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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 101 Introduced in Senate (IS)]

  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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Universal Service 
for Americans Act'' or ``USA Act''.
    (b) Table of Contents.--The table of contents for 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.
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.

              TITLE I--CONTRIBUTIONS TO UNIVERSAL SERVICE

SEC. 101. STABILIZATION OF UNIVERSAL SERVICE FUNDING.

    (a) Ensuring an Equitable Contribution Base for Universal 
Service.--
            (1) In general.--Section 254(d) of the Communications Act 
        of 1934 (47 U.S.C. 254(d)) is amended to read as follows:
    ``(d) Universal Service Support Contributions.--
            ``(1) Contribution mechanism.--
                    ``(A) In general.--Each communications service 
                provider shall contribute as provided in this 
                subsection to support universal service.
                    ``(B) Requirements.--The Commission shall ensure 
                that the contributions required by this subsection 
                are--
                            ``(i) applied in a manner that is as 
                        competitively and technologically neutral as 
                        possible;
                            ``(ii) specific, predictable, and 
                        sufficient to sustain the funding of networks 
                        used to preserve and advance universal service; 
                        and
                            ``(iii) applied in such a manner that no 
                        methodology results in a communications 
                        services provider being required to contribute 
                        more than once to support Federal universal 
                        service for the same transaction, activity, or 
                        service.
                    ``(C) Adjustments.--The Commission shall adjust the 
                contribution for communication service providers for 
                their low-call volume, non-business customers.
            ``(2) Exemptions.--The Commission may exempt a 
        communications service provider or any class of communications 
        service providers from the requirements of this subsection in 
        the following circumstances:
                    ``(A) The services of such a provider are limited 
                to such an extent that the level of its contributions 
                would be de minimis.
                    ``(B) The communications service is provided 
                pursuant to the Commission's Lifeline Assistance 
                Program.
                    ``(C) The communications service is provided only 
                to in-vehicle emergency communications customers.
                    ``(D) The communications service is provided by a 
                not-for-profit communications service provider that is 
                neither an affiliate of a for-profit organization nor 
                has a for-profit affiliate and which provides voice 
                mailboxes to low income consumers and the homeless.
            ``(3) Contribution assessment flexibility.--
                    ``(A) Methodology.--To achieve the principles in 
                this section, the Commission may base universal service 
                contributions upon--
                            ``(i) revenue from communications service;
                            ``(ii) in-use working phone numbers or any 
                        other identifier protocol or connection to the 
                        networks; or
                            ``(iii) network capacity.
                    ``(B) Use of more than 1 methodology.--If no single 
                methodology employed under subparagraph (A) achieves 
                the principles described in this subsection, the 
                Commission may employ a combination of any such 
                methodologies.
                    ``(C) Removal of interstate/intrastate 
                distinction.--Notwithstanding section 2(b) of this Act, 
                the Commission may assess the interstate, intrastate, 
                and international portions of communications service 
                for the purpose of universal service contributions.
                    ``(D) Group plan discount.--If the Commission 
                utilizes a methodology under subparagraph (A) based in 
                whole or in part on in-use working phone numbers, it 
                may provide a discount for additional numbers provided 
                under a group or family pricing plan for residential 
                customers provided in 1 bill.
            ``(4) Non-discriminatory eligibility requirement.--A 
        communications service provider is not exempted from the 
        requirements of this subsection solely on the basis that such 
        provider is not eligible to receive support under this section.
            ``(5) Billing.--
                    ``(A) In general.--A communications service 
                provider that contributes to universal service under 
                this section may place on any customer bill a separate 
                line item charge that does not exceed the amount for 
                the customer that the provider is required to 
                contribute under this subsection that shall be 
                identified as the `Federal Universal Service Fee'.
                    ``(B) Limitation.--A communications service 
                provider may not separately bill customers for 
                administrative costs associated with its collection and 
                remission of universal service fees under this 
                subsection.
            ``(6) Definitions.--In this subsection:
                    ``(A) Broadband service.--The term `broadband 
                service' means any service (whether part of a bundle of 
                services or offered separately) used for transmission 
                of information of a user's choosing with a transmission 
                speed of at least 200 kilobits per second in at least 1 
                direction, regardless of the transmission medium or 
                technology employed, that connects to the public 
                Internet directly--
                            ``(i) to the public; or
                            ``(ii) to such classes of users as to be 
                        effectively available directly to the public.
                    ``(B) Communications service.--The term 
                `communications service' means telecommunications 
                service, broadband service, or IP-enabled voice service 
                (whether part of a bundle of services or offered 
                separately).
                    ``(C) Connection.--The term `connection' means the 
                facilities that provide customers with access to a 
                public or private network, regardless of whether the 
                connection is circuit-switched, packet-switched, 
                wireline or wireless, or leased line.
                    ``(D) In-vehicle emergency communications.--The 
                term `in-vehicle emergency communications' means 
                services and technology, including automatic crash 
                notification, roadside assistance, SOS distress calls, 
                remote diagnostics, navigation or location-based 
                services, and other driver assistance services, which 
                are integrated into passenger automobiles to facilitate 
                communications from the automobile to emergency 
                response professionals.
                    ``(E) IP-enabled voice service.--The term `IP-
                enabled voice service' means the provision of real-time 
                2-way voice communications offered to the public, or 
                such classes of users as to be effectively available to 
                the public, transmitted through customer premises 
                equipment using Internet protocol, or a successor 
                protocol, for a fee (whether part of a bundle of 
                services or offered separately) with 2-way 
                interconnection capability such that the service can 
                originate traffic to, and terminate traffic from, the 
                public switched telephone network.
                    ``(F) Working phone numbers.--The term `working 
                phone number' means an assigned number (as defined in 
                section 52.15 of the Commission's regulations (47 
                C.F.R. 52.15)) or an intermediate number (as defined in 
                that section).''.
            (2) Conforming amendment.--Section 254(b)(4) of the 
        Communications Act of 1934 (47 U.S.C. 254(b)(4)) is amended by 
        striking ``telecommunications services'' and inserting 
        ``communications services (as defined in subsection 
        (d)(6)(B)''.
            (3) State authority.--Section 254(f) of the Communications 
        Act of 1934 (47 U.S.C. 254(f)) is amended to read as follows:
    ``(f) State Authority.--
            ``(1) In general.--A State may adopt regulations not 
        inconsistent with the Commission's rules to preserve and 
        advance universal service. In adopting those rules, a State may 
        require telecommunications service providers and IP-enabled 
        voice service (as defined in subsection (d)(6)(E)) providers to 
        contribute to universal service on the basis of--
                    ``(A) revenue;
                    ``(B) in-use working phone numbers or any other 
                identifier protocol or connection to the networks;
                    ``(C) network capacity; or
                    ``(D) any combination of such methodologies.
            ``(2) Disregard of interstate component.--A State may 
        require telecommunications service providers and IP-enabled 
        voice service providers to contribute under paragraph (1) 
        regardless of whether the service contains an interstate 
        component.
            ``(3) Bundling.--If a telecommunications service or IP-
        enabled voice service is offered as part of a bundle of 
        services, the Commission shall determine a fair allocation of 
        revenue between the telecommunications service or IP-enabled 
        voice service and other bundled services if the primary place 
        of use of such bundled services is within the State.
            ``(4) Guidelines.--Regulations adopted by a State under 
        this subsection shall result in a specific, predictable, and 
        sufficient mechanism to support universal service and shall be 
        competitively and technologically neutral, equitable, and 
        nondiscriminatory.''.
    (b) Proper Accounting of Universal Service Contributions.--
            (1) From all budgets.--Notwithstanding any other provision 
        of law, the receipts and disbursements of universal service 
        under section 254 of the Communications Act of 1934 (47 U.S.C. 
        254) shall not be counted as new budget authority, outlays, 
        receipts, or deficit or surplus for purposes of--
                    (A) the budget of the United States Government as 
                submitted by the President;
                    (B) the Congressional budget;
                    (C) the Balanced Budget and Emergency Deficit 
                Control Act of 1985; or
                    (D) any other law requiring budget sequesters.
            (2) Additional exemptions.--Section 1341, subchapter II of 
        chapter 15, and sections 3302, 3321, 3322, and 3325 of title 
        31, United States Code, shall not apply to--
                    (A) the collection and receipt of universal service 
                contributions, including the interest earned on such 
                contributions; or
                    (B) disbursements or other obligations authorized 
                by the Federal Communications Commission under section 
                254 and 254A of the Communications Act of 1934 (47 
                U.S.C. 254 and 254A).
    (c) Financial Management.--The Federal Communications Commission 
and the Administrator of the Universal Service Fund--
            (1) shall account for the financial transactions of the 
        Fund in accordance with generally accepted accounting 
        principles for Federal agencies;
            (2) shall maintain the accounts of the Fund in accordance 
        with the United States Government Standard General Ledger; and
            (3) may invest unexpended balances only in Federal 
        securities (as defined in section 113(b)(5) of Office of 
        Management and Budget circular OMB A-11 or any revision of that 
        circular).
    (d) Rulemaking.--Not later than 180 days after the date of 
enactment of this Act, the Federal Communications Commission shall 
issue a rule to implement section 254(d) of the Communications Act of 
1934 (47 U.S.C. 254(d)) as amended by this section.
    (e) Congressional Review.--Any rule issued under subsection (d) 
shall--
            (1) be submitted to Congress, along with any data and 
        information relied upon to establish such rule; and
            (2) not take effect until the date that is 90 days after 
        the date of such submission.

SEC. 102. MODIFICATION OF RURAL VIDEO SERVICE EXEMPTION.

    (a) Rural telephone companies.--Section 251(f)(1) of the 
Communications Act of 1934 (47 U.S.C. 251(f)(1)) is amended--
            (1) by striking ``Subsection'' in subparagraph (A) and 
        inserting ``Except as provided in subparagraph (B), 
        subsection'';
            (2) by striking ``interconnection, services, or network 
        elements'' in subparagraphs (A) and (B) and inserting 
        ``services or network elements'';
            (3) by striking ``(under subparagraph (B))'' in 
        subparagraph (A) and inserting ``(under subparagraph (C))'';
            (4) by redesignating subparagraphs (B) and (C) as 
        subparagraphs (D) and (E);
            (5) by inserting after subparagraph (A) the following:
                    ``(B) Certain carriers.--Subsection (c) (other than 
                paragraphs (1) and (2) thereof) of this section shall 
                not apply to a rural telephone company in Alaska with 
                fewer than 10 access lines per square mile installed in 
                the aggregate in its service area (as defined in 
                section 214(e)(5)).
                    ``(C) Interconnection.--Notwithstanding 
                subparagraphs (A) and (D), paragraphs (1) and (2) of 
                subsection (c) of this section shall not apply to a 
                rural telephone company until such company has received 
                a bona fide request for interconnection.''; and
            (6) by striking subparagraph (E), as redesignated.
    (b) Other Rural Carriers.--Section 251(f)(2) of the Communications 
Act of 1934 (47 U.S.C. 251(f)(2)) is amended by inserting ``(other than 
paragraphs (1) and (2) of subsection (c))'' after ``subsection (b) or 
(c)'' in the first sentence.
    (c) Effective Date.--Notwithstanding any other provision of this 
Act, the amendments made by this section shall take effect on the date 
of enactment of this Act.

SEC. 103. INTERCONNECTION.

    Title VII of the Communications Act of 1934 (47 U.S.C. 601 et seq.) 
is amended by adding after section 714 the following new section:

``SEC. 715. RIGHTS AND OBLIGATIONS OF IP-ENABLED VOICE SERVICE 
              PROVIDERS.

    ``(a) In General.--A facilities-based IP-enabled voice service 
provider shall have the same rights, duties, and obligations, including 
any obligation imposed under section 276, as a requesting 
telecommunications carrier under sections 251 and 252, if the provider 
elects to assert such rights. A telecommunications carrier may not 
refuse to transport or terminate IP-enabled voice traffic solely on the 
basis that it is IP-enabled. A provider originating, transmitting, or 
terminating IP-enabled voice traffic shall not be exempted from paying 
compensation for interstate traffic owed to another provider or carrier 
solely on the basis that such traffic is IP-enabled, and any 
obligations to pay compensation with respect to traffic that originates 
or terminates on the public switched telephone network shall be 
reciprocal, including any payment to an IP-enabled voice service 
provider that receives traffic from, or sends traffic to, the public 
switched telephone network.
    ``(b) Disabled Access.--An IP-enabled voice service provider or a 
manufacturer of IP-enabled voice service equipment shall have the same 
rights, duties, and obligations as a telecommunications carrier or 
telecommunications equipment manufacturer, respectively, under sections 
225, 255, and 710 of the Act. Within 1 year after the date of enactment 
of the Universal Service for Americans Act, the Commission, in 
consultation with the Architectural and Transportation Barriers 
Compliance Board, shall prescribe such regulations as are necessary to 
implement this section. In prescribing the regulations, the Commission 
shall take into account the differences between IP-enabled voice 
service and circuit-switched communications, and the functionalities 
required by the disabled community. Every 2 years after the date of 
enactment of the Universal Service for Americans Act, the Commission 
shall submit a report to the Committee on Commerce, Science, and 
Transportation of the Senate and the Committee on Energy and Commerce 
of the House of Representatives that assesses the level of compliance 
with this section and evaluates the extent to which any accessibility 
barriers still exist with respect to new technologies and hearing aid 
compatibility.
    ``(c) IP-enabled Emergency Response Systems.--Prior to installation 
or activation of an IP-enabled voice service for a customer, an IP-
enabled voice service provider shall provide clear and conspicuous 
notice to the customer that--
            ``(1) such customer should arrange with his or her 
        emergency response system provider, if any, to test such system 
        after installation;
            ``(2) such customer should notify his or her emergency 
        response system provider as soon as the IP-enabled voice 
        service is installed; and
            ``(3) a battery backup may be required for customer 
        premises equipment installed in connection with the IP-enabled 
        voice service in order for the signaling of such system to 
        function in the event of a power outage.
    ``(d) No Effect on Tax Laws.--Nothing in this section shall be 
construed to modify, impair, supersede, or authorize the modification, 
impairment, or supersession of, any State or local tax law.
    ``(e) Definitions.--In this section:
            ``(1) Emergency response system.--The term `emergency 
        response system' means an alarm or security system, or personal 
        security or medical monitoring system, that is connected to an 
        emergency response center by means of a telecommunications 
        carrier or IP-enabled voice service provider.
            ``(2) Emergency response center.--The term `emergency 
        response center' means an entity that monitors transmissions 
        from an emergency response system.
            ``(3) Facilities-based.--The term `facilities-based' 
        includes an IP-enabled voice service provider with control and 
        operation within a local access transport area of--
                    ``(A) communications switching and routing 
                equipment;
                    ``(B) long-haul trunks; or
                    ``(C) local transmission facilities.
            ``(4) IP-enabled voice service.--The term `IP-enabled voice 
        service' means the provision of real-time 2-way voice 
        communications offered to the public, or such classes of users 
        as to be effectively available to the public, transmitted 
        through customer premises equipment using Internet protocol, or 
        a successor protocol, for a fee (whether part of a bundle of 
        services or offered separately) with interconnection capability 
        such that the service can originate traffic to, and terminate 
        traffic from, the public switched telephone network.''.

SEC. 104. TREATMENT OF SUBSTITUTE SERVICES UNDER SECTION 254(G).

    Section 254(g) of the Communications Act of 1934 (47 U.S.C. 254(g)) 
is amended by inserting after ``State.'' the following: ``This section 
shall also apply to any services within the jurisdiction of the 
Commission that can be used as effective substitutes for interexchange 
telecommunications services, including any such substitute classified 
as an information service that uses telecommunications.''.

            TTITLE II--DISTRIBUTIONS FROM UNIVERSAL SERVICE

SEC. 201. ENCOURAGING BROADBAND DEPLOYMENT.

    (a) In General.--Beginning 2 years after the date of enactment of 
this Act, and biennially thereafter, an eligible communications carrier 
shall submit a report to the Commission and to the State commission in 
each State in which it provides communications service that sets forth 
the following:
            (1) The percentage of households to which it offers 
        broadband service in each of its service areas.
            (2) The percentage of households that subscribe to 
        broadband service in each of its service areas.
            (3) The service plans and speeds at which broadband service 
        is offered in each of its service areas.
            (4) The types of technologies used in offering broadband 
        service in each of its service areas.
            (5) Any planned upgrade or deployment of broadband service 
        in the next 2 years in each of its service areas.
    (b) Information Treated as Confidential.--The Commission and State 
commissions shall treat information received pursuant to subsection (a) 
as confidential and proprietary, and shall protect sensitive business 
information from disclosure in any reports made public.
    (c) Commission Report.--The Commission shall incorporate the data 
from reports it receives under subsection (a) into its advanced 
telecommunications capability reports under section 706 of the 
Telecommunications Act of 1996.

SEC. 202. ESTABLISHMENT OF BROADBAND PROGRAM.

    Part I of title II of the Communications Act of 1934 (47 U.S.C. 201 
et seq.) is amended by inserting after section 254 the following:

``SEC. 254A. BROADBAND FOR UNSERVED AREAS PROGRAM.

    ``(a) Program Established.--
            ``(1) In general.--The Commission shall establish a new 
        separate program to be known as the `Broadband for Unserved 
        Areas Program'.
            ``(2) Purpose.--The purpose of the Program is to provide 
        financial assistance for the deployment of broadband equipment 
        and infrastructure necessary for the deployment of broadband 
        service (including installation costs) to unserved areas 
        throughout the United States.
            ``(3) Funding.--The Program shall be funded by amounts 
        collected under section 254(d).
    ``(b) Implementation.--
            ``(1) In general.--Within 180 days after the date of 
        enactment of the Universal Service for Americans Act, the 
        Commission shall issue rules establishing--
                    ``(A) guidelines for determining which areas may be 
                considered to be unserved areas for purposes of this 
                section, which may be portions of service areas or 
                study areas;
                    ``(B) criteria for determining which facilities-
                based providers of broadband service and which projects 
                are eligible for support from the Program;
                    ``(C) procedural guidelines for awarding assistance 
                from the Program on a merit-based and competitive 
                basis;
                    ``(D) guidelines for application procedures, 
                accounting and reporting requirements, and other 
                appropriate fiscal controls for assistance made 
                available from the Program, including random audits 
                with respect to the receipt and use of funds under this 
                section;
                    ``(E) a procedure for making funds in the Program 
                available among the several States on an equitable 
                basis; and
                    ``(F) the Universal Service Administrative Company 
                as the administrator of the Program, subject to 
                Commission rules and oversight.
            ``(2) Facilities-based provider eligibility.--For purposes 
        of this section, satellite broadband service providers, 
        terrestrial wireless broadband service providers, and wireline 
        broadband service providers shall be considered to be 
        facilities-based providers eligible for support from the 
        Program. The deployment of satellite broadband service customer 
        premises equipment shall be considered to be a project eligible 
        for support from the Program.
            ``(3) De minimis subscribership exception.--The 
        availability of satellite broadband service in an area shall 
        not preclude the designation of that area as an unserved area 
        if the Commission determines that subscribership to broadband 
        satellite service in the area is de minimis.
            ``(4) Multiple areas within state.--There may be more than 
        1 unserved area within a State.
    ``(c) Limitations.--
            ``(1) Annual amount.--Amounts obligated or expended under 
        subsection (b) for any fiscal year may not exceed $500,000,000.
            ``(2) Unobligated balances.--To the extent that the full 
        amount in the program is not obligated for financial assistance 
        under this section within a fiscal year, any unobligated 
        balance shall be used to support universal service under 
        section 254.
            ``(3) Support limited to single facilities-based provider 
        per unserved area.--Assistance under this section may be 
        provided only to 1 facilities-based provider of broadband 
        service in each unserved area.
    ``(d) Application With Section 410.--Section 410 shall not apply to 
the Broadband for Unserved Areas Program.
    ``(e) Broadband Service Defined.--
            ``(1) In general.--In this section, except to the extent 
        revised by the Commission under paragraph (2), the term 
        `broadband service' means any service used for transmission of 
        information of a user's choosing at a transmission speed of at 
        least 400 kilobits per second in at least 1 direction, 
        regardless of the transmission medium or technology employed, 
        that connects to the public Internet directly--
                    ``(A) to the public; or
                    ``(B) to such classes of users as to be effectively 
                available directly to the public.
            ``(2) Annual review of transmission speed.--The Commission 
        shall review the transmission speed component of the definition 
        in paragraph (1) biannually and revise that component as 
        appropriate.
    ``(f) Report.--The Commission shall transmit an annual report to 
the Senate Committee on Commerce, Science, and Transportation and the 
House of Representatives Committee on Energy and Commerce making 
recommendations for an increase or decrease, if necessary, in the 
amounts credited to the program under this section.''.

SEC. 203. COMPETITIVE NEUTRALITY PRINCIPLE.

    Section 254(b) of the Communications Act of 1934 (47 U.S.C. 254(b)) 
is amended by redesignating paragraph (7) as paragraph (8), and 
inserting after paragraph (6) the following:
            ``(7) Competitive neutrality.--Universal service support 
        mechanisms and rules should be competitively neutral. In this 
        context, competitively neutral means that universal service 
        support mechanisms and rules neither unfairly advantage nor 
        disadvantage one provider over another, and neither unfairly 
        favor nor disfavor one technology over another.''.

SEC. 204. TRANSITION RULES FOR MODIFICATIONS ADVERSELY AFFECTING 
              CARRIERS.

    If the Federal Communications Commission modifies the high-cost 
distribution rules under section 254 of the Communications Act of 1934 
(47 U.S.C. 254), it shall adopt transition mechanisms of not less than 
5 years in duration designed to alleviate any harmful affect of those 
modifications on existing eligible communications carriers and their 
customers.

SEC. 205. ELIGIBILITY GUIDELINES.

    Section 214(e) of the Communications Act of 1934 (47 U.S.C. 214(e)) 
is amended by adding at the end the following:
            ``(7) Eligibility guidelines.--
                    ``(A) In general.--A common carrier may not be 
                designated as a new eligible communications carrier 
                unless it--
                            ``(i) is committed to providing service 
                        throughout its proposed designated service 
                        area, using its own facilities or a combination 
                        of facilities and resale of another carrier's 
                        facilities, to all customers making a 
                        reasonable request for service;
                            ``(ii) has certified to the State 
                        commission or the Commission that it will 
                        provide service on a timely basis to requesting 
                        customers within its service area, if service 
                        can be provided at reasonable cost;
                            ``(iii) has submitted a plan to the State 
                        commission or the Commission that describes 
                        with specificity proposed improvements or 
                        upgrades to its network that will be 
                        accomplished with high-cost support over the 
                        first 2 years following its designation as an 
                        eligible communications carrier;
                            ``(iv) has demonstrated to the State 
                        commission or the Commission its ability to 
                        remain functional in emergency situations, 
                        including a demonstration that it has a 
                        reasonable amount of back-up power to ensure 
                        functionality without an external power source;
                            ``(v) is committed to following applicable 
                        consumer protection and service quality 
                        standards; and
                            ``(vi) has complied with annual reporting 
                        requirements established by the Commission or 
                        by State Commissions for all carriers receiving 
                        universal service support to ensure that such 
                        support is used for the provision, maintenance, 
                        and upgrading of the facilities for which 
                        support is intended.
                    ``(B) Application limited to post date-of-enactment 
                designations.--Subparagraph (A) applies only to an 
                entity designated as an eligible communications carrier 
                after the date of enactment of the Universal Service 
                for Americans Act.
                    ``(C) 6-month designation deadline.--Beginning 6 
                months after the date of enactment of the Universal 
                Service for Americans Act, a State commission or the 
                Commission shall grant or deny an application for 
                designation as an eligible communications carrier 
                within 6 months after the date on which it receives a 
                complete application.
                    ``(D) Eligible Communications Carrier.--In this 
                paragraph, the term `eligible communications carrier' 
                means an entity designated under paragraph (2), (3), or 
                (6) of this subsection. Any reference to eligible 
                telecommunications carrier in this section or in 
                section 254 refers also to an eligible communications 
                carrier.''.

SEC. 206. PRIMARY LINE.

    Section 214(e) of the Communications Act of 1934 (47 U.S.C. 
214(e)), as amended by section 205 of this title, is amended by adding 
at the end the following:
            ``(8) Primary line.--In implementing the requirements of 
        this Act with respect to the distribution and use of Federal 
        universal service support, the Commission shall not limit such 
        distribution and use to a single connection or primary line, 
        and all residential and business lines served by an eligible 
        communications carrier shall be eligible for Federal universal 
        service support.''.

SEC. 207. PHANTOM TRAFFIC.

    (a) In General.--Section 254 (47 U.S.C. 254) is amended by adding 
at the end the following:
    ``(m) Network Traffic Identification Accountability Standards.--
            ``(1) Network traffic identification accountability 
        standards.--A provider of voice communications services shall 
        ensure, to the degree technically possible, that all traffic 
        that originates on its network contains, or, in the case of 
        nonoriginated traffic, preserves, sufficient information to 
        allow for traffic identification by other voice communications 
        service providers that transport or terminate such traffic, 
        including information on the identity of the originating 
        provider, the class of service of the originating line as 
        required under Commission orders in effect on the date of 
        enactment of the Universal Service for Americans Act, the 
        calling and called parties, and such other information as the 
        Commission deems appropriate. Except as otherwise permitted by 
        the Commission, a provider that transports traffic between 
        communications service providers shall signal-forward without 
        altering call signaling information it receives from another 
        provider.
            ``(2) Network traffic identification rulemaking.--The 
        Commission, in consultation with the State commissions, shall 
        initiate a single rulemaking no later than 180 days after the 
        date of enactment of the Universal Service for Americans Act to 
        establish rules and enforcement provisions for traffic 
        identification.
            ``(3) Network traffic identification enforcement.--The 
        Commission shall adopt and enforce clear penalties, fines, and 
        sanctions under this section.
            ``(4) Voice communications service defined.--In this 
        subsection, the term `voice communications service' means 
        telecommunications service or IP-enabled voice service (as 
        defined in section 254(d)(6)(E)).''.
    (b) Conforming Amendment.--Section 276(d) of the Communications Act 
of 1934 (47 U.S.C. 276(d)) is amended--
            (1) by striking ``Definition.--'' and inserting 
        ``Definitions.--''; and
            (2) by striking ``services.'' and inserting ``services, and 
        the term `call' includes any communication coming within the 
        definition of `communications service' (as defined in section 
        254(d)) when it originated from a payphone.''.

SEC. 208. RANDOM AUDITS.

    Section 254 (47 U.S.C. 254), as amended by section 207 of this Act, 
is amended by adding at the end the following:
    ``(n) Audits.--The Commission shall provide for random periodic 
audits, to be administered by the Universal Service Administrative 
Company, of each recipient of funds collected pursuant to subsection 
(d) with respect to its receipt and use of such support. With respect 
to an eligible communications carrier, the audit shall include a review 
of its relative cost to provide service compared to other, similarly 
situated, universal service recipients based on their respective 
service areas (as defined in section 214(e)(5)). The Commission shall 
take such remedial action as it deems necessary if any audit under this 
subsection reveals improper use of universal service support, including 
the imposition of fines or other appropriate remedies.''.

SEC. 209. INTEGRITY AND ACCOUNTABILITY.

    (a) In General.--The Federal Communications Commission, in 
consultation with the Administrator of the Universal Service 
Administrative Company, shall--
            (1) ensure the integrity and accountability of all programs 
        established under sections 254 and 254A of the Communications 
        Act of 1934 (47 U.S.C. 254 and 254A); and
            (2) not later than 180 days after the date of enactment of 
        this Act, establish rules--
                    (A) identifying appropriate fiscal controls and 
                accountability standards that shall be applied to 
                programs under sections 254 and 254A;
                    (B) establishing a memorandum of understanding, or 
                contractual relationships, as the Commission determines 
                appropriate, defining the administrative structure and 
                processes by which the Universal Service Administrative 
                Company administers programs under sections 254 and 
                254A;
                    (C) creating performance goals and measures for 
                programs under sections 254 and 254A, that shall be 
                used by the Commission to determine--
                            (i) how efficiently and cost-effectively 
                        the Universal Service Administrative Company 
                        spends funds pursuant to its operation of all 
                        universal service programs; and
                            (ii) areas for improving operations;
                    (D) creating performance goals and measurements for 
                the Schools and Libraries Program under section 254(h) 
                that--
                            (i) determine the progress of schools and 
                        libraries toward achieving advances in 
                        connectivity goals; and
                            (ii) reflect the evolving level of advanced 
                        services; and
                    (E) establishing appropriate enforcement actions, 
                including the imposition of sanctions on applicants and 
                vendors who repeatedly and knowingly violate program 
                rules set forth in section 254(h) or adopted by the 
                Commission, such as debarment from the program for 
                individuals convicted of crimes or held civilly liable 
                for actions taken in connection with the Schools and 
                Libraries Program.
    (b) Permanent Ban of Vendors Convicted of Criminal Fraud.--A vendor 
that has been convicted of a criminal fraud violation in connection 
with the provision of goods or services under section 254(h) of the 
Communications Act of 1934 (47 U.S.C. 254(h)) is not eligible to 
provide goods or services to any school, library, or other entity under 
the program authorized by that section.

SEC. 210. IMPROVING EFFECTIVENESS OF RURAL HEALTH CARE SUPPORT 
              MECHANISM.

    (a) In General.--Section 254(h) of the Communications Act of 1934 
(47 U.S.C. 254(h)) is amended--
            (1) by resetting so much of paragraph (1)(A) as follows 
        ``areas.--'' as an indented paragraph 6 ems from the left 
        margin and inserting ``(i) In general.--'' before ``A 
        telecommunications'';
            (2) by inserting ``deployment of reasonable infrastructure 
        and'' after ``including'' in the first sentence of paragraph 
        (1)(A)(i), as designated by paragraph (1) of this subsection;
            (3) by striking ``service.'' in paragraph (1)(A)(i), as 
        designated by paragraph (1) of this subsection, and inserting 
        ``service, and to receive reimbursement promptly of any amount 
        in excess of such obligations to participate in universal 
        service mechanisms.'';
            (4) by adding at the end of paragraph (1)(A) the following:
                            ``(ii) Limitation.--The discount required 
                        under clause (i) shall be available only to a 
                        public or nonprofit health care provider 
                        located in a rural area.
                            ``(iii) Definition.--For purposes of this 
                        subparagraph, the term `rural area' means--
                                    ``(I) any incorporated or 
                                unincorporated area in the United 
                                States, or in the territories or 
                                insular possessions of the United 
                                States that has not more than 20,000 
                                inhabitants based on the most recent 
                                available population statistics 
                                published in the most recent decennial 
                                census issued by the Census Bureau;
                                    ``(II) any area located outside the 
                                boundaries of any incorporated or 
                                unincorporated city, county, or borough 
                                that has more than 20,000 inhabitants 
                                based on the most recent available 
                                population statistics published in the 
                                most recent decennial census issued by 
                                the Census Bureau; or
                                    ``(III) any area that qualified as 
                                a rural area under the rules of the 
                                Commission in effect on December 1, 
                                2004.'';
            (5) by striking ``and'' in paragraph (7)(B)(vi); and
            (6) by striking paragraph (7)(B)(vii) and inserting the 
        following:
                            ``(vii) not-for-profit nursing homes or 
                        skilled nursing facilities;
                            ``(viii) critical access hospitals;
                            ``(ix) emergency medical services 
                        facilities;
                            ``(x) hospice providers;
                            ``(xi) rural dialysis facilities;
                            ``(xii) tribal health clinics;
                            ``(xiii) not-for-profit dental offices;
                            ``(xiv) school health clinics;
                            ``(xv) residential treatment facilities;
                            ``(xvi) rural pharmacies;
                            ``(xvii) consortia of health care providers 
                        consisting of 1 or more entities described in 
                        clauses (i) through (xv); and
                            ``(xviii) any other entity the Commission 
                        determines--
                                    ``(I) eligible to receive 
                                discounted telecommunications service 
                                under paragraph (1)(A); and
                                    ``(II) essential to the public 
                                health.''.
    (b) Schools, Libraries, Rural Health Care, Life-Line, Link-Up, and 
Toll Limitation Hold Harmless.--Except as provided in subsections 
(h)(1)(A), (h)(7)(B), and (h)(7)(J) of section 254 of the 
Communications Act of 1934 (47 U.S.C. 254), as amended by subsection 
(a)--
            (1) nothing in this Act (or the amendments made by this 
        Act) shall be construed as limiting, changing, modifying, or 
        altering the amount of support or means of distribution for the 
        schools, libraries, rural health care, life-line, link-up, and 
        toll limitation programs; and
            (2) the Federal Communications Commission shall ensure that 
        such amendments do not result in a decrease of such support to 
        a level below the level for the fiscal year preceding the 
        fiscal year in which this Act is enacted.
    (c) American Community Survey Residential Internet Access 
Question.--The Secretary of Commerce, in consultation with the Federal 
Communications Commission, shall expand the American Community Survey 
conducted by the Bureau of the Census to elicit information for 
residential households, including those located on Indian land (as 
defined in section 4(9) of the American Indian Agricultural Resource 
Management Act (25 U.S.C. 3703(9))), as to what technology such 
households use to access the Internet from home.

SEC. 211. COMMUNICATIONS SERVICES FOR LIBRARIES.

    Section 254(h)(4) of the Communications Act of 1934 (47 U.S.C. 
254(h)(4)) is amended to read as follows:
            ``(4) Certain users not eligible.--Notwithstanding any 
        other provision of this subsection, the following entities are 
        not entitled to preferential rates or treatment as required by 
        this subsection:
                    ``(A) An entity operated as a for-profit business.
                    ``(B) A school described in paragraph (7)(A) with 
                an endowment of more than $50,000,000.
                    ``(C) A library or library consortium not eligible 
                for assistance under the Library Services and 
                Technology Act (20 U.S.C. 9101 et seq.) from a State 
                library administrative agency.
                    ``(D) A library or library consortium not eligible 
                for assistance funded by a grant under section 261 of 
                the Library Services and Technology Act (20 U.S.C. 
                9161) from an Indian tribe or other organization.''.

SEC. 212. USF SUPPORT FOR INSULAR AREAS.

    Within 180 days after the date of enactment of this Act, the 
Federal Communications Commission shall issue an order in FCC Docket 
96-45 establishing a predictable and sufficient support mechanism for 
eligible carriers in insular areas, including any insular area that is 
a State comprised entirely of islands, that includes assistance for 
high-cost communications transport services used by carriers whose 
service territory includes multiple noncontiguous service areas.
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