) of the Senate bill establishes the
principles applicable to the provision of telecommunications by
a cable operator. Paragraph (1) of this subsection adds a new
paragraph 3(A) to section 621(b) of the Communications Act,
which sets forth the jurisdiction of and limitations on
franchising authorities over cable operators engaged in the
provision of telecommunications services. Specifically, a cable
operator or affiliate engaged in the provision of
telecommunications services is not required to obtain a
franchise under title VI of the Communications Act, nor do the
provisions of title VI apply to a cable operator or affiliate
to the extent they are engaged in the provision of
telecommunications services. Franchising authorities are
prohibited from ordering a cable operator or affiliate to
discontinue the provision of telecommunications service,
requiring cable operators to obtain a franchise to provide
telecommunications services, or requiring a cable operator to
provide telecommunications services or facilities as a
condition of initial grant of franchise, franchise renewal, or
transfer of a franchise. However, the Senate intends that
telecommunications services provided by a cable company shall
be subject to the authority of a local government to manage its
public rights of way in a non-discriminatory and competitively
neutral manner and to charge fair and reasonable fees for its
use. These changes do not affect existing Federal or State
authority with respect to telecommunications services.
House amendment
Section 106 of the House amendment creates a new section
621(b)(3)(A) of the Communications Act that provides that, to
the extent a cable operator is engaged in providing a
telecommunications service other than cable service, it shall
not be required to obtain a franchise, and the provisions of
title VI of the Communications Act shall not apply.
Subparagraph (B) provides that a franchising authority may not
impose any requirement that has the effect of prohibiting or
limiting the provision of telecommunications service by a cable
operator.
Subparagraph (C) provides that a franchising authority
may not terminate an operator's offering of a
telecommunications service or cable service because of the
failure of the operator to obtain a franchise for the provision
of telecommunications services. Subparagraph (D) establishes
that franchising authorities may not require a cable operator
to provide any telecommunications service or facilities, other
than intergovernmental services, as a condition of the initial
grant of a franchise or renewal.
Subsection (b) amends section 622(b) of the
Communications Act by inserting the phrase ``to provide cable
services.'' This amendment makes clear that the franchise fee
provision is not intended to reach revenues that a cable
operator derives for providing new telecommunications services
over its system, but only the operators cable-related revenues.
Conference agreement
The conference agreement adopts the House provision with
some minor, technical modifications. The conferees intend that,
to the extent permissible under State and local law,
telecommunications services, including those provided by a
cable company, shall be subject to the authority of a local
government to, in a nondiscriminatory and competitively neutral
way, manage its public rights-of-way and charge fair and
reasonable fees.
section 304--competitive availability of navigation devices
Senate bill
No provision.
House amendment
Section 203 of the House amendment directs the Commission
to adopt regulations to assure the competitive availability to
consumers of converter boxes, interactive communications
devices, and other customer premises equipment from
manufacturers, retailers, and other vendors not affiliated with
a telecommunications operator. Section 203 does not prohibit
telecommunications system operators from also offering
navigation devices and other customer premise equipment to
customers provided that the system operators' charges for
navigation devices and equipment are separately stated, and are
not subsidized by the charges for the network service.
Section 203 specifically recognizes that cable and other
telecommunications system operators have a valid interest,
which the Commission should continue to protect, in system or
signal security and in preventing theft of service and,
therefore, the Commission may not prescribe regulations which
would jeopardize signal security or impede the legal rights of
a provision to preempt theft of service.
Section 203 directs the Commission to waive a regulation
for a limited time where the telecommunications system operator
has shown that the waiver is necessary to the introduction of a
new telecommunications subscription service.
Section 203(f) sunsets the regulations adopted pursuant
to this section when the Commission determines that the market
for customer premises equipment, including navigation devices,
has become competitive.
Conference agreement
The conference agreement adopts the House provision with
modifications as a new section 629 of the Communications Act.
The scope of the regulations are narrowed to include only
equipment used to access services provided by multichannel
video programming distributors. In prescribing regulations to
ensure the commercial availability of such equipment to
consumers, the Commission is directed to consult with private
standard-setting organizations, such as IEEE, DAVIC (Digital
Audio Video Council), MPEG, ANSI and other appropriate bodies.
The conferees intend that the Commission avoid actions which
could have the effect of freezing or chilling the development
of new technologies and services. One purpose of this section
is to help ensure that consumers are not forced to purchase or
lease a specific, proprietary converter box, interactive device
or other equipment from the cable system or network operator.
Thus, in implementing this section, the Commission should take
cognizance of the current state of the marketplace and consider
the results of private standards setting activities.
The conference agreement also directs the Commission to
act on waiver requests within 90 days. The agreement sunsets
the regulations when the Commission determines the following:
the market for the multichannel video programming distributors
is competitive; the market for equipment used in conjunction
with the services is competitive; and elimination of the
regulations are in the public interest and would promote
competition. The agreement makes clear that nothing in this
section expands or limits current Commission authority.
Section 305--Video Programming Accessibility
Senate bill
Section 308 of the Senate bill adds a new section 262 to
the Communications Act in part to require the Commission to
ensure that video programming is accessible through closed
captions and that video programming providers or owners
maximize the accessibility of video programming previously
published or exhibited through the provision of closed
captions. New section 262(f) further provides the Commission
with authority to exempt various program and providers of video
programs from this requirement. In addition, a provider of
video programming or program owner may petition the Commission
for an exemption from the requirements of this subsection.
Section 262(f) also requires the Commission to undertake
a study of the current extent of closed captioning of video
programming and of previously published video programming;
providers of video programming; the cost and market for closed
captioning; strategies to improve competition and innovation in
the provision of closed captioning; and such other matters as
the Commission considers relevant.
New section 262(g) requires the Commission to prescribe
regulations to implement all provisions of this new section,
not later than eighteen (18) months after the date of enactment
of this Act. As noted above, such regulations shall be
consistent with the standards developed by the Board in
accordance with section 262(e) of this new section.
New section 262(h) authorizes the Commission to enforce
this new section. The Commission shall resolve, by final order,
a complaint alleging a violation of this section within 180
days after the date such complaint is filed.
Subsection (b) section 308 requires that the Commission
undertake within 6 months of enactment of this Act a study of
the feasibility of requiring the use of video descriptions on
video programming in order to ensure the accessibility of video
programming to individuals with visual impairments.
House amendment
Section 204 of the House amendment is designed to ensure
that video services are accessible to hearing impaired and
visually impaired individuals. Subsection (a) requires the
Commission to complete an inquiry within 180 days of enactment
of this section to ascertain the level at which video
programming is closed captioned. In its inquiry, the Commission
should examine the level of closed captioning for live and
prerecorded programming, the extent to which existing or
previously published programming is closed captioned, the type
and size of the provider or owner providing the closed
captioning, the size of the markets served, the relative
audience shares achieved, and any other relevant factors. The
Commission also should examine the quality of closed captioning
and the style and standards which are appropriate for the
particular type of programming. Finally, the Commission should
examine the costs of closed captioning to programs and program
providers.
Subsection (b) provides that, consistent with the results
of its inquiry, the Commission is instructed to establish an
appropriate schedule of deadlines and technical requirements
regarding closed captioning of programming. Accordingly, the
Commission shall establish reasonable timetables and exceptions
for implementing this section. Such schedules should not be
economically burdensome on program providers, distributors or
the owners of such programs.
Section 204(d) allows the Commission to exempt specific
programs, or classes of programs, or entire services from
captioning requirements. Any exemption should be granted using
the information collected during the inquiry, and should be
based on a finding that the provision of closed captioning
would be economically burdensome to the provider or owner of
such programs.
The term ``provider'' contained throughout section 204(d)
refers to the specific television station, cable operator,
cable network or other service that provides programming to the
public. When considering such exemptions, the Commission should
focus on the individual outlet and not on the financial
conditions of that outlet's corporate parent, nor on the
resources of other business units within the parent's corporate
structure.
When considering exemptions under paragraph (d)(1), the
Commission shall consider several factors, including but not
limited to: (1) the nature and cost of providing closed
captions; (2) the impact on the operations of the program
provider, distributor, or owner; (3) the financial resources of
the program provider, distributor, or owner and the financial
impact of the program; (4) the cost of the captioning,
considering the relative size of the market served or the
audience share; (5) the cost of the captioning, considering
whether the program is locally or regionally produced and
distributed; (6) the non-profit status of the provider; and (7)
the existence of alternative means of providing access to the
hearing impaired, such as signing.
Paragraph (d)(2) recognizes that closed captioning should
not be required where it would be inconsistent with programming
contracts between program owners, distributors, or providers,
already in effect as of the date of enactment of this section,
or inconsistent in effect as of the date of enactment of this
section, or inconsistent with copyright law. In addition, cable
operators and common carriers establishing video platforms may
not refuse to carry programming or services which are required
to be carried under the carriage provisions of title VI of the
Communications Act or pursuant to retransmission consent
obligations due to closed captioning requirements.
Paragraph (d)(3) authorizes the Commission to grant
additional exemptions, on a case-by-case basis, where providing
closed captions would constitute an undue burden. In making
such determinations, the Commission shall balance the need for
closed captioned programming against the potential for
hindering the production and distribution of programming.
Subsection (f) directs the Commission to initiate an
inquiry within six months of the date of enactment, regarding
the use of video descriptions on video programming in order to
ensure the accessibility of video programming to persons with
visual impairments. The Commission shall report to Congress on
its findings. The report shall assess appropriate methods for
phasing video descriptions into the marketplace, technical and
quality standards for video descriptions, a definition of
programming for which video descriptions would apply, and other
technical and legal issues. Following the completion of this
inquiry the Commission may adopt regulations it deems necessary
to promote the accessibility of video programming to persons
with visual impairments. It is the goal of the House to ensure
that all Americans ultimately have access to video services and
programs, particularly as video programming becomes an
increasingly important part of the home, school and workplace.
Subparagraph (h) makes clear that the Commission has exclusive
jurisdiction over complaints arising under this section.
Conference agreement
The conference agreement adopts the House provision with
modifications which are incorporated as new section 713 of the
Communications Act. The agreement deletes the House provision
referencing a Commission rulemaking with respect to video
description. The remedies available under the Communications
Act, including the provisions of sections 207 and 208, are
available to enforce compliance with the provisions of section
713.
TITLE IV--REGULATORY REFORM
SECTION 401--REGULATORY FORBEARANCE
Senate bill
Section 303 of the Senate bill adds a new section 260 of
the Communications Act, under which the Commission must forbear
from regulation of a carrier or a service if it determines that
enforcement is not necessary to ensure that charges are just
and reasonable and not unjustly or unreasonably discriminatory
or to protect consumers, and that forbearance is consistent
with the public interest. In making the determination to
forbear, the Commission shall consider whether forbearance
would promote competition. This section allows a carrier to
petition the Commission to request that the Commission exercise
the authority granted by this section, and such petition shall
be deemed granted if the Commission does not deny the petition
within 90 days (unless extended for an additional 60 day
period). The Commission may grant the petition in whole or in
part, and must justify its decision in writing.
House amendment
Section 103 of the House amendment adds new section 230
to the Communications Act. Section 230 requires that the
Commission forbear from applying regulation from part I or part
II of title II (except for sections 201, 202, 208, 243, and
248) to a common carrier or service unless it determines that
enforcement is necessary to ensure that charges are reasonable
and not unjustly or unreasonably discriminatory or to protect
consumers, or that forbearance is inconsistent with the public
interest. In making the determination to forbear, the
Commission shall consider whether forbearance would promote
competition.
Section 230 allows joint marketing of mobile services in
connection with telephone exchange service, exchange access,
intra- and interLATA telecommunication service and information
services.
Conference agreement
The conferees agree to create a new section 10 in title I
of the Communications Act. New subsection (a) of section 10
requires the Commission to forbear from applying any provision
of the Communications Act or from applying any of its
regulations to a telecommunications carrier or
telecommunications service, if the Commission determines that
enforcement is not necessary to:
ensure that charges, practices, classifications
or regulations for such carrier or service are just and
reasonable, and not unjustly or unreasonably
discriminatory;
protect consumers; and
protect the public interest.
In making its public interest determinations, the
Commission under new subsection (b) of section 10 shall
consider whether or not forbearance will promote competition.
New subsection (c) permits carriers to petition for
forbearance and these petitions shall be deemed granted if the
Commission does not deny such petition within one year of the
Commission's receipt of the petition. The Commission may only
extend this one-year time period for 90 days. The Commission
can also approve or deny the petition in whole or in part.
New subsection (d) provides that the Commission may not
forbear from applying the requirements of new sections 251(c)
or 271 until the Commission determines that those requirements
have been fully implemented.
New subsection (e) provides that a State may not continue
to apply or enforce any provision of the Communications Act
that the Commission has determined to forbear from applying
under new subsection (a). This new subsection is not intended
to limit or preempt State enforcement of State statutes or
regulations.
section 402--biennial review of regulations; regulatory relief
Senate bill
Section 302 of the Senate bill adds a new section 259 of
the Communications Act, under which every two years the
Commission and a Federal-State Joint Board must review all
regulations issued under the Communications Act or any State
legislation to determine whether they are still necessary in
the public interest as a result of meaningful competition. The
Commission is required to repeal any of its regulations found
to be no longer necessary.
House amendment
No provision.
Conference agreement
The conferees agree to create a new section 11 in title I
of the Communications Act. New subsection (a) of section 11
requires the Commission, beginning in 1998 and in every even
numbered year thereafter, to review all of its regulations that
apply to the operations and activities of providers of
telecommunications services and determine whether any of these
regulations are no longer in the public interest because
competition between providers renders the regulation no longer
meaningful.
New subsection (b) of section 11 requires the Commission
to eliminate the regulations that it determines are no longer
in the public interest.
New subsection (b) of section 402 of the conference
agreement addresses regulatory relief that streamlines the
procedures for revision by local exchange carriers of charges,
classifications and practices under section 204 of the
Communications Act. New subsection (b) of section 402 also
eliminates the section 214 approval requirement for extension
of lines and permits carriers to file ARMIS reports annually.
New subsection (c) of section 402 of the conference
agreement requires the Commission in classifying carriers
according to 47 CFR 32.11, and in establishing reporting
requirements pursuant to 47 CFR part 43 and 47 CFR 64.903, to
adjust revenue requirements to account for inflation as of the
date the Commission's Report and Order on Docket No. CC 91-141
was released, and annually thereafter.
Section 403--Elimination of Unnecessary Commission Regulations and
Functions
Senate bill
Section 302(b) of the Senate bill is intended to
eliminate unnecessary Commission regulations and functions.
Subsection (b)(1) repeals the current requirement that the
Commission set depreciation rates for common carriers, thus
allowing the Commission flexibility to assess whether doing so
would serve the public interest.
Subsection (b)(2) authorizes the Commission to hire
outside, independent licensed CPA's to audit telecommunications
carriers and vests those outsiders with the same authority as
Commission staff auditors.
Subsection (b)(3) streamlines the Federal-State
coordination process by allowing states and the Commission to
select the least formal method appropriate in resolving
specific regulatory issues.
Subsection (b)(4) allows for inspection of ship radio
stations by private entities and provides the Commission with
authority to waive the current mandatory annual inspection
while providing greater flexibility in scheduling ship
inspections.
Subsection (b)(5) would give the Commission flexibility
in determining whether broadcast construction permits are
required where the likelihood of interference is minimal or
does not exist.
Subsection (b)(6) allows automatic cancellation of a
broadcaster's license if the station does not transmit for 12
consecutive months.
Subsection (b)(7) provides Commission staff with
authority to process routine comparative ITFS applications.
Subsection (b)(8) permits the Commission to delegate,
subject to established Commission standards, testing and
certification of telecommunications devices and home
electronics equipment to private laboratories.
Subsection (b)(9) eliminates the requirement that a
public hearing be held for a station to make routine changes in
frequency, hours of operation, and authorized power.
Subsection (b)(10) also eliminates the individual
licensing requirement currently imposed on domestic ships and
aircraft, citizens band radio and personal radio services, if
the Commission determines it is in the public interest.
Subsection (b)(11) expedites the licensing of fixed
microwave service by eliminating the requirement that 30 days
public notice be given prior to granting these licenses.
Subsection (b)(12) also ends redundant Commission
jurisdiction over ship radios owned by other government
agencies.
Subsection (b)(13) broadens the number of individuals
authorized to administer amateur radio examinations and reduces
the amount of paperwork that must be kept.
Subsection (b)(14) authorizes the Commission to
streamline and reduce its renewal procedures for non-broadcast
radio license renewal applicants such as cellular licensees.
House amendment
The House has no comparable provisions, except for the
provision delegating equipment testing authority.
Conference agreement
The conference agreement adopts the Senate provisions,
except for subsection (b)(3), with modifications. Specifically,
subsections (b)(4), (b)(7), (b)(10) and (b)(11) of the Senate
bill have been modified to incorporate provisions as passed in
the House budget reconciliation legislation (House Report 104-
280).
The conference agreement also amends section 310(b) of
the Communications Act to remove the restrictions on
corporations having foreign officers or directors.
TITLE V--OBSCENITY AND VIOLENCE
Subtitle A--Obscene, Harassing, and Wrongful Utilization of
Telecommunications Facilities
section 502--obscene or harassing use of telecommunications facilities
under the communications act of 1934
Senate bill
Section 401 of the Senate bill updates section 223(a) of
the Communications Act by using the term ``telecommunications
service'' as a replacement for or in addition to ``telephone''
references in the present law. The term ``communication'' is
added to current law references to ``conversation.'' An intent
requirement is added to section 223(a)(1)(A) that liability is
incurred for ``obscene, lewd, lascivious, filthy, or indecent''
communications with the intent to ``annoy, abuse, threaten, or
harass another person.''
Current law ``Dial-a-Porn'' provisions (sections 223(b)
and (c)) are untouched by the Senate bill.
A new section 223(d) is added to prohibit the use of a
telecommunications device to make or make available an obscene
communication.
A new section 223(e) is added to prohibit the use of a
telecommunications device to make or make available an indecent
communications to minors.
New defenses are provided to assure that the mere
provision of access to an interactive computer service does not
create liability. The access providers provision is not
available to one who provides access to a system with which
they conspire or own or control. Employers are provided a
defense for actions by employees unless the employee's conduct
is within the scope of employment and is known, authorized, or
ratified by the employer. A good faith defense is provided for
``reasonable, effective, and appropriate'' measures to restrict
access to prohibited communications. The word ``effective'' is
given its common meaning and does not require an absolute 100
percent restriction of access to be judged ``effective.''
Nothing in the defenses to section 223 are intended to
narrow or effect the application of the existing dial-a-porn
law or other Federal criminal law or to provide a defense for
the person who created and sent a prohibited communication.
The use of the good faith defenses which are otherwise
legal shall not expose an individual to liability and the
States may not impose obligations for commercial activities
which are inconsistent with the treatment of activities or
actions described in this section.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provisions
with modifications. New subsection 223(d)(1) applies to content
providers who send prohibited material to a specific person or
persons under 18 years of age. Its ``display'' prohibition
applies to content providers who post indecent material for
online display without taking precautions that shield that
material from minors.
New section 223(d)(1) codifies the definition of
indecency from FCC v. Pacifica Foundation, 438 U.S. 726 (1978).
Defenses to violations of the new sections assure that
attention is focused on bad actors and not those who lack
knowledge of a violation or whose actions are equivalent to
those of common carriers.
The conferees intend that the term indecency (and the
rendition of the definition of that term in new section 502)
has the same meaning as established in FCC v. Pacifica
Foundation, 438 U.S. 726 (1978), and Sable Communications of
California, Inc. v. FCC, 492 U.S. 115 (1989). These cases
clearly establish the principle that the federal government has
a compelling interest in shielding minors from indecency.
Moreover, these cases firmly establish the principle that the
indecency standard is fully consistent with the Constitution
and specifically limited in its reach so that the term is not
unconstitutionally vague. See also Action for Children's
Television v. FCC, 58 F. 3d 654, 662-63 (en banc) (D.C. Cir.
1995), cert. denied, 64 U.S.L.W. 3465 (1996); Alliance For
Community Media v. FCC, 56 F. 3d 105, 1124-25 (D.C. Cir. 1995)
cert. granted sub. nom., Denver Area Education
Telecommunications Consortium v. FCC, 116 S.CT. 471 (1995),
Dial Information Services Corp. of New York v. Thornburgh, 938
F.2d 1535, 1540-41 (2d Cir. 1991) cert. denied sub. nom., Dial
Information Services Corp. of New York v. Barr, 502 U.S. 1072
(1992); Action for Children's Television v. FCC, 932 F. 2d
1504, 1508 (D.C. Cir. 1991).
The precise contours of the definition of indecency have
varied slightly depending on the communications medium to which
it has been applied. The essence of the phrase--patently
offensive descriptions of sexual and excretory activities--has
remained constant, however. At the time of this writing, the
Supreme Court will consider at least one constitutional
challenge to federal indecency statutes. Importantly, the
question whether indecency is overly broad or
unconstitutionally vague is not seriously at issue in that
challenge. See Alliance for Community Media, supra, (whether
State action exists as to private decisions by cable
operators). There is little doubt that indecency can be applied
to computer-mediated communications consistent with
constitutional strictures, insofar as it has already been
applied without rejection in other media contexts, including
telephone, cable, and broadcast radio.
The conferees considered, but rejected, the so-called
``harmful to minors'' standard. See Ginsberg v. New York, 390
U.S. 629, 641-43 (1968). The proponents of the ``harmful to
minors'' standard contended that that standard contains an
exemption for material with ``serious literary, artistic,
political, and scientific value,'' and therefore was the better
of the two alternative standards. (``Harmful to minors'' laws
use the ``variable obscenity'' test and prohibit the sale, and
sometimes the display, of certain sexually explicit material to
minors.) This assertion misapprehends the indecency standard
itself, and disregards the Supreme Court's various rulings on
this issue. See Pacifica, 438 U.S. at 743, n. 18, and its
progeny.
The gravamen of the indecency concept is ``patent
offensiveness.'' Such a determination cannot be made without a
consideration of the context of the description or depiction at
issue. It is the understanding of the conferees that, as
applied, the patent offensiveness inquiry involves two distinct
elements: the intention to be patently offensive, and a
patently offensive result. In the Matter of Sagittarius
Broadcasting Corp. et al, 7 FCC Rcd. 6873, 6875, (1992); In the
Matter of Audio Enterprises, Inc., 3 FCC Rcd. 930, 932 (1987).
Material with serious redeeming value is quite obviously
intended to edify and educate, not to offend. Therefore, it
will be imperative to consider the context and the nature of
the material in question when determining its ``patent
offensiveness.''
In view of the solid constitutional pedigree of the
indecency standard (see Pacifica), 438 U.S. at 743 (describing
indecency as low value and marginally protected by the First
Amendment)), use of the indecency standard poses no significant
risk to the free-wheeling and vibrant nature of discourse or to
serious, literary, and artistic works that currently can be
found on the Internet, and which is expected to continue and
grow. As the Supreme Court itself noted when upholding the
constitutionality of indecency prohibitions, prohibiting
indecency merely focuses speakers to re-cast their message into
less offensive terms, but does not prohibit or disfavor the
essential meaning of the communication. Pacifica, 438 U.S. at
743, n. 18. Likewise, requiring that access restrictions be
imposed to protect minors from exposure to indecent material
does not prohibit or disfavor the essential meaning of the
indecent communication, it merely puts it in its appropriate
place: away from children.
Violators of this section shall be fined under title 18,
U.S. Code, or imprisoned not more than two years, or both.
Each intentional act of posting indecent content for
display shall be considered a separate violation of this
subsection, rather than each occasion upon which indecent
material is accessed or downloaded from an interactive computer
service or posted without the content provider's knowledge on
such a service. New subsection 223(d)(2) sets forth the
standard of liability for facilities providers who
intentionally permit their facilities to be used for an
activity prohibited by new subsection 223(d)(1).
New subsection 223(e) includes statutory defenses for
violations of new sections 223 (a) and (d) that supplement
other defenses available at law, such as common law defenses.
New subsections 223 (e)(1), (e)(2) and (e)(3) set forth the
``access provider'' defense. The defense protects entities from
liability for providing access or connection to or from a
facility, network or system not under their control. The
defense covers provision of related capabilities incidental to
providing access, such as server and software functions, that
do not involve the creation of content.
The defense does not apply to entities that conspire with
entities actively involved in the creation of content
prohibited by this section, or who advertise that they offer
access to prohibited content. Nor does it apply to provision of
access or connection to a facility, system or network that
engages in violations of this section and that is owned or
controlled by the access provider. In the absence of these
conditions, commercial and non-profit Internet operators who
provide access to the Internet and other interactive computer
services shall not be liable for indecent material accessed by
means of their services. This provision is designed to target
the criminal penalties of new sections 223(a) and (d) at
content providers who violate this section and persons who
conspire with such content providers, rather than entities that
simply offer general access to the Internet and other online
content. The conferees intend that this defense be construed
broadly to avoid impairing the growth of online communications
through a regime of vicarious liability.
New subsection 223(e)(4) provides a defense to employers
whose employees or agents make unauthorized use of office
communications systems. This defense is intended to limit
vicarious or imputed liability of employers for actions of
their employees or agents. To be outside the defense, the
prohibited action must be within the scope of the employee's or
agent's employment. In addition, the employer must either have
knowledge of the prohibited action and affirmately act to
authorize or ratify it, or recklessly disregard the action.
Both conditions must be met in order for employers to be held
liable for the actions of an employee or agent.
The good faith defenses set forth in new subsection
223(e)(5) are provided for ``reasonable, effective, and
appropriate'' measures to restrict access to prohibited
communications. The word ``effective'' is given its common
meaning and does not require an absolute 100% restriction of
access to be judged effective. The managers acknowledge that
content selection standards, and other technologies that enable
restriction of minors from prohibited communications, which are
currently under development, might qualify as reasonable,
effective, and appropriate access restriction devices if they
are effective at protecting minors from exposure to indecent
material via the Internet.
New subsection 223(e)(6) permits the Commission to
describe its view of what constitute ``reasonable, effective
and appropriate'' measures and provides that use of such
measures shall be admissible as evidence that the defendant
qualifies for the good faith defense. This new subsection
grants no further authority to the Commission over interactive
computer services and should be narrowly construed.
New subsection 223(f)(1) supplements, without in any way
limiting, the ``Good Samaritan'' liability protections of new
section 230.
New subsection 223(f)(2) preempts inconsistent State and
local regulations of activities and actions described in new
subsections 223(a)(2) and (d). This provision is intended to
establish a uniform national standard of content regulation for
a national, and indeed a global, medium, in which content is
transmitted instantaneously in point-to-point, and point-to-
multipoint communications. As originally passed by the Senate,
this subsection excluded non-commercial content providers. The
conferees have expanded this section to provide for consistent
national and State and local content regulation of both
commercial and non-commercial providers. The conferees
recognize and wish to protect the important work of nonprofit
libraries and higher educational institutions in providing the
public with both access to electronic communications networks
like the Internet, and valuable content which they are uniquely
well-positioned to provide. Accordingly, nonprofit libraries
and educational institutions, like commercial entities, are
assured by this provision that they will not be subjected to
liability at the State or local level in a manner inconsistent
with the treatment of their activities or actions under this
legislation.
The conferees also recognize the critical importance of
access software in making the Internet and other interactive
computer services accessible to Americans who are not computer
experts. Accordingly, provisions of ``access software'' is
included within the access provider defense. As defined in new
subsection 223(h)(3), in term includes software that enables a
user to do any of an enumerated list of functions that are set
forth in technical language. It includes client and server
software, such as proxy server software that downloads and
caches popular web pages to reduce the load of traffic on the
Internet and to permit faster retrieval. The definition
distinguishes between software that actually creates or
includes prohibited content and software that allows the user
to access content provided by others.
section 503--obscene programming on cable television
Senate bill
Section 403 of the Senate bill amends section 639 of the
Communications Act to increase the maximum fine for
transmitting obscene programming on cable television from
$10,000 to $100,000.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provision with
modifications, $10,000 is struck from the current law and
``under title 18, United States Code'' is inserted.
section 504--scrambling of cable channels for nonsubscribers
Senate bill
Section 407 of the Senate bill adds a new section 640 to
the Communications Act requiring cable television operators to
fully scramble or otherwise block upon subscriber request and
at no charge to the subscriber, the audio and video portions of
programming not specifically subscribed to by a household and
unsuitable for children in the judgment of the subscriber.
House amendment
No provision.
Conference agreement.
The conference agreement adopts the Senate provision with
modifications as a new section 640 of the Communications Act.
The ``unsuitable for children'' standard is dropped.
Programming not subscribed to by a household shall be blocked
on request without charge.
section 505--scrambling of sexually explicit adult video service
programming
Senate bill
Section 408 of the Senate bill requires that cable
operators offering sexually explicit adult programming or other
programming that is indecent on any channel of its service
primarily dedicated to sexually-oriented programming fully
scramble or block the video and audio portions of such channel
or channels so that one not a subscriber does not receive it.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provision with
modifications as a new section 641 of the Communications Act.
Section 506--Cable Operator Refusal to Carry Certain Programs
Senate bill
Section 408 of the Senate bill amends title VI of the
Communications Act to allow cable operators to refuse to
transmit any public access or leased access program or portion
of a program which contains obscenity, indecency, or nudity.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provision.
Section 507--Protection of Minors and Clarification of Current Laws
Regarding Communication of Obscene Materials Through the Use of
Computers.
Senate bill
No provision.
House amendment
Section 403(a)(2) of the House amendment made conforming
and clarifying amendments to sections 1462, 1467, and 1469 of
title 18, United States Code. Those statutes currently prohibit
the interstate transportation of obscenity for the purpose of
sale or distribution, whether commercial or non-commercial in
nature. These statutes outlaw the importation of obscenity, by
whatever means. These provisions were intended to simply
clarify sections 1462, 1465, and 1467 of title 18, United
States Code.
Conference agreement
The Senate recedes to the House with modifications.
Section 507 simply clarifies that the current obscenity
statutes, in fact, do prohibit using a computer to import and
receive an importation of, and transport to sell or distribute,
``obscene'' material.
The amendments made by this section are clarifying and
shall not be interpreted to limit or repeal any prohibition
contained in sections 1462 or 1465 of title 18, United States
Code, before such amendment, under the rule established in
United States v. Alpers, 338 U.S. 680 (1950).
section 508--coercion and enticement of minors
Senate bill
Several provisions of the Senate bill protect children
from harassing, indecent or obscene communications.
House amendment
Several provisions of the House amendment protect
children from obscene or indecent communications.
Conference agreement
Section 508 would amend section 2422 of title 18 to
prohibit the use of a facility of interstate commerce which
includes telecommunications devices and other forms of
communication for the purpose of luring, enticing, or coercing
a minor into prostitution or a sexual crime for which a person
could be held criminally liable, or attempt to do so. On July
24, 1995, the Senate Judiciary Committee held a hearing on
online indecency, obscenity, and child endangerment. The record
of this hearing supports the need for Congress to take
effective action to protect children and families from online
harm.
section 509--online family empowerment
Senate bill
No provision.
House amendment
Section 104 of the House amendment protects from civil
liability those providers and users of interactive computer
services for actions to restrict or to enable restriction of
access to objectionable online material.
Conference agreement
The conference agreement adopts the House provision with
minor modifications as a new section 230 of the Communications
Act. This section provides ``Good Samaritan'' protections from
civil liability for providers or users of an interactive
computer service for actions to restrict or to enable
restriction of access to objectionable online material. One of
the specific purposes of this section is to overrule Stratton-
Oakmont v. Prodigy and any other similar decisions which have
treated such providers and users as publishers or speakers of
content that is not their own because they have restricted
access to objectionable material. The conferees believe that
such decisions create serious obstacles to the important
federal policy of empowering parents to determine the content
of communications their children receive through interactive
computer services.
These protections apply to all interactive computer
services, as defined in new subsection 230(e)(2), including
non-subscriber systems such as those operated by many
businesses for employee use. They also apply to all access
software providers, as defined in new section 230(e)(5),
including providers of proxy server software.
The conferees do not intend, however, that these
protections from civil liability apply to so-called
``cancelbotting,'' in which recipients of a message respond by
deleting the message from the computer systems of others
without the consent of the originator or without having the
right to do so.
Subtitle B--Violence
section 551--parental choice in television programming
Senate bill
Sections 501-505 of Senate bill gives the industry one
year to voluntarily develop a ratings system for TV programs.
If the industry fails to do so, a Federal TV Ratings Commission
would set the ratings. The Commission would be appointed by the
President, subject to confirmation by the Senate and would
establish rules for rating the level of violence and other
objectionable content in programs. The Board would also
establish rules for TV broadcasters and cable systems to
transmit the ratings to viewers. The Commission would be
authorized funds necessary to carry out its duties. The Senate
bill requires TV manufacturers to equip all 13 inch or greater
TV sets with circuitry to block rated shows.
House amendment
Section 305 of the House amendment gives the cable and
broadcast industries one year to develop voluntary ratings for
video programming containing violence, sex and other indecent
materials and to agree voluntarily to broadcast signals
containing such ratings. If the industry fails to come up with
an acceptance plan, the Commission must develop guidelines for
rating programs based on recommendations from an advisory
committee that is fairly balanced politically. If a program is
rated, the broadcasters must transmit the signal of the rating.
The House amendment requires TV manufacturers to equip 13 inch
or greater sets with circuitry that will enable the set to
block out all programs with a common rating.
Conference agreement
The conference agreement adopts the House provisions with
modifications. In subsection (a), Congress makes findings
concerning the adverse impact of violent and indecent video
programming on children, the compelling interest of the
government in addressing this problem, and the promise of
technological tools that allow parents to protect their
children by blocking harmful programming on their television
sets.
In subsection (b), Congress provides the Commission the
authority to set up an advisory committee to recommend a system
for rating video programming that contains sexual, violent or
other indecent material about which parents should be informed
before it is displayed to children. It also provides the
Commission with authority to prescribe rules requiring a
distributor to transmit a rating if the distributor has decided
to rate a video program. However, in subsection (e), Congress
delays the Commission's exercise of this authority to no sooner
than one year after the date of enactment, and only if it
determines that distributors of video programming have not
established an acceptable voluntary system for rating
programming nor agreed voluntarily to broadcast signals that
contain ratings of such programming.
In subsection (b)(1), the Commission is authorized to
prescribe guidelines and recommended procedures for a rating
system based on the recommendations from the advisory
committee. Nothing in this language is intended to preclude
publishing the rating in print advertisements or on the air,
but under this subsection the distributor must include the
electronic transmission of the rating as an additional method
of empowering parents to block programming carrying the rating.
The rules prescribed for transmitting a rating are
requirements. In contrast, the guidelines and recommended
procedures for a rating system are not rules and do not include
requirements. They are intended to provide industry with a
carefully considered and practical system for rating programs
if industry does not develop such a system itself. However,
nothing in subsection (b)(1) authorizes, and the conferees do
not intend that, the Commission require the adoption of the
recommended rating system nor that any particular program be
rated.
In subsection (b)(2), Congress directs the Commission to
ensure that the advisory committee is composed of
representatives from the private sector and be fairly balanced
in terms of political affiliation, the points of view
represented, and the functions to be performed by the
committee. It also directs the Commission to provide to the
committee such staff and resources as may be necessary and
require the committee to submit a final report no later than
one year after the appointment of its members.
In new subsections (c) and (d), the conferees have
removed language from the House amendment concerning the
importation of televisions, and clarified that the requirements
of these subsections apply to all televisions above a certain
size shipped in interstate commerce (regardless of where they
were manufactured) or televisions manufactured in the United
States. Such sets are required by these two subsections to
include a feature designed to enable viewers to block display
of programs carrying a common rating in compliance with rules
prescribed by the Commission. Under subsection (c)(4), the
Commission is authorized to amend these rules as appropriate to
allow set manufacturers to comply with this subsection using
alternative technology that meets certain standards of cost,
effectiveness and ease of use.
Under subsection (e)(1), the effective date for
subsection (b) (regarding the appointment of an advisory
committee to recommend a rating system and the rules for
transmitting a rating) is no less than one year after the date
of enactment. The actual effective date has also been made
contingent on a determination by the Commission that
distributors of video programming have not, by such date,
established a voluntary system for rating video programming and
such programming is acceptable to the Commission and have also
agreed to include ratings in the transmission of signals to
television sets for blocking.
Under subsection (e)(2), the effective date for
subsection (c) (regarding the rules for the manufacture of
television sets capable of blocking) is no less than two years
after the date of enactment. The conferees intend that the
actual effective date be specified by the Commission after
consultation with the television manufacturing industry.
Section 552--Technology Fund
Senate bill
No provision.
House amendment
Section 304 of the House amendment encourages broadcast,
cable, satellite, syndication, and other video programming
distributors to establish a technology fund to encourage TV and
electronics equipment manufacturers to facilitate the
development of blocking technology that would empower parents
to block TV programming they deem inappropriate for their
children.
Conference agreement
The conference agreement adopts the House provision with
modifications to encourage the availability of blocking
technology to low income families.
Subtitle C--Judicial Review
section 561--expedited Review
Conference agreement
The conference agreement adds new language to provide for
expedited judicial review of the indecency, obscenity and
violence provisions of this title. In any civil action in which
a party makes a facial challenge to these provisions, the
challenge shall be heard by a three-judge district court
convened under 28 U.S.C. Sec. 2284. Any decision of the three-
judge district court holding a provision unconstitutional shall
be directly appealable to the Supreme Court as a matter of
right. However, the direct right of appeal provided in
subsection (b) in this limited circumstance does not limit any
appeal rights applicable to other circumstances under general
statutes.
The conferees emphasize that these provisions are limited
in several ways. They apply only in civil actions. If a party
makes a facial challenge in a criminal context, that party
would not be able to use the procedures provided in this
section. These provisions apply only to facial challenges.
These provisions do not apply to actions in which the party
only challenges the provision as applied to the particular
party involved. However, the three-judge district court could
hear both a facial challenge and an ``as applied'' challenge if
they were combined in the same action, and facial validity had
not yet been determined. Thus, the conferees intend that these
provisions should be invoked in only the limited number of
cases necessary to determine the facial validity of these
provisions. If that facial validity is upheld by the courts,
these provisions may not be used in every ``as applied''
challenge brought thereafter.
TITLE VI--EFFECT ON OTHER LAWS
section 601--Applicability of Consent Decrees and Other Law
Senate bill
Section 7(a) of the Senate bill provides that except for
the supersession of the Modification of Final Judgment, nothing
in the Communications Act shall be construed to modify, impair,
or supersede the applicability of any antitrust law. Section
7(b) provides that the Communications Act shall supersede the
Modification of Final Judgment to the extent that it is
inconsistent with the Communications Act. Section 7(c) of the
bill transfers jurisdiction of any parts of the Modification of
Final Judgment which are not superseded to the Commission.
Section 7(d) supersedes the GTE consent decree.
Section 201(c) of the Senate bill provides that except as
provided in section 202, nothing in the Communications Act
shall be construed to modify, impair, or supersede any State or
local tax law.
Section 226 of the Senate bill provides that
notwithstanding any other provision of law or any judicial
order, no person shall be subject to the provisions of the
Modification of Final Judgment solely by reason by having
acquired CMS or private mobile service assets or operations
previously owned by a BOC or an affiliate of a BOC.
House amendment
Section 401(a) of the House amendment provides that
certain specified sections of the Modification of Final
Judgment are superseded. Section 401(b) provides that nothing
in the Communications Act or the amendments made by the
conference agreement shall be construed to modify, impair, or
supersede any of the antitrust laws. Section 401(c)(1) provides
that parts II and III of title II of the Communications Act
shall not be construed to modify, impair, or supersede Federal,
State, or local law unless expressly so provided in such part.
Section 401(c)(2) provides that notwithstanding section
401(c)(1), nothing in the Communications Act or the amendments
made by the conference agreement shall be construed to modify,
impair, or supersede any State or local tax law except as
provided in sections 243(e) and 622 of the Communications Act
and section 402 of this Act.
Section 401(d) of the House amendment provides that the
GTE consent decree is superseded. Section 401(e) provides that
no person shall be considered an affiliate, successor, or an
assign of a BOC under section III of the Modification of Final
Judgment by reason of having acquired wireless exchange assets
or operations previously owned by a BOC or an affiliate of a
BOC. Section 401(f) defines the term ``antitrust laws'' as used
in section 401. Section 401(g) provides that for the purposes
of this section, the terms ``Modification of Final Judgment''
and ``Bell Operating Company'' have the same meanings provided
such terms in section 3 of the Communications Act.
Conference agreement
The conference agreement adopts a new approach to the
supersession of the Modification of Final Judgment (now called
the AT&T Consent Decree in the conference agreement) and the
GTE consent decree, and it adds language superseding the AT&T-
McCaw Consent Decree (``McCaw Consent Decree''). The conferees
sought to avoid any possibility that the language in the
conference agreement might be interpreted as impinging on the
judicial power. Congress may not by legislation retroactively
overturn a final judgment. Plaut v. Spendthrift Farm, Inc., 115
S.Ct. 1447 (1995). On the other hand, Congress may by
legislation modify or eliminate the prospective effect of a
continuing injunction. Robertson v. Seattle Audubon Society,
503 U.S. 429 (1992); Plaut, 115 S.Ct. 1447; Pennsylvania v.
Wheeling & Belmont Bridge Co., 59 U.S. 421 (1856).
The conferees believe that the AT&T Consent Decree, the
GTE Consent Decree, and the McCaw Consent Decree are continuing
injunctions rather than final judgments. The Committee has
chosen to use the term ``AT&T Consent Decree'' rather than
``Modification of Final Judgment'' to emphasize that point.
To avoid any possible constitutional problem, the
conferees adopted the following new approach. Rather than
``superseding'' all or part of these continuing injunctions,
the conference agreement simply provides that all conduct or
activities that are currently subject to these consent decrees
shall, on and after the date of enactment, become subject to
the requirements and obligations of the Communications Act and
shall no longer be subject to the restrictions and obligations
of the respective consent decrees.
The conferees intend that the court shall retain
jurisdiction over the three consent decrees for the limited
purpose of dealing with any conduct or activity occurring
before the date of enactment. Nothing in the language
eliminating the prospective effect of the three consent decrees
should be construed as eliminating the jurisdiction of the
Court to deal with preenactment conduct or activities under the
consent decrees.
At the time of the divestiture of AT&T under the AT&T
Consent Decree, AT&T and the BOCs entered into a number of
long-term contracts that dealt with pensions, contingent
liabilities, and the like. These contracts are not incorporated
by reference in the AT&T Consent Decree, and nothing in the
language eliminating the prospective effect of the AT&T Consent
Decree should be construed as affecting these contracts.
By eliminating the prospective effect of the GTE Consent
Decree, this language removes entirely the GTE Consent Decree's
prohibition on GTE's and the GTE Operating Companies' entry
into the interexchange market. No provision in the
Communications Act should be construed as creating or
continuing in any way the GTE Consent Decree's prohibition on
GTE or its operating companies' entry into the interexchange
market.
Language explicitly overturning the McCaw Consent Decree
was not included in either bill. However, the new approach to
the AT&T and GTE Consent Decrees, as well as intervening
events, justify the overturning of the McCaw Consent Decree in
the conference agreement.
The McCaw Consent Decree includes three major elements:
(1) equal access and interconnection requirements for AT&T's
cellular business, (2) restrictions on AT&T's manufacturing
business, and (3) a separate subsidiary requirement for AT&T's
cellular business. Both bills contained language that would
have overturned the equal access and interconnection
requirements for all cellular businesses, and that language is
included in the conference agreement. Since the passage of the
original bills in both the House and Senate, AT&T has announced
that it will spin off its manufacturing business, and so the
manufacturing aspects of the decree will soon become moot.
Finally, a recent decision of the Sixth Circuit, Cincinnati
Bell Tel. Co., v. FCC, 69 F.3d 752 (6th Cir. 1995), may lead to
the removal of the separate subsidiary requirement for other
cellular businesses. Accordingly, there is little reason to
keep the McCaw Consent Decree in place.
The McCaw Consent Decree presents a slightly different
problem than the other two consent decrees because it has not
yet been formally entered by the court. The parties agreed to
the McCaw Consent Decree and filed it with the court on July
15, 1994. AT&T entered into a stipulation to abide by the
proposed consent decree until the court completed its review
under the Tunney Act. That review is still continuing.
Nonetheless, the conferees believe that the same basic
principles of law set forth above relating to modifying the
prospective effect of injunctions apply to the McCaw Consent
Decree, which is defined to include the stipulation.
The new approach adopted in the Committee required that
several new provisions be added to the conference agreement.
Two of these provisions are described below. Two other
provisions, relating to equal access and nondiscrimination for
interexchange carriers and existing activities under consent
decree waivers, are also related to this change and they are
described in the appropriate sections of this Joint Statement.
Both the Senate bill and the House amendment specifically
provided that a company would not be considered a successor to
a BOC or otherwise subject to restrictions imposed on BOCs
solely because the company acquired (by spinoff, transfer, or
any other manner) wireless exchange assets or operations from a
BOC. The language of these provisions provided this protection
under the AT&T Consent Decree. Because of the new approach to
the AT&T Consent Decree, the language in the bills no longer
worked to provide the protection that was intended. For that
reason, those specific provisions in both bills are omitted
from the conference agreement.
In lieu of those provisions, the conference agreement
modifies the definition of BOC so that successors or assigns of
the listed BOC's fall within the definition only if they
provide wireline telephone exchange service. This change of
definition is intended to provide the same protection that the
provisions in the two bills provided--that a successor to a
BOC's wireless assets shall not be treated as a BOC simply
because of the acquisition of those assets.
The conference agreement adopts the House antitrust
savings clause with modifications. The antitrust savings clause
provides that except as provided in paragraphs two and three,
nothing in this Act or the amendments made by the conference
agreement shall be construed to modify, impair, or supersede
the applicability of any of the antitrust laws. The clause was
modified to include the repeal of section 221(a) of the
Communications Act (47 U.S.C. Sec. 221(a)). Congress enacted
section 221(a) in the days when local telephone service was
viewed as a natural monopoly. Its purpose was to allow
competing local telephone companies to merge without facing
antitrust scrutiny. Thus, the statute provides that when any
two telephone companies merge, the Commission should determine
whether the merger will be ``of advantage to the persons to
whom service is to be rendered and in the public interest.'' If
so, the Commission can render the transaction immune from ``any
Act or Acts of Congress making the proposed transaction
unlawful.'' In a world of regulated monopolies, this idea made
sense.
However, section 221(a) could inadvertently undercut
several of the provisions of the Telecommunciations Act of
1996. The problem arises for at least two reasons. First, the
critical term ``telephone company'' is not defined. In the old
world of regulated monopolies, a definition probably was not
necessary. However, in the new world of competition, many
companies will be able to argue plausibly that they are
telephone companies.
Second, section 221(a) allows the Commission to confer
immunity from any Act of Congress (including the
Telecommunications Act of 1996) after performing a public
interest review. Section 221(a) could be used to avoid the
cable-telco buyout provisions of the Telecommunications Act of
1996. Any cable company that owned any telephone assets could
become a telephone company and be bought out by a BOC by
applying for immunity under this section.
In addition, if immunity were conferred under section
221(a), it would allow mergers between telecommunications
giants to go forward without any antitrust or securities
review. In the old world, the statute was usually used to
confer immunity on mergers between non-competing Bell operating
subsidiaries or mergers between Bells and small independents
within their territories. Neither of these situations involved
competitive considerations.
However, in the future, the conferees anticipate that
cable companies will be providing local telephone service and
the BOCs will be providing cable service. Mergers between these
kinds of companies should not be allowed to go through without
a thorough antitrust review under the normal Hart-Scott-Rodino
process. The new language contains a conforming change to
clarify that these mergers will now be subject to Hart-Scott-
Rodino review. By returning review of mergers in a competitive
industry to the DOJ, this repeal would be consistent with one
of the underlying themes of the bill--to get both agencies back
to their proper roles and to end government by consent decree.
The Commission should be carrying out the policies of the
Communications Act, and the DOJ should be carrying out the
policies of the antitrust laws. The repeal would not affect the
Commission's ability to conduct any review of a merger for
Communications Act purposes, e.g. transfer of licenses. Rather,
it would simply end the Commission's ability to confer
antitrust immunity.
The conference agreement adopts the House provision
stating that the bill does not have any effect on any other
Federal, State, or local law unless the bill expressly so
provides. This provision prevents affected parties from
asserting that the bill impliedly preempts other laws.
The conference agreement adopts the House version of the
State tax savings clause with a modification to clarify that
fees for open video systems are excluded from the savings
clause.
section 602--preemption of local taxation with respect to direct-to-
home services
Senate bill
No provision.
House amendment
Section 402 of the House amendment preempts local
taxation on the provision of direct-to-home (DTH) satellite
services. This section exempts DTH satellite service providers
and their sales and distribution agents and representatives
from collecting and remitting local taxes on satellite-
delivered programming services. Section 402 does not preempt
local taxes on the sale of the equipment needed to receive
these services.
Conference agreement
The conference agreement adopts the House provisions with
modifications. This section exempts DTH satellite service
providers from collecting and remitting local taxes and fees on
DTH satellite services. DTH satellite service is programming
delivered via satellite directly to subscribers equipped with
satellite receivers at their premises; it does not require the
use of public rights-of-way or the physical facilities or
services of a community.
The conferees adopt the House language, but narrow the
language to ensure that the exemption is only provided for the
actual sale of the programming delivered by the direct-to-home
satellite service. The conference agreement amends the House
provisions to clarify that the exemption applies to taxes
``on'' direct-to-home satellite service rather than ``with
respect to the provision of'' such service. The conference
agreement deletes the language specifying that the sale of
equipment was not within the exemption. The conference
agreement amends the definition of ``direct-to-home satellite
service'' so that it includes only programming transmitted or
broadcast by satellite.
The intent of these amendments is to clarify that the
exemption applies only to the programming provided by the
direct-to-home satellite service. To give two illustrative
examples, the exemption does not apply to the sale of
equipment; that language was deleted only because it could have
created a negative implication that the exemption was broader
than intended. In addition, the exemption does not apply to
real estate taxes that are otherwise applicable when the
provider owns or leases real estate in a jurisdiction. Also,
States are free to tax the sale of the service and they may
rebate some or all of those monies to localities if they so
desire.
TITLE VII--MISCELLANEOUS PROVISIONS
Section 701--Prevention of Unfair Billing Practices for Information or
Services Provided Over Toll-free Telephone Calls
Senate bill
Section 406 of the Senate bill amends section 228(c) of
the Communications Act to add protection against the use of
toll free telephone numbers to connect an individual to a
``pay-per-call'' service. Published reports have indicated that
toll free numbers have been used to defeat the blocking of
``pay-per-call'' numbers by connecting a caller to a ``pay-per-
call'' service after a toll free connection has been made.
Households, businesses and other institutions have been billed
for ``pay-per-call'' charges even though ``pay-per-call''
blocking techniques were used. This provision is intended to
stop that practice.
Section 703 of the Senate bill also amends section 228(c)
of the Communications Act to clarify that subscribers who call
an 800 number or other toll-free numbers shall not be charged
for the calls unless the calling party agrees to be charged
under a written subscription agreement or other appropriate
means. Section 703(a) enumerates findings made by Congress
concerning the prevention of unfair billing practices for
information or services provided over toll-free telephone
calls.
House amendment
Section 110 protects unsuspecting callers from being
charged for 800 calls that they expect to be toll-free--thereby
preserving the toll-free status and integrity of the 800 number
exchange and $8 billion industry--by requiring strict cost
disclosure requirements to ensure that consumers clearly know
when there is a charge for a call, how much the charge will be,
and how they will be billed.
Pursuant to the provisions of this section, information
providers must obtain legal, informed consent from a caller
through either a written pre-authorized contract between the
information providers and the caller, or through the use of an
instructive preamble at the start of all non-free 800 calls.
Both of these options ensure that consumers know there is a
charge for the information service and that they are giving
their consent to be charged.
Conference agreement
The conference agreement adopts the Senate provisions
with modifications. The conferees agreed to close a loophole in
current law, which permits information providers to evade the
restrictions of section 228 by filing tariffs for the provision
of information services. Many information providers have taken
advantage of this exemption by filing tariffs--especially for
1-500, 1-700 and 10XXX numbers--and charging customers high
prices for the services. This exemption has proven to be a
problem because consumers have none of the protections that
were enacted as part of the Telephone Disclosure and Dispute
Resolution Act (P.L. 102-556). Section 701(b) of the conference
agreement closes that loophole.
Section 702--Privacy of Customer Information
Senate bill
Section 102 of the Senate bill amends the Communications
Act to add a new section 252 to impose separate affiliate and
other safeguards on certain activities of the BOCs. Subsection
(g) of new section 252 establishes rules to ensure that the
BOCs protect the confidentiality of proprietary information
they receive and to prohibit the sharing of such information in
aggregate form with any subsidiary or affiliate unless that
information is available to all other persons on the same terms
and conditions. In general, a BOC may not share with anyone
customer-specific proprietary information without the consent
of the person to whom it relates. Exceptions to this general
rule permit disclosure in response to a court order or to
initiate, render, bill and collect for telecommunications
services. For purposes of this subsection the term ``customer
proprietary information'' does not include subscriber list
information.
Subsection 301(c) of the Senate bill defines the term
``subscriber list information'' and requires local exchange
carriers to provide subscriber list information on a timely and
unbundled basis and at nondiscriminatory and reasonable rates,
terms and conditions to anyone upon request for the purpose of
publishing directories in any format.
Subsection 301(d) provides that telecommunications
carriers have a duty to protect the confidentiality of
proprietary information of other common carriers and customers,
including resellers. A telecommunications carrier that receives
such from another carrier may not use such information for its
own marketing efforts.
House amendment
Section 105 of the House amendment adds a new section 222
to the Communications Act. Section 222 establishes privacy
protections for customer proprietary network information
(CPNI). Section 222(a) imposes on carriers a statutory duty to
provide subscriber list information on a timely basis, under
nondiscriminatory and reasonable rates, terms and conditions,
to any publisher of directories upon request.
Section 222(b)(1)(B) prohibits the use of CPNI ``in the
identifications or solicitation of potential customers for any
service other than the service from which such information is
derived.''
With respect to section 222(b)(2), the House recognizes
that carriers are likely to incur some costs in complying with
the customer-requested disclosures contemplated by this
section. This section does not preclude a carrier from being
reimbursed by the customers or third parties for the costs
associated with making such disclosures. In addition, the
disclosures described in this section include only the
information provided to the carrier by the customer. A carrier
is not required to disclose any of its work product based on
such information.
In section 222(b)(3), the term ``aggregate information''
should not be construed as a mechanism whereby carriers are
forced to disclose sensitive information to their competitors.
Indeed, the key component of ``aggregate information'' is that
such information would have to be able to be disclosed only to
those persons who have the approval of the customer. Thus, the
House intends that the use of ``aggregate information'' would
be rather limited or restricted.
Section 222(c) states that this section shall not prevent
the use of CPNI to combat toll fraud or to bill and collect for
services requested by the customers.
Section 222(d) allows the Commission to exempt from its
requirements of subsection (b) carriers with fewer than 500,000
access lines, if the Commission determines either that such an
exemption is in the public interest or that compliance would
impose an undue burden.
Section 222(e) defines terms used in this section.
Section 104(b) directs the Commission to review the
impact of converging communications technologies on customer
privacy. This section requires the Commission to commence a
proceeding within one year after the date of enactment to
examine the impact of converging technologies and globalization
of communications networks has on the privacy rights of
consumers and possible remedies to protect them. This section
also directs changes in the Commission's regulations to ensure
that customer privacy rights are considered in the introduction
of new telecommunications service and directs the Commission to
correct any defects in its privacy regulations that are
identified pursuant to this section. The Commission is also
directed to make any recommendations to Congress for any
legislative changes required to correct such defects within 18
months after the date of enactment of this Act.
This section defines three fundamental principles to
protect all consumers. These principles are: (1) the right of
consumers to know the specific information that is being
collected about them; (2) the right of consumers to have proper
notice that such information is being used for other purposes;
and (3) the right of consumers to stop the reuse or sale of
that information.
Conference agreement
The conference agreement adopts the Senate provisions
with modifications. Section 702 of the conference agreement
amends title II of the Communications Act by adding a new
section 222.
In general, the new section 222 strives to balance both
competitive and consumer privacy interests with respect to
CPNI. New subsection 222(a) stipulates that it is the duty of
every telecommunications carrier to protect the confidentiality
of proprietary information of and relating to other carriers,
equipment manufacturers and customers, including carriers
reselling telecommunications services provided by a
telecommunications carrier.
New subsection 222(b) provides that a telecommunications
carrier that receives or obtains proprietary information from
another carrier for purposes of providing any
telecommunications service shall use such information only for
such purpose and shall not use such information for its own
marketing efforts.
In new subsection 222(c) use of CPNI by
telecommunications carriers is limited, except as provided by
law or with the approval of the customer. New subsection (c)
specifies that telecommunications carriers shall only use,
disclose, or permit access to individually identifiable CPNI in
its provision of the telecommunications service for which such
information is derived or in its provision of services
necessary to or used in the provision of such
telecommunications service, including directory services. The
conferees also agreed upon a provision that will require
disclosure of CPNI by a telecommunications carrier upon
affirmative written request by the customer, to any person
designated by the customer.
The conference agreement also asserts carriers' rights in
new subsection 222(d) to use CPNI to initiate, render, bill,
and collect for telecommunications service. New subsection (d)
also allows use of CPNI to protect the rights or property of
the carrier. The conferees intend new subsection 222(d)(2) to
allow carriers to use CPNI in limited fashion for credit
evaluation to protect themselves from fraudulent operators who
subscribe to telecommunications services, run up large bills,
and then change carriers without payment.
New subsection 222(e) stipulates that subscriber list
information shall be made available by telecommunications
carriers that provide telephone exchange service on a timely
and unbundled basis to any person upon request for the purpose
of publishing directories in any format. The subscriber list
information provision guarantees independent publishers access
to subscriber list information at reasonable and
nondiscriminatory rates, terms and conditions from any provider
of local telephone service.
New subsection 222(f) contains definitions of CPNI,
aggregate information and subscriber list information.
secton 703--pole attachments
Senate bill
Section 204 of the Senate bill amends section 224 of the
Communications Act. Section 204 requires that poles, ducts,
conduits and rights-of-way controlled by utilities are made
available to cable television systems at the rates, terms and
conditions that are just and reasonable regardless of whether
the cable system is providing cable television services or
telecommunications services. Section 204 further requires the
Commission to prescribe additional regulations to establish
rates for attachments by telecommunications carriers. Such
rates will take effect five years from date of enactment and be
phased in over a five year period.
House amendment
Section 105 of the House amendment is intended to remedy
the inequity of charges for pole attachments among providers of
telecommunications services. First, it expands the scope of the
coverage of section 224 of the Communications Act. Under
current law, section 224(a)(4) currently defines ``pole
attachment'' to mean any attachment by a cable television
system to a pole, conduit, or right of way owned or controlled
by a utility. This section expands the definition of ``pole
attachment'' to include attachments by all providers of
telecommunications services.
Second, it amends section 224 to direct the Commission,
no later than one year after the date of enactment of the
Communications Act of 1995, to prescribe regulations for
ensuring that utilities charge just and reasonable and
nondiscriminatory rates for pole attachments to all providers
of telecommunications services, including such attachments used
by cable television systems to provide telecommunications
services.
The new provision directs the Commission to regulate pole
attachment rates based on a ``fully allocated cost'' formula.
In prescribing pole attachment rates, the Commission shall: (1)
recognize that the entire pole, duct, conduit, or right-of-way
other than the usable space is of equal benefit to all entities
attaching to the pole and therefore apportion the cost of the
space other than the usable space equally among all such
attachments; (2) recognize that the usable space is of
proportional benefit to all entities attaching to the pole,
duct, conduit, or right-of-way and therefore apportion the cost
of the usable space according to the percentage of usable space
required for each entity; and (3) allow for reasonable terms
and conditions relating to health, safety, and the provision of
reliable utility service.
This new provision further provides that, to the extent
that a company seeks pole attachment for a wire used solely to
provide cable television services (as defined by section 602(6)
of the Communications Act), that cable company will continue to
pay the rate authorized under current law (as set forth in
subparagraph (d)(1) of the 1978 Act). If, however, a cable
television system also provides telecommunications services,
then that company shall instead pay the pole attachment rate
prescribed by the Commission pursuant to the fully allocated
cost formula.
Finally, the new provision requires that whenever the
owner of a conduit or right-of-way intends to modify or to
alter such conduit or right-of-way, the owner shall provide
written notification of such action to any entity that has
obtained an attachment so that such entity may have a
reasonable opportunity to add to or modify its existing
attachment. Any entity that adds to or modifies its existing
attachment after receiving such notification shall bear a
proportionate share of the costs incurred by the owner in
making such conduit or right-of-way accessible.
Conference agreement
The conference agreement adopts the Senate provision with
modifications. The conference agreement amends section 224 of
the Communications Act by adding new subsection (e)(1) to allow
parties to negotiate the rates, terms, and conditions for
attaching to poles, ducts, conduits, and rights-of-way owned or
controlled by utilities. New subsection 224(e)(2) establishes a
new rate formula charged to telecommunications carriers for the
non-useable space of each pole. Such rate shall be based upon
the number of attaching entities. The conferees also agree to
three additional provisions from the House amendment. First,
subsection (g) requires utilities that engage in the provision
of telecommunications services or cable services to impute to
its costs of providing such service an equal amount to the pole
attachment rate for which such company would be liable under
section 224. Second, new subsection 224(h) requires utilities
to provide written notification to attaching entities of any
plans to modify or alter its poles, ducts, conduit, or rights-
of-way. New subsection 224(h) also requires any attaching
entity that takes advantage of such opportunity to modify its
own attachments shall bear a proportionate share of the costs
of such alterations. Third, new subsection 224(i) prevents a
utility from imposing the cost of rearrangements to other
attaching entities if done solely for the benefit of the
utility.
section 704--facilities siting; radio frequency emission standards
Senate bill
No provision.
House amendment
Section 108 of the House amendment required the
Commission to issue regulations within 180 days of enactment
for siting of CMS. A negotiated rulemaking committee comprised
of State and local governments, public safety agencies and the
affected industries were to have attempted to develop a uniform
policy to propose to the Commission for the siting of wireless
tower sites.
The House amendment also required the Commission to
complete its pending Radio Frequency (RF) emission exposure
standards within 180 days of enactment. The siting of
facilities could not be denied on the basis of RF emission
levels for facilities that were in compliance with the
Commission standard.
The House amendment also required that to the greatest
extent possible the Federal government make available to use of
Federal property, rights-of-way, easements and any other
physical instruments in the siting of wireless
telecommunications facilities.
Conference agreement
The conference agreement creates a new section 704 which
prevents Commission preemption of local and State land use
decisions and preserves the authority of State and local
governments over zoning and land use matters except in the
limited circumstances set forth in the conference agreement.
The conference agreement also provides a mechanism for judicial
relief from zoning decisions that fail to comply with the
provisions of this section. It is the intent of the conferees
that other than under section 332(c)(7)(B)(iv) of the
Communications Act of 1934 as amended by this Act and section
704 of the Telecommunications Act of 1996 the courts shall have
exclusive jurisdiction over all other disputes arising under
this section. Any pending Commission rulemaking concerning the
preemption of local zoning authority over the placement,
construction or modification of CMS facilities should be
terminated.
When utilizing the term ``functionally equivalent
services'' the conferees are referring only to personal
wireless services as defined in this section that directly
compete against one another. The intent of the conferees is to
ensure that a State or local government does not in making a
decision regarding the placement, construction and modification
of facilities of personal wireless services described in this
section unreasonably favor one competitor over another. The
conferees also intend that the phrase ``unreasonably
discriminate among providers of functionally equivalent
services'' will provide localities with the flexibility to
treat facilities that create different visual, aesthetic, or
safety concerns differently to the extent permitted under
generally applicable zoning requirements even if those
facilities provide functionally equivalent services. For
example, the conferees do not intend that if a State or local
government grants a permit in a commercial district, it must
also grant a permit for a competitor's 50-foot tower in a
residential district.
Actions taken by State or local governments shall not
prohibit or have the effect of prohibiting the placement,
construction or modification of personal wireless services. It
is the intent of this section that bans or policies that have
the effect of banning personal wireless services or facilities
not be allowed and that decisions be made on a case-by-case
basis.
Under subsection (c)(7)(B)(ii), decisions are to be
rendered in a reasonable period of time, taking into account
the nature and scope of each request. If a request for
placement of a personal wireless service facility involves a
zoning variance or a public hearing or comment process, the
time period for rendering a decision will be the usual period
under such circumstances. It is not the intent of this
provision to give preferential treatment to the personal
wireless service industry in the processing of requests, or to
subject their requests to any but the generally applicable time
frames for zoning decision.
The phrase ``substantial evidence contained in a written
record'' is the traditional standard used for judicial review
of agency actions.
The conferees intend section 332(c)(7)(B)(iv) to prevent
a State or local government or its instrumentalities from
basing the regulation of the placement, construction or
modification of CMS facilities directly or indirectly on the
environmental effects of radio frequency emissions if those
facilities comply with the Commission's regulations adopted
pursuant to section 704(b) concerning such emissions.
The limitations on the role and powers of the Commission
under this subparagraph relate to local land use regulations
and are not intended to limit or affect the Commission's
general authority over radio telecommunications, including the
authority to regulate the construction, modification and
operation of radio facilities.
The conferees intend that the court to which a party
appeals a decision under section 332(c)(7)(B)(v) may be the
Federal district court in which the facilities are located or a
State court of competent jurisdiction, at the option of the
party making the appeal, and that the courts act expeditiously
in deciding such cases. The term ``final action'' of that new
subparagraph means final administrative action at the State or
local government level so that a party can commence action
under the subparagraph rather than waiting for the exhaustion
of any independent State court remedy otherwise required.
With respect to the availability of Federal property for
the use of wireless telecommunications infrastructure sites
under section 704(c), the conferees generally adopt the House
provisions, but substitute the President or his designee for
the Commission.
It should be noted that the provisions relating to
telecommunications facilities are not limited to commercial
mobile radio licensees, but also will include other Commission
licensed wireless common carriers such as point to point
microwave in the extremely high frequency portion of the
electromagnetic spectrum which rely on line of sight for
transmitting communication services.
section 705--mobile service direct access to long distance carriers
Senate bill
Subsection (b) of section 221 of the Senate bill, as
passed, states that notwithstanding the MFJ or any other
consent decree, no CMS provider will be required by court order
or otherwise to provide long distance equal access. The
Commission may only order equal access if a CMS provider is
subject to the interconnection obligations of section 251 and
if the Commission finds that such a requirement is in the
public interest. CMS providers shall ensure that its
subscribers can obtain unblocked access to the interexchange
carrier of their choice through the use of interexchange
carrier identification codes, except that the unblocking
requirement shall not apply to mobile satellite services unless
the Commission finds it is in the public interest.
House amendment
Under section 109 of the House amendment, the Commission
shall require providers of two-way switched voice CMS to allow
their subscribers to access the telephone toll services
provider of their choice through the use of carrier
identification codes. The Commission rules will supersede the
equal access, balloting and prescription requirements imposed
by the MFJ and the AT&T-McCaw consent decree. The Commission
may exempt carriers or classes of carriers from the
requirements of this section if it is consistent with the
public interest, convenience, and necessity, and the provision
of mobile services by satellite is specifically exempt from
this section.
Conference agreement
The conference agreement adopts the House provision with
modifications as a new paragraph (8) of section 332 of the
Communications Act. Specifically, no CMS provider is required
to provide equal access to common carriers providing telephone
toll services. However, the Commission may impose rules to
require unblocked access through the use of mechanisms such as
carrier identification codes or toll-free numbers, if it
determines that customers are being denied access to the
telephone toll service provider of their choice, and such
denial is contrary to the public interest, convenience, and
necessity. The requirements for unblocked access to providers
of telephone toll service shall not apply to mobile satellite
services unless the Commission finds it to be in the public
interest.
section 706--advanced telecommunications incentives
Senate bill
Section 304 of the Senate bill ensures that advanced
telecommunications capability is promptly deployed by requiring
the Commission to initiate and complete regular inquiries to
determine whether advanced telecommunications capability,
particularly to schools and classrooms, is being deployed in a
``reasonable and timely fashion.'' Such determinations shall
include an assessment by the Commission of the availability, at
reasonable cost, of equipment needed to deliver advanced
broadband capability. If the Commission makes a negative
determination, it is required to take immediate action to
accelerate deployment. Measures to be used include: price cap
regulation, regulatory forbearance, and other methods that
remove barriers and provide the proper incentives for
infrastructure investment. The Commission may preempt State
commissions if they fail to act to ensure reasonable and timely
access.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provision with
a modification.
section 707--telecommunications development fund
Senate bill
No provision.
House amendment
Section 112 creates the Telecommunications Development
Fund (TDF). The TDF is an organization to provide funds for
small businesses involved in telecommunications applications.
The TDF is formulated to serve as a quasi-governmental entity
that will provide low interest loans as well as financial
guarantees. The capital for the Fund will be derived from the
deposit of up-front payments for spectrum auctions into an
interest bearing account.
Businesses with gross assets of less that $50 million
will be eligible to receive loans, based upon an assessment of
their loan application. The fund will be administered as a not-
for-profit organization, and funds will be disbursed on a race
and gender neutral basis. The board of directors will consist
of seven members: four from the private sector, and one from
three Federal agencies (the Commission, Department of Treasury,
and the Small Business Administration).
The fund will provide for reinvestment, create jobs, and
promote technological innovation in the telecommunications
industry. A unique aspect of the Fund is that it will promote
public/private sector partnerships to enhance fund assets, and
promote technology development and transfer.
Conference agreement
The conference agreement adopts the House provision as a
new section 714 of the Communications Act.
section 708--national education technology funding corporation
Senate bill
Title VI of the Senate bill adds the National Education
Technology Funding Corporation Act of 1995. The provisions of
this title authorize a corporation, established in the District
of Columbia as a private, nonprofit corporation which is not an
agency or independent establishment of the Federal Government,
to receive financial assistance from Federal departments and
agencies. The Corporation will receive such assistance to
leverage resources and stimulate private investment in
education technology infrastructure, to encourage States to
create and upgrade interactive high capacity networks for
elementary schools, secondary schools and public libraries, to
provide loans, grants and other forms of assistance to State
education technology agencies, and other educational purposes.
The Corporation's financial statements shall be audited
annually, and the Corporation shall publish an annual report to
the President and the Congress.
House amendment
No provision.
Conference agreement
The conference agreement adopts the Senate provision.
section 709--report on the use of advanced telecommunications services
for medical purposes
Senate bill
No provision.
House amendment
The House amendment directs the Assistant Secretary of
Commerce for Communications and Information, in consultation
with the Secretary of Health and Human Services, to submit a
report on telemedicine grant programs conducted by the
government.
Conference agreement
The conference agreement adopts the House provision.
section 710--authorization of appropriations
Senate bill
No provision.
House amendment
This section authorizes appropriations for the Commission
of such sums as may be necessary to carry out this Act, and
provides that additional amounts appropriated to carry out this
Act shall be construed to be changes in the amounts
appropriated for the performance of the activities described in
section 9(a) of the Communications Act.
Conference agreement
The conference agreement adopts the House provision with
a technical modification to section 309(j)(8)(B) of the
Communications Act.
From the Committee on Commerce, for
consideration of the Senate bill, and the House
amendment, and modifications committed to
conference:
Tom Bliley,
Jack Fields,
Michael G. Oxley,
Rick White,
John D. Dingell,
Edward J. Markey,
Rick Boucher,
Anna G. Eshoo,
Bobby L. Rush,
Provided, Mr. Pallone is appointed in lieu
of Mr. Boucher solely for consideration of sec.
205 of the Senate bill:
Frank Pallone, Jr.,
As additional conferees, for consideration
of secs. 1-6, 101-04, 106-07, 201, 204-05, 221-
25, 301-05, 307-11, 401-02, 405-06, 410, 601-
06, 703, and 705 of the Senate bill, and title
I of the House amendment, and modifications
committed to conference:
Dan Schaefer,
Joe Barton,
J. Dennis Hastert,
Bill Paxon,
Scott Klug,
Dan Frisa,
Cliff Stearns,
Sherrod Brown,
Bart Gordon,
Blanche Lambert Lincoln,
As additional conferees, for consideration
of secs. 102, 202-03, 403, 407-09, and 706 of
the Senate bill, and title II of the House
amendment, and modifications committed to
conference:
Dan Schaefer,
J. Dennis Hastert,
Dan Frisa,
As additional conferees, for consideration
of secs. 105, 206, 302, 306, 312, 501-05, and
701-02 of the Senate bill, and title III of the
House amendment, and modifications committed to
conference:
Cliff Stearns,
Bill Paxon,
Scott Klug,
As additional conferees, for consideration
of secs. 7-8, 226, 404, and 704 of the Senate
bill, and titles IV-V of the House amendment,
and modifications committed to conference:
Dan Schaefer,
J. Dennis Hastert,
Scott Klug,
As additional conferees, for consideration
of title IV of the House amendment, and
modifications committed to conference:
Dan Schaefer,
Joe Barton,
Scott Klug,
As additional conferees from the Committee on
the Judiciary, for consideration of the Senate
bill (except secs. 1-6, 101-04, 106-07, 201,
204-05, 221-25, 301-05, 307-11, 401-02, 405-06,
410, 601-06, 703, and 705), and of the House
amendment (except title I), and modifications
committed to conference:
Henry Hyde,
Carlos J. Moorhead,
Bob Goodlatte,
Steve Buyer,
Mike Flanagan,
As additional conferees, for consideration of
secs. 1-6, 101-04, 106-07, 201, 204-05, 221-25,
301-05, 307-11, 401-02, 405-06, 410, 601-06,
703, and 705 of the Senate bill, and title I of
the House amendment, and modifications
committed to conference:
Henry Hyde,
Carlos J. Moorhead,
Bob Goodlatte,
Steve Buyer,
Mike Flanagan,
Elton Gallegly,
Bob Barr,
Martin R. Hoke,
Howard L. Berman,
Managers on the Part of the House.
Larry Pressler,
Ted Stevens,
Slade Gorton,
Trent Lott,
Fritz Hollings,
Daniel K. Inouye,
Wendell Ford,
J.J. Exon,
Jay Rockefeller,
Managers on the Part of the Senate.