(5) section VIII(E) of the Modification of Final
Judgment, relating to notice to customers of AT&T,
(6) section VIII(F) of the Modification of Final
Judgment, relating to less than equal exchange
access,
(7) section VIII(G) of the Modification of Final
Judgment, relating to transfer of AT&T assets, in-
cluding all exceptions granted thereunder before the
date of the enactment of this Act,
(8) with respect to the parts of the Modification
of Final Judgment described in paragraphs (1)
through (7)—
(A) section III of the Modification of Final
Judgment, relating to applicability,
(B) section IV of the Modification of Final
Judgment, relating to definitions,
(C) section V of the Modification of Final
Judgment, relating to compliance,
(D) section VI of the Modification of Final
Judgment, relating to visitorial provisions,
(E) section VII of the Modification of
Final Judgment, relating to retention of juris-
diction, and
(F) section VIII(I) of the Modification of
Final Judgment, relating to the court’s sua
sponte authority.
(b) ANTITRUST LAWS.—Nothing in this Act shall be
construed to modify, impair, or supersede the applicability
of any other antitrust law.
(c) FEDERAL, STATE, AND LOCAL LAW.—(1) Except
as provided in paragraph (2), this Act shall not be con-
strued to modify, impair, or supersede Federal, State, or
local law unless expressly so provided in this Act.
(2) This Act shall supersede State and local law to
the extent that such law would impair or prevent the oper-
ation of this Act.
(d) CUMULATIVE PENALTY.—Any penalty imposed,
or relief granted, under this Act shall be in addition to,
and not in lieu of, any penalty or relief authorized by any
other law to be imposed with respect to conduct described
in this Act.
SEC. 108. AMENDMENT TO DEFINITION OF ANTITRUST
LAWS APPEARING IN THE CLAYTON ACT.
Subsection (a) of the first section of the Clayton Act
(15 U.S.C. 12(a)) is amended by inserting ‘‘the Antitrust
Reform Act of 1993;’’ after ‘‘thirteen;’’.
TITLE II—REGULATION OF MAN-
UFACTURING, ALARM SERV-
ICES AND ELECTRONIC PUB-
LISHING BY BELL OPERATING
COMPANIES
SEC. 201. REGULATION OF MANUFACTURING BY BELL OP-
ERATING COMPANIES.
Title II of the Communications Act of 1934 (47
U.S.C. 201 et seq.) is amended by adding at the end the
following new section:
‘‘SEC. 229. REGULATION OF MANUFACTURING BY BELL
OPERATING COMPANIES.
‘‘(a) GENERAL AUTHORITY.—Subject to the require-
ments of this section and the regulations prescribed there-
under, but notwithstanding any restriction or obligation
imposed before the date of enactment of this section pur-
suant to the Modification of Final Judgment on the lines
of business in which a Bell operating company may en-
gage, a Bell operating company, through an affiliate of
that company, may manufacture and provide tele-
communications equipment and manufacture customer
premises equipment.
‘‘(b) SEPARATE MANUFACTURING AFFILIATE.—Any
manufacturing or provision authorized under subsection
(a) shall be conducted only through an affiliate that is sep-
arate from any Bell operating company.
‘‘(c) COMMISSION REGULATION OF MANUFACTURING
AFFILIATE.—
‘‘(1) REGULATIONS REQUIRED.—The Commis-
sion shall prescribe regulations to ensure that Bell
operating companies and their affiliates comply with
the requirements of this section.
‘‘(2) BOOKS, RECORDS, ACCOUNTS.—A manu-
facturing affiliate required by subsection (b) shall
maintain books, records, and accounts separate from
its affiliated Bell operating company which identify
all financial transactions between the manufacturing
affiliate and its affiliated Bell operating company
and, even if such manufacturing affiliate is not a
publicly held corporation, prepare financial state-
ments which are in compliance with financial report-
ing requirements under the Federal securities laws
for publicly held corporations, file such statements
with the Commission, and make such statements
available for public inspection.
‘‘(3) IN-KIND BENEFITS TO AFFILIATE.—Con-
sistent with the provisions of this section, neither a
Bell 
operating 
company 
nor 
any 
of 
its
nonmanufacturing affiliates shall perform sales, ad-
vertising, installation, production, or maintenance
operations for a manufacturing affiliate, except
that—
‘‘(A) a Bell operating company and its
nonmanufacturing affiliates may sell, advertise,
install, and maintain telecommunications equip-
ment and customer premises equipment after
acquiring such equipment from their manufac-
turing affiliate; and
‘‘(B) institutional advertising, of a type not
related to specific telecommunications equip-
ment, carried out by the Bell operating com-
pany or its affiliates, shall be permitted.
‘‘(4) DOMESTIC MANUFACTURING REQUIRED.—
‘‘(A) GENERAL
RULE.—A manufacturing
affiliate required by subsection (b) shall conduct
all of its manufacturing within the United
States and, except as otherwise provided in this
paragraph, all component parts of customer
premises equipment manufactured by such affil-
iate, and all component parts of telecommuni-
cations equipment manufactured by such affili-
ate, shall have been manufactured within the
United States.
‘‘(B) EXCEPTION.—Such affiliate may use
component parts manufactured outside the
United States if—
‘‘(i) such affiliate first makes a good
faith effort to obtain equivalent component
parts manufactured within the United
States at reasonable prices, terms, and
conditions; and
‘‘(ii) for the aggregate of tele-
communications equipment and customer
premises equipment manufactured and sold
in the United States by such affiliate, the
cost of the components manufactured out-
side the United States contained in all
such equipment does not exceed 40 percent
of the sales revenue derived in any cal-
endar year from such equipment.
‘‘(C) 
CERTIFICATION
REQUIRED.—Any
such affiliate that uses component parts manu-
factured outside the United States in the manu-
facture of telecommunications equipment and
customer premises equipment within the United
States shall—
‘‘(i) certify to the Commission that a
good faith effort was made to obtain equiv-
alent 
parts 
manufactured 
within 
the
United States at reasonable prices, terms,
and conditions, which certification shall be
filed on a quarterly basis with the Commis-
sion and list component parts, by type,
manufactured outside the United States;
and
‘‘(ii) certify to the Commission on an
annual basis that such affiliate complied
with the requirements of subparagraph
(B)(ii), as adjusted in accordance with
subparagraph (G).
‘‘(D) REMEDIES FOR FAILURES.—(i) If the
Commission determines, after reviewing the cer-
tification required in subparagraph (C)(i), that
such affiliate failed to make the good faith ef-
fort required in subparagraph (B)(i) or, after
reviewing the certification required in subpara-
graph (C)(ii), that such affiliate has exceeded
the 
percentage 
specified 
in 
subparagraph
(B)(ii), the Commission may impose penalties
or forfeitures as provided for in title V of this
Act.
‘‘(ii) Any supplier claiming to be damaged
because a manufacturing affiliate failed to
make the good faith effort required in subpara-
graph (B)(i) may make complaint to the Com-
mission as provided for in section 208 of this
Act, or may bring suit for the recovery of actual
damages for which such supplier claims such
affiliate may be liable under the provisions of
this Act in any district court of the United
States of competent jurisdiction.
‘‘(E) ANNUAL REPORT.—The Commission,
in consultation with the Secretary of Commerce,
shall, on an annual basis, determine the cost of
component parts manufactured outside the
United States contained in all telecommuni-
cations equipment and customer premises
equipment sold in the United States as a per-
centage of the revenues from sales of such
equipment in the previous calendar year.
‘‘(F) USE OF INTELLECTUAL PROPERTY IN
MANUFACTURE.—Notwithstanding 
subpara-
graph (A), a manufacturing affiliate may use
intellectual property created outside the United
States in the manufacture of telecommuni-
cations equipment and customer premises
equipment in the United States. A component
manufactured using such intellectual property
shall not be treated for purposes of subpara-
graph (B)(ii) as a component manufactured
outside the United States solely on the basis of
the use of such intellectual property.
‘‘(G) RESTRICTIONS ON COMMISSION AU-
THORITY.—The Commission may not waive or
alter the requirements of this paragraph, except
that the Commission, on an annual basis, shall
adjust the percentage specified in subparagraph
(B)(ii) to the percentage determined by the
Commission, in consultation with the Secretary
of Commerce, pursuant to subparagraph (E).
‘‘(5) INSULATION OF RATE PAYERS FROM MAN-
UFACTURING AFFILIATE DEBT.—Any debt incurred
by any such manufacturing affiliate may not be is-
sued by its affiliated Bell operating company and
such manufacturing affiliate shall be prohibited from
incurring debt in a manner that would permit a
creditor, on default, to have recourse to the assets
of its affiliated Bell operating company.
‘‘(6) RELATION
TO
OTHER
AFFILIATES.—A
manufacturing affiliate required by subsection (b)
shall not be required to operate separately from the
other affiliates of its affiliated Bell operating com-
pany, but if an affiliate of a Bell operating company
becomes affiliated with a manufacturing entity, such
affiliate shall be treated as a manufacturing affiliate
of that Bell operating company and shall comply
with the requirements of this section.
‘‘(7) AVAILABILITY OF EQUIPMENT TO OTHER
CARRIERS.—A manufacturing affiliate required by
subsection (b) shall make available, without discrimi-
nation or self-preference as to price, delivery, terms,
or conditions, to any common carrier any tele-
communications equipment that is used in the provi-
sion of telephone exchange service and that is manu-
factured by such affiliate so long as each such pur-
chasing carrier—
‘‘(A) does not either manufacture tele-
communications equipment, or have an affili-
ated telecommunications equipment manufac-
turing entity; or
‘‘(B) agrees to make available, to the Bell
operating company affiliated with such manu-
facturing affiliate or any common carrier affili-
ate of such Bell operating company, any tele-
communications equipment that is used in the
provision of telephone exchange service and that
is manufactured by such purchasing carrier or
by any entity or organization with which such
purchasing carrier is affiliated.
‘‘(8) SALES
PRACTICES
OF
MANUFACTURING
AFFILIATES.—
‘‘(A) PROHIBITION
OF
DISCONTINUATION
OF EQUIPMENT FOR WHICH THERE IS REASON-
ABLE DEMAND.—A manufacturing affiliate re-
quired by subsection (b) shall not discontinue or
restrict sales to a common carrier of any tele-
communications equipment that is used in the
provision of telephone exchange service and that
such affiliate manufactures for sale as long as
there is reasonable demand for the equipment
by such carriers; except that such sales may be
discontinued or restricted if such manufactur-
ing affiliate demonstrates to the Commission
that it is not making a profit, under a marginal
cost standard implemented by the Commission
by regulation, on the sale of such equipment.
‘‘(B) DETERMINATIONS
OF
REASONABLE
DEMAND.—Within 60 days after receipt of an
application under subparagraph (A), the Com-
mission shall reach a determination as to the
existence of reasonable demand for purposes of
such subparagraph. In making such determina-
tion the Commission shall consider—
‘‘(i) whether the continued manufac-
ture of the equipment will be profitable;
‘‘(ii) whether the equipment is func-
tionally or technologically obsolete;
‘‘(iii) whether the components nec-
essary to manufacture the equipment con-
tinue to be available;
‘‘(iv) whether alternatives to the
equipment are available in the market; and
‘‘(v) such other factors as the Com-
mission deems necessary and proper.
‘‘(9) JOINT
PLANNING
OBLIGATIONS.—Each
Bell operating company shall, consistent with the
antitrust laws, engage in joint network planning and
design with other contiguous common carriers pro-
viding telephone exchange service, but agreement
with such other carriers shall not be required as a
prerequisite for such introduction or deployment.
‘‘(d) INFORMATION REQUIREMENTS.—
‘‘(1) FILING OF INFORMATION ON PROTOCOLS
AND TECHNICAL REQUIREMENTS.—Each Bell oper-
ating company shall, in accordance with regulations
prescribed by the Commission, maintain and file
with the Commission full and complete information
with respect to the protocols and technical require-
ments for connection with and use of its telephone
exchange service facilities. Each such company shall
report promptly to the Commission any material
changes or planned changes to such protocols and
requirements, and the schedule for implementation
of such changes or planned changes.
‘‘(2) FILING AS PREREQUISITE TO DISCLOSURE
TO AFFILIATE.—A Bell operating company shall not
disclose to any of its affiliates any information re-
quired to be filed under paragraph (1) unless that
information is filed promptly, as required by regula-
tion by the Commission.
‘‘(3) ACCESS
BY
COMPETITORS
TO
INFORMA-
TION.—The Commission may prescribe such addi-
tional regulations under this subsection as may be
necessary to ensure that manufacturers in competi-
tion with a Bell operating company’s manufacturing
affiliate have access to the information with respect
to the protocols and technical requirements for con-
nection with and use of its telephone exchange serv-
ice facilities required for such competition that such
company makes available to its manufacturing
affiliate.
‘‘(4) PLANNING INFORMATION.—Each Bell op-
erating company shall provide, to contiguous com-
mon carriers providing telephone exchange service,
timely information on the planned deployment of
telecommunications equipment.
‘‘(e) ADDITIONAL COMPETITION REQUIREMENTS.—
The Commission shall prescribe regulations requiring that
any Bell operating company which has an affiliate that
engages in any manufacturing authorized by subsection
(a) shall—
‘‘(1) provide, to other manufacturers of tele-
communications equipment and customer premises
equipment that is functionally equivalent to equip-
ment manufactured by the Bell operating company
manufacturing affiliate, opportunities to sell such
equipment to such Bell operating company which are
comparable to the opportunities which such Com-
pany provides to its affiliates; and
‘‘(2) not subsidize its manufacturing affiliate
with revenues from telephone exchange service or
telephone toll service.
‘‘(f) COLLABORATION PERMITTED.—Nothing in this
section (other than subsection (m)) shall be construed to
limit or restrict the ability of a Bell operating company
and its affiliates to engage in close collaboration with any
manufacturer of customer premises equipment or tele-
communications equipment during the design and develop-
ment of hardware, software, or combinations thereof
related to such equipment.
‘‘(g) ACCESSIBILITY REQUIREMENTS.—
‘‘(1) MANUFACTURING.—The Commission shall,
within 1 year after the date of enactment of this sec-
tion, prescribe such regulations as are necessary to
ensure that telecommunications equipment and cus-
tomer premises equipment designed, developed, and
fabricated pursuant to the authority granted in this
section shall be accessible and usable by individuals
with disabilities, including individuals with func-
tional limitations of hearing, vision, movement, ma-
nipulation, speech, and interpretation of information,
unless the costs of making the equipment accessible
and usable would result in an undue burden or an
adverse competitive impact.
‘‘(2) NETWORK
SERVICES.—The Commission
shall, within 1 year after the date of enactment of
this section, prescribe such regulations as are nec-
essary to ensure that advances in network services
deployed by a Bell operating company shall be acces-
sible and usable by individuals whose access might
otherwise be impeded by a disability or functional
limitation, unless the costs of making the services
accessible and usable would result in an undue bur-
den or adverse competitive impact. Such regulations
shall seek to permit the use of both standard and
special equipment and seek to minimize the need of
individuals to acquire additional devices beyond
those used by the general public to obtain such
access.
‘‘(3) COMPATIBILITY.—The regulations pre-
scribed under paragraphs (1) and (2) shall require
that whenever an undue burden or adverse competi-
tive impact would result from the manufacturing or
network services requirements in such paragraphs,
the manufacturing affiliate that designs, develops, or
fabricates the equipment or the Bell operating com-
pany that deploys the network service shall ensure
that the equipment or network service in question is
compatible with existing peripheral devices or spe-
cialized customer premises equipment commonly
used by persons with disabilities to achieve access,
unless doing so would result in an undue burden or
adverse competitive impact.
‘‘(4) DEFINITIONS.—As used in this subsection:
‘‘(A) UNDUE BURDEN.—The term ‘undue
burden’ means significant difficulty or expense.
In determining whether an activity would result
in an undue burden, factors to be considered in-
clude—
‘‘(i) the nature and cost of the activ-
ity;
‘‘(ii) the impact on the operation of
the facility involved in the manufacturing
of the equipment or deployment of the net-
work service;
‘‘(iii) the financial resources of the
manufacturing affiliate in the case of man-
ufacturing of equipment, for as long as ap-
plicable regulatory rules prohibit cross-sub-
sidization of equipment manufacturing
with revenues from regulated telecommuni-
cations service or when the manufacturing
activities are conducted in a separate sub-
sidiary;
‘‘(iv) the financial resources of the
Bell operating company in the case of net-
work services, or in the case of manufac-
turing of equipment if applicable regu-
latory rules permit cross-subsidization of
equipment manufacturing with revenues
from regulated telecommunications services
and the manufacturing activities are not
conducted in a separate subsidiary; and
‘‘(v) the type of operation or oper-
ations of the manufacturing affiliate or
Bell operating company as applicable.
‘‘(B) ADVERSE COMPETITIVE IMPACT.—In
determining whether the activity would result in
an adverse competitive impact, the following
factors will be considered:
(i) whether such activity would raise
the cost of the equipment or network serv-
ice 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 serv-
ice in question, put the manufacturing af-
filiate or Bell operating company, as appli-
cable, at a competitive disadvantage in
comparison with one or more providers of
one or more competing products and serv-
ices. This factor may only be considered so
long as competing manufacturers and net-
work service providers are not held to the
same obligation with respect to access by
persons with disabilities.
‘‘(C) ACTIVITY.—For the purposes of this
paragraph, the term ‘activity’ includes—
(i) the research, design, development,
deployment, and fabrication activities nec-
essary to comply with the requirements of
this section; and
(ii) the acquisition of the related ma-
terials and equipment components.
‘‘(5) EFFECTIVE
DATE.—The regulations re-
quired by this subsection shall become effective 18
months after the date of enactment of this section.
‘‘(6) IMPACT OF ADA.—Nothing in this section
shall be interpreted to limit or otherwise affect the
application of the Americans with Disabilities Act or
its implementing regulations.
‘‘(h) PUBLIC NETWORK ENHANCEMENT.—A Bell op-
erating company manufacturing affiliate shall, as a part
of its overall research and development effort, establish
a permanent program for the manufacturing research and
development of products and applications for the enhance-
ment of the public switched telephone network and to pro-
mote public access to advanced telecommunications serv-
ices. Such program shall focus its work substantially on
developing technological advancements in public telephone
network applications, telecommunication equipment and
products, and access solutions to new services and tech-
nology, including access by (1) public institutions, includ-
ing educational and health care institutions; and (2) peo-
ple with disabilities and functional limitations. Notwith-
standing the limitations in subsection (a), a Bell operating
company and its affiliates may engage in such a program
in conjunction with a Bell operating company not so affili-
ated or any of its affiliates. The existence or establishment
of such a program that is jointly provided by manufactur-
ing affiliates of Bell operating companies shall satisfy the
requirements of this section as it pertains to all such affili-
ates of a Bell operating company.
‘‘(i) ADDITIONAL RULES AUTHORIZED.—The Com-
mission may prescribe such additional rules and regula-
tions as the Commission determines necessary to carry out
the provisions of this section.
‘‘(j) ADMINISTRATION AND ENFORCEMENT AUTHOR-
ITY.—
‘‘(1) COMMISSION REGULATORY AUTHORITY.—
For the purposes of administering and enforcing the
provisions of this section and the regulations pre-
scribed thereunder, the Commission shall have the
same authority, power, and functions with respect to
any Bell operating company as the Commission has
in administering and enforcing the provisions of this
title with respect to any common carrier subject to
this Act.
‘‘(2) PRIVATE ACTIONS.—Any common carrier
that provides telephone exchange service and that is
injured by an act or omission of a Bell operating
company or its manufacturing affiliate which vio-
lates the requirements of paragraph (7) or (8) of
subsection (c), or the Commission’s regulations im-
plementing such paragraphs, may initiate an action
in a district court of the United States to recover
the full amount of damages sustained in con-
sequence of any such violation and obtain such or-
ders from the court as are necessary to terminate
existing violations and to prevent future violations;
or such regulated local telephone exchange carrier
may seek relief from the Commission pursuant to
sections 206 through 209.
‘‘(k) RULEMAKING
REQUIRED.—The Commission
shall prescribe regulations to implement this section with-
in 180 days after the date of enactment of this section.
‘‘(l) EXISTING
MANUFACTURING
AUTHORITY.—
Nothing in this section shall prohibit any Bell operating
Final Judgment, and includes research, design, de-
velopment, and fabrication.
‘‘(5) The term ‘manufacturing affiliate’ means
an affiliate of a Bell operating company established
in accordance with subsection (b) of this section.
‘‘(6) The term ‘Modification of Final Judg-
ment’ means the decree entered August 24, 1982, in
United States v. Western Electric Civil Action No.
82–0192 (United States District Court, District of
Columbia), and includes any judgment or order with
respect to such action entered on or after August
24, 1982, and before the date of enactment of this
section.
‘‘(7) The term ‘telecommunications’ means the
transmission, between or among points specified by
the user, of information of the user’s choosing, with-
out change in the form or content of the information
as sent and received, by means of an electromagnetic
transmission medium, including all instrumentalities,
facilities, apparatus, and services (including the col-
lection, storage, forwarding, switching, and delivery
of such information) essential to such transmission.
‘‘(8) The term ‘telecommunications equipment’
means equipment, other than customer premises
equipment, used by a carrier to provide tele-
communications services, and includes software inte-
gral to such equipment (including upgrades).
‘‘(9) The term ‘telecommunications service’
means the offering for hire of telecommunications
facilities, or of telecommunications by means of such
facilities.’’.
SEC. 202. REGULATION OF ENTRY INTO ALARM MONITOR-
ING SERVICES.
(a) AMENDMENT.—Title II of the Communications
Act is amended by adding at the end the following new
section:
‘‘SEC. 230. REGULATION OF ENTRY INTO ALARM MONITOR-
ING SERVICES.
‘‘(a) REGULATIONS REQUIRED.—Not later than 6
years after the date of enactment of this section, the Com-
mission shall prescribe regulations—
‘‘(1) to establish such requirements, limitations,
or conditions as are (A) necessary and appropriate
in the public interest with respect to the provision of
alarm monitoring services by Bell operating compa-
nies and their affiliates, and (B) effective at such
time as a Bell operating company or any of its affili-
ates is authorized to provide alarm monitoring serv-
ices;
‘‘(2) to prohibit Bell operating companies and
their affiliates, at that or any earlier time after the
date of enactment of this section, from recording in
any fashion the occurrence or the contents of calls
received by providers of alarm monitoring services
for the purposes of marketing such services on be-
half of the Bell operating company, any of its affili-
ates, or any other entity; and
‘‘(3) to establish procedures for the receipt and
review of complaints concerning violations by such
companies of such regulations, or of any other provi-
sion of this Act or the regulations thereunder, that
result in material financial harm to a provider of
alarm monitoring services.
‘‘(b) 
EXPEDITED
CONSIDERATION
OF
COM-
PLAINTS.—The procedures established under subsection
(a)(3) shall ensure that the Commission will make a final
determination with respect to any complaint described in
such subsection within 120 days after receipt of the com-
plaint. If the complaint contains an appropriate showing
that the alleged violation occurred, as determined by the
Commission in accordance with such regulations, the Com-
mission shall, within 60 days after receipt of the com-
plaint, issue a cease and desist order to prevent the Bell
operating company and its affiliates from continuing to
engage in such violation pending such final determination.
‘‘(c) REMEDIES.—The Commission may use any rem-
edy available under title V of this Act to terminate and
punish violations described in subsection (a)(2). Such rem-
edies may include, if the Commission determines that such
violation was willful or repeated, ordering the Bell operat-
ing company to cease offering alarm monitoring services.
‘‘(d) DEFINITIONS.—As used in this section, the
terms ‘Bell operating company’, ‘affiliate’, and ‘alarm
monitoring services’ have the meanings provided in section
106 of the Antitrust Reform Act of 1993.’’.
SEC. 203. REGULATION OF ELECTRONIC PUBLISHING.
Title II of the Communications Act of 1934 (47
U.S.C. 201 et seq.) is amended by adding at the end there-
of the following new section:
‘‘SEC. 231. REGULATION OF ELECTRONIC PUBLISHING.
‘‘(a) IN GENERAL.—(1) A Bell operating company
and any affiliate shall not engage in the provision of elec-
tronic publishing that is disseminated by means of such
Bell operating company’s or any of its affiliates’ basic tele-
phone service.
‘‘(2) Nothing in this section shall prohibit a separated
affiliate or electronic publishing joint venture from engag-
ing in the provision of electronic publishing or any other
lawful service in any area.
‘‘(3) Nothing in this section shall prohibit a Bell op-
erating company or affiliate from engaging in the provi-
sion of any lawful service other than electronic publishing
in any area or from engaging in the provision of electronic
publishing that is not disseminated by means of such Bell
operating company’s or any of its affiliates’ basic tele-
phone service.
‘‘(b) SEPARATED AFFILIATE OR ELECTRONIC PUB-
LISHING JOINT VENTURE REQUIREMENTS.—A separated
affiliate or electronic publishing joint venture shall—
‘‘(1) maintain books, records, and accounts that
are separate from those of the Bell operating com-
pany and from any affiliate and which 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) file with the Commission annual reports in
a form substantially equivalent to the Form 10–K
referenced at 17 C.F.R. 249.310 as that section and
form are in effect on the date of enactment;
‘‘(5) after 1 year from the effective date of this
section, not hire as corporate officers sales and mar-
keting management personnel whose responsibilities
at the separated affiliate or electronic publishing
joint venture will include the geographic area where
the Bell operating company provides basic telephone
service, or network operations personnel whose re-
sponsibilities at the separated affiliate or electronic
publishing joint venture would require dealing di-
rectly with the Bell operating company, any person
who was employed by the Bell operating company
during the year preceding their date of hire, pro-
vided that this requirement shall not apply to per-
sons subject to a collective bargaining agreement
that gives such persons rights to be employed by a
separated affiliate or electronic publishing joint ven-
ture of the Bell operating company;
‘‘(6) not provide any wireline telephone ex-
change service in any telephone exchange area where
a Bell operating company with which it is under
common ownership or control provides basic tele-
phone exchange service except on a resale basis;
‘‘(7) not use the name, trademarks, or service
marks of an existing Bell operating company except
for names or service marks that are or were used in
common with the entity that owns or controls the
Bell operating company;
‘‘(8) have performed annually by March 31, or
any other date prescribed by the Commission, a
compliance review which—
‘‘(A) must be conducted by an independent
entity which is subject to professional, legal,
and ethical obligations for the purpose of deter-
mining compliance during the preceding cal-
endar year with any provision of this section
that imposes a requirement on such separated
affiliate or electronic publishing joint venture;
and
‘‘(B) must be maintained by the separated
affiliate for a period of 5 years subject to re-
view by any lawful authority;
‘‘(9) within 90 days of receiving a review de-
scribed in paragraph (8), file a report of such excep-
tions and any corrective action with the Commission
and allow any person to inspect and copy such re-
port 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 it makes such facilities, services, or informa-
tion available to unaffiliated 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 that are filed with the Commission
and made publicly available;
‘‘(4) carry out transactions with a separated af-
filiate in a manner that is auditable in accordance
with generally accepted accounting principles;
‘‘(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 it
by its separated affiliate at the lesser of net book
cost or fair market value;
‘‘(7) except for—
‘‘(A) instances where Commission or State
regulations permit in-arrears payment for
tariffed telecommunications 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 Commis-
sion and State cost allocation and other accounting
rules;
‘‘(9) have performed annually by March 31, or
any other date prescribed by the Commission, a
compliance review which—
‘‘(A) must be conducted by an independent
entity which is subject to professional, legal,
and ethical obligations for the purpose of deter-
mining compliance during the preceding cal-
endar year with any provision of this section
that imposes a requirement on such Bell oper-
ating company; and
‘‘(B) must be maintained by the Bell oper-
ating 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 such excep-
tions and any corrective action with the Commission
and allow any person to inspect and copy such re-
port 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 the
Commission or a State, and unbundled and individ-
ually tariffed to the same extent as provided to such
publisher;
‘‘(12) provide network access and interconnec-
tions for basic telephone service to electronic pub-
lishers at prices that are regulated so long as the
prices for these services are subject to regulation;
‘‘(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
electronic publishers ceases to require a tariff, pro-
vide 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 relating to
changes in basic telephone service network design
and technical standards which would affect the pro-
vision 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 person-
nel performed on behalf of a separated affiliate;
‘‘(21) not perform the purchasing, installation
or maintenance of equipment on its 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.—A Bell oper-
ating company, affiliate or its separated affiliate is prohib-
ited from acting in concert with another Bell operating
company or any 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, ETC.—Except as provided
in subsection (h)—
‘‘(1) a Bell operating company shall not carry
out any promotion, marketing, sales, or advertising
for or in conjunction with a separated affiliate.
‘‘(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 operat-
ing company may provide inbound telemarketing or
referral 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, and subject to regulations of the Commission
to ensure that the Bell operating company’s method
of providing telemarketing or referral and its price
structure do not competitively disadvantage any elec-
tronic publishers regardless of size, including those
which do not use the Bell operating company’s
telemarketing services.
‘‘(2) TEAMING ARRANGEMENTS.—A Bell oper-
ating 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 Bell operating company or affiliate has not
more than a 50 percent direct or indirect equity in-
terest (or the equivalent thereof) or the right to
more than 50 percent of the gross revenues under
a revenue sharing or royalty agreement in any elec-
tronic publishing joint venture. Officers and employ-
ees of a Bell operating company or affiliate partici-
pating in an electronic publishing joint venture may
not have more than 50 percent of the voting control
over the electronic publishing joint venture. In the
case of joint ventures with small, local electronic
publishers, the Commission for good cause shown
may authorize the Bell operating company or affili-
ate to have a larger equity interest, revenue share,
or voting control but not to exceed 80 percent. A
Bell operating company participating in an elec-
tronic 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) Any provision of facilities, services or basic
telephone service information or any transfer of as-
sets, personnel, or anything of commercial or com-
petitive value from a Bell operating company to any
affiliate related to the provision of electronic publish-
ing shall be—
‘‘(A) recorded in the books and records of
each entity;
‘‘(B) auditable in accordance with gen-
erally accepted accounting principles; and
‘‘(C) pursuant to written contracts or tar-
iffs filed with the Commission or a State and
made publicly available.
‘‘(2) Any transfer of assets directly related to
the provision of electronic publishing from a Bell op-
erating company to an affiliate shall be valued at the
greater of net book cost or fair market value. Any
transfer of assets related to the provision of elec-
tronic publishing from an affiliate to the Bell operat-
ing company shall be valued at the lesser of net book
cost or fair market value.
‘‘(3) A Bell operating company shall not pro-
vide an affiliate any facilities, services, or basic tele-
phone service information related to the provision of
electronic publishing, which such affiliate then di-
rectly or indirectly provides to a separated affiliate,
and which is not made available to unaffiliated com-
panies on the same terms and conditions.
‘‘(j) TRANSACTIONS RELATED TO THE PROVISION OF
ELECTRONIC PUBLISHING BETWEEN AN AFFILIATE AND
A SEPARATED AFFILIATE.—
‘‘(1) Any facilities, services, or basic telephone
service information provided or any assets, person-
nel, or anything of commercial or competitive value
transferred, from a Bell operating company to any
affiliate as described in subsection (i) and then pro-
vided or transferred to a separated affiliate shall
be—
‘‘(A) recorded in the books and records of
each entity;
‘‘(B) auditable in accordance with gen-
erally accepted accounting principles; and
common with any entity whose principal business is
publishing of which a part is electronic publishing.
‘‘(2) No officer or employee of a Bell operating
company shall serve as a director of any entity
whose principal business is publishing of which a
part is electronic publishing.
‘‘(3) For the purposes of paragraphs (1) and
(2), a Bell operating company or an affiliate that
owns an electronic publishing joint venture shall not
be deemed to be engaged in the electronic publishing
business solely because of such ownership.
‘‘(4) A Bell operating company shall not carry
out—
‘‘(A) any marketing or sales for any entity
that engages in electronic publishing; or
‘‘(B) any hiring of personnel, purchasing,
or production,
for any entity that engages in electronic publishing.
‘‘(5) The Bell operating company shall not pro-
vide any facilities, services, or basic telephone service
information to any entity that engages in electronic
publishing, for use with or in connection with the
provision of electronic publishing that is dissemi-
nated by means of such Bell operating company’s or
any of its affiliates’ basic telephone service, unless
equivalent facilities, services, or information are
made available on equivalent terms and conditions to
all.
‘‘(l) TRANSITION.—Any electronic publishing service
being offered to the public by a Bell operating company
or affiliate on the date of enactment of this section shall
have one year from such date of enactment to comply with
the requirements of this section.
‘‘(m) SUNSET.—The provisions of this section shall
cease to apply to a Bell operating company or its affiliate
or separated affiliate in any telephone exchange area on
June 30, 2000.
‘‘(n) PRIVATE RIGHT OF ACTION.—
‘‘(1) Any person claiming that any act or prac-
tice of any Bell operating company, affiliate, or sep-
arated affiliate constitutes a violation of this section
may file a complaint with the Commission or bring
suit as provided in section 207 of the Communica-
tions Act of 1934 (47 U.S.C. 207), and such Bell
operating company, affiliate, or separated affiliate
shall be liable as provided in section 206 of the
Communications Act of 1934, (47 U.S.C. 207): Pro-
vided, however, That damages may not be awarded
for a violation that is discovered by a compliance re-
view as required by subsection (b)(8) or (c)(9) of
this section and corrected within 90 days.
‘‘(2) In addition to the provisions of paragraph
(1), any person claiming that any act or practice of
any Bell operating company, affiliate, or separated
affiliate constitutes a violation of this section may
make application to the Commission for an order to
cease and desist such violation or may make applica-
tion in any district court of the United States of
competent jurisdiction for an order enjoining such
acts or practices or for an order compelling compli-
ance with such requirement.
‘‘(o) ANTITRUST LAWS.—Nothing in this section
shall be construed to modify, impair, or supersede the ap-
plicability of any of the antitrust laws.
‘‘(p) DEFINITIONS.—As used in this section—
‘‘(1) The term ‘affiliate’ means any entity that,
directly or indirectly, owns or controls, is owned or
controlled by, or is under common ownership or con-
trol with, a Bell operating company. Such term shall
not include a separated affiliate.
‘‘(2) The term ‘basic telephone service’ means
wireline telephone exchange service provided by a
Bell operating company in a telephone exchange
area, except
‘‘(A) a competitive wireline telephone ex-
change service provided in a telephone exchange
area where another entity provides a wireline
telephone exchange service that was provided on
January 1, 1984, and
‘‘(B) wireless telephone exchange service
provided by an affiliate that is required by the
Commission to be a corporate entity separate
from the Bell operating company.
‘‘(3) The term ‘basic telephone service informa-
tion’ means network and customer information of a
Bell operating company and other information ac-
quired by a Bell operating company as a result of
its engaging in the provision of basic telephone
service.
‘‘(4) The term ‘control’ has the meaning that it
has in 17 C.F.R. 240.12b–2, the regulations promul-
gated by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934
(15 U.S.C. 78a et seq.) or any successor provision
to such section.
‘‘(5) The term ‘customer proprietary network
information’ means—
‘‘(A) information which—
‘‘(i) relates to the quantity, technical
configuration, 
type, 
destination, 
and
amount of use of telephone exchange serv-
ice or interexchange telephone service sub-
scribed to by any customer of a Bell oper-
ating company, and
‘‘(ii) is available to the Bell operating
company by virtue of the telephone com-
pany-customer relationship; and
‘‘(B) information contained in the bills for
telephone exchange service or interexchange
telephone service received by a customer of a
Bell operating company.
‘‘(6)(A) The term ‘electronic publishing’ means
the dissemination, provision, publication, or sale to
an unaffiliated entity or person, using a Bell operat-
ing company’s basic telephone service, of—
‘‘(i) news;
‘‘(ii) business and financial reports;
‘‘(iii) editorials;
‘‘(iv) columns;
‘‘(v) sports reporting;
‘‘(vi) features;
‘‘(vii) advertising;
‘‘(v) Level 2 gateway services as those
services are defined by the Commission’s Sec-
ond Report and Order, Recommendation to
Congress and Second Further Notice of Pro-
posed Rulemaking in CC Docket No. 87–266
dated August 14, 1992.
‘‘(vi) Data processing services that do not
involve the generation or alteration of the con-
tent of information.
‘‘(vii) Transaction processing systems that
do not involve the generation or alteration of
the content of information.
‘‘(viii) Electronic billing or advertising of a
Bell 
operating 
company’s 
regulated 
tele-
communications services.
‘‘(ix) Language translation.
‘‘(x) Conversion of data from one format
to another.
‘‘(xi) The provision of information nec-
essary for the management, control, or oper-
ation of a telephone company telecommuni-
cations system.
‘‘(xii) The provision of directory assistance
that provides names, addresses, and telephone
numbers and does not include advertising.
‘‘(xiii) Caller identification services.
‘‘(xiv) Repair and provisioning databases
for telephone company operations.
‘‘(xv) Credit card and billing validation for
telephone company operations.
‘‘(xvi) 911–E and other emergency assist-
ance databases.
‘‘(xvii) 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.
‘‘(xviii) Any upgrades to these network
services that do not involve the generation or
alteration 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 as defined in sec-
tion 602 of the Communications Act of 1934.
‘‘(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-
sion of electronic publishing which is disseminated
by means of such Bell operating company’s or any
of its affiliates’ basic telephone service.
‘‘(8) The term ‘entity’ means any organization,
and includes corporations, partnerships, sole propri-
etorships, associations, and joint ventures.
‘‘(9) The term ‘inbound telemarketing’ means
the marketing of property, goods, or services by tele-
phone to a customer or potential customer who initi-
ated the call.
‘‘(10) The term ‘own’ with respect to an entity
means to have a direct or indirect equity interest (or
the equivalent thereof) of more than 10 percent of
an entity, or the right to more than 10 percent of
the gross revenues of an entity under a revenue
sharing or royalty agreement.
‘‘(11) The term ‘separated affiliate’ means a
corporation under common ownership or control with
a Bell operating company that does not own or con-
trol a Bell operating company and is not owned or
controlled by a Bell operating company and that en-
gages in the provision of electronic publishing which
is disseminated by means of such Bell operating
company’s or any of its affiliates’ basic telephone
service.
‘‘(12) The term ‘Bell operating company’ means
the corporations subject to the Modification of Final
Judgment and listed in Appendix A thereof, or any
entity owned or controlled by such corporation, or
any successor or assign of such corporation, but
does not include an electronic publishing joint ven-
ture owned by such corporation or entity.’’.
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