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) that
has 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 RECONSIDERATION OR WAIVER.—
If the Commission adopts a rule that applies to incumbent
local exchange carriers and fails to separately evaluate the
burden that any proposed regulatory, compliance, or re-
porting requirement would have on two percent carriers,
the Commission shall not enforce the rule against two per-
cent carriers unless and until the Commission performs
such separate evaluation.
‘‘(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, but a two percent carrier that
qualifies as a class A carrier shall annually certify
to the Commission that the two percent carrier’s
cost allocation complies with the rules of the Com-
mission; 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.
‘‘(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 at any time.
The Commission shall not require a carrier making an
election under this paragraph with respect to any study
area or areas to make the same election for any other
study area.
‘‘SEC. 285. DEPLOYMENT OF NEW TELECOMMUNICATIONS
SERVICES BY TWO PERCENT COMPANIES.
‘‘The Commission shall permit two percent carriers
to introduce new interstate telecommunications services by
filing a tariff 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 Commis-
sion shall not have authority to approve or disapprove the
rate structure for such services shown in such tariff.
‘‘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.
‘‘(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