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[Senate Report 114-383]
[From the U.S. Government Publishing Office]

                                                    Calendar No. 687
114th Congress }                                             { Report
                                 SENATE
 2d Session    }                                             { 114-383

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        IMPROVING RURAL CALL QUALITY AND RELIABILITY ACT OF 2015

                                _______
                                

               November 28, 2016.--Ordered to be printed

                                _______
                                

Mr. Thune, from the Committee on Commerce, Science, and Transportation, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 827]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 827) to amend the 
Communications Act of 1934 to ensure the integrity of voice 
communications and to prevent unjust or unreasonable 
discrimination among areas of the United States in the delivery 
of such communications, having considered the same, reports 
favorably thereon with an amendment (in the nature of a 
substitute) and recommends that the bill (as amended) do pass.

                          Purpose of the Bill

    The purpose of S. 827, the Improving Rural Call Quality and 
Reliability Act of 2015, is to ensure the integrity of voice 
communications and to prevent unjust or unreasonable 
discrimination among areas of the United States in the delivery 
of such communications by requiring certain communications 
providers that carry, route, or transmit voice traffic to 
register with the Federal Communications Commission (FCC or 
Commission) and to meet service quality standards to be 
established by the Commission.

                          Background and Needs

    The FCC has found that there is a frequent and pervasive 
inability to properly complete long-distance calls to rural 
areas.\1\ The problem, known as ``rural call completion,'' 
results in lengthy periods of dead air on the calling party's 
end after dialing a number, audible ringing tones on the 
calling party's end when the called party's telephone never 
rings at all, false busy signals, inaccurate intercept 
messages, and the inability of one or both parties to hear the 
other when the call does go through.\2\ The Commission has 
received examples of life-threatening call failures, including 
a situation where an on-call surgeon was unable to receive a 
call from a hospital for emergency surgery and a 9-1-1 call 
center was unable to complete emergency call backs.\3\ In rural 
and small-town America, call completion failures have created 
```dire consequences' to consumers, economic development, and 
public safety across the Nation.''\4\
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    \1\Rural Call Completion Report and Order and Further Notice of 
Proposed Rulemaking, Rural Call Completion Order, 2013, 28 FCC Rcd. 
16154, 16160-61 2013.
    \2\Ibid. at p. 16161.
    \3\Ibid.
    \4\Ibid.
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    The FCC has determined that one of the main causes of the 
rural call completion problem is that intermediate providers, 
companies often hired by long distance providers to route and 
deliver calls to local telephone providers serving rural areas, 
are not completing the calls.\5\ Higher-than-average rates 
charged to transport and terminate long-distance calls to rural 
areas create an incentive for long-distance providers to hand 
off these calls to intermediate providers that offer to deliver 
them cheaply. Those high rates, though, also create an 
incentive for those intermediate providers not to complete the 
calls properly, to avoid paying those higher-than-average 
transport and termination charges when it is not profitable to 
do so.
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    \5\Ibid. at p. 16162.
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    Practices used for routing calls to rural areas that lead 
to call termination and quality problems may violate the 
Communications Act of 1934.\6\ The Commission has clarified the 
applicability of its rules\7\ and imposed additional reporting 
and data retention requirements for local telephone exchange 
carriers, interexchange carriers (i.e., long distance 
providers), commercial mobile radio service providers (i.e., 
cellular providers), and voice over Internet protocol 
providers,\8\ but call completion problems remain.\9\
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    \6\See 47 U.S.C. 201(b), 202(a)
    \7\ Developing a Unified Intercarrier Compensation Regime, 
Establishing Just and Reasonable Rates for Local Exchange Carriers, CC 
Docket No. 01-92, WC Docket No. 07-135, Declaratory Ruling, 27 FCC Rcd 
1351, 1356, para. 12 n.37, Wireline Comp. Bur. 2012.
    \8\Rural Call Completion Order, 28 FCC Rcd at 16164.
    \9\National Telecommunications Cooperative Association (NTCA) 
reports that 80 percent of its members responding to a questionnaire 
indicated that they have had call completion problems in the past year, 
and over 25 percent indicated that they receive complaints from 
subscribers at least weekly. Letter from Jill Canfield, Vice President 
of Legal and Industry, NTCA-The Rural Broadband Association, to Marlene 
H. Dortch, Secretary, Federal Communications Commission, WC Docket No. 
13-39, June 2, 2016.
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                         Summary of Provisions

    S. 827 would increase the reliability of intermediate 
providers by bringing transparency and standards to the 
intermediate provider market. Specifically, it would require 
intermediate providers to register with the Commission and 
maintain compliance with service quality standards to be 
adopted by the Commission. Covered providers, generally long-
distance voice service providers with more than 100,000 
domestic subscriber lines, would be prohibited from using an 
unregistered intermediate provider to transmit voice 
communications. The requirements would apply regardless of the 
format, protocol, or technology by which a communication or 
service is provided or achieved, or the regulatory 
classification of such communication or service.
    The Commission would have 180 days to promulgate rules to 
establish the registry, which would be publicly available. The 
Commission would have 1 year to promulgate rules to establish 
intermediate provider service quality standards.

                          Legislative History

    In 2013, the Committee approved S. Res. 157, introduced by 
Senator Klobuchar, expressing the sense of the Senate that 
telephone service must be improved in rural areas of the United 
States and that no entity may unreasonably discriminate against 
telephone users in those areas.
    Senator Klobuchar, for herself and Senator Tester, 
introduced S. 827 on March 19, 2015. Senators Baldwin, Ernst, 
Franken, Grassley, Heinrich, King, and Merkley later joined as 
additional cosponsors of the measure.
    On June 29, 2016, the Committee held an Executive Session 
at which S. 827 was considered. Senator Klobuchar offered a 
substitute amendment, which was adopted. The bill was approved 
unanimously by the Committee by voice vote and ordered to be 
reported with an amendment (in the nature of a substitute).

                            Estimated Costs

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

S. 827--Improving Rural Call Quality and Reliability Act of 2016

    The Federal Communications Commission (FCC) is an 
independent agency that regulates various aspects of wireline 
(telephone, for example), wireless, cable, and satellite 
communications. S. 827 would require certain providers of voice 
communication services to register with the FCC. It also would 
require the FCC to issue rules establishing service quality 
standards for those providers.
    On the basis of information from the FCC about the effort 
needed to create those service standards, CBO estimates that 
implementing S. 827 would cost $3 million over the 2017-2021 
period. However, under current law the FCC is authorized to 
collect fees sufficient to offset the cost of its regulatory 
activities each year. Therefore, CBO estimates that the net 
cost to implement S. 827 would be negligible, assuming annual 
appropriation actions consistent with the agency's authorities.
    Enacting S. 827 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    CBO estimates that enacting S. 827 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    S. 827 contains no intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA) and would not affect 
the budgets of state, local, or tribal governments.
    The bill contains private-sector mandates as defined in 
UMRA. Specifically, the bill would require all intermediate 
providers of voice communications services to register with the 
FCC and to comply with service quality standards established by 
the agency. (Intermediate providers contract with other 
telecommunication providers to transmit voice calls from one 
destination to another.) The bill also would require 
telecommunications providers that contract with intermediate 
providers to use only those providers that are registered with 
the FCC. Lastly, if the FCC increases annual fee collections to 
offset the costs of implementing its additional regulatory 
activities, the bill would increase the cost of an existing 
mandate on commercial entities required to pay those fees. On 
the basis of information about current industry and regulatory 
practices, CBO estimates that incremental cost to comply with 
the requirements of the bill would not be substantial. Further, 
any increase in fees would amount to no more than $3 million 
over the 2017-2021 period. Therefore, CBO estimates that the 
aggregate cost of the mandates in the bill would probably fall 
below the annual threshold established in UMRA for private-
sector mandates ($154 million in 2016, adjusted annually for 
inflation).
    The CBO staff contacts for this estimate are Stephen Rabent 
(for federal costs) and Logan Smith (for private-sector 
mandates). The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                           Regulatory Impact

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       number of persons covered

    The bill, as reported, would require intermediate providers 
to register with the Commission and maintain compliance with 
service quality standards to be adopted by the Commission. 
Providers that meet the definition of intermediate providers 
therein would be subject to these new compliance requirements. 
The scope of entities covered by the new requirements to 
register and for service standards would be limited, however, 
as it would clarify the definition of what constitutes an 
intermediate provider, ensuring that carriers that merely 
originate and terminate traffic are not subject to new service 
quality standards that do not apply to their actions.

                            economic impact

    S. 827 is intended to improve the efficiency and certainty 
of voice communications to rural areas of the country by 
requiring intermediate providers to register with the FCC and 
comply with service quality standards to be established by the 
Commission. Further, covered providers would be prohibited from 
using an intermediate provider that is not registered with the 
FCC. The Committee expects that improved voice communications 
for households, businesses, and public safety officials located 
in rural areas will result in positive economic benefits to 
those areas and the Nation as a whole.

                                privacy

    The bill would not have any adverse impact on the personal 
privacy of individuals.

                               paperwork

    The Committee does not anticipate a major increase in 
paperwork burdens resulting from the passage of this 
legislation.

                   Congressionally Directed Spending

    In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee provides that no 
provisions contained in the bill, as reported, meet the 
definition of congressionally directed spending items under the 
rule.

                      Section-by-Section Analysis

Section. 1. Short title.

    This section provides that this Act may be cited as the 
``Improving Rural Call Quality and Reliability Act of 2016.''

Section. 2. Ensuring the integrity of voice communications.

    This section would amend part II of title II of the 
Communications Act of 1934 (47 U.S.C. 251 et seq.) by adding a 
new section 262. Section 262 would require that intermediate 
providers, as defined in such section, register with the 
Commission and maintain compliance with service quality 
standards to be adopted by the Commission. The Commission would 
have 180 days to promulgate rules to establish the registry, 
and 1 year to promulgate rules to establish service quality 
standards. Carriers that qualify for the FCC's ``safe 
harbor''\10\ within a year of enactment (and maintain their 
qualification) would still be required to register but would 
not have to comply with the service quality standards.
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    \10\47 C.F.R. 64.2107
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    Covered providers, as defined in section 64.2101 of title 
47 of the Code of Federal Regulations, generally those 
providers of long-distance voice service that make the initial 
long-distance call path choice for more than 100,000 domestic 
retail subscriber lines, would not be permitted to use an 
unregistered intermediate provider to transmit most voice 
communications.
    The FCC would be required to establish the registry to 
record intermediate provider registrations, make the registry 
publicly available on the Commission's website, and establish 
intermediate provider service quality standards. In 
establishing those standards, the Commission would be required 
to prevent unjust and unreasonable discrimination among areas 
of the United States in the delivery of voice communications, 
regardless of the format or protocol by which the service is 
provided.
    Nothing in the new section 262 would preempt or expand the 
authority of a State public utilities commission or other 
agency to collect data or investigate or enforce State call 
completion laws or regulations.
    The new section 262 would further provide that its 
requirements apply regardless of the format by which any 
communications or service is provided, the protocol or format 
by which the transmission of such communication or service is 
achieved, or the regulatory classification of such 
communication or service. In addition, it would provide that 
nothing in such section shall be construed to affect the 
regulatory classification of any communication or service.
    Finally, the new section 262 would define an ``intermediate 
provider'' as an entity that enters into a business arrangement 
with a covered provider or other intermediate provider for the 
specific purpose of carrying, routing, or transmitting voice 
traffic. The Committee intends that, to meet this definition, 
an entity must have a business relationship for the specific 
purpose of carrying, routing, or transmitting traffic. It is 
not the intent of the Committee that this definition be 
interpreted to cover entities that only incidentally transmit 
voice traffic, like Internet Service Providers who may carry 
voice traffic alongside other packet data, without a specific 
business arrangement to carry, route, or transmit that voice 
traffic.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
material is printed in italic, existing law in which no change 
is proposed is shown in roman):

            PART II OF TITLE II OF COMMUNICATIONS ACT OF 1934

                        [47 U.S.C. 251 et seq.]

SEC. 262. ENSURING THE INTEGRITY OF VOICE COMMUNICATIONS.

  (a) Registration and Compliance by Intermediate Providers.--
An intermediate provider that offers or holds itself out as 
offering the capability to transmit covered voice 
communications from one destination to another and that charges 
any rate to any other entity (including an affiliated entity) 
for the transmission shall--
          (1) register with the Commission; and
          (2) comply with the service quality standards for 
        such transmission to be established by the Commission 
        under subsection (c)(1)(B).
  (b) Required Use of Registered Intermediate Providers.--A 
covered provider may not use an intermediate provider to 
transmit covered voice communications unless such intermediate 
provider is registered under subsection (a)(1).
  (c) Commission Rules.--
          (1) In general.--
                  (A) Registry.--Not later than 180 days after 
                the date of enactment of this section, the 
                Commission shall promulgate rules to establish 
                a registry to record registrations under 
                subsection (a)(1).
                  (B) Service quality standards.--Not later 
                than 1 year after the date of enactment of this 
                section, the Commission shall promulgate rules 
                to establish service quality standards for the 
                transmission of covered voice communications by 
                intermediate providers.
          (2) Requirements.--In promulgating the rules required 
        by paragraph (1), the Commission shall--
                  (A) ensure the integrity of the transmission 
                of covered voice communications to all 
                customers in the United States; and
                  (B) prevent unjust or unreasonable 
                discrimination among areas of the United States 
                in the delivery of covered voice 
                communications.
  (d) Public Availability of Registry.--The Commission shall 
make the registry established under subsection (c)(1)(A) 
publicly available on the website of the Commission.
  (e) Scope of Application.--The requirements of this section 
shall apply regardless of the format by which any communication 
or service is provided, the protocol or format by which the 
transmission of such communication or service is achieved, or 
the regulatory classification of such communication or service.
  (f) Rule of Construction.--Nothing in this section shall be 
construed to affect the regulatory classification of any 
communication or service.
  (g) Effect on Other Laws.--Nothing in this section shall be 
construed to preempt or expand the authority of a State public 
utility commission or other relevant State agency to collect 
data, or investigate and enforce State law and regulations, 
regarding the completion of intrastate voice communications, 
regardless of the format by which any communication or service 
is provided, the protocol or format by which the transmission 
of such communication or service is achieved, or the regulatory 
classification of such communication or service.
  (h) Exception.--The requirement under subsection (a)(2) to 
comply with the service quality standards established under 
subsection (c)(1)(B) shall not apply to a covered provider 
that--
          (1) on or before the date that is 1 year after the 
        date of enactment of this section, has certified as a 
        Safe Harbor provider under section 64.2107(a) of title 
        47, Code of Federal Regulations, or any successor 
        regulation; and
          (2) continues to meet the requirements under such 
        section 64.2107(a).
  (i) Definitions.--In this section:
          (1) Covered provider.--The term ``covered provider'' 
        has the meaning given the term in section 64.2101 of 
        title 47, Code of Federal Regulations, or any successor 
        thereto.
          (2) Covered voice communication.--The term ``covered 
        voice communication'' means a voice communication 
        (including any related signaling information) that is 
        generated--
                  (A) from the placement of a call from a 
                connection using a North American Numbering 
                Plan resource or a call placed to a connection 
                using such a numbering resource; and
                  (B) through any service provided by a covered 
                provider.
          (3) Intermediate provider.--The term ``intermediate 
        provider'' means any entity that--
                  (A) enters into a business arrangement with a 
                covered provider or other intermediate provider 
                for the specific purpose of carrying, routing, 
                or transmitting voice traffic that is generated 
                from the placement of a call placed--
                          (i) from an end user connection using 
                        a North American Numbering Plan 
                        resource; or
                          (ii) to an end user connection using 
                        such a numbering resource; and
                  (B) does not itself, either directly or in 
                conjunction with an affiliate, serve as a 
                covered provider in the context of originating 
                or terminating a given call.

                                  [all]
```