[House Report 114-582]
[From the U.S. Government Publishing Office]


114th Congress }                                             { Report
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                             { 114-582

======================================================================
 
               RURAL HEALTH CARE CONNECTIVITY ACT OF 2016

                                _______
                                

  May 23, 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Upton, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4111]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 4111) to include skilled nursing facilities as a 
type of health care provider under section 254(h) of the 
Communications Act of 1934, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Statement of General Performance Goals and Objectives............     4
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     7
Duplication of Federal Programs..................................     7
Disclosure of Directed Rule Makings..............................     7
Advisory Committee Statement.....................................     7
Applicability to Legislative Branch..............................     7
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     7

    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 ``Rural Health Care Connectivity Act of 
2016''.

SEC. 2. TELECOMMUNICATIONS SERVICES FOR SKILLED NURSING FACILITIES.

  (a) In General.--Section 254(h)(7)(B) of the Communications Act of 
1934 (47 U.S.C. 254(h)(7)(B)) is amended--
          (1) in clause (vi), by striking ``and'' at the end;
          (2) by redesignating clause (vii) as clause (viii);
          (3) by inserting after clause (vi) the following:
                          ``(vii) skilled nursing facilities (as 
                        defined in section 1819(a) of the Social 
                        Security Act (42 U.S.C. 1395i-3(a))); and''; 
                        and
          (4) in clause (viii), as redesignated, by striking ``clauses 
        (i) through (vi)'' and inserting ``clauses (i) through (vii)''.
  (b) Savings Clause.--Nothing in subsection (a) shall be construed to 
affect the aggregate annual cap on Federal universal service support 
for health care providers under section 54.675 of title 47, Code of 
Federal Regulations, or any successor regulation.
  (c) Effective Date.--The amendments made by subsection (a) shall 
apply beginning on the date that is 180 days after the date of the 
enactment of this Act.

                          Purpose and Summary

    H.R. 4111, Rural Health Care Connectivity Act of 2016, 
expands the definition of a ``health care provider'' under the 
Healthcare Connect Fund, a program within the Universal Service 
Fund. The term ``health care provider'' would be expanded to 
include skilled nursing facilities (SNFs), allowing those 
facilities to be eligible for support under the Healthcare 
Connect Fund. The purpose of the legislation is to increase 
broadband connectivity for health care providers in rural areas 
to improve care and advance innovative health technologies. In 
addition, the legislation provides the Federal Communications 
Commission (FCC) and the Universal Service Administrative 
Company (USAC) six months to implement the necessary changes to 
the program.

                  Background and Need for Legislation

    The principle that all Americans should have access to 
communications services is implemented through the Universal 
Service Fund. As a way to facilitate that goal, the 
Telecommunications Act of 1996 instructed the FCC to expand the 
traditional purpose of the Universal Service Fund to include 
increased access to advanced services. To fulfill the statute, 
four programs were established: the high-cost support program 
(now called the Connect America Fund), the schools and 
libraries program (E-Rate), the low-income program (now called 
Lifeline), and the Rural Health Care program. These programs 
are funded by contributions from telecommunications providers 
based on a formula based on the needs of the Fund and 
anticipated interstate telecommunications revenue.
    The four programs, and the various support mechanisms 
within each program, serve a range of purposes to implement the 
Act's directive, varying from increasing broadband connectivity 
in schools and libraries to providing voice and Internet 
services to low-income consumers. In particular, the Rural 
Health Care Program (RHCP) provides subsidies to public and 
non-profit rural health care providers to reduce the cost of 
communications services. Under the Act, eligibility for RHCP 
funding is limited to public or non-profit entities.
    The 2010 National Broadband Plan (NBP) observed that there 
is a health IT broadband connectivity gap that exists, 
particularly in rural areas, notwithstanding the RHCP. Among 
other things, the NBP recommended various reforms to the RHCP, 
including that the FCC re-examine the interpretation of 
``health-care provider'' in light of trends in the provision of 
healthcare.
    In 2012, the FCC created the Healthcare Connect Fund to 
reform, expand, and modernize the RHCP. Although the FCC 
acknowledged that SNFs provide some of the ``same post-acute 
services that are traditionally provided at hospitals,'' it 
could not conclude how a SNF might qualify as a health care 
provider under the Act. Notwithstanding this conclusion, the 
FCC established a pilot program to test how it could support 
broadband connectivity to non-profit skilled nursing 
facilities. In 2014, the FCC announced it was deferring the SNF 
pilot program.
    H.R. 4111 expands the statutory definition of ``health care 
provider'' under section 254 of the Communications Act of 1934, 
as amended to include Skilled Nursing Facilities. SNFs provide 
a range of traditional health care services, such as home 
health, assisted living, skilled nursing care, post-acute care, 
and hospice care. Additionally, technology is being developed 
to connect patients in rural SNFs to doctors and specialists 
located in distant areas. The legislation will allow such 
facilities to request support from the fund to bring broadband 
connectivity to SNFs in rural communities where it might 
otherwise not be available to power the advanced technologies 
that can enhance patient care in rural areas.

                                Hearings

    On April 13, 2016, the Subcommittee on Communications and 
Technology held a hearing on H.R. 4111, and received testimony 
from Dan Holdhusen, Director of Government Relations, Good 
Samaritan Society, on the bill.

                        Committee Consideration

    On April 18 and 19, 2016, the Subcommittee on 
Communications and Technology met in open markup session and 
forwarded H.R. 4111 to the full Committee, without amendment, 
by a voice vote.
    On April 26, 27, and 28, 2016, the full Committee on Energy 
and Commerce met in open markup session to consider H.R. 4111. 
Congressmen Lance and Loebsack offered a bipartisan amendment 
to the bill, which was passed by voice vote. Chairman Upton 
ordered H.R. 4111 reported to the House, as amended, by a voice 
vote.

                            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 recorded votes taken in connection with ordering 
H.R. 4111 reported.

                      Committee Oversight Findings

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

         Statement of General Performance Goals and Objectives

    The goal and objective of H.R. 4111 is to increase 
broadband connectivity for skilled nursing facilities located 
in rural communities.

   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. 
4111 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 4111 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                                      May 17, 2016.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4111, the Rural 
Health Care Connectivity Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kathleen 
Gramp.
    Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 4111--Rural Health Care Connectivity Act of 2015

    Summary: H.R. 4111 would make certain skilled nursing 
facilities (SNFs) eligible for grants under the Universal 
Service Fund's Rural Health Care (RHC) program. The Universal 
Service program is administered by the Federal Communications 
Commission (FCC) and is intended to promote the availability of 
telecommunications services at affordable rates. The cash flows 
of the fund appear in the budget as direct spending (for 
amounts distributed from the fund) and as revenues (for fund 
collections).
    CBO estimates that enacting H.R. 4111 would increase direct 
spending by $193 million and revenues by $212 million over the 
2017-2026 period, resulting in an estimated net reduction in 
the deficit of $19 million. CBO estimates that implementing the 
bill would have no significant discretionary costs. Pay-as-you-
go procedures apply because enacting the legislation would 
affect direct spending and revenues.
    CBO estimates that enacting the legislation would not 
increase net direct spending or on-budget deficits in any of 
the four consecutive 10-year periods beginning in 2027.
    H.R. 4111 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA).
    Because CBO expects the FCC would increase fee collections 
associated with the Universal Service Fund, the bill would 
increase the cost of an existing mandate on private entities 
required to pay those fees. Based on information from the FCC, 
CBO estimates that the incremental cost of the mandate would 
amount to no more than $25 million in any of the next five 
years. Thus, the aggregate cost of the mandate would fall below 
the annual threshold established in UMRA for private-sector 
mandates ($154 million in 2016, adjusted annually for 
inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 4111 is shown in the following table. 
The costs of this legislation fall within budget function 370 
(commerce and housing credit).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          By fiscal year, in millions of dollars--
                                                                   -------------------------------------------------------------------------------------
                                                                                                                                           2017-   2017-
                                                                     2017   2018   2019   2020   2021   2022   2023   2024   2025   2026   2021    2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               INCREASE IN DIRECT SPENDING
 
Estimated Budget Authority........................................      2     10     15     20     25     25     25     30     30     30      72     212
Estimated Outlays.................................................      1      6     11     17     22     24     25     28     29     30      57     193
 
                                                                  INCREASE IN REVENUES
 
Estimated Revenues................................................      2     10     15     20     25     25     25     30     30     30      72     212
 
                                                               NET DECREASE IN THE DEFICIT
 
Impact on Deficit.................................................     -1     -4     -4     -3     -3     -1      0     -2     -1      0     -15     -19
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of estimate: Current law authorizes the FCC to 
collect and spend up to $400 million a year for RHC programs, 
which provide reduced rates for telecommunications services for 
certain rural public and nonprofit health care providers. 
Expanding the eligibility criteria to include SNFs would 
increase both direct spending and revenues because the RHC 
programs currently operate below the statutory cap on total 
spending.
    CBO estimates that enacting the program would increase 
direct spending and revenues by $193 million and $212 million, 
respectively, over the 2017-2026 period. CBO also estimates 
that an average of 1,650 public and nonprofit SNFs in rural 
areas would be eligible for grants during that period and that 
participation rates and grant awards would be similar to those 
for existing RHC programs. Based on information from the FCC, 
CBO estimates that participation rates would reach 75 percent 
over a period of several years and that certain nonrural 
entities affiliated with those participants also would receive 
funding. Grant awards would vary in size depending on the 
recipient's location and choice of benefits. In 2015, most RHC 
grantees received an average of about $14,000 for 
telecommunications services. CBO estimates that grants would 
average about $18,000 a year over the next 10 years, reflecting 
the historical growth in payments for other RHC programs.
    Finally, based on information from the FCC, CBO estimates 
that the administrative activities needed to implement the new 
program would significantly increase the agency's operating 
costs. Moreover, under current law, the FCC is authorized to 
collect fees sufficient to offset the cost of its regulatory 
activities each year.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table.

        CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 4111, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON ENERGY AND COMMERCE ON APRIL 28, 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By Fiscal Year, in Millions of Dollars--
                                                            --------------------------------------------------------------------------------------------
                                                                                                                                           2016-   2016-
                                                              2016   2017   2018   2019   2020   2021   2022   2023   2024   2025   2026   2021    2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 DECREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact.............................      0     -1     -4     -4     -3     -3     -1      0     -2     -1      0     -15     -19
Memorandum:
    Changes in Outlays.....................................      0      1      6     11     17     22     24     25     28     29     30      57     193
    Changes in Revenues....................................      0      2     10     15     20     25     25     25     30     30     30      72     212
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term direct spending and deficits: CBO 
estimates that enacting the legislation would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    Estimated impact on state, local, and tribal governments: 
H.R. 4111 contains no intergovernmental mandates as defined in 
UMRA.
    Estimated impact on the private-sector: CBO expects the FCC 
to increase fee collections to offset the costs associated with 
expanding the RHC program to cover skilled nursing facilities. 
As a result, the bill would increase the cost of an existing 
mandate on some telecommunications companies required to pay 
those fees. Based on information from the FCC, CBO estimates 
that the additional fees collected would amount to about $2 
million in 2017, increasing to about $25 million in 2021. 
Therefore, the incremental cost of the mandate would fall below 
the annual threshold established in UMRA for private-sector 
mandates ($154 million in 2016, adjusted annually for 
inflation). CBO expects that telecommunications companies would 
generally pass most of the cost of the fee increase on to 
consumers.
    Previous estimate: On March 24, 2016, CBO transmitted a 
cost estimate for S. 1916, the Rural Health Care Connectivity 
Act of 2015, as ordered reported by the Senate Committee on 
Commerce, Science, and Transportation on November 18, 2015. The 
differences between the estimates reflect the effect of a 
provision in H.R. 4111 that would delay the implementation of 
the program by six months.
    Estimate prepared by: Federal costs: Kathleen Gramp; Impact 
on state, local, and tribal governments: Rachel Austin; Impact 
on the private sector: Logan Smith.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    Duplication of Federal Programs

    No provision of H.R. 4111 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting H.R. 4111 
specifically directs to be completed 0 rule makings within the 
meaning of 5 U.S.C. 551.

                      Advisory Committee Statement

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

                  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 provides the short title as the ``Rural Health 
Care Connectivity Act of 2016''.

Section 2. Telecommunications services for skilled nursing facilities

    This section adds ``skilled nursing facilities'' to the 
definition of a Health Provider in Section 254 of the 
Communications Act related to Universal Service. The bill 
defines skilled nursing facility by cross-reference to the 
definition used in the Social Security Act. The section 
requires the changes identified in the bill be made six months 
after the legislation is enacted.

         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, and existing law in which no 
change is proposed is shown in roman):

                       COMMUNICATIONS ACT OF 1934




           *       *       *       *       *       *       *
TITLE II--COMMON CARRIERS

           *       *       *       *       *       *       *


PART II--DEVELOPMENT OF COMPETITIVE MARKETS

           *       *       *       *       *       *       *


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 (7)(A) with an endowment of more 
        than $50,000,000, or is a library or library consortium 
        not eligible for assistance from a State library 
        administrative agency under the Library Services and 
        Technology Act.
          (5) Requirements for certain schools with computers 
        having internet access.--
                  (A) Internet safety.--
                          (i) In general.--Except as provided 
                        in clause (ii), an elementary or 
                        secondary school having computers with 
                        Internet access may not receive 
                        services at discount rates under 
                        paragraph (1)(B) unless the school, 
                        school board, local educational agency, 
                        or other authority with responsibility 
                        for administration of the school--
                                  (I) submits to the Commission 
                                the certifications described in 
                                subparagraphs (B) and (C);
                                  (II) submits to the 
                                Commission a certification that 
                                an Internet safety policy has 
                                been adopted and implemented 
                                for the school under subsection 
                                (l); and
                                  (III) ensures the use of such 
                                computers in accordance with 
                                the certifications.
                          (ii) Applicability.--The prohibition 
                        in clause (i) shall not apply with 
                        respect to a school that receives 
                        services at discount rates under 
                        paragraph (1)(B) only for purposes 
                        other than the provision of Internet 
                        access, Internet service, or internal 
                        connections.
                          (iii) Public notice; hearing.--An 
                        elementary or secondary school 
                        described in clause (i), or the school 
                        board, local educational agency, or 
                        other authority with responsibility for 
                        administration of the school, shall 
                        provide reasonable public notice and 
                        hold at least one public hearing or 
                        meeting to address the proposed 
                        Internet safety policy. In the case of 
                        an elementary or secondary school other 
                        than an elementary school or a 
                        secondary school as defined in section 
                        8101 of the Elementary and Secondary 
                        Education Act of 1965, the notice and 
                        hearing required by this clause may be 
                        limited to those members of the public 
                        with a relationship to the school.
                  (B) Certification with respect to minors.--A 
                certification under this subparagraph is a 
                certification that the school, school board, 
                local educational agency, or other authority 
                with responsibility for administration of the 
                school--
                          (i) is enforcing a policy of Internet 
                        safety for minors that includes 
                        monitoring the online activities of 
                        minors and the operation of a 
                        technology protection measure with 
                        respect to any of its computers with 
                        Internet access that protects against 
                        access through such computers to visual 
                        depictions that are--
                                  (I) obscene;
                                  (II) child pornography; or
                                  (III) harmful to minors;
                          (ii) is enforcing the operation of 
                        such technology protection measure 
                        during any use of such computers by 
                        minors; and
                          (iii) as part of its Internet safety 
                        policy is educating minors about 
                        appropriate online behavior, including 
                        interacting with other individuals on 
                        social networking websites and in chat 
                        rooms and cyberbullying awareness and 
                        response.
                  (C) Certification with respect to adults.--A 
                certification under this paragraph is a 
                certification that the school, school board, 
                local educational agency, or other authority 
                with responsibility for administration of the 
                school--
                          (i) is enforcing a policy of Internet 
                        safety that includes the operation of a 
                        technology protection measure with 
                        respect to any of its computers with 
                        Internet access that protects against 
                        access through such computers to visual 
                        depictions that are--
                                  (I) obscene; or
                                  (II) child pornography; and
                          (ii) is enforcing the operation of 
                        such technology protection measure 
                        during any use of such computers.
                  (D) Disabling during adult use.--An 
                administrator, supervisor, or other person 
                authorized by the certifying authority under 
                subparagraph (A)(i) may disable the technology 
                protection measure concerned, during use by an 
                adult, to enable access for bona fide research 
                or other lawful purpose.
                  (E) Timing of implementation.--
                          (i) In general.--Subject to clause 
                        (ii) in the case of any school covered 
                        by this paragraph as of the effective 
                        date of this paragraph under section 
                        1721(h) of the Children's Internet 
                        Protection Act, the certification under 
                        subparagraphs (B) and (C) shall be 
                        made--
                                  (I) with respect to the first 
                                program funding year under this 
                                subsection following such 
                                effective date, not later than 
                                120 days after the beginning of 
                                such program funding year; and
                                  (II) with respect to any 
                                subsequent program funding 
                                year, as part of the 
                                application process for such 
                                program funding year.
                          (ii) Process.--
                                  (I) Schools with internet 
                                safety policy and technology 
                                protection measures in place.--
                                A school covered by clause (i) 
                                that has in place an Internet 
                                safety policy and technology 
                                protection measures meeting the 
                                requirements necessary for 
                                certification under 
                                subparagraphs (B) and (C) shall 
                                certify its compliance with 
                                subparagraphs (B) and (C) 
                                during each annual program 
                                application cycle under this 
                                subsection, except that with 
                                respect to the first program 
                                funding year after the 
                                effective date of this 
                                paragraph under section 1721(h) 
                                of the Children's Internet 
                                Protection Act, the 
                                certifications shall be made 
                                not later than 120 days after 
                                the beginning of such first 
                                program funding year.
                                  (II) Schools without internet 
                                safety policy and technology 
                                protection measures in place.--
                                A school covered by clause (i) 
                                that does not have in place an 
                                Internet safety policy and 
                                technology protection measures 
                                meeting the requirements 
                                necessary for certification 
                                under subparagraphs (B) and 
                                (C)--
                                          (aa) for the first 
                                        program year after the 
                                        effective date of this 
                                        subsection in which it 
                                        is applying for funds 
                                        under this subsection, 
                                        shall certify that it 
                                        is undertaking such 
                                        actions, including any 
                                        necessary procurement 
                                        procedures, to put in 
                                        place an Internet 
                                        safety policy and 
                                        technology protection 
                                        measures meeting the 
                                        requirements necessary 
                                        for certification under 
                                        subparagraphs (B) and 
                                        (C); and
                                          (bb) for the second 
                                        program year after the 
                                        effective date of this 
                                        subsection in which it 
                                        is applying for funds 
                                        under this subsection, 
                                        shall certify that it 
                                        is in compliance with 
                                        subparagraphs (B) and 
                                        (C).
                                Any school that is unable to 
                                certify compliance with such 
                                requirements in such second 
                                program year shall be 
                                ineligible for services at 
                                discount rates or funding in 
                                lieu of services at such rates 
                                under this subsection for such 
                                second year and all subsequent 
                                program years under this 
                                subsection, until such time as 
                                such school comes into 
                                compliance with this paragraph.
                                  (III) Waivers.--Any school 
                                subject to subclause (II) that 
                                cannot come into compliance 
                                with subparagraphs (B) and (C) 
                                in such second year program may 
                                seek a waiver of subclause 
                                (II)(bb) if State or local 
                                procurement rules or 
                                regulations or competitive 
                                bidding requirements prevent 
                                the making of the certification 
                                otherwise required by such 
                                subclause. A school, school 
                                board, local educational 
                                agency, or other authority with 
                                responsibility for 
                                administration of the school 
                                shall notify the Commission of 
                                the applicability of such 
                                subclause to the school. Such 
                                notice shall certify that the 
                                school in question will be 
                                brought into compliance before 
                                the start of the third program 
                                year after the effective date 
                                of this subsection in which the 
                                school is applying for funds 
                                under this subsection.
                  (F) Noncompliance.--
                          (i) Failure to submit 
                        certification.--Any school that 
                        knowingly fails to comply with the 
                        application guidelines regarding the 
                        annual submission of certification 
                        required by this paragraph shall not be 
                        eligible for services at discount rates 
                        or funding in lieu of services at such 
                        rates under this subsection.
                          (ii) Failure to comply with 
                        certification.--Any school that 
                        knowingly fails to ensure the use of 
                        its computers in accordance with a 
                        certification under subparagraphs (B) 
                        and (C) shall reimburse any funds and 
                        discounts received under this 
                        subsection for the period covered by 
                        such certification.
                          (iii) Remedy of noncompliance.--
                                  (I) Failure to submit.--A 
                                school that has failed to 
                                submit a certification under 
                                clause (i) may remedy the 
                                failure by submitting the 
                                certification to which the 
                                failure relates. Upon submittal 
                                of such certification, the 
                                school shall be eligible for 
                                services at discount rates 
                                under this subsection.
                                  (II) Failure to comply.--A 
                                school that has failed to 
                                comply with a certification as 
                                described in clause (ii) may 
                                remedy the failure by ensuring 
                                the use of its computers in 
                                accordance with such 
                                certification. Upon submittal 
                                to the Commission of a 
                                certification or other 
                                appropriate evidence of such 
                                remedy, the school shall be 
                                eligible for services at 
                                discount rates under this 
                                subsection.
          (6) Requirements for certain libraries with computers 
        having internet access.--
                  (A) Internet safety.--
                          (i) In general.--Except as provided 
                        in clause (ii), a library having one or 
                        more computers with Internet access may 
                        not receive services at discount rates 
                        under paragraph (1)(B) unless the 
                        library--
                                  (I) submits to the Commission 
                                the certifications described in 
                                subparagraphs (B) and (C); and
                                  (II) submits to the 
                                Commission a certification that 
                                an Internet safety policy has 
                                been adopted and implemented 
                                for the library under 
                                subsection (l); and
                                  (III) ensures the use of such 
                                computers in accordance with 
                                the certifications.
                          (ii) Applicability.--The prohibition 
                        in clause (i) shall not apply with 
                        respect to a library that receives 
                        services at discount rates under 
                        paragraph (1)(B) only for purposes 
                        other than the provision of Internet 
                        access, Internet service, or internal 
                        connections.
                          (iii) Public notice; hearing.--A 
                        library described in clause (i) shall 
                        provide reasonable public notice and 
                        hold at least one public hearing or 
                        meeting to address the proposed 
                        Internet safety policy.
                  (B) Certification with respect to minors.--A 
                certification under this subparagraph is a 
                certification that the library--
                          (i) is enforcing a policy of Internet 
                        safety that includes the operation of a 
                        technology protection measure with 
                        respect to any of its computers with 
                        Internet access that protects against 
                        access through such computers to visual 
                        depictions that are--
                                  (I) obscene;
                                  (II) child pornography; or
                                  (III) harmful to minors; and
                          (ii) is enforcing the operation of 
                        such technology protection measure 
                        during any use of such computers by 
                        minors.
                  (C) Certification with respect to adults.--A 
                certification under this paragraph is a 
                certification that the library--
                          (i) is enforcing a policy of Internet 
                        safety that includes the operation of a 
                        technology protection measure with 
                        respect to any of its computers with 
                        Internet access that protects against 
                        access through such computers to visual 
                        depictions that are--
                                  (I) obscene; or
                                  (II) child pornography; and
                          (ii) is enforcing the operation of 
                        such technology protection measure 
                        during any use of such computers.
                  (D) Disabling during adult use.--An 
                administrator, supervisor, or other person 
                authorized by the certifying authority under 
                subparagraph (A)(i) may disable the technology 
                protection measure concerned, during use by an 
                adult, to enable access for bona fide research 
                or other lawful purpose.
                  (E) Timing of implementation.--
                          (i) In general.--Subject to clause 
                        (ii) in the case of any library covered 
                        by this paragraph as of the effective 
                        date of this paragraph under section 
                        1721(h) of the Children's Internet 
                        Protection Act, the certification under 
                        subparagraphs (B) and (C) shall be 
                        made--
                                  (I) with respect to the first 
                                program funding year under this 
                                subsection following such 
                                effective date, not later than 
                                120 days after the beginning of 
                                such program funding year; and
                                  (II) with respect to any 
                                subsequent program funding 
                                year, as part of the 
                                application process for such 
                                program funding year.
                          (ii) Process.--
                                  (I) Libraries with internet 
                                safety policy and technology 
                                protection measures in place.--
                                A library covered by clause (i) 
                                that has in place an Internet 
                                safety policy and technology 
                                protection measures meeting the 
                                requirements necessary for 
                                certification under 
                                subparagraphs (B) and (C) shall 
                                certify its compliance with 
                                subparagraphs (B) and (C) 
                                during each annual program 
                                application cycle under this 
                                subsection, except that with 
                                respect to the first program 
                                funding year after the 
                                effective date of this 
                                paragraph under section 1721(h) 
                                of the Children's Internet 
                                Protection Act, the 
                                certifications shall be made 
                                not later than 120 days after 
                                the beginning of such first 
                                program funding year.
                                  (II) Libraries without 
                                internet safety policy and 
                                technology protection measures 
                                in place.--A library covered by 
                                clause (i) that does not have 
                                in place an Internet safety 
                                policy and technology 
                                protection measures meeting the 
                                requirements necessary for 
                                certification under 
                                subparagraphs (B) and (C)--
                                          (aa) for the first 
                                        program year after the 
                                        effective date of this 
                                        subsection in which it 
                                        is applying for funds 
                                        under this subsection, 
                                        shall certify that it 
                                        is undertaking such 
                                        actions, including any 
                                        necessary procurement 
                                        procedures, to put in 
                                        place an Internet 
                                        safety policy and 
                                        technology protection 
                                        measures meeting the 
                                        requirements necessary 
                                        for certification under 
                                        subparagraphs (B) and 
                                        (C); and
                                          (bb) for the second 
                                        program year after the 
                                        effective date of this 
                                        subsection in which it 
                                        is applying for funds 
                                        under this subsection, 
                                        shall certify that it 
                                        is in compliance with 
                                        subparagraphs (B) and 
                                        (C).
                                Any library that is unable to 
                                certify compliance with such 
                                requirements in such second 
                                program year shall be 
                                ineligible for services at 
                                discount rates or funding in 
                                lieu of services at such rates 
                                under this subsection for such 
                                second year and all subsequent 
                                program years under this 
                                subsection, until such time as 
                                such library comes into 
                                compliance with this paragraph.
                                  (III) Waivers.--Any library 
                                subject to subclause (II) that 
                                cannot come into compliance 
                                with subparagraphs (B) and (C) 
                                in such second year may seek a 
                                waiver of subclause (II)(bb) if 
                                State or local procurement 
                                rules or regulations or 
                                competitive bidding 
                                requirements prevent the making 
                                of the certification otherwise 
                                required by such subclause. A 
                                library, library board, or 
                                other authority with 
                                responsibility for 
                                administration of the library 
                                shall notify the Commission of 
                                the applicability of such 
                                subclause to the library. Such 
                                notice shall certify that the 
                                library in question will be 
                                brought into compliance before 
                                the start of the third program 
                                year after the effective date 
                                of this subsection in which the 
                                library is applying for funds 
                                under this subsection.
                  (F) Noncompliance.--
                          (i) Failure to submit 
                        certification.--Any library that 
                        knowingly fails to comply with the 
                        application guidelines regarding the 
                        annual submission of certification 
                        required by this paragraph shall not be 
                        eligible for services at discount rates 
                        or funding in lieu of services at such 
                        rates under this subsection.
                          (ii) Failure to comply with 
                        certification.--Any library that 
                        knowingly fails to ensure the use of 
                        its computers in accordance with a 
                        certification under subparagraphs (B) 
                        and (C) shall reimburse all funds and 
                        discounts received under this 
                        subsection for the period covered by 
                        such certification.
                          (iii) Remedy of noncompliance.--
                                  (I) Failure to submit.--A 
                                library that has failed to 
                                submit a certification under 
                                clause (i) may remedy the 
                                failure by submitting the 
                                certification to which the 
                                failure relates. Upon submittal 
                                of such certification, the 
                                library shall be eligible for 
                                services at discount rates 
                                under this subsection.
                                  (II) Failure to comply.--A 
                                library that has failed to 
                                comply with a certification as 
                                described in clause (ii) may 
                                remedy the failure by ensuring 
                                the use of its computers in 
                                accordance with such 
                                certification. Upon submittal 
                                to the Commission of a 
                                certification or other 
                                appropriate evidence of such 
                                remedy, the library shall be 
                                eligible for services at 
                                discount rates under this 
                                subsection.
          (7) 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 section 8101 of the Elementary and 
                Secondary Education Act of 1965.
                  (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) skilled nursing facilities (as 
                        defined in section 1819(a) of the 
                        Social Security Act (42 U.S.C. 1395i-
                        3(a))); and
                          [(vii)] (viii) consortia of health 
                        care providers consisting of one or 
                        more entities described in [clauses (i) 
                        through (vi)] clauses (i) through (vii) 
                        .
                  (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.
                  (D) Minor.--The term ``minor'' means any 
                individual who has not attained the age of 17 
                years.
                  (E) Obscene.--The term ``obscene'' has the 
                meaning given such term in section 1460 of 
                title 18, United States Code.
                  (F) Child pornography.--The term ``child 
                pornography'' has the meaning given such term 
                in section 2256 of title 18, United States 
                Code.
                  (G) Harmful to minors.--The term ``harmful to 
                minors'' means any picture, image, graphic 
                image file, or other visual depiction that--
                          (i) taken as a whole and with respect 
                        to minors, appeals to a prurient 
                        interest in nudity, sex, or excretion;
                          (ii) depicts, describes, or 
                        represents, in a patently offensive way 
                        with respect to what is suitable for 
                        minors, an actual or simulated sexual 
                        act or sexual contact, actual or 
                        simulated normal or perverted sexual 
                        acts, or a lewd exhibition of the 
                        genitals; and
                          (iii) taken as a whole, lacks serious 
                        literary, artistic, political, or 
                        scientific value as to minors.
                  (H) Sexual act; sexual contact.--The terms 
                ``sexual act'' and ``sexual contact'' have the 
                meanings given such terms in section 2246 of 
                title 18, United States Code.
                  (I) Technology protection measure.--The term 
                ``technology protection measure'' means a 
                specific technology that blocks or filters 
                Internet access to the material covered by a 
                certification under paragraph (5) or (6) to 
                which such certification relates.
  (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.
  (l) Internet Safety Policy Requirement for Schools and 
Libraries.--
          (1) In general.--In carrying out its responsibilities 
        under subsection (h), each school or library to which 
        subsection (h) applies shall--
                  (A) adopt and implement an Internet safety 
                policy that addresses--
                          (i) access by minors to inappropriate 
                        matter on the Internet and World Wide 
                        Web;
                          (ii) the safety and security of 
                        minors when using electronic mail, chat 
                        rooms, and other forms of direct 
                        electronic communications;
                          (iii) unauthorized access, including 
                        so-called ``hacking'', and other 
                        unlawful activities by minors online;
                          (iv) unauthorized disclosure, use, 
                        and dissemination of personal 
                        identification information regarding 
                        minors; and
                          (v) measures designed to restrict 
                        minors' access to materials harmful to 
                        minors; and
                  (B) provide reasonable public notice and hold 
                at least one public hearing or meeting to 
                address the proposed Internet safety policy.
          (2) Local determination of content.--A determination 
        regarding what matter is inappropriate for minors shall 
        be made by the school board, local educational agency, 
        library, or other authority responsible for making the 
        determination. No agency or instrumentality of the 
        United States Government may--
                  (A) establish criteria for making such 
                determination;
                  (B) review the determination made by the 
                certifying school, school board, local 
                educational agency, library, or other 
                authority; or
                  (C) consider the criteria employed by the 
                certifying school, school board, local 
                educational agency, library, or other authority 
                in the administration of subsection (h)(1)(B).
          (3) Availability for review.--Each Internet safety 
        policy adopted under this subsection shall be made 
        available to the Commission, upon request of the 
        Commission, by the school, school board, local 
        educational agency, library, or other authority 
        responsible for adopting such Internet safety policy 
        for purposes of the review of such Internet safety 
        policy by the Commission.
          (4) Effective date.--This subsection shall apply with 
        respect to schools and libraries on or after the date 
        that is 120 days after the date of the enactment of the 
        Children's Internet Protection Act.

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