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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2054 Introduced in House (IH)]

110th CONGRESS
  1st Session
                                H. R. 2054

To reform the universal service provisions of the Communications Act of 
                     1934, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 26, 2007

   Mr. Boucher (for himself, Mr. Terry, Mr. Filner, Mrs. Capito, Mr. 
 Graves, Mrs. Cubin, Mr. Fortenberry, Mr. Manzullo, Mr. King of Iowa, 
 and Mr. Radanovich) introduced the following bill; which was referred 
                to the Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL

 
To reform the universal service provisions of the Communications Act of 
                     1934, 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 ``Universal Service Reform Act of 
2007''.

SEC. 2. DEFINITIONS.

    Section 3(a) of the Communications Act of 1934 (47 U.S.C. 153(a)) 
is amended--
            (1) by redesignating paragraphs (20) through (52) as 
        paragraphs (22) through (54);
            (2) by redesignating paragraphs (11) through (19) as 
        paragraphs (12) through (20), respectively;
            (3) by inserting after paragraph (10) the following new 
        paragraph:
            ``(11) Communications service provider.--The term 
        `communications service provider' means any entity that--
                    ``(A) contributes to or receives universal service 
                support for the most recent calendar quarter ending 
                before the date of enactment of the Universal Service 
                Reform Act of 2007;
                    ``(B) uses telephone numbers or Internet protocol 
                addresses, or their functional equivalents or 
                successors, to offer a service or a capability--
                            ``(i) that provides or enables real-time 2-
                        way voice communications; and
                            ``(ii) in which the voice component is the 
                        primary function; or
                    ``(C) offers, directly to the public, or to such 
                classes of users as to be effectively available 
                directly to the public, a physical transmission 
                facility, whether circuit-switched, packet-switched, a 
                leased line, or using radio frequency transmissions, 
                regardless of the form, protocol, or statutory 
                classification of the service, that allows an end user 
                to obtain access, from a particular end user location, 
                to a network that permits the end user to engage in 
                electronic communications (including 
                telecommunications) with the public.''; and
            (4) by inserting after paragraph (20) (as redesignated by 
        paragraph (2) of this section) the following new paragraph:
            ``(21) High-speed broadband service.--
                    ``(A) Definition.--The term `high-speed broadband 
                service' means a two way network that uses the Internet 
                protocol or a 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 services, facilities, 
                equipment, and applications that enable an end-user to 
                receive communications in Internet protocol format, 
                regardless of whether the communications are voice, 
                data, video, or any other form, at a download receiving 
                rate of 1 megabit per second or greater.
                    ``(B) Commission speed adjustment requirements.--
                The Commission shall review the speed requirement in 
                subparagraph (A) every other year beginning the sixth 
                year after implementation of the Universal Service 
                Reform Act of 2007 and shall make the necessary 
                adjustments to move to higher speeds as deployment and 
                advancement of new technology allows communications 
                service providers to provide higher speed broadband to 
                end users in an economically efficient manner.
                    ``(C) Internet protocol.--The term `Internet 
                protocol' means the Transmission Control Protocol/
                Internet Protocol, or any predecessor or successor 
                protocols to such protocol.''.

SEC. 3. UNIVERSAL SERVICE REFORM.

    (a) In General.--
            Section 254 of the Communications Act of 1934 (47 U.S.C. 
        254) is amended by amending subsections (a) through (e) to read 
        as follows:
    ``(a) Procedures To Reform Universal Service.--
            ``(1) Federal-state joint board on universal service.--
        Within one month after the date of enactment of the Universal 
        Service Reform Act of 2007, the Commission shall institute and 
        refer to the Federal-State Joint Board under section 410(c) of 
        this title a proceeding to recommend changes to any of its 
        regulations in order to implement section 214(e) of this title 
        and this section (as amended by the Universal Service Reform 
        Act of 2007), 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) of this title, 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 within 9 
        months after the date of enactment of the Universal Service 
        Reform Act of 2007.
            ``(2) Commission action.--The Commission shall initiate a 
        single proceeding to consider the recommendations from the 
        Joint Board required by paragraph (1) and shall complete such 
        proceeding within 18 months after the date of enactment of the 
        Universal Service Reform Act of 2007. 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.
    ``(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.
            ``(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 the services the Commission determines to be 
        universal services in accordance with subsection (c), 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 
        communications service providers should make equitable and 
        nondiscriminatory contributions to the preservation and 
        advancement of universal service.
            ``(5) Explicit, specific, and predictable support 
        mechanisms.--There should be explicit, specific, predictable, 
        and sufficient Federal and State mechanisms to preserve and 
        advance universal service.
            ``(6) Competitive neutrality.--Federal and State mechanisms 
        to preserve and advance universal service should be 
        competitively neutral, so that those mechanisms neither 
        unfairly advantage nor disadvantage one communications service 
        provider over another, and neither unfairly favor nor disfavor 
        one technology over another.
            ``(7) 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).
            ``(8) 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 includes the services 
        defined on the date of enactment of the Universal Service 
        Reform Act of 2007 as universal services, as modified by the 
        Commission as necessary to implement the provisions of this 
        Act, high-speed broadband services, and an evolving level of 
        telecommunications and information 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 services--
                    ``(A) are essential to education, public health, or 
                public safety;
                    ``(B) are being deployed in public 
                telecommunications networks by communications service 
                providers; and
                    ``(C) are consistent with the public interest, 
                convenience, and necessity.
            ``(2) Alterations and modifications.--The Joint Board shall 
        consider whether to recommend to the Commission modifications 
        in the definition of the services that are supported by Federal 
        universal service support mechanisms no less than once every 5 
        years.
            ``(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).
            ``(4) High-speed broadband service.--The definition of 
        universal service shall not be construed to exclude eligible 
        communications service providers from using universal service 
        funding for the provision, maintenance, and upgrading of high-
        speed broadband service.
    ``(d) Universal Service Support Contributions.--
            ``(1) Calculating universal service support 
        contributions.--
                    ``(A) In general.--To preserve and advance 
                universal service in accordance with the principles in 
                section (b), the Commission shall assess contributions 
                to universal service support mechanisms from 
                communications service providers in a manner that is 
                equitable, competitively neutral, and 
                nondiscriminatory, and ensures that communications 
                service providers are subject to similar obligations. 
                The Commission may employ any methodology to assess 
                such contributions, including consideration of--
                            ``(i) revenues derived from the provision 
                        of intrastate, interstate, and foreign 
                        communications services by communications 
                        service providers;
                            ``(ii) working telephone numbers used by 
                        communications service providers; or
                            ``(iii) any other current or successor 
                        identifier protocols or connections to the 
                        network used by communications service 
                        providers.
                    ``(B) Use of more than one methodology.--If no one 
                methodology designated under subparagraph (A) 
                effectuates the principles described in this Act, the 
                Commission may employ a combination of any such 
                methodologies.
                    ``(C) Low volume exception.--The Commission shall 
                not materially increase the contributions of 
                communications service providers whose customers 
                typically make a low volume of calls on a monthly 
                basis.
                    ``(D) De minimis exception.--The Commission may 
                exempt a communications service provider 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.
                    ``(E) Group plan exception.--If the Commission uses 
                a methodology under subparagraph (A) based in whole or 
                in part on working telephone numbers, it may provide a 
                discount for additional numbers provided under a group 
                or family pricing plan for residential customers 
                provided in one bill.
            ``(2) Reports.--The Commission shall establish annual 
        reporting requirements for all communications service providers 
        contributing to universal service support mechanisms or 
        receiving universal service support. The reporting requirements 
        shall not impose unnecessary burdens, and shall be technology 
        and provider neutral. The Commission shall periodically review 
        the reporting requirements to ensure that universal service 
        support is used for the provision, maintenance, and upgrading 
        of the facilities for which support is intended.
            ``(3) Universal service support contribution limits.--
                    ``(A) Limitation.--The total amount of universal 
                service support for all universal service support 
                mechanisms other than support for schools, libraries, 
                rural health care, life-line, link-up, and toll 
                limitation shall not exceed the total amount that was 
                collected from all sources for all universal service 
                support mechanisms other than schools, libraries, rural 
                health care, life-line, link-up, and toll limitation in 
                the last year prior to the date of enactment of the 
                Universal Service Reform Act of 2007, as adjusted--
                            ``(i) annually by a growth factor; and
                            ``(ii) once, within one year of the date of 
                        enactment of the Universal Service Reform Act 
                        of 2007, by the amounts that the adjustments in 
                        subsections (e)(3) and (m) increase demand for 
                        universal service support.
                    ``(B) Growth factor.--The growth factor shall be 
                the annual percentage change in the Gross Domestic 
                Product-Chained Price Index (GDP-CPI), or any successor 
                general inflationary factor that the Bureau of Economic 
                Analysis of the Department of Commerce determines shall 
                supersede such index, plus the annual percentage change 
                in the total number of incumbent local exchange carrier 
                working loops in rural, insular, and high cost areas, 
                if that percentage change is greater than zero.
                    ``(C) Intercarrier compensation recovery 
                mechanism.--If at any time after the date of enactment 
                of the Universal Service Reform Act of 2007 the 
                Commission mandates that intercarrier compensation 
                revenues be recovered through an alternative revenue 
                recovery mechanism, such alternative revenue recovery 
                mechanism shall be included in the limitation set forth 
                in subparagraph (A), and the Commission shall adjust 
                such limitation by the amount that such alternated 
                revenue recovery mechanism increases demand for 
                universal service support.
    ``(e) Distribution and Use of Universal Service Support.--
            ``(1) In general.--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 
        facilities-based services for which the support is intended. 
        Any such support should be explicit and sufficient to achieve 
        the purposes of this section.
            ``(2) Uses of universal service support.--The use of 
        universal service support for all rural, insular, and high cost 
        areas--
                    ``(A) should be expanded to include high-speed 
                broadband services;
                    ``(B) should be based on actual costs reasonably 
                incurred in providing such facilities-based services in 
                a service area, exclusive of the cost of acquiring 
                spectrum, except that an eligible telecommunications 
                carrier that is an incumbent local exchange carrier may 
                elect to have the Commission calculate the amount of 
                universal service support payable to such carrier 
                pursuant to section 54.309 of title 47, Code of Federal 
                Regulations (as in effect on the date of the enactment 
                of the Universal Service Reform Act of 2007); and
                    ``(C) should be available to communications service 
                providers that are determined to be eligible 
                telecommunications carriers under section 214(e).
            ``(3) Support for non-rural carriers providing service in 
        rural, insular, and high cost areas.--
                    ``(A) Calculating support.--Except with respect to 
                non-rural carriers serving insular areas, in 
                calculating the need for and distribution of Federal 
                universal service support for eligible 
                telecommunications carriers that serve rural, insular, 
                and high cost areas and that are either non-rural 
                carriers, or (after a one-time election) rural carriers 
                subject to Federal incentive regulation, the Commission 
                shall revise the Commission's support mechanism for 
                rural, insular, and high cost areas to provide support 
                to each wire center to the extent the incumbent local 
                exchange carrier's average forward-looking cost per 
                line for such wire center exceeds 2.75 times the 
                national average cost per line.
                    ``(B) Hold harmless.--In implementing this 
                paragraph, the Commission shall ensure that no non-
                rural carrier receives less Federal support calculated 
                under paragraph (1) than the non-rural carrier would 
                have received under the Commission's support mechanism 
                for rural, insular, and high cost areas as in effect on 
                the day before the date of the enactment of the 
                Universal Service Reform Act of 2007.
            ``(4) Administration: accountability standards.--
                    ``(A) Network traffic identification accountability 
                standards.--
                            ``(i) Network traffic identification 
                        standards.--A communications service provider 
                        shall ensure, to the degree technically 
                        possible, that all traffic that originates on 
                        its network contains, or, in the case of non-
                        originated traffic, preserves, sufficient 
                        information in call signaling to allow for 
                        traffic identification by other communications 
                        service providers that transport or terminate 
                        such traffic, including telephone number 
                        information of the calling and called parties 
                        and such other information as the Commission 
                        deems appropriate. Except as otherwise 
                        permitted by the Commission, to the degree 
                        technically possible, a communications service 
                        provider that transports traffic between 
                        communications service providers shall signal-
                        forward without altering call signaling 
                        information it receives from another 
                        communications service provider.
                            ``(ii) Network traffic identification 
                        rulemaking.--The Commission, in consultation 
                        with the State commissions, shall initiate a 
                        single rulemaking no later than 180 days after 
                        the date of enactment of the Universal Service 
                        Reform Act of 2007 to establish rules and 
                        enforcement provisions for traffic 
                        identification.
                            ``(iii) Network traffic identification 
                        enforcement.--The Commission shall adopt and 
                        enforce clear penalties, fines, and sanctions 
                        under this section.
                    ``(B) Universal service distribution accountability 
                standards.--To ensure fairness and accountability in 
                the distribution of universal service funding 
                contributions, the Commission shall promulgate rules to 
                calculate the level of universal service support to be 
                distributed to all eligible recipients.''.
    (b) Rural Health Care Support Mechanisms.--
            (1) Amendment.--Subparagraph (A) of section 254(h)(1) of 
        the Communications Act of 1934 (47 U.S.C. 254(h)(1)) is amended 
        to read as follows:
                    ``(A) Health care services for rural areas.--Within 
                180 days after the date of enactment of the Universal 
                Service Reform Act of 2007, the Commission shall 
                prescribe regulations that provide that a 
                communications service provider shall, upon, receiving 
                a bona fide request, provide covered 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 communications service provider providing 
                service under this subparagraph shall be entitled to 
                have an amount equal to the difference, if any, between 
                the rates for services provided to health care 
                providers for rural areas in a State and the rates for 
                similar services in urban 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.''.
            (2) Definition of health care provider.--Subparagraph (B) 
        of section 254(h)(7) of such Act (47 U.S.C. 254(h)(7)(B)) is 
        amended to read as follows:
                    ``(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) critical access hospitals;
                            ``(vii) rural hospitals with emergency 
                        rooms;
                            ``(viii) rural health clinics;
                            ``(ix) not-for-profit nursing homes or 
                        skilled nursing homes;
                            ``(x) hospice providers;
                            ``(xi) emergency medical services 
                        facilities;
                            ``(xii) rural dialysis facilities;
                            ``(xiii) elementary, secondary, and post-
                        secondary school health clinics; and
                            ``(xiv) consortia of health care providers 
                        consisting of one or more entities described in 
                        clauses (i) through (xiii).''.
            (3) Definition of rural for health care support.--Section 
        254(h)(7) of such Act is further amended by adding at the end 
        the following new subparagraph:
                    ``(J) Rural area.--Within 180 days after the date 
                of enactment of the Universal Service Reform Act of 
                2007, the Commission shall prescribe regulations that 
                provide that, for purposes of the rural health care 
                universal service support mechanisms established 
                pursuant to this subsection, a `rural area' is--
                            ``(i) any incorporated or unincorporated 
                        place in the United States, its territories and 
                        insular possessions (including any area within 
                        the Federated States of Micronesia, the 
                        Republic of the Marshall Islands and the 
                        Republic of Palau) that has no more than 20,000 
                        inhabitants based on the most recent available 
                        population statistics from the Census Bureau;
                            ``(ii) any area located outside of the 
                        boundaries of any incorporated or 
                        unincorporated city, village, or borough having 
                        a population exceeding 20,000;
                            ``(iii) any area with a population density 
                        of fewer than 250 persons per square mile; or
                            ``(iv) any place that qualified as a `rural 
                        area' and received support from the rural 
                        health care support mechanism pursuant to the 
                        Commission's rules in effect prior to December 
                        1, 2004, and that continues to qualify as a 
                        `rural area' pursuant to such rules.''.
    (c) Schools, Libraries, Rural Health Care, Life-Line, Link-up, and 
Toll Limitation Hold Harmless.--Except as provided in subsections 
(h)(1)(A), (h)(7)(B), and (h)(7)(J) of section 254 of the 
Communications Act of 1934 (47 U.S.C. 254), as amended by subsection 
(b)--
            (1) nothing in this Act (and the amendments made by this 
        Act) shall be construed as limiting, changing, modifying, or 
        altering the amount of support or means of distribution for the 
        schools, libraries, rural health care, life-line, link-up, and 
        toll limitation programs; and
            (2) the Federal Communications Commission shall ensure that 
        such amendments do not result in a decrease of such support to 
        a level below the level for the fiscal year preceding the 
        fiscal year in which this Act is enacted.

SEC. 4. ELIGIBLE RECIPIENTS OF UNIVERSAL SERVICE SUPPORT.

    (a) Amendment.--Section 214(e) of the Communications Act of 1934 
(47 U.S.C. 214(e)) is amended--
            (1) by redesignating paragraphs (3), (4), (5), and (6) as 
        paragraphs (6), (7), (9), and (8), respectively, and reordering 
        such paragraphs in numerical order; and
            (2) by striking paragraphs (1) and (2) and inserting the 
        following:
            ``(1) Eligibility to receive universal service support.--A 
        communications service provider shall be eligible to receive 
        universal service support in accordance with the requirements 
        of this subsection only if such communications service 
        provider--
                    ``(A) uses its own facilities in whole or in part 
                to make available throughout a service area the 
                services that have been determined by the Commission to 
                be universal services pursuant to section 254(c), and 
                adheres to the State carrier-of-last-resort 
                requirements that are imposed on incumbent carriers 
                serving the area;
                    ``(B) advertises the supported services and their 
                associated charges throughout the service area using 
                media of general distribution, and advertises the 
                availability of life-line and link-up services in a 
                manner reasonably designed to reach those likely to 
                qualify for those services;
                    ``(C) demonstrates the ability to remain functional 
                in emergency situations;
                    ``(D) satisfies consumer protection and service 
                quality standards; and
                    ``(E) meets the basic requirements for the 
                deployment of high-speed broadband service, and 
                provides high-speed broadband service, except that the 
                Commission shall establish a process--
                            ``(i) whereby a determination can be made 
                        to waive the requirements of this subparagraph 
                        for 3 years upon application of a 
                        communications service provider demonstrating 
                        that the deployment and provision of high-speed 
                        broadband service is not technically feasible 
                        or would materially impair the communications 
                        service provider's ability to continue to 
                        provide local exchange service throughout its 
                        service area, except that a waiver shall be 
                        deemed automatically granted under this clause 
                        for a communications service provider which can 
                        demonstrate that the cost per line of deploying 
                        and providing high-speed broadband service is 
                        at least three times the average cost of 
                        providing high-speed broadband service among 
                        all recipients of universal service support, 
                        subject to the renewal provisions set forth in 
                        clause (ii);
                            ``(ii) whereby the communications service 
                        provider may seek renewal of such waiver every 
                        3 years for as long as the deployment and 
                        provision of high-speed broadband service is 
                        not technically feasible or would materially 
                        impair the communications service provider's 
                        ability to continue to provide local exchange 
                        service throughout its service area; and
                            ``(iii) whereby any application of a 
                        communications service provider for a waiver 
                        pursuant to clause (i) on which the Commission 
                        has not taken final action within 60 days of 
                        the date of submission to the Commission shall 
                        be deemed granted.
            ``(2) Eligibility criteria.--In addition to the criteria 
        specified in paragraph (1), the Commission shall establish such 
        additional eligibility criteria for the receipt of universal 
        service support by communications service providers as it deems 
        necessary and in the public interest. The criteria established 
        in paragraph (1) and the criteria established by the Commission 
        pursuant to this paragraph shall be used by State commissions 
        in determining which providers shall be designated as eligible 
        recipients of universal service support for the purpose of 
        paragraph (3).
            ``(3) Designation of eligible recipients.--A State 
        commission shall, upon its own motion or upon request, 
        designate as an eligible recipient of universal service support 
        only those providers meeting the requirements of paragraphs (1) 
        and (2).
            ``(4) Grandfather provision.--Recipients of universal 
        service support in any service area prior to the date of 
        enactment of the Universal Service Reform Act of 2007 shall 
        meet the eligibility requirements for eligible recipients of 
        universal service support--
                    ``(A) as described in paragraphs (1)(A) through 
                (D), within one year of the date of enactment of the 
                Universal Service Reform Act of 2007; and
                    ``(B) as described in paragraph (1)(E), within 5 
                years after the date of enactment of the Universal 
                Service Reform Act of 2007.
        Failure of such an eligible recipient of universal service 
        support to maintain and meet the eligibility requirements 
        within the period required by subparagraph (A) or (B) after the 
        date of enactment of the Universal Service Reform Act of 2007 
        shall require the automatic termination of Federal universal 
        service support to that recipient. This paragraph shall not be 
        construed to prohibit such a recipient from obtaining a waiver 
        under paragraph (1)(E).''.
    (b) Definitions.--Paragraph (9) of section 214(e) (as redesignated 
by subsection (a)) is amended to read as follows:
            ``(9) Definitions.--As used in this subsection, the term 
        `service area' means a geographic area that aligns with the 
        area in which a communications service provider is licensed or 
        authorized to provide service 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' or the licensed or 
        authorized service area of any other communications service 
        provider serving an area that overlaps with the service area of 
        a rural telephone company. In the case of an area served by a 
        wireless service provider, `service area' means such company's 
        basic trading area.''.

SEC. 5. REMOVAL OF IMPEDIMENTS TO SUFFICIENT SUPPORT MECHANISMS.

    Section 254 of the Communications Act of 1934 is amended by adding 
at the end the following new subsection:
    ``(m) Removal of Limitations on High Cost Support Mechanisms.--The 
limitations on universal service support contained in section 54.305 of 
the Commission's regulations (47 CFR 54.305), and the individual caps 
imposed upon carriers contained in section 36.631 of the Commission's 
regulations (47 CFR 36.631), shall cease to be effective on the date of 
enactment of the Universal Service Reform Act of 2007. The Commission 
shall not, on or after such date of enactment, enforce or reimpose 
limitations on support mechanisms for rural telephone companies or 
exchanges they acquire.''.

SEC. 6. SCOPE OF SUPPORT.

    Section 254 of the Communications Act of 1934 (47 U.S.C. 254) is 
further amended by adding at the end the following new subsection:
    ``(n) Scope of Support.--The Commission in implementing the 
requirements of this section as amended by the Universal Service Reform 
Act of 2007 with respect to the distribution and use of Federal 
universal service support shall not limit such distribution and use to 
a single connection or primary line, and all residential and business 
lines served by an eligible telecommunications carrier shall be 
eligible for Federal universal service support.''.

SEC. 7. APPLICATION OF ANTIDEFICIENCY ACT; INVESTMENT OF CONTRIBUTIONS.

    Section 254 of the Communications Act of 1934 (47 U.S.C. 254) is 
further amended by adding at the end the following new subsections:
    ``(o) Proper Accounting of Universal Service Contributions.--
            ``(1) From all budgets.--Notwithstanding any other 
        provision of law, the receipts and disbursements of universal 
        service contributions 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 law 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--
                    ``(A) the collection and receipt of universal 
                service contributions, including the interest earned on 
                such contributions; or
                    ``(B) disbursements or other obligations authorized 
                by the Federal Communications Commission under section 
                254 of the Communications Act of 1934 (47 U.S.C. 254).
    ``(p) Investment of Universal Service Fund Contributions.--
Notwithstanding any other provision of law, including sections 3302, 
3321, 3322, and 3325 of title 31, United States Code, the cash balance 
of receipts of universal service contributions collected pursuant to 
this section shall be invested by the Commission or its designee in 
conservative, liquid, interest-bearing investment vehicles of 
government backed securities until such time as such receipts are 
disbursed pursuant to this section 254.''.

SEC. 8. STATE AUTHORITY.

    Section 254(f) of the Communications Act of 1934 (47 U.S.C. 254(f)) 
is amended to read as follows:
    ``(f) State Authority.--
            ``(1) In general.--A State may adopt regulations not 
        inconsistent with the Commission's rules to preserve and 
        advance universal service. In adopting those rules, a State may 
        require communications service providers to contribute to 
        universal service on the basis of--
                    ``(A) revenues derived from the provision of 
                intrastate, interstate, and foreign communications 
                services by communications service providers;
                    ``(B) working telephone numbers used by 
                communications service providers; or
                    ``(C) any other current or successor identifier 
                protocols or connections to the network used by 
                communications service providers.
            ``(2) Disregard of interstate component.--A State may 
        require communications service providers to contribute under 
        paragraph (1) regardless of whether the service contains an 
        interstate component.
            ``(3) Guidelines.--Regulations adopted by a State under 
        this subsection shall result in a specific, predictable, and 
        sufficient mechanism to support universal service and shall be 
        competitively and technologically neutral, equitable, and 
        nondiscriminatory.''.

SEC. 9. REPORT TO CONGRESS.

    The Commission shall, not later than 3 years after the date of 
enactment of this Act and triennially thereafter, report to Congress 
regarding the availability of the services designated by the Commission 
as universal services to all Americans, including schools, libraries, 
rural health care providers, and low income consumers.
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