I

107TH CONGRESS

1ST SESSION H. R. 1697

To amend the Clayton Act to ensure the application of the antitrust laws

to local telephone monopolies; and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 3, 2001

Mr. CONYERS (for himself, Mr. CANNON, Mr. NADLER, and Mr. ISSA) introduced the following bill; which was referred to the Committee on the Judiciary, and in addition to the Committee on Energy and Commerce, for

a period to be subsequently determined by the Speaker, in each case for

consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Clayton Act to ensure the application of the

antitrust laws to local telephone monopolies; 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 ‘‘Broadband Competi5 tion and Incentives Act of 2001’’.
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1 TITLE I—PROTECTION OF

2 BROADBAND SERVICES FROM

3 CONTINUING MONOPOLIZA4 TION

5 SEC. 101. AMENDMENT TO THE CLAYTON ACT TO INCLUDE

6 MARKET POWER ENTRY TEST.

7 The Clayton Act (15 U.S.C. 15 et seq.) is amended

8 by adding at the end the following:

9 ‘‘SEC. 28. BROADBAND TELECOMMUNICATIONS SERVICES.

10 ‘‘(a) DETERMINATION BY ATTORNEY GENERAL.—A

11 Bell operating company or an affiliate of a Bell operating

12 company may not provide interLATA services in any of

13 its in-region States under the authority of any amend14 ments to section 271 of the Communications Act of 1934

15 (47 U.S.C. 271) enacted after April 24, 2001, unless the

16 Attorney General of the United States determines that

17 such company or such affiliate does not have market

18 power in the provision of wireline telephone exchange serv19 ice in the State involved.

20 ‘‘(b) MARKET POWER.—For purposes of this section,

21 a Bell operating company or an affiliate of a Bell oper22 ating company shall be deemed to have market power in

23 the provision of wireline telephone exchange service in the

24 State involved if such company or such affiliate provides

25 service to more than 85 percent of the business sub-
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1 scribers, or more than 85 percent of the residential sub2 scribers, in such State at the time such company or such

3 affiliate requests that the Attorney General make a deter4 mination under subsection (a).

5 ‘‘(c) DEFINITIONS.—For purposes of this section:

6 ‘‘(1) AFFILIATE.—The term ‘affiliate’ means a

7 person that (directly or indirectly) owns or controls,

8 is owned or controlled by, or is under common own9 ership or control with, another person. For purposes

10 of this paragraph, the term ‘own’ means to own an

11 equity interest (or equivalent thereof) of more than

12 10 percent.

13 ‘‘(2) BELL OPERATING COMPANY.—The term

14 ‘Bell operating company’ has the meaning given

15 such term in section 3 of the Communications Act

16 of 1934 (47 U.S.C. 153).’’.

17 TITLE II—BROADBAND DEPLOY18 MENT INCENTIVES FOR SERV19 ICES TO ELIGIBLE RURAL

20 COMMUNITIES AND UNDER21 SERVED AREAS

22 SEC. 201. ELIMINATION OF DISCRIMINATORY TAXES ON

23 BROADBAND SERVICE PROVIDERS.

24 (a) PROHIBITION.—No State or political subdivision

25 of a State may impose—
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1 (1) discriminatory taxes on broadband services;

2 or

3 (2) a tax or fee imposed on telecommunications

4 carriers or affiliates thereof, other than incumbent

5 local exchange carriers and affiliates thereof, for the

6 use of public rights-of-way that is greater than the

7 tax or fee imposed on incumbent local exchange car8 riers or affiliates thereof for their use of public

9 rights-of-way.

10 (b) LIABILITIES AND PENDING CASES.—Subsection

11 (a) shall not affect liability for taxes or fees accrued and

12 enforced before the date of the enactment of this Act or

13 to ongoing litigation relating to such taxes or such fees.

14 SEC. 202. LOAN PROGRAM FOR ELIGIBLE RURAL COMMU15 NITIES AND FOR UNDERSERVED COMMU16 NITIES.

17 (a) AUTHORITY TO MAKE DIRECT LOANS AND LOAN

18 GUARANTEES.—The Attorney General of the United

19 States may make direct loans or loan guarantees to eligi20 ble broadband service providers in accordance with this

21 section to finance the deployment of broadband services

22 to eligible rural communities and to underserved areas.

23 (b) ELIGIBILITY REQUIREMENTS.—To be eligible to

24 receive a loan or loan guarantee under this section, a

25 broadband service provider shall submit to the Attorney
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1 General an application containing such information and

2 assurances as the Attorney General may require by rule,

3 including—

4 (1) information demonstrating that such pro5 vider is capable of delivering broadband service;

6 (2) a description of the proposed project to de7 ploy broadband service to an eligible rural commu8 nity or to an underserved area where broadband

9 service is not otherwise generally available through10 out such community or such area; and

11 (3) an assurance that such provider will meet

12 the standards for service and area wide coverage es13 tablished by the Attorney General.

14 (c) TERMS AND CONDITIONS.—Direct loans and loan

15 guarantees made under this section—

16 (1) shall be made available in accordance with

17 the requirements of the Federal Credit Reform Act

18 of 1990 (2 U.S.C. 661 et seq.);

19 (2) in the case of direct loans and loans guar20 anteed, shall bear interest at an annual rate of not

21 more than 2 percent per annum; and

22 (3) shall be made for the longer of—

23 (A) a term of 30 years; or

24 (B) the useful life of the assets con25 structed, reconstructed, or acquired with any
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1 part of the proceeds of such loan or of the loan

2 guaranteed.

3 (d) LIMITATIONS.—

4 (1) TECHNOLOGY NEUTRALITY.—In making di5 rect loans and loan guarantees under this section,

6 the Attorney General may not take into consider7 ation the technology proposed to be employed by the

8 applicants for such loans or such guarantees.

9 (2) SECURITY INTEREST.—The Attorney Gen10 eral may take a security interest in assets or revenue

11 streams, in connection with a direct loan or loan

12 guarantee made under this section, of not more than

13 the amount sufficient to cover the assets financed by

14 such loan or such guarantee.

15 (e) AUTHORIZATION OF APPROPRIATIONS.—There is

16 authorized to be appropriated to the Attorney General to

17 carry out this section $3,000,000,000 for fiscal years

18 2002, 2003, 2004, 2005, and 2006.

19 SEC. 203. DEFINITIONS.

20 (a) IN GENERAL.—In this title:

21 (1) AFFILIATE.—Term ‘‘affiliate’’ means a per22 son that (directly or indirectly) owns or controls, is

23 owned or controlled by, or is under common owner24 ship or control with, another person. For purposes

25 of this paragraph, the term ‘‘own’’ means to own an
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1 equity interest (or equivalent thereof) of more than

2 10 percent.

3 (2) ASSESSMENT.—The term ‘‘assessment’’

4 means valuation for a property tax levied by a taxing

5 State or political subdivision thereof.

6 (3) ASSESSMENT JURISDICTION.—The term

7 ‘‘assessment jurisdiction’’ means a geographical area

8 in a State used in determining the assessed value of

9 property for ad valorem taxation.

10 (4) BROADBAND SERVICE.—The term

11 ‘‘broadband service’’ includes, without regard to any

12 particular transmission medium or technology, high13 speed, switched, broadband telecommunications ca14 pable of delivering not less than 1.5 megabits of

15 data per second to the user and 128,000 bits of data

16 per second from the user that enables users to origi17 nate and receive high-quality voice, data, graphics,

18 and video telecommunications.

19 (5) COMMERCIAL BUSINESS.—The term ‘‘com20 mercial business’’ means a business, other than a

21 broadband service provider, devoted to a commercial

22 use.

23 (6) COMMERCIAL PROPERTY.—The term ‘‘com24 mercial property’’ means property, other than prop-
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1 erty owned by a broadband service provider, devoted

2 to a commercial use.

3 (7) DISCRIMINATORY TAX.—The term ‘‘dis4 criminatory tax’’ means any tax imposed by a State

5 or political subdivision of a State on a broadband

6 service provider that—

7 (A) uses an assessment of property owned

8 by broadband service providers at a value that

9 has a higher ratio to the true market value of

10 the broadband service provider’s property than

11 the ratio that the assessed value of other com12 mercial property in the same assessment juris13 diction has to the true market value of the

14 other commercial property value;

15 (B) uses an assessment of property owned

16 by broadband service providers at a value that

17 encompasses factors other than tangible assets,

18 such as intangible assets and a going concern

19 component, and bases the assessed value of

20 other commercial property on a local assess21 ment process of only tangible assets;

22 (C) is not generally imposed and legally

23 collectible by such State or such political sub24 division on commercial businesses; or
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1 (D) is imposed without 180 days advance

2 notification of the imposition of such tax.

3 (8) ELIGIBLE RURAL COMMUNITY.—The term

4 ‘‘eligible rural community’’ means any census tract

5 which—

6 (A) is not within 10 miles of any incor7 porated or unincorporated place containing

8 more than 25,000 people, and

9 (B) is not within a county or county equiv10 alent which has an overall population density of

11 more than 500 people per square mile of land.

12 (9) INCUMBENT LOCAL EXCHANGE CARRIER.—

13 The term ‘‘incumbent local exchange carrier’’ means,

14 with respect to an area, the local exchange carrier

15 that—

16 (A) on the date of enactment of this Act,

17 is providing telephone exchange service in such

18 area; and

19 (B)(i) is deemed to be a member of the ex20 change carrier association pursuant to section

21 69.601(b) of title 47 of the Code of Federal

22 Regulations, as in effect on such date; or

23 (ii) on or after such date, is a successor or

24 assign of a member described in clause (i).
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1 (10) TAX.—The term ‘‘tax’’ has the meaning

2 given such term in section 1104 of the Internet Tax

3 Freedom Act (47 U.S.C. 151 note).

4 (11) TELECOMMUNICATIONS CARRIER.—The

5 term ‘‘telecommunications carrier’’ has the meaning

6 given such term by section 3(44) of the Communica7 tions Act of 1934 (47 U.S.C. 153 (44)), but—

8 (A) includes all members of an affiliated

9 group of which a telecommunications carrier is

10 a member, and

11 (B) does not include a commercial mobile

12 service carrier.

13 (12) UNDERSERVED AREA.—The term ‘‘under14 served area’’ means any census tract which is lo15 cated in—

16 (A) an empowerment zone or enterprise

17 community designated under section 1391 of

18 the Internal Revenue Code of 1986;

19 (B) the District of Columbia Enterprise

20 Zone established under section 1400 of such

21 Code;

22 (C) a renewal community designated under

23 section 1400E of such Code; or

24 (D) a low-income community designated

25 under section 45D of such Code.
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1 (b) DESIGNATION OF CENSUS TRACTS.—The Sec2 retary of the Treasury shall, not later than 90 days after

3 the date of the enactment of this Act, designate and pub4 lish those census tracts meeting the criteria described in

5 paragraphs (8) and (12) of subsection (a).

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