I 

111TH CONGRESS 

2D SESSION H. R. 5828 

To reform the universal service provisions of the Communications Act of 

1934, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 22, 2010 

Mr. BOUCHER (for himself and Mr. TERRY) introduced the following bill; 

which was referred to the Committee on Energy and Commerce 

A BILL 

To reform the universal service provisions of the 

Communications Act of 1934, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Universal Service Re5 form Act of 2010’’. 

6 SEC. 2. DEFINITIONS. 

7 (a) IN GENERAL.—Section 3(a) of the Communica8 tions Act of 1934 (47 U.S.C. 153(a)) is amended— 

9 (1) by adding the following new paragraphs: 


rfrederick on DSKD9S0YB1PROD with BILLS
2 

•HR 5828 IH

1 ‘‘(53) COMMUNICATIONS SERVICE PROVIDER.— 

2 The term ‘communications service provider’ means 

3 any entity that— 

4 ‘‘(A) contributes to or receives universal 

5 service support for the most recent calendar 

6 quarter ending before the date of enactment of 

7 the Universal Service Reform Act of 2010; 

8 ‘‘(B) uses telephone numbers or Internet 

9 protocol addresses, or their functional equiva10 lents or successors, to offer a service or a capa11 bility— 

12 ‘‘(i) that provides or enables real-time 

13 2-way voice communications; and 

14 ‘‘(ii) in which the voice component is 

15 the primary function; or 

16 ‘‘(C) offers directly to the public, or to 

17 such classes of users as to be effectively avail18 able directly to the public, a physical trans19 mission facility, whether circuit-switched, pack20 et-switched, a leased line, or using radio fre21 quency transmissions (regardless of the form, 

22 protocol, or statutory classification of the serv23 ice) that allows an end user to obtain access 

24 from a particular end user location to a net25 work that permits the end user to engage in 


rfrederick on DSKD9S0YB1PROD with BILLS
3 

•HR 5828 IH

1 electronic communications (including tele2 communications) with the public. 

3 ‘‘(54) HIGH-COST SUPPORT.—The term ‘high4 cost support’ means high cost loop support, high 

5 cost model support, local switching support, inter6 state access support, and interstate common line 

7 support, as such forms of support are described in 

8 part 54 of title 47, Code of Federal Regulations, re9 spectively, as in effect on the date of enactment of 

10 the Universal Service Reform Act of 2010, or any 

11 other support or revenue recovery mechanism estab12 lished by the Commission as part of the high cost 

13 fund of the universal service fund pursuant to sec14 tion 254 or the Universal Service Reform Act of 

15 2010. 

16 ‘‘(55) HIGH-SPEED BROADBAND SERVICE.— 

17 ‘‘(A) DEFINITION.—The term ‘high-speed 

18 broadband service’ means a 2-way network that 

19 uses Internet protocol (and the associated capa20 bilities and functionalities, services, and appli21 cations provided over an Internet protocol plat22 form or for which an Internet protocol capa23 bility is an integral component) and services, fa24 cilities, equipment, or applications that enable 

25 an end-user to receive communications in InterVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
4 

•HR 5828 IH

1 net protocol format, regardless of whether the 

2 communications are voice, data, video, or any 

3 other form, at or exceeding the minimum data 

4 rate requirement established by the Commission 

5 under section 254(q). 

6 ‘‘(B) INTERNET PROTOCOL.—In subpara7 graph (A), the term ‘Internet protocol’ means 

8 the Transmission Control Protocol/Internet 

9 Protocol or any predecessor or successor proto10 cols to such protocol. 

11 ‘‘(56) MOBILE WIRELESS COMMUNICATIONS

12 SERVICE.—The term ‘mobile wireless communica13 tions service’ means a commercial mobile service (as 

14 defined in section 332(d)), except that such term 

15 shall only apply to such service as it relates to 2-way 

16 communications. 

17 ‘‘(57) MOBILE WIRELESS COMMUNICATIONS

18 SERVICE PROVIDER.—The term ‘mobile wireless 

19 communications service provider’ means a provider 

20 of a mobile wireless communications service.’’; and 

21 (2) by reordering paragraphs (1) through (52) 

22 of such section and the additional paragraphs added 

23 by paragraph (1) of this section in alphabetical 

24 order based on the headings of such paragraphs and 

25 renumbering such paragraphs as so reordered. 


rfrederick on DSKD9S0YB1PROD with BILLS
5 

•HR 5828 IH

1 (b) RULE OF CONSTRUCTION.—Terms used in this 

2 Act shall have the meanings set forth in the Communica3 tions Act of 1934 (47 U.S.C. 151 et seq.) unless otherwise 

4 specified. 

5 TITLE I—UNIVERSAL SERVICE 

6 REFORM 

7 SEC. 101. UNIVERSAL SERVICE REFORM PROCEDURES AND 

8 PRINCIPLES. 

9 Subsections (a), (b), and (c) of section 254 of the 

10 Communications Act of 1934 (47 U.S.C. 254) are amend11 ed to read as follows: 

12 ‘‘(a) PROCEDURES TO REFORM UNIVERSAL SERV13 ICE.— 

14 ‘‘(1) FEDERAL-STATE JOINT BOARD ON UNI15 VERSAL SERVICE.— 

16 ‘‘(A) PROCEEDING REQUIRED.—Within 1 

17 month after the date of enactment of the Uni18 versal Service Reform Act of 2010, the Com19 mission shall institute and refer to the Federal20 State Joint Board under section 410(c) a pro21 ceeding to recommend changes to any of its 

22 regulations in order to implement section 

23 214(e) and this section (as amended by the 

24 Universal Service Reform Act of 2010), includ25 ing the definition of the services that are supVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
6 

•HR 5828 IH

1 ported by Federal universal service support 

2 mechanisms and a specific timetable for the 

3 completion of such recommendations. 

4 ‘‘(B) ADDITIONAL MEMBER.—In addition 

5 to the members of the Joint Board required 

6 under section 410(c), 1 member of such Joint 

7 Board shall be a State-appointed utility con8 sumer advocate nominated by a national organi9 zation of State utility consumer advocates. 

10 ‘‘(C) DEADLINE FOR JOINT BOARD.—The 

11 Joint Board shall, after notice and opportunity 

12 for public comment, make its recommendations 

13 to the Commission within 9 months after the 

14 date of enactment of the Universal Service Re15 form Act of 2010. 

16 ‘‘(2) COMMISSION ACTION.— 

17 ‘‘(A) DEADLINE FOR COMMISSION.—The 

18 Commission shall initiate a proceeding to con19 sider the recommendations from the Joint 

20 Board required by paragraph (1)(C) and shall 

21 complete such proceeding within 18 months 

22 after the date of enactment of the Universal 

23 Service Reform Act of 2010. 

24 ‘‘(B) REQUIREMENT.—The rules estab25 lished by such proceeding shall include a definiVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
7 

•HR 5828 IH

1 tion of the services that are supported by Fed2 eral universal service support mechanisms and 

3 a specific timetable for implementation. 

4 ‘‘(b) UNIVERSAL SERVICE PRINCIPLES.—The Joint 

5 Board and the Commission shall base policies for the pres6 ervation and advancement of universal service on the fol7 lowing principles: 

8 ‘‘(1) QUALITY AND RATES.—Quality services 

9 should be available at just, reasonable, and afford10 able rates. 

11 ‘‘(2) ACCESS TO ADVANCED SERVICES.—Access 

12 to advanced telecommunications and information 

13 services should be provided in all regions of the Na14 tion. 

15 ‘‘(3) ACCESS IN RURAL, INSULAR, OR HIGH

16 COST AREAS.—Consumers in all regions of the Na17 tion, including low-income consumers and those in 

18 rural, insular, or high cost areas, should have access 

19 to the services the Commission determines to be uni20 versal services in accordance with subsection (c), in21 cluding interexchange services and advanced tele22 communications and information services, that are 

23 reasonably comparable to those services provided in 

24 urban areas and that are available at rates that are 


rfrederick on DSKD9S0YB1PROD with BILLS
8 

•HR 5828 IH

1 reasonably comparable to rates charged for similar 

2 services in urban areas. 

3 ‘‘(4) COMPARABLE TREATMENT OF COMMU4 NICATIONS SERVICE PROVIDERS.— 

5 ‘‘(A) EQUITABLE AND NONDISCRIM6 INATORY CONTRIBUTIONS.—All communications 

7 service providers should make equitable and 

8 nondiscriminatory contributions to the preserva9 tion and advancement of universal service. 

10 ‘‘(B) COMPETITIVE NEUTRALITY.—Federal 

11 and State mechanisms to preserve and advance 

12 universal service should be competitively neutral 

13 such that those mechanisms neither unfairly ad14 vantage nor disadvantage one communications 

15 service provider over another and neither un16 fairly favor nor disfavor one technology over an17 other. 

18 ‘‘(5) EXPLICIT, SPECIFIC, AND PREDICTABLE

19 SUPPORT MECHANISMS.—There should be explicit, 

20 specific, predictable, and sufficient Federal and 

21 State mechanisms to preserve and advance universal 

22 service. 

23 ‘‘(6) ACCESS TO ADVANCED TELECOMMUNI24 CATIONS SERVICES FOR SCHOOLS, HEALTH CARE, 

25 AND LIBRARIES.—Elementary and secondary schools 


rfrederick on DSKD9S0YB1PROD with BILLS
9 

•HR 5828 IH

1 and classrooms, health care providers, and libraries 

2 should have access to advanced telecommunications 

3 services as described in subsection (h). 

4 ‘‘(7) ADDITIONAL PRINCIPLES.—Such other 

5 principles as the Joint Board and the Commission 

6 determine are necessary and appropriate for the pro7 tection of the public interest, convenience, and ne8 cessity and are consistent with this Act. 

9 ‘‘(c) DEFINITION.— 

10 ‘‘(1) IN GENERAL.—Universal service includes 

11 the services defined on the day before the date of en12 actment of the Universal Service Reform Act of 

13 2010 as universal services, as modified by the Com14 mission as necessary to implement the provisions of 

15 such Act, high-speed broadband service, and an 

16 evolving level of telecommunications and information 

17 services that the Commission shall establish periodi18 cally under this section, taking into account ad19 vances in telecommunications and information tech20 nologies and services. 

21 ‘‘(2) ALTERATIONS AND MODIFICATIONS.—The 

22 Joint Board shall consider whether to recommend to 

23 the Commission modifications in the definition of 

24 the services that are supported by Federal universal 


rfrederick on DSKD9S0YB1PROD with BILLS
10 

•HR 5828 IH

1 service support mechanisms not less than once every 

2 5 years. 

3 ‘‘(3) CONSIDERATIONS.—The Joint Board in 

4 recommending, and the Commission in establishing, 

5 the definition of the services that are supported by 

6 Federal universal service support mechanisms shall 

7 consider the extent to which such services— 

8 ‘‘(A) are essential to education, public 

9 health, or public safety; 

10 ‘‘(B) have, through the operation of mar11 ket choices by customers, been subscribed to by 

12 a substantial majority of residential customers; 

13 ‘‘(C) are being deployed in public tele14 communications networks by communications 

15 service providers; and 

16 ‘‘(D) are consistent with the public inter17 est, convenience, and necessity. 

18 ‘‘(4) SPECIAL SERVICES.—In addition to the 

19 services included in the definition of universal serv20 ice under paragraph (1), the Commission may des21 ignate additional services for such support mecha22 nisms for schools, libraries, and health care pro23 viders for the purposes of subsection (h). 

24 ‘‘(5) HIGH-SPEED BROADBAND SERVICE.—The 

25 definition of universal service shall not be construed 


rfrederick on DSKD9S0YB1PROD with BILLS
11 

•HR 5828 IH

1 to exclude eligible communications service providers 

2 from using universal service funding for the provi3 sion, maintenance, and upgrading of high-speed 

4 broadband service.’’. 

5 SEC. 102. UNIVERSAL SERVICE SUPPORT CONTRIBUTIONS. 

6 (a) IN GENERAL.—Section 254(d) of the Commu7 nications Act of 1934 (47 U.S.C. 254(d)) is amended to 

8 read as follows: 

9 ‘‘(d) UNIVERSAL SERVICE SUPPORT CONTRIBU10 TIONS.— 

11 ‘‘(1) CALCULATING UNIVERSAL SERVICE SUP12 PORT CONTRIBUTIONS.— 

13 ‘‘(A) IN GENERAL.— 

14 ‘‘(i) EQUITABLE.—To preserve and 

15 advance universal service in accordance 

16 with the principles in subsection (b), the 

17 Commission shall assess contributions to 

18 universal service support mechanisms from 

19 communications service providers in a 

20 manner that is equitable, competitively 

21 neutral, nondiscriminatory, and ensures 

22 that communications service providers are 

23 subject to similar obligations. 

24 ‘‘(ii) METHODOLOGY.—The Commis25 sion may employ any methodology to asVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
12 

•HR 5828 IH

1 sess such contributions, including a meth2 odology based on— 

3 ‘‘(I) revenues derived from the 

4 provision of intrastate, interstate, and 

5 foreign telecommunications services 

6 and information services by commu7 nications service providers; 

8 ‘‘(II) working telephone numbers 

9 used by communications service pro10 viders; or 

11 ‘‘(III) any other current or suc12 cessor identifier protocols or connec13 tions to the network used by commu14 nications service providers. 

15 ‘‘(B) USE OF MORE THAN ONE METHOD16 OLOGY.—If no one methodology designated 

17 under subparagraph (A)(ii) effectuates the prin18 ciples described in this Act, the Commission 

19 may employ a combination of any such meth20 odologies. 

21 ‘‘(C) LOW VOLUME EXCEPTION.—The 

22 Commission shall not materially increase the 

23 contributions of communications service pro24 viders whose customers typically make a low 

25 volume of calls on a monthly basis. 


rfrederick on DSKD9S0YB1PROD with BILLS
13 

•HR 5828 IH

1 ‘‘(D) DE MINIMIS EXCEPTION.—The Com2 mission may exempt a communications service 

3 provider from the requirements of this sub4 section if the amount of telecommunications 

5 services and information services provided by 

6 such provider are limited to such an extent that 

7 the level of contributions of such provider to the 

8 preservation and advancement of universal serv9 ice would be de minimis. 

10 ‘‘(E) GROUP PLAN EXCEPTION.—If the 

11 Commission uses a methodology under subpara12 graph (A)(ii) based in whole or in part on work13 ing telephone numbers, it may provide a dis14 count for additional numbers provided under a 

15 group or family pricing plan for residential cus16 tomers provided in one bill. 

17 ‘‘(F) DISCRETIONARY AUTHORITY.—If the 

18 Commission determines that it is in the public 

19 interest, any provider of a telecommunications 

20 service or an information service may be re21 quired to contribute to the preservation and ad22 vancement of universal service. 

23 ‘‘(2) REPORTS.— 

24 ‘‘(A) IN GENERAL.—The Commission shall 

25 establish annual reporting requirements for all 


rfrederick on DSKD9S0YB1PROD with BILLS
14 

•HR 5828 IH

1 entities contributing to universal service support 

2 mechanisms or receiving universal service sup3 port. 

4 ‘‘(B) NEUTRAL.—The reporting require5 ments shall not impose unnecessary burdens 

6 and shall be neutral with respect to technology 

7 and provider. 

8 ‘‘(C) REVIEW.—The Commission shall pe9 riodically review the reporting requirements to 

10 ensure that such requirements provide adequate 

11 information to ensure that universal service 

12 support is being used for the provision, mainte13 nance, and upgrading of the facilities for which 

14 such support is intended. 

15 ‘‘(3) UNIVERSAL SERVICE SUPPORT CONTRIBU16 TION LIMITS.—In repurposing universal service sup17 port to ensure that all people in the United States 

18 have access to voice service and high-speed 

19 broadband service, the Commission shall not unrea20 sonably increase the contribution burden on con21 sumers.’’. 

22 (b) STUDY OF CONTRIBUTION METHODOLOGIES.— 

23 (1) IN GENERAL.—Not later than 270 days 

24 after the date of enactment of this Act, the Federal 

25 Communications Commission shall complete a study, 


rfrederick on DSKD9S0YB1PROD with BILLS
15 

•HR 5828 IH

1 including a cost-benefit analysis, of using a system 

2 based on working telephone numbers or revenues for 

3 calculating contributions by communications service 

4 providers to universal service support mechanisms. 

5 (2) REPORT.—Not later than 1 year after the 

6 date of enactment of this Act, the Federal Commu7 nications Commission shall transmit to the Com8 mittee on Energy and Commerce of the House of 

9 Representatives and the Committee on Commerce, 

10 Science, and Transportation of the Senate a report 

11 on the study conducted under paragraph (1). 

12 SEC. 103. UNIVERSAL SERVICE SUPPORT DISTRIBUTION. 

13 Section 254(e) of the Communications Act of 1934 

14 (47 U.S.C. 254(e)) is amended to read as follows: 

15 ‘‘(e) DISTRIBUTION AND USE OF UNIVERSAL SERV16 ICE SUPPORT.— 

17 ‘‘(1) IN GENERAL.— 

18 ‘‘(A) ELIGIBILITY.—Only a communica19 tions service provider designated as an eligible 

20 communications service provider under section 

21 214(e) shall be eligible to receive specific Fed22 eral universal service support. 

23 ‘‘(B) USE RESTRICTION.—An eligible com24 munications service provider that receives such 

25 support shall use that support only for the proVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
16 

•HR 5828 IH

1 vision, maintenance, and upgrading of facilities 

2 and facilities-based services for which the sup3 port is intended. 

4 ‘‘(C) EXPLICIT AND SUFFICIENT.—Any 

5 such support shall be explicit and sufficient to 

6 achieve the purposes of this section. 

7 ‘‘(2) USE OF HIGH-COST SUPPORT.—The use of 

8 high-cost support for all rural, insular, or high cost 

9 areas— 

10 ‘‘(A) shall be expanded to include high11 speed broadband service and any other service 

12 that is determined to be a universal service by 

13 the Commission under subsection (c); and 

14 ‘‘(B) shall be available to eligible commu15 nications service providers designated under 

16 section 214(e), but, until such time as the Com17 mission implements the new cost model re18 quired by paragraph (3), an eligible commu19 nications service provider that is also an incum20 bent local exchange carrier may elect to have 

21 the Commission calculate the amount of high22 cost support payable to such provider pursuant 

23 to part 54 of title 47, Code of Federal Regula24 tions, as in effect on the date of enactment of 

25 the Universal Service Reform Act of 2010. 


rfrederick on DSKD9S0YB1PROD with BILLS
17 

•HR 5828 IH

1 ‘‘(3) CALCULATING HIGH-COST SUPPORT FOR

2 ELIGIBLE COMMUNICATIONS SERVICE PROVIDERS

3 PROVIDING SERVICE IN RURAL, INSULAR, OR HIGH

4 COST AREAS.— 

5 ‘‘(A) CALCULATING HIGH-COST SUP6 PORT.— 

7 ‘‘(i) DEVELOPMENT OF COST

8 MODEL.—Within 2 years after the date of 

9 enactment of the Universal Service Reform 

10 Act of 2010, the Commission shall develop 

11 a new cost model for the provision of high12 cost support to eligible communications 

13 service providers to provide universal serv14 ice in rural, insular, and high cost areas, 

15 taking into account the cost to eligible 

16 communications service providers of pro17 viding voice service and high-speed 

18 broadband service. 

19 ‘‘(ii) INCLUSIVE.—The new cost 

20 model shall determine the cost of providing 

21 voice service and high-speed broadband 

22 service both on the basis of wire centers 

23 and study areas. 

24 ‘‘(iii) DATA RATE REQUIREMENTS.— 

25 The Commission shall require eligible comVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
18 

•HR 5828 IH

1 munications service providers to meet the 

2 minimum data rate requirements estab3 lished pursuant to subsection (q) no earlier 

4 than 3 years after support is initially dis5 bursed pursuant to the new cost model. 

6 ‘‘(iv) MAXIMIZATION OF ACCESS.—In 

7 developing the new cost model, the Com8 mission shall ensure that the new cost 

9 model results in the maximum number of 

10 households that do not have access to high11 speed broadband service as of the date of 

12 enactment of the Universal Service Reform 

13 Act of 2010 obtaining such access as 

14 quickly as possible. 

15 ‘‘(v) RATE OF RETURN REGULA16 TION.—In developing the new cost model, 

17 the Commission shall develop and imple18 ment a mechanism that maintains rate-of19 return regulation for the distribution of 

20 high-cost support to an eligible commu21 nications service provider subject to rate22 of-return regulation as of the date of en23 actment of the Universal Service Reform 

24 Act of 2010. 


rfrederick on DSKD9S0YB1PROD with BILLS
19 

•HR 5828 IH

1 ‘‘(B) CONSIDERATION.—In determining 

2 the appropriate level of high-cost support for el3 igible communications service providers, the 

4 Commission may consider the net revenues de5 rived by such providers from the provision of 

6 any services, including telecommunications serv7 ice, high-speed broadband service, and multi8 channel video programming service that are of9 fered in a service area over infrastructures re10 ceiving high-cost support. 

11 ‘‘(C) MODEL FOR ELIGIBLE COMMUNICA12 TIONS SERVICE PROVIDERS OTHER THAN

13 RURAL LECS.—The Commission shall require 

14 all eligible communications service providers 

15 other than rural local exchange carriers to use 

16 the wire center results of the new cost model 

17 within 120 days after the Commission com18 pletes the revisions required by subparagraph 

19 (A). 

20 ‘‘(D) RURAL LECS.— 

21 ‘‘(i) IN GENERAL.—Except as pro22 vided in clause (ii), the Commission shall 

23 require all rural local exchange carriers to 

24 use the study area results of the new cost 

25 model within 120 days after the CommisVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
20 

•HR 5828 IH

1 sion completes the revisions required by 

2 subparagraph (A). 

3 ‘‘(ii) EXCEPTION.— 

4 ‘‘(I) ELECTION.—Within 120 

5 days after the Commission completes 

6 the revisions required by subpara7 graph (A), any rural local exchange 

8 carrier may make a one-time perma9 nent election to have the Commission 

10 calculate the amount of high-cost sup11 port payable to such provider based 

12 on the wire center results of the new 

13 cost model instead of the study area 

14 results of the new cost model. 

15 ‘‘(II) REVIEW.—The Commission 

16 shall review and approve the transi17 tion to the wire center results of the 

18 new cost model for any such provider 

19 within 120 days after receiving notice 

20 of such election. 

21 ‘‘(E) LIMITATION ON HIGH-COST SUP22 PORT.—High-cost support provided to an in23 cumbent local exchange carrier in accordance 

24 with the new cost model shall be in lieu of any 

25 Federal high-cost support mechanisms to which 


rfrederick on DSKD9S0YB1PROD with BILLS
21 

•HR 5828 IH

1 the carrier was entitled on the day before the 

2 date on which the Commission implements the 

3 new cost model under subparagraph (A)(i). 

4 ‘‘(F) PROCESS FOR REDUCTION OF SUP5 PORT FOR ILECS.— 

6 ‘‘(i) IN GENERAL.— 

7 ‘‘(I) REQUIREMENT.—Within 1 

8 year after the Commission completes 

9 the new cost model required by sub10 paragraph (A), the Commission shall 

11 develop and implement a recurring 

12 mechanism for reducing or elimi13 nating the high-cost support provided 

14 to an incumbent local exchange car15 rier in the competitive portions of the 

16 incumbent local exchange carrier’s 

17 service areas and shall reduce or 

18 eliminate high-cost support in such 

19 areas. 

20 ‘‘(II) INVESTMENT COSTS.— 

21 When an incumbent local exchange 

22 carrier has invested to fulfill the re23 quirements of subparagraphs (A) 

24 through (E) of section 214(e)(1) in 

25 the portion of a service area that is 


rfrederick on DSKD9S0YB1PROD with BILLS
22 

•HR 5828 IH

1 subsequently found to be competitive, 

2 the Commission may, in recalculating 

3 the amount of per-line high-cost sup4 port provided to such carrier for the 

5 non-competitive portions of such serv6 ice area, consider an appropriate am7 ortization schedule for costs incurred 

8 to satisfy the buildout requirements in 

9 the areas that were previously deter10 mined pursuant to subclause (III) not 

11 to be competitive. 

12 ‘‘(III) DEFINITION.—For pur13 poses of this subparagraph, in a serv14 ice area (as defined in section 214) in 

15 which the Commission determines 

16 that at least 75 percent of the house17 holds can purchase wireline voice serv18 ice and wired high-speed broadband 

19 service from an unsupported, facili20 ties-based, non-incumbent provider, a 

21 competitive portion of a service area 

22 shall be that portion of a service area 

23 where households can purchase 

24 wireline voice service and wired highVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
23 

•HR 5828 IH

1 speed broadband service from such 

2 provider. 

3 ‘‘(ii) RECALCULATION.— 

4 ‘‘(I) IN GENERAL.—Such mecha5 nism shall also include a methodology 

6 for recalculating, in a service area in 

7 which the Commission has determined 

8 that there is a competitive portion, 

9 the amount of per-line high-cost sup10 port provided to an eligible commu11 nications service provider for the non12 competitive portions of such service 

13 area to ensure comparable rates for 

14 supported services in both the com15 petitive and non-competitive portions 

16 of the service area. 

17 ‘‘(II) CONSIDERATIONS.—In de18 veloping such methodology, the Com19 mission may consider the net revenues 

20 derived by such providers from the 

21 provision of any services, including 

22 telecommunications service, high23 speed broadband service, and multi24 channel video programming service 

25 that are offered in a service area over 


rfrederick on DSKD9S0YB1PROD with BILLS
24 

•HR 5828 IH

1 infrastructures receiving high-cost 

2 support, except that the total amount 

3 of high-cost support the incumbent 

4 local exchange carrier receives for the 

5 entire service area after applying such 

6 methodology shall be no greater than 

7 the total amount of high-cost support 

8 the incumbent local exchange carrier 

9 received with respect to the service 

10 area on the day before such method11 ology was applied. 

12 ‘‘(iii) REQUIREMENTS.—The Commis13 sion shall also ensure that each unsup14 ported, facilities-based non-incumbent pro15 vider in the competitive portion of each 

16 service area that such non-incumbent pro17 vider is authorized to serve and that is de18 termined by the Commission to be competi19 tive shall— 

20 ‘‘(I) provide basic voice service of 

21 standard quality and high-speed 

22 broadband service to any requesting 

23 residential customer in such area and 

24 be able to provide such service upon 

25 request, except that such provider 


rfrederick on DSKD9S0YB1PROD with BILLS
25 

•HR 5828 IH

1 may impose, subject to rules adopted 

2 by the Commission— 

3 ‘‘(aa) reasonable require4 ments for creditworthiness, such 

5 as requiring a security deposit; 

6 and 

7 ‘‘(bb) a just and reasonable 

8 line extension charge to provide 

9 service to any such customer 

10 whose premises are located be11 yond a standard distance from 

12 the provider’s infrastructure; 

13 ‘‘(II) provide residential cus14 tomers with the option to subscribe to 

15 basic voice service on a stand-alone 

16 basis without any term commitment 

17 nor any penalty for early termination 

18 of the subscription; 

19 ‘‘(III) provide toll limitation (as 

20 defined in section 54.400(d) of title 

21 47, Code of Federal Regulations, as of 

22 the date of enactment of the Universal 

23 Service Reform Act of 2010) if the 

24 provider offers basic voice service that 

25 does not include unlimited local and 


rfrederick on DSKD9S0YB1PROD with BILLS
26 

•HR 5828 IH

1 domestic interexchange calling for a 

2 flat monthly rate; 

3 ‘‘(IV) offer access to tele4 communications relay services in ac5 cordance with Commission require6 ments; and 

7 ‘‘(V) comply with Commission re8 quirements regarding— 

9 ‘‘(aa) appropriate notice and 

10 approval before discontinuing 

11 service; 

12 ‘‘(bb) emergency prepared13 ness and network outages; and 

14 ‘‘(cc) the provision of 911 

15 and E911 service. 

16 ‘‘(iv) LIMITATION.—A State may not 

17 impose or enforce any carrier-of-last-resort 

18 requirements on any unsupported, facili19 ties-based non-incumbent provider in a 

20 service area that the Commission has de21 termined is competitive. 

22 ‘‘(G) TRIBAL LANDS.— 

23 ‘‘(i) IN GENERAL.—Notwithstanding 

24 any other provision of this paragraph, the 

25 Commission shall not reduce high-cost supVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
27 

•HR 5828 IH

1 port for tribal lands under section 

2 54.400(e) of title 47, Code of Federal Reg3 ulations, unless the Commission makes an 

4 affirmative finding that such reductions 

5 are in the public interest. 

6 ‘‘(ii) REQUIREMENTS FOR FINDING.— 

7 In making a finding under clause (i), the 

8 Commission shall consider whether resi9 dents of such tribal lands have access to 

10 the services the Commission determines to 

11 be universal services in accordance with 

12 subsection (c), including interexchange 

13 services and advanced telecommunications 

14 and information services, that are reason15 ably comparable to those services provided 

16 in urban areas and that are available at 

17 rates that are reasonably comparable to 

18 rates charged for similar services in urban 

19 areas, consistent with subsection (b)(3). 

20 ‘‘(H) HOLD HARMLESS.— 

21 ‘‘(i) IN GENERAL.—The Commission 

22 shall ensure that, for 1 year after the 

23 Commission implements the new cost 

24 model under subparagraph (A)(i), no in25 cumbent local exchange carrier receives 


rfrederick on DSKD9S0YB1PROD with BILLS
28 

•HR 5828 IH

1 less high-cost support in a service area 

2 than the incumbent local exchange carrier 

3 was receiving in high-cost support in such 

4 area on the day before the Commission im5 plements such new cost model. 

6 ‘‘(ii) DETERMINATION.—The Commis7 sion shall determine the difference between 

8 the amount an incumbent local exchange 

9 carrier was receiving in high-cost support 

10 on the day before the Commission imple11 ments such new cost model and the 

12 amount that such incumbent local ex13 change carrier would receive after the 

14 Commission implements such new cost 

15 model and shall, beginning in the fifth 

16 quarter that begins after the Commission 

17 implements such new cost model, reduce 

18 the amount of such difference in equal in19 crements over a 5-year period such that 

20 the amount of the difference has been re21 duced to zero at the end of such period.’’. 

22 SEC. 104. ELIGIBLE RECIPIENTS OF UNIVERSAL SERVICE 

23 SUPPORT. 

24 (a) AMENDMENT.—Section 214(e) of the Commu25 nications Act of 1934 (47 U.S.C. 214(e)) is amended— 


rfrederick on DSKD9S0YB1PROD with BILLS
29 

•HR 5828 IH

1 (1) in paragraph (1)— 

2 (A) by striking ‘‘ELIGIBLE TELECOMMUNI3 CATIONS CARRIERS.—A common carrier’’ and 

4 all that follows through ‘‘paragraph (2), (3), or 

5 (6)’’ and inserting the following: ‘‘ELIGIBLE

6 COMMUNICATIONS SERVICE PROVIDER.—A com7 munications service provider designated as an 

8 eligible communications service provider under 

9 paragraph (2), (3), (6), or (8)’’; 

10 (B) by striking ‘‘throughout the service 

11 area for which’’ and inserting ‘‘throughout the 

12 portions of a service area that the Commission 

13 has not determined are competitive, where the 

14 eligible communications service provider accepts 

15 support, and for which’’; 

16 (C) in subparagraph (A), 

17 (i) by striking ‘‘services that are’’ and 

18 inserting ‘‘services, except for high-speed 

19 broadband service, that are’’; and 

20 (ii) by striking ‘‘; and’’ and inserting 

21 the following: ‘‘and adhere to the State 

22 carrier-of-last-resort requirements that are 

23 imposed on incumbent local exchange car24 riers serving such service area;’’; 


rfrederick on DSKD9S0YB1PROD with BILLS
30 

•HR 5828 IH

1 (D) in subparagraph (B), by striking the 

2 period at the end and inserting the following: 

3 ‘‘throughout the service area and advertise the 

4 availability of life-line and link-up services in a 

5 manner reasonably designed to reach those like6 ly to qualify for those services;’’; and 

7 (E) by adding at the end the following: 

8 ‘‘(C) demonstrate the ability to remain 

9 functional in emergency situations; 

10 ‘‘(D) comply with applicable State and 

11 Federal consumer protection and service quality 

12 standards; and 

13 ‘‘(E) notwithstanding subparagraph (A), in 

14 an area where an eligible communications serv15 ice provider elects to receive high-cost support 

16 and high-speed broadband service is not other17 wise available, meet the basic requirements for 

18 the deployment of high-speed broadband service 

19 and provide high-speed broadband service either 

20 itself or through resale of another provider’s 

21 services, including, for purposes of this sub22 paragraph only, the resale of satellite 

23 broadband service, except that the Commission 

24 shall establish a process in which— 


rfrederick on DSKD9S0YB1PROD with BILLS
31 

•HR 5828 IH

1 ‘‘(i) a determination can be made to 

2 waive the requirements of this subpara3 graph for 3 years upon a communications 

4 service provider’s application covering all 

5 or part of such communications service 

6 provider’s service area demonstrating that 

7 the deployment and provision of high-speed 

8 broadband service is not technically fea9 sible or would materially impair the com10 munications service provider’s ability to 

11 continue to provide local exchange service 

12 throughout its service area, except that a 

13 waiver shall be deemed automatically 

14 granted under this clause for a commu15 nications service provider demonstrating 

16 that the cost per line of deploying and pro17 viding high-speed broadband service to 

18 unserved high cost portions of its service 

19 area is at least 3 times the national aver20 age cost per line of providing high-speed 

21 broadband service or demonstrating that 

22 there is insufficient satellite capacity to 

23 meet the requirements to provide high24 speed broadband service, subject to the re25 newal provisions set forth in clause (ii); 


rfrederick on DSKD9S0YB1PROD with BILLS
32 

•HR 5828 IH

1 ‘‘(ii) the communications service pro2 vider may seek renewal of such waiver 

3 every 3 years for as long as the deploy4 ment and provision of high-speed 

5 broadband service is not technically fea6 sible or would materially impair the com7 munications service provider’s ability to 

8 continue to provide local exchange service 

9 throughout its service area or the cost per 

10 line of deploying and providing high-speed 

11 broadband service to unserved high cost 

12 portions of its service area remains at least 

13 3 times the national average cost per line 

14 of providing high-speed broadband service 

15 or there continues to be insufficient sat16 ellite capacity to meet the requirements to 

17 provide high-speed broadband service; and 

18 ‘‘(iii) any application of a communica19 tions service provider for a waiver pursu20 ant to clause (i) on which the Commission 

21 has not taken final action within 60 days 

22 after the date of submission to the Com23 mission shall be deemed granted.’’; 

24 (2) by amending paragraphs (2) through (4) to 

25 read as follows: 


rfrederick on DSKD9S0YB1PROD with BILLS
33 

•HR 5828 IH

1 ‘‘(2) ELIGIBILITY CRITERIA.— 

2 ‘‘(A) IN GENERAL.—In addition to the cri3 teria specified in paragraph (1), the Commis4 sion shall establish such additional eligibility 

5 criteria for the receipt of universal service sup6 port by eligible communications service pro7 viders as it deems necessary and in the public 

8 interest. The criteria established in paragraph 

9 (1) and the criteria established by the Commis10 sion pursuant to this paragraph shall be used 

11 by State commissions in determining which pro12 viders shall be designated as eligible recipients 

13 of universal service support for the purpose of 

14 paragraph (3). 

15 ‘‘(B) ADDITIONAL DESIGNATION.—The 

16 Commission may establish a life-line service 

17 provider designation that is not subject to the 

18 eligibility requirements in paragraph (1) or the 

19 eligibility criteria established in subparagraph 

20 (A). 

21 ‘‘(3) DESIGNATION OF ELIGIBLE RECIPIENTS.— 

22 A State commission shall, upon its own motion or 

23 upon request, designate as an eligible recipient of 

24 universal service support only those providers meet25 ing the requirements of paragraphs (1) and (2). 


rfrederick on DSKD9S0YB1PROD with BILLS
34 

•HR 5828 IH

1 ‘‘(4) GRANDFATHER PROVISION.— 

2 ‘‘(A) ELIGIBILITY REQUIREMENTS.—A 

3 communications service provider who was a re4 cipient of high-cost support in any service area 

5 prior to the date of enactment of the Universal 

6 Service Reform Act of 2010 shall, for those 

7 areas where high-cost support provided by sec8 tion 254(e)(3) is available and the communica9 tions service provider elects to receive such sup10 port, meet the eligibility requirements for an el11 igible communications service provider— 

12 ‘‘(i) as described in paragraphs (1)(A) 

13 through (D), within 1 year after the date 

14 of enactment of the Universal Service Re15 form Act of 2010; and 

16 ‘‘(ii) as described in paragraph 

17 (1)(E), within 5 years after such date of 

18 enactment. 

19 ‘‘(B) FAILURE TO MEET REQUIRE20 MENTS.—Failure of such recipient to maintain 

21 and meet the eligibility requirements within the 

22 period required by subparagraph (A) shall re23 quire the automatic termination of specific Fed24 eral universal service support to such recipient, 

25 and such recipient shall simultaneously be reVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
35 

•HR 5828 IH

1 lieved of its obligation under this section, except 

2 as described in subparagraph (E). 

3 ‘‘(C) PARTIAL COMPLIANCE.— 

4 ‘‘(i) IN GENERAL.—Such recipient is 

5 permitted to maintain and meet the eligi6 bility requirements in part of its service 

7 territory and is eligible to continue to re8 ceive specific Federal universal service sup9 port in those service areas within its serv10 ice territory in which it meets the eligibility 

11 requirements. 

12 ‘‘(ii) DEFINITION.—For the purposes 

13 of clause (i), the term ‘service territory’ 

14 means all of the service areas in which the 

15 communications service provider is offer16 ing, or is designated by the Commission or 

17 by a State commission to offer, services 

18 that are supported by Federal universal 

19 service support mechanisms. 

20 ‘‘(D) RULE OF CONSTRUCTION.—Nothing 

21 in this paragraph shall be construed to prohibit 

22 such recipient from obtaining a waiver under 

23 paragraph (1)(E). 

24 ‘‘(E) LIFE-LINE AND LINK-UP EXCEP25 TION.—A recipient of universal service support 


rfrederick on DSKD9S0YB1PROD with BILLS
36 

•HR 5828 IH

1 in any service area prior to the date of enact2 ment of the Universal Service Reform Act of 

3 2010 that relinquishes its eligible telecommuni4 cations carrier or eligible communications serv5 ice provider designation shall continue to offer 

6 and receive support for providing life-line and 

7 link-up service to its subscribers throughout its 

8 service area unless another provider is des9 ignated as an eligible communications service 

10 provider or a life-line service provider in all or 

11 part of that service area.’’; 

12 (3) in paragraph (6)— 

13 (A) in the heading, by striking ‘‘COMMON

14 CARRIERS’’ and inserting ‘‘COMMUNICATIONS

15 SERVICE PROVIDERS’’; 

16 (B) by striking ‘‘common carrier’’ each 

17 place it appears and inserting ‘‘communications 

18 service provider’’; 

19 (C) by striking ‘‘eligible telecommuni20 cations carrier’’ each place it appears and in21 serting ‘‘eligible communications service pro22 vider’’; and 

23 (D) by striking ‘‘carrier’’ and inserting 

24 ‘‘provider’’; and 

25 (4) by adding at the end the following: 


rfrederick on DSKD9S0YB1PROD with BILLS
37 

•HR 5828 IH

1 ‘‘(7) AMOUNT OF SPECIFIC FEDERAL UNI2 VERSAL SERVICE SUPPORT AVAILABLE TO MOBILE

3 WIRELESS COMMUNICATIONS SERVICE PROVIDERS.— 

4 ‘‘(A) IN GENERAL.—The Commission shall 

5 establish the amount of high-cost support to be 

6 distributed to all mobile wireless communica7 tions service providers designated as eligible 

8 communications service providers under this 

9 subsection through a competitive bidding proc10 ess established by the Commission. 

11 ‘‘(B) LIMITATION.—The amount of such 

12 high-cost support available to be distributed an13 nually to mobile wireless communications serv14 ice providers shall not exceed the amount of 

15 high-cost support received by all mobile wireless 

16 communications service providers for rural, in17 sular, or high cost areas in the last full cal18 endar year immediately preceding the date of 

19 enactment of the Universal Service Reform Act 

20 of 2010. 

21 ‘‘(8) COMPETITIVE BIDDING.—Within 1 year 

22 after the date of enactment of the Universal Service 

23 Reform Act of 2010, the Commission shall adopt a 

24 competitive bidding process for mobile wireless com25 munications service providers to provide service to 


rfrederick on DSKD9S0YB1PROD with BILLS
38 

•HR 5828 IH

1 rural, insular, or high cost areas that incorporates 

2 the following: 

3 ‘‘(A) To participate in the competitive bid4 ding process, a mobile wireless communications 

5 service provider shall— 

6 ‘‘(i) be designated as an eligible com7 munications service provider under this 

8 subsection or commit to immediately seek9 ing such designation under this subsection 

10 if the Commission selects its bid; and 

11 ‘‘(ii) establish that it is legally, tech12 nically, financially, and otherwise qualified 

13 to serve a rural, insular, or high cost area. 

14 ‘‘(B) The Commission shall determine 

15 whether a mobile wireless communications serv16 ice provider is legally, technically, financially, 

17 and otherwise qualified to serve a rural, insular, 

18 or high cost area in approximately the same 

19 manner as the Commission uses to qualify par20 ticipants for the Commission’s wireless spec21 trum auctions. 

22 ‘‘(C) The Commission shall seek competi23 tive bids to provide mobile wireless communica24 tions service in rural, insular, or high cost areas 

25 where there are at least 3 mobile wireless comVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
39 

•HR 5828 IH

1 munications service providers qualified to bid. 

2 In rural, insular, or high cost areas where there 

3 are not at least 3 mobile wireless communica4 tions service providers qualified to bid, the 

5 Commission shall continue to provide support 

6 at the per-line level in effect as of the day be7 fore the date of enactment of the Universal 

8 Service Reform Act of 2010, subject to adjust9 ment over time pursuant to the interim cap on 

10 support to competitive eligible telecommuni11 cations carriers adopted by the Commission 

12 prior to such date of enactment. 

13 ‘‘(D) Prior to soliciting competitive bids, 

14 the Commission shall issue a request for pro15 posals identifying the area a winning bidder 

16 must serve and the minimum requirements for 

17 serving such area. In determining the appro18 priate service area for competitive bidding, the 

19 Commission shall take into account existing 

20 service areas for providing mobile wireless com21 munications service, including the areas where 

22 mobile wireless communications service pro23 viders are licensed to provide service. 

24 ‘‘(E) No more than 2 mobile wireless com25 munications service providers shall be selected 


rfrederick on DSKD9S0YB1PROD with BILLS
40 

•HR 5828 IH

1 by the Commission to receive high-cost support 

2 in each service area based on the Commission’s 

3 evaluation of the competitive bids received for 

4 each service area. In evaluating competitive bids 

5 received for each service area, the amount of 

6 the bid and the minimum broadband speeds 

7 proposed by each mobile wireless communica8 tions service provider shall be primary factors 

9 in selecting a winning bid, but the Commission 

10 may take into account other factors, including 

11 timing of service buildout. 

12 ‘‘(F) When awarding bids to mobile wire13 less communications service providers, the Com14 mission shall prioritize funding as follows: 

15 ‘‘(i) First, to service areas where no 

16 mobile wireless communications service 

17 provider offers voice service. 

18 ‘‘(ii) Second, to service areas where no 

19 mobile wireless communications service 

20 provider offers high-speed broadband serv21 ice. 

22 ‘‘(iii) Third, to all other service areas. 

23 ‘‘(G) If the Commission selects a bid from 

24 a mobile wireless communications service pro25 vider that has not been designated as an eligible 


rfrederick on DSKD9S0YB1PROD with BILLS
41 

•HR 5828 IH

1 communications service provider in that service 

2 area, the mobile wireless communications serv3 ice provider shall apply for such designation 

4 within 1 month after the date the Commission 

5 selects its bid. The Commission or applicable 

6 State commission shall act on such application 

7 within 6 months after the date of its receipt. 

8 ‘‘(H) Each mobile wireless communications 

9 service provider selected as a Federal universal 

10 service provider for a service area shall receive 

11 high-cost support based on each mobile wireless 

12 communications service provider’s respective bid 

13 for a multi-year period, up to 10 years, as de14 termined by the Commission to be appropriate, 

15 after which time the area shall be rebid. 

16 ‘‘(I) If high-cost support is made available 

17 to a second mobile wireless communications 

18 service provider in an area that is subject to 

19 competitive bidding, the amount of such sup20 port shall be based on that mobile wireless com21 munications service provider’s bid and shall be 

22 no more than the amount of high-cost support 

23 awarded by the Commission to the first mobile 

24 wireless communications service provider in 

25 such area. 


rfrederick on DSKD9S0YB1PROD with BILLS
42 

•HR 5828 IH

1 ‘‘(J) Each mobile wireless communications 

2 service provider that is selected to serve each 

3 service area shall execute a service contract 

4 with the Commission. 

5 ‘‘(K) The Commission shall provide for a 

6 transition to competitive bidding from the cur7 rent system of high-cost support for wireless 

8 providers that shall last no longer than 3 years 

9 after the date of enactment of the Universal 

10 Service Reform Act of 2010. As of the date the 

11 Commission implements competitive bidding, 

12 provider-specific Federal universal service ad13 justments to wireless support imposed by the 

14 Commission in effect as of the date of enact15 ment of the Universal Service Reform Act of 

16 2010 shall also be superseded.’’. 

17 (b) DEFINITIONS.—Paragraph (5) of section 214(e) 

18 is amended to read as follows: 

19 ‘‘(5) SERVICE AREA DEFINED.—As used in this 

20 subsection, the term ‘service area’ means a targeted 

21 geographic area determined by the Commission as 

22 requiring universal service support and used by the 

23 Commission for the purpose of determining universal 

24 service obligations and support mechanisms for eligi25 ble communications service providers except that an 


rfrederick on DSKD9S0YB1PROD with BILLS
43 

•HR 5828 IH

1 eligible communications service provider’s service 

2 area shall not include geographic areas that the pro3 vider is not authorized to serve. In the case of an 

4 area served by a rural local exchange carrier, such 

5 term means such carrier’s ‘study area’ or the li6 censed or authorized service area of any other com7 munications service provider serving an area that 

8 overlaps with the service area of a rural local ex9 change carrier.’’. 

10 (c) PAYPHONE SERVICE.—Nothing in this Act or in 

11 the amendments made by this Act shall limit the authority 

12 of the Joint Board established under section 254 of the 

13 Communications Act of 1934 (47 U.S.C. 254) to rec14 ommend or of the Federal Communications Commission 

15 to define payphone service as a service supported by Fed16 eral universal service support mechanisms under such sec17 tion as such authority existed on the day before the date 

18 of enactment of this Act. 

19 SEC. 105. REMOVAL OF IMPEDIMENTS TO SUFFICIENT SUP20 PORT MECHANISMS. 

21 Section 254 of the Communications Act of 1934 (47 

22 U.S.C. 254) is further amended by adding at the end the 

23 following new subsection: 

24 ‘‘(m) REMOVAL OF LIMITATIONS ON UNIVERSAL

25 SUPPORT MECHANISMS.—The limitations on universal 


rfrederick on DSKD9S0YB1PROD with BILLS
44 

•HR 5828 IH

1 service support contained in section 54.305 of the Com2 mission’s regulations (47 CFR 54.305) and the individual 

3 caps imposed upon carriers contained in section 36.631 

4 of the Commission’s regulations (47 CFR 36.631) shall 

5 cease to be effective on the date of enactment of the Uni6 versal Service Reform Act of 2010.’’. 

7 SEC. 106. SCOPE OF SUPPORT. 

8 Section 254 of the Communications Act of 1934 (47 

9 U.S.C. 254) is further amended by adding after subsection 

10 (m), as added by section 105 of this Act, the following 

11 new subsection: 

12 ‘‘(n) SCOPE OF SUPPORT.—The Commission, in im13 plementing the requirements of this section (as amended 

14 by the Universal Service Reform Act of 2010 with respect 

15 to the distribution and use of high-cost support), shall not 

16 limit the distribution and use of high-cost support to a 

17 single connection or primary line, and all residential and 

18 business lines served by an eligible communications service 

19 provider shall be eligible for high-cost support.’’. 

20 SEC. 107. APPLICATION OF ANTIDEFICIENCY ACT; INVEST21 MENT OF CONTRIBUTIONS. 

22 Section 254 of the Communications Act of 1934 (47 

23 U.S.C. 254) is further amended by adding after subsection 

24 (n), as added by section 106 of this Act, the following new 

25 subsections: 


rfrederick on DSKD9S0YB1PROD with BILLS
45 

•HR 5828 IH

1 ‘‘(o) PROPER ACCOUNTING OF UNIVERSAL SERVICE

2 CONTRIBUTIONS.— 

3 ‘‘(1) FROM ALL BUDGETS.—Notwithstanding 

4 any other provision of law, the receipts and disburse5 ments of universal service contributions under this 

6 section shall not be counted as new budget author7 ity, outlays, receipts, deficit, or surplus for purposes 

8 of— 

9 ‘‘(A) the budget of the United States Gov10 ernment as submitted by the President; 

11 ‘‘(B) the Congressional budget; 

12 ‘‘(C) the Balanced Budget and Emergency 

13 Deficit Control Act of 1985; or 

14 ‘‘(D) any other law requiring budget se15 questers. 

16 ‘‘(2) ADDITIONAL EXEMPTIONS.—Section 1341, 

17 subchapter II of chapter 15, and sections 3302, 

18 3321, 3322, and 3325 of title 31, United States 

19 Code, shall not apply to— 

20 ‘‘(A) the collection and receipt of universal 

21 service contributions, including the interest 

22 earned on such contributions; or 

23 ‘‘(B) disbursements or other obligations 

24 authorized by the Commission under this sec25 tion. 


rfrederick on DSKD9S0YB1PROD with BILLS
46 

•HR 5828 IH

1 ‘‘(p) INVESTMENT OF UNIVERSAL SERVICE SUPPORT

2 CONTRIBUTIONS.—Notwithstanding any other provision 

3 of law, including sections 3302, 3321, 3322, and 3325 of 

4 title 31, United States Code, the cash balance of receipts 

5 of universal service support contributions collected pursu6 ant to this section shall be invested by the Commission 

7 or its designee in conservative, liquid, interest-bearing in8 vestment vehicles of Government backed securities until 

9 such time as such receipts are disbursed pursuant to this 

10 section.’’. 

11 SEC. 108. STATE AUTHORITY. 

12 Section 254(f) of the Communications Act of 1934 

13 (47 U.S.C. 254(f)) is amended to read as follows: 

14 ‘‘(f) STATE AUTHORITY.— 

15 ‘‘(1) IN GENERAL.—A State may adopt regula16 tions not inconsistent with the Commission’s rules to 

17 preserve and advance universal service. In adopting 

18 those rules, a State may require communications 

19 service providers to contribute to universal service on 

20 the basis of a billing address or service address as21 signed to that State for— 

22 ‘‘(A) revenues derived from the provision 

23 of intrastate telecommunications services by 

24 communications service providers; 


rfrederick on DSKD9S0YB1PROD with BILLS
47 

•HR 5828 IH

1 ‘‘(B) working telephone numbers used by 

2 communications service providers; or 

3 ‘‘(C) any other current or successor identi4 fier protocols or connections to the network 

5 used by communications service providers. 

6 ‘‘(2) DISREGARD OF INTERSTATE COMPO7 NENT.—With respect to a combination of services 

8 that includes interstate services, the Commission 

9 shall determine how States may calculate the pro10 portion of intrastate services for which they are per11 mitted to make an assessment. 

12 ‘‘(3) GUIDELINES.—Regulations adopted by a 

13 State under this subsection shall result in a specific, 

14 predictable, and sufficient mechanism to support 

15 universal service and shall be competitively and tech16 nologically neutral, equitable, and nondiscrim17 inatory.’’. 

18 SEC. 109. MINIMUM DATA RATE REQUIREMENTS. 

19 Section 254 of the Communications Act of 1934 (47 

20 U.S.C. 254) is further amended by adding after subsection 

21 (p), as added by section 107 of this Act, the following new 

22 subsection: 

23 ‘‘(q) MINIMUM DATA RATE REQUIREMENTS.— 

24 ‘‘(1) IN GENERAL.—Within 90 days after the 

25 date of enactment of the Universal Service Reform 


rfrederick on DSKD9S0YB1PROD with BILLS
48 

•HR 5828 IH

1 Act of 2010, the Commission shall adopt a minimum 

2 data rate requirement for high-speed broadband 

3 service. 

4 ‘‘(2) COMMISSION SPEED ADJUSTMENT RE5 QUIREMENTS.—Beginning in the sixth year after the 

6 date of enactment of the Universal Service Reform 

7 Act of 2010 and periodically thereafter, the Commis8 sion shall review the minimum data rate requirement 

9 in paragraph (1) and shall make adjustments, if nec10 essary, as the advancement and deployment of tech11 nology allows eligible communications service pro12 viders to provide broadband service at increased 

13 minimum data rates to end users in an economically 

14 rational manner.’’. 

15 TITLE II—ACCOUNTABILITY 

16 SEC. 201. PERFORMANCE MEASURES. 

17 Within 1 year after the date of enactment of this Act, 

18 the Federal Communications Commission shall establish 

19 and implement outcome-oriented performance goals and 

20 measures for each universal service support program. 

21 SEC. 202. AUDITS. 

22 The Federal Communications Commission shall, 

23 within 270 days after the date of enactment of this Act, 

24 establish rules to— 


rfrederick on DSKD9S0YB1PROD with BILLS
49 

•HR 5828 IH

1 (1) determine the appropriate audit method2 ology for audits of recipients of Federal universal 

3 service support; 

4 (2) ensure that universal service support audi5 tors are trained in universal service support program 

6 compliance and audit only in connection with such 

7 compliance; 

8 (3) provide that auditors may not penalize re9 cipients of universal service support by requesting 

10 and auditing for program compliance records, in11 cluding copies of invoices for equipment purchased 

12 or maintained with program disbursements, that are 

13 older than records that recipients of universal service 

14 support are required to retain pursuant to the Fed15 eral Communications Commission’s rules; and 

16 (4) provide that any appeal of a finding by the 

17 Universal Service Administrative Company or any 

18 successor organization in connection with a program 

19 audit is resolved by the Federal Communications 

20 Commission within 180 days after the date of filing 

21 of such appeal. 

22 SEC. 203. REPORT TO CONGRESS. 

23 The Federal Communications Commission shall, not 

24 later than 3 years after the date of enactment of this Act 

25 and triennially thereafter, report to Congress regarding 


rfrederick on DSKD9S0YB1PROD with BILLS
50 

•HR 5828 IH

1 the availability of the services designated by the Commis2 sion as universal services, including the availability of such 

3 services to schools, libraries, rural health care providers, 

4 and low income consumers. Such report shall include the 

5 outcome-oriented performance goals and measures for 

6 each universal service support program, an analysis of the 

7 implementation of such goals and measures, and an anal8 ysis of the progress towards meeting such goals and meas9 ures. 

10 TITLE III—INTERCARRIER 

11 COMPENSATION REFORM 

12 SEC. 301. INTERCARRIER COMPENSATION REFORM. 

13 (a) AUTHORITY.— 

14 (1) IN GENERAL.—Notwithstanding any other 

15 provision of law, the Federal Communications Com16 mission shall have authority to reform intercarrier 

17 compensation systems for both interstate and intra18 state traffic. 

19 (2) DEADLINE.—The Federal Communications 

20 Commission shall complete an initial intercarrier 

21 compensation reform proceeding within 1 year after 

22 the date of enactment of this Act. 

23 (3) PRIVATE ARRANGEMENTS.—Entities that 

24 are required to participate in intercarrier compensa25 tion shall be permitted to enter into arrangements 


rfrederick on DSKD9S0YB1PROD with BILLS
51 

•HR 5828 IH

1 by mutual agreement for the exchange of traffic 

2 without regard to the rules established by the Fed3 eral Communications Commission pursuant to this 

4 subsection. 

5 (b) INTERCARRIER COMPENSATION RECOVERY

6 MECHANISM.—If, at any time after the date of enactment 

7 of this Act, the Federal Communications Commission 

8 mandates that intercarrier compensation revenues be re9 covered through an alternate revenue recovery mechanism, 

10 the Federal Communications Commission may establish 

11 such mechanism to be included as high-cost support. 

12 SEC. 302. NETWORK TRAFFIC IDENTIFICATION ACCOUNT13 ABILITY STANDARDS. 

14 Part II of title II of the Communications Act of 1934 

15 is amended by adding at the end the following: 

16 ‘‘SEC. 262. NETWORK TRAFFIC IDENTIFICATION ACCOUNT17 ABILITY STANDARDS. 

18 ‘‘(a) NETWORK TRAFFIC IDENTIFICATION STAND19 ARDS.—A communications service provider shall ensure, 

20 to the degree technically possible and in accordance with 

21 industry standards, that all traffic that originates on its 

22 network contains or, in the case of non-originated traffic, 

23 preserves sufficient information in call signaling to allow 

24 for traffic identification by other communications service 

25 providers that transport or terminate such traffic, includVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
52 

•HR 5828 IH

1 ing the telephone number of the calling and called parties 

2 and such other information as the Commission deems ap3 propriate. Except as otherwise permitted by the Commis4 sion, to the degree technically possible, a communications 

5 service provider that transports traffic between commu6 nications service providers shall transmit without altering 

7 the call signaling information it receives from another 

8 communications service provider. 

9 ‘‘(b) NETWORK TRAFFIC IDENTIFICATION RULE10 MAKING.—The Commission shall establish rules for traffic 

11 identification consistent with this section within 180 days 

12 after the date of enactment of the Universal Service Re13 form Act of 2010. 

14 ‘‘(c) NETWORK TRAFFIC IDENTIFICATION ENFORCE15 MENT.—The Commission shall adopt and enforce pen16 alties, fines, and sanctions under this section.’’. 

17 SEC. 303. TRAFFIC PUMPING. 

18 (a) TRAFFIC STIMULATION CHARGE.—The term 

19 ‘‘traffic stimulation charge’’ means any switched access or 

20 reciprocal compensation charge assessed by a local ex21 change carrier upon a connecting carrier for delivery of 

22 telecommunications during which a free or below cost serv23 ice or product is provided by an entity with which the local 

24 exchange carrier has a business, financial, or contractual 

25 arrangement relating directly or indirectly to switched acVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
53 

•HR 5828 IH

1 cess or reciprocal compensation revenues from the offering 

2 of such service or product. 

3 (b) PROHIBITION.—The assessment of a traffic stim4 ulation charge constitutes an unreasonable practice under 

5 section 201(b) of the Communications Act of 1934 (47 

6 U.S.C. 201(b)), and local exchange carriers are prohibited 

7 from assessing traffic stimulation charges. 

8 (c) NO PRESUMPTION OF VALIDITY.—Nothing in 

9 this Act shall be construed as indicating that traffic stimu10 lation charges assessed prior to the effective date of this 

11 Act were just, reasonable, or in accordance with the Com12 munications Act of 1934 or any other statute, regulation, 

13 tariff, or policy. 

14 TITLE IV—RURAL HEALTH CARE 

15 SUPPORT MECHANISMS 

16 SEC. 401. RURAL HEALTH CARE SUPPORT MECHANISMS. 

17 (a) AMENDMENT.—Subparagraph (A) of section 

18 254(h)(1) of the Communications Act of 1934 (47 U.S.C. 

19 254(h)(1)(A)) is amended to read as follows: 

20 ‘‘(A) HEALTH CARE SERVICES FOR RURAL

21 AREAS.—Within 180 days after the date of en22 actment of the Universal Service Reform Act of 

23 2010, the Commission shall prescribe regula24 tions that provide that a communications serv25 ice provider shall, upon receiving a bona fide reVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
54 

•HR 5828 IH

1 quest, provide covered services which are nec2 essary for the provision of health care services 

3 in a State, including instruction relating to 

4 such services, to any public or not-for-profit 

5 health care provider that serves persons who re6 side in rural areas in that State at rates that 

7 are reasonably comparable to rates charged for 

8 similar services in urban areas in that State. A 

9 communications service provider providing serv10 ice under this subparagraph shall be entitled to 

11 have an amount equal to the difference, if any, 

12 between the rates for services provided to health 

13 care providers for rural areas in a State and 

14 the rates for similar services in urban areas in 

15 that State treated as a service obligation as a 

16 part of its obligation to participate in the mech17 anisms to preserve and advance universal serv18 ice.’’. 

19 (b) DEFINITION OF HEALTH CARE PROVIDER.— 

20 Subparagraph (B) of section 254(h)(7) of such Act (47 

21 U.S.C. 254(h)(7)(B)) is amended to read as follows: 

22 ‘‘(B) HEALTH CARE PROVIDER.—The term 

23 ‘health care provider’ means— 


rfrederick on DSKD9S0YB1PROD with BILLS
55 

•HR 5828 IH

1 ‘‘(i) post-secondary educational insti2 tutions offering health care instruction, 

3 teaching hospitals, and medical schools; 

4 ‘‘(ii) community health centers or 

5 health centers providing health care to mi6 grants; 

7 ‘‘(iii) local health departments or 

8 agencies; 

9 ‘‘(iv) community mental health cen10 ters; 

11 ‘‘(v) not-for-profit hospitals; 

12 ‘‘(vi) critical access hospitals; 

13 ‘‘(vii) rural hospitals with emergency 

14 rooms; 

15 ‘‘(viii) rural health clinics; 

16 ‘‘(ix) not-for-profit nursing facilities 

17 or not-for-profit skilled nursing facilities; 

18 ‘‘(x) hospice providers; 

19 ‘‘(xi) emergency medical services fa20 cilities; 

21 ‘‘(xii) rural dialysis facilities; 

22 ‘‘(xiii) elementary, secondary, and 

23 post-secondary school health clinics; and 


rfrederick on DSKD9S0YB1PROD with BILLS
56 

•HR 5828 IH

1 ‘‘(xiv) consortia of health care pro2 viders consisting of one or more entities 

3 described in clauses (i) through (xiii).’’. 

4 (c) DEFINITION OF RURAL FOR HEALTH CARE SUP5 PORT.—Section 254(h)(7) of such Act (47 U.S.C. 

6 254(h)(7)) is further amended by adding at the end the 

7 following new subparagraph: 

8 ‘‘(J) RURAL AREA.—Within 180 days after 

9 the date of enactment of the Universal Service 

10 Reform Act of 2010, the Commission shall pre11 scribe regulations that provide that, for pur12 poses of the rural health care universal service 

13 support mechanisms established pursuant to 

14 this subsection, a ‘rural area’ is— 

15 ‘‘(i) any incorporated or unincor16 porated place in the United States, its ter17 ritories and insular possessions (including 

18 any area within the Federated States of 

19 Micronesia, the Republic of the Marshall 

20 Islands and the Republic of Palau) that 

21 has no more than 20,000 inhabitants 

22 based on the most recent available popu23 lation statistics from the Census Bureau; 

24 ‘‘(ii) any area located outside of the 

25 boundaries of any incorporated or unincorVerDate Mar 15 2010 01:05 Jul 26, 2010 Jkt 089200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

rfrederick on DSKD9S0YB1PROD with BILLS
57 

•HR 5828 IH

1 porated city, village, or borough having a 

2 population exceeding 20,000; 

3 ‘‘(iii) any area with a population den4 sity of fewer than 250 persons per square 

5 mile; or 

6 ‘‘(iv) any place that qualified as a 

7 ‘rural area’ and received support from the 

8 rural health care support mechanism pur9 suant to the Commission’s rules in effect 

10 prior to December 1, 2004, and that con11 tinues to qualify as a ‘rural area’ pursuant 

12 to such rules.’’. 

13 (d) SCHOOLS, LIBRARIES, RURAL HEALTH CARE, 

14 LIFE-LINE, LINK-UP, AND TOLL LIMITATION HOLD

15 HARMLESS.—Except as provided in subsections (h)(1)(A), 

16 (h)(7)(B), and (h)(7)(J) of section 254 of the Communica17 tions Act of 1934 (47 U.S.C. 254), as amended by this 

18 section— 

19 (1) nothing in this Act (and the amendments 

20 made by this Act) shall be construed as limiting, 

21 changing, modifying, or altering the amount or 

22 means of distribution of or, with respect to schools 

23 and libraries, eligibility to receive universal service 

24 support for the schools, libraries, rural health care, 

25 life-line, link-up, and toll limitation programs; and 


rfrederick on DSKD9S0YB1PROD with BILLS
58 

•HR 5828 IH

1 (2) the Federal Communications Commission 

2 shall ensure that such amendments do not result in 

3 a decrease of such support to a level below the level 

4 for the fiscal year preceding the fiscal year in which 

5 this Act is enacted. 

Æ 


rfrederick on DSKD9S0YB1PROD with BILLS