SECTION 1. SHORT TITLE.

    This Act may be cited as the ``InterLATA Communication Improvements 
Act of 1998''.

SEC. 2. STATE INTERSTATE COMMUNICATIONS AUTHORITY.

    (a) Division of Authority for Interstate and Intrastate Services.--
Section 271(b)(1) of the Communications Act of 1934 (47 U.S.C. 271(b)) 
is amended by striking ``if the Commission approves'' and inserting 
``if the Commission, with respect to interstate interLATA services, or 
the State, with respect to intrastate interLATA services, approves''.
    (b) Administrative Provisions.--Section 271(d) of the 
Communications Act of 1934 (47 U.S.C. 271(d)) is amended--
            (1) in paragraph (1)--
                    (A) in the heading of paragraph (1), by striking 
                ``to commission'';
                    (B) by striking ``apply to the Commission for 
                authorization'' and inserting ``apply to the 
                Commission, with respect to interstate interLATA 
                services, or to the State, with respect to intrastate 
                interLATA services, for authorization''; and
                    (C) by striking the last sentence and inserting the 
                following: ``With respect to interstate interLATA 
                services, the application shall identify the 
                originating State for which authorization is sought.'';
            (2) in the first sentence of paragraph (2)(A), by inserting 
        `` with respect to interstate interLATA services'' after 
        ``under paragraph (1)'';
            (3) in paragraph (2)(B)--
                    (A) by inserting ``on an application with respect 
                to interstate interLATA services'' after 
                ``determination under this subsection''; and
                    (B) by adding at the end the following: ``The 
                Commission shall affirm the evaluation of the State 
                concerning such compliance, unless the Commission 
                determines by clear and convincing evidence that the 
                State evaluation was clearly erroneous in any material 
                respect.''; and
            (4) by striking paragraphs (3) through (6) and inserting 
        the following:
            ``(3) Determination.--
                    ``(A) In general.--Not later than 90 days after 
                receiving an application under paragraph (1), the 
                Commission, with respect to interstate interLATA 
                service, and the State, with respect to intrastate 
                interLATA service, shall issue a written determination 
                approving or denying the authorization requested in the 
                application. The Commission, with respect to interstate 
                interLATA service, and a State, with respect to 
                intrastate interLATA service, shall approve the 
                authorization requested in an application submitted 
                under paragraph (1) if it finds that--
                            ``(i)(I) with respect to interstate 
                        interLATA service, the Bell operating company's 
                        compliance with subsection (c) has been 
                        verified pursuant to subsection (d)(2)(B); or
                            ``(II) with respect to intrastate interLATA 
                        service, the State has determined that the 
                        company is in compliance with subsection (c); 
                        and
                            ``(ii) the requested authorization is 
                        consistent with the public interest, 
                        convenience, and necessity.
                    ``(B) Rule for determining public interest.--On or 
                after February 8, 1999, a determination--
                            ``(i) by the Commission, with respect to 
                        interstate interLATA service, that a Bell 
                        operating company is in compliance with 
                        subparagraph (A)(i)(I); or
                            ``(ii) a State, with respect to intrastate 
                        interLATA service, that a Bell operating 
                        company is in compliance with subparagraph 
                        (A)(i)(I);
                shall be deemed to be in full satisfaction of the 
                public interest, convenience, and necessity 
                requirements of subparagraph (A)(ii) and section 214 of 
                the Act.
                    ``(C) Statement of basis and written 
                determination.--The Commission, with respect to 
                interstate interLATA service, or a State, with respect 
                to intrastate interLATA service, shall state the basis 
                for its approval or denial of the application. Each 
                such approval or denial shall include a written 
                determination by the Commission or State indicating 
                whether the Bell operating company has complied with 
                each item of the competitive checklist and whether such 
                Bell operating company application has been determined 
                to be in the public interest, convenience, and 
                necessity.
            ``(4) Separate affiliate; safeguards compliance.--The 
        Commission, with respect to interstate interLATA service, shall 
        not approve the requested authorization unless it determines 
        that such requested authorization will be carried out in 
        accordance with section 272. In its written determination 
        approving or denying the requested authorization, the 
        Commission shall indicate whether it has determined the Bell 
        operating company to be in compliance with section 272.
            ``(5) Approval.--If a State fails to approve or disapprove 
        an application within the 90-day period specified in paragraph 
        (3), such application shall be deemed approved.
            ``(6) Judicial review.--Not later than 30 days after an 
        approval pursuant to paragraph (5), any aggrieved party may 
        bring an action in an appropriate Federal district court. The 
        court shall enter a judgment either affirming or reversing any 
        paragraph (5) approval. The court shall affirm such approval 
        unless such aggrieved party has demonstrated by clear and 
        convincing evidence that such Bell operating company has not 
        met the requirements of subsection (c)(2) with respect to the 
        subject application.
            ``(7) Limitation on commission and state.--Neither the 
        Commission nor any State may, by rule or otherwise, limit or 
        extend the terms used in the competitive checklist set forth in 
        subsection (c)(2)(B).
            ``(8) Publication.--Not later than 10 days after issuing a 
        determination under paragraph (3)--
                    ``(A) the Commission, with respect to interstate 
                interLATA service, shall publish in the Federal 
                Register a brief description of its determination; and
                    ``(B) the State, with respect to intrastate 
                interLATA service, shall make public, in a manner 
                consistent with applicable State law, its determination 
                accompanied by a brief description of such 
                determination.
            ``(9) Enforcement of conditions.--
                    ``(A) Commission and state authority.--If, at any 
                time after the approval of an application under 
                paragraph (3), the Commission, with respect to 
                interstate interLATA service, or a State, with respect 
                to intrastate interLATA service, determines that a Bell 
                operating company has ceased to meet any of the 
                conditions required for such approval, after notice and 
                opportunity for a hearing--
                            ``(i) the Commission or State, as the case 
                        may be, may issue an order to such company to 
                        correct the deficiency;
                            ``(ii)(I) the Commission may impose a 
                        penalty on such company pursuant to title V;
                            ``(II) the State may impose any penalty 
                        permitted by State law; or
                            ``(iii) the Commission or State, as the 
                        case may be, may suspend or revoke such 
                        approval.
                    ``(B) Receipt and review of complaints.--The 
                Commission with respect to interstate interLATA 
                service, and the State, with respect to intrastate 
                interLATA service, shall establish procedures for the 
                review of complaints concerning the failure by a Bell 
                operating company to meet conditions required for 
                approval under paragraph (3). Unless the parties 
                otherwise agree, the Commission shall act on each such 
                complaint within 90 days.

SEC. 3. PRESENCE OF COMPETITOR.

    (a) Simplification of competitor presence test.--Paragraph (1) of 
section 271(c) of the Communications Act of 1934 (47 U.S.C. 271(c)(1)) 
is amended to read as follows:
            ``(1) Access or statement.--A Bell operating company shall 
        be deemed to have met the requirements of this paragraph on and 
        after February 8, 1999. Prior to that date, a Bell operating 
        company meets the requirements of this paragraph if--
                    ``(A) 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; or
                    ``(B) 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).''.
    (b) Conforming Amendments.--Section 271(c)(2) is amended--
            (1) by striking the heading of subparagraph (A) and 
        inserting ``Access or statement required''; and
            (2) in subparagraph (A)(i)(I), by striking ``pursuant to 
        one or more agreements'' and inserting ``as''.

SEC. 4. RESALE.

    Section 271(b) of the Communications Act of 1934 (47 U.S.C. 271(b)) 
is amended by adding at the end the following:
            ``(5) Resale.--On or after February 8, 1999, a Bell 
        operating company may provide interstate and intrastate 
        interLATA services originating in any State through the 
        purchase and resale of telecommunications services obtained 
        from a person who is not affiliated with such Bell operating 
        company.''

SEC. 5. INCIDENTAL INTERLATA SERVICES.

    (a) Data Communications and International Services.--Section 271(g) 
of the Communications Act of 1934 (47 U.S.C. 271(g)) is amended--
            (1) by striking ``or'' at the end of paragraph (5);
            (2) by striking the period at the end of paragraph (6) and 
        inserting a semicolon; and
            (3) by adding at the end thereof the following:
            ``(7) of data communication; and
            ``(8) of any international telecommunications or 
        information service.''.
    (b) Definition of Data Services.--Section 271(i) of the 
Communications Act of 1934 is amended by adding at the end the 
following:
            ``(4) Data communication.--The term `data communication' 
        means the transmission of writing, signs, signals, pictures, 
        and sounds of all kinds by aid of wire, cable, radio, or other 
        like connection between the points of origin and reception of 
        such transmission, including the instrumentalities, facilities, 
        apparatus, and services (among other things, the receipt, 
        forwarding, and delivery of communications) incidental to such 
        transmission, except for 2-way voice conversations.''.
    (c) Conforming Amendment.--Section 272(a)(2)(B)(i) of the 
Communications Act of 1934 (47 U.S.C. 272(a)(2)(B)(i)) is amended by 
striking ``(1), (2), (3), (5), and (6)'' and inserting ``(1) through 
(8)''.

SEC. 6. REVISION OF COMMISSION REGULATIONS.

    The Federal Communications Commission shall revise its regulations 
to clarify that Internet traffic carried by local exchange carriers is 
interstate in nature for purposes of the reciprocal compensation 
provisions of section 251(b)(5) of the Communications Act of 1934 (47 
U.S.C. 251(b)(5)).
InterLATA Communication Improvements Act of 1998 - Amends the Communications Act of 1934 (the Act) to authorize a State to approve the application of a Bell operating company (BOC) to provide intrastate interLATA services originating in any of its in-region States.  Provides administrative authority for a State to receive, evaluate, and approve or disapprove such an application, requiring the Federal Communications Commission (FCC) to affirm a State's evaluation unless it determines that it was clearly erroneous in a material respect. 
Requires the FCC, with respect to interstate interLATA service, or a State, with respect to intrastate interLATA service, to include in its decision a basis for approval or denial, together with a written determination indicating whether the BOC has complied with each competitive requirement and whether the application is in the public interest, convenience, and necessity.  Requires separate affiliation for the BOCs involved.  Requires a State to approve or disapprove an application within 90 days, subject to judicial review.  Prohibits the FCC or a State from limiting or extending the terms used in the competitive checklist for application approval or denial.  Requires both the FCC and the State to:  (1) publish application determinations; and (2) enforce any conditions required for such approval. 
Deems a BOC to have met the requirements for the presence of a competitor on and after February 8, 1999.  States that a BOC meets such requirements before such date if:  (1) the BOC is providing access and interconnection to its network facilities for the network facilities of one or more unaffiliated competing providers of telephone exchange service; or (2) a statement of the terms and conditions under which the company generally offers to provide such access and interconnection has been approved or permitted to take effect by the appropriate State commission. 
Authorizes a BOC, on or after February 8, 1999, to provide interstate and intrastate interLATA services originating in any State through the purchase and resale of telecommunications services obtained from a person who is not affiliated with such BOC. 
Includes data communications and international telecommunications or information services within the definition of incidental interLATA services. 
Directs the FCC to revise its regulations to clarify that Internet traffic carried by local exchange carriers is interstate in nature for purposes of reciprocal compensation provisions of the Act.
InterLATA Communication Improvements Act of 1998