U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

" ! SENATE 105th Congress

2d Session

REPORT

105–226

INTERNET FILTERING SYSTEMS

REPORT

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND

TRANSPORTATION

on

S.1619

JUNE 25, 1998.—Ordered to be printed
ii

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED FIFTH CONGRESS

SECOND SESSION

JOHN McCAIN, Arizona, Chairman

TED STEVENS, Alaska

CONRAD BURNS, Montana

SLADE GORTON, Washington

TRENT LOTT, Mississippi

KAY BAILEY HUTCHISON, Texas

OLYMPIA SNOWE, Maine

JOHN ASHCROFT, Missouri

BILL FRIST, Tennessee

SPENCER ABRAHAM, Michigan

SAM BROWNBACK, Kansas

ERNEST F. HOLLINGS, South Carolina

DANIEL K. INOUYE, Hawaii

WENDELL H. FORD, Kentucky

JOHN D. ROCKEFELLER IV, West Virginia

JOHN F. KERRY, Massachusetts

JOHN B. BREAUX, Louisiana

RICHARD H. BRYAN, Nevada

BYRON L. DORGAN, North Dakota

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
59–010

105TH CONGRESS REPORT

2d Session " ! SENATE 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

REPORT

[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
2

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. § 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.) 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.

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.

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
3

6 Reno v. ACLU, 521 U.S. at — — .

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.

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.

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
4

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. 11 See 47 U.S.C. § 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). 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)

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

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.

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
5

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.

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

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 neu-
6

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). 21 See Borger v. Bisciglia, 888 F.Supp. 97 (E.D. Wisc. 1995). 22 See id. at 100-1. 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). 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). 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).

tral. 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.

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

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

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.

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
7

adults from engaging in constitutionally-protected material in public libraries.

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
8

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:

øInsert 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 as-
9

sistance 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.
10

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. ø47 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
11

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;
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(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
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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.—øAll

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
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(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 forprofit 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 Com-
15

mission, 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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