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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2256 Introduced in Senate (IS)]

109th CONGRESS
  2d Session
                                S. 2256

 To amend the Communications Act of 1934 to ensure the availability to 
    all Americans of high-quality, advanced telecommunications and 
broadband services, technologies, and networks at just, reasonable, and 
 affordable rates, and to establish a permanent mechanism to guarantee 
specific, sufficient, and predictable support for the preservation and 
       advancement of universal service, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            February 8, 2006

   Mr. Burns introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL

 
 To amend the Communications Act of 1934 to ensure the availability to 
    all Americans of high-quality, advanced telecommunications and 
broadband services, technologies, and networks at just, reasonable, and 
 affordable rates, and to establish a permanent mechanism to guarantee 
specific, sufficient, and predictable support for the preservation and 
       advancement of universal service, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Internet and Universal Service Act 
of 2006''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) The concept that all Americans, no matter where they 
        live, should have access to high-quality communication services 
        at affordable rates has been a hallmark of Federal policy for 
        over a century.
            (2) A national communication and information policy must 
        foster innovation, encourage investment, create jobs, improve 
        productivity, and increase consumer benefits.
            (3) A national policy is needed to accelerate the private 
        sector deployment of advanced communication infrastructure to 
        all Americans as rapidly as possible.
            (4) The preservation and advancement of universal service 
        is a fundamental goal of the Communications Act of 1934 and the 
        Telecommunications Act of 1996, and must remain the foundation 
        of future communications policy.
            (5) Maintaining a sustainable universal service fund 
        requires recipients to be accountable for how support is used.
            (6) Universal service support mechanisms should be used to 
        support the deployment and advancement of a robust 
        communications infrastructure so all Americans can enjoy new 
        and exciting communication services regardless of where they 
        live or the technology used.
            (7) Any universal service support funding mechanism should 
        be equitable, nondiscriminatory, competitively neutral, and 
        ensure affordable communications services for all Americans.
            (8) Universal service support should be used to provide 
        incentives for continued investment into the public network and 
        to increase the availability of broadband service to all 
        Americans.
            (9) Since 1998 the Federal Communications Commission has 
        committed more than $13,000,000,000 to help schools and 
        libraries acquire Internet and telecommunications services.
            (10) Recently allegations of waste, fraud, and abuse have 
        surfaced, and as steward of the Schools and Libraries Program, 
        the Federal Communications Commission must ensure that 
        participants use program funds appropriately.
            (11) Promoting telemedicine helps link rural health care 
        facilities to urban medical centers.
            (12) Many people in remote communities would not have 
        access to health care without use of the Internet, an important 
        issue in rural communities since many lack a physician.
    (b) Purposes.--The purposes of this Act are to develop a national 
telecommunications and information policy that fosters innovation, 
encourages investment, creates jobs, improves productivity, and 
increases consumer benefits by--
            (1) ensuring that the United States becomes a world leader 
        in broadband deployment by ensuring that consumers have access 
        to high-capacity broadband services and facilities;
            (2) updating and advancing the definition of universal 
        service to ensure appropriate incentives through the Federal 
        universal service support fund are used to accelerate the 
        deployment of advanced communications and information services 
        and technologies, including broadband services, for the benefit 
        of all Americans;
            (3) eliminating economic and technical barriers to 
        investment by eligible telecommunications carriers in rural and 
        high-cost areas, as contemplated in section 706 of the 
        Telecommunications Act of 1996 (47 U.S.C. 157 note);
            (4) targeting universal service support specifically to 
        high cost areas to ensure that communications services and 
        broadband facilities are made available throughout all of the 
        States in a fair and equitable manner;
            (5) ensuring universal service support contributions and 
        distributions are--
                    (A) assessed and distributed in a fair, equitable, 
                and competitively neutral manner; and
                    (B) based upon a methodology to assess 
                contributions that effectuates the principles 
                referenced in this Act;
            (6) guaranteeing the integrity the methods used to 
        calculate and distribute universal service support in a manner 
        consistent with sections 214 and 254 of the Communications Act 
        of 1934 (47 U.S.C. 214 and 254);
            (7) ensuring that all providers that use the network and 
        facilities of another provider fully compensate each provider 
        for the use of its network and facilities;
            (8) ensuring the integrity of the Schools and Libraries 
        Program to deter waste, fraud, and abuse, by strengthening the 
        Federal Communications Commission's management and oversight, 
        including imposing sanctions on applicants and vendors who 
        repeatedly and knowingly violate significant program rules; and
            (9) improving the effectiveness of the Rural Health Care 
        Program.

SEC. 3. ADVANCED TELECOMMUNICATIONS INFRASTRUCTURE INVESTMENT 
              INCENTIVES.

    (a) Removal of Barriers to Advanced Infrastructure Investment.--
Section 706 of the Telecommunications Act of 1996 (47 U.S.C. 157 note) 
is amended by adding at the end the following:
    ``(d) Advanced Telecommunications Infrastructure Investment 
Incentives.--The Commission shall ensure that eligible 
telecommunications carriers have sufficient incentives, through the use 
of Federal universal service support mechanisms, to invest and deploy 
network facilities necessary to provide broadband service and broadband 
voice service for the benefit of all Americans in rural, insular, and 
high-cost areas.''.
    (b) Effectuation of Investment Incentives.--
            (1) Rulemaking.--
                    (A) In general.--Not later than 180 days after the 
                date of enactment of this Act, the Federal 
                Communications Commission shall complete a rulemaking 
                to define advanced telecommunications infrastructure 
                and broadband service.
                    (B) Required content.--In the rulemaking required 
                under subparagraph (A), the definition of advanced 
                telecommunications infrastructure and broadband service 
                shall include--
                            (i) network facilities and capabilities 
                        that enable 2-way transmission of information 
                        using Internet protocol or any successor 
                        protocol, and the associated capabilities and 
                        functionalities, services, and applications 
                        provided over an Internet protocol platform or 
                        for which an Internet protocol capability is an 
                        integral component; and
                            (ii) service facilities and equipment and 
                        applications that enable an end-user to receive 
                        communications in Internet protocol format, 
                        regardless of whether the such communications 
                        are voice, data, video, or any other form at a 
                        download receiving rate of not lower than 1 
                        megabit per second.
            (2) Advanced telecommunications capability rulemaking.--Not 
        later than 3 years after the date of enactment of this Act, and 
        every 3 years thereafter, the Federal Communications Commission 
        shall complete a study to review the definition of advanced 
        telecommunications infrastructure and broadband service, as 
        such term is defined under the rulemaking required in paragraph 
        (1), taking into account prevailing standards of technical and 
        economic feasibility and acceptance in the marketplace.
            (3) Deployment of next generation networks.--Not later than 
        180 days after the date of enactment of this Act, and every 3 
        years thereafter, the Federal Communications Commission shall 
        complete a study to identify economic and technical barriers to 
        the deployment of next generation advanced telecommunications 
        and information networks, services, and technologies, including 
        high-capacity transmission and distribution networks capable of 
        delivering 20 megabytes per second capacity, for the benefit of 
        all Americans in rural, insular, and high-cost areas.

SEC. 4. ENSURING INTEGRITY AND ACCOUNTABILITY IN THE DISTRIBUTION OF 
              UNIVERSAL SERVICE.

    (a) Controlling the Growth of Universal Service Support.--Section 
214(e) of the Communications Act of 1934 (47 U.S.C. 214(e)) is 
amended--
            (1) in paragraph (1)--
                    (A) by redesignating subparagraph (B) as 
                subparagraph (E);
                    (B) in subparagraph (A), by striking ``; and'' and 
                inserting a semicolon; and
                    (C) by inserting the following after subparagraph 
                (A):
                    ``(B) offer any calling plan, approved by the 
                State, as meeting the definition of affordable service, 
                at rates, terms, and conditions comparable to those 
                offered by the eligible telecommunications carrier that 
                is the incumbent local exchange carrier for such 
                service area;
                    ``(C) offer such services and perform such 
                functions as may be required of the eligible 
                telecommunications carrier that is the incumbent local 
                exchange carrier for such service area under applicable 
                Federal and State law to protect customers and promote 
                public health, safety, and welfare, including promoting 
                the quality and reliability of the telecommunications 
                services and infrastructure of the nation;
                    ``(D) offer such services substantially over its 
                own facilities, excluding unbundled network elements, 
                and further commit to use any support received to 
                achieve facilities-based coverage of the entire service 
                area within 2 years of such date of designation; and'';
            (2) in paragraph (2)--
                    (A) in the second sentence, by striking ``, in the 
                case of an area served by a rural telephone company, 
                and shall, in the case of all other areas,''; and
                    (B) in the last sentence, by striking ``for an area 
                served by a rural telephone company''; and
            (3) by striking paragraph (5) and inserting the following:
            ``(5) Service area defined.--
                    ``(A) In general.--The term `service area' means 
                the entire study area of an incumbent local exchange 
                carrier for which such carrier is designated as an 
                eligible telecommunications carrier.
                    ``(B) Limitation on size.--No carrier may be 
                designated an eligible telecommunications carrier under 
                this section for any area smaller than the entire study 
                area of an incumbent local exchange carrier.''.
    (b) Eligible Telecommunications Carrier Designation Discipline.--
            (1) In general.--Section 214(e) of the Communications Act 
        of 1934 (47 U.S.C. 214(e)) is amended by adding at the end the 
        following:
            ``(7) Calculation of support.--
                    ``(A) In general.--The Commission shall calculate 
                the amount of support payable to any eligible 
                telecommunications carrier based on a prior showing of 
                the actual costs of providing, maintaining, and 
                upgrading of facilities and services in the service 
                area for which such support is intended of each such 
                carrier.
                    ``(B) Election.--An eligible telecommunications 
                carrier may elect to have the Commission calculate the 
                amount of support payable to it on the basis of the 
                forward looking costs of such carrier.''.
            (2) Rulemaking.--Not later than 270 days after the date of 
        enactment of this Act, the Commission shall complete a 
        rulemaking to implement section 214(e)(7) of the Communications 
        Act of 1934, including establishing competitively neutral 
        criteria for demonstrating actual costs as required by such 
        section for eligible telecommunications carriers not currently 
        submitting cost data under subparagraph (B) of such section.
    (c) Oversight of Use of Universal Service Support.--Section 254 of 
the Communications Act of 1934 (47 U.S.C. 254) is amended by adding at 
the end the following:
    ``(m) Accountability of Eligible Telecommunications Carriers.--
            ``(1) In general.--The Commission shall require each 
        eligible telecommunications carrier receiving support under 
        this section to certify annually to the Commission that such 
        carrier is using such support in compliance with subsection (e) 
        and section 214(e), including establishing with specificity 
        that such support is being used for the provision, maintenance, 
        and upgrading of facilities and services for which such support 
        is intended.
            ``(2) Competitively neutral criteria.--The Commission shall 
        establish competitively neutral criteria for the annual 
        certifications described in paragraph (1) that impose 
        substantially similar burdens of substantiation on each 
        eligible telecommunications carrier.''.
    (d) Effective Date; Transition Period for Authorized Eligible 
Telecommunications Carriers.--
            (1) In general.--This section and the amendments made by 
        this section shall take effect on the expiration of the date 
        which is 1 year after the date of enactment of this Act.
            (2) Compliance with this section for carriers already 
        designated as eligible.--
                    (A) Compliance required.--Each telecommunications 
                carrier designated as an eligible telecommunications 
                carrier under section 214(e) of the Communications Act 
                of 1934 (47 U.S.C. 214(e)) prior to the date of 
                enactment of this Act shall comply with the provisions 
                of this section on or after the date described in 
                paragraph (1).
                    (B) Penalty for noncompliance.--Any 
                telecommunications carrier designated as an eligible 
                telecommunications carrier under section 214(e) of the 
                Communications Act of 1934 (47 U.S.C. 214(e)) prior to 
                the date of enactment of this Act, who fails to comply 
                with the provisions of subparagraph (A) shall have such 
                designation revoked by the Commission.

SEC. 5. STABILIZATION OF UNIVERSAL SERVICE FUNDING.

    (a) Ensuring an Equitable Contribution Base for Universal 
Service.--
            (1) In general.--Section 254(d) of the Communications Act 
        of 1934 (47 U.S.C. 254(d)) is amended to read as follows:
    ``(d) Universal Service Support Contributions.--
            ``(1) Administration of universal service programs.--In 
        administering Federal universal service funding mechanisms, and 
        developing a contribution methodology for support for rural, 
        insular, and high cost areas the Commission shall ensure--
                    ``(A) that Federal universal service funding 
                mechanisms are specific, predictable, and sufficient--
                            ``(i) to preserve and advance universal 
                        service and to enable access to advanced 
                        telecommunications infrastructure and broadband 
                        services, as that term is defined under section 
                        3(b)(1) of the Internet and Universal Service 
                        Act of 2006; and
                            ``(ii) to effectuate the principles set 
                        forth in subsection (b); and
                    ``(B) that contributions to such funding mechanisms 
                are specific, predictable, and sufficient to sustain 
                the funding of networks used to preserve and advance 
                universal service.
            ``(2) Non-discriminatory contribution mechanism.--
                    ``(A) In general.--Each provider of 
                telecommunications, broadband service, or broadband 
                voice service shall contribute to the Federal universal 
                service funding mechanisms established under this 
                section.
                    ``(B) Requirements.--The Commission shall ensure 
                that the contributions required under subparagraph (A) 
                shall be--
                            ``(i) equitable and non-discriminatory 
                        among different types of providers;
                            ``(ii) applied as broadly as possible to 
                        all types of providers; and
                            ``(iii) competitively and technologically 
                        neutral, excluding no class of providers from 
                        the obligation to contribute.
            ``(3) De minimis exception.--The Commission may exempt a 
        provider of telecommunications, broadband service, or broadband 
        voice service or any class of such providers from the 
        requirements of this subsection if the communications 
        activities of such provider are limited to such an extent that 
        the level of contributions of such provider to the preservation 
        and advancement of universal service would be de minimis.
            ``(4) Contribution assessment flexibility.--
                    ``(A) In general.--The Commission may employ any 
                methodology to assess contributions to effectuate the 
                principles referenced in this section, including--
                            ``(i) revenues;
                            ``(ii) working telephone numbers; or
                            ``(iii) any other current or successor 
                        identifier protocols or connections to the 
                        network.
                    ``(B) Use of more than 1 methodology.--If no 1 
                methodology employed under subparagraph (A) effectuates 
                the principles described under this subsection, the 
                Commission may employ a combination of any such 
                methodologies.
                    ``(C) Revenue based methodology.--Notwithstanding 
                paragraph (2)(B)(ii), if the Commission determines that 
                a revenues based methodology, by itself or in 
                combination with another methodology or methodologies, 
                effectuates the principles described under this 
                subsection, the Commission may assess the interstate, 
                intrastate, and international revenues of a provider of 
                telecommunications, broadband service, or broadband 
                voice service.
                    ``(D) Limitation.--Nothing in this subsection 
                precludes a State from establishing funding mechanisms 
                to preserve and advance universal service within that 
                State pursuant to subsection (f).
            ``(5) Non-discriminatory eligibility requirement.--A 
        provider of telecommunications, broadband service, or broadband 
        voice service is not exempted from the requirements of this 
        subsection solely on the basis that such provider is not 
        eligible to receive support under this section.
            ``(6) Rulemaking.--Not later than 180 days after the date 
        of enactment of the Internet and Universal Service Act of 2006, 
        the Commission shall complete a rulemaking proceeding to 
        effectuate the provisions of this subsection.
            ``(7) Billing statement.--A contributor to universal 
        service mechanisms under this section shall--
                    ``(A) be entitled, but not required, to place on 
                any bill of a customer a separate line item charge that 
                does not exceed the percentage that such contributor is 
                required to contribute under this section; and
                    ``(B) label such line item charge `Federal 
                Universal Service Fee'.
            ``(8) Definitions.--In this subsection:
                    ``(A) Broadband service.--The term `broadband 
                service' means any service used for transmission of 
                information of a user's choosing with a transmission 
                speed of at least 200 kilobits per second in at least 1 
                direction, regardless of the transmission medium or 
                technology employed, for a fee directly--
                            ``(i) to the public; or
                            ``(ii) to such classes of users as to be 
                        effectively available directly to the public, 
                        including--
                                    ``(I) digital subscriber line 
                                service;
                                    ``(II) cable modem service;
                                    ``(III) spectrum based broadband 
                                service; or
                                    ``(IV) any service providing such 
                                transmission speed that uses advanced 
                                telecommunications capability, as that 
                                term is defined in section 706(c) of 
                                the Telecommunications Act of 1996.
                    ``(B) Broadband voice service.--The term `broadband 
                voice service' means a 2-way voice service used for 
                transmission of information of a user's choosing that 
                is--
                            ``(i) interconnected with a public switched 
                        network; or
                            ``(ii) transmitted, in whole or in part, 
                        over the Internet, as that term is defined in 
                        section 231(e)(3), or over any successor 
                        protocol.''.
            (2) Conforming amendment.--Section 254(b)(4) of the 
        Communications Act of 1934 (47 U.S.C. 254(b)(4)) is amended by 
        striking ``telecommunications services'' and inserting 
        ``telecommunications, broadband service, or broadband voice 
        service''.
    (b) Proper Accounting of Universal Service Contributions.--
            (1) From all budgets.--Notwithstanding any other provision 
        of law, the receipts and disbursements of the universal service 
        contributions collected by the Federal Communications 
        Commission under section 254 of the Communications Act of 1934 
        (47 U.S.C. 254) shall not be counted as new budget authority, 
        outlays, receipts, or deficit or surplus for purposes of--
                    (A) the budget of the United States Government as 
                submitted by the President;
                    (B) the congressional budget;
                    (C) the Balanced Budget and Emergency Deficit 
                Control Act of 1985; or
                    (D) any other statute requiring budget sequesters.
            (2) Additional exemptions.--Section 1341, subchapter II of 
        chapter 15, and sections 3302, 3321, 3322, and 3325 of title 
        31, United States Code, shall not apply to the--
                    (A) collection and receipt of universal service 
                contributions, including the interest earned on such 
                contributions; or
                    (B) disbursement or other obligation of such 
                contributions authorized by the Commission under 
                section 254 of the Communications Act of 1934 (47 
                U.S.C. 254).
    (c) Effective Date.--This section, and the amendments made by this 
section, shall apply to all universal service contribution obligations 
due on or after the date of enactment of this Act.

SEC. 6. NETWORK TRAFFIC ACCOUNTABILITY STANDARDS.

    (a) Network Traffic Identification Accountability Rules.--Section 
251 of the Communications Act of 1934 (47 U.S.C. 251) is amended by 
adding at the end the following:
    ``(j) Identification of Traffic.--
            ``(1) In general.--Not later than 120 days after the date 
        of enactment of the Internet and Universal Service Act of 2006, 
        the Commission shall issue and adopt rules to require each 
        carrier to properly identify the traffic that such carrier 
        originates or transmits in such a manner as to enable a 
        terminating carrier to properly identify, measure, and charge 
        for such traffic.
            ``(2) Required content.--
                    ``(A) Transmission rules.--Any rule adopted under 
                paragraph (1) shall require all carriers--
                            ``(i) originating traffic to transmit 
                        information identifying the originating 
                        carrier, jurisdiction, and party from which 
                        such traffic originates;
                            ``(ii) to transmit such identifying 
                        information without alteration or deletion;
                            ``(iii) except originating carriers to 
                        transmit records identifying the originating 
                        carrier; and
                            ``(iv) to route traffic in accordance with 
                        the local exchange routing guide established by 
                        the industry to ensure traffic is routed on 
                        trunk groups appropriate to the jurisdictional 
                        status of such carrier.
                    ``(B) Alternate routing arrangements.--In 
                fulfilling any requirement under subparagraph (A), a 
                carrier may, if approved in writing by the terminating 
                carrier, use alternate routing arrangements.
                    ``(C) Process rules.--Notwithstanding subparagraph 
                (A), any rule adopted under paragraph (1) shall also 
                require the Commission to establish--
                            ``(i) an expedited informal complaint 
                        process for the enforcement of such rule; and
                            ``(ii) such remedies as may be appropriate 
                        to be imposed on carriers found to be in 
                        violation of such rule.
                    ``(D) Available remedies.--A remedy described under 
                subparagraph (C)(ii) may include--
                            ``(i) the imposition of damages in 
                        accordance with section 209;
                            ``(ii) the imposition of a forfeiture in 
                        accordance with section 501;
                            ``(iii) permitting the terminating carrier 
                        that receives telecommunications traffic not 
                        accompanied by the information required in this 
                        subsection to bill the carrier that delivered 
                        the traffic to the terminating carrier the 
                        charges that would have applied if the 
                        Commission finds that the failure of such 
                        carrier to provide such information caused or 
                        contributed to the inability of the terminating 
                        carrier to bill the proper carrier; or
                            ``(iv) such other remedy as the Commission 
                        determines appropriate.
            ``(3) Definition of carrier.--As used in this section, the 
        term `carrier' means any telecommunications carrier including 
        any broadband, broadband voice, CMRS provider, and any other 
        entity that directly or indirectly obtains telephone numbers, 
        or any successor identifier, from the numbering administrator, 
        or any successor administrator, established under this 
        section.''.
    (b) Separations Freeze.--All separations allocations for 
telecommunications carriers authorized under section 410(c) of the 
Communications Act of 1934 (47 U.S.C. 410(c)) shall be frozen until 
such time as the Commission completes a rulemaking under this 
subsection establishing a comprehensive system of intercarrier 
compensation for all telecommunications and information services 
carried on the network of more than 1 carrier.

SEC. 7. ENSURING INTEGRITY AND ACCOUNTABILITY IN THE SCHOOLS AND 
              LIBRARIES PROGRAM.

    Title IV of the Communications Act of 1934 (47 U.S.C. 401 et seq.) 
is amended by adding at the end the following:

``SEC. 417. UNIVERSAL SERVICE ADMINISTRATOR.

    ``(a) Appointment of USAC as Permanent Administrator.--The 
Universal Service Administrative Company is appointed the permanent 
Administrator of the universal service support mechanisms established 
under section 254.
    ``(b) Oversight.--The Administrator shall be subject to oversight 
by the Commission.
    ``(c) Duties of the Administrator.--The Commission shall define the 
duties and responsibilities of the Administrator.
    ``(d) Accountability and Enforcement.--The Commission, in 
consultation with the Administrator, shall--
            ``(1) ensure the integrity and accountability of all 
        programs established under section 254(h); and
            ``(2) not later than 180 days after the date of enactment 
        of the Internet and Universal Service Act of 2006, establish 
        rules--
                    ``(A) identifying appropriate fiscal controls and 
                accountability standards that apply to the Schools and 
                Libraries Program under section 254(h);
                    ``(B) including a memorandum of understanding, or 
                including contractual relationships, as the Commission 
                determines appropriate, defining the administrative 
                structure and processes by which the Universal Service 
                Administrative Company administers the Schools and 
                Libraries Program under section 254(h);
                    ``(C) creating performance goals and measures for 
                the Schools and Libraries Program under section 254(h), 
                such goals and measures shall be used by the Commission 
                to determine--
                            ``(i) how efficiently and cost-effectively 
                        funds are spent in supporting the 
                        telecommunications needs of schools and 
                        libraries; and
                            ``(ii) areas for improved operations; and
                    ``(D) establishing appropriate enforcement actions, 
                including imposition of sanctions on applicants and 
                vendors who repeatedly and knowingly violate program 
                rules set forth in section 254(h), such as debarment 
                from the program for individuals convicted of crimes or 
                held civilly liable for actions taken in connection 
                with the Schools and Libraries Program.''.

SEC. 8. IMPROVING EFFECTIVENESS OF RURAL HEALTH CARE SUPPORT MECHANISM.

    Section 254(h) of the Communications Act of 1934 (47 U.S.C. 2549h)) 
is amended--
            (1) in paragraph (1), by striking subparagraph (A) and 
        inserting the following:
                    ``(A) Health care providers for rural areas.--
                            ``(i) Discounts.--A telecommunications 
                        carrier, or other provider of communications 
                        services 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 in that State at 
                        a discounted rate that is 25 percent of the 
                        lowest rate available in that State.
                            ``(ii) Limitation.--The discount required 
                        under clause (i) shall be available only to a 
                        public or nonprofit health care provider 
                        located in a rural area.
                            ``(iii) Definition.--For purposes of this 
                        subparagraph, the term `rural area' means--
                                    ``(I) any incorporated or 
                                unincorporated area in the United 
                                Sates, or in the territories or insular 
                                possession of the United States, 
                                including any area within the Federated 
                                States of Micronesia, the Republic of 
                                the Marshall Islands, and the Republic 
                                of Palau, that has not more than 20,000 
                                inhabitants based on the most recent 
                                available population statistics 
                                published in the most recent decennial 
                                census issued by the Census Bureau;
                                    ``(II) any area located outside the 
                                boundaries of any incorporated or 
                                unincorporated city, village, or 
                                borough that has more than 20,000 
                                inhabitants based on the most recent 
                                available population statistics 
                                published in the most recent decennial 
                                census issued by the Census Bureau; or
                                    ``(III) any area that qualified as 
                                a rural area under the rules of the 
                                Commission in effect on December 1, 
                                2004.''; and
            (2) in paragraph (7)--
                    (A) in clause (vi), by striking ``; and'' and 
                inserting a semicolon; and
                    (B) by striking clause (vii) and inserting the 
                following:
                            ``(vii) not-for-profit nursing homes or 
                        skilled nursing facilities;
                            ``(viii) critical access hospitals;
                            ``(ix) emergency medical services 
                        facilities;
                            ``(x) hospice providers;
                            ``(xi) rural dialysis facilities;
                            ``(xii) tribal health clinics;
                            ``(xiii) not-for-profit dental offices;
                            ``(xiv) school health clinics;
                            ``(xv) residential treatment facilities;
                            ``(xvi) consortia of health care providers 
                        consisting of 1 or more entities described in 
                        clauses (i) through (xv); and
                            ``(xvii) any other entity the Commission 
                        determines--
                                    ``(I) eligible to receive 
                                discounted telecommunications service 
                                under paragraph (1)(A); and
                                    ``(II) essential to the health, 
                                education, or safety of the public.''.
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