II

107TH CONGRESS

1ST SESSION S. 1359

To amend the Communications Act of 1934 to promote deployment of advanced services and foster the development of competition for the benefit

of consumers in all regions of the Nation by relieving unnecessary burdens on the Nation’s two percent local exchange telecommunications

carriers, and for other purposes.

IN THE SENATE OF THE UNITED STATES

AUGUST 3, 2001

Mr. BURNS (for himself, Mr. BREAUX, Mr. HAGEL, Mrs. LINCOLN, and Mr.

ENZI) introduced the following bill; which was read twice and referred to

the Committee on Commerce, Science, and Transportation

A BILL

To amend the Communications Act of 1934 to promote deployment of advanced services and foster the development

of competition for the benefit of consumers in all regions

of the Nation by relieving unnecessary burdens on the

Nation’s two percent local exchange telecommunications

carriers, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

S 1359 IS

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Facilitating Access to

3 Speedy Transmissions for Networks, E-commerce and

4 Telecommunications (FASTNET) Act’’.

5 SEC. 2. FINDINGS AND PURPOSE.

6 (a) FINDINGS.—Congress finds the following:

7 (1) The Telecommunications Act of 1996 was

8 enacted to foster the rapid deployment of advanced

9 telecommunications and information technologies

10 and services to all Americans by promoting competi11 tion and reducing regulation in telecommunications

12 markets nationwide.

13 (2) The Telecommunications Act of 1966 spe14 cifically recognized the unique abilities and cir15 cumstances of local exchange carriers with fewer

16 than two percent of the Nation’s subscriber lines in17 stalled in the aggregate nationwide.

18 (3) Given the markets two percent carriers typi19 cally serve, such carriers are uniquely positioned to

20 accelerate the deployment of advanced services and

21 competitive initiatives for the benefit of consumers

22 in less densely populated regions of the Nation.

23 (4) Existing regulations are typically tailored to

24 the circumstances of larger carriers and therefore

25 often impose disproportionate burdens on two per26 cent carriers, impeding such carriers’ deployment of
3

S 1359 IS

1 advanced telecommunications services and competi2 tive initiatives to consumers in less densely popu3 lated regions of the Nation.

4 (5) Reducing regulatory burdens on two percent

5 carriers will enable such carriers to devote additional

6 resources to the deployment of advanced services

7 and to competitive initiatives to benefit consumers in

8 less densely populated regions of the Nation.

9 (6) Reducing regulatory burdens on two percent

10 carriers will increase such carriers’ ability to respond

11 to marketplace conditions, allowing them to accel12 erate deployment of advanced services and competi13 tive initiatives to benefit consumers in less densely

14 populated regions of the Nation.

15 (b) PURPOSES.—The purposes of this Act are—

16 (1) to accelerate the deployment of advanced

17 services and the development of competition in the

18 telecommunications industry for the benefit of con19 sumers in all regions of the Nation, consistent with

20 the Telecommunications Act of 1996, by reducing

21 regulatory burdens on local exchange carriers with

22 fewer than two percent of the Nation’s subscriber

23 lines installed in the aggregate nationwide;

24 (2) to improve such carriers’ flexibility to un25 dertake such initiatives; and
4

S 1359 IS

1 (3) to allow such carriers to redirect resources

2 from paying the costs of such regulatory burdens to

3 increasing investment in such initiatives.

4 SEC. 3. DEFINITION.

5 Section 3 of the Communications Act of 1934 (47

6 U.S.C. 153) is amended—

7 (1) by redesignating paragraphs (51) and (52)

8 as paragraphs (52) and (53), respectively; and

9 (2) by inserting after paragraph (50) the fol10 lowing:

11 ‘‘(51) TWO PERCENT CARRIER.—The term ‘two

12 percent carrier’ means an incumbent local exchange

13 carrier within the meaning of section 251(h) whose

14 access lines, when aggregated with the access lines

15 of any local exchange carrier that such incumbent

16 local exchange carrier directly or indirectly controls,

17 is controlled by, or is under common control with,

18 are fewer than two percent of the Nation’s sub19 scriber lines installed in the aggregate nationwide.’’.

20 SEC. 4. REGULATORY RELIEF FOR TWO PERCENT CAR21 RIERS.

22 Title II of the Communications Act of 1934 is

23 amended by adding at the end thereof a new part IV as

24 follows:
5

S 1359 IS

1 ‘‘PART IV—PROVISIONS CONCERNING TWO

2 PERCENT CARRIERS

3 ‘‘SEC. 281. REDUCED REGULATORY REQUIREMENTS FOR

4 TWO PERCENT CARRIERS.

5 ‘‘(a) COMMISSION TO TAKE INTO ACCOUNT DIF6 FERENCES.—In adopting rules that apply to incumbent

7 local exchange carriers (within the meaning of section

8 251(h)), the Commission shall separately evaluate the bur9 den that any proposed regulatory, compliance, or report10 ing requirements would have on two percent carriers.

11 ‘‘(b) EFFECT OF COMMISSION’S FAILURE TO TAKE

12 INTO ACCOUNT DIFFERENCES.—If the Commission

13 adopts a rule that applies to incumbent local exchange car14 riers and fails to separately evaluate the burden that any

15 proposed regulatory, compliance, or reporting requirement

16 would have on two percent carriers, the Commission shall

17 not enforce the rule against two percent carriers unless

18 and until the Commission performs such separate evalua19 tion.

20 ‘‘(c) ADDITIONAL REVIEW NOT REQUIRED.—Noth21 ing in this section shall be construed to require the Com22 mission to conduct a separate evaluation under subsection

23 (a) if the rules adopted do not apply to two percent car24 riers, or such carriers are exempted from such rules.

25 ‘‘(d) SAVINGS CLAUSE.—Nothing in this section shall

26 be construed to prohibit any size-based differentiation
6

S 1359 IS

1 among carriers mandated by this Act, chapter 6 of title

2 5, United State Code, the Commission’s rules, or any

3 other provision of law.

4 ‘‘(e) EFFECTIVE DATE.—The provisions of this sec5 tion shall apply with respect to any rule adopted on or

6 after the date of enactment of this section.

7 ‘‘SEC. 282. LIMITATION OF REPORTING REQUIREMENTS.

8 ‘‘(a) LIMITATION.—The Commission shall not require

9 a two percent carrier—

10 ‘‘(1) to file cost allocation manuals or to have

11 such manuals audited or attested, but a two percent

12 carrier that qualifies as a class A carrier shall annu13 ally certify to the Commission that the two percent

14 carrier’s cost allocation complies with the rules of

15 the Commission; or

16 ‘‘(2) to file Automated Reporting and Manage17 ment Information Systems (ARMIS) reports, except

18 for purposes of section 224.

19 ‘‘(b) PRESERVATION OF AUTHORITY.—Except as

20 provided in subsection (a), nothing in this Act limits the

21 authority of the Commission to obtain access to informa22 tion under sections 211, 213, 215, 218, and 220 with re23 spect to two percent carriers.
7

S 1359 IS

1 ‘‘SEC. 283. INTEGRATED OPERATION OF TWO PERCENT

2 CARRIERS.

3 ‘‘The Commission shall not require any two percent

4 carrier to establish or maintain a separate affiliate to pro5 vide any common carrier or noncommon carrier services,

6 including local and interexchange services, commercial mo7 bile radio services, advanced services (within the meaning

8 of section 706 of the Telecommunications Act of 1996),

9 paging, Internet, information services or other enhanced

10 services, or other services. The Commission shall not re11 quire any two percent carrier and its affiliates to maintain

12 separate officers, directors, or other personnel, network fa13 cilities, buildings, research and development departments,

14 books of account, financing, marketing, provisioning, or

15 other operations.

16 ‘‘SEC. 284. PARTICIPATION IN TARIFF POOLS AND PRICE

17 CAP REGULATION.

18 ‘‘(a) NECA POOL.—The participation or withdrawal

19 from participation by a two percent carrier of one or more

20 study areas in the common line tariff administered and

21 filed by the National Exchange Carrier Association or any

22 successor tariff or administrator shall not obligate such

23 carrier to participate or withdraw from participation in

24 such tariff for any other study area. The Commission may

25 require a two percent carrier to give 60 days notice of

26 its intent to participate or withdraw from participation in
8

S 1359 IS

1 such common line tariff with respect to a study area. Ex2 cept as permitted by section 310(f)(3), a two percent car3 rier’s election under this subsection shall be binding for

4 one year from the date of the election.

5 ‘‘(b) PRICE CAP REGULATION.—A two percent car6 rier may elect to be regulated by the Commission under

7 price cap rate regulation, or elect to withdraw from such

8 regulation, for one or more of its study areas. The Com9 mission shall not require a carrier making an election

10 under this subsection with respect to any study area or

11 areas to make the same election for any other study area.

12 Except as permitted by section 310(f)(3), a two percent

13 carrier’s election under this subsection shall be binding for

14 one year from the date of the election.

15 ‘‘SEC. 285. DEPLOYMENT OF NEW TELECOMMUNICATIONS

16 SERVICES BY TWO PERCENT COMPANIES.

17 ‘‘(a) ONE-DAY NOTICE OF DEPLOYMENT.—The

18 Commission shall permit two percent carriers to introduce

19 new interstate telecommunications services by filing a tar20 iff on one day’s notice showing the charges, classifications,

21 regulations, and practices therefor, without obtaining a

22 waiver, or make any other showing before the Commission

23 in advance of the tariff filing. The Commission shall not

24 have authority to approve or disapprove the rate structure

25 for such services shown in such tariff.
9

S 1359 IS

1 ‘‘(b) DEFINITION.—For purposes of subsection (a),

2 the term ‘new interstate telecommunications service’

3 means a class or subclass of service not previously offered

4 by the two percent carrier that enlarges the range of serv5 ice options available to ratepayers of such carrier.

6 ‘‘SEC. 286. ENTRY OF COMPETING CARRIER.

7 ‘‘(a) PRICING FLEXIBILITY.—Notwithstanding any

8 other provision of this Act, any two percent carrier shall

9 be permitted to de-average its interstate switched or spe10 cial access rates, file tariffs on one day’s notice, and file

11 contract-based tariffs for interstate switched or special ac12 cess services immediately upon certifying to the Commis13 sion that a telecommunications carrier unaffiliated with

14 such carrier is engaged in facilities-based entry within

15 such carrier’s service area. A two percent carrier subject

16 to rate-of-return regulation with respect to an interstate

17 switched or special access service, for which pricing flexi18 bility has been exercised pursuant to this subsection, shall

19 compute its interstate rate of return based on the nondis20 counted rate for such service.

21 ‘‘(b) STREAMLINED PRICING REGULATION.—Not22 withstanding any other provision of this Act, upon receipt

23 by the Commission of a certification by a two percent car24 rier that—

25 ‘‘(1) a local exchange carrier, or its affiliate, or
10

S 1359 IS

1 ‘‘(2) a local exchange carrier operated by, or

2 owned in whole or part by, a governmental author3 ity,

4 is engaged in facilities-based entry within the two percent

5 carrier’s service area, the Commission shall regulate the

6 two percent carrier as non-dominant and shall not require

7 the tariffing of the interstate service offerings of the two

8 percent carrier.

9 ‘‘(c) PARTICIPATION IN EXCHANGE CARRIER ASSO10 CIATION TARIFF.—A two percent carrier that meets the

11 requirements of subsection (a) or (b) of this section with

12 respect to one or more study areas shall be permitted to

13 participate in the common line tariff administered and

14 filed by the National Exchange Carrier Association or any

15 successor tariff or administrator, by electing to include

16 one or more of its study areas in such tariff.

17 ‘‘(d) DEFINITIONS.—For purposes of this section:

18 ‘‘(1) FACILITIES-BASED ENTRY.—The term ‘fa19 cilities-based entry’ means, within the service area of

20 a two percent carrier—

21 ‘‘(A) the provision or procurement of local

22 telephone exchange switching or its equivalent;

23 and

24 ‘‘(B) the provision of telephone exchange

25 service to at least one unaffiliated customer.
11

S 1359 IS

1 ‘‘(2) CONTRACT-BASED TARIFF.—The term

2 ‘contract-based tariff’ shall mean a tariff based on

3 a service contract entered into between a two per4 cent carrier and one or more customers of such car5 rier. Such tariff shall include—

6 ‘‘(A) the term of the contract, including

7 any renewal options;

8 ‘‘(B) a brief description of each of the

9 services provided under the contract;

10 ‘‘(C) minimum volume commitments for

11 each service, if any;

12 ‘‘(D) the contract price for each service or

13 services at the volume levels committed to by

14 the customer or customers;

15 ‘‘(E) a brief description of any volume dis16 counts built into the contract rate structure;

17 and

18 ‘‘(F) a general description of any other

19 classifications, practices, and regulations affect20 ing the contract rate.

21 ‘‘(3) SERVICE AREA.—The term ‘service area’

22 has the same meaning as in section 214(e)(5).
12

S 1359 IS

1 ‘‘SEC. 287. SAVINGS PROVISIONS.

2 ‘‘(a) COMMISSION AUTHORITY.—Nothing in this part

3 shall be construed to restrict the authority of the Commis4 sion under sections 201 through 208.

5 ‘‘(b) RURAL TELEPHONE COMPANY RIGHTS.—Noth6 ing in this part shall be construed to diminish the rights

7 of rural telephone companies otherwise accorded by this

8 Act, or the rules, policies, procedures, guidelines, and

9 standards of the Commission as of the date of enactment

10 of this section.

11 ‘‘(c) STATE AUTHORITY.—Nothing in this part shall

12 be construed to limit or affect any authority (as of August

13 1, 2001) of the States over charges, classifications, prac14 tices, services, facilities, or regulations for or in connection

15 with intrastate communications service by wire or radio

16 of any carrier.’’.

17 SEC. 5. LIMITATION ON MERGER REVIEW.

18 (a) AMENDMENT.—Section 310 of the Communica19 tions Act of 1934 (47 U.S.C. 310) is amended by adding

20 at the end the following:

21 ‘‘(f) DEADLINE FOR MAKING PUBLIC INTEREST DE22 TERMINATION.—

23 ‘‘(1) TIME LIMIT.—In connection with any

24 merger between two percent carriers, or the acquisi25 tion, directly or indirectly, by a two percent carrier

26 or its affiliate of securities or assets of another car-
13

S 1359 IS

1 rier or its affiliate, if the merged or acquiring carrier

2 remains a two percent carrier after the merger or

3 acquisition, the Commission shall make any deter4 minations required by this section and section 214,

5 and shall rule on any petition for waiver of the Com6 mission’s rules or other request related to such de7 terminations, not later than 60 days after the date

8 an application with respect to such merger or acqui9 sition is submitted to the Commission.

10 ‘‘(2) APPROVAL ABSENT ACTION.—If the Com11 mission does not approve or deny an application as

12 described in paragraph (1) by the end of the period

13 specified, the application shall be deemed approved

14 on the day after the end of such period. Any such

15 application deemed approved under this subsection

16 shall be deemed approved without conditions.

17 ‘‘(3) ELECTION PERMITTED.—The Commission

18 shall permit a two percent carrier to make an elec19 tion pursuant to section 284 with respect to any

20 local exchange facilities acquired as a result of a

21 merger or acquisition that is subject to the review

22 deadline established in paragraph (1) of this sub23 section.’’.

24 (b) EFFECTIVE DATE.—The provisions of this sec25 tion shall apply with respect to any application that is sub-
14

S 1359 IS

1 mitted to the Commission on or after the date of enact2 ment of this Act. Applications pending with the Commis3 sion on the date of enactment of this Act shall be subject

4 to the requirements of this section as if they had been

5 filed with the Commission on the date of enactment of

6 this Act.

7 SEC. 6. TIME LIMITS FOR ACTION ON PETITIONS FOR RE8 CONSIDERATION OR WAIVER.

9 (a) AMENDMENT.—Section 405 of the Communica10 tions Act of 1934 (47 U.S.C. 405) is amended by adding

11 to the end the following:

12 ‘‘(c) EXPEDITED ACTION REQUIRED.—

13 ‘‘(1) TIME LIMIT.—Within 90 days after receiv14 ing from a two percent carrier a petition for recon15 sideration or other review filed under this section or

16 a petition for waiver of a rule, policy, or other Com17 mission requirement, the Commission shall issue an

18 order granting or denying such petition. If the Com19 mission fails to act on a petition for waiver subject

20 to the requirements of this section within this 90-

21 day period, the relief sought in such petition shall be

22 deemed granted. If the Commission fails to act on

23 a petition for reconsideration or other review subject

24 to the requirements of this section within such 90-

25 day period, the Commission’s enforcement of any
15

S 1359 IS

1 rule the reconsideration or other review of which was

2 specifically sought by the petitioning party shall be

3 stayed with respect to that party until the Commis4 sion issues an order granting or denying such peti5 tion.

6 ‘‘(2) FINALITY OF ACTION.—Any order issued

7 under paragraph (1), or any grant of a petition for

8 waiver that is deemed to occur as a result of the

9 Commission’s failure to act under paragraph (1),

10 shall be a final order and may be appealed.’’.

11 (b) EFFECTIVE DATE.—The provisions of this sec12 tion shall apply with respect to any petition for reconsider13 ation or other review or petition for waiver that is sub14 mitted to the Commission on or after the date of enact15 ment of this Act. Petitions for reconsideration or petitions

16 for waiver pending with the Commission on the date of

17 enactment of this Act shall be subject to the requirements

18 of this section as if they had been filed on the date of

19 enactment of this Act.

20 SEC. 7. NATIONAL SECURITY AND LAW ENFORCEMENT EX21 CEPTIONS.

22 Notwithstanding sections 310 and 405 of the Com23 munications Act of 1934 (47 U.S.C. 310 and 405), the

24 60-day time period under section 310(f)(1) of that Act,

25 as added by section 5 of this Act, and the 90-day time
16

S 1359 IS

1 period under section 405(c)(1) of that Act, as added by

2 section 6 of this Act, shall not apply to a petition or appli3 cation under section 310 or 405 if an Executive Branch

4 agency with cognizance over national security, law enforce5 ment, or public safety matters, including the Department

6 of Defense, Department of Justice, and the Federal Bu7 reau of Investigation, submits a written filing to the Fed8 eral Communications Commission advising the Commis9 sion that the petition or application may present national

10 security, law enforcement, or public safety concerns that

11 may not be resolved within the 60-day or 90-day time pe12 riod, respectively.

Æ