Calendar No. 45

104TH CONGRESS

1ST SESSION S. 652

[Report No. 104–23]

A BILL

To provide for a pro-competitive, de-regulatory naother purposes. communications markets to competition, and for and services to all Americans by opening all tele- telecommunications and information technologies rapidly private sector deployment of advanced tional policy framework designed to accelerate

MARCH 30 (legislative day, MARCH 27), 1995

Read twice and placed on the calendar
II

Calendar No. 45

104TH CONGRESS

1ST SESSION S. 652

[Report No. 104–23]

To provide for a pro-competitive, de-regulatory national policy framework

designed to accelerate rapidly private sector deployment of advanced

telecommunications and information technologies and services to all

Americans by opening all telecommunications markets to competition,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 30 (legislative day, MARCH 27), 1995

Mr. PRESSLER, from the Committee on Commerce, Science, and Transportation, reported the following original bill; which was read twice and

placed on the calendar

A BILL

To provide for a pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans by

opening all telecommunications markets to competition,

and for other purposes.

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

2 This Act may be cited as the ‘‘Telecommunications

3 Competition and Deregulation Act of 1995’’.

4 SEC. 2. TABLE OF CONTENTS.

5 The table of contents for this Act is as follows:

Page

Sec. 1. Short title ............................................................... 2

Sec. 2. Table of contents .................................................... 2

Sec. 3. Purpose ................................................................... 3

Sec. 4. Goals ....................................................................... 3

Sec. 5. Findings .................................................................. 4

Sec. 6. Amendment of Communications Act of 1934 ........ 8

Sec. 7. Effect on other laws ............................................... 8

Sec. 8. Definitions .............................................................. 9

TITLE I—TRANSITION TO COMPETITION

Sec. 101. Interconnection requirements ............................. 14

Sec. 102. Separate subsidiary and safeguard requirements 28

Sec. 103. Universal service ................................................. 36

Sec. 104. Essential telecommunications carriers ............... 43

Sec. 105. Foreign investment and ownership reform ......... 48

Sec. 106. Infrastructure sharing ........................................ 50

TITLE II—REMOVAL OF RESTRICTIONS TO COMPETITION

Subtitle A—Removal of Restrictions

Sec. 201. Removal of entry barriers ................................... 54

Sec. 202. Limitation on State and local taxation of directto-home satellite services ................................................ 57

Sec. 203. Elimination of cable and telephone company

cross-ownership restriction ............................................. 63

Sec. 204. Cable Act reform ................................................ 69

Sec. 205. Pole attachments ................................................ 71

Sec. 206. Entry by utility companies ................................. 73

Sec. 207. Broadcast reform ................................................ 76

Subtitle B—Termination of Modification of Final Judgment

Sec. 221. Removal of long distance restrictions ................. 82

Sec. 222. Removal of manufacturing restrictions .............. 99

Sec. 223. Existing activities ............................................... 105

Sec. 224. Enforcement ....................................................... 106

Sec. 225. Alarm monitoring services .................................. 108

TITLE III—AN END TO REGULATION

Sec. 301. Transition to competitive pricing ....................... 113

Sec. 302. Biennial review of regulations ............................ 117

Sec. 303. Regulatory forbearance ...................................... 118

Sec. 304. Advanced telecommunications incentives ........... 120
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Page

Sec. 305. Regulatory parity ................................................ 122

Sec. 306. Automated ship distress and safety systems ...... 123

Sec. 307. Telecommunications numbering administration 123

Sec. 308. Access by persons with disabilities ..................... 124

Sec. 309. Rural markets ..................................................... 129

Sec. 310. Telecommunications services for health care

providers for rural areas, educational providers, and libraries ............................................................................. 131

Sec. 311. Provision of payphone service and telemessaging

service ............................................................................. 135

TITLE IV—OBSCENE, HARASSING, AND WRONGFUL UTILIZATION

OF TELECOMMUNICATIONS FACILITIES

Sec. 401. Short title ........................................................... 137

Sec. 402. Obscene or harassing use of telecommunications

facilities under the Communications Act of 1934 .......... 137

Sec. 403. Obscene programming on cable television .......... 143

Sec. 404. Broadcasting obscene language on radio ........... 143

Sec. 405. Interception and disclosure of electronic communications ..................................................................... 144

Sec. 406. Additional prohibition on billing for toll-free

telephone calls ................................................................. 144

Sec. 407. Scrambling of cable channels for nonsubscribers 145

Sec. 408. Cable operator refusal to carry certain programs .............................................................................. 146

1 SEC. 3. PURPOSE.

2 It is the purpose of this Act to increase competition

3 in all telecommunications markets and provide for an or4 derly transition from regulated markets to competitive and

5 deregulated telecommunications markets consistent with

6 the public interest, convenience, and necessity.

7 SEC. 4. GOALS.

8 This Act is intended to establish a national policy

9 framework designed to accelerate rapidly the private sec10 tor deployment of advanced telecommunications and infor11 mation technologies and services to all Americans by open12 ing all telecommunications markets to competition, and to

13 meet the following goals:
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1 (1) To promote and encourage advanced tele2 communications networks, capable of enabling users

3 to originate and receive affordable, high-quality

4 voice, data, image, graphic, and video telecommuni5 cations services.

6 (2) To improve international competitiveness

7 markedly.

8 (3) To spur economic growth, create jobs, and

9 increase productivity.

10 (4) To deliver a better quality of life through

11 the preservation and advancement of universal serv12 ice to allow the more efficient delivery of edu13 cational, health care, and other social services.

14 SEC. 5. FINDINGS.

15 The Congress makes the following findings:

16 (1) Competition, not regulation, is the best way

17 to spur innovation and the development of new serv18 ices. A competitive market place is the most efficient

19 way to lower prices and increase value for consum20 ers. In furthering the principle of open and full com21 petition in all telecommunications markets, however,

22 it must be recognized that some markets are more

23 open than others.

24 (2) Local telephone service is predominantly a

25 monopoly service. Although business customers in
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1 metropolitan areas may have alternative providers

2 for exchange access service, consumers do not have

3 a choice of local telephone service. Some States have

4 begun to open local telephone markets to competi5 tion. A national policy framework is needed to accel6 erate the process.

7 (3) Because of their monopoly status, local tele8 phone companies and the Bell operating companies

9 have been prevented from competing in certain mar10 kets. It is time to eliminate these restrictions. None11 theless, transition rules designed to open monopoly

12 markets to competition must be in place before cer13 tain restrictions are lifted.

14 (4) Transition rules must be truly transitional,

15 not protectionism for certain industry segments or

16 artificial impediments to increased competition in all

17 markets. Where possible, transition rules should cre18 ate investment incentives through increased competi19 tion. Regulatory safeguards should be adopted only

20 where competitive conditions would not prevent anti21 competitive behavior.

22 (5) More competitive American telecommuni23 cations markets will promote United States techno24 logical advances, domestic job and investment oppor25 tunities, national competitiveness, sustained eco-
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1 nomic development, and improved quality of Amer2 ican life more effectively than regulation.

3 (6) Congress should establish clear statutory

4 guidelines, standards, and time frames to facilitate

5 more effective communications competition and, by

6 so doing, will reduce business and customer uncer7 tainty, lessen regulatory processes, court appeals,

8 and litigation, and thus encourage the business com9 munity to focus more on competing in the domestic

10 and international communications marketplace.

11 (7) Where competitive markets are demon12 strably inadequate to safeguard important public

13 policy goals, such as the continued universal avail14 ability of telecommunications services at reasonable

15 and affordable prices, particularly in rural America,

16 Congress should establish workable regulatory proce17 dures to advance those goals, provided that in any

18 proceeding undertaken to ensure universal availabil19 ity, regulators shall seek to choose the most procom20 petitive and least burdensome alternative.

21 (8) Competitive communications markets, safe22 guarded by effective Federal and State antitrust en23 forcement, and strong economic growth in the Unit24 ed States which such markets will foster are the

25 most effective means of assuring that all segments
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1 of the American public command access to advanced

2 telecommunications technologies.

3 (9) Achieving full and fair competition requires

4 strict parity of marketplace opportunities and re5 sponsibilities on the part of incumbent telecommuni6 cations service providers as well as new entrants into

7 the telecommunications marketplace, provided that

8 any responsibilities placed on providers should be the

9 minimum required to advance a clearly defined pub10 lic policy goal.

11 (10) Congress should not cede its constitutional

12 responsibility regarding interstate and foreign com13 merce in communications to the Judiciary through

14 the establishment of procedures which will encourage

15 or necessitate judicial interpretation or intervention

16 into the communications marketplace.

17 (11) Ensuring that all Americans, regardless of

18 where they may work, live, or visit, ultimately have

19 comparable access to the full benefits of competitive

20 communications markets requires Federal and State

21 authorities to work together affirmatively to mini22 mize and remove unnecessary institutional and regu23 latory barriers to new entry and competition.

24 (12) Effectively competitive communications

25 markets will ensure customers the widest possible
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1 choice of services and equipment, tailored to individ2 ual desires and needs, and at prices they are willing

3 to pay.

4 (13) Investment in and deployment of existing

5 and future advanced, multipurpose technologies will

6 best be fostered by minimizing government limita7 tions on the commercial use of those technologies.

8 (14) The efficient development of competitive

9 United States communications markets will be

10 furthered by policies which aim at ensuring recip11 rocal opening of international investment opportuni12 ties.

13 SEC. 6. AMENDMENT OF COMMUNICATIONS ACT OF 1934.

14 Except as otherwise expressly provided, whenever in

15 this Act an amendment or repeal is expressed in terms

16 of an amendment to, or repeal of, a section or other provi17 sion, the reference shall be considered to be made to a

18 section or other provision of the Communications Act of

19 1934 (47 U.S.C. 151 et seq.).

20 SEC. 7. EFFECT ON OTHER LAW.

21 (a) ANTITRUST LAWS.—Except as provided in sub22 sections (b) and (c), nothing in this Act shall be construed

23 to modify, impair, or supersede the applicability of any

24 antitrust law.
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1 (b) MODIFICATION OF FINAL JUDGMENT.—This Act

2 shall supersede the Modification of Final Judgment to the

3 extent that it is inconsistent with this Act.

4 (c) TRANSFER OF MFJ AND GTE CONSENT DE5 CREES.—After the date of enactment of this Act, the Com6 mission shall administer the GTE Consent Decree and any

7 provision of the Modification of Final Judgment not over8 ridden or superseded by this Act. The District Court for

9 the District of Columbia shall have no further jurisdiction

10 over any provision of the Modification of Final Judgment,

11 or the GTE Consent Decree, administered by the Commis12 sion under this Act.

13 SEC. 8. DEFINITIONS.

14 (a) TERMS USED IN THIS ACT.—As used in this

15 Act—

16 (1) COMMISSION.—The term ‘Commission’

17 means the Federal Communications Commission.

18 (2) MODIFICATION OF FINAL JUDGMENT.—The

19 term ‘Modification of Final Judgment’ means the

20 decree entered on August 24, 1982, in United States

21 v. Western Electric Civil Action No. 82-0192 (Unit22 ed States District Court, District of Columbia), and

23 includes any judgment or order with respect to such

24 action entered on or after August 24, 1982, and be25 fore the date of enactment of this Act.
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1 (3) GTE CONSENT DECREE.—The term ‘‘GTE

2 Consent Decree’’ means the order entered on De3 cember 21, 1984, as restated January 11, 1985, in

4 United States v. GTE Corporation, Civil Action No.

5 83-1298 (United States District Court, District of

6 Columbia), and includes any judgment or order with

7 respect to such action entered on or after January

8 11, 1985, and before the date of enactment of this

9 Act.

10 (4) INTEGRATED TELECOMMUNICATIONS SERV11 ICE PROVIDER.—The term ‘‘integrated telecommuni12 cations service provider’’ means any person engaged

13 in the provision of multiple services, such as voice,

14 data, image, graphics, and video services, which

15 make common use of all or part of the same trans16 mission facilities, switches, signalling, or control de17 vices.

18 (b) TERMS USED IN THE COMMUNICATIONS ACT OF

19 1934.—Section 3 (47 U.S.C. 153) is amended by adding

20 at the end thereof the following:

21 ‘‘(gg) ‘Modification of Final Judgment’ means the de22 cree entered on August 24, 1982, in United States v.

23 Western Electric Civil Action No. 82-0192 (United States

24 District Court, District of Columbia), and includes any

25 judgment or order with respect to such action entered on
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1 or after August 24, 1982, and before the date of enact2 ment of the Telecommunications Competition and Deregu3 lation Act of 1995.

4 ‘‘(hh) ‘Bell operating company’ means those compa5 nies listed in appendix A of the Modification of Final

6 Judgment, and includes any successor or assign of any

7 such company, but does not include any affiliate of such

8 company.

9 ‘‘(ii) ‘Affiliate’ means a person that (directly or indi10 rectly) owns or controls, is owned or controlled by, or is

11 under common ownership or control with, another person.

12 For purposes of this paragraph, the term ‘own’ means to

13 own an equity interest (or the equivalent thereof) of more

14 than 10 percent.

15 ‘‘(jj) ‘Telecommunications Act of 1995’ means the

16 Telecommunications Competition and Deregulation Act of

17 1995.

18 ‘‘(kk) ‘Local exchange carrier’ means a provider of

19 telephone exchange service or exchange access service.

20 ‘‘(ll) ‘Telecommunications’ means the transmission,

21 between or among points specified by the user, of informa22 tion of the user’s choosing, including voice, data, image,

23 graphics, and video, without change in the form or content

24 of the information, as sent and received, with or without

25 benefit of any closed transmission medium.
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1 ‘‘(mm) ‘Telecommunications service’ means the offer2 ing of telecommunications for a fee directly to the public,

3 or to such classes of users as to be effectively available

4 to the public, regardless of the facilities used to transmit

5 the telecommunications service. The term includes the

6 transmission, without change in the form or content, of

7 information services and cable services, but does not in8 clude the offering of those services.

9 ‘‘(nn) ‘Telecommunications carrier’ means any pro10 vider of telecommunications services, except that such

11 term does not include hotels, motels, hospitals, and other

12 aggregators of telecommunications services (as defined in

13 section 226). A telecommunications carrier shall be treat14 ed as a common carrier under this Act to the extent that

15 it is engaged in providing telecommunications services.

16 ‘‘(oo) ‘Telecommunications number portability’

17 means the ability of users of telecommunications services

18 to retain, at the same location, existing telecommuni19 cations numbers without impairment of quality, reliability,

20 or convenience when switching from one telecommuni21 cations carrier to another.

22 ‘‘(pp) ‘Information service’ means the offering of

23 services that—

24 ‘‘(1) employ computer processing applications

25 that act on the format, content, code, protocol, or
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1 similar aspects of the subscriber’s transmitted infor2 mation;

3 ‘‘(2) provide the subscriber additional, different,

4 or restructured information; or

5 ‘‘(3) involve subscriber interaction with stored

6 information.

7 ‘‘(qq) ‘Cable service’ means cable service as defined

8 in section 602.

9 ‘‘(rr) ‘Rural telephone company’ means a tele10 communications carrier operating entity to the extent that

11 such entity provides telephone exchange service, including

12 access service subject to part 69 of the Commission’s rules

13 (47 C.F.R. 69.1 et seq.), to—

14 ‘‘(1) any service area that does not include ei15 ther—

16 ‘‘(A) any incorporated place of 10,000 in17 habitants or more, or any part thereof, based

18 on the most recent population statistics of the

19 Bureau of the Census; or

20 ‘‘(B) any territory, incorporated or unin21 corporated, included in an urbanized area, as

22 defined by the Bureau of the Census as of Jan23 uary 1, 1995; or

24 ‘‘(2) fewer than 100,000 access lines within a

25 State.
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1 ‘‘(ss) ‘Service area’ means a geographic area estab2 lished by the Commission and the States for the purpose

3 of determining universal service obligations and support

4 mechanisms. In the case of an area served by a rural tele5 phone company, ‘service area’ means such company’s

6 ‘study area’ unless and until the Commission and the

7 States, after taking into account recommendations of a

8 Federal-State Joint Board instituted under section

9 410(c), establish a different definition of service area for

10 such company.’’.

11 TITLE I—TRANSITION TO COMPETITION

12 SEC. 101. INTERCONNECTION REQUIREMENTS.

13 (a) REQUIRED INTERCONNECTION.—Title II (47

14 U.S.C. 201 et seq.) is amended by inserting after section

15 228 the following:

16 ‘‘Part II—Competition in Telecommunications

17 ‘‘SEC. 251. INTERCONNECTION.

18 ‘‘(a) DUTY TO PROVIDE INTERCONNECTION.—

19 ‘‘(1) IN GENERAL.—A local exchange carrier, or

20 class of local exchange carriers, determined by the

21 Commission to have market power in providing tele22 phone exchange service or exchange access service

23 has a duty under this Act, upon request—

24 ‘‘(A) to enter into good faith negotiations

25 with any telecommunications carrier requesting
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1 interconnection between the facilities and equip2 ment of the requesting telecommunications car3 rier and the carrier, or class of carriers, of

4 which the request was made for the purpose of

5 permitting the telecommunications carrier to

6 provide telephone exchange or exchange access

7 service; and

8 ‘‘(B) to provide such interconnection, at

9 rates that are reasonable and nondiscrim10 inatory, according to the terms of the agree11 ment and in accordance with the requirements

12 of this section.

13 ‘‘(2) INITIATION.—A local exchange carrier, or

14 class of carriers, described in paragraph (1) shall

15 commence good faith negotiations to conclude an

16 agreement, whether through negotiation under sub17 section (c) or arbitration or intervention under sub18 section (d), within 15 days after receiving a request

19 from any telecommunications carrier seeking to pro20 vide telephone exchange or exchange access service.

21 Nothing in this Act shall prohibit multilateral nego22 tiations between or among a local exchange carrier

23 or class of carriers and a telecommunications carrier

24 or class of carriers seeking interconnection under

25 subsection (c) or subsection (d). At the request of
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1 any of the parties to a negotiation, a State may par2 ticipate in the negotiation of any portion of an

3 agreement under subsection (c).

4 ‘‘(3) MARKET POWER.—For the purpose of de5 termining whether a carrier has market power under

6 paragraph (1), the relevant market shall include all

7 providers of telephone exchange or exchange access

8 services in a local area, regardless of the technology

9 used by any such provider.

10 ‘‘(b) MINIMUM STANDARDS.—An interconnection

11 agreement entered into under this section shall, if re12 quested by a telecommunications carrier requesting inter13 connection, provide for—

14 ‘‘(1) nondiscriminatory access on an unbundled

15 basis to the network functions and services of the

16 local exchange carrier’s telecommunications network

17 (including switching software);

18 ‘‘(2) nondiscriminatory access on an unbundled

19 basis to any of the local exchange carrier’s tele20 communications facilities and information, including

21 databases and signaling, necessary to the trans22 mission and routing of any telephone exchange serv23 ice or exchange access service and the interoper24 ability of both carriers’ networks;
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1 ‘‘(3) interconnection to the local exchange car2 rier’s telecommunications facilities and services at

3 any technically feasible point within the carrier’s

4 network;

5 ‘‘(4) interconnection that is at least equal in

6 type, quality, and price (on a per unit basis or other7 wise) to that provided by the local exchange carrier

8 to itself or to any subsidiary, affiliate, or any other

9 party to which the carrier provides interconnection;

10 ‘‘(5) nondiscriminatory access to the poles,

11 ducts, conduits, and rights-of-way owned or con12 trolled by the local exchange carrier;

13 ‘‘(6) the local exchange carrier to take whatever

14 action under its control is necessary, as soon as is

15 technically feasible, to provide telecommunications

16 number portability and local dialing parity in a man17 ner that—

18 ‘‘(A) permits consumers to be able to dial

19 the same number of digits when using any tele20 communications carrier providing telephone ex21 change service or exchange access service in the

22 market served by the local exchange carrier;

23 ‘‘(B) permits all such carriers to have non24 discriminatory access to telephone numbers, op25 erator services, directory assistance, and direc-
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1 tory listing with no unreasonable dialing delays;

2 and

3 ‘‘(C) provides for a reasonable allocation of

4 costs among the parties to the agreement;

5 ‘‘(7) telecommunications services and network

6 functions of the local exchange carrier to be avail7 able to the telecommunications carrier on an

8 unbundled basis without any unreasonable condi9 tions on the resale or sharing of those services or

10 functions, including the origination, transport, and

11 termination of such telecommunications services,

12 other than reasonable conditions required by a

13 State; and for purposes of this paragraph, it is not

14 an unreasonable condition for a State to limit the re15 sale—

16 ‘‘(A) of services included in the definition

17 of universal service to a telecommunications

18 carrier who resells that service to a category of

19 customers different from the category of cus20 tomers being offered that universal service by

21 such carrier if the State orders a carrier to pro22 vide the same service to different categories of

23 customers at different prices necessary to pro24 mote universal service; or
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1 ‘‘(B) of subsidized universal service in a

2 manner that allows companies to charge an3 other carrier rates which reflect the actual cost

4 of such services, exclusive of any universal serv5 ice support received for providing such services;

6 ‘‘(8) reciprocal compensation arrangements for

7 the origination and termination of telecommuni8 cations;

9 ‘‘(9) reasonable public notice of changes in the

10 information necessary for the transmission and rout11 ing of services using that local exchange carrier’s fa12 cilities or networks, as well as of any other changes

13 that would affect the interoperability of those facili14 ties and networks; and

15 ‘‘(10) a schedule of itemized charges and condi16 tions for each service, facility, or function provided

17 under the agreement.

18 ‘‘(c) AGREEMENTS ARRIVED AT THROUGH NEGOTIA19 TION.—Upon receiving a request for interconnection, a

20 local exchange carrier may meet its interconnection obliga21 tions under this section by negotiating and entering into

22 a binding agreement with the telecommunications carrier

23 seeking interconnection without regard to the standards

24 set forth in subsection (b). The agreement shall include

25 a schedule of itemized charges for each service, facility,
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1 or function included in the agreement. The agreement, in2 cluding any interconnection agreement negotiated before

3 the date of enactment of the Telecommunications Act of

4 1995, shall be submitted to the State under subsection

5 (e).

6 ‘‘(d) AGREEMENTS ARRIVED AT THROUGH ARBITRA7 TION OR INTERVENTION.—

8 ‘‘(1) IN GENERAL.—Any party negotiating an

9 interconnection agreement under this section may,

10 at any point in the negotiation, ask a State to par11 ticipate in the negotiation and to arbitrate any dif12 ferences arising in the course of the negotiation. The

13 refusal of any other party to the negotiation to par14 ticipate further in the negotiations, to cooperate with

15 the State in carrying out its function as a arbitrator,

16 or to continue to negotiate in good faith in the pres17 ence, or with the assistance, of the State shall be

18 considered a failure to negotiate in good faith.

19 ‘‘(2) INTERVENTION.—If any issues remain

20 open in a negotiation commenced under this section

21 more than 135 days after the date upon which the

22 local exchange carrier received the request for such

23 negotiation, then the carrier or any other party to

24 the negotiation may petition a State to intervene in

25 the negotiations for purposes of resolving any such
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1 remaining open issues. Any such request must be

2 made during the 25-day period that begins 135 days

3 after the carrier receives the request for such nego4 tiation and ends 160 days after that date.

5 ‘‘(3) DUTY OF PETITIONER.—

6 ‘‘(A) A party that petitions a State under

7 paragraph (2) shall, within 15 days after the

8 State receives the petition, provide the State all

9 relevant documentation concerning the negotia10 tions necessary to understand—

11 ‘‘(i) the unresolved issues;

12 ‘‘(ii) the position of each of the par13 ties with respect to those issues; and

14 ‘‘(iii) any other issue discussed and

15 resolved by the parties.

16 ‘‘(B) A party petitioning a State under

17 paragraph (2) shall notify the other party of its

18 petition not later than the day on which the

19 State receives the petition.

20 ‘‘(4) OPPORTUNITY TO RESPOND.—A party to a

21 negotiation under this section with respect to which

22 the other party has petitioned a State under para23 graph (2) may respond to the other party’s petition

24 and provide such additional information as it wishes

25 within 25 days after the State receives the petition.
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1 ‘‘(5) ACTION BY STATE.—

2 ‘‘(A) A State proceeding to consider a peti3 tion under this subsection shall be conducted in

4 accordance with the rules promulgated by the

5 Commission under subsection (i). The State

6 shall limit its consideration of any petition

7 under paragraph (2) (and any response thereto)

8 to the issues set forth in the petition and in the

9 response, if any, filed under paragraph (4).

10 ‘‘(B) The State may require the petitioning

11 party and the responding party to provide such

12 information as may be necessary for the State

13 to reach a decision on the unresolved issues. If

14 either party refuses or fails unreasonably to re15 spond on a timely basis to any reasonable re16 quest from the State, then the State may pro17 ceed on the basis of the best information avail18 able to it from whatever source derived.

19 ‘‘(C) The State shall resolve each issue set

20 forth in the petition and the response, if any,

21 by imposing appropriate conditions upon the

22 parties to the agreement, and shall conduct the

23 review of the agreement (including the issues

24 resolved by the State) not later than 10 months

25 after the date on which the local exchange car-
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1 rier received the request for interconnection

2 under this section.

3 ‘‘(D) In resolving any open issues and im4 posing conditions upon the parties to the agree5 ment, a State shall ensure that the require6 ments of this section are met by the solution

7 imposed by the State and are consistent with

8 the Commission’s rules defining minimum

9 standards.

10 ‘‘(6) CHARGES.—If the amount charged by a

11 local exchange carrier, or class of local exchange car12 riers, for an unbundled element of the interconnec13 tion provided under subsection (b) is determined by

14 arbitration or intervention under this subsection,

15 then the charge—

16 ‘‘(A) shall be

17 ‘‘(i) based on the cost (determined

18 without reference to a rate-of-return or

19 other rate-based proceeding) of providing

20 the unbundled element,

21 ‘‘(ii) nondiscriminatory, and

22 ‘‘(iii) individually priced to the small23 est element that is technically and eco24 nomically reasonable to provide; and

25 ‘‘(B) may include a reasonable profit.
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1 ‘‘(e) APPROVAL BY STATE.—Any interconnection

2 agreement under this section shall be submitted for ap3 proval to the State. A State to which an agreement is sub4 mitted shall approve or reject the agreement, with written

5 findings as to any deficiencies. The State may only re6 ject—

7 ‘‘(1) an agreement under subsection (c) if it

8 finds that the agreement discriminates against a

9 telecommunications carrier not a party to the agree10 ment; and

11 ‘‘(2) an agreement under subsection (d) if it

12 finds that—

13 ‘‘(B) the agreement does not meet the

14 standards set forth in subsection (b), or

15 ‘‘(B) the implementation of the agreement

16 is not in the public interest.

17 If the State does not act to approve or reject the agree18 ment within 90 days after receiving the agreement, or 30

19 days in the case of an agreement negotiated under sub20 section (c), the agreement shall be deemed approved. No

21 State court shall have jurisdiction to review the action of

22 a State in approving or rejecting an agreement under this

23 section.

24 ‘‘(f) FILING REQUIRED.—A State shall make a copy

25 of each agreement approved under subsection (e) available
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1 for public inspection and copying within 10 days after the

2 agreement is approved. The State may charge a reason3 able and nondiscriminatory fee to the parties to the agree4 ment to cover the costs of approving and filing such agree5 ment.

6 ‘‘(g) AVAILABILITY TO OTHER TELECOMMUNI7 CATIONS CARRIERS.—A local exchange carrier shall make

8 available any service, facility, or function provided under

9 an interconnection agreement to which it is a party to any

10 other telecommunications carrier that requests such inter11 connection upon the same terms and conditions as those

12 provided in the agreement.

13 ‘‘(h) COLLOCATION.—A State may require tele14 communications carriers to provide for actual collocation

15 of equipment necessary for interconnection at the premises

16 of the carrier at reasonable charges, if the State finds ac17 tual collocation to be in the public interest.

18 ‘‘(i) IMPLEMENTATION.—

19 ‘‘(1) RULES AND STANDARDS.—The Commis20 sion shall promulgate rules to implement the re21 quirements of this section within 6 months after the

22 date of enactment of the Telecommunications Act of

23 1995. In establishing the standards for determining

24 what facilities and information are necessary for
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1 purposes of subsection (b)(2), the Commission shall

2 consider, at a minimum, whether—

3 ‘‘(A) access to such facilities and informa4 tion that are proprietary in nature is necessary;

5 and

6 ‘‘(B) the failure to provide access to such

7 facilities and information would impair the abil8 ity of the telecommunications carrier seeking

9 interconnection to provide the services that it

10 seeks to offer.

11 ‘‘(2) COMMISSION TO ACT IF STATE WILL NOT

12 ACT.—If a State, through action or inaction, fails to

13 carry out its responsibility under this section in ac14 cordance with the rules prescribed by the Commis15 sion under paragraph (1) in any proceeding or other

16 matter under this section, then the Commission shall

17 issue an order preempting the State’s jurisdiction of

18 that proceeding or matter within 90 days after being

19 notified (or taking notice) of such failure, and shall

20 assume the responsibility of the State under this sec21 tion with respect to the proceeding or matter and

22 act for the State.

23 ‘‘(3) WAIVERS AND MODIFICATIONS FOR RURAL

24 CARRIERS.—The Commission or a State shall, upon

25 petition or on its own initiative, waive or modify the
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1 requirements of subsection (b) for a rural telephone

2 company or companies, and may waive or modify the

3 requirements of subsection (b) for local exchange

4 carriers with fewer than 2 percent of the Nation’s

5 subscriber lines installed in the aggregate nation6 wide, to the extent that the Commission or a State

7 determines that such requirements would result in

8 unfair competition, impose a significant adverse eco9 nomic impact on users of telecommunications serv10 ices, be technically infeasible, or otherwise not be in

11 the public interest. The Commission or a State shall

12 act upon any petition filed under this paragraph

13 within 180 days of receiving such petition. Pending

14 such action, the Commission or a State may suspend

15 enforcement of the requirement or requirements to

16 which the petition applies with respect to the peti17 tioning carrier or carriers.

18 ‘‘(j) STATE REQUIREMENTS.—Nothing in this section

19 precludes a State from imposing requirements on a tele20 communications carrier for intrastate services that are

21 necessary to further competition in the provision of tele22 phone exchange service or exchange access service, as long

23 as the State’s requirements are not inconsistent with the

24 Commission’s regulations to implement this section.
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1 ‘‘(k) ACCESS CHARGE RULES.—Nothing in this sec2 tion shall affect the Commission’s interexchange-to-local

3 exchange access charge rules for local exchange carriers

4 or interexchange carriers in effect on the date of enact5 ment of the Telecommunications Act of 1995.’’.

6 (c) TECHNICAL AMENDMENTS.—

7 (1) Title II (47 U.S.C. 201 et seq.) is amended

8 by inserting before section 201 the following:

9 ‘‘PART I—GENERAL PROVISIONS’’.

10 (2) Section 2(b) (47 U.S.C. 152(b)) is amended

11 by striking ‘‘sections 223 through 227, inclusive,

12 and section 332,’’ and inserting ‘‘section 214(d),

13 sections 223 through 227, part II of title II, and

14 section 332,’’.

15 SEC. 102. SEPARATE SUBSIDIARY AND SAFEGUARD RE16 QUIREMENTS.

17 (a) IN GENERAL.—Part II of title II (47 U.S.C. 251

18 et seq.), as added by section 101 of this Act, is amended

19 by inserting after section 251 the following new section:

20 ‘‘SEC. 252. SEPARATE SUBSIDIARY; SAFEGUARDS.

21 ‘‘(a) SEPARATE SUBSIDIARY REQUIRED FOR COM22 PETITIVE ACTIVITIES.—

23 ‘‘(1) IN GENERAL.—A Bell operating company

24 (including its subsidiaries and affiliates) which pro25 vides telephone exchange service may not provide
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1 any service described in paragraph (2) unless it pro2 vides that service through a subsidiary that—

3 ‘‘(A) is separate from any operating com4 pany entity that provides telephone exchange

5 service; and

6 ‘‘(B) meets the requirements of subsection

7 (b).

8 ‘‘(2) SERVICES FOR WHICH A SEPARATE SUB9 SIDIARY IS REQUIRED.—The services for which a

10 separate subsidiary is required by paragraph (1) are:

11 ‘‘(A) Information services, including cable

12 services and alarm monitoring services, other

13 than any information service a Bell operating

14 company was authorized to provide before July

15 24, 1991.

16 ‘‘(B) Manufacturing services.

17 ‘‘(C) InterLATA services other than—

18 ‘‘(i) incidental services, not including

19 information services;

20 ‘‘(ii) out-of-region services; or

21 ‘‘(iii) services authorized under an

22 order entered by the United States District

23 Court for the District of Columbia pursu24 ant to the Modification of Final Judgment
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1 before the date of enactment of the Tele2 communications Act of 1995.

3 ‘‘(b) STRUCTURAL AND TRANSACTIONAL REQUIRE4 MENTS.—The separate subsidiary required by this sec5 tion—

6 ‘‘(1) shall maintain books, records, and ac7 counts in the manner prescribed by the Commission

8 which shall be separate from the books, records, and

9 accounts maintained by the Bell operating company

10 of which it is a subsidiary and any other subsidiary

11 or affiliate of such company;

12 ‘‘(2) shall have separate officers, directors, and

13 employees from the Bell operating company of which

14 it is a subsidiary or any other subsidiary or affiliate

15 of such company;

16 ‘‘(3) may not obtain credit under any arrange17 ment that would permit a creditor, upon default, to

18 have recourse to the assets of the Bell operating

19 company entity that provides telephone exchange

20 service; and

21 ‘‘(4) shall conduct all transactions with the Bell

22 operating company of which it is a subsidiary and

23 any other subsidiary or affiliate of such company on

24 an arm’s length basis with any such transactions re25 duced to writing and available for public inspection.
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1 ‘‘(c) NONDISCRIMINATION SAFEGUARDS.—In its deal2 ings with its subsidiary described in subsection (a) a Bell

3 operating company, and any other subsidiary or affiliate

4 of such company—

5 ‘‘(1) may not discriminate between that com6 pany, its subsidiaries or affiliates, and any other en7 tity in the provision or procurement of goods, serv8 ices, facilities, and information, or in the establish9 ment of standards;

10 ‘‘(2) may not provide any goods, services, facili11 ties, or information to such company, its subsidiaries

12 or affiliates, unless the goods, services, facilities, or

13 information are made available to other persons on

14 reasonable and nondiscriminatory terms and condi15 tions; and

16 ‘‘(3) shall account for all transactions with a

17 subsidiary described in subsection (a) in accordance

18 with generally accepted accounting principles.

19 ‘‘(d) JOINT MARKETING.—

20 ‘‘(1) A Bell operating company subsidiary re21 quired by this section may not market or sell tele22 phone exchange services provided by the Bell operat23 ing company unless that company permits other en24 tities offering the same or similar service to market

25 and sell its telephone exchange services.
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1 ‘‘(2) A Bell operating company may not market

2 or sell any service provided by a subsidiary required

3 by this section until that company has been author4 ized to provide interLATA services under section

5 255.

6 ‘‘(3) The joint marketing and sale of services

7 permitted under this subsection shall not be consid8 ered to violate the nondiscrimination provisions of

9 subsection (c).

10 ‘‘(e) ADDITIONAL REQUIREMENTS FOR PROVISION

11 OF INTERLATA SERVICES.—A Bell operating company—

12 ‘‘(1) shall fulfill any requests from an unaffili13 ated entity for exchange access service within a pe14 riod no longer than that in which it provides such

15 exchange access service to itself or to its affiliates;

16 ‘‘(2) shall fulfill any such requests with ex17 change access service of a quality that meets or ex18 ceeds the quality of exchange access service provided

19 by the Bell operating company or its affiliates to it20 self or its affiliate;

21 ‘‘(3) shall provide exchange access service to all

22 carriers at rates that are just, reasonable, not unrea23 sonably discriminatory, and based on costs;

24 ‘‘(4) shall not provide any facilities, services, or

25 information concerning its provision of exchange ac-
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1 cess service to the subsidiary described in subsection

2 (a) unless such facilities, services, or information are

3 made available to other providers of interLATA

4 services in that market on the same terms and con5 ditions; and

6 ‘‘(5) shall charge the subsidiary described in

7 subsection (a), and impute to itself or any

8 intraLATA interexchange affiliate, the same rates

9 for access to its telephone exchange service and ex10 change access service that it charges unaffiliated

11 interexchange carriers for such service.

12 ‘‘(f) PROPRIETARY INFORMATION.—

13 ‘‘(1) IN GENERAL.—In complying with the re14 quirements of this section, each Bell operating com15 pany and any subsidiary or affiliate of such company

16 has a duty to protect the confidentiality of propriety

17 information relating to other common carriers, to

18 equipment manufacturers, and to customers. A Bell

19 operating company may not share customer propri20 etary information in aggregate form with its subsidi21 aries and affiliates unless such aggregate informa22 tion is available to other carriers or persons under

23 the same terms and conditions. Individually identifi24 able customer proprietary information and other

25 proprietary information may be—
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1 ‘‘(A) shared only with the consent of the

2 person to which such information relates or

3 from which it was obtained (including other

4 carriers); or

5 ‘‘(B) disclosed to appropriate authorities

6 pursuant to court order.

7 ‘‘(2) EXCEPTIONS.—Paragraph (1) does not

8 limit the disclosure of individually identifiable cus9 tomer proprietary information by each Bell operat10 ing company as necessary—

11 ‘‘(A) to initiate, render, bill, and collect for

12 telephone exchange service, interexchange serv13 ice, or telecommunications service requested by

14 a customer; or

15 ‘‘(B) to protect the rights or property of

16 the carrier, or to protect users of any of those

17 services and other carriers from fraudulent,

18 abusive, or unlawful use of, or subscription to,

19 any such service.

20 ‘‘(g) COMMISSION MAY GRANT EXCEPTIONS.—The

21 Commission may grant an exception from compliance with

22 any requirement of this section upon a showing that the

23 exception is necessary for the public interest, convenience,

24 and necessity.

25 ‘‘(h) APPLICATION TO UTILITY COMPANIES.—
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1 ‘‘(1) PUBLIC UTILITY HOLDING COMPANIES.—

2 For purposes of this section, a public utility com3 pany which is a registered holding company (as de4 fined in section 2 of the Public Utility Holding Com5 pany Act of 1935 (15 U.S.C. 79b)) that provides

6 telecommunications service shall provide that service

7 through a separate subsidiary. The provisions of

8 subsection (b)(4) and (c)(1) apply to the provision of

9 telecommunications service by such a company

10 through a separate subsidiary as if such company

11 were a Bell operating company.

12 ‘‘(2) OTHER UTILITY COMPANIES.—Each State

13 shall determine whether a public utility company

14 subject to its jurisdiction that—

15 ‘‘(A) is not a registered holding company

16 (as so defined), and

17 ‘‘(B) provides telecommunications service,

18 is required to provide that service through a sepa19 rate subsidiary.

20 ‘‘(3) SAVINGS PROVISION.—Nothing in this

21 paragraph prohibits a public utility company from

22 engaging in any activity in which it is legally en23 gaged on the date of enactment of the Telecommuni24 cations Act of 1995.
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1 ‘‘(i) SEPARATE SUBSIDIARY MAY BE SUBSIDIARY OF

2 HOLDING COMPANY.—For purposes of meeting the re3 quirements of this section, and of any other provision of

4 this Act that requires a separate subsidiary that meets the

5 requirements of this section, a company (other than the

6 Bell operating company) that is a subsidiary of the same

7 company of which a Bell operating company is a subsidi8 ary shall be considered to meet the separate subsidiary

9 requirement.’’.

10 (b) IMPLEMENTATION.—The Commission shall pro11 mulgate any regulations necessary to implement section

12 252 of the Communications Act of 1934 (as added by sub13 section (a)) within 9 months after the date of enactment

14 of this Act. Any separate subsidiary established or des15 ignated for purposes of section 252(a) of the Communica16 tions Act of 1934 before the regulations have been issued

17 in final form shall be restructured or otherwise modified,

18 if necessary, to meet the requirements of those regula19 tions.

20 (c) EFFECTIVE DATE.—The amendment made by

21 subsection (a) shall take effect on the date of enactment

22 of this Act.

23 SEC. 103. UNIVERSAL SERVICE.

24 (a) FEDERAL-STATE JOINT BOARD ON UNIVERSAL

25 SERVICE.—
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1 (1) Within one month after the date of enact2 ment of this Act, the Commission shall institute and

3 refer to a Federal-State Joint Board under section

4 410(c) of the Communications Act of 1934 a pro5 ceeding to recommend rules regarding the implemen6 tation of section 253 of that Act, including the defi7 nition of universal service. The Joint Board shall,

8 after notice and public comment, make its rec9 ommendations to the Commission no later than 9

10 months after the date of enactment of this Act.

11 (2) The Commission may periodically, but no

12 less than once every 4 years, institute and refer to

13 the Joint Board a proceeding to review the imple14 mentation of section 253 of that Act and to make

15 new recommendations, as necessary, with respect to

16 any modifications or additions that may be needed.

17 As part of any such proceeding the Joint Board

18 shall review the definition of, and adequacy of sup19 port for, universal service and shall evaluate the ex20 tent to which universal service has been protected

21 and advanced.

22 (b) COMMISSION ACTION.—The Commission shall

23 initiate a single proceeding to implement recommendations

24 from the initial Joint Board required by subsection (a)

25 and shall complete such proceeding within 1 year after the
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1 date of enactment of this Act. Thereafter, the Commission

2 shall complete any proceeding to implement recommenda3 tions from any further Joint Board required under sub4 section (a) within one year after receiving such rec5 ommendations.

6 (c) SEPARATIONS RULES.—Nothing in the amend7 ments made by this Act to the Communications Act of

8 1934 shall affect the Commission’s separations rules for

9 local exchange carriers or interexchange carriers in effect

10 on the date of enactment of this Act.

11 (d) AMENDMENT OF COMMUNICATIONS ACT.—Part

12 II of title II (47 U.S.C. 251 et seq.), as added by this

13 Act, is amended by inserting after section 252 the follow14 ing new section:

15 ‘‘SEC. 253. UNIVERSAL SERVICE.

16 ‘‘(a) UNIVERSAL SERVICE PRINCIPLES.—The Joint

17 Board and the Commission shall base policies for the pres18 ervation and advancement of universal service on the fol19 lowing principles:

20 ‘‘(1) Quality services are to be provided at just,

21 reasonable, and affordable rates.

22 ‘‘(2) Access to advanced telecommunications

23 and information services should be provided in all

24 regions of the Nation.
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1 ‘‘(3) Consumers in rural and high cost areas

2 should have access to telecommunications and infor3 mation services, including interexchange services,

4 reasonably comparable to those services provided in

5 urban areas.

6 ‘‘(4) Consumers in rural and high cost areas

7 should have access to telecommunications and infor8 mation services at rates that are reasonably com9 parable to rates charged for similar services in

10 urban areas.

11 ‘‘(5) Citizens in rural and high cost areas

12 should have access to the benefits of advanced tele13 communications and information services for health

14 care, education, economic development, and other

15 public purposes.

16 ‘‘(6) There should be a coordinated Federal17 State universal service system to preserve and ad18 vance universal service using specific and predictable

19 Federal and State mechanisms administered by

20 independent, non-governmental entities.

21 ‘‘(7) Elementary and secondary schools and

22 classrooms should have access to advanced tele23 communications services.

24 ‘‘(b) DEFINITION.—Universal service is an evolving

25 level of intrastate and interstate telecommunications serv-
40

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1 ices that the Commission, based on recommendations from

2 the public, Congress, and the Federal-State Joint Board

3 periodically convened under section 103 of the Tele4 communications Act of 1995, and taking into account ad5 vances in telecommunications and information tech6 nologies and services, determines should be provided at

7 just, reasonable, and affordable rates to all Americans, in8 cluding those in rural and high-cost areas and those with

9 disabilities, to enable them to participate effectively in the

10 economic, academic, medical, and democratic processes of

11 the Nation. At a minimum, universal service shall include

12 any telecommunications services that the Commission de13 termines have, through the operation of market choices

14 by customers, been subscribed to by a substantial majority

15 of residential customers.

16 ‘‘(c) ALL TELECOMMUNICATIONS PROVIDERS CON17 TRIBUTE.—Every telecommunications carrier engaged in

18 intrastate, interstate, or foreign communication shall con19 tribute on an equitable and nondiscriminatory basis, in a

20 manner that is reasonably necessary to preserve and ad21 vance universal service. Any other provider of tele22 communications may be required to contribute to the pres23 ervation and advancement of universal service, if the pub24 lic interest so requires.
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1 ‘‘(d) ENFORCEMENT.—In adopting rules to enforce

2 subsection (c), the Commission and the States may impose

3 or require service obligations, financial or other forms of

4 contributions, sharing of equipment and services, dis5 counted rates, or other mechanisms.

6 ‘‘(e) STATE AUTHORITY.—A State may adopt regula7 tions to implement this section, or to provide for additional

8 definitions, mechanisms, and standards to preserve and

9 advance universal service within that State, to the extent

10 that such regulations do not conflict with the Commis11 sion’s rules to implement this section.

12 ‘‘(f) ELIGIBILITY FOR UNIVERSAL SERVICE SUP13 PORT.—If the Commission adopts rules for the distribu14 tion of support payments for the preservation and ad15 vancement of universal service, only telecommunications

16 carriers which are designated as essential telecommuni17 cations carriers under section 214(d) shall be eligible to

18 receive those support payments. The support payments

19 shall accurately reflect the amount reasonably necessary

20 to preserve and advance universal service.

21 ‘‘(g) AMOUNT OF UNIVERSAL SERVICE SUPPORT.—

22 The Commission and the States shall base the amount of

23 support payments, if any, on the difference between the

24 actual costs of providing universal service and the reve25 nues from providing that service. The Commission and the
42

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1 States shall have as their goal the need to make any uni2 versal support explicit and targeted to those carriers that

3 serve areas for which support is necessary. A carrier that

4 receives any such support shall use that support only for

5 the maintenance and upgrading of facilities and services

6 for which the support is intended.

7 ‘‘(h) INTEREXCHANGE SERVICE.—The rates charged

8 by providers of interexchange telecommunications service

9 to consumers in rural and high cost areas shall be main10 tained at levels no higher than those charged by each such

11 provider to its consumers in urban areas.

12 ‘‘(i) SUBSIDY OF COMPETITIVE SERVICES PROHIB13 ITED.—Telecommunications carriers may not subsidize

14 competitive services with revenues from services that are

15 not competitive. The Commission, with respect to inter16 state services, and the States, with respect to intrastate

17 services, shall establish any necessary cost allocation rules,

18 accounting safeguards, and guidelines to ensure that serv19 ices included in universal service bear no more than a rea20 sonable share (and may, in the public interest, bear less

21 than a reasonable share or no share) of the joint and com22 mon costs of facilities used to provide those services.

23 ‘‘(j) EFFECTIVE DATE.—This section takes effect on

24 the date of enactment of the Telecommunications Act of

25 1995, except for subsections (c), (e), (f), and (g), which
43

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1 take effect one year after the date of enactment of that

2 Act.’’.

3 SEC. 104. ESSENTIAL TELECOMMUNICATIONS CARRIERS.

4 (a) IN GENERAL.—Section 214(d) (47 U.S.C.

5 214(d)) is amended—

6 (1) by inserting ‘‘(1) ADEQUATE FACILITIES

7 REQUIRED.—’’ before ‘‘The Commission’’; and

8 (2) by adding at the end thereof the following:

9 ‘‘(2) DESIGNATION OF ESSENTIAL CARRIER.— If one

10 or more common carriers provide telecommunications

11 service to a geographic area, and no common carrier will

12 provide universal service to an unserved community or any

13 portion thereof that requests such service within such

14 area, then the Commission, with respect to interstate serv15 ices, or a State, with respect to intrastate services, shall

16 determine which common carrier serving that area is best

17 able to provide universal service to the requesting unserved

18 community or portion thereof, and shall designate that

19 common carrier as an essential telecommunications carrier

20 for that unserved community or portion thereof.

21 ‘‘(3) ESSENTIAL CARRIER OBLIGATIONS.—A common

22 carrier may be designated by the Commission, or by a

23 State, as appropriate, as an essential telecommunications

24 carrier for a specific service area and become eligible to

25 receive any universal support payments the Commission
44

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1 may allow under section 253. A carrier designated as an

2 essential telecommunications carrier shall—

3 ‘‘(A) provide through its own facilities or

4 through a combination of its own facilities and re5 sale of services using another carrier’s facilities, uni6 versal service and any additional service (such as

7 911 service) required by the Commission or the

8 State, to any community or portion thereof which re9 quests such service;

10 ‘‘(B) offer such services at nondiscriminatory

11 rates established by the Commission, for interstate

12 services, and the State, for intrastate services,

13 throughout the service area; and

14 ‘‘(C) advertise throughout the service area the

15 availability of such services and the rates for such

16 services using media of general distribution.

17 ‘‘(4) MULTIPLE ESSENTIAL CARRIERS.—If the Com18 mission, with respect to interstate services, or a State,

19 with respect to intrastate services, designates more than

20 one common carrier as an essential telecommunications

21 carrier for a specific service area, such carrier shall meet

22 the service, rate, and advertising requirements imposed by

23 the Commission or State on any other essential tele24 communications carrier for that service area. A State may

25 require that, before designating an additional essential
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1 telecommunications carrier, the State agency authorized

2 to make the designation shall find that—

3 ‘‘(A) the designation of an additional essential

4 telecommunications carrier is in the public interest

5 and that there will not be a significant adverse im6 pact on users of telecommunications services or on

7 the provision of universal service;

8 ‘‘(B) the designation encourages the develop9 ment and deployment of advanced telecommuni10 cations infrastructure and services in rural areas;

11 and

12 ‘‘(C) the designation protects the public safety

13 and welfare, ensures the continued quality of tele14 communications services, or safeguards the rights of

15 consumers.

16 ‘‘(5) RESALE OF UNIVERSAL SERVICE.—The Com17 mission, for interstate services, and the States, for intra18 state services, shall establish rules to govern the resale of

19 universal service to allocate any support received for the

20 provision of such service in a manner that ensures that

21 the carrier whose facilities are being resold is adequately

22 compensated for their use, taking into account the impact

23 of the resale on that carrier’s ability to maintain and de24 ploy its network as a whole. The Commission shall also

25 establish, based on the recommendations of the Federal-
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1 State Joint Board instituted to implement this section,

2 rules to permit a carrier designated as an essential tele3 communications carrier to relinquish that designation for

4 a specific service area if another telecommunications car5 rier is also designated as an essential telecommunications

6 carrier for that area. The rules—

7 ‘‘(A) shall ensure that all customers served by

8 the relinquishing carrier continue to be served, and

9 shall require sufficient notice to permit the purchase

10 or construction of adequate facilities by any remain11 ing essential telecommunications carrier if such re12 maining carrier provided universal service through

13 resale of the facilities of the relinquishing carrier;

14 and

15 ‘‘(B) shall establish criteria for determining

16 when a carrier which intends to utilize resale to

17 meet the requirements for designation under this

18 subsection has adequate resources to purchase, con19 struct, or otherwise obtain the facilities necessary to

20 meet its obligation if the reselling carrier is no

21 longer able or obligated to resell the service.

22 ‘‘(6) ENFORCEMENT.—A common carrier designated

23 by the Commission or a State as an essential telecommuni24 cations carrier that refuses to provide universal service

25 within a reasonable period to an unserved community or
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1 portion thereof which requests such service shall forfeit

2 to the United States, in the case of interstate services,

3 or the State, in the case of intrastate services, a fine of

4 up to $10,000 for each day that such carrier refuses to

5 provide such service. In establishing a reasonable period

6 the Commission or the State, as appropriate, shall con7 sider the nature of any construction required to serve such

8 requesting unserved community or portion thereof, as well

9 as the construction intervals normally attending such con10 struction, and shall allow adequate time for regulatory ap11 provals and acquisition of necessary financing.

12 ‘‘(7) INTEREXCHANGE SERVICES.—The Commission,

13 for interstate services, or a State, for intrastate services,

14 shall designate an essential telecommunications carrier for

15 interexchange services for any unserved community or por16 tion thereof requesting such services. Any common carrier

17 designated as an essential telecommunications carrier for

18 interexchange services under this paragraph shall provide

19 interexchange services included in universal service to any

20 unserved community or portion thereof which requests

21 such service. The service shall be provided at nationwide

22 geographically averaged rates for interstate interexchange

23 services and at geographically averaged rates for intra24 state interexchange services, and shall be just and reason25 able and not unjustly or unreasonably discriminatory. A
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1 common carrier designated as an essential telecommuni2 cations carrier for interexchange services under this para3 graph that refuses to provide interexchange service in ac4 cordance with this paragraph to an unserved community

5 or portion thereof that requests such service within 180

6 days of such request shall forfeit to the United States a

7 fine of $50,000 for each day that such carrier refuses to

8 provide such service. The Commission or the State, as ap9 propriate, may extend the 180-day period for providing

10 interexchange service upon a showing by the common car11 rier of good faith efforts to comply within such period.

12 ‘‘(8) IMPLEMENTATION.—The Commission may, by

13 regulation, establish guidelines by which States may im14 plement the provisions of this section.’’.

15 (b) CONFORMING AMENDMENT.—The heading for

16 section 214 is amended by inserting a semicolon and ‘‘es17 sential telecommunications carriers’’ after ‘‘lines’’.

18 SEC. 105. FOREIGN INVESTMENT AND OWNERSHIP RE19 FORM.

20 (a) IN GENERAL.—Section 310 (47 U.S.C. 310) is

21 amended by adding at the end thereof the following new

22 subsection:

23 ‘‘(f) TERMINATION OF FOREIGN OWNERSHIP RE24 STRICTIONS.—
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1 ‘‘(1) RESTRICTION NOT TO APPLY WHERE RECI2 PROCITY FOUND.—Subsection (b) shall not apply to

3 any common carrier license held, or for which appli4 cation is made, after the date of enactment of the

5 Telecommunications Act of 1995 with respect to any

6 alien (or representative thereof), corporation, or for7 eign government (or representative thereof) if the

8 Commission determines that the foreign country of

9 which such alien is a citizen, in which such corpora10 tion is organized, or in which such foreign govern11 ment is in control provides equivalent market oppor12 tunities for common carriers to citizens of the Unit13 ed States (or their representatives), corporations or14 ganized in the United States, and the United States

15 Government (or its representative). The determina16 tion of whether market opportunities are equivalent

17 shall be made on a market segment specific basis.

18 ‘‘(2) SNAPBACK FOR RECIPROCITY FAILURE.—

19 If the Commission determines that any foreign coun20 try with respect to which it has made a determina21 tion under paragraph (1) ceases to meet the require22 ments for that determination, then—

23 ‘‘(A) subsection (b) shall apply with re24 spect to such aliens, corporations, and govern25 ment (or their representatives) on the date on
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1 which the Commission publishes notice of its

2 determination under this paragraph, and

3 ‘‘(B) any license held, or application filed,

4 which could not be held or granted under sub5 section (b) shall be withdrawn, or denied, as the

6 case may be, by the Commission under the pro7 visions of subsection (b).’’.

8 (b) CONFORMING AMENDMENT.—Section 332(c)(6)

9 (47 U.S.C. 332(c)(6)) is amended by adding at the end

10 thereof the following:

11 ‘‘This paragraph does not apply to any foreign own12 ership interest or transfer of ownership to which sec13 tion 310(b) does not apply because of section

14 310(f).’’.

15 SEC. 106. INFRASTRUCTURE SHARING.

16 (a) REGULATIONS REQUIRED.—The Commission

17 shall prescribe, within one year after the date of enact18 ment of this Act, regulations that require local exchange

19 carriers that were subject to Part 69 of the Commission’s

20 rules on or before that date to make available to any quali21 fying carrier such public switched network infrastructure,

22 technology, information, and telecommunications facilities

23 and functions as may be requested by such qualifying car24 rier for the purpose of enabling such qualifying carrier to

25 provide telecommunications services, or to provide access
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1 to information services, in the service area in which such

2 qualifying carrier has requested and obtained designation

3 as an essential telecommunications carrier under section

4 214(d).

5 (b) TERMS AND CONDITIONS OF REGULATIONS.—

6 The regulations prescribed by the Commission pursuant

7 to this section shall—

8 (1) not require a local exchange carrier to

9 which this section applies to take any action that is

10 economically unreasonable or that is contrary to the

11 public interest;

12 (2) permit, but shall not require, the joint own13 ership or operation of public switched network infra14 structure and services by or among such local ex15 change carrier and a qualifying carrier;

16 (3) ensure that such local exchange carrier will

17 not be treated by the Commission or any State as

18 a common carrier for hire or as offering common

19 carrier services with respect to any infrastructure,

20 technology, information, facilities, or functions made

21 available to a qualifying carrier in accordance with

22 regulations issued pursuant to this section;

23 (4) ensure that such local exchange carrier

24 makes such infrastructure, technology, information,

25 facilities, or functions available to a qualifying car-
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1 rier on just and reasonable terms and conditions

2 that permit such qualifying carrier to fully benefit

3 from the economies of scale and scope of such local

4 exchange carrier, as determined in accordance with

5 guidelines prescribed by the Commission in regula6 tions issued pursuant to this section;

7 (5) establish conditions that promote coopera8 tion between local exchange carriers to which this

9 section applies and qualifying carriers;

10 (6) not require a local exchange carrier to

11 which this section applies to engage in any infra12 structure sharing agreement for any services or ac13 cess which are to be provided or offered to consum14 ers by the qualifying carrier in such local exchange

15 carrier’s telephone exchange area; and

16 ‘‘(7) require that such local exchange carrier

17 file with the Commission or State for public inspec18 tion, any tariffs, contracts, or other arrangements

19 showing the rates, terms, and conditions under

20 which such carrier is making available public

21 switched network infrastructure and functions under

22 this section.

23 (c) INFORMATION CONCERNING DEPLOYMENT OF

24 NEW SERVICES AND EQUIPMENT.—A local exchange car25 rier to which this section applies that has entered into an
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1 infrastructure sharing agreement under this section shall

2 provide to each party to such agreement timely informa3 tion on the planned deployment of telecommunications

4 services and equipment, including any software or up5 grades of software integral to the use or operation of such

6 telecommunications equipment.

7 (d) DEFINITIONS.—For purposes of this section—

8 (1) QUALIFYING CARRIER.—The term ‘‘qualify9 ing carrier’’ means a telecommunications carrier

10 that—

11 (A) lacks economies of scale or scope, as

12 determined in accordance with regulations pre13 scribed by the Commission pursuant to this sec14 tion; and

15 (B) is a common carrier which offers tele16 phone exchange service, exchange access serv17 ice, and any other service that is included in

18 universal service, to all consumers without pref19 erence throughout the service area for which

20 such carrier has been designated as an essential

21 telecommunications carrier under section

22 214(d) of the Communications Act of 1934.

23 (2) OTHER TERMS.—Any term used in this sec24 tion that is defined in the Communications Act of

25 1934 has the same meaning as it has in that Act.
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1 TITLE II—REMOVAL OF RESTRICTIONS TO

2 COMPETITION

3 Subtitle A—Removal of Restrictions

4 SEC. 201. REMOVAL OF ENTRY BARRIERS.

5 (a) PREEMPTION OF STATE RULES.—Part II of title

6 II (47 U.S.C. 251 et seq.), as added by this Act, is amend7 ed by inserting after section 253 the following:

8 ‘‘SEC. 254. REMOVAL OF BARRIERS TO ENTRY.

9 ‘‘(a) IN GENERAL.—No State or local statute or reg10 ulation, or other State or local legal requirement, may pro11 hibit or have the effect of prohibiting the ability of any

12 entity to provide any interstate or intrastate telecommuni13 cations services.

14 ‘‘(b) STATE REGULATORY AUTHORITY.—Nothing in

15 this section shall affect the ability of a State to impose,

16 on a competitively neutral basis and consistent with sec17 tion 253, requirements necessary to preserve and advance

18 universal service, protect the public safety and welfare, en19 sure the continued quality of telecommunications services,

20 and safeguard the rights of consumers.

21 ‘‘(c) LOCAL GOVERNMENT AUTHORITY.—Nothing in

22 this section affects the authority of a local government to

23 manage the public rights-of-way or to require fair and rea24 sonable compensation from telecommunications providers,

25 on a competitively neutral and nondiscriminatory basis,
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1 for use of public rights-of-way on a nondiscriminatory

2 basis, if the compensation required is publicly disclosed by

3 such government.

4 ‘‘(d) PREEMPTION.—If, after notice and an oppor5 tunity for public comment, the Commission determines

6 that a State or local government has permitted or imposed

7 any statute, regulation, or legal requirement that violates

8 or is inconsistent with this section, the Commission shall

9 immediately preempt the enforcement of such statute, reg10 ulation, or legal requirement to the extent necessary to

11 correct such violation or inconsistency.

12 ‘‘(e) COMMERCIAL MOBILE SERVICES PROVIDERS.—

13 Nothing in this section shall affect the application of sec14 tion 332(c)(3) to commercial mobile services providers.’’.

15 (b) PROVISION OF TELECOMMUNICATIONS SERVICES

16 BY A CABLE OPERATOR.—

17 (1) JURISDICTION OF FRANCHISING AUTHOR18 ITY.—Section 621(b) (47 U.S.C. 541(b)) is amended

19 by adding at the end thereof the following new para20 graph:

21 ‘‘(3)(A) To the extent that a cable operator or

22 affiliate thereof is engaged in the provision of tele23 communications services—
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1 ‘‘(i) such cable operator or affiliate shall

2 not be required to obtain a franchise under this

3 title; and

4 ‘‘(ii) the provisions of this title shall not

5 apply to such cable operator or affiliate.

6 ‘‘(B) A franchising authority may not order a

7 cable operator or affiliate thereof to discontinue the

8 provision of a telecommunications service.

9 ‘‘(C) A franchising authority may not require a

10 cable operator to provide any telecommunications

11 service or facilities as a condition of the initial grant

12 of a franchise, franchise renewal, or transfer of a

13 franchise.

14 ‘‘(D) Nothing in this paragraph affects existing

15 Federal or State authority with respect to tele16 communications services.’’.

17 (2) FRANCHISE FEES.—Section 622(b) (47

18 U.S.C. 542(b)) is amended by inserting ‘‘to provide

19 cable services’’ immediately before the period at the

20 end of the first sentence.

21 (c) STATE AND LOCAL TAX LAWS.—Except as pro22 vided in section 202, nothing in this Act (or in the Com23 munications Act of 1934 as amended by this Act) shall

24 be construed to modify, impair, or supersede, or authorize

25 the modification, impairment, or supersession of, any
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1 State or local law pertaining to taxation that is consistent

2 with the requirements of the Constitution of the United

3 States, this Act, the Communications Act of 1934, or any

4 other applicable Federal law.

5 (d) EFFECTIVE DATE.—The amendments made by

6 this section take effect on the date of enactment of this

7 Act.

8 SEC. 202. LIMITATION ON STATE AND LOCAL TAXATION OF

9 DIRECT-TO-HOME SATELLITE SERVICES.

10 (a) AUTHORITY TO IMPOSE TAXES AND FEES ON DI11 RECT-TO-HOME SATELLITE SERVICES.—

12 (1) IN GENERAL.—A State may require a di13 rect-to-home satellite service provider who is subject

14 to the personal jurisdiction of the State to collect

15 and remit a State sales tax, a local sales tax, or

16 both, with respect to direct-to-home satellite services,

17 if—

18 (A) the destination of such services is in

19 the State, and

20 (B) in a State in which both State and

21 local sales taxes are imposed, the State, in ac22 cordance with the requirements of this sec23 tion—

24 (i) requires the collection and remit25 tance of any applicable local sales taxes
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1 with respect to direct-to-home satellite

2 services, and

3 (ii) collects and administers the local

4 sales taxes with respect to direct-to-home

5 satellite services, except in those local tax6 ing jurisdictions described in paragraph

7 (2)(A).

8 (2) LOCAL TAXING JURISDICTION.—

9 (A) A State that exercises authority under

10 this section may require a direct-to-home sat11 ellite service provider to collect and remit local

12 sales taxes to the local taxing jurisdiction if—

13 (i) as of the effective date of this sec14 tion, the local taxing jurisdiction imposes

15 and administers a local sales tax separate

16 from the sales tax imposed by the State, or

17 (ii) after the effective date of this sec18 tion, a local jurisdiction that does not im19 pose any local sales taxes as of the effec20 tive date of this section is authorized to

21 impose a local sales tax.

22 (B) If, after the effective date of this sec23 tion, a local jurisdiction is authorized to admin24 ister a local sales tax that the State is admin25 istering as of that date, the State shall continue
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1 to collect and remit the local sales tax author2 ized under this section in accordance with para3 graph (1)(B)(ii).

4 (3) DISTRIBUTION OF LOCAL SALES TAXES.—A

5 State shall distribute the local sales tax collected

6 under the authority granted by this section to local

7 jurisdictions in accordance with the requirements of

8 State law governing the distribution of local sales

9 taxes.

10 (b) STATE AND LOCAL LAW; NONDISCRIMINATION.—

11 (1) STATE AND LOCAL LAW.—A State may re12 quire a direct-to-home satellite service provider to

13 collect and remit State and local sales taxes with re14 spect to direct-to-home satellite services only where

15 the applicable law of the State or local taxing juris16 diction imposes a sales tax.

17 (2) NONDISCRIMINATION.—Except as otherwise

18 provided in this section, a State that exercises au19 thority under this section shall allow to direct-to20 home satellite service providers exemptions or other

21 exceptions to State and local sales taxes that the

22 State or local taxing jurisdiction allows under simi23 lar circumstances to persons located within the State

24 or local taxing jurisdiction.

25 (c) EXEMPTION.—
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1 (1) EXEMPTION OF OTHER LOCAL TAX OR FEE

2 FOR SERVICES.—A direct-to-home satellite service

3 provider and its representatives for the sale or dis4 tribution of direct-to-home satellite services shall be

5 exempt from collecting and remitting any other local

6 tax or fee (as defined by subsection (d)(9)) imposed

7 on direct-to-home satellite services in any local tax8 ing jurisdiction in which, during the 1-year period

9 ending on September 30 of the calendar year preced10 ing the calendar year in which the provision of di11 rect-to-home satellite services occurs, the direct-to12 home satellite service provider does not own or hold

13 any interest in property or maintain an office, and

14 limits its business activities to no more than—

15 (A) providing direct-to-home satellite serv16 ices to subscribers in the local taxing jurisdic17 tion, and the billing for and collection of the

18 fees for such services occur outside the local

19 taxing jurisdiction; and

20 (B) soliciting and placing orders for the

21 sale of direct-to-home satellite services through

22 contractual arrangements with, and on the

23 premises of, retail outlets and establishments,

24 which orders are filled and billed for from a

25 point outside the local taxing jurisdiction, re-
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1 gardless of where the subscriber makes an ini2 tial payment for an initial subscription.

3 (2) NO OTHER EFFECT.—Except as provided

4 herein, this section does not affect the authority of

5 any State or local taxing jurisdiction of any State

6 otherwise to adopt, apply, and administer any tax or

7 method of taxation.

8 (d) DEFINITIONS.—For purposes of this section—

9 (1) COMPENSATING USE TAX.—The term ‘‘com10 pensating use tax’’ means a tax imposed on or inci11 dent to the use or consumption of direct-to-home

12 satellite services within a State or a local jurisdiction

13 or other area of a State.

14 (2) DESTINATION.—The term ‘‘destination’’

15 means the State or local jurisdiction to which the di16 rect-to-home satellite service is delivered for viewing

17 or other activity to which the service is directed.

18 (3) DIRECT-TO-HOME SATELLITE SERVICE PRO19 VIDER.—The term ‘‘direct-to-home satellite service

20 provider’’ means a person who provides direct-to21 home satellite services.

22 (4) DIRECT-TO-HOME SATELLITE SERVICES.—

23 The term ‘‘direct-to-home satellite services’’ means

24 the distribution or broadcasting of programming or

25 services by satellite directly to the subscriber’s prem-
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1 ises without the use of ground receiving or distribu2 tion equipment, except at the subscriber’s premises,

3 or used in the initial uplink process to the direct-to4 home satellite.

5 (5) LOCAL TAXING JURISDICTION.—The term

6 ‘‘local taxing jurisdiction’’ means any municipality,

7 city, county, township, parish, transportation dis8 trict, or assessment jurisdiction, or any other politi9 cal subdivision with the authority to impose a tax or

10 fee.

11 (6) LOCAL SALES TAX.—The term ‘‘local sales

12 tax’’ means a sales or compensating use tax imposed

13 by a local taxing jurisdiction, whether administered

14 by the State or the local taxing jurisdiction.

15 (7) SALES TAX.—The term ‘‘sales tax’’ means

16 a tax, including a compensating use tax, that is—

17 (A) imposed on or incident to the sale,

18 purchase, consumption, distribution, or other

19 use of direct-to-home satellite services as may

20 be defined or specified under the law imposing

21 such tax, and

22 (B) measured by the amount of the sales

23 price, cost, charge, or gross receipts, or other

24 value of or for the services.
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1 (8) STATE.—Notwithstanding any provision to

2 the contrary in this section, the term ‘‘State’’ means

3 any of the several States of the United States, the

4 District of Columbia, the Commonwealth of Puerto

5 Rico, and any territory or possession of the United

6 States.

7 (9) OTHER LOCAL TAX OR FEE.—The term

8 ‘‘other local tax or fee’’ means any local tax or fee

9 that is not a sales tax, as defined in paragraph (6)

10 or (7), including such locally imposed taxes and fees

11 as an intangible tax, income tax, business license

12 tax, utility tax, privilege tax, gross receipts tax, ex13 cise tax, franchise fees, telecommunications tax, or

14 other tax, license, or fee.

15 (e) EFFECTIVE DATE.—This section shall take effect

16 on the date of enactment of this Act.

17 SEC. 203. ELIMINATION OF CABLE AND TELEPHONE COM18 PANY CROSS-OWNERSHIP RESTRICTION.

19 (a) IN GENERAL.—Section 613(b) (47 U.S.C.

20 533(b)) is amended to read as follows:

21 ‘‘(b) VIDEO PROGRAMMING AND CABLE SERVICES.—

22 ‘‘(1) DISTINCTION BETWEEN VIDEO PLATFORM

23 AND CABLE SERVICE.—To the extent that any tele24 communications carrier carries video programming

25 provided by others, or provides video programming
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1 directly to subscribers, through a common carrier

2 video platform, neither the telecommunications car3 rier nor any video programming provider making use

4 of such platform shall be deemed to be a cable oper5 ator providing cable service. To the extent that any

6 telecommunications carrier provides video program7 ming directly to subscribers through a cable system,

8 the carrier shall be deemed to be a cable operator

9 providing cable service.

10 ‘‘(2) BELL OPERATING COMPANY ACTIVITIES.—

11 ‘‘(A) Notwithstanding the provisions of

12 section 252, to the extent that a Bell operating

13 company carries or provides video programming

14 over a common carrier video platform, it need

15 not use a separate subsidiary if—

16 ‘‘(i) the carrier provides facilities,

17 services, or information to all programmers

18 on the same terms and conditions as it

19 provides such facilities, services, or infor20 mation to its own video programming oper21 ations, and

22 ‘‘(ii) the carrier does not subsidize its

23 provision of video programming with reve24 nues from its telecommunications services.
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1 ‘‘(B) To the extent that a Bell operating

2 company provides cable service as a cable oper3 ator, it shall provide such service through a

4 subsidiary that meets the requirements of sec5 tion 252, and shall meet the requirements of

6 clauses (i) and (ii) of subparagraph (A).

7 ‘‘(C) Upon a finding by the Commission

8 that the requirement of a separate subsidiary

9 under the preceding subparagraph is no longer

10 necessary to protect consumers, competition, or

11 the public interest, the Commission shall ex12 empt a Bell operating company from that re13 quirement.

14 ‘‘(3) COMMON CARRIER VIDEO PLATFORM.—

15 Nothing in this Act precludes a telecommunications

16 carrier from carrying video programming provided

17 by others directly to subscribers over a common car18 rier video platform.

19 ‘‘(4) RATES; ACCESS.—Notwithstanding para20 graph (2)(A)(i), a provider of common carrier video

21 platform services shall provide local broadcast sta22 tions, and to those public, educational, and govern23 mental entities required by local franchise authori24 ties to be given access to cable systems operating in

25 the same market as the video platform, with access
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1 to the video platform for the transmission of tele2 vision broadcast programming at rates no higher

3 than the incremental-cost-based rates of providing

4 such access. Local broadcast stations shall be enti5 tled to obtain access on the first tier of program6 ming on the video platform.

7 ‘‘(5) COMPETITIVE NEUTRALITY.—A provider

8 of video programming may be required to pay fees

9 in lieu of franchise fees (as defined in section

10 622(g)(1)) if the fees—

11 ‘‘(A) are competitively neutral; and

12 ‘‘(B) are separately identified in consumer

13 billing.’’.

14 (b) NO PERMIT REQUIRED FOR VIDEO PROGRAM15 MING SERVICES.—Section 214 (47 U.S.C. 214) is amend16 ed by adding at the end thereof the following:

17 ‘‘(e) SPECIAL RULE.—No certificate is required

18 under this section for a carrier to construct facilities to

19 provide video programming services.’’.

20 (c) SAFEGUARDS.—Within one year after the date of

21 enactment of this Act, the Commission shall prescribe reg22 ulations that—

23 (1) require a telecommunications carrier that

24 provides video programming directly to subscribers

25 to ensure that subscribers are offered the means to
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1 obtain access to the signals of broadcast television

2 stations as readily as they are today;

3 (2) require such a carrier to display clearly and

4 prominently at the beginning of any program guide

5 or menu of program offerings the identity of any

6 signal of any television broadcast station that is car7 ried by the carrier;

8 (3) require such a carrier to ensure that viewers

9 are able to access the signal of any television broad10 cast station that is carried by that carrier without

11 first having to view advertising or promotional mate12 rial, or a navigational device, guide, or menu that

13 omits broadcasting services as an available option;

14 (4) except as required by paragraphs (1)

15 through (3), prohibit such carrier and a multi16 channel video programming distributor using the fa17 cilities of such carrier from discriminating among

18 video programming providers with respect to mate19 rial or information provided by the carrier to sub20 scribers for the purposes of selecting programming,

21 or in the way such material or information is pre22 sented to subscribers;

23 (5) require such carrier and a multichannel

24 video programming distributor using the facilities of

25 such carrier to ensure that video programming pro-
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1 viders or copyright holders (or both) are able suit2 ably and uniquely to identify their programming

3 services to subscribers;

4 (6) if such identification is transmitted as part

5 of the programming signal, require a telecommuni6 cations carrier that provides video programming di7 rectly to subscribers and a multichannel video pro8 gramming distributor using the facilities of such car9 rier to transmit such identification without change

10 or alteration;

11 (7) consistent with the other provisions of title

12 VI of the Communications Act of 1934 (47 U.S.C.

13 521 et seq.) prohibit such carrier from discriminat14 ing among video programming providers with regard

15 to carriage and ensure that the rates, terms, and

16 conditions for such carriage are just, reasonable, and

17 nondiscriminatory;

18 (8) extend to such carriers and multichannel

19 video programming distributors using the facilities

20 of such carrier the Commission’s regulations con21 cerning network nonduplication (47 C.F.R. 76.92 et

22 seq.) and syndicated exclusivity (47 C.F.R. 76.171

23 et seq.); and

24 (9) extend to such carriers and multichannel

25 video programming distributors using the facilities
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1 of such carrier the protections afforded to local

2 broadcast signals in section 614(b)(3), 614(b)(4)(A),

3 and 615(g)(1) and (2) of such Act (47 U.S.C.

4 534(b)(3), 534(b)(4)(A), and 535(g)(1) and (2)).

5 (d) ENFORCEMENT.—The Commission shall resolve

6 disputes under subsection (c) and the regulations pre7 scribed under that subsection. Any such dispute shall be

8 resolved with 180 days after notice of the dispute is sub9 mitted to the Commission. At that time, or subsequently

10 in a separate proceeding, the Commission may award

11 damages sustained in consequence of any violation of this

12 section to any person denied carriage, or require carriage,

13 or both. Any aggrieved party may also seek any other rem14 edy available under the law.

15 (e) EFFECTIVE DATES.—The amendment made by

16 subsection (a) takes effect on the date of enactment of

17 this Act. The amendment made by subsection (b) takes

18 effect 1 year after that date.

19 SEC. 204. CABLE ACT REFORM.

20 (a) RATE DEREGULATION.—

21 (1) Section 623(c) (47 U.S.C. 543(c)) is

22 amended—

23 (A) by striking ‘‘subscriber,’’ and the

24 comma after ‘‘authority’’ in paragraph (1)(B);
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1 (B) by striking paragraph (2) and insert2 ing the following:

3 ‘‘(2) STANDARD FOR UNREASONABLE RATES.—

4 The Commission may only consider a rate for cable

5 programming services to be unreasonable if it sub6 stantially exceeds the national average rate for com7 parable cable programming services.’’.

8 (2) Section 623(l)(1) (47 U.S.C. 543(l)(1)) is

9 amended—

10 (A) by striking ‘‘or’’ at the end of subpara11 graph (B);

12 (B) by striking the period at the end of

13 subparagraph (C) and inserting a semicolon

14 and ‘‘or’’; and

15 (C) by adding at the end the following:

16 ‘‘(D) a local exchange carrier offers video

17 programming services directly to subscribers, ei18 ther over a common carrier video platform or as

19 a cable operator, in the franchise area of an un20 affiliated cable operator which is providing

21 cable service in that franchise area.’’.

22 (b) DISCRIMINATORY PROGRAMMING RATES.—Sec23 tion 628(c)(2)(B)(iii) (47 U.S.C. 548(c)(2)(B)(iii)) is

24 amended by striking ‘‘scale, cost savings, or other direct
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1 and legitimate economic benefits’’ and inserting ‘‘scale or

2 cost savings’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section take effect on the date of enactment of this

5 Act.

6 SEC. 205. POLE ATTACHMENTS.

7 (a) IN GENERAL.—Section 224 (47 U.S.C. 224) is

8 amended—

9 (1) by inserting after ‘‘utility’’ in subsection

10 (a)(4) a comma and the following: ‘‘which attach11 ment may be used by that cable television system to

12 provide cable service or any other telecommuni13 cations service’’; and

14 (2) by redesignating subsections (b), (c), and

15 (d) as (c), (d), and (e), respectively, and inserting

16 the following after subsection (a):

17 ‘‘(b)(1) A utility shall provide a cable television sys18 tem with nondiscriminatory access to any pole, duct, con19 duit, or right-of-way owned or controlled by it.

20 ‘‘(2) For purposes of paragraph (1), the Commission

21 shall, not later than 1 year after the date of enactment

22 of the Telecommunications Act of 1995, prescribe regula23 tions for ensuring that utilities charge just, reasonable,

24 and nondiscriminatory rates for pole attachments provided

25 to all telecommunications carriers and cable operators, in-
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1 cluding such attachments used by cable television systems

2 to provide telecommunications services. The regulations—

3 ‘‘(A) shall recognize that the entire pole, duct,

4 conduit, or right-of-way other than the usable space

5 is of equal benefit to all attachments of entities that

6 hold an ownership interest in the pole, duct, conduit,

7 or right-of-way and therefore apportion the cost of

8 the space other than the usable space equally among

9 all such attachments; and

10 ‘‘(B) shall recognize that an entity that obtains

11 an attachment through a license or other similar ar12 rangement benefits from the entire pole, duct, con13 duit, or right-of-way other than the usable space in

14 the same proportion as it benefits from the usable

15 space and therefore apportion to such entity a por16 tion of the cost of the space other than the usable

17 space in the same manner as the cost of usable

18 space is apportioned to such entity.’’.

19 (b) CONFORMING AMENDMENTS.—Section 224 (47

20 U.S.C. 224), as amended by subsection (a), is amended—

21 (1) by striking ‘‘subsection (c)’’ in subsection

22 (c), as redesignated by subsection (a)(3), and insert23 ing ‘‘subsection (d)’’; and
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1 (2) by striking ‘‘subsection (b)’’ in subsection

2 (e), as so redesignated, and inserting ‘‘subsection

3 (c)’’.

4 SEC. 206. ENTRY BY UTILITY COMPANIES.

5 (a) IN GENERAL.—

6 (1) AUTHORIZED ACTIVITIES OF UTILITIES.—

7 Notwithstanding any other provision of law to the

8 contrary (including the Public Utility Holding Com9 pany Act of 1935 (15 U.S.C. 79a et seq.)), an elec10 tric, gas, water, or steam utility, and any subsidiary

11 company, affiliate, or associate company of such a

12 utility, other than a public utility holding company

13 that is an associate company of a registered holding

14 company, may engage, directly or indirectly, in any

15 activity whatsoever, wherever located, necessary or

16 appropriate to the provision of—

17 (A) telecommunications services,

18 (B) information services,

19 (C) other services or products subject to

20 the jurisdiction of the Federal Communications

21 Commission under the Communications Act of

22 1934 (47 U.S.C. 151 et seq.), or

23 (D) products or services that are related or

24 incidental to a product or service described in

25 subparagraph (A), (B), or (C).
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1 (2) SEC JURISDICTION LIMITED.—The Securi2 ties and Exchange Commission has no jurisdiction

3 under the Public Utility Holding Company Act of

4 1935 (15 U.S.C. 79a et seq.) over a holding com5 pany, or a subsidiary company, affiliate, or associate

6 company of a holding company, engaged in any ac7 tivity described in paragraph (1) to enforce any re8 quirement with respect to that Act, or approve or

9 otherwise review any such activity, including financ10 ing, investing in, acquiring, or maintaining any in11 terest in, or entering into affiliate transactions or

12 contracts.

13 (b) PROHIBITION OF CROSS-SUBSIDIZATION.—Noth14 ing in this section precludes the Federal Energy Regu15 latory Commission or a State commission from exercising

16 its jurisdiction to the extent otherwise authorized under

17 applicable law with respect to prohibiting cross-subsidiza18 tion of any activity described in subsection (a)(1) by a

19 public-utility company which is an associate company of

20 a registered holding company.

21 (c) SEPARATE BOOKS REQUIRED.—Any subsidiary

22 company, affiliate, or associate company that is an associ23 ate company of a registered holding company engaged in

24 any activity described in subsection (a)(1)—
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1 (1) shall maintain separate books, records, and

2 accounts that identify all transactions involving such

3 activity; and

4 (2) shall provide access to those books, records,

5 and accounts to State commissions and the Federal

6 Energy Regulatory Commission.

7 (d) INDEPENDENT AUDIT AUTHORITY FOR STATE

8 COMMISSIONS.—

9 (1) STATE MAY REQUEST AUDIT.—Any State

10 commission with jurisdiction over a public-utility

11 company that—

12 (A) is an associate company of a registered

13 holding company, and

14 (B) transacts business with a subsidiary

15 company, affiliate, or associate company of that

16 holding company engaged in any activity de17 scribed in subsection (a)(1),

18 may request that it have an independent audit per19 formed, no more frequently than on an annual basis,

20 of transactions between the public-utility company

21 and the subsidiary company, affiliate, or associate

22 company engaged in that activity.

23 (2) COMPLIANCE BY COMPANY REQUIRED.—If a

24 State commission makes such a request, the com25 pany engaged in the activity shall select an inde-
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1 pendent auditor and bear the costs of having the

2 audit performed.

3 (3) AVAILABILITY OF AUDITOR’S REPORT.—The

4 auditor’s report shall be provided to the State com5 mission within 6 months after the request for the

6 audit was made by the State commission.

7 (e) DEFINITIONS.—Any term used in this section

8 that is defined in the Public Utility Holding Company Act

9 of 1935 (15 U.S.C. 79a et seq.) has the same meaning

10 as it has in that Act.

11 (f) EFFECTIVE DATE.—This section takes effect on

12 the date of enactment of this Act.

13 SEC. 207. BROADCAST REFORM.

14 (a) SPECTRUM REFORM.—

15 (1) ADVANCED TELEVISION SPECTRUM SERV16 ICES.—If the Commission by rule permits licensees

17 to provide advanced television services, then—

18 (A) it shall adopt regulations that allow

19 such licensees to make use of the advanced tele20 vision spectrum for the transmission of ancil21 lary or supplementary services if the licensees

22 provide without charge to the public at least

23 one advanced television program service as pre24 scribed by the Commission that is intended for
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1 and available to the general public on the ad2 vanced television spectrum; and

3 (B) it shall apply similar rules to use of

4 existing television spectrum.

5 (2) COMMISSION TO COLLECT FEES.—To the

6 extent that a television broadcast licensee provides

7 ancillary or supplementary services using existing or

8 advanced television spectrum—

9 (A) for which payment of a subscription

10 fee is required in order to receive such services,

11 or

12 (B) for which the licensee directly or indi13 rectly receives compensation from a third party

14 in return for transmitting material furnished by

15 such third party, other than payments to broad16 cast stations by third parties for transmission

17 of program material or commercial advertising,

18 the Commission may collect from each such licensee

19 an annual fee to the extent the existing or advanced

20 television spectrum is used for such ancillary or sup21 plementary services. In determining the amount of

22 such fees, the Commission shall take into account

23 the portion of the licensee’s total existing or ad24 vanced television spectrum which is used for such

25 services and the amount of time such services are
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1 provided. The amount of such fees to be collected for

2 any such service shall not, in any event, exceed an

3 amount equivalent on an annualized basis to the

4 amount paid by providers of a competing service on

5 spectrum subject to auction under section 309(j) of

6 the Communications Act of 1934 (47 U.S.C. 309(j)).

7 (3) PUBLIC INTEREST REQUIREMENT.—Noth8 ing in this section shall be construed as relieving a

9 television broadcasting station from its obligation to

10 serve the public interest, convenience, and necessity.

11 In the Commission’s review of any application for

12 renewal of a broadcast license for a television station

13 that provides ancillary or supplementary services,

14 the television licensee shall establish that its pro15 gram service which is intended for and available to

16 the general public on the existing or advanced tele17 vision spectrum is in the public interest. Any viola18 tion of the Commission rules applicable to ancillary

19 or supplementary services may reflect upon the li20 censee’s qualifications for renewal of its license.

21 (4) DEFINITIONS.—As used in this sub22 section—

23 (A) The term ‘‘advanced television serv24 ices’’ means television services provided using
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1 digital or other advanced technology to enhance

2 audio quality and video resolution.

3 (B) The term ‘‘existing’’ means spectrum

4 generally in use for television broadcast pur5 poses on the date of enactment of this Act.

6 (b) OWNERSHIP REFORM.—

7 (1) IN GENERAL.—The Commission shall mod8 ify its rules for multiple ownership set forth in 47

9 CFR 73.3555 by changing the percentage set forth

10 in subdivision (e)(2)(ii) from 25 percent to 35 per11 cent.

12 (2) STATUTORY RESTRICTIONS.—Section 613

13 (47 U.S.C. 533) is amended by striking subsection

14 (a) and inserting the following:

15 ‘‘(a) The Commission shall review its ownership rules

16 biennially as part of its regulatory reform review under

17 section 259.’’.

18 (3) CONFORMING CHANGES.—The Commission

19 shall amend its rules to make any changes necessary

20 to reflect the effect of this section on its rules.

21 (4) EFFECTIVE DATE.—The Commission shall

22 make the modification required by paragraph (1) ef23 fective on the date of enactment of this Act.
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1 (c) TERM OF LICENSES.—Section 307(c) (47 U.S.C.

2 307(c)) is amended by striking the first four sentences and

3 inserting the following:

4 ‘‘No license shall be granted for a term longer than

5 10 years. Upon application, a renewal of such license may

6 be granted from time to time for a term of not to exceed

7 10 years, if the Commission finds that the public interest,

8 convenience, and necessity would be served thereby.’’.

9 (d) BROADCAST LICENSE RENEWAL PROCEDURES.—

10 (1) Section 309 (47 U.S.C. 309) is amended by

11 adding at the end thereof the following:

12 ‘‘(k)(1)(A) Notwithstanding subsections (c) and (d),

13 if the licensee of a broadcast station submits an applica14 tion to the Commission for renewal of such license, the

15 Commission shall grant the application if it finds, after

16 notice and opportunity for comment (and a hearing on the

17 record if it finds that there are credible allegations of seri18 ous violations by the licensee of this Act or the Commis19 sion’s rules or regulations), with respect to that station

20 during the preceding term of its license, that—

21 ‘‘(i) the station has served the public interest,

22 convenience, and necessity;

23 ‘‘(ii) there have been no serious violations by

24 the licensee of this Act or the rules and regulations

25 of the Commission; and
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1 ‘‘(iii) there have been no other violations by the

2 licensee of this Act or the rules and regulations of

3 the Commission which, taken together, would con4 stitute a pattern of abuse.

5 ‘‘(B) If any licensee of a broadcast station fails to

6 meet the requirements of this subsection, the Commission

7 may deny the application for renewal in accordance with

8 paragraph (2), or grant such application on appropriate

9 terms and conditions, including renewal for a term less

10 than the maximum otherwise permitted.

11 ‘‘(2) If the Commission determines that a licensee

12 has failed to meet the requirements specified in paragraph

13 (1)(A) and that no mitigating factors justify the imposi14 tion of lesser sanctions, the Commission shall—

15 ‘‘(A) issue an order denying the renewal appli16 cation filed by such licensee under section 308; and

17 ‘‘(B) only thereafter accept and consider such

18 applications for a construction permit as may be

19 filed under section 308 specifying the channel or

20 broadcasting facilities of the former licensee.

21 ‘‘(3) In making the determinations specified in para22 graphs (1) or (2)(A), the Commission shall not consider

23 whether the public interest, convenience, and necessity

24 might be served by the grant of a license to a person other

25 than the renewal applicant.’’.
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1 (2) Section 309(d) (47 U.S.C. 309(d)) is

2 amended by inserting ‘‘(or subsection (k) in the case

3 of renewal of any broadcast station license)’’ after

4 ‘‘with subsection (a)’’ each place it appears.

5 Subtitle B—Termination of Modification of Final

6 Judgment

7 SEC. 221. REMOVAL OF LONG DISTANCE RESTRICTIONS.

8 (a) IN GENERAL.—Part II of title II (47 U.S.C. 251

9 et seq.), as added by this Act, is amended by inserting

10 after section 254 the following new section:

11 ‘‘SEC. 255. INTEREXCHANGE TELECOMMUNICATIONS SERV12 ICES.

13 ‘‘(a) IN GENERAL.—Notwithstanding any restriction

14 or obligation imposed before the date of enactment of the

15 Telecommunications Act of 1995 under section II(D) of

16 the Modification of Final Judgment, a Bell operating com17 pany, or any subsidiary or affiliate of a Bell operating

18 company, that meets the requirements of this section may

19 provide—

20 ‘‘(1) interLATA telecommunications services

21 originating in any region in which it is the dominant

22 provider of wireline telephone exchange service or ex23 change access service after the Commission deter24 mines that it has fully implemented the competitive

25 checklist found in subsection (b)(2) in the area in
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1 which it seeks to provide interLATA telecommuni2 cations services, in accordance with the provisions of

3 subsection (c);

4 ‘‘(2) interLATA telecommunications services

5 originating in any area where that company is not

6 the dominant provider of wireline telephone ex7 change service or exchange access service in accord8 ance with the provisions of subsection (d); and

9 ‘‘(3) interLATA services that are incidental

10 services in accordance with the provisions of sub11 section (e).

12 ‘‘(b) SPECIFIC INTERLATA INTERCONNECTION RE13 QUIREMENTS.—

14 ‘‘(1) IN GENERAL.—A Bell operating company

15 may provide interLATA services in accordance with

16 this section only if that company has reached an

17 interconnection agreement under section 251 and

18 that agreement provides, at a minimum, for inter19 connection that meets the competitive checklist re20 quirements of paragraph (2).

21 ‘‘(2) COMPETITIVE CHECKLIST.—Interconnec22 tion provided by a Bell operating company to other

23 telecommunications carriers under section 251 shall

24 include:
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1 ‘‘(A) Nondiscriminatory access on an

2 unbundled basis to the network functions and

3 services of the Bell operating company’s tele4 communications network that is at least equal

5 in type, quality, and price to the access the Bell

6 operating company affords to itself or any other

7 entity.

8 ‘‘(B) The capability to exchange tele9 communications between customers of the Bell

10 operating company and the telecommunications

11 carrier seeking interconnection.

12 ‘‘(C) Nondiscriminatory access to the

13 poles, ducts, conduits, and rights-of-way owned

14 or controlled by the Bell operating company

15 where it has the legal authority to permit such

16 access.

17 ‘‘(D) Local loop transmission from the

18 central office to the customer’s premises,

19 unbundled from local switching or other serv20 ices.

21 ‘‘(E) Local transport from the trunk side

22 of a wireline local exchange carrier switch

23 unbundled from switching or other services.
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1 ‘‘(F) Local switching unbundled from

2 transport, local loop transmission, or other serv3 ices.

4 ‘‘(G) Nondiscriminatory access to—

5 ‘‘(i) 911 and E911 services;

6 ‘‘(ii) directory assistance services to

7 allow the other carrier’s customers to ob8 tain telephone numbers; and

9 ‘‘(iii) operator call completion services.

10 ‘‘(H) White pages directory listings for

11 customers of the other carrier’s telephone ex12 change service.

13 ‘‘(I) Until the date by which neutral tele14 phone number administration guidelines, plan,

15 or rules are established, nondiscriminatory ac16 cess to telephone numbers for assignment to the

17 other carrier’s telephone exchange service cus18 tomers. After that date, compliance with such

19 guidelines, plan, or rules.

20 ‘‘(J) Nondiscriminatory access to

21 databases and associated signaling, including

22 signaling links, signaling service control points,

23 and signaling service transfer points, necessary

24 for call routing and completion.
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1 ‘‘(K) Until the date by which the Commis2 sion determines that final telecommunications

3 number portability is technically feasible and

4 must be made available, interim telecommuni5 cations number portability through remote call

6 forwarding, direct inward dialing trunks, or

7 other comparable arrangements, with as little

8 impairment of functioning, quality, reliability,

9 and convenience as possible. After that date,

10 full compliance with final telecommunications

11 number portability.

12 ‘‘(L) Nondiscriminatory access to whatever

13 services or information may be necessary to

14 allow the requesting carrier to implement local

15 dialing parity in a manner that permits con16 sumers to be able to dial the same number of

17 digits when using any telecommunications car18 rier providing telephone exchange service or ex19 change access service.

20 ‘‘(M) Reciprocal compensation arrange21 ments on a nondiscriminatory basis for the

22 origination and termination of telecommuni23 cations.

24 ‘‘(N) Telecommunications services and net25 work functions provided on an unbundled basis
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1 without any conditions or restrictions on the re2 sale or sharing of those services or functions,

3 including both origination and termination of

4 telecommunications services, other than reason5 able conditions required by the Commission or

6 a State. For purposes of this subparagraph, it

7 is not an unreasonable condition for the Com8 mission or a State to limit the resale—

9 ‘‘(i) of services included in the defini10 tion of universal service to a telecommuni11 cations carrier who intends to resell that

12 service to a category of customers different

13 from the category of customers being of14 fered that universal service by such carrier

15 if the Commission or State orders a carrier

16 to provide the same service to different

17 categories of customers at different prices

18 necessary to promote universal service; or

19 ‘‘(ii) of subsidized universal service in

20 a manner that allows companies to charge

21 another carrier rates which reflect the ac22 tual cost of such services, exclusive of any

23 universal service support received for pro24 viding such services.
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1 ‘‘(3) JOINT MARKETING OF LOCAL AND LONG

2 DISTANCE SERVICES.—Until a Bell operating com3 pany is authorized to provide interLATA services in

4 a telephone exchange area, a telecommunications

5 carrier may not jointly market telephone exchange

6 service or exchange access service purchased from

7 such company with interexchange services offered by

8 that telecommunications carrier.

9 ‘‘(4) COMMISSION MAY NOT EXPAND COMPETI10 TIVE CHECKLIST.—The Commission may not, by

11 rule or otherwise, limit or extend the terms used in

12 the competitive checklist.

13 ‘‘(c) IN-REGION SERVICES.—

14 ‘‘(1) APPLICATION.—Upon the enactment of

15 the Telecommunications Act of 1995, a Bell operat16 ing company or its subsidiary or affiliate may apply

17 to the Commission for authorization notwithstanding

18 the Modification of Final Judgment to provide

19 interLATA telecommunications service originating in

20 any area where such Bell operating company is the

21 dominant provider of wireline telephone exchange

22 service or exchange access service. The application

23 shall describe with particularity the nature and

24 scope of the activity and of each product market or
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1 service market, and each geographic market for

2 which authorization is sought.

3 ‘‘(2) DETERMINATION BY COMMISSION.—

4 ‘‘(A) DETERMINATION.—Not later than 90

5 days after receiving an application under para6 graph (1), the Commission shall issue a written

7 determination, on the record after a hearing

8 and opportunity for comment, granting or deny9 ing the application in whole or in part. Before

10 making any determination under this subpara11 graph, the Commission shall consult with the

12 Attorney General regarding the application. In

13 consulting with the Commission under this sub14 paragraph, the Attorney General may apply any

15 appropriate standard.

16 ‘‘(B) APPROVAL.—The Commission may

17 only approve the authorization requested in an

18 application submitted under paragraph (1) if it

19 finds that—

20 ‘‘(i) the petitioning Bell operating

21 company has fully implemented the com22 petitive checklist found in subsection

23 (b)(2); and
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1 ‘‘(ii) the requested authority will be

2 carried out in accordance with the require3 ments of section 252,

4 and if the Commission determines that the re5 quested authorization is consistent with the

6 public interest, convenience, and necessity. If

7 the Commission does not approve an application

8 under this subparagraph, it shall state the basis

9 for its denial of the application.

10 ‘‘(3) PUBLICATION.—Not later than 10 days

11 after issuing a determination under paragraph (2),

12 the Commission shall publish in the Federal Register

13 a brief description of the determination.

14 ‘‘(4) JUDICIAL REVIEW.—

15 ‘‘(A) COMMENCEMENT OF ACTION.—Not

16 later than 45 days after a determination by the

17 Commission is published under paragraph (3),

18 the Bell operating company or its subsidiary or

19 affiliate that applied to the Commission under

20 paragraph (1), or any person who would be

21 threatened with loss or damage as a result of

22 the determination regarding such company’s en23 gaging in the activity described in its applica24 tion, may commence an action in any United

25 States Court of Appeals against the Commis-
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1 sion for judicial review of the determination re2 garding the application.

3 ‘‘(B) JUDGMENT.—

4 ‘‘(i) The Court shall enter a judgment

5 after reviewing the determination in ac6 cordance with section 706 of title 5 of the

7 United State Code.

8 ‘‘(ii) A judgment—

9 ‘‘(I) affirming any part of the de10 termination that approves granting all

11 or part of the requested authorization,

12 or

13 ‘‘(II) reversing any part of the

14 determination that denies all or part

15 of the requested authorization,

16 shall describe with particularity the nature

17 and scope of the activity, and of each prod18 uct market or service market, and each ge19 ographic market, to which the affirmance

20 or reversal applies.

21 ‘‘(5) REQUIREMENTS RELATING TO SEPARATE

22 SUBSIDIARY; SAFEGUARDS; AND INTRALATA TOLL

23 DIALING PARITY.—

24 ‘‘(A) SEPARATE SUBSIDIARY; SAFE25 GUARDS.—Other than interLATA services au-
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1 thorized by an order entered by the United

2 States District Court for the District of Colum3 bia pursuant to the Modification of Final Judg4 ment before the date of enactment of the Tele5 communications Act of 1995, a Bell operating

6 company, or any subsidiary or affiliate of such

7 a company, providing interLATA services au8 thorized under this subsection may provide such

9 interLATA services in that market only in ac10 cordance with the requirements of section 252.

11 ‘‘(B) INTRALATA TOLL DIALING PARITY.—

12 ‘‘(i) A Bell operating company grant13 ed authority to provide interLATA services

14 under this subsection shall provide

15 intraLATA toll dialing parity throughout

16 that market coincident with its exercise of

17 that authority. If the Commission finds

18 that such a Bell operating company has

19 provided interLATA service authorized

20 under this clause before its implementation

21 of intraLATA toll dialing parity through22 out that market, or fails to maintain

23 intraLATA toll dialing parity throughout

24 that market, the Commission, except in

25 cases of inadvertent interruptions or other
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1 events beyond the control of the Bell oper2 ating company, shall suspend the authority

3 to provide interLATA service for that mar4 ket until the Commission determines that

5 intraLATA toll dialing parity is imple6 mented or reinstated.

7 ‘‘(ii) A State may not order the imple8 mentation of toll dialing parity in an

9 intraLATA area before a Bell operating

10 company has been granted authority under

11 this subsection to provide interLATA serv12 ices in that area.

13 ‘‘(d) OUT-OF-REGION SERVICES.—A Bell operating

14 company or its subsidiary or affiliate may provide

15 interLATA telecommunications services originating in any

16 area where such company is not the dominant provider

17 of wireline telephone exchange service or exchange access

18 service upon the date of enactment of the Telecommuni19 cations Act of 1995.

20 ‘‘(e) INCIDENTAL SERVICES.—

21 ‘‘(1) IN GENERAL.—A Bell operating company

22 may provide interLATA services that are incidental

23 to the purposes of—
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1 ‘‘(A)(i) providing audio programming,

2 video programming, or other programming serv3 ices to subscribers of such company,

4 ‘‘(ii) providing the capability for inter5 action by such subscribers to select or respond

6 to such audio programming, video program7 ming, or other programming services, to order,

8 or control transmission of the programming,

9 polling or balloting, and ordering other goods or

10 services, or

11 ‘‘(iii) providing to distributors audio pro12 gramming or video programming that such

13 company owns, controls, or is licensed by the

14 copyright owner of such programming, or by an

15 assignee of such owner, to distribute,

16 ‘‘(B) providing a telecommunications serv17 ice, using the transmission facilities of a cable

18 system that is an affiliate of such company, be19 tween LATAs within a cable system franchise

20 area in which such company is not, on the date

21 of enactment of the Telecommunications Act of

22 1995, a provider of wireline telephone exchange

23 service,

24 ‘‘(C) providing a commercial mobile service

25 except where such service is a replacement for
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1 land line telephone exchange service for a sub2 stantial portion of the land line telephone ex3 change service in a State in accordance with

4 section 332(c) of this Act and with the regula5 tions prescribed by the Commission,

6 ‘‘(D) providing a service that permits a

7 customer that is located in one LATA to re8 trieve stored information from, or file informa9 tion for storage in, information storage facilities

10 of such company that are located in another

11 LATA area, so long as the customer acts af12 firmatively to initiate the storage or retrieval of

13 information, except that—

14 ‘‘(i) such service shall not cover any

15 service that establishes a direct connection

16 between end users or any real-time voice

17 and data transmission,

18 ‘‘(ii) such service shall not include

19 voice, data, or facsimile distribution serv20 ices in which the Bell operating company

21 or affiliate forwards customer-supplied in22 formation to customer- or carrier-selected

23 recipients;

24 ‘‘(iii) such service shall not include

25 any service in which the Bell operating
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1 company or affiliate searches for and con2 nects with the intended recipient of infor3 mation, or any service in which the Bell

4 operating company or affiliate automati5 cally forwards stored voicemail or other in6 formation to the intended recipient; and

7 ‘‘(iv) customers of such service shall

8 not be billed a separate charge for the

9 interLATA telecommunications furnished

10 in conjunction with the provision of such

11 service;

12 ‘‘(E) providing signaling information used

13 in connection with the provision of telephone ex14 change service or exchange access service to an15 other local exchange carrier; or

16 ‘‘(F) providing network control signaling

17 information to, and receiving such signaling in18 formation from, interexchange carriers at any

19 location within the area in which such company

20 provides telephone exchange service or exchange

21 access service.

22 ‘‘(2) LIMITATIONS.—The provisions of para23 graph (1) are intended to be narrowly construed.

24 The transmission facilities used by a Bell operating

25 company or affiliate thereof to provide interLATA
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1 telecommunications under subparagraphs (C) and

2 (D) of paragraph (1) shall be leased by that com3 pany from unaffiliated entities on terms and condi4 tions (including price) no more favorable than those

5 available to the competitors of that company until

6 that Bell operating company receives authority to

7 provide interLATA services under subsection (c).

8 The interLATA services provided under paragraph

9 (1)(A) are limited to those interLATA transmissions

10 incidental to the provision by a Bell operating com11 pany or its affiliate of video, audio, and other pro12 gramming services that the company or its affiliate

13 is engaged in providing to the public. A Bell operat14 ing company may not provide telecommunications

15 services not described in paragraph (1) without re16 ceiving the approvals required by subsection (c). The

17 provision of services authorized under this sub18 section by a Bell operating company or its affiliate

19 shall not adversely affect telephone exchange rate20 payers or competition in any telecommunications

21 market.

22 ‘‘(f) DEFINITIONS.—As used in this section—

23 ‘‘(1) LATA.—The term ‘LATA’ means a local

24 access and transport area as defined in United

25 States v. Western Electric Co., 569 F. Supp. 990
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1 (United States District Court, District of Columbia)

2 and subsequent judicial orders relating thereto.

3 ‘‘(2) AUDIO PROGRAMMING SERVICES.—The

4 term ‘audio programming services’ means program5 ming provided by, or generally considered to be com6 parable to programming provided by, a radio broad7 cast station.

8 ‘‘(3) VIDEO PROGRAMMING SERVICES; OTHER

9 PROGRAMMING SERVICES.—The terms ‘video pro10 gramming service’ and ‘other programming services’

11 have the same meanings as such terms have under

12 section 602 of this Act.’’.

13 (b) LONG DISTANCE ACCESS FOR COMMERCIAL MO14 BILE SERVICES.—Notwithstanding any restriction or obli15 gation imposed pursuant to the Modification of Final

16 Judgment prior to the date of enactment of this Act, a

17 person engaged in the provision of commercial mobile serv18 ices, insofar as such person is so engaged, shall not be

19 required to provide equal access to interexchange tele20 communications carriers unless required to do so under

21 the Communications Act of 1934. In connection with the

22 provision of two-way switched voice service, such a person

23 shall not block a subscriber from obtaining access to the

24 provider of interexchange services of the subscriber’s
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1 choice through the use of the access code assigned by the

2 Commission to each such provider.

3 SEC. 222. REMOVAL OF MANUFACTURING RESTRICTIONS.

4 (a) IN GENERAL.—Part II of title II (47 U.S.C. 251

5 et seq.), as added by this Act, is amended by inserting

6 after section 255 the following new section:

7 ‘‘SEC. 256. REGULATION OF MANUFACTURING BY BELL OP8 ERATING COMPANIES.

9 ‘‘(a) AUTHORIZATION.—

10 ‘‘(1) IN GENERAL.—Notwithstanding any re11 striction or obligation imposed before the date of en12 actment of the Telecommunications Act of 1995

13 pursuant to the Modification of Final Judgment on

14 the lines of business in which a Bell operating com15 pany may engage, if the Commission authorizes a

16 Bell operating company to provide interLATA serv17 ices under section 255, then that company may be

18 authorized by the Commission to manufacture and

19 provide telecommunications equipment, and to man20 ufacture customer premises equipment, at any time

21 after that determination is made, subject to the re22 quirements of this section and the regulations pre23 scribed thereunder.

24 ‘‘(2) CERTAIN RESEARCH AND DESIGN AR25 RANGEMENTS; ROYALTY AGREEMENTS.—Upon the
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1 enactment of the Telecommunications Act of 1995,

2 a Bell operating company may—

3 ‘‘(A) engage in research and design activi4 ties related to manufacturing, and

5 ‘‘(B) enter into royalty agreements with

6 manufacturers of telecommunications equip7 ment.

8 ‘‘(b) SEPARATE SUBSIDIARY; SAFEGUARDS.—Any

9 manufacturing or provision of equipment authorized under

10 subsection (a) shall be conducted in accordance with the

11 requirements of section 252.

12 ‘‘(c) PROTECTION OF SMALL TELEPHONE COMPANY

13 INTERESTS.—

14 ‘‘(1) EQUIPMENT TO BE MADE AVAILABLE TO

15 OTHERS.—A manufacturing subsidiary of a Bell op16 erating company shall make available, without dis17 crimination or self-preference as to price, delivery,

18 terms, or conditions, to all local exchange carriers,

19 for use with the public telecommunications network,

20 any telecommunications equipment, including soft21 ware integral to such telecommunications equipment,

22 including upgrades, manufactured by such subsidi23 ary if each such purchasing carrier—
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1 ‘‘(A) does not manufacture telecommuni2 cations equipment or have a subsidiary which

3 manufactures telecommunications equipment; or

4 ‘‘(B) agrees to make available, to the Bell

5 operating company that is the parent of the

6 manufacturing subsidiary or any of the local ex7 change carrier affiliates of such Bell company,

8 any telecommunications equipment, including

9 software integral to such telecommunications

10 equipment, including upgrades, manufactured

11 for use with the public telecommunications net12 work by such purchasing carrier or by any en13 tity or organization with which such purchasing

14 carrier is affiliated.

15 ‘‘(2) SALES TO OTHER LOCAL EXCHANGE CAR16 RIERS.—

17 ‘‘(A) A Bell operating company and any

18 entity acting on its behalf shall make procure19 ment decisions and award all supply contracts

20 for equipment, services, and software on the

21 basis of open, competitive bidding, and an ob22 jective assessment of price, quality, delivery,

23 and other commercial factors.

24 ‘‘(B) A Bell operating company and any

25 entity it owns or otherwise controls shall permit
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1 any person to participate fully on a non-dis2 criminatory basis in the process of establishing

3 standards and certifying equipment used in or

4 interconnected to the public telecommunications

5 network.

6 ‘‘(C) A manufacturing subsidiary of a Bell

7 operating company may not restrict sales to any

8 local exchange carrier of telecommunications

9 equipment, including software integral to the

10 operation of such equipment and related up11 grades.

12 ‘‘(D) A Bell operating company and any

13 entity it owns or otherwise controls shall protect

14 the proprietary information submitted with con15 tract bids and in the standards and certification

16 processes from release not specifically author17 ized by the owner of such information.

18 ‘‘(d) COLLABORATION WITH OTHER MANUFACTUR19 ERS.—A Bell operating company and its subsidiaries or

20 affiliates may engage in close collaboration with any man21 ufacturer of customer premises equipment or tele22 communications equipment not affiliated with a Bell oper23 ating company during the design and development of

24 hardware, software, or combinations thereof relating to

25 such equipment.
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1 ‘‘(e) ADDITIONAL RULES AND REGULATIONS.—The

2 Commission may prescribe such additional rules and regu3 lations as the Commission determines are necessary to

4 carry out the provisions of this section.

5 ‘‘(f) ADMINISTRATION AND ENFORCEMENT.—

6 ‘‘(1) COMMISSION AUTHORITY.—For the pur7 poses of administering and enforcing the provisions

8 of this section and the regulations prescribed under

9 this section, the Commission shall have the same au10 thority, power, and functions with respect to any

11 Bell operating company as the Commission has in

12 administering and enforcing the provisions of this

13 title with respect to any common carrier subject to

14 this Act.

15 ‘‘(2) CIVIL ACTIONS BY INJURED CARRIERS.—

16 Any local exchange carrier injured by an act or

17 omission of a Bell operating company or its manu18 facturing subsidiary or affiliate which violates the

19 requirements of paragraph (1) or (2) of subsection

20 (c), or the Commission’s regulations implementing

21 such paragraphs, may initiate an action in a district

22 court of the United States to recover the full amount

23 of damages sustained in consequence of any such

24 violation and obtain such orders from the court as

25 are necessary to terminate existing violations and to
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1 prevent future violations; or such local exchange car2 rier may seek relief from the Commission pursuant

3 to sections 206 through 209.

4 ‘‘(g) APPLICATION TO BELL COMMUNICATIONS RE5 SEARCH.—Nothing in this section—

6 ‘‘(1) provides any authority for Bell Commu7 nications Research, or any successor entity, to man8 ufacture or provide telecommunications equipment

9 or to manufacture customer premises equipment; or

10 ‘‘(2) prohibits Bell Communications Research,

11 or any successor entity, from engaging in any activ12 ity in which it is lawfully engaged on the date of en13 actment of the Telecommunications Act of 1995, in14 cluding providing a centralized organization for the

15 provision of engineering, administrative, and other

16 services (including serving as a single point of con17 tact for coordination of the Bell operating companies

18 to meet national security and emergency prepared19 ness requirements).

20 ‘‘(h) DEFINITIONS.—As used in this section—

21 ‘‘(1) The term ‘customer premises equipment’

22 means equipment employed on the premises of a

23 person (other than a carrier) to originate, route, or

24 terminate telecommunications.
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1 ‘‘(2) The term ‘manufacturing’ has the same

2 meaning as such term has in the Modification of

3 Final Judgment.

4 ‘‘(3) The term ‘telecommunications equipment’

5 means equipment, other than customer premises

6 equipment, used by a carrier to provide tele7 communications services.’’.

8 (b) EFFECT ON PRE-EXISTING MANUFACTURING AU9 THORITY.—Nothing in this section, or in section 256 of

10 the Communications Act of 1934 as added by this section,

11 prohibits any Bell operating company from engaging, di12 rectly or through any subsidiary or affiliate, in any manu13 facturing activity in which any Bell operating company,

14 subsidiary, or affiliate was authorized to engage on the

15 date of enactment of this Act.

16 SEC. 223. EXISTING ACTIVITIES.

17 Nothing in this Act, or any amendment made by this

18 Act, prohibits a Bell operating company from engaging,

19 at any time after the date of enactment of this Act, in

20 any activity authorized by an order entered by the United

21 States District Court for the District of Columbia pursu22 ant to section VII or VIII(C) of the Modification of Final

23 Judgment, if such order was entered on or before the date

24 of enactment of this Act.
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1 SEC. 224. ENFORCEMENT.

2 (a) IN GENERAL.—Part II of title II (47 U.S.C. 251

3 et seq.), as added by this Act, is amended by inserting

4 after section 256 the following:

5 ‘‘SEC. 257. ENFORCEMENT.

6 ‘‘(a) IN GENERAL.—In addition to any penalty, fine,

7 or other enforcement remedy under this Act, the failure

8 by a telecommunications carrier to implement the require9 ments of section 251 or 255, including a failure to comply

10 with the terms of an interconnection agreement approved

11 under section 251, is punishable by a civil penalty of not

12 to exceed $1,000,000 per offense. Each day of a continu13 ing offense shall be treated as a separate violation for pur14 poses of levying any penalty under this subsection.

15 ‘‘(b) NONCOMPLIANCE WITH INTERCONNECTION OR

16 SEPARATE SUBSIDIARY REQUIREMENTS.—

17 ‘‘(1) A Bell operating company that repeatedly,

18 knowingly, and without reasonable cause fails to im19 plement an interconnection agreement approved

20 under section 251, to comply with the requirements

21 of such agreement after implementing them, or to

22 comply with the separate subsidiary requirements of

23 this part may be fined up to $500,000,000 by a dis24 trict court of the United States of competent juris25 diction.
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1 ‘‘(2) A Bell operating company that repeatedly,

2 knowingly, and without reasonable cause fails to

3 meet its obligations under section 255 for the provi4 sion of interLATA service may have its authority to

5 provide any service the right to provide which is con6 ditioned upon meeting such obligations suspended.’’.

7 ‘‘(c) ENFORCEMENT BY PRIVATE RIGHT OF AC8 TION.—

9 ‘‘(1) DAMAGES.—Any person who is injured in

10 its business or property by reason of a violation of

11 this section may bring a civil action in any district

12 court of the United States in the district in which

13 the defendant resides or is found or has an agent,

14 without respect to the amount in controversy.

15 ‘‘(2) INTEREST.—The court may award under

16 this section, pursuant to a motion by such person

17 promptly made, simple interest on actual damages

18 for the period beginning on the date of service of

19 such person’s pleading setting forth a claim under

20 this title and ending on the date of judgment, or for

21 any shorter period therein, if the court finds that

22 the award of such interest for such period is just in

23 the circumstances.’’.

24 (b) CERTAIN BROADCASTS.—Section 1307(a)(2) of

25 title 18, United States Code, is amended—
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1 (1) by striking ‘‘or’’ after the semicolon at the

2 end of subparagraph (A);

3 (2) by striking the period at the end of sub4 paragraph (B) and inserting a semicolon and ‘‘or’’;

5 and

6 (3) by adding at the end thereof the following:

7 ‘‘(C) conducted by a commercial organiza8 tion and is contained in a publication published

9 in a State in which such activities or the publi10 cation of such activities are authorized or not

11 otherwise prohibited, or broadcast by a radio or

12 television station licensed in a State in which

13 such activities or the broadcast of such activi14 ties are authorized or not otherwise prohib15 ited.’’.

16 SEC. 225. ALARM MONITORING SERVICES.

17 Part II of title II (47 U.S.C. 251 et seq.), as added

18 by this Act, is amended by inserting after section 257 the

19 following new section:

20 ‘‘SEC. 258. REGULATION OF ENTRY INTO ALARM MONITOR21 ING SERVICES.

22 ‘‘(a) IN GENERAL.—Except as provided in this sec23 tion, a Bell operating company, or any subsidiary or affili24 ate of that company, may not provide alarm monitoring

25 services for the protection of life, safety, or property. A
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1 Bell operating company may transport alarm monitoring

2 service signals on a common carrier basis only.

3 ‘‘(b) AUTHORITY TO PROVIDE ALARM MONITORING

4 SERVICES.—Beginning 3 years after the date of enact5 ment of the Telecommunications Act of 1995, a Bell oper6 ating company may provide alarm monitoring services for

7 the protection of life, safety, or property if it has been

8 authorized to provide interLATA services under section

9 255 unless the Commission finds that the provision of

10 alarm monitoring services by such company is not in the

11 public interest. The Commission may not find that provi12 sion of alarm monitoring services by a Bell operating com13 pany is in the public interest until it finds that it has the

14 capability effectively to enforce any requirements, limita15 tions, or conditions that may be placed upon a Bell operat16 ing company in the provision of alarm monitoring services,

17 including the regulations prescribed under subsection (c).

18 ‘‘(c) REGULATIONS REQUIRED.—

19 ‘‘(1) Not later than 1 year after the date of en20 actment of the Telecommunications Act of 1995, the

21 Commission shall prescribe regulations—

22 ‘‘(A) to establish such requirements, limi23 tations, or conditions as are—

24 ‘‘(i) necessary and appropriate in the

25 public interest with respect to the provision
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1 of alarm monitoring services by Bell oper2 ating companies and their subsidiaries and

3 affiliates, and

4 ‘‘(ii) effective at such time as a Bell

5 operating company or any of its subsidi6 aries or affiliates is authorized to provide

7 alarm monitoring services; and

8 ‘‘(B) to establish procedures for the receipt

9 and review of complaints concerning violations

10 by such companies of such regulations, or of

11 any other provision of this Act or the regula12 tions thereunder, that result in material finan13 cial harm to a provider of alarm monitoring

14 services.

15 ‘‘(2) A Bell operating company, its subsidiaries

16 and affiliates, and any local exchange carrier are

17 prohibited from recording or using in any fashion

18 the occurrence or contents of calls received by pro19 viders of alarm monitoring services for the purposes

20 of marketing such services on behalf of the Bell op21 erating company, any of its subsidiaries or affiliates,

22 the local exchange carrier, or any other entity. Any

23 regulations necessary to enforce this paragraph shall

24 be issued initially within 6 months after the date of

25 enactment of the Telecommunications Act of 1995.
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1 ‘‘(d) EXPEDITED CONSIDERATION OF COM2 PLAINTS.—The procedures established under sub3 section (c) shall ensure that the Commission will

4 make a final determination with respect to any com5 plaint described in such subsection within 120 days

6 after receipt of the complaint. If the complaint con7 tains an appropriate showing that the alleged viola8 tion occurred, as determined by the Commission in

9 accordance with such regulations, the Commission

10 shall, within 60 days after receipt of the complaint,

11 issue a cease and desist order to prevent the Bell op12 erating company and its subsidiaries and affiliates

13 from continuing to engage in such violation pending

14 such final determination.

15 ‘‘(e) REMEDIES.—The Commission may use any rem16 edy available under title V of this Act to terminate and

17 punish violations described in subsection (c). Such rem18 edies may include, if the Commission determines that such

19 violation was willful or repeated, ordering the Bell operat20 ing company or its subsidiary or affiliate to cease offering

21 alarm monitoring services.

22 ‘‘(f) SAVINGS PROVISION.—Subsections (a) and (b)

23 do not prohibit or limit the provision of alarm monitoring

24 services by a Bell operating company that was engaged
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1 in providing those services as of December 31, 1994, to

2 the extent that such company—

3 ‘‘(1) continues to provide those services through

4 the subsidiary or affiliate through which it was pro5 viding them on that date; and

6 ‘‘(2) does not acquire, directly or indirectly, an

7 equity interest in another entity engaged in provid8 ing alarm monitoring services, and does not acquire,

9 or enter into an agreement to provide, the alarm

10 monitoring service activities of another entity.

11 ‘‘(g) ALARM MONITORING SERVICES DEFINED.—As

12 used in this section, the term ‘alarm monitoring services’

13 means services that detect threats to life, safety, or prop14 erty by burglary, fire, vandalism, bodily injury, or other

15 emergency through the use of devices that transmit signals

16 to a central point in a customer’s residence, place of busi17 ness, or other fixed premises which—

18 ‘‘(1) retransmits such signals to a remote mon19 itoring center by means of telecommunications facili20 ties of the Bell operating company and any subsidi21 ary or affiliate; and

22 ‘‘(2) serves to alert persons at the monitoring

23 center of the need to inform customers, other per24 sons, or police, fire, rescue, or other security or pub25 lic safety personnel of the threat at such premises.
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1 Such term does not include medical monitoring devices at2 tached to individuals for the automatic surveillance of on3 going medical conditions.’’.

4 TITLE III—AN END TO REGULATION

5 SEC. 301. TRANSITION TO COMPETITIVE PRICING.

6 (a) PRICING FLEXIBILITY.—

7 (1) IN GENERAL.—The Commission and the

8 States shall provide to telecommunications carriers

9 price flexibility in the rates charged consumers for

10 the provision of telecommunications services within

11 one year after the date of enactment of this Act.

12 The Commission or a State may establish the rate

13 consumers may be charged for services included in

14 the definition of universal service, as well as the con15 tribution, if any, that all carriers must contribute for

16 the preservation and advancement of universal serv17 ice.

18 (2) CONSUMER PROTECTION.—The Commission

19 and the States shall ensure that rates for residential

20 telephone service remain just, reasonable, and af21 fordable as competition develops for telephone ex22 change service and telephone exchange access serv23 ice. Where only a single carrier provides a service in

24 a market, the Commission or a State may establish

25 the rate that a carrier may charge for any such serv-
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1 ice if such rate is necessary for the protection of

2 consumers. Any such rate shall cease to be regulated

3 whenever the Commission or a State determines that

4 it is no longer necessary for the protection of con5 sumers. The Commission shall establish cost alloca6 tion guidelines for facilities owned by an essential

7 telecommunications carrier that are used for the

8 provision of both services included in the definition

9 of universal service and video programming sold by

10 such carrier directly to subscribers, if such allocation

11 is necessary for the protection of consumers.

12 (3) RATE-OF-RETURN REGULATION ELIMI13 NATED.—

14 (A) In instituting the price flexibility re15 quired under paragraph (1) the Commission

16 and the States shall establish alternative forms

17 of regulation for Tier 1 telecommunications car18 riers that do not include regulation of the rate

19 of return earned by such carrier as part of a

20 plan that provides for any or all of the follow21 ing—

22 (i) the advancement of competition in

23 the provision of telecommunications serv24 ices;

25 (ii) improvements in productivity;
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1 (iii) improvements in service quality;

2 (iv) measures to ensure customers of

3 non-competitive services do not bear the

4 risks associated with the provision of com5 petitive services;

6 (v) enhanced telecommunications serv7 ices for educational institutions; or

8 (vi) any other measures Commission

9 or a State, as appropriate, determines to

10 be in the public interest.

11 (B) The Commission or a State, as appro12 priate, may apply such alternative forms of reg13 ulation to any other telecommunications carrier

14 that is subject to rate of return regulation

15 under this Act.

16 (C) Any such alternative form of regula17 tion—

18 (i) shall be consistent with the objec19 tives of preserving and advancing universal

20 service, guaranteeing high quality service,

21 ensuring just, reasonable, and affordable

22 rates, and encouraging economic efficiency;

23 and

24 (ii) shall meet such other criteria as

25 the Commission or a State, as appropriate,
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1 finds to be consistent with the public inter2 est, convenience, and necessity.

3 (b) TRANSITION PLAN REQUIRED.—If the Commis4 sion or a State adopts rules for the distribution of support

5 payments under section 253 of the Communications Act

6 of 1934, as amended by this Act, such rules shall include

7 a transition plan to allow essential telecommunications

8 carriers to provide for an orderly transition from the uni9 versal service support mechanisms in existence upon the

10 date of enactment of this Act and the support mechanisms

11 established by the Commission and the States under this

12 Act or the Communications Act of 1934 as amended by

13 this Act. Any such transition plan shall—

14 (1) provide a phase-in of the price flexibility re15 quirements under subsection (a) for an essential

16 telecommunications carrier that is also a rural tele17 phone company; and

18 (2) require the United States Government and

19 the States, where permitted by law, to modify any

20 regulatory requirements (including conditions for the

21 repayment of loans and the depreciation of assets)

22 applicable to carriers designated as essential tele23 communications carriers in order to more accurately

24 reflect the conditions that would be imposed in a

25 competitive market for similar assets or services.
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1 (c) DUTY TO PROVIDE SUBSCRIBER LIST INFORMA2 TION.—

3 (1) IN GENERAL.—A carrier that provides local

4 exchange telephone service shall provide subscriber

5 list information gathered in its capacity as a pro6 vider of such service on a timely and unbundled

7 basis, under nondiscriminatory and reasonable rates,

8 terms, and conditions, to any person upon request.

9 (2) SUBSCRIBER LIST INFORMATION DE10 FINED.—As used in this subsection, the term ‘‘sub11 scriber list information’’ means any information—

12 (A) identifying the listed names of sub13 scribers of a carrier and such subscribers’ listed

14 telephone numbers, addresses, or primary ad15 vertising classifications, as such classifications

16 are assigned at the time of the establishment of

17 service, or any combination of such names,

18 numbers, addresses, or classifications; and

19 (B) that the carrier or an affiliate has pub20 lished, caused to be published, or accepted for

21 publication in a directory in any format.

22 SEC. 302. BIENNIAL REVIEW OF REGULATIONS.

23 Part II of title II (47 U.S.C. 251 et seq.), as added

24 by this Act, is amended by inserting after section 258 the

25 following new section:
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1 ‘‘SEC. 259. REGULATORY REFORM.

2 ‘‘(a) BIENNIAL REVIEW OF REGULATIONS.—In every

3 odd-numbered year (beginning with 1997), the Commis4 sion, with respect to its regulations under this Act, and

5 a Federal-State Joint Board established under section

6 410, for State regulations—

7 ‘‘(1) shall review all regulations issued under

8 this Act, or under State law, in effect at the time

9 of the review that apply to operations or activities of

10 providers of any telecommunications services; and

11 ‘‘(2) shall determine whether any such regula12 tion is no longer necessary in the public interest as

13 the result of meaningful economic competition be14 tween the providers of such service.

15 ‘‘(b) EFFECT OF DETERMINATION.—The Commis16 sion shall repeal any regulation it determines to be no

17 longer necessary in the public interest. The Joint Board

18 shall notify the Governor of any State of any State regula19 tion it determines to be no longer necessary in the public

20 interest.’’.

21 SEC. 303. REGULATORY FORBEARANCE.

22 Part II of title II (47 U.S.C. 251 et seq.), as added

23 by this Act, is amended by inserting after section 259 the

24 following new section:
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1 ‘‘SEC. 260. COMPETITION IN PROVISION OF TELECOMMUNI2 CATIONS SERVICE.

3 ‘‘(a) REGULATORY FLEXIBILITY.—The Commission

4 may forbear from applying any regulation or any provision

5 of this Act to a telecommunications carrier or service, or

6 class of carriers or services, in any or some of its or their

7 geographic markets if the Commission determines that—

8 ‘‘(1) enforcement of such regulation or provi9 sion is not necessary to ensure that the charges,

10 practices, classifications, or regulations by, for, or in

11 connection with that carrier or service are just and

12 reasonable and are not unjustly or unreasonably dis13 criminatory;

14 ‘‘(2) enforcement of such regulation or provi15 sion is not necessary for the protection of consum16 ers; and

17 ‘‘(3) forbearance from applying such regulation

18 or provision is consistent with the public interest.

19 ‘‘(b) COMPETITIVE EFFECT TO BE WEIGHED.—In

20 making the determination under subsection (a)(3), the

21 Commission shall consider whether forbearance from en22 forcing the regulation or provision will promote competi23 tive market conditions, including the extent to which such

24 forbearance will enhance competition among providers of

25 telecommunications services. If the Commission deter26 mines that such forbearance will promote competition
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1 among providers of telecommunications services, that de2 termination may be the basis for a Commission finding

3 that forbearance is in the public interest.

4 ‘‘(c) LIMITATION.—Except as provided in section

5 251(i)(3), the Commission may not waive the unbundling

6 requirements of section 251(b) or 255(b)(2) under sub7 section (a) until it determines that those requirements

8 have been fully implemented.’’.

9 SEC. 304. ADVANCED TELECOMMUNICATIONS INCENTIVES.

10 (a) IN GENERAL.—The Commission and each State

11 commission with regulatory jurisdiction over telecommuni12 cations services shall encourage the deployment on a rea13 sonable and timely basis of advanced telecommunications

14 capability to all Americans (including, in particular, ele15 mentary and secondary schools and classrooms) by utiliz16 ing, in a manner consistent with the public interest, con17 venience, and necessity, price cap regulation, regulatory

18 forbearance, or other regulating methods that remove bar19 riers to infrastructure investment.

20 (b) INQUIRY.—The Commission shall, within 2 years

21 after the date of enactment of this Act, and regularly

22 thereafter, initiate a notice of inquiry concerning the avail23 ability of advanced telecommunications capability to all

24 Americans (including, in particular, elementary and sec25 ondary schools and classrooms) and shall complete the in-
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1 quiry within 180 days after its initiation. In the inquiry,

2 the Commission shall determine whether advanced tele3 communications capability is being deployed to all Ameri4 cans in a reasonable and timely fashion. If the Commis5 sion’s determination is negative, it shall take immediate

6 action under this section, and it may preempt State com7 missions that fail to act to ensure such availability.

8 (c) DEFINITIONS.—For purposes of this section—

9 (1) COMMUNICATIONS ACT TERMS.—Any term

10 used in this section which is defined in the Commu11 nications Act of 1934 shall have the same meaning

12 as it has in that Act.

13 (2) ADVANCED TELECOMMUNICATIONS CAPA14 BILITY.—The term ‘‘advanced telecommunications

15 capability’’ means high-speed, switched, broadband

16 telecommunications capability that enables users to

17 originate and receive high-quality voice, data, graph18 ics, and video telecommunications.

19 (3) ELEMENTARY AND SECONDARY SCHOOLS.—

20 The term ‘‘elementary and secondary schools’’

21 means elementary schools and secondary schools, as

22 defined in paragraphs (14) and (25), respectively, of

23 section 10401 of the Elementary and Secondary

24 Education Act of 1965 (20 U.S.C. 8801).
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1 SEC. 305. REGULATORY PARITY.

2 Within 3 years after the date of enactment of this

3 Act, and periodically thereafter, the Commission shall—

4 (1) issue such modifications or terminations of

5 the regulations applicable to persons offering tele6 communications or information services under title

7 II, III, or VI of the Communications Act of 1934 as

8 are necessary to implement the changes in such Act

9 made by this Act;

10 (2) in the regulations that apply to integrated

11 telecommunications service providers, take into ac12 count the unique and disparate histories associated

13 with the development and relative market power of

14 such providers, making such modifications and ad15 justments as are necessary in the regulation of such

16 providers as are appropriate to enhance competition

17 between such providers in light of that history; and

18 (3) provide for periodic reconsideration of any

19 modifications or terminations made to such regula20 tions, with the goal of applying the same set of regu21 latory requirements to all integrated telecommuni22 cations service providers, regardless of which par23 ticular telecommunications or information service

24 may have been each provider’s original line of busi25 ness.
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1 SEC. 306. AUTOMATED SHIP DISTRESS AND SAFETY SYS2 TEMS.

3 Notwithstanding any provision of the Communica4 tions Act of 1934 or any other provision of law or regula5 tion, a ship documented under the laws of the United

6 States operating in accordance with the Global Maritime

7 Distress and Safety System provisions of the Safety of

8 Life at Sea Convention shall not be required to be

9 equipped with a radio telegraphy station operated by one

10 or more radio officers or operators.

11 SEC. 307. TELECOMMUNICATIONS NUMBERING ADMINIS12 TRATION.

13 Part II of title II (47 U.S.C. 251 et seq.), as added

14 by this Act, is amended by inserting after section 260 the

15 following new section:

16 ‘‘SEC. 261. TELECOMMUNICATIONS NUMBERING ADMINIS17 TRATION.

18 ‘‘(a) INTERIM NUMBER PORTABILITY.—In connec19 tion with any interconnection agreement reached under

20 section 251 of this Act, a local exchange carrier shall make

21 available interim telecommunications number portability,

22 upon request, beginning on the date of enactment of the

23 Telecommunications Act of 1995.

24 ‘‘(b) FINAL NUMBER PORTABILITY.—In connection

25 with any interconnection agreement reached under section

26 251 of this Act, a local exchange carrier shall make avail-
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1 able final telecommunications number portability, upon re2 quest, when the Commission determines that final tele3 communications number portability is technically feasible.

4 ‘‘(c) NEUTRAL ADMINISTRATION OF NUMBERING

5 PLANS.—

6 ‘‘(1) NATIONWIDE NEUTRAL NUMBER SYSTEM

7 COMPLIANCE.— A telecommunications carrier pro8 viding telephone exchange service shall comply with

9 the guidelines, plan, or rules established by an im10 partial entity designated by the Commission for the

11 administration of a nationwide neutral number sys12 tem.

13 ‘‘(2) OVERLAY OF AREA CODES NOT PER14 MITTED.—All telecommunications carriers providing

15 telephone exchange service in the same telephone

16 service area shall be assigned the same numbering

17 plan area code under such guideline, plan, or rules.

18 ‘‘(d) COSTS.—The cost of establishing neutral num19 ber administration arrangements and number portability

20 shall be borne by all telecommunications carriers on a

21 competitively neutral basis.’’.

22 SEC. 308. ACCESS BY PERSONS WITH DISABILITIES.

23 (a) IN GENERAL.—Part II of title II (47 U.S.C. 251

24 et seq.), as added by this Act, is amended by inserting

25 after section 261 the following new section:
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1 ‘‘SEC. 262. ACCESS BY PERSONS WITH DISABILITIES.

2 ‘‘(a) DEFINITIONS.—As used in this section—

3 ‘‘(1) DISABILITY.—The term ‘disability’ has the

4 meaning given to it by section 3(2)(A) of the Ameri5 cans with Disabilities Act of 1990 (42 U.S.C.

6 12102(2)(A)).

7 ‘‘(2) READILY ACHIEVABLE.—The term ‘readily

8 achievable’ has the meaning given to it by section

9 301(9) of that Act (42 U.S.C. 12181(9)).

10 ‘‘(b) MANUFACTURING.—A manufacturer of tele11 communications equipment and customer premises equip12 ment shall ensure that the equipment is designed, devel13 oped, and fabricated to be accessible to and usable by indi14 viduals with disabilities, if readily achievable.

15 ‘‘(c) TELECOMMUNICATIONS SERVICES.—A provider

16 of telecommunications service shall ensure that the service

17 is accessible to and usable by individuals with disabilities,

18 if readily achievable.

19 ‘‘(d) COMPATIBILITY.—Whenever the requirements

20 of subsections (b) and (c) are not readily achievable, such

21 a manufacturer or provider shall ensure that the equip22 ment or service is compatible with existing peripheral de23 vices or specialized customer premises equipment com24 monly used by individuals with disabilities to achieve ac25 cess, if readily achievable.
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1 ‘‘(e) STANDARDS.—Within 1 year after the date of

2 enactment of the Telecommunications Act of 1995, the

3 Architectural and Transportation Barriers Compliance

4 Board described in section 504 of the Americans with Dis5 abilities Act of 1990 (42 U.S.C. 12204) shall develop

6 standards for accessibility of telecommunications equip7 ment, customer premises equipment, and telecommuni8 cations services, in conjunction with the National Tele9 communications and Information Administration and the

10 National Institute of Standards and Technology. The

11 Board shall review and update the standards periodically.

12 ‘‘(f) CLOSED CAPTIONING.—

13 ‘‘(1) IN GENERAL.—The Commission shall en14 sure that—

15 ‘‘(A) video programming is accessible

16 through closed captions, if readily achievable,

17 except as provided in paragraph (2); and

18 ‘‘(B) video programming providers or own19 ers maximize the accessibility of video program20 ming previously published or exhibited through

21 the provision of closed captions, if readily

22 achievable, except as provided in paragraph (2).

23 ‘‘(2) EXEMPTIONS.—Notwithstanding para24 graph (1)—
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1 ‘‘(A) the Commission may exempt pro2 grams, classes of programs, locally produced

3 programs, providers, classes of providers, or

4 services for which the Commission has deter5 mined that the provision of closed captioning

6 would not be readily achievable to the provider

7 or owner of such programming;

8 ‘‘(B) a provider of video programming or

9 the owner of any program carried by the pro10 vider shall not be obligated to supply closed

11 captions if such action would be inconsistent

12 with a binding contract in effect on the date of

13 enactment of the Telecommunications Act of

14 1995 for the remaining term of that contract

15 (determined without regard to any extension of

16 such term), except that nothing in this subpara17 graph relieves a video programming provider of

18 its obligation to provide services otherwise re19 quired by Federal law; and

20 ‘‘(C) a provider of video programming or a

21 program owner may petition the Commission

22 for an exemption from the requirements of this

23 section, and the Commission may grant such a

24 petition upon a showing that the requirements
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1 contained in this section would not be readily

2 achievable.

3 ‘‘(3) STUDIES.—The Commission shall under4 take studies of the current extent (as of the date of

5 enactment of the Telecommunications Act of 1995)

6 of—

7 ‘‘(A) closed captioning of video program8 ming and of previously published video pro9 gramming;

10 ‘‘(B) providers of video programming;

11 ‘‘(C) the cost and market for closed cap12 tioning;

13 ‘‘(D) strategies to improve competition and

14 innovation in the provision of closed captioning;

15 and

16 ‘‘(E) such other matters as the Commis17 sion considers relevant.

18 ‘‘(g) REGULATIONS.—The Commission shall, not

19 later than 18 months after the date of enactment of the

20 Telecommunications Act of 1995, prescribe regulations to

21 implement this section. The regulations shall be consistent

22 with the standards developed by the Architectural and

23 Transportation Barriers Compliance Board in accordance

24 with subsection (e).
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1 ‘‘(h) ENFORCEMENT.—The Commission shall enforce

2 this section. The Commission shall resolve, by final order,

3 a complaint alleging a violation of this section within 180

4 days after the date on which the complaint is filed with

5 the Commission.’’.

6 (b) VIDEO DESCRIPTION.—Within 6 months after the

7 date of enactment of this Act, the Commission shall un8 dertake a study of the feasibility of requiring the use of

9 video descriptions on video programming in order to en10 sure the accessibility of video programming to individuals

11 with visual impairments. For purposes of this subsection,

12 the term ‘‘video description’’ means the insertion of audio

13 narrative descriptions of a television program’s key visual

14 elements into natural pauses between the program’s dia15 logue.

16 SEC. 309. RURAL MARKETS.

17 Part II of title II (47 U.S.C. 251 et seq.), as added

18 by this Act, is amended by inserting after section 262 the

19 following new section:

20 ‘‘SEC. 263. RURAL MARKETS.

21 ‘‘(a) STATE AUTHORITY IN RURAL MARKETS.—Ex22 cept as provided in section 251(i)(3), a State may not

23 waive or modify any requirements of section 251, but may

24 adopt statutes or regulations that are no more restrictive

25 than—
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1 ‘‘(1) to require an enforceable commitment by

2 each competing provider of telecommunications serv3 ice to offer universal service comparable to that of4 fered by the rural telephone company currently pro5 viding service in that service area, and to make such

6 service available within 24 months of the approval

7 date to all consumers throughout that service area

8 on a common carrier basis, either using the appli9 cant’s facilities or through its own facilities and re10 sale of services using another carrier’s facilities (in11 cluding the facilities of the rural telephone com12 pany), and subject to the same terms, conditions,

13 and rate structure requirements as those applicable

14 to the rural telephone company currently providing

15 universal service;

16 ‘‘(2) to require that the State must approve an

17 application by a competing telecommunications car18 rier to provide services in a market served by a rural

19 telephone company and that approval be based on

20 sufficient written public findings and conclusions to

21 demonstrate that such approval is in the public in22 terest and that there will not be a significant ad23 verse impact on users of telecommunications services

24 or on the provision of universal service;
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1 ‘‘(3) to encourage the development and deploy2 ment of advanced telecommunications and informa3 tion infrastructure and services in rural areas; or

4 ‘‘(4) to protect the public safety and welfare,

5 ensure the continued quality of telecommunications

6 and information services, or safeguard the rights of

7 consumers.

8 ‘‘(b) PREEMPTION.—Upon a proper showing, the

9 Commission may preempt any State statute or regulation

10 that the Commission finds to be inconsistent with the

11 Commission’s regulations implementing this section, or an

12 arbitrary or unreasonably discriminatory application of

13 such statute or regulation. The Commission shall act upon

14 any bona fide petition filed under this subsection within

15 180 days of receiving such petition. Pending such action,

16 the Commission may, in the public interest, suspend or

17 modify application of any statute or regulation to which

18 the petition applies.’’.

19 SEC. 310. TELECOMMUNICATIONS SERVICES FOR HEALTH

20 CARE PROVIDERS FOR RURAL AREAS, EDU21 CATIONAL PROVIDERS, AND LIBRARIES.

22 Part II of title II (47 U.S.C. 251 et seq.), as added

23 by this Act, is amended by inserting after section 263 the

24 following:
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1 ‘‘SEC. 264. TELECOMMUNICATIONS SERVICES FOR CERTAIN

2 PROVIDERS.

3 ‘‘(a) IN GENERAL.—

4 ‘‘(1) HEALTH CARE PROVIDERS FOR RURAL

5 AREAS.—A telecommunications carrier designated as

6 an essential telecommunications carrier under sec7 tion 214(d) shall, upon receiving a bona fide request,

8 provide telecommunications services which are nec9 essary for the provision of health care services, in10 cluding instruction relating to such service, at rates

11 that are reasonably comparable to rates charged for

12 similar services in urban areas to any public or non13 profit health care provider that serves persons who

14 reside in rural areas.

15 ‘‘(2) EDUCATIONAL PROVIDERS AND LIBRAR16 IES.—Any telecommunications carrier shall, upon re17 ceiving a bona fide request, provide universal service

18 (as defined under section 253) at rates that are af19 fordable and not higher than the incremental cost

20 thereof to elementary schools, secondary schools, and

21 libraries for telecommunications services that permit

22 such schools and libraries to provide or receive edu23 cational services.

24 ‘‘(b) SUPPORT PAYMENTS.—If the Commission

25 adopts rules for the distribution of support payments for

26 the preservation and advancement of universal service, the
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1 Commission shall include the amount of the support pay2 ments reasonably necessary to provide universal service

3 (including any costs related to the provision of comparable

4 rates under subsection (a)(1)) to public institutional tele5 communications users in any universal service support

6 mechanism it may establish under section 253.

7 ‘‘(c) ADVANCED SERVICES.—The Commission shall

8 establish rules—

9 ‘‘(1) to enhance, to the extent technically fea10 sible and economically reasonable, the availability of

11 advanced telecommunications and information serv12 ices to all public and nonprofit elementary and sec13 ondary school classrooms, health care providers, and

14 libraries;

15 ‘‘(2) to ensure that appropriate functional re16 quirements or performance standards, or both, in17 cluding interconnection standards, are established

18 for telecommunications carriers that connect such

19 public institutional telecommunications users with

20 the public switched network;

21 ‘‘(3) to define the circumstances under which a

22 telecommunications carrier may be required to con23 nect its network to such public institutional tele24 communications users; and
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1 ‘‘(4) to address other matters as the Commis2 sion may determine.

3 ‘‘(d) DEFINITIONS.—

4 ‘‘(1) ELEMENTARY AND SECONDARY

5 SCHOOLS.—The term ‘elementary and secondary

6 schools’ means elementary schools and secondary

7 schools, as defined in paragraphs (14) and (25), re8 spectively, of section 14101 of the Elementary and

9 Secondary Education Act of 1965 (20 U.S.C. 8801).

10 ‘‘(2) UNIVERSAL SERVICE.—The Commission

11 may in the public interest provide a separate defini12 tion of universal service under section 253(b) for ap13 plication only to public institutional telecommuni14 cations users.

15 ‘‘(3) HEALTH CARE PROVIDER.—The term

16 ‘health care provider’ means—

17 ‘‘(A) Post-secondary educational institu18 tions, teaching hospitals, and medical schools.

19 ‘‘(B) Community health centers or health

20 centers providing health care to migrants.

21 ‘‘(C) Local health departments or agencies.

22 ‘‘(D) Community mental health centers.

23 ‘‘(E) Not-for-profit hospitals.

24 ‘‘(F) Rural health clinics.
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1 ‘‘(G) Consortia of health care providers

2 consisting of one or more entities described in

3 subparagraphs (A) through (F).

4 ‘‘(4) PUBLIC INSTITUTIONAL TELECOMMUNI5 CATIONS USER.—The term ‘public institutional tele6 communications user’ means an elementary or sec7 ondary school, a library, or a health care provider as

8 those terms are defined in this subsection.’’.

9 SEC. 311. PROVISION OF PAYPHONE SERVICE AND

10 TELEMESSAGING SERVICE.

11 Part II of title II (47 U.S.C. 251 et seq.), as added

12 by this Act, is amended by adding after section 264 the

13 following new section:

14 ‘‘SEC. 265. PROVISION OF PAYPHONE SERVICE AND

15 TELEMESSAGING SERVICE.

16 ‘‘(a) NONDISCRIMINATION SAFEGUARDS.—Any Bell

17 operating company that provides payphone service or

18 telemessaging service—

19 ‘‘(1) shall not subsidize its payphone service or

20 telemessaging service directly or indirectly with reve21 nue from its telephone exchange service or its ex22 change access service; and

23 ‘‘(2) shall not prefer or discriminate in favor of

24 its payphone service or telemessaging service.

25 ‘‘(b) DEFINITIONS.—As used in this section—
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1 ‘‘(1) The term ‘payphone service’ means the

2 provision of telecommunications service through pub3 lic or semi-public pay telephones, and includes the

4 provision of service to inmates in correctional insti5 tutions.

6 ‘‘(2) The term ‘telemessaging service’ means

7 voice mail and voice storage and retrieval services,

8 any live operator services used to record, transcribe,

9 or relay messages (other than telecommunications

10 relay services), and any ancillary services offered in

11 combination with these services.

12 ‘‘(c) REGULATIONS.—Not later than 18 months after

13 the date of enactment of the Telecommunications Act of

14 1995, the Commission shall complete a rulemaking pro15 ceeding to prescribe regulations to carry out this section.

16 In that rulemaking proceeding, the Commission shall de17 termine whether, in order to enforce the requirements of

18 this section, it is appropriate to require the Bell operating

19 companies to provide payphone service or telemessaging

20 service through a separate subsidiary that meets the re21 quirements of section 252.’’.
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1 TITLE IV—OBSCENE, HARRASSING, AND

2 WRONGFUL UTILIZATION OF TELE3 COMMUNICATIONS FACILITIES

4 SEC. 401. SHORT TITLE.

5 This title may be cited as the ‘‘Communications De6 cency Act of 1995’’.

7 SEC. 402. OBSCENE OR HARASSING USE OF TELECOMMUNI8 CATIONS FACILITIES UNDER THE COMMU9 NICATIONS ACT OF 1934.

10 (a) OFFENSES.—Section 223 (47 U.S.C. 223) is

11 amended—

12 (1) in subsection (a)(1)—

13 (A) by striking out ‘‘telephone’’ in the

14 matter above subparagraph (A) and inserting

15 ‘‘telecommunications device’’;

16 (B) by striking out subparagraph (A) and

17 inserting the following:

18 ‘‘(A) knowingly—

19 ‘‘(i) makes, creates, or solicits, and

20 ‘‘(ii) initiates the transmission of,

21 any comment, request, suggestion, proposal,

22 image, or other communication which is ob23 scene, lewd, lascivious, filthy, or indecent;’’;

24 (C) by striking out subparagraph (B) and

25 inserting the following:
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1 ‘‘(B) makes a telephone call or utilizes a

2 telecommunications device, whether or not con3 versation or communications ensues, without

4 disclosing his identity and with intent to annoy,

5 abuse, threaten, or harass any person at the

6 called number or who receives the communica7 tion;’’ and

8 (D) by striking out subparagraph (D) and

9 inserting the following:

10 ‘‘(D) makes repeated telephone calls or re11 peatedly initiates communication with a tele12 communications device, during which conversa13 tion or communication ensues, solely to harass

14 any person at the called number or who receives

15 the communication; or’’;

16 (2) in subsection (a)(2), by striking ‘‘telephone’’

17 and inserting ‘‘telecommunications’’ and by striking

18 ‘‘section’’ and inserting ‘‘subsection’’;

19 (3) in subsection (b)(1)—

20 (A) by striking subparagraph (A) and in21 serting the following:

22 ‘‘(A) within the United States, by means of

23 a telecommunications device—

24 ‘‘(i) makes, creates, or solicits, and

25 ‘‘(ii) purposefully makes available,
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1 any obscene communication for commercial pur2 poses to any person, regardless of whether the

3 maker of such communication placed the call or

4 initiated the communication; or’’; and

5 (B) in subparagraph (B), by striking ‘‘tele6 phone facility’’ and inserting ‘‘telecommuni7 cations facility’’; and

8 (4) in subsection (b)(2)—

9 (A) by striking subparagraph (A) and in10 serting the following:

11 ‘‘(A) within the United States, by means of

12 telephone or telecommunications device,

13 ‘‘(i) makes, creates, or solicits, and

14 ‘‘(ii) purposefully makes available (di15 rectly or by recording device),

16 any indecent communication for commercial

17 purposes which is available to any person under

18 18 years of age or to any other person without

19 that person’s consent, regardless of whether the

20 maker of such communication placed the call;

21 or’’; and

22 (B) in subparagraph (B), by striking ‘‘tele23 phone facility’’ and inserting in lieu thereof

24 ‘‘telecommunications facility’’.
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1 (b) PENALTIES.—Section 223 (47 U.S.C. 223) is

2 amended—

3 (1) by striking out ‘‘$50,000’’ each place it ap4 pears and inserting ‘‘$100,000’’; and

5 (2) by striking ‘‘six months’’ each place it ap6 pears and inserting ‘‘2 years’’.

7 (c) PROHIBITION ON PROVISION OF ACCESS.—Sec8 tion 223(c)(1) (47 U.S.C. 223(c)(1)) is amended by strik9 ing ‘‘telephone’’ and inserting ‘‘telecommunications de10 vice’’.

11 (d) ADDITIONAL DEFENSES.—Section 223 (47

12 U.S.C. 223) is amended by adding at the end the follow13 ing:

14 ‘‘(d) ADDITIONAL DEFENSES; RESTRICTIONS ON AC15 CESS; JUDICIAL REMEDIES RESPECTING RESTRIC16 TIONS.—

17 ‘‘(1) No person shall be held to have violated

18 this section with respect to any action by that per19 son or a system under his control that is limited

20 solely to the provision of access, including trans21 mission, downloading, intermediate storage, naviga22 tional tools, and related capabilities not involving the

23 creation or alteration of the content of the commu24 nications, for another person’s communications to or
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1 from a service, facility, system, or network not under

2 that person’s control.

3 ‘‘(2) It is a defense to prosecution under sub4 sections (a)(2), (b)(1)(B), and (b)(2)(B) that a de5 fendant lacked editorial control over the communica6 tion specified in this section.

7 ‘‘(3) It is a defense to prosecution under sub8 sections (a)(2), (b)(1)(B), and (b)(2)(B) that a de9 fendant has taken good faith, reasonable steps, as

10 appropriate—

11 ‘‘(A) to provide users with the means to re12 strict access to communications described in

13 this section;

14 ‘‘(B) provide users with warnings concern15 ing the potential for access to such communica16 tions;

17 ‘‘(C) to respond to complaints from those

18 who are subjected to such communications;

19 ‘‘(D) to provide mechanisms to enforce a

20 provider’s terms of service governing such com21 munications; or

22 ‘‘(E) to implement such other measures as

23 the Commission may prescribe to carry out the

24 purposes of this paragraph. Nothing in this sec25 tion in and of itself shall be construed to treat
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1 enhanced information services as common car2 riage.

3 ‘‘(4) In addition to other defenses authorized

4 under this section, it shall be a defense to prosecu5 tion under subsection (b) that a defendant is not en6 gaged in a commercial activity that has as a pre7 dominant purpose an activity specified in that sub8 section.

9 ‘‘(5) No cause of action may be brought in any

10 court or administrative agency against any person

11 on account of any action which the person has taken

12 in good faith to implement a defense authorized

13 under this section or otherwise to restrict or prevent

14 the transmission of, or access to, a communication

15 specified in this section. The preceding sentence

16 shall not apply where the good faith defenses under

17 subsection (c)(2) apply.

18 ‘‘(6) No State or local government may impose

19 any liability in connection with a violation described

20 in subsection (a)(2), (b)(1)(B), (b)(2)(B) that is in21 consistent with the treatment of those violations

22 under this section provided, however, that nothing

23 herein shall preclude any State or local government

24 from enacting and enforcing complementary over25 sight, liability, and regulatory systems, procedures,
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1 and requirements, so long as such systems, proce2 dures, and requirements govern only intrastate serv3 ices and do not result in the imposition of inconsist4 ent obligations on the provision of interstate serv5 ices.

6 ‘‘(e) KNOWINGLY DEFINED.—For purposes of sub7 sections (a) and (b), the term ‘knowingly’ means an inten8 tional act with actual knowledge of the specific content

9 of the communication specified in this section to another

10 person.’’.

11 (e) CONFORMING AMENDMENT.—The section head12 ing for section 223 is amended to read as follows:

13 ‘‘SEC. 223. OBSCENE OR HARASSING UTILIZATION OF TELE14 COMMUNICATIONS DEVICES AND FACILITIES

15 IN THE DISTRICT OF COLUMBIA OR IN INTER16 STATE OR FOREIGN COMMUNICATIONS’’.

17 SEC. 403. OBSCENE PROGRAMMING ON CABLE TELEVISION.

18 Section 639 (47 U.S.C. 559) is amended by striking

19 ‘‘$10,000’’ and inserting ‘‘$100,000’’.

20 SEC. 404. BROADCASTING OBSCENE LANGUAGE ON RADIO.

21 Section 1464 of title 18, United States Code, is

22 amended by striking out ‘‘$10,000’’ and inserting

23 ‘‘$100,000’’.
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1 SEC. 405. INTERCEPTION AND DISCLOSURE OF ELEC2 TRONIC COMMUNICATIONS.

3 Section 2511 of title 18, United States Code, is

4 amended—

5 (1) in paragraph (1)—

6 (A) by striking ‘‘wire, oral, or electronic

7 communication’’ each place it appears and in8 serting ‘‘wire, oral, electronic, or digital commu9 nication’’, and

10 (B) in subdivision (b), by striking ‘‘oral

11 communication’’ in the matter above clause (i)

12 and inserting ‘‘communication’’; and

13 (2) in paragraph (2)(a), by striking ‘‘wire or

14 electronic communication service’’ each place it ap15 pears (other than in the second sentence) and insert16 ing ‘‘wire, electronic, or digital communication serv17 ice’’.

18 SEC. 406. ADDITIONAL PROHIBITION ON BILLING FOR

19 TOLL-FREE TELEPHONE CALLS.

20 Section 228(c)(7) (47 U.S.C. 228(c)(7)) is amend21 ed—

22 (1) by striking ‘‘or’’ at the end of subparagraph

23 (C);

24 (2) by striking the period at the end of sub25 paragraph (D) and inserting a semicolon and ‘‘or’’;

26 and
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1 (3) by adding at the end thereof the following:

2 ‘‘(E) the calling party being assessed, by

3 virtue of being asked to connect or otherwise

4 transfer to a pay-per-call service, a charge for

5 the call.’’.

6 SEC. 407. SCRAMBLING OF CABLE CHANNELS FOR

7 NONSUBSCRIBERS.

8 Part IV of title VI (47 U.S. C. 551 et seq.) is amend9 ed by adding at the end the following:

10 ‘‘SEC. 640. SCRAMBLING OF CABLE CHANNELS FOR

11 NONSUBSCRIBERS.

12 ‘‘(a) REQUIREMENT.—In providing video program13 ming unsuitable for children to any subscriber through a

14 cable system, a cable operator shall fully scramble or oth15 erwise fully block the video and audio portion of each

16 channel carrying such programming upon subscriber re17 quest and without any charge so that one not a subscriber

18 does not receive it.

19 ‘‘(b) DEFINITION.—As used in this section, the term

20 ‘scramble’ means to rearrange the content of the signal

21 of the programming so that the programming cannot be

22 received by persons unauthorized to receive the program23 ming.’’.
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1 SEC. 408. CABLE OPERATOR REFUSAL TO CARRY CERTAIN

2 PROGRAMS.

3 (a) PUBLIC, EDUCATIONAL, AND GOVERNMENTAL

4 CHANNELS.—Section 611(e) (47 U.S.C. 531(e)) is

5 amended by inserting before the period the following: ‘‘,

6 except a cable operator may refuse to transmit any public

7 access program or portion of a public access program

8 which contains obscenity, indecency, or nudity’’.

9 (b) CABLE CHANNELS FOR COMMERCIAL USE.—Sec10 tion 612(c)(2) (47 U.S.C. 532(c)(2)) is amended by strik11 ing ‘‘an operator’’ and inserting ‘‘a cable operator may

12 refuse to transmit any leased access program or portion

13 of a leased access program which contains obscenity, inde14 cency, or nudity’’.