IB
103D CONGRESS
2D SESSION
H. R. 3626
[Report No. 103–559, Parts I and II]
To supersede the Modification of Final Judgment entered August 24, 1982,
in the antitrust action styled United States v. Western Electric, Civil
Action No. 82–0192, United States District Court for the District of
Columbia; to amend the Communications Act of 1934 to regulate the
manufacturing of Bell operating companies, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 22, 1993
Mr. BROOKS (for himself and Mr. DINGELL) introduced the following bill;
which was referred jointly to the Committees on the Judiciary and En-
ergy and Commerce
JUNE 24, 1994
Reported from the Committee on Energy and Commerce with an Amendment
[Strike out all after the enacting clause and insert the part printed in italic]
JUNE 24, 1994
Additional sponsors: Mr. NADLER, Mr. LAZIO, Mr. BLUTE, Mr. GILMAN, Mr.
FISH, Mr. MOORHEAD, Mr. MARKEY, and Mr. FIELDS of Texas
JUNE 24, 1994
Reported from the Committee on the Judiciary with amendments, committed
to the Committee of the Whole House on the State of the Union, and
ordered to be printed.
[Strike out all after the enacting clause and insert the part printed in Boldface Roman]
[For text of introduced bill, see copy of bill as introduced on November 22, 1993]
A BILL
To supersede the Modification of Final Judgment entered
August 24, 1982, in the antitrust action styled United
States v. Western Electric, Civil Action No. 82–0192,
United States District Court for the District of Colum-
bia; to amend the Communications Act of 1934 to regu-
late the manufacturing of Bell operating companies, 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; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Antitrust and Communications Reform Act of 1994’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents.
TITLE I—SUPERSESSION OF THE MODIFICATION OF FINAL
JUDGMENT
Sec. 101. Authorization for Bell operating company to enter competitive lines of
business.
Sec. 102. Authorization as prerequisite.
Sec. 103. Limitations on manufacturing and providing equipment.
Sec. 104. Anticompetitive tying arrangements.
Sec. 105. Enforcement.
Sec. 106. Definitions.
Sec. 107. Relationship to other laws.
Sec. 108. Amendment to definition of antitrust laws appearing in the Clayton
Act.
TITLE II—REGULATION OF MANUFACTURING, ALARM SERVICES
AND ELECTRONIC PUBLISHING BY BELL OPERATING COMPANIES
Sec. 201. Regulation of manufacturing by Bell operating companies.
Sec. 202. Regulation of entry into alarm monitoring services.
Sec. 203. Regulation of electronic publishing.
Sec. 204. Privacy of customer information.
(i) engaging in any activity described
in subparagraph (B), (C), or (D), to the ex-
tent, with respect to each market to which
the activity relates, that there exists no ac-
tual or potential competition,
(ii) providing a service described in
subsection (b)(3)(D)(iii),
(iii) providing, through transmission
facilities owned by such company, interstate
interexchange telecommunications services
that originate and terminate in exchange
areas in which the Bell operating company,
or an affiliate (as of November 21, 1993) of
such company that is a Bell operating com-
pany, provided telephone exchange service
on November 21, 1993,
(B) except to the extent that an earlier date
is available under subparagraph (A), the date
that occurs 18 months after the date of the enact-
ment of this Act, with respect to providing
interexchange 
telecommunications 
services
through the acquisition and resale of tele-
communications services,
(C) except to the extent that an earlier date
is available under subparagraph (A) or (B), the
date that occurs 60 months after the date of the
enactment of this Act, with respect to providing
any interstate telecommunications, and
(D) the date that occurs 66 months after the
date of the enactment of this Act, with respect to
providing alarm monitoring services.
(3) INTERAGENCY NOTIFICATION.—Whenever the
Attorney General or the Federal Communications
Commission receives an application made under
paragraph (1), the recipient of the application shall
notify the other of such receipt.
(4) PUBLICATION.—Not later than 10 days after
receiving an application made under paragraph (1),
the Attorney General and the Federal Communica-
tions Commission jointly shall publish the applica-
tion in the Federal Register.
(b) SEPARATE DETERMINATIONS BY THE ATTORNEY
GENERAL AND THE FEDERAL COMMUNICATIONS COMMIS-
SION.—
(1) COMMENT PERIOD.—Not later than 45 days
after an application is published under subsection
(a)(4), interested persons may submit written com-
ments to the Attorney General, to the Federal Com-
munications Commission, or to both regarding the
application. Submitted comments shall be available to
the public.
(2) INTERAGENCY CONSULTATION.—Before mak-
ing their respective determinations under paragraph
(3), the Attorney General and the Federal Commu-
nications Commission shall consult with each other
regarding the application involved.
(3) DETERMINATIONS.—(A) After the time for
comment under paragraph (1) has expired, but not
later than 180 days after receiving an application
made under subsection (a)(1), the Attorney General
and the Federal Communications Commission each
shall issue separately a written determination, on the
record after an opportunity for a hearing, with re-
spect to granting the authorization for which the Bell
operating company has applied.
(B) Such determination shall be based on clear
and convincing evidence.
(C) Any person who might be injured in its busi-
ness or property as a result of the approval of the au-
thorization requested shall be permitted to participate
as a party in the proceeding on which the determina-
tion is based.
(D)(i) The Attorney General shall approve the
granting of the authorization requested in the appli-
cation only to the extent that the Attorney General
finds that there is no substantial possibility that such
company or its affiliates could use monopoly power to
impede competition in the market such company seeks
to enter. The Attorney General shall deny the remain-
der of the requested authorization.
(ii) The Federal Communications Commission
shall approve the granting of the requested authoriza-
tion only to the extent that the Commission finds that
granting the requested authorization is consistent
with the public interest, convenience, and necessity.
The Commission shall deny the remainder of the re-
quested authorization.
(iii) Notwithstanding clauses (i) and (ii), within
180 days after the date of the enactment of this Act,
the Attorney General and the Federal Communica-
tions Commission shall each prescribe regulations to
establish procedures and criteria for the expedited de-
termination and approval of applications to provide
interexchange telecommunications services that are
incidental to the provision of another service which
the Bell operating company may lawfully provide
(and that are not described in section 102(c)). In pre-
scribing such regulations, the Attorney General and
the Commission shall consult for the purpose of avoid-
ing inconsistencies in such regulations.
(E) In making a determination under subpara-
graph (D)(ii) regarding the public interest, conven-
ience, and necessity, the Commission shall take into
account—
(i) the probability that granting the re-
quested authorization will secure reduced rates
for consumers of the services that are the subject
of the application, especially residential subscrib-
ers,
(ii) whether granting the requested author-
ization will result in increases in rates for con-
sumers of exchange service,
(iii) the extent to which granting the re-
quested authorization will expedite the delivery
of new services and products to consumers,
(iv) the extent to which the Commission’s
regulations or other laws and regulations will
preclude the applicant from engaging in preda-
tory pricing or other coercive economic practices
with respect to the services that are the subject
of the application,
(v) the extent to which granting the re-
quested authorization would permit collusive acts
or practices between or among Bell operating
companies that are not affiliates of each other,
(vi) whether granting the requested author-
ization will result, directly or indirectly, in in-
creasing concentration among providers of the
service that is the subject of the application to
such an extent that consumers will not be pro-
tected from rates that are unjust or unreasonable
or that are unjustly or unreasonably discrimina-
tory, and
(vii) in the case of an application to pro-
vide alarm monitoring services, whether the
Commission has the capability to enforce effec-
tively the regulations established pursuant to sec-
tion 230 of the Communications Act of 1934 as
added by this Act.
(F) A determination that approves the granting
of any part of a requested authorization shall describe
with particularity the nature and scope of each activ-
ity, and of each product market or service market,
and each geographic market, to which approval ap-
plies.
(4) PUBLICATION.—Not later than 10 days after
issuing a determination under paragraph (3), the At-
torney General or the Federal Communications Com-
mission, as the case may be, shall publish in the Fed-
eral Register a brief description of the determination.
(5) FINALITY.—A determination made under
paragraph (3) shall be final unless a civil action with
respect to such determination is timely commenced
under subsection (c)(1).
(6) AUTHORIZATION GRANTED.—A requested au-
thorization is granted to the extent that—
(A)(i) both the Attorney General and the
Federal Communications Commission approve
under paragraph (3) the granting of the author-
ization, and
(ii) neither of their approvals is vacated or
reversed as a result of judicial review authorized
by subsection (c), or
(B) as a result of such judicial review of ei-
ther or both determinations, both the Attorney
General and the Federal Communications Com-
mission approve the granting of the requested
authorization.
(c) JUDICIAL REVIEW.—
(1) CIVIL ACTION.—Not later than 45 days after
a determination by the Attorney General or the Fed-
eral Communications Commission is published under
subsection (b)(4), the Bell operating company that
applied to the Attorney General and the Federal Com-
munications Commission under subsection (a), or any
person who might be injured in its business or prop-
erty as a result of the determination regarding such
company’s engaging in the activity described in such
company’s application, may commence an action in
the United States Court of Appeals for the District of
Columbia Circuit against the Attorney General or the
Federal Communications Commission, as the case
may be, for judicial review of the determination re-
garding the application.
(2) CERTIFICATION OF RECORD.—As part of the
answer to the complaint, the Attorney General or the
Federal Communications Commission, as the case
may be, shall file in such court a certified copy of the
record upon which the determination is based.
(3) CONSOLIDATION
OF
ACTIONS.—The court
shall consolidate for review all civil actions com-
menced under this subsection with respect to the ap-
plication.
(4) JUDGMENT.—(A) The court shall enter a
judgment after reviewing the determination in ac-
cordance with section 706 of title 5 of the United
States Code.
(B) A judgment—
(i) affirming any part of the determination
that approves granting all or part of the re-
quested authorization, or
(ii) reversing any part of the determination
that denies all or part of the requested authoriza-
tion,
shall describe with particularity the nature and scope
of each activity, and of each product market or serv-
ice market, and each geographic market, to which the
affirmance or reversal applies.
SEC. 102. AUTHORIZATION AS PREREQUISITE.
(a) PREREQUISITE.—Until a Bell operating company
is so authorized in accordance with section 101, it shall
be unlawful for such company, directly or through an affili-
ate, to engage in an activity described in section 101(a)(1).
(b) GENERAL EXCEPTIONS.—Except in regard to the
provision of alarm monitoring services, subsection (a) shall
not prohibit a Bell operating company or an affiliate of
a Bell operating company from engaging, at any time after
the date of the enactment of this Act—
(1) in any activity as authorized by an order en-
tered by the United States District Court for the Dis-
trict of Columbia pursuant to section VII or VIII(C)
of the Modification of Final Judgment, if—
(A) such order was entered on or before the
date of the enactment of this Act, or
(B) a request for such authorization was
pending before such court on the date of the en-
actment of this Act,
(2) in providing interexchange telecommuni-
cations services on an intrastate basis if (A) after the
date of enactment of this Act, such telecommuni-
cations have been approved by, or are authorized
under the laws of, the State involved, and public no-
tice of the availability of such authority has occurred
at least 60 days before the offering of such
interexchange telecommunications services, and (B)
the Bell operating company is required by regulations
prescribed by the Commission and the State, for the
services subject to their respective jurisdictions, to pay
a nondiscriminatory access charge to the local ex-
change carrier (including itself) that provides the Bell
operating company with telephone exchange access,
(3) in providing interexchange telecommuni-
cations services through the purchase and resale of
telecommunications services obtained from a person
who is not an affiliate of such company if—
(A) such interexchange telecommunications
services originate in any State that, after the
date of the enactment of this Act, approves or
authorizes persons that are not affiliates of such
company to provide intraexchange toll tele-
communications services in such a manner that
customers in such State have the ability to route
automatically, without the use of any access
code, their intraexchange toll telecommunications
to the telecommunications services provider of the
customer’s designation from among 2 or more
telecommunications services providers (including
such company), and
(B) not less than 45 days before such
company so provides such interexchange tele-
communications services—
(i) such company gives public notice of
the availability of such approval or author-
ization, and
(ii) the Attorney General fails to com-
mence a civil action to enjoin such com-
pany from so providing such interexchange
telecommunications services, or
(4) in any activity in which the Bell operating
company or affiliate was authorized to engage on the
date of enactment of this Act, except (A) as specifi-
cally provided in this Act with respect to alarm mon-
equipment if applicable regulatory rules
permit cross-subsidization of equipment
manufacturing with revenues from regu-
lated telecommunications services and the
manufacturing activities are not conducted
in a separate subsidiary; and
‘‘(v) the type of operation or operations
of the manufacturing affiliate or Bell oper-
ating company as applicable.
‘‘(B) ADVERSE
COMPETITIVE
IMPACT.—In
determining whether the activity would result in
an adverse competitive impact, the following fac-
tors shall be considered:
‘‘(i) whether such activity would raise
the cost of the equipment or network service
in question beyond the level at which there
would be sufficient consumer demand by the
general population to make the equipment
or network service profitable; and
‘‘(ii) whether such activity would, with
respect to the equipment or network service
in question, put the manufacturing affiliate
or Bell operating company, as applicable,
at a competitive disadvantage in compari-
son with one or more providers of one or