107TH CONGRESS
1ST SESSION
H. R. 496
AN ACT
To amend the Communications Act of 1934 to pro-
mote deployment of advanced services and foster
the development of competition for the benefit of
consumers in all regions of the Nation by reliev-
ing unnecessary burdens on the Nation’s two per-
cent local exchange telecommunications carriers,
and for other purposes.
107TH CONGRESS
1ST SESSION
H. R. 496
AN ACT
To amend the Communications Act of 1934 to promote de-
ployment of advanced services and foster the development
of competition for the benefit of consumers in all regions
of the Nation by relieving unnecessary burdens on the
Nation’s two percent local exchange telecommunications
carriers, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Independent Tele-
communications Consumer Enhancement Act of 2001’’.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—Congress finds the following:
(1) The Telecommunications Act of 1996 was
enacted to foster the rapid deployment of advanced
telecommunications and information technologies
and services to all Americans by promoting competi-
tion and reducing regulation in telecommunications
markets nationwide.
(2) The Telecommunications Act of 1996 spe-
cifically recognized the unique abilities and cir-
cumstances of local exchange carriers with fewer
than two percent of the Nation’s subscriber lines in-
stalled in the aggregate nationwide.
(3) Given the markets two percent carriers typi-
cally serve, such carriers are uniquely positioned to
accelerate the deployment of advanced services and
competitive initiatives for the benefit of consumers
in less densely populated regions of the Nation.
(4) Existing regulations are typically tailored to
the circumstances of larger carriers and therefore
often impose disproportionate burdens on two per-
cent carriers, impeding such carriers’ deployment of
advanced telecommunications services and competi-
tive initiatives to consumers in less densely popu-
lated regions of the Nation.
(5) Reducing regulatory burdens on two percent
carriers will enable such carriers to devote additional
resources to the deployment of advanced services
and to competitive initiatives to benefit consumers in
less densely populated regions of the Nation.
(6) Reducing regulatory burdens on two percent
carriers will increase such carriers’ ability to respond
to marketplace conditions, allowing them to accel-
erate deployment of advanced services and competi-
tive initiatives to benefit consumers in less densely
populated regions of the Nation.
(b) PURPOSES.—The purposes of this Act are—
(1) to accelerate the deployment of advanced
services and the development of competition in the
telecommunications industry for the benefit of con-
sumers in all regions of the Nation, consistent with
the Telecommunications Act of 1996, by reducing
regulatory burdens on local exchange carriers with
fewer than two percent of the Nation’s subscriber
lines installed in the aggregate nationwide;
(2) to improve such carriers’ flexibility to un-
dertake such initiatives; and
(3) to allow such carriers to redirect resources
from paying the costs of such regulatory burdens to
increasing investment in such initiatives.
SEC. 3. DEFINITION.
Section 3 of the Communications Act of 1934 (47
U.S.C. 153) is amended—
(1) by redesignating paragraphs (51) and (52)
as paragraphs (52) and (53), respectively; and
(2) by inserting after paragraph (50) the fol-
lowing:
‘‘(51) TWO PERCENT CARRIER.—The term ‘two
percent carrier’ means an incumbent local exchange
carrier within the meaning of section 251(h) whose
access lines, when aggregated with the access lines
of any local exchange carrier that such incumbent
local exchange carrier directly or indirectly controls,
is controlled by, or is under common control with,
are fewer than two percent of the Nation’s sub-
scriber lines installed in the aggregate nationwide.’’.
SEC. 4. REGULATORY RELIEF FOR TWO PERCENT CAR-
RIERS.
Title II of the Communications Act of 1934 is
amended by adding at the end thereof a new part IV as
follows:
‘‘PART IV—PROVISIONS CONCERNING TWO
PERCENT CARRIERS
‘‘SEC. 281. REDUCED REGULATORY REQUIREMENTS FOR
TWO PERCENT CARRIERS.
‘‘(a) COMMISSION TO TAKE INTO ACCOUNT DIF-
FERENCES.—In adopting rules that apply to incumbent
local exchange carriers (within the meaning of section
251(h)), the Commission shall separately evaluate the bur-
den that any proposed regulatory, compliance, or report-
ing requirements would have on two percent carriers.
‘‘(b) EFFECT OF COMMISSION’S FAILURE TO TAKE
INTO
ACCOUNT
DIFFERENCES.—If the Commission
adopts a rule that applies to incumbent local exchange car-
riers and fails to separately evaluate the burden that any
proposed regulatory, compliance, or reporting requirement
would have on two percent carriers, the Commission shall
not enforce the rule against two percent carriers unless
and until the Commission performs such separate evalua-
tion.
‘‘(c) ADDITIONAL REVIEW NOT REQUIRED.—Noth-
ing in this section shall be construed to require the Com-
mission to conduct a separate evaluation under subsection
(a) if the rules adopted do not apply to two percent car-
riers, or such carriers are exempted from such rules.
‘‘(d) SAVINGS CLAUSE.—Nothing in this section shall
be construed to prohibit any size-based differentiation
among carriers mandated by this Act, chapter 6 of title
5, United States Code, the Commission’s rules, or any
other provision of law.
‘‘(e) EFFECTIVE DATE.—The provisions of this sec-
tion shall apply with respect to any rule adopted on or
after the date of enactment of this section.
‘‘SEC. 282. LIMITATION OF REPORTING REQUIREMENTS.
‘‘(a) LIMITATION.—The Commission shall not require
a two percent carrier—
‘‘(1) to file cost allocation manuals or to have
such manuals audited or attested, but a two percent
carrier that qualifies as a class A carrier shall annu-
ally certify to the Commission that the two percent
carrier’s cost allocation complies with the rules of
the Commission; or
‘‘(2) to file Automated Reporting and Manage-
ment Information Systems (ARMIS) reports.
‘‘(b) PRESERVATION
OF AUTHORITY.—Except as
provided in subsection (a), nothing in this Act limits the
authority of the Commission to obtain access to informa-
tion under sections 211, 213, 215, 218, and 220 with re-
spect to two percent carriers.
‘‘SEC. 283. INTEGRATED OPERATION OF TWO PERCENT
CARRIERS.
‘‘The Commission shall not require any two percent
carrier to establish or maintain a separate affiliate to pro-
vide any common carrier or noncommon carrier services,
including local and interexchange services, commercial mo-
bile radio services, advanced services (within the meaning
of section 706 of the Telecommunications Act of 1996),
paging, Internet, information services or other enhanced
services, or other services. The Commission shall not re-
quire any two percent carrier and its affiliates to maintain
separate officers, directors, or other personnel, network fa-
cilities, buildings, research and development departments,
books of account, financing, marketing, provisioning, or
other operations.
‘‘SEC. 284. PARTICIPATION IN TARIFF POOLS AND PRICE
CAP REGULATION.
‘‘(a) NECA POOL.—The participation or withdrawal
from participation by a two percent carrier of one or more
study areas in the common line tariff administered and
filed by the National Exchange Carrier Association or any
successor tariff or administrator shall not obligate such
carrier to participate or withdraw from participation in
such tariff for any other study area. The Commission may
require a two percent carrier to give 60 days notice of
its intent to participate or withdraw from participation in
such common line tariff with respect to a study area. Ex-
cept as permitted by section 310(f)(3), a two percent car-
rier’s election under this subsection shall be binding for
one year from the date of the election.
‘‘(b) PRICE CAP REGULATION.—A two percent car-
rier may elect to be regulated by the Commission under
price cap rate regulation, or elect to withdraw from such
regulation, for one or more of its study areas. The Com-
mission shall not require a carrier making an election
under this subsection with respect to any study area or
areas to make the same election for any other study area.
Except as permitted by section 310(f)(3), a two percent
carrier’s election under this subsection shall be binding for
one year from the date of the election.
‘‘SEC. 285. DEPLOYMENT OF NEW TELECOMMUNICATIONS
SERVICES BY TWO PERCENT COMPANIES.
‘‘(a) ONE-DAY
NOTICE
OF
DEPLOYMENT.—The
Commission shall permit two percent carriers to introduce
new interstate telecommunications services by filing a tar-
iff on one day’s notice showing the charges, classifications,
regulations, and practices therefor, without obtaining a
waiver, or make any other showing before the Commission
in advance of the tariff filing. The Commission shall not
have authority to approve or disapprove the rate structure
for such services shown in such tariff.
‘‘(b) DEFINITION.—For purposes of subsection (a),
the term ‘new interstate telecommunications service’
means a class or subclass of service not previously offered
by the two percent carrier that enlarges the range of serv-
ice options available to ratepayers of such carrier.
‘‘SEC. 286. ENTRY OF COMPETING CARRIER.
‘‘(a) PRICING FLEXIBILITY.—Notwithstanding any
other provision of this Act, any two percent carrier shall
be permitted to deaverage its interstate switched or special
access rates, file tariffs on one day’s notice, and file con-
tract-based tariffs for interstate switched or special access
services immediately upon certifying to the Commission
that a telecommunications carrier unaffiliated with such
carrier is engaged in facilities-based entry within such car-
rier’s service area. A two percent carrier subject to rate-
of-return regulation with respect to an interstate switched
or special access service, for which pricing flexibility has
been exercised pursuant to this subsection, shall compute
its interstate rate of return based on the nondiscounted
rate for such service.
‘‘(b) PRICING
DEREGULATION.—Notwithstanding
any other provision of this Act, upon receipt by the Com-
mission of a certification by a two percent carrier that a
local exchange carrier that is not a two percent carrier
is engaged in facilities-based entry within the two percent
carrier’s service area, the Commission shall regulate such
two percent carrier as non-dominant, and therefore shall
not require the tariffing of the interstate service offerings
of such two percent carrier.
‘‘(c) PARTICIPATION IN EXCHANGE CARRIER ASSO-
CIATION TARIFF.—A two percent carrier that meets the
requirements of subsection (a) or (b) of this section with
respect to one or more study areas shall be permitted to
participate in the common line tariff administered and
filed by the National Exchange Carrier Association or any
successor tariff or administrator, by electing to include
one or more of its study areas in such tariff.
‘‘(d) DEFINITIONS.—For purposes of this section:
‘‘(1) FACILITIES-BASED ENTRY.—The term ‘fa-
cilities-based entry’ means, within the service area of
a two percent carrier—
‘‘(A) the provision or procurement of local
telephone exchange switching or its equivalent;
and
‘‘(B) the provision of telephone exchange
service to at least one unaffiliated customer.
‘‘(2) CONTRACT-BASED
TARIFF.—The term
‘contract-based tariff’ shall mean a tariff based on
a service contract entered into between a two per-
cent carrier and one or more customers of such car-
rier. Such tariff shall include—
‘‘(A) the term of the contract, including
any renewal options;
‘‘(B) a brief description of each of the
services provided under the contract;
‘‘(C) minimum volume commitments for
each service, if any;
‘‘(D) the contract price for each service or
services at the volume levels committed to by
the customer or customers;
‘‘(E) a brief description of any volume dis-
counts built into the contract rate structure;
and
‘‘(F) a general description of any other
classifications, practices, and regulations affect-
ing the contract rate.
‘‘(3) SERVICE AREA.—The term ‘service area’
has the same meaning as in section 214(e)(5).
‘‘SEC. 287. SAVINGS PROVISIONS.
‘‘(a) COMMISSION AUTHORITY.—Nothing in this part
shall be construed to restrict the authority of the Commis-
sion under sections 201 through 208.
‘‘(b) RURAL TELEPHONE COMPANY RIGHTS.—Noth-
ing in this part shall be construed to diminish the rights
of rural telephone companies otherwise accorded by this
Act, or the rules, policies, procedures, guidelines, and
standards of the Commission as of the date of enactment
of this section.’’.
SEC. 5. LIMITATION ON MERGER REVIEW.
(a) AMENDMENT.—Section 310 of the Communica-
tions Act of 1934 (47 U.S.C. 310) is amended by adding
at the end the following:
‘‘(f) DEADLINE FOR MAKING PUBLIC INTEREST DE-
TERMINATION.—
‘‘(1) TIME
LIMIT.—In connection with any
merger between two percent carriers, or the acquisi-
tion, directly or indirectly, by a two percent carrier
or its affiliate of securities or assets of another two
percent carrier or its affiliate, if the merged or ac-
quiring carrier remains a two percent carrier after
the merger or acquisition, the Commission shall
make any determinations required by this section
and section 214, and shall rule on any petition for
waiver of the Commission’s rules or other request re-
lated to such determinations, not later than 60 days
after the date an application with respect to such
merger or acquisition is submitted to the Commis-
sion.
‘‘(2) APPROVAL ABSENT ACTION.—If the Com-
mission does not approve or deny an application as
described in paragraph (1) by the end of the period
specified, the application shall be deemed approved
on the day after the end of such period. Any such
application deemed approved under this subsection
shall be deemed approved without conditions.
‘‘(3) ELECTION PERMITTED.—The Commission
shall permit a two percent carrier to make an elec-
tion pursuant to section 284 with respect to any
local exchange facilities acquired as a result of a
merger or acquisition that is subject to the review
deadline established in paragraph (1) of this sub-
section.’’.
(b) EFFECTIVE DATE.—The provisions of this sec-
tion shall apply with respect to any application that is sub-
mitted to the Commission on or after the date of enact-
ment of this Act. Applications pending with the Commis-
sion on the date of enactment of this Act shall be subject
to the requirements of this section as if they had been
filed with the Commission on the date of enactment of
this Act.
SEC. 6. TIME LIMITS FOR ACTION ON PETITIONS FOR RE-
CONSIDERATION OR WAIVER.
(a) AMENDMENT.—Section 405 of the Communica-
tions Act of 1934 (47 U.S.C. 405) is amended by adding
to the end the following:
‘‘(c) EXPEDITED ACTION REQUIRED.—
‘‘(1) TIME LIMIT.—Within 90 days after receiv-
ing from a two percent carrier a petition for recon-
sideration or other review filed under this section or
a petition for waiver of a rule, policy, or other Com-
mission requirement, the Commission shall issue an
order granting or denying such petition. If the Com-
mission fails to act on a petition for waiver subject
to the requirements of this section within this 90-
day period, the relief sought in such petition shall be
deemed granted. If the Commission fails to act on
a petition for reconsideration or other review subject
to the requirements of this section within such 90-
day period, the Commission’s enforcement of any
rule the reconsideration or other review of which was
specifically sought by the petitioning party shall be
stayed with respect to that party until the Commis-
sion issues an order granting or denying such peti-
tion.
‘‘(2) FINALITY OF ACTION.—Any order issued
under paragraph (1), or any grant of a petition for
waiver that is deemed to occur as a result of the
Commission’s failure to act under paragraph (1),
shall be a final order and may be appealed.’’.
(b) EFFECTIVE DATE.—The provisions of this sec-
tion shall apply with respect to any petition for reconsider-
ation or other review or petition for waiver that is sub-
mitted to the Commission on or after the date of enact-
ment of this Act. Petitions for reconsideration or petitions
for waiver pending with the Commission on the date of
enactment of this Act shall be subject to the requirements
of this section as if they had been filed on the date of
enactment of this Act.
Passed the House of Representatives March 21,
2001.
Attest:
Clerk.