IB
Union Calendar No. 15
107TH CONGRESS
1ST SESSION
H. R. 496
[Report No. 107–20]
To amend the Communications Act of 1934 to promote deployment of ad-
vanced services and foster the development of competition for the benefit
of consumers in all regions of the Nation by relieving unnecessary bur-
dens on the Nation’s two percent local exchange telecommunications
carriers, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 7, 2001
Mrs. CUBIN (for herself, Mr. GORDON, Mr. BARRETT of Wisconsin, Mr. PICK-
ERING, and Mr. LARGENT) introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce
MARCH 13, 2001
Additional sponsors: Mr. SHIMKUS, Mr. BERRY, Mr. HUTCHINSON, Mr. PE-
TERSON of Minnesota, Mr. SIMPSON, Mr. PORTMAN, Mr. DOOLITTLE,
Mr. OTTER, and Mr. BEREUTER
MARCH 13, 2001
Reported with an amendment, 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 italic]
[For text of introduced bill, see copy of bill as introduced on February 7, 2001]
A BILL
To amend the Communications Act of 1934 to promote de-
ployment of advanced services and foster the development
of competition for the benefit of consumers in all regions
of the Nation by relieving unnecessary burdens on the
Nation’s two percent local exchange telecommunications
carriers, 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.
This Act may be cited as the ‘‘Independent Tele-
communications Consumer Enhancement Act of 2001’’.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—Congress finds the following:
(1) The Telecommunications Act of 1996 was en-
acted to foster the rapid deployment of advanced tele-
communications and information technologies and
services to all Americans by promoting competition
and reducing regulation in telecommunications mar-
kets nationwide.
(2) The Telecommunications Act of 1996 specifi-
cally recognized the unique abilities and cir-
cumstances of local exchange carriers with fewer than
two percent of the Nation’s subscriber lines installed
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 percent
carriers, impeding such carriers’ deployment of ad-
vanced telecommunications services and competitive
initiatives to consumers in less densely populated re-
gions 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 accelerate
deployment of advanced services and competitive ini-
tiatives 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 reg-
ulatory burdens on local exchange carriers with fewer
than two percent of the Nation’s subscriber lines in-
stalled in the aggregate nationwide;
(2) to improve such carriers’ flexibility to under-
take 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) whose
access lines, when aggregated with the access lines of
any local exchange carrier that such incumbent local
exchange carrier directly or indirectly controls, is
controlled by, or is under common control with, are
fewer than two percent of the Nation’s subscriber 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 reporting
requirements would have on two percent carriers.
‘‘(b) EFFECT OF COMMISSION’S FAILURE TO TAKE
INTO ACCOUNT DIFFERENCES.—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 reporting requirement would
have on two percent carriers, the Commission shall not en-
force the rule against two percent carriers unless and until
the Commission performs such separate evaluation.
‘‘(c) ADDITIONAL REVIEW NOT REQUIRED.—Nothing
in this section shall be construed to require the Commission
to conduct a separate evaluation under subsection (a) if the
rules adopted do not apply to two percent carriers, 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 section
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 or attested, but a two percent
carrier that qualifies as a class A carrier shall annu-
ally certify to the Commission that the two percent
carrier’s cost allocation complies with the rules of the
Commission; or
‘‘(2) to file Automated Reporting and Manage-
ment Information Systems (ARMIS) reports.
‘‘(b) PRESERVATION OF AUTHORITY.—Except as pro-
vided in subsection (a), nothing in this Act limits the au-
thority of the Commission to obtain access to information
under sections 211, 213, 215, 218, and 220 with respect
to two percent carriers.
‘‘SEC. 283. INTEGRATED OPERATION OF TWO PERCENT CAR-
RIERS.
‘‘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), pag-
ing, Internet, information services or other enhanced serv-
ices, or other services. The Commission shall not require
any two percent carrier and its affiliates to maintain sepa-
rate officers, directors, or other personnel, network facilities,
buildings, research and development departments, books of
account, financing, marketing, provisioning, or other oper-
ations.
‘‘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 car-
rier to participate or withdraw from participation in such
tariff for any other study area. The Commission may re-
quire a two percent carrier to give 60 days notice of its
intent to participate or withdraw from participation in
such common line tariff with respect to a study area. Ex-
cept as permitted by section 310(f)(3), a two percent car-
rier’s election under this subsection shall be binding for one
year from the date of the election.
‘‘(b) PRICE CAP REGULATION.—A two percent carrier
may elect to be regulated by the Commission under price
cap rate regulation, or elect to withdraw from such regula-
tion, for one or more of its study areas. The Commission
shall not require a carrier making an election under this
subsection with respect to any study area or areas to make
the same election for any other study area. Except as per-
mitted by section 310(f)(3), a two percent carrier’s election
under this subsection shall be binding for one year from
the date of the election.
‘‘SEC. 285. DEPLOYMENT OF NEW TELECOMMUNICATIONS
SERVICES BY TWO PERCENT COMPANIES.
‘‘(a) ONE-DAY NOTICE OF DEPLOYMENT.—The Com-
mission shall permit two percent carriers to introduce new
interstate telecommunications services by filing a tariff on
one day’s notice showing the charges, classifications, regula-
tions, and practices therefor, without obtaining a waiver,
or make any other showing before the Commission in ad-
vance of the tariff filing. The Commission shall not have
authority to approve or disapprove the rate structure for
such services shown in such tariff.
‘‘(b) DEFINITION.—For purposes of subsection (a), the
term ‘new interstate telecommunications service’ means a
class or subclass of service not previously offered by the two
percent carrier that enlarges the range of service options
available to ratepayers of such carrier.
‘‘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. A two percent carrier subject to rate-
of-return regulation with respect to an interstate switched
or special access service, for which pricing flexibility has
been exercised pursuant to this subsection, shall compute
its interstate rate of return based on the nondiscounted rate
for such service.
‘‘(b) PRICING DEREGULATION.—Notwithstanding any
other provision of this Act, upon receipt by the Commission
of a certification by a two percent carrier that a local ex-
change 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 two percent
carrier as non-dominant, and therefore shall not require the
tariffing of the interstate service offerings of such two per-
cent carrier.
‘‘(c) PARTICIPATION IN EXCHANGE CARRIER ASSOCIA-
TION TARIFF.—A two percent carrier that meets the re-
quirements of subsection (a) or (b) of this section with re-
spect to one or more study areas shall be permitted to par-
ticipate in the common line tariff administered and filed
by the National Exchange Carrier Association or any suc-
cessor tariff or administrator, by electing to include one or
more of its study areas in such tariff.
‘‘(d) DEFINITIONS.—For purposes of this section:
‘‘(1) FACILITIES-BASED ENTRY.—The term ‘fa-
cilities-based entry’ means, within the service area of
a two percent carrier—
‘‘(A) the provision or procurement of local
telephone exchange switching or its equivalent;
and
‘‘(B) the provision of telephone exchange
service to at least one unaffiliated customer.
‘‘(2) CONTRACT-BASED TARIFF.—The term ‘con-
tract-based tariff’ shall mean a tariff based on a serv-
ice contract entered into between a two percent car-
rier and one or more customers of such carrier. Such
tariff shall include—
‘‘(A) the term of the contract, including any
renewal options;
‘‘(B) a brief description of each of the serv-
ices provided under the contract;
‘‘(C) minimum volume commitments for
each service, if any;
‘‘(D) the contract price for each service or
services at the volume levels committed to by the
customer or customers;
‘‘(E) a brief description of any volume dis-
counts built into the contract rate structure; and
‘‘(F) a general description of any other clas-
sifications, practices, and regulations affecting
the contract rate.
‘‘(3) SERVICE AREA.—The term ‘service area’ has
the same meaning as in section 214(e)(5).
‘‘SEC. 287. SAVINGS PROVISIONS.
‘‘(a) COMMISSION AUTHORITY.—Nothing in this part
shall be construed to restrict the authority of the Commis-
sion under sections 201 through 208.
‘‘(b) RURAL TELEPHONE COMPANY RIGHTS.—Nothing
in this part shall be construed to diminish the rights of
rural telephone companies otherwise accorded by this Act,
or the rules, policies, procedures, guidelines, and standards
of the Commission as of the date of enactment of this sec-
tion.’’.
SEC. 5. LIMITATION ON MERGER REVIEW.
(a) AMENDMENT.—Section 310 of the Communications
Act of 1934 (47 U.S.C. 310) is amended by adding at the
end the following:
‘‘(f) DEADLINE FOR MAKING PUBLIC INTEREST DE-
TERMINATION.—
‘‘(1) TIME
LIMIT.—In connection with any
merger between two percent carriers, or the acquisi-
tion, directly or indirectly, by a two percent carrier
or its affiliate of securities or assets of another two
percent carrier or its affiliate, if the merged or ac-
quiring carrier remains a two percent carrier after
the merger or acquisition, the Commission shall make
any determinations required by this section and sec-
tion 214, and shall rule on any petition for waiver
of the Commission’s rules or other request related to
such determinations, not later than 60 days after the
date an application with respect to such merger or
acquisition is submitted to the Commission.
‘‘(2) APPROVAL ABSENT ACTION.—If the Com-
mission does not approve or deny an application as
described in paragraph (1) by the end of the period
specified, the application shall be deemed approved on
the day after the end of such period. Any such appli-
cation deemed approved under this subsection shall be
deemed approved without conditions.
‘‘(3) ELECTION
PERMITTED.—The Commission
shall permit a two percent carrier to make an election
pursuant to section 284 with respect to any local ex-
change facilities acquired as a result of a merger or
acquisition that is subject to the review deadline es-
tablished in paragraph (1) of this subsection.’’.
(b) EFFECTIVE DATE.—The provisions of this section
shall apply with respect to any application that is sub-
mitted to the Commission on or after the date of enactment
of this Act. Applications pending with the Commission on
the date of enactment of this Act shall be subject to the re-
quirements of this section as if they had been filed with
the Commission on the date of enactment of this Act.
SEC. 6. TIME LIMITS FOR ACTION ON PETITIONS FOR RE-
CONSIDERATION OR WAIVER.
(a) AMENDMENT.—Section 405 of the Communications
Act of 1934 (47 U.S.C. 405) is amended by adding to the
end the following:
‘‘(c) EXPEDITED ACTION REQUIRED.—
‘‘(1) TIME LIMIT.—Within 90 days after receiv-
ing from a two percent carrier a petition for recon-
sideration or other review filed under this section or
a petition for waiver of a rule, policy, or other Com-
mission requirement, the Commission shall issue an
order granting or denying such petition. If the Com-
mission fails to act on a petition for waiver subject
to the requirements of this section within this 90-day
period, the relief sought in such petition shall be
deemed granted. If the Commission fails to act on a
petition for reconsideration or other review subject to
the requirements of this section within such 90-day
period, the Commission’s enforcement of any rule the
reconsideration or other review of which was specifi-
cally sought by the petitioning party shall be stayed
with respect to that party until the Commission
issues an order granting or denying such petition.
‘‘(2) FINALITY
OF
ACTION.—Any order issued
under paragraph (1), or any grant of a petition for
waiver that is deemed to occur as a result of the Com-
mission’s failure to act under paragraph (1), shall be
a final order and may be appealed.’’.
(b) EFFECTIVE DATE.—The provisions of this section
shall apply with respect to any petition for reconsideration
or other review or petition for waiver that is submitted to
the Commission on or after the date of enactment of this
Act. Petitions for reconsideration or petitions for waiver
pending with the Commission on the date of enactment of
this Act shall be subject to the requirements of this section
as if they had been filed on the date of enactment of this
Act.
Union Calendar No. 15
107TH CONGRESS
1ST SESSION
H. R. 496
[Report No. 107–20]
A BILL
To amend the Communications Act of 1934 to pro-
mote deployment of advanced services and foster
the development of competition for the benefit of
consumers in all regions of the Nation by reliev-
ing unnecessary burdens on the Nation’s two per-
cent local exchange telecommunications carriers,
and for other purposes.
MARCH 13, 2001
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed