II 

109TH CONGRESS 

1ST SESSION S. 2113 

To promote the widespread availability of communications services and the 

integrity of communication facilities, and to encourage investment in 

communication networks. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 15, 2005 

Mr. DEMINT introduced the following bill; which was read twice and referred 

to the Committee on Commerce, Science, and Transportation 

A BILL 

To promote the widespread availability of communications 

services and the integrity of communication facilities, 

and to encourage investment in communication networks. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Digital Age Communications Act of 2005’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—REGULATORY FRAMEWORK 
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Sec. 101. Findings and policy. 

Sec. 102. Prohibition of unfair methods of competition. 

Sec. 103. Actions for complaints. 

Sec. 104. Time limits on Commission action. 

Sec. 105. Additional powers of the Commission. 

TITLE II—TRANSFER OR ASSIGNMENT OF PERMITS, LICENSES, 

OR CERTIFICATES 

Sec. 201. Findings. 

Sec. 202. Modification of authority to deny or condition licenses. 

TITLE III—UNIVERSAL SERVICE 

Sec. 301. Applicability of Communications Act of 1934. 

Sec. 302. Principles of universal service. 

Sec. 303. Definition of basic electronic communications services. 

Sec. 304. Contribution mechanism. 

Sec. 305. Universal service block grant program. 

Sec. 306. Waiver authority. 

Sec. 307. State universal service programs not preempted. 

Sec. 308. Report to Congress. 

TITLE IV—GENERAL PROVISIONS 

Sec. 401. Findings and policy regarding allocation of Federal, State, and local 

responsibility. 

Sec. 402. Rulemaking and delegation of authority. 

Sec. 403. Judicial review of decisions. 

Sec. 404. Right-of-way authority. 

Sec. 405. State regulation of basic local rates. 

Sec. 406. Retention of additional State authority. 

Sec. 407. Preemption of State authority. 

Sec. 408. Transition and sunset of existing agreements. 

Sec. 409. Effective date. 

1 SEC. 2. DEFINITIONS. 

2 (a) IN GENERAL.—In this Act, the following defini3 tions shall apply: 

4 (1) ANTITRUST LAWS.—The term ‘‘antitrust 

5 laws’’ includes— 

6 (A) the Act entitled ‘‘An Act to protect 

7 trade and commerce against unlawful restraints 

8 and monopolies’’, approved July 2, 1890; 

9 (B) sections 73 through 76 of an Act enti10 tled ‘‘An Act to reduce taxation, to provide rev-
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1 enue for the Government, and for other pur2 poses’’, approved August 27, 1894; 

3 (C) the Act entitled ‘‘An Act to amend sec4 tions 73 and 76 of the Act of August 27, 1894, 

5 entitled An Act to reduce taxation, to provide 

6 revenue for the Government, and for other pur7 poses’’, approved February 12, 1913; and 

8 (D) the Act entitled ‘‘An Act to supple9 ment existing laws against unlawful restraints 

10 and monopolies, and for other purposes’’, ap11 proved October 15, 1914. 

12 (2) COMMISSION.—The term ‘‘Commission’’ 

13 means the Federal Communications Commission. 

14 (3) ELECTRONIC COMMUNICATIONS NET15 WORK.—The term ‘‘electronic communications net16 work’’ means— 

17 (A) a transmission system; and 

18 (B) where applicable, switching or routing 

19 equipment and other facilities which permit the 

20 conveyance of signals by wire, radio, optical, or 

21 other electromagnetic means, over satellite, 

22 cable, or other facilities, whether fixed or mo23 bile, to the extent that such facilities are used 

24 for the purpose of transmitting signals, irre25 spective of the type of information conveyed. 
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1 (4) ELECTRONIC COMMUNICATIONS SERVICE.— 

2 The term ‘‘electronic communications service’’ 

3 means a service normally provided for remuneration 

4 which consists wholly or mainly in the conveyance of 

5 signals on electronic communications networks. 

6 (5) HOUSEHOLD.—The term ‘‘household’’ in7 cludes— 

8 (A) all the persons who occupy a housing 

9 unit; and 

10 (B) housing units located in Indian lands 

11 (as such term is defined in section 4(4) of the 

12 Indian Gaming Regulatory Act (25 U.S.C. 

13 2703)). 

14 (6) HOUSING UNIT.—The term ‘‘housing unit’’ 

15 means— 

16 (A) a house; 

17 (B) an apartment; 

18 (C) a mobile home; 

19 (D) a group of rooms; or 

20 (E) a single room that is occupied as sepa21 rate living quarters. 

22 (7) JOINT BOARD.—The term ‘‘Joint Board’’ 

23 means the Federal-State Joint Board on universal 

24 service required under section 254(a) of the Commu25 nications Act of 1934 (47 U.S.C. 254(a)). 
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1 (8) LOW-INCOME HOUSEHOLD.—The term 

2 ‘‘low-income household’’ means a family whose in3 come does not exceed 80 percent of the median in4 come for the area, as determined by the Commis5 sion, with adjustments for family size, except that 

6 the Commission may establish an income ceiling 

7 higher or lower than 80 percent of the median for 

8 the area if the Commission finds that such a vari9 ation is necessary because of prevailing levels of con10 struction costs or unusually high or low family in11 comes. 

12 (9) SEPARATE LIVING QUARTERS.— 

13 (A) IN GENERAL.—The term ‘‘separate liv14 ing quarters’’ means an area in which the occu15 pants of that area— 

16 (i) live and eat separately from any 

17 other person in the building in which the 

18 area is located; and 

19 (ii) have direct access to such area— 

20 (I) from the outside of the build21 ing in which the area is located; or 

22 (II) through a common hall. 

23 (B) OCCUPANTS.—For purposes of sub24 paragraph (A), the term ‘‘occupants’’ in25 cludes— 
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1 (i) a single family; 

2 (ii) 1 person living alone; 

3 (iii) 2 or more families living together; 

4 or 

5 (iv) any other group of related or un6 related persons who share living arrange7 ments. 

8 (10) UNFAIR METHODS OF COMPETITION.— 

9 (A) IN GENERAL.—The term ‘‘unfair 

10 methods of competition’’ means— 

11 (i) practices that present a threat of 

12 abuse of significant and nontransitory 

13 market power as determined by the Com14 mission consistent with the application of 

15 jurisprudential principles grounded in mar16 ket-oriented competition analysis such as 

17 those commonly employed by the Federal 

18 Trade Commission and the United States 

19 Department of Justice in enforcing the 

20 Federal Trade Commission Act (15 U.S.C. 

21 41 et seq.) and the antitrust laws of the 

22 United States; and 

23 (ii) with respect to interconnection, 

24 practices that pose a substantial and non25 transitory risk to consumer welfare by ma-
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1 terially and substantially impeding the 

2 interconnection of public communications 

3 facilities and services in circumstances in 

4 which the Commission determines that 

5 marketplace competition is not sufficient to 

6 adequately protect consumer welfare. 

7 (B) INTERCONNECTION DETERMINA8 TION.—In making any determination under 

9 subparagraph (A)(ii), the Commission shall con10 sider whether requiring interconnection will ad11 versely affect investment in facilities and inno12 vation in services. 

13 (b) COMMON TERMINOLOGY.—Except as otherwise 

14 provided in subsection (a), terms used in this Act shall 

15 have the same meaning given to such terms under sections 

16 3, 254, and 602 of the Communications Act of 1934 (47 

17 U.S.C. 153, 254, and 522). 

18 TITLE I—REGULATORY 

19 FRAMEWORK 

20 SEC. 101. FINDINGS AND POLICY. 

21 (a) FINDINGS.—Congress finds that— 

22 (1) in 1996, Congress enacted and the Presi23 dent signed into law the Telecommunications Act of 

24 1996, which was intended to provide a procom25 petitive, deregulatory framework designed to facili-
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1 tate the continuing transition to a more competitive 

2 communications market; 

3 (2) since the enactment and implementation of 

4 the Telecommunications Act of 1996, rapid advances 

5 in technology and marketplace developments have 

6 further increased the existence of competition in all 

7 communications markets and the likelihood of the 

8 continuing existence and increasing intensity of com9 petition; 

10 (3) competition in a dynamic communications 

11 marketplace is the most effective and efficient means 

12 for protecting consumers and enhancing the con13 sumer welfare of all the people of the United States 

14 in terms of achieving the optimum mix of price, 

15 quality, and consumer choice; and 

16 (4) unnecessary regulation regarding protection 

17 of consumers and enhancement of consumer welfare 

18 deters— 

19 (A) investment in new and advanced com20 munications facilities; and 

21 (B) the development of new services and 

22 applications. 

23 (b) POLICY.—It shall be the policy of the United 

24 States Government— 
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1 (1) to promote the widespread availability of 

2 communications services for all Americans in order 

3 to assure that the American people have access to a 

4 diversity of information sources necessary for demo5 cratic government; 

6 (2) to promote the integrity, reliability, and ef7 ficiency of communications facilities in a manner 

8 consistent with— 

9 (A) the encouragement of investment in 

10 advanced communications networks; and 

11 (B) innovation in communications services 

12 and applications; 

13 (3) that economic regulation of communications 

14 markets should be presumed unnecessary absent cir15 cumstances that demonstrate the existence of a sig16 nificant threat of abuse of market power that poses 

17 a substantial and nontransitory risk to consumer 

18 welfare; and 

19 (4) that in order to ensure that the actions of 

20 the Federal Communications Commission are con21 sistent with the findings in subsection (a), and to ef22 fectuate the deregulatory policy declared in this sub23 section, the decisions of the Commission should be 

24 based on jurisprudential principles grounded in mar25 ket-oriented competition analysis such as those com-
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1 monly employed by the Federal Trade Commission 

2 and the Department of Justice in enforcing the Fed3 eral Trade Commission Act (15 U.S.C. 41 et seq.) 

4 and the antitrust laws of the United States. 

5 SEC. 102. PROHIBITION OF UNFAIR METHODS OF COMPETI6 TION. 

7 (a) IN GENERAL.—It shall be unlawful for any pro8 vider of electronic communications service, including any 

9 State, or any general purpose political subdivision of a 

10 State, to engage or participate, or to attempt to engage 

11 or participate, in— 

12 (1) unfair methods of competition in or affect13 ing electronic communications networks and elec14 tronic communications services; or 

15 (2) unfair or deceptive practices in or affecting 

16 electronic communications networks and electronic 

17 communications services. 

18 (b) RULEMAKING AUTHORITY.— 

19 (1) IN GENERAL.—The Commission may, by 

20 rule, define with specificity, the acts or practices 

21 that shall constitute unfair methods of competition 

22 or unfair or deceptive acts or practices as described 

23 in subsection (a). 

24 (2) CONTENT OF RULES.—Rules promulgated 

25 under paragraph (1) may include such requirements 
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1 as the Commission determines necessary to prevent 

2 any methods, acts, or practices prohibited by this 

3 section. 

4 (3) LIMITATION.— 

5 (A) IN GENERAL.—Notwithstanding para6 graph (1) and except as provided in subpara7 graph (B), the Commission shall have no au8 thority to issue rules that declare unlawful an 

9 act or practice on the grounds that such act or 

10 practice is an unfair method of competition or 

11 unfair or deceptive act or practice. 

12 (B) EXCEPTION.—The Commission may 

13 declare an act or practice unlawful if the Com14 mission determines, based on a showing of clear 

15 and convincing evidence presented in a rule16 making proceeding, that— 

17 (i) marketplace competition is not suf18 ficient to adequately protect consumer wel19 fare; and 

20 (ii) such act or practice— 

21 (I) causes or is likely to cause 

22 substantial injury to consumers; and 

23 (II) is not— 

24 (aa) avoidable by consumers 

25 themselves; and 
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1 (bb) outweighed by counter2 vailing benefits to consumers or 

3 to competition. 

4 (4) SUNSET OF RULES.—Any rule promulgated 

5 under paragraph (1) shall terminate on the day that 

6 is 5 years after the date on which such rule became 

7 effective unless the Commission, in a proceeding in 

8 which the public is afforded notice and an oppor9 tunity to comment, makes an affirmative determina10 tion, based on a showing of clear and convincing evi11 dence presented in such proceeding, that the rule 

12 continues to be necessary because marketplace com13 petition is not sufficient to adequately protect con14 sumers from substantial injury which is not— 

15 (A) avoidable by consumers themselves; 

16 and 

17 (B) outweighed by countervailing benefits 

18 to consumers or to competition. 

19 SEC. 103. ACTIONS FOR COMPLAINTS. 

20 The Commission shall have authority— 

21 (1) to hear complaints from any party injured 

22 by a violation of the prohibitions established under 

23 section 102; and 
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1 (2) to award damages to such injured party if 

2 the Commission determines that a violation of that 

3 section has occurred. 

4 SEC. 104. TIME LIMITS ON COMMISSION ACTION. 

5 (a) 120-DAY LIMIT FOR APPLICATIONS WITH SUP6 PORTING TESTIMONY.—If an application is filed with the 

7 Commission under this or any other Act, and such applica8 tion is accompanied by supporting testimony from the ap9 plicant or a detailed summary of that testimony, together 

10 with exhibits, if any, the Commission shall issue a decision 

11 on such application not later than 120 days after the ap12 plication is deemed complete (as the Commission shall, by 

13 rule, determine). 

14 (b) 210-DAY LIMIT FOR APPLICATIONS WITHOUT

15 SUPPORTING TESTIMONY.—If an application is filed with 

16 the Commission under this or any other Act, and such 

17 application is not accompanied by supporting testimony 

18 and exhibits, the Commission shall issue a decision on 

19 such application not later than 210 days after the applica20 tion is deemed complete (as the Commission shall, by rule, 

21 determine). 

22 (c) WAIVER.—The time limits specified in subsections 

23 (a) and (b)— 

24 (1) may be waived by an applicant; and 
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1 (2) if so waived, shall not be binding on the 

2 Commission. 

3 (d) EXTENSION OF TIME.—The Commission, in par4 ticular cases, under extraordinary conditions, and after 

5 notice and a hearing at which the existence of such condi6 tions are established, may extend the time limits specified 

7 in subsections (a) and (b) for a period not to exceed an 

8 additional 90 days. 

9 SEC. 105. ADDITIONAL POWERS OF THE COMMISSION. 

10 The Commission shall have authority— 

11 (1) to research and investigate, from time to 

12 time, the organization, business, conduct, or prac13 tices of— 

14 (A) any person or entity engaged in, or 

15 whose business affects, the operation of elec16 tronic communications networks; and 

17 (B) any provider of electronic communica18 tions service; 

19 (2) to require any person or entity that owns or 

20 operates an electronic communications networks, or 

21 any class of such persons or entities, to file, in such 

22 form, in such manner, and at such time as the Com23 mission may determine, reports or answers to spe24 cific questions regarding the organization, business, 

25 conduct, or practices of such person or entity, such 
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1 reports or answers shall be in writing and made 

2 under penalty of perjury; 

3 (3) to make public, from time to time, in such 

4 form, and in such manner as the Commission deter5 mines— 

6 (A) such portions of the information ob7 tained under paragraph (1) as are in the public 

8 interest; and 

9 (B) the reports and answers described 

10 under paragraph (2), except that the Commis11 sion— 

12 (i) may not make public any trade se13 cret or any privileged or confidential com14 mercial or financial information obtained 

15 from such reports or answers; and 

16 (ii) may disclose such trade secrets or 

17 information to officers and employees of an 

18 appropriate Federal or State law enforce19 ment agency upon prior certification by an 

20 officer of that Federal or State law en21 forcement agency that such trade secrets 

22 or information shall— 

23 (I) be maintained in confidence; 

24 and 
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1 (II) be used only for official law 

2 enforcement purposes; and 

3 (4) to make annual and special reports to Con4 gress and to submit with such reports recommenda5 tions for additional legislation. 

6 TITLE II—TRANSFER OR ASSIGN7 MENT OF PERMITS, LI8 CENSES, OR CERTIFICATES 

9 SEC. 201. FINDINGS. 

10 Congress finds the following: 

11 (1) The process by which the Federal Commu12 nications Commission currently reviews, and imposes 

13 conditions upon, the transfer or assignment of per14 mits, licenses, or certificates in the context of a 

15 merger, or other conveyance of corporate control, is 

16 in need of reform. 

17 (2) Currently, the review of telecommunications 

18 industry mergers by the Commission often results in 

19 undue delay and introduces uncertainty into the 

20 marketplace because of the unpredictability of that 

21 review under the nonspecific public interest standard 

22 established in the Communications Act of 1934 (47 

23 U.S.C. 151 et seq.). 

24 (3) The Commission has unnecessarily invoked 

25 its authority under the nonspecific public interest 
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1 standard to allow it to impose terms and conditions 

2 on the assignment and transfer of permits, licenses, 

3 or certificates unrelated to any competitive impacts 

4 of the proposed transaction. 

5 (4) The Department of Justice and the Federal 

6 Trade Commission have extensive institutional ex7 pertise in analyzing issues relating to industry con8 centration and its effects on competition. 

9 (5) It is inefficient, burdensome, and costly to 

10 the Federal Government and to the private sector, 

11 and unnecessary for the protection of consumers or 

12 for the enhancement of consumer welfare, for the 

13 Commission in a review of a transfer or assignment 

14 of licenses to duplicate the work performed by the 

15 Department of Justice or the Federal Trade Com16 mission. 

17 (6) The Commission should only deny, and 

18 should impose only those conditions on, the transfer 

19 or assignment of permits, licenses, or certificates as 

20 is necessary to ensure that applicants for such trans21 fer and assignment authority are in compliance with 

22 existing Commission rules and regulations. 
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1 SEC. 202. MODIFICATION OF AUTHORITY TO DENY OR CON2 DITION LICENSES. 

3 (a) IN GENERAL.—In any proceeding under the Com4 munications Act of 1934 (47 U.S.C. 151 et seq.) to ap5 prove an application to assign or transfer control of a li6 cense, permit, or certificate, the Commission— 

7 (1) may not deny such application unless— 

8 (A) the assignment or transfer of control 

9 would result in a violation of the— 

10 (i) Communications Act of 1934 (47 

11 U.S.C. 151 et. seq); or 

12 (ii) any rule or regulations established 

13 by the Commission in effect on the date 

14 such application is received by the Com15 mission; and 

16 (B) a violation described in subparagraph 

17 (A) cannot be cured by the conditional approval 

18 of the assignment or transfer of control under 

19 the provisions of paragraph (2); 

20 (2) may not condition approval of such applica21 tion except, to the extent necessary, to— 

22 (A) ensure that the assignee or transferee 

23 is in compliance with all Commission rules and 

24 regulations in effect on the date of such ap25 proval; or 
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1 (B) permit the orderly disposition of assets 

2 to comply with such rules and regulations; and 

3 (3) notwithstanding section 104, shall complete 

4 all action on any such application not later than 90 

5 days after the date of receipt by the Commission of 

6 the application, unless the applicant requests an ex7 tension. 

8 (b) EFFECTIVE DATE.—Subsection (a) shall apply to 

9 any application for a transfer of a permit, license, or per10 mit that is pending on, or submitted to the Commission 

11 on or after, the date of enactment of this Act. 

12 (c) DEADLINES FOR PENDING APPLICATIONS.—If an 

13 application for a transfer of a permit, license, or permit 

14 is pending before the Commission for more than 30 days, 

15 as of the date of enactment of this Act, the Commission 

16 shall complete all action on such application not later that 

17 60 days after such date of enactment, unless the applicant 

18 requests an extension. 

19 TITLE III—UNIVERSAL SERVICE 

20 SEC. 301. APPLICABILITY OF COMMUNICATIONS ACT OF 

21 1934. 

22 The provisions of section 214(e) and 254 of the Com23 munications Act of 1934 (47 U.S.C. 214(e) and 254) are 

24 repealed as of the date that is 3 years after the date of 

25 enactment of this Act. 
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1 SEC. 302. PRINCIPLES OF UNIVERSAL SERVICE. 

2 The policy of the United States Government regard3 ing the preservation and advancement of universal service 

4 shall be based on the following principles: 

5 (1) AFFORDABILITY.—Quality basic electronic 

6 communications services shall be affordable to— 

7 (A) all low-income households; and 

8 (B) households in high cost areas of the 

9 Nation. 

10 (2) EFFICIENCY.—Universal service support 

11 and contribution mechanisms for the provision of af12 fordable basic electronic communications services 

13 shall burden the economy no more than is necessary. 

14 (3) NEUTRALITY.—Neither the distribution of 

15 universal service support for basic electronic commu16 nications services nor the collection of universal serv17 ice contributions shall discriminate in favor of or 

18 against any company or technology. 

19 (4) TRANSPARENCY.— 

20 (A) RULES.—Rules governing universal 

21 service mechanisms shall be clear and enforce22 able. 

23 (B) GOALS.—The goals of universal service 

24 support shall be clearly defined and identified. 
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1 SEC. 303. DEFINITION OF BASIC ELECTRONIC COMMUNICA2 TIONS SERVICES. 

3 (a) IN GENERAL.—For purposes of this title, the 

4 term ‘‘basic electronic communications services’’ shall 

5 have the same meaning as the term ‘‘supported services’’ 

6 in section 54.101(a) of title 47, Code of Federal Regula7 tions. 

8 (b) MODIFICATION OF DEFINITION.— 

9 (1) JOINT BOARD ACTION.—The Joint Board 

10 may, from time to time, recommend to the Commis11 sion modifications as to which basic electronic com12 munications services are to be supported by Federal 

13 universal service support mechanisms. 

14 (2) COMMISSION ACTION.—Not later than 1 

15 year after receiving recommendations from the Joint 

16 Board under paragraph (1), the Commission shall 

17 complete any proceeding to consider whether to im18 plement, in whole or in part, such recommendations. 

19 (3) CONSIDERATIONS.—The Joint Board in rec20 ommending, and the Commission in implementing, 

21 any modifications of the basic electronic communica22 tions services that are supported by Federal uni23 versal service support mechanisms shall— 

24 (A) consider the extent to which— 

25 (i) basic electronic communications 

26 services have, through the operation of 
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1 market choices by customers, been already 

2 subscribed to by a substantial majority of 

3 residential consumers that do not receive 

4 any universal service support; 

5 (ii) unaffordable, prevailing basic elec6 tronic communications services relies on 

7 underlying infrastructure located in high 

8 cost areas; and 

9 (iii) universal service support under 

10 section 305 is necessary to ensure that the 

11 underlying infrastructure remains available 

12 to provide such basic electronic commu13 nications services; and 

14 (B) publish a report in the Federal Reg15 ister that details the considerations made under 

16 subparagraph (A). 

17 (4) LIMITATION.—The Commission shall not in18 crease the amount of total universal service support 

19 following any modification under this subsection 

20 without express Congressional authorization. 

21 SEC. 304. CONTRIBUTION MECHANISM. 

22 (a) IN GENERAL.—Not later than 6 months after the 

23 date of enactment of this Act, the Commission shall— 
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1 (1) complete a proceeding to promulgate rules 

2 to reform the universal services contribution mecha3 nism; and 

4 (2) adopt a new mechanism based upon the as5 signment of numbers in the North American Num6 bering Plan or any successor methodology. 

7 (b) CONTENT OF RULES.—The rules required under 

8 subsection (a) shall— 

9 (1) include an exemption from universal service 

10 contributions for low-income households; and 

11 (2) require that all assigned telephone numbers 

12 be assessed an equivalent amount for such contribu13 tions on a technologically neutral basis, except that 

14 there shall be a discounted contribution rate for pag15 ing services. 

16 (c) AUTHORITY TO MODIFY.—The Commission shall, 

17 by rule, adopt an alternative contribution mechanism to 

18 supplement the universal service fund if there is evidence 

19 of material, inefficient bypass of the numbers-based con20 tribution mechanism. 

21 SEC. 305. UNIVERSAL SERVICE BLOCK GRANT PROGRAM. 

22 (a) SINGLE UNIVERSAL SERVICE FUND.— 

23 (1) IN GENERAL.—Not later than 3 years after 

24 the date of enactment of this Act, the Commission 

25 shall revise its current universal service fund system 
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1 to establish a single universal service fund (in this 

2 title referred to as the ‘‘Fund’’). 

3 (2) FEDERAL SYSTEM.—The Fund established 

4 under paragraph (1) shall be the exclusive Federal 

5 universal service support mechanism. 

6 (3) CAP ON DISTRIBUTIONS.—The Commission 

7 may not award grants out of the Fund in any 1 fis8 cal year in excess of $3,650,000,000. 

9 (4) INFLATION ADJUSTMENTS.—The limitation 

10 under paragraph (3) shall be adjusted annually by 

11 an inflation index and by a fixed factor for produc12 tivity improvements, as determined by the Commis13 sion. 

14 (5) OTHER ADJUSTMENTS.—The limitation 

15 under paragraph (3) may also be adjusted by the 

16 Commission to account for— 

17 (A) changes in population size in each eli18 gible State; and 

19 (B) exogenous cost changes in the provi20 sion of basic electronic communications services 

21 directly related to intercarrier compensation re22 form. 

23 (b) GRANTS AUTHORIZED.— 

24 (1) IN GENERAL.—Not later than 3 years after 

25 the date of enactment of this Act, and annually 
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1 thereafter, the Commission shall grant from the 

2 Fund to each eligible State performance-based block 

3 grants to support the provision of those basic elec4 tronic communications services which have been de5 fined under section 303 to be eligible for universal 

6 service support. 

7 (2) AWARD BASIS.— 

8 (A) IN GENERAL.—Not later than 18 

9 months after the date of enactment of this Act, 

10 the Commission shall initiate a rulemaking pro11 ceeding to establish initial guidelines regarding 

12 the distribution of performance-based block 

13 grants from the Fund. 

14 (B) CONTENT OF GUIDELINES.—The 

15 guidelines required under subparagraph (A) 

16 shall include— 

17 (i) model distribution mechanisms and 

18 regulations for the support of low-income 

19 households and households in high cost 

20 areas; 

21 (ii) the national performance level, 

22 measured by household subscription to 

23 basic electronic communications services, 

24 that is necessary for each eligible State to 
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1 retain unused block grant funds under 

2 subsection (g); 

3 (iii) the initial amount of block grant 

4 funds that are available for each eligible 

5 State, such amounts to be based upon a 

6 formula— 

7 (I) developed by the Commission 

8 using any appropriate data from the 

9 Census Bureau; and 

10 (II) that reflects a comparative 

11 analysis of affordability of basic elec12 tronic communications services across 

13 States; 

14 (iv) rules and regulations, including 

15 quality of service requirements, regarding 

16 the— 

17 (I) designation of a carrier of 

18 last resort; and 

19 (II) relinquishment of basic elec20 tronic communications services by a 

21 carrier eligible to receive such funds 

22 under subsection (e)(4) in high cost 

23 areas; and 

24 (v) any other rules or regulations nec25 essary for the administration, monitoring, 
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1 record keeping, reporting, and enforcement 

2 of the performance-based block grant pro3 gram established under paragraph (1), in4 cluding provisions— 

5 (I) designed to protect against 

6 fraud; and 

7 (II) any additional guidelines to 

8 assist eligible States in implementing 

9 and adopting the guidelines required 

10 by subparagraph (A). 

11 (C) EFFECTIVE DATE, LIMITATION, AND

12 MODIFICATION.—The guidelines required under 

13 subparagraph (A)— 

14 (i) shall take effect on the date that 

15 is 3 years after the date of enactment of 

16 this Act; 

17 (ii) shall be sufficiently flexible so as 

18 to allow eligible States to experiment with 

19 alternative market-based distribution 

20 mechanisms, including voucher programs 

21 and auctions; and 

22 (iii) may be modified by the Commis23 sion any time thereafter subject to the pro24 visions of this title. 

25 (3) DEFINITION OF ELIGIBLE STATE.— 
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1 (A) IN GENERAL.—For purposes of this 

2 section, the term ‘‘eligible State’’ means any 

3 State that has certified in writing to the Com4 mission that it has met or will meet the require5 ments of this section. 

6 (B) FAILURE TO SUBMIT CERTIFI7 CATION.—If a State fails to submit to the Com8 mission a written certification under subpara9 graph (A), such State shall not be eligible to re10 ceive grants under paragraph (1). 

11 (c) TRANSITION PERIOD.— 

12 (1) IN GENERAL.—For the period beginning on 

13 the date of enactment of this Act and ending on the 

14 date that is 3 years after the date of enactment of 

15 this Act, universal service support for any eligible 

16 telecommunications carrier, as such term is defined 

17 in section 214(e) of the Communications Act of 

18 1934 (47 U.S.C. 214(e)), shall be capped at the per19 line support levels in effect on the date of enactment 

20 of this Act. 

21 (2) NO NEW ELIGIBLE CARRIERS.—During the 

22 3-year period described in paragraph (1), an eligible 

23 State may not exercise its authority under section 

24 214(e) of the Communications Act of 1934 (47 

25 U.S.C. 214(e)) to designate additional eligible tele-
29 

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1 communications carrier, except if such State makes 

2 such a designation in accordance with section 

3 54.203(a) of title 47, Code of Federal Regulations. 

4 (3) OTHER RULES.—During the 3-year period 

5 described in paragraph (1), all rules, regulations, 

6 and orders of the Commission with respect to the 

7 provision of universal service under section 254 of 

8 the Communications Act of 1934 (47 U.S.C. 254), 

9 including the provision of Lifeline and Link-up as10 sistance, shall remain in effect. 

11 (d) APPLICATION.—An eligible State seeking a grant 

12 under this section shall submit an application to the Com13 mission at such time, in such manner, and containing such 

14 information as the Commission may require. 

15 (e) CONDITIONS.—Not later than 18 months after 

16 the publication of the guidelines required under subsection 

17 (a)(2), each eligible State seeking a grant under this sec18 tion shall— 

19 (1) conduct proceedings to identify high cost 

20 areas within that State; 

21 (2) promulgate rules and regulations regarding 

22 the distribution of performance-based block grant 

23 amounts to low-income households; 
30 

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1 (3) establish distribution mechanisms for per2 formance-based block grant amounts received under 

3 this section; and 

4 (4) by rule, determine which carriers are eligi5 ble to receive universal support from that eligible 

6 State. 

7 (f) USE OF FUNDS.— 

8 (1) IN GENERAL.—A performance-based block 

9 grant awarded to an eligible State shall be used to— 

10 (A) provide a single connection to basic 

11 electronic communications services to all low-in12 come households and households in high cost 

13 areas; 

14 (B) provide support for households or for 

15 the underlying infrastructure used to provide 

16 basic electronic communications services in high 

17 cost areas; and 

18 (C) fund or reimburse carriers eligible to 

19 receive such funds under subsection (e)(4) for 

20 the provision, maintenance, and upgrading of 

21 services of basic electronic communications 

22 services to low-income households and house23 holds in high cost areas. 

24 (2) COMMISSION NEEDS.—Consistent with the 

25 principles established under section 302 and with 
31 

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1 the results of audits performed under subsection (i), 

2 the Commission may redirect a portion of the 

3 amounts in the Fund to meet additional staffing and 

4 administrative needs of the Commission. 

5 (g) UNUSED FUNDS.— 

6 (1) IN GENERAL.—If an eligible State does not 

7 use all of its allotted performance-based block grant 

8 funds in a given year, such State shall, in writing, 

9 inform the Commission of that unused amount. 

10 (2) PERFORMANCE LEVEL ACHIEVEMENT.—If 

11 an eligible State meets the performance level stand12 ards established under subsection (b)(2)(B)(ii), such 

13 State— 

14 (A) may retain any unused block grant 

15 funds; and 

16 (B) shall direct such unused funds to17 wards— 

18 (i) service not designated as basic 

19 electronic communications services; or 

20 (ii) public safety infrastructure im21 provements, including the upgrading, 

22 maintenance, and support of E911 sys23 tems. 

24 (3) OFFSET.—If an eligible State does not meet 

25 the performance level standards established under 
32 

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1 subsection (b)(2)(B)(ii), the Commission shall offset 

2 any unused funds by that State in a given year 

3 against that State’s block grant allotment in the fol4 lowing calendar year. 

5 (h) COMMISSION AUTHORITY.—The Commission may 

6 withhold performance-based block grant funds from any 

7 eligible State that fails to comply with any rule or guide8 line established by the Commission under this section. 

9 (i) AUDITS.— 

10 (1) IN GENERAL.—The Commission shall, from 

11 time to time, conduct audits of the use and distribu12 tion performance-based block grant amounts by each 

13 eligible State and eligible communications carriers. 

14 (2) NUMBER OF AUDITS TO BE CONDUCTED.— 

15 The number of audits conducted by the Commission 

16 under paragraph (1) shall be of such number, as de17 termined by the Commission, to allow the Commis18 sion, for purposes of the report required under sec19 tion 308, to provide a detailed analysis on the effi20 ciency of universal service distribution mechanisms 

21 employed by eligible States. 

22 (j) CONSULTATION WITH JOINT BOARD.— 

23 (1) IN GENERAL.—The Joint Board based upon 

24 the experience of eligible States and consistent with 

25 the principles established under section 302 may, 
33 

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1 from time to time, recommend to the Commission 

2 modifications to guidelines required under subsection 

3 (b)(2). 

4 (2) COMMISSION ACTION.—Not later than 1 

5 year after receiving recommendations from the Joint 

6 Board under paragraph (1), the Commission shall 

7 complete any proceeding to consider whether to im8 plement, in whole or in part, such recommendations. 

9 SEC. 306. WAIVER AUTHORITY. 

10 (a) IN GENERAL.—An eligible State may submit a 

11 petition to the Commission, in such manner and con12 taining such information as the Commission may require, 

13 to adopt a distribution mechanism that is not based on 

14 the model distribution mechanisms outlined in the guide15 lines required by section 305(b)(2)(B)(i). 

16 (b) TIMING.—Not later than 90 days after the date 

17 that a petition is submitted under subsection (a), the Com18 mission shall issue a decision on whether to grant or deny 

19 such petition. 

20 (c) GRANT OF PETITION.—The Commission may 

21 grant any petition submitted under subsection (a), if such 

22 petition is consistent with the universal service principles 

23 established under section 302. 
34 

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1 SEC. 307. STATE UNIVERSAL SERVICE PROGRAMS NOT PRE2 EMPTED. 

3 (a) IN GENERAL.—Nothing in this title shall preempt 

4 or be construed to preempt an eligible State from adopting 

5 laws, rules, or regulations to ensure that quality basic elec6 tronic communications services are universally available to 

7 all low-income households and households in high cost 

8 areas at affordable rates, so long as such laws, rules, or 

9 regulations are consistent with, and not in violation of, 

10 the principles established under section 302 and any other 

11 applicable provision of this title. 

12 (b) FEDERAL REVIEW.—The Commission may— 

13 (1) review any law, rule, or regulation adopted 

14 by an eligible State to determine if such law, rule, 

15 or regulation is in compliance with the requirements 

16 of subsection (a); and 

17 (2) withhold from any eligible State perform18 ance-based block grant funds awarded under section 

19 305, if the Commission determines that such laws, 

20 rules, or regulations fail to comply with the require21 ments of subsection (a). 

22 SEC. 308. REPORT TO CONGRESS. 

23 Not later than 3 years after the date of enactment 

24 of this Act, and every 3 years thereafter, the Commission 

25 shall report to Congress— 
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1 (1) an analysis of the costs and benefits of the 

2 universal service program established under section 

3 305, including an evaluation of whether, and to what 

4 extent, such universal service program has caused 

5 improvements in affordability; 

6 (2) a summary of findings from the audits the 

7 Commission undertook as required under section 

8 305(i); 

9 (3) a summary of best practices employed by el10 igible States which have adopted laws, rules, or reg11 ulations regarding universal service in compliance 

12 with section 307; 

13 (4) an evaluation of, and recommendations re14 garding, the contribution mechanism established 

15 under section 304; and 

16 (5) an analysis of the continuing need for uni17 versal service support based upon— 

18 (A) the experience of the eligible States; 

19 and 

20 (B) technological and marketplace develop21 ments, including recommendations regarding 

22 the limitation on the size of the funding cap 

23 under section 305(a). 
36 

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1 TITLE IV—GENERAL 

2 PROVISIONS 

3 SEC. 401. FINDINGS AND POLICY REGARDING ALLOCATION 

4 OF FEDERAL, STATE, AND LOCAL RESPONSI5 BILITY. 

6 (a) FINDINGS.—Congress finds that— 

7 (1) technological and market forces are chang8 ing the nature and delivery of electronic communica9 tions services; 

10 (2) these technological and market changes 

11 have altered the necessary roles for Federal, State, 

12 and local authorities in regulating electronic commu13 nications services; 

14 (3) in many cases, responsibility to regulate ac15 tivities relating to communications has been allo16 cated to a State or local jurisdiction based on wheth17 er such activities were deemed to occur within that 

18 State or jurisdiction; 

19 (4) as electronic communications services and 

20 technologies become increasingly digital and packet21 based, it has become difficult, and often impossible, 

22 to rely on jurisdictional boundaries as the basis for 

23 allocating regulatory responsibility among jurisdic24 tions; 
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1 (5) a regulatory regime enforced by multiple ju2 risdictions, based on disparate laws, may result in 

3 inconsistent, unpredictable, and onerous rules that 

4 inhibit investment, innovation, and competition; 

5 (6) the Telecommunications Act of 1996, which 

6 made substantial changes in the allocation of respon7 sibilities among regulators in different jurisdictions, 

8 nonetheless did not adopt a framework that address9 es fully the challenges posed by the rapid techno10 logical and marketplace evolution of electronic com11 munications networks and services; and 

12 (7) given these shortcomings, new statutory 

13 guidance for allocating Federal, State, and local re14 sponsibility is necessary to achieve the purposes of 

15 regulating electronic communications networks and 

16 services. 

17 (b) POLICY.—It shall be the policy of the United 

18 States Government— 

19 (1) to integrate Federal, State, and local regu20 lation of electronic communications networks; 

21 (2) that electronic communications networks 

22 and services be governed by a single, unified, mini23 mally pervasive regulatory regime determined and 

24 generally implemented at the Federal level; 
38 

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1 (3) to eliminate rate regulation and rate-setting 

2 where market conditions adequately protect the in3 terests of consumers in obtaining reasonable rates; 

4 (4) to eliminate regulation based on techno5 logical or functional distinctions among communica6 tions services and networks; 

7 (5) to avoid extending legacy regulation to addi8 tional services, networks, or providers; and 

9 (6) to create incentives to invest in new tech10 nologies and to encourage the deployment of ad11 vanced electronic communications services. 

12 SEC. 402. RULEMAKING AND DELEGATION OF AUTHORITY. 

13 (a) RULEMAKING.—Except as otherwise specifically 

14 provided in this Act, the Commission shall have exclusive 

15 jurisdiction and authority to adopt or enforce rules, regu16 lations, or obligations, or conduct rulemakings or adju17 dications to implement the provisions of this Act. 

18 (b) DELEGATION.— 

19 (1) IN GENERAL.—The Commission may dele20 gate to a State, or any general purpose political sub21 division of a State, for matters occurring wholly 

22 within the jurisdiction of that State or political sub23 division, the authority— 

24 (A) to enforce any rules, regulations, or 

25 obligations adopted under subsection (a); or 
39 

•S 2113 IS

1 (B) to adjudicate disputes between pro2 viders of electronic communications services 

3 that relate to such rules, regulations, or obliga4 tions. 

5 (2) INVALID DELEGATION.— 

6 (A) IN GENERAL.—A delegation of author7 ity under paragraph (1) shall be invalid if a 

8 State, or any general purpose political subdivi9 sion of a State, does not certify, and the Com10 mission does not concur, that such State or po11 litical subdivision is legally and practically com12 petent to execute such authority. 

13 (B) NO REVIEW.—Any determination 

14 made by the Commission under subparagraph 

15 (A) as to the competence of a State, or any 

16 general purpose political subdivision of a State, 

17 shall not be subject— 

18 (i) to review by any court of com19 petent jurisdiction; 

20 (ii) to collateral attack; or 

21 (iii) to interlocutory appeal. 

22 (3) REVERSION OF AUTHORITY.—If a State, or 

23 any general purpose political subdivision of a State, 

24 declines to accept, lacks authority, or otherwise fails 

25 to execute a delegation of authority under paragraph 
40 

•S 2113 IS

1 (1), the Commission, upon public notice, shall as2 sume back such authority. 

3 (4) CLARIFICATION OF AUTHORITY.— 

4 (A) IN GENERAL.—A State, or any general 

5 purpose political subdivision of a State, may pe6 tition the Commission— 

7 (i) to clarify the scope of a delegation 

8 of authority under paragraph (1); or 

9 (ii) to obtain a waiver from any ex10 press or implied limitations on such delega11 tion. 

12 (B) TIMING.— 

13 (i) IN GENERAL.—Not later than 120 

14 days after the date that a petition is sub15 mitted under subparagraph (A), and after 

16 affording any interested party the oppor17 tunity for comment, the Commission shall 

18 issue a decision on whether to grant or 

19 deny such petition. 

20 (ii) EXPIRATION OF 120-DAY PE21 RIOD.—If the Commission does not issue a 

22 decision within the time-period described in 

23 subparagraph (A), the petition shall be 

24 deemed granted. 

25 (5) REQUEST FOR DELEGATION.— 
41 

•S 2113 IS

1 (A) IN GENERAL.—In the absence of a del2 egation of authority under paragraph (1), a 

3 State, or any general purpose political subdivi4 sion of a State, may, for matters occurring 

5 wholly within the jurisdiction of that State or 

6 political subdivision, petition the Commission to 

7 enforce any rules, regulations, or obligations en8 acted under subsection (a). 

9 (B) TIMING.— 

10 (i) IN GENERAL.—Not later than 90 

11 days after the date that a petition is sub12 mitted under subparagraph (A), and after 

13 affording any interested party the oppor14 tunity for comment, the Commission shall 

15 issue a decision on whether to grant or 

16 deny such petition. 

17 (ii) EXPIRATION OF 90-DAY PERIOD.— 

18 If the Commission does not issue a deci19 sion within the time-period described in 

20 subparagraph (A), the petition shall be 

21 deemed denied. 

22 SEC. 403. JUDICIAL REVIEW OF DECISIONS. 

23 Except as otherwise specifically provided in this Act, 

24 any interested party may appeal any decision of the Com25 mission or any State, or any general purpose political sub-
42 

•S 2113 IS

1 division of a State, made under section 402 to the United 

2 States Court of Appeals for the District of Columbia. 

3 SEC. 404. RIGHT-OF-WAY AUTHORITY. 

4 A provider of electronic communications services shall 

5 be authorized to construct or operate an electronic com6 munications network— 

7 (1) over public rights-of-way; and 

8 (2) through easements within a State, except 

9 that in using such easements, such provider shall en10 sure that— 

11 (A) the installation or construction of fa12 cilities necessary for the electronic communica13 tions network shall not adversely affect— 

14 (i) the safety, function, and appear15 ance of the property described in the ease16 ment; and 

17 (ii) the convenience and safety of any 

18 person who has a right to use such ease19 ment; 

20 (B) the cost of installation, construction, 

21 operation, or removal of such facilities be borne 

22 by— 

23 (i) such provider; 

24 (ii) the subscriber; or 

25 (iii) a combination of both; and 
43 

•S 2113 IS

1 (C) the owner of the property described in 

2 the easement be justly compensated by such 

3 provider for any damages caused by the instal4 lation, construction, operation, or removal of 

5 such facilities. 

6 SEC. 405. STATE REGULATION OF BASIC LOCAL RATES. 

7 (a) GRANDFATHER CLAUSE.—Except as provided in 

8 subsections (b) through (d), a State may continue to regu9 late the rates for basic stand-alone local service, if prior 

10 to the date of enactment of this Act, such service was— 

11 (1) offered separately from any other services 

12 to customers who are not providers of electronic 

13 communications services; 

14 (2) of the type defined in section 254(c)(1) of 

15 the Communications Act of 1934 (47 U.S.C. 254 

16 (c)(1)), as interpreted under section 54.101(a) of 

17 title 47, Code of Federal Regulations, as those provi18 sions existed on the date of enactment of this Act; 

19 (3) provided via a circuit-switched telephone 

20 network; and 

21 (4) lawfully regulated by that State. 

22 (b) LIMITATION ON STATE REGULATION OF ANCIL23 LARY OR VERTICAL SERVICES.—The authority of a State 

24 to regulate rates under subsection (a) shall not— 
44 

•S 2113 IS

1 (1) extend to any ancillary or vertical services 

2 offered in connection with the provision of basic 

3 stand-alone local service; or 

4 (2) apply to any service bundles that contain 

5 basic stand-alone local service as a component of 

6 such bundle. 

7 (c) RETAIL OR END-USER SERVICES ARE TO BE UN8 REGULATED.—Except as provided otherwise in this Act, 

9 neither the Commission nor any State shall have authority 

10 to regulate the rates of any other retail or end-user elec11 tronic communications service. 

12 (d) PETITION TO ELIMINATE EXISTING STATE REG13 ULATIONS.— 

14 (1) IN GENERAL.—Any interested party may 

15 submit a petition to the appropriate State agency, as 

16 determined by that State, to modify or eliminate any 

17 rate regulations on services grandfathered under 

18 subsection (a). 

19 (2) TIMING.— 

20 (A) IN GENERAL.—Not later than 270 

21 days after the date that a petition is submitted 

22 under paragraph (1), the appropriate State 

23 agency shall issue a decision on whether to 

24 grant or deny such petition. 
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1 (B) EXPIRATION OF 270-DAY PERIOD.—If 

2 the appropriate State agency does not issue a 

3 decision within the time-period described in 

4 subparagraph (A), the petition shall be deemed 

5 granted. 

6 (3) CONTENT OF DECISION.—Any decision that 

7 denies a petition under paragraph (2) shall include 

8 a written explanation of— 

9 (A) how the regulation described in the pe10 tition satisfies the requirements of subsection 

11 (a); and 

12 (B) why the economic benefits of such reg13 ulation outweigh the economic harms of such 

14 regulation. 

15 (e) FEDERAL AGENCY REVIEW OF STATE DECI16 SIONS.— 

17 (1) IN GENERAL.—An interested party may 

18 submit a petition to the Commission to overturn the 

19 denial of a petition by an appropriate State agency 

20 under subsection (d). 

21 (2) SPECIAL EMPHASIS FOR REVIEW.—In decid22 ing whether or not to overturn the denial of a peti23 tion under paragraph (1), the Commission shall 

24 place special emphasis on whether the regulation de25 scribed in the petition remedies or serves to alleviate 
46 

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1 methods, acts, or practices deemed unlawful under 

2 section 102. 

3 (3) TIMING.— 

4 (A) IN GENERAL.—Not later than 180 

5 days after the date that a petition is submitted 

6 under paragraph (1), the Commission shall 

7 issue a decision on whether to grant or deny 

8 such petition. 

9 (B) EXPIRATION OF 180-DAY PERIOD.—If 

10 the Commission does not issue a decision within 

11 the time-period described in subparagraph (A), 

12 the petition shall be deemed denied. 

13 (f) FEDERAL COURT REVIEW.—An interested party 

14 may appeal the grant or denial of a petition under sub15 section (e) directly to the United States Court of Appeals 

16 for the District of Columbia. 

17 SEC. 406. RETENTION OF ADDITIONAL STATE AUTHORITY. 

18 (a) IN GENERAL.—Notwithstanding section 402, a 

19 State, or any general purpose political subdivision of a 

20 State, shall retain jurisdiction to enact and implement 

21 rules or regulations that such State or political subdivision 

22 determines, after notice and an opportunity for public 

23 comment, are minimally and directly necessary— 

24 (1) to prohibit unfair or deceptive acts or prac25 tices that would negatively affect consumers from 
47 

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1 using electronic communications services, including 

2 the concealment of the terms and conditions affect3 ing the price and quality of such services; 

4 (2) to protect the public safety and homeland 

5 security; and 

6 (3) to manage public rights-of-way and execute 

7 traditional police powers with respect to public 

8 spaces, provided that any fees imposed by such State 

9 or political subdivision for access to rights-of-way 

10 shall not exceed the actual direct costs incurred by 

11 such State or political subdivision in managing the 

12 use of such rights-of-way by electronic communica13 tions service providers. 

14 (b) RULE OF CONSTRUCTION.—Nothing in sub15 section (a) shall be construed to grant a State, or any gen16 eral purpose political subdivision of a State, the author17 ity— 

18 (1) absent a delegation under section 403, to 

19 enact or enforce rules, regulations, or obligations, or 

20 conduct rulemakings or adjudications to implement 

21 the provisions of this Act; 

22 (2) except as otherwise specifically provided, to 

23 enact— 

24 (A) regulations relating to— 

25 (i) rates; or 
48 

•S 2113 IS

1 (ii) quality-of-service; or 

2 (B) any other economic regulation; or 

3 (3) to impose any other requirements on a pro4 vider of electronic communications services to the ex5 tent that such provider relies on networks that con6 nect to customers primarily through use of electro7 magnetic spectrum or other non-physical means. 

8 SEC. 407. PREEMPTION OF STATE AUTHORITY. 

9 Except as provided in sections 405 and 406, or under 

10 a delegation of authority under section 402, this Act su11 persedes any provision of a statute, regulation, or rule, 

12 and any other requirement, prohibition or remedy under 

13 State law or the law of any general purpose political sub14 division of a State, if the Commission concludes that— 

15 (1) such statute, regulation, or rule, require16 ment, prohibition, or remedy is or would be incon17 sistent with the provisions of this Act; 

18 (2) there are substantial and clear efficiencies 

19 to be gained by preempting the regulatory approach 

20 of such State or political subdivision; 

21 (3) a single Federal regulatory approach is 

22 clearly optimal over all other regulatory approaches; 

23 (4) there is a clear showing that the costs of 

24 abiding by a diverse set of regulatory approaches 

25 outweighs the benefits of allowing States or political 
49 

•S 2113 IS

1 subdivisions thereof to experiment with innovative 

2 regulatory approaches; 

3 (5) abiding by a diverse set of regulatory ap4 proaches materially inhibits any provider of elec5 tronic communications services from effectively of6 fering such service; or 

7 (6) such State or political subdivision has im8 posed any tax solely on some or all providers of elec9 tronic communications services. 

10 SEC. 408. TRANSITION AND SUNSET OF EXISTING AGREE11 MENTS. 

12 (a) EXISTING FRANCHISE AGREEMENTS.—Any fran13 chise agreement entered into by a franchising authority 

14 and a provider of electronic communications services 

15 under section 621 of the Communications Act of 1934 (47 

16 U.S.C. 541), as of the date of enactment of this Act, shall 

17 be exempt from the provisions of this Act until the earlier 

18 of— 

19 (1) the date of expiration of the terms of such 

20 agreement; or 

21 (2) the date that is 4 years after the date of en22 actment of this Act. 

23 (b) LIMITATION.—A State, or any general purpose 

24 political subdivision of a State, may not renew, extend, 

25 or otherwise enforce the terms of an any franchise agree-
50 

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1 ment described in subsection (a) beyond the time-periods 

2 established in that subsection. 

3 (c) CONTRIBUTIONS BY COMPETING VIDEO SERV4 ICES.—Until an existing franchise agreement is termi5 nated under subsection (a), a State, or any general pur6 pose political subdivision of a State, may require any pro7 vider of competing video services to contribute an equi8 table portion of costs associated with— 

9 (1) any fees directly attributable to such agree10 ment; and 

11 (2) the provision of any public access channels 

12 required by such agreement. 

13 SEC. 409. EFFECTIVE DATE. 

14 Except as otherwise specifically provided, this Act 

15 shall take effect 2 years after the date of enactment of 

16 this Act. 

Æ