I
103D CONGRESS
1ST SESSION
H. R. 1504
To encourage the modernization of the Nation’s telecommunications infra-
structure, to promote competition in the cable television industry and
to permit telephone companies to provide video programming.
IN THE HOUSE OF REPRESENTATIVES
MARCH 29, 1993
Mr. BOUCHER (for himself, Mr. OXLEY, Mr. BARTON of Texas, Mr. MCCLOS-
KEY, Mr. MAZZOLI, Mr. NEAL of North Carolina, Mr. HENRY, Mr. GOR-
DON, Mr. WISE, Mr. MARTINEZ, Mr. SHAYS, Mr. PAXON, Mr. SUND-
QUIST, and Mr. BOEHLERT) introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce
SEPTEMBER 29, 1993
Additional sponsors: Mr. SKEEN, Mr. DORNAN, Mr. EVANS, Mr. QUILLEN,
Mr. HOUGHTON, Mr. WALSH, Mr. LAFALCE, Mr. BUNNING, Mr. SOLO-
MON, Mr. MACHTLEY, Mr. ENGEL, Mr. HOCHBRUECKNER, Ms. LONG,
Mrs. LOWEY, Mr. QUINN, Mr. HASTERT, Mr. MORAN, Mr. MCHUGH, Mr.
MEEHAN, Mr. LEHMAN, Mr. LEVY, Ms. MOLINARI, Mr. SERRANO, Mr.
TORKILDSEN, Mr. KING, Mr. LAZIO, Mr. BLUTE, Mr. CLINGER, Mr.
BARTLETT of Maryland, Mr. OLVER, Mr. SPRATT, Mr. TORRICELLI, Mr.
FIELDS of Texas, Mr. SCHUMER, Ms. BYRNE, Mr. ACKERMAN, Mr.
GALLEGLY, Mr. COMBEST, Mr. SAM JOHNSON of Texas, Mr. BAKER of
Louisiana, Mr. PAYNE of Virgina, Mr. DOOLEY, Mr. WYDEN, and Mr.
COOPER
A BILL
To encourage the modernization of the Nation’s tele-
communications infrastructure, to promote competition
in the cable television industry and to permit telephone
companies to provide video programming.
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 ‘‘Communications Com-
petitiveness and Infrastructure Modernization Act of
1993’’.
SEC. 2. CABLE SERVICE PROVIDED BY TELEPHONE COMPA-
NIES.
(a) GENERAL REQUIREMENT.— Section 613(b) of
the Communications Act of 1934 (47 U.S.C. 533(b)) is
amended to read as follows:
‘‘(b)(1) Subject to the requirements of part V and
other provisions of this title, any common carrier subject
in whole or in part to title II of this Act may provide video
programming directly to subscribers in its telephone serv-
ice area either through its own facilities or through an
affiliate owned by, operated by, controlled by, or under
common control with the common carrier.
‘‘(2) Subject to the requirements of part V and other
provisions of this title, any common carrier subject in
whole or in part to title II of this Act may provide chan-
nels of communications or pole line conduit space, or other
rental arrangements, to any entity which is directly or in-
directly owned by, operated by, controlled by, or under
common control with such common carrier, if such facili-
ties or arrangements are to be used for, or in connection
with, the provision of video programming directly to sub-
scribers in the telephone service area to the common car-
rier.’’.
(b) PROVISIONS FOR REGULATION OF CABLE SERV-
ICE PROVIDED BY TELEPHONE COMPANIES.—Title VI of
the Communications Act of 1934 (47 U.S.C. 521 et seq.)
is amended by adding at the end the following new part:
‘‘Part V—Cable Service Provided by Telephone
Companies
‘‘SEC. 651. DEFINITIONS.
‘‘For purposes of this part—
‘‘(1) the term ‘affiliated video programming’
means any video programming which is (A) owned
or controlled by, or under common control with, a
common carrier, and (B) provided by the common
carrier or an affiliate directly to subscribers in its
telephone service area;
‘‘(2) the term ‘control’ means—
‘‘(A) an ownership interest in which an en-
tity has the right to vote more than 50 percent
of the outstanding common stock or other own-
ership interest; or
‘‘(B) actual working control, if no single
entity directly or indirectly has the right to vote
more than 50 percent of the outstanding com-
mon stock or other ownership interest;
‘‘(3) the term ‘basic video dial tone platform’
has the same meaning as established by order of the
Commission entitled ‘Telephone Company-Cable Tel-
evision Cross-Ownership Rules, Sections 63.54–
63.58’, CC Docket No. 87–266, adopted July 16,
1992; and
‘‘(4) the term ‘rural area’ means a geographic
area that does not include either—
‘‘(A) any incorporated or unincorporated
place of 10,000 inhabitants or more, or any
part thereof; or
‘‘(B) any territory, incorporated or unin-
corporated, included in an urbanized area.
‘‘SEC. 652. SEPARATE VIDEO PROGRAMMING AFFILIATE.
‘‘(a) IN GENERAL.—Except as provided in subsection
(d) of this section, a common carrier shall not provide
video programming directly to subscribers in its telephone
service area unless such video programming is provided
through a video programming affiliate that is separate
from such carrier.
‘‘(b) BOOKS AND MARKETING.—A video program-
ming affiliate of a common carrier shall—
‘‘(1) maintain books, records, and accounts sep-
arate from such carrier which identify all trans-
actions with such carrier;
‘‘(2) carry out directly (or through any
nonaffiliate or any other affiliate of such carrier) its
own marketing and sales, except that institutional
advertising carried out by such carrier shall be per-
mitted so long as each party bears its pro rata share
of the costs; and
‘‘(3) not own real or personal property in com-
mon with such carrier.
‘‘(c) BUSINESS TRANSACTIONS WITH CARRIER SUB-
JECT
TO REGULATION.—Any contract, agreement, ar-
rangement, joint venture, partnership, or other manner of
conducting business, between a common carrier and its
video programming affiliate, providing for—
‘‘(1) the sale, exchange, or leasing of property
between such affiliate and such carrier;
‘‘(2) the loan of money or other extension of
credit between such affiliate and such carrier or be-
tween such affiliate and a third party directly or in-
directly guaranteed by such carrier;
‘‘(3) the furnishing of goods between such affili-
ate and such carrier; or
‘‘(4) the transfer to or use by such affiliate for
its benefit of any assets of such carrier,
shall be pursuant to regulation prescribed by the Commis-
sion, shall be on a fully compensatory and auditable basis,
shall be without cost to the telephone service ratepayers
of the carrier, and shall be in compliance with rules estab-
lished by the Commission which will be sufficient to enable
the Commission to assess the compliance of any trans-
action.
‘‘(d) WAIVER.—The Commission may waive any of
the requirements of this section upon the showing of good
cause, by a common carrier, video programming affiliate,
or any other person, if the Commission determines that
the public interest, convenience, and necessity will be
served by the waiver. The Commission shall act to approve
or disapprove a waiver application within 120 days after
the date it is filed.
‘‘SEC. 653. ESTABLISHMENT OF BASIC VIDEO DIAL TONE
PLATFORM.
‘‘Any common carrier which provides video program-
ming directly to subscribers through a video programming
affiliate in its telephone service area shall establish a basic
video dial tone platform. The Commission, together with
the States, shall establish regulations to prohibit a carrier
from discriminating in favor of its video programming af-
filiate in providing access to such platform or with regard
to rates, terms, and conditions for access to such platform.
‘‘SEC. 654. PROVISION OF AFFILIATED VIDEO PROGRAM-
MING.
‘‘(a) LIMITATION.—A common carrier which provides
affiliated video programming directly to subscribers in its
telephone service area through its video programming af-
filiate shall make available such capacity as is requested
by unaffiliated video program providers upon reasonable
notice, except that the common carrier shall not be re-
quired to provide more than 75 percent of the equipped
capacity of its basic video dial tone platform to unaffiliated
video program providers.
‘‘(b) EVALUATION BY COMMISSION.—The Commis-
sion shall, not later than 2 years after the date of enact-
ment of this part, evaluate the effect of subsection (a) on
the video programming marketplace and, on the basis of
that evaluation, make recommendations to Congress con-
cerning appropriate modifications, if any, to subsection
(a).
‘‘(c) BROADCAST SIGNAL CARRIAGE EXCLUDED.—
The carriage of local broadcast signals pursuant to section
614 shall not constitute the provision of affiliated video
programming for purposes of subsection (a).
‘‘(d) WAIVER.—The Commission may waive or other-
wise modify the applicability of subsection (a) if it deter-
mines that video programming is not available for trans-
port by a common carrier to subscribers in its telephone
service area. The Commission shall act to approve or dis-
approve a waiver application within a reasonable period
of time.
‘‘(e) TERMINATION.—Subsection (a) shall cease to be
effective five years after the date of enactment of this part.
‘‘SEC. 655. PROHIBITION OF CROSS-SUBSIDIZATION.
‘‘A common carrier shall not engage in any practice
that—
‘‘(1) results in the inclusion in rates for tele-
phone exchange service of any operating expenses,
costs, depreciation charges, capital investments, or
other expenses associated with the provision of video
programming by the common carrier or its video
programming affiliate; and
‘‘(2) is prohibited by the Commission or a
State.
‘‘SEC. 656. PROHIBITION ON BUYOUTS.
‘‘(a) GENERAL PROHIBITION.—No common carrier
which provides telephone service, nor any entity owned by
or under common ownership or control with such carrier,
may purchase or otherwise obtain control over any cable
system which is located within its telephone service area
and is owned by an unaffiliated person.
‘‘(b) EXCEPTIONS.—Notwithstanding subsection (a),
a common carrier shall not be prevented from—
‘‘(1) obtaining a noncontrolling interest in such
a cable system through a joint venture or other
means; or
‘‘(2) acquiring the use of that part of the trans-
mission facilities of such a cable system extending
from the last multi-user terminal to the premises of
the end user if such use is reasonably limited in
scope and duration.
‘‘(c) WAIVER.—
‘‘(1) The Commission may waive the restric-
tions in subsection (a) of this section only upon a
showing by a carrier that—
‘‘(A) the facilities of the cable system will
be substantially upgraded through the deploy-
ment of modern technology, including fiber op-
tics;
‘‘(B) the capacity of the cable system and
types of services offered will be expanded;
‘‘(C) the purchase or acquisition of control
will otherwise be in the public interest; and
‘‘(D) the local franchising authority ap-
proves of such waiver.
‘‘(2) The Commission shall act to approve or
disapprove a waiver application within 180 days
after the date it is filed.
‘‘SEC. 657. PENALTIES.
‘‘If the Commission finds, after notice and oppor-
tunity for a hearing, including the oral examination and
cross-examination of witnesses, that any common carrier
has knowingly and willfully violated any provision of this
part, the Commission shall assess such fines and penalties
as it deems appropriate pursuant to title V of this Act.
‘‘SEC. 658. CUSTOMER PROTECTION.
‘‘(a) JOINT BOARD REQUIRED.—The Commission
shall, within 30 days after the date of enactment of this
part, convene a Federal-State Joint Board under the pro-
visions of section 410(c) for the purpose of establishing
the practices, classifications, and regulations as may be
necessary to ensure proper jurisdictional separation and
allocation of the costs of providing broadband services, in-
cluding affiliated video programming. The Board shall
issue its recommendations to the Commission within 270
days after the date of enactment of this part.
‘‘(b) COMMISSION REGULATIONS REQUIRED.—The
Commission, with respect to interstate switched access