II 

110TH CONGRESS 

1ST SESSION S. 101 

To update and reinvigorate universal service provided under the 

Communications Act of 1934. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 4, 2007 

Mr. STEVENS (for himself, Mr. LOTT, and Mrs. HUTCHISON) introduced the 

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

Commerce, Science, and Transportation 

A BILL 

To update and reinvigorate universal service provided under 

the Communications Act of 1934. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Universal Service for Americans Act’’ or ‘‘USA Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

TITLE I—CONTRIBUTIONS TO UNIVERSAL SERVICE 

Sec. 101. Stabilization of universal service funding. 

Sec. 102. Modification of rural video service exemption. 

Sec. 103. Interconnection. 


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Sec. 104. Treatment of substitute services under section 254(g). 

TITLE II—DISTRIBUTIONS FROM UNIVERSAL SERVICE 

Sec. 201. Encouraging broadband deployment. 

Sec. 202. Establishment of broadband program. 

Sec. 203. Competitive neutrality principle. 

Sec. 204. Transition rules for modifications adversely affecting carriers. 

Sec. 205. Eligibility guidelines. 

Sec. 206. Primary line. 

Sec. 207. Phantom traffic. 

Sec. 208. Random audits. 

Sec. 209. Integrity and accountability. 

Sec. 210. Improving effectiveness of rural health care support mechanism. 

Sec. 211. Communications services for libraries. 

Sec. 212. USF support for insular areas. 

1 TITLE I—CONTRIBUTIONS TO 

2 UNIVERSAL SERVICE 

3 SEC. 101. STABILIZATION OF UNIVERSAL SERVICE FUND4 ING. 

5 (a) ENSURING AN EQUITABLE CONTRIBUTION BASE

6 FOR UNIVERSAL SERVICE.— 

7 (1) IN GENERAL.—Section 254(d) of the Com8 munications Act of 1934 (47 U.S.C. 254(d)) is 

9 amended to read as follows: 

10 ‘‘(d) UNIVERSAL SERVICE SUPPORT CONTRIBU11 TIONS.— 

12 ‘‘(1) CONTRIBUTION MECHANISM.— 

13 ‘‘(A) IN GENERAL.—Each communications 

14 service provider shall contribute as provided in 

15 this subsection to support universal service. 

16 ‘‘(B) REQUIREMENTS.—The Commission 

17 shall ensure that the contributions required by 

18 this subsection are— 


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1 ‘‘(i) applied in a manner that is as 

2 competitively and technologically neutral as 

3 possible; 

4 ‘‘(ii) specific, predictable, and suffi5 cient to sustain the funding of networks 

6 used to preserve and advance universal 

7 service; and 

8 ‘‘(iii) applied in such a manner that 

9 no methodology results in a communica10 tions services provider being required to 

11 contribute more than once to support Fed12 eral universal service for the same trans13 action, activity, or service. 

14 ‘‘(C) ADJUSTMENTS.—The Commission 

15 shall adjust the contribution for communication 

16 service providers for their low-call volume, non17 business customers. 

18 ‘‘(2) EXEMPTIONS.—The Commission may ex19 empt a communications service provider or any class 

20 of communications service providers from the re21 quirements of this subsection in the following cir22 cumstances: 

23 ‘‘(A) The services of such a provider are 

24 limited to such an extent that the level of its 

25 contributions would be de minimis. 


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1 ‘‘(B) The communications service is pro2 vided pursuant to the Commission’s Lifeline As3 sistance Program. 

4 ‘‘(C) The communications service is pro5 vided only to in-vehicle emergency communica6 tions customers. 

7 ‘‘(D) The communications service is pro8 vided by a not-for-profit communications service 

9 provider that is neither an affiliate of a for10 profit organization nor has a for-profit affiliate 

11 and which provides voice mailboxes to low in12 come consumers and the homeless. 

13 ‘‘(3) CONTRIBUTION ASSESSMENT FLEXI14 BILITY.— 

15 ‘‘(A) METHODOLOGY.—To achieve the 

16 principles in this section, the Commission may 

17 base universal service contributions upon— 

18 ‘‘(i) revenue from communications 

19 service; 

20 ‘‘(ii) in-use working phone numbers or 

21 any other identifier protocol or connection 

22 to the networks; or 

23 ‘‘(iii) network capacity. 

24 ‘‘(B) USE OF MORE THAN 1 METHOD25 OLOGY.—If no single methodology employed 


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1 under subparagraph (A) achieves the principles 

2 described in this subsection, the Commission 

3 may employ a combination of any such meth4 odologies. 

5 ‘‘(C) REMOVAL OF INTERSTATE/INTRA6 STATE DISTINCTION.—Notwithstanding section 

7 2(b) of this Act, the Commission may assess 

8 the interstate, intrastate, and international por9 tions of communications service for the purpose 

10 of universal service contributions. 

11 ‘‘(D) GROUP PLAN DISCOUNT.—If the 

12 Commission utilizes a methodology under sub13 paragraph (A) based in whole or in part on in14 use working phone numbers, it may provide a 

15 discount for additional numbers provided under 

16 a group or family pricing plan for residential 

17 customers provided in 1 bill. 

18 ‘‘(4) NON-DISCRIMINATORY ELIGIBILITY RE19 QUIREMENT.—A communications service provider is 

20 not exempted from the requirements of this sub21 section solely on the basis that such provider is not 

22 eligible to receive support under this section. 

23 ‘‘(5) BILLING.— 

24 ‘‘(A) IN GENERAL.—A communications 

25 service provider that contributes to universal 


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1 service under this section may place on any cus2 tomer bill a separate line item charge that does 

3 not exceed the amount for the customer that 

4 the provider is required to contribute under this 

5 subsection that shall be identified as the ‘Fed6 eral Universal Service Fee’. 

7 ‘‘(B) LIMITATION.—A communications 

8 service provider may not separately bill cus9 tomers for administrative costs associated with 

10 its collection and remission of universal service 

11 fees under this subsection. 

12 ‘‘(6) DEFINITIONS.—In this subsection: 

13 ‘‘(A) BROADBAND SERVICE.—The term 

14 ‘broadband service’ means any service (whether 

15 part of a bundle of services or offered sepa16 rately) used for transmission of information of 

17 a user’s choosing with a transmission speed of 

18 at least 200 kilobits per second in at least 1 di19 rection, regardless of the transmission medium 

20 or technology employed, that connects to the 

21 public Internet directly— 

22 ‘‘(i) to the public; or 

23 ‘‘(ii) to such classes of users as to be 

24 effectively available directly to the public. 


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1 ‘‘(B) COMMUNICATIONS SERVICE.—The 

2 term ‘communications service’ means tele3 communications service, broadband service, or 

4 IP-enabled voice service (whether part of a bun5 dle of services or offered separately). 

6 ‘‘(C) CONNECTION.—The term ‘connection’ 

7 means the facilities that provide customers with 

8 access to a public or private network, regardless 

9 of whether the connection is circuit-switched, 

10 packet-switched, wireline or wireless, or leased 

11 line. 

12 ‘‘(D) IN-VEHICLE EMERGENCY COMMU13 NICATIONS.—The term ‘in-vehicle emergency 

14 communications’ means services and technology, 

15 including automatic crash notification, roadside 

16 assistance, SOS distress calls, remote 

17 diagnostics, navigation or location-based serv18 ices, and other driver assistance services, which 

19 are integrated into passenger automobiles to fa20 cilitate communications from the automobile to 

21 emergency response professionals. 

22 ‘‘(E) IP-ENABLED VOICE SERVICE.—The 

23 term ‘IP-enabled voice service’ means the provi24 sion of real-time 2-way voice communications 

25 offered to the public, or such classes of users as 


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1 to be effectively available to the public, trans2 mitted through customer premises equipment 

3 using Internet protocol, or a successor protocol, 

4 for a fee (whether part of a bundle of services 

5 or offered separately) with 2-way interconnec6 tion capability such that the service can origi7 nate traffic to, and terminate traffic from, the 

8 public switched telephone network. 

9 ‘‘(F) WORKING PHONE NUMBERS.—The 

10 term ‘working phone number’ means an as11 signed number (as defined in section 52.15 of 

12 the Commission’s regulations (47 C.F.R. 

13 52.15)) or an intermediate number (as defined 

14 in that section).’’. 

15 (2) CONFORMING AMENDMENT.—Section 

16 254(b)(4) of the Communications Act of 1934 (47 

17 U.S.C. 254(b)(4)) is amended by striking ‘‘tele18 communications services’’ and inserting ‘‘commu19 nications services (as defined in subsection 

20 (d)(6)(B)’’. 

21 (3) STATE AUTHORITY.—Section 254(f) of the 

22 Communications Act of 1934 (47 U.S.C. 254(f)) is 

23 amended to read as follows: 

24 ‘‘(f) STATE AUTHORITY.— 


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1 ‘‘(1) IN GENERAL.—A State may adopt regula2 tions not inconsistent with the Commission’s rules to 

3 preserve and advance universal service. In adopting 

4 those rules, a State may require telecommunications 

5 service providers and IP-enabled voice service (as de6 fined in subsection (d)(6)(E)) providers to con7 tribute to universal service on the basis of— 

8 ‘‘(A) revenue; 

9 ‘‘(B) in-use working phone numbers or any 

10 other identifier protocol or connection to the 

11 networks; 

12 ‘‘(C) network capacity; or 

13 ‘‘(D) any combination of such methodolo14 gies. 

15 ‘‘(2) DISREGARD OF INTERSTATE COMPO16 NENT.—A State may require telecommunications 

17 service providers and IP-enabled voice service pro18 viders to contribute under paragraph (1) regardless 

19 of whether the service contains an interstate compo20 nent. 

21 ‘‘(3) BUNDLING.—If a telecommunications serv22 ice or IP-enabled voice service is offered as part of 

23 a bundle of services, the Commission shall determine 

24 a fair allocation of revenue between the tele25 communications service or IP-enabled voice service 


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1 and other bundled services if the primary place of 

2 use of such bundled services is within the State. 

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

4 State under this subsection shall result in a specific, 

5 predictable, and sufficient mechanism to support 

6 universal service and shall be competitively and tech7 nologically neutral, equitable, and nondiscrim8 inatory.’’. 

9 (b) PROPER ACCOUNTING OF UNIVERSAL SERVICE

10 CONTRIBUTIONS.— 

11 (1) FROM ALL BUDGETS.—Notwithstanding any 

12 other provision of law, the receipts and disburse13 ments of universal service under section 254 of the 

14 Communications Act of 1934 (47 U.S.C. 254) shall 

15 not be counted as new budget authority, outlays, re16 ceipts, or deficit or surplus for purposes of— 

17 (A) the budget of the United States Gov18 ernment as submitted by the President; 

19 (B) the Congressional budget; 

20 (C) the Balanced Budget and Emergency 

21 Deficit Control Act of 1985; or 

22 (D) any other law requiring budget seques23 ters. 

24 (2) ADDITIONAL EXEMPTIONS.—Section 1341, 

25 subchapter II of chapter 15, and sections 3302, 


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1 3321, 3322, and 3325 of title 31, United States 

2 Code, shall not apply to— 

3 (A) the collection and receipt of universal 

4 service contributions, including the interest 

5 earned on such contributions; or 

6 (B) disbursements or other obligations au7 thorized by the Federal Communications Com8 mission under section 254 and 254A of the 

9 Communications Act of 1934 (47 U.S.C. 254 

10 and 254A). 

11 (c) FINANCIAL MANAGEMENT.—The Federal Com12 munications Commission and the Administrator of the 

13 Universal Service Fund— 

14 (1) shall account for the financial transactions 

15 of the Fund in accordance with generally accepted 

16 accounting principles for Federal agencies; 

17 (2) shall maintain the accounts of the Fund in 

18 accordance with the United States Government 

19 Standard General Ledger; and 

20 (3) may invest unexpended balances only in 

21 Federal securities (as defined in section 113(b)(5) of 

22 Office of Management and Budget circular OMB A– 

23 11 or any revision of that circular). 

24 (d) RULEMAKING.—Not later than 180 days after the 

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1 tions Commission shall issue a rule to implement section 

2 254(d) of the Communications Act of 1934 (47 U.S.C. 

3 254(d)) as amended by this section. 

4 (e) CONGRESSIONAL REVIEW.—Any rule issued 

5 under subsection (d) shall— 

6 (1) be submitted to Congress, along with any 

7 data and information relied upon to establish such 

8 rule; and 

9 (2) not take effect until the date that is 90 

10 days after the date of such submission. 

11 SEC. 102. MODIFICATION OF RURAL VIDEO SERVICE EX12 EMPTION. 

13 (a) RURAL TELEPHONE COMPANIES.—Section 

14 251(f)(1) of the Communications Act of 1934 (47 U.S.C. 

15 251(f)(1)) is amended— 

16 (1) by striking ‘‘Subsection’’ in subparagraph 

17 (A) and inserting ‘‘Except as provided in subpara18 graph (B), subsection’’; 

19 (2) by striking ‘‘interconnection, services, or 

20 network elements’’ in subparagraphs (A) and (B) 

21 and inserting ‘‘services or network elements’’; 

22 (3) by striking ‘‘(under subparagraph (B))’’ in 

23 subparagraph (A) and inserting ‘‘(under subpara24 graph (C))’’; 


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1 (4) by redesignating subparagraphs (B) and 

2 (C) as subparagraphs (D) and (E); 

3 (5) by inserting after subparagraph (A) the fol4 lowing: 

5 ‘‘(B) CERTAIN CARRIERS.—Subsection (c) 

6 (other than paragraphs (1) and (2) thereof) of 

7 this section shall not apply to a rural telephone 

8 company in Alaska with fewer than 10 access 

9 lines per square mile installed in the aggregate 

10 in its service area (as defined in section 

11 214(e)(5)). 

12 ‘‘(C) INTERCONNECTION.—Notwithstand13 ing subparagraphs (A) and (D), paragraphs (1) 

14 and (2) of subsection (c) of this section shall 

15 not apply to a rural telephone company until 

16 such company has received a bona fide request 

17 for interconnection.’’; and 

18 (6) by striking subparagraph (E), as redesig19 nated. 

20 (b) OTHER RURAL CARRIERS.—Section 251(f)(2) of 

21 the Communications Act of 1934 (47 U.S.C. 251(f)(2)) 

22 is amended by inserting ‘‘(other than paragraphs (1) and 

23 (2) of subsection (c))’’ after ‘‘subsection (b) or (c)’’ in the 

24 first sentence. 


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1 (c) EFFECTIVE DATE.—Notwithstanding any other 

2 provision of this Act, the amendments made by this sec3 tion shall take effect on the date of enactment of this Act. 

4 SEC. 103. INTERCONNECTION. 

5 Title VII of the Communications Act of 1934 (47 

6 U.S.C. 601 et seq.) is amended by adding after section 

7 714 the following new section: 

8 ‘‘SEC. 715. RIGHTS AND OBLIGATIONS OF IP-ENABLED 

9 VOICE SERVICE PROVIDERS. 

10 ‘‘(a) IN GENERAL.—A facilities-based IP-enabled 

11 voice service provider shall have the same rights, duties, 

12 and obligations, including any obligation imposed under 

13 section 276, as a requesting telecommunications carrier 

14 under sections 251 and 252, if the provider elects to assert 

15 such rights. A telecommunications carrier may not refuse 

16 to transport or terminate IP-enabled voice traffic solely 

17 on the basis that it is IP-enabled. A provider originating, 

18 transmitting, or terminating IP-enabled voice traffic shall 

19 not be exempted from paying compensation for interstate 

20 traffic owed to another provider or carrier solely on the 

21 basis that such traffic is IP-enabled, and any obligations 

22 to pay compensation with respect to traffic that originates 

23 or terminates on the public switched telephone network 

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1 abled voice service provider that receives traffic from, or 

2 sends traffic to, the public switched telephone network. 

3 ‘‘(b) DISABLED ACCESS.—An IP-enabled voice serv4 ice provider or a manufacturer of IP-enabled voice service 

5 equipment shall have the same rights, duties, and obliga6 tions as a telecommunications carrier or telecommuni7 cations equipment manufacturer, respectively, under sec8 tions 225, 255, and 710 of the Act. Within 1 year after 

9 the date of enactment of the Universal Service for Ameri10 cans Act, the Commission, in consultation with the Archi11 tectural and Transportation Barriers Compliance Board, 

12 shall prescribe such regulations as are necessary to imple13 ment this section. In prescribing the regulations, the Com14 mission shall take into account the differences between IP15 enabled voice service and circuit-switched communications, 

16 and the functionalities required by the disabled commu17 nity. Every 2 years after the date of enactment of the Uni18 versal Service for Americans Act, the Commission shall 

19 submit a report to the Committee on Commerce, Science, 

20 and Transportation of the Senate and the Committee on 

21 Energy and Commerce of the House of Representatives 

22 that assesses the level of compliance with this section and 

23 evaluates the extent to which any accessibility barriers still 

24 exist with respect to new technologies and hearing aid 

25 compatibility. 


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1 ‘‘(c) IP-ENABLED EMERGENCY RESPONSE SYS2 TEMS.—Prior to installation or activation of an IP-enabled 

3 voice service for a customer, an IP-enabled voice service 

4 provider shall provide clear and conspicuous notice to the 

5 customer that— 

6 ‘‘(1) such customer should arrange with his or 

7 her emergency response system provider, if any, to 

8 test such system after installation; 

9 ‘‘(2) such customer should notify his or her 

10 emergency response system provider as soon as the 

11 IP-enabled voice service is installed; and 

12 ‘‘(3) a battery backup may be required for cus13 tomer premises equipment installed in connection 

14 with the IP-enabled voice service in order for the 

15 signaling of such system to function in the event of 

16 a power outage. 

17 ‘‘(d) NO EFFECT ON TAX LAWS.—Nothing in this 

18 section shall be construed to modify, impair, supersede, 

19 or authorize the modification, impairment, or supersession 

20 of, any State or local tax law. 

21 ‘‘(e) DEFINITIONS.—In this section: 

22 ‘‘(1) EMERGENCY RESPONSE SYSTEM.—The 

23 term ‘emergency response system’ means an alarm 

24 or security system, or personal security or medical 

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1 gency response center by means of a telecommuni2 cations carrier or IP-enabled voice service provider. 

3 ‘‘(2) EMERGENCY RESPONSE CENTER.—The 

4 term ‘emergency response center’ means an entity 

5 that monitors transmissions from an emergency re6 sponse system. 

7 ‘‘(3) FACILITIES-BASED.—The term ‘facilities8 based’ includes an IP-enabled voice service provider 

9 with control and operation within a local access 

10 transport area of— 

11 ‘‘(A) communications switching and rout12 ing equipment; 

13 ‘‘(B) long-haul trunks; or 

14 ‘‘(C) local transmission facilities. 

15 ‘‘(4) IP-ENABLED VOICE SERVICE.—The term 

16 ‘IP-enabled voice service’ means the provision of 

17 real-time 2-way voice communications offered to the 

18 public, or such classes of users as to be effectively 

19 available to the public, transmitted through cus20 tomer premises equipment using Internet protocol, 

21 or a successor protocol, for a fee (whether part of 

22 a bundle of services or offered separately) with inter23 connection capability such that the service can origi24 nate traffic to, and terminate traffic from, the public 

25 switched telephone network.’’. 


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1 SEC. 104. TREATMENT OF SUBSTITUTE SERVICES UNDER 

2 SECTION 254(g). 

3 Section 254(g) of the Communications Act of 1934 

4 (47 U.S.C. 254(g)) is amended by inserting after ‘‘State.’’ 

5 the following: ‘‘This section shall also apply to any services 

6 within the jurisdiction of the Commission that can be used 

7 as effective substitutes for interexchange telecommuni8 cations services, including any such substitute classified 

9 as an information service that uses telecommunications.’’. 

10 TTITLE II—DISTRIBUTIONS 

11 FROM UNIVERSAL SERVICE 

12 SEC. 201. ENCOURAGING BROADBAND DEPLOYMENT. 

13 (a) IN GENERAL.—Beginning 2 years after the date 

14 of enactment of this Act, and biennially thereafter, an eli15 gible communications carrier shall submit a report to the 

16 Commission and to the State commission in each State 

17 in which it provides communications service that sets forth 

18 the following: 

19 (1) The percentage of households to which it of20 fers broadband service in each of its service areas. 

21 (2) The percentage of households that subscribe 

22 to broadband service in each of its service areas. 

23 (3) The service plans and speeds at which 

24 broadband service is offered in each of its service 

25 areas. 


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1 (4) The types of technologies used in offering 

2 broadband service in each of its service areas. 

3 (5) Any planned upgrade or deployment of 

4 broadband service in the next 2 years in each of its 

5 service areas. 

6 (b) INFORMATION TREATED AS CONFIDENTIAL.— 

7 The Commission and State commissions shall treat infor8 mation received pursuant to subsection (a) as confidential 

9 and proprietary, and shall protect sensitive business infor10 mation from disclosure in any reports made public. 

11 (c) COMMISSION REPORT.—The Commission shall in12 corporate the data from reports it receives under sub13 section (a) into its advanced telecommunications capability 

14 reports under section 706 of the Telecommunications Act 

15 of 1996. 

16 SEC. 202. ESTABLISHMENT OF BROADBAND PROGRAM. 

17 Part I of title II of the Communications Act of 1934 

18 (47 U.S.C. 201 et seq.) is amended by inserting after sec19 tion 254 the following: 

20 ‘‘SEC. 254A. BROADBAND FOR UNSERVED AREAS PROGRAM. 

21 ‘‘(a) PROGRAM ESTABLISHED.— 

22 ‘‘(1) IN GENERAL.—The Commission shall es23 tablish a new separate program to be known as the 

24 ‘Broadband for Unserved Areas Program’. 


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1 ‘‘(2) PURPOSE.—The purpose of the Program 

2 is to provide financial assistance for the deployment 

3 of broadband equipment and infrastructure nec4 essary for the deployment of broadband service (in5 cluding installation costs) to unserved areas 

6 throughout the United States. 

7 ‘‘(3) FUNDING.—The Program shall be funded 

8 by amounts collected under section 254(d). 

9 ‘‘(b) IMPLEMENTATION.— 

10 ‘‘(1) IN GENERAL.—Within 180 days after the 

11 date of enactment of the Universal Service for 

12 Americans Act, the Commission shall issue rules es13 tablishing— 

14 ‘‘(A) guidelines for determining which 

15 areas may be considered to be unserved areas 

16 for purposes of this section, which may be por17 tions of service areas or study areas; 

18 ‘‘(B) criteria for determining which facili19 ties-based providers of broadband service and 

20 which projects are eligible for support from the 

21 Program; 

22 ‘‘(C) procedural guidelines for awarding 

23 assistance from the Program on a merit-based 

24 and competitive basis; 


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1 ‘‘(D) guidelines for application procedures, 

2 accounting and reporting requirements, and 

3 other appropriate fiscal controls for assistance 

4 made available from the Program, including 

5 random audits with respect to the receipt and 

6 use of funds under this section; 

7 ‘‘(E) a procedure for making funds in the 

8 Program available among the several States on 

9 an equitable basis; and 

10 ‘‘(F) the Universal Service Administrative 

11 Company as the administrator of the Program, 

12 subject to Commission rules and oversight. 

13 ‘‘(2) FACILITIES-BASED PROVIDER ELIGI14 BILITY.—For purposes of this section, satellite 

15 broadband service providers, terrestrial wireless 

16 broadband service providers, and wireline broadband 

17 service providers shall be considered to be facilities18 based providers eligible for support from the Pro19 gram. The deployment of satellite broadband service 

20 customer premises equipment shall be considered to 

21 be a project eligible for support from the Program. 

22 ‘‘(3) DE MINIMIS SUBSCRIBERSHIP EXCEP23 TION.—The availability of satellite broadband service 

24 in an area shall not preclude the designation of that 

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1 mines that subscribership to broadband satellite 

2 service in the area is de minimis. 

3 ‘‘(4) MULTIPLE AREAS WITHIN STATE.—There 

4 may be more than 1 unserved area within a State. 

5 ‘‘(c) LIMITATIONS.— 

6 ‘‘(1) ANNUAL AMOUNT.—Amounts obligated or 

7 expended under subsection (b) for any fiscal year 

8 may not exceed $500,000,000. 

9 ‘‘(2) UNOBLIGATED BALANCES.—To the extent 

10 that the full amount in the program is not obligated 

11 for financial assistance under this section within a 

12 fiscal year, any unobligated balance shall be used to 

13 support universal service under section 254. 

14 ‘‘(3) SUPPORT LIMITED TO SINGLE FACILITIES15 BASED PROVIDER PER UNSERVED AREA.—Assistance 

16 under this section may be provided only to 1 facili17 ties-based provider of broadband service in each 

18 unserved area. 

19 ‘‘(d) APPLICATION WITH SECTION 410.—Section 

20 410 shall not apply to the Broadband for Unserved Areas 

21 Program. 

22 ‘‘(e) BROADBAND SERVICE DEFINED.— 

23 ‘‘(1) IN GENERAL.—In this section, except to 

24 the extent revised by the Commission under para25 graph (2), the term ‘broadband service’ means any 


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1 service used for transmission of information of a 

2 user’s choosing at a transmission speed of at least 

3 400 kilobits per second in at least 1 direction, re4 gardless of the transmission medium or technology 

5 employed, that connects to the public Internet di6 rectly— 

7 ‘‘(A) to the public; or 

8 ‘‘(B) to such classes of users as to be ef9 fectively available directly to the public. 

10 ‘‘(2) ANNUAL REVIEW OF TRANSMISSION

11 SPEED.—The Commission shall review the trans12 mission speed component of the definition in para13 graph (1) biannually and revise that component as 

14 appropriate. 

15 ‘‘(f) REPORT.—The Commission shall transmit an 

16 annual report to the Senate Committee on Commerce, 

17 Science, and Transportation and the House of Represent18 atives Committee on Energy and Commerce making rec19 ommendations for an increase or decrease, if necessary, 

20 in the amounts credited to the program under this sec21 tion.’’. 

22 SEC. 203. COMPETITIVE NEUTRALITY PRINCIPLE. 

23 Section 254(b) of the Communications Act of 1934 

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1 graph (7) as paragraph (8), and inserting after paragraph 

2 (6) the following: 

3 ‘‘(7) COMPETITIVE NEUTRALITY.—Universal 

4 service support mechanisms and rules should be 

5 competitively neutral. In this context, competitively 

6 neutral means that universal service support mecha7 nisms and rules neither unfairly advantage nor dis8 advantage one provider over another, and neither 

9 unfairly favor nor disfavor one technology over an10 other.’’. 

11 SEC. 204. TRANSITION RULES FOR MODIFICATIONS AD12 VERSELY AFFECTING CARRIERS. 

13 If the Federal Communications Commission modifies 

14 the high-cost distribution rules under section 254 of the 

15 Communications Act of 1934 (47 U.S.C. 254), it shall 

16 adopt transition mechanisms of not less than 5 years in 

17 duration designed to alleviate any harmful affect of those 

18 modifications on existing eligible communications carriers 

19 and their customers. 

20 SEC. 205. ELIGIBILITY GUIDELINES. 

21 Section 214(e) of the Communications Act of 1934 

22 (47 U.S.C. 214(e)) is amended by adding at the end the 

23 following: 

24 ‘‘(7) ELIGIBILITY GUIDELINES.— 


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1 ‘‘(A) IN GENERAL.—A common carrier 

2 may not be designated as a new eligible commu3 nications carrier unless it— 

4 ‘‘(i) is committed to providing service 

5 throughout its proposed designated service 

6 area, using its own facilities or a combina7 tion of facilities and resale of another car8 rier’s facilities, to all customers making a 

9 reasonable request for service; 

10 ‘‘(ii) has certified to the State com11 mission or the Commission that it will pro12 vide service on a timely basis to requesting 

13 customers within its service area, if service 

14 can be provided at reasonable cost; 

15 ‘‘(iii) has submitted a plan to the 

16 State commission or the Commission that 

17 describes with specificity proposed im18 provements or upgrades to its network that 

19 will be accomplished with high-cost support 

20 over the first 2 years following its designa21 tion as an eligible communications carrier; 

22 ‘‘(iv) has demonstrated to the State 

23 commission or the Commission its ability 

24 to remain functional in emergency situa25 tions, including a demonstration that it 


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1 has a reasonable amount of back-up power 

2 to ensure functionality without an external 

3 power source; 

4 ‘‘(v) is committed to following applica5 ble consumer protection and service quality 

6 standards; and 

7 ‘‘(vi) has complied with annual report8 ing requirements established by the Com9 mission or by State Commissions for all 

10 carriers receiving universal service support 

11 to ensure that such support is used for the 

12 provision, maintenance, and upgrading of 

13 the facilities for which support is intended. 

14 ‘‘(B) APPLICATION LIMITED TO POST

15 DATE-OF-ENACTMENT DESIGNATIONS.—Sub16 paragraph (A) applies only to an entity des17 ignated as an eligible communications carrier 

18 after the date of enactment of the Universal 

19 Service for Americans Act. 

20 ‘‘(C) 6-MONTH DESIGNATION DEADLINE.— 

21 Beginning 6 months after the date of enact22 ment of the Universal Service for Americans 

23 Act, a State commission or the Commission 

24 shall grant or deny an application for designa25 tion as an eligible communications carrier withVerDate Aug 31 2005 07:33 Jan 10, 2007 Jkt 059200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S101.IS S101

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1 in 6 months after the date on which it receives 

2 a complete application. 

3 ‘‘(D) ELIGIBLE COMMUNICATIONS CAR4 RIER.—In this paragraph, the term ‘eligible 

5 communications carrier’ means an entity des6 ignated under paragraph (2), (3), or (6) of this 

7 subsection. Any reference to eligible tele8 communications carrier in this section or in sec9 tion 254 refers also to an eligible communica10 tions carrier.’’. 

11 SEC. 206. PRIMARY LINE. 

12 Section 214(e) of the Communications Act of 1934 

13 (47 U.S.C. 214(e)), as amended by section 205 of this 

14 title, is amended by adding at the end the following: 

15 ‘‘(8) PRIMARY LINE.—In implementing the re16 quirements of this Act with respect to the distribu17 tion and use of Federal universal service support, 

18 the Commission shall not limit such distribution and 

19 use to a single connection or primary line, and all 

20 residential and business lines served by an eligible 

21 communications carrier shall be eligible for Federal 

22 universal service support.’’. 

23 SEC. 207. PHANTOM TRAFFIC. 

24 (a) IN GENERAL.—Section 254 (47 U.S.C. 254) is 

25 amended by adding at the end the following: 


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1 ‘‘(m) NETWORK TRAFFIC IDENTIFICATION AC2 COUNTABILITY STANDARDS.— 

3 ‘‘(1) NETWORK TRAFFIC IDENTIFICATION AC4 COUNTABILITY STANDARDS.—A provider of voice 

5 communications services shall ensure, to the degree 

6 technically possible, that all traffic that originates on 

7 its network contains, or, in the case of nonoriginated 

8 traffic, preserves, sufficient information to allow for 

9 traffic identification by other voice communications 

10 service providers that transport or terminate such 

11 traffic, including information on the identity of the 

12 originating provider, the class of service of the origi13 nating line as required under Commission orders in 

14 effect on the date of enactment of the Universal 

15 Service for Americans Act, the calling and called 

16 parties, and such other information as the Commis17 sion deems appropriate. Except as otherwise per18 mitted by the Commission, a provider that trans19 ports traffic between communications service pro20 viders shall signal-forward without altering call sig21 naling information it receives from another provider. 

22 ‘‘(2) NETWORK TRAFFIC IDENTIFICATION

23 RULEMAKING.—The Commission, in consultation 

24 with the State commissions, shall initiate a single 

25 rulemaking no later than 180 days after the date of 


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1 enactment of the Universal Service for Americans 

2 Act to establish rules and enforcement provisions for 

3 traffic identification. 

4 ‘‘(3) NETWORK TRAFFIC IDENTIFICATION EN5 FORCEMENT.—The Commission shall adopt and en6 force clear penalties, fines, and sanctions under this 

7 section. 

8 ‘‘(4) VOICE COMMUNICATIONS SERVICE DE9 FINED.—In this subsection, the term ‘voice commu10 nications service’ means telecommunications service 

11 or IP-enabled voice service (as defined in section 

12 254(d)(6)(E)).’’. 

13 (b) CONFORMING AMENDMENT.—Section 276(d) of 

14 the Communications Act of 1934 (47 U.S.C. 276(d)) is 

15 amended— 

16 (1) by striking ‘‘DEFINITION.—’’ and inserting 

17 ‘‘DEFINITIONS.—’’; and 

18 (2) by striking ‘‘services.’’ and inserting ‘‘serv19 ices, and the term ‘call’ includes any communication 

20 coming within the definition of ‘communications 

21 service’ (as defined in section 254(d)) when it origi22 nated from a payphone.’’. 


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1 SEC. 208. RANDOM AUDITS. 

2 Section 254 (47 U.S.C. 254), as amended by section 

3 207 of this Act, is amended by adding at the end the fol4 lowing: 

5 ‘‘(n) AUDITS.—The Commission shall provide for 

6 random periodic audits, to be administered by the Uni7 versal Service Administrative Company, of each recipient 

8 of funds collected pursuant to subsection (d) with respect 

9 to its receipt and use of such support. With respect to 

10 an eligible communications carrier, the audit shall include 

11 a review of its relative cost to provide service compared 

12 to other, similarly situated, universal service recipients 

13 based on their respective service areas (as defined in sec14 tion 214(e)(5)). The Commission shall take such remedial 

15 action as it deems necessary if any audit under this sub16 section reveals improper use of universal service support, 

17 including the imposition of fines or other appropriate rem18 edies.’’. 

19 SEC. 209. INTEGRITY AND ACCOUNTABILITY. 

20 (a) IN GENERAL.—The Federal Communications 

21 Commission, in consultation with the Administrator of the 

22 Universal Service Administrative Company, shall— 

23 (1) ensure the integrity and accountability of all 

24 programs established under sections 254 and 254A 

25 of the Communications Act of 1934 (47 U.S.C. 254 

26 and 254A); and 


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1 (2) not later than 180 days after the date of 

2 enactment of this Act, establish rules— 

3 (A) identifying appropriate fiscal controls 

4 and accountability standards that shall be ap5 plied to programs under sections 254 and 

6 254A; 

7 (B) establishing a memorandum of under8 standing, or contractual relationships, as the 

9 Commission determines appropriate, defining 

10 the administrative structure and processes by 

11 which the Universal Service Administrative 

12 Company administers programs under sections 

13 254 and 254A; 

14 (C) creating performance goals and meas15 ures for programs under sections 254 and 

16 254A, that shall be used by the Commission to 

17 determine— 

18 (i) how efficiently and cost-effectively 

19 the Universal Service Administrative Com20 pany spends funds pursuant to its oper21 ation of all universal service programs; and 

22 (ii) areas for improving operations; 

23 (D) creating performance goals and meas24 urements for the Schools and Libraries Pro25 gram under section 254(h) that— 


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1 (i) determine the progress of schools 

2 and libraries toward achieving advances in 

3 connectivity goals; and 

4 (ii) reflect the evolving level of ad5 vanced services; and 

6 (E) establishing appropriate enforcement 

7 actions, including the imposition of sanctions on 

8 applicants and vendors who repeatedly and 

9 knowingly violate program rules set forth in 

10 section 254(h) or adopted by the Commission, 

11 such as debarment from the program for indi12 viduals convicted of crimes or held civilly liable 

13 for actions taken in connection with the Schools 

14 and Libraries Program. 

15 (b) PERMANENT BAN OF VENDORS CONVICTED OF

16 CRIMINAL FRAUD.—A vendor that has been convicted of 

17 a criminal fraud violation in connection with the provision 

18 of goods or services under section 254(h) of the Commu19 nications Act of 1934 (47 U.S.C. 254(h)) is not eligible 

20 to provide goods or services to any school, library, or other 

21 entity under the program authorized by that section. 

22 SEC. 210. IMPROVING EFFECTIVENESS OF RURAL HEALTH 

23 CARE SUPPORT MECHANISM. 

24 (a) IN GENERAL.—Section 254(h) of the Commu25 nications Act of 1934 (47 U.S.C. 254(h)) is amended— 


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1 (1) by resetting so much of paragraph (1)(A) as 

2 follows ‘‘AREAS.—’’ as an indented paragraph 6 ems 

3 from the left margin and inserting ‘‘(i) IN GEN4 ERAL.—’’ before ‘‘A telecommunications’’; 

5 (2) by inserting ‘‘deployment of reasonable in6 frastructure and’’ after ‘‘including’’ in the first sen7 tence of paragraph (1)(A)(i), as designated by para8 graph (1) of this subsection; 

9 (3) by striking ‘‘service.’’ in paragraph 

10 (1)(A)(i), as designated by paragraph (1) of this 

11 subsection, and inserting ‘‘service, and to receive re12 imbursement promptly of any amount in excess of 

13 such obligations to participate in universal service 

14 mechanisms.’’; 

15 (4) by adding at the end of paragraph (1)(A) 

16 the following: 

17 ‘‘(ii) LIMITATION.—The discount re18 quired under clause (i) shall be available 

19 only to a public or nonprofit health care 

20 provider located in a rural area. 

21 ‘‘(iii) DEFINITION.—For purposes of 

22 this subparagraph, the term ‘rural area’ 

23 means— 

24 ‘‘(I) any incorporated or unincor25 porated area in the United States, or 


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1 in the territories or insular posses2 sions of the United States that has 

3 not more than 20,000 inhabitants 

4 based on the most recent available 

5 population statistics published in the 

6 most recent decennial census issued 

7 by the Census Bureau; 

8 ‘‘(II) any area located outside the 

9 boundaries of any incorporated or un10 incorporated city, county, or borough 

11 that has more than 20,000 inhab12 itants based on the most recent avail13 able population statistics published in 

14 the most recent decennial census 

15 issued by the Census Bureau; or 

16 ‘‘(III) any area that qualified as 

17 a rural area under the rules of the 

18 Commission in effect on December 1, 

19 2004.’’; 

20 (5) by striking ‘‘and’’ in paragraph (7)(B)(vi); 

21 and 

22 (6) by striking paragraph (7)(B)(vii) and in23 serting the following: 

24 ‘‘(vii) not-for-profit nursing homes or 

25 skilled nursing facilities; 


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1 ‘‘(viii) critical access hospitals; 

2 ‘‘(ix) emergency medical services fa3 cilities; 

4 ‘‘(x) hospice providers; 

5 ‘‘(xi) rural dialysis facilities; 

6 ‘‘(xii) tribal health clinics; 

7 ‘‘(xiii) not-for-profit dental offices; 

8 ‘‘(xiv) school health clinics; 

9 ‘‘(xv) residential treatment facilities; 

10 ‘‘(xvi) rural pharmacies; 

11 ‘‘(xvii) consortia of health care pro12 viders consisting of 1 or more entities de13 scribed in clauses (i) through (xv); and 

14 ‘‘(xviii) any other entity the Commis15 sion determines— 

16 ‘‘(I) eligible to receive discounted 

17 telecommunications service under 

18 paragraph (1)(A); and 

19 ‘‘(II) essential to the public 

20 health.’’. 

21 (b) SCHOOLS, LIBRARIES, RURAL HEALTH CARE, 

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

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

24 (h)(7)(B), and (h)(7)(J) of section 254 of the CommunicaVerDate Aug 31 2005 07:33 Jan 10, 2007 Jkt 059200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S101.IS S101

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1 tions Act of 1934 (47 U.S.C. 254), as amended by sub2 section (a)— 

3 (1) nothing in this Act (or the amendments 

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

5 changing, modifying, or altering the amount of sup6 port or means of distribution for the schools, librar7 ies, rural health care, life-line, link-up, and toll limi8 tation programs; and 

9 (2) the Federal Communications Commission 

10 shall ensure that such amendments do not result in 

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

12 for the fiscal year preceding the fiscal year in which 

13 this Act is enacted. 

14 (c) AMERICAN COMMUNITY SURVEY RESIDENTIAL

15 INTERNET ACCESS QUESTION.—The Secretary of Com16 merce, in consultation with the Federal Communications 

17 Commission, shall expand the American Community Sur18 vey conducted by the Bureau of the Census to elicit infor19 mation for residential households, including those located 

20 on Indian land (as defined in section 4(9) of the American 

21 Indian Agricultural Resource Management Act (25 U.S.C. 

22 3703(9))), as to what technology such households use to 

23 access the Internet from home. 


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1 SEC. 211. COMMUNICATIONS SERVICES FOR LIBRARIES. 

2 Section 254(h)(4) of the Communications Act of 

3 1934 (47 U.S.C. 254(h)(4)) is amended to read as follows: 

4 ‘‘(4) CERTAIN USERS NOT ELIGIBLE.—Notwith5 standing any other provision of this subsection, the 

6 following entities are not entitled to preferential 

7 rates or treatment as required by this subsection: 

8 ‘‘(A) An entity operated as a for-profit 

9 business. 

10 ‘‘(B) A school described in paragraph 

11 (7)(A) with an endowment of more than 

12 $50,000,000. 

13 ‘‘(C) A library or library consortium not el14 igible for assistance under the Library Services 

15 and Technology Act (20 U.S.C. 9101 et seq.) 

16 from a State library administrative agency. 

17 ‘‘(D) A library or library consortium not 

18 eligible for assistance funded by a grant under 

19 section 261 of the Library Services and Tech20 nology Act (20 U.S.C. 9161) from an Indian 

21 tribe or other organization.’’. 

22 SEC. 212. USF SUPPORT FOR INSULAR AREAS. 

23 Within 180 days after the date of enactment of this 

24 Act, the Federal Communications Commission shall issue 

25 an order in FCC Docket 96–45 establishing a predictable 

26 and sufficient support mechanism for eligible carriers in 


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1 insular areas, including any insular area that is a State 

2 comprised entirely of islands, that includes assistance for 

3 high-cost communications transport services used by car4 riers whose service territory includes multiple noncontig5 uous service areas. 

Æ 


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