Calendar No. 610

103D CONGRESS

2D SESSION S. 1822

[Report No. 103–367]

A BILL

To foster the further development of the Nation’s

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

SEPTEMBER 14 (legislative day, SEPTEMBER 12), 1994

Reported with an amendment
II

Calendar No. 610

103D CONGRESS

2D SESSION S. 1822

[Report No. 103–367]

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, Mr. KERRY, Mr. BOND, Ms.

MOSELEY-BRAUN, Mr. AKAKA, Mr. LOTT, Mr. MATHEWS, and Mr.

LIEBERMAN) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation

SEPTEMBER 14 (legislative day, SEPTEMBER 12), 1994

Reported by Mr. HOLLINGS, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

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,
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1 SECTION 1. SHORT TITLE.

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

3 of 1994’’.

4 SEC. 2. FINDINGS.

5 The Congress finds that—

6 (1) Congress has not passed a broad review of

7 the Communications Act of 1934 since that Act was

8 originally passed;

9 (2) Congress must pass comprehensive commu10 nications legislation to promote the development and

11 growth of the national information superhighway;

12 (3) changes in the telecommunications market13 place have made some of the provisions of the Com14 munications Act of 1934 obsolete, unnecessary, or

15 inimical to advances in communications technologies

16 and services;

17 (4) for instance, competition has emerged in

18 many services that were previously thought to be

19 natural monopolies, but the Communications Act of

20 1934 requires all carriers to be regulated as if they

21 were monopolies;

22 (5) as communications markets change, govern23 ment must ensure that the public interest, conven24 ience and necessity is preserved;

25 (6) the public interest requires that universal

26 telephone service is protected and advanced, that
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1 new telecommunications technologies are deployed

2 rapidly and equitably, and that access by schools,

3 hospitals, public broadcasters, libraries, other public

4 entities, community newspapers, and broadcasters in

5 the smallest markets to advanced telecommuni6 cations services is assisted;

7 (7) access to basic telecommunications services

8 is fundamental to safety of life and participation in

9 a democratic society;

10 (8) telecommunications networks make substan11 tial use of public rights of way in real property and

12 in spectrum frequencies, and carriers that make use

13 of such public rights of way have an obligation to

14 provide preferential rates to entities that provide sig15 nificant public benefits;

16 (9) advanced telecommunications services can

17 enhance the quality of life and promote economic de18 velopment and international competitiveness;

19 (10) telecommunications infrastructure develop20 ment is particularly crucial to the continued eco21 nomic development of rural areas that may lack an

22 adequate industrial or service base for continued de23 velopment;

24 (11) advancements in the Nation’s tele25 communications infrastructure will enhance the pub-
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1 lic welfare by helping to speed the delivery of new

2 services, such as distance learning, remote medical

3 sensing, and distribution of health information;

4 (12) infrastructure advancement can be assisted

5 by joint planning and infrastructure sharing by all

6 carriers providing communications services;

7 (13) increased competition in telecommuni8 cations services can, if subject to appropriate safe9 guards, encourage infrastructure development and

10 have beneficial effects on the price, universal avail11 ability, variety, and quality of telecommunications

12 services;

13 (14) the emergence of competition in tele14 communications services has already contributed,

15 and can be expected to continue contributing, to the

16 modernization of the infrastructure;

17 (15) competition in the long distance industry

18 and the communications equipment market has

19 brought about lower prices and higher quality serv20 ices;

21 (16) competition for local communications serv22 ices has already begun to benefit the public; com23 petitive access providers have deployed thousands of

24 miles of optical fiber in their local networks; local ex25 change carriers have been prompted by competition
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1 to accelerate the installation of optical fiber in their

2 own networks;

3 (17) electric utilities, satellite carriers, and oth4 ers are prepared to enter the local telephone market

5 over the next few years;

6 (18) a diversity of telecommunications carriers

7 enhances network reliability by providing redundant

8 capacity, thereby lessening the impact of any net9 work failure;

10 (19) competition must proceed under rules that

11 protect consumers and are fair to all telecommuni12 cations carriers;

13 (20) all telecommunications carriers, including

14 competitors to the telephone companies, should con15 tribute to universal service and should make their

16 networks available for interconnection by others;

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

18 entry into the telecommunications services market

19 and provision of national standards for interconnec20 tion are warranted after mechanisms to protect uni21 versal service and rules are established to ensure

22 that competition develops fairly;

23 (22) increasing the availability of interconnec24 tion and interoperability among the facilities of tele-
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1 communications carriers will help stimulate the de2 velopment of fair competition among providers;

3 (23) the portability of telecommunications num4 bers will eliminate a significant advantage held by

5 traditional telephone companies over competitors in

6 the provision of telecommunications services;

7 (24) restrictions on resale and sharing of tele8 communications networks retard the growth of com9 petition and restrict the diversity of services avail10 able to the public;

11 (25) additional regulatory measures are needed

12 to allow consumers in rural markets and non13 competitive markets the opportunity to benefit from

14 high-quality telecommunications capabilities;

15 (26) regulatory flexibility for existing providers

16 of telephone exchange service is necessary to allow

17 them to respond to competition;

18 (27) the Federal Communications Commission

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

20 the States must have the flexibility to adjust their

21 regulations to the market power of each provider of

22 telecommunications services;

23 (28) the Commission should take steps to en24 sure network reliability and the development of net25 work standards;
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1 (29) access to switched, digital telecommuni2 cations service for all segments of the population

3 promotes the core First Amendment goal of diverse

4 information sources by enabling individuals and or5 ganizations alike to publish and otherwise make in6 formation available in electronic form;

7 (30) the national welfare will be enhanced if

8 community newspapers and broadcasters in the

9 smallest markets are provided ease of entry into the

10 operation of information services disseminated

11 through electronic means primarily to customers in

12 the localities served by such newspapers and broad13 casters at reasonable, nondiscriminatory rates to

14 such newspapers;

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

16 participation in access to telecommunications net17 works and services by individuals with disabilities;

18 (32) the obligations of telecommunications car19 riers includes the duty to furnish telecommuni20 cations services which are designed to be fully acces21 sible to individuals with disabilities in accordance

22 with such standards as the Commission may pre23 scribe;

24 (33) permitting the Bell operating companies to

25 enter the manufacturing market will stimulate great-
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1 er research and development, create more jobs, and

2 enhance our international competitiveness;

3 (34) the Bell operating companies should be

4 permitted to provide long distance service for cable

5 television and for cellular hands off immediately be6 cause there is little harm, if any, that such entry

7 could cause the public;

8 (35) the Bell operating companies should not be

9 permitted to enter the market for other long dis10 tance services until they have eliminated the barriers

11 to competition and interconnection and until the Bell

12 operating company faces competition for local tele13 phone service;

14 (36) safeguards are necessary to ensure that

15 the Bell operating companies do not abuse their

16 market power over local telephone service to dis17 criminate against competitors in the markets for

18 electronic publishing, alarm, and other information

19 services;

20 (37) amending the legal barriers to the provi21 sion of video programming by telephone companies

22 in their service areas will encourage competition to

23 existing cable television service providers and en24 courage telephone companies to upgrade their tele25 communications facilities to enable them to deliver
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1 video programming, as long as telephone companies

2 are prohibited from buying or combining with exist3 ing cable companies in their telephone service areas;

4 (38) as communications technologies and serv5 ices proliferate, consumers must be given the right

6 to control information concerning their use of those

7 technologies and services; and

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

9 Commission should reexamine the need for national

10 and local ownership limits on broadcast stations,

11 consistent with the need to maintain diversity of in12 formation sources.

13 SEC. 3. EFFECT ON OTHER LAW.

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

15 construed to modify, impair, or supersede the applicability

16 of any antitrust law.

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

18 as provided in paragraph (2), this Act shall not be con19 strued to modify, impair, or supersede Federal, State, or

20 local law unless expressly so provided in this Act.

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

22 the extent that such law would impair or prevent the oper23 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-
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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:
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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
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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
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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;
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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
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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;
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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;
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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
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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—
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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-
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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-
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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-
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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
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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
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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
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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
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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
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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
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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.
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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

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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 RS

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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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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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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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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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-
63

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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-
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S 1822 RS

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 RS

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
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S 1822 RS

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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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,
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S 1822 RS

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 RS

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 RS

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-
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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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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
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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-
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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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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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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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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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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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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
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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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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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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.

13 SECTION 1. SHORT TITLES; TABLE OF CONTENTS.

14 (a) SHORT TITLE OF ACT.—This Act may be cited as

15 the ‘‘Communications Act of 1994’’.

16 (b) SHORT TITLE OF SUBTITLE A OF TITLE IV.—Sub17 title A of title IV may be cited as the ‘‘Telecommunications

18 Equipment Research and Manufacturing Competition Act

19 of 1994’’.

20 (c) TABLE OF CONTENTS.—

Sec. 1. Short titles; table of contents.

Sec. 2. Findings.

Sec. 3. Effect on other law.

TITLE I—PROTECTION AND ADVANCEMENT OF UNIVERSAL SERVICE

Sec. 101. National policy goals.

Sec. 102. Universal service protection and advancement.

Sec. 103. Public rights-of-way.

Sec. 104. Public access.
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TITLE II—TELECOMMUNICATIONS

Sec. 201. Infrastructure investment.

TITLE III—REGULATORY REFORM

Sec. 301. Definitions.

Sec. 302. Regulatory reform.

Sec. 303. Implementing regulations.

Sec. 304. State and local taxation of direct broadcast satellite services.

Sec. 305. Pole attachments.

Sec. 306. Carrier of last resort.

Sec. 307. Additional requirements for certain carriers in Alaska.

TITLE IV—AUTHORIZED ACTIVITIES OF BELL COMPANIES

Subtitle A—Telecommunications Equipment Research and Manufacturing

Competition

Sec. 401. Findings.

Sec. 402. Amendment to Communications Act of 1934.

Sec. 403. Increased penalty for recordkeeping violations.

Sec. 404. Application of antitrust laws.

Subtitle B—Regulation of Alarm Services and Electronic Publishing by Bell

Operating Companies

Sec. 421. Regulation of entry into alarm monitoring services.

Sec. 422. Regulation of electronic publishing.

Subtitle C—Information Services and Payphone Services

Sec. 431. Provision of information services.

Sec. 432. Provision of payphone services.

Subtitle D—InterLATA Telecommunications Services

Sec. 441. InterLATA telecommunications services.

Sec. 442. Jurisdiction.

TITLE V—REGULATORY PARITY AMONG PROVIDERS OF CABLE

SERVICE

Sec. 501. Provision of cable service by local exchange carriers and provision of

telecommunications services by cable operators.

Sec. 502. Common carrier video platform.

Sec. 503. Jurisdiction of franchising authority.

TITLE VI—CUSTOMER CONTROL OVER INFORMATION

Sec. 601. Customer information protection.

TITLE VII—MEDIA DIVERSITY

Sec. 701. Review of broadcast rules.

Sec. 702. Television broadcaster provision of additional services.

Sec. 703. Video programming accessibility.
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TITLE VIII—OBSCENE, HARASSING, AND WRONGFUL UTILIZATION

OF TELECOMMUNICATIONS FACILITIES

Sec. 801. Obscene or harassing use of telecommunications facilities under the

Communications Act of 1934.

Sec. 802. Obscene programming on cable television.

Sec. 803. Broadcasting obscene language on radio.

Sec. 804. Interception and disclosure of electronic communications.

Sec. 805. Additional prohibition on billing for toll-free telephone calls.

Sec. 806. Scrambling of cable channels for nonsubscribers.

Sec. 807. Cable operator refusal to carry certain programs.

TITLE IX—ADVANCED TELECOMMUNICATIONS NETWORK

CAPABILITY

Sec. 901. Advanced telecommunications network capability.

1 SEC. 2. FINDINGS.

2 The Congress makes the following findings:

3 (1) Congress has not passed comprehensive

4 changes to the Communications Act of 1934 since that

5 Act was originally passed.

6 (2) Congress must pass comprehensive commu7 nications legislation to promote the development and

8 growth of the national information superhighway.

9 (3) Changes in the telecommunications market10 place have made some of the provisions of the Com11 munications Act of 1934 obsolete, unnecessary, or in12 imical to advances in communications technologies

13 and services.

14 (4) Competition has emerged in many services

15 that were previously thought to be natural monopo16 lies, but the Communications Act of 1934 requires all

17 carriers to be regulated as if they were monopolies.
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1 (5) As communications markets change, govern2 ment must ensure that the public interest, conven3 ience, and necessity are preserved.

4 (6) The public interest requires that universal

5 service is protected and advanced, that new tele6 communications technologies are deployed rapidly

7 and equitably, and that access by schools, hospitals,

8 public broadcasters, libraries, and museums to ad9 vanced telecommunications services is assisted.

10 (7) Access to telecommunications services is fun11 damental to safety of life and participation in a

12 democratic society.

13 (8) Telecommunications networks make substan14 tial use of public rights of way in real property and

15 in spectrum frequencies, and carriers that make use

16 of such public rights of way have an obligation to

17 provide preferential rates to entities that provide sig18 nificant public benefits.

19 (9) Advanced telecommunications services can

20 enhance the quality of life and promote economic de21 velopment and international competitiveness.

22 (10) Telecommunications infrastructure develop23 ment is particularly crucial to the continued eco24 nomic development of rural areas that may lack an
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1 adequate industrial or service base for continued

2 development.

3 (11) Advancements in the Nation’s telecommuni4 cations infrastructure will enhance the public welfare

5 by helping to speed the delivery of new services, such

6 as distance learning, remote medical sensing, and dis7 tribution of health information.

8 (12) Infrastructure advancement can be assisted

9 by joint planning and infrastructure sharing by car10 riers and other providers of network facilities and

11 services providing communications services.

12 (13) Increased competition in telecommuni13 cations services can, if subject to appropriate safe14 guards, encourage infrastructure development and

15 have beneficial effects on the price, universal avail16 ability, variety, and quality of telecommunications

17 services.

18 (14) The emergence of competition in tele19 communications services has already contributed, and

20 can be expected to continue contributing, to the mod21 ernization of the infrastructure.

22 (15) Competition in the long distance industry

23 and the communications equipment market has

24 brought about lower prices and higher quality serv25 ices.
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1 (16) Competition for local communications serv2 ices has already begun to benefit the public; competi3 tive access providers have deployed thousands of miles

4 of optical fiber in their local networks; local exchange

5 carriers have been prompted by competition to accel6 erate the installation of optical fiber in their own net7 works.

8 (17) Electric utilities, satellite carriers, and oth9 ers are prepared to enter the local telephone market

10 over the next few years.

11 (18) A diversity of telecommunications carriers

12 enhances network reliability by providing redundant

13 capacity, thereby lessening the impact of any network

14 failure.

15 (19) Competition must proceed under rules that

16 protect consumers and are fair to all telecommuni17 cations carriers.

18 (20) All telecommunications carriers, including

19 competitors to the telephone companies, should con20 tribute to universal service and should make their net21 works available for interconnection by others.

22 (21) Removal of all State and local barriers to

23 entry into the telecommunications services market

24 and provision of interconnection are warranted after
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1 mechanisms to protect universal service and rules are

2 established to ensure that competition develops.

3 (22) Increasing the availability of interconnec4 tion and interoperability among the facilities of tele5 communications carriers will help stimulate the devel6 opment of fair competition among providers.

7 (23) The portability of telecommunications num8 bers will eliminate a significant advantage held by

9 traditional telephone companies over competitors in

10 the provision of telecommunications services.

11 (24) Unreasonable restrictions on resale and

12 sharing of telecommunications networks retard the

13 growth of competition and restrict the diversity of

14 services available to the public.

15 (25) Additional regulatory measures are needed

16 to allow consumers in rural markets and noncompeti17 tive markets the opportunity to benefit from high18 quality telecommunications capabilities.

19 (26) Regulatory flexibility for existing providers

20 of telephone exchange service is necessary to allow

21 them to respond to competition.

22 (27) The Federal Communications Commission

23 (referred to elsewhere in this Act as the ‘‘Commis24 sion’’) and the States must have the flexibility to ad-
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1 just their regulations of each provider of telecommuni2 cations services to serve the public interest.

3 (28) If the efforts of the private sector fail, the

4 Commission should take steps to ensure network reli5 ability and the development of network standards.

6 (29) Access to switched, digital telecommuni7 cations service for all segments of the population pro8 motes the core First Amendment goal of diverse infor9 mation sources by enabling individuals and organiza10 tions alike to publish and otherwise make information

11 available in electronic form.

12 (30) The national welfare will be enhanced if

13 community newspapers are provided ease of entry

14 into the operation of information services dissemi15 nated through electronic means primarily to cus16 tomers in the localities served by such newspapers at

17 rates that are not higher, on a perunit basis, than the

18 rates charged for such services to any other electronic

19 publisher.

20 (31) A clear national mandate is needed for full

21 participation in access to telecommunications net22 works and services by individuals with disabilities.

23 (32) The obligations of telecommunications car24 riers include the duty to furnish telecommunications

25 services which are designed to be fully accessible to in-
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1 dividuals with disabilities in accordance with such

2 standards as the Commission may prescribe.

3 (33) Permitting the Bell operating companies to

4 enter the manufacturing market will stimulate great5 er research and development, create more jobs, and

6 enhance our international competitiveness.

7 (34) The Bell operating companies should not be

8 permitted to enter the market for other long distance

9 services until they have eliminated the barriers to

10 competition and interconnection.

11 (35) Safeguards are necessary to ensure that the

12 Bell operating companies do not abuse their market

13 power over local telephone service to discriminate

14 against competitors in the markets for electronic pub15 lishing, alarm services, and other information serv16 ices.

17 (36) Amending the legal barriers to the provision

18 of video programming by telephone companies in

19 their service areas will encourage competition to exist20 ing cable television service providers and encourage

21 telephone companies to upgrade their telecommuni22 cations facilities to enable them to deliver video pro23 gramming, as long as telephone companies and cable

24 companies are prohibited from buying or joint ven-
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1 turing with each other in their service areas (except

2 for certain rural areas).

3 (37) As communications technologies and serv4 ices proliferate, consumers must be given the right to

5 control information concerning their use of those tech6 nologies and services.

7 (38) As competition in the media increases, the

8 Commission should reexamine the need for national

9 and local ownership limits on broadcast stations, con10 sistent with the need to maintain diversity of infor11 mation sources.

12 SEC. 3. EFFECT ON OTHER LAW.

13 (a) ANTITRUST LAWS.—Except as provided in sub14 section (b), nothing in this Act shall be construed to modify,

15 impair, or supersede the applicability of any antitrust law.

16 (b) MODIFICATION OF FINAL JUDGMENT.—This Act

17 shall supersede the Modification of Final Judgment to the

18 extent that it is inconsistent with this Act.

19 TITLE I—PROTECTION AND

20 ADVANCEMENT OF UNIVERSAL SERVICE

21 SEC. 101. NATIONAL POLICY GOALS.

22 Section 1 of the Communications Act of 1934 (47

23 U.S.C. 151) is amended by inserting ‘‘(a)’’ before ‘‘For the

24 purpose of’’ and by adding at the end the following new

25 subsection:
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1 ‘‘(b) The primary objective of United States national

2 and international communications policy shall be to protect

3 the public interest. The public interest shall include the fol4 lowing:

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

6 reasonably evolving telecommunications services at

7 just, reasonable, and affordable rates taking into ac8 count advances in telecommunications and informa9 tion technology.

10 ‘‘(2) To promote the development and widespread

11 availability of new technologies and advanced tele12 communications and information services to all per13 sons regardless of location or disability.

14 ‘‘(3) To ensure that consumers have access to di15 verse sources of information.

16 ‘‘(4) To promote learning, education, and knowl17 edge.

18 ‘‘(5) To ensure reasonably comparable services at

19 reasonably comparable rates for consumers in urban

20 and rural areas.

21 ‘‘(6) To allow each individual the opportunity to

22 contribute to the free flow of ideas and information

23 through telecommunications and information services.
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1 ‘‘(7) To maximize the contribution of commu2 nications and information technologies and services to

3 economic welfare and quality of life.

4 ‘‘(8) To protect each individual’s right to control

5 the use of information concerning his or her use of

6 telecommunications services.

7 ‘‘(9) To provide secure and reliable services for

8 Federal, State, and local government emergency re9 sponse.

10 ‘‘(10) To promote democracy.

11 ‘‘(11) To make available so far as possible, to all

12 the people of the United States, regardless of race,

13 color, national origin, income, residence in a rural or

14 urban area, or disability, high capacity two-way

15 communications networks capable of enabling users to

16 originate and receive affordable and accessible high

17 quality voice, data, graphics, video, and other types

18 of telecommunications services.’’.

19 SEC. 102. UNIVERSAL SERVICE PROTECTION AND ADVANCE20 MENT.

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

22 of 1934 (47 U.S.C. 201 et seq.) is amended by inserting

23 after section 201 the following new section:
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1 ‘‘SEC. 201A. UNIVERSAL SERVICE PROTECTION AND AD2 VANCEMENT.

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

4 Board and the Commission shall base policies for the preser5 vation and advancement of universal service on the follow6 ing principles:

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

8 reasonable, and affordable rates.

9 ‘‘(2) Access to advanced telecommunications and

10 information services should be provided in all regions

11 of the Nation.

12 ‘‘(3) Consumers in rural and high cost areas

13 should have access to telecommunications and infor14 mation services, including interexchange services, rea15 sonably comparable to those services provided in

16 urban areas.

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

18 should have access to telecommunications and infor19 mation services at rates that are reasonably com20 parable to rates charged for similar services in urban

21 areas.

22 ‘‘(5) Citizens in rural and high cost areas should

23 have access to the benefits of advanced telecommuni24 cations and information services for health care, edu25 cation, economic development, and other public pur26 poses.
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1 ‘‘(6) There should be a coordinated Federal-State

2 universal service system to preserve and advance uni3 versal service.

4 ‘‘(7) Consumers should be permitted to exercise

5 choice among telecommunications carriers offering

6 universal service.

7 ‘‘(8) Consumers of universal service should have

8 the right to control the use of information concerning

9 their individual use of such service.

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

11 package of services which includes any telecommunications

12 and information services which the Commission, based on

13 recommendations from the public, Congress, and the Fed14 eral-State Joint Board periodically convened under section

15 102 of the Communications Act of 1994, and taking into

16 account advances in telecommunications and information

17 technologies and services, determines should be provided at

18 just, reasonable, and affordable rates to all Americans, in19 cluding those in rural and high-cost areas and those with

20 disabilities, to enable them to participate effectively in the

21 economic, academic, medical, and democratic processes of

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

23 access to any telecommunications and information services

24 that the Commission determines have, through the operation
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1 of market choices by customers, been subscribed to by a sub2 stantial majority of residential customers.

3 ‘‘(c) ALL TELECOMMUNICATIONS PROVIDERS CON4 TRIBUTE.—Every telecommunications carrier engaged in

5 intrastate, interstate, or foreign communication by wire or

6 radio shall contribute to the preservation and advancement

7 of universal service. The Commission may, by rule, require

8 any other telecommunications provider to contribute to the

9 preservation and advancement of universal service, if the

10 public interest so requires. Such contributions shall be in

11 the manner determined by the Commission, after referral

12 to the Joint Board periodically convened under section 102

13 of the Communications Act of 1994, and shall be on an eq14 uitable and non-discriminatory basis. The Commission and

15 the States shall, through the Universal Service Fund estab16 lished under subsection (d), collect only the amount of con17 tributions needed to meet the amount of support payments

18 reasonably necessary to preserve and advance universal

19 service, as defined by the Commission under subsection (b).

20 ‘‘(d) UNIVERSAL SERVICE FUND.—The Commission

21 shall establish within 18 months after the date of enactment

22 of the Communications Act of 1994, after referral to the

23 Federal-State Joint Board convened under section 102 of

24 that Act, a Universal Service Fund, controlled by an inde25 pendent administrator, which shall have specific and pre-
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1 dictable Federal and State mechanisms to provide adequate

2 and sustainable support for maintaining and advancing

3 universal service. The Fund shall be the primary repository

4 of universal service contributions, and shall be responsible

5 for the collection of universal service contributions and the

6 distribution of support payments, based on rules established

7 by the Commission and the States to implement this section.

8 ‘‘(e) FEDERAL-STATE PARTNERSHIP.—A State may

9 adopt regulations to provide for additional definitions,

10 mechanisms, and standards to preserve and advance uni11 versal service within such State, and to implement any

12 Joint Board recommendation made under section 102 of the

13 Communications Act of 1994, provided that such State reg14 ulations are not inconsistent, or are modified to be made

15 not inconsistent, within one year after the effective date of

16 regulations prescribed by the Commission to implement this

17 section.

18 ‘‘(f) ELIGIBILITY FOR UNIVERSAL SERVICE SUP19 PORT.—Only telecommunications carriers which are des20 ignated as a carrier of last resort under section 214(d) shall

21 be eligible to receive support payments from the Universal

22 Service Fund established under this section. The Commis23 sion, after referral to the Joint Board periodically convened

24 under section 102 of the Communications Act of 1994, shall

25 establish appropriate regulatory mechanisms to ensure that
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1 support payments accurately reflect the amount reasonably

2 necessary to preserve and advance universal service.

3 ‘‘(g) RATE ADJUSTMENTS.—The Commission shall,

4 after referral to the Joint Board established under section

5 102 of the Communications Act of 1994, establish guidelines

6 to be implemented by the States to allow for rate adjust7 ments by existing providers of universal service necessary

8 to implement the universal service rules approved by the

9 Commission pursuant to this section. Such guidelines shall

10 provide for—

11 ‘‘(1) the development and approval of transition

12 plans for up to 2 years, or 4 years in the case of

13 small telecommunications carriers;

14 ‘‘(2) compensation for services not included in

15 the definition of universal service by the Commission,

16 but required under State law; and

17 ‘‘(3) expedited implementation by States of any

18 changes required by this section.

19 ‘‘(h) INTEREXCHANGE SERVICE.—The Commission

20 shall ensure that the rates charged by providers of

21 interexchange telecommunications service to consumers in

22 rural and high cost areas are maintained at levels no higher

23 than those charged by each such provider to its consumers

24 in urban areas.
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1 ‘‘(i) SUBSIDY OF COMPETITIVE SERVICES PROHIB2 ITED.—Telecommunications carriers shall not be permitted

3 to subsidize competitive services from revenues obtained

4 from services that are not competitive. The Commission,

5 after referral to the Joint Board established under section

6 102 of the Communications Act of 1994, shall establish cost

7 allocation rules and guidelines to ensure that services in8 cluded in the definition of universal service bear no more

9 than a reasonable share (and may, in the public interest,

10 bear less than or none of such share) of the joint and com11 mon costs of facilities used to provide such services.

12 ‘‘(j) EFFECTIVE DATE.—The provisions of subsections

13 (c), (d), (e), (f), and (g) of this section shall take effect 18

14 months after the date of enactment of the Communications

15 Act of 1994.’’.

16 (b) FEDERAL-STATE JOINT BOARD ON UNIVERSAL

17 SERVICE.—

18 (1) Within one month of the date of enactment

19 of this Act, the Commission shall institute and refer

20 to a Federal-State Joint Board under section 410(c)

21 of the Communications Act of 1934 a proceeding to

22 recommend rules regarding the implementation of sec23 tion 201A of that Act, including the definition of uni24 versal service. Such Joint Board shall, after notice

25 and public comment, make its recommendations to
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1 the Commission no later than nine months after the

2 date of enactment of this Act.

3 (2) The Commission shall periodically, but no

4 less than once every 6 years, institute and refer to a

5 Federal-State Joint Board under section 410(c) of the

6 Communications Act of 1934 a proceeding to review

7 the implementation of section 201A of that Act and

8 to make new recommendations within 9 months of the

9 date such Joint Board convened, if necessary, with re10 spect to any modifications or additions that may be

11 needed. As part of any such proceeding the Joint

12 Board shall review the definition of, and adequacy of

13 support for, universal service and shall evaluate the

14 extent to which universal service has been protected

15 and advanced.

16 (c) COMMISSION ACTION.—The Commission shall ini17 tiate a single proceeding to implement recommendations

18 from the initial Joint Board required by subsection (b) and

19 shall complete such proceeding within 18 months of the date

20 of enactment of this Act. Thereafter, the Commission shall

21 complete any proceeding to implement recommendations

22 from any further Joint Board required under subsection (b)

23 within 9 months of receiving such recommendations.

24 (d) SEPARATIONS RULES.—Nothing in the amend25 ments made by this Act to the Communications Act of 1934
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1 shall affect the Commission’s separations rules for local ex2 change or interexchange carriers in effect on the date of en3 actment of this Act.

4 (e) CONFORMING AMENDMENT.—Section 332(c)(1)(A)

5 of the Communications Act of 1934 (47 U.S.C.

6 332(c)(1)(A)) is amended by inserting ‘‘201A, 201B, 201C’’

7 after ‘‘section 201,’’.

8 SEC. 103. PUBLIC RIGHTS-OF-WAY.

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

10 of 1934 (47 U.S.C. 201 et seq.) is amended by inserting

11 after section 201A the following new section:

12 ‘‘SEC. 201B. PUBLIC RIGHTS-OF-WAY.

13 ‘‘(a) REQUIREMENT FOR RESERVED CAPACITY.—

14 Within 2 years after the enactment of the Communications

15 Act of 1994, the Commission shall promulgate regulations

16 to require owners and operators of telecommunications net17 works to reserve, for public uses, up to 5 percent of the ca18 pacity on such networks used for the delivery of information

19 services, for use by eligible entities at incremental cost based

20 rates for the delivery of information services to the general

21 public. The capacity shall be reserved in exchange for the

22 use of public rights-of-way accorded telecommunications

23 networks. The capacity shall be allocated pursuant to regu24 lations promulgated by the Commission and State authori25 ties. The owner or operator of any affected telecommuni-
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1 cations network shall have no control over, and no liability

2 for, the communications content of such capacity.

3 ‘‘(b) RESERVATION OF CAPACITY.—

4 ‘‘(1) AMOUNT OF CAPACITY TO BE RESERVED.—

5 The Commission shall determine on the record, after

6 notice and opportunity for comment, the appropriate

7 amount of capacity to be reserved on each tele8 communications network. In making such a deter9 mination, the Commission shall consider the type of

10 technology used by the network, barriers to accessing

11 the network, existing set-aside requirements for broad12 cast spectrum, existing requirements under sections

13 335, 611, and 615, the public’s right to receive ade14 quate compensation for use of public rights-of-way,

15 and such other factors as the Commission considers

16 appropriate.

17 ‘‘(2) TEMPORARY REDUCTIONS.—If the Commis18 sion determines that any portion of the amount of ca19 pacity that a telecommunications network is required

20 to reserve under this section will go unused, the Com21 mission may temporarily reduce the reserved amount

22 by such unused portion. During the period when the

23 reserved capacity of a telecommunications network is

24 temporarily reduced, an eligible entity described in

25 subsection (c) may request use of any of the portion
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1 by which such reserved capacity was reduced and the

2 Commission shall act promptly upon such request.

3 ‘‘(3) QUALITY.—The quality of telecommuni4 cations capacity reserved for public uses under this

5 section shall be equivalent to the best quality of avail6 able capacity of the affected telecommunications net7 work in all respects, including accessibility, channel

8 positioning, interconnection access rights, network ca9 pabilities, and such other factors as the Commission

10 considers appropriate.

11 ‘‘(4) ESTABLISHMENT OF RATES FOR ELIGIBLE

12 ENTITIES ON OPEN SYSTEMS.—If the Commission de13 termines on the record after notice and opportunity

14 for comment that a telecommunications network has

15 clearly sufficient open architecture, capacity, and

16 nondiscriminatory access terms to ensure access by el17 igible entities described in subsection (c), the Commis18 sion shall determine that the obligation to reserve a

19 certain amount of capacity imposed under this sub20 section is not applicable. This paragraph shall not af21 fect the requirement to make capacity available to eli22 gible entities at incremental cost based rates.

23 ‘‘(c) ALLOCATION OF CAPACITY.—
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1 ‘‘(1) ELIGIBLE ENTITIES.—The following entities

2 are eligible for access to the capacity reserved under

3 this section:

4 ‘‘(A) Elementary and secondary schools as

5 defined in section 1471 of the Elementary and

6 Secondary Education Act of 1965 (20 U.S.C.

7 2891), and institutions of higher education as

8 defined in section 1201 of the Higher Education

9 Act of 1965 (20 U.S.C. 2891).

10 ‘‘(B) Public telecommunications entities.

11 ‘‘(C) Public and nonprofit libraries.

12 ‘‘(D) Nonprofit organizations described in

13 section 501(c)(3) of the Internal Revenue Code of

14 1986 that are formed for the purpose of provid15 ing nondiscriminatory public access to non16 commercial educational, informational, cultural,

17 civic, or charitable services.

18 ‘‘(2) TERMS AND CONDITIONS OF ACCESS.—Such

19 eligible entities shall have access to such capacity for

20 the provision of educational, informational, cultural,

21 civic, or charitable services directly to the general

22 public. Telecommunications capacity allocated pursu23 ant to this section shall not be sold, resold, or other24 wise transferred in consideration for money or any

25 other thing of value.
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1 ‘‘(3) ALLOCATION.—The Commission and the

2 States shall determine appropriate mechanisms and

3 guidelines for allocating such capacity.

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

5 ‘‘(1) The term ‘telecommunications network’

6 means any group of facilities that has been granted

7 the right to occupy any public right-of-way and that

8 is used to transmit or carry information services, in9 cluding video services, to the general public, and that

10 provides the consumer or end-user the opportunity to

11 choose from a range of information services that are

12 available contemporaneously to the general public.

13 Neither terrestrial radio or television broadcast sta14 tions licensed under title III, nor cable systems subject

15 to sections 611 and 615, shall be considered to be tele16 communications networks.

17 ‘‘(2) The term ‘public right-of-way’ means any

18 right-of-way, including use of the electromagnetic

19 spectrum, that is held or otherwise controlled by Fed20 eral, State, or local governments on behalf of the gen21 eral public, and is used in the transmission or car22 riage of telecommunications.

23 ‘‘(3) The term ‘incremental cost based rates’

24 means the lowest rate that is consistent with the long

25 run incremental cost or out-of-pocket cost, whichever
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1 is lower, of telecommunications networks in offering

2 technically similar commercial services. These rates

3 shall be no more than the directly attributable cost of

4 the service, and in no event shall they contain a con5 tribution to coverage of the joint or common costs of

6 the provider.’’.

7 SEC. 104. PUBLIC ACCESS.

8 (a) AMENDMENT OF COMMUNICATIONS ACT.—Title II

9 of the Communications Act of 1934 (47 U.S.C. 201 et seq.),

10 as amended by this Act, is further amended by inserting

11 after section 201B the following new section:

12 ‘‘SEC. 201C. PUBLIC ACCESS.

13 ‘‘(a) PUBLIC FACILITIES.—

14 ‘‘(1) A telecommunications carrier designated as

15 a carrier of last resort under section 214(d) shall,

16 upon a bona fide request, provide universal service to

17 any public or non-profit—

18 ‘‘(A) elementary and secondary school, as

19 defined in section 1471 of the Elementary and

20 Secondary Education Act (20 U.S.C. 1141);

21 ‘‘(B) library;

22 ‘‘(C) health care facility;

23 ‘‘(D) museum (including a zoo or aquar24 ium);

25 ‘‘(E) public broadcast station; and
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1 any member of such other classes of public institu2 tional telecommunications users as the Commission

3 may identify, based on the public interest, that con4 tribute in a significant way to the public’s quality of

5 life.

6 ‘‘(2) The Commission may, in the public inter7 est, provide for separate definitions of universal serv8 ice under subsection 201A(c) for application only to

9 those public institutional telecommunications users to

10 which this section applies.

11 ‘‘(3) The Commission shall include the amount

12 of support payments reasonably necessary to provide

13 universal service to public institutional telecommuni14 cations users to which this section applies in the uni15 versal service support mechanisms required under sec16 tion 201A.

17 ‘‘(b) ADVANCED SERVICES.—The Commission shall es18 tablish rules—

19 ‘‘(1) to enhance, to the extent technically feasible

20 and economically reasonable, the availability of ad21 vanced telecommunications and information services

22 to all public and non-profit elementary and second23 ary school classrooms, health care facilities, libraries,

24 museums (including zoos and aquariums), public

25 broadcast stations, and any other class of public in-
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1 stitutional telecommunications users identified by the

2 Commission under subsection (a);

3 ‘‘(2) to require preferential rates under sub4 section (c);

5 ‘‘(3) to ensure that appropriate functional re6 quirements or performance standards, or both, includ7 ing interoperability standards, are established for

8 telecommunications carriers that connect such public

9 institutional telecommunications users with the pub10 lic switched network;

11 ‘‘(4) to define the circumstances under which a

12 telecommunications carrier may be required to con13 nect its network to such public institutional tele14 communications users; and

15 ‘‘(5) to address such other matters as the Com16 mission may determine.

17 ‘‘(c) PREFERENTIAL RATES.—Notwithstanding sec18 tions 202 and 230, the rules promulgated under subsection

19 (b) shall require telecommunications carriers to offer spe20 cific telecommunications and information services, includ21 ing advanced services, at a preferential rate to some or all

22 of the public institutional telecommunications users to

23 which this section applies.

24 ‘‘(d) RESTRICTION.—Public institutional tele25 communications users receiving universal service or services
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1 at a preferential rate under this section shall be prohibited

2 from reselling such service, or from aggregating tele3 communications services under section 226.’’.

4 (b) EFFECTIVE DATE.—The amendments made by sub5 section (a) shall take effect 2 years after the date of enact6 ment of this Act.

7 (c) RULEMAKING.—The Commission shall complete

8 and rulemaking and prescribe regulations to implement the

9 provisions of sections 201B and 201C of the Communica10 tions Act of 1934 within 2 years after the date of enactment

11 of this Act.

12 TITLE II—TELECOMMUNICATIONS

13 INVESTMENT

14 SEC. 201. INFRASTRUCTURE INVESTMENT.

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

16 of 1934 (47 U.S.C. 201 et seq.) is amended by inserting

17 after section 228 the following new section:

18 ‘‘SEC. 229. INFRASTRUCTURE INVESTMENT.

19 ‘‘(a) RURAL MARKETS AND NONCOMPETITIVE MAR20 KETS.—To the extent possible, consumers in rural markets

21 and noncompetitive markets shall have access to high qual22 ity interoperable telecommunications network facilities and

23 capabilities which—

24 ‘‘(1) provide subscribers with sufficient inter25 active bi-directional network capacity to allow access
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1 to information services that provide a combination of

2 voice, data, image, and video; and

3 ‘‘(2) are widely available at just, reasonable, af4 fordable, and nondiscriminatory rates.

5 ‘‘(b) FULL EFFECTUATION.—The Commission shall

6 have the authority to pre-empt any State or local statute

7 or regulation, or other State or local legal requirement, ex8 cept as provided in section 230(k), that prevents the full

9 effectuation of the goal set forth in subsection (a).

10 ‘‘(c) TELECOMMUNICATIONS NETWORK STANDARDS

11 AND PLANNING.—

12 ‘‘(1) TELECOMMUNICATIONS NETWORK STAND13 ARDS.—

14 ‘‘(A) INTERCONNECTION AND INTEROPER15 ABILITY STANDARDS.—The Commission shall en16 courage telecommunications carriers and tele17 communications equipment manufacturers to de18 velop standards to ensure interconnection, inter19 operability, and reliability of telecommuni20 cations networks.

21 ‘‘(B) INDUSTRY ASSISTANCE.—The Commis22 sion shall, when necessary, establish deadlines,

23 create incentives, or use other mechanisms to as24 sist the industry to develop and implement such

25 standards.
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1 ‘‘(C) COMMISSION AUTHORITY TO ESTAB2 LISH STANDARDS.—The Commission may, after

3 notice and opportunity for comment, establish

4 standards only if industry participants fail to

5 reach agreement.

6 ‘‘(2) NETWORK PLANNING.—

7 ‘‘(A) REGULATIONS ON JOINT ACTION.—The

8 Commission shall prescribe regulations that per9 mit joint telecommunications network planning,

10 design, and implementation among all tele11 communications carriers, cable television compa12 nies, railroads, and electric, gas, water, and

13 other utilities in the same geographic area.

14 ‘‘(B) INFORMATION DISCLOSURE PROCE15 DURES.—The Commission and the States shall

16 prescribe regulations establishing procedures to

17 ensure that—

18 ‘‘(i) telecommunications carriers on

19 reasonable request make available timely in20 formation to other such carriers, informa21 tion service providers, other infrastructure

22 providers, and other users in the same geo23 graphic area about the deployment of tele24 communications equipment, including soft25 ware integral to such telecommunications
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1 equipment, including upgrades that will

2 materially affect the ability of a tele3 communications carrier, information serv4 ice provider, infrastructure provider, or

5 other user to interconnect or interoperate in

6 the same geographic area;

7 ‘‘(ii) telecommunications carriers are

8 not required to share information required

9 under clause (i) with anyone, including

10 carriers with whom they directly compete,

11 except as may be necessary to meet the

12 interconnection and interoperability re13 quirements set forth in this paragraph; and

14 ‘‘(iii) the recipient of any information

15 described in clause (i) uses it only for its

16 own interconnection and interoperability.

17 ‘‘(C) DEFINITION OF INFRASTRUCTURE PRO18 VIDERS.—For purposes of this section, the term

19 ‘infrastructure provider’ means any entity, such

20 as a railroad, electric, gas, water, or other util21 ity, that builds and maintains an infrastructure

22 and makes it available by lease or other arrange23 ment to one or more telecommunications car24 riers, but which is not itself a telecommuni25 cations carrier.
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1 ‘‘(3) INFRASTRUCTURE SHARING.—

2 ‘‘(A) REGULATIONS REQUIRED.—The Com3 mission shall prescribe, within one year after the

4 date of enactment of the Communications Act of

5 1994, regulations that require local exchange car6 riers that were subject to Part 69 of the Commis7 sion’s rules on or before that date to make avail8 able to any qualifying carrier such public

9 switched network infrastructure, technology, in10 formation, and telecommunications facilities and

11 functions as may be requested by such qualifying

12 carrier for the purpose of enabling such qualify13 ing carrier to provide telecommunications serv14 ices, or to provide access to information services,

15 in the service area in which such qualifying car16 rier has requested and obtained designation as a

17 carrier of last resort under section 214(d).

18 ‘‘(B) QUALIFYING CARRIER.—For the pur19 poses of this paragraph, the term ‘qualifying car20 rier’ means a telecommunications carrier

21 which—

22 ‘‘(i) lacks economies of scale or scope,

23 as determined in accordance with regula24 tions prescribed by the Commission pursu25 ant to this paragraph; and
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1 ‘‘(ii) is a common carrier which offers

2 telephone exchange service, telephone ex3 change access service, and any other service

4 that is within the definition of universal

5 service, to all consumers without preference

6 throughout the service area for which such

7 carrier has been designated as a carrier of

8 last resort under section 214(d).

9 ‘‘(C) TERMS AND CONDITIONS OF REGULA10 TIONS.—The regulations prescribed by the Com11 mission pursuant to this paragraph shall—

12 ‘‘(i) not require a local exchange car13 rier to which this paragraph applies to take

14 any action that is economically unreason15 able or that is contrary to the public inter16 est;

17 ‘‘(ii) permit, but shall not require, the

18 joint ownership or operation of public

19 switched network infrastructure and services

20 by or among such local exchange carrier

21 and a qualifying carrier;

22 ‘‘(iii) ensure that such local exchange

23 carrier shall not be treated by the Commis24 sion or any State commission as a common

25 carrier for hire or as offering common car-
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1 rier services with respect to any infrastruc2 ture, technology, information, facilities, or

3 functions made available to a qualifying

4 carrier in accordance with regulations is5 sued pursuant to this paragraph;

6 ‘‘(iv) ensure that such local exchange

7 carrier makes such infrastructure, tech8 nology, information, facilities, or functions

9 available to a qualifying carrier on just and

10 reasonable terms and conditions that per11 mits such qualifying carrier to fully benefit

12 from the economies of scale and scope of

13 such local exchange carrier, as determined

14 in accordance with guidelines prescribed by

15 the Commission in regulations issued pur16 suant to this paragraph;

17 ‘‘(v) establish conditions that promote

18 cooperation between local exchange carriers

19 to which this paragraph applies and quali20 fying carriers;

21 ‘‘(vi) not require a local exchange car22 rier to which this paragraph applies to en23 gage in any infrastructure sharing agree24 ment for any services or access which are to

25 be provided or offered to consumers by the
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1 qualifying carrier in such local exchange

2 carrier’s telephone exchange service area;

3 and

4 ‘‘(vii) require that such local exchange

5 carrier file with the Commission or State

6 commission, for public inspection, any tar7 iffs, contracts, or other arrangements show8 ing the rates, terms and conditions under

9 which such carrier is making available pub10 lic switched network infrastructure and

11 functions under this paragraph.

12 ‘‘(D) INFORMATION CONCERNING DEPLOY13 MENT OF NEW SERVICES AND EQUIPMENT.—A

14 local exchange carrier to which this paragraph

15 applies that has entered into an infrastructure

16 sharing agreement under this paragraph shall

17 provide to each party to such agreement timely

18 information on the planned deployment of tele19 communications services and equipment, includ20 ing any software or upgrades of software integral

21 to the use or operation of such telecommuni22 cations equipment.

23 ‘‘(d) DISABILITY ACCESS.—

24 ‘‘(1) NETWORK SERVICES.—Telecommunications

25 carriers shall ensure that advances in network serv-
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1 ices deployed by them are accessible and usable by in2 dividuals with disabilities, including individuals with

3 functional limitations of hearing, vision, movement,

4 manipulation, speech, or interpretation of informa5 tion, unless the cost of making the services accessible

6 and usable would result in an undue burden or ad7 verse competitive impact. The carriers shall seek to

8 permit the use of both standard and special equip9 ment, and seek to minimize the need of individuals to

10 acquire additional devices beyond those used by the

11 general public to obtain such access.

12 ‘‘(2) INQUIRY.—The Commission shall, within 2

13 years after the date of enactment of the Communica14 tions Act of 1994, complete an inquiry into policies,

15 practices, and regulations which address the access

16 needs of individuals with speech disabilities, includ17 ing those who use electronic speechmaking devices and

18 those who use telephone relay services. The inquiry

19 will develop recommendations for more effective ways

20 to incorporate current specialized consumer product

21 equipment devices into the nation’s telecommuni22 cations infrastructure in addition to addressing the

23 speech-to-speech translation needs of individuals with

24 significant voice disabilities.
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1 ‘‘(3) COMPATIBILITY.—Whenever an undue bur2 den or adverse competitive impact would result from

3 the requirements in paragraphs (1) and (2), the man4 ufacturer that designs, develops, or fabricates the

5 equipment or network service shall ensure that such

6 equipment or service is compatible with existing pe7 ripheral devices or specialized customer premises

8 equipment commonly used by persons with disabil9 ities to achieve access, unless doing so would result in

10 an undue burden or adverse competitive impact.

11 ‘‘(4) DEFINITIONS.—As used in this section:

12 ‘‘(A) UNDUE BURDEN.—The term ‘undue

13 burden’ means significant difficulty or expense.

14 In determining whether the activity necessary to

15 comply with the requirements of paragraphs (1),

16 (2), and (3) would result in an undue burden,

17 the factors to be considered include—

18 ‘‘(i) the nature and cost of the activity;

19 ‘‘(ii) the impact on the operation of the

20 facility involved in the manufacture of the

21 equipment or the deployment of the network

22 service;
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1 ‘‘(iii) the financial resources of the tele2 communications equipment manufacturer

3 or telecommunications carrier;

4 ‘‘(iv) the financial resources of the

5 manufacturing affiliate of a Bell operating

6 company in the case of manufacturing of

7 equipment, as long as applicable regulatory

8 rules prohibit cross-subsidization of equip9 ment manufacturing with revenues from

10 regulated telecommunications service or

11 when the manufacturing activities are con12 ducted in a separate subsidiary; and

13 ‘‘(v) the type of operations of the tele14 communications equipment manufacturer

15 or telecommunications carrier.

16 ‘‘(B) ADVERSE COMPETITIVE IMPACT.—In

17 determining whether the activity necessary to

18 comply with the requirements of paragraphs (1),

19 (2), and (3) would result in adverse competitive

20 impact, the following factors shall be considered:

21 ‘‘(i) Whether such activity would raise

22 the cost of the equipment or network service

23 in question beyond the level at which there

24 would be sufficient consumer demand by the
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1 general population to make the equipment

2 or network service profitable.

3 ‘‘(ii) Whether such activity would, with

4 respect to the equipment or network service

5 in question, put the telecommunications

6 equipment manufacturer or telecommuni7 cations carrier at a competitive disadvan8 tage. This factor may be considered so long

9 as competing telecommunications equipment

10 manufacturers and telecommunications car11 riers are not held to the same obligation

12 with respect to access by persons with dis13 abilities.

14 ‘‘(C) ACTIVITY.—For the purposes of this

15 paragraph, the term ‘activity’ includes—

16 ‘‘(i) the research, design, development,

17 deployment, and fabrication activities nec18 essary to comply with the requirements of

19 this section; and

20 ‘‘(ii) the acquisition of the related ma21 terials and equipment components.

22 ‘‘(5) COORDINATION IN DEVELOPING REGULA23 TIONS.—Throughout the process of developing regula24 tions required by this paragraph, the Commission

25 shall coordinate and consult with representatives of
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1 individuals with disabilities and interested equipment

2 and service providers to ensure their concerns and in3 terests are given full consideration in such process.

4 ‘‘(6) EFFECTIVE DATE.—The regulations re5 quired by this subsection shall become effective 18

6 months after the date of enactment of the Commu7 nications Act of 1994.

8 ‘‘(e) ANNUAL SURVEY.—The Commission shall collect

9 information regarding the deployment of technologies on a

10 State-by-State basis and make such information available

11 to the public.

12 ‘‘(f) COST ALLOCATION REGULATIONS.—Notwith13 standing any other time period, the Commission shall with14 in 6 months adopt regulations, consistent with the need to

15 protect universal service, to allocate a local exchange car16 rier’s costs of deploying broadband telecommunications fa17 cilities between local exchange service and competitive serv18 ices.

19 ‘‘(g) NONDISCRIMINATORY ACCESS.—In considering

20 any application under section 214, the Commission shall

21 ensure that access to such applicant’s telecommunications

22 services is not denied to any group of potential subscribers

23 because of their race, gender, national origin, income, age,

24 or residence in a rural or high-cost area.’’.
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1 (b) NETWORK PLANNING AND INFRASTRUCTURE

2 SHARING RULES.—The Commission shall complete a rule3 making proceeding and adopt rules to implement sections

4 229(c) (2) and (3) of the Communications Act of 1934 with5 in 1 year after the date of enactment of this Act.

6 (c) DISABILITY ACCESS RULES.—The Commission

7 shall complete a rulemaking proceeding and adopt rules to

8 implement section 229(d) of the Communications Act of

9 1934 within 2 years after the date of enactment of this Act.

10 TITLE III—REGULATORY REFORM

11 SEC. 301. DEFINITIONS.

12 Section 3 of the Communications Act of 1934 (47

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

14 new subsections:

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

16 telephone exchange service that the Commission determines

17 has market power. Such term does not include a person en18 gaged in the provision of a commercial mobile service under

19 section 332(c), except to the extent that the Commission

20 finds that such service as provided by such person in a

21 State is a replacement for a substantial portion of the

22 wireline telephone exchange service within such State.

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

24 between or among points specified by the user, of informa25 tion of the user’s choosing, including voice, data, image,
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1 graphics, or video, without change in the form or content

2 of the information, as sent and received, by means of electro3 magnetic transmission, with or without benefit of any

4 closed transmission medium.

5 ‘‘(jj) ‘Telecommunications service’ means the direct of6 fering of telecommunications for profit to the general public

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

8 the general public regardless of the facilities used to trans9 mit such telecommunications services. Such term does not

10 include information services or cable services as defined

11 under section 602.

12 ‘‘(kk) ‘Telecommunications carrier’ means any pro13 vider of telecommunications services, except that such term

14 does not include hotels, motels, hospitals, and other

15 aggregators of telecommunications services.

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

17 the ability of users of telecommunications services to retain,

18 at the same location, existing telecommunications numbers

19 without impairment of quality, reliability, or convenience

20 when switching from one telecommunications carrier to an21 other.

22 ‘‘(mm) ‘Information service’ means the offering of serv23 ices which employ computer processing applications that

24 act on the format, content, code, protocol, or similar aspects

25 of the subscriber’s transmitted information, provide the sub-
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1 scriber additional, different, or restructured information, or

2 involve subscriber interaction with stored information.

3 ‘‘(nn) ‘Rural telephone company’ means a tele4 communications carrier operating entity to the extent that

5 such entity provides telephone exchange service, including

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

7 (47 C.F.R. 69.1 et seq.), to—

8 ‘‘(1) any service area that does not include

9 either—

10 ‘‘(A) any incorporated place of 10,000 in11 habitants or more, or any part thereof, based on

12 the most recent population statistics of the Bu13 reau of the Census; or

14 ‘‘(B) any territory, incorporated or unin15 corporated, included in an urbanized area, as

16 defined by the Bureau of the Census as of August

17 10, 1993; or

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

19 State.

20 ‘‘(oo) ‘Service area’ means a geographic area estab21 lished by the Commission and the States for the purpose

22 of determining universal service obligations and support

23 mechanisms. In establishing a service area, the Commission

24 and the States shall at a minimum consider—
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1 ‘‘(1) the principles and requirements of section

2 201A;

3 ‘‘(2) the nature of Federal and State universal

4 service support mechanisms;

5 ‘‘(3) the historic area of service by a company

6 and the economics of such company’s operations; and

7 ‘‘(4) the interest of consumers and competition

8 in such area.

9 In the case of an area served by a rural telephone company,

10 ‘service area’ shall mean such company’s ‘study area’ unless

11 and until the Commission and the States, after taking into

12 account recommendations of a Federal-State Joint Board

13 instituted under section 410(c), establish a different defini14 tion of service area for such company.’’.

15 SEC. 302. REGULATORY REFORM.

16 (a) AMENDMENT OF COMMUNICATIONS ACT.—Title II

17 of the Communications Act of 1934 (47 U.S.C. 201 et seq.)

18 is amended by inserting after section 229 the following new

19 section:

20 ‘‘SEC. 230. TELECOMMUNICATIONS COMPETITION.

21 ‘‘(a) REMOVAL OF BARRIERS TO ENTRY.—

22 ‘‘(1) Except as provided in subsection (k), one

23 year after the date of enactment of the Communica24 tions Act of 1994, no State or local statute or regula25 tion, or other State or local legal requirement, may
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1 prohibit or have the effect of prohibiting the ability

2 of any entity to provide any interstate or intrastate

3 telecommunications services.

4 ‘‘(2) No local government may, after 1 year after

5 the date of enactment of the Communications Act of

6 1994, impose or collect any franchise, license, permit,

7 or right-of-way fee or any assessment, rental, or any

8 other charge or equivalent thereof as a condition for

9 operating in the locality or for obtaining access to, oc10 cupying, or crossing public rights-of-way from any

11 telecommunications carrier that distinguishes between

12 or among telecommunications carriers, including the

13 local exchange carrier. For purposes of this para14 graph, a franchise, license, permit, or right-of-way fee

15 or an assessment, rental, or any other charge or

16 equivalent thereof does not include any imposition of

17 general applicability which does not distinguish be18 tween or among telecommunications carriers, or any

19 tax.

20 ‘‘(3) Nothing in this subsection shall affect the

21 application of section 332(c)(3) to commercial mobile

22 services providers.

23 ‘‘(4) If, after notice and an opportunity for pub24 lic comment, the Commission determines that a State

25 or local government has permitted or imposed any
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1 statute, regulation, or legal requirement that violates

2 or is inconsistent with this subsection, the Commis3 sion shall immediately preempt the enforcement of

4 such statute, regulation, or legal requirement to the

5 extent necessary to correct such violation or inconsist6 ency.

7 ‘‘(5) Nothing in this section restricts the ability

8 of any State or local government entity to make its

9 telecommunications facilities available to carriers so

10 long as making such facilities available is not a tele11 communications service.

12 ‘‘(b) REGULATORY AUTHORITY.—Nothing in this sec13 tion shall affect the ability of State officials to impose, on

14 a competitively neutral basis and consistent with section

15 201A, requirements necessary to preserve and advance uni16 versal service, protect the public safety and welfare, ensure

17 the continued quality of telecommunications services, and

18 safeguard the rights of consumers.

19 ‘‘(c) OBLIGATIONS OF TELECOMMUNICATIONS CAR20 RIERS.—

21 ‘‘(1) To the extent that they provide tele22 communications services, telecommunications carriers

23 shall be deemed common carriers under this Act. The

24 Commission shall prescribe regulations consistent

25 with its determinations under subsection (g)(1) to re-
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1 quire all telecommunications carriers, upon bona fide

2 request, to provide to any provider of telecommuni3 cations equipment or any entity seeking to provide

4 telecommunications services or information services,

5 on reasonable terms and conditions and at rates that

6 are just and reasonable and not unjustly or unreason7 ably discriminatory—

8 ‘‘(A) interconnection to the carrier’s tele9 communications facilities and services at any

10 technically and economically feasible point with11 in the carrier’s network;

12 ‘‘(B) nondiscriminatory access on an

13 unbundled basis where technically and economi14 cally feasible to any of the carrier’s telecommuni15 cations facilities and information, including

16 databases and signaling, necessary to the trans17 mission and routing of any telecommunications

18 service or information service and the interoper19 ability of both carriers’ networks;

20 ‘‘(C) nondiscriminatory access, where tech21 nically and economically feasible, to the poles,

22 ducts, conduits, and rights of way owned or con23 trolled by the carrier;

24 ‘‘(D) nondiscriminatory access where tech25 nically and economically feasible to the network
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1 functions and services of the carrier’s tele2 communications network, which shall be offered

3 on an unbundled basis;

4 ‘‘(E) telecommunications services and net5 work functions on an unbundled basis without

6 any unreasonable conditions or restrictions on

7 the resale or sharing of those services or func8 tions, including both origination and termi9 nation of telecommunications services (for pur10 poses of this subparagraph, it shall not be

11 deemed an unreasonable condition for a tele12 communications carrier, consistent with the

13 Commission’s rules and State regulations, to

14 limit the resale of services included in the defini15 tion of universal service to another telecommuni16 cations carrier who intends to resell that service

17 to a category of customers different from the cat18 egory of customers being offered that universal

19 service by such carrier, nor shall it be deemed

20 unreasonable to provide services included in the

21 definition of universal service to another tele22 communications carrier for resale at rates which

23 reflect the actual cost of providing such services,

24 exclusive of any universal service support re-
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1 ceived by such carrier in accordance with regula2 tions promulgated under section 201A);

3 ‘‘(F) local dialing parity, as soon as tech4 nically and economically feasible, in a manner

5 that permits consumers to be able to dial the

6 same number of digits when using any tele7 communications carrier providing telephone ex8 change service or exchange access service through

9 resale in a market, and in a manner that per10 mits all such carriers to have nondiscriminatory

11 access to telephone numbers, operator services,

12 directory assistance, directory listing, and no

13 unreasonable dialing delays; and

14 ‘‘(G) telecommunications number port15 ability, as administered by an impartial entity,

16 as soon as technically and economically feasible.

17 ‘‘(2) A State may not, with respect to the provi18 sion of any intrastate telecommunications service, im19 pose upon any telecommunications carrier any regu20 latory requirement concerning the provision of intra21 state services inconsistent with the requirements im22 posed by the Commission on such carrier with respect

23 to the provision of interstate services. Nothing in this

24 subsection precludes a State from imposing require25 ments on a carrier for intrastate services that are nec-
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1 essary to further competition for local exchange or ex2 change access services, including intraLATA toll dial3 ing parity, as long as the State’s actions are not in4 consistent with the Commission’s regulations.

5 ‘‘(d) CONSUMER INFORMATION.—As competition for

6 telecommunications services develops, the Commission and

7 State regulatory authorities shall ensure that consumers are

8 given the information necessary to make informed choices

9 among their telecommunications alternatives. Any tele10 communications carrier that provides billing and collection

11 for any information service shall display any charges for

12 information services in a part of the subscriber’s bill that

13 is separate from charges for telecommunications services.

14 ‘‘(e) PRESUBSCRIPTION AND BALLOTING.—The Com15 mission shall prescribe regulations to ensure that consum16 ers, as soon as practicable, have the opportunity to select

17 their local exchange carrier by means of a balloting and

18 presubscription process, and that all carriers providing any

19 such service in each market bear a reasonable share of the

20 costs of their respective balloting processes.

21 ‘‘(f) COMPENSATION AGREEMENTS.—The Commission

22 and the States shall adopt regulations to ensure that tele23 communications carriers compensate each other for termi24 nation of telecommunications services on each other’s net25 works.
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1 ‘‘(g) REGULATORY FLEXIBILITY IN COMPETITIVE MAR2 KETS.—

3 ‘‘(1) REGULATORY FLEXIBILITY.—The Commis4 sion may forbear from applying any regulation or

5 any provision of this title (except for sections 201,

6 201A, 201B, 201C, 202, 208, and 230(c)(1)(G)) to a

7 telecommunications carrier or service, or class of car8 riers or services, in any or some of its or their geo9 graphic markets only if the Commission determines

10 that—

11 ‘‘(A) enforcement of such regulation or pro12 vision is not necessary to ensure that the charges,

13 practices, classifications, or regulations by, for,

14 or in connection with that carrier or service are

15 just and reasonable and are not unjustly or un16 reasonably discriminatory;

17 ‘‘(B) enforcement of such regulation or pro18 vision is not necessary for the protection of con19 sumers; and

20 ‘‘(C) forbearance from applying such regu21 lation or provision is consistent with the public

22 interest.

23 In making the determination under subparagraph

24 (C), the Commission shall consider whether forbear25 ance from enforcing the regulation or provision will
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1 promote competitive market conditions, including the

2 extent to which such forbearance will enhance com3 petition among providers of telecommunications serv4 ices. If the Commission determines that such forbear5 ance will promote competition among providers of

6 telecommunications services, that determination may

7 be the basis for a Commission finding that forbear8 ance is in the public interest.

9 ‘‘(2) COMMERCIAL MOBILE SERVICES.—Nothing

10 in this subsection shall affect any determination by

11 the Commission under section 332 that a provision of

12 title II is inapplicable to a provider of commercial

13 mobile services.

14 ‘‘(3) PRICING FLEXIBILITY.—Consistent with sec15 tions 201(b) and 202(a), the Commission and the

16 States shall permit telecommunications carriers to

17 have pricing flexibility in service or geographic mar18 kets that are found to be competitive. In implement19 ing this subsection, the Commission and the States

20 shall ensure that rates for universal service and for

21 services that are not competitive remain just, reason22 able, affordable, and not unjustly or unreasonably

23 discriminatory and that universal service is preserved

24 and advanced.
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1 ‘‘(h) RULES FOR FOREIGN OWNERSHIP.—The Com2 mission, upon a petition for waiver filed within 6 months

3 after the date of enactment of the Communications Act of

4 1994, may waive the application of section 310(b) to any

5 foreign ownership that lawfully existed before August, 1,

6 1994, of any provider of a telecommunications service that

7 will be treated as a common carrier solely as a result of

8 the enactment of the Communications Act of 1994, but only

9 upon the following conditions:

10 ‘‘(1) The extent of foreign ownership interest

11 shall not be increased above the extent which existed

12 on August, 1, 1994.

13 ‘‘(2) Such waiver shall not permit the subsequent

14 transfer of ownership to any other person in violation

15 of section 310(b).

16 ‘‘(i) COLLOCATION.—In the exercise of its authority

17 under this subsection, the Commission may require carriers

18 to provide for actual collocation of equipment necessary for

19 interconnection at the premises of any carrier, if the Com20 mission finds actual collocation to be in the public interest.

21 ‘‘(j) MULTI-UNIT BUILDING.—No person owning, leas22 ing, controlling, or managing a multi-unit building shall

23 forbid or unreasonably restrict any occupant, tenant, or les24 see of such building from receiving telecommunications serv25 ices from any provider of its choice, who is duly certified
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1 by or otherwise authorized by the State regulatory agency

2 of relevant jurisdiction. The owner of such multi-unit build3 ing may require from any such telecommunications carrier

4 just and reasonable compensation for purposes of accessing

5 the building to serve any occupant, tenant, or lessee or for

6 the use of building facilities, provided that such compensa7 tion is just and reasonable and does not discriminate be8 tween or among providers of telecommunications services or

9 charge any telecommunications service provider greater

10 compensation than that imposed, if any, on the local ex11 change carrier. Nothing in this subsection shall affect the

12 ability of a person owning, leasing, controlling, or manag13 ing a multi-unit building to impose, on a competitively

14 neutral basis, requirements necessary to protect the safety

15 and security of the property and the safety and convenience

16 of other persons.

17 ‘‘(k) RURAL MARKETS.—

18 ‘‘(1) STATE APPROVAL REQUIRED.—The Com19 mission shall, within one year after the date of enact20 ment of the Communications Act of 1994, promulgate

21 regulations to require that any entity (other than an

22 entity to which section 332(c) applies) seeking to pro23 vide telephone exchange service in an area served by

24 a rural telephone company after such date of enact25 ment must first obtain approval from the appropriate
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1 State commission for the purpose of ensuring compli2 ance with any statutes or regulations, if any, adopted

3 by such State under paragraph (2). Such State com4 mission shall approve an application for permission

5 to provide such service only if the application is con6 sistent with regulations issued by the Commission

7 under this subsection. A State commission shall take

8 action to approve or disapprove any application

9 within 180 days of receiving such application.

10 ‘‘(2) STATE OVERSIGHT.—The Commission shall,

11 within one year after the date of enactment of the

12 Communications Act of 1994, promulgate regulations

13 to permit State oversight of rural markets. The Com14 mission’s regulations shall not permit States to waive

15 or modify any requirements of the other subsections of

16 this section, but shall permit States to adopt statutes

17 or regulations that are no more restrictive than—

18 ‘‘(A) to require an enforceable commitment

19 by each applicant to offer universal service com20 parable to that offered by the rural telephone

21 company currently providing service in that

22 service area, and to make such service available

23 within 24 months of the approval date to all

24 consumers throughout that service area on a

25 common carrier basis, either using the appli-
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1 cant’s facilities or through resale under sub2 section (c) of services using another carrier’s fa3 cilities (including the facilities of the rural tele4 phone company), and subject to the same terms,

5 conditions, and rate structure requirements as

6 those applicable to the rural telephone company

7 currently providing universal service;

8 ‘‘(B) to require that approval by the State

9 commission under paragraph (1) be based on

10 sufficient written public findings and conclu11 sions to demonstrate that such approval is in the

12 public interest and that there will not be a sig13 nificant adverse impact on users of telecommuni14 cations services or on the provision of universal

15 service;

16 ‘‘(C) to encourage the development and de17 ployment of advanced telecommunications and

18 information infrastructure and services in rural

19 areas; or

20 ‘‘(D) to protect the public safety and wel21 fare, ensure the continued quality of tele22 communications and information services, or

23 safeguard the rights of consumers.

24 ‘‘(3) PRE-EMPTION.—Upon a proper showing,

25 the Commission may pre-empt any State statute or
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1 regulation that the Commission finds to be inconsist2 ent with the Commission’s regulations implementing

3 this subsection, or an arbitrary or unreasonably dis4 criminatory application of such statute or regulation.

5 The Commission shall act upon any bona fide peti6 tion filed under this subsection within 180 days of re7 ceiving such petition. Pending such action, the Com8 mission may, in the public interest, suspend or mod9 ify application of any statute or regulation to which

10 the petition applies.

11 ‘‘(4) VIDEO PROGRAMMING.—Notwithstanding

12 section 613(b)(1), and unless authorized to provide

13 video programming directly to subscribers under sec14 tion 613(b)(3) or (b)(4), a rural telephone company

15 may not, after the date of enactment of the Commu16 nications Act of 1994, provide video programming di17 rectly to subscribers in such rural telephone compa18 ny’s service area, or obtain a controlling interest

19 under section 613(b)(5) in a cable operator providing

20 cable service in such rural telephone company’s serv21 ice area, unless—

22 ‘‘(A) the State has not imposed, or ceases to

23 impose, any conditions authorized under this

24 subsection on any entity’s ability to provide tele-
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1 phone exchange service in such rural telephone

2 company’s service area;

3 ‘‘(B) such rural telephone company success4 fully petitions the State to waive any conditions

5 on any entity’s ability to provide telephone ex6 change service in such rural telephone company’s

7 service area; or

8 ‘‘(C) an entity unaffiliated with such rural

9 telephone company obtains approval from the

10 State to provide telephone exchange service in

11 such rural telephone company’s service area.

12 ‘‘(l) WAIVERS AND MODIFICATIONS.—

13 ‘‘(1) RURAL TELEPHONE COMPANIES.—The Com14 mission shall, upon petition or on the Commission’s

15 own initiative, modify the requirements of subsections

16 (c) and (e) for a rural telephone company or compa17 nies to the extent that the Commission determines

18 that such requirements would result in unfair com19 petition, impose a significant adverse economic im20 pact on users of telecommunications services, be tech21 nically infeasible, or otherwise not be in the public

22 interest. The Commission shall act upon any petition

23 filed under this paragraph within 180 days of receiv24 ing such petition. Pending such action, the Commis25 sion may suspend enforcement of the regulation or
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1 regulations to which the petition applies with respect

2 to the petitioning carrier or carriers.

3 ‘‘(2) CERTAIN OTHER CARRIERS.—Upon a prop4 er showing by a telecommunications carrier or car5 riers, the Commission may waive or modify the re6 quirements of subsections (c) and (e) for that carrier

7 or carriers if each such carrier has, in the aggregate

8 nationwide, fewer than 2 percent of the Nation’s sub9 scriber lines installed, to the extent that the Commis10 sion determines that such requirements would result

11 in unfair competition, impose a significant adverse

12 economic impact on users of telecommunications serv13 ices, be technically infeasible, or otherwise not be in

14 the public interest. The Commission shall act upon

15 any petition filed under this paragraph within 180

16 days of receiving such petition. Pending such action,

17 the Commission may suspend enforcement of the regu18 lation or regulations to which the petition applies

19 with respect to the petitioning carrier or carriers.

20 ‘‘(m) SPACE SEGMENT CAPACITY.—Nothing in this

21 Act prohibits the Commission from continuing to determine

22 whether the provision of space segment capacity by satellite

23 systems to providers of commercial mobile services shall be

24 treated as common carriage.’’.
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1 (b) PARTICIPATION BY REGISTERED UTILITY HOLD2 ING COMPANIES IN PROVIDING TELECOMMUNICATIONS

3 SERVICES.—

4 (1) IN GENERAL.—Title I of the Public Utility

5 Holding Company Act of 1935 (15 U.S.C. 79a et seq.)

6 is amended—

7 (A) by redesignating sections 34 and 35 as

8 35 and 36, respectively; and

9 (B) by inserting after section 33 the follow10 ing new section:

11 ‘‘SEC. 34. PARTICIPATION IN PROVISION OF TELECOMMUNI12 CATIONS SERVICES.

13 ‘‘(a) EXEMPTION OF COMMUNICATIONS ENTITIES

14 FROM APPLICABILITY OF ACT.—A communications entity

15 shall be exempt from all provisions of this Act, whether or

16 not it is a subsidiary company, an affiliate, or an associate

17 company of a holding company.

18 ‘‘(b) OWNERSHIP OF COMMUNICATIONS ENTITIES BY

19 REGISTERED HOLDING COMPANIES.—Notwithstanding any

20 provision of this Act, a registered holding company shall

21 be permitted to acquire and hold the securities or an inter22 est in the business of one or more communications entities

23 without the need to apply for or receive approval from the

24 Commission.
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1 ‘‘(c) CONTINUING JURISDICTION OF THE COMMIS2 SION.—

3 ‘‘(1) IN GENERAL.—The issuance of securities by

4 a registered holding company for purposes of financ5 ing the acquisition of a communications entity, the

6 guarantee of securities of a communications entity by

7 a registered holding company and the creation or

8 maintenance of other relationships in addition to that

9 described in subsection (b) between a communications

10 entity and a registered holding company, its affiliates

11 and associate companies, shall remain subject to the

12 jurisdiction of the Commission under the terms of this

13 Act and applicable Federal law.

14 ‘‘(2) BOOKS AND MARKETING.—A communica15 tions entity which is an associate company of a reg16 istered holding company shall—

17 ‘‘(A) maintain books, records, and accounts

18 separate from the registered holding company

19 which identify all transactions with the reg20 istered holding company and its other associate

21 companies and provide access to such books,

22 records, and accounts to State commissions and

23 the Federal Energy Regulatory Commission

24 under the same terms and procedures as pro-
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1 vided in section 201(g) of the Federal Power Act;

2 and

3 ‘‘(B) carry out directly (or through any

4 company that is not an associate company of the

5 communications entity) its own promotion, ex6 cept that institutional advertising carried out by

7 the registered holding company or its associate

8 companies shall be permitted so long as each

9 party bears its fair share of the costs of such ad10 vertising.

11 ‘‘(3) Notwithstanding paragraph (2)(B), a reg12 istered holding company or an associate company

13 thereof may provide inbound telemarketing or referral

14 service related to the provision of telecommunications

15 services, information services or other services set

16 forth in or subject to the Communications Act of

17 1934, or products or services related thereto, by a

18 communications entity which is an associate com19 pany of such registered holding company.

20 ‘‘(4) Notwithstanding paragraph (2)(B), a reg21 istered holding company or an associate company

22 thereof (other than a communications entity) may pe23 tition the Federal Communications Commission for

24 permission to market directly telecommunications

25 services, information services, or other services set
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1 forth in or subject to the Communications Act of

2 1934, or products or services related thereto, provided

3 by an associate company which is a communications

4 entity upon a showing that a cable operator or other

5 entity directly or indirectly provides telecommuni6 cations services and markets such services jointly with

7 video programming services in the geographic region

8 covered by the petition. The registered holding com9 pany or associate company thereof shall specify the

10 geographic region covered by the petition. Any such

11 petition shall be granted or denied within 180 days.

12 ‘‘(d) INDEPENDENT AUDIT AUTHORITY FOR STATE

13 COMMISSIONS.—Any State commission with jurisdiction

14 over a public utility company that is an associate company

15 of a registered holding company and that transacts business

16 with a communications entity which is an associate com17 pany of such public utility company, may request that such

18 communications entity have performed, no more frequently

19 than on an annual basis, an independent audit of trans20 actions between such jurisdictional public utility and such

21 communications entity. Upon such request from a State

22 commission, the communications entity shall select an inde23 pendent auditor and bear the costs of performing such an

24 audit. The audit report shall be provided to the State com25 mission within 6 months of the audit request.
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1 ‘‘(e) ASSUMPTION OF LIABILITIES.—Any public utility

2 company that is an associate company of a registered hold3 ing company and that is subject to the jurisdiction of a

4 State commission with respect to its retail electric or gas

5 rates shall not include in rates any cost associated with

6 the issuance of any security by the public utility for the

7 purpose of financing the acquisition, or for the purposes

8 of financing the ownership or operation, of a communica9 tions entity without the express approval of the State com10 mission. Any public utility company that is an associate

11 company of a registered holding company and that is sub12 ject to the jurisdiction of a State commission with respect

13 to its retail electric or gas rates shall not include in rates

14 any cost associated with the assumption of any obligation

15 or liability as guarantor, endorser, surety, or otherwise by

16 the public utility in respect of any security of a commu17 nications entity without the express approval of the State

18 commission.

19 ‘‘(f) PLEDGING OR ENCUMBERING UTILITY ASSETS.—

20 Any public utility company that is an associate company

21 of a registered holding company and that is subject to the

22 jurisdiction of a State commission with respect to its retail

23 electric or gas rates may not include in rates any cost asso24 ciated with the pledge or encumbering of any utility assets

25 of the public utility or utility assets of any subsidiary there-
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1 of for the benefit of an associate communications entity

2 without the express approval of the State commission.

3 ‘‘(g) PROHIBITION ON CROSS SUBSIDIZATION.—The

4 Federal Communications Commission shall prescribe regu5 lations that prohibit a communications entity that is an

6 associate company of a registered holding company from

7 providing telecommunications services, information serv8 ices, or other services set forth in or subject to the Commu9 nications Act of 1934, or products or services related thereto

10 to any associate company thereof unless the terms under

11 which the communications entity offers such services or

12 products are comparable to those offered to the public, hav13 ing due regard to any differences in type, quality, or quan14 tity of service, or, if no such comparability exists, then on

15 the basis of the fair allocation of the cost of providing such

16 services or products.

17 ‘‘(h) APPLICABILITY OF TELECOMMUNICATIONS REGU18 LATION.—Nothing in this section shall affect the authority

19 of the Federal Communications Commission under the

20 Communications Act of 1934, or the authority of State com21 missions under State laws concerning the provision of tele22 communications services, to regulate the activities of com23 munication entities.

24 ‘‘(i) DEFINITIONS.—For purposes of this section:

25 ‘‘(1) COMMUNICATIONS ENTITY.—
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1 ‘‘(A) IN GENERAL.—The term ‘communica2 tions entity’ means any person determined by

3 the Commission to be engaged, whether through

4 ownership of facilities, in the provision of serv5 ices, or otherwise, directly (or indirectly through

6 ownership of securities or any other interest) and

7 exclusively in the business, wheresoever located,

8 of providing telecommunications services, infor9 mation services, or other products or services set

10 forth in or subject to the Communications Act of

11 1934 (47 U.S.C. 151 et seq.), or products or serv12 ices related or incidental thereto, including en13 ergy and demand-side management services (but

14 not the manufacturing of devices or products ex15 cept to the extent such devices or products relate

16 to the provision of electric or gas service, and en17 ergy and demand-side management services).

18 ‘‘(B) COMMISSION DETERMINATION.—No

19 person shall be deemed to be a communications

20 entity under this section unless such person has

21 applied to the Commission for a determination

22 under this paragraph. A person applying in

23 good faith for such a determination shall be

24 deemed a communications entity under this sec25 tion, with all of the exemptions provided by this
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1 section, until the Commission makes such a de2 termination. The Commission shall make such

3 determination within 60 days of its receipt of

4 such application. Not later than 12 months after

5 the date of enactment of the Communications Act

6 of 1994, the Commission shall promulgate regu7 lations to establish expeditious procedures for the

8 implementation of this paragraph. Applications

9 for determination filed after the effective date of

10 such rules shall be subject thereto.

11 ‘‘(2) TELECOMMUNICATIONS SERVICE AND INFOR12 MATION SERVICE.—The terms ‘telecommunications

13 service’ and ‘information service’ have the meanings

14 given such terms under the Communications Act of

15 1934.’’.

16 (2) AUTHORITY TO DISALLOW RECOVERY OF CER17 TAIN COSTS UNDER FEDERAL POWER ACT.—Section

18 318 of the Federal Power Act (16 U.S.C. 825q) is

19 amended—

20 (A) by inserting ‘‘(a)’’ after ‘‘SEC. 318.’’;

21 and

22 (B) by adding at the end thereof the follow23 ing:

24 ‘‘(b)(1) The Commission shall have the authority to

25 disallow recovery in jurisdictional rates of any costs in-
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1 curred by a public utility pursuant to a transaction that

2 has been authorized under section 13(b) of the Public Util3 ity Holding Company Act of 1935, including costs allocated

4 to such public utility in accordance with paragraph (d),

5 if the Commission determines that the recovery of such costs

6 is unjust, unreasonable, or unduly preferential or discrimi7 natory under sections 205 or 206 of this Act.

8 ‘‘(2) Nothing in the Public Utility Holding Company

9 Act of 1935, or any actions taken thereunder, shall prevent

10 a State commission from exercising its jurisdiction to the

11 extent otherwise authorized under applicable law with re12 spect to the recovery by a public utility in its retail rates

13 of costs incurred by such public utility pursuant to a trans14 action authorized by the Securities and Exchange Commis15 sion under section 13(b) between an associate company and

16 such public utility, including costs allocated to such public

17 utility in accordance with paragraph (d).

18 ‘‘(c) In any proceeding of the Commission to consider

19 the recovery of costs described in subsection (b)(1), there

20 shall be a rebuttable presumption that such costs are just,

21 reasonable, and not unduly discriminatory or preferential

22 within the meaning of this Act.

23 ‘‘(d)(1) In any proceeding of the Commission to con24 sider the recovery of costs, the Commission shall give sub25 stantial deference to an allocation of charges for services,
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1 construction work, or goods among associate companies

2 under section 13 of the Public Utility Holding Company

3 Act of 1935, whether made by rule, regulation, or order of

4 the Securities and Exchange Commission prior to or follow5 ing the enactment of the Communications Act of 1994.

6 ‘‘(2) If the Commission pursuant to paragraph (1) es7 tablishes an allocation of charges that differs from an allo8 cation established by the Securities and Exchange Commis9 sion with respect to the same charges, the allocation estab10 lished by the Federal Energy Regulatory Commission shall

11 be effective 12 months from the date of the order of the Fed12 eral Energy Regulatory Commission establishing such allo13 cation, and binding on the Securities and Exchange Com14 mission as of that date.

15 ‘‘(e) An allocation of charges for services, construction

16 work, or goods among associate companies under section 13

17 of the Public Utility Holding Company Act of 1935, wheth18 er made by rule, regulation, or order of the Securities and

19 Exchange Commission prior to or following enactment of

20 the Communications Act of 1994, shall prevent a State

21 Commission from using a different allocation with respect

22 to the assignment of costs to any associate company.

23 ‘‘(f) Subsection (b) shall not apply—
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1 ‘‘(1) to any cost incurred and recovered prior to

2 July 15, 1994, whether or not subject to refund or ad3 justment; or

4 ‘‘(2) to any uncontested settlement approved by

5 the Commission or a State Commission prior to the

6 date of enactment of the Communications Act of

7 1994.’’.

8 (3) IMPACT ON OTHER MATTER.—The enactment

9 of this subsection shall in no way affect Federal En10 ergy Regulatory Commission Docket No. FA89–28.

11 (4) SAVINGS PROVISION.—Section 318(b) of the

12 Federal Power Act (16 U.S.C. 825q(b)) shall not

13 apply to any cost incurred and recovered prior to the

14 date of enactment of this Act pursuant to a contract

15 or other arrangement for the sale of fuel from Wind16 sor Coal Company or Central Ohio Coal Company

17 which has been the subject of a determination by the

18 Securities and Exchange Commission prior to the

19 date of enactment of this Act, or any cost prudently

20 incurred after that date pursuant to such a contract

21 or other such arrangement before January 1, 2001.

22 (c) CERTAIN BROADCASTS.—Section 1307(a)(2) of

23 title 18, United States Code, is amended by striking out

24 ‘‘that is authorized’’ and all that follows and inserting

25 ‘‘which is broadcast by a radio or television station licensed
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1 to a location in a State in which such activities are author2 ized or not otherwise prohibited.’’.

3 SEC. 303. IMPLEMENTING REGULATIONS.

4 (a) The Commission shall, within 1 year after the date

5 of enactment of this Act, complete a proceeding to issue reg6 ulations to implement the amendments made by this title.

7 (b) Section 303 of the Communications Act of 1934

8 (47 U.S.C. 303) is amended by adding at the end thereof

9 the following new subsection:

10 ‘‘(v) Have exclusive jurisdiction to regulate the provi11 sion of direct broadcast satellite services.’’.

12 SEC. 304. STATE AND LOCAL TAXATION OF DIRECT BROAD13 CAST SATELLITE SERVICES.

14 (a) AUTHORITY TO IMPOSE TAXES AND FEES ON DI15 RECT BROADCAST SATELLITE SERVICES.—

16 (1) IN GENERAL.—A State may require a direct

17 broadcast satellite service provider who is subject to

18 the personal jurisdiction of the State to collect and

19 remit a State sales tax, a local sales tax, or both, with

20 respect to direct broadcast satellite services, if—

21 (A) the destination of such services is in the

22 State, and

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

24 local sales taxes are imposed, the State, in ac25 cordance with the requirements of this section—
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1 (i) requires the collection and remit2 tance of any applicable local sales taxes

3 with respect to direct broadcast satellite

4 services, and

5 (ii) collects and administers the local

6 sales taxes with respect to direct broadcast

7 satellite services, except in those local taxing

8 jurisdictions described in paragraph (2)(A).

9 (2) LOCAL TAXING JURISDICTION.—

10 (A) A State that exercises authority under

11 this section may require a direct broadcast sat12 ellite service provider to collect and remit local

13 sales taxes to the local taxing jurisdiction if—

14 (i) as of the effective date of this sec15 tion, the local taxing jurisdiction imposes

16 and administers a local sales tax separate

17 from the sales tax imposed by the State, or

18 (ii) after the effective date of this sec19 tion, a local jurisdiction that does not im20 pose any local sales taxes as of the effective

21 date of this section is authorized to impose

22 a local sales tax.

23 (B) If, after the effective date of this section,

24 a local jurisdiction is authorized to administer a

25 local sales tax that the State is administering as
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1 of the effective date of this section, the State shall

2 continue to collect and remit the local sales tax

3 authorized under this section in accordance with

4 paragraph (1)(B)(ii).

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

6 State shall distribute the local sales tax collected

7 under the authority granted by this section to local

8 jurisdictions in accordance with the requirements pro9 vided by State law governing the distribution of local

10 sales taxes.

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

12 (1) STATE AND LOCAL LAW.—A State may re13 quire a direct broadcast satellite service provider to

14 collect and remit State and local sales taxes with re15 spect to direct broadcast satellite services only where

16 the applicable law of the State or local taxing juris17 diction imposes a sales tax.

18 (2) NONDISCRIMINATION.—Except as otherwise

19 provided in this section, a State that exercises author20 ity under this section shall allow to direct broadcast

21 satellite service providers exemptions or other excep22 tions to State and local sales taxes that the State or

23 local taxing jurisdiction allows under similar cir24 cumstances to persons located within the State or

25 local taxing jurisdiction.
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1 (c) EXEMPTION.—

2 (1) EXEMPTION OF OTHER LOCAL TAX OR FEE

3 FOR SERVICES.—A direct broadcast satellite service

4 provider and its representatives for the sale or dis5 tribution of direct broadcast satellite services shall be

6 exempt from collecting and remitting any other local

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

8 on direct broadcast satellite services in any local tax9 ing jurisdiction in which, during the 1-year period

10 ending on September 30 of the calendar year preced11 ing the calendar year in which the provision of direct

12 broadcast satellite services occurs, the direct broadcast

13 satellite service provider does not own or hold any in14 terest in property or maintain an office, and limits

15 its business activities to no more than—

16 (A) providing direct broadcast satellite serv17 ices to subscribers in the local taxing jurisdic18 tion, and the billing for and collection of the fees

19 for such services occur outside the local taxing

20 jurisdiction; and

21 (B) soliciting and placing orders for the

22 sale of direct broadcast satellite services through

23 contractual arrangements with, and on the

24 premises of, retail outlets and establishments,

25 which orders are filled and billed for from a
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1 point outside the local taxing jurisdiction, re2 gardless of where the subscriber makes an initial

3 payment for an initial subscription.

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

5 herein, this section does not affect the authority of

6 any State or local taxing jurisdiction of any State

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

8 method of taxation.

9 (d) DEFINITIONS.—For purposes of this section:

10 (1) COMPENSATING USE TAX.—The term ‘‘com11 pensating use tax’’ means a tax imposed on or inci12 dent to the use or consumption of direct broadcast

13 satellite services within a State or a local jurisdiction

14 or other area of a State.

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

16 means the State or local jurisdiction to which the di17 rect broadcast satellite service is delivered for viewing

18 or other activity to which the service is directed.

19 (3) DIRECT BROADCAST SATELLITE SERVICE

20 PROVIDER.—The term ‘‘direct broadcast satellite serv21 ice provider’’ means a licensee for a Ku-band satellite

22 system under part 100 of title 47, Code of Federal

23 Regulations, who provides direct broadcast satellite

24 services.
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1 (4) DIRECT BROADCAST SATELLITE SERVICES.—

2 The term ‘‘direct broadcast satellite services’’ means

3 the distribution or broadcasting of programming or

4 services by satellite directly to the subscriber’s prem5 ises without the use of ground receiving or distribu6 tion equipment, except at the subscriber’s premises, or

7 used in the initial uplink process to the direct broad8 cast satellite.

9 (5) LOCAL TAXING JURISDICTION.—The term

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

11 city, county, township, parish, transportation dis12 trict, or assessment jurisdiction, or any other political

13 subdivision with the authority to impose a tax or fee.

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

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

16 by a local taxing jurisdiction, whether administered

17 by the State or the local taxing jurisdiction.

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

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

20 (A) imposed on or incident to the sale, pur21 chase, consumption, distribution, or other use of

22 direct satellite broadcast services as may be de23 fined or specified under the law imposing such

24 tax, and
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1 (B) measured by the amount of the sales

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

3 value of or for the services.

4 (8) STATE.—Notwithstanding any provision to

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

6 any of the several States of the United States, the

7 District of Columbia, the Commonwealth of Puerto

8 Rico, and any territory or possession of the United

9 States.

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

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

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

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

14 as an intangible tax, income tax, business license tax,

15 utility tax, privilege tax, gross receipts tax, excise tax,

16 franchise fees, telecommunications tax, or other tax,

17 license, or fee.

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

19 June 1, 1994.

20 SEC. 305. POLE ATTACHMENTS.

21 Section 224 of the Communications Act of 1934 (47

22 U.S.C. 224) is amended as follows—

23 (1) by inserting ‘‘or provider of telecommuni24 cations service’’ in subsection (a)(4) after ‘‘system’’;
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1 (2) by striking ‘‘cable television services’’ in sub2 section (c)(2)(B) and inserting ‘‘the services offered

3 via such attachments’’;

4 (3) by redesignating paragraph (2) of subsection

5 (d) as paragraph (4); and

6 (4) by striking out so much of subsection (d) as

7 precedes paragraph (4) (as redesignated) and insert8 ing the following:

9 ‘‘(d)(1) For purposes of subsection (b) of this section,

10 the Commission shall, no later than 1 year after the date

11 of enactment of the Communications Act of 1994, prescribe

12 regulations for ensuring that utilities charge just and rea13 sonable and nondiscriminatory rates for pole attachments

14 provided to all providers of telecommunications services, in15 cluding such attachments used by cable television systems

16 to provide telecommunications services (as defined in sec17 tion 3(jj) of this Act). The regulations shall—

18 ‘‘(A) recognize that the entire pole, duct, conduit,

19 or right-of-way, other than the usable space, is of

20 equal benefit to all attachments to the pole, duct, con21 duit, or right-of-way and therefore apportion the cost

22 of space, other than the usable space, equally among

23 all such attachments,

24 ‘‘(B) recognize that the usable space is of propor25 tional benefit to all entities attached to the pole, duct,
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1 conduit, or right-of-way and therefore apportion the

2 cost of the usable space according to the percentage of

3 usable space required for each entity, and

4 ‘‘(C) allow for reasonable terms and conditions

5 relating to health, safety, and the provision of reliable

6 utility service.

7 ‘‘(2) The final regulations prescribed by the Commis8 sion under paragraph (1) shall not apply to a pole attach9 ment used by a cable television system solely to provide

10 cable services as defined in section 602(6) of this Act. The

11 rates for pole attachments used for such purposes shall as12 sure a utility the recovery of not less than the additional

13 costs of providing pole attachments, nor more than an

14 amount determined by multiplying—

15 ‘‘(A) the percentage of total usable space, or the

16 percentage of the total duct, conduit, or right-of-way

17 capacity occupied by the pole attachment, by

18 ‘‘(B) the sum of the operating expenses and ac19 tual capital costs of the utility attributable to the en20 tire pole, duct, conduit, or right-of-way.

21 ‘‘(3) For all providers of telecommunications services

22 except members of the exchange carrier association estab23 lished under 47 C.F.R. 69.601 as of December 31, 1993,

24 upon enactment of the Communications Act of 1994 and

25 until the Commission promulgates its final regulations
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1 under paragraph (1), the rate formula contained in any

2 joint use pole attachment agreement between the electric

3 utility and the largest local exchange carrier having such

4 a joint use agreement in the utility’s service area in effect

5 on January 1, 1994, shall also apply to the pole attach6 ments in the utility’s service area. If no such joint use

7 agreement containing a rate formula exists, then the pole

8 attachment rate shall be the rate applicable under para9 graph (2) to the cable television systems which solely pro10 vide cable service as defined in section 602(6) of this Act.

11 Disputes concerning the applicability of a joint use agree12 ment shall be resolved by the Commission or the States, as

13 appropriate.’’.

14 SEC. 306. CARRIER OF LAST RESORT.

15 Section 214(d) of the Communications Act of 1934 (47

16 U.S.C. 214(d)) is amended by inserting ‘‘(1)’’ before ‘‘The

17 Commission’’ and by adding at the end the following new

18 paragraphs:

19 ‘‘(2) If one or more common carriers provide

20 telecommunications service to a geographic area, and

21 no common carrier will provide universal service to

22 an unserved community or any portion thereof that

23 requests such service within such area, or to a public

24 institutional telecommunications user which makes a

25 bona fide request under section 201C, then the Com-
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1 mission shall determine which common carrier serv2 ing that area is best able to provide universal service

3 to the requesting unserved community or portion

4 thereof, or the requesting public institutional tele5 communications user, and shall designate such com6 mon carrier as a carrier of last resort for that

7 unserved community, portion thereof, or user.

8 ‘‘(3) In order to be designated as a carrier of last

9 resort eligible for universal service support payments

10 under section 201A, a common carrier must agree to

11 provide, either through its own facilities or through

12 resale of services using another carrier’s facilities, the

13 services encompassed within the definition of univer14 sal service to any community or portion thereof which

15 requests such service, and to any public institutional

16 telecommunications user which makes a bona fide re17 quest, within the applicable service area. Such serv18 ices must be offered at nondiscriminatory rates estab19 lished by the Commission throughout such service

20 area, and such carrier must advertise the availability

21 of such services and the applicable nondiscriminatory

22 rates throughout such service area using media of

23 general distribution. More than one common carrier

24 may be designated as a carrier of last resort for a

25 specific service area, provided that any additional
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1 common carrier seeking carrier of last resort designa2 tion agrees to provide, either through its own facilities

3 or through resale of services using another carrier’s

4 facilities, the services encompassed within the defini5 tion of universal service to any community or portion

6 thereof which requests such service, and to any public

7 institutional telecommunications user which makes a

8 bona fide request, within the same service area as the

9 first common carrier designated as a carrier of last

10 resort for such service area under this paragraph.

11 Such services must be offered at nondiscriminatory

12 rates established by the Commission throughout such

13 service area, and any such additional carrier of last

14 resort must advertise the availability of such services

15 and the applicable nondiscriminatory rates through16 out such service area using media of general distribu17 tion.

18 ‘‘(4) A common carrier designated by the Com19 mission as the carrier of last resort under paragraphs

20 (2) or (3) that refuses to provide universal service

21 within a reasonable period to such requesting

22 unserved community, portion thereof, or user shall

23 forfeit to the United States a fine of up to $10,000

24 for each day that such carrier refuses to provide such

25 service. In establishing a reasonable period, the Com-
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1 mission shall consider the nature of any construction

2 required to serve such requesting unserved commu3 nity, portion thereof, or user, as well as the construc4 tion intervals normally attending such construction,

5 and shall allow adequate time for regulatory approv6 als and acquisition of necessary financing.

7 ‘‘(5) The Commission shall designate a carrier of

8 last resort for interexchange services for any unserved

9 community or portion thereof requesting such service.

10 Any common carrier designated as the carrier of last

11 resort for interexchange services under this section

12 shall provide interexchange services encompassed

13 within the definition of universal service to any

14 unserved community or portion thereof which requests

15 such service. Such service shall be at nationwide geo16 graphically averaged rates for interstate

17 interexchange services and at geographically averaged

18 rates for intrastate interexchange services, and shall

19 be just and reasonable and not unjustly or unreason20 ably discriminatory. A common carrier designated as

21 the carrier of last resort for interexchange services

22 under this paragraph may, if the Commission finds

23 the public interest so requires, be eligible for universal

24 service support payments under section 201A. A com25 mon carrier designated as the carrier of last resort for
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1 interexchange services under this paragraph that re2 fuses to provide interexchange service in accordance

3 with this paragraph to an unserved community or

4 portion thereof that requests such service within 180

5 days of such request shall forfeit to the United States

6 a fine of $50,000 for each day that such carrier re7 fuses to provide such service. The Commission may

8 extend the 180 day period for providing interexchange

9 service upon a showing by the common carrier of good

10 faith efforts to comply within such period.

11 ‘‘(6) The Commission may, by regulation, estab12 lish guidelines by which State commissions may im13 plement the provisions of this section.’’.

14 SEC. 307. ADDITIONAL REQUIREMENTS FOR CERTAIN CAR15 RIERS IN ALASKA.

16 (a) FCC TO APPLY FULL COMMUNICATIONS ACT

17 STANDARDS TO CERTAIN NEW ENTRANTS.—Notwithstand18 ing any other provision of law, the Commission may not

19 waive any rule, regulation, or other requirement of the

20 Communications Act of 1934 applicable to any tele21 communications carrier, or to any affiliate of such a car22 rier, in any service area in Alaska such carrier or affiliate

23 seeks to provide telephone exchange or telephone exchange

24 access service, and shall immediately apply any rule, regu25 lation, or other requirement with respect to such service to
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1 such carrier or affiliate, even if it would not otherwise

2 apply, if the carrier or affiliate—

3 (1) owns or controls more than 2 percent of the

4 telephone exchange or cable access lines in the United

5 States; or

6 (2) controls more than 40 percent of the market

7 nationwide in the United States for interexchange

8 services.

9 (b) WAIVER PERMITTED WHEN REQUIREMENT NO

10 LONGER APPLIES IN AREA.—Notwithstanding subsection

11 (a), the Commission may waive or modify any rule, regula12 tion, or other requirement applied to a telecommunications

13 carrier or its affiliate under subsection (a) in a particular

14 service area at any time that the rule, regulation, or other

15 requirement ceases to apply to all other telecommunications

16 carriers providing telephone exchange or telephone exchange

17 access service, as applicable, in that service area in Alaska.

18 (c) SECTION INAPPLICABLE IN CERTAIN CIR19 CUMSTANCES.—Subsection (a) shall not apply in any in20 stance in which a telecommunications carrier or affiliate

21 described in subsection (a) enters or seeks to enter a service

22 area in Alaska in which the dominant telecommunications

23 carrier or affiliate is also described in subsection (a).
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1 (d) DEFINITIONS.—Any term used in this section that

2 is defined in the Communications Act of 1934 has the same

3 meaning as when that term is used in that Act.

4 TITLE IV—AUTHORIZED ACTIVITIES OF

5 BELL OPERATING COMPANIES

6 Subtitle A—Telecommunications Equipment

7 Research and Manufacturing Competition

8 SEC. 401. FINDINGS.

9 The Congress finds that the continued economic growth

10 and the international competitiveness of American industry

11 would be assisted by permitting the Bell operating compa12 nies, through their affiliates, to manufacture (including de13 sign, development, and fabrication) telecommunications

14 equipment and customer premises equipment, and to engage

15 in research with respect to such equipment.

16 SEC. 402. AMENDMENT TO COMMUNICATIONS ACT OF 1934.

17 Title II of the Communications Act of 1934 (47 U.S.C.

18 201 et seq.) is amended by inserting after section 230 the

19 following new section:

20 ‘‘SEC. 231. REGULATION OF MANUFACTURING BY BELL OP21 ERATING COMPANIES.

22 ‘‘(a) AUTHORIZATION.—Subject to the requirements of

23 this section and the regulations prescribed thereunder, a

24 Bell operating company, through an affiliate of that com25 pany, notwithstanding any restriction or obligation im-
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1 posed before the date of enactment of the Communications

2 Act of 1994 pursuant to the Modification of Final Judg3 ment on the lines of business in which a Bell operating com4 pany may engage, may manufacture and provide tele5 communications equipment and manufacture customer

6 premises equipment, except that neither a Bell operating

7 company nor any of its affiliates may engage in such man8 ufacturing in conjunction with a Bell operating company

9 not so affiliated or any of its affiliates. Nothing in this sec10 tion shall provide any authority for Bell Communications

11 Research, or any successor entity, to manufacture or pro12 vide telecommunications equipment or to manufacture cus13 tomer premises equipment.

14 ‘‘(b) REQUIREMENT FOR SEPARATE AFFILIATE.—Any

15 manufacturing or provision authorized under subsection (a)

16 shall be conducted only through an affiliate (referred to else17 where in this section to as a ‘manufacturing affiliate’) that

18 is separate from any Bell operating company entity that

19 provides regulated local telephone exchange service. The af20 filiate required by this section need not be separate from

21 affiliates required in sections 233, 235, and 613 of this Act

22 or any other affiliate that does not provide regulated local

23 telephone exchange service.

24 ‘‘(c) MANUFACTURING RULES.—
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1 ‘‘(1) BOOKS, RECORDS, ACCESS, AND FINANCIAL

2 STATEMENTS.—

3 ‘‘(A) A manufacturing affiliate shall main4 tain books, records, and accounts separate from

5 its affiliated Bell operating company and iden6 tify all transactions between the manufacturing

7 affiliate and its affiliated Bell operating com8 pany.

9 ‘‘(B) The Commission and the State com10 missions that exercise regulatory authority over

11 any Bell operating company affiliated with such

12 manufacturing affiliate shall have access to the

13 books, records, and accounts required to be pre14 pared under subparagraph (A).

15 ‘‘(C) A manufacturing affiliate, even if it is

16 not a publicly-held corporation, shall prepare fi17 nancial statements in compliance with Federal

18 financial reporting requirements for publicly19 held corporations, shall file such statements with

20 the Commission and the State commissions that

21 exercise regulatory authority over any Bell oper22 ating company affiliated with such manufactur23 ing affiliate, and shall make such statements

24 available for public inspection.
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1 ‘‘(2) CERTAIN RELATED-PARTY ACTIVITIES PRO2 HIBITED.—Neither a Bell operating company nor any

3 of its nonmanufacturing affiliates may perform sales,

4 advertising, installation, production, or maintenance

5 operations for a manufacturing affiliate of that Bell

6 operating company; except that institutional advertis7 ing, of a type not related to specific telecommuni8 cations equipment, carried out by the Bell operating

9 company or its affiliates is permitted if each party

10 pays its pro rata share.

11 ‘‘(3) MANUFACTURING ACTIVITIES TO BE CAR12 RIED OUT IN THE UNITED STATES.—

13 ‘‘(A) A manufacturing affiliate shall con14 duct all of its manufacturing within the United

15 States and, except as otherwise provided in this

16 paragraph, all component parts of customer

17 premises equipment manufactured by such affili18 ate, and all component parts of telecommuni19 cations equipment manufactured by such affili20 ate, shall be manufactured within the United

21 States.

22 ‘‘(B) A manufacturing affiliate may use

23 component parts manufactured outside the

24 United States if—
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1 ‘‘(i) the affiliate first makes a good

2 faith effort to obtain equivalent component

3 parts manufactured within the United

4 States at reasonable prices, terms, and con5 ditions; and

6 ‘‘(ii) for the aggregate of telecommuni7 cations equipment and customer premises

8 equipment manufactured and sold in the

9 United States by such affiliate in any cal10 endar year, the cost of the components man11 ufactured outside the United States con12 tained in the equipment does not exceed 40

13 percent of the sales revenue derived from

14 such equipment.

15 ‘‘(4) CERTIFICATION REQUIRED.—An affiliate

16 that uses component parts manufactured outside the

17 United States in the manufacture of telecommuni18 cations equipment and customer premises equipment

19 within the United States shall—

20 ‘‘(A) certify to the Commission that a good

21 faith effort was made to obtain equivalent parts

22 manufactured within the United States at rea23 sonable prices, terms, and conditions, which cer24 tification shall be filed on a quarterly basis with

25 the Commission and list component parts, by
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1 type, manufactured outside the United States;

2 and

3 ‘‘(B) certify to the Commission on an an4 nual basis that, for the aggregate of tele5 communications equipment and customer prem6 ises equipment manufactured and sold in the

7 United States by such affiliate in the previous

8 calendar year, the cost of the components manu9 factured outside the United States contained in

10 such equipment did not exceed the percentage

11 specified in paragraph (3)(B)(ii) or as adjusted

12 in accordance with paragraph (8).

13 ‘‘(5) PENALTIES AND PRIVATE RIGHT OF AC14 TION.—

15 ‘‘(A) If the Commission determines, after re16 viewing the certification required by paragraph

17 (4), that such affiliate failed to make the good

18 faith effort required in paragraph (3)(B)(i) or,

19 after reviewing the certification required by

20 paragraph (4), that such affiliate has exceeded

21 the percentage specified in paragraph (3)(B)(ii),

22 the Commission may impose penalties or forfeit23 ures as provided for in title V of this Act.

24 ‘‘(B) Any supplier claiming to be damaged

25 because a manufacturing affiliate failed to make
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1 the good faith effort required in paragraph

2 (3)(B)(i) may file a complaint with the Commis3 sion as provided for in section 208 of this Act,

4 or may bring suit for the recovery of actual

5 damages for which such supplier claims such af6 filiate may be liable under the provisions of this

7 Act in any district court of the United States of

8 competent jurisdiction.

9 ‘‘(6) DETERMINATION OF MARKET SHARE FOR

10 FOREIGN PARTS.—The Commission, in consultation

11 with the Secretary of Commerce, shall, on an annual

12 basis, determine the cost of component parts manufac13 tured outside the United States contained in all tele14 communications equipment and customer premises

15 equipment sold in the United States as a percentage

16 of the revenues from sales of such equipment in the

17 previous calendar year.

18 ‘‘(7) FOREIGN INTELLECTUAL PROPERTY USE

19 PERMITTED.—Notwithstanding any other provision of

20 this subsection, a manufacturing affiliate may use in21 tellectual property created outside the United States

22 in the manufacture of telecommunications equipment

23 and customer premises equipment in the United

24 States.
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1 ‘‘(8) ADJUSTMENT OF PARAGRAPH (3)(B)(ii) PER2 CENTAGE.—The Commission may not waive or alter

3 the requirements of this subsection, except that the

4 Commission, on an annual basis, shall adjust the per5 centage specified in paragraph (3)(B)(ii) to the per6 centage determined by the Commission, in consulta7 tion with the Secretary of Commerce, under para8 graph (6).

9 ‘‘(9) OWNERSHIP AND DEBT REQUIREMENTS.—

10 No more than 90 percent of the equity of a manufac11 turing affiliate shall be owned by its affiliated Bell

12 operating company and any affiliates of that Bell op13 erating company. Any debt incurred by a manufac14 turing affiliate may not be issued by its affiliates. A

15 manufacturing affiliate may not incur debt in a

16 manner that would permit a creditor, on default, to

17 have recourse to the assets of its affiliated Bell operat18 ing company’s telecommunications services business.

19 ‘‘(10) RELATIONSHIPS AMONG AFFILIATES.—A

20 manufacturing affiliate is not required to operate sep21 arately from the other affiliates of its affiliated Bell

22 operating company, but if an affiliate of a Bell oper23 ating company becomes directly affiliated with a

24 manufacturing entity, the affiliate shall be treated as

25 a manufacturing affiliate of that Bell operating com-
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1 pany within the meaning of subsection (b) and shall

2 comply with the requirements of this section.

3 ‘‘(11) EQUIPMENT TO BE MADE AVAILABLE TO

4 OTHERS.—A manufacturing affiliate shall make

5 available, without discrimination or self-preference as

6 to price, delivery, terms, or conditions, to all regu7 lated local telephone exchange carriers, for use with

8 the public telecommunications network, any tele9 communications equipment, including software inte10 gral to such telecommunications equipment, including

11 upgrades, manufactured by such affiliate so long as

12 each such purchasing carrier—

13 ‘‘(A) does not either manufacture tele14 communications equipment, or have a manufac15 turing affiliate which manufactures tele16 communications equipment; or

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

18 operating company affiliated with such manu19 facturing affiliate or any of the regulated local

20 telephone exchange carrier affiliates of such Bell

21 company, any telecommunications equipment,

22 including software integral to such telecommuni23 cations equipment, including upgrades, manu24 factured for use with the public telecommuni25 cations network by such purchasing carrier or by
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1 any entity or organization with which such pur2 chasing carrier is affiliated.

3 ‘‘(12) SALES TO OTHER REGULATED LOCAL

4 TELEPHONE EXCHANGE CARRIERS.—

5 ‘‘(A) A manufacturing affiliate may not

6 discontinue or restrict sales to other regulated

7 local telephone exchange carriers of any tele8 communications equipment, including software

9 integral to such telecommunications equipment,

10 including upgrades, that such affiliate manufac11 tures for sale as long as there is reasonable de12 mand for the equipment by such carriers; except

13 that such sales may be discontinued or restricted

14 if such manufacturing affiliate demonstrates to

15 the Commission that it is not making a profit,

16 under a marginal cost standard implemented by

17 the Commission, on the sale of such equipment.

18 ‘‘(B) In reaching a determination as to the

19 existence of reasonable demand under subpara20 graph (A), the Commission shall within 60 days

21 after receiving a request from a manufacturing

22 affiliate consider—

23 ‘‘(i) whether the continued manufac24 ture of the equipment will be profitable;
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1 ‘‘(ii) whether the equipment is func2 tionally or technologically obsolete;

3 ‘‘(iii) whether the components nec4 essary to manufacture the equipment con5 tinue to be available;

6 ‘‘(iv) whether alternatives to the equip7 ment are available in the market; and

8 ‘‘(v) such other factors as the Commis9 sion deems necessary and proper.

10 ‘‘(13) JOINT NETWORK PLANNING.—A Bell oper11 ating company shall, consistent with the antitrust

12 laws, engage in joint network planning and design

13 with other regulated local telephone exchange carriers

14 operating in the same area of interest; except that no

15 participant in such planning shall be allowed to

16 delay the introduction of new technology or the de17 ployment of facilities to provide telecommunications

18 services, and agreement with such other carriers shall

19 not be required as a prerequisite for such introduction

20 or deployment.

21 ‘‘(14) INFORMATION SHARING.—A Bell operating

22 company shall provide, to other regulated local tele23 phone exchange carriers operating in the same area

24 of interest, timely information on the planned deploy25 ment of telecommunications equipment, including
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1 software integral to such telecommunications equip2 ment, including upgrades.

3 ‘‘(15) REGULATIONS.—The Commission shall

4 prescribe regulations to carry out the provisions of

5 this subsection.

6 ‘‘(d) TELEPHONE EXCHANGE SERVICE REGULA7 TIONS.—

8 ‘‘(1) IN GENERAL.—The Commission shall pre9 scribe regulations to require each Bell operating com10 pany to maintain and file with the Commission full

11 and complete information with respect to the proto12 cols and technical requirements for connection with

13 and use of its telephone exchange service facilities.

14 Such regulations shall require each such Bell com15 pany to report promptly to the Commission any ma16 terial changes or planned changes to such protocols

17 and requirements, and the schedule for implementa18 tion of such changes or planned changes.

19 ‘‘(2) DISCLOSURE RESTRICTION.—A Bell operat20 ing company shall not disclose to any of its affiliates

21 any information required to be filed under paragraph

22 (1) unless that information is immediately so filed.

23 ‘‘(3) COMPETITORS’ ACCESS TO INFORMATION.—

24 The Commission may prescribe such additional regu25 lations under this subsection as may be necessary to
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1 ensure that manufacturers in competition with a Bell

2 operating company’s manufacturing affiliate have

3 ready and equal access to the information required

4 for such competition that such Bell company makes

5 available to its manufacturing affiliate.

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 any

10 manufacturing authorized by subsection (a)—

11 ‘‘(1) shall 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 to

15 the opportunities which such company provides to its

16 affiliates;

17 ‘‘(2) shall not subsidize its manufacturing affili18 ate with revenues from its regulated telecommuni19 cations services; and

20 ‘‘(3) shall only purchase equipment from its

21 manufacturing 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-
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1 ment not affiliated with a Bell operating company during

2 the design and development of hardware, software, or com3 binations thereof relating to such equipment, consistent

4 with subsection (e)(2).

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

6 Commission may prescribe such additional rules and regu7 lations as the Commission determines necessary to carry

8 out the provisions of this section.

9 ‘‘(h) ADMINISTRATION AND ENFORCEMENT.—

10 ‘‘(1) COMMISSION AUTHORITY.—For the purposes

11 of administering and enforcing the provisions of this

12 section and the regulations prescribed under this sec13 tion, the Commission shall have the same authority,

14 power, and functions with respect to any Bell operat15 ing company as the Commission has in administering

16 and enforcing the provisions of this title with respect

17 to any common carrier subject to this 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 (11) or (12) 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
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1 of damages sustained in consequence of any such vio2 lation and obtain such orders from the court as are

3 necessary to terminate existing violations and to pre4 vent future violations; or such regulated local tele5 phone exchange carrier may seek relief from the Com6 mission pursuant to sections 206 through 209.

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

8 the Commission to prescribe regulations to carry out this

9 section is effective on the date of enactment of the Commu10 nications Act of 1994. The Commission shall prescribe such

11 regulations within 180 days after such date of enactment,

12 and the authority to engage in the manufacturing author13 ized in subsection (a) shall not take effect until regulations

14 prescribed by the Commission under subsections (c), (d),

15 and (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 on

21 the date of enactment of such Act.

22 ‘‘(k) ANNUAL AUDIT.—

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

24 that manufactures or provides telecommunications

25 equipment or manufactures customer premises equip-
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1 ment through an affiliate shall obtain and pay for an

2 annual audit conducted by an independent auditor

3 selected by and working at the direction of the State

4 commission of each State in which such Bell company

5 provides local exchange service, to determine whether

6 such Bell company has complied with this section and

7 the regulations promulgated under this section, and

8 particularly whether such Bell company has complied

9 with the separate accounting requirements under sub10 section (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.—The

19 audit required under paragraph (1) shall be con20 ducted in accordance with procedures established by

21 regulation by the State commission of the State in

22 which such Bell company provides local exchange

23 service, including requirements that each audit sub24 mitted to the Commission and to the State commis-
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1 sion is certified by the auditor responsible for con2 ducting the audit.

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

4 shall periodically review and analyze the audits sub5 mitted to it under this subsection, and shall provide

6 to the Congress every 2 years—

7 ‘‘(A) a report of its findings on the compli8 ance of the Bell operating companies with this

9 section and the regulations promulgated there10 under; and

11 ‘‘(B) an analysis of the impact of such regu12 lations on the affordability of local telephone ex13 change service.

14 ‘‘(5) ACCESS TO ACCOUNTS AND RECORDS.—For

15 purposes of conducting audits and reviews under this

16 subsection, an independent auditor, the Commission,

17 and the State commission shall have access to the fi18 nancial accounts and records of each Bell operating

19 company and those of its affiliates (including affili20 ates described in paragraphs (9) and (10) of sub21 section (c)) necessary to verify transactions conducted

22 with such Bell operating company that are relevant

23 to the specific activities permitted under this section

24 and that are necessary to the State’s regulation of

25 telephone rates. Each State commission shall imple-
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1 ment appropriate procedures to ensure the protection

2 of any proprietary information submitted to it under

3 this section.

4 ‘‘(l) ACCESSIBILITY REQUIREMENTS.—

5 ‘‘(1) IN GENERAL.—The Bell operating compa6 nies or their manufacturing affiliates shall ensure

7 that telecommunications equipment and customer

8 premises equipment designed, developed, and fab9 ricated pursuant to the authority granted in this sec10 tion shall be accessible and usable by individuals with

11 disabilities, including individuals with functional

12 limitations of hearing, vision, movement, manipula13 tion, speech, and interpretation of information, unless

14 the costs of making the equipment accessible and usa15 ble would result in an undue burden or an adverse

16 competitive impact.

17 ‘‘(2) COMPATIBILITY.—Whenever an undue bur18 den or adverse competitive impact would result from

19 the requirements in this subsection, the Bell operating

20 company or its manufacturing affiliate that designs,

21 develops, or fabricates the equipment shall ensure that

22 such equipment is compatible with existing peripheral

23 devices or specialized customer premises equipment

24 commonly used by persons with disabilities to achieve
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1 access, unless doing so would result in an undue bur2 den or adverse competitive impact.

3 ‘‘(3) DEFINITIONS.—As used in this subsection:

4 ‘‘(A) UNDUE BURDEN.—The term ‘undue

5 burden’ means significant difficulty or expense.

6 In determining whether an activity would result

7 in an undue burden, factors to be considered

8 include—

9 ‘‘(i) the nature and cost of the activity;

10 ‘‘(ii) the impact on the operation of the

11 facility involved in the manufacturing of

12 the equipment;

13 ‘‘(iii) the financial resources of the

14 manufacturing affiliate, or of the Bell oper15 ating company if the manufacturing activi16 ties are not conducted in a separate subsidi17 ary; and

18 ‘‘(iv) the type of operation or oper19 ations of the manufacturing affiliate, or

20 Bell operating company, as the case may

21 be.

22 ‘‘(B) ADVERSE COMPETITIVE IMPACT.—In

23 determining whether an activity would result in

24 an adverse competitive impact, the following fac25 tors will be considered:
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1 ‘‘(i) Whether such activity would raise

2 the cost of the equipment in question beyond

3 the level at which there would be sufficient

4 consumer demand by the general population

5 to make the equipment profitable.

6 ‘‘(ii) Whether such activity would, with

7 respect to the equipment in question, put

8 the manufacturing affiliate, or the Bell op9 erating company if the manufacturing ac10 tivities are not conducted in a separate sub11 sidiary, at a competitive disadvantage in

12 comparison with one or more providers of

13 one or more competing products. This factor

14 may only be considered so long as compet15 ing manufacturers are not held to the same

16 obligation with respect to access by persons

17 with disabilities.

18 ‘‘(C) ACTIVITY.—For purposes of this para19 graph, the term ‘activity’ includes—

20 ‘‘(i) the research, design, development,

21 deployment, and fabrication activities nec22 essary to comply with the requirements of

23 this section; and

24 ‘‘(ii) the acquisition of the related ma25 terials and equipment components.
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1 ‘‘(4) IMPACT OF ADA.—Nothing in this section

2 shall be interpreted to limit or otherwise affect the ap3 plication of the Americans with Disabilities Act or its

4 implementing regulations.

5 ‘‘(m) DEFINITIONS.—As used in this section:

6 ‘‘(1) The term ‘affiliate’ means any organization

7 or entity that, directly or indirectly, owns or controls,

8 is owned or controlled by, or is under common owner9 ship with a Bell operating company. The term in10 cludes any organization or entity in which a Bell op11 erating company and any of its affiliates—

12 ‘‘(A) have an equity interest of greater than

13 10 percent, or a management interest of greater

14 than 10 percent, or

15 ‘‘(B) in which a Bell operating company

16 and any of its affiliates have any other signifi17 cant financial interest.

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

19 those companies listed in appendix A of the Modifica20 tion of Final Judgment, and includes any successor

21 or assign of any such company, but does not include

22 any affiliate of any such company.

23 ‘‘(3) The term ‘customer premises equipment’

24 means equipment employed on the premises of a per-
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1 son (other than a carrier) to originate, route, or ter2 minate telecommunications.

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

4 meaning as such term has in the Modification of

5 Final Judgment.

6 ‘‘(5) The term ‘Modification of Final Judgment’

7 means the decree entered August 24, 1982, in United

8 States v. Western Electric, Civil Action No. 82–0192

9 (United States District Court, District of Columbia).

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

11 transmission, between or among points specified by

12 the user, of information of the user’s choosing, without

13 change in the form or content of the information as

14 sent and received, by means of an electromagnetic

15 transmission medium, including all instrumentalities,

16 facilities, apparatus, and services (including the col17 lection, storage, forwarding, switching, and delivery

18 of such information) essential to such transmission.

19 ‘‘(7) The term ‘telecommunications equipment’

20 means equipment, other than customer premises

21 equipment, used by a carrier to provide telecommuni22 cations services.

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

24 means the offering for hire of telecommunications fa-
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1 cilities, or of telecommunications by means of such

2 facilities.’’.

3 SEC. 403. INCREASED PENALTY FOR RECORDKEEPING VIO4 LATIONS.

5 Section 220(d) of the Communications Act of 1934 (47

6 U.S.C. 220(d)) is amended by striking ‘‘$6,000’’ and insert7 ing ‘‘$10,000’’.

8 SEC. 404. APPLICATION OF ANTITRUST LAWS.

9 Nothing in this subtitle shall be deemed to alter the

10 application of Federal and State antitrust laws as inter11 preted by the respective courts.

12 Subtitle B—Regulation of Alarm Services and

13 Electronic Publishing by Bell Operating

14 Companies

15 SEC. 421. REGULATION OF ENTRY INTO ALARM MONITOR16 ING SERVICES.

17 AMENDMENT.—Title II of the Communications Act of

18 1934 (47 U.S.C. 201 et seq.) is amended by inserting after

19 section 231 the following new section:

20 ‘‘SEC. 232. REGULATION OF ENTRY INTO ALARM MONITOR21 ING SERVICES.

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

23 (c), no Bell operating company, or any affiliate of that com24 pany, shall provide alarm monitoring services for the pro25 tection of life, safety, or property. A Bell operating com-
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1 pany may transport alarm monitoring service signals but

2 on a common carrier basis only.

‘‘(b) AUTHORITY TO PETITION.—Beginning 51 3 ⁄2 years

4 from the date of enactment of the Communications Act of

5 1994, a Bell operating company or any affiliate of that

6 company may petition the Commission to seek permission

7 to provide alarm monitoring services for the protection of

8 life, safety, or property.

9 ‘‘(c) AUTHORITY TO PERMIT BELL OPERATING COM10 PANIES TO PROVIDE SERVICES.—Beginning 6 years from

11 the date of enactment of the Communications Act of 1994,

12 the Commission shall have the authority to permit a Bell

13 operating company to provide alarm monitoring services

14 for the protection of life, safety, or property; except that the

15 Commission shall not grant such permission until—

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

17 is no substantial possibility that such Bell company

18 or its affiliates could use monopoly power to impede

19 competition in the market such Bell company seeks to

20 enter; and

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

22 alarm monitoring services by the Bell operating com23 pany is in the public interest and that the Commis24 sion has the capability effectively to enforce any re25 quirements, limitations, or conditions placed upon the
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1 Bell operating company in the provision of alarm

2 monitoring services for the protection of life, safety, or

3 property, including the regulations it has prescribed

4 pursuant to subsection (d).

5 ‘‘(d) REGULATIONS REQUIRED.—

6 ‘‘(1) Not later than 6 years after the date of en7 actment of the Communications Act of 1994, the Com8 mission shall prescribe regulations—

9 ‘‘(A) to establish such requirements, limita10 tions, or conditions as are—

11 ‘‘(i) necessary and appropriate in the

12 public interest with respect to the provision

13 of alarm monitoring services by Bell operat14 ing companies and their affiliates, and

15 ‘‘(ii) effective at such time as a Bell

16 operating company or any of its affiliates is

17 authorized to provide alarm monitoring

18 services; and

19 ‘‘(B) to establish procedures for the receipt

20 and review of complaints concerning violations

21 by such companies of such regulations, or of any

22 other provision of this Act or the regulations

23 thereunder, that result in material financial

24 harm to a provider of alarm monitoring services.
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1 ‘‘(2) The Bell operating companies and their af2 filiates are prohibited from recording or using in any

3 fashion the occurrence or contents of calls received by

4 providers of alarm monitoring services for the pur5 poses of marketing such services on behalf of the Bell

6 operating company, any of its affiliates, or any other

7 entity. Any regulations necessary to enforce this para8 graph shall be issued within 6 months after the date

9 of enactment of the Communications Act of 1994.

10 ‘‘(e) EXPEDITED CONSIDERATION OF COMPLAINTS.—

11 The procedures established under subsection (d) shall ensure

12 that the Commission will make a final determination with

13 respect to any complaint described in such subsection with14 in 120 days after receipt of the complaint. If the complaint

15 contains an appropriate showing that the alleged violation

16 occurred, as determined by the Commission in accordance

17 with such regulations, the Commission shall, within 60

18 days after receipt of the complaint, issue a cease and desist

19 order to prevent the Bell operating company and its affili20 ates from continuing to engage in such violation pending

21 such final determination.

22 ‘‘(f) REMEDIES.—The Commission may use any rem23 edy available under title V of this Act to terminate and

24 punish violations described in subsection (d). Such remedies

25 may include, if the Commission determines that such viola-
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1 tion was willful or repeated, ordering the Bell operating

2 company to cease offering alarm monitoring services.

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

4 ‘‘(1) The term ‘alarm monitoring services’ means

5 services that detect threats to life, safety, or property

6 by burglary, fire, vandalism, bodily injury, or other

7 emergency through the use of devices that transmit

8 signals to a central point in a customer’s residence,

9 place of business, or other fixed premises which—

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

11 monitoring center by means of telecommuni12 cations facilities of the Bell operating company

13 and any affiliate; and

14 ‘‘(B) serves to alert persons at the monitor15 ing center of the need to inform customers, other

16 persons, or police, fire, rescue, or other security

17 or public safety personnel of the threat at such

18 premises.

19 Such term does not include medical monitoring de20 vices attached to individuals for the automatic sur21 veillance of ongoing medical conditions.

22 ‘‘(2) The term ‘Bell operating company’ has the

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

24 ‘‘(3) The term ‘affiliate’ means a person that (di25 rectly or indirectly) owns or controls, is owned or
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1 controlled by, or is under common ownership or con2 trol with, another person. For purposes of this para3 graph, the term ‘own’ means to own an equity inter4 est (or the equivalent thereof) of more than 10

5 percent.’’.

6 SEC. 422. REGULATION OF ELECTRONIC PUBLISHING.

7 Title II of the Communications Act of 1934 (47 U.S.C.

8 201 et seq.) is amended by inserting after section 232 the

9 following new section:

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

11 ‘‘(a) IN GENERAL.—

12 ‘‘(1) A Bell operating company and any affiliate

13 shall not engage in the provision of electronic publish14 ing that is disseminated by means of such Bell oper15 ating company’s or any of its affiliates’ basic tele16 phone service.

17 ‘‘(2) Nothing in this section shall prohibit a sep18 arated affiliate or electronic publishing joint venture

19 from engaging in the provision of electronic publish20 ing or any other lawful service in any area. Any sep21 arated affiliate or electronic publishing joint venture

22 permitted by this section need not be separate from

23 affiliates required in sections 231, 235, and 613 of the

24 Act or any other affiliate that does not provide regu25 lated local telephone exchange service.
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1 ‘‘(3) Nothing in this section shall prohibit a Bell

2 operating company or affiliate from engaging in the

3 provision of any lawful service other than electronic

4 publishing in any area or from engaging in the pro5 vision of electronic publishing that is not dissemi6 nated by means of such Bell operating company’s or

7 any of its affiliates’ basic telephone service.

8 ‘‘(b) SEPARATED AFFILIATE OR ELECTRONIC PUB9 LISHING JOINT VENTURE REQUIREMENTS.—A separated

10 affiliate or electronic publishing joint venture shall—

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

12 are separate from those of the Bell operating company

13 and from any affiliate and which record in accord14 ance with generally accepted accounting principles all

15 transactions, whether direct or indirect, with the Bell

16 operating company;

17 ‘‘(2) not incur debt in a manner that would per18 mit a creditor upon default to have recourse to the as19 sets of the Bell operating company;

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

21 consolidated with those of the Bell operating company

22 or any affiliate, although consolidated statements may

23 also be prepared for other purposes;

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

25 a form substantially equivalent to the Form 10-K ref-
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1 erenced at 17 CFR 249.310 as that section and form

2 are in effect on the date of enactment of the Commu3 nications Act of 1994;

4 ‘‘(5) after 1 year from that date, not hire as—

5 ‘‘(A) corporate officers,

6 ‘‘(B) sales and marketing management per7 sonnel whose responsibilities at the separated af8 filiate or electronic publishing joint venture will

9 include the geographic area where the Bell oper10 ating company provides basic telephone service,

11 or

12 ‘‘(C) network operations personnel whose re13 sponsibilities at the separated affiliate or elec14 tronic publishing joint venture would require

15 dealing directly with the Bell operating com16 pany,

17 any person who was employed by the Bell operating

18 company during the year preceding that person’s date

19 of hire, other than a person subject to a collective bar20 gaining agreement that gives such person the right to

21 be employed by a separated affiliate or electronic pub22 lishing joint venture of the Bell operating company;

23 ‘‘(6) not provide any wireline telephone exchange

24 service in any telephone exchange area where a Bell

25 operating company with which it is under common
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1 ownership or control provides basic telephone ex2 change service except on a resale basis;

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

4 marks of an existing Bell operating company except

5 for names, trademarks, or service marks that are or

6 were used in common with the entity that owns or

7 controls the Bell operating company;

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

9 any other date prescribed by the Commission, a com10 pliance review which—

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

12 entity which is subject to professional, legal, and

13 ethical obligations for the purpose of determining

14 compliance during the preceding calendar year

15 with any provision of this section that imposes

16 a requirement on such separated affiliate or elec17 tronic publishing joint venture; and

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

19 affiliate for a period of 5 years subject to review

20 by any lawful authority; and

21 ‘‘(9) within 90 days of receiving a review de22 scribed in paragraph (8), file a report of any excep23 tions and any corrective action with the Commission

24 and allow any person to inspect and copy such report

25 subject to reasonable safeguards to protect any propri-
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1 etary information contained in such report from

2 being used for purposes other than to enforce or pur3 sue remedies under this section.

4 ‘‘(c) BELL OPERATING COMPANY REQUIREMENTS.—A

5 Bell operating company under common ownership or con6 trol with a separated affiliate or electronic publishing joint

7 venture shall—

8 ‘‘(1) not provide a separated affiliate any facili9 ties, services, or basic telephone service information

10 unless it makes such facilities, services, or informa11 tion available to unaffiliated entities upon request

12 and on the same terms and conditions;

13 ‘‘(2) carry out transactions with a separated af14 filiate in a manner equivalent to the manner that un15 related parties would carry out independent trans16 actions and not based upon the affiliation;

17 ‘‘(3) carry out transactions with a separated af18 filiate, which involve the transfer of personnel, assets,

19 or anything of value, pursuant to written contracts or

20 tariffs that are filed with the Commission and made

21 publicly available;

22 ‘‘(4) carry out transactions with a separated af23 filiate in a manner that is auditable in accordance

24 with generally accepted accounting principles;
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1 ‘‘(5) value any assets that are transferred to a

2 separated affiliate at the greater of net book cost or

3 fair market value;

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

5 by its separated affiliate at the lesser of net book cost

6 or fair market value;

7 ‘‘(7) except for—

8 ‘‘(A) instances where Commission or State

9 regulations permit in-arrears payment for

10 tariffed telecommunications services, or

11 ‘‘(B) the investment by an affiliate of divi12 dends or profits derived from a Bell operating

13 company,

14 not provide debt or equity financing directly or indi15 rectly to a separated affiliate;

16 ‘‘(8) comply fully with all applicable Commis17 sion and State cost allocation and other accounting

18 rules;

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

20 any other date prescribed by the Commission, a com21 pliance review which—

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

23 entity which is subject to professional, legal, and

24 ethical obligations for the purpose of determining

25 compliance during the preceding calendar year
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1 with any provision of this section that imposes

2 a requirement on such Bell operating company;

3 and

4 ‘‘(B) must be maintained by the Bell oper5 ating company for a period of 5 years subject to

6 review by any lawful authority;

7 ‘‘(10) within 90 days of receiving a review de8 scribed in paragraph (9), file a report of any excep9 tions and any corrective action with the Commission

10 and allow any person to inspect and copy such report

11 subject to reasonable safeguards to protect any propri12 etary information contained in such report from

13 being used for purposes other than to enforce or pur14 sue remedies under this section;

15 ‘‘(11) if it provides facilities or services for tele16 communication, transmission, billing and collection,

17 or physical collocation to any electronic publisher, in18 cluding a separated affiliate, for use with or in con19 nection with the provision of electronic publishing

20 that is disseminated by means of such Bell operating

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

22 service, provide to all other electronic publishers the

23 same type of facilities and services on request, on the

24 same terms and conditions or as required by the

25 Commission or a State, and unbundled and individ-
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1 ually tariffed to the smallest element that is tech2 nically feasible and economically reasonable to pro3 vide;

4 ‘‘(12) provide network access and interconnec5 tions for basic telephone service to electronic publish6 ers at any technically feasible and economically rea7 sonable point within the Bell operating company’s

8 network and at just and reasonable rates that are

9 tariffed (so long as rates for such services are subject

10 to regulation) and that are not higher on a per-unit

11 basis than those charged for such services to any other

12 electronic publisher or any separated affiliate engaged

13 in electronic publishing;

14 ‘‘(13) if prices for network access and inter15 connection for basic telephone service are no longer

16 subject to regulation, provide electronic publishers

17 such services on the same terms and conditions as a

18 separated affiliate receives such services;

19 ‘‘(14) if any basic telephone service used by elec20 tronic publishers ceases to require a tariff, provide

21 electronic publishers with such service on the same

22 terms and conditions as a separated affiliate receives

23 such service;
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1 ‘‘(15) provide reasonable advance notification at

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

3 electronic publishers of—

4 ‘‘(A) information necessary for the trans5 mission or routing of information by an inter6 connected electronic publisher;

7 ‘‘(B) information necessary to ensure the

8 interoperability of an electronic publisher and

9 the Bell operating company’s networks; and

10 ‘‘(C) information concerning changes in

11 basic telephone service network design and tech12 nical standards which may affect the provision

13 of electronic publishing;

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

15 of monetary value to a separated affiliate unless in

16 exchange for consideration at least equal to the great17 er of its net book cost or fair market value, except the

18 investment by an affiliate of dividends or profits de19 rived from a Bell operating company;

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

21 provision of any gateway for electronic publishing

22 services or any electronic directory of information

23 services, which is provided over such Bell operating

24 company’s basic telephone service;
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1 ‘‘(18) have no directors, officers, or employees in

2 common with a separated affiliate;

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

4 separated affiliate;

5 ‘‘(20) not perform hiring or training of person6 nel on behalf of a separated affiliate;

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

8 or maintenance of equipment on behalf of its sepa9 rated affiliate, except for telephone service that it pro10 vides under tariff or contract subject to the provisions

11 of this section; and

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

13 behalf of its separated affiliate.

14 ‘‘(d) CUSTOMER PROPRIETARY NETWORK INFORMA15 TION.—A Bell operating company or any affiliate shall not

16 provide to any electronic publisher, including a separated

17 affiliate or electronic publishing joint venture, customer

18 proprietary network information for use with or in connec19 tion with the provision of electronic publishing that is dis20 seminated by means of such Bell operating company’s or

21 any of its affiliates’ basic telephone service that is not made

22 available by the Bell operating company or affiliate to all

23 electronic publishers on the same terms and conditions.

24 ‘‘(e) COMPLIANCE WITH SAFEGUARDS.—A Bell operat25 ing company, affiliate, or its separated affiliate is prohib-
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1 ited from acting in concert with another Bell operating

2 company or any entity in order to knowingly and willfully

3 violate or evade the requirements of this section.

4 ‘‘(f) TELEPHONE OPERATING COMPANY DIVIDENDS.—

5 Nothing in this section shall prohibit an affiliate from in6 vesting dividends derived from a Bell operating company

7 in its separated affiliate and subsections (i) and (j) of this

8 section shall not apply to any such investment.

9 ‘‘(g) JOINT MARKETING.—Except as provided in sub10 section (h), a Bell operating company shall not carry out

11 any promotion, marketing, sales, or advertising for or in

12 conjuction with—

13 ‘‘(1) a separated affiliate; or

14 ‘‘(2) an affiliate that is related to the provision

15 of electronic publishing.

16 ‘‘(h) PERMISSIBLE JOINT ACTIVITIES.—

17 ‘‘(1) JOINT TELEMARKETING.—A Bell operating

18 company may provide inbound telemarketing or refer19 ral services related to the provision of electronic pub20 lishing for a separated affiliate, electronic publishing

21 joint venture, affiliate, or unaffiliated electronic pub22 lisher, but if such services are provided to a separated

23 affiliate, electronic publishing joint venture, or affili24 ate, such services shall be made available to all elec25 tronic publishers on request, on nondiscriminatory
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1 terms, at compensatory prices, and subject to regula2 tions of the Commission to ensure that the Bell oper3 ating company’s method of providing telemarketing

4 or referral and its price structure do not competi5 tively disadvantage any electronic publishers regard6 less of size, including those which do not use the Bell

7 operating company’s telemarketing services.

8 ‘‘(2) TEAMING ARRANGEMENTS.—A Bell operat9 ing company may engage in nondiscriminatory

10 teaming or business arrangements to engage in elec11 tronic publishing with any separated affiliate or with

12 any other electronic publisher provided that the Bell

13 operating company only provides facilities, services,

14 and basic telephone service information as authorized

15 by this section and provided that the Bell operating

16 company does not own such teaming or business ar17 rangement.

18 ‘‘(3) ELECTRONIC PUBLISHING JOINT VEN19 TURES.—A Bell operating company or affiliate may

20 participate on a nonexclusive basis in electronic pub21 lishing joint ventures with entities that are not any

22 Bell operating company, affiliate, or separated affili23 ate to provide electronic publishing services, only if

24 the Bell operating company or affiliate has not more

25 than a 50 percent direct or indirect equity interest
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1 (or the equivalent thereof) or the right to more than

2 50 percent of the gross revenues under a revenue shar3 ing or royalty agreement in any electronic publishing

4 joint venture. Officers and employees of a Bell operat5 ing company or affiliate participating in an elec6 tronic publishing joint venture may not have more

7 than 50 percent of the voting control over the elec8 tronic publishing joint venture. In the case of joint

9 ventures with small local electronic publishers, the

10 Commission for good cause shown may authorize the

11 Bell operating company or affiliate to have a larger

12 equity interest, revenue share, or voting control, but

13 not to exceed 80 percent. A Bell operating company

14 participating in an electronic publishing joint ven15 ture may provide promotion, marketing, sales, or ad16 vertising personnel and services to such joint venture.

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

18 ELECTRONIC PUBLISHING BETWEEN A TELEPHONE OPER19 ATING COMPANY AND ANY AFFILIATE.—

20 ‘‘(1) Any provision of facilities, services, or basic

21 telephone service information or any transfer of as22 sets, personnel, or anything of commercial or competi23 tive value from a Bell operating company to any af24 filiate related to the provision of electronic publishing

25 shall be—
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1 ‘‘(A) recorded in the books and records of

2 each entity;

3 ‘‘(B) auditable in accordance with generally

4 accepted accounting principles; and

5 ‘‘(C) pursuant to written contracts or tariffs

6 filed with the Commission or a State and made

7 publicly available.

8 ‘‘(2) Any transfer of assets directly related to the

9 provision of electronic publishing from a Bell operat10 ing company to an affiliate shall be valued at the

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

12 transfer of assets related to the provision of electronic

13 publishing from an affiliate to the Bell operating

14 company shall be valued at the lesser of net book cost

15 or fair market value.

16 ‘‘(3) A Bell operating company shall not provide

17 an affiliate any facilities, services, or basic telephone

18 service information related to the provision of elec19 tronic publishing, which such affiliate then directly or

20 indirectly provides to a separated affiliate, and which

21 is not made available to unaffiliated companies on

22 the same terms and conditions.

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

24 ELECTRONIC PUBLISHING BETWEEN AN AFFILIATE AND A

25 SEPARATED AFFILIATE.—
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1 ‘‘(1) Any facilities, services, or basic telephone

2 service information provided or any assets, personnel,

3 or anything of commercial or competitive value trans4 ferred, from a Bell operating company to any affiliate

5 as described in subsection (i) and then provided or

6 transferred to a separated affiliate shall be—

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

8 each entity;

9 ‘‘(B) auditable in accordance with generally

10 accepted accounting principles; and

11 ‘‘(C) pursuant to written contracts or tariffs

12 filed with the Commission or a State and made

13 publicly available.

14 ‘‘(2) Any transfer of assets directly related to the

15 provision of electronic publishing from a Bell operat16 ing company to any affiliate as described in sub17 section (i) and then transferred to a separated affili18 ate shall be valued at the greater of net book cost or

19 fair market value. Any transfer of assets related to the

20 provision of electronic publishing from a separated af21 filiate to any affiliate and then transferred to the Bell

22 operating company as described in subsection (i) shall

23 be valued at the lesser of net book cost or fair market

24 value.
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1 ‘‘(3) An affiliate shall not provide a separated

2 affiliate any facilities, services, or basic telephone

3 service information related to the provision of elec4 tronic publishing, which were provided to such affili5 ate directly or indirectly by a Bell operating com6 pany, and which is not made available to unaffiliated

7 companies on the same terms and conditions.

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

9 provided in subsection (h)(3):

10 ‘‘(1) A Bell operating company shall not have

11 any officers, employees, property, or facilities in com12 mon with any entity whose principal business is pub13 lishing of which a part is electronic publishing.

14 ‘‘(2) No officer or employee of a Bell operating

15 company shall serve as a director of any entity whose

16 principal business is publishing of which a part is

17 electronic publishing.

18 ‘‘(3) For the purposes of paragraphs (1) and (2),

19 a Bell operating company or an affiliate that owns

20 an electronic publishing joint venture shall not be

21 deemed to be engaged in the electronic publishing

22 business solely because of such ownership.

23 ‘‘(4) A Bell operating company shall not carry

24 out—
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1 ‘‘(A) any marketing or sales for any entity

2 that engages in electronic publishing; or

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

4 or production, for any entity that engages in

5 electronic publishing.

6 ‘‘(5) A Bell operating company shall not provide

7 any facilities, services, or basic telephone service in8 formation to any entity that engages in electronic

9 publishing, for use with or in connection with the

10 provision of electronic publishing that is disseminated

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

12 its affiliates’ basic telephone service, unless equivalent

13 facilities, services, or information are made available

14 on equivalent terms and conditions to all.

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

16 being offered to the public by a Bell operating company

17 or affiliate on the date of enactment of the Communications

18 Act of 1994 shall have one year from such date of enactment

19 to comply with the requirements of this section.

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

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

22 or separated affiliate in any telephone exchange area on

23 June 30, 2000.

24 ‘‘(n) PRIVATE RIGHT OF ACTION.—
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1 ‘‘(1) Any person claiming that any act or prac2 tice of any Bell operating company, affiliate, or sepa3 rated affiliate constitutes a violation of this section

4 may file a complaint with the Commission or bring

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

6 Bell operating company, affiliate, or separated affili7 ate shall be liable as provided in section 206 of this

8 Act. Damages may not, however, be awarded for a

9 violation that is discovered by a compliance review as

10 required by subsection (b)(8) or (c)(9) of this section

11 and corrected within 90 days.

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

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

14 any Bell operating company, affiliate, or separated

15 affiliate constitutes a violation of this section may

16 make application to the Commission for an order to

17 cease and desist such violation or may make applica18 tion in any district court of the United States of com19 petent jurisdiction for an order enjoining such acts or

20 practices or for an order compelling compliance with

21 such requirement.

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

23 be construed to modify, impair, or supersede the applicabil24 ity of any of the antitrust laws.

25 ‘‘(p) DEFINITIONS.—As used in this section:
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1 ‘‘(1) The term ‘affiliate’ means any entity that,

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

3 controlled by, or is under common ownership or con4 trol with, a Bell operating company. Such term shall

5 not include a separated affiliate.

6 ‘‘(2) The term ‘basic telephone service’ means

7 any wireline telephone exchange service, or wireline

8 telephone exchange facility, provided by a Bell operat9 ing company in a telephone exchange area, except—

10 ‘‘(A) a competitive wireline telephone ex11 change service provided in a telephone exchange

12 area where another entity provides a wireline

13 telephone exchange service that was provided on

14 January 1, 1984; and

15 ‘‘(B) wireless telephone exchange service

16 provided by an affiliate that is required by the

17 Commission to be a corporate entity separate

18 from the Bell operating company.

19 ‘‘(3) The term ‘basic telephone service informa20 tion’ means network and customer information of a

21 Bell operating company and other information ac22 quired by a Bell operating company as a result of its

23 engaging in the provision of basic telephone service.

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

25 has in 17 C.F.R. 240.12b–2, the regulations promul-
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1 gated by the Securities and Exchange Commission

2 pursuant to the Securities Exchange Act of 1934 (15

3 U.S.C. 78a et seq.) or any successor provision to such

4 section.

5 ‘‘(5) The term ‘customer proprietary network in6 formation’ means—

7 ‘‘(A) information which—

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

9 configuration, type, destination, and

10 amount of use of telephone exchange service

11 or interexchange telephone service subscribed

12 to by any customer of a Bell operating com13 pany, and

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

15 company by virtue of the telephone com16 pany-customer relationship; and

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

18 telephone exchange service or interexchange tele19 phone service received by a customer of a Bell

20 operating company.

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

22 the dissemination, provision, publication, or sale to

23 an unaffiliated entity or person of—

24 ‘‘(i) news;

25 ‘‘(ii) entertainment;
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1 ‘‘(iii) business, financial, legal, consumer,

2 or credit material;

3 ‘‘(iv) editorials;

4 ‘‘(v) columns;

5 ‘‘(vi) sports reporting;

6 ‘‘(vii) features;

7 ‘‘(viii) advertising;

8 ‘‘(ix) photos or images;

9 ‘‘(x) archival or research material;

10 ‘‘(xi) legal notices or public records;

11 ‘‘(xii) scientific, educational, instructional,

12 technical, professional, trade, or other literary

13 materials; or

14 ‘‘(xiii) other like or similar information.

15 ‘‘(B) The term ‘electronic publishing’ does not

16 include the following network services:

17 ‘‘(i) Information access as that term is de18 fined by the Modification of Final Judgment.

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

20 common carrier.

21 ‘‘(iii) The transmission of information as

22 part of a gateway to an information service that

23 does not involve the generation or alteration of

24 the content of information, including data trans25 mission, address translation, protocol conversion,
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1 billing management, introductory information

2 content, and navigational systems that enable

3 users to access electronic publishing services,

4 which do not affect the presentation of such elec5 tronic publishing services to users.

6 ‘‘(iv) Messaging and electronic mail serv7 ices.

8 ‘‘(v) Level 2 gateway services as those serv9 ices are defined by the Commission’s Second Re10 port and Order, Recommendation to Congress

11 and Second Further Notice of Proposed Rule12 making in CC Docket No. 87–266 dated August

13 14, 1992.

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

15 involve the generation or alteration of the con16 tent of information.

17 ‘‘(vii) Transaction processing systems that

18 do not involve the generation or alteration of the

19 content of information.

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

21 Bell operating company’s regulated telecommuni22 cations services.

23 ‘‘(ix) Language translation.

24 ‘‘(x) Conversion of data from one format to

25 another.
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1 ‘‘(xi) The provision of information nec2 essary for the management, control, or operation

3 of a telephone company telecommunications sys4 tem.

5 ‘‘(xii) The provision of directory assistance

6 that provides names, addresses, and telephone

7 numbers and does not include advertising.

8 ‘‘(xiii) Caller identification services.

9 ‘‘(xiv) Repair and provisioning databases

10 for telephone company operations.

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

12 telephone company operations.

13 ‘‘(xvi) 911–E and other emergency assist14 ance databases.

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

16 that is like or similar to these network services

17 and that does not involve the generation or alter18 ation of the content of information.

19 ‘‘(xviii) Any upgrades to these network serv20 ices that do not involve the generation or alter21 ation of the content of information.

22 ‘‘(C) The term ‘electronic publishing’ also does

23 not include—

24 ‘‘(i) full motion video entertainment on de25 mand; and
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1 ‘‘(ii) video programming as defined in sec2 tion 602 of this Act.

3 ‘‘(7) The term ‘electronic publishing joint ven4 ture’ means a joint venture owned by a Bell operating

5 company or affiliate that engages in the provision of

6 electronic publishing which is disseminated by means

7 of such Bell operating company’s or any of its affili8 ates’ basic telephone service.

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

10 and includes corporations, partnerships, sole propri11 etorships, associations, and joint ventures.

12 ‘‘(9) The term ‘inbound telemarketing’ means the

13 marketing of property, goods, or services by telephone

14 to a customer or potential customer who initiated the

15 call.

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

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

18 the equivalent thereof) of more than 10 percent of an

19 entity, or the right to more than 10 percent of the

20 gross revenues of an entity under a revenue sharing

21 or royalty agreement.

22 ‘‘(11) The term ‘separated affiliate’ means a cor23 poration under common ownership or control with a

24 Bell operating company that does not own or control

25 a Bell operating company and is not owned or con-
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1 trolled by a Bell operating company and that engages

2 in the provision of electronic publishing which is dis3 seminated by means of such Bell operating company’s

4 or any of its affiliates’ basic telephone service.

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

6 the corporations subject to the Modification of Final

7 Judgment and listed in appendix A thereof, or any

8 entity owned or controlled by such corporation, or

9 any successor or assign of such corporation, but does

10 not include an electronic publishing joint venture

11 owned by such corporation or entity.’’.

12 Subtitle C—Information Services and

13 Payphone Services

14 SEC. 431. PROVISION OF INFORMATION SERVICES.

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

16 201 et seq.) is amended by inserting after section 233 the

17 following new section:

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

19 ‘‘(a) PROVISION OF GATEWAY SERVICES.—Unless ex20 pressly provided elsewhere in this Act, any Bell operating

21 company that offers a gateway service shall make such serv22 ice and functions available under nondiscriminatory rates,

23 terms, and conditions.

24 ‘‘(b) RESTRICTION ON STATE REGULATION.—Notwith25 standing section 2(b) of this Act, no State or local govern-
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1 ment shall have any authority to regulate the entry of infor2 mation service providers or the rates charged for any infor3 mation service, except as provided in sections 201A, 201B,

4 201C, and 230, and in title VI.

5 ‘‘(c) DEFINITIONS.—As used in this section:

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

7 meaning given that term under section 231.

8 ‘‘(2) The term ‘gateway service’ means an infor9 mation service that, at the request of the provider of

10 an electronic publishing service or other information

11 service, provides a subscriber with access to such elec12 tronic publishing service or other information service,

13 other than cable service, utilizing the following func14 tions: data transmission, address translation, billing

15 information, protocol conversion, and introductory

16 information content.’’.

17 SEC. 432. PROVISION OF PAYPHONE SERVICES AND

18 TELEMESSAGING SERVICES.

19 Title II of the Communications Act of 1934 (47 U.S.C.

20 201 et seq.) is amended by inserting after section 234 the

21 following new section:
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1 ‘‘SEC. 235. PROVISION OF PAYPHONE SERVICES AND

2 TELEMESSAGING SERVICES.

3 ‘‘(a) NONDISCRIMINATION SAFEGUARDS.—Any Bell

4 operating company that provides payphone services or

5 telemessaging services—

6 ‘‘(1) shall not subsidize its payphone services or

7 telemessaging services directly or indirectly with reve8 nue from its telephone exchange services or its ex9 change access services; and

10 ‘‘(2) shall not prefer or discriminate in favor of

11 its payphone services or telemessaging services.

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

13 ‘‘(1) the term ‘payphone service’ means the pro14 vision of telecommunications service through public or

15 semi-public pay telephones, and includes the provi16 sion of service to inmates in correctional institutions;

17 and

18 ‘‘(2) the term ‘telemessaging service’ means voice

19 mail and voice storage and retrieval services provided

20 over telephone lines, any live operator services used to

21 record, transcribe, or relay messages (other than Tele22 communications Relay Services), and any ancillary

23 services offered in combination with these services.

24 ‘‘(c) REGULATIONS.—Within 18 months after the date

25 of enactment of the Communications Act of 1994, the Com26 mission shall complete a rulemaking proceeding to prescribe
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1 regulations to carry out this section. In that rulemaking

2 proceeding, the Commission shall determine whether, in

3 order to enforce the requirements of this section, it is appro4 priate to require the Bell operating companies to provide

5 payphone service or telemessaging service through a sepa6 rate subsidiary that meets the requirements of section

7 236(f).’’.

8 Subtitle D—InterLATA Telecommunications

9 Services

10 SEC. 441. INTERLATA TELECOMMUNICATIONS SERVICES.

11 Title II of the Communications Act of 1934 (47 U.S.C.

12 201 et seq.) is amended by inserting after section 234 the

13 following new section:

14 ‘‘SEC. 236. INTERLATA TELECOMMUNICATIONS SERVICES.

15 ‘‘(a) AUTHORITY.—Notwithstanding any restriction or

16 obligation imposed before the date of enactment of the Com17 munications Act of 1994 pursuant to section II(D) of the

18 Modification of Final Judgment, a Bell operating company

19 may engage in the provision of interLATA telecommuni20 cations services subject to the requirements of this section

21 and any regulations prescribed thereunder. No Bell operat22 ing company or affiliate of a Bell operating company shall

23 engage in the provision of interLATA telecommunications

24 services, except as authorized under this section.
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1 ‘‘(b) CURRENTLY AUTHORIZED ACTIVITIES.—Sub2 section (a) shall not prohibit a Bell operating company

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

4 the Communications Act of 1994, in any activity as author5 ized by an order entered by the United States District Court

6 for the District of Columbia pursuant to the Modification

7 of Final Judgment if such order was entered on or before

8 such date of enactment.

9 ‘‘(c) PETITION FOR AUTHORITY FOR INTERLATA

10 TELECOMMUNICATIONS SERVICES.—

11 ‘‘(1) APPLICATION.—

12 ‘‘(A) IN REGION.—On or after the date of

13 enactment of the Communications Act of 1994, a

14 Bell operating company or affiliate may apply

15 to the Attorney General and the Commission for

16 authorization notwithstanding the Modification

17 of Final Judgment to provide interLATA tele18 communications service originating in any area

19 where such Bell operating company is the domi20 nant provider of wireline telephone exchange

21 service. The application shall describe with par22 ticularity the nature and scope of the activity

23 and of each product market or service market,

24 and each geographic market for which authoriza25 tion is sought.
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1 ‘‘(B) OUT OF REGION.—On or after the date

2 of enactment of the Communications Act of 1994,

3 a Bell operating company or affiliate may apply

4 to the Attorney General and the Commission for

5 authorization, notwithstanding the Modification

6 of Final Judgment, to provide interLATA tele7 communications services not described in sub8 paragraph (A). The application shall describe

9 with particularity the nature and scope of the

10 activity and of each product market or service

11 market, and each geographic market for which

12 authorization is sought.

13 ‘‘(2) DETERMINATION BY ATTORNEY GENERAL

14 AND COMMISSION.—

15 ‘‘(A) DETERMINATION.—Not later than 180

16 days after receiving an application made under

17 paragraph (1), the Attorney General and the

18 Commission each shall issue a written deter19 mination, on the record after an opportunity for

20 a hearing, with respect to the authorization for

21 which a Bell operating company or affiliate has

22 applied. In making such determinations, the At23 torney General and the Commission shall review

24 the whole record.

25 ‘‘(B) APPROVAL.—
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1 ‘‘(i) The Attorney General shall ap2 prove the authorization requested in any

3 application submitted under paragraph (1)

4 only to the extent that the Attorney General

5 finds that there is no substantial possibility

6 that such company or its affiliates could use

7 monopoly power in a telephone exchange or

8 exchange access service market to impede

9 competition in the interLATA telecommuni10 cations services market such company or af11 filiate seeks to enter. The Attorney General

12 shall deny the remainder of the requested

13 authorization.

14 ‘‘(ii) The Commission shall approve

15 the requested authorization only to the ex16 tent that the Commission finds that the re17 quested authorization is consistent with the

18 public interest, convenience and necessity.

19 The Commission shall deny the remainder

20 of the requested authorization. For applica21 tions submitted under paragraph (1)(A), the

22 Commission shall only find that the re23 quested authorization is consistent with the

24 public interest, convenience, and necessity if
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1 the requirements of clause (iii) are satisfied,

2 and shall take into account—

3 ‘‘(I) the extent to which granting

4 the requested authorization would bene5 fit consumers;

6 ‘‘(II) the likely effect that grant7 ing the requested authorization would

8 have on the rates for, and availability

9 of, telephone exchange, interexchange,

10 and other telecommunications services;

11 ‘‘(III) the availability of alter12 native providers of telephone exchange

13 service throughout the geographic area

14 in which the Bell operating company

15 or its affiliate seeks to provide service;

16 ‘‘(IV) the extent to which there

17 exist barriers to entering the telephone

18 exchange services market, including the

19 extent to which consumers have an op20 portunity to select their presubscribed

21 telephone exchange service providers by

22 means of a balloting process; and

23 ‘‘(V) the potential for cross-sub24 sidization or anticompetitive activity

25 by the Bell operating company.
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1 For applications submitted under para2 graph (1)(B), the Commission shall take

3 into account subclauses (I), (II), and (V).

4 ‘‘(iii) The Commission shall approve a

5 requested authorization for applications

6 submitted under paragraph (1)(A) only if—

7 ‘‘(I) the Commission finds that, as

8 prescribed by section 230(a), no State

9 or local statute, regulations, or other

10 State or local requirement in effect in

11 the area in which the petitioning Bell

12 operating company or affiliate seeks to

13 originate interLATA telecommuni14 cations, prohibits or has the effect of

15 prohibiting the ability of any entity to

16 provide interstate or intrastate tele17 communications services in the State

18 and local area where the Bell operating

19 company seeks to originate interLATA

20 services;

21 ‘‘(II) either the Commission has

22 adopted and made effective regulations

23 to implement and enforce the require24 ments of section 201A, or 21 months

25 after the date of enactment of the Com-
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1 munications Act of 1994, whichever is

2 earlier; and

3 ‘‘(III) the Commission finds that

4 the Bell operating company has fully

5 implemented the requirements of sub6 paragraphs (A) through (G) of section

7 230(c)(1), and finds that, at the time

8 of consideration of its application, the

9 Bell operating company is in full com10 pliance with the Commission’s regula11 tions to implement and enforce the re12 quirements of section 230(e) and (f),

13 and any State regulations under

14 230(c)(2), where the Bell operating

15 company seeks to originate interLATA

16 services.

17 ‘‘(iv) Any Bell operating company

18 granted authority under paragraph (1)(A)

19 shall provide intraLATA toll dialing parity

20 throughout that market coincident with its

21 exercise of that authority. If the Commis22 sion finds that such a Bell operating com23 pany has provided interLATA service au24 thorized under this clause before its imple25 mentation of intraLATA toll dialing parity
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1 throughout that market, or fails to main2 tain intraLATA toll dialing parity

3 throughout that market, the Commission,

4 except in cases of inadvertent interruptions

5 or other events beyond the control of the Bell

6 operating company, shall suspend the au7 thority to provide interLATA service for

8 that market until the Commission deter9 mines that intraLATA toll dialing parity is

10 implemented or reinstated.

11 ‘‘(C) DESCRIPTION.—A determination that

12 approves any part of a requested authorization

13 shall describe with particularity the nature and

14 scope of the activity, and of each product market

15 or service market, and each geographic market,

16 to which approval applies.

17 ‘‘(3) PUBLICATION.—Not later than 10 days

18 after issuing a determination under paragraph (2),

19 the Attorney General and the Federal Communica20 tions Commission each shall publish in the Federal

21 Register a brief description of the determination.

22 ‘‘(4) AUTHORIZATION GRANTED.—A requested

23 authorization is granted only to the extent that—

24 ‘‘(A) both the Attorney General and the

25 Federal Communications Commission approve
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1 the authorization under paragraph (2), unless ei2 ther of their approvals is vacated, reversed, or re3 manded as a result of judicial review, or

4 ‘‘(B) as a result of such judicial review of

5 either or both determinations, both the Attorney

6 General and the Federal Communications Com7 mission approve the requested authorization.

8 ‘‘(d) JUDICIAL REVIEW.—

9 ‘‘(1) COMMENCEMENT OF ACTION.—Not later

10 than 45 days after a determination by the Attorney

11 General or the Federal Communications Commission

12 is published under subsection (c)(3), the Bell operat13 ing company or affiliate that applied to the Attorney

14 General and the Federal Communications Commis15 sion under subsection (c)(1), or any person who

16 would be threatened with loss or damage as a result

17 of the determination regarding such company’s engag18 ing in the activity described in such company’s appli19 cation, may commence an action in any United

20 States Court of Appeals against the Attorney General

21 or the Federal Communications Commission, as the

22 case may be, for judicial review of the determination

23 regarding the application.

24 ‘‘(2) JUDGMENT.—
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1 ‘‘(A) The Court shall enter a judgment after

2 reviewing the determination in accordance with

3 section 706 of title 5 of the United States Code.

4 ‘‘(B) A judgment—

5 ‘‘(i) affirming any part of the deter6 mination that approves granting all or part

7 of the requested authorization, or

8 ‘‘(ii) reversing any part of the deter9 mination that denies all or part of the re10 quested authorization,

11 shall describe with particularity the nature and

12 scope of the activity, and of each product market

13 or service market, and each geographic market,

14 to which the affirmance or reversal applies.

15 ‘‘(e) ENFORCEMENT.—

16 ‘‘(1) PRIVATE RIGHT OF ACTION.—Any person

17 who is injured in its business or property by reason

18 of a violation of this section—

19 ‘‘(A) may bring a civil action in any dis20 trict court of the United States in the district in

21 which the defendant resides or is found or has an

22 agent, without respect to the amount in con23 troversy, and

24 ‘‘(B) shall recover threefold the damages sus25 tained, and the costs of suit (including a reason-
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1 able attorney’s fee). The court may award under

2 this section, pursuant to a motion by such per3 son promptly made, simple interest on actual

4 damages for the period beginning on the date of

5 service of such person’s pleading setting forth a

6 claim under this title and ending on the date of

7 judgment, or for any shorter period therein, if

8 the court finds that the award of such interest

9 for such period is just in the circumstances.

10 ‘‘(2) PRIVATE INJUNCTIVE RELIEF.—Any person

11 shall be entitled to sue for and have injunctive relief,

12 in any court of the United States having jurisdiction

13 over the parties, against threatened loss or damage by

14 a violation of this section, when and under the same

15 conditions and principles as injunctive relief is avail16 able under section 16 of the Clayton Act (15 U.S.C.

17 26). In any action under this subsection in which the

18 plaintiff substantially prevails, the court shall award

19 the cost of suit, including a reasonable attorney’s fee,

20 to such plaintiff.

21 ‘‘(f) INTERLATA TELECOMMUNICATIONS SERVICE

22 SAFEGUARDS.—

23 ‘‘(1) SEPARATE SUBSIDIARY.—Other than

24 interLATA services authorized by an order entered by

25 the United States District Court for the District of
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1 Columbia pursuant to the Modification of Final

2 Judgment before the date of the enactment of the

3 Communications Act of 1994, a Bell operating com4 pany providing interLATA services authorized under

5 subsection (c) shall provide such interLATA services

6 in that market only through a subsidiary that is sep7 arate from any Bell operating company entity that

8 provides regulated local telephone exchange service.

9 The subsidiary required by this section need not be

10 separate from affiliates required in sections 231, 233,

11 and 613 of this Act or any other affiliate that does

12 not provide regulated local telephone exchange service.

13 ‘‘(2) NONDISCRIMINATION SAFEGUARDS.—The

14 Bell operating company—

15 ‘‘(A) shall fulfill any requests from an unaf16 filiated entity for exchange access service within

17 a period no longer than that in which it provides

18 such exchange access service to itself or to its af19 filiates;

20 ‘‘(B) shall fulfill any such requests with ex21 change access service of a quality that meets or

22 exceeds the quality of exchange access services

23 provided by the Bell operating company or its

24 affiliates to itself or its affiliate;
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1 ‘‘(C) shall provide exchange access to all

2 carriers at rates that are not unreasonably dis3 criminatory and are based on costs and any ex4 plicit subsidy;

5 ‘‘(D) shall, in any transaction with the sub6 sidiary required by this section, not prefer or

7 discriminate in favor of such subsidiary;

8 ‘‘(E) shall not provide any facilities, serv9 ices, or information concerning its provision of

10 exchange access service to the subsidiary required

11 by this section unless such facilities, services, or

12 information are made available to other provid13 ers of interLATA services in that market on the

14 same terms and conditions;

15 ‘‘(F) shall not enter into any joint venture

16 or partnership with the subsidiary required by

17 this section; and

18 ‘‘(G) shall charge the subsidiary required by

19 this section, and impute to itself or any

20 intraLATA toll affiliate, the same rates for ac21 cess to its local exchange and exchange access

22 services that it charges other, unaffiliated, toll

23 carriers for such services.

24 ‘‘(3) SEPARATE SUBSIDIARY SAFEGUARDS.—The

25 separate subsidiary required by this section—
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1 ‘‘(A) shall carry out its marketing and sales

2 directly and separate from its affiliated Bell op3 erating company or any affiliates of such com4 pany;

5 ‘‘(B) shall maintain books, records, and ac6 counts in the manner prescribed by the Commis7 sion which shall be separate from the books,

8 records, and accounts maintained by its affili9 ated Bell operating company or any affiliates of

10 such company;

11 ‘‘(C) shall charge rates to consumers, and

12 any intraLATA toll affiliate shall charge rates to

13 consumers, for interLATA service and

14 intraLATA toll service that are no less than the

15 rates the Bell operating company charges other

16 interLATA carriers for its local exchange and ex17 change access services plus the other costs to the

18 subsidiary of providing such services;

19 ‘‘(D) shall be permitted to use interLATA

20 facilities and services provided by its affiliated

21 Bell operating company, so long as its costs are

22 appropriately allocated and such facilities and

23 services are provided to its subsidiaries and

24 other carriers on nondiscriminatory rates, terms

25 and conditions;
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1 ‘‘(E) shall comply with Commission regula2 tions to ensure that the economic risks associated

3 with the provision of interLATA services by such

4 subsidiary are not borne by customers of the

5 company’s telephone exchange services; and

6 ‘‘(F) shall not obtain credit under any ar7 rangement that would permit a creditor, upon

8 default, to have recourse to the assets of the local

9 exchange carrier.

10 ‘‘(4) TRIENNIAL AUDIT.—

11 ‘‘(A) GENERAL REQUIREMENT.—A Bell op12 erating company that engages in interLATA

13 services shall obtain and pay for an audit every

14 3 years conducted by an independent auditor se15 lected by, and working at the direction of, the

16 State commission of each State in which such

17 Bell operating company provides local exchange

18 service, to determine whether such Bell operating

19 company has complied with this section and the

20 regulations promulgated under this section, and

21 particularly whether such Bell operating com22 pany has complied with the separate accounting

23 requirements under subsection (c).

24 ‘‘(B) RESULTS SUBMITTED TO COMMISSION;

25 STATE COMMISSIONS.—The auditor described in
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1 clause (i) shall submit the results of the audit to

2 the Commission and to the State commission of

3 each State in which the Bell operating company

4 audited provides telephone exchange service,

5 which shall make such results available for pub6 lic inspection. Any party may submit comments

7 on the final audit report.

8 ‘‘(C) REGULATIONS.—The audit required

9 under paragraph (1) shall be conducted in ac10 cordance with procedures established by regula11 tion by the State commission of the State in

12 which such Bell operating company provides

13 local exchange service. The regulations shall in14 clude requirements that—

15 ‘‘(i) each audit submitted to the Com16 mission and to the State commission is cer17 tified by the auditor responsible for conduct18 ing the audit; and

19 ‘‘(ii) each audit shall be certified by

20 the person who conducted the audit and

21 shall identify with particularity any quali22 fications or limitations on such certification

23 and any other information relevant to the

24 enforcement of the requirements of this

25 section.
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1 ‘‘(D) COMMISSION REVIEW.—The Commis2 sion shall periodically review and analyze the

3 audits submitted to it under this subsection.

4 ‘‘(E) ACCESS TO DOCUMENTS.—For pur5 poses of conducting audits and reviews under

6 this subsection—

7 ‘‘(i) the independent auditor, the Com8 mission, and the State commission shall

9 have access to the financial accounts and

10 records of each Bell operating company and

11 of its subsidiaries necessary to verify trans12 actions conducted with that Bell operating

13 company that are relevant to the specific

14 activities permitted under this section and

15 that are necessary for the regulation of rates

16 for telephone exchange and exchange access;

17 ‘‘(ii) the Commission and the State

18 Commission shall have access to the working

19 papers and supporting materials of any

20 auditor who performs an audit under this

21 section; and

22 ‘‘(iii) the State commission shall im23 plement appropriate procedures to ensure

24 the protection of any proprietary informa25 tion submitted to it under this section.
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1 ‘‘(F) COMMISSION ACTION ON COM2 PLAINTS.—With respect to any complaint

3 brought under section 208 alleging a violation of

4 this section or the regulations implementing it,

5 the Commission shall issue a final order within

6 1 year after such complaint is filed.

7 ‘‘(g) ADDITIONAL AUTHORITY TO PROVIDE

8 INTERLATA SERVICES RELATING TO COMMERCIAL MO9 BILE RADIO SERVICES.—Notwithstanding any restriction

10 or obligation imposed pursuant to the Modification of Final

11 Judgment before the date of enactment of the Communica12 tions Act of 1994, the Commission shall prescribe uniform

13 equal access and long distance presubscription requirements

14 for providers of all cellular and two-way wireless services.

15 ‘‘(h) EXCEPTIONS FOR INCIDENTAL SERVICES.—

16 ‘‘(1) Subsection (a) shall not prohibit a Bell op17 erating company at any time after the date of enact18 ment of the Communications Act of 1994 from pro19 viding interLATA telecommunications services inci20 dental to the purpose of—

21 ‘‘(A)(i) providing audio programming,

22 video programming, or other programming serv23 ices to subscribers of such company,

24 ‘‘(ii) providing the capability for inter25 action by such subscribers to select or respond to
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1 such audio programming, video programming,

2 or other programming services, to order, or con3 trol transmission of the programming, polling or

4 balloting, and ordering other goods or services, or

5 ‘‘(iii) providing to distributors audio pro6 gramming or video programming that such com7 pany owns, controls, or is licensed by the copy8 right owner of such programming, or by an as9 signee of such owner, to distribute;

10 ‘‘(B) providing a telecommunications serv11 ice, using the transmission facilities of a cable

12 system that is an affiliate of such company, be13 tween LATAs within a cable system franchise

14 area in which such company is not, on the date

15 of the enactment of the Communications Act of

16 1994, a provider of wireline telephone exchange

17 service;

18 ‘‘(C) providing a commercial mobile service

19 except where such service is a replacement for

20 land line telephone exchange service for a sub21 stantial portion of the telephone land line ex22 change service in a State in accordance with sec23 tion 332(c) of the Communications Act of 1934

24 (47 U.S.C. 332(c)) and with the regulations pre25 scribed by the Commission;
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1 ‘‘(D) providing a service that permits a cus2 tomer that is located in one LATA to retrieve

3 stored information from, or file information for

4 storage in, information storage facilities of such

5 company that are located in another LATA area,

6 so long as the customer acts affirmatively to ini7 tiate the storage or retrieval of information, ex8 cept that—

9 ‘‘(i) such service shall not cover any

10 service that establishes a direct connection

11 between end users or any real-time voice

12 and data transmission;

13 ‘‘(ii) such service shall not include

14 voice, data, or facsimile distribution serv15 ices in which the Bell operating company or

16 affiliate forwards customer-supplied infor17 mation to customer- or carrier-selected re18 cipients;

19 ‘‘(iii) such service shall not include

20 any service in which the Bell operating

21 company or affiliate searches for and con22 nects with the intended recipient of infor23 mation, or any service in which the Bell op24 erating company or affiliate automatically
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1 forwards stored voicemail or other informa2 tion to the intended recipient; and

3 ‘‘(iv) customers of such service shall

4 not be billed a separate charge for the

5 interLATA telecommunications furnished in

6 conjunction with the provision of such serv7 ice;

8 ‘‘(E) providing signaling information used

9 in connection with the provision of exchange or

10 exchange access services to a local exchange car11 rier that, together with any affiliated local ex12 change carriers, has aggregate annual revenues

13 of less than $100,000,000; or

14 ‘‘(F) providing network control signaling

15 information to, and receiving such signaling in16 formation from, interexchange carriers at any lo17 cation within the area in which such company

18 provides exchange services or exchange access.

19 ‘‘(2) The provisions of paragraph (1) are in20 tended to be narrowly construed. Nothing in this sub21 section permits a Bell operating company or any af22 filiate of such a company to provide interLATA tele23 communications services not described in paragraph

24 (1) without receiving the approval of the Commission

25 and the Attorney General under subsection (c). The
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1 transmission facilities used by a Bell operating com2 pany or affiliate thereof to provide interLATA tele3 communications under subparagraphs (C) and (D) of

4 paragraph (1) shall be leased by that company from

5 unaffiliated entities on terms and conditions (includ6 ing price) no more favorable than those available to

7 the competitors of that company until approval is ob8 tained from the Commission and the Attorney Gen9 eral under subsection (c). The interLATA services

10 provided under paragraph (1)(A) are limited to those

11 interLATA transmissions incidental to the provision

12 by a Bell operating company or its affiliate of video,

13 audio, and other programming services that the com14 pany or its affiliate is engaged in providing to the

15 public and, except as provided in paragraph

16 (1)(A)(iii), does not include the interLATA trans17 mission of audio, video, or other programming serv18 ices provided by others.

19 ‘‘(3)(A) The Commission, in consultation with

20 the Attorney General, shall prescribe regulations for

21 the provision by a Bell operating company or any of

22 its affiliates of the interLATA services authorized

23 under this subsection. The regulations shall ensure

24 that the provision of such service by a Bell operating

25 company or its affiliate does not—
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1 ‘‘(i) permit that company to provide tele2 communications services not described in para3 graph (1) without receiving the approvals re4 quired by subsection (c), or

5 ‘‘(ii) adversely affect telephone exchange

6 ratepayers or competition in any telecommuni7 cations services market.

8 ‘‘(B) Nothing in this paragraph shall delay the

9 ability of a Bell operating company to provide the

10 interLATA services described in paragraph (1) imme11 diately upon enactment of the Communications Act of

12 1994.

13 ‘‘(4) As used in this subsection:

14 ‘‘(A) The term ‘audio programming serv15 ices’ means programming provided by, or gen16 erally considered to be comparable to program17 ming provided by, a radio broadcast station.

18 ‘‘(B) The terms ‘video programming service’

19 and ‘other programming services’ have the same

20 meanings as such terms have under section 602

21 of this Act.

22 ‘‘(i) DEFINITIONS.—As used in this section:

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

24 transport area as defined in United States v. Western

25 Electric Co., 569 F.Supp. 990 (United States District
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1 Court, District of Columbia) and subsequent judicial

2 orders relating thereto.

3 ‘‘(2) The term ‘cable service’ has the meaning

4 given that term under section 602.’’.

5 SEC. 442. JURISDICTION.

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

7 U.S.C. 152) is amended by striking ‘‘section 332’’ and in8 serting in lieu thereof ‘‘sections 229, 230, 234, 235, 237,

9 and 332’’.

10 TITLE V—REGULATORY PARITY AMONG

11 PROVIDERS OF CABLE SERVICE

12 SEC. 501. PROVISION OF CABLE SERVICE BY LOCAL EX13 CHANGE CARRIERS AND PROVISION OF TELE14 COMMUNICATIONS SERVICES BY CABLE OP15 ERATORS.

16 Section 613(b) of the Communications Act of 1934 (47

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

18 ‘‘(b)(1) VIDEO PROGRAMMING AND CABLE SERV19 ICES.—

20 ‘‘(A) TELECOMMUNICATIONS CARRIER OR AFFILI21 ATE.—To the extent that any telecommunications car22 rier or its affiliate provides video programming to

23 subscribers through a common carrier video platform,

24 neither the telecommunications carrier, its affiliate,

25 nor any video programming provider making use of
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1 such platform shall be deemed to be a cable operator

2 providing cable service. To the extent that any tele3 communications carrier or its affiliate provides video

4 programming directly to subscribers through a cable

5 system, the carrier or its affiliate, as the case may be,

6 shall be deemed to be a cable operator providing cable

7 service.

8 ‘‘(B) LOCAL EXCHANGE CARRIER OR AFFILI9 ATE.—A local exchange carrier or its affiliate may

10 provide video programming directly to subscribers

11 through a cable system in the local exchange carrier’s

12 telephone service area, or through a common carrier

13 video platform in the local exchange carrier’s tele14 phone service area, only if—

15 ‘‘(i) the Commission finds that, as pre16 scribed by section 230(a) and except as provided

17 in section 230(k), no State or local statute, regu18 lations, or other State or local requirement in ef19 fect in such local exchange carrier’s telephone

20 service area prohibits or has the effect of prohib21 iting the ability of any entity to provide inter22 state or intrastate telecommunications services in

23 such telephone service area where the local ex24 change carrier seeks to provide video program25 ming;
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1 ‘‘(ii) either the Commission has adopted

2 and made effective regulations to implement and

3 enforce the requirements of section 201A, or 21

4 months have elapsed since the date of enactment

5 of the Communications Act of 1994, whichever is

6 earlier; and

7 ‘‘(iii) the Commission finds that the local

8 exchange carrier has, within the telephone service

9 area in which such carrier seeks to provide video

10 programming directly to subscribers, fully imple11 mented the applicable requirements of subpara12 graphs (A) through (G) of section 230(c)(1), and

13 finds that the local exchange carrier is in full

14 compliance with the Commission’s regulations to

15 implement and enforce the requirements of sub16 sections (e) and (f) of section 230, and any State

17 regulations under section 230(c)(2).

18 ‘‘(C) EXCEPTION.—Notwithstanding subpara19 graph (B), a local exchange carrier may provide video

20 programming directly to subscribers in its telephone

21 service area if—

22 ‘‘(i) the Commission determines that—

23 ‘‘(I) the State in which the carrier

24 seeks to provide video programming has im25 plemented laws and regulations that are
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1 substantially similar to and not inconsist2 ent with the requirements of section

3 230(c)(1); and

4 ‘‘(II) the carrier is in compliance with

5 such State laws and regulations in such

6 telephone service area; or

7 ‘‘(ii)(I) there is no enforceable statutory

8 prohibition against such carrier providing video

9 programming directly to subscribers in its tele10 phone service area on the date of enactment of

11 the Communications Act of 1994, and (II) no ju12 dicial proceeding reinstates the enforceability of

13 such statutory prohibition prior to the date such

14 local exchange carrier must comply with the reg15 ulations to implement subsections (c), (e), and

16 (f) of section 230.

17 Any common carrier permitted to provide video pro18 gramming under this subparagraph shall not be ex19 empt from the requirements of section 230 after the

20 effective date of such regulations in final form. The

21 Commission shall revoke the authority granted under

22 this paragraph to the extent that a carrier fails to

23 comply with the regulations required by sections

24 230(c), (e), or (f), except in cases of inadvertent inter25 ruptions or other events beyond the control of such
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1 local exchange carrier. The Commission determina2 tion required in clause (i) shall be completed within

3 60 days of submission to the Commission by a local

4 exchange carrier of an application for such a deter5 mination, or, if the determination is not completed

6 during that period, the determination shall be deemed

7 to have been completed and to be that the carrier is

8 in compliance with the State laws and regulations in

9 the carrier’s telephone service area referred to in that

10 clause.

11 ‘‘(D) SEPARATE SUBSIDIARY REQUIRED.—Any

12 local exchange carrier providing video programming

13 directly to subscribers through a cable system, or

14 through a common carrier video platform, shall do so

15 only through a separate subsidiary. In providing such

16 programming—

17 ‘‘(i) the carrier may not provide any com18 mon carrier facilities, services, or information to

19 that cable subsidiary unless such facilities, serv20 ices, or information are made available to others

21 on the same terms and conditions;

22 ‘‘(ii) the carrier may not grant any pref23 erence to, or discriminate in favor of, that cable

24 subsidiary; and
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1 ‘‘(iii) the carrier may not subsidize directly

2 or indirectly that cable subsidiary with revenue

3 from its telephone exchange or exchange access

4 services.

5 ‘‘(E) EXEMPTION BY COMMISSION.—Upon a

6 finding by the Commission that the requirement of a

7 separate subsidiary under the preceding subpara8 graph is no longer necessary to protect consumers,

9 competition, or the public interest, the Commission

10 shall exempt a local exchange carrier from that re11 quirement.

12 ‘‘(2) PROVISION OF TELECOMMUNICATIONS SERVICES

13 BY CABLE OPERATORS.—

14 ‘‘(A) SAFEGUARDS.—A cable operator may not

15 provide telecommunications services in its cable fran16 chise area unless such telecommunications services are

17 provided through a separate telecommunications sub18 sidiary. A cable operator or its affiliate may not sub19 sidize its telecommunications services directly or indi20 rectly with revenue from its cable services.

21 ‘‘(B) EXEMPTION BY COMMISSION.—Upon a

22 finding by the Commission that imposing the require23 ment of a separate subsidiary on a cable operator is

24 no longer necessary for the protection of consumers,

25 competition, or the public interest, the Commission
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1 shall exempt that cable operator from that require2 ment.

3 ‘‘(3) SUBSECTION NOT TO APPLY IN CERTAIN CIR4 CUMSTANCES.—This subsection shall not apply to any local

5 exchange carrier or cable operator to the extent such carrier

6 or operator provides telephone exchange service or cable

7 service, respectively, in any rural area.

8 ‘‘(4) WAIVER BY COMMISSION.—In those areas where

9 the provision of video programming directly to subscribers

10 through a cable system demonstrably could not exist except

11 through a cable system owned by, operated by, controlled

12 by, or affiliated with the local exchange carrier involved,

13 or upon other showing of good cause, the Commission may,

14 on petition for waiver, waive the applicability of paragraph

15 (1) of this subsection. Any such waiver shall be made in

16 accordance with section 63.56 of title 47, Code of Federal

17 Regulations (as in effect on September 20, 1984) and shall

18 be granted by the Commission upon a finding that the issu19 ance of such waiver is justified by the particular cir20 cumstances demonstrated by the petitioner, taking into ac21 count the policy of this subsection.

22 ‘‘(5) ACQUISITIONS; JOINT VENTURES; PARTNER23 SHIPS; JOINT USE OF FACILITIES.—

24 ‘‘(A) LOCAL EXCHANGE CARRIERS.—No local ex25 change carrier or any affiliate of such carrier owned
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1 by, operated by, controlled by, or under common con2 trol with such carrier may purchase or otherwise ac3 quire more than a 10 percent financial interest, or

4 any management interest, in any cable operator pro5 viding cable service within the local exchange carrier’s

6 telephone service area.

7 ‘‘(B) CABLE OPERATORS.—No cable operator or

8 affiliate of a cable operator that is owned by, operated

9 by, controlled by, or under common ownership with

10 such cable operator may purchase or otherwise ac11 quire, directly or indirectly, more than a 10 percent

12 financial interest, or any management interest, in

13 any local exchange carrier providing telephone ex14 change service within such cable operator’s franchise

15 area.

16 ‘‘(C) JOINT VENTURE.—A local exchange carrier

17 and a cable operator whose telephone service area and

18 cable franchise area, respectively, are in the same

19 market may not enter into any joint venture or part20 nership to provide video programming directly to

21 subscribers or to provide telecommunications services

22 within such market.

23 ‘‘(D) EXCEPTION.—Notwithstanding subpara24 graphs (A), (B), and (C) of this paragraph, a local

25 exchange carrier (with respect to a cable system lo-
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1 cated in its telephone service area) and a cable opera2 tor (with respect to the facilities of a local exchange

3 carrier used to provide telephone exchange service in

4 its cable franchise area) may obtain a controlling in5 terest in, management interest in, or enter into a

6 joint venture or partnership with such system or fa7 cilities to the extent that such system or facilities do

8 not serve—

9 ‘‘(i) any incorporated or unincorporated

10 place with more than 50,000 inhabitants; or

11 ‘‘(ii) any territory, incorporated or unin12 corporated, included in an urbanized area, as

13 defined by the Bureau of the Census.

14 ‘‘(E) WAIVER.—The Commission may waive the

15 restrictions of subparagraph (A), (B), or (C) only

16 if—

17 ‘‘(i) the petitioning local exchange carrier’s

18 telephone service area or cable operator’s cable

19 franchise area does not include either—

20 ‘‘(I) any incorporated or unincor21 porated place of 100,000 inhabitants or

22 more, or any part thereof; or

23 ‘‘(II) any territory, incorporated or

24 unincorporated, included in an urbanized

25 area; and
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1 ‘‘(ii) the Commission determines that—

2 ‘‘(I) because of the nature of the market

3 served by the affected cable system or facili4 ties used to provide telephone exchange serv5 ice—

6 ‘‘(aa) the incumbent cable opera7 tor or local exchange carrier would be

8 subjected to undue economic distress by

9 the enforcement of such provisions; or

10 ‘‘(bb) the system or facilities

11 would not be economically viable if

12 such provisions were enforced; and

13 ‘‘(II) the local franchising authority

14 (in the case of the purchase or acquisition

15 of a cable operator, or a joint venture to

16 provide cable service) or the State commis17 sion (in the case of the acquisition of a local

18 exchange carrier, or a joint venture to pro19 vide telephone exchange service) approves of

20 such a waiver.

21 ‘‘(F) JOINT USE.—Notwithstanding subpara22 graphs (A), (B), and (C), a telecommunications car23 rier may obtain within such carrier’s telephone serv24 ice area, with the concurrence of the cable operator on

25 the rates, terms, and conditions, the use of that por-
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1 tion of the transmission facilities of such a cable sys2 tem extending from the last multiuser terminal to the

3 premises of the end user in excess of the capacity that

4 the cable operator uses to provide its own cable serv5 ices. A cable operator that provides access to such por6 tion of its transmission facilities to one telecommuni7 cations carrier shall provide nondiscriminatory access

8 to such portion of its transmission facilities to any

9 other telecommunications carrier requesting such ac10 cess.

11 ‘‘(6) DEFINITIONS.—As used in this subsection:

12 ‘‘(A) The term ‘affiliate’ means any organization

13 or entity that, directly or indirectly, owns or controls,

14 or is controlled by, or is under common ownership or

15 control with a local exchange carrier or a cable opera16 tor.

17 ‘‘(B) The terms ‘own’, ‘owned’, and ‘ownership’

18 mean a direct or indirect equity interest (or the

19 equivalent thereof) of more than 10 percent of an or20 ganization or entity, or the right to more than 10

21 percent of the gross revenues of an organization or en22 tity under a revenue sharing or royalty agreement, or

23 any substantial management or financial interest.

24 ‘‘(C) The term ‘rural area’ means a geographic

25 area that does not include either—
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1 ‘‘(i) any incorporated or unincorporated

2 place of 10,000 inhabitants or more, or any part

3 thereof; or

4 ‘‘(ii) any territory, incorporated or unin5 corporated, included in an urbanized area as de6 fined by the Bureau of the Census.’’.

7 SEC. 502. COMMON CARRIER VIDEO PLATFORM.

8 (a) DEFINITION.—Section 602 of the Communications

9 Act of 1934 (47 U.S.C. 522) is amended—

10 (1) by redesignating paragraphs (8) through (19)

11 as (9) through (20), respectively, and

12 (2) by inserting after paragraph (7) the follow13 ing:

14 ‘‘(8) the term ‘common carrier video platform’

15 means a telecommunications service coupled with a

16 common carrier video gateway by which consumers

17 can access any or all video program providers making

18 use of the platform and to which such video program

19 providers can obtain access on a common carriage

20 basis;’’.

21 (b) CARRIAGE REQUIREMENTS.—Any provision that

22 applies to a cable operator under section 325, 614, or 615

23 of the Communications Act of 1934 applies to a tele24 communications carrier or the affiliate of a telecommuni25 cations carrier if it establishes a common carrier video plat-
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1 form. The Commission shall prescribe regulations applica2 ble to providers of common carrier video platforms to ensure

3 that commercial broadcast stations have an opportunity to

4 choose between mandatory carriage and reimbursement for

5 retransmission of the signal of such stations.

6 (c) CABLE SERVICE.—Section 602(6) of the Commu7 nications Act of 1934 (47 U.S.C. 522(6)) is amended—

8 (1) by striking the semicolon at the end of sub9 paragraph (B) and inserting a comma, and

10 (2) by inserting after subparagraph (B) the fol11 lowing: ‘‘but such term does not include the provision

12 of video programming to subscribers through a com13 mon carrier video platform;’’.

14 (d) EXCEPTION FROM FACILITY DEFINITION.—Sub15 division (C) of section 602(7) of the Communications Act

16 of 1934 (47 U.S.C. 522(7)) is amended to read as follows:

17 ‘‘(C) a facility of a common carrier which is subject to the

18 provisions of title II of this Act, except that such facility

19 shall be considered a cable system (other than for purposes

20 of section 621(c)) to the extent that such facility is used

21 in the transmission of video programming directly to sub22 scribers and such common carrier has not made access to

23 a video gateway associated with such facility available to

24 all video program providers on a nondiscriminatory basis;

25 or’’.
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1 SEC. 503. JURISDICTION OF FRANCHISING AUTHORITY.

2 (a) TELECOMMUNICATIONS SERVICES.—Section 621(b)

3 of the Communications Act of 1934 (47 U.S.C. 541(b)) is

4 amended by adding at the end thereof the following new

5 paragraph:

6 ‘‘(3)(A) To the extent that a cable operator or af7 filiate thereof is engaged in the provision of tele8 communications services—

9 ‘‘(i) such cable operator or affiliate shall not

10 be required to obtain a franchise under this title;

11 and

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

13 apply to such cable operator or affiliate.

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

15 cable operator or affiliate thereof to discontinue the

16 provision of a telecommunications service.

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

18 cable operator to provide any telecommunications

19 service or facilities as a condition of the initial grant

20 of a franchise or a franchise renewal.

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

22 Federal or State authority with respect to tele23 communications services. Nothing in this paragraph

24 affects existing authority of a franchising authority

25 with respect to equipment or services other than tele26 communications services.’’.
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1 (b) FRANCHISE FEES.—Section 622(b) of the Commu2 nications Act of 1934 (47 U.S.C. 542(b)) is amended by

3 inserting ‘‘to provide cable services’’ immediately before the

4 period at the end of the first sentence.

5 (c) SHOWING REQUIRED TO OBTAIN A FRANCHISE.—

6 Section 621(a)(4)(C) of the Act (47 U.S.C. 541(a)(4)(C))

7 is amended by adding after ‘‘cable service.’’ the following:

8 ‘‘If a local exchange carrier has a certificate of public con9 venience and necessity, or other certificate of authority, to

10 provide local exchange service within the geographic area

11 for which the local exchange carrier or its video program12 ming affiliate seeks to obtain a cable franchise, the local

13 exchange carrier and its video programming affiliate shall

14 be deemed to have made adequate assurance regarding the

15 financial, technical or legal qualifications to provide cable

16 service.’’.

17 TITLE VI—CUSTOMER CONTROL OVER

18 INFORMATION

19 SEC. 601. CUSTOMER INFORMATION PROTECTION.

20 Title II of the Communications Act of 1934 (47 U.S.C.

21 201 et seq.) is amended by inserting after section 236 the

22 following new section:

23 ‘‘SEC. 237. CUSTOMER INFORMATION PROTECTION.

24 ‘‘(a) CUSTOMER PROPRIETARY NETWORK INFORMA25 TION.—A local exchange carrier—
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1 ‘‘(1) shall not, except as required by law or upon

2 the affirmative request of the customer to whom the

3 information relates, or a person designated in writing

4 by that customer—

5 ‘‘(A) use customer proprietary network in6 formation in the identification or solicitation of

7 potential customers for any service or product

8 other than the service from which such informa9 tion is derived; or

10 ‘‘(B) disclose such information to any affili11 ate of such local exchange carrier or any other

12 person that is not an employee of such carrier

13 except to bill or collect for any service the cus14 tomer has requested; and

15 ‘‘(2) shall, whenever such local exchange carrier

16 provides any aggregate information based on cus17 tomer proprietary network information to any per18 sonnel of such local exchange carrier, or any affiliate

19 of such local exchange carrier, that are engaged in

20 providing any service or product other than telephone

21 exchange service and exchange access service and serv22 ices adjunct thereto, or to any other person that is not

23 an employee or affiliate of such carrier, notify the

24 Commission of the availability of such aggregate in25 formation and shall provide such aggregate informa-
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1 tion on reasonable and nondiscriminatory terms and

2 conditions to any other provider of services or prod3 ucts upon reasonable request therefor.

4 ‘‘(b) RULES OF CONSTRUCTION.—

5 ‘‘(1) DISCLOSURE OF PROPRIETARY INFORMA6 TION UNDER COURT ORDER.—This section shall not

7 be construed to prohibit the disclosure of customer

8 proprietary network information as necessary to com9 ply with a court order authorizing the disclosure of

10 such information.

11 ‘‘(2) OTHER DISCLOSURES.—This section shall

12 not be construed to prohibit the disclosure of customer

13 proprietary network information as necessary—

14 ‘‘(A) to render, bill, and collect for telephone

15 exchange service or telephone toll service;

16 ‘‘(B) to render, bill, and collect for any

17 other telecommunications service that the cus18 tomer has requested;

19 ‘‘(C) to protect the rights or property of the

20 carrier; or

21 ‘‘(D) to protect users of any of those services

22 and other carriers from fraudulent, abusive, or

23 unlawful use of, or subscription to, such service.

24 ‘‘(c) EXEMPTION PERMITTED.—The Commission may,

25 by rule, exempt from the requirements of subsection (a)(2)
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1 local exchange carriers that have fewer than 1,000,000 ag2 gregate nationwide lines installed if the Commission deter3 mines that such exemption is in the public interest or if

4 compliance with the requirements would impose an undue

5 economic burden on the carrier.

6 ‘‘(d) DUTY TO PROVIDE SUBSCRIBER LIST INFORMA7 TION.—Notwithstanding subsections (a), (b), (c), and (e),

8 a local exchange carrier shall provide subscriber list infor9 mation on a timely and unbundled basis, under non10 discriminatory and reasonable rates, terms, and conditions,

11 to any person upon reasonable request.

12 ‘‘(e) CUSTOMER CONTROL.—Within one year after the

13 date of enactment of the Communications Act of 1994, the

14 Commission shall adopt rules that govern the practices of

15 telcommunication carriers that are not local exchange car16 riers related to the use and disclosure of information con17 cerning a customer’s use of telecommunications services to

18 unaffiliated parties. In implementing this subsection, the

19 Commission shall—

20 ‘‘(1) consider the appropriate manner in which,

21 and whether, to require that the customer be periodi22 cally notified about how information concerning a

23 customer’s use of telecommunications services is used

24 and disclosed by the telecommunications carrier;
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1 ‘‘(2) provide that telecommunications carriers

2 may use and disclose information concerning a cus3 tomer’s use of telecommunications services or other

4 services provided by the telecommunication carrier

5 where the disclosure is necessary to render, or to con6 duct a legitimate business activity related to, a tele7 communications service or other service or product

8 provided by the telecommunications provider to the

9 customer; and

10 ‘‘(3) provide the customer the opportunity to

11 limit the disclosure of information to unaffiliated per12 sons where such disclosure is not permitted under this

13 section.

14 ‘‘(f) AUTOMATIC NUMBER IDENTIFICATION SERV15 ICES.—

16 ‘‘(1) CONTRACT OR TARIFF REQUIREMENTS.—

17 Any telecommunications carrier or affiliate of a car18 rier providing automatic number identification serv19 ices to any person shall provide such services under

20 a contract or tariff containing telephone subscriber

21 information requirements that comply with this sub22 section. Such requirements shall—

23 ‘‘(A) permit such person to use the telephone

24 number and billing information provided pursu25 ant to the automatic number identification serv-
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1 ice for billing and collection, routing, screening,

2 and completion of the originating telephone sub3 scriber’s call or transaction, or for services di4 rectly related to the originating telephone sub5 scriber’s call or transaction;

6 ‘‘(B) prohibit such person from reusing or

7 disclosing the telephone number or billing infor8 mation provided pursuant to the automatic

9 number identification service without first (i)

10 notifying the originating telephone subscriber

11 and (ii) extending to such subscriber the option

12 to limit or prohibit such reuse or disclosure; and

13 ‘‘(C) prohibit such person from disclosing,

14 except as permitted by subparagraphs (A) and

15 (B), any information derived from the automatic

16 number identification service for any purpose

17 other than—

18 ‘‘(i) performing the services or trans19 actions that are the subject of the originat20 ing telephone subscriber’s call,

21 ‘‘(ii) ensuring network performance, se22 curity, and the effectiveness of call delivery,

23 ‘‘(iii) compiling, using, and disclosing

24 aggregate information, and
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1 ‘‘(iv) complying with a court order or

2 applicable law.

3 ‘‘(2) EXCEPTION FOR ESTABLISHED CUS4 TOMERS.—The customer information requirements

5 imposed under paragraph (1) shall not prevent a per6 son to which automatic number identification services

7 are provided from using—

8 ‘‘(A) the telephone number and billing in9 formation provided pursuant to such service, and

10 ‘‘(B) any information derived from the

11 automatic number identification service, or from

12 the analysis of the characteristics of a tele13 communications transmission,

14 to offer, to any telephone subscriber with whom such

15 person has an established customer relationship, a

16 product or service that is directly related to the prod17 ucts or services previously acquired by that customer

18 from such person.

19 ‘‘(3) ENFORCEMENT.—The Commission may, by

20 rule or order, direct the termination of automatic

21 number identification services to any person who has

22 violated the telephone subscriber information require23 ments imposed under paragraph (1).

24 ‘‘(4) EFFECTIVE DATE.—
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1 ‘‘(A) Except as provided in subparagraph

2 (B), the requirements of this subsection shall

3 apply to any automatic number identification

4 service provided more than one year after the

5 date of enactment of the Communications Act of

6 1994.

7 ‘‘(B) In the case of any automatic number

8 identification service provided under a contract

9 entered into, or tariff taking effect, more than 3

10 months after the date of enactment of the Com11 munications Act of 1994, the requirements of this

12 subsection shall apply to any automatic number

13 identification service provided pursuant to such

14 contract or tariff.

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

16 ‘‘(1) The term ‘customer proprietary network in17 formation’ means—

18 ‘‘(A) information which relates to the quan19 tity, technical configuration, type, destination,

20 and amount of use of telephone exchange service

21 or exchange access service subscribed to by any

22 customer of a local exchange carrier;

23 ‘‘(B) information which pertains to tele24 phone exchange service or exchange access service
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1 contained in bills received by a customer of a

2 local exchange carrier; and

3 ‘‘(C) such other information concerning the

4 customer as is (i) available to the local exchange

5 carrier by virtue of the customer’s use of the

6 services, and (ii) specified as within the defini7 tion of such term by such rules as the Commis8 sion may prescribe consistent with the public in9 terest,

10 except that such term does not include subscriber list

11 information.

12 ‘‘(2) The term ‘subscriber list information’

13 means any information—

14 ‘‘(A) identifying the names of subscribers of

15 a local exchange carrier and such subscribers’

16 telephone numbers, addresses, or advertising clas17 sifications, or any combination of such names,

18 numbers, addresses, or classifications; and

19 ‘‘(B) that the carrier or an affiliate has

20 published or accepted for future publication.

21 ‘‘(3) The term ‘aggregate information’ means col22 lective data that relates to a group or category of

23 services or customers, from which individual customer

24 identities or characteristics have been removed.
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1 ‘‘(4) The term ‘automatic number identification’

2 means an access signaling protocol in common use by

3 common carriers that uses an identifying signal asso4 ciated with the use of a subscriber’s telephone to pro5 vide billing information or other information to the

6 local exchange carrier and to any other interconnect7 ing carriers.

8 TITLE VII—MEDIA DIVERSITY

9 SEC. 701. REVIEW OF BROADCAST RULES.

10 Within 1 year after the date of enactment of this Act,

11 the Federal Communications Commission (referred to else12 where in this title as the ‘‘Commission’’) shall, after a notice

13 and comment, complete a proceeding—

14 (1) to modify or remove such national and local

15 ownership rules on radio and television broadcasters

16 as are necessary to ensure that broadcasters are able

17 to compete fairly with other media providers while

18 ensuring that the public receives information from a

19 diversity of media sources;

20 (2) to review the ownership restriction in section

21 613(a)(1) and report to Congress whether or not such

22 restriction continues to serve the public interest; and

23 (3) to consider the applicability of the Commis24 sion’s rules regarding network non-duplication protec25 tion, syndicated exclusivity protection, and sports
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1 programming exclusivity to programmers whose pro2 grams are transmitted on common carrier video plat3 forms.

4 SEC. 702. TELEVISION BROADCASTER PROVISION OF ADDI5 TIONAL SERVICES.

6 (a) ADVANCED TELEVISION SPECTRUM SERVICES.—If

7 the Commission determines to issue additional licenses for

8 advanced television services, and initially limits the eligi9 bility for such licenses to persons that, as of the date of

10 issuance, are licensed to operate a television broadcast sta11 tion or hold a permit to construct such a station, or both,

12 the Commission shall adopt regulations that allow such li13 censees or permittees to make use of the advanced television

14 spectrum for the transmission of ancillary and supple15 mentary services, so long as the licensees provide without

16 charge to the public, at least one advanced television pro17 gram service as prescribed by the Commission that is in18 tended for and available to the general public on the ad19 vanced television spectrum. The Commission shall deter20 mine the modulation technologies to be used for advanced

21 television services.

22 (b) COMMISSION TO COLLECT FEES.—To the extent

23 that a television broadcast licensee provides ancillary and

24 supplementary services using advanced television spec25 trum—
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1 (1) for which payment of a subscription fee is re2 quired in order to receive such services, or

3 (2) for which the licensee directly or indirectly

4 receives compensation from a third party in return

5 for transmitting material furnished by such third

6 party, other than payments to broadcast stations by

7 third parties for transmission of program material or

8 commercial advertising,

9 the Commission may collect from each such licensee an an10 nual fee to the extent the advanced television spectrum is

11 used for such ancillary and supplementary services. In de12 termining the amount of such fees, the Commission shall

13 take into account the portion of the licensee’s total spectrum

14 which is used for such services and the amount of time such

15 services are provided. The amount of such fees to be collected

16 for any such service shall not, in any event, exceed an

17 amount equivalent on an annualized basis to the amount

18 paid by providers of a competing service on spectrum sub19 ject to auction under section 309(j) of the Communications

20 Act of 1934 (47 U.S.C. 309(j)).

21 (c) PUBLIC INTEREST REQUIREMENT.—Nothing in

22 this section shall be construed as relieving a television

23 broadcasting station from its obligation to serve the public

24 interest, convenience, and necessity. In the Commission’s re25 view of any application for renewal of a broadcast license
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1 for a television station that provides ancillary and supple2 mentary services, the television licensee shall establish that

3 its program service which is intended for and available to

4 the general public on the advanced television spectrum is

5 in the public interest. Any violation of the Commission

6 rules applicable to ancillary and supplementary services

7 may reflect upon the licensee’s qualifications for renewal

8 of its license.

9 (d) DEFINITION OF ADVANCED TELEVISION SERV10 ICES.—As used in this section, the term ‘‘advanced tele11 vision services’’ means television services provided using

12 digital or other advanced technology to enhance audio qual13 ity and video resolution, as further defined in the opinion,

14 report, and order of the Commission entitled ‘‘Advanced

15 Television Systems and Their Impact Upon the Existing

16 Television Broadcast Service’’, MM Docket 87–268.

17 SEC. 703. VIDEO PROGRAMMING ACCESSIBILITY.

18 (a) INQUIRY REQUIRED.—Within 180 days after the

19 date of enactment of this Act, the Commission shall com20 plete an inquiry to ascertain the level at which video pro21 gramming is closed captioned. Such inquiry shall examine

22 the extent to which existing or previously published pro23 gramming is closed captioned, the size of the video program24 ming provider or programming owner providing closed

25 captioning, the size of the market served, the relative audi-
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1 ence shares achieved, or any other related factors. The Com2 mission shall submit to the Congress a report of the results

3 of such inquiry.

4 (b) CONTENTS OF REGULATIONS.—Within 18 months

5 after such date of enactment, the Commission shall prescribe

6 regulations to ensure that—

7 (1) video programming first published or exhib8 ited after the effective date of such regulations is fully

9 accessible through the provision of closed captions, ex10 cept as provided in subsection (d); and

11 (2) video programming providers or owners

12 maximize the accessibility of video programming first

13 published or exhibited prior to the effective date of

14 such regulations through the provision of closed cap15 tions, except as provided in subsection (d).

16 (c) IMPLEMENTING CLOSED CAPTIONING.—The regula17 tions shall include an appropriate implementation schedule

18 of deadlines for the provision of closed captioning of video

19 programming.

20 (d) EXEMPTIONS.—Notwithstanding subsection (b)—

21 (1) the Commission may exempt by regulation

22 programs, classes of programs, locally produced pro23 grams, providers, classes of providers or services for

24 which the Commission has determined that the provi25 sion of closed captioning would result in an undue
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1 burden to the provider or owner of such program2 ming;

3 (2) a provider of video programming or the

4 owner of any program carried by the provider shall

5 not be obligated to supply closed captions if such ac6 tion would be inconsistent with contracts in effect on

7 the date of enactment of this Act, except that nothing

8 in this section shall be construed to relieve a video

9 programming provider of its obligations to provide

10 services otherwise required by Federal law; and

11 (3) a provider of video programming or program

12 owner may petition the Commission for an exemption

13 from the requirements of this section, and the Com14 mission may grant such petition upon a showing that

15 the requirements contained in this section would re16 sult in an undue burden.

17 (e) UNDUE BURDEN.—The term ‘‘undue burden’’

18 means significant difficulty or expense. In determining

19 whether the closed captions necessary to comply with the

20 requirements of this paragraph would result in an undue

21 economic burden, the factors to be considered include—

22 (1) the nature and the cost of the closed captions

23 for the programming;

24 (2) the impact on the operation of the provider

25 or program owner;
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1 (3) the financial resources of the provider or pro2 gram owner; and

3 (4) the type of operations of the provider or pro4 grammer owner.

5 (f) ADDITIONAL PROCEEDING ON VIDEO DESCRIP6 TIONS REQUIRED.—Within 6 months after the date of en7 actment of this Act, the Commission shall commence an in8 quiry to examine the use of video descriptions on video pro9 gramming in order to ensure the accessibility of video pro10 gramming to persons with visual impairments, and report

11 to Congress on its findings. The Commission’s report shall

12 assess appropriate methods and schedules for phasing video

13 descriptions into the marketplace, technical and quality

14 standards for video descriptions, a definition of program15 ming for which video descriptions would apply, and other

16 technical and legal issues that the Commission deems ap17 propriate. Following the completion of such inquiry, the

18 Commission may adopt regulations it deems necessary to

19 promote the accessibility of video programming to persons

20 with visual impairments.

21 (g) VIDEO DESCRIPTIONS.—For purposes of this sec22 tion, ‘‘video description’’ means the insertion of audio nar23 rated descriptions of a television program’s key visual ele24 ments into natural pauses between the program’s dialogue.
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1 TITLE VIII—OBSCENE, HARASSING, AND

2 WRONGFUL UTILIZATION OF TELE3 COMMUNICATIONS FACILITIES

4 SEC. 801. OBSCENE OR HARASSING USE OF TELECOMMUNI5 CATIONS FACILITIES UNDER THE COMMU6 NICATIONS ACT OF 1934.

7 (a) OFFENSES.—Section 223 of the Communications

8 Act of 1934 (47 U.S.C. 223) is amended—

9 (1) in subsection (a)(1)—

10 (A) by striking out ‘‘telephone’’ in the mat11 ter above subparagraph (A) and inserting ‘‘tele12 communications device’’;

13 (B) by striking out ‘‘makes any comment,

14 request, suggestion, or proposal’’ in subpara15 graph (A) and inserting ‘‘makes, transmits, or

16 otherwise makes available any comment, request,

17 suggestion, proposal, image, or other communica18 tion’’;

19 (C) by striking out subparagraph (B) and

20 inserting the following:

21 ‘‘(B) makes a telephone call or utilizes a

22 telecommunications device, whether or not con23 versation or communications ensues, without dis24 closing his identity and with intent to annoy,

25 abuse, threaten, or harass any person at the
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1 called number or who receives the communica2 tion;’’ and

3 (D) by striking out subparagraph (D) and

4 inserting the following:

5 ‘‘(D) makes repeated telephone calls or re6 peatedly initiates communication with a tele7 communications device, during which conversa8 tion or communication ensues, solely to harass

9 any person at the called number or who receives

10 the communication; or’’;

11 (2) in subsection (a)(2), by striking ‘‘telephone

12 facility’’ and inserting ‘‘telecommunications facility’’;

13 (3) in subsection (b)(1)—

14 (A) in subparagraph (A)—

15 (i) by striking ‘‘telephone’’ and insert16 ing ‘‘telecommunications device’’; and

17 (ii) by inserting ‘‘or initiated the com18 munication’’ after ‘‘placed the call’’, and

19 (B) in subparagraph (B), by striking ‘‘tele20 phone facility’’ and inserting ‘‘telecommuni21 cations facility’’; and

22 (4) in subsection (b)(2)—

23 (A) in subparagraph (A)—

24 (i) by striking ‘‘by means of telephone,

25 makes’’ and inserting ‘‘by means of tele-
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1 phone or telecommunications device, makes,

2 transmits, or makes available’’; and

3 (ii) by inserting ‘‘or initiated the com4 munication’’ after ‘‘placed the call’’; and

5 (B) in subparagraph (B), by striking ‘‘tele6 phone facility’’ and inserting in lieu thereof

7 ‘‘telecommunications facility’’.

8 (b) PENALTIES.—Section 223 of such Act (47 U.S.C.

9 223) is amended—

10 (1) by striking out ‘‘$50,000’’ each place it ap11 pears and inserting ‘‘$100,000’’; and

12 (2) by striking ‘‘six months’’ each place it ap13 pears and inserting ‘‘2 years’’.

14 (c) PROHIBITION ON PROVISION OF ACCESS.—Sub15 section (c)(1) of such section (47 U.S.C. 223(c)) is amended

16 by striking ‘‘telephone’’ and inserting ‘‘telecommunications

17 device’’.

18 (d) CONFORMING AMENDMENT.—The section heading

19 for such section is amended to read as follows:
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1 ‘‘OBSCENE OR HARASSING UTILIZATION OF TELECOMMUNI2 CATIONS DEVICES AND FACILITIES IN THE DISTRICT

3 OF COLUMBIA OR IN INTERSTATE OR FOREIGN COM4 MUNICATIONS’’.

5 SEC. 802. OBSCENE PROGRAMMING ON CABLE TELEVISION.

6 Section 639 of the Communications Act of 1934 (47

7 U.S.C. 559) is amended by striking ‘‘$10,000’’ and insert8 ing ‘‘$100,000’’.

9 SEC. 803. BROADCASTING OBSCENE LANGUAGE ON RADIO.

10 Section 1464 of title 18, United States Code, is amend11 ed by striking out ‘‘$10,000’’ and inserting in lieu thereof

12 ‘‘$100,000’’.

13 SEC. 804. INTERCEPTION AND DISCLOSURE OF ELEC14 TRONIC COMMUNICATIONS.

15 Section 2511 of title 18, United States Code, is

16 amended—

17 (1) in paragraph (1)—

18 (A) by striking ‘‘wire, oral, or electronic

19 communication’’ each place it appears and in20 serting ‘‘wire, oral, electronic, or digital commu21 nication’’, and

22 (B) in the matter designated as ‘‘(b)’’, by

23 striking ‘‘oral communication’’ in the matter

24 above clause (i) and inserting ‘‘communication’’;

25 and
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1 (2) in paragraph (2)(a), by striking ‘‘wire or

2 electronic communication service’’ each place it ap3 pears (other than in the second sentence) and insert4 ing ‘‘wire, electronic, or digital communication

5 service’’.

6 SEC. 805. ADDITIONAL PROHIBITION ON BILLING FOR

7 TOLL-FREE TELEPHONE CALLS.

8 Section 228(c)(6) of the Communications Act of 1934

9 (47 U.S.C. 228(c)(6)) is amended—

10 (1) by striking ‘‘or’’ at the end of subparagraph

11 (C);

12 (2) by striking the period at the end of subpara13 graph (D) and inserting a semicolon and ‘‘or’’; and

14 (3) by adding at the end thereof the following:

15 ‘‘(E) the calling party being assessed, by

16 virtue of being asked to connect or otherwise

17 transfer to a pay-per-call service, a charge for

18 the call.’’.

19 SEC. 806. SCRAMBLING OF CABLE CHANNELS FOR

20 NONSUBSCRIBERS.

21 Part IV of title VI of the Communications Act of 1934

22 (47 U.S.C. 551 et seq.) is amended by adding at the end

23 the following:
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1 ‘‘SEC. 640. SCRAMBLING OF CABLE CHANNELS FOR

2 NONSUBSCRIBERS.

3 ‘‘(a) REQUIREMENT.—In providing video program4 ming unsuitable for children to any subscriber through a

5 cable system, a cable operator shall fully scramble or other6 wise fully block the video and audio portion of each channel

7 carrying such programming so that one not a subscriber

8 does not receive it.

9 ‘‘(b) DEFINITION.—As used in this section, the term

10 ‘scramble’ means to rearrange the content of the signal of

11 the programming so that the programming cannot be re12 ceived by persons unauthorized to receive the program13 ming.’’.

14 SEC. 807. CABLE OPERATOR REFUSAL TO CARRY CERTAIN

15 PROGRAMS.

16 (a) PUBLIC, EDUCATIONAL, AND GOVERNMENTAL

17 CHANNELS.—Section 611(e) of the Communications Act of

18 1934 (47 U.S.C. 531(e)) is amended by inserting before the

19 period the following: ‘‘, except a cable operator may refuse

20 to transmit any public access program or portion of a pub21 lic access program which contains obscenity, indecency, or

22 nudity’’.

23 (b) CABLE CHANNELS FOR COMMERCIAL USE.—Sec24 tion 612(c)(2) of the Communications Act of 1934 (47

25 U.S.C. 532(c)(2)) is amended by striking ‘‘an operator’’

26 and inserting ‘‘a cable operator may refuse to transmit any
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1 leased access program or portion of a leased access program

2 which contains obscenity, indecency, or nudity. An opera3 tor’’.

4 TITLE IX—ADVANCED TELECOMMUNI5 CATIONS NETWORK CAPABILITY

6 SEC. 901. ADVANCED TELECOMMUNICATIONS NETWORK CA7 PABILITY.

8 (a) PROMOTION OF ADVANCED TELECOMMUNICATIONS

9 NETWORK CAPABILITY.—The Commission shall promote to

10 all Americans, regardless of location or disability, the de11 ployment of switched, broadband, telecommunications net12 works capable of enabling users to originate and receive af13 fordable and accessible high quality voice, data, graphics,

14 and video telecommunications services. In promoting the

15 deployment of such networks, the Commission shall, to the

16 maximum extent feasible, rely on competition among tele17 communications providers. In the event the Commission de18 termines that users are not gaining reasonable and timely

19 access to switched, broadband, telecommunications network

20 capabilities, the Commission shall have the authority to

21 provide sufficient incentives such that this access is

22 achieved.

23 (b) RULEMAKING.—If the Commission finds in its in24 quiry proceedings or any other time that switched,

25 broadband, telecommunications network capabilities are
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1 not being deployed to all Americans in a reasonable and

2 timely fashion, it shall commence a rulemaking to prescribe

3 regulations using incentives to promote, to the maximum

4 extent technically feasible and economically reasonable, the

5 availability of switched, broadband, telecommunications

6 network capabilities.

Æ