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[Senate Report 105-226]
[From the U.S. Government Publishing Office]

105th Congress                                                   Report
                                SENATE

 2d Session                                                     105-226
_______________________________________________________________________

 
                       INTERNET FILTERING SYSTEMS

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                    on

                                 S.1619

                 June 25, 1998.--Ordered to be printed

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       one hundred fifth congress

                             second session

                     JOHN McCAIN, Arizona, Chairman

TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             WENDELL H. FORD, Kentucky
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas            Virginia
OLYMPIA SNOWE, Maine                 JOHN F. KERRY, Massachusetts
JOHN ASHCROFT, Missouri              JOHN B. BREAUX, Louisiana
BILL FRIST, Tennessee                RICHARD H. BRYAN, Nevada
SPENCER ABRAHAM, Michigan            BYRON L. DORGAN, North Dakota
SAM BROWNBACK, Kansas                RON WYDEN, Oregon

                       John Raidt, Staff Director

                       Mark Buse, Policy Director

     Ivan A. Schlager, Democratic Chief Counsel and Staff Director

             James S. W. Drewry, Democratic General Counsel

105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-226
_______________________________________________________________________

                       INTERNET FILTERING SYSTEMS

                                _______
                                

                 June 25, 1998.--Ordered to be printed

_______________________________________________________________________

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

                              R E P O R T

                         [To accompany S. 1619]

    The Committee on Commerce, Science, and Transportation, to 
which was referred S. 1619, ``A Bill to direct the Federal 
Communications Commission to study systems for filtering or 
blocking matter on the Internet, to require the installation of 
such a system on computers in schools and libraries with 
Internet access, and for other purposes'', having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                          Purpose of the Bill

  The purpose of the bill is to protect American children from 
exposure to harmful material while accessing the Internet from 
a school or library.

                          Background and Needs

CONGRESSIONAL CONCERN

  Pornography and other material harmful to minors is 
widespread on the Internet. According to Wired magazine, there 
are currently some 28,000 adult Web sites promoting hard-and 
soft-core pornography. Other Web sites depict graphic violence 
or provide how-to instructions on drug or bomb-making. Still 
other sites allow Internet users to access online highstakes 
gambling. Furthermore, sexual predators are using the Internet 
to entice and traumatize their victims through the use of 
Internet chat rooms and the transmission of pornographic 
pictures and materials.
  The danger posed by this material is particularly acute for 
the nation's children, who are unable to guard themselves with 
the sophistication of an adult. The Milwaukee Journal Sentinel 
reports how a 39-year-old man, residing in Florida, used 
Internet chat rooms to lure 14 and 15-year-old girls, living as 
far away as Pennsylvania and Wisconsin, to hotel rooms where he 
sexually assaulted them. The New York Daily News tells how a 
14-year-old boy was repeatedly raped by an older man he met in 
a chat room on America Online. A mother recounts in the Ladies 
Home Journal how her 13-year-old son suffered first and second 
degree burns over more than 25 percent of his body after a 
failed attempt to manufacture a bomb from instructions found on 
an Internet Web site. In addition, first-hand accounts of 
educators, parents, and civic groups attest to the harm caused 
to children by the easy access to Internet pornography, 
including child pornography, bestiality, sadomasochism, and 
torture.
  There is currently little or no protection for children from 
harmful material on the Internet. While searching the Internet 
using innocuous words, such as ``teen,'' ``nurse,'' or 
``cheerleader,'' children can inadvertently run into adult, 
pornographic Web sites. Although some of these sites require a 
credit card or adult access number to gain access to sexual 
material, many display pornographic advertisements and sample 
pictures to entice viewers to adult-rated sites. These 
pornographic images are readily available to children without 
the need to present any verification of their age.

EXISTING SOLUTIONS

  There is currently no limit on what may be placed on the 
Internet. In 1996, the Congress passed the Communications 
Decency Act (``CDA'') as part of the Telecommunications Act of 
1996. \1\  The CDA sought to prohibit the transmission of 
obscene or indecent messages to minors through the Internet by 
imposing criminal sanctions on the sender, unless the sender 
took good faith actions to restrict access by requiring certain 
designated forms of age verification. \2\  The CDA was signed 
into law by President Clinton on February 8, 1996, and was 
immediately challenged as unconstitutional. On June 11, 1996, a 
three-judge District Court entered a preliminary injunction 
against enforcement of the challenged provisions of the CDA. 
\3\  The case was appealed to the Supreme Court. On June 26, 
1997, the Supreme Court agreed with the District Court that the 
CDA abridged the freedom of speech protected by the First 
Amendment. \4\  The Court found that speech placed on the 
Internet deserves the highest level of protection under the 
First Amendment and that, by placing broad prohibitions on what 
could be put on the Internet, the CDA imposed an unacceptably 
heavy burden on protected speech and was not narrowly tailored 
to meet the government's interest in protecting children.
---------------------------------------------------------------------------
    \1\  See Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat. 
56 (1996).
    \2\  See Communications Decency Act of 1996, 47 U.S.C. Sec.  223(a) 
et seq. (Supp. 1997).
    \3\  See ACLU v. Reno, 929 F.Supp. 824 (E.D. Pa. 1996).
    \4\  See Reno v. ACLU, 521 U.S. -- -- (1997) (slip. op.)
---------------------------------------------------------------------------
  Filtering or blocking what comes out of the Internet is an 
alternative method of protecting children from harmful 
material. Filtering or blocking systems restrict what the user 
may receive over the Internet, rather than what a speaker may 
put on to the Internet. Several such systems are currently 
commercially available. \5\  There are two main methods 
employed by filtering or blocking systems to restrict minors' 
access to harmful material. One method restricts access based 
on the appearance of key words or phrases in the text of 
Internet material. For example, the user can set the system to 
block material containing the key word ``bestiality'' or ``teen 
sex.'' Certain systems also prevent the transmission of 
personal data, such as addresses, phone numbers, and credit 
card numbers. The other method restricts access to sites 
previously found to be inappropriate. For example, the 
filtering or blocking system contains a database of sites found 
to contain objectionable material, such as sexually explicit 
material, excessive violence, hate speech, gambling, or illicit 
drug use, and prevents users from accessing those sites. This 
list is continuously updated by the company which provides the 
filtering or blocking system.
---------------------------------------------------------------------------
    \5\  Some of the more commonly available examples are CyberPatrol 
by Microsystems Software, CYBERsitter by Solid Oak Software, Net Nanny 
by Net Nanny Ltd., and SurfWatch by Spyglass.
---------------------------------------------------------------------------
  While neither method is perfect, both provide reasonable 
means of protecting children from the majority of harmful 
material on the Internet. These systems promise to become even 
more effective in the future. Indeed, the Supreme Court in Reno 
v. ACLU noted that ``currently available user-based software 
suggests that a reasonably effective method by which parents 
can prevent their children from accessing sexually explicit and 
other material which parents may believe is inappropriate for 
their children will soon be widely available.'' (emphasis 
omitted). \6\  However, these systems can be effective only if 
they are actually used.
---------------------------------------------------------------------------
    \6\  Reno v. ACLU, 521 U.S. at -- -- .
---------------------------------------------------------------------------

APPROACH OF S. 1619

  Although the best protection for children from harmful online 
content is close supervision by their parents, this supervision 
is not possible when children use the Internet while away from 
home in schools and libraries. Therefore, as schools and 
libraries become increasingly connected to the Internet, it is 
incumbent on them to assume a supervisory role in protecting 
children from harmful material encountered on the Internet.
  S. 1619 is intended to ensure that schools and libraries will 
effectively participate in the supervision of children's 
Internet use by taking the steps necessary to prevent children 
from being exposed to harmful online content. As the use of the 
Internet by schools and libraries expands through the receipt 
of federal universal service assistance, S. 1619 seeks to make 
sure that schools and libraries will have the tools necessary 
to protect children from material inappropriate for their age 
or for the school or library environment.

CONSTITUTIONAL ANALYSIS

  S. 1619 seeks to protect children from harmful material in a 
way that is least intrusive on the self-governance of schools 
and libraries, and on the right of adults to engage in 
constitutionally-protected speech.

SPENDING POWER

  The requirements of S. 1619 attempt to balance the right of 
States to administer their schools and libraries with the power 
of Congress to see that federal funds are appropriately used. 
The universal service assistance program is a form of subsidy 
undertaken as part of the spending power of Congress. Although 
the Supreme Court has recently affirmed that ``[education is an 
area] where States historically have been sovereign,'' \7\  
Congress may impose reasonable conditions on the receipt of 
federal funds or subsidies as part of its spending power. \8\  
These conditions must be stated clearly and unambiguously. \9\  
Additionally, the conditions cannot be so coercive as to become 
compulsive regulation of powers given to the States under the 
Constitution, nor can the conditions violate any provisions of 
the Constitution. \10\ 
---------------------------------------------------------------------------
    \7\  United States v. Lopez, 514 U.S. 549, 564 (1995).
    \8\  See New York v. United States, 505 U.S. 144 (1992); South 
Dakota v. Dole, 483 U.S. 203 (1987).
    \9\  See Pennhurst State Sch. and Hosp. v. Halderman, 451 U.S. 1 
(1981).
    \10\  See 483 U.S. at 209-11.
---------------------------------------------------------------------------
  The Committee has good reason to believe that the filtering 
or blocking conditions set on the receipt of universal service 
assistance to schools and libraries are constitutional. The 
condition of protecting minors from inappropriate Internet 
matter through the installation of filtering or blocking 
systems is reasonably related to the purpose of providing 
schools and libraries with Internet services to fulfill their 
educational mission. \11\  The certification requirements 
contained in S. 1619 provide clear notice of the conditions 
placed on the acceptance of the federal funds. The universal 
service assistance only provides a discount on the acquisition 
of telecommunication services; the school or library must still 
pay for a portion of the acquisition. Thus, ineligibility to 
receive a discount on services does not rise to the level of 
impermissible coercion by which failure to meet a condition 
results in the forfeiture of all funding. \12\  Furthermore, S. 
1619 intentionally leaves not only the selection of the 
particular filtering or blocking system, but also the 
determination of what material constitutes ``matter deemed to 
be inappropriate for minors,'' to the local school and library 
authorities.
---------------------------------------------------------------------------
    \11\  See 47 U.S.C. Sec.  254(h)(1)(B) (stating that universal 
service assistance be provided to educational providers and libraries 
``for educational purposes.'')
    \12\  Compare South Dakota v. Dole, 483 U.S. 203 (1987) 
(withholding of ten percent of federal highway funds of States that 
fail to implement a 21-year old minimum drinking age is an incentive, 
not coercion) with Commonwealth of Virginia Dept of Educ. v. Riley, 106 
F.3d 559 (4th Cir. 1997)(en banc) (holding that the withholding of the 
entirety of a state's sixty million dollar federal education grant due 
to a failure to meet a condition affecting 126 students was 
impermissible coercion).
---------------------------------------------------------------------------
  In two recent cases, Rust v. Sullivan, 500 U.S. 173 (1991) 
and Rosenberger v. Rector and Visitors of the University of 
Virginia, 515 U.S. 819 (1995), the Supreme Court has examined 
the relationship of the First Amendment and the government's 
right to subsidize speech. In Rust, the Court upheld a 
governmental prohibition on federally funded family planning 
projects from advocating, promoting, or advising on abortion. 
The Court recognized that when the government spends public 
funds to promote a particular policy, the government is 
entitled to say what it wishes. \13\  Furthermore, when the 
government disburses public funds to private entities to 
promote a particular policy, ``it may take legitimate and 
appropriate steps to ensure that its message is neither garbled 
nor distorted . . . .'' \14\  In Rosenberger, however, the 
Court held that a University's refusal to reimburse the 
publication expenses of a Christian student newspaper, while 
reimbursing the expenses of other student publications, was 
unconstitutional under the First Amendment. Although the Court 
affirmed that the State may make content-based spending 
decisions, \15\  the Court determined that the University was 
not the speaker or the subsidizer of the message. Instead, the 
Court found that the University expended the funds to encourage 
a diversity of views from private speakers, and therefore was 
required to maintain viewpoint neutrality in its funding 
decisions. \16\  Thus, the key factors appear to be the extent 
that the government or its agent is the speaker or subsidizer 
of the message, and to what extent the government has opened 
the forum to outside, private speakers. \17\ 
---------------------------------------------------------------------------
    \13\  See Rosenberger, 515 U.S. at 833 (citing Rust, 500 U.S. at 
194).
    \14\  See id. (citing Rust, 500 U.S. at 196-200)
    \15\  ``[W]hen the State is the speaker, it may make content-based 
choices. When the University determines the content of the education it 
provides, it is the University speaking, and we have permitted the 
government to regulate the content of what is or is not expressed when 
it is the speaker or when it enlists private entities to convey its own 
message.'' Rosenberger, 515 U.S. at 833.
    \16\  See id. at 834.
    \17\  Forum analysis is more fully discussed infra., at II.A.
---------------------------------------------------------------------------
  S. 1619 would pass the analyses used in Rust and Rosenberger. 
Because the Internet material is to be used in the schools as 
part of their curriculum, the government, through the school, 
remains the speaker, or at least the subsidizer of the Internet 
speech. Through universal service assistance the government is 
seeking to promote a policy of connecting schools and libraries 
to the Internet for educational purposes. The introduction of 
inappropriate material, such as pornography, would tend to 
``garble'' and ``distort'' the educational message the 
government is seeking to promote. The required installation of 
filtering or blocking systems is viewed as an appropriate 
measure to ensure that the government's message is not 
distorted. If the school or library strongly desires to provide 
unfiltered access to the Internet, it is free to do so with its 
own funds, or through other governmental programs. Furthermore, 
even assuming that the school and library uses the Internet to 
encourage a diversity of views of private speakers, there is 
nothing in S. 1619 that necessitates a violation of viewpoint 
neutrality. S. 1619 seeks to filter or block material based on 
its inappropriate content, not based on any particular 
viewpoint. Thus, S. 1619 still meets the constitutional 
requirements of the spending power, as set forth in Rust and 
Rosenberger.

FIRST AMENDMENT

  S. 1619 is intended to protect children from the harmful 
effects of inappropriate material consistent with the freedom 
of speech guaranteed under the First Amendment. Under First 
Amendment jurisprudence, courts have traditionally examined the 
forum in which the speech is conducted to determine what, if 
any, legitimate restrictions may be placed on speech. 
Additionally, any governmental restriction must be examined for 
overbreadth and vagueness, in order to ensure that the 
regulation provides reasonable precision of what speech is to 
be limited.

FORUM ANALYSIS

  According to the forum analysis used by the Supreme Court, an 
elementary or secondary school is a nonpublic forum in which 
the government may prescribe content-based restrictions on 
subject matter and speaker identity, so long as the 
restrictions are reasonable in light of the purpose of the 
forum and are viewpoint neutral. \18\  Although students do not 
``shed their constitutional rights to freedom of speech . . . 
at the school house gate,'' \19\  the rights of students in 
public elementary or secondary schools are not coextensive with 
the rights of adults. \20\  Thus, the government and its agents 
have considerable discretion to control what goes on in their 
schools, so long as their actions are reasonable and viewpoint 
neutral.
---------------------------------------------------------------------------
    \18\  See Perry Educ. Assoc. v. Perry Local Educator's Assoc., 460 
U.S.. 37 (1983).
    \19\  Tinker v. Des Moines Indep. Community Sch. Dist., 393 U.S. 
503, 506 (1969).
    \20\  See Hazelwood Sch. Dist. v. Kuhlmeier, 484 U.S. 260 (1988).
---------------------------------------------------------------------------
  S. 1619 does not require any school to filter or block 
material based on the viewpoint expressed. It only requires 
schools to filter or block material because the content of that 
material is inappropriate for minors in a school setting. In a 
different context, a court has already upheld a similar policy 
instituted by a school district that prohibited the showing of 
films rated ``R'' by the Motion Picture Association of America 
(``MPAA''). \21\  The court found that the school district's 
reliance on the rating standards of the MPAA was a reasonable 
way of preventing children from being exposed to films 
containing excessive sex, violence, or profane language. \22\ 
---------------------------------------------------------------------------
    \21\  See Borger v. Bisciglia, 888 F.Supp. 97 (E.D. Wisc. 1995).
    \22\  See id. at 100-1.
---------------------------------------------------------------------------
  A public library, however, is considered to be a public forum 
for the acquisition of knowledge, and any regulation affecting 
this purpose must pass strict constitutional scrutiny. \23\  
Strict scrutiny requires the government to show that the 
restriction on speech serves a compelling governmental interest 
and is narrowly tailored to achieve that interest, in such a 
way least burdensome to constitutionally-protected speech. \24\ 

---------------------------------------------------------------------------
    \23\  See Kreimer v. Bureau of Police for Morristown, 958 F.2d 1242 
(1992).
    \24\  See Sable Communications of Cal., Inc. v. F.C.C., 492 U.S. 
115, 126 (1989).
---------------------------------------------------------------------------
  Courts have repeatedly found that the protection of minors 
from harmful materials is a compelling governmental interest. 
\25\  S. 1619 seeks to protect children from harmful materials 
by filtering or blocking inappropriate material in schools and 
libraries. According to Supreme Court precedent, this objective 
would be deemed a compelling governmental interest.
---------------------------------------------------------------------------
    \25\  See Sable, supra, note 24; New York v. Ferber, 458 U.S. 747, 
756-7 (1982); F.C.C. v. Pacifica Found., 438 U.S. 726, 749 (1978); 
Ginsberg v. New York, 390 U.S. 629, 639 (1968).
---------------------------------------------------------------------------

OVERBREADTH AND VAGUENESS

  S. 1619 is also narrowly tailored to achieve this compelling 
governmental interest. It does not impose any burden on what 
materials adults may place on to the Internet. In Reno v. ACLU, 
the Supreme Court suggested that the use of filtering or 
blocking systems in order to regulate what comes out of the 
Internet is a more narrowly-tailored method of protecting 
children from harmful Internet material than an attempt to 
criminalize what is placed on the Internet. \26\  Much of the 
material sought to be filtered or blocked consists of obscenity 
or child pornography, neither of which is accorded First 
Amendment protection. \27\  Furthermore, by requiring that only 
one computer with Internet access in a library needs to employ 
a filtering or blocking system, S. 1619 does not prevent adults 
from engaging in constitutionally-protected material in public 
libraries.
---------------------------------------------------------------------------
    \26\  See Reno v. ACLU, 521 U.S. at -- --.
    \27\  See Miller v. California, 413 U.S. 15 (1973) (obscenity); 
Roth v. United States, 354 U.S. 476 (1957) (obscenity); Osborne v. 
Ohio, 495 U.S. 103 (1990) (child pornography); New York v. Ferber, 458 
U.S. 747, 756-7 (1982) (child pornography).
---------------------------------------------------------------------------
  The installation of filtering or blocking systems is the 
least restrictive means of achieving the government's 
compelling interest. A ``standard of use'' policy, by itself, 
would be insufficient to protect children from harmful Internet 
material. A ``standard of use'' policy relies on the 
affirmative pledge of students not to actively seek harmful 
material on the Internet. It does not address the harm caused 
to children by the inadvertent access to harmful materials 
through the use of innocuous search terms, such as 
``cheerleader,'' or ``nurse.'' A child may be traumatized by 
exposure to hard-core pornography using innocuous search terms, 
even though the child did not violate the school's standard of 
use policy by intentionally seeking out inappropriate material. 
In addition, a student who ignores the standard of use policy 
may expose other children to harmful material found on the 
Internet at the school or library. Although the student would 
be subject to disciplinary action after the fact, the damage 
would be already done to the other children exposed to the 
harmful material. Thus, a ``standard of use'' policy is not an 
alternative, less-restrictive means of achieving the compelling 
governmental interest in protecting children from harmful 
Internet material.
  Under S. 1619, the government is expressly banned from 
prescribing what material constitutes ``matter deemed to be 
inappropriate for minors.'' It is expected that the school and 
library authorities that install the filtering or blocking 
systems will clarify and make concrete this standard according 
to their local community's norms. S. 1619 places the 
determination of what material is inappropriate for minors in 
the hands of the local school or library authorities, which are 
best equipped to make that determination based on their 
knowledge of the local community and their traditional role of 
acting in loco parentis.
  Schools and libraries can tailor the filtering or blocking 
systems to meet the standards of their local communities. 
Authorities can select what key words and phrases, if any, they 
wish to filter or block. They are able to add and delete Web 
sites to the database of unapproved sites. They can select 
system providers whose standards of filtering most match the 
standards of the local community. Finally, they can temporarily 
turn off the filtering or blocking system when it is 
appropriate to do so and the governmental interest would still 
be met.

                          Legislative History

  Senator McCain, the chairman of the Committee on Commerce, 
Science, and Transportation, introduced S. 1619 on February 9, 
1998. Senators Hollings, Coats, Murray, Stevens, Inouye, 
Hutchison, Kohl, Bond, and Abraham are cosponsors.
  The full Committee held a hearing on Internet indecency on 
February 10, 1998. The hearing consisted of testimony from 
Senator Coats and two panels of speakers, which represented the 
interests of law enforcement, the Internet adult entertainment 
industry, schools, and Internet industry associations. 
Witnesses included an undercover police detective assigned to 
investigate child pornography and child sexual exploitation on 
the Internet, the president of a major commercial online 
supplier of adult entertainment, the coordinator of 
instructional technologies from an Arizona school district, and 
representatives of Internet industry associations.
  On March 12, 1998, in open executive session the Committee 
ordered the bill to be reported favorably without amendment.

                      Summary of Major Provisions

  As reported, S.1619 would: (1) require schools seeking 
universal service assistance to certify that they have selected 
and installed a system to block or filter material available on 
the Internet which is deemed to be inappropriate for minors; 
(2) require libraries seeking universal service assistance to 
certify that at least one computer with Internet access employs 
a system to filter or block matter deemed to be inappropriate 
for minors; and (3) specify that the determination of what 
constitutes material deemed to be inappropriate for minors 
shall be made locally by the school or library seeking 
certification.

                            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:

       [Insert CBO letter, attached as page(s) ---- through ----]

                      Regulatory Impact Statement

    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

  A precise number of schools and libraries applying for 
universal service assistance under Section 254(h)(1)(B) is not 
available at this time. As of June 1998, the Schools and 
Libraries Corporation had received about 45,000 applications. 
Due to the permissive eligibility standards envisioned by 
Section 254(h)(1)(B), it is conceivable that a majority of 
schools and libraries will apply for some sort of universal 
service assistance. There are currently about 97,000 public 
elementary and secondary schools in the United States, which 
are potentially eligible for assistance. In addition, there are 
currently about 16,000 private elementary and secondary schools 
in the United States with an endowment of less than $50 million 
that are also potentially eligible for assistance. There are an 
estimated 9,000 public libraries in the United States.

                            economic impact

  This bill will add marginally to the cost of connecting to 
the Internet for schools and libraries. Filtering and blocking 
systems are included in the categories of universal service 
providers covered by Section 254. Under the need-based matrix, 
universal service assistance will provide up to a 90% discount 
on the purchase price of these systems. The remainder will have 
to be incurred by the schools or libraries. The cost of these 
systems is anticipated to be minimal, and is not expected to 
have a significant economic impact on the schools or libraries 
installing them.

                                privacy

  Because the filtering or blocking system is entirely user-
based, there will be no impact on personal privacy as a result 
of this legislation. In addition, because sites are blocked 
before children have access to them, there will be less need to 
trace where children have been on the Internet in order to 
enforce a ``standard of use'' policy.

                               paperwork

  Schools and libraries applying for universal service 
assistance already are required to fill out application forms 
for the Federal Communications Commission (FCC) in order to 
qualify for the program. Implementation of this bill will add 
an additional certification requirement to this application. It 
is intended that this certification requirement will be 
minimal, and will consist of no more than an affirmation that 
the school or library has met the requisite certification 
requirement. In the case of a library changing its filtering or 
blocking system, or discontinuing the use of such as system 
after installation, an additional notification will have to be 
made to the FCC.

                      Section-by-section Analysis

SECTION 1. NO UNIVERSAL SERVICE FOR SCHOOLS OR LIBRARIES THAT FAIL TO 
                    IMPLEMENT A FILTERING OR BLOCKING SYSTEM FOR 
                    COMPUTERS WITH INTERNET ACCESS

  This is the only section of the bill. Section 1 (a) adds a 
new subsection (l) to section 254 of the Communications Act of 
1934 (all section references are to the Communications Act of 
1934, unless otherwise noted).
  New section 254(l)(1) sets a general condition that no 
universal service assistance can be provided to any elementary 
or secondary school, or any library, without meeting the 
certification requirements of new subsections (l)(2) and 
(l)(3).
  New section 254(l)(2) requires that, before receiving 
universal service assistance, an elementary or secondary school 
must certify to the FCC that it has: (A) selected a system for 
computers with Internet access to filter or block matter deemed 
to be inappropriate for minors; and (B) installed, or will 
install as soon as it obtains computers with Internet access, a 
system to filter or block such matter. This certification can 
be made by the school board or other authority with 
responsibility for administration of the school.
  New section 254(l)(3) requires that, before receiving 
universal service assistance, a library that has a computer 
with Internet access must certify to the FCC that, on one or 
more of its computers with Internet access, it employs a system 
to filter or block matter deemed to be inappropriate for 
minors. If a library that makes a certification changes the 
system it employs or ceases to employ any such system, it must 
notify the FCC within 10 days after implementing the change or 
ceasing to employ the system.
  The phrase ``a system to filter or block'' is intended to 
provide maximum discretion to the certifying authority in its 
selection of such a system. The selection is not intended to be 
limited to software-based systems, but it is intended to 
encompass all technologies available now and as technology 
develops. The Committee does not intend to impose the 
certification requirement on computers that are accessed solely 
by adults, such as school nurses, or library or school staff, 
administrators, and teachers. The Committee anticipates that a 
library possessing only one computer with Internet access will 
enable adults to turn off the filtering or blocking system 
during use by adults, in order to preserve the ability of 
adults to engage in speech constitutionally protected for 
adults.
  New section 254(l)(4) provides that the determination of what 
matter is inappropriate for minors shall be made by the school, 
school board, library, or other authority responsible for 
making the required certification. No agency or instrumentality 
of the United States Government may: (A) establish criteria for 
making that determination; (B) review the determination made by 
the certifying school, school board, library, or other 
authority; or (C) consider the criteria employed by the 
certifying school, school board, library, or other authority in 
the administration of universal service assistance.
  Section 1(b) of the bill consists of conforming changes to 
the text of existing section 254(h)(1)(B) to take into account 
the certification requirements of the new section 254(l).

                        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):

SEC. 254. [47 U.S.C. 254] UNIVERSAL SERVICE.

    (a) Procedures to Review Universal Service Requirements.--
            (1) Federal-state joint board on universal 
        service.--Within one month after the date of enactment 
        of the Telecommunications Act of 1996, the Commission 
        shall institute and refer to a Federal-State Joint 
        Board under section 410(c) a proceeding to recommend 
        changes to any of its regulations in order to implement 
        sections 214(e) and this section, 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), 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 9 months 
        after the date of enactment of the Telecommunications 
        Act of 1996.
            (2) Commission action.--The Commission shall 
        initiate a single proceeding to implement the 
        recommendations from the Joint Board required by 
        paragraph (1) and shall complete such proceeding within 
        15 months after the date of enactment of the 
        Telecommunications Act of 1996. 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. Thereafter, the Commission shall 
        complete any proceeding to implement subsequent 
        recommendations from any Joint Board on universal 
        service within one year after receiving such 
        recommendations.
    (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 telecommunications and 
        information services, 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 providers of telecommunications 
        services should make an equitable and nondiscriminatory 
        contribution to the preservation and advancement of 
        universal service.
            (5) Specific and predictable support mechanisms.--
        There should be specific, predictable and sufficient 
        Federal and State mechanisms to preserve and advance 
        universal service.
            (6) 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).
            (7) 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 is an evolving 
        level of telecommunications 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 telecommunications services--
                    (A) are essential to education, public 
                health, or public safety;
                    (B) have, through the operation of market 
                choices by customers, been subscribed to by a 
                substantial majority of residential customers;
                    (C) are being deployed in public 
                telecommunications networks by 
                telecommunications carriers; and
                    (D) are consistent with the public 
                interest, convenience, and necessity.
            (2) Alterations and modifications.--The Joint Board 
        may, from time to time, recommend to the Commission 
        modifications in the definition of the services that 
        are supported by Federal universal service support 
        mechanisms.
            (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).
    (d) Telecommunications Carrier Contribution.--Every 
telecommunications carrier that provides interstate 
telecommunications services shall contribute, on an equitable 
and nondiscriminatory basis, to the specific, predictable, and 
sufficient mechanisms established by the Commission to preserve 
and advance universal service. The Commission may exempt a 
carrier or class of carriers from this requirement if the 
carrier's telecommunications activities are limited to such an 
extent that the level of such carrier's contribution to the 
preservation and advancement of universal service would be de 
minimis. Any other provider of interstate telecommunications 
may be required to contribute to the preservation and 
advancement of universal service if the public interest so 
requires.
    (e) Universal Service Support.--After the date on which 
Commission regulations implementing this section take effect, 
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 services for which the support is 
intended. Any such support should be explicit and sufficient to 
achieve the purposes of this section.
    (f) State Authority.--A State may adopt regulations not 
inconsistent with the Commission's rules to preserve and 
advance universal service. Every telecommunications carrier 
that provides intrastate telecommunications services shall 
contribute, on an equitable and nondiscriminatory basis, in a 
manner determined by the State to the preservation and 
advancement of universal service in that State. A State may 
adopt regulations to provide for additional definitions and 
standards to preserve and advance universal service within that 
State only to the extent that such regulations adopt additional 
specific, predictable, and sufficient mechanisms to support 
such definitions or standards that do not rely on or burden 
Federal universal service support mechanisms.
    (g) Interexchange and Interstate Services.--Within 6 months 
after the date of enactment of the Telecommunications Act of 
1996, the Commission shall adopt rules to require that the 
rates charged by providers of interexchange telecommunications 
services to subscribers in rural and high cost areas shall be 
no higher than the rates charged by each such provider to its 
subscribers in urban areas. Such rules shall also require that 
a provider of interstate interexchange telecommunications 
services shall provide such services to its subscribers in each 
State at rates no higher than the rates charged to its 
subscribers in any other State.
    (h) Telecommunications Services for Certain Providers.--
            (1) In general.--
                    (A) Health care providers for rural 
                areas.--A telecommunications carrier 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 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 telecommunications carrier providing service 
                under this paragraph 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 
                provided to other customers in comparable rural 
                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.
                    (B) Educational providers and libraries.--
                [All telecommunications] Except as provided by 
                subsection (l), all telecommunications carriers 
                serving a geographic area shall, upon a bona 
                fide request for any of its services that are 
                within the definition of universal service 
                under subsection (c)(3), provide such services 
                to elementary schools, secondary schools, and 
                libraries for educational purposes at rates 
                less than the amounts charged for similar 
                services to other parties. The discount shall 
                be an amount that the Commission, with respect 
                to interstate services, and the States, with 
                respect to intrastate services, determine is 
                appropriate and necessary to ensure affordable 
                access to and use of such services by such 
                entities. A telecommunications carrier 
                providing service under this paragraph shall--
                            (i) have an amount equal to the 
                        amount of the discount treated as an 
                        offset to its obligation to contribute 
                        to the mechanisms to preserve and 
                        advance universal service, or
                            (ii) notwithstanding the provisions 
                        of subsection (e) of this section, 
                        receive reimbursement utilizing the 
                        support mechanisms to preserve and 
                        advance universal service.
            (2) Advanced services.--The Commission shall 
        establish competitively neutral rules--
                    (A) to enhance, to the extent technically 
                feasible and economically reasonable, access to 
                advanced telecommunications and information 
                services for all public and nonprofit 
                elementary and secondary school classrooms, 
                health care providers, and libraries; and
                    (B) to define the circumstances under which 
                a telecommunications carrier may be required to 
                connect its network to such public 
                institutional telecommunications users.
            (3) Terms and conditions.--Telecommunications 
        services and network capacity provided to a public 
        institutional telecommunications user under this 
        subsection may not be sold, resold, or otherwise 
        transferred by such user in consideration for money or 
        any other thing of value.
            (4) Eligibility of users.--No entity listed in this 
        subsection shall be entitled to preferential rates or 
        treatment as required by this subsection, if such 
        entity operates as a for-profit business, is a school 
        described in paragraph (5)(A) with an endowment of more 
        than $50,000,000, or is a library or library consortium 
        not eligible for assistance from a State library 
        administrative agency under the Library Services and 
        Technology Act.
            (5) Definitions.--For purposes of this subsection:
                    (A) Elementary and secondary schools.--The 
                term ``elementary and secondary schools'' means 
                elementary schools and secondary schools, as 
                defined in paragraphs (14) and (25), 
                respectively, of section 14101 of the 
                Elementary and Secondary Education Act of 1965 
                (20 U.S.C. 8801).
                    (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) rural health clinics; and
                            (vii) consortia of health care 
                        providers consisting of one or more 
                        entities described in clauses (i) 
                        through (vi).
                    (C) Public institutional telecommunications 
                user.--The term ``public institutional 
                telecommunications user'' means an elementary 
                or secondary school, a library, or a health 
                care provider as those terms are defined in 
                this paragraph.
    (i) Consumer Protection.--The Commission and the States 
should ensure that universal service is available at rates that 
are just, reasonable, and affordable.
    (j) Lifeline Assistance.--Nothing in this section shall 
affect the collection, distribution, or administration of the 
Lifeline Assistance Program provided for by the Commission 
under regulations set forth in section 69.117 of title 47, Code 
of Federal Regulations, and other related sections of such 
title.
    (k) Subsidy of Competitive Services Prohibited.--A 
telecommunications carrier may not use services that are not 
competitive to subsidize services that are subject to 
competition. The Commission, with respect to interstate 
services, and the States, with respect to intrastate services, 
shall establish any necessary cost allocation rules, accounting 
safeguards, and guidelines to ensure that services included in 
the definition of universal service bear no more than a 
reasonable share of the joint and common costs of facilities 
used to provide those services.
    (l) Implementation of a Filtering or Blocking System.--
            (1) In general.--No services may be provided under 
        subsection (h)(1)(B) to any elementary or secondary 
        school, or any library, unless it provides the 
        certification required by paragraph (2) or (3), 
        respectively.
            (2) Certification for schools.--Before receiving 
        universal service assistance under subsection 
        (h)(1)(B), an elementary or secondary school (or the 
        school board or other authority with responsibility for 
        administration of that school) shall certify to the 
        Commission that it has--
                    (A) selected a system for computers with 
                Internet access to filter or block matter 
                deemed to be inappropriate for minors; and
                    (B) installed, or will install as soon as 
                it obtains computers with Internet access, a 
                system to filter or block such matter.
            (3) Certification for Libraries.--Before receiving 
        universal service assistance under subsection 
        (h)(1)(B), a library that has a computer with Internet 
        access shall certify to the Commission that, on one or 
        more of its computers with Internet access, it employs 
        a system to filter or block matter deemed to be 
        inappropriate for minors. If a library that makes a 
        certification under this paragraph changes the system 
        it employs or ceases to employ any such system, it 
        shall notify the Commission within 10 days after 
        implementing the change or ceasing to employ the 
        system.
            (4) Local determination of content.--For purposes 
        of paragraphs (2) and (3), the determination of what 
        matter is inappropriate for minors shall be made by the 
        school, school board, library or other authority 
        responsible for making the required certification. No 
        agency or instrumentality of the United States 
        Government may--
                    (A) establish criteria for making that 
                determination;
                    (B) review the determination made by the 
                certifying school, school board, library, or 
                other authority; or
                    (C) consider the criteria employed by the 
                certifying school, school board, library, or 
                other authority in the administration of 
                subsection (h)(1)(B).

                                
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