[House Report 106-926]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-926

======================================================================



 
    INDEPENDENT TELECOMMUNICATIONS CONSUMER ENHANCEMENT ACT OF 2000

                                _______
                                

October 3, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                        [To accompany H.R. 3850]

  The Committee on Commerce, to whom was referred the bill 
(H.R. 3850) to amend the Communications Act of 1934 to promote 
deployment of advanced services and foster the development of 
competition for the benefit of consumers in all regions of the 
Nation by relieving unnecessary burdens on the Nation's two 
percent local exchange telecommunications carriers, and for 
other purposes, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     1
Purpose and Summary..............................................     5
Background and Need for Legislation..............................     5
Hearings.........................................................     6
Committee Consideration..........................................     6
Committee Votes..................................................     6
Committee Oversight Findings.....................................     6
Committee on Government Reform Oversight Findings................     6
New Budget Authority, Entitlement Authority, and Tax Expenditures     7
Committee Cost Estimate..........................................     7
Congressional Budget Office Estimate.............................     7
Federal Mandates Statement.......................................     7
Advisory Committee Statement.....................................     7
Constitutional Authority Statement...............................     7
Applicability to Legislative Branch..............................     7
Section-by-Section Analysis of the Legislation...................     8
Changes in Existing Law Made by the Bill, as Reported............     9

                               Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Independent Telecommunications 
Consumer Enhancement Act of 2000''.

SEC. 2. FINDINGS AND PURPOSE.

  (a) Findings.--Congress finds the following:
          (1) The Telecommunications Act of 1996 was enacted to foster 
        the rapid deployment of advanced telecommunications and 
        information technologies and services to all Americans by 
        promoting competition and reducing regulation in 
        telecommunications markets nationwide.
          (2) The Telecommunications Act of 1996 specifically 
        recognized the unique abilities and circumstances of local 
        exchange carriers with fewer than two percent of the Nation's 
        subscriber lines installed in the aggregate nationwide.
          (3) Given the markets two percent carriers typically serve, 
        such carriers are uniquely positioned to accelerate the 
        deployment of advanced services and competitive initiatives for 
        the benefit of consumers in less densely populated regions of 
        the Nation.
          (4) Existing regulations are typically tailored to the 
        circumstances of larger carriers and therefore often impose 
        disproportionate burdens on two percent carriers, impeding such 
        carriers' deployment of advanced telecommunications services 
        and competitive initiatives to consumers in less densely 
        populated regions of the Nation.
          (5) Reducing regulatory burdens on two percent carriers will 
        enable such carriers to devote additional resources to the 
        deployment of advanced services and to competitive initiatives 
        to benefit consumers in less densely populated regions of the 
        Nation.
          (6) Reducing regulatory burdens on two percent carriers will 
        increase such carriers' ability to respond to marketplace 
        conditions, allowing them to accelerate deployment of advanced 
        services and competitive initiatives to benefit consumers in 
        less densely populated regions of the Nation.
  (b) Purposes.--The purposes of this Act are--
          (1) to accelerate the deployment of advanced services and the 
        development of competition in the telecommunications industry 
        for the benefit of consumers in all regions of the Nation, 
        consistent with the Telecommunications Act of 1996, by reducing 
        regulatory burdens on local exchange carriers with fewer than 
        two percent of the Nation's subscriber lines installed in the 
        aggregate nationwide;
          (2) to improve such carriers' flexibility to undertake such 
        initiatives; and
          (3) to allow such carriers to redirect resources from paying 
        the costs of such regulatory burdens to increasing investment 
        in such initiatives.

SEC. 3. DEFINITION.

  Section 3 of the Communications Act of 1934 (47 U.S.C. 153) is 
amended--
          (1) by redesignating paragraphs (51) and (52) as paragraphs 
        (52) and (53), respectively; and
          (2) by inserting after paragraph (50) the following:
          ``(51) Two percent carrier.--The term `two percent carrier' 
        means an incumbent local exchange carrier within the meaning of 
        section 251(h) that has fewer than two percent of the Nation's 
        subscriber lines installed in the aggregate nationwide.''.

SEC. 4. REGULATORY RELIEF FOR TWO PERCENT CARRIERS.

  Title II of the Communications Act of 1934 is amended by adding at 
the end thereof a new part IV as follows:

         ``PART IV--PROVISIONS CONCERNING TWO PERCENT CARRIERS

``SEC. 281. REDUCED REGULATORY REQUIREMENTS FOR TWO PERCENT CARRIERS.

  ``(a) Commission To Take Into Account Differences.--In adopting rules 
that apply to incumbent local exchange carriers (within the meaning of 
section 251(h)), the Commission shall separately evaluate the burden 
that any proposed regulatory, compliance, or reporting requirements 
would have on two percent carriers.
  ``(b) Effect of Reconsideration or Waiver.--If the Commission adopts 
a rule that applies to incumbent local exchange carriers and fails to 
separately evaluate the burden that any proposed regulatory, 
compliance, or reporting requirement would have on two percent 
carriers, the Commission shall not enforce the rule against two percent 
carriers unless and until the Commission performs such separate 
evaluation.
  ``(c) Additional Review Not Required.--Nothing in this section shall 
be construed to require the Commission to conduct a separate evaluation 
under subsection (a) if the rules adopted do not apply to two percent 
carriers, or such carriers are exempted from such rules.
  ``(d) Savings Clause.--Nothing in this section shall be construed to 
prohibit any size-based differentiation among carriers mandated by this 
Act, chapter 6 of title 5, United States Code, the Commission's rules, 
or any other provision of law.
  ``(e) Effective Date.--The provisions of this section shall apply 
with respect to any rule adopted on or after the date of enactment of 
this section.

``SEC. 282. LIMITATION OF REPORTING REQUIREMENTS.

  ``(a) Limitation.--The Commission shall not require a two percent 
carrier--
          ``(1) to file cost allocation manuals or to have such manuals 
        audited, but a two percent carrier that qualifies as a class A 
        carrier shall annually certify to the Commission that the two 
        percent carrier's cost allocation complies with the rules of 
        the Commission; or
          ``(2) to file Automated Reporting and Management Information 
        Systems (ARMIS) reports.
  ``(b) Preservation of Authority.--Except as provided in subsection 
(a), nothing in this Act limits the authority of the Commission to 
obtain access to information under sections 211, 213, 215, 218, and 220 
with respect to two percent carriers.

``SEC. 283. INTEGRATED OPERATION OF TWO PERCENT CARRIERS.

  ``The Commission shall not require any two percent carrier to 
establish or maintain a separate affiliate to provide any common 
carrier or noncommon carrier services, including local and 
interexchange services, commercial mobile radio services, advanced 
services (within the meaning of section 706 of the Telecommunications 
Act of 1996), paging, Internet, information services or other enhanced 
services, or other services. The Commission shall not require any two 
percent carrier and its affiliates to maintain separate officers, 
directors, or other personnel, network facilities, buildings, research 
and development departments, books of account, financing, marketing, 
provisioning, or other operations.

``SEC. 284. PARTICIPATION IN TARIFF POOLS AND PRICE CAP REGULATION.

  ``(a) NECA Pool.--The participation or withdrawal from participation 
by a two percent carrier of one or more study areas in the common line 
tariff administered and filed by the National Exchange Carrier 
Association or any successor tariff or administrator shall not obligate 
such carrier to participate or withdraw from participation in such 
tariff for any other study area.
  ``(b) Price Cap Regulation.--A two percent carrier may elect to be 
regulated by the Commission under price cap rate regulation, or elect 
to withdraw from such regulation, for one or more of its study areas at 
any time. The Commission shall not require a carrier making an election 
under this paragraph with respect to any study area or areas to make 
the same election for any other study area.

``SEC. 285. DEPLOYMENT OF NEW TELECOMMUNICATIONS SERVICES BY TWO 
                    PERCENT COMPANIES.

  ``The Commission shall permit two percent carriers to introduce new 
interstate telecommunications services by filing a tariff on one day's 
notice showing the charges, classifications, regulations and practices 
therefor, without obtaining a waiver, or make any other showing before 
the Commission in advance of the tariff filing. The Commission shall 
not have authority to approve or disapprove the rate structure for such 
services shown in such tariff.

``SEC. 286. ENTRY OF COMPETING CARRIER.

  ``(a) Pricing Flexibility.--Notwithstanding any other provision of 
this Act, any two percent carrier shall be permitted to deaverage its 
interstate switched or special access rates, file tariffs on one day's 
notice, and file contract-based tariffs for interstate switched or 
special access services immediately upon certifying to the Commission 
that a telecommunications carrier unaffiliated with such carrier is 
engaged in facilities-based entry within such carrier's service area.
  ``(b) Pricing Deregulation.--Notwithstanding any other provision of 
this Act, upon receipt by the Commission of a certification by a two 
percent carrier that a local exchange carrier that is not a two percent 
carrier is engaged in facilities-based entry within the two percent 
carrier's service area, the Commission shall regulate such two percent 
carrier as non-dominant, and therefore shall not require the tariffing 
of the interstate service offerings of such two percent carrier.
  ``(c) Participation in Exchange Carrier Association Tariff.--A two 
percent carrier that meets the requirements of subsection (a) or (b) of 
this section with respect to one or more study areas shall be permitted 
to participate in the common line tariff administered and filed by the 
National Exchange Carrier Association or any successor tariff or 
administrator, by electing to include one or more of its study areas in 
such tariff.
  ``(d) Definitions.--For purposes of this section:
          ``(1) Facilities-based entry.--The term `facilities-based 
        entry' means, within the service area of a two percent 
        carrier--
                  ``(A) the provision or procurement of local telephone 
                exchange switching capability; and
                  ``(B) the provision of local exchange service to at 
                least one unaffiliated customer.
          ``(2) Contract-based tariff.--The term `contract-based 
        tariff' shall mean a tariff based on a service contract entered 
        into between a two percent carrier and one or more customers of 
        such carrier. Such tariff shall include--
                  ``(A) the term of the contract, including any renewal 
                options;
                  ``(B) a brief description of each of the services 
                provided under the contract;
                  ``(C) minimum volume commitments for each service, if 
                any;
                  ``(D) the contract price for each service or services 
                at the volume levels committed to by the customer or 
                customers;
                  ``(E) a brief description of any volume discounts 
                built into the contract rate structure; and
                  ``(F) a general description of any other 
                classifications, practices, and regulations affecting 
                the contract rate.
          ``(3) Service area.--The term `service area' has the same 
        meaning as in section 214(e)(5).

``SEC. 287. SAVINGS PROVISIONS.

  ``(a) Commission Authority.--Nothing in this part shall be construed 
to restrict the authority of the Commission under sections 201 through 
205 and 208.
  ``(b) Rural Telephone Company Rights.--Nothing in this part shall be 
construed to diminish the rights of rural telephone companies otherwise 
accorded by this Act, or the rules, policies, procedures, guidelines, 
and standards of the Commission as of the date of enactment of this 
section.''.

SEC. 5. LIMITATION ON MERGER REVIEW

  (a) Amendment.--Section 310 of the Communications Act of 1934 (47 
U.S.C. 310) is amended by adding at the end the following:
  ``(f) Deadline for Making Public Interest Determination.--
          ``(1) Time limit.--In connection with any merger between two 
        percent carriers, or the acquisition, directly or indirectly, 
        by a two percent carrier or its affiliate of the securities or 
        assets of another two percent carrier or its affiliate, the 
        Commission shall make any determination required by subsection 
        (d) of this section or section 214 not later than 60 days after 
        the date an application with respect to such merger is 
        submitted to the Commission.
          ``(2) Approval absent action.--If the Commission does not 
        approve or deny an application as described in paragraph (1) by 
        the end of the period specified, the application shall be 
        deemed approved on the day after the end of such period. Any 
        such application deemed approved under this subsection shall be 
        deemed approved without conditions.''.
  (b) Effective Date.--The provisions of this section shall apply with 
respect to any application that is submitted to the Commission on or 
after the date of enactment of this Act. Applications pending with the 
Commission on the date of enactment of this Act shall be subject to the 
requirements of this section as if they had been filed with the 
Commission on the date of enactment of this Act.

SEC. 6. TIME LIMITS FOR ACTION ON PETITIONS FOR RECONSIDERATION OR 
                    WAIVER.

  (a) Amendment.--Section 405 of the Communications Act of 1934 (47 
U.S.C. 405) is amended by adding to the end the following:
  ``(c) Expedited Action Required.--
          ``(1) Time limit.--Within 90 days after receiving from a two 
        percent carrier a petition for reconsideration filed under this 
        section or a petition for waiver of a rule, policy, or other 
        Commission requirement, the Commission shall issue an order 
        granting or denying such petition. If the Commission fails to 
        act on a petition for waiver subject to the requirements of 
        this section within this 90-day period, the relief sought in 
        such petition shall be deemed granted. If the Commission fails 
        to act on a petition for reconsideration subject to the 
        requirements of this section within this 90 day period, the 
        Commission's enforcement of any rule the reconsideration of 
        which was specifically sought by the petitioning party shall be 
        stayed with respect to that party until the Commission issues 
        an order granting or denying such petition.
          ``(2) Finality of action.--Any order issued under paragraph 
        (1), or any grant of a petition for waiver that is deemed to 
        occur as a result of the Commission's failure to act under 
        paragraph (1), shall be a final order and may be appealed.''.
  (b) Effective Date.--The provisions of this section shall apply with 
respect to any petition for reconsideration or petition for waiver that 
is submitted to the Commission on or after the date of enactment of 
this Act. Pending petitions for reconsideration or petitions for waiver 
shall be subject to the requirements of this section as if they had 
been filed on the date of enactment of this Act.

                          Purpose and Summary

    The purpose of H.R. 3850, the Independent 
Telecommunications Consumer Enhancement Act of 2000, is to 
deregulate two percent telecommunications carriers so they may 
more effectively compete in rural and less densely populated 
areas.

                  Background and Need for Legislation

    There is an ongoing debate about whether there is 
sufficient competition in the provision of telecommunications 
in smaller markets to warrant a reduction in FCC regulation for 
carriers with less than two percent of the installed subscriber 
lines in the country. The ``two percent carriers'' argue that 
the FCC regulations are too burdensome for smaller carriers of 
their size and that strong competition make many FCC 
regulations no longer necessary.
    In February 1998, the Independent Telephone and 
Telecommunications Alliance (ITTA), a group of 14 mid-size 
incumbent local exchange carriers (ILECs) that each have less 
than two percent of the nation's installed subscriber lines, 
brought a proceeding before the FCC requesting forbearance from 
a number of regulations. In May 1999, the FCC released six 
orders which granted ITTA some of its requests and denied 
others. H.R. 3850 would legislatively remedy some of the items 
denied by the FCC and would, additionally, relieve other 
regulatory burdens imposed on two percent carriers.
    Supporters of the legislation believe this bill is 
necessary to protect two percent ILECs. They argue that FCC 
regulations are written primarily for the large regional Bell 
operating companies (RBOCs), and consequently, the regulations 
have a disproportionate financial and regulatory impact on two 
percent carriers. For instance, ITTA contends that the ``cost 
allocation manual'' reporting requirements cost the two percent 
carriers as much as $4.00 per customer, while it costs the 
RBOCs approximately $0.04 per customer. Despite the fact that 
two percent carriers do not pose the threat to competition they 
did prior to 1996, two percent carriers also believe that FCC 
regulations place a greater operation burden on smaller 
carriers. As a result, two percent carriers argue that these 
regulatory burdens prevent them from being fully competitive in 
a very competitive environment.
    The FCC, on the other hand, opposed much of H.R. 3850, 
arguing that the bill goes too far in its effort to reduce 
regulatory burdens on two percent carriers. For in stance, the 
bill contains a provision requiring the FCC to take action on 
waiver or reconsideration petitions filed by two percent 
carriers within 90 days. The FCC argued that it lacks the 
resources, particularly in light of other statutory mandates 
(such as section 271 proceedings), to meet the obligations set 
out in the bill. The FCC also claimed that it is planning to 
take steps to address some of the issues raised in the bill 
with a notice of proposed rulemaking in fall 2000.

                                Hearings

    The Subcommittee on July 20, 2000 held a hearing on H.R. 
3850, the Independent Telecommunications Consumer Protection 
Act. The Subcommittee received testimony from: Carol E. Mattey, 
Deputy Chief, Common Carrier Bureau, Federal Communications 
Commission; Larry F. Darby, Darby Associates, Communications 
Consultants; John Sumpter, Vice President of Regulatory 
Affairs, Pac-West Telecomm, Inc., on behalf of Association for 
Local Telecommunications Services; Jack Mueller, Cincinnati 
Telephone Company/BroadWing, on behalf of Independent Telephone 
and Telecommunications Alliance; and David Cole, Senior Vice 
President of Operations Support, CenturyTel, Inc.

                        Committee Consideration

    On September 14, 2000, the Subcommittee on 
Telecommunications, Trade, and Consumer Protection was 
discharged from the further consideration of H.R. 3850. The 
Full Committee met in open markup session on September 14, 
2000, and ordered H.R. 3850 reported to the House, with an 
amendment, by a voice vote, a quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. 
There were no record votes taken in connection with ordering 
H.R. 3850 reported. A motion by Mr. Bliley to order H.R. 3850 
reported to the House, with amendment, was agreed to by a voice 
vote.
    The following amendment was agreed to by a voice vote:

          An amendment in the nature of a substitute by Mr. 
        Tauzin, No. 1, requiring the FCC to evaluate the burden 
        of any future regulation on two percent 
        telecommunications carriers, requiring the FCC to 
        approve a merger between two percent telecommunications 
        carriers within sixty days, and making other technical 
        changes.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a legislative 
hearing and made findings that are reflected in this report.

           Committee on Government Reform Oversight Findings

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
3850, the Independent Consumer Enhancement Act, would result in 
no new or increased budget authority, entitlement authority, or 
tax expenditures or revenues.

                        Committee Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee includes the following 
estimate of the costs of this legislation:
    The Committee estimates that H.R. 3850 would not have a 
significant impact on the Federal budget because it would not 
significantly expand the regulatory burdens on Federal 
agencies. The Federal Communications Commission may realize 
some increased rulemaking costs, but the Committee estimates 
that these would not exceed $500,000 per year in each of the 
next five fiscal years. The bill will not affect direct 
spending or receipts; therefore, pay-as-you-go procedures would 
not apply.

                  Congressional Budget Office Estimate

    Although requested on September 14, 2000, the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974 was not timely 
received by the Committee.

                       Federal Mandates Statement

    The estimate of Federal mandates prepared by the Director 
of the Congressional Budget Office pursuant to section 423 of 
the Unfunded Mandates Reform Act was not timely received by the 
Committee. Accordingly, the Committee finds that the 
legislation does not contain intergovernment or private sector 
mandates as defined by the Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section establishes the short title of the bill, the 
``Independent Telecommunications Consumer Enhancement Act of 
2000.''

Section 2. Findings and purpose

    This section makes certain Congressional findings and 
describes the purposes of the bill.

Section 3. Definition

    This section defines the term ``two percent carrier'' as an 
incumbent local exchange carrier within the meaning of section 
251(h) that has fewer than two percent of the Nation's 
subscriber lines installed in the aggregate nationwide.

Section 4. Regulatory relief for two percent carriers

    Section 4 of the bill adds a new section 281 that requires 
the FCC to separately evaluate the burden that any proposed 
regulation would have on two percent carriers. If the FCC fails 
to separately evaluate two percent carriers, the Commission is 
not permitted to enforce the rule against two percent carriers. 
The bill makes it clear that if the proposed regulation does 
not apply to two percent carriers, a separate evaluation is not 
required. The effective date of this section applies to any 
rule adopted on or after the date of enactment of the bill.
    New section 282 exempts two percent carriers from filing or 
auditing cost allocation manuals and annual Automated Reporting 
and Management Information Systems reports. Two percent 
carriers that qualify as Class A carriers must annually certify 
that they are complying with cost allocation rules. Except for 
the provisions contained in section 282, nothing in this bill 
is meant to limit the authority of the FCC to request or obtain 
access to information currently allowed under the 
Communications Act of 1934 (Communications Act; 47 U.S.C. 
Sec. 151 et seq.).
    New section 283 prevents the FCC from requiring a two 
percent carrier to establish a separate affiliate to provide 
any common carrier or noncommon carrier service, including 
local and interexchange services, commercial mobile radio 
service, advanced services (within the meaning of section 706 
of the Communications Act), paging, Internet, information 
service or other enhanced services.
    New section 284 eliminates the ``all or nothing rules'' 
relating to the NECA common line tariff pool and price can 
regulations. This section allows multiple operating companies 
of two percent carriers to participate in one or more study 
areas for NECA's common line tariff, and elect to be regulated 
under the price cap scheme for one or more study areas.
    New section 285 allows two percent carriers to introduce 
new interstate services by filing a tariff with one day's 
notice, without obtaining a waiver, and prevents the FCC from 
approving or disapproving the rate structure. Nothing in this 
section restricts the authority of the FCC under sections 201 
through 205 and 208 of the Communications Act.
    New section 286 allows a two percent carrier to deaverage 
its interstate switched or special access rates, file a tariff 
with one day's notice, or file contract-based tariffs for 
intestate switched or special access services upon certifying 
that the carrier faces a facilities-based entrant. Upon 
certifying that a two percent carrier faces a facilities-based 
entrant, the FCC must regulate a two percent carrier as a non-
dominant carrier, and therefore, shall not require the 
tariffing of the interstate service offerings. The right to 
participate in the NECA common line tariff is preserved in both 
instances. The term ``Facilities-based entry'' is defined as 
the provision or procurement of local telephone exchange 
switching capability, and the provision of local exchange 
service to at least one unaffiliated customer.
    New section 287 includes a savings provision providing that 
nothing in this section is to be construed to diminish the 
rights of rural telephone companies under the Communications 
Act.

Section 5. Limitation on merger review

    This section amends section 310 of the Communications Act 
(47 U.S.C. Sec. 310) by adding a deadline for making a public 
interest determination. This provision was intended to apply in 
instances where a merger between two percent carriers results 
in a two percent carrier. The FCC, in making a determination 
under section 214 or 310, must make a determination not later 
than 60 days after the date an application is filed with the 
FCC. If the FCC fails to approve or deny the application within 
60 days, the merger application is deemed approved without 
conditions. This section is effective with respect to any 
application submitted to the FCC on or after the date of 
enactment. Merger applications pending at the FCC on the date 
of enactment shall be subject to this section as if they had 
been filed with the FCC on the date of enactment.

Section 6. Time limits for action on petitions for reconsideration or 
        waiver

    Section 6 amends section 405 of the Communications Act (47 
U.S.C. Sec. 405) by requiring the FCC to act on waiver and 
reconsideration petitions filed by two percent carriers within 
90 days of filing. If no action is taken on a waiver petition 
within 90 days, the petition is deemed granted. If no action is 
taken on a petition for reconsideration within 90 days, the 
Commission's enforcement of any rule the reconsideration of 
which was specifically sought shall be stayed with respect to 
that party until the Commission issues an order granting or 
denying the petition.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                       COMMUNICATIONS ACT OF 1934


                       TITLE I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


SEC. 3. DEFINITIONS.

  For the purposes of this Act, unless the context otherwise 
requires--
          (1) * * *

           *       *       *       *       *       *       *

          (51) Two percent carrier.--The term ``two percent 
        carrier'' means an incumbent local exchange carrier 
        within the meaning of section 251(h) that has fewer 
        than two percent of the Nation's subscriber lines 
        installed in the aggregate nationwide.
          [(51)] (52) United states.--The term ``United 
        States'' means the several States and Territories, the 
        District of Columbia, and the possessions of the United 
        States, but does not include the Canal Zone.
          [(52)] (53) Wire communication.--The term ``wire 
        communication'' or ``communication by wire'' means the 
        transmission of writing, signs, signals, pictures, and 
        sounds of all kinds by aid of wire, cable, or other 
        like connection between the points of origin and 
        reception of such transmission, including all 
        instrumentalities, facilities, apparatus, and services 
        (among other things, the receipt, forwarding, and 
        delivery of communications) incidental to such 
        transmission.

           *       *       *       *       *       *       *


                       TITLE II--COMMON CARRIERS

           *       *       *       *       *       *       *


          PART IV--PROVISIONS CONCERNING TWO PERCENT CARRIERS

SEC. 281. REDUCED REGULATORY REQUIREMENTS FOR TWO PERCENT CARRIERS.

  (a) Commission To Take Into Account Differences.--In adopting 
rules that apply to incumbent local exchange carriers (within 
the meaning of section 251(h)), the Commission shall separately 
evaluate the burden that any proposed regulatory, compliance, 
or reporting requirements would have on two percent carriers.
  (b) Effect of Reconsideration or Waiver.--If the Commission 
adopts a rule that applies to incumbent local exchange carriers 
and fails to separately evaluate the burden that any proposed 
regulatory, compliance, or reporting requirement would have on 
two percent carriers, the Commission shall not enforce the rule 
against two percent carriers unless and until the Commission 
performs such separate evaluation.
  (c) Additional Review Not Required.--Nothing in this section 
shall be construed to require the Commission to conduct a 
separate evaluation under subsection (a) if the rules adopted 
do not apply to two percent carriers, or such carriers are 
exempted from such rules.
  (d) Savings Clause.--Nothing in this section shall be 
construed to prohibit any size-based differentiation among 
carriers mandated by this Act, chapter 6 of title 5, United 
States Code, the Commission's rules, or any other provision of 
law.
  (e) Effective Date.--The provisions of this section shall 
apply with respect to any rule adopted on or after the date of 
enactment of this section.

SEC. 282. LIMITATION OF REPORTING REQUIREMENTS.

  (a) Limitation.--The Commission shall not require a two 
percent carrier--
          (1) to file cost allocation manuals or to have such 
        manuals audited, but a two percent carrier that 
        qualifies as a class A carrier shall annually certify 
        to the Commission that the two percent carrier's cost 
        allocation complies with the rules of the Commission; 
        or
          (2) to file Automated Reporting and Management 
        Information Systems (ARMIS) reports.
  (b) Preservation of Authority.--Except as provided in 
subsection (a), nothing in this Act limits the authority of the 
Commission to obtain access to information under sections 211, 
213, 215, 218, and 220 with respect to two percent carriers.

SEC. 283. INTEGRATED OPERATION OF TWO PERCENT CARRIERS.

  The Commission shall not require any two percent carrier to 
establish or maintain a separate affiliate to provide any 
common carrier or noncommon carrier services, including local 
and interexchange services, commercial mobile radio services, 
advanced services (within the meaning of section 706 of the 
Telecommunications Act of 1996), paging, Internet, information 
services or other enhanced services, or other services. The 
Commission shall not require any two percent carrier and its 
affiliates to maintain separate officers, directors, or other 
personnel, network facilities, buildings, research and 
development departments, books of account, financing, 
marketing, provisioning, or other operations.

SEC. 284. PARTICIPATION IN TARIFF POOLS AND PRICE CAP REGULATION.

  (a) NECA Pool.--The participation or withdrawal from 
participation by a two percent carrier of one or more study 
areas in the common line tariff administered and filed by the 
National Exchange Carrier Association or any successor tariff 
or administrator shall not obligate such carrier to participate 
or withdraw from participation in such tariff for any other 
study area.
  (b) Price Cap Regulation.--A two percent carrier may elect to 
be regulated by the Commission under price cap rate regulation, 
or elect to withdraw from such regulation, for one or more of 
its study areas at any time. The Commission shall not require a 
carrier making an election under this paragraph with respect to 
any study area or areas to make the same election for any other 
study area.

SEC. 285. DEPLOYMENT OF NEW TELECOMMUNICATIONS SERVICES BY TWO PERCENT 
                    COMPANIES.

  The Commission shall permit two percent carriers to introduce 
new interstate telecommunications services by filing a tariff 
on one day's notice showing the charges, classifications, 
regulations and practices therefor, without obtaining a waiver, 
or make any other showing before the Commission in advance of 
the tariff filing. The Commission shall not have authority to 
approve or disapprove the rate structure for such services 
shown in such tariff.

SEC. 286. ENTRY OF COMPETING CARRIER.

  (a) Pricing Flexibility.--Notwithstanding any other provision 
of this Act, any two percent carrier shall be permitted to 
deaverage its interstate switched or special access rates, file 
tariffs on one day's notice, and file contract-based tariffs 
for interstate switched or special access services immediately 
upon certifying to the Commission that a telecommunications 
carrier unaffiliated with such carrier is engaged in 
facilities-based entry within such carrier's service area.
  (b) Pricing Deregulation.--Notwithstanding any other 
provision of this Act, upon receipt by the Commission of a 
certification by a two percent carrier that a local exchange 
carrier that is not a two percent carrier is engaged in 
facilities-based entry within the two percent carrier's service 
area, the Commission shall regulate such two percent carrier as 
non-dominant, and therefore shall not require the tariffing of 
the interstate service offerings of such two percent carrier.
  (c) Participation in Exchange Carrier Association Tariff.--A 
two percent carrier that meets the requirements of subsection 
(a) or (b) of this section with respect to one or more study 
areas shall be permitted to participate in the common line 
tariff administered and filed by the National Exchange Carrier 
Association or any successor tariff or administrator, by 
electing to include one or more of its study areas in such 
tariff.
  (d) Definitions.--For purposes of this section:
          (1) Facilities-based entry.--The term ``facilities-
        based entry'' means, within the service area of a two 
        percent carrier--
                  (A) the provision or procurement of local 
                telephone exchange switching capability; and
                  (B) the provision of local exchange service 
                to at least one unaffiliated customer.
          (2) Contract-based tariff.--The term ``contract-based 
        tariff'' shall mean a tariff based on a service 
        contract entered into between a two percent carrier and 
        one or more customers of such carrier. Such tariff 
        shall include--
                  (A) the term of the contract, including any 
                renewal options;
                  (B) a brief description of each of the 
                services provided under the contract;
                  (C) minimum volume commitments for each 
                service, if any;
                  (D) the contract price for each service or 
                services at the volume levels committed to by 
                the customer or customers;
                  (E) a brief description of any volume 
                discounts built into the contract rate 
                structure; and
                  (F) a general description of any other 
                classifications, practices, and regulations 
                affecting the contract rate.
          (3) Service area.--The term ``service area'' has the 
        same meaning as in section 214(e)(5).

SEC. 287. SAVINGS PROVISIONS.

  (a) Commission Authority.--Nothing in this part shall be 
construed to restrict the authority of the Commission under 
sections 201 through 205 and 208.
  (b) Rural Telephone Company Rights.--Nothing in this part 
shall be construed to diminish the rights of rural telephone 
companies otherwise accorded by this Act, or the rules, 
policies, procedures, guidelines, and standards of the 
Commission as of the date of enactment of this section.

                TITLE III--PROVISIONS RELATING TO RADIO

                      PART I--GENERAL PROVISIONS

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SEC. 310. LIMITATION ON HOLDING AND TRANSFER OF LICENSES.

  (a) * * *

           *       *       *       *       *       *       *

  (f) Deadline for Making Public Interest Determination.--
          (1) Time limit.--In connection with any merger 
        between two percent carriers, or the acquisition, 
        directly or indirectly, by a two percent carrier or its 
        affiliate of the securities or assets of another two 
        percent carrier or its affiliate, the Commission shall 
        make any determination required by subsection (d) of 
        this section or section 214 not later than 60 days 
        after the date an application with respect to such 
        merger is submitted to the Commission.
          (2) Approval absent action.--If the Commission does 
        not approve or deny an application as described in 
        paragraph (1) by the end of the period specified, the 
        application shall be deemed approved on the day after 
        the end of such period. Any such application deemed 
        approved under this subsection shall be deemed approved 
        without conditions.

           *       *       *       *       *       *       *


          TITLE IV--PROCEDURAL AND ADMINISTRATIVE PROVISIONS

           *       *       *       *       *       *       *


SEC. 405. RECONSIDERATIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Expedited Action Required.--
          (1) Time limit.--Within 90 days after receiving from 
        a two percent carrier a petition for reconsideration 
        filed under this section or a petition for waiver of a 
        rule, policy, or other Commission requirement, the 
        Commission shall issue an order granting or denying 
        such petition. If the Commission fails to act on a 
        petition for waiver subject to the requirements of this 
        section within this 90-day period, the relief sought in 
        such petition shall be deemed granted. If the 
        Commission fails to act on a petition for 
        reconsideration subject to the requirements of this 
        section within this 90 day period, the Commission's 
        enforcement of any rule the reconsideration of which 
        was specifically sought by the petitioning party shall 
        be stayed with respect to that party until the 
        Commission issues an order granting or denying such 
        petition.
          (2) Finality of action.--Any order issued under 
        paragraph (1), or any grant of a petition for waiver 
        that is deemed to occur as a result of the Commission's 
        failure to act under paragraph (1), shall be a final 
        order and may be appealed.

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