II

103D CONGRESS

2D SESSION S. 1822

To foster the further development of the Nation’s telecommunications

infrastructure and protection of the public interest, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 3 (legislative day, JANUARY 25), 1994

Mr. HOLLINGS (for himself, Mr. DANFORTH, Mr. INOUYE, Mr. STEVENS, Mr.

EXON, Mr. PRESSLER, Mr. ROCKEFELLER, Mr. BURNS, Mr. ROBB, Mr.

GORTON, Mr. DORGAN, Mr. KERREY, and Mr. KERRY) introduced the

following bill; which was read twice and referred to the Committee on

Commerce, Science, and Transportation

A BILL

To foster the further development of the Nation’s telecommunications infrastructure and protection of the public interest, 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,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Communications Act

5 of 1994’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—
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1 (1) Congress has not passed a broad review of

2 the Communications Act of 1934 since that Act was

3 originally passed;

4 (2) Congress must pass comprehensive commu5 nications legislation to promote the development and

6 growth of the national information superhighway;

7 (3) changes in the telecommunications market8 place have made some of the provisions of the Com9 munications Act of 1934 obsolete, unnecessary, or

10 inimical to advances in communications technologies

11 and services;

12 (4) for instance, competition has emerged in

13 many services that were previously thought to be

14 natural monopolies, but the Communications Act of

15 1934 requires all carriers to be regulated as if they

16 were monopolies;

17 (5) as communications markets change, govern18 ment must ensure that the public interest, conven19 ience and necessity is preserved;

20 (6) the public interest requires that universal

21 telephone service is protected and advanced, that

22 new telecommunications technologies are deployed

23 rapidly and equitably, and that access by schools,

24 hospitals, public broadcasters, libraries, other public

25 entities, community newspapers, and broadcasters in
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1 the smallest markets to advanced telecommuni2 cations services is assisted;

3 (7) access to basic telecommunications services

4 is fundamental to safety of life and participation in

5 a democratic society;

6 (8) telecommunications networks make substan7 tial use of public rights of way in real property and

8 in spectrum frequencies, and carriers that make use

9 of such public rights of way have an obligation to

10 provide preferential rates to entities that provide sig11 nificant public benefits;

12 (9) advanced telecommunications services can

13 enhance the quality of life and promote economic de14 velopment and international competitiveness;

15 (10) telecommunications infrastructure develop16 ment is particularly crucial to the continued eco17 nomic development of rural areas that may lack an

18 adequate industrial or service base for continued de19 velopment;

20 (11) advancements in the Nation’s tele21 communications infrastructure will enhance the pub22 lic welfare by helping to speed the delivery of new

23 services, such as distance learning, remote medical

24 sensing, and distribution of health information;
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1 (12) infrastructure advancement can be assisted

2 by joint planning and infrastructure sharing by all

3 carriers providing communications services;

4 (13) increased competition in telecommuni5 cations services can, if subject to appropriate safe6 guards, encourage infrastructure development and

7 have beneficial effects on the price, universal avail8 ability, variety, and quality of telecommunications

9 services;

10 (14) the emergence of competition in tele11 communications services has already contributed,

12 and can be expected to continue contributing, to the

13 modernization of the infrastructure;

14 (15) competition in the long distance industry

15 and the communications equipment market has

16 brought about lower prices and higher quality serv17 ices;

18 (16) competition for local communications serv19 ices has already begun to benefit the public; com20 petitive access providers have deployed thousands of

21 miles of optical fiber in their local networks; local ex22 change carriers have been prompted by competition

23 to accelerate the installation of optical fiber in their

24 own networks;
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1 (17) electric utilities, satellite carriers, and oth2 ers are prepared to enter the local telephone market

3 over the next few years;

4 (18) a diversity of telecommunications carriers

5 enhances network reliability by providing redundant

6 capacity, thereby lessening the impact of any net7 work failure;

8 (19) competition must proceed under rules that

9 protect consumers and are fair to all telecommuni10 cations carriers;

11 (20) all telecommunications carriers, including

12 competitors to the telephone companies, should con13 tribute to universal service and should make their

14 networks available for interconnection by others;

15 (21) removal of all State and local barriers to

16 entry into the telecommunications services market

17 and provision of national standards for interconnec18 tion are warranted after mechanisms to protect uni19 versal service and rules are established to ensure

20 that competition develops fairly;

21 (22) increasing the availability of interconnec22 tion and interoperability among the facilities of tele23 communications carriers will help stimulate the de24 velopment of fair competition among providers;
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1 (23) the portability of telecommunications num2 bers will eliminate a significant advantage held by

3 traditional telephone companies over competitors in

4 the provision of telecommunications services;

5 (24) restrictions on resale and sharing of tele6 communications networks retard the growth of com7 petition and restrict the diversity of services avail8 able to the public;

9 (25) additional regulatory measures are needed

10 to allow consumers in rural markets and non11 competitive markets the opportunity to benefit from

12 high-quality telecommunications capabilities;

13 (26) regulatory flexibility for existing providers

14 of telephone exchange service is necessary to allow

15 them to respond to competition;

16 (27) the Federal Communications Commission

17 (hereinafter referred to as the ‘‘Commission’’) and

18 the States must have the flexibility to adjust their

19 regulations to the market power of each provider of

20 telecommunications services;

21 (28) the Commission should take steps to en22 sure network reliability and the development of net23 work standards;

24 (29) access to switched, digital telecommuni25 cations service for all segments of the population
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1 promotes the core First Amendment goal of diverse

2 information sources by enabling individuals and or3 ganizations alike to publish and otherwise make in4 formation available in electronic form;

5 (30) the national welfare will be enhanced if

6 community newspapers and broadcasters in the

7 smallest markets are provided ease of entry into the

8 operation of information services disseminated

9 through electronic means primarily to customers in

10 the localities served by such newspapers and broad11 casters at reasonable, nondiscriminatory rates to

12 such newspapers;

13 (31) a clear national mandate is needed for full

14 participation in access to telecommunications net15 works and services by individuals with disabilities;

16 (32) the obligations of telecommunications car17 riers includes the duty to furnish telecommuni18 cations services which are designed to be fully acces19 sible to individuals with disabilities in accordance

20 with such standards as the Commission may pre21 scribe;

22 (33) permitting the Bell operating companies to

23 enter the manufacturing market will stimulate great24 er research and development, create more jobs, and

25 enhance our international competitiveness;
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1 (34) the Bell operating companies should be

2 permitted to provide long distance service for cable

3 television and for cellular hands off immediately be4 cause there is little harm, if any, that such entry

5 could cause the public;

6 (35) the Bell operating companies should not be

7 permitted to enter the market for other long dis8 tance services until they have eliminated the barriers

9 to competition and interconnection and until the Bell

10 operating company faces competition for local tele11 phone service;

12 (36) safeguards are necessary to ensure that

13 the Bell operating companies do not abuse their

14 market power over local telephone service to dis15 criminate against competitors in the markets for

16 electronic publishing, alarm, and other information

17 services;

18 (37) amending the legal barriers to the provi19 sion of video programming by telephone companies

20 in their service areas will encourage competition to

21 existing cable television service providers and en22 courage telephone companies to upgrade their tele23 communications facilities to enable them to deliver

24 video programming, as long as telephone companies
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1 are prohibited from buying or combining with exist2 ing cable companies in their telephone service areas;

3 (38) as communications technologies and serv4 ices proliferate, consumers must be given the right

5 to control information concerning their use of those

6 technologies and services; and

7 (39) as competition in the media increases, the

8 Commission should reexamine the need for national

9 and local ownership limits on broadcast stations,

10 consistent with the need to maintain diversity of in11 formation sources.

12 SEC. 3. EFFECT ON OTHER LAW.

13 (a) ANTITRUST LAWS.—Nothing in this Act shall be

14 construed to modify, impair, or supersede the applicability

15 of any antitrust law.

16 (b) FEDERAL, STATE, AND LOCAL LAW.—(1) Except

17 as provided in paragraph (2), this Act shall not be con18 strued to modify, impair, or supersede Federal, State, or

19 local law unless expressly so provided in this Act.

20 (2) This Act shall supersede State and local law to

21 the extent that such law would impair or prevent the oper22 ation of this Act.
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1 TITLE I—PROTECTION AND

2 ADVANCEMENT OF UNIVERSAL SERVICE

3 SEC. 101. NATIONAL POLICY GOALS.

4 Section 1 of the Communications Act of 1934 (47

5 U.S.C. 151) is amended by inserting ‘‘(a)’’ immediately

6 before ‘‘For the purpose of’’ and by adding at the end

7 the following new subsection:

8 ‘‘(b) the primary objective of United States national

9 and international communications policy shall be to pro10 tect the public interest. The goals of United States na11 tional and international communications policy shall in12 clude the following:

13 ‘‘(1) To ensure that every person has access to

14 basic telecommunications at reasonable charges.

15 ‘‘(2) To promote the development and wide16 spread availability of new technologies.

17 ‘‘(3) To ensure that consumes have access to

18 diverse sources of information.

19 ‘‘(4) To allow each individual the opportunity to

20 contribute to the free flow of ideas and information

21 through telecommunications services.

22 ‘‘(5) To maximize the contribution of commu23 nications and information technologies and services

24 to economic welfare and quality of life.
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1 ‘‘(6) To protect each individual’s right to con2 trol the use of information concerning his or her use

3 of telecommunications services.

4 ‘‘(7) To promote democracy.’’.

5 SEC. 102. UNIVERSAL SERVICE PROTECTION AND AD6 VANCEMENT.

7 (a) IN GENERAL.—Title II of the Communications

8 Act of 1934 (47 U.S.C. 201 et seq.) is amended by adding

9 immediately after section 201 the following new section:

10 ‘‘SEC. 201A. UNIVERSAL SERVICE PROTECTION AND AD11 VANCEMENT.

12 ‘‘(a) DUTY TO CONTRIBUTE.—It shall be the duty of

13 every common carrier engaged in intrastate, interstate, or

14 foreign communication by wire or radio to contribute to

15 the preservation and advancement of universal service.

16 Such contributions can include monetary payment, certain

17 service obligations, in-kind payment, or other forms of

18 contribution as determined by the Commission and any

19 State as set forth in subsections (b) and (c).

20 ‘‘(b) RESPONSIBILITIES OF THE COMMISSION.—(1)

21 Within one year after the date of enactment of this sec22 tion, the Commission, after receiving comment from the

23 States, shall set forth minimum guidelines for the defini24 tion of universal service. Such guidelines shall ensure

25 that—
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1 ‘‘(A) universal service includes no less than

2 voice grade telephone exchange services at a charge

3 that includes no more than a reasonable share of the

4 joint and common costs of facilities used to provide

5 such services; and

6 ‘‘(B) any other service that utilizes such facili7 ties shall bear a reasonable share of such costs.

8 The Commission shall periodically revise such guidelines.

9 ‘‘(2) Within two years after the date of enactment

10 of this section, the Commission shall prescribe and imple11 ment regulations to provide that a charge be collected, or

12 other action be taken, to ensure that providers of inter13 state telecommunications make a contribution to the pro14 tection and advancement of universal service on a competi15 tively neutral basis. Any funds contributed under this sec16 tion shall be distributed to each State.

17 ‘‘(c) PRIMARY RESPONSIBILITY.—(1) The Commis18 sion shall delegate to each State the primary responsibility

19 for defining universal service and ensuring that universal

20 service goals are met. Each State may impose a non21 discriminatory charge on intrastate telecommunications,

22 or take other action, as the State finds necessary to pro23 tect and advance universal service.

24 ‘‘(2) In considering methods of protecting and ad25 vancing universal service, the State may consider assisting
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1 directly telecommunications carriers, assisting directly in2 dividuals and entities who cannot afford the cost of certain

3 telecommunications services, assisting directly individuals

4 or entities in purchasing or leasing equipment or program5 ming, allowing carriers to compete for the right to obtain

6 funding in exchange for providing certain services, and

7 other options. To the extent that a State establishes a

8 fund to support universal service, all provider of tele9 communications services shall be eligible to receive pay10 ment from such fund.

11 ‘‘(3) If a State has not implemented procedures to

12 carry out the objectives of paragraphs (1) and (2) within

13 two years after the date of enactment of this section, or

14 at any time thereafter fails to meet the objectives of such

15 paragraphs, the Commission shall assume the primary re16 sponsibility to ensure that those objectives are met.’’

17 (b) CONFORMING AMENDMENT.—Section

18 332(c)(1)(A) of the Communications Act of 1934 (47

19 U.S.C. 332(c)(1)(A)) is amended by inserting ‘‘201A,’’

20 immediately after ‘‘section 201,’’.

21 SEC. 103. PUBLIC ACCESS.

22 (a) AMENDMENT.—Section 202 of the Communica23 tions Act of 1934 (47 U.S.C. 202) is amended by adding

24 at the end the following new subsection:
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1 ‘‘(d)(1) Notwithstanding subsections (a) through (c),

2 it shall be the duty of all telecommunications carriers that

3 use public rights of way to permit educational institutions,

4 health-care institutions, local and State governments, pub5 lic broadcast stations, public libraries, other public enti6 ties, community newspapers, and broadcasters in the

7 smallest markets to obtain access to intrastate and inter8 state services provided by such carriers at preferential

9 rates. Entities that obtain services under this provision

10 may not resell such services, except to other entities that

11 are eligible for preferential rates under this subsection.

12 ‘‘(2) Within one year after the date of enactment of

13 this subsection, the Commission shall prescribe regulations

14 to enforce the provisions of this subsection.’’.

15 (b) RULEMAKING ON ADVANCED TELECOMMUNI16 CATIONS SERVICES.—The Commission shall commence a

17 rulemaking proceeding for the purpose of prescribing reg18 ulations that—

19 (1) enhance, to the extent feasible, the availabil20 ity of advanced telecommunications services to all

21 public elementary and secondary school classrooms,

22 health care institutions, and libraries; and

23 (2) ensure that appropriate functional require24 ments or performance standards, or both, including

25 interoperability standards, are established for tele-
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1 communications arrangements that interconnect

2 educational institutions, health care institutions, and

3 libraries with the public switched network.

4 TITLE II—TELECOMMUNICATIONS

5 INVESTMENT

6 SEC. 201. INFRASTRUCTURE INVESTMENT.

7 Title II of the Communications Act of 1934 (47

8 U.S.C. 201 et seq.), as amended by this Act, is further

9 amended by adding at the end the following new section:

10 ‘‘SEC. 229. INFRASTRUCTURE INVESTMENT.

11 ‘‘(a) RURAL MARKETS AND NONCOMPETITIVE MAR12 KETS.—If State regulatory authorities fail to achieve the

13 goal of ensuring that telecommunications carriers provide

14 consumers in rural markets and noncompetitive markets

15 with access to high quality, interoperable telecommuni16 cations network facilities and capabilities which—

17 ‘‘(1) provide subscribers with sufficient inter18 active bi-directional network capacity to allow access

19 to information services that provide a combination of

20 voice, data, image, and video; and

21 ‘‘(2) are widely available at reasonable non22 discriminatory rates that are based on reasonably

23 identifiable costs of providing such services,

24 then the Commission may take any action necessary to

25 achieve that goal.
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1 ‘‘(b) FULL EFFECTUATION.—The Commission shall

2 have the authority to preempt any State or local statute

3 or regulation, or other State or local legal requirement,

4 that prevents the full effectuation of the goal embodied

5 in subsection (a).

6 ‘‘(c) STATE REGULATORY INCENTIVES.—The States

7 are encouraged to implement regulatory incentives to pro8 mote the development of high quality telecommunications

9 network facilities and capabilities. If regulatory incentives

10 fail to result in the deployment of high quality tele11 communications network facilities and capabilities in rural

12 markets and noncompetitive markets, the States may

13 adopt other methods to ensure that the goal of subsection

14 (a) is achieved.

15 ‘‘(d) NETWORK STANDARDS AND PLANNING.—

16 ‘‘(1) NETWORK STANDARDS.—

17 ‘‘(A) INTERCONNECTION AND INTEROPER18 ABILITY STANDARDS.—The Commission shall

19 encourage telecommunications carriers and tele20 communications equipment manufacturers to

21 develop standards to ensure interconnection and

22 interoperability of telecommunications net23 works.

24 ‘‘(B) INDUSTRY ASSISTANCE.—The Com25 mission shall, when necessary, establish dead-
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1 lines, create incentives, or use other mecha2 nisms to assist the industry to develop and im3 plement such standards.

4 ‘‘(C) COMMISSION AUTHORITY TO ESTAB5 LISH STANDARDS.—The Commission may es6 tablish standards when industry participants

7 fail to reach agreement.

8 ‘‘(2) NETWORK PLANNING.—

9 ‘‘(A) REGULATIONS ON JOINT COORDI10 NATED ACTION.—The Commission shall pre11 scribe regulations that permit joint coordinated

12 network planning, design, and cooperative im13 plementation among all telecommunications car14 riers in the provision of public switched network

15 infrastructure and services.

16 ‘‘(B) PROCEDURES.—The Commission

17 shall prescribe regulations establishing proce18 dures to ensure that—

19 ‘‘(i) telecommunications carriers shall

20 make available timely information to other

21 such carriers and information service pro22 viders in the same geographic area about

23 the deployment of telecommunications

24 equipment, including software integral to

25 such telecommunications equipment, in-
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1 cluding upgrades, that will affect a tele2 communications carrier’s or information

3 service provider’s ability to interconnect or

4 interoperate in the same geographic area;

5 ‘‘(ii) telecommunications carriers shall

6 not be required to share information re7 quired under clause (i) with anyone, in8 cluding carriers with whom they directly

9 compete, except as may be necessary to

10 meet the interconnection and interoper11 ability requirements set forth in this para12 graph; and

13 ‘‘(iii) the recipient of any information

14 described in clause (i) shall use it only for

15 its own interconnection and interoper16 ability.

17 ‘‘(3) INFRASTRUCTURE SHARING ARRANGE18 MENTS BETWEEN OR AMONG TELECOMMUNICATIONS

19 CARRIERS.—

20 ‘‘(A) REGULATIONS REQUIRED.—The

21 Commission shall prescribe regulations that re22 quire a local exchange carrier to share public

23 switched network infrastructure and function

24 with requesting telecommunications carriers
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1 lacking economies of scale or scope, as defined

2 in subparagraph (B).

3 ‘‘(B) DEFINITION.—For the purposes of

4 this paragraph, the term ‘telecommunications

5 carrier lacking economies of scale or scope’

6 means any telecommunications carrier which

7 serves a geographic area for which it lacks

8 economies of scale or scope for the particular

9 required network function.

10 ‘‘(C) CONTENTS OF REGULATIONS.—The

11 regulations governing such sharing between

12 local exchange carriers and telecommunications

13 carriers shall—

14 ‘‘(i) promote economically efficient de15 cisionmaking by local exchange carriers

16 and telecommunications carriers lacking

17 economies of scale or scope;

18 ‘‘(ii) not require any local exchange

19 carrier or telecommunications carrier lack20 ing economies of scale or scope to make

21 any decision that is uneconomic or adverse

22 to the public interest;

23 ‘‘(iii) permit, but not require, joint

24 ownership and operation of public switched

25 network infrastructure and services by
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1 local exchange carriers and telecommuni2 cations carriers lacking economies of scale

3 or scope;

4 ‘‘(iv) ensure that fair and reasonable

5 terms and conditions for and in connection

6 with the business arrangement described in

7 this paragraph are determined by local ex8 change carriers and telecommunications

9 carriers lacking economies of scale or scope

10 in accordance with general guidelines con11 tained in the regulations prescribed pursu12 ant to this paragraph:

13 ‘‘(v) establish conditions that promote

14 cooperation between local exchange carriers

15 and telecommunications carriers lacking

16 economies of scale or scope; and

17 ‘‘(vi) ensure that all regulation rights

18 and obligations for and in connection with

19 the business arrangements described in

20 this paragraph shall be determined exclu21 sively in accordance with the regulations

22 prescribed pursuant to his paragraph.

23 ‘‘(4) DISABILITY ACCESS.—The Commission

24 and the States shall ensure that advances in network

25 capabilities and telecommunications service deployed
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1 by telecommunications carries are designed to be ac2 cessible to individuals with disabilities.

3 ‘‘(e) ANNUAL SURVEY.—The Commission shall pub4 lish annually a survey of the deployment of technologies

5 on a State-by-State basis.

6 ‘‘(f) COST ALLOCATION REGULATIONS.—The Com7 mission shall develop regulations, consistent with the need

8 to protect universal service to allocate a local exchange

9 carrier’s costs of deploying of broadband telecommuni10 cations facilities between local exchange service and com11 petitive services.’’.

12 TITLE III—REGULATORY REFORM

13 SEC. 301. DEFINITIONS.

14 Section 3 of the Communications Act of 1934 (49

15 U.S.C. 153) is amended by adding at the end the following

16 new subsections:

17 ‘‘(hh) ‘Local exchange carrier’ means a provider of

18 telephone exchange service that the Commission deter19 mines that market power.

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

21 between or among points specified by the user, or informa22 tion of the user’s choosing, without change in the reform

23 or content of the information as sent and received, by

24 means of electromagnetic transmission, with or without

25 benefit of any closed transmission medium, including all
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1 instrumentalities facilities, apparatus, and services (in2 cluding the receipt, switching, and delivery of such infor3 mation) essential to such transmission.

4 ‘‘(jj) ‘Telecommunications service’ means the offering

5 for profit to the public or to such classes and eligible users

6 as to be effectively available to a substantial portion of

7 the public of—

8 ‘‘(1) telecommunications facilities that (A) are

9 owned or controlled by a provider of telephone ex10 change service or (B) interconnect with the network

11 of a provider of telephone exchange service; or

12 ‘‘(2) telecommunications by means of such tele13 communications facilities.

14 Such term does not include information services.

15 ‘‘(kk) ‘Telecommunications carrier’ means any pro16 vider of telecommunications services, except that such

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

18 aggregators of telecommunications services as defined in

19 section 226.

20 ‘‘(ll) ‘Telecommunications number portability’ means

21 the ability of users of telecommunications services to re22 tain existing telecommunications numbers without impair23 ment of quality, reliability, or convenience when switching

24 from one telecommunications carrier to another.
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1 ‘‘(mm) ‘Information service’ means the offering of

2 services over common carrier transmission facilities which

3 employ computer processing applications that act on the

4 format, content, code, protocol or similar aspects of the

5 subscriber’s transmitted information, provide the sub6 scriber additional, different, or restructured information,

7 or involve subscriber interaction with stored information.

8 ‘‘(nn) ‘Bell operating company’ means any of the

9 companies listed in appendix A of the Modification of

10 Final Judgment, and includes any successor or assign of

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

12 any such company.

13 ‘‘(oo) ‘Modification of Final Judgment’ means the de14 cree entered August 24, 1982, in United States v. Western

15 Electric, Civil Action No. 82–0192 (United States District

16 Court, District of Columbia).’’.

17 SEC. 302. REGULATORY REFORM.

18 Title II of the Communications Act of 1934 (47

19 U.S.C. 201 et seq.), as amended by this Act, is further

20 amended by adding at the end the following new section:

21 ‘‘SEC. 230. TELECOMMUNICATIONS COMPETITION.

22 ‘‘(a) REMOVAL OF BARRIERS TO ENTRY.—Subject to

23 the provisions of section 301 of this Act, at such time as

24 the regulations required by section 201A of this Act have

25 been implemented, or 2 years after the date of enactment
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1 of this section, whichever is earlier, no State or local stat2 ute or regulation, or other State or local legal requirement,

3 shall prohibit or have the effect of prohibiting the ability

4 of any entity to provide interstate or intrastate tele5 communications services. No State or local governmental

6 entity may unreasonably discriminate among tele7 communications carriers.

8 ‘‘(b) PROVISION OF TELECOMMUNICATIONS SERV9 ICES BY OTHER UTILITIES.—Notwithstanding any other

10 provision of law and subject to the regulatory safeguards

11 imposed by an appropriate regulatory agency, an electric,

12 gas, water, or steam utility may provide telecommuni13 cations services.

14 ‘‘(c) REGULATORY AUTHORITY.—Nothing in this sec15 tion shall affect the ability of State or local officials to

16 impose, on a competitively neutral basis, requirements

17 necessary to preserve and advance universal service, pro18 tect the public safety and welfare, ensure the continued

19 quality of telecommunications services, and safeguard the

20 rights of consumers.

21 ‘‘(d) OBLIGATIONS OF TELECOMMUNICATIONS CAR22 RIERS.—To the extent that they provide telecommuni23 cations services, telecommunications carriers shall be

24 deemed common carriers under this Act. The Commission

25 shall prescribe regulations to require each telecommuni-
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1 cations carrier, upon bona fide request, to provide to any

2 telecommunications equipment manufacturer or any entity

3 seeking to provide telecommunications services or informa4 tion services, on reasonable terms and conditions—

5 ‘‘(1) interconnection to the carrier’s tele6 communications facilities at any technically and eco7 nomically feasible point within the carrier’s network;

8 ‘‘(2) nondiscriminatory access to any of the car9 rier’s telecommunications facilities and information

10 necessary to the transmission and routing of any

11 telecommunications service or information service

12 and the interoperability of both carriers’ networks;

13 ‘‘(3) nondiscriminatory access, where technically

14 and economically feasible, to the poles, ducts, con15 duits, and rights of way owned or controlled by the

16 carrier, and nondiscriminatory rates for such access;

17 ‘‘(4) nondiscriminatory access to the network

18 functions of the carrier’s telecommunications net19 work, which shall be offered on an unbundled basis;

20 and

21 ‘‘(5) telecommunications services and network

22 functions without any restrictions on the resale or

23 sharing of those services and functions.

24 The States may prescribe regulations implementing para25 graphs (1) through (5) for intrastate services so long as
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1 such regulations are not inconsistent with those prescribed

2 by the Commission.

3 ‘‘(e) CONSUMER INFORMATION.—As competition for

4 telecommunications services develops, the Commission and

5 State regulatory authorities shall take action to ensure

6 that consumers are given the information necessary to

7 make informed choices among their telecommunications

8 alternatives.

9 ‘‘(f) TELECOMMUNICATIONS NUMBER PORT10 ABILITY.—The Commission shall prescribe regulations to

11 ensure that—

12 ‘‘(1) telecommunications number portability

13 shall be available, upon request, as soon as tech14 nically feasible; and

15 ‘‘(2) an impartial entity shall administer tele16 communications numbering and make such numbers

17 available on an equitable basis.

18 ‘‘(g) RECIPROCAL COMPENSATION AGREEMENTS.—

19 Telecommunications carriers shall compensate each other

20 on a reciprocal and equivalent basis for termination of

21 telecommunications services on each other’s networks.

22 ‘‘(h) REGULATORY FLEXIBILITY FOR COMPETITIVE

23 SERVICES.—

24 ‘‘(1) REGULATORY FLEXIBILITY.—In the event

25 that a telecommunications carrier does not have
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1 market power in any or some of its telecommuni2 cations services in any or some of its geographic

3 markets, the Commission may streamline any regu4 lation or forbear from applying any provision of this

5 title (except for sections 201, 201A, 202, and 208)

6 to such a telecommunications carrier or service only

7 if the Commission determines that—

8 ‘‘(A) full application of such regulation or

9 provision is unnecessary in order to ensure that

10 the charges, practices, classifications, or regula11 tions for or in connection with that service are

12 just and reasonable and are not unjustly or un13 reasonably discriminatory;

14 ‘‘(B) full application of such regulation or

15 provision is unnecessary to achieve the goals of

16 this Act; and

17 ‘‘(C) such action is consistent with the

18 public interest and the protection of consumers.

19 Any finding by the Commission under section 332

20 that a provision of title II is inapplicable to a com21 mercial mobile service or a provider of commercial

22 mobile services shall be deemed also to be a deter23 mination under this paragraph that the require24 ments of subparagraphs (A), (B), and (C) of this

25 paragraph are satisfied.
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1 ‘‘(2) PRICING FLEXIBILITY.—The Commission

2 shall and the States are encouraged to permit tele3 communications carriers to have pricing flexibility in

4 service or geographic markets that are found to be

5 competitive. In implementing this subsection, the

6 Commission and the States shall ensure that rates

7 for basic telephone service and for services that are

8 not competitive remain just and reasonable and that

9 universal service is preserved and advanced.

10 ‘‘(i) RULES FOR FOREIGN OWNERSHIP.—The provi11 sions of section 310(b) shall not apply to any lawful for12 eign ownership in a telecommunications carrier prior to

13 February 1, 1994, if that carrier was not regulated as a

14 common carrier prior to the date of enactment of this sec15 tion and is deemed to be a common carrier under this

16 Act.’’.

17 SEC. 303. IMPLEMENTING REGULATIONS.

18 The Commission shall, within 12 months after the

19 date of enactment of this Act, issue regulations to imple20 ment this title. Such regulations shall take effect within

21 6 months after their issuance, except that the Commission

22 may extend such effective date for up to 24 additional

23 months for any small carrier providing telecommuni24 cations service in rural areas, upon a showing by the car-
29

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1 rier that compliance would not be technically and economi2 cally feasible without additional time.

3 TITLE IV—AUTHORIZED ACTIVITIES OF

4 BELL OPERATING COMPANIES

5 Subtitle A—Telecommunications Equipment

6 Research and Manufacturing Competition

7 SEC. 401. SHORT TITLE.

8 This subtitle may be cited as the ‘‘Telecommuni9 cations Equipment Research and Manufacturing Competi10 tion Act of 1994’’.

11 SEC. 402. FINDINGS.

12 The Congress finds that the continued economic

13 growth and the international competitiveness of American

14 industry would be assisted by permitting the Bell operat15 ing companies, through their affiliates, to manufacture

16 (including design, development, and fabrication) tele17 communications equipment and customer premises equip18 ment, and to engage in research with respect to such

19 equipment.

20 SEC. 403. AMENDMENT TO COMMUNICATIONS ACT OF 1934.

21 Title II of the Communications Act of 1934 (47

22 U.S.C. 201 et seq.), as amended by this Act, is further

23 amended by adding at the end the following new section:
30

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1 ‘‘SEC. 231. REGULATION OF MANUFACTURING BY BELL OP2 ERATING COMPANIES.

3 ‘‘(a) AUTHORIZATION.—Subject to the requirements

4 of this section and the regulations prescribed thereunder,

5 a Bell operating company, through an affiliate of that

6 company, notwithstanding any restrictions or obligation

7 imposed before the date of enactment of this section pur8 suant to the Modification of Final Judgment on the lines

9 of business in which a Bell operating company may en10 gage, may manufacture and provide telecommunications

11 equipment and manufacture customer premises equip12 ment, except that neither a Bell operating company nor

13 any of its affiliates may engage in such manufacturing in

14 conjunction with a Bell operating company not so affili15 ated or any of its affiliates.

16 ‘‘(b) REQUIREMENT FOR SEPARATE AFFILIATE.—

17 Any manufacturing or provision authorized under sub18 section (a) shall be conducted only through an affiliate

19 (hereafter in this section referred to as a ‘manufacturing

20 affiliate’) that is separate from any Bell operating com21 pany.

22 ‘‘(c) MANUFACTURING REGULATIONS.—The Com23 mission shall prescribe regulations to ensure that—

24 ‘‘(1)(A) such manufacturing affiliate shall

25 maintain books, records, and accounts separate from

26 its affiliated Bell operating company, that identify
31

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1 all transactions between the manufacturing affiliate

2 and its affiliated Bell operating company;

3 ‘‘(B) the Commission and the State commis4 sions that exercise regulatory authority over any Bell

5 operating company affiliated with such manufactur6 ing affiliate shall have access to the books, records,

7 and accounts required to be prepared under sub8 paragraph (A); and

9 ‘‘(C) such manufacturing affiliate shall, even if

10 it is not a publicly held corporation, prepare finan11 cial statements which are in compliance with Federal

12 financial reporting requirements for publicly held

13 corporations, file such statements with the Commis14 sion and the State commissions that exercise regu15 latory authority over any Bell operating company af16 filiated with such manufacturing affiliate, and make

17 such statements available for public inspection;

18 ‘‘(2) consistent with the provisions of this sec19 tion, neither a Bell operating company nor any of its

20 nonmanufacturing affiliates shall perform sales, ad21 vertising, installation, production, or maintenance

22 operations for a manufacturing affiliate; except that

23 institutional advertising, of a type not related to spe24 cific telecommunications equipment, carried out by
32

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1 the Bell operating company or its affiliates shall be

2 permitted if each party pays its pro rata share;

3 ‘‘(3)(A) such manufacturing affiliate shall con4 duct all of its manufacturing within the United

5 States and, except as otherwise provided in this

6 paragraph, all component parts of customer prem7 ises equipment manufactured by such affiliate, and

8 all component parts of telecommunications equip9 ment manufactured by such affiliate, shall have been

10 manufactured within the United States;

11 ‘‘(B) such affiliate may use component parts

12 manufactured outside the United States if—

13 ‘‘(i) such affiliate first makes a good faith

14 effort to obtain equivalent component parts

15 manufactured within the United States at rea16 sonable prices, terms, and conditions; and

17 ‘‘(ii) for the aggregate of telecommuni18 cations equipment and customer premises

19 equipment manufactured and sold in the United

20 States by such affiliate in any calendar year,

21 the cost of the components manufactured out22 side the United States contained in the equip23 ment does not exceed 40 percent of the sales

24 revenue derived from such equipment;
33

S 1822 IS

1 ‘‘(C) any such affiliate that uses component

2 parts manufactured outside the United States in the

3 manufacture of telecommunications equipment and

4 customer premises equipment within the United

5 States shall—

6 ‘‘(i) certify to the Commission that a good

7 faith effort was made to obtain equivalent parts

8 manufactured within the United States at rea9 sonable prices, terms, and conditions, which

10 certification shall be filed on a quarterly basis

11 with the Commission and list component parts,

12 by type, manufactured outside the United

13 States; and

14 ‘‘(ii) certify to the Commission on an an15 nual basis that for the aggregate of tele16 communications equipment and customer prem17 ises equipment manufactured and sold in the

18 United States by such affiliate in the previous

19 calendar year, the cost of the components man20 ufactured outside the United States contained

21 in such equipment did not exceed the percent22 age specified in subparagraph (B)(ii) or ad23 justed in accordance with subparagraph (G);

24 ‘‘(D)(i) if the Commission determines, after re25 viewing the certification required in subparagraph
34

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1 (C)(i), that such affiliate failed to make the good

2 faith effort required in subparagraph (B)(i) or, after

3 reviewing the certification required in subparagraph

4 (C)(ii), that such affiliate has exceeded the percent5 age specified in subparagraph (B)(ii), the Commis6 sion may impose penalties or forfeitures as provided

7 for in title V of this Act; and

8 ‘‘(ii) any supplier claiming to be damaged be9 cause a manufacturing affiliate failed to make the

10 good faith effort required in subparagraph (B)(i)

11 may make complaint to the Commission as provided

12 for in section 208 of this Act, or may bring suit for

13 the recovery of actual damages for which such sup14 plier claims such affiliate may be liable under the

15 provisions of this Act in any district court of the

16 United States of competent jurisdiction;

17 ‘‘(E) the Commission, in consultation with the

18 Secretary of Commerce, shall, on an annual basis,

19 determine the cost of component parts manufactured

20 outside the United States contained in all tele21 communications equipment and customer premises

22 equipment sold in the United States as a percentage

23 of the revenues from sales of such equipment in the

24 previous calendar year;
35

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1 ‘‘(F) a manufacturing affiliate may use intellec2 tual property created outside the United States in

3 the manufacture of telecommunications equipment

4 and customer premises equipment in the United

5 States; and

6 ‘‘(G) the Commission may not waive or alter

7 the requirements of this subsection, except that the

8 Commission, on an annual basis, shall adjust the

9 percentage specified in subparagraph (B)(ii) to the

10 percentage determined by the Commission, in con11 sultation with the Secretary of Commerce, as di12 rected in subparagraph (E);

13 ‘‘(4) no more than 90 percent of the equity of

14 such manufacturing affiliate shall be owned by its

15 affiliated Bell operating company and any affiliates

16 of that Bell operating company;

17 ‘‘(5) any debt incurred by such manufacturing

18 affiliate may not be issued by its affiliates, and such

19 manufacturing affiliate shall be prohibited from in20 curring debt in a manner that would permit a credi21 tor, on default, to have recourse to the assets of its

22 affiliated Bell operating company’s telecommuni23 cations service business;
36

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1 ‘‘(6) such manufacturing affiliate shall not be

2 required to operate separately from the other affili3 ates of its affiliated Bell operating company;

4 ‘‘(7) if an affiliate of a Bell operating company

5 becomes affiliated with a manufacturing entity, such

6 affiliate shall be treated as a manufacturing affiliate

7 of that Bell operating company within the meaning

8 of subsection (b) and shall comply with the require9 ments of this section;

10 ‘‘(8) such manufacturing affiliate shall make

11 available, without discrimination or self-preference

12 as to price, delivery, terms, or conditions, to all reg13 ulated local telephone exchange carriers, for use with

14 the public telecommunications network, any tele15 communications equipment, including software inte16 gral to such telecommunications equipment, includ17 ing upgrades, manufactured by such affiliate so long

18 as each such purchasing carrier—

19 ‘‘(A) does not either manufacture tele20 communications equipment, or have a manufac21 turing affiliate which manufactures tele22 communications equipment; or

23 ‘‘(B) agrees to make available, to the Bell

24 operating company affiliated with such manu25 facturing affiliate or any of the requested local
37

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1 exchange telephone carrier affiliates of such

2 Bell company, any telecommunications equip3 ment, including software integral to such tele4 communications equipment, including upgrades,

5 manufactured for use with the public tele6 communications network by such purchasing

7 carrier or by any entity or organization with

8 which such purchasing carrier is affiliated;

9 ‘‘(9)(A) such manufacturing affiliate shall not

10 discontinue or restrict sales to other regulated local

11 telephone exchange carriers of any telecommuni12 cations equipment, including software integral to

13 such telecommunications equipment, including up14 grades, that such affiliate manufactures for sale as

15 long as there is reasonable demand for the equip16 ment by such carriers; except that such sales may be

17 discontinued or restricted if such manufacturing af18 filiate demonstrates to the Commission that it is not

19 making a profit, under a marginal cost standard im20 plemented by the Commission, on the sale of such

21 equipment;

22 ‘‘(B) in reaching a determination as to the ex23 istence of reasonable demand as referred to in sub24 paragraph (A), the Commission shall within 60 days

25 consider—
38

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1 ‘‘(i) whether the continued manufacture of

2 the equipment will be profitable;

3 ‘‘(ii) whether the equipment is functionally

4 or technologically obsolete;

5 ‘‘(iii) whether the components necessary to

6 manufacture the equipment continue to be

7 available;

8 ‘‘(iv) whether alternatives to the equipment

9 are available in the market; and

10 ‘‘(v) such other factors as the Commission

11 deems necessary and proper;

12 ‘‘(10) Bell operating companies shall, consistent

13 with the antitrust laws, engage in joint network

14 planning and design with other regulated local tele15 phone exchange carriers operating in the same area

16 of interest; except that no participant in such plan17 ning shall delay the introduction of new technology

18 or the deployment of facilities to provide tele19 communications services, and agreement with such

20 other carriers shall not be required as a prerequisite

21 for such introduction or deployment; and

22 ‘‘(11) Bell operating companies shall provide, to

23 other regulated local telephone exchange carriers op24 erating in the same area of interest, timely informa25 tion on the planned deployment of telecommuni-
39

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1 cations equipment, including software integral to

2 such telecommunications equipment, including up3 grades.

4 ‘‘(d) TELEPHONE EXCHANGE SERVICE REGULA5 TIONS.—

6 ‘‘(1) IN GENERAL.—The Commission shall pre7 scribe regulations to require that each Bell operating

8 company shall maintain and file with the Commis9 sion full and complete information with respect to

10 the protocols and technical requirements for connec11 tion with and use of its telephone exchange service

12 facilities. Such regulations shall require each such

13 Bell company to report promptly to the Commission

14 any material changes or planned changes to such

15 protocols and requirements, and the schedule for im16 plementation of such changes or planned changes.

17 ‘‘(2) DISCLOSURE RESTRICTION.—A Bell oper18 ating company shall not disclose to any of its affili19 ates any information required to be filed under para20 graph (1) unless that information is immediately so

21 filed.

22 ‘‘(3) COMPETITORS’ ACCESS TO INFORMA23 TION.—The Commission may prescribe such addi24 tional regulations under this subsection as may be

25 necessary to ensure that manufacturers in competi-
40

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1 tion with a Bell operating company’s manufacturing

2 affiliate have ready and equal access to the informa3 tion required for such competition that such Bell

4 company makes available to its manufacturing affili5 ate.

6 ‘‘(e) REQUIREMENTS FOR BELL OPERATING COMPA7 NIES WITH MANUFACTURING AFFILIATE.—The Commis8 sion shall prescribe regulations requiring that any Bell op9 erating company which has an affiliate that engages in

10 any manufacturing authorized by subsection (a) shall—

11 ‘‘(1) provide, to other manufacturers of tele12 communications equipment and customer premises

13 equipment, opportunities to sell such equipment to

14 such Bell operating company which are comparable

15 to the opportunities which such company provides to

16 its affiliates;

17 ‘‘(2) not subsidize its manufacturing affiliate

18 with revenues from its regulated telecommunications

19 services; and

20 ‘‘(3) only purchase equipment from its manu21 facturing affiliate at the open market price.

22 ‘‘(f) COLLABORATION WITH OTHER MANUFACTUR23 ERS.—A Bell operating company and its affiliates may en24 gage in close collaboration with any manufacturer of cus25 tomer premises equipment or telecommunications equip-
41

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1 ment during the design and development of hardware,

2 software, or combinations thereof relating to such equip3 ment, consistent with subsection (e)(2).

4 ‘‘(g) ADDITIONAL RULES AND REGULATIONS.—The

5 Commission may prescribe such additional rules and regu6 lations as the Commission determines necessary to carry

7 out the provisions of this section.

8 ‘‘(h) ADMINISTRATION AND ENFORCEMENT.—

9 ‘‘(1) COMMISSION AUTHORITY.—For the pur10 poses of administering and enforcing the provisions

11 of this section and the regulations prescribed there12 under, the Commission shall have the same author13 ity, power, and functions with respect to any Bell

14 operating company as the Commission has in admin15 istering and enforcing the provisions of this title

16 with respect to any common carrier subject to this

17 Act.

18 ‘‘(2) CIVIL ACTIONS BY INJURED CARRIERS.—

19 Any regulated local telephone exchange carrier in20 jured by an act or omission of a Bell operating com21 pany or its manufacturing affiliate which violates the

22 requirements of paragraph (8) or (9) of subsection

23 (c), or the Commission’s regulations implementing

24 such paragraphs, may initiate an action in a district

25 court of the United States to recover the full amount
42

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1 of damages sustained in consequence of any such

2 violation and obtain such orders from the court as

3 are necessary to terminate existing violations and to

4 prevent future violations; or such regulated local

5 telephone exchange carrier may seek relief from the

6 Commission pursuant to sections 206 through 209.

7 ‘‘(i) EFFECTIVE DATES; DEADLINE.—The authority

8 of the Commission to prescribe regulations to carry out

9 this section is effective on the date of enactment of this

10 section. The Commission shall prescribe such regulations

11 within 180 days after such date of enactment, and the

12 authority to engage in the manufacturing authorized in

13 subsection (a) shall not take effect until regulations pre14 scribed by the Commission under subsections (c), (d), and

15 (e) are in effect.

16 ‘‘(j) EFFECT ON PREEXISTING MANUFACTURING AU17 THORITY.—Nothing in this section shall prohibit any Bell

18 operating company from engaging, directly or through any

19 affiliate, in any manufacturing activity in which any Bell

20 operating company or affiliate was authorized to engage

21 on the date of enactment of this section.

22 ‘‘(k) ANNUAL AUDIT.—

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

24 that manufactures or provides telecommunications

25 equipment or manufactures customer premises
43

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1 equipment through an affiliate shall obtain and pay

2 for an annual audit conducted by an independent

3 auditor selected by and working at the direction of

4 the State commission of each State in which such

5 Bell company provides local exchange service, to de6 termine whether such Bell company has complied

7 with this section and the regulations promulgated

8 under this section, and particularly whether such

9 Bell company has complied with the separate ac10 counting requirements under subsection (c)(1).

11 ‘‘(2) SUBMISSION OF AUDIT RESULTS.—The

12 auditor described in paragraph (1) shall submit the

13 results of such audit to the Commission and to the

14 State commission of each State in which such Bell

15 company provides telephone exchange service. Any

16 party may submit comments on the final audit re17 port.

18 ‘‘(3) PROCEDURES APPLICABLE TO AUDIT.—

19 The audit required under paragraph (1) shall be

20 conducted in accordance with procedures established

21 by regulation by the State commission of the State

22 in which such Bell company provides local exchange

23 service, including requirements that—
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1 ‘‘(A) the independent auditors performing

2 such audits are rotated to ensure their inde3 pendence; and

4 ‘‘(B) each audit submitted to the Commis5 sion and to the State commission is certified by

6 the auditor responsible for conducting the

7 audit.

8 ‘‘(4) COMMISSION REVIEW.—The Commission

9 shall periodically review and analyze the audits sub10 mitted to it under this subsection, and shall provide

11 to the Congress every 2 years—

12 ‘‘(A) a report of its findings on the compli13 ance of the Bell operating companies with this

14 section and the regulations promulgated there15 under; and

16 ‘‘(B) an analysis of the impact of such reg17 ulations on the affordability of local telephone

18 exchange service.

19 ‘‘(5) ACCESS TO ACCOUNTS AND RECORDS.—

20 For purposes of conducting audits and reviews

21 under this subsection, an independent auditor, the

22 Commission, and the State commission shall have

23 access to the financial accounts and records of each

24 Bell operating company and those of its affiliates

25 (including affiliates described in paragraphs (6) and
45

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1 (7) of subsection (c)) necessary to verify trans2 actions conducted with such Bell operating company

3 that are relevant to the specific activities permitted

4 under this section and that are necessary to the

5 State’s regulation of telephone rates. Each State

6 commission shall implement appropriate procedures

7 to ensure the protection of any proprietary informa8 tion submitted to it under this section.

9 ‘‘(l) DEFINITIONS.—As used in this section:

10 ‘‘(1) The term ‘affiliate’ means any organiza11 tion or entity that, directly or indirectly, owns or

12 controls, is owned or controlled by, or is under com13 mon ownership with a Bell operating company. Such

14 term includes any organization or entity (A) in

15 which a Bell operating company and any of its affili16 ates have an equity interest of greater than 10 per17 cent, or a management interest of greater than 10

18 percent, or (B) in which a Bell operating company

19 and any of its affiliates have any other significant fi20 nancial interest.

21 ‘‘(2) The term ‘Bell operating company’ means

22 those companies listed in appendix A of the Modi23 fication of Final Judgment, and includes any succes24 sor or assign of any such company, but does not in25 clude any affiliate of any such company.
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1 ‘‘(3) The term ‘customer premises equipment’

2 means equipment employed on the premises of a

3 person (other than a carrier) to originate, route, or

4 terminate telecommunications.

5 ‘‘(4) The term ‘manufacturing’ has the same

6 meaning as such term has in the Modification of

7 Final Judgment as interpreted in United States v.

8 Western Electric, Civil Action No. 82–0192 (United

9 States District Court, District of Columbia) (filed

10 December 3, 1987).

11 ‘‘(5) The term ‘Modification of Final Judg12 ment’ means the decree entered August 24, 1982, in

13 United States v. Western Electric, Civil Action No.

14 82–0192 (United States District Court, District of

15 Columbia).

16 ‘‘(6) The term ‘telecommunications’ means the

17 transmission, between or among points specified by

18 the user, of information of the user’s choosing, with19 out change in the form or content of the information

20 as sent and received, by means of an electromagnetic

21 transmission medium, including all instrumentalities,

22 facilities, apparatus, and services (including the col23 lection, storage, forwarding, switching, and delivery

24 of such information) essential to such transmission.
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1 ‘‘(7) The term ‘telecommunications equipment’

2 means equipment, other than customer premises

3 equipment, used by a carrier to provide tele4 communications services.

5 ‘‘(8) The term ‘telecommunications service’

6 means the offering for hire of telecommunications

7 facilities, or of telecommunications by means of such

8 facilities.’’.

9 SEC. 404. INCREASED PENALTY FOR RECORDKEEPING VIO10 LATIONS.

11 Section 220(d) of the Communications Act of 1934

12 (47 U.S.C. 220(d)) is amended by striking ‘‘$6,000‘‘ and

13 inserting in lieu thereof ‘‘$10,000’’.

14 SEC. 405. APPLICATION OF ANTITRUST LAWS.

15 Nothing in this subtitle shall be deemed to alter the

16 application of Federal and State antitrust laws as inter17 preted by the respective courts.

18 Subtitle B—Regulation of Alarm Services and

19 Electronic Publishing by Bell Operating

20 Companies

21 SEC. 451. REGULATION OF ENTRY INTO ALARM MONITOR22 ING SERVICES.

23 (a) AMENDMENT.—Title II of the Communications

24 Act of 1934 (47 U.S.C. 201 et seq.), as amended by this
48

S 1822 IS

1 Act, is further amended by adding at the end the following

2 new section:

3 ‘‘SEC. 232. REGULATION OF ENTRY INTO ALARM MONITOR4 ING SERVICES.

5 ‘‘(a) IN GENERAL.—Except as provided in subsection

6 (c), no Bell operating company, or any affiliate of that

7 company, shall provide alarm monitoring services for the

8 protection of life, safety, or property. A Bell operating

9 company may transport alarm monitoring service signals

10 but on a common carrier basis only.

‘‘(b) AUTHORITY TO PETITION.—Beginning 51 11 ⁄2

12 years from the date of enactment of this section, a Bell

13 operating company or any affiliate of that company may

14 petition the Commission to seek permission to provide

15 alarm monitoring services for the protection of life, safety,

16 or property.

17 ‘‘(c) AUTHORITY TO PERMIT BELL OPERATING COM18 PANIES TO PROVIDE SERVICES.—Beginning 6 years from

19 the date of enactment of this section, the Commission

20 shall have the authority to permit a Bell operating com21 pany to provide alarm monitoring services for the protec22 tion of life, safety, or property; except that the Commis23 sion shall not grant such permission until—

24 ‘‘(1) the Department of Justice finds that there

25 is no substantial possibility that such Bell company
49

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1 or its affiliates could use monopoly power to impede

2 competition in the market such Bell company seeks

3 to enter; and

4 ‘‘(2) the Commission finds that the provision of

5 alarm monitoring services by the Bell operating com6 pany is in the public interest and that the Commis7 sion has the capability to effectively enforce any re8 quirements, limitations, or conditions placed upon

9 the Bell operating company in the provision of alarm

10 monitoring services for the protection of life, safety,

11 or property, including the regulations it has pre12 scribed pursuant to subsection (d).

13 ‘‘(d) REGULATIONS REQUIRED.—Not later than 6

14 years after the date of enactment of this section, the Com15 mission shall prescribe regulations—

16 ‘‘(1) to establish such requirements, limitations,

17 or conditions as are (A) necessary and appropriate

18 in the public interest with respect to the provision of

19 alarm monitoring services by Bell operating compa20 nies and their affiliates, and (B) effective at such

21 time as a Bell operating company or any of its affili22 ates is authorized to provide alarm monitoring serv23 ices;

24 ‘‘(2) to prohibit Bell operating companies and

25 their affiliates, at that or any earlier time after the
50

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1 date of enactment of this section, from recording in

2 any fashion the occurrence or the contents of calls

3 received by providers of alarm monitoring services

4 for the purposes of marketing such services on be5 half of the Bell operating company, any of its affili6 ates, or any other entity; and

7 ‘‘(3) to establish procedures for the receipt and

8 review of complaints concerning violations by such

9 companies of such regulations, or of any other provi10 sion of this Act or the regulations thereunder, that

11 result in material financial harm to a provider of

12 alarm monitoring services.

13 ‘‘(e) EXPEDITED CONSIDERATION OF COM14 PLAINTS.—The procedures established under subsection

15 (d)(3) shall ensure that the Commission will make a final

16 determination with respect to any complaint described in

17 such subsection within 120 days after receipt of the com18 plaint. If the complaint contains an appropriate showing

19 that the alleged violation occurred, as determined by the

20 Commission in accordance with such regulations, the Com21 mission shall, within 60 days after receipt of the com22 plaint, issue a cease and desist order to prevent the Bell

23 operating company and its affiliates from continuing to

24 engage in such violation pending such final determination.
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1 ‘‘(f) REMEDIES.—The Commission may use any rem2 edy available under title V of this Act to terminate and

3 punish violations described in subsection (d)(2). Such rem4 edies may include, if the Commission determines that such

5 violation was willful or repeated, ordering the Bell operat6 ing company to cease offering alarm monitoring services.

7 ‘‘(g) DEFINITIONS.—As used in this section:

8 ‘‘(1) the term ‘alarm monitoring services’

9 means services that detect threats to life, safety, or

10 property, by burglary, fire, vandalism, bodily injury,

11 or other emergency, through the use of devices that

12 transmit signals to a central point in a customer’s

13 residence, place of business, or other fixed premises

14 which—

15 ‘‘(A) retransmits such signals to a remote

16 monitoring center by means of telephone ex17 change service facilities, and

18 ‘‘(B) serves to alert persons at the mon19 itoring center of the need to inform police, fire,

20 rescue, or other security or public safety per21 sonnel of the threat at such premises.

22 Such term does not include medical monitoring de23 vices attached to individuals for the automatic sur24 veillance of ongoing medical conditions.
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1 ‘‘(2) The term ‘Bell operating company’ has the

2 meaning given that term in section 233 of this Act.

3 ‘‘(3) The term ‘affiliate’ means a person that

4 (directly or indirectly) owns or controls, is owned or

5 controlled by, or is under common ownership or con6 trol with, another person. For purposes of this para7 graph, to own refers to owning an equity interest (or

8 equivalent thereof) of more than 50 percent.’’.

9 SEC. 452. REGULATION OF ELECTRONIC PUBLISHING.

10 Title II of the Communications Act of 1934 (47

11 U.S.C. 201 et seq.), as amended by this Act, is further

12 amended by adding at the end the following new section:

13 ‘‘SEC. 233. REGULATION OF ELECTRONIC PUBLISHING.

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

15 and any affiliate shall not engage in the provision of elec16 tronic publishing that is disseminated by means of such

17 Bell operating company’s or any of its affiliates’ basic tele18 phone service.

19 ‘‘(2) Nothing in this section shall prohibit a separated

20 affiliate or electronic publishing joint venture from engag21 ing in the provision of electronic publishing or any other

22 lawful service in any area.

23 ‘‘(3) Nothing in this section shall prohibit a Bell op24 erating company or affiliate from engaging in the provi25 sion of any lawful service other than electronic publishing
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1 in any area or from engaging in the provision of electronic

2 publishing that is not disseminated by means of such Bell

3 operating company’s or any of its affiliates’ basic tele4 phone service.

5 ‘‘(b) SEPARATED AFFILIATE OR ELECTRONIC PUB6 LISHING JOINT VENTURE REQUIREMENTS.—A separated

7 affiliate or electronic publishing joint venture shall—

8 ‘‘(1) maintain books, records, and accounts that

9 are separate from those of the Bell operating com10 pany and from any affiliate and which record in ac11 cordance with generally accepted accounting prin12 ciples all transactions, whether direct or indirect,

13 with the Bell operating company;

14 ‘‘(2) not incur debt in a manner that would per15 mit a creditor upon default to have recourse to the

16 assets of the Bell operating company;

17 ‘‘(3) prepare financial statements that are not

18 consolidated with those of the Bell operating com19 pany or any affiliate, provided that consolidated

20 statements may also be prepared;

21 ‘‘(4) file with the Commission annual reports in

22 a form substantially equivalent to the Form 10–K

23 referenced at 17 CFR 249.310 as that section and

24 form are in effect on the date of enactment;
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1 ‘‘(5) after 1 year from the effective date of this

2 section, not hire as corporate officers sales and mar3 keting management personnel whose responsibilities

4 at the separated affiliate or electronic publishing

5 joint venture will include the geographic area where

6 the Bell operating company provides basic telephone

7 service, or network operations personnel whose re8 sponsibilities at the separated affiliate or electronic

9 publishing joint venture would require dealing di10 rectly with the Bell operating company, any person

11 who was employed by the Bell operating company

12 during the year preceding their date of hire, pro13 vided that this requirement shall not apply to per14 sons subject to a collective bargaining agreement

15 that gives such persons rights to be employed by a

16 separated affiliate or electronic publishing joint ven17 ture of the Bell operating company;

18 ‘‘(6) not provide any wireline telephone ex19 change service in any telephone exchange area where

20 a Bell operating company with which it is under

21 common ownership or control provides basic tele22 phone exchange service except on a resale basis;

23 ‘‘(7) not use the name, trademarks, or service

24 marks of an existing Bell operating company except

25 for names or service marks that are or were used in
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1 common with the entity that owns or controls the

2 Bell operating company;

3 ‘‘(8) have performed annually by March 31, or

4 any other date prescribed by the Commission, a

5 compliance review which—

6 ‘‘(A) must be conducted by an independent

7 entity which is subject to professional, legal,

8 and ethical obligations for the purpose of deter9 mining compliance during the preceding cal10 endar year with any provision of this section

11 that imposes a requirement on such separated

12 affiliate or electronic publishing joint venture;

13 and

14 ‘‘(B) must be maintained by the separated

15 affiliate for a period of 5 years subject to re16 view by any unlawful authority; and

17 ‘‘(9) within 90 days of receiving a review de18 scribed in paragraph (8), file a report of such excep19 tions and any corrective action with the Commission

20 and allow any person to inspect and copy such re21 port subject to reasonable safeguards to protect any

22 proprietary information contained in such report

23 from being used for purposes other than to enforce

24 or pursue remedies under this section.
56

S 1822 IS

1 ‘‘(c) BELL OPERATING COMPANY REQUIREMENTS.—

2 A Bell operating company under common ownership or

3 control with a separated affiliate or electronic publishing

4 joint venture shall—

5 ‘‘(1) not provide a separated affiliate any facili6 ties, services, or basic telephone service information

7 unless it makes such facilities, services, or informa8 tion available to unaffiliated entities upon request

9 and on the same terms and conditions;

10 ‘‘(2) carry out transactions with a separated af11 filiate in a manner equivalent to the manner that

12 unrelated parties would carry out independent trans13 actions and not based upon the affiliation;

14 ‘‘(3) carry out transactions with a separated af15 filiate, which involve the transfer of personnel, as16 sets, or anything of value, pursuant to written con17 tracts or tariffs that are filed with the Commission

18 and made publicly available;

19 ‘‘(4) carry out transactions with a separated af20 filiate in a manner that is auditable in accordance

21 with generally accepted accounting principles;

22 ‘‘(5) value any assets that are transferred to a

23 separated affiliate at the greater of net book cost or

24 fair market value;
57

S 1822 IS

1 ‘‘(6) value any assets that are transferred to it

2 by its separated affiliate at the lesser of net book

3 cost or fair market value;

4 ‘‘(7) except for—

5 ‘‘(A) instances where Commission or State

6 regulations permit in-arrears payment for

7 tariffed telecommunications services; or

8 ‘‘(B) the investment by an affiliate of divi9 dends or profits derived from a Bell operating

10 company,

11 not provide debt or equity financing directly or indi12 rectly to a separated affiliate;

13 ‘‘(8) comply fully with all applicable Commis14 sion and State cost allocation and other accounting

15 rules;

16 ‘‘(9) have performed annually by March 31, or

17 any other date prescribed by the Commission, a

18 compliance review which—

19 ‘‘(A) must be conducted by an independent

20 entity which is subject to professional, legal,

21 and ethical obligations for the purpose of deter22 mining compliance during the preceding cal23 endar year with any provision of this section

24 that imposes a requirement on such Bell oper25 ating company; and
58

S 1822 IS

1 ‘‘(B) must be maintained by the Bell oper2 ating company for a period of 5 years subject

3 to review by any lawful authority;

4 ‘‘(10) within 90 days of receiving a review de5 scribed in paragraph (9), file a report of such excep6 tions and any corrective action with the Commission

7 and allow any person to inspect and copy such re8 port subject to reasonable safeguards to protect any

9 proprietary information contained in such report

10 from being used for purposes other than to enforce

11 or pursue remedies under this section;

12 ‘‘(11) if it provides facilities or services for tele13 communication, transmission, billing and collection,

14 or physical collocation to any electronic publisher,

15 including a separated affiliate, for use with or in

16 connection with the provision of electronic publishing

17 that is disseminated by means of such Bell operating

18 company’s or any of its affiliates’ basic telephone

19 service, provide to all other electronic publishers the

20 same type of facilities and services on request, on

21 the same terms and conditions or as required by the

22 Commission or a State, and unbundled and individ23 ually tariffed to the same extent as provided to such

24 publisher;
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S 1822 IS

1 ‘‘(12) provide network access and interconnec2 tions for basic telephone service to electronic pub3 lishers at prices that are regulated so long as the

4 prices for these services are subject to regulation;

5 ‘‘(13) if prices for network access and inter6 connection for basic telephone service are no longer

7 subject to regulation, provide electronic publishers

8 such services on the same terms and conditions as

9 a separated affiliate receives such services;

10 ‘‘(14) if any basic telephone service used by

11 electronic publishers ceases to require a tariff, pro12 vide electronic publishers with such service on the

13 same terms and conditions as a separated affiliate

14 receives such service;

15 ‘‘(15) provide reasonable advance notification at

16 the same time and on the same terms to all affected

17 electronic publishers of information relating to

18 changes in basic telephone service network design

19 and technical standards which would affect the pro20 vision of electronic publishing;

21 ‘‘(16) not directly or indirectly provide anything

22 of monetary value to a separated affiliate unless in

23 exchange for consideration at least equal to the

24 greater of its net book cost or fair market value, ex-
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S 1822 IS

1 cept the investment by an affiliate of dividends or

2 profits derived from a Bell operating company;

3 ‘‘(17) not discriminate in the presentation or

4 provision of any gateway for electronic publishing

5 services or any electronic directory of information

6 services, which is provided over such Bell operating

7 company’s basic telephone service;

8 ‘‘(18) have no directors, officers, or employees

9 in common with a separated affiliate;

10 ‘‘(19) not own any property in common with a

11 separated affiliate;

12 ‘‘(20) not perform hiring or training of person13 nel performed on behalf of a separated affiliate;

14 ‘‘(21) not perform the purchasing, installation,

15 or maintenance of equipment on its behalf of a sepa16 rated affiliate, except for telephone service that it

17 provides under tariff or contract subject to the pro18 visions of this section; and

19 ‘‘(22) not perform research and development on

20 behalf of a separated affiliate.

21 ‘‘(d) CUSTOMER PROPRIETARY NETWORK INFORMA22 TION.—A Bell operating company or any affiliate shall not

23 provide to any electronic publisher, including a separated

24 affiliate or electronic publishing joint venture, customer

25 proprietary network information for use with or in connec-
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S 1822 IS

1 tion with the provision of electronic publishing that is dis2 seminated by means of such Bell operating company’s or

3 any of its affiliates’ basic telephone service that is not

4 made available by the Bell operating company or affiliate

5 to all electronic publishers on the same terms and condi6 tions.

7 ‘‘(e) COMPLIANCE WITH SAFEGUARDS.—A Bell oper8 ating company, affiliate or its separated affiliate is prohib9 ited from acting in concert with another Bell operating

10 company or any entity in order to knowingly and willfully

11 violate or evade the requirements of this section.

12 ‘‘(f) TELEPHONE OPERATING COMPANY DIVI13 DENDS.—Nothing in this section shall prohibit an affiliate

14 from investing dividends derived from a Bell operating

15 company in its separated affiliate and subsections (i) and

16 (j) of this section shall not apply to any such investment.

17 ‘‘(g) JOINT MARKETING, AND SO FORTH.—Except as

18 provided in subsection (h)—

19 ‘‘(1) a Bell operating company shall not carry

20 out any promotion, marketing, sales, or advertising

21 for or in conjunction with a separated affiliate; and

22 ‘‘(2) a Bell operating company shall not carry

23 out any promotion, marketing, sales, or advertising

24 or in conjunction with an affiliate that is related to

25 the provision of electronic publishing.
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S 1822 IS

1 ‘‘(h) PERMISSIBLE JOINT ACTIVITIES.—

2 ‘‘(1) JOINT TELEMARKETING.—A Bell operat3 ing company may provide inbound telemarketing or

4 referral services related to the provision of electronic

5 publishing for a separated affiliate, electronic pub6 lishing joint venture, affiliate, or unaffiliated elec7 tronic publisher, provided that if such services are

8 provided to a separated affiliate, electronic publish9 ing joint venture, or affiliate, such services shall be

10 made available to all electronic publishers on re11 quest, on nondiscriminatory terms, at compensatory

12 prices, and subject to regulations of the Commission

13 to ensure that the Bell operating company’s method

14 of providing telemarketing or referral and its price

15 structure do not competitively disadvantage any elec16 tronic publishers regardless of size, including those

17 which do not use the Bell operating company’s

18 telemarketing services.

19 ‘‘(2) TEAMING ARRANGEMENTS.—A Bell oper20 ating company may engage in nondiscriminatory

21 teaming or business arrangements to engage in elec22 tronic publishing with any separated affiliate or with

23 any other electronic publisher provided that the Bell

24 operating company only provides facilities, services,

25 and basic telephone service information as author-
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S 1822 IS

1 ized by this section and provided that the Bell oper2 ating company own such teaming or business ar3 rangement.

4 ‘‘(3) ELECTRONIC PUBLISHING JOINT VEN5 TURES.—A Bell operating company or affiliate may

6 participate on a nonexclusive basis in electronic pub7 lishing joint ventures with entities that are not any

8 Bell operating company, affiliate, or separated affili9 ate to provide electronic publishing services, provided

10 that the Bell operating company or affiliate has not

11 more than a 50 percent direct or indirect equity in12 terest (or the equivalent thereof) or the right to

13 more than 50 percent of the gross revenues under

14 a revenue sharing or royalty agreement in any elec15 tronic publishing joint venture. Officers and employ16 ees of a Bell operating company or affiliate partici17 pating in an electronic publishing joint venture may

18 not have more than 50 percent of the voting control

19 over the electronic publishing joint venture. In the

20 case of joint ventures with small, local electronic

21 publishers, the Commission for good cause shown

22 may authorize the Bell operating company or affili23 ate to have a larger equity interest, revenue share,

24 or voting control but not to exceed 80 percent. A

25 Bell operating company participating in an elec-
64

S 1822 IS

1 tronic publishing joint venture may provide pro2 motion, marketing, sales, or advertising personnel

3 and services to such joint venture.

4 ‘‘(i) TRANSACTIONS RELATED TO THE PROVISION OF

5 ELECTRONIC PUBLISHING BETWEEN A TELEPHONE OP6 ERATING COMPANY AND ANY AFFILIATE.—

7 ‘‘(1) Any provision of facilities, services, or

8 basic telephone service information or any transfer

9 of assets, personnel, or anything of commercial or

10 competitive value from a Bell operating company to

11 any affiliate related to the provision of electronic

12 publishing shall be—

13 ‘‘(A) recorded in the books and records of

14 each entity;

15 ‘‘(B) auditable in accordance with gen16 erally accepted accounting principles; and

17 ‘‘(C) pursuant to written contracts or tar18 iffs filed with the Commission or a State and

19 made publicly available.

20 ‘‘(2) Any transfer of assets directly related to

21 the provision of electronic publishing from a Bell op22 erating company to an affiliate shall be valued at the

23 greater of net book cost or fair market value. Any

24 transfer of assets related to the provision of elec25 tronic publishing from an affiliate to the Bell operat-
65

S 1822 IS

1 ing company shall be valued at the lesser of net book

2 cost or fair market value.

3 ‘‘(3) A Bell operating company shall not pro4 vide an affiliate any facilities, services, or basic tele5 phone service information related to the provision of

6 electronic publishing, which such affiliate then di7 rectly or indirectly provides to a separated affiliate,

8 and which is not made available to unaffiliated com9 panies on the same terms and conditions.

10 ‘‘(j) TRANSACTIONS RELATED TO THE PROVISION OF

11 ELECTRONIC PUBLISHING BETWEEN AN AFFILIATE AND

12 A SEPARATED AFFILIATE.—

13 ‘‘(1) Any facilities, services, or basic telephone

14 service information provided or any assets, person15 nel, or anything of commercial or competitive value

16 transferred, from a Bell operating company to any

17 affiliate as described in subsection (i) and then pro18 vided or transferred to a separated affiliate shall

19 be—

20 ‘‘(A) recorded in the books and records of

21 each entity;

22 ‘‘(B) auditable in accordance with gen23 erally accepted accounting principles; and
66

S 1822 IS

1 ‘‘(C) pursuant to written contracts or tar2 iffs filed with the Commission or a State and

3 made publicly available.

4 ‘‘(2) Any transfer of assets directly related to

5 the provision of electronic publishing from a Bell op6 erating company to any affiliate as described in sub7 section (i) and then transferred to a separated affili8 ate shall be valued at the greater of net book cost

9 or fair market value. Any transfer of assets related

10 to the provision of electronic publishing from a sepa11 rated affiliate to any affiliate and then transferred

12 to the Bell operating company as described in sub13 section (i) shall be valued at the lesser of net book

14 cost or fair market value.

15 ‘‘(3) An affiliate shall not provide a separated

16 affiliate any facilities, services, or basic telephone

17 service information related to the provision of elec18 tronic publishing, which were provided to such affili19 ate directly of indirectly by a Bell operating com20 pany, and which is not made available to unaffiliated

21 companies on the same terms and conditions.

22 ‘‘(k) OTHER ELECTRONIC PUBLISHERS.—Except as

23 provided in subsection (h)(3)—

24 ‘‘(1) a bell operating company shall not have

25 any officers, employees, property, or facilities in
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S 1822 IS

1 common with any entity whose principal business is

2 publishing of which a part is electronic publishing;

3 ‘‘(2) no officer or employee of a Bell operating

4 company shall serve as a director of any entity

5 whose principal business is publishing of which a

6 part is electronic publishing;

7 ‘‘(3) for the purposes of paragraphs (1) and

8 (2), a Bell operating company or an affiliate that

9 owns an electronic publishing joint venture shall not

10 be deemed to be engaged in the electronic publishing

11 business solely because of such ownership;

12 ‘‘(4) a Bell operating company shall not carry

13 out—

14 ‘‘(A) any marketing or sales for any entity

15 that engages in electronic publishing; or

16 ‘‘(B) any hiring of personnel, purchasing,

17 or production, for any entity that engages in

18 electronic publishing; and

19 ‘‘(5) the Bell operating company shall not pro20 vide any facilities, services, or basic telephone service

21 information to any entity that engages in electronic

22 publishing, for use with or in connection with the

23 provision of electronic publishing that is dissemi24 nated by means of such Bell operating company’s or

25 any of its affiliates’ basic telephone service, unless,
68

S 1822 IS

1 equivalent facilities, services, or information are

2 made available on equivalent terms and conditions to

3 all.

4 ‘‘(l) TRANSITION.—Any electronic publishing service

5 being offered to the public by a Bell operating company

6 or affiliate on the date of enactment of this section shall

7 have one year from such date of enactment to comply with

8 the requirements of this section.

9 ‘‘(m) SUNSET.—The provisions of this section shall

10 cease to apply to a Bell operating company or its affiliate

11 or separated affiliate in any telephone exchange area on

12 June 30, 2000.

13 ‘‘(n) PRIVATE RIGHT OF ACTION.—

14 ‘‘(1) Any person claiming that any act or prac15 tice of any Bell operating company, affiliate, or sep16 arated affiliate constitutes a violation of this section

17 may file a complaint with the Commission or bring

18 suit as provided in section 207 of this Act, and such

19 Bell operating company, affiliate, or separated affili20 ate shall be liable as provided in section 206 of this

21 Act: Provided, however, That damages may not be

22 awarded for a violation that is discovered by a com23 pliance review as required by subsection (b)(8) or

24 (c)(9) of this section and corrected within 90 days.
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S 1822 IS

1 ‘‘(2) In addition to the provisions of paragraph

2 (1), any person claiming that any act or practice of

3 any Bell operating company, affiliate, or separated

4 affiliate constitutes a violation of this section may

5 make application to the Commission for an order to

6 cease and desist such violation or may make applica7 tion in any district court of the United States of

8 competent jurisdiction for an order enjoining such

9 acts or practices or for an order compelling compli10 ance with such requirement.

11 ‘‘(o) ANTITRUST LAWS.—Nothing in this section

12 shall be construed to modify, impair, or supersede the ap13 plicability of any of the antitrust laws.

14 ‘‘(p) DEFINITIONS.—As used in this section:

15 ‘‘(1) The term ‘affiliate’ means any entity that,

16 directly or indirectly, owns or controls, is owned or

17 controlled by, or is under common ownership or con18 trol with, a Bell operating company. Such term shall

19 not include a separated affiliate.

20 ‘‘(2) the term ‘basic telephone service’ means

21 wireline telephone exchange service provided by a

22 Bell operating company in a telephone exchange

23 area, except—

24 ‘‘(A) a competitive wireline telephone ex25 change service provided in a telephone exchange
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S 1822 IS

1 area where another entity provides a wireline

2 telephone exchange service that was provided on

3 January 1, 1984; and

4 ‘‘(B) wireless telephone exchange service

5 provided by an affiliate that is required by the

6 Commission to be a corporate entity separate

7 from the Bell operating company.

8 ‘‘(3) The term ‘basic telephone service informa9 tion’ means network and customer information of a

10 Bell operating company and other information ac11 quired by a Bell operating company as a result of

12 its engaging in the provision of basic telephone

13 service.

14 ‘‘(4) The term ‘control’ has the meaning that it

15 has in 17 CFR 240.12b–2, the regulations promul16 gated by the Securities and Exchange Commission

17 pursuant to the Securities Exchange Act of 1934

18 (15 U.S.C. 78a et seq.) or any successor provision

19 to such section.

20 ‘‘(5) The term ‘customer proprietary network

21 information’ means—

22 ‘‘(A) information which—

23 ‘‘(i) relates to the quantity, technical

24 configuration, type, destination, and

25 amount of use of telephone exchange serv-
71

S 1822 IS

1 ice or interexchange telephone service sub2 scribed to by any customer of a Bell oper3 ating company, and

4 ‘‘(ii) is available to the Bell operating

5 company by virtue of the telephone com6 pany-customer relationship; and

7 ‘‘(B) information contained in the bills for

8 telephone exchange service or interexchange

9 telephone service received by a customer of a

10 Bell operating company.

11 ‘‘(6)(A) The term ‘electronic publishing’ means

12 the dissemination, provision, publication, or sale by

13 a provider or publisher to an unaffiliated entity or

14 person using a Bell operating company’s local ex15 change facility of any information which the provider

16 or publisher has or has caused to be originated, au17 thored, compiled, collected, or edited or in which the

18 provider or publisher has direct or indirect financial

19 or proprietary interest, including but not limited to

20 the following:

21 ‘‘(i) News or entertainment.

22 ‘‘(ii) Business, financial, legal, consumer,

23 or credit material.

24 ‘‘(iii) Editorials.

25 ‘‘(iv) Columns.
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S 1822 IS

1 ‘‘(v) Sports reporting.

2 ‘‘(vi) Features.

3 ‘‘(vi) Advertising.

4 ‘‘(viii) Photos or images.

5 ‘‘(ix) Archival or research material.

6 ‘‘(x) Legal notices or public records.

7 ‘‘(xi) Scientific, educational, instructional,

8 technical, professional, trade, or other literary

9 materials.

10 ‘‘(xii) Other like or similar information.

11 ‘‘(B) The term ‘electronic publishing’ shall not

12 include the following network services:

13 ‘‘(i) Information access as that term is de14 fined by the Modification of Final Judgment.

15 ‘‘(ii) The transmission of information as a

16 common carrier.

17 ‘‘(iii) The transmission of information as

18 part of a gateway to an information service that

19 does not involve the generation or alteration of

20 the content of information, including data

21 transmission, address translation, protocol con22 version, billing management, introductory infor23 mation content, and navigational systems that

24 enable users to access electronic publishing
73

S 1822 IS

1 services, which do not affect the presentation of

2 such electronic publishing services to users.

3 ‘‘(iv) Voice storage and retrieval services,

4 including voice messaging and electronic mail

5 services.

6 ‘‘(v) Level 2 gateway services as those

7 services are defined by the Commission’s Sec8 ond Report and Order, Recommendation to

9 Congress and Second Further Notice of Pro10 posed Rulemaking in CC Docket No. 87–266

11 dated August 14, 1992.

12 ‘‘(vi) Data processing services that do not

13 involve the generation or alteration of the con14 tent of information.

15 ‘‘(vii) Transaction processing systems that

16 do not involve the generation or alteration of

17 the content of information.

18 ‘‘(viii) Electronic billing or advertising of a

19 Bell operating company’s regulated tele20 communications services.

21 ‘‘(ix) Language translation.

22 ‘‘(x) Conversion of data from one format

23 to another.

24 ‘‘(xi) The provision of information nec25 essary for the management, control, or oper-
74

S 1822 IS

1 ation of a telephone company telecommuni2 cations system.

3 ‘‘(xii) The provision of directory assistance

4 that provides names, addresses, and telephone

5 numbers and does not include advertising.

6 ‘‘(xiii) Caller identification services.

7 ‘‘(xiv) Repair and provisioning databases

8 for telephone company operations.

9 ‘‘(xv) Credit card and billing validation for

10 telephone company operations.

11 ‘‘(xvi) 911–E and other emergency assist12 ance databases.

13 ‘‘(xvii) Any other network service of a type

14 that is like or similar to these network services

15 and that does not involve the generation or al16 teration of the content of information.

17 ‘‘(xviii) Any upgrades to these network

18 services that do not involve the generation or

19 alteration of the content of information.

20 ‘‘(C) The term ‘electronic publishing’ also shall

21 not include—

22 ‘‘(i) full motion video entertainment on de23 mand; and

24 ‘‘(ii) video programming as defined in sec25 tion 602 of this Act.
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S 1822 IS

1 ‘‘(7) The term ‘electronic publishing joint ven2 ture’ means a joint venture owned by a Bell operat3 ing company or affiliate that engages in the provi4 sion of electronic publishing which is disseminated

5 by means of such Bell operating company’s or any

6 of its affiliates’ basic telephone service.

7 ‘‘(8) The term ‘entity’ means any organization,

8 and includes corporations, partnerships, sole propri9 etorships, associations, and joint ventures.

10 ‘‘(9) The term ‘inbound telemarketing’ means

11 the marketing of property, goods, or services by tele12 phone to a customer or potential customer who initi13 ated the call.

14 ‘‘(10) The term ‘own’ with respect to an entity

15 means to have a direct or indirect equity interest (or

16 the equivalent thereof) of more than 10 percent of

17 an entity, or the right to more than 10 percent of

18 the gross revenues of an entity under a revenue

19 sharing or royalty agreement.

20 ‘‘(11) The term ‘separated affiliate’ means a

21 corporation under common ownership or control with

22 a Bell operating company that does not own or con23 trol a Bell operating company and is not owned or

24 controlled by a Bell operating company and that en25 gages in the provision of electronic publishing which
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S 1822 IS

1 is disseminated by means of such Bell operating

2 company’s or any of its affiliates’ basic telephone

3 service.

4 ‘‘(12) The term ‘Bell operating company’ means

5 the corporations subject to the Modification of Final

6 Judgment and listed in Appendix A thereof, or any

7 entity owned or controlled by such corporation, or

8 any successor or assign of such corporation, but

9 does not include an electronic publishing joint ven10 ture owned by such corporation or entity.’’.

11 Subtitle C—Information Services

12 SEC. 491. PROVISION OF INFORMATION SERVICES.

13 Title II of the Communications Act of 1934 (47

14 U.S.C. 201 et seq.), as amended by this Act, is further

15 amended by adding at the end the following new section:

16 ‘‘SEC. 234. PROVISION OF INFORMATION SERVICES.

17 ‘‘(a) PROVISION OF GATEWAY SERVICES.—Unless ex18 pressly provided elsewhere in this Act, and Bell operating

19 company or affiliate thereof that offers a gateway service

20 shall make such service available concurrently to all of its

21 subscribers under nondiscriminatory rates, terms, and

22 conditions, and shall offer gateway service functions to all

23 providers of information services on nondiscriminatory

24 rates, terms, and conditions.
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S 1822 IS

1 ‘‘(b) PREVENTION OF CROSS-SUBSIDIES.—In addi2 tion to regulations on cross-subsidization that are pre3 scribed under other provisions of this Act, the Commission

4 shall prescribe cost allocation regulations to prevent any

5 Bell operating company or affiliate that offers services

6 that have market power from using revenues from such

7 services to subsidize competitive information services.

8 ‘‘(c) RESTRICTION ON STATE REGULATION.—Not9 withstanding section 2(b) of this Act, a State may not reg10 ulate the rates, terms, or conditions for the offering of

11 information services, except as provided in title VI.

12 ‘‘(d) DEFINITIONS.—As used in this section:

13 ‘‘(1) The term ‘Bell operating company’ has the

14 meaning given that term under section 231.

15 ‘‘(2) The term ‘gateway service’ means an in16 formation service that, at the request of the provider

17 of an electronic publishing service or other informa18 tion service, provides a subscriber with access to

19 such electronic publishing service or other informa20 tion service, utilizing the following functions: data

21 transmission, address translation, billing informa22 tion, protocol conversion, and introductory informa23 tion content.

24 ‘‘(3) The term ‘affiliate’ has the meaning given

25 that term under section 236 of this Act.’’.
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S 1822 IS

1 Subtitle D—InterLATA Telecommunications

2 Services

3 SEC. 481. INTERLATA TELECOMMUNICATIONS SERVICES.

4 Title II of the Communications Act of 1934 (47

5 U.S.C. 201 et seq.), as amended by this Act, is further

6 amended by adding at the end the following new section:

7 ‘‘SEC. 235. INTERLATA TELECOMMUNICATIONS SERVICES.

8 ‘‘(a) AUTHORITY.—Notwithstanding any restriction

9 or obligation imposed before the date of enactment of this

10 section pursuant to section II(D) of the Modification of

11 Final Judgment, a Bell operating company may engage

12 in the provision of interLATA telecommunications services

13 subject to the requirements of this section and any regula14 tions prescribed thereunder. No Bell operating company

15 or affiliate of a Bell operating company shall engage in

16 the provision of interLATA telecommunications services,

17 except as provided in this section.

18 ‘‘(b) CURRENTLY AUTHORIZED ACTIVITIES.—Sub19 section (a) shall not prohibit a Bell operating company

20 from engaging, at any time after the date of enactment

21 of this section, in any activity as authorized by an order

22 entered by the United States District Court for the Dis23 trict of Columbia pursuant to section VIII(C) of the Modi24 fication of Final Judgment if such order was entered on

25 or before such date of enactment.
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S 1822 IS

1 ‘‘(c) PETITION FOR AUTHORITY.—

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

3 or its affiliate may petition the Commission for au4 thority to provide interLATA telecommunications

5 services. The petition shall describe with particular6 ity the nature and scope of each proposed

7 interLATA telecommunications service, and of each

8 product market or service market, and each geo9 graphic market, for which authorization is sought.

10 ‘‘(2) REQUIRED SHOWING FOR IN-MARKET

11 SERVICES.—The Commission may, after consultation

12 with the Attorney General, and on the record after

13 opportunity for a hearing in which the public has an

14 opportunity to participate, grant a petition for au15 thority to offer an interLATA telecommunications

16 service to be originated, terminated, or otherwise

17 provided in any area in which the petitioner or its

18 affiliate provides telephone exchange or exchange ac19 cess services, only if—

20 ‘‘(A) the showing required by paragraph

21 (3) is made;

22 ‘‘(B) all the regulations required by section

23 230 have been prescribed by the Commission,

24 and each relevant State certifies and the Com25 mission finds that the petitioning Bell operating
80

S 1822 IS

1 company or its affiliate is providing telephone

2 exchange and exchange access service in the rel3 evant telephone exchange or exchange access

4 market in full compliance with such regulations;

5 and

6 ‘‘(C) the Commission finds, after receiving

7 factual evidence submitted by the State, that

8 there is actual and demonstrable competition to

9 the Bell operating company’s telephone ex10 change and exchange access services in each

11 relevant area, based on the requirement that

12 actual and demonstrable competition exists

13 when telephone exchange and exchange access

14 services—

15 ‘‘(i) are available from at least one

16 provider that is unaffiliated with the peti17 tioning Bell operating company or its af18 filiates;

19 ‘‘(ii) offered predominantly over facili20 ties not owned or controlled by the Bell op21 erating company or its affiliates and are

22 comparable in geographic range, function,

23 quality, and price to the service offered by

24 the petitioning Bell operating company or

25 its affiliate; and
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S 1822 IS

1 ‘‘(iii) subscribed to by a significant

2 number of persons in each relevant area.

3 ‘‘(3) REQUIRED SHOWING FOR OUT-OF-MARKET

4 SERVICES.—The Commission may, after consultation

5 with the Attorney General, and on the record after

6 opportunity for a hearing in which the public has an

7 opportunity to participate, grant authority to a peti8 tioning Bell operating company or its affiliate to

9 provide interLATA telecommunications services not

10 described in paragraph (2), upon a showing by the

11 petitioner that there is no substantial possibility that

12 the Bell operating company or its affiliates could use

13 market power in a telephone exchange and exchange

14 access service market to impede competition in the

15 interLATA telecommunications services market that

16 the petitioner seeks to enter.

17 ‘‘(4) INTERLATA TELECOMMUNICATIONS SERV18 ICE SAFEGUARDS.—

19 ‘‘(A) SEPARATE SUBSIDIARY; FULFILL20 MENT OF CERTAIN REQUESTS.—Other than

21 interLATA services authorized by an order en22 tered by the United States District Court for

23 the District of Columbia pursuant to section

24 VIII(C) of the Modification of Final Judgment

25 before the date of the enactment of this section,
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S 1822 IS

1 a Bell operating company or an affiliate thereof

2 providing interLATA services authorized under

3 this subsection shall do so through a separate

4 subsidiary as specified in section 236. Such sep5 arate subsidiary shall—

6 ‘‘(i) fulfill any requests from an unaf7 filiated entity for exchange access service

8 within a period no longer than that in

9 which it provides such exchange access

10 service to itself or to its affiliates;

11 ‘‘(ii) fulfill any such requests with ex12 change access service of a quality that

13 meets or exceeds the quality of exchange

14 access services provided by the Bell operat15 ing company or its affiliates to itself or its

16 affiliate; and

17 ‘‘(iii) provide exchange access at rates

18 to all interLATA carrier at rates that are

19 not unreasonably discriminatory.

20 ‘‘(B) COMMISSION ACTION ON COM21 PLAINTS.—With respect to any complaint

22 brought under section 208 alleging a violation

23 of this section or the regulations implementing

24 it, the Commission shall issue a final order

25 within 1 year after such complaint is filed.
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1 ‘‘(d) ADDITIONAL INTERLATA AUTHORITY ASSOCI2 ATED WITH CABLE TELEVISION SERVICE.—

3 ‘‘(1) AUTHORITY.—Notwithstanding subsection

4 (c), a Bell operating company or its affiliate may—

5 ‘‘(A) own and operate receive-only anten6 nas, satellite master antenna television facili7 ties, and satellite earth stations, solely for the

8 purpose of providing cable service;

9 ‘‘(B) own and operate interLATA distribu10 tion facilities solely for the purpose of providing

11 cable service; and

12 ‘‘(C) engage in interLATA telecommuni13 cations service for the purpose of one-way

14 transmission of video and audio programming

15 solely for cable service.

16 ‘‘(2) RESTRICTION.—A Bell operating company

17 may own and operate the antennas, stations, and fa18 cilities described in paragraph (1)(A) and (B) only

19 through one or more affiliates that are totally sepa20 rate from the Bell operating company’s local ex21 change company.

22 ‘‘(e) ADDITIONAL AUTHORITY TO PROVIDE

23 INTERLATA SERVICES RELATING TO CELLULAR MOBILE

24 RADIO SERVICES.—
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1 ‘‘(1) AUTHORITY.—A Bell operating company

2 or its cellular affiliate may provide the interLATA

3 services authorized under this section solely as nec4 essary to provide cellular mobile radio services.

5 ‘‘(2) INTERSYSTEM HANDOFF.—A Bell operat6 ing company or its cellular affiliate may provide

7 intersystem handoff, across LATA boundaries, of

8 cellular mobile radio transmissions between adjacent

9 cellular systems, including the provision of such

10 transmission facilities as are necessary to allow the

11 continuation of calls in progress without interruption

12 or degradation of service due to the movement of the

13 mobile telephone unit or the characteristics of radio

14 propagation.

15 ‘‘(3) AUTOMATIC CALL DELVIERY.—A Bell op16 erating company or its cellular affiliate may provide

17 the routing of cellular transmissions between its cel18 lular system and a cellular system located in another

19 LATA, for purposes of completing a call to one of

20 its out-of-region cellular customers.

21 ‘‘(4) USE OF LEASED FACILITIES.—Facilities

22 necessary for intersystem handoff across LATA

23 boundaries or interLATA routing of cellular trans24 missions, as permitted under paragraphs (2) and

25 (3), shall be leased by a Bell operating company or
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1 its cellular affiliate from a carrier (other than a Bell

2 operating company or its affiliate) authorized to pro3 vide interLATA telecommunications.

4 ‘‘(5) EQUAL ACCESS AND PRESUBSCRIPTION.—

5 Notwithstanding any restriction or obligation im6 posed pursuant to the Modification of Final Judg7 ment before the date of enactment of this section,

8 the Commission shall prescribe uniform equal access

9 and long distance presubscription requirements for

10 providers of all cellular and two-way wireless serv11 ices.

12 ‘‘(d) DEFINITIONS.—As used in this section:

13 ‘‘(1) The term ‘LATA’ means the local access

14 and transport areas as defined in United States v.

15 Western Electric Co., 569 F.Supp. 990 (United

16 States District Court, District of Columbia) and

17 subsequent judicial orders relating thereto.

18 ‘‘(2) the term ‘cable service’ has the meaning

19 given that term under section 602.’’.

20 SEC. 482. JURISDICTION.

21 Section 2(b) of the Communications Act of 1934 (47

22 U.S.C. 153) is amended by striking ‘‘section 332’’ and in23 serting in lieu thereof ‘‘sections 229, 230, 234, 235, 237,

24 and 332’’.
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1 TITLE V—REGULATORY PARITY BETWEEN

2 TELEPHONE AND CABLE COMPANIES

3 SEC. 501. OWNERSHIP AND CONTROL OF CABLE TELE4 VISION SYSTEMS AND TELEPHONE COMPA5 NIES.

6 Section 613(b) of the Communications Act of 1934

7 (47 U.S.C. 533(b)) is amended to read as follows:

8 ‘‘(b)(1)(A) No local exchange carrier, subject in whole

9 or in part to title II of this Act, nor any affiliate of such

10 carrier, owned by, operated by, controlled by, or under

11 common control with such carrier, may—

12 ‘‘(i) purchase or otherwise acquire, directly or

13 indirectly, more than a 5 percent financial interest,

14 any management interest, or any other interest, in

15 any cable system that is providing service within the

16 carrier’s telephone exchange service area and is

17 owned by an unaffiliated person; or

18 ‘‘(ii) enter into any joint venture or partnership

19 with a cable operator to provide video programming

20 to subscribers within such telephone exchange serv21 ice area.

22 ‘‘(B) A local exchange carrier shall not provide video

23 programming directly to subscribers in its telephone ex24 change service area unless—
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1 ‘‘(i) such video programming is provided

2 through a separate subsidiary as set forth in section

3 236; and

4 ‘‘(ii) the Commission finds that the local ex5 change carrier offers service in full compliance with

6 the regulations prescribed under section 230 in the

7 geographic area in which it seeks to provide video

8 programming.

9 ‘‘(C) A local exchange carrier that provides video pro10 gramming directly to subscribers is a cable operator as

11 defined in section 602.

12 ‘‘(D) a local exchange carrier shall not engage in

13 practices prohibited by the Commission or by a State (in14 cluding but not limited to the improper assignment of

15 costs) that subsidize directly or indirectly its video pro16 gramming operations.

17 ‘‘(E) Subparagraphs (A) and (B) shall not apply to

18 a local exchange carrier to the extent that such carrier

19 provides telephone exchange service in an area to which

20 an exemption applies under section 63.58 of title 47, Code

21 of Federal Regulations (as in effect on the date of enact22 ment of the Communications Act of 1994).

23 ‘‘(F) Upon a showing that a local exchange carrier

24 has no market power in its telephone service area, the
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1 Commission shall exempt the carrier from the provisions

2 of subparagraphs (B) and (D).

3 ‘‘(2)(A) A cable operator shall not provide tele4 communications services directly to subscribers in its cable

5 service area unless such telecommunications services are

6 provided through a separate subsidiary.

7 ‘‘(B) No cable operator, nor any affiliate of such

8 cable operator, owned by, operated by, controlled by, or

9 under common ownership with such cable operator, may—

10 ‘‘(i) purchase or otherwise acquire, directly or

11 indirectly, more than a 5 percent financial interest,

12 any management interest, or any other interest, in

13 any local exchange carrier that is providing local ex14 change service within the cable operator’s service

15 area; or

16 ‘‘(ii) enter into any joint venture or partnership

17 with such local exchange carrier, unless—

18 ‘‘(I) the joint venture or partnership ad19 vances the objectives of local competition by

20 promoting or increasing telecommunications

21 competition over facilities separate from the

22 local exchange carrier’s facilities in the local ex23 change carrier’s service area; and

24 ‘‘(II) the local exchange carrier’s interest

25 in such competing telecommunications services
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1 provider does not retard the competing provid2 er’s incentives to compete.

3 ‘‘(C) A cable operator shall not engage in practices

4 prohibited by the Commission or by a State (including but

5 not limited to the improper assignment of costs) that sub6 sidize directly or indirectly its telecommunications serv7 ices.

8 ‘‘(D) Upon a showing that a cable operator has no

9 market power in its cable service area, the Commission

10 shall exempt the cable operator from the provisions of sub11 paragraphs (A), (B), and (C).’’.

12 SEC. 502. CONSUMER AND COMPETITIVE SAFEGUARDS.

13 Title II of the Communications Act of 1934 (47

14 U.S.C. 201 et seq.), as amended by this Act, is further

15 amended by adding at the end the following new section:

16 ‘‘SEC 236. CONSUMER AND COMPETITIVE SAFEGUARDS.

17 ‘‘(a) SEPARATE SUBSIDIARY.—

18 ‘‘(1) IN GENERAL.—Any subsidiary required by

19 section 235 or 613(b)(1) shall, at a minimum, be

20 separated from a local exchange carrier, in accord21 ance with the requirements of this subsection and

22 the regulations prescribed by the Commission to

23 carry out this subsection.

24 ‘‘(2) TRANSACTION REQUIREMENTS.—Any

25 transaction between such a subsidiary and any local
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1 exchange carrier and any other affiliate of the car2 rier shall not be based upon any preference or dis3 crimination in favor of the subsidiary arising out of

4 the subsidiary’s affiliation with the carrier.

5 ‘‘(3) SEPARATE OPERATION AND PROPERTY.—

6 A subsidiary required by this subsection may not

7 enter into any joint venture activities or partnership

8 with a local exchange carrier or any affiliate of such

9 carrier.

10 ‘‘(4) SEPARATE COMMERCIAL ACTIVITIES.—A

11 subsidiary required by this subsection shall carry out

12 its marketing and sales directly and separate from

13 any local exchange carrier or its affiliate.

14 ‘‘(5) BOOKS, RECORDS, AND ACCOUNTS.—Any

15 subsidiary required by this subsection shall maintain

16 books, records, and accounts in a manner prescribed

17 by the Commission which shall be separate from the

18 books, records, and accounts maintained by any local

19 exchange carrier or any affiliates of such carrier.

20 ‘‘(6) PROVISION OF SERVICES AND INFORMA21 TION.—A local exchange carrier may not provide any

22 services or information to a subsidiary required by

23 this subsection unless such services or information

24 are made available to others on the same terms and

25 conditions.
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1 ‘‘(7) PREVENTION OF CROSS-SUBSIDIES.—Any

2 local exchange carrier required to maintain a sub3 sidiary under this subsection shall establish and ad4 minister, in accordance with the requirements of this

5 subsection and the regulations prescribed there6 under, a cost allocation system that prohibits any

7 cost of providing competitive services from being

8 subsidized by revenue from telephone exchange serv9 ices. The cost allocation system shall employ a for10 mula that ensures that—

11 ‘‘(A) the rates for telephone exchange serv12 ices are no greater than they would have been

13 in the absence of such investment in competi14 tive services (taking into account any decline in

15 the real costs of providing such telephone ex16 change services); and

17 ‘‘(B) competitive services bear a reasonable

18 share of the joint and common costs of facilities

19 used to provide telephone exchange and com20 petitive services.

21 ‘‘(8) ASSETS.—The Commission shall, by regu22 lation, ensure that the economic risks associated

23 with the provision of competitive services by a local

24 exchange carrier or an affiliate thereof (including

25 any increases in the carrier’s cost of capital that
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1 occur as a result of the provision of such services)

2 are not borne by customers of telephone exchange

3 services in the event of a business loss or failure. In4 vestments or other expenditures assigned to competi5 tive services shall not be reassigned to telephone ex6 change service or telephone exchange access service.

7 ‘‘(9) DEBT.—Any local exchange carrier, which

8 is required to be or is structurally separate from an

9 affiliate engaged in the provision of telephone ex10 change services, shall not obtain credit under any ar11 rangement that would—

12 ‘‘(A) permit a creditor, upon default, to

13 have recourse to the assets of the local ex14 change carrier; or

15 ‘‘(B) induce a creditor to rely on the tan16 gible or intangible assets of the local exchange

17 carrier in extending credit.

18 ‘‘(b) DEFINITIONS.—As used in this section, the term

19 ‘affiliate’ means any organization or entity that, directly

20 or indirectly, owns or controls, or is owned or controlled

21 by, or is under common ownership or control with, a local

22 exchange carrier. For purposes of this subsection, the

23 terms ‘own’, ‘owned’, and ‘ownership’ mean a direct or in24 direct equity interest (or equivalent thereof) of more than

25 5 percent of an organization or entity, or the right to more
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1 than 5 percent of the gross revenues of an organization

2 or entity under a revenue sharing or royalty agreement,

3 or any substantial management or financial interest.’’.

4 TITLE VI—CUSTOMER CONTROL OVER

5 INFORMATION

6 SEC. 601. CUSTOMER INFORMATION PROTECTIONS.

7 Title II of the Communications Act of 1934 (47

8 U.S.C. 201 et seq.), as amended by this Act, is further

9 amended by adding at the end the following new section:

10 ‘‘SEC. 237. CUSTOMER INFORMATION REQUIREMENTS.

11 ‘‘(a) CUSTOMER PROPRIETARY NETWORK INFORMA12 TION.—A local exchange carrier—

13 ‘‘(1) shall not, except as required by law or

14 upon the affirmative request of the customer to

15 which the information relates—

16 ‘‘(A) use customer proprietary network in17 formation in the providing of any service other

18 than (i) telephone exchange service or telephone

19 toll service, or (ii) a service necessary to or used

20 in the provision of telephone exchange service

21 or telephone toll service;

22 ‘‘(B) use customer proprietary network in23 formation in the identification or solicitation of

24 potential customers for any service other than
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1 the service from which such information is de2 rived;

3 ‘‘(C) use such information in their provi4 sion of customer premises equipment; or

5 ‘‘(D) disclose such information to any affil6 iate of such common carrier or any other per7 son that is not an employee of such carrier;

8 ‘‘(2) shall disclose such information, upon af9 firmative written request by the customer, to any

10 person designated by the customer;

11 ‘‘(3) shall, whenever such common carrier pro12 vides any aggregate information based on customer

13 proprietary network information or any data base or

14 other compilation of customer proprietary informa15 tion to any personnel of such common carrier, or

16 any affiliate of such common carrier, that are en17 gaged in providing any service that is not necessary

18 to the provision of telephone exchange service, or

19 that are engaged in the provision of customer prem20 ises equipment, or to any other person that is not

21 an employee or affiliate of such carrier, notify the

22 Commission of the availability of such aggregate or

23 compiled information and shall provide such aggre24 gate or compiled information on reasonable terms
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1 and conditions to any other service or equipment

2 provider upon reasonable request therefor; and

3 ‘‘(4) shall not discriminate between affiliated

4 and unaffiliated service or equipment providers in

5 providing access to, or in the use and disclosure of,

6 individual and aggregate or compiled information

7 made available consistent with this subsection.

8 ‘‘(b) RULE OF CONSTRUCTION.—This section shall

9 not be construed to prohibit the disclosure of customer

10 proprietary network information as necessary—

11 ‘‘(1) to render, bill, and collect for telephone ex12 change service or telephone toll service;

13 ‘‘(2) to render, bill, and collect for any other

14 telecommunications service that the customer has re15 quested;

16 ‘‘(3) to protect the rights or property of the

17 carrier; or

18 ‘‘(4) to protect users of any of those services

19 and other carriers from fraudulent, abusive, or un20 lawful use of or subscription to such service.

21 ‘‘(c) EXEMPTION PERMITTED.—The Commission

22 may, by rule, exempt from the requirements of subsection

23 (a) local exchange carriers that do not have 1,000,000 ag24 gregate nationwide lines installed if the Commission deter25 mines that such exemption is in the public interest or if
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1 compliance with the requirements would impose an undue

2 economic burden on the carrier.

3 ‘‘(d) DUTY TO PROVIDE SUBSCRIBER LIST INFORMA4 TION.—Notwithstanding subsections (a), (b), and (c), a

5 local exchange carrier that provides subscriber list infor6 mation to any affiliated or unaffiliated service provider or

7 person shall provide subscriber list information on a timely

8 and unbundled basis, under nondiscriminatory and reason9 able rates, terms, and conditions, to any person upon rea10 sonable request.

11 ‘‘(e) AUTOMATIC NUMBER IDENTIFICATION SERV12 ICES.—

13 ‘‘(1) CONTRACT REQUIREMENTS.—Any common

14 carrier or affiliate of a common carrier providing

15 automatic number identification services to any per16 son shall provide such services under a contract or

17 tariff containing telephone subscriber information

18 requirements that comply with this subsection. Such

19 requirements shall—

20 ‘‘(A) permit such person to use the tele21 phone number and billing information provided

22 pursuant to the automatic number identifica23 tion service for billing and collection, routing,

24 screening, and completion of the originating

25 telephone subscriber’s call or transaction, or for
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1 services directly related to the originating tele2 phone subscriber’s call or transaction;

3 ‘‘(B) prohibit such person from reusing or

4 selling the telephone number or billing informa5 tion provided pursuant to the automatic num6 ber identification service without first orally (i)

7 notifying the originating telephone subscriber

8 and (ii) extending to such subscriber the option

9 to limit or prohibit such reuse or sale; and

10 ‘‘(C) prohibit such person from disclosing,

11 except as permitted by subparagraphs (A) and

12 (B), any information derived from the auto13 matic number identification service for any pur14 pose other than—

15 ‘‘(i) performing the services or trans16 actions that are the subject of the originat17 ing telephone subscriber’s call,

18 ‘‘(ii) ensuring network performance,

19 security, and the effectiveness of call deliv20 ery,

21 ‘‘(iii) compiling, using, and disclosing

22 aggregate information, and

23 ‘‘(iv) complying with applicable law or

24 legal process.
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1 ‘‘(2) EXCEPTION FOR ESTABLISHED CUS2 TOMERS.—The customer information requirements

3 imposed under paragraph (1) shall not prevent a

4 person to which automatic number identification

5 services are provided from using—

6 ‘‘(A) the telephone number and billing

7 information provided pursuant to such

8 service, and

9 ‘‘(B) any information derived from

10 the automatic number identification serv11 ice, or from the analysis of the characteris12 tics of a telecommunications transmission,

13 to offer, to any telephone subscriber with which such

14 person has an established customer relationship, a

15 product or service that is directly related to the

16 products or service previously acquired by that cus17 tomer from such person.

18 ‘‘(3) ENFORCEMENT.—(A) Each common car19 rier shall receive and transmit to the Commission

20 complaints concerning violations of the telephone

21 subscriber information requirements imposed under

22 paragraph (1). Each common carrier shall submit to

23 the Commission, in such form as the Commission

24 may require by regulation, reports on actions taken

25 by the carrier to comply with this section.
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1 ‘‘(B) The Commission may, by rule or order, di2 rect the termination of automatic number identifica3 tion services to any person who has violated the tele4 phone subscriber information requirements imposed

5 under paragraph (1). For purposes of section

6 503(b)(1)(B), violations of such requirements shall

7 be considered to be a violation of a provision of this

8 Act.

9 ‘‘(4) EFFECTIVE DATE.—(A) Except as pro10 vided in subparagraph (B), the requirements of this

11 subsection shall apply to any automatic number

12 identification service provided on or after one year

13 after the date of enactment of this subsection.

14 ‘‘(B) In the case of any automatic number iden15 tification service provided under a contract entered

16 into, or tariff taking effect, more than 90 days after

17 the date of enactment of this subsection, the require18 ments of this subsection shall apply to any auto19 matic number identification service provided pursu20 ant to such contract or tariff.

21 ‘‘(f) DEFINITIONS.—As used in this section:

22 ‘‘(1) The term ‘customer proprietary network

23 information’ means—

24 ‘‘(A) information which (i) relates to the

25 quantity, technical configuration, type, destina-
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1 tion, and amount of use of telephone exchange

2 service or interexchange telephone service sub3 scribed to by any customer of a telephone oper4 ating company, and (ii) is available to the tele5 phone operating company by virtue of the tele6 phone company-customer relationship;

7 ‘‘(B) information contained in the bills for

8 telephone exchange service or interexchange

9 telephone service received by a customer of a

10 telephone operating company; and

11 ‘‘(C) such other information concerning the

12 customer as is (i) available to the telephone op13 erating company by virtue of the customer’s use

14 of the company’s services, and (ii) specified as

15 within the definition of such term by such rules

16 as the Commission shall prescribe consistent

17 with the public interest,

18 except that such term does not include subscriber

19 list information.

20 ‘‘(2) The term ‘subscriber information’ means

21 any information—

22 ‘‘(A) identifying the names of subscribers

23 of a local exchange carrier and such subscrib24 ers’ telephone numbers, addresses, or advertis25 ing classifications, or any combination of such
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1 names, numbers, addresses, or classifications;

2 and

3 ‘‘(B) that the carrier or an affiliate has

4 published or accepted for future publication.

5 ‘‘(3) The term ‘aggregate information’ means

6 collective data that relates to a group or category of

7 services or customers, from which individual cus8 tomer identities or characteristics have been re9 moved.

10 ‘‘(4) the term ‘automatic number identification’

11 means an access signaling protocol in common use

12 by common carriers that uses an identifying signal

13 associated with the use of a subscriber’s telephone to

14 provide billing information or other information to

15 the local exchange carrier and to any other inter16 connecting carriers.

17 ‘‘(g) PROCEEDING REQUIRED.—Within 6 months

18 after the date of enactment of this section, the Commis19 sion shall commence a proceeding—

20 ‘‘(1) to examine the impact of the integration

21 into interconnected communications networks of

22 wireless telephone, cable, satellite, and other tech23 nologies on the privacy rights and remedies of the

24 consumers of those technologies;
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1 ‘‘(2) to examine the impact that the

2 globalization of such integrated communications net3 works has on the international dissemination of

4 consumer information and the privacy rights and

5 remedies to protect consumers;

6 ‘‘(3) to propose changes in the Commission’s

7 regulations to ensure that the effect on consumer

8 privacy rights is considered in the introduction of

9 new telecommunications services and that the pro10 tection of such privacy rights is incorporated as nec11 essary in the design of such services or the rules reg12 ulating such services;

13 ‘‘(4) to propose changes in the Commission’s

14 regulations as necessary to correct any defects iden15 tified pursuant to paragraph (1) in such rights and

16 remedies; and

17 ‘‘(5) to prepare recommendations to the Con18 gress for any legislative changes required to correct

19 such defects.’’.

20 TITLE VII—MEDIA DIVERSITY

21 SEC. 701. REMOVAL OF BROADCAST STATION OWNERSHIP

22 RESTRICTIONS.

23 Within one year after the date of enactment of this

24 Act, the Commission shall, after a notice and comment

25 proceeding, modify or remove such national and local own-
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1 ership rules on radio and television broadcast stations as

2 are necessary to ensure that broadcasters are able to com3 pete fairly with other media providers while ensuring that

4 the public receives information from a diversity of media

5 sources

6 SEC. 702. REVIEW OF STATUTORY OWNERSHIP RESTRIC7 TION.

8 Within one year after the date of enactment of this

9 Act, the Commission shall review the ownership restriction

10 in section 613(a)(1) and report to Congress whether or

11 not such restriction continues to serve the public interest.

12 703. REVIEW OF VIDEO NON-DUPLICATION AND SYN13 DICATED EXCLUSIVITY RULES.

14 Within one year after the date of enactment of this

15 Act, the Commission shall complete a notice and comment

16 proceeding to consider the applicability of the Commis17 sion’s rules regarding network non-duplication protection

18 and syndicated exclusivity protection to other multi19 channel video programming providers.

20 SEC. 704. BROADCASTER PROVISION OF ADDITIONAL SERV21 ICES.

22 The Commission shall, after a notice and comment

23 proceeding, prescribe regulations to permit broadcasters

24 to make use of the broadcast spectrum that they are li25 censed to use, for services that are related to the program-
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1 ming services which they are authorized to provide. To the

2 extent that the broadcast licensee provides commercial

3 services using broadcast spectrum, the Commission shall

4 be authorized to collect from each licensee an amount

5 equivalent to the amount that would have been paid if the

6 license to provide such service has been subjected to com7 petitive bidding under section 309(j) of the Communica8 tions Act of 1934 (47 U.S.C. 309(j)). Such amounts shall

9 be collected and distributed pursuant to such section

10 309(j). Nothing shall be construed as relieving a broad11 casting station from its obligation to serve the public inter12 est, convenience, and necessity.

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