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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 652 Enrolled Bill (ENR)]

        S.652

                       One Hundred Fourth Congress

                                 of the

                        United States of America

                          AT THE SECOND SESSION

         Begun and held at the City of Washington on Wednesday,
   the third day of January, one thousand nine hundred and ninety-six

                                 An Act

 
 To promote competition and reduce regulation in order to secure lower 
   prices and higher quality services for American telecommunications 
 consumers and encourage the rapid deployment of new telecommunications 
                              technologies.

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

SECTION 1. SHORT TITLE; REFERENCES.

    (a) Short Title.--This Act may be cited as the ``Telecommunications 
Act of 1996''.
    (b) References.--Except as otherwise expressly provided, whenever 
in this Act an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Communications Act of 1934 (47 U.S.C. 151 et seq.).

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:
Sec. 1. Short title; references.
Sec. 2. Table of contents.
Sec. 3. Definitions.

                   TITLE I--TELECOMMUNICATION SERVICES

                 Subtitle A--Telecommunications Services

Sec. 101. Establishment of part II of title II.

              ``Part II--Development of Competitive Markets

    ``Sec. 251. Interconnection.
    ``Sec. 252. Procedures for negotiation, arbitration, and approval of 
              agreements.
    ``Sec. 253. Removal of barriers to entry.
    ``Sec. 254. Universal service.
    ``Sec. 255. Access by persons with disabilities.
    ``Sec. 256. Coordination for interconnectivity.
    ``Sec. 257. Market entry barriers proceeding.
    ``Sec. 258. Illegal changes in subscriber carrier selections.
    ``Sec. 259. Infrastructure sharing.
    ``Sec. 260. Provision of telemessaging service.
    ``Sec. 261. Effect on other requirements.''
Sec. 102. Eligible telecommunications carriers.
Sec. 103. Exempt telecommunications companies.
Sec. 104. Nondiscrimination principle.

   Subtitle B--Special Provisions Concerning Bell Operating Companies

Sec. 151. Bell operating company provisions.

   ``PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES

    ``Sec. 271. Bell operating company entry into interLATA services.
    ``Sec. 272. Separate affiliate; safeguards.
    ``Sec. 273. Manufacturing by Bell operating companies.
    ``Sec. 274. Electronic publishing by Bell operating companies.
    ``Sec. 275. Alarm monitoring services.
    ``Sec. 276. Provision of payphone service.''

                      TITLE II--BROADCAST SERVICES

Sec. 201. Broadcast spectrum flexibility.
    ``Sec. 336. Broadcast spectrum flexibility.''
Sec. 202. Broadcast ownership.
Sec. 203. Term of licenses.
Sec. 204. Broadcast license renewal procedures.
Sec. 205. Direct broadcast satellite service.
Sec. 206. Automated ship distress and safety systems.
    ``Sec. 365. Automated ship distress and safety systems.''
Sec. 207. Restrictions on over-the-air reception devices.

                        TITLE III--CABLE SERVICES

Sec. 301. Cable Act reform.
Sec. 302. Cable service provided by telephone companies.

  ``Part V--Video Programming Services Provided by Telephone Companies

    ``Sec. 651. Regulatory treatment of video programming services.
    ``Sec. 652. Prohibition on buy outs.
    ``Sec. 653. Establishment of open video systems.''
Sec. 303. Preemption of franchising authority regulation of 
          telecommunications services.
Sec. 304. Competitive availability of navigation devices.
    ``Sec. 629. Competitive availability of navigation devices.''
Sec. 305. Video programming accessibility.
    ``Sec. 713. Video programming accessibility.''

                       TITLE IV--REGULATORY REFORM

Sec. 401. Regulatory forbearance.
    ``Sec. 10. Competition in provision of telecommunications service.''
Sec. 402. Biennial review of regulations; regulatory relief.
    ``Sec. 11. Regulatory reform.''
Sec. 403. Elimination of unnecessary Commission regulations and 
          functions.

                     TITLE V--OBSCENITY AND VIOLENCE

      Subtitle A--Obscene, Harassing, and Wrongful Utilization of 
                      Telecommunications Facilities

Sec. 501. Short title.
Sec. 502. Obscene or harassing use of telecommunications facilities 
          under the Communications Act of 1934.
Sec. 503. Obscene programming on cable television.
Sec. 504. Scrambling of cable channels for nonsubscribers.
    ``Sec. 640. Scrambling of cable channels for nonsubscribers.''
Sec. 505. Scrambling of sexually explicit adult video service 
          programming.
    ``Sec. 641. Scrambling of sexually explicit adult video service 
              programming.''
Sec. 506. Cable operator refusal to carry certain programs.
Sec. 507. Clarification of current laws regarding communication of 
          obscene materials through the use of computers.
Sec. 508. Coercion and enticement of minors.
Sec. 509. Online family empowerment.
    ``Sec. 230. Protection for private blocking and screening of 
              offensive material.''

                          Subtitle B--Violence

Sec. 551. Parental choice in television programming.
Sec. 552. Technology fund.

                       Subtitle C--Judicial Review

Sec. 561. Expedited review.

                     TITLE VI--EFFECT ON OTHER LAWS

Sec. 601. Applicability of consent decrees and other law.
Sec. 602. Preemption of local taxation with respect to direct-to-home 
          services.

                   TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 701. Prevention of unfair billing practices for information or 
          services provided over toll-free telephone calls.
Sec. 702. Privacy of customer information.
    ``Sec. 222. Privacy of customer information.''
Sec. 703. Pole attachments.
Sec. 704. Facilities siting; radio frequency emission standards.
Sec. 705. Mobile services direct access to long distance carriers.
Sec. 706. Advanced telecommunications incentives.
Sec. 707. Telecommunications Development Fund.
    ``Sec. 714. Telecommunications Development Fund.''
Sec. 708. National Education Technology Funding Corporation.
Sec. 709. Report on the use of advanced telecommunications services for 
          medical purposes.
Sec. 710. Authorization of appropriations.

SEC. 3. DEFINITIONS.

    (a) Additional Definitions.--Section 3 (47 U.S.C. 153) is amended--
        (1) in subsection (r)--
            (A) by inserting ``(A)'' after ``means''; and
            (B) by inserting before the period at the end the 
        following: ``, or (B) comparable service provided through a 
        system of switches, transmission equipment, or other facilities 
        (or combination thereof) by which a subscriber can originate 
        and terminate a telecommunications service''; and
        (2) by adding at the end thereof the following:
        ``(33) Affiliate.--The term `affiliate' means a person that 
    (directly or indirectly) owns or controls, is owned or controlled 
    by, or is under common ownership or control with, another person. 
    For purposes of this paragraph, the term `own' means to own an 
    equity interest (or the equivalent thereof) of more than 10 
    percent.
        ``(34) AT&T consent decree.--The term `AT&T Consent Decree' 
    means the order entered August 24, 1982, in the antitrust action 
    styled United States v. Western Electric, Civil Action No. 82-0192, 
    in the United States District Court for the District of Columbia, 
    and includes any judgment or order with respect to such action 
    entered on or after August 24, 1982.
        ``(35) Bell operating company.--The term `Bell operating 
    company'--
            ``(A) means any of the following companies: Bell Telephone 
        Company of Nevada, Illinois Bell Telephone Company, Indiana 
        Bell Telephone Company, Incorporated, Michigan Bell Telephone 
        Company, New England Telephone and Telegraph Company, New 
        Jersey Bell Telephone Company, New York Telephone Company, U S 
        West Communications Company, South Central Bell Telephone 
        Company, Southern Bell Telephone and Telegraph Company, 
        Southwestern Bell Telephone Company, The Bell Telephone Company 
        of Pennsylvania, The Chesapeake and Potomac Telephone Company, 
        The Chesapeake and Potomac Telephone Company of Maryland, The 
        Chesapeake and Potomac Telephone Company of Virginia, The 
        Chesapeake and Potomac Telephone Company of West Virginia, The 
        Diamond State Telephone Company, The Ohio Bell Telephone 
        Company, The Pacific Telephone and Telegraph Company, or 
        Wisconsin Telephone Company; and
            ``(B) includes any successor or assign of any such company 
        that provides wireline telephone exchange service; but
            ``(C) does not include an affiliate of any such company, 
        other than an affiliate described in subparagraph (A) or (B).
        ``(36) Cable service.--The term `cable service' has the meaning 
    given such term in section 602.
        ``(37) Cable system.--The term `cable system' has the meaning 
    given such term in section 602.
        ``(38) Customer premises equipment.--The term `customer 
    premises equipment' means equipment employed on the premises of a 
    person (other than a carrier) to originate, route, or terminate 
    telecommunications.
        ``(39) Dialing parity.--The term `dialing parity' means that a 
    person that is not an affiliate of a local exchange carrier is able 
    to provide telecommunications services in such a manner that 
    customers have the ability to route automatically, without the use 
    of any access code, their telecommunications to the 
    telecommunications services provider of the customer's designation 
    from among 2 or more telecommunications services providers 
    (including such local exchange carrier).
        ``(40) Exchange access.--The term `exchange access' means the 
    offering of access to telephone exchange services or facilities for 
    the purpose of the origination or termination of telephone toll 
    services.
        ``(41) Information service.--The term `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.
        ``(42) Interlata service.--The term `interLATA service' means 
    telecommunications between a point located in a local access and 
    transport area and a point located outside such area.
        ``(43) Local access and transport area.--The term `local access 
    and transport area' or `LATA' means a contiguous geographic area--
            ``(A) established before the date of enactment of the 
        Telecommunications Act of 1996 by a Bell operating company such 
        that no exchange area includes points within more than 1 
        metropolitan statistical area, consolidated metropolitan 
        statistical area, or State, except as expressly permitted under 
        the AT&T Consent Decree; or
            ``(B) established or modified by a Bell operating company 
        after such date of enactment and approved by the Commission.
        ``(44) Local exchange carrier.--The term `local exchange 
    carrier' means any person that is engaged in the provision of 
    telephone exchange service or exchange access. Such term does not 
    include a person insofar as such person is engaged in the provision 
    of a commercial mobile service under section 332(c), except to the 
    extent that the Commission finds that such service should be 
    included in the definition of such term.
        ``(45) Network element.--The term `network element' means a 
    facility or equipment used in the provision of a telecommunications 
    service. Such term also includes features, functions, and 
    capabilities that are provided by means of such facility or 
    equipment, including subscriber numbers, databases, signaling 
    systems, and information sufficient for billing and collection or 
    used in the transmission, routing, or other provision of a 
    telecommunications service.
        ``(46) Number portability.--The term `number portability' means 
    the ability of users of telecommunications services to retain, at 
    the same location, existing telecommunications numbers without 
    impairment of quality, reliability, or convenience when switching 
    from one telecommunications carrier to another.
        ``(47) Rural telephone company.--The term `rural telephone 
    company' means a local exchange carrier operating entity to the 
    extent that such entity--
            ``(A) provides common carrier service to any local exchange 
        carrier study area that does not include either--
                ``(i) any incorporated place of 10,000 inhabitants or 
            more, or any part thereof, based on the most recently 
            available population statistics of the Bureau of the 
            Census; or
                ``(ii) any territory, incorporated or unincorporated, 
            included in an urbanized area, as defined by the Bureau of 
            the Census as of August 10, 1993;
            ``(B) provides telephone exchange service, including 
        exchange access, to fewer than 50,000 access lines;
            ``(C) provides telephone exchange service to any local 
        exchange carrier study area with fewer than 100,000 access 
        lines; or
            ``(D) has less than 15 percent of its access lines in 
        communities of more than 50,000 on the date of enactment of the 
        Telecommunications Act of 1996.
        ``(48) Telecommunications.--The term `telecommunications' means 
    the transmission, between or among points specified by the user, of 
    information of the user's choosing, without change in the form or 
    content of the information as sent and received.
        ``(49) Telecommunications carrier.--The term 
    `telecommunications carrier' means any provider of 
    telecommunications services, except that such term does not include 
    aggregators of telecommunications services (as defined in section 
    226). A telecommunications carrier shall be treated as a common 
    carrier under this Act only to the extent that it is engaged in 
    providing telecommunications services, except that the Commission 
    shall determine whether the provision of fixed and mobile satellite 
    service shall be treated as common carriage.
        ``(50) Telecommunications equipment.--The term 
    `telecommunications equipment' means equipment, other than customer 
    premises equipment, used by a carrier to provide telecommunications 
    services, and includes software integral to such equipment 
    (including upgrades).
        ``(51) Telecommunications service.--The term 
    `telecommunications service' means the offering of 
    telecommunications for a fee directly to the public, or to such 
    classes of users as to be effectively available directly to the 
    public, regardless of the facilities used.''.
    (b) Common Terminology.--Except as otherwise provided in this Act, 
the terms used in this Act have the meanings provided in section 3 of 
the Communications Act of 1934 (47 U.S.C. 153), as amended by this 
section.
    (c) Stylistic Consistency.--Section 3 (47 U.S.C. 153) is amended--
        (1) in subsections (e) and (n), by redesignating clauses (1), 
    (2), and (3), as clauses (A), (B), and (C), respectively;
        (2) in subsection (w), by redesignating paragraphs (1) through 
    (5) as subparagraphs (A) through (E), respectively;
        (3) in subsections (y) and (z), by redesignating paragraphs (1) 
    and (2) as subparagraphs (A) and (B), respectively;
        (4) by redesignating subsections (a) through (ff) as paragraphs 
    (1) through (32);
        (5) by indenting such paragraphs 2 em spaces;
        (6) by inserting after the designation of each such paragraph--
            (A) a heading, in a form consistent with the form of the 
        heading of this subsection, consisting of the term defined by 
        such paragraph, or the first term so defined if such paragraph 
        defines more than one term; and
            (B) the words ``The term'';
        (7) by changing the first letter of each defined term in such 
    paragraphs from a capital to a lower case letter (except for 
    ``United States'', ``State'', ``State commission'', and ``Great 
    Lakes Agreement''); and
        (8) by reordering such paragraphs and the additional paragraphs 
    added by subsection (a) in alphabetical order based on the headings 
    of such paragraphs and renumbering such paragraphs as so reordered.
    (d) Conforming Amendments.--The Act is amended--
        (1) in section 225(a)(1), by striking ``section 3(h)'' and 
    inserting ``section 3'';
        (2) in section 332(d), by striking ``section 3(n)'' each place 
    it appears and inserting ``section 3''; and
        (3) in sections 621(d)(3), 636(d), and 637(a)(2), by striking 
    ``section 3(v)'' and inserting ``section 3''.

                  TITLE I--TELECOMMUNICATION SERVICES
                Subtitle A--Telecommunications Services

SEC. 101. ESTABLISHMENT OF PART II OF TITLE II.

    (a) Amendment.--Title II is amended by inserting after section 229 
(47 U.S.C. 229) the following new part:

             ``PART II--DEVELOPMENT OF COMPETITIVE MARKETS

``SEC. 251. INTERCONNECTION.

    ``(a) General Duty of Telecommunications Carriers.--Each 
telecommunications carrier has the duty--
        ``(1) to interconnect directly or indirectly with the 
    facilities and equipment of other telecommunications carriers; and
        ``(2) not to install network features, functions, or 
    capabilities that do not comply with the guidelines and standards 
    established pursuant to section 255 or 256.
    ``(b) Obligations of All Local Exchange Carriers.--Each local 
exchange carrier has the following duties:
        ``(1) Resale.--The duty not to prohibit, and not to impose 
    unreasonable or discriminatory conditions or limitations on, the 
    resale of its telecommunications services.
        ``(2) Number portability.--The duty to provide, to the extent 
    technically feasible, number portability in accordance with 
    requirements prescribed by the Commission.
        ``(3) Dialing parity.--The duty to provide dialing parity to 
    competing providers of telephone exchange service and telephone 
    toll service, and the duty to permit all such providers to have 
    nondiscriminatory access to telephone numbers, operator services, 
    directory assistance, and directory listing, with no unreasonable 
    dialing delays.
        ``(4) Access to rights-of-way.--The duty to afford access to 
    the poles, ducts, conduits, and rights-of-way of such carrier to 
    competing providers of telecommunications services on rates, terms, 
    and conditions that are consistent with section 224.
        ``(5) Reciprocal compensation.--The duty to establish 
    reciprocal compensation arrangements for the transport and 
    termination of telecommunications.
    ``(c) Additional Obligations of Incumbent Local Exchange 
Carriers.--In addition to the duties contained in subsection (b), each 
incumbent local exchange carrier has the following duties:
        ``(1) Duty to negotiate.--The duty to negotiate in good faith 
    in accordance with section 252 the particular terms and conditions 
    of agreements to fulfill the duties described in paragraphs (1) 
    through (5) of subsection (b) and this subsection. The requesting 
    telecommunications carrier also has the duty to negotiate in good 
    faith the terms and conditions of such agreements.
        ``(2) Interconnection.--The duty to provide, for the facilities 
    and equipment of any requesting telecommunications carrier, 
    interconnection with the local exchange carrier's network--
            ``(A) for the transmission and routing of telephone 
        exchange service and exchange access;
            ``(B) at any technically feasible point within the 
        carrier's network;
            ``(C) that is at least equal in quality to that provided by 
        the local exchange carrier to itself or to any subsidiary, 
        affiliate, or any other party to which the carrier provides 
        interconnection; and
            ``(D) on rates, terms, and conditions that are just, 
        reasonable, and nondiscriminatory, in accordance with the terms 
        and conditions of the agreement and the requirements of this 
        section and section 252.
        ``(3) Unbundled access.--The duty to provide, to any requesting 
    telecommunications carrier for the provision of a 
    telecommunications service, nondiscriminatory access to network 
    elements on an unbundled basis at any technically feasible point on 
    rates, terms, and conditions that are just, reasonable, and 
    nondiscriminatory in accordance with the terms and conditions of 
    the agreement and the requirements of this section and section 252. 
    An incumbent local exchange carrier shall provide such unbundled 
    network elements in a manner that allows requesting carriers to 
    combine such elements in order to provide such telecommunications 
    service.
        ``(4) Resale.--The duty--
            ``(A) to offer for resale at wholesale rates any 
        telecommunications service that the carrier provides at retail 
        to subscribers who are not telecommunications carriers; and
            ``(B) not to prohibit, and not to impose unreasonable or 
        discriminatory conditions or limitations on, the resale of such 
        telecommunications service, except that a State commission may, 
        consistent with regulations prescribed by the Commission under 
        this section, prohibit a reseller that obtains at wholesale 
        rates a telecommunications service that is available at retail 
        only to a category of subscribers from offering such service to 
        a different category of subscribers.
        ``(5) Notice of changes.--The duty to provide reasonable public 
    notice of changes in the information necessary for the transmission 
    and routing of services using that local exchange carrier's 
    facilities or networks, as well as of any other changes that would 
    affect the interoperability of those facilities and networks.
        ``(6) Collocation.--The duty to provide, on rates, terms, and 
    conditions that are just, reasonable, and nondiscriminatory, for 
    physical collocation of equipment necessary for interconnection or 
    access to unbundled network elements at the premises of the local 
    exchange carrier, except that the carrier may provide for virtual 
    collocation if the local exchange carrier demonstrates to the State 
    commission that physical collocation is not practical for technical 
    reasons or because of space limitations.
    ``(d) Implementation.--
        ``(1) In general.--Within 6 months after the date of enactment 
    of the Telecommunications Act of 1996, the Commission shall 
    complete all actions necessary to establish regulations to 
    implement the requirements of this section.
        ``(2) Access standards.--In determining what network elements 
    should be made available for purposes of subsection (c)(3), the 
    Commission shall consider, at a minimum, whether--
            ``(A) access to such network elements as are proprietary in 
        nature is necessary; and
            ``(B) the failure to provide access to such network 
        elements would impair the ability of the telecommunications 
        carrier seeking access to provide the services that it seeks to 
        offer.
        ``(3) Preservation of state access regulations.--In prescribing 
    and enforcing regulations to implement the requirements of this 
    section, the Commission shall not preclude the enforcement of any 
    regulation, order, or policy of a State commission that--
            ``(A) establishes access and interconnection obligations of 
        local exchange carriers;
            ``(B) is consistent with the requirements of this section; 
        and
            ``(C) does not substantially prevent implementation of the 
        requirements of this section and the purposes of this part.
    ``(e) Numbering Administration.--
        ``(1) Commission authority and jurisdiction.--The Commission 
    shall create or designate one or more impartial entities to 
    administer telecommunications numbering and to make such numbers 
    available on an equitable basis. The Commission shall have 
    exclusive jurisdiction over those portions of the North American 
    Numbering Plan that pertain to the United States. Nothing in this 
    paragraph shall preclude the Commission from delegating to State 
    commissions or other entities all or any portion of such 
    jurisdiction.
        ``(2) Costs.--The cost of establishing telecommunications 
    numbering administration arrangements and number portability shall 
    be borne by all telecommunications carriers on a competitively 
    neutral basis as determined by the Commission.
    ``(f) Exemptions, Suspensions, and Modifications.--
        ``(1) Exemption for certain rural telephone companies.--
            ``(A) Exemption.--Subsection (c) of this section shall not 
        apply to a rural telephone company until (i) such company has 
        received a bona fide request for interconnection, services, or 
        network elements, and (ii) the State commission determines 
        (under subparagraph (B)) that such request is not unduly 
        economically burdensome, is technically feasible, and is 
        consistent with section 254 (other than subsections (b)(7) and 
        (c)(1)(D) thereof).
            ``(B) State termination of exemption and implementation 
        schedule.--The party making a bona fide request of a rural 
        telephone company for interconnection, services, or network 
        elements shall submit a notice of its request to the State 
        commission. The State commission shall conduct an inquiry for 
        the purpose of determining whether to terminate the exemption 
        under subparagraph (A). Within 120 days after the State 
        commission receives notice of the request, the State commission 
        shall terminate the exemption if the request is not unduly 
        economically burdensome, is technically feasible, and is 
        consistent with section 254 (other than subsections (b)(7) and 
        (c)(1)(D) thereof). Upon termination of the exemption, a State 
        commission shall establish an implementation schedule for 
        compliance with the request that is consistent in time and 
        manner with Commission regulations.
            ``(C) Limitation on exemption.--The exemption provided by 
        this paragraph shall not apply with respect to a request under 
        subsection (c) from a cable operator providing video 
        programming, and seeking to provide any telecommunications 
        service, in the area in which the rural telephone company 
        provides video programming. The limitation contained in this 
        subparagraph shall not apply to a rural telephone company that 
        is providing video programming on the date of enactment of the 
        Telecommunications Act of 1996.
        ``(2) Suspensions and modifications for rural carriers.--A 
    local exchange carrier with fewer than 2 percent of the Nation's 
    subscriber lines installed in the aggregate nationwide may petition 
    a State commission for a suspension or modification of the 
    application of a requirement or requirements of subsection (b) or 
    (c) to telephone exchange service facilities specified in such 
    petition. The State commission shall grant such petition to the 
    extent that, and for such duration as, the State commission 
    determines that such suspension or modification--
            ``(A) is necessary--
                ``(i) to avoid a significant adverse economic impact on 
            users of telecommunications services generally;
                ``(ii) to avoid imposing a requirement that is unduly 
            economically burdensome; or
                ``(iii) to avoid imposing a requirement that is 
            technically infeasible; and
            ``(B) is consistent with the public interest, convenience, 
        and necessity.
    The State commission shall act upon any petition filed under this 
    paragraph within 180 days after receiving such petition. Pending 
    such action, the State commission may suspend enforcement of the 
    requirement or requirements to which the petition applies with 
    respect to the petitioning carrier or carriers.
    ``(g) Continued Enforcement of Exchange Access and Interconnection 
Requirements.--On and after the date of enactment of the 
Telecommunications Act of 1996, each local exchange carrier, to the 
extent that it provides wireline services, shall provide exchange 
access, information access, and exchange services for such access to 
interexchange carriers and information service providers in accordance 
with the same equal access and nondiscriminatory interconnection 
restrictions and obligations (including receipt of compensation) that 
apply to such carrier on the date immediately preceding the date of 
enactment of the Telecommunications Act of 1996 under any court order, 
consent decree, or regulation, order, or policy of the Commission, 
until such restrictions and obligations are explicitly superseded by 
regulations prescribed by the Commission after such date of enactment. 
During the period beginning on such date of enactment and until such 
restrictions and obligations are so superseded, such restrictions and 
obligations shall be enforceable in the same manner as regulations of 
the Commission.
    ``(h) Definition of Incumbent Local Exchange Carrier.--
        ``(1) Definition.--For purposes of this section, the term 
    `incumbent local exchange carrier' means, with respect to an area, 
    the local exchange carrier that--
            ``(A) on the date of enactment of the Telecommunications 
        Act of 1996, provided telephone exchange service in such area; 
        and
            ``(B)(i) on such date of enactment, was deemed to be a 
        member of the exchange carrier association pursuant to section 
        69.601(b) of the Commission's regulations (47 C.F.R. 
        69.601(b)); or
            ``(ii) is a person or entity that, on or after such date of 
        enactment, became a successor or assign of a member described 
        in clause (i).
        ``(2) Treatment of comparable carriers as incumbents.--The 
    Commission may, by rule, provide for the treatment of a local 
    exchange carrier (or class or category thereof) as an incumbent 
    local exchange carrier for purposes of this section if--
            ``(A) such carrier occupies a position in the market for 
        telephone exchange service within an area that is comparable to 
        the position occupied by a carrier described in paragraph (1);
            ``(B) such carrier has substantially replaced an incumbent 
        local exchange carrier described in paragraph (1); and
            ``(C) such treatment is consistent with the public 
        interest, convenience, and necessity and the purposes of this 
        section.
    ``(i) Savings Provision.--Nothing in this section shall be 
construed to limit or otherwise affect the Commission's authority under 
section 201.

``SEC. 252. PROCEDURES FOR NEGOTIATION, ARBITRATION, AND APPROVAL OF 
              AGREEMENTS.

    ``(a) Agreements Arrived at Through Negotiation.--
        ``(1) Voluntary negotiations.--Upon receiving a request for 
    interconnection, services, or network elements pursuant to section 
    251, an incumbent local exchange carrier may negotiate and enter 
    into a binding agreement with the requesting telecommunications 
    carrier or carriers without regard to the standards set forth in 
    subsections (b) and (c) of section 251. The agreement shall include 
    a detailed schedule of itemized charges for interconnection and 
    each service or network element included in the agreement. The 
    agreement, including any interconnection agreement negotiated 
    before the date of enactment of the Telecommunications Act of 1996, 
    shall be submitted to the State commission under subsection (e) of 
    this section.
        ``(2) Mediation.--Any party negotiating an agreement under this 
    section may, at any point in the negotiation, ask a State 
    commission to participate in the negotiation and to mediate any 
    differences arising in the course of the negotiation.
    ``(b) Agreements Arrived at Through Compulsory Arbitration.--
        ``(1) Arbitration.--During the period from the 135th to the 
    160th day (inclusive) after the date on which an incumbent local 
    exchange carrier receives a request for negotiation under this 
    section, the carrier or any other party to the negotiation may 
    petition a State commission to arbitrate any open issues.
        ``(2) Duty of petitioner.--
            ``(A) A party that petitions a State commission under 
        paragraph (1) shall, at the same time as it submits the 
        petition, provide the State commission all relevant 
        documentation concerning--
                ``(i) the unresolved issues;
                ``(ii) the position of each of the parties with respect 
            to those issues; and
                ``(iii) any other issue discussed and resolved by the 
            parties.
            ``(B) A party petitioning a State commission under 
        paragraph (1) shall provide a copy of the petition and any 
        documentation to the other party or parties not later than the 
        day on which the State commission receives the petition.
        ``(3) Opportunity to respond.--A non-petitioning party to a 
    negotiation under this section may respond to the other party's 
    petition and provide such additional information as it wishes 
    within 25 days after the State commission receives the petition.
        ``(4) Action by state commission.--
            ``(A) The State commission shall limit its consideration of 
        any petition under paragraph (1) (and any response thereto) to 
        the issues set forth in the petition and in the response, if 
        any, filed under paragraph (3).
            ``(B) The State commission may require the petitioning 
        party and the responding party to provide such information as 
        may be necessary for the State commission to reach a decision 
        on the unresolved issues. If any party refuses or fails 
        unreasonably to respond on a timely basis to any reasonable 
        request from the State commission, then the State commission 
        may proceed on the basis of the best information available to 
        it from whatever source derived.
            ``(C) The State commission shall resolve each issue set 
        forth in the petition and the response, if any, by imposing 
        appropriate conditions as required to implement subsection (c) 
        upon the parties to the agreement, and shall conclude the 
        resolution of any unresolved issues not later than 9 months 
        after the date on which the local exchange carrier received the 
        request under this section.
        ``(5) Refusal to negotiate.--The refusal of any other party to 
    the negotiation to participate further in the negotiations, to 
    cooperate with the State commission in carrying out its function as 
    an arbitrator, or to continue to negotiate in good faith in the 
    presence, or with the assistance, of the State commission shall be 
    considered a failure to negotiate in good faith.
    ``(c) Standards for Arbitration.--In resolving by arbitration under 
subsection (b) any open issues and imposing conditions upon the parties 
to the agreement, a State commission shall--
        ``(1) ensure that such resolution and conditions meet the 
    requirements of section 251, including the regulations prescribed 
    by the Commission pursuant to section 251;
        ``(2) establish any rates for interconnection, services, or 
    network elements according to subsection (d); and
        ``(3) provide a schedule for implementation of the terms and 
    conditions by the parties to the agreement.
    ``(d) Pricing Standards.--
        ``(1) Interconnection and network element charges.--
    Determinations by a State commission of the just and reasonable 
    rate for the interconnection of facilities and equipment for 
    purposes of subsection (c)(2) of section 251, and the just and 
    reasonable rate for network elements for purposes of subsection 
    (c)(3) of such section--
            ``(A) shall be--
                ``(i) based on the cost (determined without reference 
            to a rate-of-return or other rate-based proceeding) of 
            providing the interconnection or network element (whichever 
            is applicable), and
                ``(ii) nondiscriminatory, and
            ``(B) may include a reasonable profit.
        ``(2) Charges for transport and termination of traffic.--
            ``(A) In general.--For the purposes of compliance by an 
        incumbent local exchange carrier with section 251(b)(5), a 
        State commission shall not consider the terms and conditions 
        for reciprocal compensation to be just and reasonable unless--
                ``(i) such terms and conditions provide for the mutual 
            and reciprocal recovery by each carrier of costs associated 
            with the transport and termination on each carrier's 
            network facilities of calls that originate on the network 
            facilities of the other carrier; and
                ``(ii) such terms and conditions determine such costs 
            on the basis of a reasonable approximation of the 
            additional costs of terminating such calls.
            ``(B) Rules of construction.--This paragraph shall not be 
        construed--
                ``(i) to preclude arrangements that afford the mutual 
            recovery of costs through the offsetting of reciprocal 
            obligations, including arrangements that waive mutual 
            recovery (such as bill-and-keep arrangements); or
                ``(ii) to authorize the Commission or any State 
            commission to engage in any rate regulation proceeding to 
            establish with particularity the additional costs of 
            transporting or terminating calls, or to require carriers 
            to maintain records with respect to the additional costs of 
            such calls.
        ``(3) Wholesale prices for telecommunications services.--For 
    the purposes of section 251(c)(4), a State commission shall 
    determine wholesale rates on the basis of retail rates charged to 
    subscribers for the telecommunications service requested, excluding 
    the portion thereof attributable to any marketing, billing, 
    collection, and other costs that will be avoided by the local 
    exchange carrier.
    ``(e) Approval by State Commission.--
        ``(1) Approval required.--Any interconnection agreement adopted 
    by negotiation or arbitration shall be submitted for approval to 
    the State commission. A State commission to which an agreement is 
    submitted shall approve or reject the agreement, with written 
    findings as to any deficiencies.
        ``(2) Grounds for rejection.--The State commission may only 
    reject--
            ``(A) an agreement (or any portion thereof) adopted by 
        negotiation under subsection (a) if it finds that--
                ``(i) the agreement (or portion thereof) discriminates 
            against a telecommunications carrier not a party to the 
            agreement; or
                ``(ii) the implementation of such agreement or portion 
            is not consistent with the public interest, convenience, 
            and necessity; or
            ``(B) an agreement (or any portion thereof) adopted by 
        arbitration under subsection (b) if it finds that the agreement 
        does not meet the requirements of section 251, including the 
        regulations prescribed by the Commission pursuant to section 
        251, or the standards set forth in subsection (d) of this 
        section.
        ``(3) Preservation of authority.--Notwithstanding paragraph 
    (2), but subject to section 253, nothing in this section shall 
    prohibit a State commission from establishing or enforcing other 
    requirements of State law in its review of an agreement, including 
    requiring compliance with intrastate telecommunications service 
    quality standards or requirements.
        ``(4) Schedule for decision.--If the State commission does not 
    act to approve or reject the agreement within 90 days after 
    submission by the parties of an agreement adopted by negotiation 
    under subsection (a), or within 30 days after submission by the 
    parties of an agreement adopted by arbitration under subsection 
    (b), the agreement shall be deemed approved. No State court shall 
    have jurisdiction to review the action of a State commission in 
    approving or rejecting an agreement under this section.
        ``(5) Commission to act if state will not act.--If a State 
    commission fails to act to carry out its responsibility under this 
    section in any proceeding or other matter under this section, then 
    the Commission shall issue an order preempting the State 
    commission's jurisdiction of that proceeding or matter within 90 
    days after being notified (or taking notice) of such failure, and 
    shall assume the responsibility of the State commission under this 
    section with respect to the proceeding or matter and act for the 
    State commission.
        ``(6) Review of state commission actions.--In a case in which a 
    State fails to act as described in paragraph (5), the proceeding by 
    the Commission under such paragraph and any judicial review of the 
    Commission's actions shall be the exclusive remedies for a State 
    commission's failure to act. In any case in which a State 
    commission makes a determination under this section, any party 
    aggrieved by such determination may bring an action in an 
    appropriate Federal district court to determine whether the 
    agreement or statement meets the requirements of section 251 and 
    this section.
    ``(f) Statements of Generally Available Terms.--
        ``(1) In general.--A Bell operating company may prepare and 
    file with a State commission a statement of the terms and 
    conditions that such company generally offers within that State to 
    comply with the requirements of section 251 and the regulations 
    thereunder and the standards applicable under this section.
        ``(2) State commission review.--A State commission may not 
    approve such statement unless such statement complies with 
    subsection (d) of this section and section 251 and the regulations 
    thereunder. Except as provided in section 253, nothing in this 
    section shall prohibit a State commission from establishing or 
    enforcing other requirements of State law in its review of such 
    statement, including requiring compliance with intrastate 
    telecommunications service quality standards or requirements.
        ``(3) Schedule for review.--The State commission to which a 
    statement is submitted shall, not later than 60 days after the date 
    of such submission--
            ``(A) complete the review of such statement under paragraph 
        (2) (including any reconsideration thereof), unless the 
        submitting carrier agrees to an extension of the period for 
        such review; or
            ``(B) permit such statement to take effect.
        ``(4) Authority to continue review.--Paragraph (3) shall not 
    preclude the State commission from continuing to review a statement 
    that has been permitted to take effect under subparagraph (B) of 
    such paragraph or from approving or disapproving such statement 
    under paragraph (2).
        ``(5) Duty to negotiate not affected.--The submission or 
    approval of a statement under this subsection shall not relieve a 
    Bell operating company of its duty to negotiate the terms and 
    conditions of an agreement under section 251.
    ``(g) Consolidation of State Proceedings.--Where not inconsistent 
with the requirements of this Act, a State commission may, to the 
extent practical, consolidate proceedings under sections 214(e), 
251(f), 253, and this section in order to reduce administrative burdens 
on telecommunications carriers, other parties to the proceedings, and 
the State commission in carrying out its responsibilities under this 
Act.
    ``(h) Filing Required.--A State commission shall make a copy of 
each agreement approved under subsection (e) and each statement 
approved under subsection (f) available for public inspection and 
copying within 10 days after the agreement or statement is approved. 
The State commission may charge a reasonable and nondiscriminatory fee 
to the parties to the agreement or to the party filing the statement to 
cover the costs of approving and filing such agreement or statement.
    ``(i) Availability to Other Telecommunications Carriers.--A local 
exchange carrier shall make available any interconnection, service, or 
network element provided under an agreement approved under this section 
to which it is a party to any other requesting telecommunications 
carrier upon the same terms and conditions as those provided in the 
agreement.
    ``(j) Definition of Incumbent Local Exchange Carrier.--For purposes 
of this section, the term `incumbent local exchange carrier' has the 
meaning provided in section 251(h).

``SEC. 253. REMOVAL OF BARRIERS TO ENTRY.

    ``(a) In General.--No State or local statute or regulation, or 
other State or local legal requirement, may prohibit or have the effect 
of prohibiting the ability of any entity to provide any interstate or 
intrastate telecommunications service.
    ``(b) State Regulatory Authority.--Nothing in this section shall 
affect the ability of a State to impose, on a competitively neutral 
basis and consistent with section 254, requirements necessary to 
preserve and advance universal service, protect the public safety and 
welfare, ensure the continued quality of telecommunications services, 
and safeguard the rights of consumers.
    ``(c) State and Local Government Authority.--Nothing in this 
section affects the authority of a State or local government to manage 
the public rights-of-way or to require fair and reasonable compensation 
from telecommunications providers, on a competitively neutral and 
nondiscriminatory basis, for use of public rights-of-way on a 
nondiscriminatory basis, if the compensation required is publicly 
disclosed by such government.
    ``(d) Preemption.--If, after notice and an opportunity for public 
comment, the Commission determines that a State or local government has 
permitted or imposed any statute, regulation, or legal requirement that 
violates subsection (a) or (b), the Commission shall preempt the 
enforcement of such statute, regulation, or legal requirement to the 
extent necessary to correct such violation or inconsistency.
    ``(e) Commercial Mobile Service Providers.--Nothing in this section 
shall affect the application of section 332(c)(3) to commercial mobile 
service providers.
    ``(f) Rural Markets.--It shall not be a violation of this section 
for a State to require a telecommunications carrier that seeks to 
provide telephone exchange service or exchange access in a service area 
served by a rural telephone company to meet the requirements in section 
214(e)(1) for designation as an eligible telecommunications carrier for 
that area before being permitted to provide such service. This 
subsection shall not apply--
        ``(1) to a service area served by a rural telephone company 
    that has obtained an exemption, suspension, or modification of 
    section 251(c)(4) that effectively prevents a competitor from 
    meeting the requirements of section 214(e)(1); and
        ``(2) to a provider of commercial mobile services.

``SEC. 254. UNIVERSAL SERVICE.

    ``(a) Procedures to Review Universal Service Requirements.--
        ``(1) Federal-state joint board on universal service.--Within 
    one month after the date of enactment of the Telecommunications Act 
    of 1996, the Commission shall institute and refer to a Federal-
    State Joint Board under section 410(c) a proceeding to recommend 
    changes to any of its regulations in order to implement sections 
    214(e) and this section, including the definition of the services 
    that are supported by Federal universal service support mechanisms 
    and a specific timetable for completion of such recommendations. In 
    addition to the members of the Joint Board required under section 
    410(c), one member of such Joint Board shall be a State-appointed 
    utility consumer advocate nominated by a national organization of 
    State utility consumer advocates. The Joint Board shall, after 
    notice and opportunity for public comment, make its recommendations 
    to the Commission 9 months after the date of enactment of the 
    Telecommunications Act of 1996.
        ``(2) Commission action.--The Commission shall initiate a 
    single proceeding to implement the recommendations from the Joint 
    Board required by paragraph (1) and shall complete such proceeding 
    within 15 months after the date of enactment of the 
    Telecommunications Act of 1996. The rules established by such 
    proceeding shall include a definition of the services that are 
    supported by Federal universal service support mechanisms and a 
    specific timetable for implementation. Thereafter, the Commission 
    shall complete any proceeding to implement subsequent 
    recommendations from any Joint Board on universal service within 
    one year after receiving such recommendations.
    ``(b) Universal Service Principles.--The Joint Board and the 
Commission shall base policies for the preservation and advancement of 
universal service on the following principles:
        ``(1) Quality and rates.--Quality services should be available 
    at just, reasonable, and affordable rates.
        ``(2) Access to advanced services.--Access to advanced 
    telecommunications and information services should be provided in 
    all regions of the Nation.
        ``(3) Access in rural and high cost areas.--Consumers in all 
    regions of the Nation, including low-income consumers and those in 
    rural, insular, and high cost areas, should have access to 
    telecommunications and information services, including 
    interexchange services and advanced telecommunications and 
    information services, that are reasonably comparable to those 
    services provided in urban areas and that are available at rates 
    that are reasonably comparable to rates charged for similar 
    services in urban areas.
        ``(4) Equitable and nondiscriminatory contributions.--All 
    providers of telecommunications services should make an equitable 
    and nondiscriminatory contribution to the preservation and 
    advancement of universal service.
        ``(5) Specific and predictable support mechanisms.--There 
    should be specific, predictable and sufficient Federal and State 
    mechanisms to preserve and advance universal service.
        ``(6) Access to advanced telecommunications services for 
    schools, health care, and libraries.--Elementary and secondary 
    schools and classrooms, health care providers, and libraries should 
    have access to advanced telecommunications services as described in 
    subsection (h).
        ``(7) Additional principles.--Such other principles as the 
    Joint Board and the Commission determine are necessary and 
    appropriate for the protection of the public interest, convenience, 
    and necessity and are consistent with this Act.
    ``(c) Definition.--
        ``(1) In general.--Universal service is an evolving level of 
    telecommunications services that the Commission shall establish 
    periodically under this section, taking into account advances in 
    telecommunications and information technologies and services. The 
    Joint Board in recommending, and the Commission in establishing, 
    the definition of the services that are supported by Federal 
    universal service support mechanisms shall consider the extent to 
    which such telecommunications services--
            ``(A) are essential to education, public health, or public 
        safety;
            ``(B) have, through the operation of market choices by 
        customers, been subscribed to by a substantial majority of 
        residential customers;
            ``(C) are being deployed in public telecommunications 
        networks by telecommunications carriers; and
            ``(D) are consistent with the public interest, convenience, 
        and necessity.
        ``(2) Alterations and modifications.--The Joint Board may, from 
    time to time, recommend to the Commission modifications in the 
    definition of the services that are supported by Federal universal 
    service support mechanisms.
        ``(3) Special services.--In addition to the services included 
    in the definition of universal service under paragraph (1), the 
    Commission may designate additional services for such support 
    mechanisms for schools, libraries, and health care providers for 
    the purposes of subsection (h).
    ``(d) Telecommunications Carrier Contribution.--Every 
telecommunications carrier that provides interstate telecommunications 
services shall contribute, on an equitable and nondiscriminatory basis, 
to the specific, predictable, and sufficient mechanisms established by 
the Commission to preserve and advance universal service. The 
Commission may exempt a carrier or class of carriers from this 
requirement if the carrier's telecommunications activities are limited 
to such an extent that the level of such carrier's contribution to the 
preservation and advancement of universal service would be de minimis. 
Any other provider of interstate telecommunications may be required to 
contribute to the preservation and advancement of universal service if 
the public interest so requires.
    ``(e) Universal Service Support.--After the date on which 
Commission regulations implementing this section take effect, only an 
eligible telecommunications carrier designated under section 214(e) 
shall be eligible to receive specific Federal universal service 
support. A carrier that receives such support shall use that support 
only for the provision, maintenance, and upgrading of facilities and 
services for which the support is intended. Any such support should be 
explicit and sufficient to achieve the purposes of this section.
    ``(f) State Authority.--A State may adopt regulations not 
inconsistent with the Commission's rules to preserve and advance 
universal service. Every telecommunications carrier that provides 
intrastate telecommunications services shall contribute, on an 
equitable and nondiscriminatory basis, in a manner determined by the 
State to the preservation and advancement of universal service in that 
State. A State may adopt regulations to provide for additional 
definitions and standards to preserve and advance universal service 
within that State only to the extent that such regulations adopt 
additional specific, predictable, and sufficient mechanisms to support 
such definitions or standards that do not rely on or burden Federal 
universal service support mechanisms.
    ``(g) Interexchange and Interstate Services.--Within 6 months after 
the date of enactment of the Telecommunications Act of 1996, the 
Commission shall adopt rules to require that the rates charged by 
providers of interexchange telecommunications services to subscribers 
in rural and high cost areas shall be no higher than the rates charged 
by each such provider to its subscribers in urban areas. Such rules 
shall also require that a provider of interstate interexchange 
telecommunications services shall provide such services to its 
subscribers in each State at rates no higher than the rates charged to 
its subscribers in any other State.
    ``(h) Telecommunications Services for Certain Providers.--
        ``(1) In general.--
            ``(A) Health care providers for rural areas.--A 
        telecommunications carrier shall, upon receiving a bona fide 
        request, provide telecommunications services which are 
        necessary for the provision of health care services in a State, 
        including instruction relating to such services, to any public 
        or nonprofit health care provider that serves persons who 
        reside in rural areas in that State at rates that are 
        reasonably comparable to rates charged for similar services in 
        urban areas in that State. A telecommunications carrier 
        providing service under this paragraph shall be entitled to 
        have an amount equal to the difference, if any, between the 
        rates for services provided to health care providers for rural 
        areas in a State and the rates for similar services provided to 
        other customers in comparable rural areas in that State treated 
        as a service obligation as a part of its obligation to 
        participate in the mechanisms to preserve and advance universal 
        service.
            ``(B) Educational providers and libraries.--All 
        telecommunications carriers serving a geographic area shall, 
        upon a bona fide request for any of its services that are 
        within the definition of universal service under subsection 
        (c)(3), provide such services to elementary schools, secondary 
        schools, and libraries for educational purposes at rates less 
        than the amounts charged for similar services to other parties. 
        The discount shall be an amount that the Commission, with 
        respect to interstate services, and the States, with respect to 
        intrastate services, determine is appropriate and necessary to 
        ensure affordable access to and use of such services by such 
        entities. A telecommunications carrier providing service under 
        this paragraph shall--
                ``(i) have an amount equal to the amount of the 
            discount treated as an offset to its obligation to 
            contribute to the mechanisms to preserve and advance 
            universal service, or
                ``(ii) notwithstanding the provisions of subsection (e) 
            of this section, receive reimbursement utilizing the 
            support mechanisms to preserve and advance universal 
            service.
        ``(2) Advanced services.--The Commission shall establish 
    competitively neutral rules--
            ``(A) to enhance, to the extent technically feasible and 
        economically reasonable, access to advanced telecommunications 
        and information services for all public and nonprofit 
        elementary and secondary school classrooms, health care 
        providers, and libraries; and
            ``(B) to define the circumstances under which a 
        telecommunications carrier may be required to connect its 
        network to such public institutional telecommunications users.
        ``(3) Terms and conditions.--Telecommunications services and 
    network capacity provided to a public institutional 
    telecommunications user under this subsection may not be sold, 
    resold, or otherwise transferred by such user in consideration for 
    money or any other thing of value.
        ``(4) Eligibility of users.--No entity listed in this 
    subsection shall be entitled to preferential rates or treatment as 
    required by this subsection, if such entity operates as a for-
    profit business, is a school described in paragraph (5)(A) with an 
    endowment of more than $50,000,000, or is a library not eligible 
    for participation in State-based plans for funds under title III of 
    the Library Services and Construction Act (20 U.S.C. 335c et seq.).
        ``(5) Definitions.--For purposes of this subsection:
            ``(A) Elementary and secondary schools.--The term 
        `elementary and secondary schools' means elementary schools and 
        secondary schools, as defined in paragraphs (14) and (25), 
        respectively, of section 14101 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 8801).
            ``(B) Health care provider.--The term `health care 
        provider' means--
                ``(i) post-secondary educational institutions offering 
            health care instruction, teaching hospitals, and medical 
            schools;
                ``(ii) community health centers or health centers 
            providing health care to migrants;
                ``(iii) local health departments or agencies;
                ``(iv) community mental health centers;
                ``(v) not-for-profit hospitals;
                ``(vi) rural health clinics; and
                ``(vii) consortia of health care providers consisting 
            of one or more entities described in clauses (i) through 
            (vi).
            ``(C) Public institutional telecommunications user.--The 
        term `public institutional telecommunications user' means an 
        elementary or secondary school, a library, or a health care 
        provider as those terms are defined in this paragraph.
    ``(i) Consumer Protection.--The Commission and the States should 
ensure that universal service is available at rates that are just, 
reasonable, and affordable.
    ``(j) Lifeline Assistance.--Nothing in this section shall affect 
the collection, distribution, or administration of the Lifeline 
Assistance Program provided for by the Commission under regulations set 
forth in section 69.117 of title 47, Code of Federal Regulations, and 
other related sections of such title.
    ``(k) Subsidy of Competitive Services Prohibited.--A 
telecommunications carrier may not use services that are not 
competitive to subsidize services that are subject to competition. The 
Commission, with respect to interstate services, and the States, with 
respect to intrastate services, shall establish any necessary cost 
allocation rules, accounting safeguards, and guidelines to ensure that 
services included in the definition of universal service bear no more 
than a reasonable share of the joint and common costs of facilities 
used to provide those services.

``SEC. 255. ACCESS BY PERSONS WITH DISABILITIES.

    ``(a) Definitions.--As used in this section--
        ``(1) Disability.--The term `disability' has the meaning given 
    to it by section 3(2)(A) of the Americans with Disabilities Act of 
    1990 (42 U.S.C. 12102(2)(A)).
        ``(2) Readily achievable.--The term `readily achievable' has 
    the meaning given to it by section 301(9) of that Act (42 U.S.C. 
    12181(9)).
    ``(b) Manufacturing.--A manufacturer of telecommunications 
equipment or customer premises equipment shall ensure that the 
equipment is designed, developed, and fabricated to be accessible to 
and usable by individuals with disabilities, if readily achievable.
    ``(c) Telecommunications Services.--A provider of 
telecommunications service shall ensure that the service is accessible 
to and usable by individuals with disabilities, if readily achievable.
    ``(d) Compatibility.--Whenever the requirements of subsections (b) 
and (c) are not readily achievable, such a manufacturer or provider 
shall ensure that the equipment or service is compatible with existing 
peripheral devices or specialized customer premises equipment commonly 
used by individuals with disabilities to achieve access, if readily 
achievable.
    ``(e) Guidelines.--Within 18 months after the date of enactment of 
the Telecommunications Act of 1996, the Architectural and 
Transportation Barriers Compliance Board shall develop guidelines for 
accessibility of telecommunications equipment and customer premises 
equipment in conjunction with the Commission. The Board shall review 
and update the guidelines periodically.
    ``(f) No Additional Private Rights Authorized.--Nothing in this 
section shall be construed to authorize any private right of action to 
enforce any requirement of this section or any regulation thereunder. 
The Commission shall have exclusive jurisdiction with respect to any 
complaint under this section.

``SEC. 256. COORDINATION FOR INTERCONNECTIVITY.

    ``(a) Purpose.--It is the purpose of this section--
        ``(1) to promote nondiscriminatory accessibility by the 
    broadest number of users and vendors of communications products and 
    services to public telecommunications networks used to provide 
    telecommunications service through--
            ``(A) coordinated public telecommunications network 
        planning and design by telecommunications carriers and other 
        providers of telecommunications service; and
            ``(B) public telecommunications network interconnectivity, 
        and interconnectivity of devices with such networks used to 
        provide telecommunications service; and
        ``(2) to ensure the ability of users and information providers 
    to seamlessly and transparently transmit and receive information 
    between and across telecommunications networks.
    ``(b) Commission Functions.--In carrying out the purposes of this 
section, the Commission--
        ``(1) shall establish procedures for Commission oversight of 
    coordinated network planning by telecommunications carriers and 
    other providers of telecommunications service for the effective and 
    efficient interconnection of public telecommunications networks 
    used to provide telecommunications service; and
        ``(2) may participate, in a manner consistent with its 
    authority and practice prior to the date of enactment of this 
    section, in the development by appropriate industry standards-
    setting organizations of public telecommunications network 
    interconnectivity standards that promote access to--
            ``(A) public telecommunications networks used to provide 
        telecommunications service;
            ``(B) network capabilities and services by individuals with 
        disabilities; and
            ``(C) information services by subscribers of rural 
        telephone companies.
    ``(c) Commission's Authority.--Nothing in this section shall be 
construed as expanding or limiting any authority that the Commission 
may have under law in effect before the date of enactment of the 
Telecommunications Act of 1996.
    ``(d) Definition.--As used in this section, the term `public 
telecommunications network interconnectivity' means the ability of two 
or more public telecommunications networks used to provide 
telecommunications service to communicate and exchange information 
without degeneration, and to interact in concert with one another.

``SEC. 257. MARKET ENTRY BARRIERS PROCEEDING.

    ``(a) Elimination of Barriers.--Within 15 months after the date of 
enactment of the Telecommunications Act of 1996, the Commission shall 
complete a proceeding for the purpose of identifying and eliminating, 
by regulations pursuant to its authority under this Act (other than 
this section), market entry barriers for entrepreneurs and other small 
businesses in the provision and ownership of telecommunications 
services and information services, or in the provision of parts or 
services to providers of telecommunications services and information 
services.
    ``(b) National Policy.--In carrying out subsection (a), the 
Commission shall seek to promote the policies and purposes of this Act 
favoring diversity of media voices, vigorous economic competition, 
technological advancement, and promotion of the public interest, 
convenience, and necessity.
    ``(c) Periodic Review.--Every 3 years following the completion of 
the proceeding required by subsection (a), the Commission shall review 
and report to Congress on--
        ``(1) any regulations prescribed to eliminate barriers within 
    its jurisdiction that are identified under subsection (a) and that 
    can be prescribed consistent with the public interest, convenience, 
    and necessity; and
        ``(2) the statutory barriers identified under subsection (a) 
    that the Commission recommends be eliminated, consistent with the 
    public interest, convenience, and necessity.

``SEC. 258. ILLEGAL CHANGES IN SUBSCRIBER CARRIER SELECTIONS.

    ``(a) Prohibition.--No telecommunications carrier shall submit or 
execute a change in a subscriber's selection of a provider of telephone 
exchange service or telephone toll service except in accordance with 
such verification procedures as the Commission shall prescribe. Nothing 
in this section shall preclude any State commission from enforcing such 
procedures with respect to intrastate services.
    ``(b) Liability for Charges.--Any telecommunications carrier that 
violates the verification procedures described in subsection (a) and 
that collects charges for telephone exchange service or telephone toll 
service from a subscriber shall be liable to the carrier previously 
selected by the subscriber in an amount equal to all charges paid by 
such subscriber after such violation, in accordance with such 
procedures as the Commission may prescribe. The remedies provided by 
this subsection are in addition to any other remedies available by law.

``SEC. 259. INFRASTRUCTURE SHARING.

    ``(a) Regulations Required.--The Commission shall prescribe, within 
one year after the date of enactment of the Telecommunications Act of 
1996, regulations that require incumbent local exchange carriers (as 
defined in section 251(h)) to make available to any qualifying carrier 
such public switched network infrastructure, technology, information, 
and telecommunications facilities and functions as may be requested by 
such qualifying carrier for the purpose of enabling such qualifying 
carrier to provide telecommunications services, or to provide access to 
information services, in the service area in which such qualifying 
carrier has requested and obtained designation as an eligible 
telecommunications carrier under section 214(e).
    ``(b) Terms and Conditions of Regulations.--The regulations 
prescribed by the Commission pursuant to this section shall--
        ``(1) not require a local exchange carrier to which this 
    section applies to take any action that is economically 
    unreasonable or that is contrary to the public interest;
        ``(2) permit, but shall not require, the joint ownership or 
    operation of public switched network infrastructure and services by 
    or among such local exchange carrier and a qualifying carrier;
        ``(3) ensure that such local exchange carrier will not be 
    treated by the Commission or any State as a common carrier for hire 
    or as offering common carrier services with respect to any 
    infrastructure, technology, information, facilities, or functions 
    made available to a qualifying carrier in accordance with 
    regulations issued pursuant to this section;
        ``(4) ensure that such local exchange carrier makes such 
    infrastructure, technology, information, facilities, or functions 
    available to a qualifying carrier on just and reasonable terms and 
    conditions that permit such qualifying carrier to fully benefit 
    from the economies of scale and scope of such local exchange 
    carrier, as determined in accordance with guidelines prescribed by 
    the Commission in regulations issued pursuant to this section;
        ``(5) establish conditions that promote cooperation between 
    local exchange carriers to which this section applies and 
    qualifying carriers;
        ``(6) not require a local exchange carrier to which this 
    section applies to engage in any infrastructure sharing agreement 
    for any services or access which are to be provided or offered to 
    consumers by the qualifying carrier in such local exchange 
    carrier's telephone exchange area; and
        ``(7) require that such local exchange carrier file with the 
    Commission or State for public inspection, any tariffs, contracts, 
    or other arrangements showing the rates, terms, and conditions 
    under which such carrier is making available public switched 
    network infrastructure and functions under this section.
    ``(c) Information Concerning Deployment of New Services and 
Equipment.--A local exchange carrier to which this section applies that 
has entered into an infrastructure sharing agreement under this section 
shall provide to each party to such agreement timely information on the 
planned deployment of telecommunications services and equipment, 
including any software or upgrades of software integral to the use or 
operation of such telecommunications equipment.
    ``(d) Definition.--For purposes of this section, the term 
`qualifying carrier' means a telecommunications carrier that--
        ``(1) lacks economies of scale or scope, as determined in 
    accordance with regulations prescribed by the Commission pursuant 
    to this section; and
        ``(2) offers telephone exchange service, exchange access, and 
    any other service that is included in universal service, to all 
    consumers without preference throughout the service area for which 
    such carrier has been designated as an eligible telecommunications 
    carrier under section 214(e).

``SEC. 260. PROVISION OF TELEMESSAGING SERVICE.

    ``(a) Nondiscrimination Safeguards.--Any local exchange carrier 
subject to the requirements of section 251(c) that provides 
telemessaging service--
        ``(1) shall not subsidize its telemessaging service directly or 
    indirectly from its telephone exchange service or its exchange 
    access; and
        ``(2) shall not prefer or discriminate in favor of its 
    telemessaging service operations in its provision of 
    telecommunications services.
    ``(b) Expedited Consideration of Complaints.--The Commission shall 
establish procedures for the receipt and review of complaints 
concerning violations of subsection (a) or the regulations thereunder 
that result in material financial harm to a provider of telemessaging 
service. Such procedures shall ensure that the Commission will make a 
final determination with respect to any such complaint within 120 days 
after receipt of the complaint. If the complaint contains an 
appropriate showing that the alleged violation occurred, the Commission 
shall, within 60 days after receipt of the complaint, order the local 
exchange carrier and any affiliates to cease engaging in such violation 
pending such final determination.
    ``(c) Definition.--As used in this section, the term `telemessaging 
service' means voice mail and voice storage and retrieval services, any 
live operator services used to record, transcribe, or relay messages 
(other than telecommunications relay services), and any ancillary 
services offered in combination with these services.

``SEC. 261. EFFECT ON OTHER REQUIREMENTS.

    ``(a) Commission Regulations.--Nothing in this part shall be 
construed to prohibit the Commission from enforcing regulations 
prescribed prior to the date of enactment of the Telecommunications Act 
of 1996 in fulfilling the requirements of this part, to the extent that 
such regulations are not inconsistent with the provisions of this part.
    ``(b) Existing State Regulations.--Nothing in this part shall be 
construed to prohibit any State commission from enforcing regulations 
prescribed prior to the date of enactment of the Telecommunications Act 
of 1996, or from prescribing regulations after such date of enactment, 
in fulfilling the requirements of this part, if such regulations are 
not inconsistent with the provisions of this part.
    ``(c) Additional State Requirements.--Nothing in this part 
precludes a State from imposing requirements on a telecommunications 
carrier for intrastate services that are necessary to further 
competition in the provision of telephone exchange service or exchange 
access, as long as the State's requirements are not inconsistent with 
this part or the Commission's regulations to implement this part.''.
    (b) Designation of Part I.--Title II of the Act is further amended 
by inserting before the heading of section 201 the following new 
heading:

                 ``PART I--COMMON CARRIER REGULATION''.

    (c) Stylistic Consistency.--The Act is amended so that--
        (1) the designation and heading of each title of the Act shall 
    be in the form and typeface of the designation and heading of this 
    title of this Act; and
        (2) the designation and heading of each part of each title of 
    the Act shall be in the form and typeface of the designation and 
    heading of part I of title II of the Act, as amended by subsection 
    (a).

SEC. 102. ELIGIBLE TELECOMMUNICATIONS CARRIERS.

    (a) In General.--Section 214 (47 U.S.C. 214) is amended by adding 
at the end thereof the following new subsection:
    ``(e) Provision of Universal Service.--
        ``(1) Eligible telecommunications carriers.--A common carrier 
    designated as an eligible telecommunications carrier under 
    paragraph (2) or (3) shall be eligible to receive universal service 
    support in accordance with section 254 and shall, throughout the 
    service area for which the designation is received--
            ``(A) offer the services that are supported by Federal 
        universal service support mechanisms under section 254(c), 
        either using its own facilities or a combination of its own 
        facilities and resale of another carrier's services (including 
        the services offered by another eligible telecommunications 
        carrier); and
            ``(B) advertise the availability of such services and the 
        charges therefor using media of general distribution.
        ``(2) Designation of eligible telecommunications carriers.--A 
    State commission shall upon its own motion or upon request 
    designate a common carrier that meets the requirements of paragraph 
    (1) as an eligible telecommunications carrier for a service area 
    designated by the State commission. Upon request and consistent 
    with the public interest, convenience, and necessity, the State 
    commission may, in the case of an area served by a rural telephone 
    company, and shall, in the case of all other areas, designate more 
    than one common carrier as an eligible telecommunications carrier 
    for a service area designated by the State commission, so long as 
    each additional requesting carrier meets the requirements of 
    paragraph (1). Before designating an additional eligible 
    telecommunications carrier for an area served by a rural telephone 
    company, the State commission shall find that the designation is in 
    the public interest.
        ``(3) Designation of eligible telecommunications carriers for 
    unserved areas.--If no common carrier will provide the services 
    that are supported by Federal universal service support mechanisms 
    under section 254(c) to an unserved community or any portion 
    thereof that requests such service, the Commission, with respect to 
    interstate services, or a State commission, with respect to 
    intrastate services, shall determine which common carrier or 
    carriers are best able to provide such service to the requesting 
    unserved community or portion thereof and shall order such carrier 
    or carriers to provide such service for that unserved community or 
    portion thereof. Any carrier or carriers ordered to provide such 
    service under this paragraph shall meet the requirements of 
    paragraph (1) and shall be designated as an eligible 
    telecommunications carrier for that community or portion thereof.
        ``(4) Relinquishment of universal service.--A State commission 
    shall permit an eligible telecommunications carrier to relinquish 
    its designation as such a carrier in any area served by more than 
    one eligible telecommunications carrier. An eligible 
    telecommunications carrier that seeks to relinquish its eligible 
    telecommunications carrier designation for an area served by more 
    than one eligible telecommunications carrier shall give advance 
    notice to the State commission of such relinquishment. Prior to 
    permitting a telecommunications carrier designated as an eligible 
    telecommunications carrier to cease providing universal service in 
    an area served by more than one eligible telecommunications 
    carrier, the State commission shall require the remaining eligible 
    telecommunications carrier or carriers to ensure that all customers 
    served by the relinquishing carrier will continue to be served, and 
    shall require sufficient notice to permit the purchase or 
    construction of adequate facilities by any remaining eligible 
    telecommunications carrier. The State commission shall establish a 
    time, not to exceed one year after the State commission approves 
    such relinquishment under this paragraph, within which such 
    purchase or construction shall be completed.
        ``(5) Service area defined.--The term `service area' means a 
    geographic area established by a State commission for the purpose 
    of determining universal service obligations and support 
    mechanisms. In the case of an area served by a rural telephone 
    company, `service area' means such company's `study area' unless 
    and until the Commission and the States, after taking into account 
    recommendations of a Federal-State Joint Board instituted under 
    section 410(c), establish a different definition of service area 
    for such company.''.

SEC. 103. EXEMPT TELECOMMUNICATIONS COMPANIES.

    The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 and 
following) is amended by redesignating sections 34 and 35 as sections 
35 and 36, respectively, and by inserting the following new section 
after section 33:

``SEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES.

    ``(a) Definitions.--For purposes of this section--
        ``(1) Exempt telecommunications company.--The term `exempt 
    telecommunications company' means any person determined by the 
    Federal Communications Commission to be engaged directly or 
    indirectly, wherever located, through one or more affiliates (as 
    defined in section 2(a)(11)(B)), and exclusively in the business of 
    providing---
            ``(A) telecommunications services;
            ``(B) information services;
            ``(C) other services or products subject to the 
        jurisdiction of the Federal Communications Commission; or
            ``(D) products or services that are related or incidental 
        to the provision of a product or service described in 
        subparagraph (A), (B), or (C).
    No person shall be deemed to be an exempt telecommunications 
    company under this section unless such person has applied to the 
    Federal Communications Commission for a determination under this 
    paragraph. A person applying in good faith for such a determination 
    shall be deemed an exempt telecommunications company under this 
    section, with all of the exemptions provided by this section, until 
    the Federal Communications Commission makes such determination. The 
    Federal Communications Commission shall make such determination 
    within 60 days of its receipt of any such application filed after 
    the enactment of this section and shall notify the Commission 
    whenever a determination is made under this paragraph that any 
    person is an exempt telecommunications company. Not later than 12 
    months after the date of enactment of this section, the Federal 
    Communications Commission shall promulgate rules implementing the 
    provisions of this paragraph which shall be applicable to 
    applications filed under this paragraph after the effective date of 
    such rules.
        ``(2) Other terms.--For purposes of this section, the terms 
    `telecommunications services' and `information services' shall have 
    the same meanings as provided in the Communications Act of 1934.
    ``(b) State Consent for Sale of Existing Rate-Based Facilities.--If 
a rate or charge for the sale of electric energy or natural gas (other 
than any portion of a rate or charge which represents recovery of the 
cost of a wholesale rate or charge) for, or in connection with, assets 
of a public utility company that is an associate company or affiliate 
of a registered holding company was in effect under the laws of any 
State as of December 19, 1995, the public utility company owning such 
assets may not sell such assets to an exempt telecommunications company 
that is an associate company or affiliate unless State commissions 
having jurisdiction over such public utility company approve such sale. 
Nothing in this subsection shall preempt the otherwise applicable 
authority of any State to approve or disapprove the sale of such 
assets. The approval of the Commission under this Act shall not be 
required for the sale of assets as provided in this subsection.
    ``(c) Ownership of ETCS by Exempt Holding Companies.--
Notwithstanding any provision of this Act, a holding company that is 
exempt under section 3 of this Act shall be permitted, without 
condition or limitation under this Act, to acquire and maintain an 
interest in the business of one or more exempt telecommunications 
companies.
    ``(d) Ownership of ETCS by Registered Holding Companies.--
Notwithstanding any provision of this Act, a registered holding company 
shall be permitted (without the need to apply for, or receive, approval 
from the Commission, and otherwise without condition under this Act) to 
acquire and hold the securities, or an interest in the business, of one 
or more exempt telecommunications companies.
    ``(e) Financing and Other Relationships Between ETCS and Registered 
Holding Companies.--The relationship between an exempt 
telecommunications company and a registered holding company, its 
affiliates and associate companies, shall remain subject to the 
jurisdiction of the Commission under this Act: Provided, That--
        ``(1) section 11 of this Act shall not prohibit the ownership 
    of an interest in the business of one or more exempt 
    telecommunications companies by a registered holding company 
    (regardless of activities engaged in or where facilities owned or 
    operated by such exempt telecommunications companies are located), 
    and such ownership by a registered holding company shall be deemed 
    consistent with the operation of an integrated public utility 
    system;
        ``(2) the ownership of an interest in the business of one or 
    more exempt telecommunications companies by a registered holding 
    company (regardless of activities engaged in or where facilities 
    owned or operated by such exempt telecommunications companies are 
    located) shall be considered as reasonably incidental, or 
    economically necessary or appropriate, to the operations of an 
    integrated public utility system;
        ``(3) the Commission shall have no jurisdiction under this Act 
    over, and there shall be no restriction or approval required under 
    this Act with respect to (A) the issue or sale of a security by a 
    registered holding company for purposes of financing the 
    acquisition of an exempt telecommunications company, or (B) the 
    guarantee of a security of an exempt telecommunications company by 
    a registered holding company; and
        ``(4) except for costs that should be fairly and equitably 
    allocated among companies that are associate companies of a 
    registered holding company, the Commission shall have no 
    jurisdiction under this Act over the sales, service, and 
    construction contracts between an exempt telecommunications company 
    and a registered holding company, its affiliates and associate 
    companies.
    ``(f) Reporting Obligations Concerning Investments and Activities 
of Registered Public-Utility Holding Company Systems.--
        ``(1) Obligations to report information.--Any registered 
    holding company or subsidiary thereof that acquires or holds the 
    securities, or an interest in the business, of an exempt 
    telecommunications company shall file with the Commission such 
    information as the Commission, by rule, may prescribe concerning--
            ``(A) investments and activities by the registered holding 
        company, or any subsidiary thereof, with respect to exempt 
        telecommunications companies, and
            ``(B) any activities of an exempt telecommunications 
        company within the holding company system,
    that are reasonably likely to have a material impact on the 
    financial or operational condition of the holding company system.
        ``(2) Authority to require additional information.--If, based 
    on reports provided to the Commission pursuant to paragraph (1) of 
    this subsection or other available information, the Commission 
    reasonably concludes that it has concerns regarding the financial 
    or operational condition of any registered holding company or any 
    subsidiary thereof (including an exempt telecommunications 
    company), the Commission may require such registered holding 
    company to make additional reports and provide additional 
    information.
        ``(3) Authority to limit disclosure of information.--
    Notwithstanding any other provision of law, the Commission shall 
    not be compelled to disclose any information required to be 
    reported under this subsection. Nothing in this subsection shall 
    authorize the Commission to withhold the information from Congress, 
    or prevent the Commission from complying with a request for 
    information from any other Federal or State department or agency 
    requesting the information for purposes within the scope of its 
    jurisdiction. For purposes of section 552 of title 5, United States 
    Code, this subsection shall be considered a statute described in 
    subsection (b)(3)(B) of such section 552.
    ``(g) Assumption of Liabilities.--Any public utility company that 
is an associate company, or an affiliate, of a registered holding 
company and that is subject to the jurisdiction of a State commission 
with respect to its retail electric or gas rates shall not issue any 
security for the purpose of financing the acquisition, ownership, or 
operation of an exempt telecommunications company. Any public utility 
company that is an associate company, or an affiliate, of a registered 
holding company and that is subject to the jurisdiction of a State 
commission with respect to its retail electric or gas rates shall not 
assume any obligation or liability as guarantor, endorser, surety, or 
otherwise by the public utility company in respect of any security of 
an exempt telecommunications company.
    ``(h) Pledging or Mortgaging of Assets.--Any public utility company 
that is an associate company, or affiliate, of a registered holding 
company and that is subject to the jurisdiction of a State commission 
with respect to its retail electric or gas rates shall not pledge, 
mortgage, or otherwise use as collateral any assets of the public 
utility company or assets of any subsidiary company thereof for the 
benefit of an exempt telecommunications company.
    ``(i) Protection Against Abusive Affiliate Transactions.--A public 
utility company may enter into a contract to purchase services or 
products described in subsection (a)(1) from an exempt 
telecommunications company that is an affiliate or associate company of 
the public utility company only if--
        ``(1) every State commission having jurisdiction over the 
    retail rates of such public utility company approves such contract; 
    or
        ``(2) such public utility company is not subject to State 
    commission retail rate regulation and the purchased services or 
    products--
            ``(A) would not be resold to any affiliate or associate 
        company; or
            ``(B) would be resold to an affiliate or associate company 
        and every State commission having jurisdiction over the retail 
        rates of such affiliate or associate company makes the 
        determination required by subparagraph (A).
The requirements of this subsection shall not apply in any case in 
which the State or the State commission concerned publishes a notice 
that the State or State commission waives its authority under this 
subsection.
    ``(j) Nonpreemption of Rate Authority.--Nothing in this Act shall 
preclude the Federal Energy Regulatory Commission or a State commission 
from exercising its jurisdiction under otherwise applicable law to 
determine whether a public utility company may recover in rates the 
costs of products or services purchased from or sold to an associate 
company or affiliate that is an exempt telecommunications company, 
regardless of whether such costs are incurred through the direct or 
indirect purchase or sale of products or services from such associate 
company or affiliate.
    ``(k) Reciprocal Arrangements Prohibited.--Reciprocal arrangements 
among companies that are not affiliates or associate companies of each 
other that are entered into in order to avoid the provisions of this 
section are prohibited.
    ``(l) Books and Records.--(1) Upon written order of a State 
commission, a State commission may examine the books, accounts, 
memoranda, contracts, and records of--
        ``(A) a public utility company subject to its regulatory 
    authority under State law;
        ``(B) any exempt telecommunications company selling products or 
    services to such public utility company or to an associate company 
    of such public utility company; and
        ``(C) any associate company or affiliate of an exempt 
    telecommunications company which sells products or services to a 
    public utility company referred to in subparagraph (A),
wherever located, if such examination is required for the effective 
discharge of the State commission's regulatory responsibilities 
affecting the provision of electric or gas service in connection with 
the activities of such exempt telecommunications company.
    ``(2) Where a State commission issues an order pursuant to 
paragraph (1), the State commission shall not publicly disclose trade 
secrets or sensitive commercial information.
    ``(3) Any United States district court located in the State in 
which the State commission referred to in paragraph (1) is located 
shall have jurisdiction to enforce compliance with this subsection.
    ``(4) Nothing in this section shall--
        ``(A) preempt applicable State law concerning the provision of 
    records and other information; or
        ``(B) in any way limit rights to obtain records and other 
    information under Federal law, contracts, or otherwise.
    ``(m) Independent Audit Authority for State Commissions.--
        ``(1) State may order audit.--Any State commission with 
    jurisdiction over a public utility company that--
            ``(A) is an associate company of a registered holding 
        company; and
            ``(B) transacts business, directly or indirectly, with a 
        subsidiary company, an affiliate or an associate company that 
        is an exempt telecommunications company,
    may order an independent audit to be performed, no more frequently 
    than on an annual basis, of all matters deemed relevant by the 
    selected auditor that reasonably relate to retail rates: Provided, 
    That such matters relate, directly or indirectly, to transactions 
    or transfers between the public utility company subject to its 
    jurisdiction and such exempt telecommunications company.
        ``(2) Selection of firm to conduct audit.--(A) If a State 
    commission orders an audit in accordance with paragraph (1), the 
    public utility company and the State commission shall jointly 
    select, within 60 days, a firm to perform the audit. The firm 
    selected to perform the audit shall possess demonstrated 
    qualifications relating to--
            ``(i) competency, including adequate technical training and 
        professional proficiency in each discipline necessary to carry 
        out the audit; and
            ``(ii) independence and objectivity, including that the 
        firm be free from personal or external impairments to 
        independence, and should assume an independent position with 
        the State commission and auditee, making certain that the audit 
        is based upon an impartial consideration of all pertinent facts 
        and responsible opinions.
        ``(B) The public utility company and the exempt 
    telecommunications company shall cooperate fully with all 
    reasonable requests necessary to perform the audit and the public 
    utility company shall bear all costs of having the audit performed.
        ``(3) Availability of auditor's report.--The auditor's report 
    shall be provided to the State commission not later than 6 months 
    after the selection of the auditor, and provided to the public 
    utility company not later than 60 days thereafter.
    ``(n) Applicability of Telecommunications Regulation.--Nothing in 
this section shall affect the authority of the Federal Communications 
Commission under the Communications Act of 1934, or the authority of 
State commissions under State laws concerning the provision of 
telecommunications services, to regulate the activities of an exempt 
telecommunications company.''.

SEC. 104. NONDISCRIMINATION PRINCIPLE.

     Section 1 (47 U.S.C. 151) is amended by inserting after ``to all 
the people of the United States'' the following: ``, without 
discrimination on the basis of race, color, religion, national origin, 
or sex,''.

   Subtitle B--Special Provisions Concerning Bell Operating Companies

SEC. 151. BELL OPERATING COMPANY PROVISIONS.

    (a) Establishment of Part III of Title II.--Title II is amended by 
adding at the end of part II (as added by section 101) the following 
new part:

   ``PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES

``SEC. 271. BELL OPERATING COMPANY ENTRY INTO INTERLATA SERVICES.

    ``(a) General Limitation.--Neither a Bell operating company, nor 
any affiliate of a Bell operating company, may provide interLATA 
services except as provided in this section.
    ``(b) InterLATA Services to Which This Section Applies.--
        ``(1) In-region services.--A Bell operating company, or any 
    affiliate of that Bell operating company, may provide interLATA 
    services originating in any of its in-region States (as defined in 
    subsection (i)) if the Commission approves the application of such 
    company for such State under subsection (d)(3).
        ``(2) Out-of-region services.--A Bell operating company, or any 
    affiliate of that Bell operating company, may provide interLATA 
    services originating outside its in-region States after the date of 
    enactment of the Telecommunications Act of 1996, subject to 
    subsection (j).
        ``(3) Incidental interlata services.--A Bell operating company, 
    or any affiliate of a Bell operating company, may provide 
    incidental interLATA services (as defined in subsection (g)) 
    originating in any State after the date of enactment of the 
    Telecommunications Act of 1996.
        ``(4) Termination.--Nothing in this section prohibits a Bell 
    operating company or any of its affiliates from providing 
    termination for interLATA services, subject to subsection (j).
    ``(c) Requirements for Providing Certain In-Region InterLATA 
Services.--
        ``(1) Agreement or statement.--A Bell operating company meets 
    the requirements of this paragraph if it meets the requirements of 
    subparagraph (A) or subparagraph (B) of this paragraph for each 
    State for which the authorization is sought.
            ``(A) Presence of a facilities-based competitor.--A Bell 
        operating company meets the requirements of this subparagraph 
        if it has entered into one or more binding agreements that have 
        been approved under section 252 specifying the terms and 
        conditions under which the Bell operating company is providing 
        access and interconnection to its network facilities for the 
        network facilities of one or more unaffiliated competing 
        providers of telephone exchange service (as defined in section 
        3(47)(A), but excluding exchange access) to residential and 
        business subscribers. For the purpose of this subparagraph, 
        such telephone exchange service may be offered by such 
        competing providers either exclusively over their own telephone 
        exchange service facilities or predominantly over their own 
        telephone exchange service facilities in combination with the 
        resale of the telecommunications services of another carrier. 
        For the purpose of this subparagraph, services provided 
        pursuant to subpart K of part 22 of the Commission's 
        regulations (47 C.F.R. 22.901 et seq.) shall not be considered 
        to be telephone exchange services.
            ``(B) Failure to request access.--A Bell operating company 
        meets the requirements of this subparagraph if, after 10 months 
        after the date of enactment of the Telecommunications Act of 
        1996, no such provider has requested the access and 
        interconnection described in subparagraph (A) before the date 
        which is 3 months before the date the company makes its 
        application under subsection (d)(1), and a statement of the 
        terms and conditions that the company generally offers to 
        provide such access and interconnection has been approved or 
        permitted to take effect by the State commission under section 
        252(f). For purposes of this subparagraph, a Bell operating 
        company shall be considered not to have received any request 
        for access and interconnection if the State commission of such 
        State certifies that the only provider or providers making such 
        a request have (i) failed to negotiate in good faith as 
        required by section 252, or (ii) violated the terms of an 
        agreement approved under section 252 by the provider's failure 
        to comply, within a reasonable period of time, with the 
        implementation schedule contained in such agreement.
        ``(2) Specific interconnection requirements.--
            ``(A) Agreement required.--A Bell operating company meets 
        the requirements of this paragraph if, within the State for 
        which the authorization is sought--
                ``(i)(I) such company is providing access and 
            interconnection pursuant to one or more agreements 
            described in paragraph (1)(A), or
                ``(II) such company is generally offering access and 
            interconnection pursuant to a statement described in 
            paragraph (1)(B), and
                ``(ii) such access and interconnection meets the 
            requirements of subparagraph (B) of this paragraph.
            ``(B) Competitive checklist.--Access or interconnection 
        provided or generally offered by a Bell operating company to 
        other telecommunications carriers meets the requirements of 
        this subparagraph if such access and interconnection includes 
        each of the following:
                ``(i) Interconnection in accordance with the 
            requirements of sections 251(c)(2) and 252(d)(1).
                ``(ii) Nondiscriminatory access to network elements in 
            accordance with the requirements of sections 251(c)(3) and 
            252(d)(1).
                ``(iii) Nondiscriminatory access to the poles, ducts, 
            conduits, and rights-of-way owned or controlled by the Bell 
            operating company at just and reasonable rates in 
            accordance with the requirements of section 224.
                ``(iv) Local loop transmission from the central office 
            to the customer's premises, unbundled from local switching 
            or other services.
                ``(v) Local transport from the trunk side of a wireline 
            local exchange carrier switch unbundled from switching or 
            other services.
                ``(vi) Local switching unbundled from transport, local 
            loop transmission, or other services.
                ``(vii) Nondiscriminatory access to--

                    ``(I) 911 and E911 services;
                    ``(II) directory assistance services to allow the 
                other carrier's customers to obtain telephone numbers; 
                and
                    ``(III) operator call completion services.

                ``(viii) White pages directory listings for customers 
            of the other carrier's telephone exchange service.
                ``(ix) Until the date by which telecommunications 
            numbering administration guidelines, plan, or rules are 
            established, nondiscriminatory access to telephone numbers 
            for assignment to the other carrier's telephone exchange 
            service customers. After that date, compliance with such 
            guidelines, plan, or rules.
                ``(x) Nondiscriminatory access to databases and 
            associated signaling necessary for call routing and 
            completion.
                ``(xi) Until the date by which the Commission issues 
            regulations pursuant to section 251 to require number 
            portability, interim telecommunications number portability 
            through remote call forwarding, direct inward dialing 
            trunks, or other comparable arrangements, with as little 
            impairment of functioning, quality, reliability, and 
            convenience as possible. After that date, full compliance 
            with such regulations.
                ``(xii) Nondiscriminatory access to such services or 
            information as are necessary to allow the requesting 
            carrier to implement local dialing parity in accordance 
            with the requirements of section 251(b)(3).
                ``(xiii) Reciprocal compensation arrangements in 
            accordance with the requirements of section 252(d)(2).
                ``(xiv) Telecommunications services are available for 
            resale in accordance with the requirements of sections 
            251(c)(4) and 252(d)(3).
    ``(d) Administrative Provisions.--
        ``(1) Application to commission.--On and after the date of 
    enactment of the Telecommunications Act of 1996, a Bell operating 
    company or its affiliate may apply to the Commission for 
    authorization to provide interLATA services originating in any in-
    region State. The application shall identify each State for which 
    the authorization is sought.
        ``(2) Consultation.--
            ``(A) Consultation with the attorney general.--The 
        Commission shall notify the Attorney General promptly of any 
        application under paragraph (1). Before making any 
        determination under this subsection, the Commission shall 
        consult with the Attorney General, and if the Attorney General 
        submits any comments in writing, such comments shall be 
        included in the record of the Commission's decision. In 
        consulting with and submitting comments to the Commission under 
        this paragraph, the Attorney General shall provide to the 
        Commission an evaluation of the application using any standard 
        the Attorney General considers appropriate. The Commission 
        shall give substantial weight to the Attorney General's 
        evaluation, but such evaluation shall not have any preclusive 
        effect on any Commission decision under paragraph (3).
            ``(B) Consultation with state commissions.--Before making 
        any determination under this subsection, the Commission shall 
        consult with the State commission of any State that is the 
        subject of the application in order to verify the compliance of 
        the Bell operating company with the requirements of subsection 
        (c).
        ``(3) Determination.--Not later than 90 days after receiving an 
    application under paragraph (1), the Commission shall issue a 
    written determination approving or denying the authorization 
    requested in the application for each State. The Commission shall 
    not approve the authorization requested in an application submitted 
    under paragraph (1) unless it finds that--
            ``(A) the petitioning Bell operating company has met the 
        requirements of subsection (c)(1) and--
                ``(i) with respect to access and interconnection 
            provided pursuant to subsection (c)(1)(A), has fully 
            implemented the competitive checklist in subsection 
            (c)(2)(B); or
                ``(ii) with respect to access and interconnection 
            generally offered pursuant to a statement under subsection 
            (c)(1)(B), such statement offers all of the items included 
            in the competitive checklist in subsection (c)(2)(B);
            ``(B) the requested authorization will be carried out in 
        accordance with the requirements of section 272; and
            ``(C) the requested authorization is consistent with the 
        public interest, convenience, and necessity.
    The Commission shall state the basis for its approval or denial of 
    the application.
        ``(4) Limitation on commission.--The Commission may not, by 
    rule or otherwise, limit or extend the terms used in the 
    competitive checklist set forth in subsection (c)(2)(B).
        ``(5) Publication.--Not later than 10 days after issuing a 
    determination under paragraph (3), the Commission shall publish in 
    the Federal Register a brief description of the determination.
        ``(6) Enforcement of conditions.--
            ``(A) Commission authority.--If at any time after the 
        approval of an application under paragraph (3), the Commission 
        determines that a Bell operating company has ceased to meet any 
        of the conditions required for such approval, the Commission 
        may, after notice and opportunity for a hearing--
                ``(i) issue an order to such company to correct the 
            deficiency;
                ``(ii) impose a penalty on such company pursuant to 
            title V; or
                ``(iii) suspend or revoke such approval.
            ``(B) Receipt and review of complaints.--The Commission 
        shall establish procedures for the review of complaints 
        concerning failures by Bell operating companies to meet 
        conditions required for approval under paragraph (3). Unless 
        the parties otherwise agree, the Commission shall act on such 
        complaint within 90 days.
    ``(e) Limitations.--
        ``(1) Joint marketing of local and long distance services.--
    Until a Bell operating company is authorized pursuant to subsection 
    (d) to provide interLATA services in an in-region State, or until 
    36 months have passed since the date of enactment of the 
    Telecommunications Act of 1996, whichever is earlier, a 
    telecommunications carrier that serves greater than 5 percent of 
    the Nation's presubscribed access lines may not jointly market in 
    such State telephone exchange service obtained from such company 
    pursuant to section 251(c)(4) with interLATA services offered by 
    that telecommunications carrier.
        ``(2) Intralata toll dialing parity.--
            ``(A) Provision required.--A Bell operating company granted 
        authority to provide interLATA services under subsection (d) 
        shall provide intraLATA toll dialing parity throughout that 
        State coincident with its exercise of that authority.
            ``(B) Limitation.--Except for single-LATA States and States 
        that have issued an order by December 19, 1995, requiring a 
        Bell operating company to implement intraLATA toll dialing 
        parity, a State may not require a Bell operating company to 
        implement intraLATA toll dialing parity in that State before a 
        Bell operating company has been granted authority under this 
        section to provide interLATA services originating in that State 
        or before 3 years after the date of enactment of the 
        Telecommunications Act of 1996, whichever is earlier. Nothing 
        in this subparagraph precludes a State from issuing an order 
        requiring intraLATA toll dialing parity in that State prior to 
        either such date so long as such order does not take effect 
        until after the earlier of either such dates.
    ``(f) Exception for Previously Authorized Activities.--Neither 
subsection (a) nor section 273 shall prohibit a Bell operating company 
or affiliate from engaging, at any time after the date of enactment of 
the Telecommunications Act of 1996, in any activity to the extent 
authorized by, and subject to the terms and conditions contained in, an 
order entered by the United States District Court for the District of 
Columbia pursuant to section VII or VIII(C) of the AT&T Consent Decree 
if such order was entered on or before such date of enactment, to the 
extent such order is not reversed or vacated on appeal. Nothing in this 
subsection shall be construed to limit, or to impose terms or 
conditions on, an activity in which a Bell operating company is 
otherwise authorized to engage under any other provision of this 
section.
    ``(g) Definition of Incidental InterLATA Services.--For purposes of 
this section, the term `incidental interLATA services' means the 
interLATA provision by a Bell operating company or its affiliate--
        ``(1)(A) of audio programming, video programming, or other 
    programming services to subscribers to such services of such 
    company or affiliate;
        ``(B) of the capability for interaction by such subscribers to 
    select or respond to such audio programming, video programming, or 
    other programming services;
        ``(C) to distributors of audio programming or video programming 
    that such company or affiliate owns or controls, or is licensed by 
    the copyright owner of such programming (or by an assignee of such 
    owner) to distribute; or
        ``(D) of alarm monitoring services;
        ``(2) of two-way interactive video services or Internet 
    services over dedicated facilities to or for elementary and 
    secondary schools as defined in section 254(h)(5);
        ``(3) of commercial mobile services in accordance with section 
    332(c) of this Act and with the regulations prescribed by the 
    Commission pursuant to paragraph (8) of such section;
        ``(4) of a service that permits a customer that is located in 
    one LATA to retrieve stored information from, or file information 
    for storage in, information storage facilities of such company that 
    are located in another LATA;
        ``(5) of signaling information used in connection with the 
    provision of telephone exchange services or exchange access by a 
    local exchange carrier; or
        ``(6) of network control signaling information to, and receipt 
    of such signaling information from, common carriers offering 
    interLATA services at any location within the area in which such 
    Bell operating company provides telephone exchange services or 
    exchange access.
    ``(h) Limitations.--The provisions of subsection (g) are intended 
to be narrowly construed. The interLATA services provided under 
subparagraph (A), (B), or (C) of subsection (g)(1) are limited to those 
interLATA transmissions incidental to the provision by a Bell operating 
company or its affiliate of video, audio, and other programming 
services that the company or its affiliate is engaged in providing to 
the public. The Commission shall ensure that the provision of services 
authorized under subsection (g) by a Bell operating company or its 
affiliate will not adversely affect telephone exchange service 
ratepayers or competition in any telecommunications market.
    ``(i) Additional Definitions.--As used in this section--
        ``(1) In-region state.--The term `in-region State' means a 
    State in which a Bell operating company or any of its affiliates 
    was authorized to provide wireline telephone exchange service 
    pursuant to the reorganization plan approved under the AT&T Consent 
    Decree, as in effect on the day before the date of enactment of the 
    Telecommunications Act of 1996.
        ``(2) Audio programming services.--The term `audio programming 
    services' means programming provided by, or generally considered to 
    be comparable to programming provided by, a radio broadcast 
    station.
        ``(3) Video programming services; other programming services.--
    The terms `video programming service' and `other programming 
    services' have the same meanings as such terms have under section 
    602 of this Act.
    ``(j) Certain Service Applications Treated as In-Region Service 
Applications.--For purposes of this section, a Bell operating company 
application to provide 800 service, private line service, or their 
equivalents that--
        ``(1) terminate in an in-region State of that Bell operating 
    company, and
        ``(2) allow the called party to determine the interLATA 
    carrier,
shall be considered an in-region service subject to the requirements of 
subsection (b)(1).

``SEC. 272. SEPARATE AFFILIATE; SAFEGUARDS.

    ``(a) Separate Affiliate Required for Competitive Activities.--
        ``(1) In general.--A Bell operating company (including any 
    affiliate) which is a local exchange carrier that is subject to the 
    requirements of section 251(c) may not provide any service 
    described in paragraph (2) unless it provides that service through 
    one or more affiliates that--
            ``(A) are separate from any operating company entity that 
        is subject to the requirements of section 251(c); and
            ``(B) meet the requirements of subsection (b).
        ``(2) Services for which a separate affiliate is required.--The 
    services for which a separate affiliate is required by paragraph 
    (1) are:
            ``(A) Manufacturing activities (as defined in section 
        273(h)).
            ``(B) Origination of interLATA telecommunications services, 
        other than--
                ``(i) incidental interLATA services described in 
            paragraphs (1), (2), (3), (5), and (6) of section 271(g);
                ``(ii) out-of-region services described in section 
            271(b)(2); or
                ``(iii) previously authorized activities described in 
            section 271(f).
            ``(C) InterLATA information services, other than electronic 
        publishing (as defined in section 274(h)) and alarm monitoring 
        services (as defined in section 275(e)).
    ``(b) Structural and Transactional Requirements.--The separate 
affiliate required by this section--
        ``(1) shall operate independently from the Bell operating 
    company;
        ``(2) shall maintain books, records, and accounts in the manner 
    prescribed by the Commission which shall be separate from the 
    books, records, and accounts maintained by the Bell operating 
    company of which it is an affiliate;
        ``(3) shall have separate officers, directors, and employees 
    from the Bell operating company of which it is an affiliate;
        ``(4) may not obtain credit under any arrangement that would 
    permit a creditor, upon default, to have recourse to the assets of 
    the Bell operating company; and
        ``(5) shall conduct all transactions with the Bell operating 
    company of which it is an affiliate on an arm's length basis with 
    any such transactions reduced to writing and available for public 
    inspection.
  ``(c) Nondiscrimination Safeguards.--In its dealings with its 
affiliate described in subsection (a), a Bell operating company--
        ``(1) may not discriminate between that company or affiliate 
    and any other entity in the provision or procurement of goods, 
    services, facilities, and information, or in the establishment of 
    standards; and
        ``(2) shall account for all transactions with an affiliate 
    described in subsection (a) in accordance with accounting 
    principles designated or approved by the Commission.
    ``(d) Biennial Audit.--
        ``(1) General requirement.--A company required to operate a 
    separate affiliate under this section shall obtain and pay for a 
    joint Federal/State audit every 2 years conducted by an independent 
    auditor to determine whether such company has complied with this 
    section and the regulations promulgated under this section, and 
    particularly whether such company has complied with the separate 
    accounting requirements under subsection (b).
        ``(2) Results submitted to commission; state commissions.--The 
    auditor described in paragraph (1) shall submit the results of the 
    audit to the Commission and to the State commission of each State 
    in which the company audited provides service, which shall make 
    such results available for public inspection. Any party may submit 
    comments on the final audit report.
        ``(3) Access to documents.--For purposes of conducting audits 
    and reviews under this subsection--
            ``(A) the independent auditor, the Commission, and the 
        State commission shall have access to the financial accounts 
        and records of each company and of its affiliates necessary to 
        verify transactions conducted with that company that are 
        relevant to the specific activities permitted under this 
        section and that are necessary for the regulation of rates;
            ``(B) the Commission and the State commission shall have 
        access to the working papers and supporting materials of any 
        auditor who performs an audit under this section; and
            ``(C) the State commission shall implement appropriate 
        procedures to ensure the protection of any proprietary 
        information submitted to it under this section.
    ``(e) Fulfillment of Certain Requests.--A Bell operating company 
and an affiliate that is subject to the requirements of section 
251(c)--
        ``(1) shall fulfill any requests from an unaffiliated entity 
    for telephone exchange service and exchange access within a period 
    no longer than the period in which it provides such telephone 
    exchange service and exchange access to itself or to its 
    affiliates;
        ``(2) shall not provide any facilities, services, or 
    information concerning its provision of exchange access to the 
    affiliate described in subsection (a) unless such facilities, 
    services, or information are made available to other providers of 
    interLATA services in that market on the same terms and conditions;
        ``(3) shall charge the affiliate described in subsection (a), 
    or impute to itself (if using the access for its provision of its 
    own services), an amount for access to its telephone exchange 
    service and exchange access that is no less than the amount charged 
    to any unaffiliated interexchange carriers for such service; and
        ``(4) may provide any interLATA or intraLATA facilities or 
    services to its interLATA affiliate if such services or facilities 
    are made available to all carriers at the same rates and on the 
    same terms and conditions, and so long as the costs are 
    appropriately allocated.
    ``(f) Sunset.--
        ``(1) Manufacturing and long distance.--The provisions of this 
    section (other than subsection (e)) shall cease to apply with 
    respect to the manufacturing activities or the interLATA 
    telecommunications services of a Bell operating company 3 years 
    after the date such Bell operating company or any Bell operating 
    company affiliate is authorized to provide interLATA 
    telecommunications services under section 271(d), unless the 
    Commission extends such 3-year period by rule or order.
        ``(2) InterLATA information services.--The provisions of this 
    section (other than subsection (e)) shall cease to apply with 
    respect to the interLATA information services of a Bell operating 
    company 4 years after the date of enactment of the 
    Telecommunications Act of 1996, unless the Commission extends such 
    4-year period by rule or order.
        ``(3) Preservation of existing authority.--Nothing in this 
    subsection shall be construed to limit the authority of the 
    Commission under any other section of this Act to prescribe 
    safeguards consistent with the public interest, convenience, and 
    necessity.
    ``(g) Joint Marketing.--
        ``(1) Affiliate sales of telephone exchange services.--A Bell 
    operating company affiliate required by this section may not market 
    or sell telephone exchange services provided by the Bell operating 
    company unless that company permits other entities offering the 
    same or similar service to market and sell its telephone exchange 
    services.
        ``(2) Bell operating company sales of affiliate services.--A 
    Bell operating company may not market or sell interLATA service 
    provided by an affiliate required by this section within any of its 
    in-region States until such company is authorized to provide 
    interLATA services in such State under section 271(d).
        ``(3) Rule of construction.--The joint marketing and sale of 
    services permitted under this subsection shall not be considered to 
    violate the nondiscrimination provisions of subsection (c).
    ``(h) Transition.--With respect to any activity in which a Bell 
operating company is engaged on the date of enactment of the 
Telecommunications Act of 1996, such company shall have one year from 
such date of enactment to comply with the requirements of this section.

``SEC. 273. MANUFACTURING BY BELL OPERATING COMPANIES.

    ``(a) Authorization.--A Bell operating company may manufacture and 
provide telecommunications equipment, and manufacture customer premises 
equipment, if the Commission authorizes that Bell operating company or 
any Bell operating company affiliate to provide interLATA services 
under section 271(d), subject to the requirements of this section and 
the regulations prescribed thereunder, except that neither a Bell 
operating company nor any of its affiliates may engage in such 
manufacturing in conjunction with a Bell operating company not so 
affiliated or any of its affiliates.
    ``(b) Collaboration; Research and Royalty Agreements.--
        ``(1) Collaboration.--Subsection (a) shall not prohibit a Bell 
    operating company from engaging in close collaboration with any 
    manufacturer of customer premises equipment or telecommunications 
    equipment during the design and development of hardware, software, 
    or combinations thereof related to such equipment.
        ``(2) Certain research arrangements; royalty agreements.--
    Subsection (a) shall not prohibit a Bell operating company from--
            ``(A) engaging in research activities related to 
        manufacturing, and
            ``(B) entering into royalty agreements with manufacturers 
        of telecommunications equipment.
    ``(c) Information Requirements.--
        ``(1) Information on protocols and technical requirements.--
    Each Bell operating company shall, in accordance with regulations 
    prescribed by the Commission, maintain and file with the Commission 
    full and complete information with respect to the protocols and 
    technical requirements for connection with and use of its telephone 
    exchange service facilities. Each such company shall report 
    promptly to the Commission any material changes or planned changes 
    to such protocols and requirements, and the schedule for 
    implementation of such changes or planned changes.
        ``(2) Disclosure of information.--A Bell operating company 
    shall not disclose any information required to be filed under 
    paragraph (1) unless that information has been filed promptly, as 
    required by regulation by the Commission.
        ``(3) Access by competitors to information.--The Commission may 
    prescribe such additional regulations under this subsection as may 
    be necessary to ensure that manufacturers have access to the 
    information with respect to the protocols and technical 
    requirements for connection with and use of telephone exchange 
    service facilities that a Bell operating company makes available to 
    any manufacturing affiliate or any unaffiliated manufacturer.
        ``(4) Planning information.--Each Bell operating company shall 
    provide, to interconnecting carriers providing telephone exchange 
    service, timely information on the planned deployment of 
    telecommunications equipment.
    ``(d) Manufacturing Limitations for Standard-Setting 
Organizations.--
        ``(1) Application to bell communications research or 
    manufacturers.--Bell Communications Research, Inc., or any 
    successor entity or affiliate--
            ``(A) shall not be considered a Bell operating company or a 
        successor or assign of a Bell operating company at such time as 
        it is no longer an affiliate of any Bell operating company; and
            ``(B) notwithstanding paragraph (3), shall not engage in 
        manufacturing telecommunications equipment or customer premises 
        equipment as long as it is an affiliate of more than 1 
        otherwise unaffiliated Bell operating company or successor or 
        assign of any such company.
    Nothing in this subsection prohibits Bell Communications Research, 
    Inc., or any successor entity, from engaging in any activity in 
    which it is lawfully engaged on the date of enactment of the 
    Telecommunications Act of 1996. Nothing provided in this subsection 
    shall render Bell Communications Research, Inc., or any successor 
    entity, a common carrier under title II of this Act. Nothing in 
    this subsection restricts any manufacturer from engaging in any 
    activity in which it is lawfully engaged on the date of enactment 
    of the Telecommunications Act of 1996.
        ``(2) Proprietary information.--Any entity which establishes 
    standards for telecommunications equipment or customer premises 
    equipment, or generic network requirements for such equipment, or 
    certifies telecommunications equipment or customer premises 
    equipment, shall be prohibited from releasing or otherwise using 
    any proprietary information, designated as such by its owner, in 
    its possession as a result of such activity, for any purpose other 
    than purposes authorized in writing by the owner of such 
    information, even after such entity ceases to be so engaged.
        ``(3) Manufacturing safeguards.--(A) Except as prohibited in 
    paragraph (1), and subject to paragraph (6), any entity which 
    certifies telecommunications equipment or customer premises 
    equipment manufactured by an unaffiliated entity shall only 
    manufacture a particular class of telecommunications equipment or 
    customer premises equipment for which it is undertaking or has 
    undertaken, during the previous 18 months, certification activity 
    for such class of equipment through a separate affiliate.
        ``(B) Such separate affiliate shall--
            ``(i) maintain books, records, and accounts separate from 
        those of the entity that certifies such equipment, consistent 
        with generally acceptable accounting principles;
            ``(ii) not engage in any joint manufacturing activities 
        with such entity; and
            ``(iii) have segregated facilities and separate employees 
        with such entity.
        ``(C) Such entity that certifies such equipment shall--
            ``(i) not discriminate in favor of its manufacturing 
        affiliate in the establishment of standards, generic 
        requirements, or product certification;
            ``(ii) not disclose to the manufacturing affiliate any 
        proprietary information that has been received at any time from 
        an unaffiliated manufacturer, unless authorized in writing by 
        the owner of the information; and
            ``(iii) not permit any employee engaged in product 
        certification for telecommunications equipment or customer 
        premises equipment to engage jointly in sales or marketing of 
        any such equipment with the affiliated manufacturer.
        ``(4) Standard-setting entities.--Any entity that is not an 
    accredited standards development organization and that establishes 
    industry-wide standards for telecommunications equipment or 
    customer premises equipment, or industry-wide generic network 
    requirements for such equipment, or that certifies 
    telecommunications equipment or customer premises equipment 
    manufactured by an unaffiliated entity, shall--
            ``(A) establish and publish any industry-wide standard for, 
        industry-wide generic requirement for, or any substantial 
        modification of an existing industry-wide standard or industry-
        wide generic requirement for, telecommunications equipment or 
        customer premises equipment only in compliance with the 
        following procedure--
                ``(i) such entity shall issue a public notice of its 
            consideration of a proposed industry-wide standard or 
            industry-wide generic requirement;
                ``(ii) such entity shall issue a public invitation to 
            interested industry parties to fund and participate in such 
            efforts on a reasonable and nondiscriminatory basis, 
            administered in such a manner as not to unreasonably 
            exclude any interested industry party;
                ``(iii) such entity shall publish a text for comment by 
            such parties as have agreed to participate in the process 
            pursuant to clause (ii), provide such parties a full 
            opportunity to submit comments, and respond to comments 
            from such parties;
                ``(iv) such entity shall publish a final text of the 
            industry-wide standard or industry-wide generic 
            requirement, including the comments in their entirety, of 
            any funding party which requests to have its comments so 
            published; and
                ``(v) such entity shall attempt, prior to publishing a 
            text for comment, to agree with the funding parties as a 
            group on a mutually satisfactory dispute resolution process 
            which such parties shall utilize as their sole recourse in 
            the event of a dispute on technical issues as to which 
            there is disagreement between any funding party and the 
            entity conducting such activities, except that if no 
            dispute resolution process is agreed to by all the parties, 
            a funding party may utilize the dispute resolution 
            procedures established pursuant to paragraph (5) of this 
            subsection;
            ``(B) engage in product certification for 
        telecommunications equipment or customer premises equipment 
        manufactured by unaffiliated entities only if--
                ``(i) such activity is performed pursuant to published 
            criteria;
                ``(ii) such activity is performed pursuant to auditable 
            criteria; and
                ``(iii) such activity is performed pursuant to 
            available industry-accepted testing methods and standards, 
            where applicable, unless otherwise agreed upon by the 
            parties funding and performing such activity;
            ``(C) not undertake any actions to monopolize or attempt to 
        monopolize the market for such services; and
            ``(D) not preferentially treat its own telecommunications 
        equipment or customer premises equipment, or that of its 
        affiliate, over that of any other entity in establishing and 
        publishing industry-wide standards or industry-wide generic 
        requirements for, and in certification of, telecommunications 
        equipment and customer premises equipment.
        ``(5) Alternate dispute resolution.--Within 90 days after the 
    date of enactment of the Telecommunications Act of 1996, the 
    Commission shall prescribe a dispute resolution process to be 
    utilized in the event that a dispute resolution process is not 
    agreed upon by all the parties when establishing and publishing any 
    industry-wide standard or industry-wide generic requirement for 
    telecommunications equipment or customer premises equipment, 
    pursuant to paragraph (4)(A)(v). The Commission shall not establish 
    itself as a party to the dispute resolution process. Such dispute 
    resolution process shall permit any funding party to resolve a 
    dispute with the entity conducting the activity that significantly 
    affects such funding party's interests, in an open, 
    nondiscriminatory, and unbiased fashion, within 30 days after the 
    filing of such dispute. Such disputes may be filed within 15 days 
    after the date the funding party receives a response to its 
    comments from the entity conducting the activity. The Commission 
    shall establish penalties to be assessed for delays caused by 
    referral of frivolous disputes to the dispute resolution process.
        ``(6) Sunset.--The requirements of paragraphs (3) and (4) shall 
    terminate for the particular relevant activity when the Commission 
    determines that there are alternative sources of industry-wide 
    standards, industry-wide generic requirements, or product 
    certification for a particular class of telecommunications 
    equipment or customer premises equipment available in the United 
    States. Alternative sources shall be deemed to exist when such 
    sources provide commercially viable alternatives that are providing 
    such services to customers. The Commission shall act on any 
    application for such a determination within 90 days after receipt 
    of such application, and shall receive public comment on such 
    application.
        ``(7) Administration and enforcement authority.--For the 
    purposes of administering this subsection and the regulations 
    prescribed thereunder, the Commission shall have the same remedial 
    authority as the Commission has in administering and enforcing the 
    provisions of this title with respect to any common carrier subject 
    to this Act.
        ``(8) Definitions.--For purposes of this subsection:
            ``(A) The term `affiliate' shall have the same meaning as 
        in section 3 of this Act, except that, for purposes of 
        paragraph (1)(B)--
                ``(i) an aggregate voting equity interest in Bell 
            Communications Research, Inc., of at least 5 percent of its 
            total voting equity, owned directly or indirectly by more 
            than 1 otherwise unaffiliated Bell operating company, shall 
            constitute an affiliate relationship; and
                ``(ii) a voting equity interest in Bell Communications 
            Research, Inc., by any otherwise unaffiliated Bell 
            operating company of less than 1 percent of Bell 
            Communications Research's total voting equity shall not be 
            considered to be an equity interest under this paragraph.
            ``(B) The term `generic requirement' means a description of 
        acceptable product attributes for use by local exchange 
        carriers in establishing product specifications for the 
        purchase of telecommunications equipment, customer premises 
        equipment, and software integral thereto.
            ``(C) The term `industry-wide' means activities funded by 
        or performed on behalf of local exchange carriers for use in 
        providing wireline telephone exchange service whose combined 
        total of deployed access lines in the United States constitutes 
        at least 30 percent of all access lines deployed by 
        telecommunications carriers in the United States as of the date 
        of enactment of the Telecommunications Act of 1996.
            ``(D) The term `certification' means any technical process 
        whereby a party determines whether a product, for use by more 
        than one local exchange carrier, conforms with the specified 
        requirements pertaining to such product.
            ``(E) The term `accredited standards development 
        organization' means an entity composed of industry members 
        which has been accredited by an institution vested with the 
        responsibility for standards accreditation by the industry.
    ``(e) Bell Operating Company Equipment Procurement and Sales.--
        ``(1) Nondiscrimination standards for manufacturing.--In the 
    procurement or awarding of supply contracts for telecommunications 
    equipment, a Bell operating company, or any entity acting on its 
    behalf, for the duration of the requirement for a separate 
    subsidiary including manufacturing under this Act--
            ``(A) shall consider such equipment, produced or supplied 
        by unrelated persons; and
            ``(B) may not discriminate in favor of equipment produced 
        or supplied by an affiliate or related person.
        ``(2) Procurement standards.--Each Bell operating company or 
    any entity acting on its behalf shall make procurement decisions 
    and award all supply contracts for equipment, services, and 
    software on the basis of an objective assessment of price, quality, 
    delivery, and other commercial factors.
        ``(3) Network planning and design.--A Bell operating company 
    shall, to the extent consistent with the antitrust laws, engage in 
    joint network planning and design with local exchange carriers 
    operating in the same area of interest. No participant in such 
    planning shall be allowed to delay the introduction of new 
    technology or the deployment of facilities to provide 
    telecommunications services, and agreement with such other carriers 
    shall not be required as a prerequisite for such introduction or 
    deployment.
        ``(4) Sales restrictions.--Neither a Bell operating company 
    engaged in manufacturing nor a manufacturing affiliate of such a 
    company shall restrict sales to any local exchange carrier of 
    telecommunications equipment, including software integral to the 
    operation of such equipment and related upgrades.
        ``(5) Protection of proprietary information.--A Bell operating 
    company and any entity it owns or otherwise controls shall protect 
    the proprietary information submitted for procurement decisions 
    from release not specifically authorized by the owner of such 
    information.
    ``(f) Administration and Enforcement Authority.--For the purposes 
of administering and enforcing the provisions of this section and the 
regulations prescribed thereunder, the Commission shall have the same 
authority, power, and functions with respect to any Bell operating 
company or any affiliate thereof as the Commission has in administering 
and enforcing the provisions of this title with respect to any common 
carrier subject to this Act.
    ``(g) Additional Rules and Regulations.--The Commission may 
prescribe such additional rules and regulations as the Commission 
determines are necessary to carry out the provisions of this section, 
and otherwise to prevent discrimination and cross-subsidization in a 
Bell operating company's dealings with its affiliate and with third 
parties.
    ``(h) Definition.--As used in this section, the term 
`manufacturing' has the same meaning as such term has under the AT&T 
Consent Decree.

``SEC. 274. ELECTRONIC PUBLISHING BY BELL OPERATING COMPANIES.

    ``(a) Limitations.--No Bell operating company or any affiliate may 
engage in the provision of electronic publishing that is disseminated 
by means of such Bell operating company's or any of its affiliates' 
basic telephone service, except that nothing in this section shall 
prohibit a separated affiliate or electronic publishing joint venture 
operated in accordance with this section from engaging in the provision 
of electronic publishing.
    ``(b) Separated Affiliate or Electronic Publishing Joint Venture 
Requirements.--A separated affiliate or electronic publishing joint 
venture shall be operated independently from the Bell operating 
company. Such separated affiliate or joint venture and the Bell 
operating company with which it is affiliated shall--
        ``(1) maintain separate books, records, and accounts and 
    prepare separate financial statements;
        ``(2) not incur debt in a manner that would permit a creditor 
    of the separated affiliate or joint venture upon default to have 
    recourse to the assets of the Bell operating company;
        ``(3) carry out transactions (A) in a manner consistent with 
    such independence, (B) pursuant to written contracts or tariffs 
    that are filed with the Commission and made publicly available, and 
    (C) in a manner that is auditable in accordance with generally 
    accepted auditing standards;
        ``(4) value any assets that are transferred directly or 
    indirectly from the Bell operating company to a separated affiliate 
    or joint venture, and record any transactions by which such assets 
    are transferred, in accordance with such regulations as may be 
    prescribed by the Commission or a State commission to prevent 
    improper cross subsidies;
        ``(5) between a separated affiliate and a Bell operating 
    company--
            ``(A) have no officers, directors, and employees in common 
        after the effective date of this section; and
            ``(B) own no property in common;
        ``(6) not use for the marketing of any product or service of 
    the separated affiliate or joint venture, the name, trademarks, or 
    service marks of an existing Bell operating company except for 
    names, trademarks, or service marks that are owned by the entity 
    that owns or controls the Bell operating company;
        ``(7) not permit the Bell operating company--
            ``(A) to perform hiring or training of personnel on behalf 
        of a separated affiliate;
            ``(B) to perform the purchasing, installation, or 
        maintenance of equipment on behalf of a separated affiliate, 
        except for telephone service that it provides under tariff or 
        contract subject to the provisions of this section; or
            ``(C) to perform research and development on behalf of a 
        separated affiliate;
        ``(8) each have performed annually a compliance review--
            ``(A) that is conducted by an independent entity for the 
        purpose of determining compliance during the preceding calendar 
        year with any provision of this section; and
            ``(B) the results of which are maintained by the separated 
        affiliate or joint venture and the Bell operating company for a 
        period of 5 years subject to review by any lawful authority; 
        and
        ``(9) within 90 days of receiving a review described in 
    paragraph (8), file a report of any exceptions and corrective 
    action with the Commission and allow any person to inspect and copy 
    such report subject to reasonable safeguards to protect any 
    proprietary information contained in such report from being used 
    for purposes other than to enforce or pursue remedies under this 
    section.
    ``(c) Joint Marketing.--
        ``(1) In general.--Except as provided in paragraph (2)--
            ``(A) a Bell operating company shall not carry out any 
        promotion, marketing, sales, or advertising for or in 
        conjunction with a separated affiliate; and
            ``(B) a Bell operating company shall not carry out any 
        promotion, marketing, sales, or advertising for or in 
        conjunction with an affiliate that is related to the provision 
        of electronic publishing.
        ``(2) Permissible joint activities.--
            ``(A) Joint telemarketing.--A Bell operating company may 
        provide inbound telemarketing or referral services related to 
        the provision of electronic publishing for a separated 
        affiliate, electronic publishing joint venture, affiliate, or 
        unaffiliated electronic publisher: Provided, That if such 
        services are provided to a separated affiliate, electronic 
        publishing joint venture, or affiliate, such services shall be 
        made available to all electronic publishers on request, on 
        nondiscriminatory terms.
            ``(B) Teaming arrangements.--A Bell operating company may 
        engage in nondiscriminatory teaming or business arrangements to 
        engage in electronic publishing with any separated affiliate or 
        with any other electronic publisher if (i) the Bell operating 
        company only provides facilities, services, and basic telephone 
        service information as authorized by this section, and (ii) the 
        Bell operating company does not own such teaming or business 
        arrangement.
            ``(C) Electronic publishing joint ventures.--A Bell 
        operating company or affiliate may participate on a 
        nonexclusive basis in electronic publishing joint ventures with 
        entities that are not a Bell operating company, affiliate, or 
        separated affiliate to provide electronic publishing services, 
        if the Bell operating company or affiliate has not more than a 
        50 percent direct or indirect equity interest (or the 
        equivalent thereof) or the right to more than 50 percent of the 
        gross revenues under a revenue sharing or royalty agreement in 
        any electronic publishing joint venture. Officers and employees 
        of a Bell operating company or affiliate participating in an 
        electronic publishing joint venture may not have more than 50 
        percent of the voting control over the electronic publishing 
        joint venture. In the case of joint ventures with small, local 
        electronic publishers, the Commission for good cause shown may 
        authorize the Bell operating company or affiliate to have a 
        larger equity interest, revenue share, or voting control but 
        not to exceed 80 percent. A Bell operating company 
        participating in an electronic publishing joint venture may 
        provide promotion, marketing, sales, or advertising personnel 
        and services to such joint venture.
    ``(d) Bell Operating Company Requirement.--A Bell operating company 
under common ownership or control with a separated affiliate or 
electronic publishing joint venture shall provide network access and 
interconnections for basic telephone service to electronic publishers 
at just and reasonable rates that are tariffed (so long as rates for 
such services are subject to regulation) and that are not higher on a 
per-unit basis than those charged for such services to any other 
electronic publisher or any separated affiliate engaged in electronic 
publishing.
    ``(e) Private Right of Action.--
        ``(1) Damages.--Any person claiming that any act or practice of 
    any Bell operating company, affiliate, or separated affiliate 
    constitutes a violation of this section may file a complaint with 
    the Commission or bring suit as provided in section 207 of this 
    Act, and such Bell operating company, affiliate, or separated 
    affiliate shall be liable as provided in section 206 of this Act; 
    except that damages may not be awarded for a violation that is 
    discovered by a compliance review as required by subsection (b)(7) 
    of this section and corrected within 90 days.
        ``(2) Cease and desist orders.--In addition to the provisions 
    of paragraph (1), any person claiming that any act or practice of 
    any Bell operating company, affiliate, or separated affiliate 
    constitutes a violation of this section may make application to the 
    Commission for an order to cease and desist such violation or may 
    make application in any district court of the United States of 
    competent jurisdiction for an order enjoining such acts or 
    practices or for an order compelling compliance with such 
    requirement.
    ``(f) Separated Affiliate Reporting Requirement.--Any separated 
affiliate under this section shall file with the Commission annual 
reports in a form substantially equivalent to the Form 10-K required by 
regulations of the Securities and Exchange Commission.
    ``(g) Effective Dates.--
        ``(1) Transition.--Any electronic publishing service being 
    offered to the public by a Bell operating company or affiliate on 
    the date of enactment of the Telecommunications Act of 1996 shall 
    have one year from such date of enactment to comply with the 
    requirements of this section.
        ``(2) Sunset.--The provisions of this section shall not apply 
    to conduct occurring after 4 years after the date of enactment of 
    the Telecommunications Act of 1996.
    ``(h) Definition of Electronic Publishing.--
        ``(1) In general.--The term `electronic publishing' means the 
    dissemination, provision, publication, or sale to an unaffiliated 
    entity or person, of any one or more of the following: news 
    (including sports); entertainment (other than interactive games); 
    business, financial, legal, consumer, or credit materials; 
    editorials, columns, or features; advertising; photos or images; 
    archival or research material; legal notices or public records; 
    scientific, educational, instructional, technical, professional, 
    trade, or other literary materials; or other like or similar 
    information.
        ``(2) Exceptions.--The term `electronic publishing' shall not 
    include the following services:
            ``(A) Information access, as that term is defined by the 
        AT&T Consent Decree.
            ``(B) The transmission of information as a common carrier.
            ``(C) The transmission of information as part of a gateway 
        to an information service that does not involve the generation 
        or alteration of the content of information, including data 
        transmission, address translation, protocol conversion, billing 
        management, introductory information content, and navigational 
        systems that enable users to access electronic publishing 
        services, which do not affect the presentation of such 
        electronic publishing services to users.
            ``(D) Voice storage and retrieval services, including voice 
        messaging and electronic mail services.
            ``(E) Data processing or transaction processing services 
        that do not involve the generation or alteration of the content 
        of information.
            ``(F) Electronic billing or advertising of a Bell operating 
        company's regulated telecommunications services.
            ``(G) Language translation or data format conversion.
            ``(H) The provision of information necessary for the 
        management, control, or operation of a telephone company 
        telecommunications system.
            ``(I) The provision of directory assistance that provides 
        names, addresses, and telephone numbers and does not include 
        advertising.
            ``(J) Caller identification services.
            ``(K) Repair and provisioning databases and credit card and 
        billing validation for telephone company operations.
            ``(L) 911-E and other emergency assistance databases.
            ``(M) Any other network service of a type that is like or 
        similar to these network services and that does not involve the 
        generation or alteration of the content of information.
            ``(N) Any upgrades to these network services that do not 
        involve the generation or alteration of the content of 
        information.
            ``(O) Video programming or full motion video entertainment 
        on demand.
    ``(i) Additional Definitions.--As used in this section--
        ``(1) The term `affiliate' means any entity that, directly or 
    indirectly, owns or controls, is owned or controlled by, or is 
    under common ownership or control with, a Bell operating company. 
    Such term shall not include a separated affiliate.
        ``(2) The term `basic telephone service' means any wireline 
    telephone exchange service, or wireline telephone exchange service 
    facility, provided by a Bell operating company in a telephone 
    exchange area, except that such term does not include--
            ``(A) a competitive wireline telephone exchange service 
        provided in a telephone exchange area where another entity 
        provides a wireline telephone exchange service that was 
        provided on January 1, 1984, or
            ``(B) a commercial mobile service.
        ``(3) The term `basic telephone service information' means 
    network and customer information of a Bell operating company and 
    other information acquired by a Bell operating company as a result 
    of its engaging in the provision of basic telephone service.
        ``(4) The term `control' has the meaning that it has in 17 
    C.F.R. 240.12b-2, the regulations promulgated by the Securities and 
    Exchange Commission pursuant to the Securities Exchange Act of 1934 
    (15 U.S.C. 78a et seq.) or any successor provision to such section.
        ``(5) The term `electronic publishing joint venture' means a 
    joint venture owned by a Bell operating company or affiliate that 
    engages in the provision of electronic publishing which is 
    disseminated by means of such Bell operating company's or any of 
    its affiliates' basic telephone service.
        ``(6) The term `entity' means any organization, and includes 
    corporations, partnerships, sole proprietorships, associations, and 
    joint ventures.
        ``(7) The term `inbound telemarketing' means the marketing of 
    property, goods, or services by telephone to a customer or 
    potential customer who initiated the call.
        ``(8) The term `own' with respect to an entity means to have a 
    direct or indirect equity interest (or the equivalent thereof) of 
    more than 10 percent of an entity, or the right to more than 10 
    percent of the gross revenues of an entity under a revenue sharing 
    or royalty agreement.
        ``(9) The term `separated affiliate' means a corporation under 
    common ownership or control with a Bell operating company that does 
    not own or control a Bell operating company and is not owned or 
    controlled by a Bell operating company and that engages in the 
    provision of electronic publishing which is disseminated by means 
    of such Bell operating company's or any of its affiliates' basic 
    telephone service.
        ``(10) The term `Bell operating company' has the meaning 
    provided in section 3, except that such term includes any entity or 
    corporation that is owned or controlled by such a company (as so 
    defined) but does not include an electronic publishing joint 
    venture owned by such an entity or corporation.

``SEC. 275. ALARM MONITORING SERVICES.

    ``(a) Delayed Entry Into Alarm Monitoring.--
        ``(1) Prohibition.--No Bell operating company or affiliate 
    thereof shall engage in the provision of alarm monitoring services 
    before the date which is 5 years after the date of enactment of the 
    Telecommunications Act of 1996.
        ``(2) Existing activities.--Paragraph (1) does not prohibit or 
    limit the provision, directly or through an affiliate, of alarm 
    monitoring services by a Bell operating company that was engaged in 
    providing alarm monitoring services as of November 30, 1995, 
    directly or through an affiliate. Such Bell operating company or 
    affiliate may not acquire any equity interest in, or obtain 
    financial control of, any unaffiliated alarm monitoring service 
    entity after November 30, 1995, and until 5 years after the date of 
    enactment of the Telecommunications Act of 1996, except that this 
    sentence shall not prohibit an exchange of customers for the 
    customers of an unaffiliated alarm monitoring service entity.
    ``(b) Nondiscrimination.--An incumbent local exchange carrier (as 
defined in section 251(h)) engaged in the provision of alarm monitoring 
services shall--
        ``(1) provide nonaffiliated entities, upon reasonable request, 
    with the network services it provides to its own alarm monitoring 
    operations, on nondiscriminatory terms and conditions; and
        ``(2) not subsidize its alarm monitoring services either 
    directly or indirectly from telephone exchange service operations.
    ``(c) Expedited Consideration of Complaints.--The Commission shall 
establish procedures for the receipt and review of complaints 
concerning violations of subsection (b) or the regulations thereunder 
that result in material financial harm to a provider of alarm 
monitoring service. Such procedures shall ensure that the Commission 
will make a final determination with respect to any such complaint 
within 120 days after receipt of the complaint. If the complaint 
contains an appropriate showing that the alleged violation occurred, as 
determined by the Commission in accordance with such regulations, the 
Commission shall, within 60 days after receipt of the complaint, order 
the incumbent local exchange carrier (as defined in section 251(h)) and 
its affiliates to cease engaging in such violation pending such final 
determination.
    ``(d) Use of Data.--A local exchange carrier may not record or use 
in any fashion the occurrence or contents of calls received by 
providers of alarm monitoring services for the purposes of marketing 
such services on behalf of such local exchange carrier, or any other 
entity. Any regulations necessary to enforce this subsection shall be 
issued initially within 6 months after the date of enactment of the 
Telecommunications Act of 1996.
    ``(e) Definition of Alarm Monitoring Service.--The term `alarm 
monitoring service' means a service that uses a device located at a 
residence, place of business, or other fixed premises--
        ``(1) to receive signals from other devices located at or about 
    such premises regarding a possible threat at such premises to life, 
    safety, or property, from burglary, fire, vandalism, bodily injury, 
    or other emergency, and
        ``(2) to transmit a signal regarding such threat by means of 
    transmission facilities of a local exchange carrier or one of its 
    affiliates to a remote monitoring center to alert a person at such 
    center of the need to inform the customer or another person or 
    police, fire, rescue, security, or public safety personnel of such 
    threat,
but does not include a service that uses a medical monitoring device 
attached to an individual for the automatic surveillance of an ongoing 
medical condition.

``SEC. 276. PROVISION OF PAYPHONE SERVICE.

    ``(a) Nondiscrimination Safeguards.--After the effective date of 
the rules prescribed pursuant to subsection (b), any Bell operating 
company that provides payphone service--
        ``(1) shall not subsidize its payphone service directly or 
    indirectly from its telephone exchange service operations or its 
    exchange access operations; and
        ``(2) shall not prefer or discriminate in favor of its payphone 
    service.
    ``(b) Regulations.--
        ``(1) Contents of regulations.--In order to promote competition 
    among payphone service providers and promote the widespread 
    deployment of payphone services to the benefit of the general 
    public, within 9 months after the date of enactment of the 
    Telecommunications Act of 1996, the Commission shall take all 
    actions necessary (including any reconsideration) to prescribe 
    regulations that--
            ``(A) establish a per call compensation plan to ensure that 
        all payphone service providers are fairly compensated for each 
        and every completed intrastate and interstate call using their 
        payphone, except that emergency calls and telecommunications 
        relay service calls for hearing disabled individuals shall not 
        be subject to such compensation;
            ``(B) discontinue the intrastate and interstate carrier 
        access charge payphone service elements and payments in effect 
        on such date of enactment, and all intrastate and interstate 
        payphone subsidies from basic exchange and exchange access 
        revenues, in favor of a compensation plan as specified in 
        subparagraph (A);
            ``(C) prescribe a set of nonstructural safeguards for Bell 
        operating company payphone service to implement the provisions 
        of paragraphs (1) and (2) of subsection (a), which safeguards 
        shall, at a minimum, include the nonstructural safeguards equal 
        to those adopted in the Computer Inquiry-III (CC Docket No. 90-
        623) proceeding;
            ``(D) provide for Bell operating company payphone service 
        providers to have the same right that independent payphone 
        providers have to negotiate with the location provider on the 
        location provider's selecting and contracting with, and, 
        subject to the terms of any agreement with the location 
        provider, to select and contract with, the carriers that carry 
        interLATA calls from their payphones, unless the Commission 
        determines in the rulemaking pursuant to this section that it 
        is not in the public interest; and
            ``(E) provide for all payphone service providers to have 
        the right to negotiate with the location provider on the 
        location provider's selecting and contracting with, and, 
        subject to the terms of any agreement with the location 
        provider, to select and contract with, the carriers that carry 
        intraLATA calls from their payphones.
        ``(2) Public interest telephones.--In the rulemaking conducted 
    pursuant to paragraph (1), the Commission shall determine whether 
    public interest payphones, which are provided in the interest of 
    public health, safety, and welfare, in locations where there would 
    otherwise not be a payphone, should be maintained, and if so, 
    ensure that such public interest payphones are supported fairly and 
    equitably.
        ``(3) Existing contracts.--Nothing in this section shall affect 
    any existing contracts between location providers and payphone 
    service providers or interLATA or intraLATA carriers that are in 
    force and effect as of the date of enactment of the 
    Telecommunications Act of 1996.
    ``(c) State Preemption.--To the extent that any State requirements 
are inconsistent with the Commission's regulations, the Commission's 
regulations on such matters shall preempt such State requirements.
    ``(d) Definition.--As used in this section, the term `payphone 
service' means the provision of public or semi-public pay telephones, 
the provision of inmate telephone service in correctional institutions, 
and any ancillary services.''.
    (b) Review of Entry Decisions.--Section 402(b) (47 U.S.C. 402(b)) 
is amended--
        (1) in paragraph (6), by striking ``(3), and (4)'' and 
    inserting ``(3), (4), and (9)''; and
        (2) by adding at the end the following new paragraph:
    ``(9) By any applicant for authority to provide interLATA services 
under section 271 of this Act whose application is denied by the 
Commission.''.

                      TITLE II--BROADCAST SERVICES

SEC. 201. BROADCAST SPECTRUM FLEXIBILITY.

    Title III is amended by inserting after section 335 (47 U.S.C. 335) 
the following new section:

``SEC. 336. BROADCAST SPECTRUM FLEXIBILITY.

    ``(a) Commission Action.--If the Commission determines to issue 
additional licenses for advanced television services, the Commission--
        ``(1) should limit the initial eligibility for such licenses to 
    persons that, as of the date of such issuance, are licensed to 
    operate a television broadcast station or hold a permit to 
    construct such a station (or both); and
        ``(2) shall adopt regulations that allow the holders of such 
    licenses to offer such ancillary or supplementary services on 
    designated frequencies as may be consistent with the public 
    interest, convenience, and necessity.
    ``(b) Contents of Regulations.--In prescribing the regulations 
required by subsection (a), the Commission shall--
        ``(1) only permit such licensee or permittee to offer ancillary 
    or supplementary services if the use of a designated frequency for 
    such services is consistent with the technology or method 
    designated by the Commission for the provision of advanced 
    television services;
        ``(2) limit the broadcasting of ancillary or supplementary 
    services on designated frequencies so as to avoid derogation of any 
    advanced television services, including high definition television 
    broadcasts, that the Commission may require using such frequencies;
        ``(3) apply to any other ancillary or supplementary service 
    such of the Commission's regulations as are applicable to the 
    offering of analogous services by any other person, except that no 
    ancillary or supplementary service shall have any rights to 
    carriage under section 614 or 615 or be deemed a multichannel video 
    programming distributor for purposes of section 628;
        ``(4) adopt such technical and other requirements as may be 
    necessary or appropriate to assure the quality of the signal used 
    to provide advanced television services, and may adopt regulations 
    that stipulate the minimum number of hours per day that such signal 
    must be transmitted; and
        ``(5) prescribe such other regulations as may be necessary for 
    the protection of the public interest, convenience, and necessity.
    ``(c) Recovery of License.--If the Commission grants a license for 
advanced television services to a person that, as of the date of such 
issuance, is licensed to operate a television broadcast station or 
holds a permit to construct such a station (or both), the Commission 
shall, as a condition of such license, require that either the 
additional license or the original license held by the licensee be 
surrendered to the Commission for reallocation or reassignment (or 
both) pursuant to Commission regulation.
    ``(d) Public Interest Requirement.--Nothing in this section shall 
be construed as relieving a television broadcasting station from its 
obligation to serve the public interest, convenience, and necessity. In 
the Commission's review of any application for renewal of a broadcast 
license for a television station that provides ancillary or 
supplementary services, the television licensee shall establish that 
all of its program services on the existing or advanced television 
spectrum are in the public interest. Any violation of the Commission 
rules applicable to ancillary or supplementary services shall reflect 
upon the licensee's qualifications for renewal of its license.
    ``(e) Fees.--
        ``(1) Services to which fees apply.--If the regulations 
    prescribed pursuant to subsection (a) permit a licensee to offer 
    ancillary or supplementary services on a designated frequency--
            ``(A) for which the payment of a subscription fee is 
        required in order to receive such services, or
            ``(B) for which the licensee directly or indirectly 
        receives compensation from a third party in return for 
        transmitting material furnished by such third party (other than 
        commercial advertisements used to support broadcasting for 
        which a subscription fee is not required),
    the Commission shall establish a program to assess and collect from 
    the licensee for such designated frequency an annual fee or other 
    schedule or method of payment that promotes the objectives 
    described in subparagraphs (A) and (B) of paragraph (2).
        ``(2) Collection of fees.--The program required by paragraph 
    (1) shall--
            ``(A) be designed (i) to recover for the public a portion 
        of the value of the public spectrum resource made available for 
        such commercial use, and (ii) to avoid unjust enrichment 
        through the method employed to permit such uses of that 
        resource;
            ``(B) recover for the public an amount that, to the extent 
        feasible, equals but does not exceed (over the term of the 
        license) the amount that would have been recovered had such 
        services been licensed pursuant to the provisions of section 
        309(j) of this Act and the Commission's regulations thereunder; 
        and
            ``(C) be adjusted by the Commission from time to time in 
        order to continue to comply with the requirements of this 
        paragraph.
        ``(3) Treatment of revenues.--
            ``(A) General rule.--Except as provided in subparagraph 
        (B), all proceeds obtained pursuant to the regulations required 
        by this subsection shall be deposited in the Treasury in 
        accordance with chapter 33 of title 31, United States Code.
            ``(B) Retention of revenues.--Notwithstanding subparagraph 
        (A), the salaries and expenses account of the Commission shall 
        retain as an offsetting collection such sums as may be 
        necessary from such proceeds for the costs of developing and 
        implementing the program required by this section and 
        regulating and supervising advanced television services. Such 
        offsetting collections shall be available for obligation 
        subject to the terms and conditions of the receiving 
        appropriations account, and shall be deposited in such accounts 
        on a quarterly basis.
        ``(4) Report.--Within 5 years after the date of enactment of 
    the Telecommunications Act of 1996, the Commission shall report to 
    the Congress on the implementation of the program required by this 
    subsection, and shall annually thereafter advise the Congress on 
    the amounts collected pursuant to such program.
    ``(f) Evaluation.--Within 10 years after the date the Commission 
first issues additional licenses for advanced television services, the 
Commission shall conduct an evaluation of the advanced television 
services program. Such evaluation shall include--
        ``(1) an assessment of the willingness of consumers to purchase 
    the television receivers necessary to receive broadcasts of 
    advanced television services;
        ``(2) an assessment of alternative uses, including public 
    safety use, of the frequencies used for such broadcasts; and
        ``(3) the extent to which the Commission has been or will be 
    able to reduce the amount of spectrum assigned to licensees.
    ``(g) Definitions.--As used in this section:
        ``(1) Advanced television services.--The term `advanced 
    television services' means television services provided using 
    digital or other advanced technology as further defined in the 
    opinion, report, and order of the Commission entitled `Advanced 
    Television Systems and Their Impact Upon the Existing Television 
    Broadcast Service', MM Docket 87-268, adopted September 17, 1992, 
    and successor proceedings.
        ``(2) Designated frequencies.--The term `designated frequency' 
    means each of the frequencies designated by the Commission for 
    licenses for advanced television services.
        ``(3) High definition television.--The term `high definition 
    television' refers to systems that offer approximately twice the 
    vertical and horizontal resolution of receivers generally available 
    on the date of enactment of the Telecommunications Act of 1996, as 
    further defined in the proceedings described in paragraph (1) of 
    this subsection.''.

SEC. 202. BROADCAST OWNERSHIP.

    (a) National Radio Station Ownership Rule Changes Required.--The 
Commission shall modify section 73.3555 of its regulations (47 C.F.R. 
73.3555) by eliminating any provisions limiting the number of AM or FM 
broadcast stations which may be owned or controlled by one entity 
nationally.
    (b) Local Radio Diversity.--
        (1) Applicable caps.--The Commission shall revise section 
    73.3555(a) of its regulations (47 C.F.R. 73.3555) to provide that--
            (A) in a radio market with 45 or more commercial radio 
        stations, a party may own, operate, or control up to 8 
        commercial radio stations, not more than 5 of which are in the 
        same service (AM or FM);
            (B) in a radio market with between 30 and 44 (inclusive) 
        commercial radio stations, a party may own, operate, or control 
        up to 7 commercial radio stations, not more than 4 of which are 
        in the same service (AM or FM);
            (C) in a radio market with between 15 and 29 (inclusive) 
        commercial radio stations, a party may own, operate, or control 
        up to 6 commercial radio stations, not more than 4 of which are 
        in the same service (AM or FM); and
            (D) in a radio market with 14 or fewer commercial radio 
        stations, a party may own, operate, or control up to 5 
        commercial radio stations, not more than 3 of which are in the 
        same service (AM or FM), except that a party may not own, 
        operate, or control more than 50 percent of the stations in 
        such market.
        (2) Exception.--Notwithstanding any limitation authorized by 
    this subsection, the Commission may permit a person or entity to 
    own, operate, or control, or have a cognizable interest in, radio 
    broadcast stations if the Commission determines that such 
    ownership, operation, control, or interest will result in an 
    increase in the number of radio broadcast stations in operation.
    (c) Television Ownership Limitations.--
        (1) National ownership limitations.--The Commission shall 
    modify its rules for multiple ownership set forth in section 
    73.3555 of its regulations (47 C.F.R. 73.3555)--
            (A) by eliminating the restrictions on the number of 
        television stations that a person or entity may directly or 
        indirectly own, operate, or control, or have a cognizable 
        interest in, nationwide; and
            (B) by increasing the national audience reach limitation 
        for television stations to 35 percent.
        (2) Local ownership limitations.--The Commission shall conduct 
    a rulemaking proceeding to determine whether to retain, modify, or 
    eliminate its limitations on the number of television stations that 
    a person or entity may own, operate, or control, or have a 
    cognizable interest in, within the same television market.
    (d) Relaxation of One-To-A-Market.--With respect to its enforcement 
of its one-to-a-market ownership rules under section 73.3555 of its 
regulations, the Commission shall extend its waiver policy to any of 
the top 50 markets, consistent with the public interest, convenience, 
and necessity.
    (e) Dual Network Changes.--The Commission shall revise section 
73.658(g) of its regulations (47 C.F.R. 658(g)) to permit a television 
broadcast station to affiliate with a person or entity that maintains 2 
or more networks of television broadcast stations unless such dual or 
multiple networks are composed of--
        (1) two or more persons or entities that, on the date of 
    enactment of the Telecommunications Act of 1996, are ``networks'' 
    as defined in section 73.3613(a)(1) of the Commission's regulations 
    (47 C.F.R. 73.3613(a)(1)); or
        (2) any network described in paragraph (1) and an English-
    language program distribution service that, on such date, provides 
    4 or more hours of programming per week on a national basis 
    pursuant to network affiliation arrangements with local television 
    broadcast stations in markets reaching more than 75 percent of 
    television homes (as measured by a national ratings service).
    (f) Cable Cross Ownership.--
        (1) Elimination of restrictions.--The Commission shall revise 
    section 76.501 of its regulations (47 C.F.R. 76.501) to permit a 
    person or entity to own or control a network of broadcast stations 
    and a cable system.
        (2) Safeguards against discrimination.--The Commission shall 
    revise such regulations if necessary to ensure carriage, channel 
    positioning, and nondiscriminatory treatment of nonaffiliated 
    broadcast stations by a cable system described in paragraph (1).
    (g) Local Marketing Agreements.--Nothing in this section shall be 
construed to prohibit the origination, continuation, or renewal of any 
television local marketing agreement that is in compliance with the 
regulations of the Commission.
    (h) Further Commission Review.--The Commission shall review its 
rules adopted pursuant to this section and all of its ownership rules 
biennially as part of its regulatory reform review under section 11 of 
the Communications Act of 1934 and shall determine whether any of such 
rules are necessary in the public interest as the result of 
competition. The Commission shall repeal or modify any regulation it 
determines to be no longer in the public interest.
    (i) Elimination of Statutory Restriction.--Section 613(a) (47 
U.S.C. 533(a)) is amended--
        (1) by striking paragraph (1);
        (2) by redesignating paragraph (2) as subsection (a);
        (3) by redesignating subparagraphs (A) and (B) as paragraphs 
    (1) and (2), respectively;
        (4) by striking ``and'' at the end of paragraph (1) (as so 
    redesignated);
        (5) by striking the period at the end of paragraph (2) (as so 
    redesignated) and inserting ``; and''; and
        (6) by adding at the end the following new paragraph:
        ``(3) shall not apply the requirements of this subsection to 
    any cable operator in any franchise area in which a cable operator 
    is subject to effective competition as determined under section 
    623(l).''.

SEC. 203. TERM OF LICENSES.

    Section 307(c) (47 U.S.C. 307(c)) is amended to read as follows:
    ``(c) Terms of Licenses.--
        ``(1) Initial and renewal licenses.--Each license granted for 
    the operation of a broadcasting station shall be for a term of not 
    to exceed 8 years. Upon application therefor, a renewal of such 
    license may be granted from time to time for a term of not to 
    exceed 8 years from the date of expiration of the preceding 
    license, if the Commission finds that public interest, convenience, 
    and necessity would be served thereby. Consistent with the 
    foregoing provisions of this subsection, the Commission may by rule 
    prescribe the period or periods for which licenses shall be granted 
    and renewed for particular classes of stations, but the Commission 
    may not adopt or follow any rule which would preclude it, in any 
    case involving a station of a particular class, from granting or 
    renewing a license for a shorter period than that prescribed for 
    stations of such class if, in its judgment, the public interest, 
    convenience, or necessity would be served by such action.
        ``(2) Materials in application.--In order to expedite action on 
    applications for renewal of broadcasting station licenses and in 
    order to avoid needless expense to applicants for such renewals, 
    the Commission shall not require any such applicant to file any 
    information which previously has been furnished to the Commission 
    or which is not directly material to the considerations that affect 
    the granting or denial of such application, but the Commission may 
    require any new or additional facts it deems necessary to make its 
    findings.
        ``(3) Continuation pending decision.--Pending any hearing and 
    final decision on such an application and the disposition of any 
    petition for rehearing pursuant to section 405, the Commission 
    shall continue such license in effect.''.

SEC. 204. BROADCAST LICENSE RENEWAL PROCEDURES.

    (a) Renewal Procedures.--
        (1) Amendment.--Section 309 (47 U.S.C. 309) is amended by 
    adding at the end thereof the following new subsection:
    ``(k) Broadcast Station Renewal Procedures.--
        ``(1) Standards for renewal.--If the licensee of a broadcast 
    station submits an application to the Commission for renewal of 
    such license, the Commission shall grant the application if it 
    finds, with respect to that station, during the preceding term of 
    its license--
            ``(A) the station has served the public interest, 
        convenience, and necessity;
            ``(B) there have been no serious violations by the licensee 
        of this Act or the rules and regulations of the Commission; and
            ``(C) there have been no other violations by the licensee 
        of this Act or the rules and regulations of the Commission 
        which, taken together, would constitute a pattern of abuse.
        ``(2) Consequence of failure to meet standard.--If any licensee 
    of a broadcast station fails to meet the requirements of this 
    subsection, the Commission may deny the application for renewal in 
    accordance with paragraph (3), or grant such application on terms 
    and conditions as are appropriate, including renewal for a term 
    less than the maximum otherwise permitted.
        ``(3) Standards for denial.--If the Commission determines, 
    after notice and opportunity for a hearing as provided in 
    subsection (e), that a licensee has failed to meet the requirements 
    specified in paragraph (1) and that no mitigating factors justify 
    the imposition of lesser sanctions, the Commission shall--
            ``(A) issue an order denying the renewal application filed 
        by such licensee under section 308; and
            ``(B) only thereafter accept and consider such applications 
        for a construction permit as may be filed under section 308 
        specifying the channel or broadcasting facilities of the former 
        licensee.
        ``(4) Competitor consideration prohibited.--In making the 
    determinations specified in paragraph (1) or (2), the Commission 
    shall not consider whether the public interest, convenience, and 
    necessity might be served by the grant of a license to a person 
    other than the renewal applicant.''.
        (2) Conforming amendment.--Section 309(d) (47 U.S.C. 309(d)) is 
    amended by inserting after ``with subsection (a)'' each place it 
    appears the following: ``(or subsection (k) in the case of renewal 
    of any broadcast station license)''.
    (b) Summary of Complaints on Violent Programming.--Section 308 (47 
U.S.C. 308) is amended by adding at the end the following new 
subsection:
    ``(d) Summary of Complaints.--Each applicant for the renewal of a 
commercial or noncommercial television license shall attach as an 
exhibit to the application a summary of written comments and 
suggestions received from the public and maintained by the licensee (in 
accordance with Commission regulations) that comment on the applicant's 
programming, if any, and that are characterized by the commentor as 
constituting violent programming.''.
    (c) Effective Date.--The amendments made by this section apply to 
applications filed after May 1, 1995.

SEC. 205. DIRECT BROADCAST SATELLITE SERVICE.

    (a) DBS Signal Security.--Section 705(e)(4) (47 U.S.C. 605(e)(4)) 
is amended by inserting ``or direct-to-home satellite services,'' after 
``programming,''.
    (b) FCC Jurisdiction Over Direct-to-Home Satellite Services.--
Section 303 (47 U.S.C. 303) is amended by adding at the end thereof the 
following new subsection:
    ``(v) Have exclusive jurisdiction to regulate the provision of 
direct-to-home satellite services. As used in this subsection, the term 
`direct-to-home satellite services' means the distribution or 
broadcasting of programming or services by satellite directly to the 
subscriber's premises without the use of ground receiving or 
distribution equipment, except at the subscriber's premises or in the 
uplink process to the satellite.''.

SEC. 206. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.

    Part II of title III is amended by inserting after section 364 (47 
U.S.C. 362) the following new section:

``SEC. 365. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS.

    ``Notwithstanding any provision of this Act or any other provision 
of law or regulation, a ship documented under the laws of the United 
States operating in accordance with the Global Maritime Distress and 
Safety System provisions of the Safety of Life at Sea Convention shall 
not be required to be equipped with a radio telegraphy station operated 
by one or more radio officers or operators. This section shall take 
effect for each vessel upon a determination by the United States Coast 
Guard that such vessel has the equipment required to implement the 
Global Maritime Distress and Safety System installed and operating in 
good working condition.''.

SEC. 207. RESTRICTIONS ON OVER-THE-AIR RECEPTION DEVICES.

    Within 180 days after the date of enactment of this Act, the 
Commission shall, pursuant to section 303 of the Communications Act of 
1934, promulgate regulations to prohibit restrictions that impair a 
viewer's ability to receive video programming services through devices 
designed for over-the-air reception of television broadcast signals, 
multichannel multipoint distribution service, or direct broadcast 
satellite services.

                       TITLE III--CABLE SERVICES

SEC. 301. CABLE ACT REFORM.

    (a) Definitions.--
        (1) Definition of cable service.--Section 602(6)(B) (47 U.S.C. 
    522(6)(B)) is amended by inserting ``or use'' after ``the 
    selection''.
        (2) Change in definition of cable system.--Section 602(7) (47 
    U.S.C. 522(7)) is amended by striking ``(B) a facility that serves 
    only subscribers in 1 or more multiple unit dwellings under common 
    ownership, control, or management, unless such facility or 
    facilities uses any public right-of-way;'' and inserting ``(B) a 
    facility that serves subscribers without using any public right-of-
    way;''.
    (b) Rate Deregulation.--
        (1) Upper tier regulation.--Section 623(c) (47 U.S.C. 543(c)) 
    is amended--
            (A) in paragraph (1)(B), by striking ``subscriber, 
        franchising authority, or other relevant State or local 
        government entity'' and inserting ``franchising authority (in 
        accordance with paragraph (3))'';
            (B) in paragraph (1)(C), by striking ``such complaint'' and 
        inserting ``the first complaint filed with the franchising 
        authority under paragraph (3)''; and
            (C) by striking paragraph (3) and inserting the following:
        ``(3) Review of rate changes.--The Commission shall review any 
    complaint submitted by a franchising authority after the date of 
    enactment of the Telecommunications Act of 1996 concerning an 
    increase in rates for cable programming services and issue a final 
    order within 90 days after it receives such a complaint, unless the 
    parties agree to extend the period for such review. A franchising 
    authority may not file a complaint under this paragraph unless, 
    within 90 days after such increase becomes effective it receives 
    subscriber complaints.
        ``(4) Sunset of upper tier rate regulation.--This subsection 
    shall not apply to cable programming services provided after March 
    31, 1999.''.
        (2) Sunset of uniform rate structure in markets with effective 
    competition.--Section 623(d) (47 U.S.C. 543(d)) is amended by 
    adding at the end thereof the following: ``This subsection does not 
    apply to (1) a cable operator with respect to the provision of 
    cable service over its cable system in any geographic area in which 
    the video programming services offered by the operator in that area 
    are subject to effective competition, or (2) any video programming 
    offered on a per channel or per program basis. Bulk discounts to 
    multiple dwelling units shall not be subject to this subsection, 
    except that a cable operator of a cable system that is not subject 
    to effective competition may not charge predatory prices to a 
    multiple dwelling unit. Upon a prima facie showing by a complainant 
    that there are reasonable grounds to believe that the discounted 
    price is predatory, the cable system shall have the burden of 
    showing that its discounted price is not predatory.''.
        (3) Effective competition.--Section 623(l)(1) (47 U.S.C. 
    543(l)(1)) is amended--
            (A) by striking ``or'' at the end of subparagraph (B);
            (B) by striking the period at the end of subparagraph (C) 
        and inserting ``; or''; and
            (C) by adding at the end the following:
            ``(D) a local exchange carrier or its affiliate (or any 
        multichannel video programming distributor using the facilities 
        of such carrier or its affiliate) offers video programming 
        services directly to subscribers by any means (other than 
        direct-to-home satellite services) in the franchise area of an 
        unaffiliated cable operator which is providing cable service in 
        that franchise area, but only if the video programming services 
        so offered in that area are comparable to the video programming 
        services provided by the unaffiliated cable operator in that 
        area.''.
    (c) Greater Deregulation for Smaller Cable Companies.--Section 623 
(47 U.S.C 543) is amended by adding at the end thereof the following:
    ``(m) Special Rules for Small Companies.--
        ``(1) In general.--Subsections (a), (b), and (c) do not apply 
    to a small cable operator with respect to--
            ``(A) cable programming services, or
            ``(B) a basic service tier that was the only service tier 
        subject to regulation as of December 31, 1994,
    in any franchise area in which that operator services 50,000 or 
    fewer subscribers.
        ``(2) Definition of small cable operator.--For purposes of this 
    subsection, the term `small cable operator' means a cable operator 
    that, directly or through an affiliate, serves in the aggregate 
    fewer than 1 percent of all subscribers in the United States and is 
    not affiliated with any entity or entities whose gross annual 
    revenues in the aggregate exceed $250,000,000.''.
    (d) Market Determinations.--
        (1) Market determinations; expedited decisionmaking.--Section 
    614(h)(1)(C) (47 U.S.C. 534(h)(1)(C)) is amended--
            (A) by striking ``in the manner provided in section 
        73.3555(d)(3)(i) of title 47, Code of Federal Regulations, as 
        in effect on May 1, 1991,'' in clause (i) and inserting ``by 
        the Commission by regulation or order using, where available, 
        commercial publications which delineate television markets 
        based on viewing patterns,''; and
            (B) by striking clause (iv) and inserting the following:
                ``(iv) Within 120 days after the date on which a 
            request is filed under this subparagraph (or 120 days after 
            the date of enactment of the Telecommunications Act of 
            1996, if later), the Commission shall grant or deny the 
            request.''.
        (2) Application to pending requests.--The amendment made by 
    paragraph (1) shall apply to--
            (A) any request pending under section 614(h)(1)(C) of the 
        Communications Act of 1934 (47 U.S.C. 534(h)(1)(C)) on the date 
        of enactment of this Act; and
            (B) any request filed under that section after that date.
    (e) Technical Standards.--Section 624(e) (47 U.S.C. 544(e)) is 
amended by striking the last two sentences and inserting the following: 
``No State or franchising authority may prohibit, condition, or 
restrict a cable system's use of any type of subscriber equipment or 
any transmission technology.''.
    (f) Cable Equipment Compatibility.--Section 624A (47 U.S.C. 544A) 
is amended--
        (1) in subsection (a) by striking ``and'' at the end of 
    paragraph (2), by striking the period at the end of paragraph (3) 
    and inserting ``; and''; and by adding at the end the following new 
    paragraph:
        ``(4) compatibility among televisions, video cassette 
    recorders, and cable systems can be assured with narrow technical 
    standards that mandate a minimum degree of common design and 
    operation, leaving all features, functions, protocols, and other 
    product and service options for selection through open competition 
    in the market.'';
        (2) in subsection (c)(1)--
            (A) by redesignating subparagraphs (A) and (B) as 
        subparagraphs (B) and (C), respectively; and
            (B) by inserting before such redesignated subparagraph (B) 
        the following new subparagraph:
            ``(A) the need to maximize open competition in the market 
        for all features, functions, protocols, and other product and 
        service options of converter boxes and other cable converters 
        unrelated to the descrambling or decryption of cable television 
        signals;''; and
        (3) in subsection (c)(2)--
            (A) by redesignating subparagraphs (D) and (E) as 
        subparagraphs (E) and (F), respectively; and
            (B) by inserting after subparagraph (C) the following new 
        subparagraph:
            ``(D) to ensure that any standards or regulations developed 
        under the authority of this section to ensure compatibility 
        between televisions, video cassette recorders, and cable 
        systems do not affect features, functions, protocols, and other 
        product and service options other than those specified in 
        paragraph (1)(B), including telecommunications interface 
        equipment, home automation communications, and computer network 
        services;''.
    (g) Subscriber Notice.--Section 632 (47 U.S.C. 552) is amended--
        (1) by redesignating subsection (c) as subsection (d); and
        (2) by inserting after subsection (b) the following new 
    subsection:
    ``(c) Subscriber Notice.--A cable operator may provide notice of 
service and rate changes to subscribers using any reasonable written 
means at its sole discretion. Notwithstanding section 623(b)(6) or any 
other provision of this Act, a cable operator shall not be required to 
provide prior notice of any rate change that is the result of a 
regulatory fee, franchise fee, or any other fee, tax, assessment, or 
charge of any kind imposed by any Federal agency, State, or franchising 
authority on the transaction between the operator and the 
subscriber.''.
    (h) Program Access.--Section 628 (47 U.S.C. 548) is amended by 
adding at the end the following:
    ``(j) Common Carriers.--Any provision that applies to a cable 
operator under this section shall apply to a common carrier or its 
affiliate that provides video programming by any means directly to 
subscribers. Any such provision that applies to a satellite cable 
programming vendor in which a cable operator has an attributable 
interest shall apply to any satellite cable programming vendor in which 
such common carrier has an attributable interest. For the purposes of 
this subsection, two or fewer common officers or directors shall not by 
itself establish an attributable interest by a common carrier in a 
satellite cable programming vendor (or its parent company).''.
    (i) Antitrafficking.--Section 617 (47 U.S.C. 537) is amended--
        (1) by striking subsections (a) through (d); and
        (2) in subsection (e), by striking ``(e)'' and all that follows 
    through ``a franchising authority'' and inserting ``A franchising 
    authority''.
    (j) Aggregation of Equipment Costs.--Section 623(a) (47 U.S.C. 
543(a)) is amended by adding at the end the following new paragraph:
        ``(7) Aggregation of equipment costs.--
            ``(A) In general.--The Commission shall allow cable 
        operators, pursuant to any rules promulgated under subsection 
        (b)(3), to aggregate, on a franchise, system, regional, or 
        company level, their equipment costs into broad categories, 
        such as converter boxes, regardless of the varying levels of 
        functionality of the equipment within each such broad category. 
        Such aggregation shall not be permitted with respect to 
        equipment used by subscribers who receive only a rate regulated 
        basic service tier.
            ``(B) Revision to commission rules; forms.--Within 120 days 
        of the date of enactment of the Telecommunications Act of 1996, 
        the Commission shall issue revisions to the appropriate rules 
        and forms necessary to implement subparagraph (A).''.
    (k) Treatment of Prior Year Losses.--
        (1) Amendment.--Section 623 (48 U.S.C. 543) is amended by 
    adding at the end thereof the following:
    ``(n) Treatment of Prior Year Losses.--Notwithstanding any other 
provision of this section or of section 612, losses associated with a 
cable system (including losses associated with the grant or award of a 
franchise) that were incurred prior to September 4, 1992, with respect 
to a cable system that is owned and operated by the original franchisee 
of such system shall not be disallowed, in whole or in part, in the 
determination of whether the rates for any tier of service or any type 
of equipment that is subject to regulation under this section are 
lawful.''.
        (2) Effective date.--The amendment made by paragraph (1) shall 
    take effect on the date of enactment of this Act and shall be 
    applicable to any rate proposal filed on or after September 4, 
    1993, upon which no final action has been taken by December 1, 
    1995.

SEC. 302. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES.

    (a) Provisions for Regulation of Cable Service Provided by 
Telephone Companies.--Title VI (47 U.S.C. 521 et seq.) is amended by 
adding at the end the following new part:

  ``PART V--VIDEO PROGRAMMING SERVICES PROVIDED BY TELEPHONE COMPANIES

``SEC. 651. REGULATORY TREATMENT OF VIDEO PROGRAMMING SERVICES.

    ``(a) Limitations on Cable Regulation.--
        ``(1) Radio-based systems.--To the extent that a common carrier 
    (or any other person) is providing video programming to subscribers 
    using radio communication, such carrier (or other person) shall be 
    subject to the requirements of title III and section 652, but shall 
    not otherwise be subject to the requirements of this title.
        ``(2) Common carriage of video traffic.--To the extent that a 
    common carrier is providing transmission of video programming on a 
    common carrier basis, such carrier shall be subject to the 
    requirements of title II and section 652, but shall not otherwise 
    be subject to the requirements of this title. This paragraph shall 
    not affect the treatment under section 602(7)(C) of a facility of a 
    common carrier as a cable system.
        ``(3) Cable systems and open video systems.--To the extent that 
    a common carrier is providing video programming to its subscribers 
    in any manner other than that described in paragraphs (1) and (2)--
            ``(A) such carrier shall be subject to the requirements of 
        this title, unless such programming is provided by means of an 
        open video system for which the Commission has approved a 
        certification under section 653; or
            ``(B) if such programming is provided by means of an open 
        video system for which the Commission has approved a 
        certification under section 653, such carrier shall be subject 
        to the requirements of this part, but shall be subject to parts 
        I through IV of this title only as provided in 653(c).
        ``(4) Election to operate as open video system.--A common 
    carrier that is providing video programming in a manner described 
    in paragraph (1) or (2), or a combination thereof, may elect to 
    provide such programming by means of an open video system that 
    complies with section 653. If the Commission approves such 
    carrier's certification under section 653, such carrier shall be 
    subject to the requirements of this part, but shall be subject to 
    parts I through IV of this title only as provided in 653(c).
    ``(b) Limitations on Interconnection Obligations.--A local exchange 
carrier that provides cable service through an open video system or a 
cable system shall not be required, pursuant to title II of this Act, 
to make capacity available on a nondiscriminatory basis to any other 
person for the provision of cable service directly to subscribers.
    ``(c) Additional Regulatory Relief.--A common carrier shall not be 
required to obtain a certificate under section 214 with respect to the 
establishment or operation of a system for the delivery of video 
programming.

``SEC. 652. PROHIBITION ON BUY OUTS.

    ``(a) Acquisitions by Carriers.--No local exchange carrier or any 
affiliate of such carrier owned by, operated by, controlled by, or 
under common control with such carrier may purchase or otherwise 
acquire directly or indirectly more than a 10 percent financial 
interest, or any management interest, in any cable operator providing 
cable service within the local exchange carrier's telephone service 
area.
    ``(b) Acquisitions by Cable Operators.--No cable operator or 
affiliate of a cable operator that is owned by, operated by, controlled 
by, or under common ownership with such cable operator may purchase or 
otherwise acquire, directly or indirectly, more than a 10 percent 
financial interest, or any management interest, in any local exchange 
carrier providing telephone exchange service within such cable 
operator's franchise area.
    ``(c) Joint Ventures.--A local exchange carrier and a cable 
operator whose telephone service area and cable franchise area, 
respectively, are in the same market may not enter into any joint 
venture or partnership to provide video programming directly to 
subscribers or to provide telecommunications services within such 
market.
    ``(d) Exceptions.--
        ``(1) Rural systems.--Notwithstanding subsections (a), (b), and 
    (c) of this section, a local exchange carrier (with respect to a 
    cable system located in its telephone service area) and a cable 
    operator (with respect to the facilities of a local exchange 
    carrier used to provide telephone exchange service in its cable 
    franchise area) may obtain a controlling interest in, management 
    interest in, or enter into a joint venture or partnership with the 
    operator of such system or facilities for the use of such system or 
    facilities to the extent that--
            ``(A) such system or facilities only serve incorporated or 
        unincorporated--
                ``(i) places or territories that have fewer than 35,000 
            inhabitants; and
                ``(ii) are outside an urbanized area, as defined by the 
            Bureau of the Census; and
            ``(B) in the case of a local exchange carrier, such system, 
        in the aggregate with any other system in which such carrier 
        has an interest, serves less than 10 percent of the households 
        in the telephone service area of such carrier.
        ``(2) Joint use.--Notwithstanding subsection (c), a local 
    exchange carrier may obtain, with the concurrence of the cable 
    operator on the rates, terms, and conditions, the use of that part 
    of the transmission facilities of 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, as determined by 
    the Commission.
        ``(3) Acquisitions in competitive markets.--Notwithstanding 
    subsections (a) and (c), a local exchange carrier may obtain a 
    controlling interest in, or form a joint venture or other 
    partnership with, or provide financing to, a cable system 
    (hereinafter in this paragraph referred to as `the subject cable 
    system'), if--
            ``(A) the subject cable system operates in a television 
        market that is not in the top 25 markets, and such market has 
        more than 1 cable system operator, and the subject cable system 
        is not the cable system with the most subscribers in such 
        television market;
            ``(B) the subject cable system and the cable system with 
        the most subscribers in such television market held on May 1, 
        1995, cable television franchises from the largest municipality 
        in the television market and the boundaries of such franchises 
        were identical on such date;
            ``(C) the subject cable system is not owned by or under 
        common ownership or control of any one of the 50 cable system 
        operators with the most subscribers as such operators existed 
        on May 1, 1995; and
            ``(D) the system with the most subscribers in the 
        television market is owned by or under common ownership or 
        control of any one of the 10 largest cable system operators as 
        such operators existed on May 1, 1995.
        ``(4) Exempt cable systems.--Subsection (a) does not apply to 
    any cable system if--
            ``(A) the cable system serves no more than 17,000 cable 
        subscribers, of which no less than 8,000 live within an urban 
        area, and no less than 6,000 live within a nonurbanized area as 
        of June 1, 1995;
            ``(B) the cable system is not owned by, or under common 
        ownership or control with, any of the 50 largest cable system 
        operators in existence on June 1, 1995; and
            ``(C) the cable system operates in a television market that 
        was not in the top 100 television markets as of June 1, 1995.
        ``(5) Small cable systems in nonurban areas.--Notwithstanding 
    subsections (a) and (c), a local exchange carrier with less than 
    $100,000,000 in annual operating revenues (or any affiliate of such 
    carrier owned by, operated by, controlled by, or under common 
    control with such carrier) may purchase or otherwise acquire more 
    than a 10 percent financial interest in, or any management interest 
    in, or enter into a joint venture or partnership with, any cable 
    system within the local exchange carrier's telephone service area 
    that serves no more than 20,000 cable subscribers, if no more than 
    12,000 of those subscribers live within an urbanized area, as 
    defined by the Bureau of the Census.
        ``(6) Waivers.--The Commission may waive the restrictions of 
    subsections (a), (b), or (c) only if--
            ``(A) the Commission determines that, because of the nature 
        of the market served by the affected cable system or facilities 
        used to provide telephone exchange service--
                ``(i) the affected cable operator or local exchange 
            carrier would be subjected to undue economic distress by 
            the enforcement of such provisions;
                ``(ii) the system or facilities would not be 
            economically viable if such provisions were enforced; or
                ``(iii) the anticompetitive effects of the proposed 
            transaction are clearly outweighed in the public interest 
            by the probable effect of the transaction in meeting the 
            convenience and needs of the community to be served; and
            ``(B) the local franchising authority approves of such 
        waiver.
    ``(e) Definition of Telephone Service Area.--For purposes of this 
section, 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 provided telephone exchange 
service as of January 1, 1993, but if any common carrier after such 
date transfers its telephone 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.

``SEC. 653. ESTABLISHMENT OF OPEN VIDEO SYSTEMS.

    ``(a) Open Video Systems.--
        ``(1) Certificates of compliance.--A local exchange carrier may 
    provide cable service to its cable service subscribers in its 
    telephone service area through an open video system that complies 
    with this section. To the extent permitted by such regulations as 
    the Commission may prescribe consistent with the public interest, 
    convenience, and necessity, an operator of a cable system or any 
    other person may provide video programming through an open video 
    system that complies with this section. An operator of an open 
    video system shall qualify for reduced regulatory burdens under 
    subsection (c) of this section if the operator of such system 
    certifies to the Commission that such carrier complies with the 
    Commission's regulations under subsection (b) and the Commission 
    approves such certification. The Commission shall publish notice of 
    the receipt of any such certification and shall act to approve or 
    disapprove any such certification within 10 days after receipt of 
    such certification.
        ``(2) Dispute resolution.--The Commission shall have the 
    authority to resolve disputes under this section and the 
    regulations prescribed thereunder. Any such dispute shall be 
    resolved within 180 days after notice of such dispute is submitted 
    to the Commission. At that time or subsequently in a separate 
    damages proceeding, the Commission may, in the case of any 
    violation of this section, require carriage, award damages to any 
    person denied carriage, or any combination of such sanctions. Any 
    aggrieved party may seek any other remedy available under this Act.
    ``(b) Commission Actions.--
        ``(1) Regulations required.--Within 6 months after the date of 
    enactment of the Telecommunications Act of 1996, the Commission 
    shall complete all actions necessary (including any 
    reconsideration) to prescribe regulations that--
            ``(A) except as required pursuant to section 611, 614, or 
        615, prohibit an operator of an open video system from 
        discriminating among video programming providers with regard to 
        carriage on its open video system, and ensure that the rates, 
        terms, and conditions for such carriage are just and 
        reasonable, and are not unjustly or unreasonably 
        discriminatory;
            ``(B) if demand exceeds the channel capacity of the open 
        video system, prohibit an operator of an open video system and 
        its affiliates from selecting the video programming services 
        for carriage on more than one-third of the activated channel 
        capacity on such system, but nothing in this subparagraph shall 
        be construed to limit the number of channels that the carrier 
        and its affiliates may offer to provide directly to 
        subscribers;
            ``(C) permit an operator of an open video system to carry 
        on only one channel any video programming service that is 
        offered by more than one video programming provider (including 
        the local exchange carrier's video programming affiliate): 
        Provided, That subscribers have ready and immediate access to 
        any such video programming service;
            ``(D) extend to the distribution of video programming over 
        open video systems the Commission's regulations concerning 
        sports exclusivity (47 C.F.R. 76.67), network nonduplication 
        (47 C.F.R. 76.92 et seq.), and syndicated exclusivity (47 
        C.F.R. 76.151 et seq.); and
            ``(E)(i) prohibit an operator of an open video system from 
        unreasonably discriminating in favor of the operator or its 
        affiliates with regard to material or information (including 
        advertising) provided by the operator to subscribers for the 
        purposes of selecting programming on the open video system, or 
        in the way such material or information is presented to 
        subscribers;
            ``(ii) require an operator of an open video system to 
        ensure that video programming providers or copyright holders 
        (or both) are able suitably and uniquely to identify their 
        programming services to subscribers;
            ``(iii) if such identification is transmitted as part of 
        the programming signal, require the carrier to transmit such 
        identification without change or alteration; and
            ``(iv) prohibit an operator of an open video system from 
        omitting television broadcast stations or other unaffiliated 
        video programming services carried on such system from any 
        navigational device, guide, or menu.
        ``(2) Consumer access.--Subject to the requirements of 
    paragraph (1) and the regulations thereunder, nothing in this 
    section prohibits a common carrier or its affiliate from 
    negotiating mutually agreeable terms and conditions with over-the-
    air broadcast stations and other unaffiliated video programming 
    providers to allow consumer access to their signals on any level or 
    screen of any gateway, menu, or other program guide, whether 
    provided by the carrier or its affiliate.
    ``(c) Reduced Regulatory Burdens for Open Video Systems.--
        ``(1) In general.--Any provision that applies to a cable 
    operator under--
            ``(A) sections 613 (other than subsection (a) thereof), 
        616, 623(f), 628, 631, and 634 of this title, shall apply,
            ``(B) sections 611, 614, and 615 of this title, and section 
        325 of title III, shall apply in accordance with the 
        regulations prescribed under paragraph (2), and
            ``(C) sections 612 and 617, and parts III and IV (other 
        than sections 623(f), 628, 631, and 634), of this title shall 
        not apply,
    to any operator of an open video system for which the Commission 
    has approved a certification under this section.
        ``(2) Implementation.--
            ``(A) Commission action.--In the rulemaking proceeding to 
        prescribe the regulations required by subsection (b)(1), the 
        Commission shall, to the extent possible, impose obligations 
        that are no greater or lesser than the obligations contained in 
        the provisions described in paragraph (1)(B) of this 
        subsection. The Commission shall complete all action (including 
        any reconsideration) to prescribe such regulations no later 
        than 6 months after the date of enactment of the 
        Telecommunications Act of 1996.
            ``(B) Fees.--An operator of an open video system under this 
        part may be subject to the payment of fees on the gross 
        revenues of the operator for the provision of cable service 
        imposed by a local franchising authority or other governmental 
        entity, in lieu of the franchise fees permitted 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 franchise area, 
        as determined in accordance with regulations prescribed by the 
        Commission. An operator of an open video system may designate 
        that portion of a subscriber's bill attributable to the fee 
        under this subparagraph as a separate item on the bill.
        ``(3) Regulatory streamlining.--With respect to the 
    establishment and operation of an open video system, the 
    requirements of this section shall apply in lieu of, and not in 
    addition to, the requirements of title II.
        ``(4) Treatment as cable operator.--Nothing in this Act 
    precludes a video programming provider making use of an open video 
    system from being treated as an operator of a cable system for 
    purposes of section 111 of title 17, United States Code.
    ``(d) Definition of Telephone Service Area.--For purposes of this 
section, 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 is offering telephone exchange 
service.''.
    (b) Conforming and Technical Amendments.--
        (1) Repeal.--Subsection (b) of section 613 (47 U.S.C. 533(b)) 
    is repealed.
        (2) Definitions.--Section 602 (47 U.S.C. 531) is amended--
            (A) in paragraph (7), by striking ``, or (D)'' and 
        inserting the following: ``, unless the extent of such use is 
        solely to provide interactive on-demand services; (D) an open 
        video system that complies with section 653 of this title; or 
        (E)'';
            (B) by redesignating paragraphs (12) through (19) as 
        paragraphs (13) through (20), respectively; and
            (C) by inserting after paragraph (11) the following new 
        paragraph:
        ``(12) the term `interactive on-demand services' means a 
    service providing video programming to subscribers over switched 
    networks on an on-demand, point-to-point basis, but does not 
    include services providing video programming prescheduled by the 
    programming provider;''.
        (3) Termination of video-dialtone regulations.--The 
    Commission's regulations and policies with respect to video 
    dialtone requirements issued in CC Docket No. 87-266 shall cease to 
    be effective on the date of enactment of this Act. This paragraph 
    shall not be construed to require the termination of any video-
    dialtone system that the Commission has approved before the date of 
    enactment of this Act.

SEC. 303. PREEMPTION OF FRANCHISING AUTHORITY REGULATION OF 
              TELECOMMUNICATIONS SERVICES.

    (a) Provision of Telecommunications Services by a Cable Operator.--
Section 621(b) (47 U.S.C. 541(b)) is amended by adding at the end 
thereof the following new paragraph:
    ``(3)(A) If a cable operator or affiliate thereof is engaged in the 
provision of telecommunications services--
        ``(i) such cable operator or affiliate shall not be required to 
    obtain a franchise under this title for the provision of 
    telecommunications services; and
        ``(ii) the provisions of this title shall not apply to such 
    cable operator or affiliate for the provision of telecommunications 
    services.
    ``(B) A franchising authority may not impose any requirement under 
this title that has the purpose or effect of prohibiting, limiting, 
restricting, or conditioning the provision of a telecommunications 
service by a cable operator or an affiliate thereof.
    ``(C) A franchising authority may not order a cable operator or 
affiliate thereof--
        ``(i) to discontinue the provision of a telecommunications 
    service, or
        ``(ii) to discontinue the operation of a cable system, to the 
    extent such cable system is used for the provision of a 
    telecommunications service, by reason of the failure of such cable 
    operator or affiliate thereof to obtain a franchise or franchise 
    renewal under this title with respect to the provision of such 
    telecommunications service.
    ``(D) Except as otherwise permitted by sections 611 and 612, a 
franchising authority may not require a cable operator to provide any 
telecommunications service or facilities, other than institutional 
networks, as a condition of the initial grant of a franchise, a 
franchise renewal, or a transfer of a franchise.''.
    (b) Franchise Fees.--Section 622(b) (47 U.S.C. 542(b)) is amended 
by inserting ``to provide cable services'' immediately before the 
period at the end of the first sentence thereof.

SEC. 304. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

    Part III of title VI is amended by inserting after section 628 (47 
U.S.C. 548) the following new section:

``SEC. 629. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES.

    ``(a) Commercial Consumer Availability of Equipment Used To Access 
Services Provided by Multichannel Video Programming Distributors.--The 
Commission shall, in consultation with appropriate industry standard-
setting organizations, adopt regulations to assure the commercial 
availability, to consumers of multichannel video programming and other 
services offered over multichannel video programming systems, of 
converter boxes, interactive communications equipment, and other 
equipment used by consumers to access multichannel video programming 
and other services offered over multichannel video programming systems, 
from manufacturers, retailers, and other vendors not affiliated with 
any multichannel video programming distributor. Such regulations shall 
not prohibit any multichannel video programming distributor from also 
offering converter boxes, interactive communications equipment, and 
other equipment used by consumers to access multichannel video 
programming and other services offered over multichannel video 
programming systems, to consumers, if the system operator's charges to 
consumers for such devices and equipment are separately stated and not 
subsidized by charges for any such service.
    ``(b) Protection of System Security.--The Commission shall not 
prescribe regulations under subsection (a) which would jeopardize 
security of multichannel video programming and other services offered 
over multichannel video programming systems, or impede the legal rights 
of a provider of such services to prevent theft of service.
    ``(c) Waiver.--The Commission shall waive a regulation adopted 
under subsection (a) for a limited time upon an appropriate showing by 
a provider of multichannel video programming and other services offered 
over multichannel video programming systems, or an equipment provider, 
that such waiver is necessary to assist the development or introduction 
of a new or improved multichannel video programming or other service 
offered over multichannel video programming systems, technology, or 
products. Upon an appropriate showing, the Commission shall grant any 
such waiver request within 90 days of any application filed under this 
subsection, and such waiver shall be effective for all service 
providers and products in that category and for all providers of 
services and products.
    ``(d) Avoidance of Redundant Regulations.--
        ``(1) Commercial availability determinations.--Determinations 
    made or regulations prescribed by the Commission with respect to 
    commercial availability to consumers of converter boxes, 
    interactive communications equipment, and other equipment used by 
    consumers to access multichannel video programming and other 
    services offered over multichannel video programming systems, 
    before the date of enactment of the Telecommunications Act of 1996 
    shall fulfill the requirements of this section.
        ``(2) Regulations.--Nothing in this section affects section 
    64.702(e) of the Commission's regulations (47 C.F.R. 64.702(e)) or 
    other Commission regulations governing interconnection and 
    competitive provision of customer premises equipment used in 
    connection with basic common carrier communications services.
    ``(e) Sunset.--The regulations adopted under this section shall 
cease to apply when the Commission determines that--
        ``(1) the market for the multichannel video programming 
    distributors is fully competitive;
        ``(2) the market for converter boxes, and interactive 
    communications equipment, used in conjunction with that service is 
    fully competitive; and
        ``(3) elimination of the regulations would promote competition 
    and the public interest.
    ``(f) Commission's Authority.--Nothing in this section shall be 
construed as expanding or limiting any authority that the Commission 
may have under law in effect before the date of enactment of the 
Telecommunications Act of 1996.''.

SEC. 305. VIDEO PROGRAMMING ACCESSIBILITY.

    Title VII is amended by inserting after section 712 (47 U.S.C. 612) 
the following new section:

``SEC. 713. VIDEO PROGRAMMING ACCESSIBILITY.

    ``(a) Commission Inquiry.--Within 180 days after the date of 
enactment of the Telecommunications Act of 1996, the Federal 
Communications Commission shall complete an inquiry to ascertain the 
level at which video programming is closed captioned. Such inquiry 
shall examine the extent to which existing or previously published 
programming is closed captioned, the size of the video programming 
provider or programming owner providing closed captioning, the size of 
the market served, the relative audience shares achieved, or any other 
related factors. The Commission shall submit to the Congress a report 
on the results of such inquiry.
    ``(b) Accountability Criteria.--Within 18 months after such date of 
enactment, the Commission shall prescribe such regulations as are 
necessary to implement this section. Such regulations shall ensure 
that--
        ``(1) video programming first published or exhibited after the 
    effective date of such regulations is fully accessible through the 
    provision of closed captions, except as provided in subsection (d); 
    and
        ``(2) video programming providers or owners maximize the 
    accessibility of video programming first published or exhibited 
    prior to the effective date of such regulations through the 
    provision of closed captions, except as provided in subsection (d).
    ``(c) Deadlines for Captioning.--Such regulations shall include an 
appropriate schedule of deadlines for the provision of closed 
captioning of video programming.
    ``(d) Exemptions.--Notwithstanding subsection (b)--
        ``(1) the Commission may exempt by regulation programs, classes 
    of programs, or services for which the Commission has determined 
    that the provision of closed captioning would be economically 
    burdensome to the provider or owner of such programming;
        ``(2) a provider of video programming or the owner of any 
    program carried by the provider shall not be obligated to supply 
    closed captions if such action would be inconsistent with contracts 
    in effect on the date of enactment of the Telecommunications Act of 
    1996, except that nothing in this section shall be construed to 
    relieve a video programming provider of its obligations to provide 
    services required by Federal law; and
        ``(3) a provider of video programming or program owner may 
    petition the Commission for an exemption from the requirements of 
    this section, and the Commission may grant such petition upon a 
    showing that the requirements contained in this section would 
    result in an undue burden.
    ``(e) Undue Burden.--The term `undue burden' means significant 
difficulty or expense. In determining whether the closed captions 
necessary to comply with the requirements of this paragraph would 
result in an undue economic burden, the factors to be considered 
include--
        ``(1) the nature and cost of the closed captions for the 
    programming;
        ``(2) the impact on the operation of the provider or program 
    owner;
        ``(3) the financial resources of the provider or program owner; 
    and
        ``(4) the type of operations of the provider or program owner.
    ``(f) Video Descriptions Inquiry.--Within 6 months after the date 
of enactment of the Telecommunications Act of 1996, the Commission 
shall commence an inquiry to examine the use of video descriptions on 
video programming in order to ensure the accessibility of video 
programming to persons with visual impairments, and report to Congress 
on its findings. The Commission's report shall assess appropriate 
methods and schedules for phasing video descriptions into the 
marketplace, technical and quality standards for video descriptions, a 
definition of programming for which video descriptions would apply, and 
other technical and legal issues that the Commission deems appropriate.
    ``(g) Video Description.--For purposes of this section, `video 
description' means the insertion of audio narrated descriptions of a 
television program's key visual elements into natural pauses between 
the program's dialogue.
    ``(h) Private Rights of Actions Prohibited.--Nothing in this 
section shall be construed to authorize any private right of action to 
enforce any requirement of this section or any regulation thereunder. 
The Commission shall have exclusive jurisdiction with respect to any 
complaint under this section.''.

                      TITLE IV--REGULATORY REFORM

SEC. 401. REGULATORY FORBEARANCE.

    Title I is amended by inserting after section 9 (47 U.S.C. 159) the 
following new section:

``SEC. 10. COMPETITION IN PROVISION OF TELECOMMUNICATIONS SERVICE.

    ``(a) Regulatory flexibility.--Notwithstanding section 332(c)(1)(A) 
of this Act, the Commission shall forbear from applying any regulation 
or any provision of this Act to a telecommunications carrier or 
telecommunications service, or class of telecommunications carriers or 
telecommunications services, in any or some of its or their geographic 
markets, if the Commission determines that--
        ``(1) enforcement of such regulation or provision is not 
    necessary to ensure that the charges, practices, classifications, 
    or regulations by, for, or in connection with that 
    telecommunications carrier or telecommunications service are just 
    and reasonable and are not unjustly or unreasonably discriminatory;
        ``(2) enforcement of such regulation or provision is not 
    necessary for the protection of consumers; and
        ``(3) forbearance from applying such provision or regulation is 
    consistent with the public interest.
    ``(b) Competitive Effect To Be Weighed.--In making the 
determination under subsection (a)(3), the Commission shall consider 
whether forbearance from enforcing the provision or regulation will 
promote competitive market conditions, including the extent to which 
such forbearance will enhance competition among providers of 
telecommunications services. If the Commission determines that such 
forbearance will promote competition among providers of 
telecommunications services, that determination may be the basis for a 
Commission finding that forbearance is in the public interest.
    ``(c) Petition for Forbearance.--Any telecommunications carrier, or 
class of telecommunications carriers, may submit a petition to the 
Commission requesting that the Commission exercise the authority 
granted under this section with respect to that carrier or those 
carriers, or any service offered by that carrier or carriers. Any such 
petition shall be deemed granted if the Commission does not deny the 
petition for failure to meet the requirements for forbearance under 
subsection (a) within one year after the Commission receives it, unless 
the one-year period is extended by the Commission. The Commission may 
extend the initial one-year period by an additional 90 days if the 
Commission finds that an extension is necessary to meet the 
requirements of subsection (a). The Commission may grant or deny a 
petition in whole or in part and shall explain its decision in writing.
    ``(d) Limitation.--Except as provided in section 251(f), the 
Commission may not forbear from applying the requirements of section 
251(c) or 271 under subsection (a) of this section until it determines 
that those requirements have been fully implemented.
    ``(e) State Enforcement After Commission Forbearance.--A State 
commission may not continue to apply or enforce any provision of this 
Act that the Commission has determined to forbear from applying under 
subsection (a).''.

SEC. 402. BIENNIAL REVIEW OF REGULATIONS; REGULATORY RELIEF.

    (a) Biennial Review.--Title I is amended by inserting after section 
10 (as added by section 401) the following new section:

``SEC. 11. REGULATORY REFORM.

    ``(a) Biennial Review of Regulations.--In every even-numbered year 
(beginning with 1998), the Commission--
        ``(1) shall review all regulations issued under this Act in 
    effect at the time of the review that apply to the operations or 
    activities of any provider of telecommunications service; and
        ``(2) shall determine whether any such regulation is no longer 
    necessary in the public interest as the result of meaningful 
    economic competition between providers of such service.
    ``(b) Effect of Determination.--The Commission shall repeal or 
modify any regulation it determines to be no longer necessary in the 
public interest.''.
    (b) Regulatory Relief.--
        (1) Streamlined procedures for changes in charges, 
    classifications, regulations, or practices.--
            (A) Section 204(a) (47 U.S.C. 204(a)) is amended--
                (i) by striking ``12 months'' the first place it 
            appears in paragraph (2)(A) and inserting ``5 months'';
                (ii) by striking ``effective,'' and all that follows in 
            paragraph (2)(A) and inserting ``effective.''; and
                (iii) by adding at the end thereof the following:
        ``(3) A local exchange carrier may file with the Commission a 
    new or revised charge, classification, regulation, or practice on a 
    streamlined basis. Any such charge, classification, regulation, or 
    practice shall be deemed lawful and shall be effective 7 days (in 
    the case of a reduction in rates) or 15 days (in the case of an 
    increase in rates) after the date on which it is filed with the 
    Commission unless the Commission takes action under paragraph (1) 
    before the end of that 7-day or 15-day period, as is 
    appropriate.''.
            (B) Section 208(b) (47 U.S.C. 208(b)) is amended--
                (i) by striking ``12 months'' the first place it 
            appears in paragraph (1) and inserting ``5 months''; and
                (ii) by striking ``filed,'' and all that follows in 
            paragraph (1) and inserting ``filed.''.
        (2) Extensions of lines under section 214; armis reports.--The 
    Commission shall permit any common carrier--
            (A) to be exempt from the requirements of section 214 of 
        the Communications Act of 1934 for the extension of any line; 
        and
            (B) to file cost allocation manuals and ARMIS reports 
        annually, to the extent such carrier is required to file such 
        manuals or reports.
        (3) Forbearance authority not limited.--Nothing in this 
    subsection shall be construed to limit the authority of the 
    Commission to waive, modify, or forbear from applying any of the 
    requirements to which reference is made in paragraph (1) under any 
    other provision of this Act or other law.
        (4) Effective date of amendments.--The amendments made by 
    paragraph (1) of this subsection shall apply with respect to any 
    charge, classification, regulation, or practice filed on or after 
    one year after the date of enactment of this Act.
    (c) Classification of Carriers.--In classifying carriers according 
to section 32.11 of its regulations (47 C.F.R. 32.11) and in 
establishing reporting requirements pursuant to part 43 of its 
regulations (47 C.F.R. part 43) and section 64.903 of its regulations 
(47 C.F.R. 64.903), the Commission shall adjust the revenue 
requirements to account for inflation as of the release date of the 
Commission's Report and Order in CC Docket No. 91-141, and annually 
thereafter. This subsection shall take effect on the date of enactment 
of this Act.

SEC. 403. ELIMINATION OF UNNECESSARY COMMISSION REGULATIONS AND 
              FUNCTIONS.

    (a) Modification of Amateur Radio Examination Procedures.--Section 
4(f)(4) (47 U.S.C. 154(f)(4)) is amended--
        (1) in subparagraph (A)--
            (A) by inserting ``or administering'' after ``for purposes 
        of preparing'';
            (B) by inserting ``of'' after ``than the class''; and
            (C) by inserting ``or administered'' after ``for which the 
        examination is being prepared'';
        (2) by striking subparagraph (B);
        (3) in subparagraph (H), by striking ``(A), (B), and (C)'' and 
    inserting ``(A) and (B)'';
        (4) in subparagraph (J)--
            (A) by striking ``or (B)''; and
            (B) by striking the last sentence; and
        (5) by redesignating subparagraphs (C) through (J) as 
    subparagraphs (B) through (I), respectively.
    (b) Authority To Designate Entities To Inspect.--Section 4(f)(3) 
(47 U.S.C. 154(f)(3)) is amended by inserting before the period at the 
end the following: ``: and Provided further, That, in the alternative, 
an entity designated by the Commission may make the inspections 
referred to in this paragraph''.
    (c) Expediting Instructional Television Fixed Service Processing.--
Section 5(c)(1) (47 U.S.C. 155(c)(1)) is amended by striking the last 
sentence and inserting the following: ``Except for cases involving the 
authorization of service in the instructional television fixed service, 
or as otherwise provided in this Act, nothing in this paragraph shall 
authorize the Commission to provide for the conduct, by any person or 
persons other than persons referred to in paragraph (2) or (3) of 
section 556(b) of title 5, United States Code, of any hearing to which 
such section applies.''.
    (d) Repeal Setting of Depreciation Rates.--The first sentence of 
section 220(b) (47 U.S.C. 220(b)) is amended by striking ``shall 
prescribe for such carriers'' and inserting ``may prescribe, for such 
carriers as it determines to be appropriate,''.
    (e) Use of Independent Auditors.--Section 220(c) (47 U.S.C. 220(c)) 
is amended by adding at the end thereof the following: ``The Commission 
may obtain the services of any person licensed to provide public 
accounting services under the law of any State to assist with, or 
conduct, audits under this section. While so employed or engaged in 
conducting an audit for the Commission under this section, any such 
person shall have the powers granted the Commission under this 
subsection and shall be subject to subsection (f) in the same manner as 
if that person were an employee of the Commission.''.
    (f) Delegation of Equipment Testing and Certification to Private 
Laboratories.--Section 302 (47 U.S.C. 302) is amended by adding at the 
end the following:
    ``(e) The Commission may--
        ``(1) authorize the use of private organizations for testing 
    and certifying the compliance of devices or home electronic 
    equipment and systems with regulations promulgated under this 
    section;
        ``(2) accept as prima facie evidence of such compliance the 
    certification by any such organization; and
        ``(3) establish such qualifications and standards as it deems 
    appropriate for such private organizations, testing, and 
    certification.''.
    (g) Making License Modification Uniform.--Section 303(f) (47 U.S.C. 
303(f)) is amended by striking ``unless, after a public hearing,'' and 
inserting ``unless''.
    (h) Eliminate FCC Jurisdiction Over Government-Owned Ship Radio 
Stations.--
        (1) Section 305 (47 U.S.C. 305) is amended by striking 
    subsection (b) and redesignating subsections (c) and (d) as (b) and 
    (c), respectively.
        (2) Section 382(2) (47 U.S.C. 382(2)) is amended by striking 
    ``except a vessel of the United States Maritime Administration, the 
    Inland and Coastwise Waterways Service, or the Panama Canal 
    Company,''.
    (i) Permit Operation of Domestic Ship and Aircraft Radios Without 
License.--Section 307(e) (47 U.S.C. 307(e)) is amended to read as 
follows:
    ``(e)(1) Notwithstanding any license requirement established in 
this Act, if the Commission determines that such authorization serves 
the public interest, convenience, and necessity, the Commission may by 
rule authorize the operation of radio stations without individual 
licenses in the following radio services: (A) the citizens band radio 
service; (B) the radio control service; (C) the aviation radio service 
for aircraft stations operated on domestic flights when such aircraft 
are not otherwise required to carry a radio station; and (D) the 
maritime radio service for ship stations navigated on domestic voyages 
when such ships are not otherwise required to carry a radio station.
    ``(2) Any radio station operator who is authorized by the 
Commission to operate without an individual license shall comply with 
all other provisions of this Act and with rules prescribed by the 
Commission under this Act.
    ``(3) For purposes of this subsection, the terms `citizens band 
radio service', `radio control service', `aircraft station' and `ship 
station' shall have the meanings given them by the Commission by 
rule.''.
    (j) Expedited Licensing for Fixed Microwave Service.--Section 
309(b)(2) (47 U.S.C. 309(b)(2)) is amended by striking subparagraph (A) 
and redesignating subparagraphs (B) through (G) as subparagraphs (A) 
through (F), respectively.
    (k) Foreign Directors.--Section 310(b) (47 U.S.C. 310(b)) is 
amended--
        (1) in paragraph (3), by striking ``of which any officer or 
    director is an alien or''; and
        (2) in paragraph (4), by striking ``of which any officer or 
    more than one-fourth of the directors are aliens, or''.
    (l) Limitation on Silent Station Authorizations.--Section 312 (47 
U.S.C. 312) is amended by adding at the end the following:
    ``(g) If a broadcasting station fails to transmit broadcast signals 
for any consecutive 12-month period, then the station license granted 
for the operation of that broadcast station expires at the end of that 
period, notwithstanding any provision, term, or condition of the 
license to the contrary.''.
    (m) Modification of Construction Permit Requirement.--Section 
319(d) is amended by striking the last two sentences and inserting the 
following: ``With respect to any broadcasting station, the Commission 
shall not have any authority to waive the requirement of a permit for 
construction, except that the Commission may by regulation determine 
that a permit shall not be required for minor changes in the facilities 
of authorized broadcast stations. With respect to any other station or 
class of stations, the Commission shall not waive the requirement for a 
construction permit unless the Commission determines that the public 
interest, convenience, and necessity would be served by such a 
waiver.''.
    (n) Conduct of Inspections.--Section 362(b) (47 U.S.C. 362(b)) is 
amended to read as follows:
    ``(b) Every ship of the United States that is subject to this part 
shall have the equipment and apparatus prescribed therein inspected at 
least once each year by the Commission or an entity designated by the 
Commission. If, after such inspection, the Commission is satisfied that 
all relevant provisions of this Act and the station license have been 
complied with, the fact shall be so certified on the station license by 
the Commission. The Commission shall make such additional inspections 
at frequent intervals as the Commission determines may be necessary to 
ensure compliance with the requirements of this Act. The Commission 
may, upon a finding that the public interest could be served thereby--
        ``(1) waive the annual inspection required under this section 
    for a period of up to 90 days for the sole purpose of enabling a 
    vessel to complete its voyage and proceed to a port in the United 
    States where an inspection can be held; or
        ``(2) waive the annual inspection required under this section 
    for a vessel that is in compliance with the radio provisions of the 
    Safety Convention and that is operating solely in waters beyond the 
    jurisdiction of the United States: Provided, That such inspection 
    shall be performed within 30 days of such vessel's return to the 
    United States.''.
    (o) Inspection by Other Entities.--Section 385 (47 U.S.C. 385) is 
amended--
        (1) by inserting ``or an entity designated by the Commission'' 
    after ``The Commission''; and
        (2) by adding at the end thereof the following: ``In accordance 
    with such other provisions of law as apply to Government contracts, 
    the Commission may enter into contracts with any person for the 
    purpose of carrying out such inspections and certifying compliance 
    with those requirements, and may, as part of any such contract, 
    allow any such person to accept reimbursement from the license 
    holder for travel and expense costs of any employee conducting an 
    inspection or certification.''.

                    TITLE V--OBSCENITY AND VIOLENCE
      Subtitle A--Obscene, Harassing, and Wrongful Utilization of 
                     Telecommunications Facilities

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Communications Decency Act of 
1996''.

SEC. 502. OBSCENE OR HARASSING USE OF TELECOMMUNICATIONS FACILITIES 
              UNDER THE COMMUNICATIONS ACT OF 1934.

    Section 223 (47 U.S.C. 223) is amended--
        (1) by striking subsection (a) and inserting in lieu thereof:
    ``(a) Whoever--
        ``(1) in interstate or foreign communications--
            ``(A) by means of a telecommunications device knowingly--
                ``(i) makes, creates, or solicits, and
                ``(ii) initiates the transmission of,
        any comment, request, suggestion, proposal, image, or other 
        communication which is obscene, lewd, lascivious, filthy, or 
        indecent, with intent to annoy, abuse, threaten, or harass 
        another person;
            ``(B) by means of a telecommunications device knowingly--
                ``(i) makes, creates, or solicits, and
                ``(ii) initiates the transmission of,
        any comment, request, suggestion, proposal, image, or other 
        communication which is obscene or indecent, knowing that the 
        recipient of the communication is under 18 years of age, 
        regardless of whether the maker of such communication placed 
        the call or initiated the communication;
            ``(C) makes a telephone call or utilizes a 
        telecommunications device, whether or not conversation or 
        communication ensues, without disclosing his identity and with 
        intent to annoy, abuse, threaten, or harass any person at the 
        called number or who receives the communications;
            ``(D) makes or causes the telephone of another repeatedly 
        or continuously to ring, with intent to harass any person at 
        the called number; or
            ``(E) makes repeated telephone calls or repeatedly 
        initiates communication with a telecommunications device, 
        during which conversation or communication ensues, solely to 
        harass any person at the called number or who receives the 
        communication; or
        ``(2) knowingly permits any telecommunications facility under 
    his control to be used for any activity prohibited by paragraph (1) 
    with the intent that it be used for such activity,
shall be fined under title 18, United States Code, or imprisoned not 
more than two years, or both.''; and
        (2) by adding at the end the following new subsections:
    ``(d) Whoever--
        ``(1) in interstate or foreign communications knowingly--
            ``(A) uses an interactive computer service to send to a 
        specific person or persons under 18 years of age, or
            ``(B) uses any interactive computer service to display in a 
        manner available to a person under 18 years of age,
    any comment, request, suggestion, proposal, image, or other 
    communication that, in context, depicts or describes, in terms 
    patently offensive as measured by contemporary community standards, 
    sexual or excretory activities or organs, regardless of whether the 
    user of such service placed the call or initiated the 
    communication; or
        ``(2) knowingly permits any telecommunications facility under 
    such person's control to be used for an activity prohibited by 
    paragraph (1) with the intent that it be used for such activity,
shall be fined under title 18, United States Code, or imprisoned not 
more than two years, or both.
    ``(e) In addition to any other defenses available by law:
        ``(1) No person shall be held to have violated subsection (a) 
    or (d) solely for providing access or connection to or from a 
    facility, system, or network not under that person's control, 
    including transmission, downloading, intermediate storage, access 
    software, or other related capabilities that are incidental to 
    providing such access or connection that does not include the 
    creation of the content of the communication.
        ``(2) The defenses provided by paragraph (1) of this subsection 
    shall not be applicable to a person who is a conspirator with an 
    entity actively involved in the creation or knowing distribution of 
    communications that violate this section, or who knowingly 
    advertises the availability of such communications.
        ``(3) The defenses provided in paragraph (1) of this subsection 
    shall not be applicable to a person who provides access or 
    connection to a facility, system, or network engaged in the 
    violation of this section that is owned or controlled by such 
    person.
        ``(4) No employer shall be held liable under this section for 
    the actions of an employee or agent unless the employee's or 
    agent's conduct is within the scope of his or her employment or 
    agency and the employer (A) having knowledge of such conduct, 
    authorizes or ratifies such conduct, or (B) recklessly disregards 
    such conduct.
        ``(5) It is a defense to a prosecution under subsection 
    (a)(1)(B) or (d), or under subsection (a)(2) with respect to the 
    use of a facility for an activity under subsection (a)(1)(B) that a 
    person--
            ``(A) has taken, in good faith, reasonable, effective, and 
        appropriate actions under the circumstances to restrict or 
        prevent access by minors to a communication specified in such 
        subsections, which may involve any appropriate measures to 
        restrict minors from such communications, including any method 
        which is feasible under available technology; or
            ``(B) has restricted access to such communication by 
        requiring use of a verified credit card, debit account, adult 
        access code, or adult personal identification number.
        ``(6) The Commission may describe measures which are 
    reasonable, effective, and appropriate to restrict access to 
    prohibited communications under subsection (d). Nothing in this 
    section authorizes the Commission to enforce, or is intended to 
    provide the Commission with the authority to approve, sanction, or 
    permit, the use of such measures. The Commission shall have no 
    enforcement authority over the failure to utilize such measures. 
    The Commission shall not endorse specific products relating to such 
    measures. The use of such measures shall be admitted as evidence of 
    good faith efforts for purposes of paragraph (5) in any action 
    arising under subsection (d). Nothing in this section shall be 
    construed to treat interactive computer services as common carriers 
    or telecommunications carriers.
    ``(f)(1) No cause of action may be brought in any court or 
administrative agency against any person on account of any activity 
that is not in violation of any law punishable by criminal or civil 
penalty, and that the person has taken in good faith to implement a 
defense authorized under this section or otherwise to restrict or 
prevent the transmission of, or access to, a communication specified in 
this section.
    ``(2) No State or local government may impose any liability for 
commercial activities or actions by commercial entities, nonprofit 
libraries, or institutions of higher education in connection with an 
activity or action described in subsection (a)(2) or (d) that is 
inconsistent with the treatment of those activities or actions under 
this section: Provided, however, That nothing herein shall preclude any 
State or local government from enacting and enforcing complementary 
oversight, liability, and regulatory systems, procedures, and 
requirements, so long as such systems, procedures, and requirements 
govern only intrastate services and do not result in the imposition of 
inconsistent rights, duties or obligations on the provision of 
interstate services. Nothing in this subsection shall preclude any 
State or local government from governing conduct not covered by this 
section.
    ``(g) Nothing in subsection (a), (d), (e), or (f) or in the 
defenses to prosecution under subsection (a) or (d) shall be construed 
to affect or limit the application or enforcement of any other Federal 
law.
    ``(h) For purposes of this section--
        ``(1) The use of the term `telecommunications device' in this 
    section--
            ``(A) shall not impose new obligations on broadcasting 
        station licensees and cable operators covered by obscenity and 
        indecency provisions elsewhere in this Act; and
            ``(B) does not include an interactive computer service.
        ``(2) The term `interactive computer service' has the meaning 
    provided in section 230(e)(2).
        ``(3) The term `access software' means software (including 
    client or server software) or enabling tools that do not create or 
    provide the content of the communication but that allow a user to 
    do any one or more of the following:
            ``(A) filter, screen, allow, or disallow content;
            ``(B) pick, choose, analyze, or digest content; or
            ``(C) transmit, receive, display, forward, cache, search, 
        subset, organize, reorganize, or translate content.
        ``(4) The term `institution of higher education' has the 
    meaning provided in section 1201 of the Higher Education Act of 
    1965 (20 U.S.C. 1141).
        ``(5) The term `library' means a library eligible for 
    participation in State-based plans for funds under title III of the 
    Library Services and Construction Act (20 U.S.C. 355e et seq.).''.

SEC. 503. OBSCENE PROGRAMMING ON CABLE TELEVISION.

    Section 639 (47 U.S.C. 559) is amended by striking ``not more than 
$10,000'' and inserting ``under title 18, United States Code,''.

SEC. 504. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.

    Part IV of title VI (47 U.S.C. 551 et seq.) is amended by adding at 
the end the following:

``SEC. 640. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS.

    ``(a) Subscriber Request.--Upon request by a cable service 
subscriber, a cable operator shall, without charge, fully scramble or 
otherwise fully block the audio and video programming of each channel 
carrying such programming so that one not a subscriber does not receive 
it.
    ``(b) Definition.--As used in this section, the term `scramble' 
means to rearrange the content of the signal of the programming so that 
the programming cannot be viewed or heard in an understandable 
manner.''.

SEC. 505. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE 
              PROGRAMMING.

    (a) Requirement.--Part IV of title VI (47 U.S.C. 551 et seq.), as 
amended by this Act, is further amended by adding at the end the 
following:

``SEC. 641. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE 
              PROGRAMMING.

    ``(a) Requirement.--In providing sexually explicit adult 
programming or other programming that is indecent on any channel of its 
service primarily dedicated to sexually-oriented programming, a 
multichannel video programming distributor shall fully scramble or 
otherwise fully block the video and audio portion of such channel so 
that one not a subscriber to such channel or programming does not 
receive it.
    ``(b) Implementation.--Until a multichannel video programming 
distributor complies with the requirement set forth in subsection (a), 
the distributor shall limit the access of children to the programming 
referred to in that subsection by not providing such programming during 
the hours of the day (as determined by the Commission) when a 
significant number of children are likely to view it.
    ``(c) Definition.--As used in this section, the term `scramble' 
means to rearrange the content of the signal of the programming so that 
the programming cannot be viewed or heard in an understandable 
manner.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect 30 days after the date of enactment of this Act.

SEC. 506. CABLE OPERATOR REFUSAL TO CARRY CERTAIN PROGRAMS.

    (a) Public, Educational, and Governmental Channels.--Section 611(e) 
(47 U.S.C. 531(e)) is amended by inserting before the period the 
following: ``, except a cable operator may refuse to transmit any 
public access program or portion of a public access program which 
contains obscenity, indecency, or nudity''.
    (b) Cable Channels for Commercial Use.--Section 612(c)(2) (47 
U.S.C. 532(c)(2)) is amended by striking ``an operator'' and inserting 
``a cable operator may refuse to transmit any leased access program or 
portion of a leased access program which contains obscenity, indecency, 
or nudity and''.

SEC. 507. CLARIFICATION OF CURRENT LAWS REGARDING COMMUNICATION OF 
              OBSCENE MATERIALS THROUGH THE USE OF COMPUTERS.

    (a) Importation or Transportation.--Section 1462 of title 18, 
United States Code, is amended--
        (1) in the first undesignated paragraph, by inserting ``or 
    interactive computer service (as defined in section 230(e)(2) of 
    the Communications Act of 1934)'' after ``carrier''; and
        (2) in the second undesignated paragraph--
            (A) by inserting ``or receives,'' after ``takes'';
            (B) by inserting ``or interactive computer service (as 
        defined in section 230(e)(2) of the Communications Act of 
        1934)'' after ``common carrier''; and
            (C) by inserting ``or importation'' after ``carriage''.
    (b) Transportation for Purposes of Sale or Distribution.--The first 
undesignated paragraph of section 1465 of title 18, United States Code, 
is amended--
        (1) by striking ``transports in'' and inserting ``transports or 
    travels in, or uses a facility or means of,'';
        (2) by inserting ``or an interactive computer service (as 
    defined in section 230(e)(2) of the Communications Act of 1934) in 
    or affecting such commerce'' after ``foreign commerce'' the first 
    place it appears;
        (3) by striking ``, or knowingly travels in'' and all that 
    follows through ``obscene material in interstate or foreign 
    commerce,'' and inserting ``of''.
    (c) Interpretation.--The amendments made by this section are 
clarifying and shall not be interpreted to limit or repeal any 
prohibition contained in sections 1462 and 1465 of title 18, United 
States Code, before such amendment, under the rule established in 
United States v. Alpers, 338 U.S. 680 (1950).

SEC. 508. COERCION AND ENTICEMENT OF MINORS.

    Section 2422 of title 18, United States Code, is amended--
        (1) by inserting ``(a)'' before ``Whoever knowingly''; and
        (2) by adding at the end the following:
    ``(b) Whoever, using any facility or means of interstate or foreign 
commerce, including the mail, or within the special maritime and 
territorial jurisdiction of the United States, knowingly persuades, 
induces, entices, or coerces any individual who has not attained the 
age of 18 years to engage in prostitution or any sexual act for which 
any person may be criminally prosecuted, or attempts to do so, shall be 
fined under this title or imprisoned not more than 10 years, or 
both.''.

SEC. 509. ONLINE FAMILY EMPOWERMENT.

    Title II of the Communications Act of 1934 (47 U.S.C. 201 et seq.) 
is amended by adding at the end the following new section:

``SEC. 230. PROTECTION FOR PRIVATE BLOCKING AND SCREENING OF OFFENSIVE 
              MATERIAL.

    ``(a) Findings.--The Congress finds the following:
        ``(1) The rapidly developing array of Internet and other 
    interactive computer services available to individual Americans 
    represent an extraordinary advance in the availability of 
    educational and informational resources to our citizens.
        ``(2) These services offer users a great degree of control over 
    the information that they receive, as well as the potential for 
    even greater control in the future as technology develops.
        ``(3) The Internet and other interactive computer services 
    offer a forum for a true diversity of political discourse, unique 
    opportunities for cultural development, and myriad avenues for 
    intellectual activity.
        ``(4) The Internet and other interactive computer services have 
    flourished, to the benefit of all Americans, with a minimum of 
    government regulation.
        ``(5) Increasingly Americans are relying on interactive media 
    for a variety of political, educational, cultural, and 
    entertainment services.
    ``(b) Policy.--It is the policy of the United States--
        ``(1) to promote the continued development of the Internet and 
    other interactive computer services and other interactive media;
        ``(2) to preserve the vibrant and competitive free market that 
    presently exists for the Internet and other interactive computer 
    services, unfettered by Federal or State regulation;
        ``(3) to encourage the development of technologies which 
    maximize user control over what information is received by 
    individuals, families, and schools who use the Internet and other 
    interactive computer services;
        ``(4) to remove disincentives for the development and 
    utilization of blocking and filtering technologies that empower 
    parents to restrict their children's access to objectionable or 
    inappropriate online material; and
        ``(5) to ensure vigorous enforcement of Federal criminal laws 
    to deter and punish trafficking in obscenity, stalking, and 
    harassment by means of computer.
    ``(c) Protection for `Good Samaritan' Blocking and Screening of 
Offensive Material.--
        ``(1) Treatment of publisher or speaker.--No provider or user 
    of an interactive computer service shall be treated as the 
    publisher or speaker of any information provided by another 
    information content provider.
        ``(2) Civil liability.--No provider or user of an interactive 
    computer service shall be held liable on account of--
            ``(A) any action voluntarily taken in good faith to 
        restrict access to or availability of material that the 
        provider or user considers to be obscene, lewd, lascivious, 
        filthy, excessively violent, harassing, or otherwise 
        objectionable, whether or not such material is constitutionally 
        protected; or
            ``(B) any action taken to enable or make available to 
        information content providers or others the technical means to 
        restrict access to material described in paragraph (1).
    ``(d) Effect on Other Laws.--
        ``(1) No effect on criminal law.--Nothing in this section shall 
    be construed to impair the enforcement of section 223 of this Act, 
    chapter 71 (relating to obscenity) or 110 (relating to sexual 
    exploitation of children) of title 18, United States Code, or any 
    other Federal criminal statute.
        ``(2) No effect on intellectual property law.--Nothing in this 
    section shall be construed to limit or expand any law pertaining to 
    intellectual property.
        ``(3) State law.--Nothing in this section shall be construed to 
    prevent any State from enforcing any State law that is consistent 
    with this section. No cause of action may be brought and no 
    liability may be imposed under any State or local law that is 
    inconsistent with this section.
        ``(4) No effect on communications privacy law.--Nothing in this 
    section shall be construed to limit the application of the 
    Electronic Communications Privacy Act of 1986 or any of the 
    amendments made by such Act, or any similar State law.
    ``(e) Definitions.--As used in this section:
        ``(1) Internet.--The term `Internet' means the international 
    computer network of both Federal and non-Federal interoperable 
    packet switched data networks.
        ``(2) Interactive computer service.--The term `interactive 
    computer service' means any information service, system, or access 
    software provider that provides or enables computer access by 
    multiple users to a computer server, including specifically a 
    service or system that provides access to the Internet and such 
    systems operated or services offered by libraries or educational 
    institutions.
        ``(3) Information content provider.--The term `information 
    content provider' means any person or entity that is responsible, 
    in whole or in part, for the creation or development of information 
    provided through the Internet or any other interactive computer 
    service.
        ``(4) Access software provider.--The term `access software 
    provider' means a provider of software (including client or server 
    software), or enabling tools that do any one or more of the 
    following:
            ``(A) filter, screen, allow, or disallow content;
            ``(B) pick, choose, analyze, or digest content; or
            ``(C) transmit, receive, display, forward, cache, search, 
        subset, organize, reorganize, or translate content.''.

                          Subtitle B--Violence

SEC. 551. PARENTAL CHOICE IN TELEVISION PROGRAMMING.

    (a) Findings.--The Congress makes the following findings:
        (1) Television influences children's perception of the values 
    and behavior that are common and acceptable in society.
        (2) Television station operators, cable television system 
    operators, and video programmers should follow practices in 
    connection with video programming that take into consideration that 
    television broadcast and cable programming has established a 
    uniquely pervasive presence in the lives of American children.
        (3) The average American child is exposed to 25 hours of 
    television each week and some children are exposed to as much as 11 
    hours of television a day.
        (4) Studies have shown that children exposed to violent video 
    programming at a young age have a higher tendency for violent and 
    aggressive behavior later in life than children not so exposed, and 
    that children exposed to violent video programming are prone to 
    assume that acts of violence are acceptable behavior.
        (5) Children in the United States are, on average, exposed to 
    an estimated 8,000 murders and 100,000 acts of violence on 
    television by the time the child completes elementary school.
        (6) Studies indicate that children are affected by the 
    pervasiveness and casual treatment of sexual material on 
    television, eroding the ability of parents to develop responsible 
    attitudes and behavior in their children.
        (7) Parents express grave concern over violent and sexual video 
    programming and strongly support technology that would give them 
    greater control to block video programming in the home that they 
    consider harmful to their children.
        (8) There is a compelling governmental interest in empowering 
    parents to limit the negative influences of video programming that 
    is harmful to children.
        (9) Providing parents with timely information about the nature 
    of upcoming video programming and with the technological tools that 
    allow them easily to block violent, sexual, or other programming 
    that they believe harmful to their children is a nonintrusive and 
    narrowly tailored means of achieving that compelling governmental 
    interest.
    (b) Establishment of Television Rating Code.--
        (1) Amendment.--Section 303 (47 U.S.C. 303) is amended by 
    adding at the end the following:
    ``(w) Prescribe--
        ``(1) on the basis of recommendations from an advisory 
    committee established by the Commission in accordance with section 
    551(b)(2) of the Telecommunications Act of 1996, guidelines and 
    recommended procedures for the identification and rating of video 
    programming that contains sexual, violent, or other indecent 
    material about which parents should be informed before it is 
    displayed to children: Provided, That nothing in this paragraph 
    shall be construed to authorize any rating of video programming on 
    the basis of its political or religious content; and
        ``(2) with respect to any video programming that has been 
    rated, and in consultation with the television industry, rules 
    requiring distributors of such video programming to transmit such 
    rating to permit parents to block the display of video programming 
    that they have determined is inappropriate for their children.''.
        (2) Advisory committee requirements.--In establishing an 
    advisory committee for purposes of the amendment made by paragraph 
    (1) of this subsection, the Commission shall--
            (A) ensure that such committee is composed of parents, 
        television broadcasters, television programming producers, 
        cable operators, appropriate public interest groups, and other 
        interested individuals from the private sector and is fairly 
        balanced in terms of political affiliation, the points of view 
        represented, and the functions to be performed by the 
        committee;
            (B) provide to the committee such staff and resources as 
        may be necessary to permit it to perform its functions 
        efficiently and promptly; and
            (C) require the committee to submit a final report of its 
        recommendations within one year after the date of the 
        appointment of the initial members.
    (c) Requirement for Manufacture of Televisions That Block 
Programs.--Section 303 (47 U.S.C. 303), as amended by subsection (a), 
is further amended by adding at the end the following:
    ``(x) Require, in the case of an apparatus designed to receive 
television signals that are shipped in interstate commerce or 
manufactured in the United States and that have a picture screen 13 
inches or greater in size (measured diagonally), that such apparatus be 
equipped with a feature designed to enable viewers to block display of 
all programs with a common rating, except as otherwise permitted by 
regulations pursuant to section 330(c)(4).''.
    (d) Shipping of Televisions That Block Programs.--
        (1) Regulations.--Section 330 (47 U.S.C. 330) is amended--
            (A) by redesignating subsection (c) as subsection (d); and
            (B) by adding after subsection (b) the following new 
        subsection (c):
    ``(c)(1) Except as provided in paragraph (2), no person shall ship 
in interstate commerce or manufacture in the United States any 
apparatus described in section 303(x) of this Act except in accordance 
with rules prescribed by the Commission pursuant to the authority 
granted by that section.
    ``(2) This subsection shall not apply to carriers transporting 
apparatus referred to in paragraph (1) without trading in it.
    ``(3) The rules prescribed by the Commission under this subsection 
shall provide for the oversight by the Commission of the adoption of 
standards by industry for blocking technology. Such rules shall require 
that all such apparatus be able to receive the rating signals which 
have been transmitted by way of line 21 of the vertical blanking 
interval and which conform to the signal and blocking specifications 
established by industry under the supervision of the Commission.
    ``(4) As new video technology is developed, the Commission shall 
take such action as the Commission determines appropriate to ensure 
that blocking service continues to be available to consumers. If the 
Commission determines that an alternative blocking technology exists 
that--
        ``(A) enables parents to block programming based on identifying 
    programs without ratings,
        ``(B) is available to consumers at a cost which is comparable 
    to the cost of technology that allows parents to block programming 
    based on common ratings, and
        ``(C) will allow parents to block a broad range of programs on 
    a multichannel system as effectively and as easily as technology 
    that allows parents to block programming based on common ratings,
the Commission shall amend the rules prescribed pursuant to section 
303(x) to require that the apparatus described in such section be 
equipped with either the blocking technology described in such section 
or the alternative blocking technology described in this paragraph.''.
        (2) Conforming amendment.--Section 330(d), as redesignated by 
    subsection (d)(1)(A), is amended by striking ``section 303(s), and 
    section 303(u)'' and inserting in lieu thereof ``and sections 
    303(s), 303(u), and 303(x)''.
    (e) Applicability and Effective Dates.--
        (1) Applicability of rating provision.--The amendment made by 
    subsection (b) of this section shall take effect 1 year after the 
    date of enactment of this Act, but only if the Commission 
    determines, in consultation with appropriate public interest groups 
    and interested individuals from the private sector, that 
    distributors of video programming have not, by such date--
            (A) established voluntary rules for rating video 
        programming that contains sexual, violent, or other indecent 
        material about which parents should be informed before it is 
        displayed to children, and such rules are acceptable to the 
        Commission; and
            (B) agreed voluntarily to broadcast signals that contain 
        ratings of such programming.
        (2) Effective date of manufacturing provision.--In prescribing 
    regulations to implement the amendment made by subsection (c), the 
    Federal Communications Commission shall, after consultation with 
    the television manufacturing industry, specify the effective date 
    for the applicability of the requirement to the apparatus covered 
    by such amendment, which date shall not be less than two years 
    after the date of enactment of this Act.

SEC. 552. TECHNOLOGY FUND.

    It is the policy of the United States to encourage broadcast 
television, cable, satellite, syndication, other video programming 
distributors, and relevant related industries (in consultation with 
appropriate public interest groups and interested individuals from the 
private sector) to--
        (1) establish a technology fund to encourage television and 
    electronics equipment manufacturers to facilitate the development 
    of technology which would empower parents to block programming they 
    deem inappropriate for their children and to encourage the 
    availability thereof to low income parents;
        (2) report to the viewing public on the status of the 
    development of affordable, easy to use blocking technology; and
        (3) establish and promote effective procedures, standards, 
    systems, advisories, or other mechanisms for ensuring that users 
    have easy and complete access to the information necessary to 
    effectively utilize blocking technology and to encourage the 
    availability thereof to low income parents.

                      Subtitle C--Judicial Review

SEC. 561. EXPEDITED REVIEW.

    (a) Three-Judge District Court Hearing.--Notwithstanding any other 
provision of law, any civil action challenging the constitutionality, 
on its face, of this title or any amendment made by this title, or any 
provision thereof, shall be heard by a district court of 3 judges 
convened pursuant to the provisions of section 2284 of title 28, United 
States Code.
    (b) Appellate Review.--Notwithstanding any other provision of law, 
an interlocutory or final judgment, decree, or order of the court of 3 
judges in an action under subsection (a) holding this title or an 
amendment made by this title, or any provision thereof, 
unconstitutional shall be reviewable as a matter of right by direct 
appeal to the Supreme Court. Any such appeal shall be filed not more 
than 20 days after entry of such judgment, decree, or order.

                     TITLE VI--EFFECT ON OTHER LAWS

SEC. 601. APPLICABILITY OF CONSENT DECREES AND OTHER LAW.

    (a) Applicability of Amendments to Future Conduct.--
        (1) AT&T consent decree.--Any conduct or activity that was, 
    before the date of enactment of this Act, subject to any 
    restriction or obligation imposed by the AT&T Consent Decree shall, 
    on and after such date, be subject to the restrictions and 
    obligations imposed by the Communications Act of 1934 as amended by 
    this Act and shall not be subject to the restrictions and the 
    obligations imposed by such Consent Decree.
        (2) GTE consent decree.--Any conduct or activity that was, 
    before the date of enactment of this Act, subject to any 
    restriction or obligation imposed by the GTE Consent Decree shall, 
    on and after such date, be subject to the restrictions and 
    obligations imposed by the Communications Act of 1934 as amended by 
    this Act and shall not be subject to the restrictions and the 
    obligations imposed by such Consent Decree.
        (3) McCaw consent decree.--Any conduct or activity that was, 
    before the date of enactment of this Act, subject to any 
    restriction or obligation imposed by the McCaw Consent Decree 
    shall, on and after such date, be subject to the restrictions and 
    obligations imposed by the Communications Act of 1934 as amended by 
    this Act and subsection (d) of this section and shall not be 
    subject to the restrictions and the obligations imposed by such 
    Consent Decree.
    (b) Antitrust Laws.--
        (1) Savings clause.--Except as provided in paragraphs (2) and 
    (3), nothing in this Act or the amendments made by this Act shall 
    be construed to modify, impair, or supersede the applicability of 
    any of the antitrust laws.
        (2) Repeal.--Subsection (a) of section 221 (47 U.S.C. 221(a)) 
    is repealed.
        (3) Clayton act.--Section 7 of the Clayton Act (15 U.S.C. 18) 
    is amended in the last paragraph by striking ``Federal 
    Communications Commission,''.
    (c) Federal, State, and Local Law.--
        (1) No implied effect.--This Act and the amendments made by 
    this Act shall not be construed to modify, impair, or supersede 
    Federal, State, or local law unless expressly so provided in such 
    Act or amendments.
        (2) State tax savings provision.--Notwithstanding paragraph 
    (1), nothing in this Act or the amendments made by this Act shall 
    be construed to modify, impair, or supersede, or authorize the 
    modification, impairment, or supersession of, any State or local 
    law pertaining to taxation, except as provided in sections 622 and 
    653(c) of the Communications Act of 1934 and section 602 of this 
    Act.
    (d) Commercial Mobile Service Joint Marketing.--Notwithstanding 
section 22.903 of the Commission's regulations (47 C.F.R. 22.903) or 
any other Commission regulation, a Bell operating company or any other 
company may, except as provided in sections 271(e)(1) and 272 of the 
Communications Act of 1934 as amended by this Act as they relate to 
wireline service, jointly market and sell commercial mobile services in 
conjunction with telephone exchange service, exchange access, intraLATA 
telecommunications service, interLATA telecommunications service, and 
information services.
    (e) Definitions.--As used in this section:
        (1) AT&T consent decree.--The term ``AT&T Consent Decree'' 
    means the order entered August 24, 1982, in the antitrust action 
    styled United States v. Western Electric, Civil Action No. 82-0192, 
    in the United States District Court for the District of Columbia, 
    and includes any judgment or order with respect to such action 
    entered on or after August 24, 1982.
        (2) GTE consent decree.--The term ``GTE Consent Decree'' means 
    the order entered December 21, 1984, as restated January 11, 1985, 
    in the action styled United States v. GTE Corp., Civil Action No. 
    83-1298, in the United States District Court for the District of 
    Columbia, and any judgment or order with respect to such action 
    entered on or after December 21, 1984.
        (3) McCaw consent decree.--The term ``McCaw Consent Decree'' 
    means the proposed consent decree filed on July 15, 1994, in the 
    antitrust action styled United States v. AT&T Corp. and McCaw 
    Cellular Communications, Inc., Civil Action No. 94-01555, in the 
    United States District Court for the District of Columbia. Such 
    term includes any stipulation that the parties will abide by the 
    terms of such proposed consent decree until it is entered and any 
    order entering such proposed consent decree.
        (4) Antitrust laws.--The term ``antitrust laws'' has the 
    meaning given it in subsection (a) of the first section of the 
    Clayton Act (15 U.S.C. 12(a)), except that such term includes the 
    Act of June 19, 1936 (49 Stat. 1526; 15 U.S.C. 13 et seq.), 
    commonly known as the Robinson-Patman Act, and section 5 of the 
    Federal Trade Commission Act (15 U.S.C. 45) to the extent that such 
    section 5 applies to unfair methods of competition.

SEC. 602. PREEMPTION OF LOCAL TAXATION WITH RESPECT TO DIRECT-TO-HOME 
              SERVICES.

    (a) Preemption.--A provider of direct-to-home satellite service 
shall be exempt from the collection or remittance, or both, of any tax 
or fee imposed by any local taxing jurisdiction on direct-to-home 
satellite service.
    (b) Definitions.--For the purposes of this section--
        (1) Direct-to-home satellite service.--The term ``direct-to-
    home satellite service'' means only programming transmitted or 
    broadcast by satellite directly to the subscribers' premises 
    without the use of ground receiving or distribution equipment, 
    except at the subscribers' premises or in the uplink process to the 
    satellite.
        (2) Provider of direct-to-home satellite service.--For purposes 
    of this section, a ``provider of direct-to-home satellite service'' 
    means a person who transmits, broadcasts, sells, or distributes 
    direct-to-home satellite service.
        (3) Local taxing jurisdiction.--The term ``local taxing 
    jurisdiction'' means any municipality, city, county, township, 
    parish, transportation district, or assessment jurisdiction, or any 
    other local jurisdiction in the territorial jurisdiction of the 
    United States with the authority to impose a tax or fee, but does 
    not include a State.
        (4) State.--The term ``State'' means any of the several States, 
    the District of Columbia, or any territory or possession of the 
    United States.
        (5) Tax or fee.--The terms ``tax'' and ``fee'' mean any local 
    sales tax, local use tax, local intangible tax, local income tax, 
    business license tax, utility tax, privilege tax, gross receipts 
    tax, excise tax, franchise fees, local telecommunications tax, or 
    any other tax, license, or fee that is imposed for the privilege of 
    doing business, regulating, or raising revenue for a local taxing 
    jurisdiction.
    (c) Preservation of State Authority.--This section shall not be 
construed to prevent taxation of a provider of direct-to-home satellite 
service by a State or to prevent a local taxing jurisdiction from 
receiving revenue derived from a tax or fee imposed and collected by a 
State.

                  TITLE VII--MISCELLANEOUS PROVISIONS

SEC. 701. PREVENTION OF UNFAIR BILLING PRACTICES FOR INFORMATION OR 
              SERVICES PROVIDED OVER TOLL-FREE TELEPHONE CALLS.

    (a) Prevention of Unfair Billing Practices.--
        (1) In general.--Section 228(c) (47 U.S.C. 228(c)) is amended--
            (A) by striking out subparagraph (C) of paragraph (7) and 
        inserting in lieu thereof the following:
            ``(C) the calling party being charged for information 
        conveyed during the call unless--
                ``(i) the calling party has a written agreement 
            (including an agreement transmitted through electronic 
            medium) that meets the requirements of paragraph (8); or
                ``(ii) the calling party is charged for the information 
            in accordance with paragraph (9); or'';
            (B)(i) by striking ``or'' at the end of subparagraph (C) of 
        such paragraph;
            (ii) by striking the period at the end of subparagraph (D) 
        of such paragraph and inserting a semicolon and ``or''; and
            (iii) by adding at the end thereof the following:
            ``(E) the calling party being assessed, by virtue of being 
        asked to connect or otherwise transfer to a pay-per-call 
        service, a charge for the call.''; and
            (C) by adding at the end the following new paragraphs:
        ``(8) Subscription agreements for billing for information 
    provided via toll-free calls.--
            ``(A) In general.--For purposes of paragraph (7)(C)(i), a 
        written subscription does not meet the requirements of this 
        paragraph unless the agreement specifies the material terms and 
        conditions under which the information is offered and 
        includes--
                ``(i) the rate at which charges are assessed for the 
            information;
                ``(ii) the information provider's name;
                ``(iii) the information provider's business address;
                ``(iv) the information provider's regular business 
            telephone number;
                ``(v) the information provider's agreement to notify 
            the subscriber at least one billing cycle in advance of all 
            future changes in the rates charged for the information; 
            and
                ``(vi) the subscriber's choice of payment method, which 
            may be by direct remit, debit, prepaid account, phone bill, 
            or credit or calling card.
            ``(B) Billing arrangements.--If a subscriber elects, 
        pursuant to subparagraph (A)(vi), to pay by means of a phone 
        bill--
                ``(i) the agreement shall clearly explain that the 
            subscriber will be assessed for calls made to the 
            information service from the subscriber's phone line;
                ``(ii) the phone bill shall include, in prominent type, 
            the following disclaimer:

                    `Common carriers may not disconnect local or long 
                distance telephone service for failure to pay disputed 
                charges for information services.'; and

                ``(iii) the phone bill shall clearly list the 800 
            number dialed.
            ``(C) Use of pins to prevent unauthorized use.--A written 
        agreement does not meet the requirements of this paragraph 
        unless it--
                ``(i) includes a unique personal identification number 
            or other subscriber-specific identifier and requires a 
            subscriber to use this number or identifier to obtain 
            access to the information provided and includes 
            instructions on its use; and
                ``(ii) assures that any charges for services accessed 
            by use of the subscriber's personal identification number 
            or subscriber-specific identifier be assessed to 
            subscriber's source of payment elected pursuant to 
            subparagraph (A)(vi).
            ``(D) Exceptions.--Notwithstanding paragraph (7)(C), a 
        written agreement that meets the requirements of this paragraph 
        is not required--
                ``(i) for calls utilizing telecommunications devices 
            for the deaf;
                ``(ii) for directory services provided by a common 
            carrier or its affiliate or by a local exchange carrier or 
            its affiliate; or
                ``(iii) for any purchase of goods or of services that 
            are not information services.
            ``(E) Termination of service.--On receipt by a common 
        carrier of a complaint by any person that an information 
        provider is in violation of the provisions of this section, a 
        carrier shall--
                ``(i) promptly investigate the complaint; and
                ``(ii) if the carrier reasonably determines that the 
            complaint is valid, it may terminate the provision of 
            service to an information provider unless the provider 
            supplies evidence of a written agreement that meets the 
            requirements of this section.
            ``(F) Treatment of remedies.--The remedies provided in this 
        paragraph are in addition to any other remedies that are 
        available under title V of this Act.
        ``(9) Charges by credit, prepaid, debit, charge, or calling 
    card in absence of agreement.--For purposes of paragraph 
    (7)(C)(ii), a calling party is not charged in accordance with this 
    paragraph unless the calling party is charged by means of a credit, 
    prepaid, debit, charge, or calling card and the information service 
    provider includes in response to each call an introductory 
    disclosure message that--
            ``(A) clearly states that there is a charge for the call;
            ``(B) clearly states the service's total cost per minute 
        and any other fees for the service or for any service to which 
        the caller may be transferred;
            ``(C) explains that the charges must be billed on either a 
        credit, prepaid, debit, charge, or calling card;
            ``(D) asks the caller for the card number;
            ``(E) clearly states that charges for the call begin at the 
        end of the introductory message; and
            ``(F) clearly states that the caller can hang up at or 
        before the end of the introductory message without incurring 
        any charge whatsoever.
        ``(10) Bypass of introductory disclosure message.--The 
    requirements of paragraph (9) shall not apply to calls from repeat 
    callers using a bypass mechanism to avoid listening to the 
    introductory message: Provided, That information providers shall 
    disable such a bypass mechanism after the institution of any price 
    increase and for a period of time determined to be sufficient by 
    the Federal Trade Commission to give callers adequate and 
    sufficient notice of a price increase.
        ``(11) Definition of calling card.--As used in this subsection, 
    the term `calling card' means an identifying number or code unique 
    to the individual, that is issued to the individual by a common 
    carrier and enables the individual to be charged by means of a 
    phone bill for charges incurred independent of where the call 
    originates.''.
        (2) Regulations.--The Federal Communications Commission shall 
    revise its regulations to comply with the amendment made by 
    paragraph (1) not later than 180 days after the date of enactment 
    of this Act.
        (3) Effective date.--The amendments made by paragraph (1) shall 
    take effect on the date of enactment of this Act.
    (b) Clarification of ``Pay-Per-Call Services''.--
        (1) Telephone disclosure and dispute resolution act.--Section 
    204(1) of the Telephone Disclosure and Dispute Resolution Act (15 
    U.S.C. 5714(1)) is amended to read as follows:
        ``(1) The term `pay-per-call services' has the meaning provided 
    in section 228(i) of the Communications Act of 1934, except that 
    the Commission by rule may, notwithstanding subparagraphs (B) and 
    (C) of section 228(i)(1) of such Act, extend such definition to 
    other similar services providing audio information or audio 
    entertainment if the Commission determines that such services are 
    susceptible to the unfair and deceptive practices that are 
    prohibited by the rules prescribed pursuant to section 201(a).''.
        (2) Communications act.--Section 228(i)(2) (47 U.S.C. 
    228(i)(2)) is amended by striking ``or any service the charge for 
    which is tariffed,''.

SEC. 702. PRIVACY OF CUSTOMER INFORMATION.

    Title II is amended by inserting after section 221 (47 U.S.C. 221) 
the following new section:

``SEC. 222. PRIVACY OF CUSTOMER INFORMATION.

    ``(a) In General.--Every telecommunications carrier has a duty to 
protect the confidentiality of proprietary information of, and relating 
to, other telecommunication carriers, equipment manufacturers, and 
customers, including telecommunication carriers reselling 
telecommunications services provided by a telecommunications carrier.
    ``(b) Confidentiality of Carrier Information.--A telecommunications 
carrier that receives or obtains proprietary information from another 
carrier for purposes of providing any telecommunications service shall 
use such information only for such purpose, and shall not use such 
information for its own marketing efforts.
    ``(c) Confidentiality of Customer Proprietary Network 
Information.--
        ``(1) Privacy requirements for telecommunications carriers.--
    Except as required by law or with the approval of the customer, a 
    telecommunications carrier that receives or obtains customer 
    proprietary network information by virtue of its provision of a 
    telecommunications service shall only use, disclose, or permit 
    access to individually identifiable customer proprietary network 
    information in its provision of (A) the telecommunications service 
    from which such information is derived, or (B) services necessary 
    to, or used in, the provision of such telecommunications service, 
    including the publishing of directories.
        ``(2) Disclosure on request by customers.--A telecommunications 
    carrier shall disclose customer proprietary network information, 
    upon affirmative written request by the customer, to any person 
    designated by the customer.
        ``(3) Aggregate customer information.--A telecommunications 
    carrier that receives or obtains customer proprietary network 
    information by virtue of its provision of a telecommunications 
    service may use, disclose, or permit access to aggregate customer 
    information other than for the purposes described in paragraph (1). 
    A local exchange carrier may use, disclose, or permit access to 
    aggregate customer information other than for purposes described in 
    paragraph (1) only if it provides such aggregate information to 
    other carriers or persons on reasonable and nondiscriminatory terms 
    and conditions upon reasonable request therefor.
    ``(d) Exceptions.--Nothing in this section prohibits a 
telecommunications carrier from using, disclosing, or permitting access 
to customer proprietary network information obtained from its 
customers, either directly or indirectly through its agents--
        ``(1) to initiate, render, bill, and collect for 
    telecommunications services;
        ``(2) to protect the rights or property of the carrier, or to 
    protect users of those services and other carriers from fraudulent, 
    abusive, or unlawful use of, or subscription to, such services; or
        ``(3) to provide any inbound telemarketing, referral, or 
    administrative services to the customer for the duration of the 
    call, if such call was initiated by the customer and the customer 
    approves of the use of such information to provide such service.
    ``(e) Subscriber List Information.--Notwithstanding subsections 
(b), (c), and (d), a telecommunications carrier that provides telephone 
exchange service shall provide subscriber list information gathered in 
its capacity as a provider of such service on a timely and unbundled 
basis, under nondiscriminatory and reasonable rates, terms, and 
conditions, to any person upon request for the purpose of publishing 
directories in any format.
    ``(f) Definitions.--As used in this section:
        ``(1) Customer proprietary network information.--The term 
    `customer proprietary network information' means--
            ``(A) information that relates to the quantity, technical 
        configuration, type, destination, and amount of use of a 
        telecommunications service subscribed to by any customer of a 
        telecommunications carrier, and that is made available to the 
        carrier by the customer solely by virtue of the carrier-
        customer relationship; and
            ``(B) information contained in the bills pertaining to 
        telephone exchange service or telephone toll service received 
        by a customer of a carrier;
    except that such term does not include subscriber list information.
        ``(2) Aggregate information.--The term `aggregate customer 
    information' means collective data that relates to a group or 
    category of services or customers, from which individual customer 
    identities and characteristics have been removed.
        ``(3) Subscriber list information.--The term `subscriber list 
    information' means any information--
            ``(A) identifying the listed names of subscribers of a 
        carrier and such subscribers' telephone numbers, addresses, or 
        primary advertising classifications (as such classifications 
        are assigned at the time of the establishment of such service), 
        or any combination of such listed names, numbers, addresses, or 
        classifications; and
            ``(B) that the carrier or an affiliate has published, 
        caused to be published, or accepted for publication in any 
        directory format.''.

SEC. 703. POLE ATTACHMENTS.

    Section 224 (47 U.S.C. 224) is amended--
        (1) in subsection (a)(1), by striking the first sentence and 
    inserting the following: ``The term `utility' means any person who 
    is a local exchange carrier or an electric, gas, water, steam, or 
    other public utility, and who owns or controls poles, ducts, 
    conduits, or rights-of-way used, in whole or in part, for any wire 
    communications.'';
        (2) in subsection (a)(4), by inserting after ``system'' the 
    following: ``or provider of telecommunications service'';
        (3) by inserting after subsection (a)(4) the following:
        ``(5) For purposes of this section, the term 
    `telecommunications carrier' (as defined in section 3 of this Act) 
    does not include any incumbent local exchange carrier as defined in 
    section 251(h).'';
        (4) by inserting after ``conditions'' in subsection (c)(1) a 
    comma and the following: ``or access to poles, ducts, conduits, and 
    rights-of-way as provided in subsection (f),'';
        (5) in subsection (c)(2)(B), by striking ``cable television 
    services'' and inserting ``the services offered via such 
    attachments'';
        (6) by inserting after subsection (d)(2) the following:
    ``(3) This subsection shall apply to the rate for any pole 
attachment used by a cable television system solely to provide cable 
service. Until the effective date of the regulations required under 
subsection (e), this subsection shall also apply to the rate for any 
pole attachment used by a cable system or any telecommunications 
carrier (to the extent such carrier is not a party to a pole attachment 
agreement) to provide any telecommunications service.''; and
        (7) by adding at the end thereof the following:
    ``(e)(1) The Commission shall, no later than 2 years after the date 
of enactment of the Telecommunications Act of 1996, prescribe 
regulations in accordance with this subsection to govern the charges 
for pole attachments used by telecommunications carriers to provide 
telecommunications services, when the parties fail to resolve a dispute 
over such charges. Such regulations shall ensure that a utility charges 
just, reasonable, and nondiscriminatory rates for pole attachments.
    ``(2) A utility shall apportion the cost of providing space on a 
pole, duct, conduit, or right-of-way other than the usable space among 
entities so that such apportionment equals two-thirds of the costs of 
providing space other than the usable space that would be allocated to 
such entity under an equal apportionment of such costs among all 
attaching entities.
    ``(3) A utility shall apportion the cost of providing usable space 
among all entities according to the percentage of usable space required 
for each entity.
    ``(4) The regulations required under paragraph (1) shall become 
effective 5 years after the date of enactment of the Telecommunications 
Act of 1996. Any increase in the rates for pole attachments that result 
from the adoption of the regulations required by this subsection shall 
be phased in equal annual increments over a period of 5 years beginning 
on the effective date of such regulations.
    ``(f)(1) A utility shall provide a cable television system or any 
telecommunications carrier with nondiscriminatory access to any pole, 
duct, conduit, or right-of-way owned or controlled by it.
    ``(2) Notwithstanding paragraph (1), a utility providing electric 
service may deny a cable television system or any telecommunications 
carrier access to its poles, ducts, conduits, or rights-of-way, on a 
non-discriminatory basis where there is insufficient capacity and for 
reasons of safety, reliability and generally applicable engineering 
purposes.
    ``(g) A utility that engages in the provision of telecommunications 
services or cable services shall impute to its costs of providing such 
services (and charge any affiliate, subsidiary, or associate company 
engaged in the provision of such services) an equal amount to the pole 
attachment rate for which such company would be liable under this 
section.
    ``(h) Whenever the owner of a pole, duct, conduit, or right-of-way 
intends to modify or alter such pole, duct, conduit, or right-of-way, 
the owner shall provide written notification of such action to any 
entity that has obtained an attachment to such conduit or right-of-way 
so that such entity may have a reasonable opportunity to add to or 
modify its existing attachment. Any entity that adds to or modifies its 
existing attachment after receiving such notification shall bear a 
proportionate share of the costs incurred by the owner in making such 
pole, duct, conduit, or right-of-way accessible.
    ``(i) An entity that obtains an attachment to a pole, conduit, or 
right-of-way shall not be required to bear any of the costs of 
rearranging or replacing its attachment, if such rearrangement or 
replacement is required as a result of an additional attachment or the 
modification of an existing attachment sought by any other entity 
(including the owner of such pole, duct, conduit, or right-of-way).''.

SEC. 704. FACILITIES SITING; RADIO FREQUENCY EMISSION STANDARDS.

    (a) National Wireless Telecommunications Siting Policy.--Section 
332(c) (47 U.S.C. 332(c)) is amended by adding at the end the following 
new paragraph:
        ``(7) Preservation of local zoning authority.--
            ``(A) General authority.--Except as provided in this 
        paragraph, nothing in this Act shall limit or affect the 
        authority of a State or local government or instrumentality 
        thereof over decisions regarding the placement, construction, 
        and modification of personal wireless service facilities.
            ``(B) Limitations.--
                ``(i) The regulation of the placement, construction, 
            and modification of personal wireless service facilities by 
            any State or local government or instrumentality thereof--

                    ``(I) shall not unreasonably discriminate among 
                providers of functionally equivalent services; and
                    ``(II) shall not prohibit or have the effect of 
                prohibiting the provision of personal wireless 
                services.

                ``(ii) A State or local government or instrumentality 
            thereof shall act on any request for authorization to 
            place, construct, or modify personal wireless service 
            facilities within a reasonable period of time after the 
            request is duly filed with such government or 
            instrumentality, taking into account the nature and scope 
            of such request.
                ``(iii) Any decision by a State or local government or 
            instrumentality thereof to deny a request to place, 
            construct, or modify personal wireless service facilities 
            shall be in writing and supported by substantial evidence 
            contained in a written record.
                ``(iv) No State or local government or instrumentality 
            thereof may regulate the placement, construction, and 
            modification of personal wireless service facilities on the 
            basis of the environmental effects of radio frequency 
            emissions to the extent that such facilities comply with 
            the Commission's regulations concerning such emissions.
                ``(v) Any person adversely affected by any final action 
            or failure to act by a State or local government or any 
            instrumentality thereof that is inconsistent with this 
            subparagraph may, within 30 days after such action or 
            failure to act, commence an action in any court of 
            competent jurisdiction. The court shall hear and decide 
            such action on an expedited basis. Any person adversely 
            affected by an act or failure to act by a State or local 
            government or any instrumentality thereof that is 
            inconsistent with clause (iv) may petition the Commission 
            for relief.
            ``(C) Definitions.--For purposes of this paragraph--
                ``(i) the term `personal wireless services' means 
            commercial mobile services, unlicensed wireless services, 
            and common carrier wireless exchange access services;
                ``(ii) the term `personal wireless service facilities' 
            means facilities for the provision of personal wireless 
            services; and
                ``(iii) the term `unlicensed wireless service' means 
            the offering of telecommunications services using duly 
            authorized devices which do not require individual 
            licenses, but does not mean the provision of direct-to-home 
            satellite services (as defined in section 303(v)).''.
    (b) Radio Frequency Emissions.--Within 180 days after the enactment 
of this Act, the Commission shall complete action in ET Docket 93-62 to 
prescribe and make effective rules regarding the environmental effects 
of radio frequency emissions.
    (c) Availability of Property.--Within 180 days of the enactment of 
this Act, the President or his designee shall prescribe procedures by 
which Federal departments and agencies may make available on a fair, 
reasonable, and nondiscriminatory basis, property, rights-of-way, and 
easements under their control for the placement of new 
telecommunications services that are dependent, in whole or in part, 
upon the utilization of Federal spectrum rights for the transmission or 
reception of such services. These procedures may establish a 
presumption that requests for the use of property, rights-of-way, and 
easements by duly authorized providers should be granted absent 
unavoidable direct conflict with the department or agency's mission, or 
the current or planned use of the property, rights-of-way, and 
easements in question. Reasonable fees may be charged to providers of 
such telecommunications services for use of property, rights-of-way, 
and easements. The Commission shall provide technical support to States 
to encourage them to make property, rights-of-way, and easements under 
their jurisdiction available for such purposes.

SEC. 705. MOBILE SERVICES DIRECT ACCESS TO LONG DISTANCE CARRIERS.

    Section 332(c) (47 U.S.C. 332(c)) is amended by adding at the end 
the following new paragraph:
        ``(8) Mobile services access.--A person engaged in the 
    provision of commercial mobile services, insofar as such person is 
    so engaged, shall not be required to provide equal access to common 
    carriers for the provision of telephone toll services. If the 
    Commission determines that subscribers to such services are denied 
    access to the provider of telephone toll services of the 
    subscribers' choice, and that such denial is contrary to the public 
    interest, convenience, and necessity, then the Commission shall 
    prescribe regulations to afford subscribers unblocked access to the 
    provider of telephone toll services of the subscribers' choice 
    through the use of a carrier identification code assigned to such 
    provider or other mechanism. The requirements for unblocking shall 
    not apply to mobile satellite services unless the Commission finds 
    it to be in the public interest to apply such requirements to such 
    services.''.

SEC. 706. ADVANCED TELECOMMUNICATIONS INCENTIVES.

    (a) In General.--The Commission and each State commission with 
regulatory jurisdiction over telecommunications services shall 
encourage the deployment on a reasonable and timely basis of advanced 
telecommunications capability to all Americans (including, in 
particular, elementary and secondary schools and classrooms) by 
utilizing, in a manner consistent with the public interest, 
convenience, and necessity, price cap regulation, regulatory 
forbearance, measures that promote competition in the local 
telecommunications market, or other regulating methods that remove 
barriers to infrastructure investment.
    (b) Inquiry.--The Commission shall, within 30 months after the date 
of enactment of this Act, and regularly thereafter, initiate a notice 
of inquiry concerning the availability of advanced telecommunications 
capability to all Americans (including, in particular, elementary and 
secondary schools and classrooms) and shall complete the inquiry within 
180 days after its initiation. In the inquiry, the Commission shall 
determine whether advanced telecommunications capability is being 
deployed to all Americans in a reasonable and timely fashion. If the 
Commission's determination is negative, it shall take immediate action 
to accelerate deployment of such capability by removing barriers to 
infrastructure investment and by promoting competition in the 
telecommunications market.
    (c) Definitions.--For purposes of this subsection:
        (1) Advanced telecommunications capability.--The term 
    ``advanced telecommunications capability'' is defined, without 
    regard to any transmission media or technology, as high-speed, 
    switched, broadband telecommunications capability that enables 
    users to originate and receive high-quality voice, data, graphics, 
    and video telecommunications using any technology.
        (2) Elementary and secondary schools.--The term ``elementary 
    and secondary schools'' means elementary and secondary schools, as 
    defined in paragraphs (14) and (25), respectively, of section 14101 
    of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
    8801).

SEC. 707. TELECOMMUNICATIONS DEVELOPMENT FUND.

    (a) Deposit and Use of Auction Escrow Accounts.--Section 309(j)(8) 
(47 U.S.C. 309(j)(8)) is amended by adding at the end the following new 
subparagraph:
            ``(C) Deposit and use of auction escrow accounts.--Any 
        deposits the Commission may require for the qualification of 
        any person to bid in a system of competitive bidding pursuant 
        to this subsection shall be deposited in an interest bearing 
        account at a financial institution designated for purposes of 
        this subsection by the Commission (after consultation with the 
        Secretary of the Treasury). Within 45 days following the 
        conclusion of the competitive bidding--
                ``(i) the deposits of successful bidders shall be paid 
            to the Treasury;
                ``(ii) the deposits of unsuccessful bidders shall be 
            returned to such bidders; and
                ``(iii) the interest accrued to the account shall be 
            transferred to the Telecommunications Development Fund 
            established pursuant to section 714 of this Act.''.
    (b) Establishment and Operation of Fund.--Title VII is amended by 
inserting after section 713 (as added by section 305) the following new 
section:

``SEC. 714. TELECOMMUNICATIONS DEVELOPMENT FUND.

    ``(a) Purpose of Section.--It is the purpose of this section--
        ``(1) to promote access to capital for small businesses in 
    order to enhance competition in the telecommunications industry;
        ``(2) to stimulate new technology development, and promote 
    employment and training; and
        ``(3) to support universal service and promote delivery of 
    telecommunications services to underserved rural and urban areas.
    ``(b) Establishment of Fund.--There is hereby established a body 
corporate to be known as the Telecommunications Development Fund, which 
shall have succession until dissolved. The Fund shall maintain its 
principal office in the District of Columbia and shall be deemed, for 
purposes of venue and jurisdiction in civil actions, to be a resident 
and citizen thereof.
    ``(c) Board of Directors.--
        ``(1) Composition of board; chairman.--The Fund shall have a 
    Board of Directors which shall consist of 7 persons appointed by 
    the Chairman of the Commission. Four of such directors shall be 
    representative of the private sector and three of such directors 
    shall be representative of the Commission, the Small Business 
    Administration, and the Department of the Treasury, respectively. 
    The Chairman of the Commission shall appoint one of the 
    representatives of the private sector to serve as chairman of the 
    Fund within 30 days after the date of enactment of this section, in 
    order to facilitate rapid creation and implementation of the Fund. 
    The directors shall include members with experience in a number of 
    the following areas: finance, investment banking, government 
    banking, communications law and administrative practice, and public 
    policy.
        ``(2) Terms of appointed and elected members.--The directors 
    shall be eligible to serve for terms of 5 years, except of the 
    initial members, as designated at the time of their appointment--
            ``(A) 1 shall be eligible to service for a term of 1 year;
            ``(B) 1 shall be eligible to service for a term of 2 years;
            ``(C) 1 shall be eligible to service for a term of 3 years;
            ``(D) 2 shall be eligible to service for a term of 4 years; 
        and
            ``(E) 2 shall be eligible to service for a term of 5 years 
        (1 of whom shall be the Chairman).
    Directors may continue to serve until their successors have been 
    appointed and have qualified.
        ``(3) Meetings and functions of the board.--The Board of 
    Directors shall meet at the call of its Chairman, but at least 
    quarterly. The Board shall determine the general policies which 
    shall govern the operations of the Fund. The Chairman of the Board 
    shall, with the approval of the Board, select, appoint, and 
    compensate qualified persons to fill the offices as may be provided 
    for in the bylaws, with such functions, powers, and duties as may 
    be prescribed by the bylaws or by the Board of Directors, and such 
    persons shall be the officers of the Fund and shall discharge all 
    such functions, powers, and duties.
    ``(d) Accounts of the Fund.--The Fund shall maintain its accounts 
at a financial institution designated for purposes of this section by 
the Chairman of the Board (after consultation with the Commission and 
the Secretary of the Treasury). The accounts of the Fund shall consist 
of--
        ``(1) interest transferred pursuant to section 309(j)(8)(C) of 
    this Act;
        ``(2) such sums as may be appropriated to the Commission for 
    advances to the Fund;
        ``(3) any contributions or donations to the Fund that are 
    accepted by the Fund; and
        ``(4) any repayment of, or other payment made with respect to, 
    loans, equity, or other extensions of credit made from the Fund.
    ``(e) Use of the Fund.--All moneys deposited into the accounts of 
the Fund shall be used solely for--
        ``(1) the making of loans, investments, or other extensions of 
    credits to eligible small businesses in accordance with subsection 
    (f);
        ``(2) the provision of financial advice to eligible small 
    businesses;
        ``(3) expenses for the administration and management of the 
    Fund (including salaries, expenses, and the rental or purchase of 
    office space for the fund);
        ``(4) preparation of research, studies, or financial analyses; 
    and
        ``(5) other services consistent with the purposes of this 
    section.
    ``(f) Lending and Credit Operations.--Loans or other extensions of 
credit from the Fund shall be made available in accordance with the 
requirements of the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et 
seq.) and any other applicable law to an eligible small business on the 
basis of--
        ``(1) the analysis of the business plan of the eligible small 
    business;
        ``(2) the reasonable availability of collateral to secure the 
    loan or credit extension;
        ``(3) the extent to which the loan or credit extension promotes 
    the purposes of this section; and
        ``(4) other lending policies as defined by the Board.
    ``(g) Return of Advances.--Any advances appropriated pursuant to 
subsection (d)(2) shall be disbursed upon such terms and conditions 
(including conditions relating to the time or times of repayment) as 
are specified in any appropriations Act providing such advances.
    ``(h) General Corporate Powers.--The Fund shall have power--
        ``(1) to sue and be sued, complain and defend, in its corporate 
    name and through its own counsel;
        ``(2) to adopt, alter, and use the corporate seal, which shall 
    be judicially noticed;
        ``(3) to adopt, amend, and repeal by its Board of Directors, 
    bylaws, rules, and regulations as may be necessary for the conduct 
    of its business;
        ``(4) to conduct its business, carry on its operations, and 
    have officers and exercise the power granted by this section in any 
    State without regard to any qualification or similar statute in any 
    State;
        ``(5) to lease, purchase, or otherwise acquire, own, hold, 
    improve, use, or otherwise deal in and with any property, real, 
    personal, or mixed, or any interest therein, wherever situated, for 
    the purposes of the Fund;
        ``(6) to accept gifts or donations of services, or of property, 
    real, personal, or mixed, tangible or intangible, in aid of any of 
    the purposes of the Fund;
        ``(7) to sell, convey, mortgage, pledge, lease, exchange, and 
    otherwise dispose of its property and assets;
        ``(8) to appoint such officers, attorneys, employees, and 
    agents as may be required, to determine their qualifications, to 
    define their duties, to fix their salaries, require bonds for them, 
    and fix the penalty thereof; and
        ``(9) to enter into contracts, to execute instruments, to incur 
    liabilities, to make loans and equity investment, and to do all 
    things as are necessary or incidental to the proper management of 
    its affairs and the proper conduct of its business.
    ``(i) Accounting, Auditing, and Reporting.--The accounts of the 
Fund shall be audited annually. Such audits shall be conducted in 
accordance with generally accepted auditing standards by independent 
certified public accountants. A report of each such audit shall be 
furnished to the Secretary of the Treasury and the Commission. The 
representatives of the Secretary and the Commission shall have access 
to all books, accounts, financial records, reports, files, and all 
other papers, things, or property belonging to or in use by the Fund 
and necessary to facilitate the audit.
    ``(j) Report on Audits by Treasury.--A report of each such audit 
for a fiscal year shall be made by the Secretary of the Treasury to the 
President and to the Congress not later than 6 months following the 
close of such fiscal year. The report shall set forth the scope of the 
audit and shall include a statement of assets and liabilities, capital 
and surplus or deficit; a statement of surplus or deficit analysis; a 
statement of income and expense; a statement of sources and application 
of funds; and such comments and information as may be deemed necessary 
to keep the President and the Congress informed of the operations and 
financial condition of the Fund, together with such recommendations 
with respect thereto as the Secretary may deem advisable.
    ``(k) Definitions.--As used in this section:
        ``(1) Eligible small business.--The term `eligible small 
    business' means business enterprises engaged in the 
    telecommunications industry that have $50,000,000 or less in annual 
    revenues, on average over the past 3 years prior to submitting the 
    application under this section.
        ``(2) Fund.--The term `Fund' means the Telecommunications 
    Development Fund established pursuant to this section.
        ``(3) Telecommunications industry.--The term 
    `telecommunications industry' means communications businesses using 
    regulated or unregulated facilities or services and includes 
    broadcasting, telecommunications, cable, computer, data 
    transmission, software, programming, advanced messaging, and 
    electronics businesses.''.

SEC. 708. NATIONAL EDUCATION TECHNOLOGY FUNDING CORPORATION.

    (a) Findings; Purpose.--
        (1) Findings.--The Congress finds as follows:
            (A) Corporation.--There has been established in the 
        District of Columbia a private, nonprofit corporation known as 
        the National Education Technology Funding Corporation which is 
        not an agency or independent establishment of the Federal 
        Government.
            (B) Board of directors.--The Corporation is governed by a 
        Board of Directors, as prescribed in the Corporation's articles 
        of incorporation, consisting of 15 members, of which--
                (i) five members are representative of public agencies 
            representative of schools and public libraries;
                (ii) five members are representative of State 
            government, including persons knowledgeable about State 
            finance, technology and education; and
                (iii) five members are representative of the private 
            sector, with expertise in network technology, finance and 
            management.
            (C) Corporate purposes.--The purposes of the Corporation, 
        as set forth in its articles of incorporation, are--
                (i) to leverage resources and stimulate private 
            investment in education technology infrastructure;
                (ii) to designate State education technology agencies 
            to receive loans, grants or other forms of assistance from 
            the Corporation;
                (iii) to establish criteria for encouraging States to--

                    (I) create, maintain, utilize and upgrade 
                interactive high capacity networks capable of providing 
                audio, visual and data communications for elementary 
                schools, secondary schools and public libraries;
                    (II) distribute resources to assure equitable aid 
                to all elementary schools and secondary schools in the 
                State and achieve universal access to network 
                technology; and
                    (III) upgrade the delivery and development of 
                learning through innovative technology-based 
                instructional tools and applications;

                (iv) to provide loans, grants and other forms of 
            assistance to State education technology agencies, with due 
            regard for providing a fair balance among types of school 
            districts and public libraries assisted and the disparate 
            needs of such districts and libraries;
                (v) to leverage resources to provide maximum aid to 
            elementary schools, secondary schools and public libraries; 
            and
                (vi) to encourage the development of education 
            telecommunications and information technologies through 
            public-private ventures, by serving as a clearinghouse for 
            information on new education technologies, and by providing 
            technical assistance, including assistance to States, if 
            needed, to establish State education technology agencies.
        (2) Purpose.--The purpose of this section is to recognize the 
    Corporation as a nonprofit corporation operating under the laws of 
    the District of Columbia, and to provide authority for Federal 
    departments and agencies to provide assistance to the Corporation.
    (b) Definitions.--For the purpose of this section--
        (1) the term ``Corporation'' means the National Education 
    Technology Funding Corporation described in subsection (a)(1)(A);
        (2) the terms ``elementary school'' and ``secondary school'' 
    have the same meanings given such terms in section 14101 of the 
    Elementary and Secondary Education Act of 1965; and
        (3) the term ``public library'' has the same meaning given such 
    term in section 3 of the Library Services and Construction Act.
    (c) Assistance for Education Technology Purposes.--
        (1) Receipt by corporation.--Notwithstanding any other 
    provision of law, in order to carry out the corporate purposes 
    described in subsection (a)(1)(C), the Corporation shall be 
    eligible to receive discretionary grants, contracts, gifts, 
    contributions, or technical assistance from any Federal department 
    or agency, to the extent otherwise permitted by law.
        (2) Agreement.--In order to receive any assistance described in 
    paragraph (1) the Corporation shall enter into an agreement with 
    the Federal department or agency providing such assistance, under 
    which the Corporation agrees--
            (A) to use such assistance to provide funding and technical 
        assistance only for activities which the Board of Directors of 
        the Corporation determines are consistent with the corporate 
        purposes described in subsection (a)(1)(C);
            (B) to review the activities of State education technology 
        agencies and other entities receiving assistance from the 
        Corporation to assure that the corporate purposes described in 
        subsection (a)(1)(C) are carried out;
            (C) that no part of the assets of the Corporation shall 
        accrue to the benefit of any member of the Board of Directors 
        of the Corporation, any officer or employee of the Corporation, 
        or any other individual, except as salary or reasonable 
        compensation for services;
            (D) that the Board of Directors of the Corporation will 
        adopt policies and procedures to prevent conflicts of interest;
            (E) to maintain a Board of Directors of the Corporation 
        consistent with subsection (a)(1)(B);
            (F) that the Corporation, and any entity receiving the 
        assistance from the Corporation, are subject to the appropriate 
        oversight procedures of the Congress; and
            (G) to comply with--
                (i) the audit requirements described in subsection (d); 
            and
                (ii) the reporting and testimony requirements described 
            in subsection (e).
        (3) Construction.--Nothing in this section shall be construed 
    to establish the Corporation as an agency or independent 
    establishment of the Federal Government, or to establish the 
    members of the Board of Directors of the Corporation, or the 
    officers and employees of the Corporation, as officers or employees 
    of the Federal Government.
    (d) Audits.--
        (1) Audits by independent certified public accountants.--
            (A) In general.--The Corporation's financial statements 
        shall be audited annually in accordance with generally accepted 
        auditing standards by independent certified public accountants 
        who are certified by a regulatory authority of a State or other 
        political subdivision of the United States. The audits shall be 
        conducted at the place or places where the accounts of the 
        Corporation are normally kept. All books, accounts, financial 
        records, reports, files, and all other papers, things, or 
        property belonging to or in use by the Corporation and 
        necessary to facilitate the audit shall be made available to 
        the person or persons conducting the audits, and full 
        facilities for verifying transactions with the balances or 
        securities held by depositories, fiscal agents, and custodians 
        shall be afforded to such person or persons.
            (B) Reporting requirements.--The report of each annual 
        audit described in subparagraph (A) shall be included in the 
        annual report required by subsection (e)(1).
        (2) Recordkeeping requirements; audit and examination of 
    books.--
            (A) Recordkeeping requirements.--The Corporation shall 
        ensure that each recipient of assistance from the Corporation 
        keeps--
                (i) separate accounts with respect to such assistance;
                (ii) such records as may be reasonably necessary to 
            fully disclose--

                    (I) the amount and the disposition by such 
                recipient of the proceeds of such assistance;
                    (II) the total cost of the project or undertaking 
                in connection with which such assistance is given or 
                used; and
                    (III) the amount and nature of that portion of the 
                cost of the project or undertaking supplied by other 
                sources; and

                (iii) such other records as will facilitate an 
            effective audit.
            (B) Audit and examination of books.--The Corporation shall 
        ensure that the Corporation, or any of the Corporation's duly 
        authorized representatives, shall have access for the purpose 
        of audit and examination to any books, documents, papers, and 
        records of any recipient of assistance from the Corporation 
        that are pertinent to such assistance. Representatives of the 
        Comptroller General shall also have such access for such 
        purpose.
    (e) Annual Report; Testimony to the Congress.--
        (1) Annual report.--Not later than April 30 of each year, the 
    Corporation shall publish an annual report for the preceding fiscal 
    year and submit that report to the President and the Congress. The 
    report shall include a comprehensive and detailed evaluation of the 
    Corporation's operations, activities, financial condition, and 
    accomplishments under this section and may include such 
    recommendations as the Corporation deems appropriate.
        (2) Testimony before congress.--The members of the Board of 
    Directors, and officers, of the Corporation shall be available to 
    testify before appropriate committees of the Congress with respect 
    to the report described in paragraph (1), the report of any audit 
    made by the Comptroller General pursuant to this section, or any 
    other matter which any such committee may determine appropriate.

SEC. 709. REPORT ON THE USE OF ADVANCED TELECOMMUNICATIONS SERVICES FOR 
              MEDICAL PURPOSES.

    The Secretary of Commerce, in consultation with the Secretary of 
Health and Human Services and other appropriate departments and 
agencies, shall submit a report to the Committee on Commerce of the 
House of Representatives and the Committee on Commerce, Science, and 
Transportation of the Senate concerning the activities of the Joint 
Working Group on Telemedicine, together with any findings reached in 
the studies and demonstrations on telemedicine funded by the Public 
Health Service or other Federal agencies. The report shall examine 
questions related to patient safety, the efficacy and quality of the 
services provided, and other legal, medical, and economic issues 
related to the utilization of advanced telecommunications services for 
medical purposes. The report shall be submitted to the respective 
committees by January 31, 1997.

SEC. 710. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--In addition to any other sums authorized by law, 
there are authorized to be appropriated to the Federal Communications 
Commission such sums as may be necessary to carry out this Act and the 
amendments made by this Act.
    (b) Effect on Fees.--For the purposes of section 9(b)(2) (47 U.S.C. 
159(b)(2)), additional amounts appropriated pursuant to subsection (a) 
shall be construed to be changes in the amounts appropriated for the 
performance of activities described in section 9(a) of the 
Communications Act of 1934.
    (c) Funding Availability.--Section 309(j)(8)(B) (47 U.S.C. 
309(j)(8)(B)) is amended by adding at the end the following new 
sentence: ``Such offsetting collections are authorized to remain 
available until expended.''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
```