SEC. 2. AUTHORIZATION FOR BELL OPERATING COMPANY
TO ENTER COMPETITIVE LINES OF BUSINESS.
(a) APPLICATION.—
(1) IN
GENERAL.—After the applicable date
specified in paragraph (2), a Bell operating company
may apply to the Attorney General for authorization,
notwithstanding the Modification of Final Judg-
ment—
(A) to provide interexchange telecommuni-
cations services,
(B) to manufacture or provide tele-
communications equipment, or manufacture
customer premises equipment, or
(C) to provide alarm monitoring services.
The application shall describe the nature and scope
of the activity, and the product market, service mar-
ket, and geographic market, for which authorization
is sought.
(2) APPLICABLE
DATES.—For purposes of
paragraph (1), the applicable date after which a Bell
operating company may apply for authorization shall
be—
(A) the date of the enactment of this Act,
with respect to—
(i) 
providing 
interexchange 
tele-
communications services, and
(ii) manufacturing or providing tele-
communications equipment, or manufac-
turing customer premises equipment, and
(B) the date that occurs 3 years after the
date of the enactment of this Act, with respect
to providing alarm monitoring services.
(3) PUBLICATION.—Not later than 10 days
after receiving an application made under paragraph
(1), the Attorney General shall publish the applica-
tion in the Federal Register.
(4) AVAILABILITY OF INFORMATION.—The At-
torney General shall make available to the public all
information (excluding trade secrets and privileged
or confidential commercial or financial information)
submitted by the applicant in connection with the
application.
(b) DETERMINATION
BY
THE
ATTORNEY
GEN-
ERAL.—
(1) COMMENT PERIOD.—Not later than 45 days
after an application is published under subsection
(a)(3), interested persons may submit written com-
ments to the Attorney General, regarding the appli-
cation. Submitted comments shall be available to the
public.
(2) DETERMINATION.—(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
shall issue a written determination, with respect to
granting the authorization for which the Bell operat-
ing company has applied. If the Attorney General
fails to issue such determination in the 180-day pe-
riod beginning on the date the Attorney General re-
ceives such application, the Attorney General shall
be deemed to have issued a determination approving
such application on the last day of such period.
(B) The Attorney General shall approve the
granting of the authorization requested in the appli-
cation unless the Attorney General finds by clear
and convincing evidence that there is a dangerous
probability that such company or its affiliates would
successfully use market power to achieve monopoly
power in the market such company seeks to enter.
The Attorney General may approve all or part of the
requested authorization.
(C) A determination that approves any part of
a requested authorization shall describe with par-
ticularity the nature and scope of the approved ac-
tivity, and list each product market, service market,
and geographic market, to which such approval
applies.
(3) PUBLICATION.—Not later than 10 days
after issuing a determination under paragraph (2),
the Attorney General shall publish a brief descrip-
tion of the determination in the Federal Register.
(4) FINALITY.—A determination made under
paragraph (2) shall be final unless a petition with
respect to such determination is timely filed under
subsection (c)(1).
(c) JUDICIAL REVIEW.—
(1) FILING OF PETITION.—(A) Not later than
30 days after a determination by the Attorney Gen-
eral is published under subsection (b)(3), the Bell
operating company that applied to the Attorney
General under subsection (a), or any person who
would be injured in its business or property as a re-
sult of the determination regarding such company’s
engaging in the activity described in such company’s
application, may file a petition for judicial review of
the determination in the United States Court of Ap-
peals for the District of Columbia Circuit.
(B) The United States Court of Appeals for the
District of Columbia shall have exclusive jurisdiction
to review determinations made under section
2(b)(2).
(2) CERTIFICATION OF RECORD.—As part of
the answer to the petition, the Attorney General
shall file in such court a certified copy of the record
upon which the determination is based.
(3) CONSOLIDATION OF PETITIONS.—The court
shall consolidate for judicial review all petitions filed
under this subsection with respect to the application.
(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. Whether there is clear and convincing
evidence supporting the determination, as required
by subsection (b)(2)(B), shall be affirmed by the
court only if the court finds that the record certified
pursuant to paragraph (2) provides substantial evi-
dence for that determination.
(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 author-
ization,
shall describe with particularity the nature and
scope of the activity, and each product market, serv-
ice market, and geographic market, to which the af-
firmance or reversal applies.
SEC. 3. AUTHORIZATION AS PREREQUISITE.
(a) PREREQUISITE.—Until a Bell operating company
is so authorized in accordance with section 2, it shall be
unlawful for such company, directly or through an affili-
ate, to engage in an activity described in section 2(a)(1).
(b) GENERAL EXCEPTIONS.—Except with respect to
providing alarm monitoring services, subsection (a) shall
not prohibit a Bell operating company from engaging, at
any time after the date of the enactment of this Act, in
any activity as authorized by an order entered by the
United States District Court for the District of Columbia
pursuant to section VII or VIII(C) of the Modification of
Final Judgment, if—
(1) such order was entered on or before the
date of the enactment of this Act, or
(2) a request for such authorization was pend-
ing before such court on the date of the enactment
of this Act.
(c) EXCEPTION FOR CERTAIN ALARM MONITORING
SERVICES.—Subsection (a) shall not prohibit a Bell oper-
ating company, at any time after the date of the enact-
ment of this Act, from providing alarm monitoring services
to the same extent that such company was already provid-
ing such services before such date.
(d) EXCEPTION
FOR
CERTAIN
INTEREXCHANGE
TELECOMMUNICATIONS SERVICES.—Subsection (a) shall
not prohibit a Bell operating company, at any time after
the date of the enactment of this Act, from providing
interexchange telecommunications services with respect to
telecommunications that originate in any exchange area
in which such company is not the dominant provider of
wireline telephone exchange service.
(e) EXCEPTIONS FOR INCIDENTAL SERVICES.—Sub-
section (a) shall not prohibit a Bell operating company,
at any time after the date of the enactment of this Act,
from providing interexchange telecommunications services
for the purpose of—
(1)(A) providing audio programming, video pro-
gramming, or other programming services to sub-
scribers to such services of such company,
(B) providing the capability for interaction by
such subscribers to select or respond to such audio
programming, video programming, or other pro-
gramming services, or
(C) providing to distributors audio program-
ming or video programming that such company
owns, controls, or is licensed by the copyright owner
of such programming, or by an assignee of such
owner, to distribute,
(2) providing a telecommunications service,
using the transmission facilities of a cable system
that is an affiliate of such company, between ex-
change areas within a cable system franchise area in
which such company is not, on the date of the enact-
ment of this Act, a provider of wireline telephone ex-
change service,
(3) providing commercial mobile services in ac-
cordance with existing law,
(4) providing a service that permits a customer
that is located in one exchange area to retrieve
stored information from, or file information for stor-
age in, information storage facilities of such com-
pany that are located in another exchange area,
(5) providing signaling information used in con-
nection with the provision of exchange services, or
exchange access, to a local exchange carrier, or
(6) providing network control signaling infor-
mation to, and receiving such signaling information
from, interexchange carriers at any location within
the area in which such company provides exchange
services or exchange access.
SEC. 4. REGULATION OF ELECTRONIC PUBLISHING.
(a) IN GENERAL.—
(1) PROHIBITION.—A Bell operating company
and any affiliate shall not engage in the provision of
electronic publishing that is disseminated by means
of such Bell operating company’s or any of its affili-
ates’ basic telephone service.
(2) PERMITTED ACTIVITIES OF SEPARATED AF-
FILIATE.—Subject to subsection (b), nothing in this
section shall prohibit a separated affiliate or elec-
tronic publishing joint venture from engaging in the
provision of electronic publishing or any other lawful
service in any area.
(3) RULE OF CONSTRUCTION.—Nothing in this
section shall prohibit a Bell operating company or
affiliate from engaging in the provision of any lawful
service other than electronic publishing in any area
or from engaging in the provision of electronic pub-
lishing that is not disseminated by means of such
Bell operating company’s or any of its affiliates’
basic telephone service.
(b) SEPARATED AFFILIATE OR ELECTRONIC PUB-
LISHING JOINT VENTURE REQUIREMENTS.—A separated
affiliate and electronic publishing joint venture shall
each—
(1) maintain books, records, and accounts that
are separate from those of the Bell operating com-
pany and from any affiliate and that record in ac-
cordance with generally accepted accounting prin-
ciples all transactions, whether direct or indirect,
with the Bell operating company,
(2) not incur debt in a manner that would per-
mit a creditor upon default to have recourse to the
assets of the Bell operating company,
(3) prepare financial statements that are not
consolidated with those of the Bell operating com-
pany or an affiliate, provided that consolidated
statements may also be prepared,
(4) after 1 year from the effective date of this
section, not hire—
(A) as corporate officers, sales and mar-
keting management personnel whose respon-
sibilities at the separated affiliate or electronic
publishing joint venture will include the geo-
graphic area where the Bell operating company
provides basic telephone service,
(B) network operations personnel whose
responsibilities at the separated affiliate or elec-
tronic publishing joint venture would require
dealing directly with the Bell operating com-
pany, or
(C) any person who was employed by the
Bell operating company during the year preced-
ing their date of hire,
except that the requirements of this paragraph shall
not apply to persons subject to a collective bargain-
ing agreement that gives such persons rights to be
employed by a separated affiliate or electronic pub-
lishing joint venture of the Bell operating company,
(5) not provide any wireline telephone exchange
service in any telephone exchange area where a Bell
operating company with which it is under common
ownership or control provides basic telephone ex-
change service except on a resale basis,
(6) not use the name, trademarks, or service
marks of an existing Bell operating company except
for names, trademarks, or service marks that are or
were used in common with the entity that owns or
controls the Bell operating company,
(7) have performed annually by March 31 a
compliance review—
(A) that is conducted by an independent
entity that is subject to professional, legal, and
ethical obligations for the purpose of determin-
ing compliance during the preceding calendar
year with any provision of this section that im-
poses a requirement on such separated affiliate
or electronic publishing joint venture, and
(B) the results of which are maintained by
the separated affiliate for a period of 5 years
subject to review by any lawful authority;
(8) within 90 days of receiving a review de-
scribed in paragraph (7), file a report of any excep-
tions and corrective action with the Attorney Gen-
eral and allow any person to inspect and copy such
report subject to reasonable safeguards to protect
any proprietary information contained in such report
from being used for purposes other than to enforce
or pursue remedies under this section.
(c) BELL OPERATING COMPANY REQUIREMENTS.—
A Bell operating company under common ownership or
control with a separated affiliate or electronic publishing
joint venture shall—
(1) not provide a separated affiliate any facili-
ties, services, or basic telephone service information
unless such Bell operating company makes such fa-
cilities, services, or information available to unaffili-
ated entities upon request and on the same terms
and conditions;
(2) carry out transactions with a separated af-
filiate in a manner equivalent to the manner that
unrelated parties would carry out independent trans-
actions and not based upon the affiliation;
(3) carry out transactions with a separated af-
filiate, which involve the transfer of personnel, as-
sets, or anything of value, pursuant to written con-
tracts or tariffs made publicly available;
(4) carry out transactions with a separated af-
filiate in a manner that is auditable in accordance
with generally accepted auditing standards;
(5) value any assets that are transferred to a
separated affiliate at the greater of net book cost or
fair market value;
(6) value any assets that are transferred to the
Bell operating company by its separated affiliate at
the lesser of net book cost or fair market value;
(7) except for—
(A) instances where State regulations per-
mit in-arrears payment for tariffed tele-
communications services, or
(B) the investment by an affiliate of divi-
dends or profits derived from a Bell operating
company,
not provide debt or equity financing directly or indi-
rectly to a separated affiliate;
(8) comply fully with all applicable State cost
allocation and other accounting rules;
(9) have performed annually by March 31 a
compliance review—
(A) that is conducted by an independent
entity that is subject to professional, legal, and
ethical obligations for the purpose of determin-
ing compliance during the preceding calendar
year with any provision of this section that im-
poses a requirement on such Bell operating
company, and
(B) the results of which are maintained by
the Bell operating company for a period of 5
years subject to review by any lawful authority;
(10) within 90 days of receiving a review de-
scribed in paragraph (9), file a report of any excep-
tions and corrective action with the Attorney Gen-
eral and allow any person to inspect and copy such
report subject to reasonable safeguards to protect
any proprietary information contained in such report
from being used for purposes other than to enforce
or pursue remedies under this section;
(11) if it provides facilities or services for tele-
communication, transmission, billing and collection,
or physical collocation to any electronic publisher,
including a separated affiliate, for use with or in
connection with the provision of electronic publishing
that is disseminated by means of such Bell operating
company’s or any of its affiliates’ basic telephone
service, provide to all other electronic publishers the
same type of facilities and services on request, on
the same terms and conditions or as required by a
State, and unbundled and individually tariffed to the
smallest extent that is technically feasible and eco-
nomically reasonable to provide;
(12) provide network access and interconnec-
tions for basic telephone service to electronic pub-
lishers at any technically feasible and economically
reasonable point within the Bell operating company’s
network and at just and reasonable rates that are
tariffed (so long as rates for such services are sub-
ject to regulation) and that are not higher on a per-
unit basis than those charged for such services to
any other electronic publisher or any separated affil-
iate engaged in electronic publishing;
(13) if prices for network access and inter-
connection for basic telephone service are no longer
subject to regulation, provide electronic publishers
such services on the same terms and conditions as
a separated affiliate receives such services;
(14) if any basic telephone service used by elec-
tronic publishers ceases to require a tariff, provide
electronic publishers with such service on the same
terms and conditions as a separated affiliate receives
such service;
(15) provide reasonable advance notification at
the same time and on the same terms to all affected
electronic publishers of information if such informa-
tion is within any one or more of the following cat-
egories:
(A) such information is necessary for the
transmission or routing of information by an
interconnected electronic publisher;
(B) such information is necessary to en-
sure the interoperability of an electronic pub-
lisher’s and the Bell operating company’s net-
works; or
(C) such information concerns changes in
basic telephone service network design and
technical standards which may affect the provi-
sion of electronic publishing;
(16) not directly or indirectly provide anything
of monetary value to a separated affiliate unless in
exchange for consideration at least equal to the
greater of its net book cost or fair market value, ex-
cept the investment by an affiliate of dividends or
profits derived from a Bell operating company;
(17) not discriminate in the presentation or
provision of any gateway for electronic publishing
services or any electronic directory of information
services, which is provided over such Bell operating
company’s basic telephone service;
(18) have no directors, officers, or employees in
common with a separated affiliate;
(19) not own any property in common with a
separated affiliate;
(20) not perform hiring or training of personnel
on behalf of a separated affiliate;
(21) not perform the purchasing, installation,
or maintenance of equipment on behalf of a sepa-
rated affiliate, except for telephone service that it
provides under tariff or contract subject to the pro-
visions of this section; and
(22) not perform research and development on
behalf of a separated affiliate.
(d) CUSTOMER PROPRIETARY NETWORK INFORMA-
TION.—A Bell operating company or any affiliate shall not
provide to any electronic publisher, including a separated
affiliate or electronic publishing joint venture, customer
proprietary network information for use with or in connec-
tion with the provision of electronic publishing that is dis-
seminated by means of such Bell operating company’s or
any of its affiliates’ basic telephone service that is not
made available by the Bell operating company or affiliate
to all electronic publishers on the same terms and condi-
tions.
(e) COMPLIANCE WITH SAFEGUARDS.—No Bell oper-
ating company, affiliate, or separated affiliate shall act in
concert with another Bell operating company or any other
entity in order to knowingly and willfully violate or evade
the requirements of this section.
(f) 
TELEPHONE
OPERATING
COMPANY
DIVI-
DENDS.—Nothing in this section shall prohibit an affiliate
from investing dividends derived from a Bell operating
company in its separated affiliate, and subsections (i) and
(j) of this section shall not apply to any such investment.
(g) JOINT MARKETING.—Except as provided in sub-
section (h)—
(1) a Bell operating company shall not carry
out any promotion, marketing, sales, or advertising
for or in conjunction with a separated affiliate, and
(2) a Bell operating company shall not carry
out any promotion, marketing, sales, or advertising
for or in conjunction with an affiliate that is related
to the provision of electronic publishing.
(h) PERMISSIBLE JOINT ACTIVITIES.—
(1) JOINT TELEMARKETING.—A Bell operating
company may provide inbound telemarketing or re-
ferral services related to the provision of electronic
publishing for a separated affiliate, electronic pub-
lishing joint venture, affiliate, or unaffiliated elec-
tronic publisher, provided that if such services are
provided to a separated affiliate, electronic publish-
ing joint venture, or affiliate, such services shall be
made available to all electronic publishers on re-
quest, on nondiscriminatory terms, at compensatory
prices, to ensure that the Bell operating company’s
method of providing telemarketing or referral and its
price structure do not competitively disadvantage
any electronic publishers regardless of size, including
those which do not use the Bell operating company’s
telemarketing services.
(2) TEAMING ARRANGEMENTS.—A Bell operat-
ing company may engage in nondiscriminatory
teaming or business arrangements to engage in elec-
tronic publishing with any separated affiliate or with
any other electronic publisher provided that the Bell
operating company only provides facilities, services,
and basic telephone service information as author-
ized by this section and provided that the Bell oper-
ating company does not own such teaming or busi-
ness arrangement.
(3) ELECTRONIC
PUBLISHING
JOINT
VEN-
TURES.—A Bell operating company or affiliate may
participate on a nonexclusive basis in electronic pub-
lishing joint ventures with entities that are not any
Bell operating company, affiliate, or separated affili-
ate to provide electronic publishing services, provided
that the participating Bell operating company or
participating affiliate has not more than a 50 per-
cent direct or indirect equity interest (or the equiva-
lent thereof) or the right to more than 50 percent
of the gross revenues under a revenue sharing or
royalty agreement in any electronic publishing joint
venture. Officers and employees of a Bell operating
company or affiliate participating in an electronic
publishing joint venture may not have more than 50
percent of the voting control over the electronic pub-
lishing joint venture. In the case of joint ventures
with small, local electronic publishers, the Attorney
General may authorize the Bell operating company
or affiliate to have a larger equity interest, revenue
share, or voting control but not to exceed 80 per-
cent. A Bell operating company participating in an
electronic publishing joint venture may provide pro-
motion, marketing, sales, or advertising personnel
and services to such joint venture.
(i) TRANSACTIONS RELATED TO THE PROVISION OF
ELECTRONIC PUBLISHING BETWEEN A TELEPHONE OP-
ERATING COMPANY AND ANY AFFILIATE.—
(1) RECORDS OF TRANSACTIONS.—Any provi-
sion of facilities, services, or basic telephone service
information, or any transfer of assets, personnel, or
anything of commercial or competitive value, from a
Bell operating company to any affiliate related to
the provision of electronic publishing shall be—
(A) recorded in the books and records of
each entity,
(B) auditable in accordance with generally
accepted auditing standards, and
(C) pursuant to written contracts or tariffs
filed with a State and made publicly available.
(2) VALUATION OF TRANSFERS.—Any transfer
of assets directly related to the provision of elec-
tronic publishing from a Bell operating company to
an affiliate shall be valued at the greater of net book
cost or fair market value. Any transfer of assets re-
lated to the provision of electronic publishing from
an affiliate to the Bell operating company shall be
valued at the lesser of net book cost or fair market
value.
(3) PROHIBITION OF EVASIONS.—A Bell operat-
ing company shall not provide directly or indirectly
to a separated affiliate any facilities, services, or
basic telephone service information related to the
provision of electronic publishing that are not made
available to unaffiliated companies on the same
terms and conditions.
(j) TRANSACTIONS RELATED TO THE PROVISION OF
ELECTRONIC PUBLISHING BETWEEN AN AFFILIATE AND
A SEPARATED AFFILIATE.—
(1) RECORDS OF TRANSACTIONS.—Any facili-
ties, services, or basic telephone service information
provided or any assets, personnel, or anything of
commercial or competitive value transferred, from a
Bell operating company to any affiliate as described
in subsection (i) and then provided or transferred to
a separated affiliate shall be—
(A) recorded in the books and records of
each entity,
(B) auditable in accordance with generally
accepted auditing standards, and
(C) pursuant to written contracts or tariffs
filed with a State and made publicly available.
(2) VALUATION OF TRANSFERS.—Any transfer
of assets directly related to the provision of elec-
tronic publishing from a Bell operating company to
any affiliate as described in subsection (i) and then
transferred to a separated affiliate shall be valued at
the greater of net book cost or fair market value.
Any transfer of assets related to the provision of
electronic publishing from a separated affiliate to
any affiliate and then transferred to the Bell operat-
ing company as described in subsection (i) shall be
valued at the lesser of net book cost or fair market
value.
(3) PROHIBITION
OF
EVASIONS.—An affiliate
shall not provide directly or indirectly to a separated
affiliate any facilities, services, or basic telephone
service information related to the provision of elec-
tronic publishing that are not made available to un-
(xi) The provision of directory assistance
that provides names, addresses, and telephone
numbers and does not include advertising.
(xii) Caller identification services.
(xiii) Repair and provisioning databases for
telephone company operations.
(xiv) Credit card and billing validation for
telephone company operations.
(xv) 911–E and other emergency assist-
ance databases.
(xvi) Any other network service of a type
that is like or similar to these network services
and that does not involve the generation or al-
teration of the content of information.
(xvii) Any upgrades to these network serv-
ices that do not involve the generation or alter-
ation of the content of information.
(C) The term ‘‘electronic publishing’’ also shall
not include—
(i) full motion video entertainment on de-
mand, and
(ii) video programming.
(7) The term ‘‘electronic publishing joint ven-
ture’’ means a joint venture owned by a Bell operat-
ing company or affiliate that engages in the provi-