[104th Congress Public Law 104]
[From the U.S. Government Printing Office]


<DOC>
[DOCID: f:publ104.104]

                     TELECOMMUNICATIONS ACT OF 1996

[[Page 110 STAT. 56]]

Public Law 104-104
104th Congress

                                 An Act


 
 To promote competition and reduce regulation in order to secure lower 
   prices and higher quality services for American telecommunications 
 consumers and encourage the rapid deployment of new telecommunications 
            technologies. <<NOTE: Feb. 8, 1996 -  [S. 652]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress 
assembled, <<NOTE: Telecommunications Act of 1996. Intergovernmental 
relations.>> 

SECTION 1. SHORT TITLE; REFERENCES.

    (a) <<NOTE: 47 USC 609 note.>>  Short Title.--This Act may be cited 
as the ``Telecommunications Act of 1996''.

    (b) References.--Except as otherwise expressly provided, whenever in 
this Act an amendment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the 
Communications Act of 1934 (47 U.S.C. 151 et seq.).

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

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

                   TITLE I--TELECOMMUNICATION SERVICES

                 Subtitle A--Telecommunications Services

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

              ``Part II--Development of Competitive Markets

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

   Subtitle B--Special Provisions Concerning Bell Operating Companies

Sec. 151. Bell operating company provisions.

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

        ``Sec. 271. Bell operating company entry into interLATA 
                            services.
        ``Sec. 272. Separate affiliate; safeguards.

[[Page 110 STAT. 57]]

        ``Sec. 273. Manufacturing by Bell operating companies.
        ``Sec. 274. Electronic publishing by Bell operating companies.
        ``Sec. 275. Alarm monitoring services.
        ``Sec. 276. Provision of payphone service.''

                      TITLE II--BROADCAST SERVICES

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

                        TITLE III--CABLE SERVICES

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

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

        ``Sec. 651. Regulatory treatment of video programming services.
        ``Sec. 652. Prohibition on buy outs.
        ``Sec. 653. Establishment of open video systems.''
Sec. 303. Preemption of franchising authority regulation of 
           telecommunications services.
Sec. 304. Competitive availability of navigation devices.
        ``Sec. 629. Competitive availability of navigation devices.''
Sec. 305. Video programming accessibility.
        ``Sec. 713. Video programming accessibility.''

                       TITLE IV--REGULATORY REFORM

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

                     TITLE V--OBSCENITY AND VIOLENCE

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

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

                          Subtitle B--Violence

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

                       Subtitle C--Judicial Review

Sec. 561. Expedited review.

                     TITLE VI--EFFECT ON OTHER LAWS

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

                   TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 701. Prevention of unfair billing practices for information or 
           services provided over toll-free telephone calls.

[[Page 110 STAT. 58]]

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

SEC. 3. DEFINITIONS.

    (a) Additional Definitions.--Section 3 (47 U.S.C. 153) is amended--
            (1) in subsection (r)--
                    (A) by inserting ``(A)'' after ``means''; and
                    (B) by inserting before the period at the end the 
                following: ``, or (B) comparable service provided 
                through a system of switches, transmission equipment, or 
                other facilities (or combination thereof) by which a 
                subscriber can originate and terminate a 
                telecommunications service''; and
            (2) by adding at the end thereof the following:
            ``(33) Affiliate.--The term `affiliate' means a person that 
        (directly or indirectly) owns or controls, is owned or 
        controlled by, or is under common ownership or control with, 
        another person. For purposes of this paragraph, the term `own' 
        means to own an equity interest (or the equivalent thereof) of 
        more than 10 percent.
            ``(34) AT&T consent decree.--The term `AT&T Consent Decree' 
        means the order entered August 24, 1982, in the antitrust action 
        styled United States v. Western Electric, Civil Action No. 82-
        0192, in the United States District Court for the District of 
        Columbia, and includes any judgment or order with respect to 
        such action entered on or after August 24, 1982.
            ``(35) Bell operating company.--The term `Bell operating 
        company'--
                    ``(A) means any of the following companies: Bell 
                Telephone Company of Nevada, Illinois Bell Telephone 
                Company, Indiana Bell Telephone Company, Incorporated, 
                Michigan Bell Telephone Company, New England Telephone 
                and Telegraph Company, New Jersey Bell Telephone 
                Company, New York Telephone Company, U S West 
                Communications Company, South Central Bell Telephone 
                Company, Southern Bell Telephone and Telegraph Company, 
                Southwestern Bell Telephone Company, The Bell Telephone 
                Company of Pennsylvania, The Chesapeake and Potomac 
                Telephone Company, The Chesapeake and Potomac Telephone 
                Company of Maryland, The Chesapeake and Potomac 
                Telephone Company of Virginia, The Chesapeake and 
                Potomac Telephone Company of West Virginia, The Diamond 
                State Telephone Company, The Ohio Bell Telephone 
                Company, The Pacific Telephone and Telegraph Company, or 
                Wisconsin Telephone Company; and
                    ``(B) includes any successor or assign of any such 
                company that provides wireline telephone exchange 
                service; but

[[Page 110 STAT. 59]]

                    ``(C) does not include an affiliate of any such 
                company, other than an affiliate described in 
                subparagraph (A) or (B).
            ``(36) Cable service.--The term `cable service' has the 
        meaning given such term in section 602.
            ``(37) Cable system.--The term `cable system' has the 
        meaning given such term in section 602.
            ``(38) Customer premises equipment.--The term `customer 
        premises equipment' means equipment employed on the premises of 
        a person (other than a carrier) to originate, route, or 
        terminate telecommunications.
            ``(39) Dialing parity.--The term `dialing parity' means that 
        a person that is not an affiliate of a local exchange carrier is 
        able to provide telecommunications services in such a manner 
        that customers have the ability to route automatically, without 
        the use of any access code, their telecommunications to the 
        telecommunications services provider of the customer's 
        designation from among 2 or more telecommunications services 
        providers (including such local exchange carrier).
            ``(40) Exchange access.--The term `exchange access' means 
        the offering of access to telephone exchange services or 
        facilities for the purpose of the origination or termination of 
        telephone toll services.
            ``(41) Information service.--The term `information service' 
        means the offering of a capability for generating, acquiring, 
        storing, transforming, processing, retrieving, utilizing, or 
        making available information via telecommunications, and 
        includes electronic publishing, but does not include any use of 
        any such capability for the management, control, or operation of 
        a telecommunications system or the management of a 
        telecommunications service.
            ``(42) Interlata service.--The term `interLATA service' 
        means telecommunications between a point located in a local 
        access and transport area and a point located outside such area.
            ``(43) Local access and transport area.--The term `local 
        access and transport area' or `LATA' means a contiguous 
        geographic area--
                    ``(A) established before the date of enactment of 
                the Telecommunications Act of 1996 by a Bell operating 
                company such that no exchange area includes points 
                within more than 1 metropolitan statistical area, 
                consolidated metropolitan statistical area, or State, 
                except as expressly permitted under the AT&T Consent 
                Decree; or
                    ``(B) established or modified by a Bell operating 
                company after such date of enactment and approved by the 
                Commission.
            ``(44) Local exchange carrier.--The term `local exchange 
        carrier' means any person that is engaged in the provision of 
        telephone exchange service or exchange access. Such term does 
        not include a person insofar as such person is engaged in the 
        provision of a commercial mobile service under section 332(c), 
        except to the extent that the Commission finds that such service 
        should be included in the definition of such term.
            ``(45) Network element.--The term `network element' means a 
        facility or equipment used in the provision of a 
        telecommunications service. Such term also includes features, 
        func

[[Page 110 STAT. 60]]

        tions, and capabilities that are provided by means of such 
        facility or equipment, including subscriber numbers, databases, 
        signaling systems, and information sufficient for billing and 
        collection or used in the transmission, routing, or other 
        provision of a telecommunications service.
            ``(46) Number portability.--The term `number portability' 
        means the ability of users of telecommunications services to 
        retain, at the same location, existing telecommunications 
        numbers without impairment of quality, reliability, or 
        convenience when switching from one telecommunications carrier 
        to another.
            ``(47) Rural telephone company.--The term `rural telephone 
        company' means a local exchange carrier operating entity to the 
        extent that such entity--
                    ``(A) provides common carrier service to any local 
                exchange carrier study area that does not include 
                either--
                          ``(i) any incorporated place of 10,000 
                      inhabitants or more, or any part thereof, based on 
                      the most recently available population statistics 
                      of the Bureau of the Census; or
                          ``(ii) any territory, incorporated or 
                      unincorporated, included in an urbanized area, as 
                      defined by the Bureau of the Census as of August 
                      10, 1993;
                    ``(B) provides telephone exchange service, including 
                exchange access, to fewer than 50,000 access lines;
                    ``(C) provides telephone exchange service to any 
                local exchange carrier study area with fewer than 
                100,000 access lines; or
                    ``(D) has less than 15 percent of its access lines 
                in communities of more than 50,000 on the date of 
                enactment of the Telecommunications Act of 1996.
            ``(48) Telecommunications.--The term `telecommunications' 
        means the transmission, between or among points specified by the 
        user, of information of the user's choosing, without change in 
        the form or content of the information as sent and received.
            ``(49) Telecommunications carrier.--The term 
        `telecommunications carrier' means any provider of 
        telecommunications services, except that such term does not 
        include aggregators of telecommunications services (as defined 
        in section 226). A telecommunications carrier shall be treated 
        as a common carrier under this Act only to the extent that it is 
        engaged in providing telecommunications services, except that 
        the Commission shall determine whether the provision of fixed 
        and mobile satellite service shall be treated as common 
        carriage.
            ``(50) Telecommunications equipment.--The term 
        `telecommunications equipment' means equipment, other than 
        customer premises equipment, used by a carrier to provide 
        telecommunications services, and includes software integral to 
        such equipment (including upgrades).
            ``(51) Telecommunications service.--The term 
        `telecommunications service' means the offering of 
        telecommunications for a fee directly to the public, or to such 
        classes of users as to be effectively available directly to the 
        public, regardless of the facilities used.''.

[[Page 110 STAT. 61]]

    (b) <<NOTE: 47 USC 153 note.>>  Common Terminology.--Except as 
otherwise provided in this Act, the terms used in this Act have the 
meanings provided in section 3 of the Communications Act of 1934 (47 
U.S.C. 153), as amended by this section.

    (c) Stylistic Consistency.--Section 3 (47 U.S.C. 153) is amended--
            (1) in subsections (e) and (n), by redesignating clauses 
        (1), (2), and (3), as clauses (A), (B), and (C), respectively;
            (2) in subsection (w), by redesignating paragraphs (1) 
        through (5) as subparagraphs (A) through (E), respectively;
            (3) in subsections (y) and (z), by redesignating paragraphs 
        (1) and (2) as subparagraphs (A) and (B), respectively;
            (4) by redesignating subsections (a) through (ff) as 
        paragraphs (1) through (32);
            (5) by indenting such paragraphs 2 em spaces;
            (6) by inserting after the designation of each such 
        paragraph--
                    (A) a heading, in a form consistent with the form of 
                the heading of this subsection, consisting of the term 
                defined by such paragraph, or the first term so defined 
                if such paragraph defines more than one term; and
                    (B) the words ``The term'';
            (7) by changing the first letter of each defined term in 
        such paragraphs from a capital to a lower case letter (except 
        for ``United States'', ``State'', ``State commission'', and 
        ``Great Lakes Agreement''); and
            (8) by reordering such paragraphs and the additional 
        paragraphs added by subsection (a) in alphabetical order based 
        on the headings of such paragraphs and renumbering such 
        paragraphs as so reordered.

    (d) Conforming Amendments.--The Act is amended--
            (1) in section 225(a)(1), <<NOTE: 47 USC 225.>>  by striking 
        ``section 3(h)'' and inserting ``section 3'';
            (2) in section 332(d), <<NOTE: 47 USC 332.>>  by striking 
        ``section 3(n)'' each place it appears and inserting ``section 
        3''; and
            (3) in sections 621(d)(3), 636(d), and 637(a)(2), <<NOTE: 47 
        USC 541, 556, 557.>>  by striking ``section 3(v)'' and inserting 
        ``section 3''.

                   TITLE I--TELECOMMUNICATION SERVICES

                 Subtitle A--Telecommunications Services

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

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

              ``PART II--DEVELOPMENT OF COMPETITIVE MARKETS

``SEC. 251. <<NOTE: 47 USC 251.>>  INTERCONNECTION.

    ``(a) General Duty of Telecommunications Carriers.--Each 
telecommunications carrier has the duty--
            ``(1) to interconnect directly or indirectly with the 
        facilities and equipment of other telecommunications carriers; 
        and

[[Page 110 STAT. 62]]

            ``(2) not to install network features, functions, or 
        capabilities that do not comply with the guidelines and 
        standards established pursuant to section 255 or 256.

    ``(b) Obligations of All Local Exchange Carriers.--Each local 
exchange carrier has the following duties:
            ``(1) Resale.--The duty not to prohibit, and not to impose 
        unreasonable or discriminatory conditions or limitations on, the 
        resale of its telecommunications services.
            ``(2) Number portability.--The duty to provide, to the 
        extent technically feasible, number portability in accordance 
        with requirements prescribed by the Commission.
            ``(3) Dialing parity.--The duty to provide dialing parity to 
        competing providers of telephone exchange service and telephone 
        toll service, and the duty to permit all such providers to have 
        nondiscriminatory access to telephone numbers, operator 
        services, directory assistance, and directory listing, with no 
        unreasonable dialing delays.
            ``(4) Access to rights-of-way.--The duty to afford access to 
        the poles, ducts, conduits, and rights-of-way of such carrier to 
        competing providers of telecommunications services on rates, 
        terms, and conditions that are consistent with section 224.
            ``(5) Reciprocal compensation.--The duty to establish 
        reciprocal compensation arrangements for the transport and 
        termination of telecommunications.

    ``(c) Additional Obligations of Incumbent Local Exchange Carriers.--
In addition to the duties contained in subsection (b), each incumbent 
local exchange carrier has the following duties:
            ``(1) Duty to negotiate.--The duty to negotiate in good 
        faith in accordance with section 252 the particular terms and 
        conditions of agreements to fulfill the duties described in 
        paragraphs (1) through (5) of subsection (b) and this 
        subsection. The requesting telecommunications carrier also has 
        the duty to negotiate in good faith the terms and conditions of 
        such agreements.
            ``(2) Interconnection.--The duty to provide, for the 
        facilities and equipment of any requesting telecommunications 
        carrier, interconnection with the local exchange carrier's 
        network--
                    ``(A) for the transmission and routing of telephone 
                exchange service and exchange access;
                    ``(B) at any technically feasible point within the 
                carrier's network;
                    ``(C) that is at least equal in quality to that 
                provided by the local exchange carrier to itself or to 
                any subsidiary, affiliate, or any other party to which 
                the carrier provides interconnection; and
                    ``(D) on rates, terms, and conditions that are just, 
                reasonable, and nondiscriminatory, in accordance with 
                the terms and conditions of the agreement and the 
                requirements of this section and section 252.
            ``(3) Unbundled access.--The duty to provide, to any 
        requesting telecommunications carrier for the provision of a 
        telecommunications service, nondiscriminatory access to network 
        elements on an unbundled basis at any technically feasible point 
        on rates, terms, and conditions that are just, reasonable, and 
        nondiscriminatory in accordance with the terms and conditions of 
        the agreement and the requirements of this section and section 
        252. An incumbent local exchange carrier shall

[[Page 110 STAT. 63]]

        provide such unbundled network elements in a manner that allows 
        requesting carriers to combine such elements in order to provide 
        such telecommunications service.
            ``(4) Resale.--The duty--
                    ``(A) to offer for resale at wholesale rates any 
                telecommunications service that the carrier provides at 
                retail to subscribers who are not telecommunications 
                carriers; and
                    ``(B) not to prohibit, and not to impose 
                unreasonable or discriminatory conditions or limitations 
                on, the resale of such telecommunications service, 
                except that a State commission may, consistent with 
                regulations prescribed by the Commission under this 
                section, prohibit a reseller that obtains at wholesale 
                rates a telecommunications service that is available at 
                retail only to a category of subscribers from offering 
                such service to a different category of subscribers.
            ``(5) Notice of changes.--The duty to provide reasonable 
        public notice of changes in the information necessary for the 
        transmission and routing of services using that local exchange 
        carrier's facilities or networks, as well as of any other 
        changes that would affect the interoperability of those 
        facilities and networks.
            ``(6) Collocation.--The duty to provide, on rates, terms, 
        and conditions that are just, reasonable, and nondiscriminatory, 
        for physical collocation of equipment necessary for 
        interconnection or access to unbundled network elements at the 
        premises of the local exchange carrier, except that the carrier 
        may provide for virtual collocation if the local exchange 
        carrier demonstrates to the State commission that physical 
        collocation is not practical for technical reasons or because of 
        space limitations.

    ``(d) Implementation.--
            ``(1) <<NOTE: Regulations.>>  In general.--Within 6 months 
        after the date of enactment of the Telecommunications Act of 
        1996, the Commission shall complete all actions necessary to 
        establish regulations to implement the requirements of this 
        section.
            ``(2) Access standards.--In determining what network 
        elements should be made available for purposes of subsection 
        (c)(3), the Commission shall consider, at a minimum, whether--
                    ``(A) access to such network elements as are 
                proprietary in nature is necessary; and
                    ``(B) the failure to provide access to such network 
                elements would impair the ability of the 
                telecommunications carrier seeking access to provide the 
                services that it seeks to offer.
            ``(3) Preservation of state access regulations.--In 
        prescribing and enforcing regulations to implement the 
        requirements of this section, the Commission shall not preclude 
        the enforcement of any regulation, order, or policy of a State 
        commission that--
                    ``(A) establishes access and interconnection 
                obligations of local exchange carriers;
                    ``(B) is consistent with the requirements of this 
                section; and

[[Page 110 STAT. 64]]

                    ``(C) does not substantially prevent implementation 
                of the requirements of this section and the purposes of 
                this part.

    ``(e) Numbering Administration.--
            ``(1) Commission authority and jurisdiction.--The Commission 
        shall create or designate one or more impartial entities to 
        administer telecommunications numbering and to make such numbers 
        available on an equitable basis. The Commission shall have 
        exclusive jurisdiction over those portions of the North American 
        Numbering Plan that pertain to the United States. Nothing in 
        this paragraph shall preclude the Commission from delegating to 
        State commissions or other entities all or any portion of such 
        jurisdiction.
            ``(2) Costs.--The cost of establishing telecommunications 
        numbering administration arrangements and number portability 
        shall be borne by all telecommunications carriers on a 
        competitively neutral basis as determined by the Commission.

    ``(f) Exemptions, Suspensions, and Modifications.--
            ``(1) Exemption for certain rural telephone companies.--
                    ``(A) Exemption.--Subsection (c) of this section 
                shall not apply to a rural telephone company until (i) 
                such company has received a bona fide request for 
                interconnection, services, or network elements, and (ii) 
                the State commission determines (under subparagraph (B)) 
                that such request is not unduly economically burdensome, 
                is technically feasible, and is consistent with section 
                254 (other than subsections (b)(7) and (c)(1)(D) 
                thereof).
                    ``(B) State termination of exemption and 
                implementation schedule.--The party making a bona fide 
                request of a rural telephone company for 
                interconnection, services, or network elements shall 
                submit a notice of its request to the State commission. 
                The State commission shall conduct an inquiry for the 
                purpose of determining whether to terminate the 
                exemption under subparagraph (A). Within 120 days after 
                the State commission receives notice of the request, the 
                State commission shall terminate the exemption if the 
                request is not unduly economically burdensome, is 
                technically feasible, and is consistent with section 254 
                (other than subsections (b)(7) and (c)(1)(D) thereof). 
                Upon termination of the exemption, a State commission 
                shall establish an implementation schedule for 
                compliance with the request that is consistent in time 
                and manner with Commission regulations.
                    ``(C) Limitation on exemption.--The exemption 
                provided by this paragraph shall not apply with respect 
                to a request under subsection (c) from a cable operator 
                providing video programming, and seeking to provide any 
                telecommunications service, in the area in which the 
                rural telephone company provides video programming. The 
                limitation contained in this subparagraph shall not 
                apply to a rural telephone company that is providing 
                video programming on the date of enactment of the 
                Telecommunications Act of 1996.
            ``(2) Suspensions and modifications for rural carriers.--A 
        local exchange carrier with fewer than 2 percent of the Nation's 
        subscriber lines installed in the aggregate

[[Page 110 STAT. 65]]

        nationwide may petition a State commission for a suspension or 
        modification of the application of a requirement or requirements 
        of subsection (b) or (c) to telephone exchange service 
        facilities specified in such petition. The State commission 
        shall grant such petition to the extent that, and for such 
        duration as, the State commission determines that such 
        suspension or modification--
                    ``(A) is necessary--
                          ``(i) to avoid a significant adverse economic 
                      impact on users of telecommunications services 
                      generally;
                          ``(ii) to avoid imposing a requirement that is 
                      unduly economically burdensome; or
                          ``(iii) to avoid imposing a requirement that 
                      is technically infeasible; and
                    ``(B) is consistent with the public interest, 
                convenience, and necessity.
        The State commission shall act upon any petition filed under 
        this paragraph within 180 days after receiving such petition. 
        Pending such action, the State commission may suspend 
        enforcement of the requirement or requirements to which the 
        petition applies with respect to the petitioning carrier or 
        carriers.

    ``(g) Continued Enforcement of Exchange Access and Interconnection 
Requirements.--On and after the date of enactment of the 
Telecommunications Act of 1996, each local exchange carrier, to the 
extent that it provides wireline services, shall provide exchange 
access, information access, and exchange services for such access to 
interexchange carriers and information service providers in accordance 
with the same equal access and nondiscriminatory interconnection 
restrictions and obligations (including receipt of compensation) that 
apply to such carrier on the date immediately preceding the date of 
enactment of the Telecommunications Act of 1996 under any court order, 
consent decree, or regulation, order, or policy of the Commission, until 
such restrictions and obligations are explicitly superseded by 
regulations prescribed by the Commission after such date of enactment. 
During the period beginning on such date of enactment and until such 
restrictions and obligations are so superseded, such restrictions and 
obligations shall be enforceable in the same manner as regulations of 
the Commission.
    ``(h) Definition of Incumbent Local Exchange Carrier.--
            ``(1) Definition.--For purposes of this section, the term 
        `incumbent local exchange carrier' means, with respect to an 
        area, the local exchange carrier that--
                    ``(A) on the date of enactment of the 
                Telecommunications Act of 1996, provided telephone 
                exchange service in such area; and
                    ``(B)(i) on such date of enactment, was deemed to be 
                a member of the exchange carrier association pursuant to 
                section 69.601(b) of the Commission's regulations (47 
                C.F.R. 69.601(b)); or
                    ``(ii) is a person or entity that, on or after such 
                date of enactment, became a successor or assign of a 
                member described in clause (i).
            ``(2) Treatment of comparable carriers as incumbents.--The 
        Commission may, by rule, provide for the treatment of a local 
        exchange carrier (or class or category thereof)

[[Page 110 STAT. 66]]

        as an incumbent local exchange carrier for purposes of this 
        section if--
                    ``(A) such carrier occupies a position in the market 
                for telephone exchange service within an area that is 
                comparable to the position occupied by a carrier 
                described in paragraph (1);
                    ``(B) such carrier has substantially replaced an 
                incumbent local exchange carrier described in paragraph 
                (1); and
                    ``(C) such treatment is consistent with the public 
                interest, convenience, and necessity and the purposes of 
                this section.

    ``(i) Savings Provision.--Nothing in this section shall be construed 
to limit or otherwise affect the Commission's authority under section 
201.

``SEC. 252. <<NOTE: 47 USC 252.>>  PROCEDURES FOR NEGOTIATION, 
            ARBITRATION, AND APPROVAL OF AGREEMENTS.

    ``(a) Agreements Arrived at Through Negotiation.--
            ``(1) Voluntary negotiations.--Upon receiving a request for 
        interconnection, services, or network elements pursuant to 
        section 251, an incumbent local exchange carrier may negotiate 
        and enter into a binding agreement with the requesting 
        telecommunications carrier or carriers without regard to the 
        standards set forth in subsections (b) and (c) of section 251. 
        The agreement shall include a detailed schedule of itemized 
        charges for interconnection and each service or network element 
        included in the agreement. The agreement, including any 
        interconnection agreement negotiated before the date of 
        enactment of the Telecommunications Act of 1996, shall be 
        submitted to the State commission under subsection (e) of this 
        section.
            ``(2) Mediation.--Any party negotiating an agreement under 
        this section may, at any point in the negotiation, ask a State 
        commission to participate in the negotiation and to mediate any 
        differences arising in the course of the negotiation.

    ``(b) Agreements Arrived at Through Compulsory Arbitration.--
            ``(1) Arbitration.--During the period from the 135th to the 
        160th day (inclusive) after the date on which an incumbent local 
        exchange carrier receives a request for negotiation under this 
        section, the carrier or any other party to the negotiation may 
        petition a State commission to arbitrate any open issues.
            ``(2) Duty of petitioner.--
                    ``(A) A party that petitions a State commission 
                under paragraph (1) shall, at the same time as it 
                submits the petition, provide the State commission all 
                relevant documentation concerning--
                          ``(i) the unresolved issues;
                          ``(ii) the position of each of the parties 
                      with respect to those issues; and
                          ``(iii) any other issue discussed and resolved 
                      by the parties.
                    ``(B) A party petitioning a State commission under 
                paragraph (1) shall provide a copy of the petition and 
                any documentation to the other party or parties not 
                later than the day on which the State commission 
                receives the petition.

[[Page 110 STAT. 67]]

            ``(3) Opportunity to respond.--A non-petitioning party to a 
        negotiation under this section may respond to the other party's 
        petition and provide such additional information as it wishes 
        within 25 days after the State commission receives the petition.
            ``(4) Action by state commission.--
                    ``(A) The State commission shall limit its 
                consideration of any petition under paragraph (1) (and 
                any response thereto) to the issues set forth in the 
                petition and in the response, if any, filed under 
                paragraph (3).
                    ``(B) The State commission may require the 
                petitioning party and the responding party to provide 
                such information as may be necessary for the State 
                commission to reach a decision on the unresolved issues. 
                If any party refuses or fails unreasonably to respond on 
                a timely basis to any reasonable request from the State 
                commission, then the State commission may proceed on the 
                basis of the best information available to it from 
                whatever source derived.
                    ``(C) The State commission shall resolve each issue 
                set forth in the petition and the response, if any, by 
                imposing appropriate conditions as required to implement 
                subsection (c) upon the parties to the agreement, and 
                shall conclude the resolution of any unresolved issues 
                not later than 9 months after the date on which the 
                local exchange carrier received the request under this 
                section.
            ``(5) Refusal to negotiate.--The refusal of any other party 
        to the negotiation to participate further in the negotiations, 
        to cooperate with the State commission in carrying out its 
        function as an arbitrator, or to continue to negotiate in good 
        faith in the presence, or with the assistance, of the State 
        commission shall be considered a failure to negotiate in good 
        faith.

    ``(c) Standards for Arbitration.--In resolving by arbitration under 
subsection (b) any open issues and imposing conditions upon the parties 
to the agreement, a State commission shall--
            ``(1) ensure that such resolution and conditions meet the 
        requirements of section 251, including the regulations 
        prescribed by the Commission pursuant to section 251;
            ``(2) establish any rates for interconnection, services, or 
        network elements according to subsection (d); and
            ``(3) provide a schedule for implementation of the terms and 
        conditions by the parties to the agreement.

    ``(d) Pricing Standards.--
            ``(1) Interconnection and network element charges.--
        Determinations by a State commission of the just and reasonable 
        rate for the interconnection of facilities and equipment for 
        purposes of subsection (c)(2) of section 251, and the just and 
        reasonable rate for network elements for purposes of subsection 
        (c)(3) of such section--
                    ``(A) shall be--
                          ``(i) based on the cost (determined without 
                      reference to a rate-of-return or other rate-based 
                      proceeding) of providing the interconnection or 
                      network element (whichever is applicable), and
                          ``(ii) nondiscriminatory, and
                    ``(B) may include a reasonable profit.

[[Page 110 STAT. 68]]

            ``(2) Charges for transport and termination of traffic.--
                    ``(A) In general.--For the purposes of compliance by 
                an incumbent local exchange carrier with section 
                251(b)(5), a State commission shall not consider the 
                terms and conditions for reciprocal compensation to be 
                just and reasonable unless--
                          ``(i) such terms and conditions provide for 
                      the mutual and reciprocal recovery by each carrier 
                      of costs associated with the transport and 
                      termination on each carrier's network facilities 
                      of calls that originate on the network facilities 
                      of the other carrier; and
                          ``(ii) such terms and conditions determine 
                      such costs on the basis of a reasonable 
                      approximation of the additional costs of 
                      terminating such calls.
                    ``(B) Rules of construction.--This paragraph shall 
                not be construed--
                          ``(i) to preclude arrangements that afford the 
                      mutual recovery of costs through the offsetting of 
                      reciprocal obligations, including arrangements 
                      that waive mutual recovery (such as bill-and-keep 
                      arrangements); or
                          ``(ii) to authorize the Commission or any 
                      State commission to engage in any rate regulation 
                      proceeding to establish with particularity the 
                      additional costs of transporting or terminating 
                      calls, or to require carriers to maintain records 
                      with respect to the additional costs of such 
                      calls.
            ``(3) Wholesale prices for telecommunications services.--For 
        the purposes of section 251(c)(4), a State commission shall 
        determine wholesale rates on the basis of retail rates charged 
        to subscribers for the telecommunications service requested, 
        excluding the portion thereof attributable to any marketing, 
        billing, collection, and other costs that will be avoided by the 
        local exchange carrier.

    ``(e) Approval by State Commission.--
            ``(1) Approval required.--Any interconnection agreement 
        adopted by negotiation or arbitration shall be submitted for 
        approval to the State commission. A State commission to which an 
        agreement is submitted shall approve or reject the agreement, 
        with written findings as to any deficiencies.
            ``(2) Grounds for rejection.--The State commission may only 
        reject--
                    ``(A) an agreement (or any portion thereof) adopted 
                by negotiation under subsection (a) if it finds that--
                          ``(i) the agreement (or portion thereof) 
                      discriminates against a telecommunications carrier 
                      not a party to the agreement; or
                          ``(ii) the implementation of such agreement or 
                      portion is not consistent with the public 
                      interest, convenience, and necessity; or
                    ``(B) an agreement (or any portion thereof) adopted 
                by arbitration under subsection (b) if it finds that the 
                agreement does not meet the requirements of section 251, 
                including the regulations prescribed by the Commission 
                pursuant to section 251, or the standards set forth in 
                subsection (d) of this section.

[[Page 110 STAT. 69]]

            ``(3) Preservation of authority.--Notwithstanding paragraph 
        (2), but subject to section 253, nothing in this section shall 
        prohibit a State commission from establishing or enforcing other 
        requirements of State law in its review of an agreement, 
        including requiring compliance with intrastate 
        telecommunications service quality standards or requirements.
            ``(4) Schedule for decision.--If the State commission does 
        not act to approve or reject the agreement within 90 days after 
        submission by the parties of an agreement adopted by negotiation 
        under subsection (a), or within 30 days after submission by the 
        parties of an agreement adopted by arbitration under subsection 
        (b), the agreement shall be deemed approved. No State court 
        shall have jurisdiction to review the action of a State 
        commission in approving or rejecting an agreement under this 
        section.
            ``(5) Commission to act if state will not act.--If a State 
        commission fails to act to carry out its responsibility under 
        this section in any proceeding or other matter under this 
        section, then the Commission shall issue an order preempting the 
        State commission's jurisdiction of that proceeding or matter 
        within 90 days after being notified (or taking notice) of such 
        failure, and shall assume the responsibility of the State 
        commission under this section with respect to the proceeding or 
        matter and act for the State commission.
            ``(6) Review of state commission actions.--In a case in 
        which a State fails to act as described in paragraph (5), the 
        proceeding by the Commission under such paragraph and any 
        judicial review of the Commission's actions shall be the 
        exclusive remedies for a State commission's failure to act. In 
        any case in which a State commission makes a determination under 
        this section, any party aggrieved by such determination may 
        bring an action in an appropriate Federal district court to 
        determine whether the agreement or statement meets the 
        requirements of section 251 and this section.

    ``(f) Statements of Generally Available Terms.--
            ``(1) In general.--A Bell operating company may prepare and 
        file with a State commission a statement of the terms and 
        conditions that such company generally offers within that State 
        to comply with the requirements of section 251 and the 
        regulations thereunder and the standards applicable under this 
        section.
            ``(2) State commission review.--A State commission may not 
        approve such statement unless such statement complies with 
        subsection (d) of this section and section 251 and the 
        regulations thereunder. Except as provided in section 253, 
        nothing in this section shall prohibit a State commission from 
        establishing or enforcing other requirements of State law in its 
        review of such statement, including requiring compliance with 
        intrastate telecommunications service quality standards or 
        requirements.
            ``(3) Schedule for review.--The State commission to which a 
        statement is submitted shall, not later than 60 days after the 
        date of such submission--
                    ``(A) complete the review of such statement under 
                paragraph (2) (including any reconsideration thereof), 
                unless the submitting carrier agrees to an extension of 
                the period for such review; or

[[Page 110 STAT. 70]]

                    ``(B) permit such statement to take effect.
            ``(4) Authority to continue review.--Paragraph (3) shall not 
        preclude the State commission from continuing to review a 
        statement that has been permitted to take effect under 
        subparagraph (B) of such paragraph or from approving or 
        disapproving such statement under paragraph (2).
            ``(5) Duty to negotiate not affected.--The submission or 
        approval of a statement under this subsection shall not relieve 
        a Bell operating company of its duty to negotiate the terms and 
        conditions of an agreement under section 251.

    ``(g) Consolidation of State Proceedings.--Where not inconsistent 
with the requirements of this Act, a State commission may, to the extent 
practical, consolidate proceedings under sections 214(e), 251(f), 253, 
and this section in order to reduce administrative burdens on 
telecommunications carriers, other parties to the proceedings, and the 
State commission in carrying out its responsibilities under this Act.
    ``(h) <<NOTE: Public information.>>  Filing Required.--A State 
commission shall make a copy of each agreement approved under subsection 
(e) and each statement approved under subsection (f) available for 
public inspection and copying within 10 days after the agreement or 
statement is approved. The State commission may charge a reasonable and 
nondiscriminatory fee to the parties to the agreement or to the party 
filing the statement to cover the costs of approving and filing such 
agreement or statement.

    ``(i) Availability to Other Telecommunications Carriers.--A local 
exchange carrier shall make available any interconnection, service, or 
network element provided under an agreement approved under this section 
to which it is a party to any other requesting telecommunications 
carrier upon the same terms and conditions as those provided in the 
agreement.
    ``(j) Definition of Incumbent Local Exchange Carrier.--For purposes 
of this section, the term `incumbent local exchange carrier' has the 
meaning provided in section 251(h).

``SEC. 253. <<NOTE: 47 USC 253.>>  REMOVAL OF BARRIERS TO ENTRY.

    ``(a) In General.--No State or local statute or regulation, or other 
State or local legal requirement, may prohibit or have the effect of 
prohibiting the ability of any entity to provide any interstate or 
intrastate telecommunications service.
    ``(b) State Regulatory Authority.--Nothing in this section shall 
affect the ability of a State to impose, on a competitively neutral 
basis and consistent with section 254, requirements necessary to 
preserve and advance universal service, protect the public safety and 
welfare, ensure the continued quality of telecommunications services, 
and safeguard the rights of consumers.
    ``(c) State and Local Government Authority.--Nothing in this section 
affects the authority of a State or local government to manage the 
public rights-of-way or to require fair and reasonable compensation from 
telecommunications providers, on a competitively neutral and 
nondiscriminatory basis, for use of public rights-of-way on a 
nondiscriminatory basis, if the compensation required is publicly 
disclosed by such government.
    ``(d) Preemption.--If, after notice and an opportunity for public 
comment, the Commission determines that a State or local government has 
permitted or imposed any statute, regulation, or legal requirement that 
violates subsection (a) or (b), the Commission

[[Page 110 STAT. 71]]

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

``SEC. 254. <<NOTE: 47 USC 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.

[[Page 110 STAT. 72]]

            ``(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).

[[Page 110 STAT. 73]]

    ``(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) <<NOTE: Rules. Rural areas.>>  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,

[[Page 110 STAT. 74]]

                between the rates for services provided to health care 
                providers for rural areas in a State and the rates for 
                similar services provided to other customers in 
                comparable rural areas in that State treated as a 
                service obligation as a part of its obligation to 
                participate in the mechanisms to preserve and advance 
                universal service.
                    ``(B) Educational providers and libraries.--All 
                telecommunications carriers serving a geographic area 
                shall, upon a bona fide request for any of its services 
                that are within the definition of universal service 
                under subsection (c)(3), provide such services to 
                elementary schools, secondary schools, and libraries for 
                educational purposes at rates less than the amounts 
                charged for similar services to other parties. The 
                discount shall be an amount that the Commission, with 
                respect to interstate services, and the States, with 
                respect to intrastate services, determine is appropriate 
                and necessary to ensure affordable access to and use of 
                such services by such entities. A telecommunications 
                carrier providing service under this paragraph shall--
                          ``(i) have an amount equal to the amount of 
                      the discount treated as an offset to its 
                      obligation to contribute to the mechanisms to 
                      preserve and advance universal service, or
                          ``(ii) notwithstanding the provisions of 
                      subsection (e) of this section, receive 
                      reimbursement utilizing the support mechanisms to 
                      preserve and advance universal service.
            ``(2) Advanced services.--The Commission shall establish 
        competitively neutral rules--
                    ``(A) to enhance, to the extent technically feasible 
                and economically reasonable, access to advanced 
                telecommunications and information services for all 
                public and nonprofit elementary and secondary school 
                classrooms, health care providers, and libraries; and
                    ``(B) to define the circumstances under which a 
                telecommunications carrier may be required to connect 
                its network to such public institutional 
                telecommunications users.
            ``(3) Terms and conditions.--Telecommunications services and 
        network capacity provided to a public institutional 
        telecommunications user under this subsection may not be sold, 
        resold, or otherwise transferred by such user in consideration 
        for money or any other thing of value.
            ``(4) Eligibility of users.--No entity listed in this 
        subsection shall be entitled to preferential rates or treatment 
        as required by this subsection, if such entity operates as a 
        for-profit business, is a school described in paragraph (5)(A) 
        with an endowment of more than $50,000,000, or is a library not 
        eligible for participation in State-based plans for funds under 
        title III of the Library Services and Construction Act (20 
        U.S.C. 335c et seq.).
            ``(5) Definitions.--For purposes of this subsection:
                    ``(A) Elementary and secondary schools.--The term 
                `elementary and secondary schools' means elementary 
                schools and secondary schools, as defined in paragraphs 
                (14) and (25), respectively, of section 14101 of the

[[Page 110 STAT. 75]]

                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 8801).
                    ``(B) Health care provider.--The term `health care 
                provider' means--
                          ``(i) post-secondary educational institutions 
                      offering health care instruction, teaching 
                      hospitals, and medical schools;
                          ``(ii) community health centers or health 
                      centers providing health care to migrants;
                          ``(iii) local health departments or agencies;
                          ``(iv) community mental health centers;
                          ``(v) not-for-profit hospitals;
                          ``(vi) rural health clinics; and
                          ``(vii) consortia of health care providers 
                      consisting of one or more entities described in 
                      clauses (i) through (vi).
                    ``(C) Public institutional telecommunications 
                user.--The term `public institutional telecommunications 
                user' means an elementary or secondary school, a 
                library, or a health care provider as those terms are 
                defined in this paragraph.

    ``(i) Consumer Protection.--The Commission and the States should 
ensure that universal service is available at rates that are just, 
reasonable, and affordable.
    ``(j) Lifeline Assistance.--Nothing in this section shall affect the 
collection, distribution, or administration of the Lifeline Assistance 
Program provided for by the Commission under regulations set forth in 
section 69.117 of title 47, Code of Federal Regulations, and other 
related sections of such title.
    ``(k) Subsidy of Competitive Services Prohibited.--A 
telecommunications carrier may not use services that are not competitive 
to subsidize services that are subject to competition. The Commission, 
with respect to interstate services, and the States, with respect to 
intrastate services, shall establish any necessary cost allocation 
rules, accounting safeguards, and guidelines to ensure that services 
included in the definition of universal service bear no more than a 
reasonable share of the joint and common costs of facilities used to 
provide those services.

``SEC. 255. <<NOTE: 47 USC 255.>>  ACCESS BY PERSONS WITH DISABILITIES.

    ``(a) Definitions.--As used in this section--
            ``(1) Disability.--The term `disability' has the meaning 
        given to it by section 3(2)(A) of the Americans with 
        Disabilities Act of 1990 (42 U.S.C. 12102(2)(A)).
            ``(2) Readily achievable.--The term `readily achievable' has 
        the meaning given to it by section 301(9) of that Act (42 U.S.C. 
        12181(9)).

    ``(b) Manufacturing.--A manufacturer of telecommunications equipment 
or customer premises equipment shall ensure that the equipment is 
designed, developed, and fabricated to be accessible to and usable by 
individuals with disabilities, if readily achievable.
    ``(c) Telecommunications Services.--A provider of telecommunications 
service shall ensure that the service is accessible to and usable by 
individuals with disabilities, if readily achievable.
    ``(d) Compatibility.--Whenever the requirements of subsections (b) 
and (c) are not readily achievable, such a manufacturer or provider 
shall ensure that the equipment or service is compatible

[[Page 110 STAT. 76]]

with existing peripheral devices or specialized customer premises 
equipment commonly used by individuals with disabilities to achieve 
access, if readily achievable.
    ``(e) Guidelines.--Within 18 months after the date of enactment of 
the Telecommunications Act of 1996, the Architectural and Transportation 
Barriers Compliance Board shall develop guidelines for accessibility of 
telecommunications equipment and customer premises equipment in 
conjunction with the Commission. The Board shall review and update the 
guidelines periodically.
    ``(f) No Additional Private Rights Authorized.--Nothing in this 
section shall be construed to authorize any private right of action to 
enforce any requirement of this section or any regulation thereunder. 
The Commission shall have exclusive jurisdiction with respect to any 
complaint under this section.

``SEC. 256. <<NOTE: 47 USC 256.>>  COORDINATION FOR INTERCONNECTIVITY.

    ``(a) Purpose.--It is the purpose of this section--
            ``(1) to promote nondiscriminatory accessibility by the 
        broadest number of users and vendors of communications products 
        and services to public telecommunications networks used to 
        provide telecommunications service through--
                    ``(A) coordinated public telecommunications network 
                planning and design by telecommunications carriers and 
                other providers of telecommunications service; and
                    ``(B) public telecommunications network 
                interconnectivity, and interconnectivity of devices with 
                such networks used to provide telecommunications 
                service; and
            ``(2) to ensure the ability of users and information 
        providers to seamlessly and transparently transmit and receive 
        information between and across telecommunications networks.

    ``(b) Commission Functions.--In carrying out the purposes of this 
section, the Commission--
            ``(1) shall establish procedures for Commission oversight of 
        coordinated network planning by telecommunications carriers and 
        other providers of telecommunications service for the effective 
        and efficient interconnection of public telecommunications 
        networks used to provide telecommunications service; and
            ``(2) may participate, in a manner consistent with its 
        authority and practice prior to the date of enactment of this 
        section, in the development by appropriate industry standards-
        setting organizations of public telecommunications network 
        interconnectivity standards that promote access to--
                    ``(A) public telecommunications networks used to 
                provide telecommunications service;
                    ``(B) network capabilities and services by 
                individuals with disabilities; and
                    ``(C) information services by subscribers of rural 
                telephone companies.

    ``(c) Commission's Authority.--Nothing in this section shall be 
construed as expanding or limiting any authority that the Commission may 
have under law in effect before the date of enactment of the 
Telecommunications Act of 1996.
    ``(d) Definition.--As used in this section, the term `public 
telecommunications network interconnectivity' means the ability of two 
or more public telecommunications networks used to provide 
telecommunications service to communicate and exchange informa

[[Page 110 STAT. 77]]

tion without degeneration, and to interact in concert with one another.

``SEC. 257. <<NOTE: 47 USC 257.>>  MARKET ENTRY BARRIERS PROCEEDING.

    ``(a) <<NOTE: Regulations.>>  Elimination of Barriers.--Within 15 
months after the date of enactment of the Telecommunications Act of 
1996, the Commission shall complete a proceeding for the purpose of 
identifying and eliminating, by regulations pursuant to its authority 
under this Act (other than this section), market entry barriers for 
entrepreneurs and other small businesses in the provision and ownership 
of telecommunications services and information services, or in the 
provision of parts or services to providers of telecommunications 
services and information services.

    ``(b) National Policy.--In carrying out subsection (a), the 
Commission shall seek to promote the policies and purposes of this Act 
favoring diversity of media voices, vigorous economic competition, 
technological advancement, and promotion of the public interest, 
convenience, and necessity.
    ``(c) <<NOTE: Reports.>>  Periodic Review.--Every 3 years following 
the completion of the proceeding required by subsection (a), the 
Commission shall review and report to Congress on--
            ``(1) any regulations prescribed to eliminate barriers 
        within its jurisdiction that are identified under subsection (a) 
        and that can be prescribed consistent with the public interest, 
        convenience, and necessity; and
            ``(2) the statutory barriers identified under subsection (a) 
        that the Commission recommends be eliminated, consistent with 
        the public interest, convenience, and necessity.

``SEC. 258. <<NOTE: 47 USC 258.>>  ILLEGAL CHANGES IN SUBSCRIBER CARRIER 
            SELECTIONS.

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

``SEC. 259. <<NOTE: 47 USC 259.>>  INFRASTRUCTURE SHARING.

    ``(a) Regulations Required.--The Commission shall prescribe, within 
one year after the date of enactment of the Telecommunications Act of 
1996, regulations that require incumbent local exchange carriers (as 
defined in section 251(h)) to make available to any qualifying carrier 
such public switched network infrastructure, technology, information, 
and telecommunications facilities and functions as may be requested by 
such qualifying carrier for the purpose of enabling such qualifying 
carrier to provide telecommunications services, or to provide access to 
information services, in the service area in which such qualifying 
carrier has requested

[[Page 110 STAT. 78]]

and obtained designation as an eligible telecommunications carrier under 
section 214(e).
    ``(b) Terms and Conditions of Regulations.--The regulations 
prescribed by the Commission pursuant to this section shall--
            ``(1) not require a local exchange carrier to which this 
        section applies to take any action that is economically 
        unreasonable or that is contrary to the public interest;
            ``(2) permit, but shall not require, the joint ownership or 
        operation of public switched network infrastructure and services 
        by or among such local exchange carrier and a qualifying 
        carrier;
            ``(3) ensure that such local exchange carrier will not be 
        treated by the Commission or any State as a common carrier for 
        hire or as offering common carrier services with respect to any 
        infrastructure, technology, information, facilities, or 
        functions made available to a qualifying carrier in accordance 
        with regulations issued pursuant to this section;
            ``(4) ensure that such local exchange carrier makes such 
        infrastructure, technology, information, facilities, or 
        functions available to a qualifying carrier on just and 
        reasonable terms and conditions that permit such qualifying 
        carrier to fully benefit from the economies of scale and scope 
        of such local exchange carrier, as determined in accordance with 
        guidelines prescribed by the Commission in regulations issued 
        pursuant to this section;
            ``(5) establish conditions that promote cooperation between 
        local exchange carriers to which this section applies and 
        qualifying carriers;
            ``(6) not require a local exchange carrier to which this 
        section applies to engage in any infrastructure sharing 
        agreement for any services or access which are to be provided or 
        offered to consumers by the qualifying carrier in such local 
        exchange carrier's telephone exchange area; and
            ``(7) require that such local exchange carrier file with the 
        Commission or State for public inspection, any tariffs, 
        contracts, or other arrangements showing the rates, terms, and 
        conditions under which such carrier is making available public 
        switched network infrastructure and functions under this 
        section.

    ``(c) Information Concerning Deployment of New Services and 
Equipment.--A local exchange carrier to which this section applies that 
has entered into an infrastructure sharing agreement under this section 
shall provide to each party to such agreement timely information on the 
planned deployment of telecommunications services and equipment, 
including any software or upgrades of software integral to the use or 
operation of such telecommunications equipment.
    ``(d) Definition.--For purposes of this section, the term 
`qualifying carrier' means a telecommunications carrier that--
            ``(1) lacks economies of scale or scope, as determined in 
        accordance with regulations prescribed by the Commission 
        pursuant to this section; and
            ``(2) offers telephone exchange service, exchange access, 
        and any other service that is included in universal service, to 
        all consumers without preference throughout the service area for 
        which such carrier has been designated as an eligible 
        telecommunications carrier under section 214(e).

[[Page 110 STAT. 79]]

``SEC. 260. <<NOTE: 47 USC 260.>>  PROVISION OF TELEMESSAGING SERVICE.

    ``(a) Nondiscrimination Safeguards.--Any local exchange carrier 
subject to the requirements of section 251(c) that provides 
telemessaging service--
            ``(1) shall not subsidize its telemessaging service directly 
        or indirectly from its telephone exchange service or its 
        exchange access; and
            ``(2) shall not prefer or discriminate in favor of its 
        telemessaging service operations in its provision of 
        telecommunications services.

    ``(b) Expedited Consideration of Complaints.--The Commission shall 
establish procedures for the receipt and review of complaints concerning 
violations of subsection (a) or the regulations thereunder that result 
in material financial harm to a provider of telemessaging service. Such 
procedures shall ensure that the Commission will make a final 
determination with respect to any such complaint within 120 days after 
receipt of the complaint. If the complaint contains an appropriate 
showing that the alleged violation occurred, the Commission shall, 
within 60 days after receipt of the complaint, order the local exchange 
carrier and any affiliates to cease engaging in such violation pending 
such final determination.
    ``(c) Definition.--As used in this section, the term `telemessaging 
service' means voice mail and voice storage and retrieval services, any 
live operator services used to record, transcribe, or relay messages 
(other than telecommunications relay services), and any ancillary 
services offered in combination with these services.

``SEC. 261. <<NOTE: 47 USC 261.>>  EFFECT ON OTHER REQUIREMENTS.

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

                 ``PART I--COMMON CARRIER REGULATION''.

    (c) <<NOTE: 47 USC 151 note.>>  Stylistic Consistency.--The Act is 
amended so that--

[[Page 110 STAT. 80]]

            (1) the designation and heading of each title of the Act 
        shall be in the form and typeface of the designation and heading 
        of this title of this Act; and
            (2) the designation and heading of each part of each title 
        of the Act shall be in the form and typeface of the designation 
        and heading of part I of title II of the Act, as amended by 
        subsection (a).

SEC. 102. ELIGIBLE TELECOMMUNICATIONS CARRIERS.

    (a) In General.--Section 214 (47 U.S.C. 214) is amended by adding at 
the end thereof the following new subsection:
    ``(e) Provision of Universal Service.--
            ``(1) Eligible telecommunications carriers.--A common 
        carrier designated as an eligible telecommunications carrier 
        under paragraph (2) or (3) shall be eligible to receive 
        universal service support in accordance with section 254 and 
        shall, throughout the service area for which the designation is 
        received--
                    ``(A) offer the services that are supported by 
                Federal universal service support mechanisms under 
                section 254(c), either using its own facilities or a 
                combination of its own facilities and resale of another 
                carrier's services (including the services offered by 
                another eligible telecommunications carrier); and
                    ``(B) advertise the availability of such services 
                and the charges therefor using media of general 
                distribution.
            ``(2) Designation of eligible telecommunications carriers.--
        A State commission shall upon its own motion or upon request 
        designate a common carrier that meets the requirements of 
        paragraph (1) as an eligible telecommunications carrier for a 
        service area designated by the State commission. Upon request 
        and consistent with the public interest, convenience, and 
        necessity, the State commission may, in the case of an area 
        served by a rural telephone company, and shall, in the case of 
        all other areas, designate more than one common carrier as an 
        eligible telecommunications carrier for a service area 
        designated by the State commission, so long as each additional 
        requesting carrier meets the requirements of paragraph (1). 
        Before designating an additional eligible telecommunications 
        carrier for an area served by a rural telephone company, the 
        State commission shall find that the designation is in the 
        public interest.
            ``(3) Designation of eligible telecommunications carriers 
        for unserved areas.--If no common carrier will provide the 
        services that are supported by Federal universal service support 
        mechanisms under section 254(c) to an unserved community or any 
        portion thereof that requests such service, the Commission, with 
        respect to interstate services, or a State commission, with 
        respect to intrastate services, shall determine which common 
        carrier or carriers are best able to provide such service to the 
        requesting unserved community or portion thereof and shall order 
        such carrier or carriers to provide such service for that 
        unserved community or portion thereof. Any carrier or carriers 
        ordered to provide such service under this paragraph shall meet 
        the requirements of paragraph (1) and shall be designated as an 
        eligible telecommunications carrier for that community or 
        portion thereof.

[[Page 110 STAT. 81]]

            ``(4) Relinquishment of universal service.--A State 
        commission shall permit an eligible telecommunications carrier 
        to relinquish its designation as such a carrier in any area 
        served by more than one eligible telecommunications carrier. An 
        eligible telecommunications carrier that seeks to relinquish its 
        eligible telecommunications carrier designation for an area 
        served by more than one eligible telecommunications carrier 
        shall give advance notice to the State commission of such 
        relinquishment. Prior to permitting a telecommunications carrier 
        designated as an eligible telecommunications carrier to cease 
        providing universal service in an area served by more than one 
        eligible telecommunications carrier, the State commission shall 
        require the remaining eligible telecommunications carrier or 
        carriers to ensure that all customers served by the 
        relinquishing carrier will continue to be served, and shall 
        require sufficient notice to permit the purchase or construction 
        of adequate facilities by any remaining eligible 
        telecommunications carrier. The State commission shall establish 
        a time, not to exceed one year after the State commission 
        approves such relinquishment under this paragraph, within which 
        such purchase or construction shall be completed.
            ``(5) Service area defined.--The term `service area' means a 
        geographic area established by a State commission for the 
        purpose of determining universal service obligations and support 
        mechanisms. In the case of an area served by a rural telephone 
        company, `service area' means such company's `study area' unless 
        and until the Commission and the States, after taking into 
        account recommendations of a Federal-State Joint Board 
        instituted under section 410(c), establish a different 
        definition of service area for such company.''.

SEC. 103. EXEMPT TELECOMMUNICATIONS COMPANIES.

    The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 and 
following) is amended by redesignating sections 34 and 35 <<NOTE: 15 USC 
79z-6, 79.>>  as sections 35 and 36, respectively, and by inserting the 
following new section after section 33:

``SEC. 34. <<NOTE: 15 USC 79z-5c.>>  EXEMPT TELECOMMUNICATIONS 
            COMPANIES.

    ``(a) Definitions.--For purposes of this section--
            ``(1) Exempt telecommunications company.--The term `exempt 
        telecommunications company' means any person determined by the 
        Federal Communications Commission to be engaged directly or 
        indirectly, wherever located, through one or more affiliates (as 
        defined in section 2(a)(11)(B)), and exclusively in the business 
        of providing---
                    ``(A) telecommunications services;
                    ``(B) information services;
                    ``(C) other services or products subject to the 
                jurisdiction of the Federal Communications Commission; 
                or
                    ``(D) products or services that are related or 
                incidental to the provision of a product or service 
                described in subparagraph (A), (B), or (C).
        No person shall be deemed to be an exempt telecommunications 
        company under this section unless such person has applied to the 
        Federal Communications Commission for a determination under this 
        paragraph. A person applying in good faith for such a 
        determination shall be deemed an exempt telecommunications 
        company under this section, with all of the exemptions

[[Page 110 STAT. 82]]

        provided by this section, until the Federal Communications 
        Commission makes such determination. <<NOTE: Notification.>>  
        The Federal Communications Commission shall make such 
        determination within 60 days of its receipt of any such 
        application filed after the enactment of this section and shall 
        notify the Commission whenever a determination is made under 
        this paragraph that any person is an exempt telecommunications 
        company. <<NOTE: Rules.>>  Not later than 12 months after the 
        date of enactment of this section, the Federal Communications 
        Commission shall promulgate rules implementing the provisions of 
        this paragraph which shall be applicable to applications filed 
        under this paragraph after the effective date of such rules.
            ``(2) Other terms.--For purposes of this section, the terms 
        `telecommunications services' and `information services' shall 
        have the same meanings as provided in the Communications Act of 
        1934.

    ``(b) State Consent for Sale of Existing Rate-Based Facilities.--If 
a rate or charge for the sale of electric energy or natural gas (other 
than any portion of a rate or charge which represents recovery of the 
cost of a wholesale rate or charge) for, or in connection with, assets 
of a public utility company that is an associate company or affiliate of 
a registered holding company was in effect under the laws of any State 
as of December 19, 1995, the public utility company owning such assets 
may not sell such assets to an exempt telecommunications company that is 
an associate company or affiliate unless State commissions having 
jurisdiction over such public utility company approve such sale. Nothing 
in this subsection shall preempt the otherwise applicable authority of 
any State to approve or disapprove the sale of such assets. The approval 
of the Commission under this Act shall not be required for the sale of 
assets as provided in this subsection.
    ``(c) Ownership of ETCS by Exempt Holding Companies.--
Notwithstanding any provision of this Act, a holding company that is 
exempt under section 3 of this Act shall be permitted, without condition 
or limitation under this Act, to acquire and maintain an interest in the 
business of one or more exempt telecommunications companies.
    ``(d) Ownership of ETCS by Registered Holding Companies.--
Notwithstanding any provision of this Act, a registered holding company 
shall be permitted (without the need to apply for, or receive, approval 
from the Commission, and otherwise without condition under this Act) to 
acquire and hold the securities, or an interest in the business, of one 
or more exempt telecommunications companies.
    ``(e) Financing and Other Relationships Between ETCS and Registered 
Holding Companies.--The relationship between an exempt 
telecommunications company and a registered holding company, its 
affiliates and associate companies, shall remain subject to the 
jurisdiction of the Commission under this Act: Provided, That--
            ``(1) section 11 of this Act shall not prohibit the 
        ownership of an interest in the business of one or more exempt 
        telecommunications companies by a registered holding company 
        (regardless of activities engaged in or where facilities owned 
        or operated by such exempt telecommunications companies are 
        located), and such ownership by a registered holding company

[[Page 110 STAT. 83]]

        shall be deemed consistent with the operation of an integrated 
        public utility system;
            ``(2) the ownership of an interest in the business of one or 
        more exempt telecommunications companies by a registered holding 
        company (regardless of activities engaged in or where facilities 
        owned or operated by such exempt telecommunications companies 
        are located) shall be considered as reasonably incidental, or 
        economically necessary or appropriate, to the operations of an 
        integrated public utility system;
            ``(3) the Commission shall have no jurisdiction under this 
        Act over, and there shall be no restriction or approval required 
        under this Act with respect to (A) the issue or sale of a 
        security by a registered holding company for purposes of 
        financing the acquisition of an exempt telecommunications 
        company, or (B) the guarantee of a security of an exempt 
        telecommunications company by a registered holding company; and
            ``(4) except for costs that should be fairly and equitably 
        allocated among companies that are associate companies of a 
        registered holding company, the Commission shall have no 
        jurisdiction under this Act over the sales, service, and 
        construction contracts between an exempt telecommunications 
        company and a registered holding company, its affiliates and 
        associate companies.

    ``(f) Reporting Obligations Concerning Investments and Activities of 
Registered Public-Utility Holding Company Systems.--
            ``(1) Obligations to report information.--Any registered 
        holding company or subsidiary thereof that acquires or holds the 
        securities, or an interest in the business, of an exempt 
        telecommunications company shall file with the Commission such 
        information as the Commission, by rule, may prescribe 
        concerning--
                    ``(A) investments and activities by the registered 
                holding company, or any subsidiary thereof, with respect 
                to exempt telecommunications companies, and
                    ``(B) any activities of an exempt telecommunications 
                company within the holding company system,
        that are reasonably likely to have a material impact on the 
        financial or operational condition of the holding company 
        system.
            ``(2) Authority to require additional information.--If, 
        based on reports provided to the Commission pursuant to 
        paragraph (1) of this subsection or other available information, 
        the Commission reasonably concludes that it has concerns 
        regarding the financial or operational condition of any 
        registered holding company or any subsidiary thereof (including 
        an exempt telecommunications company), the Commission may 
        require such registered holding company to make additional 
        reports and provide additional information.
            ``(3) Authority to limit disclosure of information.--
        Notwithstanding any other provision of law, the Commission shall 
        not be compelled to disclose any information required to be 
        reported under this subsection. Nothing in this subsection shall 
        authorize the Commission to withhold the information from 
        Congress, or prevent the Commission from complying with a 
        request for information from any other Federal or State 
        department or agency requesting the information for purposes

[[Page 110 STAT. 84]]

        within the scope of its jurisdiction. For purposes of section 
        552 of title 5, United States Code, this subsection shall be 
        considered a statute described in subsection (b)(3)(B) of such 
        section 552.

    ``(g) Assumption of Liabilities.--Any public utility company that is 
an associate company, or an affiliate, of a registered holding company 
and that is subject to the jurisdiction of a State commission with 
respect to its retail electric or gas rates shall not issue any security 
for the purpose of financing the acquisition, ownership, or operation of 
an exempt telecommunications company. Any public utility company that is 
an associate company, or an affiliate, of a registered holding company 
and that is subject to the jurisdiction of a State commission with 
respect to its retail electric or gas rates shall not assume any 
obligation or liability as guarantor, endorser, surety, or otherwise by 
the public utility company in respect of any security of an exempt 
telecommunications company.
    ``(h) Pledging or Mortgaging of Assets.--Any public utility company 
that is an associate company, or affiliate, of a registered holding 
company and that is subject to the jurisdiction of a State commission 
with respect to its retail electric or gas rates shall not pledge, 
mortgage, or otherwise use as collateral any assets of the public 
utility company or assets of any subsidiary company thereof for the 
benefit of an exempt telecommunications company.
    ``(i) Protection Against Abusive Affiliate Transactions.--A public 
utility company may enter into a contract to purchase services or 
products described in subsection (a)(1) from an exempt 
telecommunications company that is an affiliate or associate company of 
the public utility company only if--
            ``(1) every State commission having jurisdiction over the 
        retail rates of such public utility company approves such 
        contract; or
            ``(2) such public utility company is not subject to State 
        commission retail rate regulation and the purchased services or 
        products--
                    ``(A) would not be resold to any affiliate or 
                associate company; or
                    ``(B) would be resold to an affiliate or associate 
                company and every State commission having jurisdiction 
                over the retail rates of such affiliate or associate 
                company makes the determination required by subparagraph 
                (A).

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

[[Page 110 STAT. 85]]

    ``(l) Books and Records.--(1) Upon written order of a State 
commission, a State commission may examine the books, accounts, 
memoranda, contracts, and records of--
            ``(A) a public utility company subject to its regulatory 
        authority under State law;
            ``(B) any exempt telecommunications company selling products 
        or services to such public utility company or to an associate 
        company of such public utility company; and
            ``(C) any associate company or affiliate of an exempt 
        telecommunications company which sells products or services to a 
        public utility company referred to in subparagraph (A),

wherever located, if such examination is required for the effective 
discharge of the State commission's regulatory responsibilities 
affecting the provision of electric or gas service in connection with 
the activities of such exempt telecommunications company.
    ``(2) <<NOTE: Confidentiality.>>  Where a State commission issues an 
order pursuant to paragraph (1), the State commission shall not publicly 
disclose trade secrets or sensitive commercial information.

    ``(3) <<NOTE: Courts.>>  Any United States district court located in 
the State in which the State commission referred to in paragraph (1) is 
located shall have jurisdiction to enforce compliance with this 
subsection.

    ``(4) Nothing in this section shall--
            ``(A) preempt applicable State law concerning the provision 
        of records and other information; or
            ``(B) in any way limit rights to obtain records and other 
        information under Federal law, contracts, or otherwise.

    ``(m) Independent Audit Authority for State Commissions.--
            ``(1) State may order audit.--Any State commission with 
        jurisdiction over a public utility company that--
                    ``(A) is an associate company of a registered 
                holding company; and
                    ``(B) transacts business, directly or indirectly, 
                with a subsidiary company, an affiliate or an associate 
                company that is an exempt telecommunications company,
        may order an independent audit to be performed, no more 
        frequently than on an annual basis, of all matters deemed 
        relevant by the selected auditor that reasonably relate to 
        retail rates: Provided, That such matters relate, directly or 
        indirectly, to transactions or transfers between the public 
        utility company subject to its jurisdiction and such exempt 
        telecommunications company.
            ``(2) Selection of firm to conduct audit.--(A) If a State 
        commission orders an audit in accordance with paragraph (1), the 
        public utility company and the State commission shall jointly 
        select, within 60 days, a firm to perform the audit. The firm 
        selected to perform the audit shall possess demonstrated 
        qualifications relating to--
                    ``(i) competency, including adequate technical 
                training and professional proficiency in each discipline 
                necessary to carry out the audit; and
                    ``(ii) independence and objectivity, including that 
                the firm be free from personal or external impairments 
                to independence, and should assume an independent 
                position with the State commission and auditee, making 
                certain that the audit is based upon an impartial 
                consideration of all pertinent facts and responsible 
                opinions.

[[Page 110 STAT. 86]]

            ``(B) The public utility company and the exempt 
        telecommunications company shall cooperate fully with all 
        reasonable requests necessary to perform the audit and the 
        public utility company shall bear all costs of having the audit 
        performed.
            ``(3) Availability of auditor's report.--The auditor's 
        report shall be provided to the State commission not later than 
        6 months after the selection of the auditor, and provided to the 
        public utility company not later than 60 days thereafter.

    ``(n) Applicability of Telecommunications Regulation.--Nothing in 
this section shall affect the authority of the Federal Communications 
Commission under the Communications Act of 1934, or the authority of 
State commissions under State laws concerning the provision of 
telecommunications services, to regulate the activities of an exempt 
telecommunications company.''.

SEC. 104. NONDISCRIMINATION PRINCIPLE.

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

   Subtitle B--Special Provisions Concerning Bell Operating Companies

SEC. 151. BELL OPERATING COMPANY PROVISIONS.

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

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

``SEC. 271. <<NOTE: 47 USC 271.>>  BELL OPERATING COMPANY ENTRY INTO 
            INTERLATA SERVICES.

    ``(a) General Limitation.--Neither a Bell operating company, nor any 
affiliate of a Bell operating company, may provide interLATA services 
except as provided in this section.
    ``(b) InterLATA Services to Which This Section Applies.--
            ``(1) In-region services.--A Bell operating company, or any 
        affiliate of that Bell operating company, may provide interLATA 
        services originating in any of its in-region States (as defined 
        in subsection (i)) if the Commission approves the application of 
        such company for such State under subsection (d)(3).
            ``(2) Out-of-region services.--A Bell operating company, or 
        any affiliate of that Bell operating company, may provide 
        interLATA services originating outside its in-region States 
        after the date of enactment of the Telecommunications Act of 
        1996, subject to subsection (j).
            ``(3) Incidental interlata services.--A Bell operating 
        company, or any affiliate of a Bell operating company, may 
        provide incidental interLATA services (as defined in subsection 
        (g)) originating in any State after the date of enactment of the 
        Telecommunications Act of 1996.

[[Page 110 STAT. 87]]

            ``(4) Termination.--Nothing in this section prohibits a Bell 
        operating company or any of its affiliates from providing 
        termination for interLATA services, subject to subsection (j).

    ``(c) Requirements for Providing Certain In-Region InterLATA 
Services.--
            ``(1) Agreement or statement.--A Bell operating company 
        meets the requirements of this paragraph if it meets the 
        requirements of subparagraph (A) or subparagraph (B) of this 
        paragraph for each State for which the authorization is sought.
                    ``(A) Presence of a facilities-based competitor.--A 
                Bell operating company meets the requirements of this 
                subparagraph if it has entered into one or more binding 
                agreements that have been approved under section 252 
                specifying the terms and conditions under which the Bell 
                operating company is providing access and 
                interconnection to its network facilities for the 
                network facilities of one or more unaffiliated competing 
                providers of telephone exchange service (as defined in 
                section 3(47)(A), but excluding exchange access) to 
                residential and business subscribers. For the purpose of 
                this subparagraph, such telephone exchange service may 
                be offered by such competing providers either 
                exclusively over their own telephone exchange service 
                facilities or predominantly over their own telephone 
                exchange service facilities in combination with the 
                resale of the telecommunications services of another 
                carrier. For the purpose of this subparagraph, services 
                provided pursuant to subpart K of part 22 of the 
                Commission's regulations (47 C.F.R. 22.901 et seq.) 
                shall not be considered to be telephone exchange 
                services.
                    ``(B) Failure to request access.--A Bell operating 
                company meets the requirements of this subparagraph if, 
                after 10 months after the date of enactment of the 
                Telecommunications Act of 1996, no such provider has 
                requested the access and interconnection described in 
                subparagraph (A) before the date which is 3 months 
                before the date the company makes its application under 
                subsection (d)(1), and a statement of the terms and 
                conditions that the company generally offers to provide 
                such access and interconnection has been approved or 
                permitted to take effect by the State commission under 
                section 252(f). For purposes of this subparagraph, a 
                Bell operating company shall be considered not to have 
                received any request for access and interconnection if 
                the State commission of such State certifies that the 
                only provider or providers making such a request have 
                (i) failed to negotiate in good faith as required by 
                section 252, or (ii) violated the terms of an agreement 
                approved under section 252 by the provider's failure to 
                comply, within a reasonable period of time, with the 
                implementation schedule contained in such agreement.
            ``(2) Specific interconnection requirements.--
                    ``(A) Agreement required.--A Bell operating company 
                meets the requirements of this paragraph if, within the 
                State for which the authorization is sought--
                          ``(i)(I) such company is providing access and 
                      interconnection pursuant to one or more agreements 
                      described in paragraph (1)(A), or

[[Page 110 STAT. 88]]

                          ``(II) such company is generally offering 
                      access and interconnection pursuant to a statement 
                      described in paragraph (1)(B), and
                          ``(ii) such access and interconnection meets 
                      the requirements of subparagraph (B) of this 
                      paragraph.
                    ``(B) Competitive checklist.--Access or 
                interconnection provided or generally offered by a Bell 
                operating company to other telecommunications carriers 
                meets the requirements of this subparagraph if such 
                access and interconnection includes each of the 
                following:
                          ``(i) Interconnection in accordance with the 
                      requirements of sections 251(c)(2) and 252(d)(1).
                          ``(ii) Nondiscriminatory access to network 
                      elements in accordance with the requirements of 
                      sections 251(c)(3) and 252(d)(1).
                          ``(iii) Nondiscriminatory access to the poles, 
                      ducts, conduits, and rights-of-way owned or 
                      controlled by the Bell operating company at just 
                      and reasonable rates in accordance with the 
                      requirements of section 224.
                          ``(iv) Local loop transmission from the 
                      central office to the customer's premises, 
                      unbundled from local switching or other services.
                          ``(v) Local transport from the trunk side of a 
                      wireline local exchange carrier switch unbundled 
                      from switching or other services.
                          ``(vi) Local switching unbundled from 
                      transport, local loop transmission, or other 
                      services.
                          ``(vii) Nondiscriminatory access to--
                                    ``(I) 911 and E911 services;
                                    ``(II) directory assistance services 
                                to allow the other carrier's customers 
                                to obtain telephone numbers; and
                                    ``(III) operator call completion 
                                services.
                          ``(viii) White pages directory listings for 
                      customers of the other carrier's telephone 
                      exchange service.
                          ``(ix) Until the date by which 
                      telecommunications numbering administration 
                      guidelines, plan, or rules are established, 
                      nondiscriminatory access to telephone numbers for 
                      assignment to the other carrier's telephone 
                      exchange service customers. After that date, 
                      compliance with such guidelines, plan, or rules.
                          ``(x) Nondiscriminatory access to databases 
                      and associated signaling necessary for call 
                      routing and completion.
                          ``(xi) Until the date by which the Commission 
                      issues regulations pursuant to section 251 to 
                      require number portability, interim 
                      telecommunications number portability through 
                      remote call forwarding, direct inward dialing 
                      trunks, or other comparable arrangements, with as 
                      little impairment of functioning, quality, 
                      reliability, and convenience as possible. After 
                      that date, full compliance with such regulations.
                          ``(xii) Nondiscriminatory access to such 
                      services or information as are necessary to allow 
                      the requesting carrier to implement local dialing 
                      parity in accordance with the requirements of 
                      section 251(b)(3).

[[Page 110 STAT. 89]]

                          ``(xiii) Reciprocal compensation arrangements 
                      in accordance with the requirements of section 
                      252(d)(2).
                          ``(xiv) Telecommunications services are 
                      available for resale in accordance with the 
                      requirements of sections 251(c)(4) and 252(d)(3).

    ``(d) Administrative Provisions.--
            ``(1) Application to commission.--On and after the date of 
        enactment of the Telecommunications Act of 1996, a Bell 
        operating company or its affiliate may apply to the Commission 
        for authorization to provide interLATA services originating in 
        any in-region State. The application shall identify each State 
        for which the authorization is sought.
            ``(2) Consultation.--
                    ``(A) <<NOTE: Notification.>>  Consultation with the 
                attorney general.--The Commission shall notify the 
                Attorney General promptly of any application under 
                paragraph (1). Before making any determination under 
                this subsection, the Commission shall consult with the 
                Attorney General, and if the Attorney General submits 
                any comments in writing, such comments shall be included 
                in the record of the Commission's decision. In 
                consulting with and submitting comments to the 
                Commission under this paragraph, the Attorney General 
                shall provide to the Commission an evaluation of the 
                application using any standard the Attorney General 
                considers appropriate. The Commission shall give 
                substantial weight to the Attorney General's evaluation, 
                but such evaluation shall not have any preclusive effect 
                on any Commission decision under paragraph (3).
                    ``(B) Consultation with state commissions.--Before 
                making any determination under this subsection, the 
                Commission shall consult with the State commission of 
                any State that is the subject of the application in 
                order to verify the compliance of the Bell operating 
                company with the requirements of subsection (c).
            ``(3) Determination.--Not later than 90 days after receiving 
        an application under paragraph (1), the Commission shall issue a 
        written determination approving or denying the authorization 
        requested in the application for each State. The Commission 
        shall not approve the authorization requested in an application 
        submitted under paragraph (1) unless it finds that--
                    ``(A) the petitioning Bell operating company has met 
                the requirements of subsection (c)(1) and--
                          ``(i) with respect to access and 
                      interconnection provided pursuant to subsection 
                      (c)(1)(A), has fully implemented the competitive 
                      checklist in subsection (c)(2)(B); or
                          ``(ii) with respect to access and 
                      interconnection generally offered pursuant to a 
                      statement under subsection (c)(1)(B), such 
                      statement offers all of the items included in the 
                      competitive checklist in subsection (c)(2)(B);
                    ``(B) the requested authorization will be carried 
                out in accordance with the requirements of section 272; 
                and
                    ``(C) the requested authorization is consistent with 
                the public interest, convenience, and necessity.
        The Commission shall state the basis for its approval or denial 
        of the application.

[[Page 110 STAT. 90]]

            ``(4) Limitation on commission.--The Commission may not, by 
        rule or otherwise, limit or extend the terms used in the 
        competitive checklist set forth in subsection (c)(2)(B).
            ``(5) <<NOTE: Federal Register, publication.>>  
        Publication.--Not later than 10 days after issuing a 
        determination under paragraph (3), the Commission shall publish 
        in the Federal Register a brief description of the 
        determination.
            ``(6) Enforcement of conditions.--
                    ``(A) Commission authority.--If at any time after 
                the approval of an application under paragraph (3), the 
                Commission determines that a Bell operating company has 
                ceased to meet any of the conditions required for such 
                approval, the Commission may, after notice and 
                opportunity for a hearing--
                          ``(i) issue an order to such company to 
                      correct the deficiency;
                          ``(ii) impose a penalty on such company 
                      pursuant to title V; or
                          ``(iii) suspend or revoke such approval.
                    ``(B) Receipt and review of complaints.--The 
                Commission shall establish procedures for the review of 
                complaints concerning failures by Bell operating 
                companies to meet conditions required for approval under 
                paragraph (3). Unless the parties otherwise agree, the 
                Commission shall act on such complaint within 90 days.

    ``(e) Limitations.--
            ``(1) Joint marketing of local and long distance services.--
        Until a Bell operating company is authorized pursuant to 
        subsection (d) to provide interLATA services in an in-region 
        State, or until 36 months have passed since the date of 
        enactment of the Telecommunications Act of 1996, whichever is 
        earlier, a telecommunications carrier that serves greater than 5 
        percent of the Nation's presubscribed access lines may not 
        jointly market in such State telephone exchange service obtained 
        from such company pursuant to section 251(c)(4) with interLATA 
        services offered by that telecommunications carrier.
            ``(2) Intralata toll dialing parity.--
                    ``(A) Provision required.--A Bell operating company 
                granted authority to provide interLATA services under 
                subsection (d) shall provide intraLATA toll dialing 
                parity throughout that State coincident with its 
                exercise of that authority.
                    ``(B) Limitation.--Except for single-LATA States and 
                States that have issued an order by December 19, 1995, 
                requiring a Bell operating company to implement 
                intraLATA toll dialing parity, a State may not require a 
                Bell operating company to implement intraLATA toll 
                dialing parity in that State before a Bell operating 
                company has been granted authority under this section to 
                provide interLATA services originating in that State or 
                before 3 years after the date of enactment of the 
                Telecommunications Act of 1996, whichever is earlier. 
                Nothing in this subparagraph precludes a State from 
                issuing an order requiring intraLATA toll dialing parity 
                in that State prior to either such date so long as such 
                order does not take effect until after the earlier of 
                either such dates.

[[Page 110 STAT. 91]]

    ``(f) Exception for Previously Authorized Activities.--Neither 
subsection (a) nor section 273 shall prohibit a Bell operating company 
or affiliate from engaging, at any time after the date of enactment of 
the Telecommunications Act of 1996, in any activity to the extent 
authorized by, and subject to the terms and conditions contained in, an 
order entered by the United States District Court for the District of 
Columbia pursuant to section VII or VIII(C) of the AT&T Consent Decree 
if such order was entered on or before such date of enactment, to the 
extent such order is not reversed or vacated on appeal. Nothing in this 
subsection shall be construed to limit, or to impose terms or conditions 
on, an activity in which a Bell operating company is otherwise 
authorized to engage under any other provision of this section.
    ``(g) Definition of Incidental InterLATA Services.--For purposes of 
this section, the term `incidental interLATA services' means the 
interLATA provision by a Bell operating company or its affiliate--
            ``(1)(A) of audio programming, video programming, or other 
        programming services to subscribers to such services of such 
        company or affiliate;
            ``(B) of the capability for interaction by such subscribers 
        to select or respond to such audio programming, video 
        programming, or other programming services;
            ``(C) to distributors of audio programming or video 
        programming that such company or affiliate owns or controls, or 
        is licensed by the copyright owner of such programming (or by an 
        assignee of such owner) to distribute; or
            ``(D) of alarm monitoring services;
            ``(2) of two-way interactive video services or Internet 
        services over dedicated facilities to or for elementary and 
        secondary schools as defined in section 254(h)(5);
            ``(3) of commercial mobile services in accordance with 
        section 332(c) of this Act and with the regulations prescribed 
        by the Commission pursuant to paragraph (8) of such section;
            ``(4) of a service that permits a customer that is located 
        in one LATA to retrieve stored information from, or file 
        information for storage in, information storage facilities of 
        such company that are located in another LATA;
            ``(5) of signaling information used in connection with the 
        provision of telephone exchange services or exchange access by a 
        local exchange carrier; or
            ``(6) of network control signaling information to, and 
        receipt of such signaling information from, common carriers 
        offering interLATA services at any location within the area in 
        which such Bell operating company provides telephone exchange 
        services or exchange access.

    ``(h) Limitations.--The provisions of subsection (g) are intended to 
be narrowly construed. The interLATA services provided under 
subparagraph (A), (B), or (C) of subsection (g)(1) are limited to those 
interLATA transmissions incidental to the provision by a Bell operating 
company or its affiliate of video, audio, and other programming services 
that the company or its affiliate is engaged in providing to the public. 
The Commission shall ensure that the provision of services authorized 
under subsection (g) by a Bell operating company or its affiliate will 
not adversely affect telephone exchange service ratepayers or 
competition in any telecommunications market.

[[Page 110 STAT. 92]]

    ``(i) Additional Definitions.--As used in this section--
            ``(1) In-region state.--The term `in-region State' means a 
        State in which a Bell operating company or any of its affiliates 
        was authorized to provide wireline telephone exchange service 
        pursuant to the reorganization plan approved under the AT&T 
        Consent Decree, as in effect on the day before the date of 
        enactment of the Telecommunications Act of 1996.
            ``(2) Audio programming services.--The term `audio 
        programming services' means programming provided by, or 
        generally considered to be comparable to programming provided 
        by, a radio broadcast station.
            ``(3) Video programming services; other programming 
        services.--The terms `video programming service' and `other 
        programming services' have the same meanings as such terms have 
        under section 602 of this Act.

    ``(j) Certain Service Applications Treated as In-Region Service 
Applications.--For purposes of this section, a Bell operating company 
application to provide 800 service, private line service, or their 
equivalents that--
            ``(1) terminate in an in-region State of that Bell operating 
        company, and
            ``(2) allow the called party to determine the interLATA 
        carrier,

shall be considered an in-region service subject to the requirements of 
subsection (b)(1).

``SEC. 272. <<NOTE: 47 USC 272.>>  SEPARATE AFFILIATE; SAFEGUARDS.

    ``(a) Separate Affiliate Required for Competitive Activities.--
            ``(1) In general.--A Bell operating company (including any 
        affiliate) which is a local exchange carrier that is subject to 
        the requirements of section 251(c) may not provide any service 
        described in paragraph (2) unless it provides that service 
        through one or more affiliates that--
                    ``(A) are separate from any operating company entity 
                that is subject to the requirements of section 251(c); 
                and
                    ``(B) meet the requirements of subsection (b).
            ``(2) Services for which a separate affiliate is required.--
        The services for which a separate affiliate is required by 
        paragraph (1) are:
                    ``(A) Manufacturing activities (as defined in 
                section 273(h)).
                    ``(B) Origination of interLATA telecommunications 
                services, other than--
                          ``(i) incidental interLATA services described 
                      in paragraphs (1), (2), (3), (5), and (6) of 
                      section 271(g);
                          ``(ii) out-of-region services described in 
                      section 271(b)(2); or
                          ``(iii) previously authorized activities 
                      described in section 271(f).
                    ``(C) InterLATA information services, other than 
                electronic publishing (as defined in section 274(h)) and 
                alarm monitoring services (as defined in section 
                275(e)).

    ``(b) Structural and Transactional Requirements.--The separate 
affiliate required by this section--
            ``(1) shall operate independently from the Bell operating 
        company;

[[Page 110 STAT. 93]]

            ``(2) <<NOTE: Records.>>  shall maintain books, records, and 
        accounts in the manner prescribed by the Commission which shall 
        be separate from the books, records, and accounts maintained by 
        the Bell operating company of which it is an affiliate;
            ``(3) shall have separate officers, directors, and employees 
        from the Bell operating company of which it is an affiliate;
            ``(4) may not obtain credit under any arrangement that would 
        permit a creditor, upon default, to have recourse to the assets 
        of the Bell operating company; and
            ``(5) shall conduct all transactions with the Bell operating 
        company of which it is an affiliate on an arm's length basis 
        with any such transactions reduced to writing and available for 
        public inspection.

  ``(c) Nondiscrimination Safeguards.--In its dealings with its 
affiliate described in subsection (a), a Bell operating company--
            ``(1) may not discriminate between that company or affiliate 
        and any other entity in the provision or procurement of goods, 
        services, facilities, and information, or in the establishment 
        of standards; and
            ``(2) shall account for all transactions with an affiliate 
        described in subsection (a) in accordance with accounting 
        principles designated or approved by the Commission.

    ``(d) Biennial Audit.--
            ``(1) General requirement.--A company required to operate a 
        separate affiliate under this section shall obtain and pay for a 
        joint Federal/State audit every 2 years conducted by an 
        independent auditor to determine whether such company has 
        complied with this section and the regulations promulgated under 
        this section, and particularly whether such company has complied 
        with the separate accounting requirements under subsection (b).
            ``(2) <<NOTE: Public information.>>  Results submitted to 
        commission; state commissions.--The auditor described in 
        paragraph (1) shall submit the results of the audit to the 
        Commission and to the State commission of each State in which 
        the company audited provides service, which shall make such 
        results available for public inspection. Any party may submit 
        comments on the final audit report.
            ``(3) <<NOTE: Records.>>  Access to documents.--For purposes 
        of conducting audits and reviews under this subsection--
                    ``(A) the independent auditor, the Commission, and 
                the State commission shall have access to the financial 
                accounts and records of each company and of its 
                affiliates necessary to verify transactions conducted 
                with that company that are relevant to the specific 
                activities permitted under this section and that are 
                necessary for the regulation of rates;
                    ``(B) the Commission and the State commission shall 
                have access to the working papers and supporting 
                materials of any auditor who performs an audit under 
                this section; and
                    ``(C) the State commission shall implement 
                appropriate procedures to ensure the protection of any 
                proprietary information submitted to it under this 
                section.

    ``(e) Fulfillment of Certain Requests.--A Bell operating company and 
an affiliate that is subject to the requirements of section 251(c)--

[[Page 110 STAT. 94]]

            ``(1) shall fulfill any requests from an unaffiliated entity 
        for telephone exchange service and exchange access within a 
        period no longer than the period in which it provides such 
        telephone exchange service and exchange access to itself or to 
        its affiliates;
            ``(2) shall not provide any facilities, services, or 
        information concerning its provision of exchange access to the 
        affiliate described in subsection (a) unless such facilities, 
        services, or information are made available to other providers 
        of interLATA services in that market on the same terms and 
        conditions;
            ``(3) shall charge the affiliate described in subsection 
        (a), or impute to itself (if using the access for its provision 
        of its own services), an amount for access to its telephone 
        exchange service and exchange access that is no less than the 
        amount charged to any unaffiliated interexchange carriers for 
        such service; and
            ``(4) may provide any interLATA or intraLATA facilities or 
        services to its interLATA affiliate if such services or 
        facilities are made available to all carriers at the same rates 
        and on the same terms and conditions, and so long as the costs 
        are appropriately allocated.

    ``(f) Sunset.--
            ``(1) Manufacturing and long distance.--The provisions of 
        this section (other than subsection (e)) shall cease to apply 
        with respect to the manufacturing activities or the interLATA 
        telecommunications services of a Bell operating company 3 years 
        after the date such Bell operating company or any Bell operating 
        company affiliate is authorized to provide interLATA 
        telecommunications services under section 271(d), unless the 
        Commission extends such 3-year period by rule or order.
            ``(2) InterLATA information services.--The provisions of 
        this section (other than subsection (e)) shall cease to apply 
        with respect to the interLATA information services of a Bell 
        operating company 4 years after the date of enactment of the 
        Telecommunications Act of 1996, unless the Commission extends 
        such 4-year period by rule or order.
            ``(3) Preservation of existing authority.--Nothing in this 
        subsection shall be construed to limit the authority of the 
        Commission under any other section of this Act to prescribe 
        safeguards consistent with the public interest, convenience, and 
        necessity.

    ``(g) Joint Marketing.--
            ``(1) Affiliate sales of telephone exchange services.--A 
        Bell operating company affiliate required by this section may 
        not market or sell telephone exchange services provided by the 
        Bell operating company unless that company permits other 
        entities offering the same or similar service to market and sell 
        its telephone exchange services.
            ``(2) Bell operating company sales of affiliate services.--A 
        Bell operating company may not market or sell interLATA service 
        provided by an affiliate required by this section within any of 
        its in-region States until such company is authorized to provide 
        interLATA services in such State under section 271(d).
            ``(3) Rule of construction.--The joint marketing and sale of 
        services permitted under this subsection shall not be

[[Page 110 STAT. 95]]

        considered to violate the nondiscrimination provisions of 
        subsection (c).

    ``(h) Transition.--With respect to any activity in which a Bell 
operating company is engaged on the date of enactment of the 
Telecommunications Act of 1996, such company shall have one year from 
such date of enactment to comply with the requirements of this section.

``SEC. 273. <<NOTE: 47 USC 273.>>  MANUFACTURING BY BELL OPERATING 
            COMPANIES.

    ``(a) Authorization.--A Bell operating company may manufacture and 
provide telecommunications equipment, and manufacture customer premises 
equipment, if the Commission authorizes that Bell operating company or 
any Bell operating company affiliate to provide interLATA services under 
section 271(d), subject to the requirements of this section and the 
regulations prescribed thereunder, except that neither a Bell operating 
company nor any of its affiliates may engage in such manufacturing in 
conjunction with a Bell operating company not so affiliated or any of 
its affiliates.
    ``(b) Collaboration; Research and Royalty Agreements.--
            ``(1) Collaboration.--Subsection (a) shall not prohibit a 
        Bell operating company from engaging in close collaboration with 
        any manufacturer of customer premises equipment or 
        telecommunications equipment during the design and development 
        of hardware, software, or combinations thereof related to such 
        equipment.
            ``(2) Certain research arrangements; royalty agreements.--
        Subsection (a) shall not prohibit a Bell operating company 
        from--
                    ``(A) engaging in research activities related to 
                manufacturing, and
                    ``(B) entering into royalty agreements with 
                manufacturers of telecommunications equipment.

    ``(c) Information Requirements.--
            ``(1) <<NOTE: Regulations.>>  Information on protocols and 
        technical requirements.--Each Bell operating company shall, in 
        accordance with regulations prescribed by the Commission, 
        maintain and file with the Commission full and complete 
        information with respect to the protocols and technical 
        requirements for connection with and use of its telephone 
        exchange service facilities. Each such company shall report 
        promptly to the Commission any material changes or planned 
        changes to such protocols and requirements, and the schedule for 
        implementation of such changes or planned changes.
            ``(2) Disclosure of information.--A Bell operating company 
        shall not disclose any information required to be filed under 
        paragraph (1) unless that information has been filed promptly, 
        as required by regulation by the Commission.
            ``(3) Access by competitors to information.--The Commission 
        may prescribe such additional regulations under this subsection 
        as may be necessary to ensure that manufacturers have access to 
        the information with respect to the protocols and technical 
        requirements for connection with and use of telephone exchange 
        service facilities that a Bell operating company makes available 
        to any manufacturing affiliate or any unaffiliated manufacturer.

[[Page 110 STAT. 96]]

            ``(4) Planning information.--Each Bell operating company 
        shall provide, to interconnecting carriers providing telephone 
        exchange service, timely information on the planned deployment 
        of telecommunications equipment.

    ``(d) Manufacturing Limitations for Standard-Setting 
Organizations.--
            ``(1) Application to bell communications research or 
        manufacturers.--Bell Communications Research, Inc., or any 
        successor entity or affiliate--
                    ``(A) shall not be considered a Bell operating 
                company or a successor or assign of a Bell operating 
                company at such time as it is no longer an affiliate of 
                any Bell operating company; and
                    ``(B) notwithstanding paragraph (3), shall not 
                engage in manufacturing telecommunications equipment or 
                customer premises equipment as long as it is an 
                affiliate of more than 1 otherwise unaffiliated Bell 
                operating company or successor or assign of any such 
                company.
        Nothing in this subsection prohibits Bell Communications 
        Research, Inc., or any successor entity, from engaging in any 
        activity in which it is lawfully engaged on the date of 
        enactment of the Telecommunications Act of 1996. Nothing 
        provided in this subsection shall render Bell Communications 
        Research, Inc., or any successor entity, a common carrier under 
        title II of this Act. Nothing in this subsection restricts any 
        manufacturer from engaging in any activity in which it is 
        lawfully engaged on the date of enactment of the 
        Telecommunications Act of 1996.
            ``(2) Proprietary information.--Any entity which establishes 
        standards for telecommunications equipment or customer premises 
        equipment, or generic network requirements for such equipment, 
        or certifies telecommunications equipment or customer premises 
        equipment, shall be prohibited from releasing or otherwise using 
        any proprietary information, designated as such by its owner, in 
        its possession as a result of such activity, for any purpose 
        other than purposes authorized in writing by the owner of such 
        information, even after such entity ceases to be so engaged.
            ``(3) Manufacturing safeguards.--(A) Except as prohibited in 
        paragraph (1), and subject to paragraph (6), any entity which 
        certifies telecommunications equipment or customer premises 
        equipment manufactured by an unaffiliated entity shall only 
        manufacture a particular class of telecommunications equipment 
        or customer premises equipment for which it is undertaking or 
        has undertaken, during the previous 18 months, certification 
        activity for such class of equipment through a separate 
        affiliate.
            ``(B) Such separate affiliate shall--
                    ``(i) <<NOTE: Records.>>  maintain books, records, 
                and accounts separate from those of the entity that 
                certifies such equipment, consistent with generally 
                acceptable accounting principles;
                    ``(ii) not engage in any joint manufacturing 
                activities with such entity; and
                    ``(iii) have segregated facilities and separate 
                employees with such entity.
            ``(C) Such entity that certifies such equipment shall--

[[Page 110 STAT. 97]]

                    ``(i) not discriminate in favor of its manufacturing 
                affiliate in the establishment of standards, generic 
                requirements, or product certification;
                    ``(ii) not disclose to the manufacturing affiliate 
                any proprietary information that has been received at 
                any time from an unaffiliated manufacturer, unless 
                authorized in writing by the owner of the information; 
                and
                    ``(iii) not permit any employee engaged in product 
                certification for telecommunications equipment or 
                customer premises equipment to engage jointly in sales 
                or marketing of any such equipment with the affiliated 
                manufacturer.
            ``(4) Standard-setting entities.--Any entity that is not an 
        accredited standards development organization and that 
        establishes industry-wide standards for telecommunications 
        equipment or customer premises equipment, or industry-wide 
        generic network requirements for such equipment, or that 
        certifies telecommunications equipment or customer premises 
        equipment manufactured by an unaffiliated entity, shall--
                    ``(A) <<NOTE: Publication.>>  establish and publish 
                any industry-wide standard for, industry-wide generic 
                requirement for, or any substantial modification of an 
                existing industry-wide standard or industry-wide generic 
                requirement for, telecommunications equipment or 
                customer premises equipment only in compliance with the 
                following procedure--
                          ``(i) <<NOTE: Notice.>>  such entity shall 
                      issue a public notice of its consideration of a 
                      proposed industry-wide standard or industry-wide 
                      generic requirement;
                          ``(ii) such entity shall issue a public 
                      invitation to interested industry parties to fund 
                      and participate in such efforts on a reasonable 
                      and nondiscriminatory basis, administered in such 
                      a manner as not to unreasonably exclude any 
                      interested industry party;
                          ``(iii) such entity shall publish a text for 
                      comment by such parties as have agreed to 
                      participate in the process pursuant to clause 
                      (ii), provide such parties a full opportunity to 
                      submit comments, and respond to comments from such 
                      parties;
                          ``(iv) such entity shall publish a final text 
                      of the industry-wide standard or industry-wide 
                      generic requirement, including the comments in 
                      their entirety, of any funding party which 
                      requests to have its comments so published; and
                          ``(v) such entity shall attempt, prior to 
                      publishing a text for comment, to agree with the 
                      funding parties as a group on a mutually 
                      satisfactory dispute resolution process which such 
                      parties shall utilize as their sole recourse in 
                      the event of a dispute on technical issues as to 
                      which there is disagreement between any funding 
                      party and the entity conducting such activities, 
                      except that if no dispute resolution process is 
                      agreed to by all the parties, a funding party may 
                      utilize the dispute resolution procedures 
                      established pursuant to paragraph (5) of this 
                      subsection;
                    ``(B) engage in product certification for 
                telecommunications equipment or customer premises 
                equipment manufactured by unaffiliated entities only 
                if--

[[Page 110 STAT. 98]]

                          ``(i) such activity is performed pursuant to 
                      published criteria;
                          ``(ii) such activity is performed pursuant to 
                      auditable criteria; and
                          ``(iii) such activity is performed pursuant to 
                      available industry-accepted testing methods and 
                      standards, where applicable, unless otherwise 
                      agreed upon by the parties funding and performing 
                      such activity;
                    ``(C) not undertake any actions to monopolize or 
                attempt to monopolize the market for such services; and
                    ``(D) not preferentially treat its own 
                telecommunications equipment or customer premises 
                equipment, or that of its affiliate, over that of any 
                other entity in establishing and publishing industry-
                wide standards or industry-wide generic requirements 
                for, and in certification of, telecommunications 
                equipment and customer premises equipment.
            ``(5) Alternate dispute resolution.--Within 90 days after 
        the date of enactment of the Telecommunications Act of 1996, the 
        Commission shall prescribe a dispute resolution process to be 
        utilized in the event that a dispute resolution process is not 
        agreed upon by all the parties when establishing and publishing 
        any industry-wide standard or industry-wide generic requirement 
        for telecommunications equipment or customer premises equipment, 
        pursuant to paragraph (4)(A)(v). The Commission shall not 
        establish itself as a party to the dispute resolution process. 
        Such dispute resolution process shall permit any funding party 
        to resolve a dispute with the entity conducting the activity 
        that significantly affects such funding party's interests, in an 
        open, nondiscriminatory, and unbiased fashion, within 30 days 
        after the filing of such dispute. Such disputes may be filed 
        within 15 days after the date the funding party receives a 
        response to its comments from the entity conducting the 
        activity. <<NOTE: Penalties.>>  The Commission shall establish 
        penalties to be assessed for delays caused by referral of 
        frivolous disputes to the dispute resolution process.
            ``(6) Sunset.--The requirements of paragraphs (3) and (4) 
        shall terminate for the particular relevant activity when the 
        Commission determines that there are alternative sources of 
        industry-wide standards, industry-wide generic requirements, or 
        product certification for a particular class of 
        telecommunications equipment or customer premises equipment 
        available in the United States. Alternative sources shall be 
        deemed to exist when such sources provide commercially viable 
        alternatives that are providing such services to customers. The 
        Commission shall act on any application for such a determination 
        within 90 days after receipt of such application, and shall 
        receive public comment on such application.
            ``(7) Administration and enforcement authority.--For the 
        purposes of administering this subsection and the regulations 
        prescribed thereunder, the Commission shall have the same 
        remedial authority as the Commission has in administering and 
        enforcing the provisions of this title with respect to any 
        common carrier subject to this Act.
            ``(8) Definitions.--For purposes of this subsection:

[[Page 110 STAT. 99]]

                    ``(A) The term `affiliate' shall have the same 
                meaning as in section 3 of this Act, except that, for 
                purposes of paragraph (1)(B)--
                          ``(i) an aggregate voting equity interest in 
                      Bell Communications Research, Inc., of at least 5 
                      percent of its total voting equity, owned directly 
                      or indirectly by more than 1 otherwise 
                      unaffiliated Bell operating company, shall 
                      constitute an affiliate relationship; and
                          ``(ii) a voting equity interest in Bell 
                      Communications Research, Inc., by any otherwise 
                      unaffiliated Bell operating company of less than 1 
                      percent of Bell Communications Research's total 
                      voting equity shall not be considered to be an 
                      equity interest under this paragraph.
                    ``(B) The term `generic requirement' means a 
                description of acceptable product attributes for use by 
                local exchange carriers in establishing product 
                specifications for the purchase of telecommunications 
                equipment, customer premises equipment, and software 
                integral thereto.
                    ``(C) The term `industry-wide' means activities 
                funded by or performed on behalf of local exchange 
                carriers for use in providing wireline telephone 
                exchange service whose combined total of deployed access 
                lines in the United States constitutes at least 30 
                percent of all access lines deployed by 
                telecommunications carriers in the United States as of 
                the date of enactment of the Telecommunications Act of 
                1996.
                    ``(D) The term `certification' means any technical 
                process whereby a party determines whether a product, 
                for use by more than one local exchange carrier, 
                conforms with the specified requirements pertaining to 
                such product.
                    ``(E) The term `accredited standards development 
                organization' means an entity composed of industry 
                members which has been accredited by an institution 
                vested with the responsibility for standards 
                accreditation by the industry.

    ``(e) Bell Operating Company Equipment Procurement and Sales.--
            ``(1) Nondiscrimination standards for manufacturing.--In the 
        procurement or awarding of supply contracts for 
        telecommunications equipment, a Bell operating company, or any 
        entity acting on its behalf, for the duration of the requirement 
        for a separate subsidiary including manufacturing under this 
        Act--
                    ``(A) shall consider such equipment, produced or 
                supplied by unrelated persons; and
                    ``(B) may not discriminate in favor of equipment 
                produced or supplied by an affiliate or related person.
            ``(2) Procurement standards.--Each Bell operating company or 
        any entity acting on its behalf shall make procurement decisions 
        and award all supply contracts for equipment, services, and 
        software on the basis of an objective assessment of price, 
        quality, delivery, and other commercial factors.
            ``(3) Network planning and design.--A Bell operating company 
        shall, to the extent consistent with the antitrust laws, engage 
        in joint network planning and design with local exchange 
        carriers operating in the same area of interest. No

[[Page 110 STAT. 100]]

        participant in such planning shall be allowed to delay the 
        introduction of new technology or the deployment of facilities 
        to provide telecommunications services, and agreement with such 
        other carriers shall not be required as a prerequisite for such 
        introduction or deployment.
            ``(4) Sales restrictions.--Neither a Bell operating company 
        engaged in manufacturing nor a manufacturing affiliate of such a 
        company shall restrict sales to any local exchange carrier of 
        telecommunications equipment, including software integral to the 
        operation of such equipment and related upgrades.
            ``(5) Protection of proprietary information.--A Bell 
        operating company and any entity it owns or otherwise controls 
        shall protect the proprietary information submitted for 
        procurement decisions from release not specifically authorized 
        by the owner of such information.

    ``(f) Administration and Enforcement Authority.--For the purposes of 
administering and enforcing the provisions of this section and the 
regulations prescribed thereunder, the Commission shall have the same 
authority, power, and functions with respect to any Bell operating 
company or any affiliate thereof as the Commission has in administering 
and enforcing the provisions of this title with respect to any common 
carrier subject to this Act.
    ``(g) Additional Rules and Regulations.--The Commission may 
prescribe such additional rules and regulations as the Commission 
determines are necessary to carry out the provisions of this section, 
and otherwise to prevent discrimination and cross-subsidization in a 
Bell operating company's dealings with its affiliate and with third 
parties.
    ``(h) Definition.--As used in this section, the term `manufacturing' 
has the same meaning as such term has under the AT&T Consent Decree.

``SEC. 274. <<NOTE: 47 USC 274.>>  ELECTRONIC PUBLISHING BY BELL 
            OPERATING COMPANIES.

    ``(a) Limitations.--No Bell operating company or any affiliate may 
engage in the provision of electronic publishing that is disseminated by 
means of such Bell operating company's or any of its affiliates' basic 
telephone service, except that nothing in this section shall prohibit a 
separated affiliate or electronic publishing joint venture operated in 
accordance with this section from engaging in the provision of 
electronic publishing.
    ``(b) Separated Affiliate or Electronic Publishing Joint Venture 
Requirements.--A separated affiliate or electronic publishing joint 
venture shall be operated independently from the Bell operating company. 
Such separated affiliate or joint venture and the Bell operating company 
with which it is affiliated shall--
            ``(1) <<NOTE: Records.>>  maintain separate books, records, 
        and accounts and prepare separate financial statements;
            ``(2) not incur debt in a manner that would permit a 
        creditor of the separated affiliate or joint venture upon 
        default to have recourse to the assets of the Bell operating 
        company;
            ``(3) carry out transactions (A) in a manner consistent with 
        such independence, (B) pursuant to written contracts or tariffs 
        that are filed with the Commission and made publicly available, 
        and (C) in a manner that is auditable in accordance with 
        generally accepted auditing standards;

[[Page 110 STAT. 101]]

            ``(4) value any assets that are transferred directly or 
        indirectly from the Bell operating company to a separated 
        affiliate or joint venture, and record any transactions by which 
        such assets are transferred, in accordance with such regulations 
        as may be prescribed by the Commission or a State commission to 
        prevent improper cross subsidies;
            ``(5) between a separated affiliate and a Bell operating 
        company--
                    ``(A) have no officers, directors, and employees in 
                common after the effective date of this section; and
                    ``(B) own no property in common;
            ``(6) not use for the marketing of any product or service of 
        the separated affiliate or joint venture, the name, trademarks, 
        or service marks of an existing Bell operating company except 
        for names, trademarks, or service marks that are owned by the 
        entity that owns or controls the Bell operating company;
            ``(7) not permit the Bell operating company--
                    ``(A) to perform hiring or training of personnel on 
                behalf of a separated affiliate;
                    ``(B) to perform the purchasing, installation, or 
                maintenance of equipment on behalf of a separated 
                affiliate, except for telephone service that it provides 
                under tariff or contract subject to the provisions of 
                this section; or
                    ``(C) to perform research and development on behalf 
                of a separated affiliate;
            ``(8) each have performed annually a compliance review--
                    ``(A) that is conducted by an independent entity for 
                the purpose of determining compliance during the 
                preceding calendar year with any provision of this 
                section; and
                    ``(B) the results of which are maintained by the 
                separated affiliate or joint venture and the Bell 
                operating company for a period of 5 years subject to 
                review by any lawful authority; and
            ``(9) <<NOTE: Reports.>>  within 90 days of receiving a 
        review described in paragraph (8), file a report of any 
        exceptions and corrective action with the Commission and allow 
        any person to inspect and copy such report subject to reasonable 
        safeguards to protect any proprietary information contained in 
        such report from being used for purposes other than to enforce 
        or pursue remedies under this section.

    ``(c) Joint Marketing.--
            ``(1) In general.--Except as provided in paragraph (2)--
                    ``(A) a Bell operating company shall not carry out 
                any promotion, marketing, sales, or advertising for or 
                in conjunction with a separated affiliate; and
                    ``(B) a Bell operating company shall not carry out 
                any promotion, marketing, sales, or advertising for or 
                in conjunction with an affiliate that is related to the 
                provision of electronic publishing.
            ``(2) Permissible joint activities.--
                    ``(A) Joint telemarketing.--A Bell operating company 
                may provide inbound telemarketing or referral services 
                related to the provision of electronic publishing for a 
                separated affiliate, electronic publishing joint 
                venture, affiliate, or unaffiliated electronic 
                publisher: Provided, That if such services are provided 
                to a separated affiliate, electronic publishing joint 
                venture, or affiliate, such services shall

[[Page 110 STAT. 102]]

                be made available to all electronic publishers on 
                request, on nondiscriminatory terms.
                    ``(B) Teaming arrangements.--A Bell operating 
                company may engage in nondiscriminatory teaming or 
                business arrangements to engage in electronic publishing 
                with any separated affiliate or with any other 
                electronic publisher if (i) the Bell operating company 
                only provides facilities, services, and basic telephone 
                service information as authorized by this section, and 
                (ii) the Bell operating company does not own such 
                teaming or business arrangement.
                    ``(C) Electronic publishing joint ventures.--A Bell 
                operating company or affiliate may participate on a 
                nonexclusive basis in electronic publishing joint 
                ventures with entities that are not a Bell operating 
                company, affiliate, or separated affiliate to provide 
                electronic publishing services, if the Bell operating 
                company or affiliate has not more than a 50 percent 
                direct or indirect equity interest (or the equivalent 
                thereof) or the right to more than 50 percent of the 
                gross revenues under a revenue sharing or royalty 
                agreement in any electronic publishing joint venture. 
                Officers and employees of a Bell operating company or 
                affiliate participating in an electronic publishing 
                joint venture may not have more than 50 percent of the 
                voting control over the electronic publishing joint 
                venture. In the case of joint ventures with small, local 
                electronic publishers, the Commission for good cause 
                shown may authorize the Bell operating company or 
                affiliate to have a larger equity interest, revenue 
                share, or voting control but not to exceed 80 percent. A 
                Bell operating company participating in an electronic 
                publishing joint venture may provide promotion, 
                marketing, sales, or advertising personnel and services 
                to such joint venture.

    ``(d) Bell Operating Company Requirement.--A Bell operating company 
under common ownership or control with a separated affiliate or 
electronic publishing joint venture shall provide network access and 
interconnections for basic telephone service to electronic publishers at 
just and reasonable rates that are tariffed (so long as rates for such 
services are subject to regulation) and that are not higher on a per-
unit basis than those charged for such services to any other electronic 
publisher or any separated affiliate engaged in electronic publishing.
    ``(e) Private Right of Action.--
            ``(1) Damages.--Any person claiming that any act or practice 
        of any Bell operating company, affiliate, or separated affiliate 
        constitutes a violation of this section may file a complaint 
        with the Commission or bring suit as provided in section 207 of 
        this Act, and such Bell operating company, affiliate, or 
        separated affiliate shall be liable as provided in section 206 
        of this Act; except that damages may not be awarded for a 
        violation that is discovered by a compliance review as required 
        by subsection (b)(7) of this section and corrected within 90 
        days.
            ``(2) Cease and desist orders.--In addition to the 
        provisions of paragraph (1), any person claiming that any act or 
        practice of any Bell operating company, affiliate, or separated 
        affiliate constitutes a violation of this section may make 
        application to the Commission for an order to cease and desist 
        such

[[Page 110 STAT. 103]]

        violation or may make application in any district court of the 
        United States of competent jurisdiction for an order enjoining 
        such acts or practices or for an order compelling compliance 
        with such requirement.

    ``(f) Separated Affiliate Reporting Requirement.--Any separated 
affiliate under this section shall file with the Commission annual 
reports in a form substantially equivalent to the Form 10-K required by 
regulations of the Securities and Exchange Commission.
    ``(g) Effective Dates.--
            ``(1) Transition.--Any electronic publishing service being 
        offered to the public by a Bell operating company or affiliate 
        on the date of enactment of the Telecommunications Act of 1996 
        shall have one year from such date of enactment to comply with 
        the requirements of this section.
            ``(2) Sunset.--The provisions of this section shall not 
        apply to conduct occurring after 4 years after the date of 
        enactment of the Telecommunications Act of 1996.

    ``(h) Definition of Electronic Publishing.--
            ``(1) In general.--The term `electronic publishing' means 
        the dissemination, provision, publication, or sale to an 
        unaffiliated entity or person, of any one or more of the 
        following: news (including sports); entertainment (other than 
        interactive games); business, financial, legal, consumer, or 
        credit materials; editorials, columns, or features; advertising; 
        photos or images; archival or research material; legal notices 
        or public records; scientific, educational, instructional, 
        technical, professional, trade, or other literary materials; or 
        other like or similar information.
            ``(2) Exceptions.--The term `electronic publishing' shall 
        not include the following services:
                    ``(A) Information access, as that term is defined by 
                the AT&T Consent Decree.
                    ``(B) The transmission of information as a common 
                carrier.
                    ``(C) The transmission of information as part of a 
                gateway to an information service that does not involve 
                the generation or alteration of the content of 
                information, including data transmission, address 
                translation, protocol conversion, billing management, 
                introductory information content, and navigational 
                systems that enable users to access electronic 
                publishing services, which do not affect the 
                presentation of such electronic publishing services to 
                users.
                    ``(D) Voice storage and retrieval services, 
                including voice messaging and electronic mail services.
                    ``(E) Data processing or transaction processing 
                services that do not involve the generation or 
                alteration of the content of information.
                    ``(F) Electronic billing or advertising of a Bell 
                operating company's regulated telecommunications 
                services.
                    ``(G) Language translation or data format 
                conversion.
                    ``(H) The provision of information necessary for the 
                management, control, or operation of a telephone company 
                telecommunications system.

[[Page 110 STAT. 104]]

                    ``(I) The provision of directory assistance that 
                provides names, addresses, and telephone numbers and 
                does not include advertising.
                    ``(J) Caller identification services.
                    ``(K) Repair and provisioning databases and credit 
                card and billing validation for telephone company 
                operations.
                    ``(L) 911-E and other emergency assistance 
                databases.
                    ``(M) Any other network service of a type that is 
                like or similar to these network services and that does 
                not involve the generation or alteration of the content 
                of information.
                    ``(N) Any upgrades to these network services that do 
                not involve the generation or alteration of the content 
                of information.
                    ``(O) Video programming or full motion video 
                entertainment on demand.

    ``(i) Additional Definitions.--As used in this section--
            ``(1) The term `affiliate' means any entity that, directly 
        or indirectly, owns or controls, is owned or controlled by, or 
        is under common ownership or control with, a Bell operating 
        company. Such term shall not include a separated affiliate.
            ``(2) The term `basic telephone service' means any wireline 
        telephone exchange service, or wireline telephone exchange 
        service facility, provided by a Bell operating company in a 
        telephone exchange area, except that such term does not 
        include--
                    ``(A) a competitive wireline telephone exchange 
                service provided in a telephone exchange area where 
                another entity provides a wireline telephone exchange 
                service that was provided on January 1, 1984, or
                    ``(B) a commercial mobile service.
            ``(3) The term `basic telephone service information' means 
        network and customer information of a Bell operating company and 
        other information acquired by a Bell operating company as a 
        result of its engaging in the provision of basic telephone 
        service.
            ``(4) The term `control' has the meaning that it has in 17 
        C.F.R. 240.12b-2, the regulations promulgated by the Securities 
        and Exchange Commission pursuant to the Securities Exchange Act 
        of 1934 (15 U.S.C. 78a et seq.) or any successor provision to 
        such section.
            ``(5) The term `electronic publishing joint venture' means a 
        joint venture owned by a Bell operating company or affiliate 
        that engages in the provision of electronic publishing which is 
        disseminated by means of such Bell operating company's or any of 
        its affiliates' basic telephone service.
            ``(6) The term `entity' means any organization, and includes 
        corporations, partnerships, sole proprietorships, associations, 
        and joint ventures.
            ``(7) The term `inbound telemarketing' means the marketing 
        of property, goods, or services by telephone to a customer or 
        potential customer who initiated the call.
            ``(8) The term `own' with respect to an entity means to have 
        a direct or indirect equity interest (or the equivalent thereof) 
        of more than 10 percent of an entity, or the right to more than 
        10 percent of the gross revenues of an entity under a revenue 
        sharing or royalty agreement.

[[Page 110 STAT. 105]]

            ``(9) The term `separated affiliate' means a corporation 
        under common ownership or control with a Bell operating company 
        that does not own or control a Bell operating company and is not 
        owned or controlled by a Bell operating company and that engages 
        in the provision of electronic publishing which is disseminated 
        by means of such Bell operating company's or any of its 
        affiliates' basic telephone service.
            ``(10) The term `Bell operating company' has the meaning 
        provided in section 3, except that such term includes any entity 
        or corporation that is owned or controlled by such a company (as 
        so defined) but does not include an electronic publishing joint 
        venture owned by such an entity or corporation.

``SEC. 275. <<NOTE: 47 USC 275.>>  ALARM MONITORING SERVICES.

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

    ``(b) Nondiscrimination.--An incumbent local exchange carrier (as 
defined in section 251(h)) engaged in the provision of alarm monitoring 
services shall--
            ``(1) provide nonaffiliated entities, upon reasonable 
        request, with the network services it provides to its own alarm 
        monitoring operations, on nondiscriminatory terms and 
        conditions; and
            ``(2) not subsidize its alarm monitoring services either 
        directly or indirectly from telephone exchange service 
        operations.

    ``(c) Expedited Consideration of Complaints.--The Commission shall 
establish procedures for the receipt and review of complaints concerning 
violations of subsection (b) or the regulations thereunder that result 
in material financial harm to a provider of alarm monitoring service. 
Such procedures shall ensure that the Commission will make a final 
determination with respect to any such complaint within 120 days after 
receipt of the complaint. If the complaint contains an appropriate 
showing that the alleged violation occurred, as determined by the 
Commission in accordance with such regulations, the Commission shall, 
within 60 days after receipt of the complaint, order the incumbent local 
exchange carrier (as defined in section 251(h)) and its affiliates to 
cease engaging in such violation pending such final determination.
    ``(d) Use of Data.--A local exchange carrier may not record or use 
in any fashion the occurrence or contents of calls received by providers 
of alarm monitoring services for the purposes of marketing such services 
on behalf of such local exchange carrier,

[[Page 110 STAT. 106]]

or any other entity. Any regulations necessary to enforce this 
subsection shall be issued initially within 6 months after the date of 
enactment of the Telecommunications Act of 1996.
    ``(e) Definition of Alarm Monitoring Service.--The term `alarm 
monitoring service' means a service that uses a device located at a 
residence, place of business, or other fixed premises--
            ``(1) to receive signals from other devices located at or 
        about such premises regarding a possible threat at such premises 
        to life, safety, or property, from burglary, fire, vandalism, 
        bodily injury, or other emergency, and
            ``(2) to transmit a signal regarding such threat by means of 
        transmission facilities of a local exchange carrier or one of 
        its affiliates to a remote monitoring center to alert a person 
        at such center of the need to inform the customer or another 
        person or police, fire, rescue, security, or public safety 
        personnel of such threat,

but does not include a service that uses a medical monitoring device 
attached to an individual for the automatic surveillance of an ongoing 
medical condition.

``SEC. 276. <<NOTE: 47 USC 276.>>  PROVISION OF PAYPHONE SERVICE.

    ``(a) Nondiscrimination Safeguards.--After the effective date of the 
rules prescribed pursuant to subsection (b), any Bell operating company 
that provides payphone service--
            ``(1) shall not subsidize its payphone service directly or 
        indirectly from its telephone exchange service operations or its 
        exchange access operations; and
            ``(2) shall not prefer or discriminate in favor of its 
        payphone service.

    ``(b) Regulations.--
            ``(1) Contents of regulations.--In order to promote 
        competition among payphone service providers and promote the 
        widespread deployment of payphone services to the benefit of the 
        general public, within 9 months after the date of enactment of 
        the Telecommunications Act of 1996, the Commission shall take 
        all actions necessary (including any reconsideration) to 
        prescribe regulations that--
                    ``(A) establish a per call compensation plan to 
                ensure that all payphone service providers are fairly 
                compensated for each and every completed intrastate and 
                interstate call using their payphone, except that 
                emergency calls and telecommunications relay service 
                calls for hearing disabled individuals shall not be 
                subject to such compensation;
                    ``(B) discontinue the intrastate and interstate 
                carrier access charge payphone service elements and 
                payments in effect on such date of enactment, and all 
                intrastate and interstate payphone subsidies from basic 
                exchange and exchange access revenues, in favor of a 
                compensation plan as specified in subparagraph (A);
                    ``(C) prescribe a set of nonstructural safeguards 
                for Bell operating company payphone service to implement 
                the provisions of paragraphs (1) and (2) of subsection 
                (a), which safeguards shall, at a minimum, include the 
                nonstructural safeguards equal to those adopted in the 
                Computer Inquiry-III (CC Docket No. 90-623) proceeding;
                    ``(D) provide for Bell operating company payphone 
                service providers to have the same right that 
                independent

[[Page 110 STAT. 107]]

                payphone providers have to negotiate with the location 
                provider on the location provider's selecting and 
                contracting with, and, subject to the terms of any 
                agreement with the location provider, to select and 
                contract with, the carriers that carry interLATA calls 
                from their payphones, unless the Commission determines 
                in the rulemaking pursuant to this section that it is 
                not in the public interest; and
                    ``(E) provide for all payphone service providers to 
                have the right to negotiate with the location provider 
                on the location provider's selecting and contracting 
                with, and, subject to the terms of any agreement with 
                the location provider, to select and contract with, the 
                carriers that carry intraLATA calls from their 
                payphones.
            ``(2) Public interest telephones.--In the rulemaking 
        conducted pursuant to paragraph (1), the Commission shall 
        determine whether public interest payphones, which are provided 
        in the interest of public health, safety, and welfare, in 
        locations where there would otherwise not be a payphone, should 
        be maintained, and if so, ensure that such public interest 
        payphones are supported fairly and equitably.
            ``(3) Existing contracts.--Nothing in this section shall 
        affect any existing contracts between location providers and 
        payphone service providers or interLATA or intraLATA carriers 
        that are in force and effect as of the date of enactment of the 
        Telecommunications Act of 1996.

    ``(c) State Preemption.--To the extent that any State requirements 
are inconsistent with the Commission's regulations, the Commission's 
regulations on such matters shall preempt such State requirements.
    ``(d) Definition.--As used in this section, the term `payphone 
service' means the provision of public or semi-public pay telephones, 
the provision of inmate telephone service in correctional institutions, 
and any ancillary services.''.
    (b) Review of Entry Decisions.--Section 402(b) (47 U.S.C. 402(b)) is 
amended--
            (1) in paragraph (6), by striking ``(3), and (4)'' and 
        inserting ``(3), (4), and (9)''; and
            (2) by adding at the end the following new paragraph:

    ``(9) By any applicant for authority to provide interLATA services 
under section 271 of this Act whose application is denied by the 
Commission.''.

                      TITLE II--BROADCAST SERVICES

SEC. 201. BROADCAST SPECTRUM FLEXIBILITY.

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

``SEC. 336. <<NOTE: 47 USC 336.>>  BROADCAST SPECTRUM FLEXIBILITY.

    ``(a) Commission Action.--If the Commission determines to issue 
additional licenses for advanced television services, the Commission--
            ``(1) should limit the initial eligibility for such licenses 
        to persons that, as of the date of such issuance, are licensed

[[Page 110 STAT. 108]]

        to operate a television broadcast station or hold a permit to 
        construct such a station (or both); and
            ``(2) <<NOTE: Regulations.>>  shall adopt regulations that 
        allow the holders of such licenses to offer such ancillary or 
        supplementary services on designated frequencies as may be 
        consistent with the public interest, convenience, and necessity.

    ``(b) Contents of Regulations.--In prescribing the regulations 
required by subsection (a), the Commission shall--
            ``(1) only permit such licensee or permittee to offer 
        ancillary or supplementary services if the use of a designated 
        frequency for such services is consistent with the technology or 
        method designated by the Commission for the provision of 
        advanced television services;
            ``(2) limit the broadcasting of ancillary or supplementary 
        services on designated frequencies so as to avoid derogation of 
        any advanced television services, including high definition 
        television broadcasts, that the Commission may require using 
        such frequencies;
            ``(3) apply to any other ancillary or supplementary service 
        such of the Commission's regulations as are applicable to the 
        offering of analogous services by any other person, except that 
        no ancillary or supplementary service shall have any rights to 
        carriage under section 614 or 615 or be deemed a multichannel 
        video programming distributor for purposes of section 628;
            ``(4) adopt such technical and other requirements as may be 
        necessary or appropriate to assure the quality of the signal 
        used to provide advanced television services, and may adopt 
        regulations that stipulate the minimum number of hours per day 
        that such signal must be transmitted; and
            ``(5) prescribe such other regulations as may be necessary 
        for the protection of the public interest, convenience, and 
        necessity.

    ``(c) Recovery of License.--If the Commission grants a license for 
advanced television services to a person that, as of the date of such 
issuance, is licensed to operate a television broadcast station or holds 
a permit to construct such a station (or both), the Commission shall, as 
a condition of such license, require that either the additional license 
or the original license held by the licensee be surrendered to the 
Commission for reallocation or reassignment (or both) pursuant to 
Commission regulation.
    ``(d) Public Interest Requirement.--Nothing in this section shall be 
construed as relieving a television broadcasting station from its 
obligation to serve the public interest, convenience, and necessity. In 
the Commission's review of any application for renewal of a broadcast 
license for a television station that provides ancillary or 
supplementary services, the television licensee shall establish that all 
of its program services on the existing or advanced television spectrum 
are in the public interest. Any violation of the Commission rules 
applicable to ancillary or supplementary services shall reflect upon the 
licensee's qualifications for renewal of its license.
    ``(e) Fees.--
            ``(1) Services to which fees apply.--If the regulations 
        prescribed pursuant to subsection (a) permit a licensee to offer 
        ancillary or supplementary services on a designated frequency--

[[Page 110 STAT. 109]]

                    ``(A) for which the payment of a subscription fee is 
                required in order to receive such services, or
                    ``(B) for which the licensee directly or indirectly 
                receives compensation from a third party in return for 
                transmitting material furnished by such third party 
                (other than commercial advertisements used to support 
                broadcasting for which a subscription fee is not 
                required),
        the Commission shall establish a program to assess and collect 
        from the licensee for such designated frequency an annual fee or 
        other schedule or method of payment that promotes the objectives 
        described in subparagraphs (A) and (B) of paragraph (2).
            ``(2) Collection of fees.--The program required by paragraph 
        (1) shall--
                    ``(A) be designed (i) to recover for the public a 
                portion of the value of the public spectrum resource 
                made available for such commercial use, and (ii) to 
                avoid unjust enrichment through the method employed to 
                permit such uses of that resource;
                    ``(B) recover for the public an amount that, to the 
                extent feasible, equals but does not exceed (over the 
                term of the license) the amount that would have been 
                recovered had such services been licensed pursuant to 
                the provisions of section 309(j) of this Act and the 
                Commission's regulations thereunder; and
                    ``(C) be adjusted by the Commission from time to 
                time in order to continue to comply with the 
                requirements of this paragraph.
            ``(3) Treatment of revenues.--
                    ``(A) General rule.--Except as provided in 
                subparagraph (B), all proceeds obtained pursuant to the 
                regulations required by this subsection shall be 
                deposited in the Treasury in accordance with chapter 33 
                of title 31, United States Code.
                    ``(B) Retention of revenues.--Notwithstanding 
                subparagraph (A), the salaries and expenses account of 
                the Commission shall retain as an offsetting collection 
                such sums as may be necessary from such proceeds for the 
                costs of developing and implementing the program 
                required by this section and regulating and supervising 
                advanced television services. Such offsetting 
                collections shall be available for obligation subject to 
                the terms and conditions of the receiving appropriations 
                account, and shall be deposited in such accounts on a 
                quarterly basis.
            ``(4) Report.--Within 5 years after the date of enactment of 
        the Telecommunications Act of 1996, the Commission shall report 
        to the Congress on the implementation of the program required by 
        this subsection, and shall annually thereafter advise the 
        Congress on the amounts collected pursuant to such program.

    ``(f) Evaluation.--Within 10 years after the date the Commission 
first issues additional licenses for advanced television services, the 
Commission shall conduct an evaluation of the advanced television 
services program. Such evaluation shall include--
            ``(1) an assessment of the willingness of consumers to 
        purchase the television receivers necessary to receive 
        broadcasts of advanced television services;

[[Page 110 STAT. 110]]

            ``(2) an assessment of alternative uses, including public 
        safety use, of the frequencies used for such broadcasts; and
            ``(3) the extent to which the Commission has been or will be 
        able to reduce the amount of spectrum assigned to licensees.

    ``(g) Definitions.--As used in this section:
            ``(1) Advanced television services.--The term `advanced 
        television services' means television services provided using 
        digital or other advanced technology as further defined in the 
        opinion, report, and order of the Commission entitled `Advanced 
        Television Systems and Their Impact Upon the Existing Television 
        Broadcast Service', MM Docket 87-268, adopted September 17, 
        1992, and successor proceedings.
            ``(2) Designated frequencies.--The term `designated 
        frequency' means each of the frequencies designated by the 
        Commission for licenses for advanced television services.
            ``(3) High definition television.--The term `high definition 
        television' refers to systems that offer approximately twice the 
        vertical and horizontal resolution of receivers generally 
        available on the date of enactment of the Telecommunications Act 
        of 1996, as further defined in the proceedings described in 
        paragraph (1) of this subsection.''.

SEC. 202. <<NOTE: Regulations.>>  BROADCAST OWNERSHIP.

    (a) National Radio Station Ownership Rule Changes Required.--The 
Commission shall modify section 73.3555 of its regulations (47 C.F.R. 
73.3555) by eliminating any provisions limiting the number of AM or FM 
broadcast stations which may be owned or controlled by one entity 
nationally.
    (b) Local Radio Diversity.--
            (1) Applicable caps.--The Commission shall revise section 
        73.3555(a) of its regulations (47 C.F.R. 73.3555) to provide 
        that--
                    (A) in a radio market with 45 or more commercial 
                radio stations, a party may own, operate, or control up 
                to 8 commercial radio stations, not more than 5 of which 
                are in the same service (AM or FM);
                    (B) in a radio market with between 30 and 44 
                (inclusive) commercial radio stations, a party may own, 
                operate, or control up to 7 commercial radio stations, 
                not more than 4 of which are in the same service (AM or 
                FM);
                    (C) in a radio market with between 15 and 29 
                (inclusive) commercial radio stations, a party may own, 
                operate, or control up to 6 commercial radio stations, 
                not more than 4 of which are in the same service (AM or 
                FM); and
                    (D) in a radio market with 14 or fewer commercial 
                radio stations, a party may own, operate, or control up 
                to 5 commercial radio stations, not more than 3 of which 
                are in the same service (AM or FM), except that a party 
                may not own, operate, or control more than 50 percent of 
                the stations in such market.
            (2) Exception.--Notwithstanding any limitation authorized by 
        this subsection, the Commission may permit a person or entity to 
        own, operate, or control, or have a cognizable interest in, 
        radio broadcast stations if the Commission determines that such 
        ownership, operation, control, or interest will

[[Page 110 STAT. 111]]

        result in an increase in the number of radio broadcast stations 
        in operation.

    (c) Television Ownership Limitations.--
            (1) National ownership limitations.--The Commission shall 
        modify its rules for multiple ownership set forth in section 
        73.3555 of its regulations (47 C.F.R. 73.3555)--
                    (A) by eliminating the restrictions on the number of 
                television stations that a person or entity may directly 
                or indirectly own, operate, or control, or have a 
                cognizable interest in, nationwide; and
                    (B) by increasing the national audience reach 
                limitation for television stations to 35 percent.
            (2) Local ownership limitations.--The Commission shall 
        conduct a rulemaking proceeding to determine whether to retain, 
        modify, or eliminate its limitations on the number of television 
        stations that a person or entity may own, operate, or control, 
        or have a cognizable interest in, within the same television 
        market.

    (d) Relaxation of One-To-A-Market.--With respect to its enforcement 
of its one-to-a-market ownership rules under section 73.3555 of its 
regulations, the Commission shall extend its waiver policy to any of the 
top 50 markets, consistent with the public interest, convenience, and 
necessity.
    (e) Dual Network Changes.--The Commission shall revise section 
73.658(g) of its regulations (47 C.F.R. 658(g)) to permit a television 
broadcast station to affiliate with a person or entity that maintains 2 
or more networks of television broadcast stations unless such dual or 
multiple networks are composed of--
            (1) two or more persons or entities that, on the date of 
        enactment of the Telecommunications Act of 1996, are 
        ``networks'' as defined in section 73.3613(a)(1) of the 
        Commission's regulations (47 C.F.R. 73.3613(a)(1)); or
            (2) any network described in paragraph (1) and an English-
        language program distribution service that, on such date, 
        provides 4 or more hours of programming per week on a national 
        basis pursuant to network affiliation arrangements with local 
        television broadcast stations in markets reaching more than 75 
        percent of television homes (as measured by a national ratings 
        service).

    (f) Cable Cross Ownership.--
            (1) Elimination of restrictions.--The Commission shall 
        revise section 76.501 of its regulations (47 C.F.R. 76.501) to 
        permit a person or entity to own or control a network of 
        broadcast stations and a cable system.
            (2) Safeguards against discrimination.--The Commission shall 
        revise such regulations if necessary to ensure carriage, channel 
        positioning, and nondiscriminatory treatment of nonaffiliated 
        broadcast stations by a cable system described in paragraph (1).

    (g) Local Marketing Agreements.--Nothing in this section shall be 
construed to prohibit the origination, continuation, or renewal of any 
television local marketing agreement that is in compliance with the 
regulations of the Commission.
    (h) Further Commission Review.--The Commission shall review its 
rules adopted pursuant to this section and all of its ownership rules 
biennially as part of its regulatory reform review under section 11 of 
the Communications Act of 1934 and shall

[[Page 110 STAT. 112]]

determine whether any of such rules are necessary in the public interest 
as the result of competition. The Commission shall repeal or modify any 
regulation it determines to be no longer in the public interest.
    (i) Elimination of Statutory Restriction.--Section 613(a) (47 U.S.C. 
533(a)) is amended--
            (1) by striking paragraph (1);
            (2) by redesignating paragraph (2) as subsection (a);
            (3) by redesignating subparagraphs (A) and (B) as paragraphs 
        (1) and (2), respectively;
            (4) by striking ``and'' at the end of paragraph (1) (as so 
        redesignated);
            (5) by striking the period at the end of paragraph (2) (as 
        so redesignated) and inserting ``; and''; and
            (6) by adding at the end the following new paragraph:
            ``(3) shall not apply the requirements of this subsection to 
        any cable operator in any franchise area in which a cable 
        operator is subject to effective competition as determined under 
        section 623(l).''.

SEC. 203. TERM OF LICENSES.

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

SEC. 204. BROADCAST LICENSE RENEWAL PROCEDURES.

    (a) Renewal Procedures.--
            (1) Amendment.--Section 309 (47 U.S.C. 309) is amended by 
        adding at the end thereof the following new subsection:

    ``(k) Broadcast Station Renewal Procedures.--

[[Page 110 STAT. 113]]

            ``(1) Standards for renewal.--If the licensee of a broadcast 
        station submits an application to the Commission for renewal of 
        such license, the Commission shall grant the application if it 
        finds, with respect to that station, during the preceding term 
        of its license--
                    ``(A) the station has served the public interest, 
                convenience, and necessity;
                    ``(B) there have been no serious violations by the 
                licensee of this Act or the rules and regulations of the 
                Commission; and
                    ``(C) there have been no other violations by the 
                licensee of this Act or the rules and regulations of the 
                Commission which, taken together, would constitute a 
                pattern of abuse.
            ``(2) Consequence of failure to meet standard.--If any 
        licensee of a broadcast station fails to meet the requirements 
        of this subsection, the Commission may deny the application for 
        renewal in accordance with paragraph (3), or grant such 
        application on terms and conditions as are appropriate, 
        including renewal for a term less than the maximum otherwise 
        permitted.
            ``(3) Standards for denial.--If the Commission determines, 
        after notice and opportunity for a hearing as provided in 
        subsection (e), that a licensee has failed to meet the 
        requirements specified in paragraph (1) and that no mitigating 
        factors justify the imposition of lesser sanctions, the 
        Commission shall--
                    ``(A) issue an order denying the renewal application 
                filed by such licensee under section 308; and
                    ``(B) only thereafter accept and consider such 
                applications for a construction permit as may be filed 
                under section 308 specifying the channel or broadcasting 
                facilities of the former licensee.
            ``(4) Competitor consideration prohibited.--In making the 
        determinations specified in paragraph (1) or (2), the Commission 
        shall not consider whether the public interest, convenience, and 
        necessity might be served by the grant of a license to a person 
        other than the renewal applicant.''.
            (2) Conforming amendment.--Section 309(d) (47 U.S.C. 309(d)) 
        is amended by inserting after ``with subsection (a)'' each place 
        it appears the following: ``(or subsection (k) in the case of 
        renewal of any broadcast station license)''.

    (b) Summary of Complaints on Violent Programming.--Section 308 (47 
U.S.C. 308) is amended by adding at the end the following new 
subsection:
    ``(d) Summary of Complaints.--Each applicant for the renewal of a 
commercial or noncommercial television license shall attach as an 
exhibit to the application a summary of written comments and suggestions 
received from the public and maintained by the licensee (in accordance 
with Commission regulations) that comment on the applicant's 
programming, if any, and that are characterized by the commentor as 
constituting violent programming.''.
    (c) <<NOTE: 47 USC 308 note.>>  Effective Date.--The amendments made 
by this section apply to applications filed after May 1, 1995.

[[Page 110 STAT. 114]]

SEC. 205. DIRECT BROADCAST SATELLITE SERVICE.

    (a) DBS Signal Security.--Section 705(e)(4) (47 U.S.C. 605(e)(4)) is 
amended by inserting ``or direct-to-home satellite services,'' after 
``programming,''.
    (b) FCC Jurisdiction Over Direct-to-Home Satellite Services.--
Section 303 (47 U.S.C. 303) is amended by adding at the end thereof the 
following new subsection:
    ``(v) Have exclusive jurisdiction to regulate the provision of 
direct-to-home satellite services. As used in this subsection, the term 
`direct-to-home satellite services' means the distribution or 
broadcasting of programming or services by satellite directly to the 
subscriber's premises without the use of ground receiving or 
distribution equipment, except at the subscriber's premises or in the 
uplink process to the satellite.''.

SEC. 206. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.

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

``SEC. 365. <<NOTE: 47 USC 363.>>  AUTOMATED SHIP DISTRESS AND SAFETY 
            SYSTEMS.

    ``Notwithstanding any provision of this Act or any other provision 
of law or regulation, a ship documented under the laws of the United 
States operating in accordance with the Global Maritime Distress and 
Safety System provisions of the Safety of Life at Sea Convention shall 
not be required to be equipped with a radio telegraphy station operated 
by one or more radio officers or operators. This section shall take 
effect <<NOTE: Effective date.>>  for each vessel upon a determination 
by the United States Coast Guard that such vessel has the equipment 
required to implement the Global Maritime Distress and Safety System 
installed and operating in good working condition.''.

SEC. 207. <<NOTE: Regulations. 47 USC 303 note.>>  RESTRICTIONS ON OVER-
            THE-AIR RECEPTION DEVICES.

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

                        TITLE III--CABLE SERVICES

SEC. 301. CABLE ACT REFORM.

    (a) Definitions.--
            (1) Definition of cable service.--Section 602(6)(B) (47 
        U.S.C. 522(6)(B)) is amended by inserting ``or use'' after ``the 
        selection''.
            (2) Change in definition of cable system.--Section 602(7) 
        (47 U.S.C. 522(7)) is amended by striking ``(B) a facility that 
        serves only subscribers in 1 or more multiple unit dwellings 
        under common ownership, control, or management, unless such 
        facility or facilities uses any public right-of-way;'' and 
        inserting ``(B) a facility that serves subscribers without using 
        any public right-of-way;''.

    (b) Rate Deregulation.--

[[Page 110 STAT. 115]]

            (1) Upper tier regulation.--Section 623(c) (47 U.S.C. 
        543(c)) is amended--
                    (A) in paragraph (1)(B), by striking ``subscriber, 
                franchising authority, or other relevant State or local 
                government entity'' and inserting ``franchising 
                authority (in accordance with paragraph (3))'';
                    (B) in paragraph (1)(C), by striking ``such 
                complaint'' and inserting ``the first complaint filed 
                with the franchising authority under paragraph (3)''; 
                and
                    (C) by striking paragraph (3) and inserting the 
                following:
            ``(3) Review of rate changes.--The Commission shall review 
        any complaint submitted by a franchising authority after the 
        date of enactment of the Telecommunications Act of 1996 
        concerning an increase in rates for cable programming services 
        and issue a final order within 90 days after it receives such a 
        complaint, unless the parties agree to extend the period for 
        such review. A franchising authority may not file a complaint 
        under this paragraph unless, within 90 days after such increase 
        becomes effective it receives subscriber complaints.
            ``(4) Sunset of upper tier rate regulation.--This subsection 
        shall not apply to cable programming services provided after 
        March 31, 1999.''.
            (2) Sunset of uniform rate structure in markets with 
        effective competition.--Section 623(d) (47 U.S.C. 543(d)) is 
        amended by adding at the end thereof the following: ``This 
        subsection does not apply to (1) a cable operator with respect 
        to the provision of cable service over its cable system in any 
        geographic area in which the video programming services offered 
        by the operator in that area are subject to effective 
        competition, or (2) any video programming offered on a per 
        channel or per program basis. Bulk discounts to multiple 
        dwelling units shall not be subject to this subsection, except 
        that a cable operator of a cable system that is not subject to 
        effective competition may not charge predatory prices to a 
        multiple dwelling unit. Upon a prima facie showing by a 
        complainant that there are reasonable grounds to believe that 
        the discounted price is predatory, the cable system shall have 
        the burden of showing that its discounted price is not 
        predatory.''.
            (3) Effective competition.--Section 623(l)(1) (47 U.S.C. 
        543(l)(1)) is amended--
                    (A) by striking ``or'' at the end of subparagraph 
                (B);
                    (B) by striking the period at the end of 
                subparagraph (C) and inserting ``; or''; and
                    (C) by adding at the end the following:
                    ``(D) a local exchange carrier or its affiliate (or 
                any multichannel video programming distributor using the 
                facilities of such carrier or its affiliate) offers 
                video programming services directly to subscribers by 
                any means (other than direct-to-home satellite services) 
                in the franchise area of an unaffiliated cable operator 
                which is providing cable service in that franchise area, 
                but only if the video programming services so offered in 
                that area are comparable to the video programming 
                services provided by the unaffiliated cable operator in 
                that area.''.

[[Page 110 STAT. 116]]

    (c) Greater Deregulation for Smaller Cable Companies.--Section 623 
(47 U.S.C 543) is amended by adding at the end thereof the following:
    ``(m) Special Rules for Small Companies.--
            ``(1) In general.--Subsections (a), (b), and (c) do not 
        apply to a small cable operator with respect to--
                    ``(A) cable programming services, or
                    ``(B) a basic service tier that was the only service 
                tier subject to regulation as of December 31, 1994,
        in any franchise area in which that operator services 50,000 or 
        fewer subscribers.
            ``(2) Definition of small cable operator.--For purposes of 
        this subsection, the term `small cable operator' means a cable 
        operator that, directly or through an affiliate, serves in the 
        aggregate fewer than 1 percent of all subscribers in the United 
        States and is not affiliated with any entity or entities whose 
        gross annual revenues in the aggregate exceed $250,000,000.''.

    (d) Market Determinations.--
            (1) Market determinations; expedited decisionmaking.--
        Section 614(h)(1)(C) (47 U.S.C. 534(h)(1)(C)) is amended--
                    (A) by striking ``in the manner provided in section 
                73.3555(d)(3)(i) of title 47, Code of Federal 
                Regulations, as in effect on May 1, 1991,'' in clause 
                (i) and inserting ``by the Commission by regulation or 
                order using, where available, commercial publications 
                which delineate television markets based on viewing 
                patterns,''; and
                    (B) by striking clause (iv) and inserting the 
                following:
                          ``(iv) Within 120 days after the date on which 
                      a request is filed under this subparagraph (or 120 
                      days after the date of enactment of the 
                      Telecommunications Act of 1996, if later), the 
                      Commission shall grant or deny the request.''.
            (2) <<NOTE: 47 USC 534 note.>>  Application to pending 
        requests.--The amendment made by paragraph (1) shall apply to--
                    (A) any request pending under section 614(h)(1)(C) 
                of the Communications Act of 1934 (47 U.S.C. 
                534(h)(1)(C)) on the date of enactment of this Act; and
                    (B) any request filed under that section after that 
                date.

    (e) Technical Standards.--Section 624(e) (47 U.S.C. 544(e)) is 
amended by striking the last two sentences and inserting the following: 
``No State or franchising authority may prohibit, condition, or restrict 
a cable system's use of any type of subscriber equipment or any 
transmission technology.''.
    (f) Cable Equipment Compatibility.--Section 624A (47 U.S.C. 
544A) <<NOTE: 47 USC 544a.>>  is amended--
            (1) in subsection (a) by striking ``and'' at the end of 
        paragraph (2), by striking the period at the end of paragraph 
        (3) and inserting ``; and''; and by adding at the end the 
        following new paragraph:
            ``(4) compatibility among televisions, video cassette 
        recorders, and cable systems can be assured with narrow 
        technical standards that mandate a minimum degree of common 
        design and operation, leaving all features, functions, 
        protocols, and other product and service options for selection 
        through open competition in the market.'';

[[Page 110 STAT. 117]]

            (2) in subsection (c)(1)--
                    (A) by redesignating subparagraphs (A) and (B) as 
                subparagraphs (B) and (C), respectively; and
                    (B) by inserting before such redesignated 
                subparagraph (B) the following new subparagraph:
                    ``(A) the need to maximize open competition in the 
                market for all features, functions, protocols, and other 
                product and service options of converter boxes and other 
                cable converters unrelated to the descrambling or 
                decryption of cable television signals;''; and
            (3) in subsection (c)(2)--
                    (A) by redesignating subparagraphs (D) and (E) as 
                subparagraphs (E) and (F), respectively; and
                    (B) by inserting after subparagraph (C) the 
                following new subparagraph:
                    ``(D) to ensure that any standards or regulations 
                developed under the authority of this section to ensure 
                compatibility between televisions, video cassette 
                recorders, and cable systems do not affect features, 
                functions, protocols, and other product and service 
                options other than those specified in paragraph (1)(B), 
                including telecommunications interface equipment, home 
                automation communications, and computer network 
                services;''.

    (g) Subscriber Notice.--Section 632 (47 U.S.C. 552) is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following new 
        subsection:

    ``(c) Subscriber Notice.--A cable operator may provide notice of 
service and rate changes to subscribers using any reasonable written 
means at its sole discretion. Notwithstanding section 623(b)(6) or any 
other provision of this Act, a cable operator shall not be required to 
provide prior notice of any rate change that is the result of a 
regulatory fee, franchise fee, or any other fee, tax, assessment, or 
charge of any kind imposed by any Federal agency, State, or franchising 
authority on the transaction between the operator and the subscriber.''.
    (h) Program Access.--Section 628 (47 U.S.C. 548) is amended by 
adding at the end the following:
    ``(j) Common Carriers.--Any provision that applies to a cable 
operator under this section shall apply to a common carrier or its 
affiliate that provides video programming by any means directly to 
subscribers. Any such provision that applies to a satellite cable 
programming vendor in which a cable operator has an attributable 
interest shall apply to any satellite cable programming vendor in which 
such common carrier has an attributable interest. For the purposes of 
this subsection, two or fewer common officers or directors shall not by 
itself establish an attributable interest by a common carrier in a 
satellite cable programming vendor (or its parent company).''.
    (i) Antitrafficking.--Section 617 (47 U.S.C. 537) is amended--
            (1) by striking subsections (a) through (d); and
            (2) in subsection (e), by striking ``(e)'' and all that 
        follows through ``a franchising authority'' and inserting ``A 
        franchising authority''.

[[Page 110 STAT. 118]]

    (j) Aggregation of Equipment Costs.--Section 623(a) (47 U.S.C. 
543(a)) is amended by adding at the end the following new paragraph:
            ``(7) Aggregation of equipment costs.--
                    ``(A) In general.--The Commission shall allow cable 
                operators, pursuant to any rules promulgated under 
                subsection (b)(3), to aggregate, on a franchise, system, 
                regional, or company level, their equipment costs into 
                broad categories, such as converter boxes, regardless of 
                the varying levels of functionality of the equipment 
                within each such broad category. Such aggregation shall 
                not be permitted with respect to equipment used by 
                subscribers who receive only a rate regulated basic 
                service tier.
                    ``(B) Revision to commission rules; forms.--Within 
                120 days of the date of enactment of the 
                Telecommunications Act of 1996, the Commission shall 
                issue revisions to the appropriate rules and forms 
                necessary to implement subparagraph (A).''.

    (k) Treatment of Prior Year Losses.--
            (1) Amendment.--Section 623 (48 U.S.C. 543) <<NOTE: 47 USC 
        543.>>  is amended by adding at the end thereof the following:

    ``(n) Treatment of Prior Year Losses.--Notwithstanding any other 
provision of this section or of section 612, losses associated with a 
cable system (including losses associated with the grant or award of a 
franchise) that were incurred prior to September 4, 1992, with respect 
to a cable system that is owned and operated by the original franchisee 
of such system shall not be disallowed, in whole or in part, in the 
determination of whether the rates for any tier of service or any type 
of equipment that is subject to regulation under this section are 
lawful.''.
            (2) <<NOTE: 47 USC 543 note.>>  Effective date.--The 
        amendment made by paragraph (1) shall take effect on the date of 
        enactment of this Act and shall be applicable to any rate 
        proposal filed on or after September 4, 1993, upon which no 
        final action has been taken by December 1, 1995.

SEC. 302. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES.

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

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

``SEC. 651. <<NOTE: 47 USC 571.>>  REGULATORY TREATMENT OF VIDEO 
            PROGRAMMING SERVICES.

    ``(a) Limitations on Cable Regulation.--
            ``(1) Radio-based systems.--To the extent that a common 
        carrier (or any other person) is providing video programming to 
        subscribers using radio communication, such carrier (or other 
        person) shall be subject to the requirements of title III and 
        section 652, but shall not otherwise be subject to the 
        requirements of this title.
            ``(2) Common carriage of video traffic.--To the extent that 
        a common carrier is providing transmission of video programming 
        on a common carrier basis, such carrier shall be subject to the 
        requirements of title II and section 652,

[[Page 110 STAT. 119]]

        but shall not otherwise be subject to the requirements of this 
        title. This paragraph shall not affect the treatment under 
        section 602(7)(C) of a facility of a common carrier as a cable 
        system.
            ``(3) Cable systems and open video systems.--To the extent 
        that a common carrier is providing video programming to its 
        subscribers in any manner other than that described in 
        paragraphs (1) and (2)--
                    ``(A) such carrier shall be subject to the 
                requirements of this title, unless such programming is 
                provided by means of an open video system for which the 
                Commission has approved a certification under section 
                653; or
                    ``(B) if such programming is provided by means of an 
                open video system for which the Commission has approved 
                a certification under section 653, such carrier shall be 
                subject to the requirements of this part, but shall be 
                subject to parts I through IV of this title only as 
                provided in 653(c).
            ``(4) Election to operate as open video system.--A common 
        carrier that is providing video programming in a manner 
        described in paragraph (1) or (2), or a combination thereof, may 
        elect to provide such programming by means of an open video 
        system that complies with section 653. If the Commission 
        approves such carrier's certification under section 653, such 
        carrier shall be subject to the requirements of this part, but 
        shall be subject to parts I through IV of this title only as 
        provided in 653(c).

    ``(b) Limitations on Interconnection Obligations.--A local exchange 
carrier that provides cable service through an open video system or a 
cable system shall not be required, pursuant to title II of this Act, to 
make capacity available on a nondiscriminatory basis to any other person 
for the provision of cable service directly to subscribers.
    ``(c) Additional Regulatory Relief.--A common carrier shall not be 
required to obtain a certificate under section 214 with respect to the 
establishment or operation of a system for the delivery of video 
programming.

``SEC. 652. <<NOTE: 47 USC 572.>>  PROHIBITION ON BUY OUTS.

    ``(a) Acquisitions by Carriers.--No local exchange carrier or any 
affiliate of such carrier owned by, operated by, controlled by, or under 
common control with such carrier may purchase or otherwise acquire 
directly or indirectly more than a 10 percent financial interest, or any 
management interest, in any cable operator providing cable service 
within the local exchange carrier's telephone service area.
    ``(b) Acquisitions by Cable Operators.--No cable operator or 
affiliate of a cable operator that is owned by, operated by, controlled 
by, or under common ownership with such cable operator may purchase or 
otherwise acquire, directly or indirectly, more than a 10 percent 
financial interest, or any management interest, in any local exchange 
carrier providing telephone exchange service within such cable 
operator's franchise area.
    ``(c) Joint Ventures.--A local exchange carrier and a cable operator 
whose telephone service area and cable franchise area, respectively, are 
in the same market may not enter into any joint venture or partnership 
to provide video programming directly to

[[Page 110 STAT. 120]]

subscribers or to provide telecommunications services within such 
market.
    ``(d) Exceptions.--
            ``(1) Rural systems.--Notwithstanding subsections (a), (b), 
        and (c) of this section, a local exchange carrier (with respect 
        to a cable system located in its telephone service area) and a 
        cable operator (with respect to the facilities of a local 
        exchange carrier used to provide telephone exchange service in 
        its cable franchise area) may obtain a controlling interest in, 
        management interest in, or enter into a joint venture or 
        partnership with the operator of such system or facilities for 
        the use of such system or facilities to the extent that--
                    ``(A) such system or facilities only serve 
                incorporated or unincorporated--
                          ``(i) places or territories that have fewer 
                      than 35,000 inhabitants; and
                          ``(ii) are outside an urbanized area, as 
                      defined by the Bureau of the Census; and
                    ``(B) in the case of a local exchange carrier, such 
                system, in the aggregate with any other system in which 
                such carrier has an interest, serves less than 10 
                percent of the households in the telephone service area 
                of such carrier.
            ``(2) Joint use.--Notwithstanding subsection (c), a local 
        exchange carrier may obtain, with the concurrence of the cable 
        operator on the rates, terms, and conditions, the use of that 
        part of the transmission facilities of a cable system extending 
        from the last multi-user terminal to the premises of the end 
        user, if such use is reasonably limited in scope and duration, 
        as determined by the Commission.
            ``(3) Acquisitions in competitive markets.--Notwithstanding 
        subsections (a) and (c), a local exchange carrier may obtain a 
        controlling interest in, or form a joint venture or other 
        partnership with, or provide financing to, a cable system 
        (hereinafter in this paragraph referred to as `the subject cable 
        system'), if--
                    ``(A) the subject cable system operates in a 
                television market that is not in the top 25 markets, and 
                such market has more than 1 cable system operator, and 
                the subject cable system is not the cable system with 
                the most subscribers in such television market;
                    ``(B) the subject cable system and the cable system 
                with the most subscribers in such television market held 
                on May 1, 1995, cable television franchises from the 
                largest municipality in the television market and the 
                boundaries of such franchises were identical on such 
                date;
                    ``(C) the subject cable system is not owned by or 
                under common ownership or control of any one of the 50 
                cable system operators with the most subscribers as such 
                operators existed on May 1, 1995; and
                    ``(D) the system with the most subscribers in the 
                television market is owned by or under common ownership 
                or control of any one of the 10 largest cable system 
                operators as such operators existed on May 1, 1995.
            ``(4) Exempt cable systems.--Subsection (a) does not apply 
        to any cable system if--

[[Page 110 STAT. 121]]

                    ``(A) the cable system serves no more than 17,000 
                cable subscribers, of which no less than 8,000 live 
                within an urban area, and no less than 6,000 live within 
                a nonurbanized area as of June 1, 1995;
                    ``(B) the cable system is not owned by, or under 
                common ownership or control with, any of the 50 largest 
                cable system operators in existence on June 1, 1995; and
                    ``(C) the cable system operates in a television 
                market that was not in the top 100 television markets as 
                of June 1, 1995.
            ``(5) Small cable systems in nonurban areas.--
        Notwithstanding subsections (a) and (c), a local exchange 
        carrier with less than $100,000,000 in annual operating revenues 
        (or any affiliate of such carrier owned by, operated by, 
        controlled by, or under common control with such carrier) may 
        purchase or otherwise acquire more than a 10 percent financial 
        interest in, or any management interest in, or enter into a 
        joint venture or partnership with, any cable system within the 
        local exchange carrier's telephone service area that serves no 
        more than 20,000 cable subscribers, if no more than 12,000 of 
        those subscribers live within an urbanized area, as defined by 
        the Bureau of the Census.
            ``(6) Waivers.--The Commission may waive the restrictions of 
        subsections (a), (b), or (c) only if--
                    ``(A) the Commission determines that, because of the 
                nature of the market served by the affected cable system 
                or facilities used to provide telephone exchange 
                service--
                          ``(i) the affected cable operator or local 
                      exchange carrier would be subjected to undue 
                      economic distress by the enforcement of such 
                      provisions;
                          ``(ii) the system or facilities would not be 
                      economically viable if such provisions were 
                      enforced; or
                          ``(iii) the anticompetitive effects of the 
                      proposed transaction are clearly outweighed in the 
                      public interest by the probable effect of the 
                      transaction in meeting the convenience and needs 
                      of the community to be served; and
                    ``(B) the local franchising authority approves of 
                such waiver.

    ``(e) Definition of Telephone Service Area.--For purposes of this 
section, the term `telephone service area' when used in connection with 
a common carrier subject in whole or in part to title II of this Act 
means the area within which such carrier provided telephone exchange 
service as of January 1, 1993, but if any common carrier after such date 
transfers its telephone exchange service facilities to another common 
carrier, the area to which such facilities provide telephone exchange 
service shall be treated as part of the telephone service area of the 
acquiring common carrier and not of the selling common carrier.

``SEC. 653. <<NOTE: 47 USC 573.>>  ESTABLISHMENT OF OPEN VIDEO SYSTEMS.

    ``(a) Open Video Systems.--
            ``(1) Certificates of compliance.--A local exchange carrier 
        may provide cable service to its cable service subscribers in 
        its telephone service area through an open video system that 
        complies with this section. To the extent permitted by such 
        regulations as the Commission may prescribe consistent

[[Page 110 STAT. 122]]

        with the public interest, convenience, and necessity, an 
        operator of a cable system or any other person may provide video 
        programming through an open video system that complies with this 
        section. An operator of an open video system shall qualify for 
        reduced regulatory burdens under subsection (c) of this section 
        if the operator of such system certifies to the Commission that 
        such carrier complies with the Commission's regulations under 
        subsection (b) and the Commission approves such 
        certification. <<NOTE: Publication.>>  The Commission shall 
        publish notice of the receipt of any such certification and 
        shall act to approve or disapprove any such certification within 
        10 days after receipt of such certification.
            ``(2) Dispute resolution.--The Commission shall have the 
        authority to resolve disputes under this section and the 
        regulations prescribed thereunder. Any such dispute shall be 
        resolved within 180 days after notice of such dispute is 
        submitted to the Commission. At that time or subsequently in a 
        separate damages proceeding, the Commission may, in the case of 
        any violation of this section, require carriage, award damages 
        to any person denied carriage, or any combination of such 
        sanctions. Any aggrieved party may seek any other remedy 
        available under this Act.

    ``(b) Commission Actions.--
            ``(1) Regulations required.--Within 6 months after the date 
        of enactment of the Telecommunications Act of 1996, the 
        Commission shall complete all actions necessary (including any 
        reconsideration) to prescribe regulations that--
                    ``(A) except as required pursuant to section 611, 
                614, or 615, prohibit an operator of an open video 
                system from discriminating among video programming 
                providers with regard to carriage on its open video 
                system, and ensure that the rates, terms, and conditions 
                for such carriage are just and reasonable, and are not 
                unjustly or unreasonably discriminatory;
                    ``(B) if demand exceeds the channel capacity of the 
                open video system, prohibit an operator of an open video 
                system and its affiliates from selecting the video 
                programming services for carriage on more than one-third 
                of the activated channel capacity on such system, but 
                nothing in this subparagraph shall be construed to limit 
                the number of channels that the carrier and its 
                affiliates may offer to provide directly to subscribers;
                    ``(C) permit an operator of an open video system to 
                carry on only one channel any video programming service 
                that is offered by more than one video programming 
                provider (including the local exchange carrier's video 
                programming affiliate): Provided, That subscribers have 
                ready and immediate access to any such video programming 
                service;
                    ``(D) extend to the distribution of video 
                programming over open video systems the Commission's 
                regulations concerning sports exclusivity (47 C.F.R. 
                76.67), network nonduplication (47 C.F.R. 76.92 et 
                seq.), and syndicated exclusivity (47 C.F.R. 76.151 et 
                seq.); and
                    ``(E)(i) prohibit an operator of an open video 
                system from unreasonably discriminating in favor of the 
                operator or its affiliates with regard to material or 
                information (including advertising) provided by the 
                operator to subscrib

[[Page 110 STAT. 123]]

                ers for the purposes of selecting programming on the 
                open video system, or in the way such material or 
                information is presented to subscribers;
                    ``(ii) require an operator of an open video system 
                to ensure that video programming providers or copyright 
                holders (or both) are able suitably and uniquely to 
                identify their programming services to subscribers;
                    ``(iii) if such identification is transmitted as 
                part of the programming signal, require the carrier to 
                transmit such identification without change or 
                alteration; and
                    ``(iv) prohibit an operator of an open video system 
                from omitting television broadcast stations or other 
                unaffiliated video programming services carried on such 
                system from any navigational device, guide, or menu.
            ``(2) Consumer access.--Subject to the requirements of 
        paragraph (1) and the regulations thereunder, nothing in this 
        section prohibits a common carrier or its affiliate from 
        negotiating mutually agreeable terms and conditions with over-
        the-air broadcast stations and other unaffiliated video 
        programming providers to allow consumer access to their signals 
        on any level or screen of any gateway, menu, or other program 
        guide, whether provided by the carrier or its affiliate.

    ``(c) Reduced Regulatory Burdens for Open Video Systems.--
            ``(1) In general.--Any provision that applies to a cable 
        operator under--
                    ``(A) sections 613 (other than subsection (a) 
                thereof), 616, 623(f), 628, 631, and 634 of this title, 
                shall apply,
                    ``(B) sections 611, 614, and 615 of this title, and 
                section 325 of title III, shall apply in accordance with 
                the regulations prescribed under paragraph (2), and
                    ``(C) sections 612 and 617, and parts III and IV 
                (other than sections 623(f), 628, 631, and 634), of this 
                title shall not apply,
        to any operator of an open video system for which the Commission 
        has approved a certification under this section.
            ``(2) Implementation.--
                    ``(A) Commission action.--In the rulemaking 
                proceeding to prescribe the regulations required by 
                subsection (b)(1), the Commission shall, to the extent 
                possible, impose obligations that are no greater or 
                lesser than the obligations contained in the provisions 
                described in paragraph (1)(B) of this subsection. The 
                Commission shall complete all action (including any 
                reconsideration) to prescribe such regulations no later 
                than 6 months after the date of enactment of the 
                Telecommunications Act of 1996.
                    ``(B) Fees.--An operator of an open video system 
                under this part may be subject to the payment of fees on 
                the gross revenues of the operator for the provision of 
                cable service imposed by a local franchising authority 
                or other governmental entity, in lieu of the franchise 
                fees permitted under section 622. The rate at which such 
                fees are imposed shall not exceed the rate at which 
                franchise fees are imposed on any cable operator 
                transmitting video programming in the franchise area, as 
                determined in accordance with regulations prescribed by 
                the Commission. An operator of an open video system may 
                designate that portion

[[Page 110 STAT. 124]]

                of a subscriber's bill attributable to the fee under 
                this subparagraph as a separate item on the bill.
            ``(3) Regulatory streamlining.--With respect to the 
        establishment and operation of an open video system, the 
        requirements of this section shall apply in lieu of, and not in 
        addition to, the requirements of title II.
            ``(4) Treatment as cable operator.--Nothing in this Act 
        precludes a video programming provider making use of an open 
        video system from being treated as an operator of a cable system 
        for purposes of section 111 of title 17, United States Code.

    ``(d) Definition of Telephone Service Area.--For purposes of this 
section, the term `telephone service area' when used in connection with 
a common carrier subject in whole or in part to title II of this Act 
means the area within which such carrier is offering telephone exchange 
service.''.
    (b) Conforming and Technical Amendments.--
            (1) Repeal.--Subsection (b) of section 613 (47 U.S.C. 
        533(b)) is repealed.
            (2) Definitions.--Section 602 (47 U.S.C. 531) <<NOTE: 47 USC 
        522.>>  is amended--
                    (A) in paragraph (7), by striking ``, or (D)'' and 
                inserting the following: ``, unless the extent of such 
                use is solely to provide interactive on-demand services; 
                (D) an open video system that complies with section 653 
                of this title; or (E)'';
                    (B) by redesignating paragraphs (12) through (19) as 
                paragraphs (13) through (20), respectively; and
                    (C) by inserting after paragraph (11) the following 
                new paragraph:
            ``(12) the term `interactive on-demand services' means a 
        service providing video programming to subscribers over switched 
        networks on an on-demand, point-to-point basis, but does not 
        include services providing video programming prescheduled by the 
        programming provider;''.
            (3) Termination of video-dialtone regulations.--The 
        Commission's regulations and policies with respect to video 
        dialtone requirements issued in CC Docket No. 87-266 shall cease 
        to be effective on the date of enactment of this Act. This 
        paragraph shall not be construed to require the termination of 
        any video-dialtone system that the Commission has approved 
        before the date of enactment of this Act.

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

    (a) Provision of Telecommunications Services by a Cable Operator.--
Section 621(b) (47 U.S.C. 541(b)) is amended by adding at the end 
thereof the following new paragraph:
    ``(3)(A) If a cable operator or affiliate thereof is engaged in the 
provision of telecommunications services--
            ``(i) such cable operator or affiliate shall not be required 
        to obtain a franchise under this title for the provision of 
        telecommunications services; and
            ``(ii) the provisions of this title shall not apply to such 
        cable operator or affiliate for the provision of 
        telecommunications services.

    ``(B) A franchising authority may not impose any requirement under 
this title that has the purpose or effect of prohibiting, limit

[[Page 110 STAT. 125]]

ing, restricting, or conditioning the provision of a telecommunications 
service by a cable operator or an affiliate thereof.
    ``(C) A franchising authority may not order a cable operator or 
affiliate thereof--
            ``(i) to discontinue the provision of a telecommunications 
        service, or
            ``(ii) to discontinue the operation of a cable system, to 
        the extent such cable system is used for the provision of a 
        telecommunications service, by reason of the failure of such 
        cable operator or affiliate thereof to obtain a franchise or 
        franchise renewal under this title with respect to the provision 
        of such telecommunications service.

    ``(D) Except as otherwise permitted by sections 611 and 612, a 
franchising authority may not require a cable operator to provide any 
telecommunications service or facilities, other than institutional 
networks, as a condition of the initial grant of a franchise, a 
franchise renewal, or a transfer of a franchise.''.
    (b) Franchise Fees.--Section 622(b) (47 U.S.C. 542(b)) is amended by 
inserting ``to provide cable services'' immediately before the period at 
the end of the first sentence thereof.

SEC. 304. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

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

``SEC. 629. <<NOTE: Regulations. 47 USC 549.>>  COMPETITIVE AVAILABILITY 
            OF NAVIGATION DEVICES.

    ``(a) Commercial Consumer Availability of Equipment Used To Access 
Services Provided by Multichannel Video Programming Distributors.--The 
Commission shall, in consultation with appropriate industry standard-
setting organizations, adopt regulations to assure the commercial 
availability, to consumers of multichannel video programming and other 
services offered over multichannel video programming systems, of 
converter boxes, interactive communications equipment, and other 
equipment used by consumers to access multichannel video programming and 
other services offered over multichannel video programming systems, from 
manufacturers, retailers, and other vendors not affiliated with any 
multichannel video programming distributor. Such regulations shall not 
prohibit any multichannel video programming distributor from also 
offering converter boxes, interactive communications equipment, and 
other equipment used by consumers to access multichannel video 
programming and other services offered over multichannel video 
programming systems, to consumers, if the system operator's charges to 
consumers for such devices and equipment are separately stated and not 
subsidized by charges for any such service.
    ``(b) Protection of System Security.--The Commission shall not 
prescribe regulations under subsection (a) which would jeopardize 
security of multichannel video programming and other services offered 
over multichannel video programming systems, or impede the legal rights 
of a provider of such services to prevent theft of service.
    ``(c) Waiver.--The Commission shall waive a regulation adopted under 
subsection (a) for a limited time upon an appropriate showing by a 
provider of multichannel video programming and other services offered 
over multichannel video programming systems, or an equipment provider, 
that such waiver is necessary to assist the development or introduction 
of a new or improved multichannel video programming or other service 
offered over multichannel video

[[Page 110 STAT. 126]]

programming systems, technology, or products. Upon an appropriate 
showing, the Commission shall grant any such waiver request within 90 
days of any application filed under this subsection, and such waiver 
shall be effective for all service providers and products in that 
category and for all providers of services and products.
    ``(d) Avoidance of Redundant Regulations.--
            ``(1) Commercial availability determinations.--
        Determinations made or regulations prescribed by the Commission 
        with respect to commercial availability to consumers of 
        converter boxes, interactive communications equipment, and other 
        equipment used by consumers to access multichannel video 
        programming and other services offered over multichannel video 
        programming systems, before the date of enactment of the 
        Telecommunications Act of 1996 shall fulfill the requirements of 
        this section.
            ``(2) Regulations.--Nothing in this section affects section 
        64.702(e) of the Commission's regulations (47 C.F.R. 64.702(e)) 
        or other Commission regulations governing interconnection and 
        competitive provision of customer premises equipment used in 
        connection with basic common carrier communications services.

    ``(e) Sunset.--The regulations adopted under this section shall 
cease to apply when the Commission determines that--
            ``(1) the market for the multichannel video programming 
        distributors is fully competitive;
            ``(2) the market for converter boxes, and interactive 
        communications equipment, used in conjunction with that service 
        is fully competitive; and
            ``(3) elimination of the regulations would promote 
        competition and the public interest.

    ``(f) Commission's Authority.--Nothing in this section shall be 
construed as expanding or limiting any authority that the Commission may 
have under law in effect before the date of enactment of the 
Telecommunications Act of 1996.''.

SEC. 305. VIDEO PROGRAMMING ACCESSIBILITY.

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

``SEC. 713. <<NOTE: 47 USC 613.>>  VIDEO PROGRAMMING ACCESSIBILITY.

    ``(a) Commission Inquiry.--Within 180 days after the date of 
enactment of the Telecommunications Act of 1996, the Federal 
Communications Commission shall complete an inquiry to ascertain the 
level at which video programming is closed captioned. Such inquiry shall 
examine the extent to which existing or previously published programming 
is closed captioned, the size of the video programming provider or 
programming owner providing closed captioning, the size of the market 
served, the relative audience shares achieved, or any other related 
factors. <<NOTE: Reports.>>  The Commission shall submit to the Congress 
a report on the results of such inquiry.

    ``(b) <<NOTE: Regulations.>>  Accountability Criteria.--Within 18 
months after such date of enactment, the Commission shall prescribe such 
regulations as are necessary to implement this section. Such regulations 
shall ensure that--
            ``(1) video programming first published or exhibited after 
        the effective date of such regulations is fully accessible 
        through the provision of closed captions, except as provided in 
        subsection (d); and

[[Page 110 STAT. 127]]

            ``(2) video programming providers or owners maximize the 
        accessibility of video programming first published or exhibited 
        prior to the effective date of such regulations through the 
        provision of closed captions, except as provided in subsection 
        (d).

    ``(c) Deadlines for Captioning.--Such regulations shall include an 
appropriate schedule of deadlines for the provision of closed captioning 
of video programming.
    ``(d) Exemptions.--Notwithstanding subsection (b)--
            ``(1) the Commission may exempt by regulation programs, 
        classes of programs, or services for which the Commission has 
        determined that the provision of closed captioning would be 
        economically burdensome to the provider or owner of such 
        programming;
            ``(2) a provider of video programming or the owner of any 
        program carried by the provider shall not be obligated to supply 
        closed captions if such action would be inconsistent with 
        contracts in effect on the date of enactment of the 
        Telecommunications Act of 1996, except that nothing in this 
        section shall be construed to relieve a video programming 
        provider of its obligations to provide services required by 
        Federal law; and
            ``(3) a provider of video programming or program owner may 
        petition the Commission for an exemption from the requirements 
        of this section, and the Commission may grant such petition upon 
        a showing that the requirements contained in this section would 
        result in an undue burden.

    ``(e) Undue Burden.--The term `undue burden' means significant 
difficulty or expense. In determining whether the closed captions 
necessary to comply with the requirements of this paragraph would result 
in an undue economic burden, the factors to be considered include--
            ``(1) the nature and cost of the closed captions for the 
        programming;
            ``(2) the impact on the operation of the provider or program 
        owner;
            ``(3) the financial resources of the provider or program 
        owner; and
            ``(4) the type of operations of the provider or program 
        owner.

    ``(f) <<NOTE: Reports.>>  Video Descriptions Inquiry.--Within 6 
months after the date of enactment of the Telecommunications Act of 
1996, the Commission shall commence an inquiry to examine the use of 
video descriptions on video programming in order to ensure the 
accessibility of video programming to persons with visual impairments, 
and report to Congress on its findings. The Commission's report shall 
assess appropriate methods and schedules for phasing video descriptions 
into the marketplace, technical and quality standards for video 
descriptions, a definition of programming for which video descriptions 
would apply, and other technical and legal issues that the Commission 
deems appropriate.

    ``(g) Video Description.--For purposes of this section, `video 
description' means the insertion of audio narrated descriptions of a 
television program's key visual elements into natural pauses between the 
program's dialogue.
    ``(h) Private Rights of Actions Prohibited.--Nothing in this section 
shall be construed to authorize any private right of action to enforce 
any requirement of this section or any regulation there

[[Page 110 STAT. 128]]

under. The Commission shall have exclusive jurisdiction with respect to 
any complaint under this section.''.

                       TITLE IV--REGULATORY REFORM

SEC. 401. REGULATORY FORBEARANCE.

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

``SEC. 10. <<NOTE: 47 USC 160.>>  COMPETITION IN PROVISION OF 
            TELECOMMUNICATIONS SERVICE.

    ``(a) Regulatory flexibility.--Notwithstanding section 332(c)(1)(A) 
of this Act, the Commission shall forbear from applying any regulation 
or any provision of this Act to a telecommunications carrier or 
telecommunications service, or class of telecommunications carriers or 
telecommunications services, in any or some of its or their geographic 
markets, if the Commission determines that--
            ``(1) enforcement of such regulation or provision is not 
        necessary to ensure that the charges, practices, 
        classifications, or regulations by, for, or in connection with 
        that telecommunications carrier or telecommunications service 
        are just and reasonable and are not unjustly or unreasonably 
        discriminatory;
            ``(2) enforcement of such regulation or provision is not 
        necessary for the protection of consumers; and
            ``(3) forbearance from applying such provision or regulation 
        is consistent with the public interest.

    ``(b) Competitive Effect To Be Weighed.--In making the determination 
under subsection (a)(3), the Commission shall consider whether 
forbearance from enforcing the provision or regulation will promote 
competitive market conditions, including the extent to which such 
forbearance will enhance competition among providers of 
telecommunications services. If the Commission determines that such 
forbearance will promote competition among providers of 
telecommunications services, that determination may be the basis for a 
Commission finding that forbearance is in the public interest.
    ``(c) Petition for Forbearance.--Any telecommunications carrier, or 
class of telecommunications carriers, may submit a petition to the 
Commission requesting that the Commission exercise the authority granted 
under this section with respect to that carrier or those carriers, or 
any service offered by that carrier or carriers. Any such petition shall 
be deemed granted if the Commission does not deny the petition for 
failure to meet the requirements for forbearance under subsection (a) 
within one year after the Commission receives it, unless the one-year 
period is extended by the Commission. The Commission may extend the 
initial one-year period by an additional 90 days if the Commission finds 
that an extension is necessary to meet the requirements of subsection 
(a). The Commission may grant or deny a petition in whole or in part and 
shall explain its decision in writing.
    ``(d) Limitation.--Except as provided in section 251(f), the 
Commission may not forbear from applying the requirements of section 
251(c) or 271 under subsection (a) of this section until it determines 
that those requirements have been fully implemented.
    ``(e) State Enforcement After Commission Forbearance.--A State 
commission may not continue to apply or enforce any

[[Page 110 STAT. 129]]

provision of this Act that the Commission has determined to forbear from 
applying under subsection (a).''.

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

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

``SEC. 11. <<NOTE: 47 USC 161.>>  REGULATORY REFORM.

    ``(a) Biennial Review of Regulations.--In every even-numbered year 
(beginning with 1998), the Commission--
            ``(1) shall review all regulations issued under this Act in 
        effect at the time of the review that apply to the operations or 
        activities of any provider of telecommunications service; and
            ``(2) shall determine whether any such regulation is no 
        longer necessary in the public interest as the result of 
        meaningful economic competition between providers of such 
        service.

    ``(b) Effect of Determination.--The Commission shall repeal or 
modify any regulation it determines to be no longer necessary in the 
public interest.''.
    (b) Regulatory Relief.--
            (1) Streamlined procedures for changes in charges, 
        classifications, regulations, or practices.--
                    (A) Section 204(a) (47 U.S.C. 204(a)) is amended--
                          (i) by striking ``12 months'' the first place 
                      it appears in paragraph (2)(A) and inserting ``5 
                      months'';
                          (ii) by striking ``effective,'' and all that 
                      follows in paragraph (2)(A) and inserting 
                      ``effective.''; and
                          (iii) by adding at the end thereof the 
                      following:
            ``(3) A local exchange carrier may file with the Commission 
        a new or revised charge, classification, regulation, or practice 
        on a streamlined basis. Any such charge, classification, 
        regulation, or practice shall be deemed lawful and shall be 
        effective 7 days (in the case of a reduction in rates) or 15 
        days (in the case of an increase in rates) after the date on 
        which it is filed with the Commission unless the Commission 
        takes action under paragraph (1) before the end of that 7-day or 
        15-day period, as is appropriate.''.
                    (B) Section 208(b) (47 U.S.C. 208(b)) is amended--
                          (i) by striking ``12 months'' the first place 
                      it appears in paragraph (1) and inserting ``5 
                      months''; and
                          (ii) by striking ``filed,'' and all that 
                      follows in paragraph (1) and inserting ``filed.''.
            (2) <<NOTE: 47 USC 214 note.>>  Extensions of lines under 
        section 214; armis reports.--The Commission shall permit any 
        common carrier--
                    (A) to be exempt from the requirements of section 
                214 of the Communications Act of 1934 for the extension 
                of any line; and
                    (B) to file cost allocation manuals and ARMIS 
                reports annually, to the extent such carrier is required 
                to file such manuals or reports.
            (3) <<NOTE: 47 USC 204 note.>>  Forbearance authority not 
        limited.--Nothing in this subsection shall be construed to limit 
        the authority of the Commission to waive, modify, or forbear 
        from applying any of the requirements to which reference is made 
        in paragraph (1) under any other provision of this Act or other 
        law.
            (4) <<NOTE: 47 USC 204 note.>>  Effective date of 
        amendments.--The amendments made by paragraph (1) of this 
        subsection shall apply with respect to any charge, 
        classification, regulation, or practice

[[Page 110 STAT. 130]]

        filed on or after one year after the date of enactment of this 
        Act.

    (c) Classification of Carriers.--In classifying carriers according 
to section 32.11 of its regulations (47 C.F.R. 32.11) and in 
establishing reporting requirements pursuant to part 43 of its 
regulations (47 C.F.R. part 43) and section 64.903 of its regulations 
(47 C.F.R. 64.903), the Commission shall adjust the revenue requirements 
to account for inflation as of the release date of the Commission's 
Report and Order in CC Docket No. 91-141, and annually 
thereafter. <<NOTE: Effective date.>>  This subsection shall take effect 
on the date of enactment of this Act.

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

    (a) Modification of Amateur Radio Examination Procedures.--Section 
4(f)(4) (47 U.S.C. 154(f)(4)) is amended--
            (1) in subparagraph (A)--
                    (A) by inserting ``or administering'' after ``for 
                purposes of preparing'';
                    (B) by inserting ``of'' after ``than the class''; 
                and
                    (C) by inserting ``or administered'' after ``for 
                which the examination is being prepared'';
            (2) by striking subparagraph (B);
            (3) in subparagraph (H), by striking ``(A), (B), and (C)'' 
        and inserting ``(A) and (B)'';
            (4) in subparagraph (J)--
                    (A) by striking ``or (B)''; and
                    (B) by striking the last sentence; and
            (5) by redesignating subparagraphs (C) through (J) as 
        subparagraphs (B) through (I), respectively.

    (b) Authority To Designate Entities To Inspect.--Section 4(f)(3) (47 
U.S.C. 154(f)(3)) is amended by inserting before the period at the end 
the following: ``: and Provided further, That, in the alternative, an 
entity designated by the Commission may make the inspections referred to 
in this paragraph''.
    (c) Expediting Instructional Television Fixed Service Processing.--
Section 5(c)(1) (47 U.S.C. 155(c)(1)) is amended by striking the last 
sentence and inserting the following: ``Except for cases involving the 
authorization of service in the instructional television fixed service, 
or as otherwise provided in this Act, nothing in this paragraph shall 
authorize the Commission to provide for the conduct, by any person or 
persons other than persons referred to in paragraph (2) or (3) of 
section 556(b) of title 5, United States Code, of any hearing to which 
such section applies.''.
    (d) Repeal Setting of Depreciation Rates.--The first sentence of 
section 220(b) (47 U.S.C. 220(b)) is amended by striking ``shall 
prescribe for such carriers'' and inserting ``may prescribe, for such 
carriers as it determines to be appropriate,''.
    (e) Use of Independent Auditors.--Section 220(c) (47 U.S.C. 220(c)) 
is amended by adding at the end thereof the following: ``The Commission 
may obtain the services of any person licensed to provide public 
accounting services under the law of any State to assist with, or 
conduct, audits under this section. While so employed or engaged in 
conducting an audit for the Commission under this section, any such 
person shall have the powers granted the Commission under this 
subsection and shall be subject to sub

[[Page 110 STAT. 131]]

section (f) in the same manner as if that person were an employee of the 
Commission.''.
    (f) Delegation of Equipment Testing and Certification to Private 
Laboratories.--Section 302 (47 U.S.C. 302) <<NOTE: 47 USC 302a.>>  is 
amended by adding at the end the following:

    ``(e) The Commission may--
            ``(1) authorize the use of private organizations for testing 
        and certifying the compliance of devices or home electronic 
        equipment and systems with regulations promulgated under this 
        section;
            ``(2) accept as prima facie evidence of such compliance the 
        certification by any such organization; and
            ``(3) establish such qualifications and standards as it 
        deems appropriate for such private organizations, testing, and 
        certification.''.

    (g) Making License Modification Uniform.--Section 303(f) (47 U.S.C. 
303(f)) is amended by striking ``unless, after a public hearing,'' and 
inserting ``unless''.
    (h) Eliminate FCC Jurisdiction Over Government-Owned Ship Radio 
Stations.--
            (1) Section 305 (47 U.S.C. 305) is amended by striking 
        subsection (b) and redesignating subsections (c) and (d) as (b) 
        and (c), respectively.
            (2) Section 382(2) (47 U.S.C. 382(2)) is amended by striking 
        ``except a vessel of the United States Maritime Administration, 
        the Inland and Coastwise Waterways Service, or the Panama Canal 
        Company,''.

    (i) Permit Operation of Domestic Ship and Aircraft Radios Without 
License.--Section 307(e) (47 U.S.C. 307(e)) is amended to read as 
follows:
    ``(e)(1) Notwithstanding any license requirement established in this 
Act, if the Commission determines that such authorization serves the 
public interest, convenience, and necessity, the Commission may by rule 
authorize the operation of radio stations without individual licenses in 
the following radio services: (A) the citizens band radio service; (B) 
the radio control service; (C) the aviation radio service for aircraft 
stations operated on domestic flights when such aircraft are not 
otherwise required to carry a radio station; and (D) the maritime radio 
service for ship stations navigated on domestic voyages when such ships 
are not otherwise required to carry a radio station.
    ``(2) Any radio station operator who is authorized by the Commission 
to operate without an individual license shall comply with all other 
provisions of this Act and with rules prescribed by the Commission under 
this Act.
    ``(3) For purposes of this subsection, the terms `citizens band 
radio service', `radio control service', `aircraft station' and `ship 
station' shall have the meanings given them by the Commission by 
rule.''.
    (j) Expedited Licensing for Fixed Microwave Service.--Section 
309(b)(2) (47 U.S.C. 309(b)(2)) is amended by striking subparagraph (A) 
and redesignating subparagraphs (B) through (G) as subparagraphs (A) 
through (F), respectively.
    (k) Foreign Directors.--Section 310(b) (47 U.S.C. 310(b)) is 
amended--
            (1) in paragraph (3), by striking ``of which any officer or 
        director is an alien or''; and

[[Page 110 STAT. 132]]

            (2) in paragraph (4), by striking ``of which any officer or 
        more than one-fourth of the directors are aliens, or''.

    (l) Limitation on Silent Station Authorizations.--Section 312 (47 
U.S.C. 312) is amended by adding at the end the following:
    ``(g) If a broadcasting station fails to transmit broadcast signals 
for any consecutive 12-month period, then the station license granted 
for the operation of that broadcast station expires at the end of that 
period, notwithstanding any provision, term, or condition of the license 
to the contrary.''.
    (m) Modification of Construction Permit Requirement.--Section 
319(d) <<NOTE: 47 USC 319.>>  is amended by striking the last two 
sentences and inserting the following: ``With respect to any 
broadcasting station, the Commission shall not have any authority to 
waive the requirement of a permit for construction, except that the 
Commission may by regulation determine that a permit shall not be 
required for minor changes in the facilities of authorized broadcast 
stations. With respect to any other station or class of stations, the 
Commission shall not waive the requirement for a construction permit 
unless the Commission determines that the public interest, convenience, 
and necessity would be served by such a waiver.''.

    (n) Conduct of Inspections.--Section 362(b) (47 U.S.C. 
362(b)) <<NOTE: 47 USC 360.>>  is amended to read as follows:

    ``(b) Every ship of the United States that is subject to this part 
shall have the equipment and apparatus prescribed therein inspected at 
least once each year by the Commission or an entity designated by the 
Commission. If, after such inspection, the Commission is satisfied that 
all relevant provisions of this Act and the station license have been 
complied with, the fact shall be so certified on the station license by 
the Commission. The Commission shall make such additional inspections at 
frequent intervals as the Commission determines may be necessary to 
ensure compliance with the requirements of this Act. The Commission may, 
upon a finding that the public interest could be served thereby--
            ``(1) waive the annual inspection required under this 
        section for a period of up to 90 days for the sole purpose of 
        enabling a vessel to complete its voyage and proceed to a port 
        in the United States where an inspection can be held; or
            ``(2) waive the annual inspection required under this 
        section for a vessel that is in compliance with the radio 
        provisions of the Safety Convention and that is operating solely 
        in waters beyond the jurisdiction of the United States: 
        Provided, That such inspection shall be performed within 30 days 
        of such vessel's return to the United States.''.

    (o) Inspection by Other Entities.--Section 385 (47 U.S.C. 385) is 
amended--
            (1) by inserting ``or an entity designated by the 
        Commission'' after ``The Commission''; and
            (2) by adding at the end thereof the following: ``In 
        accordance with such other provisions of law as apply to 
        Government contracts, the Commission may enter into contracts 
        with any person for the purpose of carrying out such inspections 
        and certifying compliance with those requirements, and may, as 
        part of any such contract, allow any such person to accept 
        reimbursement from the license holder for travel and expense 
        costs of any employee conducting an inspection or 
        certification.''.

[[Page 110 STAT. 133]]

 TITLE V--OBSCENITY AND VIOLENCE <<NOTE: Communications Decency Act of 
1996. Law enforcement and crime. Penalties.>> 

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

SEC. 501. <<NOTE: 47 USC 609 note.>>  SHORT TITLE.

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

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

    Section 223 (47 U.S.C. 223) is amended--
            (1) by striking subsection (a) and inserting in lieu 
        thereof:

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

shall be fined under title 18, United States Code, or imprisoned not 
more than two years, or both.''; and
            (2) by adding at the end the following new subsections:

    ``(d) Whoever--
            ``(1) in interstate or foreign communications knowingly--

[[Page 110 STAT. 134]]

                    ``(A) uses an interactive computer service to send 
                to a specific person or persons under 18 years of age, 
                or
                    ``(B) uses any interactive computer service to 
                display in a manner available to a person under 18 years 
                of age,
        any comment, request, suggestion, proposal, image, or other 
        communication that, in context, depicts or describes, in terms 
        patently offensive as measured by contemporary community 
        standards, sexual or excretory activities or organs, regardless 
        of whether the user of such service placed the call or initiated 
        the communication; or
            ``(2) knowingly permits any telecommunications facility 
        under such person's control to be used for an activity 
        prohibited by paragraph (1) with the intent that it be used for 
        such activity,

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

[[Page 110 STAT. 135]]

        this section authorizes the Commission to enforce, or is 
        intended to provide the Commission with the authority to 
        approve, sanction, or permit, the use of such measures. The 
        Commission shall have no enforcement authority over the failure 
        to utilize such measures. The Commission shall not endorse 
        specific products relating to such measures. The use of such 
        measures shall be admitted as evidence of good faith efforts for 
        purposes of paragraph (5) in any action arising under subsection 
        (d). Nothing in this section shall be construed to treat 
        interactive computer services as common carriers or 
        telecommunications carriers.

    ``(f)(1) No cause of action may be brought in any court or 
administrative agency against any person on account of any activity that 
is not in violation of any law punishable by criminal or civil penalty, 
and that the person has taken in good faith to implement a defense 
authorized under this section or otherwise to restrict or prevent the 
transmission of, or access to, a communication specified in this 
section.
    ``(2) No State or local government may impose any liability for 
commercial activities or actions by commercial entities, nonprofit 
libraries, or institutions of higher education in connection with an 
activity or action described in subsection (a)(2) or (d) that is 
inconsistent with the treatment of those activities or actions under 
this section: Provided, however, That nothing herein shall preclude any 
State or local government from enacting and enforcing complementary 
oversight, liability, and regulatory systems, procedures, and 
requirements, so long as such systems, procedures, and requirements 
govern only intrastate services and do not result in the imposition of 
inconsistent rights, duties or obligations on the provision of 
interstate services. Nothing in this subsection shall preclude any State 
or local government from governing conduct not covered by this section.
    ``(g) Nothing in subsection (a), (d), (e), or (f) or in the defenses 
to prosecution under subsection (a) or (d) shall be construed to affect 
or limit the application or enforcement of any other Federal law.
    ``(h) For purposes of this section--
            ``(1) The use of the term `telecommunications device' in 
        this section--
                    ``(A) shall not impose new obligations on 
                broadcasting station licensees and cable operators 
                covered by obscenity and indecency provisions elsewhere 
                in this Act; and
                    ``(B) does not include an interactive computer 
                service.
            ``(2) The term `interactive computer service' has the 
        meaning provided in section 230(e)(2).
            ``(3) The term `access software' means software (including 
        client or server software) or enabling tools that do not create 
        or provide the content of the communication but that allow a 
        user to do any one or more of the following:
                    ``(A) filter, screen, allow, or disallow content;
                    ``(B) pick, choose, analyze, or digest content; or
                    ``(C) transmit, receive, display, forward, cache, 
                search, subset, organize, reorganize, or translate 
                content.
            ``(4) The term `institution of higher education' has the 
        meaning provided in section 1201 of the Higher Education Act of 
        1965 (20 U.S.C. 1141).

[[Page 110 STAT. 136]]

            ``(5) The term `library' means a library eligible for 
        participation in State-based plans for funds under title III of 
        the Library Services and Construction Act (20 U.S.C. 355e et 
        seq.).''.

SEC. 503. OBSCENE PROGRAMMING ON CABLE TELEVISION.

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

SEC. 504. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.

    Part IV of title VI (47 U.S.C. 551 et seq.) is amended by adding at 
the end the following:

``SEC. 640. <<NOTE: 47 USC 560.>>  SCRAMBLING OF CABLE CHANNELS FOR 
            NONSUBSCRIBERS.

    ``(a) Subscriber Request.--Upon request by a cable service 
subscriber, a cable operator shall, without charge, fully scramble or 
otherwise fully block the audio and video programming of each channel 
carrying such programming so that one not a subscriber does not receive 
it.
    ``(b) Definition.--As used in this section, the term `scramble' 
means to rearrange the content of the signal of the programming so that 
the programming cannot be viewed or heard in an understandable 
manner.''.

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

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

``SEC. 641. <<NOTE: 47 USC 561.>>  SCRAMBLING OF SEXUALLY EXPLICIT ADULT 
            VIDEO SERVICE PROGRAMMING.

    ``(a) Requirement.--In providing sexually explicit adult programming 
or other programming that is indecent on any channel of its service 
primarily dedicated to sexually-oriented programming, a multichannel 
video programming distributor shall fully scramble or otherwise fully 
block the video and audio portion of such channel so that one not a 
subscriber to such channel or programming does not receive it.
    ``(b) <<NOTE: Children and youth.>>  Implementation.--Until a 
multichannel video programming distributor complies with the requirement 
set forth in subsection (a), the distributor shall limit the access of 
children to the programming referred to in that subsection by not 
providing such programming during the hours of the day (as determined by 
the Commission) when a significant number of children are likely to view 
it.

    ``(c) Definition.--As used in this section, the term `scramble' 
means to rearrange the content of the signal of the programming so that 
the programming cannot be viewed or heard in an understandable 
manner.''.
    (b) <<NOTE: 47 USC 561 note.>>  Effective Date.--The amendment made 
by subsection (a) shall take effect 30 days after the date of enactment 
of this Act.

SEC. 506. CABLE OPERATOR REFUSAL TO CARRY CERTAIN PROGRAMS.

    (a) Public, Educational, and Governmental Channels.--Section 611(e) 
(47 U.S.C. 531(e)) is amended by inserting before the period the 
following: ``, except a cable operator may refuse to transmit any public 
access program or portion of a public access program which contains 
obscenity, indecency, or nudity''.

[[Page 110 STAT. 137]]

    (b) Cable Channels for Commercial Use.--Section 612(c)(2) (47 U.S.C. 
532(c)(2)) is amended by striking ``an operator'' and inserting ``a 
cable operator may refuse to transmit any leased access program or 
portion of a leased access program which contains obscenity, indecency, 
or nudity and''.

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

    (a) Importation or Transportation.--Section 1462 of title 18, United 
States Code, is amended--
            (1) in the first undesignated paragraph, by inserting ``or 
        interactive computer service (as defined in section 230(e)(2) of 
        the Communications Act of 1934)'' after ``carrier''; and
            (2) in the second undesignated paragraph--
                    (A) by inserting ``or receives,'' after ``takes'';
                    (B) by inserting ``or interactive computer service 
                (as defined in section 230(e)(2) of the Communications 
                Act of 1934)'' after ``common carrier''; and
                    (C) by inserting ``or importation'' after 
                ``carriage''.

    (b) Transportation for Purposes of Sale or Distribution.--The first 
undesignated paragraph of section 1465 of title 18, United States Code, 
is amended--
            (1) by striking ``transports in'' and inserting ``transports 
        or travels in, or uses a facility or means of,'';
            (2) by inserting ``or an interactive computer service (as 
        defined in section 230(e)(2) of the Communications Act of 1934) 
        in or affecting such commerce'' after ``foreign commerce'' the 
        first place it appears;
            (3) by striking ``, or knowingly travels in'' and all that 
        follows through ``obscene material in interstate or foreign 
        commerce,'' and inserting ``of''.

    (c) <<NOTE: 18 USC 1462 note.>>  Interpretation.--The amendments 
made by this section are clarifying and shall not be interpreted to 
limit or repeal any prohibition contained in sections 1462 and 1465 of 
title 18, United States Code, before such amendment, under the rule 
established in United States v. Alpers, 338 U.S. 680 (1950).

SEC. 508. COERCION AND ENTICEMENT OF MINORS.

    Section 2422 of title 18, United States Code, is amended--
            (1) by inserting ``(a)'' before ``Whoever knowingly''; and
            (2) by adding at the end the following:

    ``(b) Whoever, using any facility or means of interstate or foreign 
commerce, including the mail, or within the special maritime and 
territorial jurisdiction of the United States, knowingly persuades, 
induces, entices, or coerces any individual who has not attained the age 
of 18 years to engage in prostitution or any sexual act for which any 
person may be criminally prosecuted, or attempts to do so, shall be 
fined under this title or imprisoned not more than 10 years, or both.''.

SEC. 509. ONLINE FAMILY EMPOWERMENT.

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

``SEC. 230. <<NOTE: 47 USC 230.>>  PROTECTION FOR PRIVATE BLOCKING AND 
            SCREENING OF OFFENSIVE MATERIAL.

    ``(a) Findings.--The Congress finds the following:

[[Page 110 STAT. 138]]

            ``(1) The rapidly developing array of Internet and other 
        interactive computer services available to individual Americans 
        represent an extraordinary advance in the availability of 
        educational and informational resources to our citizens.
            ``(2) These services offer users a great degree of control 
        over the information that they receive, as well as the potential 
        for even greater control in the future as technology develops.
            ``(3) The Internet and other interactive computer services 
        offer a forum for a true diversity of political discourse, 
        unique opportunities for cultural development, and myriad 
        avenues for intellectual activity.
            ``(4) The Internet and other interactive computer services 
        have flourished, to the benefit of all Americans, with a minimum 
        of government regulation.
            ``(5) Increasingly Americans are relying on interactive 
        media for a variety of political, educational, cultural, and 
        entertainment services.

    ``(b) Policy.--It is the policy of the United States--
            ``(1) to promote the continued development of the Internet 
        and other interactive computer services and other interactive 
        media;
            ``(2) to preserve the vibrant and competitive free market 
        that presently exists for the Internet and other interactive 
        computer services, unfettered by Federal or State regulation;
            ``(3) to encourage the development of technologies which 
        maximize user control over what information is received by 
        individuals, families, and schools who use the Internet and 
        other interactive computer services;
            ``(4) to remove disincentives for the development and 
        utilization of blocking and filtering technologies that empower 
        parents to restrict their children's access to objectionable or 
        inappropriate online material; and
            ``(5) to ensure vigorous enforcement of Federal criminal 
        laws to deter and punish trafficking in obscenity, stalking, and 
        harassment by means of computer.

    ``(c) Protection for `Good Samaritan' Blocking and Screening of 
Offensive Material.--
            ``(1) Treatment of publisher or speaker.--No provider or 
        user of an interactive computer service shall be treated as the 
        publisher or speaker of any information provided by another 
        information content provider.
            ``(2) Civil liability.--No provider or user of an 
        interactive computer service shall be held liable on account 
        of--
                    ``(A) any action voluntarily taken in good faith to 
                restrict access to or availability of material that the 
                provider or user considers to be obscene, lewd, 
                lascivious, filthy, excessively violent, harassing, or 
                otherwise objectionable, whether or not such material is 
                constitutionally protected; or
                    ``(B) any action taken to enable or make available 
                to information content providers or others the technical 
                means to restrict access to material described in 
                paragraph (1).

    ``(d) Effect on Other Laws.--
            ``(1) No effect on criminal law.--Nothing in this section 
        shall be construed to impair the enforcement of section 223 of 
        this Act, chapter 71 (relating to obscenity) or 110 (relating

[[Page 110 STAT. 139]]

        to sexual exploitation of children) of title 18, United States 
        Code, or any other Federal criminal statute.
            ``(2) No effect on intellectual property law.--Nothing in 
        this section shall be construed to limit or expand any law 
        pertaining to intellectual property.
            ``(3) State law.--Nothing in this section shall be construed 
        to prevent any State from enforcing any State law that is 
        consistent with this section. No cause of action may be brought 
        and no liability may be imposed under any State or local law 
        that is inconsistent with this section.
            ``(4) No effect on communications privacy law.--Nothing in 
        this section shall be construed to limit the application of the 
        Electronic Communications Privacy Act of 1986 or any of the 
        amendments made by such Act, or any similar State law.

    ``(e) Definitions.--As used in this section:
            ``(1) Internet.--The term `Internet' means the international 
        computer network of both Federal and non-Federal interoperable 
        packet switched data networks.
            ``(2) Interactive computer service.--The term `interactive 
        computer service' means any information service, system, or 
        access software provider that provides or enables computer 
        access by multiple users to a computer server, including 
        specifically a service or system that provides access to the 
        Internet and such systems operated or services offered by 
        libraries or educational institutions.
            ``(3) Information content provider.--The term `information 
        content provider' means any person or entity that is 
        responsible, in whole or in part, for the creation or 
        development of information provided through the Internet or any 
        other interactive computer service.
            ``(4) Access software provider.--The term `access software 
        provider' means a provider of software (including client or 
        server software), or enabling tools that do any one or more of 
        the following:
                    ``(A) filter, screen, allow, or disallow content;
                    ``(B) pick, choose, analyze, or digest content; or
                    ``(C) transmit, receive, display, forward, cache, 
                search, subset, organize, reorganize, or translate 
                content.''.

                          Subtitle B--Violence

SEC. 551. PARENTAL CHOICE IN TELEVISION PROGRAMMING.

    (a) <<NOTE: 47 USC 303 note.>>  Findings.--The Congress makes the 
following findings:
            (1) Television influences children's perception of the 
        values and behavior that are common and acceptable in society.
            (2) Television station operators, cable television system 
        operators, and video programmers should follow practices in 
        connection with video programming that take into consideration 
        that television broadcast and cable programming has established 
        a uniquely pervasive presence in the lives of American children.
            (3) The average American child is exposed to 25 hours of 
        television each week and some children are exposed to as much as 
        11 hours of television a day.

[[Page 110 STAT. 140]]

            (4) Studies have shown that children exposed to violent 
        video programming at a young age have a higher tendency for 
        violent and aggressive behavior later in life than children not 
        so exposed, and that children exposed to violent video 
        programming are prone to assume that acts of violence are 
        acceptable behavior.
            (5) Children in the United States are, on average, exposed 
        to an estimated 8,000 murders and 100,000 acts of violence on 
        television by the time the child completes elementary school.
            (6) Studies indicate that children are affected by the 
        pervasiveness and casual treatment of sexual material on 
        television, eroding the ability of parents to develop 
        responsible attitudes and behavior in their children.
            (7) Parents express grave concern over violent and sexual 
        video programming and strongly support technology that would 
        give them greater control to block video programming in the home 
        that they consider harmful to their children.
            (8) There is a compelling governmental interest in 
        empowering parents to limit the negative influences of video 
        programming that is harmful to children.
            (9) Providing parents with timely information about the 
        nature of upcoming video programming and with the technological 
        tools that allow them easily to block violent, sexual, or other 
        programming that they believe harmful to their children is a 
        nonintrusive and narrowly tailored means of achieving that 
        compelling governmental interest.

    (b) Establishment of Television Rating Code.--
            (1) Amendment.--Section 303 (47 U.S.C. 303) is amended by 
        adding at the end the following:

    ``(w) Prescribe--
            ``(1) on the basis of recommendations from an advisory 
        committee established by the Commission in accordance with 
        section 551(b)(2) of the Telecommunications Act of 1996, 
        guidelines and recommended procedures for the identification and 
        rating of video programming that contains sexual, violent, or 
        other indecent material about which parents should be informed 
        before it is displayed to children: Provided, That nothing in 
        this paragraph shall be construed to authorize any rating of 
        video programming on the basis of its political or religious 
        content; and
            ``(2) with respect to any video programming that has been 
        rated, and in consultation with the television industry, rules 
        requiring distributors of such video programming to transmit 
        such rating to permit parents to block the display of video 
        programming that they have determined is inappropriate for their 
        children.''.
            (2) <<NOTE: 47 USC 303 note.>>  Advisory committee 
        requirements.--In establishing an advisory committee for 
        purposes of the amendment made by paragraph (1) of this 
        subsection, the Commission shall--
                    (A) ensure that such committee is composed of 
                parents, television broadcasters, television programming 
                producers, cable operators, appropriate public interest 
                groups, and other interested individuals from the 
                private sector and is fairly balanced in terms of 
                political affiliation, the points of view represented, 
                and the functions to be performed by the committee;

[[Page 110 STAT. 141]]

                    (B) provide to the committee such staff and 
                resources as may be necessary to permit it to perform 
                its functions efficiently and promptly; and
                    (C) <<NOTE: Reports.>>  require the committee to 
                submit a final report of its recommendations within one 
                year after the date of the appointment of the initial 
                members.

    (c) Requirement for Manufacture of Televisions That Block 
Programs.--Section 303 (47 U.S.C. 303), as amended by subsection (a), is 
further amended by adding at the end the following:
    ``(x) Require, in the case of an apparatus designed to receive 
television signals that are shipped in interstate commerce or 
manufactured in the United States and that have a picture screen 13 
inches or greater in size (measured diagonally), that such apparatus be 
equipped with a feature designed to enable viewers to block display of 
all programs with a common rating, except as otherwise permitted by 
regulations pursuant to section 330(c)(4).''.
    (d) Shipping of Televisions That Block Programs.--
            (1) Regulations.--Section 330 (47 U.S.C. 330) is amended--
                    (A) by redesignating subsection (c) as subsection 
                (d); and
                    (B) by adding after subsection (b) the following new 
                subsection (c):

    ``(c)(1) Except as provided in paragraph (2), no person shall ship 
in interstate commerce or manufacture in the United States any apparatus 
described in section 303(x) of this Act except in accordance with rules 
prescribed by the Commission pursuant to the authority granted by that 
section.
    ``(2) This subsection shall not apply to carriers transporting 
apparatus referred to in paragraph (1) without trading in it.
    ``(3) The rules prescribed by the Commission under this subsection 
shall provide for the oversight by the Commission of the adoption of 
standards by industry for blocking technology. Such rules shall require 
that all such apparatus be able to receive the rating signals which have 
been transmitted by way of line 21 of the vertical blanking interval and 
which conform to the signal and blocking specifications established by 
industry under the supervision of the Commission.
    ``(4) As new video technology is developed, the Commission shall 
take such action as the Commission determines appropriate to ensure that 
blocking service continues to be available to consumers. If the 
Commission determines that an alternative blocking technology exists 
that--
            ``(A) enables parents to block programming based on 
        identifying programs without ratings,
            ``(B) is available to consumers at a cost which is 
        comparable to the cost of technology that allows parents to 
        block programming based on common ratings, and
            ``(C) will allow parents to block a broad range of programs 
        on a multichannel system as effectively and as easily as 
        technology that allows parents to block programming based on 
        common ratings,

the Commission shall amend the rules prescribed pursuant to section 
303(x) to require that the apparatus described in such section be 
equipped with either the blocking technology described in such

[[Page 110 STAT. 142]]

section or the alternative blocking technology described in this 
paragraph.''.
            (2) Conforming amendment.--Section 330(d), as redesignated 
        by subsection (d)(1)(A), <<NOTE: 47 USC 330.>>  is amended by 
        striking ``section 303(s), and section 303(u)'' and inserting in 
        lieu thereof ``and sections 303(s), 303(u), and 303(x)''.

    (e) <<NOTE: 47 USC 303 note.>>  Applicability and Effective Dates.--
            (1) Applicability of rating provision.--The amendment made 
        by subsection (b) of this section shall take effect 1 year after 
        the date of enactment of this Act, but only if the Commission 
        determines, in consultation with appropriate public interest 
        groups and interested individuals from the private sector, that 
        distributors of video programming have not, by such date--
                    (A) established voluntary rules for rating video 
                programming that contains sexual, violent, or other 
                indecent material about which parents should be informed 
                before it is displayed to children, and such rules are 
                acceptable to the Commission; and
                    (B) agreed voluntarily to broadcast signals that 
                contain ratings of such programming.
            (2) Effective date of manufacturing provision.--In 
        prescribing regulations to implement the amendment made by 
        subsection (c), the Federal Communications Commission shall, 
        after consultation with the television manufacturing industry, 
        specify the effective date for the applicability of the 
        requirement to the apparatus covered by such amendment, which 
        date shall not be less than two years after the date of 
        enactment of this Act.

SEC. 552. <<NOTE: 47 USC 303 note.>>  TECHNOLOGY FUND.

    It is the policy of the United States to encourage broadcast 
television, cable, satellite, syndication, other video programming 
distributors, and relevant related industries (in consultation with 
appropriate public interest groups and interested individuals from the 
private sector) to--
            (1) establish a technology fund to encourage television and 
        electronics equipment manufacturers to facilitate the 
        development of technology which would empower parents to block 
        programming they deem inappropriate for their children and to 
        encourage the availability thereof to low income parents;
            (2) report to the viewing public on the status of the 
        development of affordable, easy to use blocking technology; and
            (3) establish and promote effective procedures, standards, 
        systems, advisories, or other mechanisms for ensuring that users 
        have easy and complete access to the information necessary to 
        effectively utilize blocking technology and to encourage the 
        availability thereof to low income parents.

                       Subtitle C--Judicial Review

SEC. 561. <<NOTE: 47 USC 223 note.>>  EXPEDITED REVIEW.

    (a) Three-Judge District Court Hearing.--Notwithstanding any other 
provision of law, any civil action challenging the constitutionality, on 
its face, of this title or any amendment made by this title, or any 
provision thereof, shall be heard by a district

[[Page 110 STAT. 143]]

court of 3 judges convened pursuant to the provisions of section 2284 of 
title 28, United States Code.
    (b) Appellate Review.--Notwithstanding any other provision of law, 
an interlocutory or final judgment, decree, or order of the court of 3 
judges in an action under subsection (a) holding this title or an 
amendment made by this title, or any provision thereof, unconstitutional 
shall be reviewable as a matter of right by direct appeal to the Supreme 
Court. Any such appeal shall be filed not more than 20 days after entry 
of such judgment, decree, or order.

TITLE VI--EFFECT ON OTHER LAWS <<NOTE: 47 USC 152 note.>> 

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

    (a) Applicability of Amendments to Future Conduct.--
            (1) AT&T consent decree.--Any conduct or activity that was, 
        before the date of enactment of this Act, subject to any 
        restriction or obligation imposed by the AT&T Consent Decree 
        shall, on and after such date, be subject to the restrictions 
        and obligations imposed by the Communications Act of 1934 as 
        amended by this Act and shall not be subject to the restrictions 
        and the obligations imposed by such Consent Decree.
            (2) GTE consent decree.--Any conduct or activity that was, 
        before the date of enactment of this Act, subject to any 
        restriction or obligation imposed by the GTE Consent Decree 
        shall, on and after such date, be subject to the restrictions 
        and obligations imposed by the Communications Act of 1934 as 
        amended by this Act and shall not be subject to the restrictions 
        and the obligations imposed by such Consent Decree.
            (3) McCaw consent decree.--Any conduct or activity that was, 
        before the date of enactment of this Act, subject to any 
        restriction or obligation imposed by the McCaw Consent Decree 
        shall, on and after such date, be subject to the restrictions 
        and obligations imposed by the Communications Act of 1934 as 
        amended by this Act and subsection (d) of this section and shall 
        not be subject to the restrictions and the obligations imposed 
        by such Consent Decree.

    (b) Antitrust Laws.--
            (1) Savings clause.--Except as provided in paragraphs (2) 
        and (3), nothing in this Act or the amendments made by this Act 
        shall be construed to modify, impair, or supersede the 
        applicability of any of the antitrust laws.
            (2) Repeal.--Subsection (a) of section 221 (47 U.S.C. 
        221(a)) is repealed.
            (3) Clayton act.--Section 7 of the Clayton Act (15 U.S.C. 
        18) is amended in the last paragraph by striking ``Federal 
        Communications Commission,''.

    (c) Federal, State, and Local Law.--
            (1) No implied effect.--This Act and the amendments made by 
        this Act shall not be construed to modify, impair, or supersede 
        Federal, State, or local law unless expressly so provided in 
        such Act or amendments.
            (2) State tax savings provision.--Notwithstanding paragraph 
        (1), nothing in this Act or the amendments made by this Act 
        shall be construed to modify, impair, or supersede, or authorize 
        the modification, impairment, or supersession of, any State or 
        local law pertaining to taxation, except as provided

[[Page 110 STAT. 144]]

        in sections 622 and 653(c) of the Communications Act of 1934 and 
        section 602 of this Act.

    (d) Commercial Mobile Service Joint Marketing.--Notwithstanding 
section 22.903 of the Commission's regulations (47 C.F.R. 22.903) or any 
other Commission regulation, a Bell operating company or any other 
company may, except as provided in sections 271(e)(1) and 272 of the 
Communications Act of 1934 as amended by this Act as they relate to 
wireline service, jointly market and sell commercial mobile services in 
conjunction with telephone exchange service, exchange access, intraLATA 
telecommunications service, interLATA telecommunications service, and 
information services.
    (e) Definitions.--As used in this section:
            (1) AT&T consent decree.--The term ``AT&T Consent Decree'' 
        means the order entered August 24, 1982, in the antitrust action 
        styled United States v. Western Electric, Civil Action No. 82-
        0192, in the United States District Court for the District of 
        Columbia, and includes any judgment or order with respect to 
        such action entered on or after August 24, 1982.
            (2) GTE consent decree.--The term ``GTE Consent Decree'' 
        means the order entered December 21, 1984, as restated January 
        11, 1985, in the action styled United States v. GTE Corp., Civil 
        Action No. 83-1298, in the United States District Court for the 
        District of Columbia, and any judgment or order with respect to 
        such action entered on or after December 21, 1984.
            (3) McCaw consent decree.--The term ``McCaw Consent Decree'' 
        means the proposed consent decree filed on July 15, 1994, in the 
        antitrust action styled United States v. AT&T Corp. and McCaw 
        Cellular Communications, Inc., Civil Action No. 94-01555, in the 
        United States District Court for the District of Columbia. Such 
        term includes any stipulation that the parties will abide by the 
        terms of such proposed consent decree until it is entered and 
        any order entering such proposed consent decree.
            (4) Antitrust laws.--The term ``antitrust laws'' has the 
        meaning given it in subsection (a) of the first section of the 
        Clayton Act (15 U.S.C. 12(a)), except that such term includes 
        the Act of June 19, 1936 (49 Stat. 1526; 15 U.S.C. 13 et seq.), 
        commonly known as the Robinson-Patman Act, and section 5 of the 
        Federal Trade Commission Act (15 U.S.C. 45) to the extent that 
        such section 5 applies to unfair methods of competition.

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

    (a) Preemption.--A provider of direct-to-home satellite service 
shall be exempt from the collection or remittance, or both, of any tax 
or fee imposed by any local taxing jurisdiction on direct-to-home 
satellite service.
    (b) Definitions.--For the purposes of this section--
            (1) Direct-to-home satellite service.--The term ``direct-to-
        home satellite service'' means only programming transmitted or 
        broadcast by satellite directly to the subscribers' premises 
        without the use of ground receiving or distribution equipment,

[[Page 110 STAT. 145]]

        except at the subscribers' premises or in the uplink process to 
        the satellite.
            (2) Provider of direct-to-home satellite service.--For 
        purposes of this section, a ``provider of direct-to-home 
        satellite service'' means a person who transmits, broadcasts, 
        sells, or distributes direct-to-home satellite service.
            (3) Local taxing jurisdiction.--The term ``local taxing 
        jurisdiction'' means any municipality, city, county, township, 
        parish, transportation district, or assessment jurisdiction, or 
        any other local jurisdiction in the territorial jurisdiction of 
        the United States with the authority to impose a tax or fee, but 
        does not include a State.
            (4) State.--The term ``State'' means any of the several 
        States, the District of Columbia, or any territory or possession 
        of the United States.
            (5) Tax or fee.--The terms ``tax'' and ``fee'' mean any 
        local sales tax, local use tax, local intangible tax, local 
        income tax, business license tax, utility tax, privilege tax, 
        gross receipts tax, excise tax, franchise fees, local 
        telecommunications tax, or any other tax, license, or fee that 
        is imposed for the privilege of doing business, regulating, or 
        raising revenue for a local taxing jurisdiction.

    (c) Preservation of State Authority.--This section shall not be 
construed to prevent taxation of a provider of direct-to-home satellite 
service by a State or to prevent a local taxing jurisdiction from 
receiving revenue derived from a tax or fee imposed and collected by a 
State.

                   TITLE VII--MISCELLANEOUS PROVISIONS

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

    (a) Prevention of Unfair Billing Practices.--
            (1) In general.--Section 228(c) (47 U.S.C. 228(c)) is 
        amended--
                    (A) by striking out subparagraph (C) of paragraph 
                (7) and inserting in lieu thereof the following:
                    ``(C) the calling party being charged for 
                information conveyed during the call unless--
                          ``(i) the calling party has a written 
                      agreement (including an agreement transmitted 
                      through electronic medium) that meets the 
                      requirements of paragraph (8); or
                          ``(ii) the calling party is charged for the 
                      information in accordance with paragraph (9); 
                      or'';
                    (B)(i) by striking ``or'' at the end of subparagraph 
                (C) of such paragraph;
                    (ii) by striking the period at the end of 
                subparagraph (D) of such paragraph and inserting a 
                semicolon and ``or''; and
                    (iii) by adding at the end thereof the following:
                    ``(E) the calling party being assessed, by virtue of 
                being asked to connect or otherwise transfer to a pay-
                per-call service, a charge for the call.''; and

[[Page 110 STAT. 146]]

                    (C) by adding at the end the following new 
                paragraphs:
            ``(8) Subscription agreements for billing for information 
        provided via toll-free calls.--
                    ``(A) In general.--For purposes of paragraph 
                (7)(C)(i), a written subscription does not meet the 
                requirements of this paragraph unless the agreement 
                specifies the material terms and conditions under which 
                the information is offered and includes--
                          ``(i) the rate at which charges are assessed 
                      for the information;
                          ``(ii) the information provider's name;
                          ``(iii) the information provider's business 
                      address;
                          ``(iv) the information provider's regular 
                      business telephone number;
                          ``(v) the information provider's agreement to 
                      notify the subscriber at least one billing cycle 
                      in advance of all future changes in the rates 
                      charged for the information; and
                          ``(vi) the subscriber's choice of payment 
                      method, which may be by direct remit, debit, 
                      prepaid account, phone bill, or credit or calling 
                      card.
                    ``(B) Billing arrangements.--If a subscriber elects, 
                pursuant to subparagraph (A)(vi), to pay by means of a 
                phone bill--
                          ``(i) the agreement shall clearly explain that 
                      the subscriber will be assessed for calls made to 
                      the information service from the subscriber's 
                      phone line;
                          ``(ii) the phone bill shall include, in 
                      prominent type, the following disclaimer:
                                    `Common carriers may not disconnect 
                                local or long distance telephone service 
                                for failure to pay disputed charges for 
                                information services.'; and
                          ``(iii) the phone bill shall clearly list the 
                      800 number dialed.
                    ``(C) Use of pins to prevent unauthorized use.--A 
                written agreement does not meet the requirements of this 
                paragraph unless it--
                          ``(i) includes a unique personal 
                      identification number or other subscriber-specific 
                      identifier and requires a subscriber to use this 
                      number or identifier to obtain access to the 
                      information provided and includes instructions on 
                      its use; and
                          ``(ii) assures that any charges for services 
                      accessed by use of the subscriber's personal 
                      identification number or subscriber-specific 
                      identifier be assessed to subscriber's source of 
                      payment elected pursuant to subparagraph (A)(vi).
                    ``(D) Exceptions.--Notwithstanding paragraph (7)(C), 
                a written agreement that meets the requirements of this 
                paragraph is not required--
                          ``(i) for calls utilizing telecommunications 
                      devices for the deaf;
                          ``(ii) for directory services provided by a 
                      common carrier or its affiliate or by a local 
                      exchange carrier or its affiliate; or
                          ``(iii) for any purchase of goods or of 
                      services that are not information services.

[[Page 110 STAT. 147]]

                    ``(E) Termination of service.--On receipt by a 
                common carrier of a complaint by any person that an 
                information provider is in violation of the provisions 
                of this section, a carrier shall--
                          ``(i) promptly investigate the complaint; and
                          ``(ii) if the carrier reasonably determines 
                      that the complaint is valid, it may terminate the 
                      provision of service to an information provider 
                      unless the provider supplies evidence of a written 
                      agreement that meets the requirements of this 
                      section.
                    ``(F) Treatment of remedies.--The remedies provided 
                in this paragraph are in addition to any other remedies 
                that are available under title V of this Act.
            ``(9) Charges by credit, prepaid, debit, charge, or calling 
        card in absence of agreement.--For purposes of paragraph 
        (7)(C)(ii), a calling party is not charged in accordance with 
        this paragraph unless the calling party is charged by means of a 
        credit, prepaid, debit, charge, or calling card and the 
        information service provider includes in response to each call 
        an introductory disclosure message that--
                    ``(A) clearly states that there is a charge for the 
                call;
                    ``(B) clearly states the service's total cost per 
                minute and any other fees for the service or for any 
                service to which the caller may be transferred;
                    ``(C) explains that the charges must be billed on 
                either a credit, prepaid, debit, charge, or calling 
                card;
                    ``(D) asks the caller for the card number;
                    ``(E) clearly states that charges for the call begin 
                at the end of the introductory message; and
                    ``(F) clearly states that the caller can hang up at 
                or before the end of the introductory message without 
                incurring any charge whatsoever.
            ``(10) Bypass of introductory disclosure message.--The 
        requirements of paragraph (9) shall not apply to calls from 
        repeat callers using a bypass mechanism to avoid listening to 
        the introductory message: Provided, That information providers 
        shall disable such a bypass mechanism after the institution of 
        any price increase and for a period of time determined to be 
        sufficient by the Federal Trade Commission to give callers 
        adequate and sufficient notice of a price increase.
            ``(11) Definition of calling card.--As used in this 
        subsection, the term `calling card' means an identifying number 
        or code unique to the individual, that is issued to the 
        individual by a common carrier and enables the individual to be 
        charged by means of a phone bill for charges incurred 
        independent of where the call originates.''.
            (2) <<NOTE: 47 USC 228 note.>>  Regulations.--The Federal 
        Communications Commission shall revise its regulations to comply 
        with the amendment made by paragraph (1) not later than 180 days 
        after the date of enactment of this Act.
            (3) <<NOTE: 47 USC 228 note.>>  Effective date.--The 
        amendments made by paragraph (1) shall take effect on the date 
        of enactment of this Act.

    (b) Clarification of ``Pay-Per-Call Services''.--
            (1) Telephone disclosure and dispute resolution act.--
        Section 204(1) of the Telephone Disclosure and Dispute 
        Resolution Act (15 U.S.C. 5714(1)) is amended to read as 
        follows:

[[Page 110 STAT. 148]]

            ``(1) The term `pay-per-call services' has the meaning 
        provided in section 228(i) of the Communications Act of 1934, 
        except that the Commission by rule may, notwithstanding 
        subparagraphs (B) and (C) of section 228(i)(1) of such Act, 
        extend such definition to other similar services providing audio 
        information or audio entertainment if the Commission determines 
        that such services are susceptible to the unfair and deceptive 
        practices that are prohibited by the rules prescribed pursuant 
        to section 201(a).''.
            (2) Communications act.--Section 228(i)(2) (47 U.S.C. 
        228(i)(2)) is amended by striking ``or any service the charge 
        for which is tariffed,''.

SEC. 702. PRIVACY OF CUSTOMER INFORMATION.

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

``SEC. 222. <<NOTE: 47 USC 222.>>  PRIVACY OF CUSTOMER INFORMATION.

    ``(a) In General.--Every telecommunications carrier has a duty to 
protect the confidentiality of proprietary information of, and relating 
to, other telecommunication carriers, equipment manufacturers, and 
customers, including telecommunication carriers reselling 
telecommunications services provided by a telecommunications carrier.
    ``(b) Confidentiality of Carrier Information.--A telecommunications 
carrier that receives or obtains proprietary information from another 
carrier for purposes of providing any telecommunications service shall 
use such information only for such purpose, and shall not use such 
information for its own marketing efforts.
    ``(c) Confidentiality of Customer Proprietary Network Information.--
            ``(1) Privacy requirements for telecommunications 
        carriers.--Except as required by law or with the approval of the 
        customer, a telecommunications carrier that receives or obtains 
        customer proprietary network information by virtue of its 
        provision of a telecommunications service shall only use, 
        disclose, or permit access to individually identifiable customer 
        proprietary network information in its provision of (A) the 
        telecommunications service from which such information is 
        derived, or (B) services necessary to, or used in, the provision 
        of such telecommunications service, including the publishing of 
        directories.
            ``(2) Disclosure on request by customers.--A 
        telecommunications carrier shall disclose customer proprietary 
        network information, upon affirmative written request by the 
        customer, to any person designated by the customer.
            ``(3) Aggregate customer information.--A telecommunications 
        carrier that receives or obtains customer proprietary network 
        information by virtue of its provision of a telecommunications 
        service may use, disclose, or permit access to aggregate 
        customer information other than for the purposes described in 
        paragraph (1). A local exchange carrier may use, disclose, or 
        permit access to aggregate customer information other than for 
        purposes described in paragraph (1) only if it provides such 
        aggregate information to other carriers or persons on reasonable 
        and nondiscriminatory terms and conditions upon reasonable 
        request therefor.

[[Page 110 STAT. 149]]

    ``(d) Exceptions.--Nothing in this section prohibits a 
telecommunications carrier from using, disclosing, or permitting access 
to customer proprietary network information obtained from its customers, 
either directly or indirectly through its agents--
            ``(1) to initiate, render, bill, and collect for 
        telecommunications services;
            ``(2) to protect the rights or property of the carrier, or 
        to protect users of those services and other carriers from 
        fraudulent, abusive, or unlawful use of, or subscription to, 
        such services; or
            ``(3) to provide any inbound telemarketing, referral, or 
        administrative services to the customer for the duration of the 
        call, if such call was initiated by the customer and the 
        customer approves of the use of such information to provide such 
        service.

    ``(e) Subscriber List Information.--Notwithstanding subsections (b), 
(c), and (d), a telecommunications carrier that provides telephone 
exchange service shall provide subscriber list information gathered in 
its capacity as a provider of such service on a timely and unbundled 
basis, under nondiscriminatory and reasonable rates, terms, and 
conditions, to any person upon request for the purpose of publishing 
directories in any format.
    ``(f) Definitions.--As used in this section:
            ``(1) Customer proprietary network information.--The term 
        `customer proprietary network information' means--
                    ``(A) information that relates to the quantity, 
                technical configuration, type, destination, and amount 
                of use of a telecommunications service subscribed to by 
                any customer of a telecommunications carrier, and that 
                is made available to the carrier by the customer solely 
                by virtue of the carrier-customer relationship; and
                    ``(B) information contained in the bills pertaining 
                to telephone exchange service or telephone toll service 
                received by a customer of a carrier;
        except that such term does not include subscriber list 
        information.
            ``(2) Aggregate information.--The term `aggregate customer 
        information' means collective data that relates to a group or 
        category of services or customers, from which individual 
        customer identities and characteristics have been removed.
            ``(3) Subscriber list information.--The term `subscriber 
        list information' means any information--
                    ``(A) identifying the listed names of subscribers of 
                a carrier and such subscribers' telephone numbers, 
                addresses, or primary advertising classifications (as 
                such classifications are assigned at the time of the 
                establishment of such service), or any combination of 
                such listed names, numbers, addresses, or 
                classifications; and
                    ``(B) that the carrier or an affiliate has 
                published, caused to be published, or accepted for 
                publication in any directory format.''.

SEC. 703. POLE ATTACHMENTS.

    Section 224 (47 U.S.C. 224) is amended--
            (1) in subsection (a)(1), by striking the first sentence and 
        inserting the following: ``The term `utility' means any person 
        who is a local exchange carrier or an electric, gas, water,

[[Page 110 STAT. 150]]

        steam, or other public utility, and who owns or controls poles, 
        ducts, conduits, or rights-of-way used, in whole or in part, for 
        any wire communications.'';
            (2) in subsection (a)(4), by inserting after ``system'' the 
        following: ``or provider of telecommunications service'';
            (3) by inserting after subsection (a)(4) the following:
            ``(5) For purposes of this section, the term 
        `telecommunications carrier' (as defined in section 3 of this 
        Act) does not include any incumbent local exchange carrier as 
        defined in section 251(h).'';
            (4) by inserting after ``conditions'' in subsection (c)(1) a 
        comma and the following: ``or access to poles, ducts, conduits, 
        and rights-of-way as provided in subsection (f),'';
            (5) in subsection (c)(2)(B), by striking ``cable television 
        services'' and inserting ``the services offered via such 
        attachments'';
            (6) by inserting after subsection (d)(2) the following:

    ``(3) <<NOTE: Applicability.>>  This subsection shall apply to the 
rate for any pole attachment used by a cable television system solely to 
provide cable service. Until the effective date of the regulations 
required under subsection (e), this subsection shall also apply to the 
rate for any pole attachment used by a cable system or any 
telecommunications carrier (to the extent such carrier is not a party to 
a pole attachment agreement) to provide any telecommunications 
service.''; and
            (7) by adding at the end thereof the following:

    ``(e)(1) <<NOTE: Regulations.>>  The Commission shall, no later than 
2 years after the date of enactment of the Telecommunications Act of 
1996, prescribe regulations in accordance with this subsection to govern 
the charges for pole attachments used by telecommunications carriers to 
provide telecommunications services, when the parties fail to resolve a 
dispute over such charges. Such regulations shall ensure that a utility 
charges just, reasonable, and nondiscriminatory rates for pole 
attachments.

    ``(2) A utility shall apportion the cost of providing space on a 
pole, duct, conduit, or right-of-way other than the usable space among 
entities so that such apportionment equals two-thirds of the costs of 
providing space other than the usable space that would be allocated to 
such entity under an equal apportionment of such costs among all 
attaching entities.
    ``(3) A utility shall apportion the cost of providing usable space 
among all entities according to the percentage of usable space required 
for each entity.
    ``(4) <<NOTE: Effective date.>>  The regulations required under 
paragraph (1) shall become effective 5 years after the date of enactment 
of the Telecommunications Act of 1996. Any increase in the rates for 
pole attachments that result from the adoption of the regulations 
required by this subsection shall be phased in equal annual increments 
over a period of 5 years beginning on the effective date of such 
regulations.

    ``(f)(1) A utility shall provide a cable television system or any 
telecommunications carrier with nondiscriminatory access to any pole, 
duct, conduit, or right-of-way owned or controlled by it.
    ``(2) Notwithstanding paragraph (1), a utility providing electric 
service may deny a cable television system or any telecommunications 
carrier access to its poles, ducts, conduits, or rights-of-way, on a 
non-discriminatory basis where there is insufficient capacity and for 
reasons of safety, reliability and generally applicable engineering 
purposes.

[[Page 110 STAT. 151]]

    ``(g) A utility that engages in the provision of telecommunications 
services or cable services shall impute to its costs of providing such 
services (and charge any affiliate, subsidiary, or associate company 
engaged in the provision of such services) an equal amount to the pole 
attachment rate for which such company would be liable under this 
section.
    ``(h) Whenever the owner of a pole, duct, conduit, or right-of-way 
intends to modify or alter such pole, duct, conduit, or right-of-way, 
the owner shall provide written notification of such action to any 
entity that has obtained an attachment to such conduit or right-of-way 
so that such entity may have a reasonable opportunity to add to or 
modify its existing attachment. Any entity that adds to or modifies its 
existing attachment after receiving such notification shall bear a 
proportionate share of the costs incurred by the owner in making such 
pole, duct, conduit, or right-of-way accessible.
    ``(i) An entity that obtains an attachment to a pole, conduit, or 
right-of-way shall not be required to bear any of the costs of 
rearranging or replacing its attachment, if such rearrangement or 
replacement is required as a result of an additional attachment or the 
modification of an existing attachment sought by any other entity 
(including the owner of such pole, duct, conduit, or right-of-way).''.

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

    (a) National Wireless Telecommunications Siting Policy.--Section 
332(c) (47 U.S.C. 332(c)) is amended by adding at the end the following 
new paragraph:
            ``(7) Preservation of local zoning authority.--
                    ``(A) General authority.--Except as provided in this 
                paragraph, nothing in this Act shall limit or affect the 
                authority of a State or local government or 
                instrumentality thereof over decisions regarding the 
                placement, construction, and modification of personal 
                wireless service facilities.
                    ``(B) Limitations.--
                          ``(i) The regulation of the placement, 
                      construction, and modification of personal 
                      wireless service facilities by any State or local 
                      government or instrumentality thereof--
                                    ``(I) shall not unreasonably 
                                discriminate among providers of 
                                functionally equivalent services; and
                                    ``(II) shall not prohibit or have 
                                the effect of prohibiting the provision 
                                of personal wireless services.
                          ``(ii) A State or local government or 
                      instrumentality thereof shall act on any request 
                      for authorization to place, construct, or modify 
                      personal wireless service facilities within a 
                      reasonable period of time after the request is 
                      duly filed with such government or 
                      instrumentality, taking into account the nature 
                      and scope of such request.
                          ``(iii) <<NOTE: Records.>>  Any decision by a 
                      State or local government or instrumentality 
                      thereof to deny a request to place, construct, or 
                      modify personal wireless service facilities shall 
                      be in writing and supported by substantial 
                      evidence contained in a written record.

[[Page 110 STAT. 152]]

                          ``(iv) No State or local government or 
                      instrumentality thereof may regulate the 
                      placement, construction, and modification of 
                      personal wireless service facilities on the basis 
                      of the environmental effects of radio frequency 
                      emissions to the extent that such facilities 
                      comply with the Commission's regulations 
                      concerning such emissions.
                          ``(v) Any person adversely affected by any 
                      final action or failure to act by a State or local 
                      government or any instrumentality thereof that is 
                      inconsistent with this subparagraph may, within 30 
                      days after such action or failure to act, commence 
                      an action in any court of competent 
                      jurisdiction. <<NOTE: Courts.>>  The court shall 
                      hear and decide such action on an expedited basis. 
                      Any person adversely affected by an act or failure 
                      to act by a State or local government or any 
                      instrumentality thereof that is inconsistent with 
                      clause (iv) may petition the Commission for 
                      relief.
                    ``(C) Definitions.--For purposes of this paragraph--
                          ``(i) the term `personal wireless services' 
                      means commercial mobile services, unlicensed 
                      wireless services, and common carrier wireless 
                      exchange access services;
                          ``(ii) the term `personal wireless service 
                      facilities' means facilities for the provision of 
                      personal wireless services; and
                          ``(iii) the term `unlicensed wireless service' 
                      means the offering of telecommunications services 
                      using duly authorized devices which do not require 
                      individual licenses, but does not mean the 
                      provision of direct-to-home satellite services (as 
                      defined in section 303(v)).''.

    (b) <<NOTE: Rules.>>  Radio Frequency Emissions.--Within 180 days 
after the enactment of this Act, the Commission shall complete action in 
ET Docket 93-62 to prescribe and make effective rules regarding the 
environmental effects of radio frequency emissions.

    (c) <<NOTE: President. 47 USC 332 note.>>  Availability of 
Property.--Within 180 days of the enactment of this Act, the President 
or his designee shall prescribe procedures by which Federal departments 
and agencies may make available on a fair, reasonable, and 
nondiscriminatory basis, property, rights-of-way, and easements under 
their control for the placement of new telecommunications services that 
are dependent, in whole or in part, upon the utilization of Federal 
spectrum rights for the transmission or reception of such services. 
These procedures may establish a presumption that requests for the use 
of property, rights-of-way, and easements by duly authorized providers 
should be granted absent unavoidable direct conflict with the department 
or agency's mission, or the current or planned use of the property, 
rights-of-way, and easements in question. Reasonable fees may be charged 
to providers of such telecommunications services for use of property, 
rights-of-way, and easements. The Commission shall provide technical 
support to States to encourage them to make property, rights-of-way, and 
easements under their jurisdiction available for such purposes.

[[Page 110 STAT. 153]]

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

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

SEC. 706. <<NOTE: 47 USC 157 note.>>  ADVANCED TELECOMMUNICATIONS 
            INCENTIVES.

    (a) In General.--The Commission and each State commission with 
regulatory jurisdiction over telecommunications services shall encourage 
the deployment on a reasonable and timely basis of advanced 
telecommunications capability to all Americans (including, in 
particular, elementary and secondary schools and classrooms) by 
utilizing, in a manner consistent with the public interest, convenience, 
and necessity, price cap regulation, regulatory forbearance, measures 
that promote competition in the local telecommunications market, or 
other regulating methods that remove barriers to infrastructure 
investment.
    (b) Inquiry.--The Commission shall, within 30 months after the date 
of enactment of this Act, and regularly thereafter, initiate a notice of 
inquiry concerning the availability of advanced telecommunications 
capability to all Americans (including, in particular, elementary and 
secondary schools and classrooms) and shall complete the inquiry within 
180 days after its initiation. In the inquiry, the Commission shall 
determine whether advanced telecommunications capability is being 
deployed to all Americans in a reasonable and timely fashion. If the 
Commission's determination is negative, it shall take immediate action 
to accelerate deployment of such capability by removing barriers to 
infrastructure investment and by promoting competition in the 
telecommunications market.
    (c) Definitions.--For purposes of this subsection:
            (1) Advanced telecommunications capability.--The term 
        ``advanced telecommunications capability'' is defined, without 
        regard to any transmission media or technology, as high-speed, 
        switched, broadband telecommunications capability that enables 
        users to originate and receive high-quality voice, data, 
        graphics, and video telecommunications using any technology.
            (2) Elementary and secondary schools.--The term ``elementary 
        and secondary schools'' means elementary and secondary schools, 
        as defined in paragraphs (14) and (25), respectively, of section 
        14101 of the Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 8801).

[[Page 110 STAT. 154]]

SEC. 707. TELECOMMUNICATIONS DEVELOPMENT FUND.

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

    (b) Establishment and Operation of Fund.--Title VII is amended by 
inserting after section 713 (as added by section 305) the following new 
section:

``SEC. 714. <<NOTE: 47 USC 614.>>  TELECOMMUNICATIONS DEVELOPMENT FUND.

    ``(a) Purpose of Section.--It is the purpose of this section--
            ``(1) to promote access to capital for small businesses in 
        order to enhance competition in the telecommunications industry;
            ``(2) to stimulate new technology development, and promote 
        employment and training; and
            ``(3) to support universal service and promote delivery of 
        telecommunications services to underserved rural and urban 
        areas.

    ``(b) Establishment of Fund.--There is hereby established a body 
corporate to be known as the Telecommunications Development Fund, which 
shall have succession until dissolved. The Fund shall maintain its 
principal office in the District of Columbia and shall be deemed, for 
purposes of venue and jurisdiction in civil actions, to be a resident 
and citizen thereof.
    ``(c) Board of Directors.--
            ``(1) Composition of board; chairman.--The Fund shall have a 
        Board of Directors which shall consist of 7 persons appointed by 
        the Chairman of the Commission. Four of such directors shall be 
        representative of the private sector and three of such directors 
        shall be representative of the Commission, the Small Business 
        Administration, and the Department of the Treasury, 
        respectively. The Chairman of the Commission shall appoint one 
        of the representatives of the private sector to serve as 
        chairman of the Fund within 30 days after the date of enactment 
        of this section, in order to facilitate rapid creation and 
        implementation of the Fund. The directors shall include members 
        with experience in a number of the following areas: finance, 
        investment banking, government banking, communications law and 
        administrative practice, and public policy.

[[Page 110 STAT. 155]]

            ``(2) Terms of appointed and elected members.--The directors 
        shall be eligible to serve for terms of 5 years, except of the 
        initial members, as designated at the time of their 
        appointment--
                    ``(A) 1 shall be eligible to service for a term of 1 
                year;
                    ``(B) 1 shall be eligible to service for a term of 2 
                years;
                    ``(C) 1 shall be eligible to service for a term of 3 
                years;
                    ``(D) 2 shall be eligible to service for a term of 4 
                years; and
                    ``(E) 2 shall be eligible to service for a term of 5 
                years (1 of whom shall be the Chairman).
        Directors may continue to serve until their successors have been 
        appointed and have qualified.
            ``(3) Meetings and functions of the board.--The Board of 
        Directors shall meet at the call of its Chairman, but at least 
        quarterly. The Board shall determine the general policies which 
        shall govern the operations of the Fund. The Chairman of the 
        Board shall, with the approval of the Board, select, appoint, 
        and compensate qualified persons to fill the offices as may be 
        provided for in the bylaws, with such functions, powers, and 
        duties as may be prescribed by the bylaws or by the Board of 
        Directors, and such persons shall be the officers of the Fund 
        and shall discharge all such functions, powers, and duties.

    ``(d) Accounts of the Fund.--The Fund shall maintain its accounts at 
a financial institution designated for purposes of this section by the 
Chairman of the Board (after consultation with the Commission and the 
Secretary of the Treasury). The accounts of the Fund shall consist of--
            ``(1) interest transferred pursuant to section 309(j)(8)(C) 
        of this Act;
            ``(2) such sums as may be appropriated to the Commission for 
        advances to the Fund;
            ``(3) any contributions or donations to the Fund that are 
        accepted by the Fund; and
            ``(4) any repayment of, or other payment made with respect 
        to, loans, equity, or other extensions of credit made from the 
        Fund.

    ``(e) Use of the Fund.--All moneys deposited into the accounts of 
the Fund shall be used solely for--
            ``(1) the making of loans, investments, or other extensions 
        of credits to eligible small businesses in accordance with 
        subsection (f);
            ``(2) the provision of financial advice to eligible small 
        businesses;
            ``(3) expenses for the administration and management of the 
        Fund (including salaries, expenses, and the rental or purchase 
        of office space for the fund);
            ``(4) preparation of research, studies, or financial 
        analyses; and
            ``(5) other services consistent with the purposes of this 
        section.

    ``(f) Lending and Credit Operations.--Loans or other extensions of 
credit from the Fund shall be made available in accordance

[[Page 110 STAT. 156]]

with the requirements of the Federal Credit Reform Act of 1990 (2 U.S.C. 
661 et seq.) and any other applicable law to an eligible small business 
on the basis of--
            ``(1) the analysis of the business plan of the eligible 
        small business;
            ``(2) the reasonable availability of collateral to secure 
        the loan or credit extension;
            ``(3) the extent to which the loan or credit extension 
        promotes the purposes of this section; and
            ``(4) other lending policies as defined by the Board.

    ``(g) Return of Advances.--Any advances appropriated pursuant to 
subsection (d)(2) shall be disbursed upon such terms and conditions 
(including conditions relating to the time or times of repayment) as are 
specified in any appropriations Act providing such advances.
    ``(h) General Corporate Powers.--The Fund shall have power--
            ``(1) to sue and be sued, complain and defend, in its 
        corporate name and through its own counsel;
            ``(2) to adopt, alter, and use the corporate seal, which 
        shall be judicially noticed;
            ``(3) to adopt, amend, and repeal by its Board of Directors, 
        bylaws, rules, and regulations as may be necessary for the 
        conduct of its business;
            ``(4) to conduct its business, carry on its operations, and 
        have officers and exercise the power granted by this section in 
        any State without regard to any qualification or similar statute 
        in any State;
            ``(5) to lease, purchase, or otherwise acquire, own, hold, 
        improve, use, or otherwise deal in and with any property, real, 
        personal, or mixed, or any interest therein, wherever situated, 
        for the purposes of the Fund;
            ``(6) to accept gifts or donations of services, or of 
        property, real, personal, or mixed, tangible or intangible, in 
        aid of any of the purposes of the Fund;
            ``(7) to sell, convey, mortgage, pledge, lease, exchange, 
        and otherwise dispose of its property and assets;
            ``(8) to appoint such officers, attorneys, employees, and 
        agents as may be required, to determine their qualifications, to 
        define their duties, to fix their salaries, require bonds for 
        them, and fix the penalty thereof; and
            ``(9) to enter into contracts, to execute instruments, to 
        incur liabilities, to make loans and equity investment, and to 
        do all things as are necessary or incidental to the proper 
        management of its affairs and the proper conduct of its 
        business.

    ``(i) Accounting, Auditing, and Reporting.--The accounts of the Fund 
shall be audited annually. Such audits shall be conducted in accordance 
with generally accepted auditing standards by independent certified 
public accountants. A report of each such audit shall be furnished to 
the Secretary of the Treasury and the Commission. The representatives of 
the Secretary and the Commission shall have access to all books, 
accounts, financial records, reports, files, and all other papers, 
things, or property belonging to or in use by the Fund and necessary to 
facilitate the audit.
    ``(j) Report on Audits by Treasury.--A report of each such audit for 
a fiscal year shall be made by the Secretary of the

[[Page 110 STAT. 157]]

Treasury to the President and to the Congress not later than 6 months 
following the close of such fiscal year. The report shall set forth the 
scope of the audit and shall include a statement of assets and 
liabilities, capital and surplus or deficit; a statement of surplus or 
deficit analysis; a statement of income and expense; a statement of 
sources and application of funds; and such comments and information as 
may be deemed necessary to keep the President and the Congress informed 
of the operations and financial condition of the Fund, together with 
such recommendations with respect thereto as the Secretary may deem 
advisable.
    ``(k) Definitions.--As used in this section:
            ``(1) Eligible small business.--The term `eligible small 
        business' means business enterprises engaged in the 
        telecommunications industry that have $50,000,000 or less in 
        annual revenues, on average over the past 3 years prior to 
        submitting the application under this section.
            ``(2) Fund.--The term `Fund' means the Telecommunications 
        Development Fund established pursuant to this section.
            ``(3) Telecommunications industry.--The term 
        `telecommunications industry' means communications businesses 
        using regulated or unregulated facilities or services and 
        includes broadcasting, telecommunications, cable, computer, data 
        transmission, software, programming, advanced messaging, and 
        electronics businesses.''.

SEC. 708. NATIONAL EDUCATION TECHNOLOGY FUNDING CORPORATION.

    (a) Findings; Purpose.--
            (1) Findings.--The Congress finds as follows:
                    (A) Corporation.--There has been established in the 
                District of Columbia a private, nonprofit corporation 
                known as the National Education Technology Funding 
                Corporation which is not an agency or independent 
                establishment of the Federal Government.
                    (B) Board of directors.--The Corporation is governed 
                by a Board of Directors, as prescribed in the 
                Corporation's articles of incorporation, consisting of 
                15 members, of which--
                          (i) five members are representative of public 
                      agencies representative of schools and public 
                      libraries;
                          (ii) five members are representative of State 
                      government, including persons knowledgeable about 
                      State finance, technology and education; and
                          (iii) five members are representative of the 
                      private sector, with expertise in network 
                      technology, finance and management.
                    (C) Corporate purposes.--The purposes of the 
                Corporation, as set forth in its articles of 
                incorporation, are--
                          (i) to leverage resources and stimulate 
                      private investment in education technology 
                      infrastructure;
                          (ii) to designate State education technology 
                      agencies to receive loans, grants or other forms 
                      of assistance from the Corporation;
                          (iii) to establish criteria for encouraging 
                      States to--
                                    (I) create, maintain, utilize and 
                                upgrade interactive high capacity 
                                networks capable of providing

[[Page 110 STAT. 158]]

                                audio, visual and data communications 
                                for elementary schools, secondary 
                                schools and public libraries;
                                    (II) distribute resources to assure 
                                equitable aid to all elementary schools 
                                and secondary schools in the State and 
                                achieve universal access to network 
                                technology; and
                                    (III) upgrade the delivery and 
                                development of learning through 
                                innovative technology-based 
                                instructional tools and applications;
                          (iv) to provide loans, grants and other forms 
                      of assistance to State education technology 
                      agencies, with due regard for providing a fair 
                      balance among types of school districts and public 
                      libraries assisted and the disparate needs of such 
                      districts and libraries;
                          (v) to leverage resources to provide maximum 
                      aid to elementary schools, secondary schools and 
                      public libraries; and
                          (vi) to encourage the development of education 
                      telecommunications and information technologies 
                      through public-private ventures, by serving as a 
                      clearinghouse for information on new education 
                      technologies, and by providing technical 
                      assistance, including assistance to States, if 
                      needed, to establish State education technology 
                      agencies.
            (2) Purpose.--The purpose of this section is to recognize 
        the Corporation as a nonprofit corporation operating under the 
        laws of the District of Columbia, and to provide authority for 
        Federal departments and agencies to provide assistance to the 
        Corporation.

    (b) Definitions.--For the purpose of this section--
            (1) the term ``Corporation'' means the National Education 
        Technology Funding Corporation described in subsection 
        (a)(1)(A);
            (2) the terms ``elementary school'' and ``secondary school'' 
        have the same meanings given such terms in section 14101 of the 
        Elementary and Secondary Education Act of 1965; and
            (3) the term ``public library'' has the same meaning given 
        such term in section 3 of the Library Services and Construction 
        Act.

    (c) Assistance for Education Technology Purposes.--
            (1) Receipt by corporation.--Notwithstanding any other 
        provision of law, in order to carry out the corporate purposes 
        described in subsection (a)(1)(C), the Corporation shall be 
        eligible to receive discretionary grants, contracts, gifts, 
        contributions, or technical assistance from any Federal 
        department or agency, to the extent otherwise permitted by law.
            (2) Agreement.--In order to receive any assistance described 
        in paragraph (1) the Corporation shall enter into an agreement 
        with the Federal department or agency providing such assistance, 
        under which the Corporation agrees--
                    (A) to use such assistance to provide funding and 
                technical assistance only for activities which the Board 
                of Directors of the Corporation determines are 
                consistent with the corporate purposes described in 
                subsection (a)(1)(C);
                    (B) to review the activities of State education 
                technology agencies and other entities receiving 
                assistance from

[[Page 110 STAT. 159]]

                the Corporation to assure that the corporate purposes 
                described in subsection (a)(1)(C) are carried out;
                    (C) that no part of the assets of the Corporation 
                shall accrue to the benefit of any member of the Board 
                of Directors of the Corporation, any officer or employee 
                of the Corporation, or any other individual, except as 
                salary or reasonable compensation for services;
                    (D) that the Board of Directors of the Corporation 
                will adopt policies and procedures to prevent conflicts 
                of interest;
                    (E) to maintain a Board of Directors of the 
                Corporation consistent with subsection (a)(1)(B);
                    (F) that the Corporation, and any entity receiving 
                the assistance from the Corporation, are subject to the 
                appropriate oversight procedures of the Congress; and
                    (G) to comply with--
                          (i) the audit requirements described in 
                      subsection (d); and
                          (ii) the reporting and testimony requirements 
                      described in subsection (e).
            (3) Construction.--Nothing in this section shall be 
        construed to establish the Corporation as an agency or 
        independent establishment of the Federal Government, or to 
        establish the members of the Board of Directors of the 
        Corporation, or the officers and employees of the Corporation, 
        as officers or employees of the Federal Government.

    (d) Audits.--
            (1) Audits by independent certified public accountants.--
                    (A) In general.--The Corporation's financial 
                statements shall be audited annually in accordance with 
                generally accepted auditing standards by independent 
                certified public accountants who are certified by a 
                regulatory authority of a State or other political 
                subdivision of the United States. The audits shall be 
                conducted at the place or places where the accounts of 
                the Corporation are normally kept. All books, accounts, 
                financial records, reports, files, and all other papers, 
                things, or property belonging to or in use by the 
                Corporation and necessary to facilitate the audit shall 
                be made available to the person or persons conducting 
                the audits, and full facilities for verifying 
                transactions with the balances or securities held by 
                depositories, fiscal agents, and custodians shall be 
                afforded to such person or persons.
                    (B) Reporting requirements.--The report of each 
                annual audit described in subparagraph (A) shall be 
                included in the annual report required by subsection 
                (e)(1).
            (2) Recordkeeping requirements; audit and examination of 
        books.--
                    (A) Recordkeeping requirements.--The Corporation 
                shall ensure that each recipient of assistance from the 
                Corporation keeps--
                          (i) separate accounts with respect to such 
                      assistance;
                          (ii) such records as may be reasonably 
                      necessary to fully disclose--
                                    (I) the amount and the disposition 
                                by such recipient of the proceeds of 
                                such assistance;

[[Page 110 STAT. 160]]

                                    (II) the total cost of the project 
                                or undertaking in connection with which 
                                such assistance is given or used; and
                                    (III) the amount and nature of that 
                                portion of the cost of the project or 
                                undertaking supplied by other sources; 
                                and
                          (iii) such other records as will facilitate an 
                      effective audit.
                    (B) Audit and examination of books.--The Corporation 
                shall ensure that the Corporation, or any of the 
                Corporation's duly authorized representatives, shall 
                have access for the purpose of audit and examination to 
                any books, documents, papers, and records of any 
                recipient of assistance from the Corporation that are 
                pertinent to such assistance. Representatives of the 
                Comptroller General shall also have such access for such 
                purpose.

    (e) Annual Report; Testimony to the Congress.--
            (1) <<NOTE: Publication.>>  Annual report.--Not later than 
        April 30 of each year, the Corporation shall publish an annual 
        report for the preceding fiscal year and submit that report to 
        the President and the Congress. The report shall include a 
        comprehensive and detailed evaluation of the Corporation's 
        operations, activities, financial condition, and accomplishments 
        under this section and may include such recommendations as the 
        Corporation deems appropriate.
            (2) Testimony before congress.--The members of the Board of 
        Directors, and officers, of the Corporation shall be available 
        to testify before appropriate committees of the Congress with 
        respect to the report described in paragraph (1), the report of 
        any audit made by the Comptroller General pursuant to this 
        section, or any other matter which any such committee may 
        determine appropriate.

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

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

SEC. 710. AUTHORIZATION OF APPROPRIATIONS.

    (a) <<NOTE: 47 USC 156 note.>>  In General.--In addition to any 
other sums authorized by law, there are authorized to be appropriated to 
the Federal Communications Commission such sums as may be necessary to 
carry out this Act and the amendments made by this Act.

    (b) <<NOTE: 47 USC 156 note.>>  Effect on Fees.--For the purposes of 
section 9(b)(2) (47 U.S.C. 159(b)(2)), additional amounts appropriated 
pursuant to subsection (a) shall be construed to be changes in the 
amounts appro

[[Page 110 STAT. 161]]

priated for the performance of activities described in section 9(a) of 
the Communications Act of 1934.

    (c) Funding Availability.--Section 309(j)(8)(B) (47 U.S.C. 
309(j)(8)(B)) is amended by adding at the end the following new 
sentence: ``Such offsetting collections are authorized to remain 
available until expended.''.

    Approved February 8, 1996.

LEGISLATIVE HISTORY--S. 652 (H.R. 1555):
---------------------------------------------------------------------------

HOUSE REPORTS: No. 104-204, Pt. 1 accompanying H.R. 1555 (Comm. on 
Commerce).
SENATE REPORTS: Nos. 104-23 (Comm. on Commerce, Science, and 
Transportation) and 104-230 (Comm. of Conference).
CONGRESSIONAL RECORD:
                                                        Vol. 141 (1995):
                                    June 7, 8, 12-15, considered and 
                                        passed Senate.
                                    Aug. 2, 4, H.R. 1555 considered and 
                                        passed House.
                                    Oct. 12, S. 652 considered and 
                                        passed House, amended, in lieu 
                                        of H.R. 1555.
                                                        Vol. 142 (1996):
                                    Feb. 1, House and Senate agreed to 
                                        conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 32 (1996):
            Feb. 8, Presidential remarks and statement.

                                  <all>