Communications Competitiveness and Infrastructure Modernization Act of 1993

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Communications Competitiveness and 
Infrastructure Modernization Act of 1993''.

SEC. 2. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES.

    (a) General Requirement.-- Section 613(b) of the Communications Act 
of 1934 (47 U.S.C. 533(b)) is amended to read as follows:
    ``(b)(1) Subject to the requirements of part V and other provisions 
of this title, any common carrier subject in whole or in part to title 
II of this Act may provide video programming directly to subscribers in 
its telephone service area either through its own facilities or through 
an affiliate owned by, operated by, controlled by, or under common 
control with the common carrier.
    ``(2) Subject to the requirements of part V and other provisions of 
this title, any common carrier subject in whole or in part to title II 
of this Act may provide channels of communications or pole line conduit 
space, or other rental arrangements, to any entity which is directly or 
indirectly owned by, operated by, controlled by, or under common 
control with such common carrier, if such facilities or arrangements 
are to be used for, or in connection with, the provision of video 
programming directly to subscribers in the telephone service area to 
the common carrier.''.
    (b) Provisions for Regulation of Cable Service Provided by 
Telephone Companies.--Title VI of the Communications Act of 1934 (47 
U.S.C. 521 et seq.) is amended by adding at the end the following new 
part:

        ``Part V--Cable Service Provided by Telephone Companies

``SEC. 651. DEFINITIONS.

    ``For purposes of this part--
            ``(1) the term `affiliated video programming' means any 
        video programming which is (A) owned or controlled by, or under 
        common control with, a common carrier, and (B) provided by the 
        common carrier or an affiliate directly to subscribers in its 
        telephone service area;
            ``(2) the term `control' means--
                    ``(A) an ownership interest in which an entity has 
                the right to vote more than 50 percent of the 
                outstanding common stock or other ownership interest; 
                or
                    ``(B) actual working control, if no single entity 
                directly or indirectly has the right to vote more than 
                50 percent of the outstanding common stock or other 
                ownership interest;
            ``(3) the term `basic video dial tone platform' has the 
        same meaning as established by order of the Commission entitled 
        `Telephone Company-Cable Television Cross-Ownership Rules, 
        Sections 63.54-63.58', CC Docket No. 87-266, adopted July 16, 
        1992; and
            ``(4) the term `rural area' means a geographic area that 
        does not include either--
                    ``(A) any incorporated or unincorporated place of 
                10,000 inhabitants or more, or any part thereof; or
                    ``(B) any territory, incorporated or 
                unincorporated, included in an urbanized area.

``SEC. 652. SEPARATE VIDEO PROGRAMMING AFFILIATE.

    ``(a) In General.--Except as provided in subsection (d) of this 
section, a common carrier shall not provide video programming directly 
to subscribers in its telephone service area unless such video 
programming is provided through a video programming affiliate that is 
separate from such carrier.
    ``(b) Books and Marketing.--A video programming affiliate of a 
common carrier shall--
            ``(1) maintain books, records, and accounts separate from 
        such carrier which identify all transactions with such carrier;
            ``(2) carry out directly (or through any nonaffiliate or 
        any other affiliate of such carrier) its own marketing and 
        sales, except that institutional advertising carried out by 
        such carrier shall be permitted so long as each party bears its 
        pro rata share of the costs; and
            ``(3) not own real or personal property in common with such 
        carrier.
    ``(c) Business Transactions With Carrier Subject to Regulation.--
Any contract, agreement, arrangement, joint venture, partnership, or 
other manner of conducting business, between a common carrier and its 
video programming affiliate, providing for--
            ``(1) the sale, exchange, or leasing of property between 
        such affiliate and such carrier;
            ``(2) the loan of money or other extension of credit 
        between such affiliate and such carrier or between such 
        affiliate and a third party directly or indirectly guaranteed 
        by such carrier;
            ``(3) the furnishing of goods between such affiliate and 
        such carrier; or
            ``(4) the transfer to or use by such affiliate for its 
        benefit of any assets of such carrier,
shall be pursuant to regulation prescribed by the Commission, shall be 
on a fully compensatory and auditable basis, shall be without cost to 
the telephone service ratepayers of the carrier, and shall be in 
compliance with rules established by the Commission which will be 
sufficient to enable the Commission to assess the compliance of any 
transaction.
    ``(d) Waiver.--The Commission may waive any of the requirements of 
this section upon the showing of good cause, by a common carrier, video 
programming affiliate, or any other person, if the Commission 
determines that the public interest, convenience, and necessity will be 
served by the waiver. The Commission shall act to approve or disapprove 
a waiver application within 120 days after the date it is filed.

``SEC. 653. ESTABLISHMENT OF BASIC VIDEO DIAL TONE PLATFORM.

    ``Any common carrier which provides video programming directly to 
subscribers through a video programming affiliate in its telephone 
service area shall establish a basic video dial tone platform. The 
Commission, together with the States, shall establish regulations to 
prohibit a carrier from discriminating in favor of its video 
programming affiliate in providing access to such platform or with 
regard to rates, terms, and conditions for access to such platform.

``SEC. 654. PROVISION OF AFFILIATED VIDEO PROGRAMMING.

    ``(a) Limitation.--A common carrier which provides affiliated video 
programming directly to subscribers in its telephone service area 
through its video programming affiliate shall make available such 
capacity as is requested by unaffiliated video program providers upon 
reasonable notice, except that the common carrier shall not be required 
to provide more than 75 percent of the equipped capacity of its basic 
video dial tone platform to unaffiliated video program providers.
    ``(b) Evaluation by Commission.--The Commission shall, not later 
than 2 years after the date of enactment of this part, evaluate the 
effect of subsection (a) on the video programming marketplace and, on 
the basis of that evaluation, make recommendations to Congress 
concerning appropriate modifications, if any, to subsection (a).
    ``(c) Broadcast Signal Carriage Excluded.--The carriage of local 
broadcast signals pursuant to section 614 shall not constitute the 
provision of affiliated video programming for purposes of subsection 
(a).
    ``(d) Waiver.--The Commission may waive or otherwise modify the 
applicability of subsection (a) if it determines that video programming 
is not available for transport by a common carrier to subscribers in 
its telephone service area. The Commission shall act to approve or 
disapprove a waiver application within a reasonable period of time.
    ``(e) Termination.--Subsection (a) shall cease to be effective five 
years after the date of enactment of this part.

``SEC. 655. PROHIBITION OF CROSS-SUBSIDIZATION.

    ``A common carrier shall not engage in any practice that--
            ``(1) results in the inclusion in rates for telephone 
        exchange service of any operating expenses, costs, depreciation 
        charges, capital investments, or other expenses associated with 
        the provision of video programming by the common carrier or its 
        video programming affiliate; and
            ``(2) is prohibited by the Commission or a State.

``SEC. 656. PROHIBITION ON BUYOUTS.

    ``(a) General Prohibition.--No common carrier which provides 
telephone service, nor any entity owned by or under common ownership or 
control with such carrier, may purchase or otherwise obtain control 
over any cable system which is located within its telephone service 
area and is owned by an unaffiliated person.
    ``(b) Exceptions.--Notwithstanding subsection (a), a common carrier 
shall not be prevented from--
            ``(1) obtaining a noncontrolling interest in such a cable 
        system through a joint venture or other means; or
            ``(2) acquiring the use of that part of the transmission 
        facilities of such 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.
    ``(c) Waiver.--
            ``(1) The Commission may waive the restrictions in 
        subsection (a) of this section only upon a showing by a carrier 
        that--
                    ``(A) the facilities of the cable system will be 
                substantially upgraded through the deployment of modern 
                technology, including fiber optics;
                    ``(B) the capacity of the cable system and types of 
                services offered will be expanded;
                    ``(C) the purchase or acquisition of control will 
                otherwise be in the public interest; and
                    ``(D) the local franchising authority approves of 
                such waiver.
            ``(2) The Commission shall act to approve or disapprove a 
        waiver application within 180 days after the date it is filed.

``SEC. 657. PENALTIES.

    ``If the Commission finds, after notice and opportunity for a 
hearing, including the oral examination and cross-examination of 
witnesses, that any common carrier has knowingly and willfully violated 
any provision of this part, the Commission shall assess such fines and 
penalties as it deems appropriate pursuant to title V of this Act.

``SEC. 658. CUSTOMER PROTECTION.

    ``(a) Joint Board Required.--The Commission shall, within 30 days 
after the date of enactment of this part, convene a Federal-State Joint 
Board under the provisions of section 410(c) for the purpose of 
establishing the practices, classifications, and regulations as may be 
necessary to ensure proper jurisdictional separation and allocation of 
the costs of providing broadband services, including affiliated video 
programming. The Board shall issue its recommendations to the 
Commission within 270 days after the date of enactment of this part.
    ``(b) Commission Regulations Required.--The Commission, with 
respect to interstate switched access service, and the States, with 
respect to telephone exchange service and intrastate interexchange 
service, shall, within one year after the date of the enactment of this 
part, establish such rules and regulations as may be necessary to 
implement section 655.
    ``(c) No Effect on Carrier Regulation Authority.--Nothing in this 
section shall be construed to limit or supersede the authority of any 
State or the Commission with respect to the allocation of costs 
associated with intrastate or interstate communication services.

``SEC. 659. RURAL AREA EXEMPTION.

    ``The provisions of sections 652, 653, 654, and 656 shall not apply 
to video programming provided in a rural area by a common carrier that 
provides telephone exchange service in the same area.''.

Summary: Communications Competitiveness and Infrastructure Modernization Act of 1993 - Amends the Communications Act of 1934 to allow a common carrier to provide video programming directly to subscribers in its telephone service area through its own facilities or an affiliate. Authorizes the common carrier to provide channels of communications, pole line conduit space, or other rental arrangements to any entity which is directly or indirectly owned, operated, or controlled by it if such facilities or arrangements are to be used for, or in connection with, the provision of video programming directly to subscribers in the telephone service area of the common carrier. Prohibits a common carrier from providing video programming directly to subscribers in its telephone service area unless the programming is provided through a separate video programming affiliate. Requires business arrangements and transactions between a common carrier and its video programming affiliate to be pursuant to regulations prescribed by the Federal Communications Commission and to be without cost to the telephone service ratepayers of the carrier. Requires any common carrier which provides video programming directly to subscribers through an affiliate in its telephone service area to establish a basic video dial tone platform. Requires such common carrier to make a maximum of 75 percent of the equipped capacity of its basic video dial tone platform available to unaffiliated video program providers. States that the carriage of local broadcast signals shall not constitute the provisions of affiliated video programming under this Act. Sets forth prohibitions on: (1) cross-subsidization between telephone service and video programming by common carriers. And (2) common carrier buyouts of cable systems located in the carrier's telephone service area. Requires the Commission to convene a Federal-State Joint Board to establish practices, classifications, and regulations necessary to ensure proper jurisdictional separation and allocation of the costs of providing broadband services, including affiliated video programming. Makes provisions of this Act inapplicable to video programming provided in a rural area by a common carrier that provides telephone exchange service in such area.