‘‘(1)
FACILITIES-BASED
VOIP
SERVICE
PRO-
VIDER.—The
term
‘facilities-based
VOIP
service 
provider’ means an entity that provides VOIP serv-
ice over a physical facility that terminates at the end 
user’s location and which such entity or an affiliate 
owns or over which such entity or affiliate has exclu-
sive use. An entity or affiliate shall be considered a 
facilities-based VOIP service provider only in those 
geographic areas where such terminating physical 
facilities are located. 
‘‘(2) VOIP SERVICE PROVIDER; VOIP SERVICE.— 
The terms ‘VOIP service provider’ and ‘VOIP serv-
ice’ have the meanings given such terms by section 
716(l).’’. 
SEC. 302. COMPENSATION AND CONTRIBUTION. 
(a) RULE OF CONSTRUCTION.—Nothing in this Act 
(including the amendments made by this Act) shall be con-
strued to exempt a VOIP service provider from require-
ments imposed by the Federal Communications Commis-
sion or a State commission on all VOIP service providers 
to— 
(1) pay appropriate compensation for the trans-
mission of a VOIP service over the facilities and 
equipment of another provider; or 
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(2) contribute on an equitable and non-discrimi-
natory basis to the preservation and advancement 
of universal service. 
(b) DEFINITIONS.—As used in this section— 
(1) the terms ‘‘VOIP service provider’’ and 
‘‘VOIP service’’ have the meanings given such terms 
in section 716(h) of the Communications Act of 
1934, as added by section 301 of this Act; and 
(2) the term ‘‘State commission’’ has the mean-
ing given such term in section 3 of the Communica-
tions Act of 1934 (47 U.S.C. 153). 
TITLE IV—MUNICIPAL 
PROVISION OF SERVICES 
SEC. 401. GOVERNMENT AUTHORITY TO PROVIDE SERV-
ICES. 
(a) IN GENERAL.—Neither the Communications Act 
of 1934 nor any State statute, regulation, or other State 
legal requirement may prohibit or have the effect of pro-
hibiting any public provider of telecommunications service, 
information service, or cable service (as such terms are 
defined in sections 3 and 602 of such Act) from providing 
such services to any person or entity. 
(b) COMPETITION NEUTRALITY.—Any State or polit-
ical subdivision thereof, or any agency, authority, or in-
strumentality of a State or political subdivision thereof, 
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that is, owns, controls, or is otherwise affiliated with a 
public provider of telecommunications service, information 
service, or cable service shall not grant any preference or 
advantage to any such provider. Such entity shall apply 
its ordinances, rules, and policies, including those relating 
to the use of public rights-of-way, permitting, performance 
bonding, and reporting without discrimination in favor of 
any such provider as compared to other providers of such 
services. 
(c) COMPLIANCE WITH OTHER LAWS
NOT AF-
FECTED.—Nothing in this section shall exempt a public 
provider from any law or regulation that applies to pro-
viders of telecommunications service, information service, 
or cable service. 
(d) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the Federal Communications 
Commission shall submit to the Congress a report on the 
status of the provision of telecommunications service, in-
formation service, and cable service by States and political 
subdivisions thereof. 
(e) DEFINITION OF PUBLIC PROVIDER.—For pur-
poses of this section, the term ‘‘public provider’’ means 
a State or political subdivision thereof, or any agency, au-
thority, or instrumentality of a State or political subdivi-
sion thereof, that provides telecommunications service, in-
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