```

[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3636 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 3636

   To promote a national communications infrastructure to encourage 
deployment of advanced communications services through competition, and 
                          for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           November 22, 1993

 Mr. Markey (for himself, Mr. Fields of Texas, Mr. Boucher, Mr. Oxley, 
 Mr. Hall of Texas, Mr. Moorhead, Mr. Bryant, Mr. Barton of Texas, Mr. 
   Lehman, Mr. Hastert, Mr. Richardson, Mr. Gillmor, and Ms. Schenk) 
 introduced the following bill; which was referred to the Committee on 
                          Energy and Commerce

                           February 10, 1994

      Additional sponsors: Mr. Moakley, Mr. Studds, Mr. Frank of 
     Massachusetts, Mr. Levy, Mr. Meehan, Mr. Olver, Mr. Franks of 
          Connecticut, Mr. Machtley, Mr. Blute, and Mr. McHugh

_______________________________________________________________________

                                 A BILL

 
   To promote a national communications infrastructure to encourage 
deployment of advanced communications services through competition, and 
                          for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Communications Competition 
and Information Infrastructure Act of 1993''.

       TITLE I--TELECOMMUNICATIONS INFRASTRUCTURE AND COMPETITION

SEC. 101. POLICY; DEFINITIONS.

    (a) Policy.--Section 1 of the Communications Act of 1934 (47 U.S.C. 
151) is amended--
            (1) by inserting ``(a)'' after ``Section 1.''; and
            (2) by adding at the end thereof the following new 
        subsection:
    ``(b) The purposes described in subsection (a), as they relate to 
common carrier services, include--
            ``(1) to preserve and enhance universal telecommunications 
        service at affordable rates;
            ``(2) to encourage the continued development and deployment 
        of advanced and reliable capabilities and services in 
        telecommunications networks;
            ``(3) to ensure that the costs of such networks and 
        services are allocated equitably among users and are 
        constrained by competition whenever possible;
            ``(4) to ensure a seamless and open nationwide 
        telecommunications network through joint planning, 
        coordination, and service arrangements between and among 
        carriers; and
            ``(5) to ensure that common carriers' networks function at 
        a high standard of quality in delivering advances in network 
        capabilities and services.''.
    (b) Definitions.--Section 3 of such Act (47 U.S.C. 153) is amended 
by adding at the end thereof the following new subsections:
    ``(hh) `Information service' means the offering of a capability for 
generating, acquiring, storing, transforming, processing, retrieving, 
utilizing, or making available information via telecommunications, and 
includes electronic publishing, but does not include any use of any 
such capability for the management, control, or operation of a 
telecommunications system or the management of a telecommunications 
service.
    ``(ii) `Equal access' means to afford, to any person seeking to 
provide an information service or a competing telecommunications 
service, reasonable and nondiscriminatory access--
            ``(1) to databases, signaling systems, poles, ducts, 
        conduits, and rights-of-way owned or controlled by a local 
        exchange carrier, or other facilities or information (including 
        customer numbers) integral to the transmission, routing, or 
        other provision of telephone exchange services;
            ``(2) that is at least equal in type and quality to the 
        access which the carrier affords to itself or to any other 
        person; and
            ``(3) that is sufficient to ensure the full 
        interoperability of the equipment and facilities of the carrier 
        and of the person seeking such access.
    ``(jj) `Open platform service' means a switched, end-to-end digital 
telecommunications service, subject to title II of this Act, which (1) 
provides subscribers with sufficient network capability to access 
multimedia information services, (2) is widely available throughout 
each State, (3) is provided based on accepted standards, and (4) is 
available to all customers on a single line basis upon reasonable 
request.
    ``(kk) `Local exchange carrier' means any person that is engaged in 
the provision of telephone exchange service or telephone exchange 
access service.
    ``(ll) `Telephone exchange access service' means the offering of 
telephone exchange services or facilities for the purpose of the 
origination or termination of interexchange telecommunications services 
to or from an exchange area.
    ``(mm) `Telecommunications' means the transmission, between or 
among points specified by the customer, of information of the 
customer's choosing, without change in the form or content of the 
information as sent and received, by means of an electromagnetic 
transmission medium, including all instrumentalities, facilities, 
apparatus, and services (including the collection, storage, forwarding, 
switching, and delivery of such information) essential to such 
transmission.
    ``(nn) `Telecommunications service' means the offering, on a common 
carrier or other basis, of telecommunications facilities, or of 
telecommunications by means of such facilities. Such term does not 
include an information service.''.

SEC. 102. EQUAL ACCESS AND NETWORK FUNCTIONALITY AND QUALITY.

    (a) Amendment.--Section 201 of the Communications Act of 1934 (47 
U.S.C. 201) is amended by adding at the end thereof the following new 
subsections:
    ``(c) Equal Access.--
            ``(1) Openness and accessibility obligations.--
                    ``(A) Common carrier obligations.--The duty of a 
                common carrier under subsection (a) to furnish 
                communications service includes the duty to furnish 
                that service in accordance with such regulations with 
                respect to the openness and accessibility of common 
                carrier networks as the Commission may prescribe as 
                necessary or desirable in the public interest pursuant 
                to this subsection.
                    ``(B) Additional obligations of local exchange 
                carriers.--The duty under such subsection of a local 
                exchange carrier includes the duty--
                            ``(i) to provide, in accordance with the 
                        regulations prescribed under paragraph (2), 
                        equal access to and interconnection with the 
                        facilities of the carrier's networks to any 
                        other carrier or person providing 
                        telecommunications services reasonably 
                        requesting such equal access and 
                        interconnection, so that the networks are fully 
                        interoperable; and
                            ``(ii) to offer unbundled features, 
                        functions, and capabilities in accordance with 
                        requirements prescribed by the Commission 
                        pursuant to this subsection and other laws.
            ``(2) Equal access and interconnection regulations.--
                    ``(A) Regulations required.--The Commission shall, 
                within 1 year after the date of enactment of this 
                subsection, establish regulations that provide 
                reasonable and nondiscriminatory equal access to and 
                interconnection with the facilities of a local exchange 
                carrier's network at any technically feasible and 
                economically reasonable point within the carrier's 
                network on reasonable terms and conditions, to any 
                other carrier or person providing telecommunications 
                services requesting such access. The Commission shall 
                establish such regulations after consultation with the 
                Joint Board established pursuant to subparagraph (D). 
                Such regulations shall provide for actual collocation 
                of equipment necessary for interconnection at the 
                premises of a local exchange carrier, except that the 
                regulations shall provide for virtual collocation where 
                the local exchange carrier demonstrates that actual 
                collocation is not practical for technical reasons or 
                because of space limitations.
                    ``(B) Compensation.--The Commission shall establish 
                rules, within 1 year after the date of enactment of 
                this subsection, for the just and reasonable 
                compensation to the exchange carrier providing such 
                interconnection and equal access pursuant to 
                subparagraph (A).
                    ``(C) Exemptions and modifications.--
                Notwithstanding any other provision of this subsection, 
                a local exchange carrier in a rural area shall not be 
                required to provide equal access and interconnection to 
                another local exchange carrier. The Commission may 
                modify the requirements of this paragraph for any local 
                exchange carrier that has, in the aggregate nationwide, 
                fewer than 500,000 subscriber lines installed, to the 
                extent that the Commission determines that compliance 
                with such requirements would be unduly economically 
                burdensome, technologically infeasible, or otherwise 
                not in the public interest.
                    ``(D) Joint board on equal access and 
                interconnection standards.--Within 30 days after the 
                date of enactment of this subsection, the Commission 
                shall convene a Federal-State Joint Board under section 
                410(c) for the purpose of preparing a recommended 
                decision for the Commission with respect to the equal 
                access and interconnection regulations required by this 
                paragraph.
                    ``(E) Enforcement of existing regulations.--Nothing 
                in this section shall be construed to prohibit the 
                Commission from enforcing regulations prescribed prior 
                to the date of enactment of this section in fulfilling 
                the requirements of this subsection to the extent that 
                such regulations are consistent with the provisions of 
                this subsection.
            ``(3) State preemption.--Notwithstanding section 2(b), no 
        State or local government may, after one year after the date of 
        enactment of this subsection--
                    ``(A) effectively prohibit any provider of any 
                telecommunication services from providing that or any 
                other such service, or impose any restrictions on entry 
                into the business of providing any such service that is 
                inconsistent with this subsection or any other 
                provision of this Act, or any regulation thereunder;
                    ``(B) prohibit any carrier or other person 
                providing telecommunications services from exercising 
                the access and interconnection rights provided under 
                this subsection; or
                    ``(C) impose any limitation on the exercise of such 
                rights that is inconsistent with this subsection or the 
                regulations prescribed under this subsection.
            ``(4) Tariffs.--
                    ``(A) Generally.--A local exchange carrier shall, 
                within 18 months after the date of enactment of this 
                subsection, prepare and file tariffs in accordance with 
                this Act with respect to the services or elements 
                offered to comply with the equal access and 
                interconnection regulations required under this 
                subsection. The costs that a carrier incurs in 
                providing such services or elements of exchange 
                services shall be borne solely by the users of the 
                features and functions comprising such services or 
                which uses or includes such service element. The 
                Commission shall review such tariffs to ensure that--
                            ``(i) the charges for such services or 
                        elements of exchange services are cost-based; 
                        and
                            ``(ii) the terms and conditions contained 
                        in such tariffs do not bundle together any 
                        separable elements, features, or functions.
                    ``(B) Supporting information.--A local exchange 
                carrier shall submit supporting information with its 
                tariffs for equal access and interconnection that is 
                sufficient to enable the Commission and the public to 
                determine the relationship between the proposed charges 
                and the costs of providing such services or elements of 
                exchange services. The submission of such information 
                shall be pursuant to rules adopted by the Commission to 
                ensure that similarly situated carriers provide such 
                information in a uniform fashion.
            ``(5) Pricing flexibility.--(A) Within 270 days after the 
        date of enactment of this subsection, the Commission, by 
        regulation, shall establish criteria for determining--
                    ``(i) whether a telecommunications service or 
                provider of such service has become, or is reasonably 
                certain imminently to become, subject to competition, 
                either within a geographic area or within a class or 
                category of service;
                    ``(ii) whether such competition will effectively 
                prevent rates for such service that are unjust or 
                unreasonable or that are unjustly or unreasonably 
                discriminatory; and
                    ``(iii) appropriate flexible pricing procedures 
                that can be used in lieu of the filing of tariff 
                schedules, or in lieu of other pricing procedures 
                established by the Commission, and that are consistent 
                with the public interest, convenience, and necessity.
            ``(B) The Commission, with respect to rates for interstate 
        or foreign communications, and State commissions, with respect 
        to rates for intrastate communications, shall, upon 
        application--
                    ``(i) render determinations in accordance with the 
                criteria established under clauses (i) and (ii) of 
                subparagraph (A) concerning the services or providers 
                that are the subject of such application; and
                    ``(ii) upon a proper showing, establish an 
                appropriate flexible pricing procedure consistent with 
                the criteria established under clause (iii) of such 
                subparagraph.
        The Commission shall approve or reject any such application 
        within 180 days after its submission.
            ``(6) Joint board to preserve universal service.--
                    ``(A) Establishment; functions.--Within 30 days 
                after the date of enactment of this subsection, the 
                Commission shall convene a Federal-State Joint Board 
                under section 410(c) for the purpose of recommending 
                actions to the Commission and State commissions for the 
                preservation of universal service. As a part of 
                preparing such recommendations, the Joint Board shall 
                survey providers of telephone exchange service and 
                consult with State commissions in order to determine 
                the pecuniary difference between the cost of providing 
                universal service and the prices determined to be 
                appropriate for such service. In making such 
                recommendations, the Joint Board shall base policies 
                for the preservation of universal service on the 
                following principles:
                            ``(i) A plan adopted by the Commission and 
                        the States should ensure the continued 
                        viability of universal service by maintaining 
                        quality services at affordable prices.
                            ``(ii) Such plan should define the nature 
                        and extent of the services encompassed within 
                        carriers' universal service obligations and 
                        should seek to promote access to advanced 
                        telecommunications services for all Americans 
                        by including advanced telecommunications 
                        services in the definition of universal 
                        service, while maintaining affordable rates.
                            ``(iii) Such plan should establish specific 
                        and predictable mechanisms to provide adequate 
                        and sustainable support for universal service.
                            ``(iv) All providers of telecommunications 
                        services should make an equitable and 
                        nondiscriminatory contribution to preservation 
                        of universal service.
                    ``(B) Report; commission response.--The Joint Board 
                convened pursuant to subparagraph (A) shall report its 
                recommendations within 270 days after the date of 
                enactment of this subsection. The Commission shall 
                complete any proceeding to implement such 
                recommendations within one year after such date of 
                enactment. A State may adopt regulations to implement 
                the Joint Board's recommendations, except that such 
                regulations shall not, after 18 months after such date 
                of enactment, be inconsistent with regulations 
                prescribed by the Commission to implement such 
                recommendations.
            ``(7) Resale.--The resale or sharing of telephone exchange 
        service (or unbundled elements of such service) in conjunction 
        with the furnishing of a telecommunications service or any 
        information service shall not be prohibited nor subject to 
        unreasonable conditions by the carrier, the Commission, or any 
        State.
            ``(8) Review of standards and requirements.--At least once 
        every three years, the Commission shall--
                    ``(A) conduct a proceeding in which interested 
                parties shall have an opportunity to comment on whether 
                the standards and requirements established by or under 
                this subsection have opened the networks of carriers to 
                reasonable and nondiscriminatory access by providers of 
                telecommunications services and information services;
                    ``(B) review the definition of universal service 
                and evaluate the extent to which universal service has 
                been protected and access to advanced services has been 
                facilitated pursuant to this subsection and the plans 
                and regulations thereunder; and
                    ``(C) submit to the Congress a report containing a 
                statement of the Commission's findings pursuant to such 
                proceeding, and including an identification of any 
                defects or delays observed in attaining the objectives 
                of this subsection and a plan for correcting such 
                defects and delays.
            ``(9) Study of rural phone service.--No later than 1 year 
        after the date of enactment of this subsection, the Commission 
        shall initiate an inquiry to examine the effects of competition 
        in the provision of telephone exchange access and telephone 
        exchange service on the availability and rates for telephone 
        exchange access and telephone exchange service furnished by 
        rural exchange carriers.
    ``(d) Network Functionality and Quality.--
            ``(1) Functionality and reliability obligations.--The duty 
        of a common carrier under subsection (a) to furnish 
        communications service includes the duty to furnish that 
        service in accordance with such regulations of functionality 
        and reliability as the Commission may prescribe as necessary or 
        desirable in the public interest pursuant to this subsection.
            ``(2) Coordinated planning for interoperability and other 
        purposes.--The Commission shall establish--
                    ``(A) procedures for the conduct of coordinated 
                network planning by common carriers and other providers 
                of telecommunications or information services, subject 
                to Commission supervision, for the effective and 
                efficient interconnection and interoperability of 
                public and private networks; and
                    ``(B) procedures for the development, subject to 
                Commission supervision, of--
                            ``(i) standards for the interconnection and 
                        interoperability of such networks;
                            ``(ii) standards for the design of such 
                        networks that promote access to network 
                        capabilities and services by individuals with 
                        disabilities; and
                            ``(iii) standards to ensure that the design 
                        of such networks does not impede access to 
                        information services by subscribers to 
                        telephone exchange service furnished by a rural 
                        exchange carrier.
            ``(3) Open platform service.--
                    ``(A) Study.--No later than 90 days after the 
                enactment of this subsection, the Commission shall 
                initiate an inquiry to consider the rules and policies 
                necessary to make open platform service available to 
                all subscribers at reasonable rates based on the 
                reasonably identifiable costs of providing such 
                services, utilizing existing facilities to the maximum 
                extent feasible and economically practicable. The 
                inquiry required under this paragraph shall be 
                completed within 120 days after initiation.
                    ``(B) Regulations.--On the basis of the results of 
                the inquiry required under subparagraph (A), the 
                Commission shall prescribe and make effective such 
                regulations as are necessary to implement the inquiry's 
                conclusions. Such regulations may require a local 
                exchange carrier to file, in the appropriate 
                jurisdiction, tariffs for the origination and 
                termination of open platform service as soon as such 
                service is economically and technically feasible. In 
                establishing any such regulations, the Commission shall 
                take into account the proximate and long-term 
                deployment plans of local exchange carriers, and may 
                establish a procedure to delay for a reasonable period 
                of time any requirement of open platform service if a 
                petition from a local exchange carrier demonstrates 
                that compliance with such requirement would 
                significantly delay the deployment of a more advanced 
                technology. Any such regulations shall provide for the 
                allocation of all costs of facilities jointly used to 
                provide open platform service and telephone exchange 
                service. Nothing in this subsection shall be construed 
                to limit a State's authority to continue to regulate 
                any services subject to State jurisdiction under this 
                Act.
                    ``(C) Continuing oversight.--Commencing not later 
                than 2 years after the date of enactment of this 
                subsection, the Commission shall conduct an inquiry on 
                the progress of open platform service deployment. The 
                Commission shall submit a report to the Congress on the 
                results of such inquiry within 90 days after the 
                commencement of such inquiry and annually thereafter 
                for the succeeding 5 years.
            ``(4) Accessibility regulations.--
                    ``(A) Regulations.--The Commission shall, within 1 
                year after enactment of this section, prescribe such 
                regulations as are necessary to ensure that advances in 
                network services deployed by local exchange carriers 
                shall be accessible and usable by individuals with 
                disabilities, including individuals with functional 
                limitations of hearing, vision, movement, manipulation, 
                speech and interpretation of information, unless the 
                cost of making the services accessible and usable would 
                result in an undue burden or adverse competitive 
                impact. Such regulations shall seek to permit the use 
                of both standard and special equipment, and seek to 
                minimize the need of individuals to acquire additional 
                devices beyond those used by the general public to 
                obtain such access.
                    ``(B) Compatibility.--Such regulations shall 
                require that whenever an undue burden or adverse 
                competitive impact would result from the requirements 
                in subparagraph (A), the local exchange carrier that 
                deploys the network service shall ensure that the 
                network service in question is compatible with existing 
                peripheral devices or specialized customer premises 
                equipment commonly used by persons with disabilities to 
                achieve access, unless doing so would result in an 
                undue burden or adverse competitive impact.
                    ``(C) Undue burden.--The term `undue burden' means 
                significant difficulty or expense. In determining 
                whether the activity necessary to comply with the 
                requirements of this paragraph would result in an undue 
                burden, the factors to be considered include:
                            ``(i) The nature and cost of the activity.
                            ``(ii) The impact on the operation of the 
                        facility involved in the deployment of the 
                        network service.
                            ``(iii) The financial resources of the 
                        local exchange carrier.
                            ``(iv) The type of operations of the local 
                        exchange carrier.
                    ``(D) Adverse competitive impact.--In determining 
                whether the activity necessary to comply with the 
                requirements of this paragraph would result in adverse 
                competitive impact, the following factors shall be 
                considered:
                            ``(i) whether such activity would raise the 
                        cost of the network service in question beyond 
                        the level at which there would be sufficient 
                        consumer demand by the general population to 
                        make the network service profitable; and
                            ``(ii) whether such activity would, with 
                        respect to the network service in question, put 
                        the local exchange carrier at a competitive 
                        disadvantage. This factor may be considered so 
                        long as competing network service providers are 
                        not held to the same obligation with respect to 
                        access by persons with disabilities.
                    ``(E) Effective date.--The regulations required by 
                this paragraph shall become effective 18 months after 
                the date of enactment of this subsection.
            ``(5) Quality rules.--(A) The Commission shall designate or 
        otherwise establish network reliability and quality performance 
        measures or benchmarks for common carriers for the purpose of 
        ensuring the continued maintenance and evolution of common 
        carrier facilities and service. Not later than 180 days after 
        the date of enactment of this subsection, the Commission shall 
        initiate a rulemaking proceeding to establish performance 
        measures or benchmarks for maintaining common carrier network 
        quality.
            ``(B) Such rules and regulations shall include--
                    ``(i) quantitative network reliability and service 
                quality performance measures or benchmarks;
                    ``(ii) procedures to monitor and evaluate common 
                carrier efforts to increase network reliability and 
                service quality; and
                    ``(iii) procedures to resolve network reliability 
                and service quality complaints.
            ``(C) Throughout the process of developing network 
        reliability and service quality performance measures or 
        benchmarks, as required by subparagraph (A), the Commission 
        shall coordinate and consult with service and equipment 
        providers and users and State regulatory bodies to ensure their 
        concerns and interests are given full consideration in such 
        process.
            ``(6) Rural exemption.--The Commission may modify, or grant 
        exemptions from, the requirements of this subsection in the 
        case of a common carrier providing telecommunications services 
        in a rural area.''.
    (b) Conforming Amendment.--Section 2(b) of the Communications Act 
of 1934 (47 U.S.C.152(b)) is amended by inserting ``201(c) and (d),'' 
after ``Except as provided in sections''.

SEC. 103. DISCRIMINATORY INTERCONNECTION.

    Section 208 of the Communications Act of 1934 is amended by adding 
at the end thereof the following new subsection:
    ``(c) Expedited Review of Certain Complaints.--The Commission shall 
issue a final order with respect to any complaint arising from alleged 
violations of the rules and orders prescribed pursuant to section 
201(c) within 180 days after such complaint is filed.''.

SEC. 104. EXPEDITED LICENSING OF NEW TECHNOLOGIES AND SERVICES.

    Section 7 of the Communications Act of 1934 (47 U.S.C. 157) is 
amended by adding at the end thereof the following new subsection:
    ``(c) Licensing of New Technologies.--
            ``(1) Expedited rulemaking.--Within 24 months after making 
        a determination under subsection (b) that a technology or 
        service related to the furnishing of telecommunications 
        services is in the public interest, the Commission shall, with 
        respect to any such service requiring a license or other 
        authorization from the Commission, adopt and make effective 
        rules for--
                    ``(A) the provision of such technology or service; 
                and
                    ``(B) the filing of applications for the licenses 
                or authorizations necessary to offer such technology or 
                service to the public, and shall act on any such 
                application within 24 months after it is filed.
            ``(2) Review of applications.--Any application filed by a 
        carrier under this subsection for the construction or extension 
        of a line shall also be subject to section 214 and to any 
        necessary approval by the appropriate State commissions.''.

SEC. 105. NEW OR EXTENDED LINES.

    Section 214 of the Communications Act of 1934 is amended by adding 
at the end the following new subsection:
    ``(e) Any application filed under this section by a provider of 
telephone exchange service for authority to construct or extend a line 
shall address the means by which such construction or extension will 
meet the network access needs of individuals with disabilities.''.

                TITLE II--COMMUNICATIONS COMPETITIVENESS

SEC. 201. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES.

    (a) General Requirement.--
            (1) Amendment.--Section 613(b) of the Communications Act of 
        1934 (47 U.S.C. 533(b)) is amended to read as follows:
    ``(b)(1) Subject to the requirements of part V and the other 
provisions of this title, any common carrier subject in whole or in 
part to title II of this Act may, either through its own facilities or 
through an affiliate owned by, operated by, controlled by, or under 
common control with the common carrier, provide video programming 
directly to subscribers in its telephone service area.
    ``(2) Subject to the requirements of part V and the other 
provisions of this title, any common carrier subject in whole or in 
part to title II of this Act may provide channels of communications or 
pole, line, or conduit space, or other rental arrangements, to any 
entity which is directly or indirectly owned by, operated by, 
controlled by, or under common control with such common carrier, if 
such facilities or arrangements are to be used for, or in connection 
with, the provision of video programming directly to subscribers in its 
telephone service area.''.
            (2) Conforming amendment.--Section 602 of the 
        Communications Act of 1934 (47 U.S.C. 531) is amended--
                    (A) by redesignating paragraphs (18) and (19) as 
                paragraphs (19 and (20) respectively; and
                    (B) by inserting after paragraph (17) the following 
                new paragraph:
            ``(18) the term `telephone service area' when used in 
        connection with a common carrier subject in whole or in part to 
        title II of this Act means the area within which such carrier 
        provides telephone exchange service as of November 20, 1993, 
        but if any common carrier after such date transfers its 
        exchange service facilities to another common carrier, the area 
        to which such facilities provide telephone exchange service 
        shall be treated as part of the telephone service area of the 
        acquiring common carrier and not of the selling common carrier.
    (b) Provisions for Regulation of Cable Service Provided by 
Telephone Companies.--Title VI of the Communications Act of 1934 (47 
U.S.C. 521 et seq.) is amended by adding at the end the following new 
part:

        ``PART V--CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES

``SEC. 651. DEFINITIONS.

    ``For purposes of this part--
            ``(1) the term `affiliated video programming' means any 
        video programming which is (A) owned or controlled by, or under 
        common control with, a common carrier, and (B) provided by the 
        common carrier or an affiliate directly to subscribers in its 
        telephone service area;
            ``(2) the term `control' means--
                    ``(A) an ownership interest in which an entity has 
                the right to vote more than 50 percent of the 
                outstanding common stock or other ownership interest; 
                or
                    ``(B) actual working control, as defined in the 
                order of the Commission entitled ``Implementation of 
                Sections 11 and 13 of the Cable Television Consumer 
                Protection and Competitive Act of 1992--Horizontal and 
                Vertical Ownership Limits, Cross-Ownership Limitations, 
                and Anti-Trafficking Provisions'', MM Docket 92-264, 
                adopted September 23, 1993, if no single entity 
                directly or indirectly has the right to vote more than 
                50 percent of the outstanding common stock or other 
                ownership interest;
            ``(3) the term `video platform' has the same meaning as the 
        term `basic platform' in the order of the Commission entitled 
        `Telephone Company-Cable Television Cross-Ownership Rules, 
        Sections 63.54-63.58', CC Docket No. 87-266, adopted July 16, 
        1992; and
            ``(4) the term `rural area' means a geographic area that 
        does not include either--
                    ``(A) any incorporated or unincorporated place of 
                10,000 inhabitants or more, or any part thereof; or
                    ``(B) any territory, incorporated or 
                unincorporated, included in an urbanized area.

``SEC. 652. SEPARATE VIDEO PROGRAMMING AFFILIATE.

    ``(a) In General.--Except as provided in subsection (d) of this 
section, a common carrier subject to title II of this Act shall not 
provide video programming directly to subscribers in its telephone 
service area unless such video programming is provided through a video 
programming affiliate that is separate from such carrier.
    ``(b) Books and Marketing.--
            ``(1) In general.--A video programming affiliate of a 
        common carrier shall--
                    ``(A) maintain books, records, and accounts 
                separate from such carrier which identify all 
                transactions with such carrier;
                    ``(B) carry out directly (or through any 
                nonaffiliate) its own promotion, except that 
                institutional advertising carried out by such carrier 
                shall be permitted so long as each party bears its pro 
                rata share of the costs; and
                    ``(C) not own real or personal property in common 
                with such carrier.
            ``(2) Inbound telemarketing.--Notwithstanding paragraph 
        (1)(B), a common carrier may provide inbound telemarketing or 
        referral services related to the provision of video programming 
        by a video programming affiliate of such carrier. If such 
        services are provided to a video programming affiliate, such 
        services shall be made available to any video programmer or 
        cable operator on request, on nondiscriminatory terms, at 
        compensatory prices, and subject to regulations of the 
        Commission to ensure that the carrier's method of providing 
        telemarketing or referral and its price structure do not 
        competitively disadvantage any video programmer or cable 
        operator, regardless of size, including those which do not use 
        the carrier's telemarketing services.
            ``(3) Joint telemarketing.--Notwithstanding paragraph 
        (1)(B), a common carrier may petition the Commission for 
        permission to market video programming directly, upon showing 
        that a cable operator or other entity directly or indirectly 
        provides telecommunications services and markets such services 
        jointly with video programming services. The common carrier 
        shall specify the geographic region covered by the petition. 
        Any such petition shall be granted or denied within 180 days.
    ``(c) Business Transactions With Carrier Subject to Regulation.--
Any contract, agreement, arrangement, or other manner of conducting 
business, between a common carrier and its video programming affiliate, 
providing for--
            ``(1) the sale, exchange, or leasing of property between 
        such affiliate and such carrier;
            ``(2) the furnishing of goods or services between such 
        affiliate and such carrier; or
            ``(3) the transfer to or use by such affiliate for its 
        benefit of any asset or resource of such carrier,
shall be pursuant to regulation prescribed by the Commission, shall be 
on a fully compensatory and auditable basis, shall be without cost to 
the telephone service ratepayers of the carrier, shall be filed with 
the Commission, and shall be in compliance with rules established by 
the Commission which will be sufficient to enable the Commission to 
assess the compliance of any transaction.
    ``(d) Waiver.--
            ``(1) Criteria for waiver.--The Commission may waive any of 
        the requirements of this section for small or rural telephone 
        companies, and may, beginning 5 years after the date of 
        enactment of this section, waive such requirements for any 
        common carrier, if the Commission determines, after notice and 
        comment, that--
                    ``(A) such waiver will not affect the ability of 
                the Commission to ensure that all video programming 
                activity is carried out without any support from 
                telephone ratepayers;
                    ``(B) the interests of telephone ratepayers or 
                cable subscribers will not be harmed if such waiver is 
                granted; and
                    ``(C) such waiver otherwise is in the public 
                interest.
            ``(2) Deadline for action.--The Commission shall act to 
        approve or disapprove a waiver application within 180 days 
        after the date it is filed.

``SEC. 653. ESTABLISHMENT OF VIDEO PLATFORM.

    ``(a) Common Carrier Obligations.--Any common carrier subject to 
title II of this Act and that provides, through a video programming 
affiliate, video programming directly to subscribers in its telephone 
service area, shall establish a video platform. The Commission, 
together with the States, shall establish regulations to prohibit a 
carrier from discriminating in favor of its video programming affiliate 
in providing access to such platform or with regard to rates, terms, 
and conditions for access to such platform. The Commission shall take 
final action on any application under section 214 seeking authority to 
establish a video platform within one year after the date such 
application is filed.
    ``(b) Commission Study.--The Commission shall conduct a study of 
whether it is in the public interest to extend the requirements of 
subsection (a) to cable operators in lieu of the requirements of 
section 612. The Commission shall submit to the Congress a report on 
the results of such study not later than 2 years after the date of 
enactment of this section.

``SEC. 654. PROVISION OF AFFILIATED VIDEO PROGRAMMING.

    ``(a) Limitation.--A common carrier which provides, through its 
video programming affiliate, affiliated video programming directly to 
subscribers in its telephone service area, shall make available such 
capacity as is requested by unaffiliated video program providers upon 
reasonable notice. A common carrier shall not be required under this 
subsection to provide more than 75 percent of the equipped capacity of 
its video platform to unaffiliated video program providers.
    ``(b) Evaluation by Commission.--The Commission shall, not later 
than 2 years after the date of enactment of this part, evaluate the 
effect of subsection (a) on the video programming marketplace and, on 
the basis of that evaluation, make recommendations to Congress 
concerning appropriate modifications, if any, to subsection (a).
    ``(c) Broadcast Signal Carriage Excluded.--The carriage of local 
broadcast signals pursuant to section 614 shall not constitute the 
provision of affiliated video programming for purposes of subsection 
(a).
    ``(d) Termination.--Subsection (a) shall cease to be effective five 
years after the date of enactment of this part.

``SEC. 655. PROHIBITION OF CROSS-SUBSIDIZATION.

    ``(a) Common Carrier Prohibitions.--The Commission shall prescribe 
regulations to prohibit a common carrier from engaging in any practice 
that results in the inclusion in rates for telephone exchange service 
of any operating expenses, costs, depreciation charges, capital 
investments, or other expenses associated with the provision of video 
programming by the common carrier or its video programming affiliate.
    ``(b) Cable Operator Prohibitions.--The Commission shall prescribe 
regulations to prohibit a cable operator from engaging in any practice 
that results in the inclusion in rates for cable service of any 
operating expenses, costs, depreciation charges, capital investments, 
or other expenses associated with the provision of telecommunications 
service by the cable operator or its telecommunications service 
affiliate.

``SEC. 656. PROHIBITION ON BUYOUTS.

    ``(a) General Prohibition.--No common carrier that provides 
telephone exchange service, nor any entity owned by or under common 
ownership or control with such carrier, may purchase or otherwise 
obtain control over any cable system that is located within its 
telephone service area and is owned by an unaffiliated person.
    ``(b) Exceptions.--Notwithstanding subsection (a), a common carrier 
may--
            ``(1) obtain a controlling interest in, or form a joint 
        venture or other partnership with, a cable system that serves a 
        rural area;
            ``(2) obtain a controlling interest in, or form a joint 
        venture or other partnership with, a cable system or systems, 
        if such systems in the aggregate serve less than 10 percent of 
        the households in the telephone service area of such carrier 
        and its affiliated common carriers; or
            ``(3) acquire the use of that part of the transmission 
        facilities of such a cable system extending from the last 
        multi-user terminal to the premises of the end user if such use 
        is reasonably limited in scope and duration.
    ``(c) Waiver.--
            ``(1) Criteria for waiver.--The Commission may waive the 
        restrictions in subsection (a) of this section only upon a 
        showing by the applicant that--
                    ``(A) because of the nature of the market served by 
                the cable system concerned--
                            ``(i) the incumbent cable operator would be 
                        subjected to undue economic distress by the 
                        enforcement of such subsection; or
                            ``(ii) the cable system would not be 
                        economically viable if such subsection were 
                        enforced; and
                    ``(B) the local franchising authority approves of 
                such waiver.
            ``(2) Deadline for action.--The Commission shall act to 
        approve or disapprove a waiver application within 180 days 
        after the date it is filed.

``SEC. 657. PENALTIES.

    ``If the Commission finds that any common carrier has knowingly 
violated any provision of this part, the Commission shall assess such 
fines and penalties as it deems appropriate pursuant to title V of this 
Act.

``SEC. 658. CONSUMER PROTECTION.

    ``(a) Joint Board Required.--The Commission shall, within 30 days 
after the date of enactment of this part, convene a Federal-State Joint 
Board under the provisions of section 410(c) for the purpose of 
establishing the practices, classifications, and regulations as may be 
necessary to ensure proper jurisdictional separation and allocation of 
the costs of establishing and providing a video platform and 
allocations of those costs between regulated and unregulated services, 
including affiliated video programming. The Board shall issue its 
recommendations to the Commission within 270 days after the date of 
enactment of this part.
    ``(b) Commission Regulations Required.--The Commission, with 
respect to interstate switched access service, and the States, with 
respect to telephone exchange service and intrastate interexchange 
service, shall, within one year after the date of the enactment of this 
part, establish such rules and regulations as may be necessary to 
implement section 655.
    ``(c) No Effect on Carrier Regulation Authority.--Nothing in this 
section shall be construed to limit or supersede the authority of any 
State or the Commission with respect to the allocation of costs 
associated with intrastate or interstate communication services.

``SEC. 659. APPLICABILITY OF FRANCHISE AND OTHER REQUIREMENTS.

    ``(a) In General.--Except as provided in subsection (b)--
            ``(1) the provisions of part II and sections 628, 631 and 
        632 of this title, and section 325 of title III, shall apply, 
        and
            ``(2) the provisions of parts III and IV (other than 
        sections 628, 631, and 632) of this title shall not apply,
to any video platform established by a common carrier in accordance 
with the requirements of this part.
    ``(b) Implementation of Requirements.--
            ``(1) Regulations.--The Commission shall prescribe 
        regulations to ensure that a video programming affiliate of a 
        common carrier shall establish a video platform under this part 
        that provides (A) capacity for public, educational, and 
        governmental use, (B) capacity for commercial use, (C) carriage 
        of commercial and non-commercial broadcast television stations, 
        and (D) an opportunity for commercial broadcast stations to 
        choose between mandatory carriage and reimbursement for 
        retransmission of the signal of such station. In prescribing 
        such regulations, the Commission shall impose obligations that 
        are no greater or lesser than the obligations contained in the 
        provisions described in subsection (a)(1) of this section.
            ``(2) Fees.--A video programming affiliate of any common 
        carrier that establishes a video platform under this part shall 
        be subject to the payment of fees imposed by a local 
        franchising authority, in lieu of the fees required under 
        section 622. The rate at which such fees are imposed shall not 
        exceed the rate at which franchise fees are imposed on any 
        cable operator transmitting video programming in the same 
        service area.

``SEC. 660. RURAL AREA EXEMPTION.

    ``The provisions of sections 652, 653, 654, and 656 shall not apply 
to video programming provided in a rural area by a common carrier that 
provides telephone exchange service in the same area.''.

                                 <all>

HR 3636 SC----2
HR 3636 SC----3
HR 3636 SC----4
```