Telecommunications Act of 1996
PL 104-104 (S.652), enacted 02/08/1996

110 STAT. 56 
PUBLIC LAW 104-104—FEB. 8, 1996 
Public Law 104-104 
104th Congress 
Feb. 8, 1996 
[S. 652] 
Telecommuni-
cations Act of 
1996. 
Intergovern-
mental relations. 
47 u s e 609 note. 
An Act 
To promote competition and reduce regulation in order to secure lower prices and 
higher quality services for American telecommunications consumers and encourage 
the rapid deployment of new telecommunications technologies. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; REFERENCES. 
(a) SHORT TITLE.—This Act may be cited as the "Telecommuni-
cations Act of 1996". 
(b) REFERENCES.—Except as otherwise expressly provided, 
whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Communications Act of 1934 (47 U.S.C. 151 et 
seq.). 
SEC. 2. TABLE OF CONTENTS. 
The table of contents for this Act is as follows: 
Sec. 1. Short title; references. 
Sec. 2. Table of contents. 
Sec. 3. Definitions. 
TITLE I—TELECOMMUNICATION SERVICES 
Subtitle A—Telecommunications Services 
Sec. 101. Establishment of part II of title II. 
"PART II—DEVELOPMENT OF COMPETITIVE MARKETS 
"Sec. 251. Interconnection. 
"Sec. 252. Procedures for negotiation, arbitration, and approval of agreements. 
"Sec. 253. Removal of barriers to entry. 
"Sec. 254. Universal service. 
"Sec. 255. Access by persons with disabilities. 
"Sec. 256. Coordination for interconnectivity. 
"Sec. 257. Market entry barriers proceeding. 
"Sec. 258. Illegal changes in subscriber carrier selections. 
"Sec. 259. Infrastructure sharing. 
"Sec. 260. Provision of telemessaging service. 
"Sec. 261. Effect on other requirements." 
Sec. 102. Eligible telecommunications carriers. 
Sec. 103. Exempt telecommunications companies. 
Sec. 104. Nondiscrimination principle. 
Subtitle B—Special Provisions Concerning Bell Operating Companies 
Sec. 151. Bell operating company provisions. 
"PART III—SPECIAL PROVISIONS CONCERNING BELL OPERATING 
COMPANIES 
"Sec. 271. Bell operating company entry into interLATA services. 
"Sec. 272. Separate affiliate; safeguards. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 57 
"Sec. 273. Manufacturing by Bell operating companies. 
"Sec. 274. Electronic publisning by Bell operating companies. 
"Sec. 275. Alarm monitoring services. 
"Sec. 276. Provision of paypnone service." 
TITLE II—BROADCAST SERVICES 
Sec. 201. Broadcast spectrum flexibility. 
"Sec. 336. Broadcast spectrum flexibility." 
Sec. 202. Broadcast ownership. 
Sec. 203. Term of licenses. 
Sec. 204. Broadcast license renewal procedures. 
Sec. 205. Direct broadcast satellite service. 
Sec. 206. Automated ship distress and safety systems. 
"Sec. 365. Automated ship distress and safety systems." 
Sec. 207. Restrictions on over-the-air reception devices. 
TITLE III—CABLE SERVICES 
Sec. 301. Cable Act reform. 
Sec. 302. Cable service provided by telephone companies. 
"PART V—VIDEO PROGRAMMING SERVICES PROVIDED BY TELEPHONE COMPANIES 
"Sec. 651. Regulatory treatment of video programming services. 
"Sec. 652. Prohibition on buy outs. 
"Sec. 653. Establishment of open video systems." 
Sec. 303. Preemption of franchising authority regulation of telecommunications 
services. 
Sec. 304. Competitive availability of navigation devices. 
"Sec. 629. Competitive availability of navigation devices." 
Sec. 305. Video programming accessibility. 
"Sec. 713. Video programming accessibility." 
TITLE IV—REGULATORY REFORM 
Sec. 401. Regulatory forbearance. 
"Sec. 10. Competition in provision of telecommunications service." 
Sec. 402. Biennial review of regulations; regulatory relief 
"Sec. 11. Regulatory reform." 
Sec. 403. Elimination of unnecessary Commission regulations and functions. 
TITLE V—OBSCENITY AND VIOLENCE 
Subtitle A—Obscene, Harassing, and Wrongful Utilization of Telecommunications 
Facilities 
Sec. 501. Short title. 
Sec. 502. Obscene or harassing use of telecommunications facilities under the Com-
munications Act of 1934. 
Sec. 503. Obscene programming on cable television. 
Sec. 504. Scrambling of cable channels for nonsubscribers. 
"Sec. 640. Scrambling of cable channels for nonsubscribers." 
Sec. 505. Scrambling of sexually explicit adult video service programming. 
"Sec. 641. Scrambling of sexually explicit adult video service programming." 
Sec. 506. Cable operator refusal to carry certain programs. 
Sec. 507. Clarification of current laws regarding communication of obscene mate-
rials through the use of computers. 
Sec. 508. Coercion and enticement of minors. 
Sec. 509. Online family empowerment. 
"Sec. 230. Protection for private blocking and screening of offensive material." 
Subtitle B—Violence 
Sec. 551. Parental choice in television programming. 
Sec. 552. Technology fund. 
Subtitle C—Judicial Review 
Sec. 561. Expedited review. 
TITLE VI—EFFECT ON OTHER LAWS 
Sec. 601. Applicability of consent decrees and other law. 
Sec. 602. Preemption of local taxation with respect to direct-to-home services. 
TITLE VII—MISCELLANEOUS PROVISIONS 
Sec. 701. Prevention of unfair billing practices for information or services provided 
over toll-free telephone calls. 
110 STAT. 58 
PUBLIC LAW 104-104—FEB. 8, 1996 
Sec. 702. Privacy of customer information. 
"Sec. 222. Privacy of customer information." 
Sec. 703. Pole attachments. 
Sec. 704. Facilities siting; radio frequency emission standards. 
Sec. 705. Mobile services direct access to long distance carriers. 
Sec. 706. Advanced telecommunications incentives. 
Sec. 707. Telecommunications Development Fund. 
"Sec. 714. Telecommunications Development Fund." 
Sec. 708. National Education Technology Funding Corporation. 
Sec. 709. Report on the use of advanced telecommunications services for medical 
purposes. 
Sec. 710. Authorization of appropriations. 
SEC. 3. DEFINITIONS. 
(a) ADDITIONAL DEFINITIONS.—Section 3 (47 U.S.C. 153) 
is 
amended— 
(1) in subsection (r)— 
(A) by inserting "(A)" after "means"; and 
(B) by inserting before the period at the end the follow-
ing: ", or (B) comparable service provided through a system 
of switches, transmission equipment, or other facilities (or 
combination thereof) by which a subscriber can originate 
and terminate a telecommunications service"; and 
(2) by adding at the end thereof the following: 
"(33) AFFILIATE.—The term 'affiliate' means a person that 
(directly or indirectly) owns or controls, is owned or controlled 
by, or is under common ownership or control with, another 
person. For purposes of this paragraph, the term 'own' means 
to own an equity interest (or the equivalent thereof) of more 
than 10 percent. 
"(34) AT&T CONSENT DECREE.—The term 'AT&T Consent 
Decree' means the order entered August 24, 1982, in the anti-
trust action styled United States v. Western Electric, Civil 
Action No. 82-0192, in the United States District Court for 
the District of Columbia, and includes any judgment or order 
with respect to such action entered on or after August 24, 
1982. 
"(35) BELL OPERATING COMPANY.—The term 'Bell operating 
company'— 
"(A) means any of the following companies: Bell Tele-
phone Company of Nevada, Illinois Bell Telephone Com-
pany, Indiana Bell Telephone Company, Incorporated, 
Michigan Bell Telephone Company, New England Tele-
phone and Telegraph Company, New Jersey Bell Telephone 
Company, New York Telephone Company, U S West 
Communications Company, South Central Bell Telephone 
Company, Southern Bell Telephone and Telegraph Com-
pany, Southwestern Bell Telephone Company, The Bell 
Telephone Company of Pennsylvania, The Chesapeake and 
Potomac Telephone Company, The Chesapeake and Poto-
mac Telephone Company of Maryland, The Chesapeake 
and Potomac Telephone Company of Virginia, The Chesa-
peake and Potomac Telephone Company of West Virginia, 
The Diamond State Telephone Company, The Ohio Bell 
Telephone Company, The Pacific Telephone and Telegraph 
Company, or Wisconsin Telephone Company; and 
"(B) includes any successor or assign of any such com-
pany that provides wireline telephone exchange service; 
but 
PUBLIC I ^ W 104-104—FEB. 8, 1996 
110 STAT. 59 
"(C) does not include an affiliate of any such company, 
other than an affiliate described in subparagraph (A) or 
(B). 
"(36) CABLE SERVICE.—The term 'cable service' has the 
meaning given such term in section 602. 
"(37) CABLE SYSTEM.—The term 'cable system' has the 
meaning given such term in section 602. 
"(38) CUSTOMER PREMISES EQUIPMENT.—The term 'cus-
tomer premises equipment' means equipment employed on the 
premises of a person (other than a carrier) to originate, route, 
or terminate telecommunications. 
"(39) DIALING PARITY.—The term 'dialing parity' means 
that a person that is not an affiliate of a local exchange carrier 
is able to provide telecommunications services in such a manner 
that customers have the ability to route automatically, without 
the use of any access code, their telecommunications to the 
telecommunications services provider of the customer's designa-
tion from among 2 or more telecommunications services provid-
ers (including such local exchange carrier). 
"(40) 
EXCHANGE ACCESS.—The term 'exchange access' 
means the offering of access to telephone exchange services 
or facilities for the purpose of the origination or termination 
of telephone toll services. 
"(41) INFORMATION SERVICE.—The term 'information serv-
ice' means the offering of a capability for generating, acquiring, 
storing, transforming, processing, retrieving, utilizing, or mak-
ing available information via telecommunications, and includes 
electronic publishing, but does not include any use of any 
such capability for the management, control, or operation of 
a telecommunications system or the management of a tele-
communications service. 
"(42) INTERLATA SERVICE.—The term 'interLATA service' 
means telecommunications between a point located in a local 
access and transport area and a point located outside such 
area. 
"(43) LOCAL ACCESS AND TRANSPORT AREA.—The term 'local 
access and transport area' or 'LATA' means a contiguous 
geographic area— 
"(A) established before the date of enactment of the 
Telecommunications Act of 1996 by a Bell operating com-
pany such that no exchange area includes points within 
more than 1 metropolitan statistical area, consolidated 
metropolitan statistical area, or State, except as expressly 
permitted under the AT&T Consent Decree; or 
"(B) established or modified by a Bell operating com-
pany after such date of enactment and approved by the 
Commission. 
"(44) LOCAL EXCHANGE CARRIER.—The term 'local exchange 
carrier' means any person that is engaged in the provision 
of telephone exchange service or exchange access. Such term 
does not include a person insofar as such person is engaged 
in the provision of a commercial mobile service under section 
332(c), except to the extent that the Commission finds that 
such service should be included in the definition of such term. 
"(45) NETWORK ELEMENT.—The term 'network element' 
means a facility or equipment used in the provision of a tele-
communications service. Such term also includes features, func-
110 STAT. 60 
PUBLIC LAW 104-104—FEB. 8, 1996 
tions, and capabilities that are provided by means of such 
facility or equipment, including subscriber numbers, databases, 
signaling systems, and information sufficient for billing and 
collection or used in the transmission, routing, or other provi-
sion of a telecommunications service. 
"(46) NUMBER PORTABILITY.—The term 'number portability' 
means the ability of users of telecommunications services to 
retain, at the same location, existing telecommunications num-
bers without impairment of quality, reliability, or convenience 
when switching from 
one telecommunications 
carrier to 
another. 
"(47) RURAL TELEPHONE COMPANY.—The term 'rural tele-
phone company' means a local exchange carrier operating entity 
to the extent that such entity— 
"(A) provides common carrier service to any local 
exchange carrier study area that does not include either— 
"(i) any incorporated place of 10,000 inhabitants 
or more, or any part thereof, based on the most recently 
available population statistics of the Bureau of the 
Census; or 
"(ii) any territory, incorporated or unincorporated, 
included in an urbanized area, as defined by the 
Bureau of the Census as of August 10,1993; 
"(B) provides telephone exchange service, including 
exchange access, to fewer than 50,000 access lines; 
"(C) provides telephone exchange service to any local 
exchange carrier study area with fewer than 100,000 access 
lines; or 
"(D) has less than 15 percent of its access lines in 
communities of more than 50,000 on the date of enactment 
of the Telecommunications Act of 1996. 
"(48) 
TELECOMMUNICATIONS.—The 
term 
'telecommuni-
cations' means the transmission, between or among points 
specified by the user, of information of the user's choosing, 
without change in the form or content of the information as 
sent and received. 
"(49) 
TELECOMMUNICATIONS CARRIER.—The term 'tele-
communications carrier' means any provider of telecommuni-
cations services, except that such term does not include 
aggregators of telecommunications services (as defined in sec-
tion 226). A telecommunications carrier shall be treated as 
a common carrier under this Act only to the extent that it 
is engaged in providing telecommunications services, except 
that the Commission shall determine whether the provision 
of fixed and mobile satellite service shall be treated as common 
carriage. 
"(50) TELECOMMUNICATIONS EQUIPMENT.—The term 'tele-
communications equipment' means equipment, other than cus-
tomer premises equipment, used by a carrier to provide tele-
communications services, and includes software integral to such 
equipment (including upgrades). 
"(51) 
TELECOMMUNICATIONS SERVICE.—The term 'tele-
communications service' means the offering of telecommuni-
cations for a fee directly to the public, or to such classes 
of users as to be effectively available directly to the public, 
regardless of the facilities used.". 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 61 
(b) COMMON TERMINOLOGY.—Except as otherwise provided in 
47 use 153 note. 
this Act, the terms used in this Act have the meanings provided 
in section 3 of the Communications Act of 1934 (47 U.S.C. 153), 
as amended by this section. 
(c) STYLISTIC CONSISTENCY.—Section 3 (47 U.S.C. 153) is 
amended— 
(1) in subsections (e) and (n), by redesignating clauses 
(1), (2), and (3), as clauses (A), (B), and (C), respectively; 
(2) in subsection (w), by redesignating paragraphs (1) 
through (5) as subparagraphs (A) through (E), respectively; 
(3) in subsections (y) and (z), by redesignating paragraphs 
(1) and (2) as subparagraphs (A) and (B), respectively; 
(4) by redesignating subsections (a) through (ff) as para-
graphs (1) through (32); 
(5) by indenting such paragraphs 2 em spaces; 
(6) by inserting after the designation of each such para-
graph— 
(A) a heading, in a form consistent with the form 
of the heading of this subsection, consisting of the term 
defined by such paragraph, or the first term so defined 
if such paragraph defines more than one term; and 
(B) the words "The term"; 
(7) by changing the first letter of each defined term in 
such paragraphs from a capital to a lower case letter (except 
for "United States", "State", "State commission", and "Great 
Lakes Agreement"); and 
(8) by reordering such paragraphs and the additional para-
graphs added by subsection (a) in alphabetical order based 
on the headings of such paragraphs and renumbering such 
paragraphs as so reordered. 
(d) CONFORMING AMENDMENTS.—The Act is amended— 
(1) in section 225(a)(1), by striking "section 3(h)" and insert- 
47 USC 225. 
ing "section 3"; 
(2) in section 332(d), by striking "section 3(n)" each place 47 USC 332. 
it appears and inserting "section 3"; and 
(3) in sections 621(d)(3), 636(d), and 637(a)(2), by striking 
47 USC 541, 556, 
"section 3(v)" and inserting "section 3". 
557. 
TITLE I—TELECOMMUNICATION 
SERVICES 
Subtitle A—Telecommunications Services 
SEC. 101. ESTABLISHMENT OF PART II OF TITLE 11. 
(a) AMENDMENT.—Title II is amended by inserting after section 
229 (47 U.S.C. 229) the following new part: 
"PART II—DEVELOPMENT OF COMPETITIVE 
MARKETS 
"SEC. 251. INTERCONNECTION. 
47 USC 251. 
"(a) GENERAL DUTY OF TELECOMMUNICATIONS CARRIERS.—Each 
telecommunications carrier has the duty— 
"(1) to interconnect directly or indirectly with the facilities 
and equipment of other telecommunications carriers; and 
110 STAT. 62 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(2) not to install network features, functions, or capabili-
ties that do not comply with the guidelines and standards 
established pursuant to section 255 or 256. 
"(b) OBLIGATIONS OF ALL LOCAL EXCHANGE CARRIERS.—Each 
local exchange carrier has the following duties: 
"(1) RESALE.—The duty not to prohibit, and not to impose 
unreasonable or discriminatory conditions or limitations on, 
the resale of its telecommunications services. 
"(2) NUMBER PORTABILITY.—The duty to provide, to the 
extent technically feasible, number portability in accordance 
with requirements prescribed by the Commission. 
"(3) DIALING PARITY.—The duty to provide dialing parity 
to competing providers of telephone exchange service and tele-
phone toll service, and the duty to permit all such providers 
to have nondiscriminatory access to telephone numbers, opera-
tor services, directory assistance, and directory listing, with 
no unreasonable dialing delays. 
"(4) ACCESS TO RIGHTS-OF-WAY.—The duty to afford access 
to the poles, ducts, conduits, and rights-of-way of such carrier 
to competing providers of telecommunications services on rates, 
terms, and conditions that are consistent with section 224. 
"(5) RECIPROCAL COMPENSATION.—The duty to establish 
reciprocal compensation arrangements for the transport and 
termination of telecommunications. 
"(c) ADDITIONAL OBLIGATIONS OF INCUMBENT LOCAL EXCHANGE 
CARRIERS.—In addition to the duties contained in subsection (b), 
each incumbent local exchange carrier has the following duties: 
"(1) DUTY TO NEGOTIATE.—The duty to negotiate in good 
faith in accordance with section 252 the particular terms and 
conditions of agreements to fulfill the duties described in para-
graphs (1) through (5) of subsection (b) and this subsection. 
The requesting telecommunications carrier also has the duty 
to negotiate in good faith the terms and conditions of such 
agreements. 
"(2) INTERCONNECTION.—The duty to provide, for the facili-
ties and equipment of any requesting telecommunications car-
rier, interconnection with the local exchange carrier's network— 
"(A) for the transmission and routing of telephone 
exchange service and exchange access; 
"(B) at any technically feasible point within the car-
rier's network; 
"(C) that is at least equal in quality to that provided 
by the local exchange carrier to itself or to any subsidiary, 
affiliate, or any other party to which the carrier provides 
interconnection; and 
"(D) on rates, terms, and conditions that are just, 
reasonable, and nondiscriminatory, in accordance with the 
terms and conditions of the agreement and the require-
ments of this section and section 252. 
"(3) UNBUNDLED ACCESS.—The duty to provide, to any 
requesting telecommunications carrier for the provision of a 
telecommunications service, nondiscriminatory access to net-
work elements on an unbundled basis at any technically feasible 
point on rates, terms, and conditions that are just, reasonable, 
and nondiscriminatory in accordance with the terms and condi-
tions of the agreement and the requirements of this section 
and section 252. An incumbent local exchange carrier shall 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 63 
provide such unbundled network elements in a manner that 
allows requesting carriers to combine such elements in order 
to provide such telecommunications service. 
"(4) RESALE.—The duty— 
"(A) to offer for resale at wholesale rates any tele-
communications service that the carrier provides at retail 
to subscribers who are not telecommunications carriers; 
and 
"(B) not to prohibit, and not to impose unreasonable 
or discriminatory conditions or limitations on, the resale 
of such telecommunications service, except that a State 
commission may, consistent with regulations prescribed by 
the Commission under this section, prohibit a reseller that 
obtains at wholesale rates a telecommunications service 
that is available at retail only to a category of subscribers 
from offering such service to a different category of 
subscribers. 
"(5) NOTICE OF CHANGES.—The duty to provide reasonable 
public notice of changes in the information necessary for the 
transmission and routing of services using that local exchange 
carrier's facilities or networks, as well as of any other changes 
that would affect the interoperability of those facilities and 
networks. 
"(6) COLLOCATION.—The duty to provide, on rates, terms, 
and conditions that are just, reasonable, and nondiscriminatory, 
for physical collocation of equipment necessary for interconnec-
tion or access to unbundled network elements at the premises 
of the local exchange carrier, except that the carrier may pro-
vide for virtual collocation if the local exchange carrier dem-
onstrates to the State commission that physical collocation 
is not practical for technical reasons or because of space limita-
tions. 
"(d) IMPLEMENTATION.~ 
"(1) IN GENERAL.—Within 6 months after the date of enact- Regulations. 
ment of the Telecommunications Act of 1996, the Commission 
shall complete all actions necessary to establish regulations 
to implement the requirements of this section. 
"(2) ACCESS STANDARDS.—In determining what network ele-
ments should be made available for purposes of subsection 
(c)(3), the Commission shall consider, at a minimum, whether— 
"(A) access to such network elements as are proprietary 
in nature is necessary; and 
"(B) the failure to provide access to such network ele-
ments would impair the ability of the telecommunications 
carrier seeking access to provide the services that it seeks 
to offer. 
"(3) 
PRESERVATION OF STATE ACCESS REGULATIONS.—In 
prescribing and enforcing regulations to implement the require-
ments of this section, the Commission shall not preclude the 
enforcement of any regulation, order, or policy of a State 
commission that— 
"(A) establishes access and interconnection obligations 
of local exchange carriers; 
"(B) is consistent with the requirements of this section; 
and 
110 STAT. 64 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(C) does not substantially prevent implementation of 
the requirements of this section and the purposes of this 
part. 
"(e) NUMBERING ADMINISTRATION.— 
"(1) 
COMMISSION 
AUTHORITY 
AND 
JURISDICTION.—The 
Commission shall create or designate one or more impartial 
entities to administer telecommunications numbering and to 
make such numbers available on an equitable basis. The 
Commission shall have exclusive jurisdiction over those portions 
of the North American Numbering Plan that pertain to the 
United States. Nothing in this paragraph shall preclude the 
Commission from delegating to State commissions or other 
entities all or any portion of such jurisdiction. 
"(2) COSTS.—The cost of establishing telecommunications 
numbering administration arrangements and number port-
ability shall be borne by all telecommunications carriers on 
a competitively neutral basis as determined by the Commission. 
"(f) EXEMPTIONS, SUSPENSIONS, AND MODIFICATIONS.— 
"(1) 
EXEMPTION FOR CERTAIN RURAL TELEPHONE COMPA-
NIES.--
"(A) EXEMPTION.—Subsection (c) of this section shall 
not apply to a rural telephone company until (i) such com-
pany has received a bona fide request for interconnection, 
services, or network elements, and (ii) the State commission 
determines (under subparagraph (B)) that such request 
is not unduly economically burdensome, is technically fea-
sible, and is consistent with section 254 (other than sub-
sections (b)(7) and (c)(1)(D) thereof). 
"(B) 
STATE 
TERMINATION 
OF 
EXEMPTION 
AND 
IMPLEMENTATION SCHEDULE.—The party making a bona 
fide request of a rural telephone company for interconnec-
tion, services, or network elements shall submit a notice 
of its request to the State commission. The State commis-
sion shall conduct an inquiry for the purpose of determining 
whether to terminate the exemption under subparagraph 
(A). Within 120 days after the State commission receives 
notice of the request, the State commission shall terminate 
the exemption if the request is not unduly economically 
burdensome, is technically feasible, and is consistent with 
section 254 (other than subsections (b)(7) and (c)(1)(D) 
thereof). Upon termination of the exemption, a State 
commission shall establish an implementation schedule for 
compliance with the request that is consistent in time 
and manner with Commission regulations. 
"(C) LIMITATION ON EXEMPTION.—The exemption pro-
vided by this paragraph shall not apply with respect to 
a request under subsection (c) from a cable operator provid-
ing video programming, and seeking to provide any tele-
communications service, in the area in which the rural 
telephone company provides video programming. The 
limitation contained in this subparagraph shall not apply 
to a rural telephone company that is providing video 
programming on the date of enactment of the Telecommuni-
cations Act of 1996. 
"(2) 
SUSPENSIONS AND MODIFICATIONS FOR RURAL CAR-
RIERS.—A local exchange carrier with fewer than 2 percent 
of the Nation's subscriber lines installed in the aggregate 
PUBLIC I;AW 104-104—FEB. 8, 1996 
110 STAT. 65 
nationwide may petition a State commission for a suspension 
or modification of the application of a requirement or require-
ments of subsection (b) or (c) to telephone exchange service 
facilities specified in such petition. The State commission shall 
grant such petition to the extent that, and for such duration 
as, the State commission determines that such suspension or 
modification— 
"(A) is necessary— 
"(i) to avoid a significant adverse economic impact 
on users of telecommunications services generally; 
"(ii) to avoid imposing a requirement that is unduly 
economically burdensome; or 
"(iii) to avoid imposing a requirement that is tech-
nically infeasible; and 
"(B) is consistent with the public interest, convenience, 
and necessity. 
The State commission shall act upon any petition filed under 
this paragraph within 180 days after receiving such petition. 
Pending such action, the State commission may suspend 
enforcement of the requirement or requirements to which the 
petition applies with respect to the petitioning carrier or car-
riers. 
"(g) 
CONTINUED ENFORCEMENT OF EXCHANGE ACCESS AND 
INTERCONNECTION REQUIREMENTS.—On and after the date of enact-
ment of the Telecommunications Act of 1996, each local exchange 
carrier, to the extent that it provides wireline services, shall provide 
exchange access, information access, and exchange services for such 
access to interexchange carriers and information service providers 
in accordance with the same equal access and nondiscriminatory 
interconnection restrictions and obligations (including receipt of 
compensation) that appl}'' to such carrier on the date immediately 
preceding the date of enactment of the Telecommunications Act 
of 1996 under any court order, consent decree, or regulation, order, 
or policy of the Commission, until such restrictions and obligations 
are explicitly superseded by regulations prescribed by the Commis-
sion after such date of enactment. During the period beginning 
on such date of enactment and until such restrictions and obliga-
tions are so superseded, such restrictions and obligations shall 
be enforceable in the same manner as regulations of the Commis-
sion. 
"(h) DEFINITION OF INCUMBENT LOCAL EXCHANGE CARRIER.— 
"(1) DEFINITION.—For purposes of this section, the term 
'incumbent local exchange carrier' means, with respect to an 
area, the local exchange carrier that— 
"(A) on the date of enactment of the Telecommuni-
cations Act of 1996, provided telephone exchange service 
in such area; and 
"(B)(i) on such date of enactment, was deemed to be 
a member of the exchange carrier association pursuant 
to section 69.601(b) of the Commission's regulations (47 
C.F.R. 69.601(b)); or 
"(ii) is a person or entity that, on or after such date 
of enactment, became a successor or assign of a member 
described in clause (i). 
"(2) 
TREATMENT OF COMPARABLE CARRIERS AS INCUM-
BENTS.—The Commission may, by rule, provide for the treat-
ment of a local exchange carrier (or class or category thereof) 
110 STAT. 66 
PUBLIC LAW 104-104—FEB. 8, 1996 
as an incumbent local exchange carrier for purposes of this 
section if— 
"(A) such carrier occupies a position in the market 
for telephone exchange service within an area that is com-
parable to the position occupied by a carrier described 
in paragraph (1); 
, 
"(B) such carrier has substantially replaced an incum-
bent local exchange carrier described in paragraph (1); 
and 
"(C) such treatment is consistent with the public 
interest, convenience, and necessity and the purposes of 
this section. 
"(i) SAVINGS PROVISION.—Nothing in this section shall be con-
strued to limit or otherwise affect the Commission's authority under 
section 201. 
47 use 252. 
"SEC. 252. PROCEDURES FOR NEGOTIATION, ARBITRATION, AND 
APPROVAL OF AGREEMENTS. 
"(a) AGREEMENTS ARRIVED AT THROUGH NEGOTIATION.— 
"(1) VOLUNTARY NEGOTIATIONS.—Upon receiving a request 
for interconnection, services, or network elements pursuant 
to section 251, an incumbent local exchange carrier may nego-
tiate and enter into a binding agreement with the requesting 
telecommunications carrier or carriers without regard to the 
standards set forth in subsections (b) and (c) of section 251. 
The agreement shall include a detailed schedule of itemized 
charges for interconnection and each service or network element 
included in the agreement. The agreement, including any inter-
connection agreement negotiated before the date of enactment 
of the Telecommunications Act of 1996, shall be submitted 
to the State commission under subsection (e) of this section. 
"(2) MEDIATION.—Any party negotiating an agreement 
under this section may, at any point in the negotiation, ask 
a State commission to participate in the negotiation and to 
mediate any differences arising in the course of the negotiation. 
"(b) AGREEMENTS ARRIVED AT THROUGH COMPULSORY ARBITRA-
TION.— 
"(1) ARBITRATION.—During the period from the 135th to 
the 160th day (inclusive) after the date on which an incumbent 
local exchange carrier receives a request for negotiation under 
this section, the carrier or any other party to the negotiation 
may petition a State commission to arbitrate any open issues. 
"(2) DUTY OF PETITIONER.— 
"(A) A party that petitions a State commission under 
paragraph (1) shall, at the same time as it submits the 
petition, provide the State commission all relevant docu-
mentation concerning— 
"(i) the unresolved issues; 
"(ii) the position of each of the parties with respect 
to those issues; and 
"(iii) any other issue discussed and resolved by 
the parties. 
"(B) A party petitioning a State commission under 
paragraph (1) shall provide a copy of the petition and 
any documentation to the other party or parties not later 
than the day on which the State commission receives the 
petition. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 67 
"(3) OPPORTUNITY TO RESPOND.—A non-petitioning party 
to a negotiation under this section may respond to the other 
party's petition and provide such additional information as 
it wishes within 25 days after the State commission receives 
the petition. 
"(4) ACTION BY STATE COMMISSION.— 
"(A) The State commission shall limit its consideration 
of any petition under paragraph (1) (and any response 
thereto) to the issues set forth in the petition and in the 
response, if any, filed under paragraph (3). 
"(B) The State commission may require the petitioning 
party and the responding party to provide such information 
as may be necessary for the State commission to reach 
a decision on the unresolved issues. If any party refuses 
or fails unreasonably to respond on a timely basis to any 
reasonable request from the State commission, then the 
State commission may proceed on the basis of the best 
information available to it from whatever source derived. 
"(C) The State commission shall resolve each issue 
set forth in the petition and the response, if any, by impos-
ing appropriate conditions as required to implement sub-
section (c) upon the parties to the agreement, and shall 
conclude the resolution of any unresolved issues not later 
than 9 months after the date on which the local exchange 
carrier received the request under this section. 
"(5) REFUSAL TO NEGOTIATE.—The refusal of any other 
party to the negotiation to participate further in the negotia-
tions, to cooperate with the State commission in carrying out 
its function as an arbitrator, or to continue to negotiate in 
good faith in the presence, or with the assistance, of the State 
commission shall be considered a failure to negotiate in good 
faith. 
"(c) STANDARDS FOR ARBITRATION.—In resolving by arbitration 
under subsection (b) any open issues and imposing conditions upon 
the parties to the agreement, a State commission shall— 
"(1) ensure that such resolution and conditions meet the 
requirements of section 251, including the regulations pre-
scribed by the Commission pursuant to section 251; 
"(2) establish any rates for interconnection, services, or 
network elements according to subsection (d); and 
"(3) provide a schedule for implementation of the terms 
and conditions by the parties to the agreement. 
"(d) PRICING STANDARDS.— 
"(1) INTERCONNECTION AND NETWORK ELEMENT CHARGES.— 
Determinations by a State commission of the just and reason-
able rate for the interconnection of facilities and equipment 
for purposes of subsection (c)(2) of section 251, and the just 
and reasonable rate for network elements for purposes of sub-
section (c)(3) of such section— 
"(A) shall be— 
"(i) based on the cost (determined without ref-
erence to a rate-of-return or other rate-based proceed-
ing) of providing the interconnection or network ele-
ment (whichever is applicable), and 
"(ii) nondiscriminatory, and 
"(B) may include a reasonable profit. 
110 STAT. 68 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(2) CHARGES FOR TRANSPORT AND TERMINATION OF TRAF-
FIC.— 
"(A) IN GENERAL.—For the purposes of compliance by 
an incumbent local exchange carrier with section 251(b)(5), 
a State commission shall not consider the terms and condi-
tions for reciprocal compensation to be just and reasonable 
unless— 
"(i) such terms and conditions provide for the 
mutual and reciprocal recovery by each carrier of costs 
associated with the transport and termination on each 
carrier's network facilities of calls that originate on 
the network facilities of the other carrier; and 
"(ii) such terms and conditions determine such 
costs on the basis of a reasonable approximation of 
the additional costs of terminating such calls. 
"(B) RULES OF CONSTRUCTION.—This paragraph shall 
not be construed— 
"(i) to preclude arrangements that afford the 
mutual recovery of costs through the offsetting of recip-
rocal obligations, including arrangements that waive 
mutual recovery (such as bill-and-keep arrangements); 
or 
"(ii) to authorize the Commission or any State 
commission to engage in any rate regulation proceeding 
to establish with particularity the additional costs of 
transporting or terminating calls, or to require carriers 
to maintain records with respect to the additional costs 
of such calls. 
"(3) WHOLESALE PRICES FOR TELECOMMUNICATIONS SERV-
ICES.—For the purposes of section 251(c)(4), a State commission 
shall determine wholesale rates on the basis of retail rates 
charged to subscribers for the telecommunications service 
requested, excluding the portion thereof attributable to any 
marketing, billing, collection, and other costs that will be 
avoided by the local exchange carrier. 
"(e) APPROVAL BY STATE COMMISSION.— 
"(1) APPROVAL REQUIRED.—Any interconnection agreement 
adopted by negotiation or arbitration shall be submitted for 
approval to the State commission. A State commission to which 
an agreement is submitted shall approve or reject the agree-
ment, with written findings as to any deficiencies. 
"(2) GROUNDS FOR REJECTION.—The State commission may 
only reject— 
"(A) an agreement (or any portion thereof) adopted 
by negotiation under subsection (a) if it finds that— 
"(i) the agreement (or portion thereof) discrimi-
nates against a telecommunications carrier not a party 
to the agreement; or 
"(ii) the implementation of such agreement or por-
tion is not consistent with the public interest, conven-
ience, and necessity; or 
"(B) an agreement (or any portion thereof) adopted 
by arbitration under subsection (b) if it finds that the 
agreement does not meet the requirements of section 251, 
including the regulations prescribed by the Commission 
pursuant to section 251, or the standards set forth in 
subsection (d) of this section. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 69 
"(3) PRESERVATION OF AUTHORITY.—Notwithstanding para-
graph (2), but subject to section 253, nothing in this section 
shall prohibit a State commission from establishing or enforcing 
other requirements of State law in its review of an agreement, 
including requiring compliance with intrastate telecommuni-
cations service quality standards or requirements. 
"(4) SCHEDULE FOR DECISION.—If the State commission does 
not act to approve or reject the agreement within 90 days 
after submission by the parties of an agreement adopted by 
negotiation under subsection (a), or within 30 days after 
submission by the parties of an agreement adopted by arbitra-
tion under subsection (b), the agreement shall be deemed 
approved. No State court shall have jurisdiction to review the 
action of a State commission in approving or rejecting an agree-
ment under this section. 
"(5) 
COMMISSION TO ACT IF STATE WILL NOT ACT.—If a 
State commission fails to act to carry out its responsibility 
under this section in any proceeding or other matter under 
this section, then the Commission shall issue an order preempt-
ing the State commission's jurisdiction of that proceeding or 
matter within 90 days after being notified (or taking notice) 
of such failure, and shall assume the responsibility of the 
State commission under this section with respect to the proceed-
ing or matter and act for the State commission. 
"(6) REVIEW OF STATE COMMISSION ACTIONS.—In a case 
in which a State fails to act as described in paragraph (5), 
the proceeding by the Commission under such paragraph and 
any judicial review of the Commission's actions shall be the 
exclusive remedies for a State commission's failure to act. In 
any case in which a State commission makes a determination 
under this section, any party aggrieved by such determination 
may bring an action in an appropriate Federal district court 
to determine whether the agreement or statement meets the 
requirements of section 251 and this section. 
"(f) STATEMENTS OF GENERALLY AVAILABLE TERMS.— 
"(1) IN GENERAL.—A Bell operating company may prepare 
and file with a State commission a statement of the terms 
and conditions that such company generally offers within that 
State to comply with the requirements of section 251 and 
the regulations thereunder and the standards applicable under 
this section. 
"(2) STATE COMMISSION REVIEW.—A State commission may 
not approve such statement unless such statement complies 
with subsection (d) of this section and section 251 and the 
regulations thereunder. Except as provided in section 253, noth-
ing in this section shall prohibit a State commission from 
establishing or enforcing other requirements of State law in 
its review of such statement, including requiring compliance 
with intrastate telecommunications service quality standards 
or requirements. 
"(3) SCHEDULE FOR REVIEW.—The State commission to 
which a statement is submitted shall, not later than 60 days 
after the date of such submission— 
"(A) complete the review of such statement under para-
graph (2) (including any reconsideration thereof), unless 
the submitting carrier agrees to an extension of the period 
for such review; or 
110 STAT. 70 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(B) permit such statement to take effect. 
"(4) AUTHORITY TO CONTINUE REVIEW.—Paragraph (3) shall 
not preclude the State commission from continuing to review 
a statement that has been permitted to take effect under 
subparagraph (B) of such paragraph or from approving or dis-
approving such statement under paragraph (2). 
"(5) DUTY TO NEGOTIATE NOT AFFECTED.—The submission 
or approval of a statement under this subsection shall not 
relieve a Bell operating company of its duty to negotiate the 
terms and conditions of an agreement under section 251. 
"(g) 
CONSOLIDATION 
OF 
STATE 
PROCEEDINGS.—Where 
not 
inconsistent with the requirements of this Act, a State commission 
may, to the extent practical, consolidate proceedings under sections 
214(e), 251(f), 253, and this section in order to reduce administrative 
burdens on telecommunications carriers, other parties to the 
proceedings, and the State commission in carrying out its respon-
sibilities under this Act. 
Public 
"(h) FILING REQUIRED.—A State commission shall make a copy 
information. 
of each agreement approved under subsection (e) and each state-
ment approved under subsection (f) available for public inspection 
and copying within 10 days after the agreement or statement is 
approved. The State commission may charge a reasonable and 
nondiscriminatory fee to the parties to the agreement or to the 
party filing the statement to cover the costs of approving and 
filing such agreement or statement. 
"(i) AVAILABILITY TO OTHER TELECOMMUNICATIONS CARRIERS.— 
A local exchange carrier shall make available any interconnection, 
service, or network element provided under an agreement approved 
under this section to which it is a party to any other requesting 
telecommunications carrier upon the same terms and conditions 
as those provided in the agreement. 
"(j) DEFINITION OF INCUMBENT LOCAL EXCHANGE CARRIER.— 
For purposes of this section, the term 'incumbent local exchange 
carrier' has the meaning provided in section 251(h). 
47 use 253. 
"SEC. 253. REMOVAL OF BARRIERS TO ENTRY. 
"(a) IN GENERAL.—No State or local statute or regulation, or 
other State or local legal requirement, may prohibit or have the 
effect of prohibiting the ability of any entity to provide any inter-
state or intrastate telecommunications service. 
"(b) STATE REGULATORY AUTHORITY.—Nothing in this section 
shall affect the ability of a State to impose, on a competitively 
neutral basis and consistent with section 254, requirements nec-
essary to preserve and advance universal service, protect the public 
safety and welfare, ensure the continued quality of telecommuni-
cations services, and safeguard the rights of consumers. 
"(c) STATE AND LOCAL GOVERNMENT AUTHORITY.—Nothing in 
this section affects the authority of a State or local government 
to manage the public rights-of-way or to require fair and reasonable 
compensation from telecommunications providers, on a competi-
tively neutral and nondiscriminatory basis, for use of public rights-
of-way on a nondiscriminatory basis, if the compensation required 
is publicly disclosed by such government. 
"(d) PREEMPTION.—If, after notice and an opportunity for public 
comment, the Commission determines that a State or local govern-
ment has permitted or imposed any statute, regulation, or legal 
requirement that violates subsection (a) or (b), the Commission 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 71 
shall preempt the enforcement of such statute, regulation, or legal 
requirement to the extent necessary to correct such violation or 
inconsistency. 
"(e) COMMERCIAL MOBILE SERVICE PROVIDERS.—Nothing in this 
section shall affect the application of section 332(c)(3) to commercial 
mobile service providers. 
"(f) RURAL MARKETS.—It shall not be a violation of this section 
for a State to require a telecommunications carrier that seeks 
to provide telephone exchange service or exchange access in a 
service area served by a rural telephone company to meet the 
requirements in section 214(e)(1) for designation as an eligible 
telecommunications carrier for that area before being permitted 
to provide such service. This subsection shall not apply— 
"(1) to a service area served by a rural telephone company 
that has obtained an exemption, suspension, or modification 
of section 251(c)(4) that effectively prevents a competitor from 
meeting the requirements of section 214(e)(1); and 
"(2) to a provider of commercial mobile services. 
"SEC. 254. UNIVERSAL SERVICE. 
47 USC 254 
"(a) 
PROCEDURES TO REVIEW UNIVERSAL SERVICE REQUIRE-
MENTS.— 
"(1) FEDERAL-STATE JOINT BOARD ON UNIVERSAL SERVICE.— 
Within one month after the date of enactment of the Tele-
communications Act of 1996, the Commission shall institute 
and refer to a Federal-State Joint Board under section 410(c) 
a proceeding to recommend changes to any of its regulations 
in order to implement sections 214(e) and this section, including 
the definition of the services that are supported by Federal 
universal service support mechanisms and a specific timetable 
for completion of such recommendations. In addition to the 
members of the Joint Board required under section 410(c), 
one member of such Joint Board shall be a State-appointed 
utility consumer advocate nominated by a national organization 
of State utility consumer advocates. The Joint Board shall, 
after notice and opportunity for public comment, make its rec-
ommendations to the Commission 9 months after the date 
of enactment of the Telecommunications Act of 1996. 
"(2) COMMISSION ACTION.—The Commission shall initiate 
a single proceeding to implement the recommendations from 
the Joint Board required by paragraph (1) and shall complete 
such proceeding within 15 months after the date of enactment 
of the Telecommunications Act of 1996. The rules established 
by such proceeding shall include a definition of the services 
that are supported by Federal universal service support mecha-
nisms and a specific timetable for implementation. Thereafter, 
the Commission shall complete any proceeding to implement 
subsequent recommendations from any Joint Board on univer-
sal service within one year after receiving such recommenda-
tions. 
"(b) UNIVERSAL SERVICE PRINCIPLES.—The Joint Board and 
the Commission shall base policies for the preservation and 
advancement of universal service on the following principles: 
"(1) QUALITY AND RATES.—Quality services should be avail-
able at just, reasonable, and affordable rates. 
110 STAT. 72 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(2) ACCESS TO ADVANCED SERVICES.—Access to advanced 
telecommunications and information services should be pro-
vided in all regions of the Nation. 
"(3) ACCESS IN RURAL AND HIGH COST AREAS.—Consumers 
in all regions of the Nation, including low-income consumers 
and those in rural, insular, and high cost areas, should have 
access to telecommunications and information services, includ-
ing interexchange services and advanced telecommunications 
and information services, that are reasonably comparable to 
those services provided in urban areas and that are available 
at rates that are reasonably comparable to rates charged for 
similar services in urban areas. 
"(4) EQUITABLE AND NONDISCRIMINATORY CONTRIBUTIONS.— 
All providers of telecommunications services should make an 
equitable and nondiscriminatory contribution to the preserva-
tion and advancement of universal service. 
"(5) SPECIFIC AND PREDICTABLE SUPPORT MECHANISMS.— 
There should be specific, predictable and sufficient Federal 
and State mechanisms to preserve and advance universal serv-
ice. 
"(6) ACCESS TO ADVANCED TELECOMMUNICATIONS SERVICES 
FOR SCHOOLS, HEALTH CARE, AND LIBRARIES.—Elementary and 
secondary schools and classrooms, health care providers, and 
libraries should have access to advanced telecommunications 
services as described in subsection (h). 
"(7) ADDITIONAL PRINCIPLES.—Such other principles as the 
Joint Board and the Commission determine are necessary and 
appropriate for the protection of the public interest, conven-
ience, and necessity and are consistent with this Act. 
"(c) DEFINITION.— 
"(1) IN GENERAL.—Universal service is an evolving level 
of telecommunications services that the Commission shall 
establish periodically under this section, taking into account 
advances in telecommunications and information technologies 
and services. The Joint Board in recommending, and the 
Commission in establishing, the definition of the services that 
are supported by Federal universal service support mechanisms 
shall consider the extent to which such telecommunications 
services— 
"(A) are essential to education, public health, or public 
safety; 
"(B) have, through the operation of market choices 
by customers, been subscribed to by a substantial majority 
of residential customers; 
"(C) are being deployed in public telecommunications 
networks by telecommunications carriers; and 
"(D) are consistent with the public interest, conven-
ience, and necessity. 
"(2) ALTERATIONS AND MODIFICATIONS.—The Joint Board 
may, from time to time, recommend to the Commission modi-
fications in the definition of the services that are supported 
by Federal universal service support mechanisms. 
"(3) SPECLU. SERVICES.—In addition to the services included 
in the definition of universal service under paragraph (1), the 
Commission may designate additional services for such support 
mechanisms for schools, libraries, and health care providers 
for the purposes of subsection (h). 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 73 
"(d) 
TELECOMMUNICATIONS 
CARRIER 
CONTRIBUTION.—Every 
telecommunications carrier that provides interstate telecommuni-
cations services shall contribute, on an equitable and nondiscrim-
inatory basis, to the specific, predictable, and sufficient mechanisms 
established by the Commission to preserve and advance universal 
service. The Commission may exempt a carrier or class of carriers 
from this requirement if the carrier's telecommunications activities 
are limited to such an extent that the level of such carrier's contribu-
tion to the preservation and advancement of universal service would 
be de minimis. Any other provider of interstate telecommunications 
may be required to contribute to the preservation and advancement 
of universal service if the public interest so requires. 
"(e) UNIVERSAL SERVICE SUPPORT.—After the date on which 
Commission regulations implementing this section take effect, only 
an eligible telecommunications carrier designated under section 
214(e) shall be eligible to receive specific Federal universal service 
support. A carrier that receives such support shall use that support 
only for the provision, maintenance, and upgrading of facilities 
and services for which the support is intended. Any such support 
should be explicit and sufficient to achieve the purposes of this 
section. 
"(f) STATE AUTHORITY.—A State may adopt regulations not 
inconsistent with the Commission's rules to preserve and advance 
universal service. Every telecommunications carrier that provides 
intrastate telecommunications services shall contribute, on an equi-
table and nondiscriminatory basis, in a manner determined by 
the State to the preservation and advancement of universal service 
in that State. A State may adopt regulations to provide for addi-
tional definitions and standards to preserve and advance universal 
service within that State only to the extent that such regulations 
adopt additional specific, predictable, and sufficient mechanisms 
to support such definitions or standards that do not rely on or 
burden Federal universal service support mechanisms. 
"(g) 
INTEREXCHANGE AND INTERSTATE SERVICES.—Within 6 Rules. 
months after the date of enactment of the Telecommunications 
Rural areas. 
Act of 1996, the Commission shall adopt rules to require that 
the rates charged by providers of interexchange telecommunications 
services to subscribers in rural and high cost areas shall be no 
higher than the rates charged by each such provider to its subscrib-
ers in urban areas. Such rules shall also require that a provider 
of interstate interexchange telecommunications services shall pro-
vide such services to its subscribers in each State at rates no 
higher than the rates charged to its subscribers in any other State. 
"(h) 
TELECOMMUNICATIONS SERVICES FOR CERTAIN PROVID-
ERS.— 
"(1) IN GENERAL.— 
"(A) HEALTH CARE PROVIDERS FOR RURAL AREAS.—A 
telecommunications carrier shall, upon receiving a bona 
fide request, provide telecommunications services which 
are necessary for the provision of health care services in 
a State, including instruction relating to such services, 
to any public or nonprofit health care provider that serves 
persons who reside in rural areas in that State at rates 
that are reasonably comparable to rates charged for similar 
services in urban areas in that State. A telecommunications 
carrier providing service under this paragraph shall be 
entitled to have an amount equal to the difference, if any. 
29-194 0-96-4:QL3Partl 
110 STAT. 74 
PUBLIC LAW 104-104—FEB. 8, 1996 
between the rates for services provided to health care 
providers for rural areas in a State and the rates for 
similar services provided to other customers in comparable 
rural areas in that State treated as a service obligation 
as a part of its obligation to participate in the mechanisms 
to preserve and advance universal service. 
"(B) EDUCATIONAL PROVIDERS AND LIBRARIES.—All tele-
^ 
communications carriers serving a geographic area shall, 
upon a bona fide request for any of its services that are 
' 
within the definition of universal service under subsection 
(c)(3), provide such services to elementary schools, second-
ary schools, and libraries for educational purposes at rates 
less than the amounts charged for similar services to other 
parties. The discount shall be an amount that the Commis-
sion, with respect to interstate services, and the States, 
with respect to intrastate services, determine is appropriate 
and necessary to ensure affordable access to and use of 
such services by such entities. A telecommunications carrier 
providing service under this paragraph shall— 
"(i) have an amount equal to the amount of the 
discount treated as an offset to its obligation to contrib-
ute to the mechanisms to preserve and advance univer-
sal service, or 
"(ii) notwithstanding the provisions of subsection 
(e) of this section, receive reimbursement utilizing the 
support mechanisms to preserve euid advance universal 
service. 
"(2) ADVANCED SERVICES.—The Commission shall establish 
competitively neutral rules— 
"(A) to enhance, to the extent technically feasible and 
economically reasonable, access to advanced telecommuni-
cations and information services for all public and nonprofit 
elementary and secondary school classrooms, health care 
providers, and libraries; and 
"(B) to define the circumstances under which a tele-
communications carrier may be required to connect its 
network to such public institutional telecommunications 
users. 
"(3) TERMS AND CONDITIONS.—^Telecommunications services 
and network capacity provided to a public institutional tele-
communications user under this subsection may not be sold, 
resold, or otherwise transferred by such user in consideration 
for money or any other thing of value. 
"(4) ELIGIBILITY OF USERS.—No entity listed in this sub-
section shall be entitled to preferential rates or treatment as 
required by this subsection, irsuch entity operates as a for-
profit business, is a school described in paragraph (5)(A) with 
an endowment of more than $50,000,000, or is a library not 
eligible for participation in State-based plans for funds under 
title III of the Library Services and Construction Act (20 U.S.C. 
335c et seq.). 
"(5) DEFINITIONS.—For purposes of this subsection: 
"(A) ELEMENTARY AND SECONDARY SCHOOLS.—The term 
'elementary and secondary schools' means elementary 
schools and secondary schools, as defined in paragraphs 
(14) and (25), respectively, of section 14101 of the 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 75 
Elementary and Secondary Education Act of 1965 (20 
U.S.C. 8801). 
"(B) HEALTH CARE PROVIDER.—The term 'health care 
provider' means— 
"(i) post-secondary educational institutions offering 
health care instruction, teaching hospitals, and medical 
schools; 
"(ii) community health centers or health centers 
providing health care to migrants; 
"(iii) local health departments or agencies; 
"(iv) community mental health centers; 
"(v) not-for-profit hospitals; 
"(vi) rural health clinics; and 
"(vii) consortia of health care providers consisting 
of one or more entities described in clauses (i) through 
(vi). 
"(C) 
PUBLIC 
INSTITUTIONAL 
TELECOMMUNICATIONS 
USER.—The term 'public institutional telecommunications 
user' means an elementary or secondary school, a library, 
or a health care provider as those terms are defined in 
this paragraph. 
"(i) CONSUMER PROTECTION.—The Commission and the States 
should ensure that universal service is available at rates that 
are just, reasonable, and affordable. 
"(j) LIFELINE ASSISTANCE.—Nothing in this section shall affect 
the collection, distribution, or administration of the Lifeline Assist-
ance Program provided for by the Commission under regulations 
set forth in section 69.117 of title 47, Code of Federal Regulations, 
and other related sections of such title. 
"(k) SUBSIDY OF COMPETITIVE SERVICES PROHIBITED.—A tele-
communications carrier may not use services that are not competi-
tive to subsidize services that are subject to competition. The 
Commission, with respect to interstate services, and the States, 
with respect to intrastate services, shall establish any necessary 
cost allocation rules, accounting safeguards, and guidelines to 
ensure that services included in the definition of universal service 
bear no more than a reasonable share of the joint and common 
costs of facilities used to provide those services. 
"SEC. 255. ACCESS BY PERSONS WITH DISABILITIES. 
47 USC 255. 
"(a) DEFINITIONS.—As used in this section— 
"(1) DISABILITY.—The term 'disability' has the meaning 
given to it by section 3(2)(A) of the Americans with Disabilities 
Act of 1990 (42 U.S.C. 12102(2)(A)). 
"(2) READILY ACHIEVABLE.—The term 'readily achievable' 
has the meaning given to it by section 301(9) of that Act 
(42 U.S.C. 12181(9)). 
"(b) MANUFACTURING.—^A manufacturer of telecommunications 
equipment or customer premises equipment shall ensure that the 
equipment is designed, developed, and fabricated to be accessible 
to and usable by individuals with disabilities, if readily achievable. 
"(c) 
TELECOMMUNICATIONS SERVICES.—^A provider of tele-
communications service shall ensure that the service is accessible 
to and usable by individuals with disabilities, if readily achievable. 
"(d) COMPATIBILITY.—Whenever the requirements of subsections 
(b) and (c) are not readily achievable, such a manufacturer or 
provider shall ensure that the equipment or service is compatible 
110 STAT. 76 
PUBLIC LAW 104-104—FEB. 8, 1996 
with existing peripheral devices or speciahzed customer premises 
equipment commonly used by individuals with disabilities to achieve 
access, if readily achievable. 
"(e) GUIDELINES.—^Within 18 months after the date of enact-
ment of the Telecommunications Act of 1996, the Architectural 
and Transportation Barriers Compliance Board shall develop guide-
lines for accessibility of telecommunications equipment and cus-
tomer premises equipment in conjunction with the Commission. 
The Board shall review and update the guidelines periodically. 
"(f) No ADDITIONAL PRIVATE RIGHTS AUTHORIZED.—Nothing in 
this section shall be construed to authorize any private right of 
action to enforce any requirement of this section or any regulation 
thereunder. The Commission shall have exclusive jurisdiction with 
respect to any complaint under this section. 
47 use 256. 
"SEC. 256. COORDINATION FOR INTERCONNECTIVITY. 
"(a) PURPOSE.—It is the purpose of this section— 
"(1) to promote nondiscriminatory accessibility by the 
broadest number of users and vendors of communications prod-
ucts and services to public telecommunications networks used 
to provide telecommunications service through— 
"(A) coordinated public telecommunications network 
planning and design by telecommunications carriers and 
other providers of telecommunications service; and 
"(B) 
public 
telecommunications 
network 
interconnectivity, and interconnectivity of devices with such 
networks used to provide telecommunications service; and 
"(2) to ensure the ability of users and information providers 
to seamlessly and transparently transmit and receive informa-
tion between and across telecommunications networks. 
"(b) COMMISSION FUNCTIONS.—In carrying out the purposes 
of this section, the Commission— 
"(1) shall establish procedures for Commission oversight 
of coordinated network planning by telecommunications carriers 
and other providers of telecommunications service for the effec-
tive and efficient interconnection of public telecommunications 
networks used to provide telecommunications service; and 
"(2) may participate, in a manner consistent with its 
authority and practice prior to the date of enactment of this 
section, in the development by appropriate industry standards-
setting organizations of public telecommunications network 
interconnectivity standards that promote access to— 
"(A) public telecommunications networks used to pro-
vide telecommunications service; 
"(B) network capabilities and services by individuals 
with disabilities; and 
"(C) information services by subscribers of rural tele-
phone companies. 
"(c) COMMISSION'S AUTHORITY.—Nothing in this section shall 
be construed as expanding or limiting any authority that the 
Commission may have under law in effect before the date of enact-
ment of the Telecommunications Act of 1996. 
"(d) DEFINITION.—As used in this section, the term 'public 
telecommunications network interconnectivity' means the ability 
of two or more public telecommunications networks used to provide 
telecommunications service to communicate and exchange informa-
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 77 
tion without degeneration, and to interact in concert with one 
another. 
"SEC. 257. MARKET ENTRY BARRIERS PROCEEDING. 
47 USC 257. 
"(a) ELIMINATION OF BARRIERS.—Within 15 months after the Regtiiations. 
date of enactment of the Telecommimications Act of 1996, the 
Commission shall complete a proceeding for the purpose of identify-
ing and eliminating, by regulations pursuant to its authority under 
this Act (other than this section), market entry barriers for entre-
preneurs and other small businesses in the provision and ownership 
of telecommunications services and information services, or in the 
provision of parts or services to providers of telecommunications 
services and information services. 
"(b) NATIONAL POLICY.—In carrying out subsection (a), the 
Commission shall seek to promote the policies and purposes of 
this Act favoring diversity of media voices, vigorous economic com-
petition, technological advancement, and promotion of the public 
interest, convenience, and necessity. 
"(c) PERIODIC REVIEW.—Every 3 years following the completion Reports. 
of the proceeding required by subsection (a), the Commission shall 
review and report to Congress on— 
"(1) any regulations prescribed to eliminate barriers within 
its jurisdiction that are identified under subsection (a) and 
that can be prescribed consistent with the public interest, con-
venience, and necessity; and 
"(2) the statutory barriers identified under subsection (a) 
that the Commission recommends be eliminated, consistent 
with the public interest, convenience, and necessity. 
"SEC. 258. ILLEGAL CHANGES IN SUBSCRIBER CARRIER SELECTIONS. 47 USC 258. 
"(a) PROHIBITION.—No telecommunications carrier shall submit 
or execute a change in a subscriber's selection of a provider of 
telephone exchange service or telephone toll service except in accord-
ance with such verification procedures as the Commission shall 
prescribe. Nothing in this section shall preclude any State commis-
sion from enforcing such procedures with respect to intrastate serv-
ices. 
"(b) LIABILITY FOR CHARGES.—Any telecommunications carrier 
that violates the verification procedures described in subsection 
(a) and that collects charges for telephone exchange service or 
telephone toll sei^^ice from a subscriber shall be liable to the carrier 
previously selected by the subscriber in an amount equal to all 
charges paid by such subscriber after such violation, in accordance 
with such procedures as the Commission may prescribe. The rem-
edies provided by this subsection are in addition to any other 
remedies available by law. 
"SEC. 259. INFRASTRUCTURE SHARING. 
"(a) REGULATIONS REQUIRED.—The Commission shall prescribe, 
within one year after the date of enactment of the Telecommuni-
cations Act of 1996, regulations that require incumbent local 
exchange carriers (as defined in section 251(h)) to make available 
to any qualifying carrier such public switched network infrastruc-
ture, technology, information, and telecommunications facilities and 
functions as may be requested by such qualifying carrier for the 
purpose of enabling such qualifying carrier to provide telecommuni-
cations services, or to provide access to information services, in 
the service area in which such qualifying carrier has requested 
47 USC 259. 
110 STAT. 78 
PUBLIC LAW 104-104—FEB. 8, 1996 
and obtained designation as an eligible telecommunications carrier 
under section 214(e). 
"(b) TERMS AND CONDITIONS OF REGULATIONS.—The regulations 
prescribed by the Commission pursuant to this section shall— 
"(1) not require a local exchange carrier to which this 
section applies to take any action that is economically unreason-
able or that is contrary to the public interest; 
"(2) permit, but shall not require, the joint ownership or 
operation of public switched network infrastructure and services 
by or among such local exchange carrier and a qualifjang car-
rier; 
"(3) ensure that such local exchange carrier will not be 
treated by the Commission or any State as a common carrier 
for hire or as offering common carrier services with respect 
to any infrastructure, technology, information, facilities, or func-
tions made available to a qualifying carrier in accordance with 
regulations issued pursuant to this section; 
"(4) ensure that such local exchange carrier makes such 
infrastructure, technology, information, facilities, or functions 
available to a qualifying carrier on just and reasonable terms 
and conditions that permit such qualifying carrier to fully bene-
fit from the economies of scale and scope of such local exchange 
carrier, as determined in accordance with guidelines prescribed 
by the Commission in regulations issued pursuant to this sec-
tion; 
"(5) establish conditions that promote cooperation between 
local exchange carriers to which this section applies and qualify-
ing carriers; 
"(6) not require a local exchange carrier to which this 
section applies to engage in any infrastructure sharing agree-
ment for any services or access which are to be provided or 
offered to consumers by the qualifying carrier in such local 
exchange carrier's telephone exchange area; and 
"(7) require that such local exchange carrier file with the 
Commission or State for public inspection, any tariffs, contracts, 
or other arrangements showing the rates, terms, and conditions 
under which such carrier is making available public switched 
network infi-astructure and functions under this section. 
"(c) INFORMATION CONCERNING DEPLOYMENT OF NEW SERVICES 
AND EQUIPMENT.—A local exchange carrier to which this section 
applies that has entered into an infrastructure sharing agreement 
under this section shall provide to each party to such agreement 
timely information on the planned deployment of telecommuni-
cations services and equipment, including any software or upgrades 
of software integral to the use or operation of such telecommuni-
cations equipment. 
"(d) DEFINITION.—For purposes of this section, the term 'qualify-
ing carrier' means a telecommunications carrier that— 
"(1) lacks economies of scale or scope, as determined in 
accordance with regulations prescribed by the Commission 
pursuant to this section; and 
"(2) offers telephone exchange service, exchange access, 
and any other service that is included in universal service, 
to all consumers without preference throughout the service 
area for which such carrier has been designated as an eligible 
telecommunications carrier under section 214(e). 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 79 
"SEC. 260. PROVISION OF TELEMESSAGING SERVICE. 
47 USC 260. 
"(a) NONDISCRIMINATION SAFEGUARDS.—Any local exchange car-
rier subject to the requirements of section 251(c) that provides 
telemessaging service— 
"(1) shall not subsidize its telemessaging service directly 
or indirectly from its telephone exchange service or its exchange 
access; and 
"(2) shall not prefer or discriminate in favor of its 
telemessaging service operations in its provision of tele-
communications services. 
"(b) EXPEDITED CONSIDERATION OF COMPLAINTS.—The Commis-
sion shall establish procedures for the receipt and review of com-
plaints concerning violations of subsection (a) or the regulations 
thereunder that result in material financial harm to a provider 
of telemessaging service. Such procedures shall ensure that the 
Commission will make a final determination with respect to any 
such complaint within 120 days after receipt of the complaint. 
If the complaint contains an appropriate showing that the alleged 
violation occurred, the Commission shall, within 60 days after 
receipt of the complaint, order the local exchange carrier and any 
affiliates to cease engaging in such violation pending such final 
determination. 
"(c) 
DEFINITION.—As 
used 
in this 
section, 
the term 
'telemessaging service' means voice mail and voice storage and 
retrieval services, any live operator services used to record, tran-
scribe, or relay messages (other than telecommunications relay 
services), and any ancillary services offered in combination with 
these services. 
"SEC. 261. EFFECT ON OTHER REQUIREMENTS. 
47 USC 261. 
"(a) COMMISSION REGULATIONS.—Nothing in this part shall be 
construed to prohibit the Commission fi'om enforcing regulations 
prescribed prior to the date of enactment of the Telecommunications 
Act of 1996 in fulfilling the requirements of this part, to the extent 
that such regulations are not inconsistent with the provisions of 
this part. 
"(b) EXISTING STATE REGULATIONS.—Nothing in this part shall 
be construed to prohibit any State commission from enforcing regu-
lations prescribed prior to the date of enactment of the Tele-
communications Act of 1996, or fi*om prescribing regulations after 
such date of enactment, in fulfilling the requirements of this part, 
if such regulations are not inconsistent with the provisions of this 
part. 
"(c) ADDITIONAL STATE REQUIREMENTS.—Nothing in this part 
precludes a State from imposing requirements on a telecommuni-
cations carrier for intrastate services that are necessary to further 
competition in the provision of telephone exchange service or 
exchange access, as long as the State's requirements are not 
inconsistent with this part or the Commission's regulations to imple-
ment this part.". 
(b) DESIGNATION OF PART I.—Title II of the Act is further 
amended by inserting before the heading of section 201 the following 
new heading: 
"PART I—COMMON CARRIER REGULATION". 
(c) STYLISTIC CONSISTENCY.—The Act is amended so that— 
47 use i5i note. 
110 STAT. 80 
PUBLIC LAW 104-104—FEB. 8, 1996 
(1) the designation and heading of each title of the Act 
shall be in the form and tjrpeface of the designation and heading 
of this title of this Act; and 
(2) the designation and heading of each part of each title 
of the Act shall be in the form and typeface of the designation 
and heading of part I of title II of the Act, as amended by 
subsection (a). 
SEC. 102. ELIGIBLE TELECOMMUNICATIONS CARRIERS. 
(a) IN GENERAL.—Section 214 (47 U.S.C. 214) is amended by 
adding at the end thereof the following new subsection: 
"(e) PROVISION OF UNIVERSAL SERVICE.— 
"(1) ELIGIBLE TELECOMMUNICATIONS CARRIERS.—A common 
carrier designated as an eligible telecommunications carrier 
under paragraph (2) or (3) shall be eligible to receive universal 
service support in accordance with section 254 and shall, 
throughout the service area for which the designation is 
received— 
"(A) offer the services that are supported by Federal 
universal service support mechanisms under section 254(c), 
either using its own facilities or a combination of its own 
facilities and resale of another carrier's services (including 
the services offered by another eligible telecommunications 
carrier); and 
"(B) advertise the availability of such services and 
the charges therefor using media of general distribution. 
"(2) DESIGNATION OF ELIGIBLE TELECOMMUNICATIONS CAR-
RIERS.—A State commission shall upon its own motion or upon 
request designate a common carrier that meets the require-
ments of paragraph (1) as an eligible telecommunications car-
rier for a service area designated by the State commission. 
Upon request and consistent with the public interest, conven-
ience, and necessity, the State commission may, in the case 
of an area served by a rural telephone company, and shall, 
in the case of all other areas, designate more than one common 
carrier as an eligible telecommunications carrier for a service 
area designated by the State commission, so long as each addi-
tional requesting carrier meets the requirements of paragraph 
(1). Before designating an additional eligible telecommuni-
cations carrier for an area served by a rural telephone company, 
the State commission shall find that the designation is in 
the public interest. 
"(3) DESIGNATION OF ELIGIBLE TELECOMMUNICATIONS CAR-
RIERS FOR UNSERVED AREAS.—If no common carrier will provide 
the services that are supported by Federal universal service 
support mechanisms under section 254(c) to an unserved 
community or any portion thereof that requests such service, 
the Commission, with respect to interstate services, or a State 
commission, with respect to intrastate services, shall determine 
which common carrier or carriers are best able to provide 
such service to the requesting unserved community or portion 
thereof and shall order such carrier or carriers to provide 
such service for that unserved community or portion thereof. 
Any carrier or carriers ordered to provide such service under 
this paragraph shall meet the requirements of paragraph (1) 
and shall be designated as an eligible telecommunications car-
rier for that community or portion thereof. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 81 
"(4) RELINQUISHMENT OF UNIVERSAL SERVICE.—A State 
commission shall permit an eligible telecommunications carrier 
to relinquish its designation as such a carrier in any area 
served by more than one eligible telecommunications carrier. 
An eligible telecommunications carrier that seeks to relinquish 
its eligible telecommunications carrier designation for an area 
served by more than one eligible telecommunications carrier 
shall give advance notice to the State commission of such 
relinquishment. Prior to permitting a telecommunications car-
rier designated as an eligible telecommunications carrier to 
cease providing universal service in an area served by more 
than one eligible telecommunications carrier, the State commis-
sion shall require the remaining eligible telecommunications 
carrier or carriers to ensure that all customers served by the 
relinquishing carrier will continue to be served, and shall 
require sufficient notice to permit the purchase or construction 
of adequate facilities by any remaining eligible telecommuni-
cations carrier. The State commission shall establish a time, 
not to exceed one year after the State commission approves 
such relinquishment under this paragraph, within which such 
purchase or construction shall be completed. 
"(5) SERVICE AREA DEFINED.—The term 'service area' means 
a geographic area established by a State commission for the 
purpose of determining universal service obligations and sup-
port mechanisms. In the case of an area served by a rural 
telephone company, 'service area' means such company's 'study 
area' unless and until the Commission and the States, after 
taking into account recommendations of a Federal-State Joint 
Board instituted under section 410(c), establish a different defi-
nition of service area for such company.". 
SEC. 103. EXEMPT TELECOMMUNICATIONS COMPANIES. 
The Public Utility Holding Company Act of 1935 (15 U.S.C. 
79 and following) is amended by redesignating sections 34 and 
35 as sections 35 and 36, respectively, and by inserting the following 
15 USC 79z-6, 
new section after section 33: 
79. 
"SEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES. 
15 USC 79z-5c. 
"(a) DEFINITIONS.—For purposes of this section— 
"(1) EXEMPT TELECOMMUNICATIONS COMPANY.—The term 
'exempt telecommunications company' means any person deter-
mined by the Federal Communications Commission to be 
engaged directly or indirectly, wherever located, through one 
or more affiliates (as defined in section 2(a)(ll)(B)), and exclu-
sively in the business of providing 
"(A) telecommunications services; 
"(B) information services; 
"(C) other services or products subject to the jurisdic-
tion of the Federal Communications Commission; or 
"(D) products or services that are related or incidental 
to the provision of a product or service described in 
subparagraph (A), (B), or (C). 
No person shall be deemed to be an exempt telecommunications 
company under this section unless such person has applied 
to the Federal Communications Commission for a determination 
under this paragraph. A person applying in good faith for 
such a determination shall be deemed an exempt telecommuni-
cations company under this section, with all of the exemptions 
110 STAT. 82 
PUBLIC LAW 104-104—FEB. 8, 1996 
Notification. 
Rules. 
provided by this section, until the Federal Communications 
Commission makes such determination. The Federal Commu-
nications Commission shall make such determination within 
60 days of its receipt of any such application filed after the 
enactment of this section and shall notify the Commission 
whenever a determination is made under this paragraph that 
any person is an exempt telecommunications company. Not 
later than 12 months after the date of enactment of this section, 
the Federal Communications Commission shall promulgate 
rules implementing the provisions of this paragraph which 
shall be applicable to applications filed under this paragraph 
after the effective date of such rules. 
"(2) OTHER TERMS.—For purposes of this section, the terms 
'telecommunications services' and 'information services' shall 
have the same meanings as provided in the Communications 
Act of 1934. 
"(b) STATE CONSENT FOR SALE OF EXISTING RATE-BASED FACILI-
TIES.—If a rate or charge for the sale of electric energy or natural 
gas (other than any portion of a rate or charge which represents 
recovery of the cost of a wholesale rate or charge) for, or in connec-
tion with, assets of a public utility company that is an associate 
compEiny or affiliate of a registered holding company was in effect 
under the laws of any State as of December 19, 1995, the public 
utility company owning such assets may not sell such assets to 
an exempt telecommunications company that is an associate com-
pany or affiliate unless State commissions having jurisdiction over 
such public utility company approve such sale. Nothing in this 
subsection shall preempt the otherwise applicable authority of any 
State to approve or disapprove the sale of such assets. The approval 
of the Commission under this Act shall not be required for the 
sale of assets as provided in this subsection. 
"(c) OWNERSHIP OF E T C S BY EXEMPT HOLDING COMPANIES.— 
Notwithstanding any provision of this Act, a holding company that 
is exempt under section 3 of this Act shall be permitted, without 
condition or limitation under this Act, to acquire and maintain 
an interest in the business of one or more exempt telecommuni-
cations companies. 
"(d) OWNERSHIP OF ETCS BY REGISTERED HOLDING COMPA-
NIES.—Notwithstanding any provision of this Act, a registered hold-
ing company shall be permitted (without the need to apply for, 
or receive, approval from the Commission, and otherwise without 
condition under this Act) to acquire and hold the securities, or 
an interest in the business, of one or more exempt telecommuni-
cations companies. 
"(e) FINANCING AND OTHER RELATIONSHIPS BETWEEN ETCS 
AND REGISTERED HOLDING COMPANIES.—The relationship between 
an exempt telecommunications company and a registered holding 
company, its affiliates and associate companies, shall remain subject 
to the jurisdiction of the Commission under this Act: Provided, 
That— 
"(1) section 11 of this Act shall not prohibit the ownership 
of an interest in the business of one or more exempt tele-
communications companies by a registered holding company 
(regardless of activities engaged in or where facilities owned 
or operated by such exempt telecommunications companies are 
located), and such ownership by a registered holding company 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 83 
shall be deemed consistent with the operation of an integrated 
public utility system; 
"(2) the ownership of an interest in the business of one 
or more exempt telecommunications companies by a registered 
holding company (regardless of activities engaged in or where 
facilities owned or operated by such exempt telecommunications 
companies are located) shall be considered as reasonably 
incidental, or economically necessary or appropriate, to the 
operations of an integrated public utility system; 
"(3) the Commission shall have no jurisdiction under this 
Act over, and there shall be no restriction or approval required 
under this Act with respect to (A) the issue or sale of a security 
by a registered holding company for purposes of financing the 
acquisition of an exempt telecommunications company, or (B) 
the guarantee of a security of an exempt telecommunications 
company by a registered holding company; and 
"(4) except for costs that should be fairly and equitably 
allocated among companies that are associate companies of 
a registered holding company, the Commission shall have no 
jurisdiction under this Act over the sales, service, and construc-
tion contracts between an exempt telecommunications company 
and a registered holding company, its affiliates and associate 
companies. 
"(f) 
REPORTING OBLIGATIONS CONCERNING INVESTMENTS AND 
ACTIVITIES OF REGISTERED PUBLIC-UTILITY HOLDING COMPANY SYS-
TEMS.— 
"(1) OBLIGATIONS TO REPORT INFORMATION.—Any registered 
holding company or subsidiary thereof that acquires or holds 
the securities, or an interest in the business, of an exempt 
telecommunications company shall file with the Commission 
such information as the Commission, by rule, may prescribe 
concerning— 
"(A) investments and activities by the registered hold-
ing company, or any subsidiary thereof, with respect to 
exempt telecommunications companies, and 
"(B) any activities of an exempt telecommunications 
company within the holding company system, 
that are reasonably likely to have a material impact on the 
financial or operational condition of the holding company sys-
tem. 
"(2) AUTHORITY TO REQUIRE ADDITIONAL INFORMATION.— 
If, based on reports provided to the Commission pursuant to 
paragraph (1) of this subsection or other available information, 
the Commission reasonably concludes that it has concerns 
regarding the financial or operational condition of any reg-
istered holding company or any subsidiary thereof (including 
an exempt telecommunications company), the Commission may 
require such registered holding company to make additional 
reports and provide additional information. 
"(3) AUTHORITY TO LIMIT DISCLOSURE OF INFORMATION.— 
Notwithstanding any other provision of law, the Commission 
shall not be compelled to disclose any information required 
to be reported under this subsection. Nothing in this subsection 
shall authorize the Commission to withhold the information 
fi*om Congress, or prevent the Commission fi'om complying 
with a request for information from any other Federal or State 
department or agency requesting the information for purposes 
110 STAT. 84 
PUBLIC LAW 104-104—FEB. 8, 1996 
within the scope of its jurisdiction. For purposes of section 
552 of title 5, United States Code, this subsection shall be 
considered a statute described in subsection (b)(3)(B) of such 
section 552. 
"(g) ASSUMPTION OF LIABILITIES.—Any public utility company 
that is an associate company, or an affiliate, of a registered holding 
company and that is subject to the jurisdiction of a State commission 
with respect to its retail electric or gas rates shall not issue any 
security for the purpose of financing the acquisition, ownership, 
or operation of an exempt telecommunications company. Any public 
utility company that is an associate company, or an affiliate, of 
a registered holding company and that is subject to the jurisdiction 
of a State commission with respect to its retail electric or gas 
rates shall not assume any obligation or liability as guarantor, 
endorser, surety, or otherwise by the public utility company in 
respect of any security of an exempt telecommunications company. 
"(h) PLEDGING OR MORTGAGING OF ASSETS.—Any public utility 
company that is an associate company, or affiliate, of a registered 
holding company and that is subject to the jurisdiction of a State 
commission with respect to its retail electric or gas rates shall 
not pledge, mortgage, or otherwise use as collateral any assets 
of the public utility company or assets of any subsidiary company 
thereof for the benefit of an exempt telecommunications company. 
"(i) PROTECTION AGAINST ABUSIVE AFFILIATE TRANSACTIONS.— 
A pulDlic utility company may enter into a contract to purchase 
services or products described in subsection (a)(1) from an exempt 
telecommunications company that is an affiliate or associate com-
pany of the public utility company only if— 
"(1) every State commission having jurisdiction over the 
retail rates of such public utility company approves such con-
tract; or 
"(2) such public utility company is not subject to State 
commission retail rate regulation and the purchased services 
or products— 
"(A) would not be resold to any affiliate or associate 
company; or 
"(B) would be resold to an affiliate or associate company 
and every State commission having jurisdiction over the 
retail rates of such affiliate or associate company makes 
the determination required by subparagraph (A). 
The requirements of this subsection shall not apply in any case 
in which the State or the State commission concerned publishes 
a notice that the State or State commission waives its authority 
under this subsection. 
"(j) NONPREEMPTION OF RATE AUTHORITY.—Nothing in this Act 
shall preclude the Federal Energy Regulatory Commission or a 
State commission from exercising its jurisdiction under otherwise 
applicable law to determine whether a public utility company may 
recover in rates the costs of products or services purchased from 
or sold to an associate company or affiliate that is an exempt 
telecommunications company, regardless of whether such costs are 
incurred through the direct or indirect purchase or sale of products 
or services from such associate company or affiliate. 
"(k) 
RECIPROCAL 
ARRANGEMENTS 
PROHIBITED.—Reciprocal 
arrangements among companies that are not affiliates or associate 
companies of each other that are entered into in order to avoid 
the provisions of this section are prohibited. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 85 
"(1) BOOKS AND RECORDS.—(1) Upon written order of a State 
commission, a State commission may examine the books, accounts, 
memoranda, contracts, and records o
f
— 
"(A) a public utility company subject to its regulatory 
authority under State law; 
"(B) any exempt telecommunications company selling prod-
ucts or services to such public utility company or to an associate 
company of such public utility company; and 
"(C) any associate company or affiliate of an exempt tele-
communications company which sells products or services to 
a public utility company referred to in subparagraph (A), 
wherever located, if such examination is required for the effective 
discharge of the State commission's regulatory responsibilities 
affecting the provision of electric or gas service in connection with 
the activities of such exempt telecommunications company. 
"(2) Where a State commission issues an order pursuant to 
paragraph (1), the State commission shall not publicly disclose 
trade secrets or sensitive commercial information. 
"(3) Any United States district court located in the State in 
which the State commission referred to in paragraph (1) is located 
shall have jurisdiction to enforce compliance with this subsection. 
"(4) Nothing in this section shall— 
"(A) preempt applicable State law concerning the provision 
of records and other information; or 
"(B) in any way limit rights to obtain records and other 
information under Federal law, contracts, or otherwise. 
"(m) 
INDEPENDENT AUDIT AUTHORITY FOR STATE COMMIS-
SIONS.— 
"(1) STATE MAY ORDER AUDIT.—Any State commission with 
jurisdiction over a public utility company that— 
"(A) is an associate company of a registered holding 
company; and 
"(B) transacts business, directly or indirectly, with a 
subsidiary company, an affiliate or an associate company 
that is an exempt telecommunications company, 
may order an independent audit to be performed, no more 
frequently than on an annual basis, of all matters deemed 
relevant by the selected auditor that reasonably relate to retail 
rates: Provided, That such matters relate, directly or indirectly, 
to transactions or transfers between the public utility company 
subject to its jurisdiction and such exempt telecommunications 
company. 
"(2) SELECTION OF FIRM TO CONDUCT AUDIT.—(A) If a State 
commission orders an audit in accordance with paragraph (1), 
the public utility company and the State commission shall 
jointly select, within 60 days, a firm to perform the audit. 
The firm selected to perform the audit shall possess dem-
onstrated qualifications relating to— 
"(i) competency, including adequate technical training 
and professional proficiency in each discipline necessary 
to carry out the audit; and 
"(ii) independence and objectivity, including that the 
firm be free from personal or external impairments to 
independence, and should assume an independent position 
with the State commission and auditee, making certain 
that the audit is based upon an impartial consideration 
of all pertinent facts and responsible opinions. 
Confidentiality. 
Courts. 
110 STAT. 86 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(B) The public utility company and the exempt tele-
communications company shall cooperate fully with all reason-
able requests necessary to perform the audit and the public 
utility company shall bear all costs of having the audit per-
formed. 
"(3) 
AVAILABILITY OF AUDITOR'S REPORT.—The auditor's 
report shall be provided to the State commission not later 
than 6 months after the selection of the auditor, and provided 
to the public utility company not later than 60 days thereafter. 
"(n) 
APPLICABILITY OF TELECOMMUNICATIONS REGULATION.— 
Nothing in this section shall affect the authority of the Federal 
Communications Commission under the Communications Act of 
1934, or the authority of State commissions under State laws 
concerning the provision of telecommunications services, to regulate 
the activities of an exempt telecommunications company.". 
SEC. 104. NONDISCRIMINATION PRINCIPLE. 
Section 1 (47 U.S.C. 151) is amended by inserting after "to 
all the people of the United States" the following: ", without 
discrimination on the basis of race, color, religion, national origin, 
or sex,". 
Subtitle B—Special Provisions Concerning 
Bell Operating Companies 
SEC. 151. BELL OPERATING COMPANY PROVISIONS. 
(a) ESTABLISHMENT OF PART III OF TITLE IL—Title II is amend-
ed by adding at the end of part II (as added by section 101) 
the following new part: 
"PART III—SPECIAL PROVISIONS 
CONCERNING BELL OPERATING COMPANIES 
47 use 271. 
"SEC. 271. BELL OPERATING COMPANY ENTRY INTO INTERLATA SERV-
ICES. 
"(a) GENERAL LIMITATION.—Neither a Bell operating company, 
' 
nor any affiliate of a Bell operating company, may provide 
interLATA services except as provided in this section. 
"(b) INTERLATA SERVICES TO WHICH THIS SECTION APPLIES.— 
"(1) IN-REGION SERVICES.—A Bell operating company, or 
any affiliate of that Bell operating company, may provide 
interLATA services originating in any of its in-region States 
(as defined in subsection (i)) if the Commission approves the 
application of such company for such State under subsection 
(d)(3). 
"(2) OUT-OF-REGION SERVICES.—A Bell operating company, 
or any affiliate of that Bell operating company, may provide 
interLATA services originating outside its in-region States after 
the date of enactment of the Telecommunications Act of 1996, 
subject to subsection (j). 
"(3) INCIDENTAL INTERLATA SERVICES.—A Bell operating 
company, or any affiliate of a Bell operating company, may 
provide incidental interLATA services (as defined in subsection 
(g)) originating in any State after the date of enactment of 
the Telecommunications Act of 1996. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 87 
"(4) TERMINATION.—Nothing in this section prohibits a Bell 
operating company or any of its affiliates from providing termi-
nation for interLATA services, subject to subsection (j). 
"(c) 
REQUIREMENTS 
FOR 
PROVIDING 
CERTAIN 
IN-REGION 
INTERLATA SERVICES.— 
"(1) AGREEMENT OR STATEMENT.—A Bell operating company 
meets the requirements of this paragraph if it meets the 
requirements of subparagraph (A) or subparagraph (B) of this 
paragraph for each State for which the authorization is sought. 
"(A) PRESENCE OF A FACILITIES-BASED COMPETITOR.— 
A Bell operating company meets the requirements of this 
subparagraph if it has entered into one or more binding 
agreements that have been approved under section 252 
specifying the terms and conditions under which the Bell 
operating company is providing access and interconnection 
to its network facilities for the network facilities of one 
or more unaffiliated competing providers of telephone 
exchange service (as defined in section 3(47)(A), but exclud-
ing exchange access) to residential and business subscrib-
ers. For the purpose of this subparagraph, such telephone 
exchange service may be offered by such competing provid-
ers either exclusively over their own telephone exchange 
service facilities or predominsmtly over their own telephone 
exchange service facilities in combination with the resale 
of the telecommunications services of another carrier. For 
the purpose of this subparagraph, services provided pursu-
ant to subpart K of part 22 of the Commission's regulations 
(47 C.F.R. 22.901 et seq.) shall not be considered to be 
telephone exchange services. 
"(B) FAILURE TO REQUEST ACCESS.—A Bell operating 
company meets the requirements of this subparagraph if, 
after 10 months after the date of enactment of the Tele-
communications Act of 1996, no such provider 
has 
requested the access and interconnection described in 
subparagraph (A) before the date which is 3 months before 
the date the company makes its application under sub-
section (d)(1), and a statement of the terms and conditions 
that the company generally offers to provide such access 
and interconnection has been approved or permitted to 
take effect by the State commission under section 252(f). 
For purposes of this subparagraph, a Bell operating com-
pany shall be considered not to have received any request 
for access and interconnection if the State commission of 
such State certifies that the only provider or providers 
making such a request have (i) failed to negotiate in good 
faith as required by section 252, or (ii) violated the terms 
of an agreement approved under section 252 by the provid-
er's failure to comply, within a reasonable period of time, 
with the implementation schedule contained in such agree-
ment. 
"(2) SPECIFIC INTERCONNECTION REQUIREMENTS.— 
"(A) AGREEMENT REQUIRED.—A Bell operating company 
meets the requirements of this paragraph if, within the 
State for which the authorization is sought— 
"(i)(I) such company is providing access and inter-
connection pursuant to one or more 
agreements 
described in paragraph (1)(A), or 
110 STAT. 88 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(II) such company is generally offering access and 
interconnection pursuant to a statement described in 
paragraph (1)(B), and 
"(ii) such access and interconnection meets the 
requirements of subparagraph (B) of this paragraph. 
"(B) COMPETITIVE CHECKLIST.—Access or interconnec-
tion provided or generally offered by a Bell operating com-
pany to other telecommunications carriers meets the 
requirements of this subparagraph if such access and inter-
connection includes each of the following: 
"(i) Interconnection in accordance with the require-
ments of sections 251(c)(2) and 252(d)(1). 
"(ii) Nondiscriminatory access to network elements 
in accordance with the requirements of sections 
251(c)(3) and 252(d)(1). 
"(iii) Nondiscriminatory access to the poles, ducts, 
conduits, and rights-of-way owned or controlled by the 
Bell operating company at just and reasonable rates 
in accordance with the requirements of section 224. 
"(iv) Local loop transmission from the central office 
to the customer's premises, unbundled from local 
switching or other services. 
"(v) Local transport from the trunk side of a 
wireline local exchange carrier switch unbundled from 
switching or other services. 
"(vi) Local switching unbundled from transport, 
local loop transmission, or other services. 
"(vii) Nondiscriminatory access to— 
"(I) 911 and E911 services; 
"(II) directory assistance services to allow the 
other carrier's customers to obtain telephone num-
bers; and 
"(III) operator call completion services. 
"(viii) White pages directory listings for customers 
of the other carrier's telephone exchange service. 
"(ix) Until the date by which telecommunications 
numbering administration guidelines, plan, or rules 
are established, nondiscriminatory access to telephone 
numbers for assignment to the other carrier's telephone 
exchange service customers. After that date, compli-
ance with such guidelines, plan, or rules. 
"(x) Nondiscriminatory access to databases and 
associated signaling necessary for call routing and 
completion. 
"(xi) Until the date by which the Commission 
issues regulations pursuant to section 251 to require 
number portability, interim telecommunications num-
ber portability through remote call forwarding, direct 
inward dialing trunks, or other comparable arrange-
ments, with as little impairment of functioning, qual-
ity, reliability, and convenience as possible. After that 
date, full compliance with such regulations. 
"(xii) Nondiscriminatory access to such services 
or information as are necessary to allow the requesting 
carrier to implement local dialing parity in accordance 
with the requirements of section 251(b)(3). 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 89 
"(xiii) Reciprocal compensation arrangements in 
accordance with the requirements of section 252(d)(2). 
"(xiv) Telecommunications services are available 
for resale in accordance with the requirements of sec-
tions 251(c)(4) and 252(d)(3). 
"(d) ADMINISTRATIVE: PROVISIONS.— 
"(1) APPLICATION TO COMMISSION.—On and after the date 
of enactment of the Telecommunications Act of 1996, a Bell 
operating company or its affiliate may apply to the Commission 
for authorization to provide interlATA services originating in 
any in-region State. The application shall identify each State 
for which the authorization is sought. 
"(2) CONSULTATION.— 
"(A) CONSULTATION WITH THE ATTORNEY GENERAL.— Notification. 
The 
Commission 
shall 
notify 
the Attorney 
General 
promptly of anj*^ application under paragraph (1). Before 
making any determination under this subsection, the 
Commission shall consult with the Attorney General, and 
if the Attorney General submits any comments in writing, 
such comments shall be included in the record of the 
Commission's decision. In consulting with and submitting 
comments to the Commission under this paragraph, the 
Attorney General shall provide to the Commission an 
evaluation of the application using any standard the Attor-
ney General considers appropriate. The Commission shall 
give substantial weight to the Attorney General's evalua-
tion, but such evaluation shall not have any preclusive 
effect on any Commission decision under paragraph (3). 
"(B) CONSULTATION WITH STATE COMMISSIONS.—Before 
making any determination under this subsection, the 
Commission shall consult with the State commission of 
any State that is the subject of the application in order 
to verify the compliance of the Bell operating company 
with the requirements of subsection (c). 
"(3) DETERMINATION.—Not later than 90 days after receiv-
ing an application under paragraph (1), the Commission shall 
issue a written determination approving or denying the 
authorization requested in the application for each State. The 
Commission shall not approve the authorization requested in 
an application submitted under paragraph (1) unless it finds 
that— 
"(A) the petitioning Bell operating company has met 
the requirements of subsection (c)(1) and— 
"(i) with respect to access and interconnection pro-
vided pursuant to subsection (c)(1)(A), has fully imple-
mented 
the 
competitive 
checklist 
in 
subsection 
(c)(2)(B); or 
"(ii) with respect to access and interconnection gen-
erally offered pursuant to a statement under subsection 
(c)(1)(B), such statement offers all of the items included 
in the competitive checklist in subsection (c)(2)(B); 
"(B) the requested authorization will be carried out 
in accordance with the requirements of section 272; and 
"(C) the requested authorization is consistent with the 
public interest, convenience, and necessity. 
The Commission shall state the basis for its approval or denial 
of the application. 
110 STAT. 90 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(4) LIMITATION ON COMMISSION.—The Commission may 
not, by rule or otherwise, Hmit or extend the terms used in 
the competitive checkUst set forth in subsection (c)(2)(B). 
Federal Register, 
"(5) PUBLICATION.—Not later than 10 days after issuing 
publication. 
a determination under paragraph (3), the Commission shall 
publish in the Federal Register a brief description of the deter-
mination. 
"(6) ENFORCEMENT OF CONDITIONS.— 
"(A) COMMISSION AUTHORITY.—If at any time after the 
approval of an application under paragraph (3), the 
Commission determines that a Bell operating company has 
ceased to meet any of the conditions required for such 
approval, the Commission may, after notice and oppor-
tunity for a hearing— 
"(i) issue an order to such company to correct 
the deficiency; 
"(ii) impose a penalty on such company pursuant 
to title V; or 
"(iii) suspend or revoke such approval. 
"(B) 
RECEIPT 
AND 
REVIEW 
OF 
COMPLAINTS.—The 
Commission shall establish procedures for the review of 
complaints concerning failures by Bell operating companies 
to meet conditions required for approval under paragraph 
(3). Unless the parties otherwise agree, the Commission 
shall act on such complaint within 90 days. 
"(e) LIMITATIONS.— 
"(1) JOINT MARKETING OF LOCAL AND LONG DISTANCE SERV-
ICES.—Until a Bell operating company is authorized pursuant 
to subsection (d) to provide interLATA services in an in-region 
State, or until 36 months have passed since the date of enact-
ment of the Telecommunications Act of 1996, whichever is 
earlier, a telecommunications carrier that serves greater than 
5 percent of the Nation's presubscribed access lines may not 
jointly market in such State telephone exchange service 
obtained from such company pursuant to section 251(c)(4) with 
interLATA services offered by that telecommunications carrier. 
"(2) INTRALATA TOLL DIALING PARITY.— 
"(A) PROVISION REQUIRED.—A Bell operating company 
granted authority to provide interLATA services under sub-
section (d) shall provide intraLATA toll dialing parity 
throughout that State coincident with its exercise of that 
authority. 
"(B) LIMITATION.—Except for single-LATA States and 
States that have issued an order by December 19, 1995, 
requiring 
a 
Bell 
operating 
company 
to 
implement 
intraLATA toll dialing parity, a State may not require 
a Bell operating company to implement intraLATA toll 
dialing parity in that State before a Bell operating company 
has been granted authority under this section to provide 
interLATA services originating in that State or before 3 
years after the date of enactment of the Telecommuni-
cations Act of 1996, whichever is earlier. Nothing in this 
subparagraph precludes a State from issuing an order 
requiring intraLATA toll dialing parity in that State prior 
to either such date so long as such order does not take 
effect until after the earlier of either such dates. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 91 
"(f) EXCEPTION FOR PREVIOUSLY AUTHORIZED ACTIVITIES.—Nei-
ther subsection (a) nor section 273 shall prohibit a Bell operating 
company or affiliate from engaging, at any time after the date 
of enactment of the Telecommunications Act of 1996, in any activity 
to the extent authorized by, and subject to the terms and conditions 
contained in, an order entered by the United States District Court 
for the District of Columbia pursuant to section VII or VIII(C) 
of the AT&T Consent Decree if such order was entered on or 
before such date of enactment, to the extent such order is not 
reversed or vacated on appeal. Nothing in this subsection shall 
be construed to limit, or to impose terms or conditions on, an 
activity in which a Bell operating company is otherwise authorized 
to engage under any other provision of this section. 
"(g) 
DEFINITION OF INCIDENTAL INTERLATA SERVICES.—For 
purposes of this section, the term 'incidental interLATA services' 
means the interLATA provision by a Bell operating company or 
its affiliate— 
"(1)(A) of audio programming, video programming, or other 
programming services to subscribers to such services of such 
company or affiliate; 
"(B) of the capability for interaction by such subscribers 
to select or respond to such audio programming, video program-
ming, or other programming services; 
"(C) to distributors of audio programming or video program-
ming that such company or affiliate owns or controls, or is 
licensed by the copyright owner of such programming (or by 
an assignee of such owner) to distribute; or 
"(D) of alarm monitoring services; 
"(2) of two-way interactive video services or Internet serv-
ices over dedicated facilities to or for elementary and secondary 
schools as defined in section 254(h)(5); 
"(3) of commercial mobile services in accordance with sec-
tion 332(c) of this Act and with the regulations prescribed 
by the Commission pursuant to paragraph (8) of such section; 
"(4) of a service that permits a customer that is located 
in one LATA to retrieve stored information from, or file informa-
tion for storage in, information storage facilities of such com-
pany that are located in another LATA; 
"(5) of signaling information used in connection with the 
provision of telephone exchange services or exchange access 
by a local exchange carrier; or 
"(6) of network control signaling information to, and receipt 
of such signaling inibrmation from, common carriers offering 
interLATA services at any location within the area in which 
such Bell operating company provides telephone exchange serv-
ices or exchange access. 
"(h) LIMITATIONS.—The provisions of subsection (g) are intended 
to be narrowly construed. The interLATA services provided under 
subparagraph (A), (B), or (C) of subsection (g)(1) are limited to 
those interLATA transmissions incidental to the provision by a 
Bell operating company or its affiliate of video, audio, and other 
programming services that the company or its affiliate is engaged 
in providing to the public. The Commission shall ensure that the 
provision of services authorized under subsection (g) by a Bell 
operating company or its affiliate will not adversely affect telephone 
exchange service ratepayers or competition in any telecommuni-
cations market. 
110 STAT. 92 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(i) ADDITIONAL DEFINITIONS.—As used in this section— 
"(1) IN-REGION STATE.—The term 'in-region State' means 
a State in which a Bell operating company or any of its affiliates 
was authorized to provide wireline telephone exchange service 
pursuant to the reorganization plan approved under the AT&T 
Consent Decree, as in effect on the day before the date of 
enactment of the Telecommunications Act of 1996. 
"(2) AUDIO PROGRAMMING SERVICES.—The term 'audio 
programming services' means programming provided by, or gen-
erally considered to be comparable to programming provided 
by, a radio broadcast station. 
"(3) VIDEO PROGRAMMING SERVICES; OTHER PROGRAMMING 
SERVICES.—The terms 'video programming service' and 'other 
programming services' have the same meanings as such terms 
have under section 602 of this Act. 
"(j) CERTAIN SERVICE APPLICATIONS TREATED AS IN-REGION 
SERVICE APPLICATIONS.—For purposes of this section, a Bell operat-
ing company application to provide 800 service, private line service, 
or their equivalents that— 
"(1) terminate in an in-region State of that Bell operating 
company, and 
"(2) allow the called party to determine the interLATA 
carrier, 
shall be considered an in-region service subject to the requirements 
of subsection (b)(1). 
47 use 272. 
"SEC. 272. SEPARATE AFFILIATE; SAFEGUARDS. 
"(a) SEPARATE AFFILIATE REQUIRED FOR COMPETITIVE ACTIVI-
TIES.— 
"(1) IN GENERAL.—A Bell operating company (including 
any affiliate) which is a local exchange carrier that is subject 
to the requirements of section 251(c) may not provide any 
service described in paragraph (2) unless it provides that service 
through one or more affiliates that— 
"(A) are separate from any operating company entity 
that is subject to the requirements of section 251(c); and 
"(B) meet the requirements of subsection (b). 
"(2) 
SERVICES FOR WHICH A SEPARATE AFFILIATE IS 
REQUIRED.—The services for which a separate affiliate is 
required by paragraph (1) are: 
"(A) Manufacturing activities (as defined in section 
273(h)). 
"(B) Origination of interLATA telecommunications 
services, other than— 
"(i) incidental interLATA services described in 
paragraphs (1), (2), (3), (5), and (6) of section 271(g); 
"(ii) out-of-region services described in section 
271(b)(2); or 
"(iii) previously authorized activities described in 
section 271(f). 
"(C) InterLATA information services, other than elec-
tronic publishing (as defined in section 274(h)) and alarm 
monitoring services (as defined in section 275(e)). 
"(b) 
STRUCTURAL AND TRANSACTIONAL REQUIREMENTS.—The 
separate affiliate required by this section— 
"(1) shall operate independently from the Bell operating 
company; 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 93 
"(2) shall maintain books, records, and accounts in the Records. 
manner prescribed by the Commission which shall be separate 
from the books, records, and accounts maintained by the Bell 
operating company of which it is an affiliate; 
"(3) shall have separate officers, directors, and employees 
from the Bell operating company of which it is an affiliate; 
"(4) may not obtain credit under any arrangement that 
would permit a creditor, upon default, to have recourse to 
the assets of the Bell operating company; and 
"(5) shall conduct all transactions with the Bell operating 
company of which it is an affiliate on an arm's length basis 
with any such transactions reduced to writing and available 
for public inspection. 
"(c) NONDISCRIMINATION SAFEGUARDS.—In its dealings with its 
affiliate described in subsection (a), a Bell operating company— 
"(1) may not discriminate between that company or affiliate 
and any other entity in the provision or procurement of goods, 
services, facilities, and information, or in the establishment 
of standards; and 
"(2) shall account for all transactions with an affiliate 
described in subsection (a) in accordance with accounting prin-
ciples designated or approved by the Commission. 
"(d) BIENNIAL AUDIT.— 
"(1) GENERAL REQUIREMENT.—^A company required to oper-
ate a separate affiliate under this section shall obtain and 
pay for a joint Federal/State audit every 2 years conducted 
by an independent auditor to determine whether such company 
has complied with this section and the regulations promulgated 
under this section, and particularly whether such company 
has complied with the separate accounting requirements under 
subsection (b). 
"(2) RESULTS SUBMITTED TO COMMISSION; STATE COMMIS-
SIONS.—The auditor described in paragraph (1) shall submit 
the results of the audit to the Commission and to the State 
commission of each State in which the company audited pro-
vides service, which shall make such results available for public 
inspection. Any party may submit comments on the final audit 
report. 
"(3) ACCESS TO DOCUMENTS.—For purposes of conducting Records, 
audits and reviews under this subsection— 
"(A) the independent auditor, the Commission, and 
the State commission shall have access to the financial 
accounts and records of each company and of its affiliates 
necessary to verify transactions conducted with that com-
pany that are relevant to the specific activities permitted 
under this section and that are necessary for the regulation 
of rates; 
"(B) the Commission and the State commission shall 
have access to the working papers and supporting materials 
of any auditor who performs an audit under this section; 
and 
"(C) the State commission shall implement appropriate 
procedures to ensure the protection of any proprietary 
information submitted to it under this section. 
"(e) FULFILLMENT OF CERTAIN REQUESTS.—A Bell operating 
company and an affiliate that is subject to the requirements of 
section 251(c)— 
Public 
information. 
110 STAT. 94 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(1) shall fulfill any requests from an unaffiliated entity 
for telephone exchange service and exchange access within 
a period no longer than the period in which it provides such 
telephone exchange service and exchange access to itself or 
to its affiliates; 
"(2) shall not provide any facilities, services, or information 
concerning its provision of exchange access to the affiliate 
described in subsection (a) unless such facilities, services, or 
information are made available to other providers of interLATA 
services in that market on the same terms and conditions; 
"(3) shall charge the affiliate described in subsection (a), 
or impute to itself (if using the access for its provision of 
its own services), an amount for access to its telephone exchange 
service and exchange access that is no less than the amount 
charged to any unaffiliated interexchange carriers for such 
service; and 
"(4) may provide any interLATA or intraLATA facilities 
or services to its interLATA affiliate if such services or facilities 
are made available to all carriers at the same rates and on 
the same terms and conditions, and so long as the costs are 
appropriately allocated. 
"(f) SUNSET.— 
"(1) MANUFACTURING AND LONG DISTANCE.—The provisions 
of this section (other than subsection (e)) shall cease to apply 
with respect to the manufacturing activities or the interLATA 
telecommunications services of a Bell operating company 3 
years after the date such Bell operating company or any Bell 
operating company affiliate is authorized to provide interLATA 
telecommunications services under section 271(d), unless the 
Commission extends such 3-year period by rule or order. 
"(2) INTERLATA INFORMATION SERVICES.—The provisions 
of this section (other than subsection (e)) shall cease to apply 
with respect to the interLATA information services of a Bell 
operating company 4 years after the date of enactment of 
the Telecommunications Act of 1996, unless the Commission 
extends such 4-year period by rule or order. 
"(3) PRESERVATION OF EXISTING AUTHORITY.—Nothing in 
this subsection shall be construed to limit the authority of 
the Commission under any other section of this Act to prescribe 
safeguards consistent with the public interest, convenience, 
and necessity. 
"(g) JOINT MARKETING.— 
"(1) AFFILIATE SALES OF TELEPHONE EXCHANGE SERVICES.— 
A Bell operating company affiliate required by this section 
may not market or sell telephone exchange services provided 
by the Bell operating company unless that company permits 
other entities offering the same or similar service to market 
and sell its telephone exchange services. 
"(2) BELL OPERATING COMPANY SALES OF AFFILIATE SERV-
ICES.—A Bell operating company may not market or sell 
interLATA service provided by an affiliate required by this 
section within any of its in-region States until such company 
is authorized to provide interLATA services in such State under 
section 271(d). 
"(3) RULE OF CONSTRUCTION.—The joint marketing and 
sale of services permitted under this subsection shall not be 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 95 
considered to violate the nondiscrimination provisions of sub-
section (c). 
"(h) TRANSITION.—With respect to any activity in which a Bell 
operating company is engaged on the date of enactment of the 
Telecommunications Act of 1996, such company shall have one 
year from such date of enactment to comply with the requirements 
of this section. 
"SEC. 273. MANUFACTURING BY BELL OPERATING COMPANIES. 
47 USC 273 
"(a) AUTHORIZATION.—^A Bell operating company may manufac-
ture and provide telecommunications equipment, and manufacture 
customer premises equipment, if the Commission authorizes that 
Bell operating company or any Bell operating company affiliate 
to provide interLATA services under section 271(d), subject to the 
requirements of this section and the regulations prescribed there-
under, except that neither a Bell operating company nor any of 
its affiliates may engage in such manufacturing in conjunction 
with a Bell operating company not so affiliated or any of its affili-
ates. 
"(b) COLLABORATION; RESEARCH AND ROYALTY AGREEMENTS.— 
"(1) COLLABORATION.—Subsection (a) shall not prohibit a 
Bell operating company from engaging in close collaboration 
with any manufacturer of customer premises equipment or 
telecommunications equipment during the design and develop-
ment of hardware, software, or combinations thereof related 
to such equipment. 
"(2) CERTAIN RESEARCH ARRANGEMENTS; ROYALTY AGREE-
MENTS.—Subsection (a) shall not prohibit a Bell operating com-
pany from— 
"(A) engaging in research activities related to manufac-
turing, and 
"(B) entering into royalty agreements with manufactur-
ers of telecommunications equipment. 
"(c) INFORMATION REQUIREMENTS.— 
"(1) INFORMATION ON PROTOCOLS AND TECHNICAL REQUIRE- Regulations. 
MENTS.—Each Bell operating 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 requirements 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) DISCLOSURE OF INFORMATION.—A Bell operating com-
pany shall not disclose any information required to be filed 
under paragraph (1) unless that information has been filed 
promptly, as required by regulation by the Commission. 
"(3) 
ACCESS 
BY COMPETITORS 
TO 
INFORMATION.—The 
Commission may prescribe such additional regulations under 
this subsection as may be necessary to ensure that manufactur-
ers have access to the information with respect to the protocols 
and technical requirements for connection with and use of 
telephone exchange service facilities that a Bell operating com-
pany makes available to any manufacturing affiliate or any 
unaffiliated manufacturer. 
110 STAT. 96 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(4) PLANNING INFORMATION.—Each Bell operating com-
pany shall provide, to interconnecting carriers providing tele-
phone exchange service, timely information on the planned 
deployment of telecommunications equipment. 
"(d) 
MANUFACTURING LIMITATIONS FOR STANDARD-SETTING 
ORGANIZATIONS.— 
"(1) APPLICATION TO BELL COMMUNICATIONS RESEARCH OR 
MANUFACTURERS.—Bell Communications Research, Inc., or any 
successor entity or affiliate— 
"(A) shall not be considered a Bell operating company 
or a successor or assign of a Bell operating company at 
such time as it is no longer an affiliate of any Bell operating 
company; and 
"(B) notwithstanding paragraph (3), shall not engage 
in manufacturing telecommunications equipment or cus-
tomer premises equipment as long as it is an affiliate 
of more than 1 otherwise unaffiliated Bell operating com-
pany or successor or assign of any such company. 
Nothing in this subsection prohibits Bell Communications 
Research, Inc., or any successor entity, from engaging in any 
activity in which it is lawfully engaged on the date of enactment 
of the Telecommunications Act of 1996. Nothing provided in 
this subsection shall render Bell Communications Research, 
Inc., or any successor entity, a common carrier under title 
II of this Act. Nothing in this subsection restricts any manufac-
turer fi-om engaging in any activity in which it is lawfully 
engaged on the date of enactment of the Telecommunications 
Act of 1996. 
"(2) PROPRIETARY INFORMATION.—Any entity which estab-
lishes standards for telecommunications equipment or customer 
premises equipment, or generic network requirements for such 
equipment, or certifies telecommunications equipment or cus-
tomer premises equipment, shall be prohibited from releasing 
or otherwise using any proprietary information, designated as 
such by its owner, in its possession as a result of such activity, 
for any purpose other than purposes authorized in writing 
by the owner of such information, even after such entity ceases 
to be so engaged. 
"(3) MANUFACTURING SAFEGUARDS.—(A) Except as prohib-
ited in paragraph (1), and subject to paragraph (6), any entity 
which certifies telecommunications equipment or customer 
premises equipment manufactured by an unaffiliated entity 
shall only manufacture a particular class of telecommunications 
equipment or customer premises equipment for which it is 
undertaking or has undertaken, during the previous 18 months, 
certification activity for such class of equipment through a 
separate affiliate. 
"(B) Such separate affiliate shall— 
Records. 
"(i) maintain books, records, and accounts separate 
from those of the entity that certifies such equipment, 
consistent with generally acceptable accounting principles; 
"(ii) not engage in any joint manufacturing activities 
with such entity; and 
"(iii) have segregated facilities and separate employees 
with such entity. 
"(C) Such entity that certifies such equipment shall— 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 97 
"(i) not discriminate in favor of its manufacturing affili-
ate in the establishment of standards, generic require-
ments, or product certification; 
"(ii) not disclose to the manufacturing affiliate any 
proprietary information that has been received at any time 
from an unaffiliated manufacturer, unless authorized in 
writing by the owner of the information; and 
"(iii) not permit any employee engaged in product cer-
tification for telecommunications equipment or customer 
premises equipment to engage jointly in sales or marketing 
of any such equipment with the affiliated manufacturer. 
"(4) STANDARD-SETTING ENTITIES.—Any entity that is not 
an accredited standards development organization and that 
establishes industry-wide standards for telecommunications 
equipment or customer premises equipment, or industry-wide 
generic network requirements for such equipment, or that cer-
tifies telecommunications equipment or customer premises 
equipment manufactured by an unaffiliated entity, shall— 
"(A) establish and publish any industry-wide standard 
for, industry-wide generic requirement for, or any substan-
tial modification of an existing industry-wide standard or 
industry-wide generic requirement for, telecommunications 
equipment or customer premises equipment only in compli-
ance with the following procedure— 
"(i) such entity shall issue a public notice of its 
consideration of a proposed industry-wide standard or 
industry-wide generic requirement; 
"(ii) such entity shall issue a public invitation to 
interested industry parties to fund and participate in 
such efforts on a reasonable and nondiscriminatory 
basis, administered in such a manner as not to 
unreasonably exclude any interested industry party; 
"(iii) such entity shall publish a text for comment 
by such parties as have agreed to participate in the 
process pursuant to clause (ii), provide such parties 
a full opportunity to submit comments, and respond 
to comments from such parties; 
"(iv) such entity shall publish a final text of the 
industry-wide 
standard 
or industry-wide 
generic 
requirement, including the comments in their entirety, 
of any funding party which requests to have its com-
ments so published; and 
"(v) such entity shall attempt, prior to publishing 
a text for comment, to agree with the funding parties 
as a group on a mutually satisfactory dispute resolution 
process which such parties shall utilize as their sole 
recourse in the event of a dispute on technical issues 
as to which there is disagreement between any funding 
party and the entity conducting such activities, except 
that if no dispute resolution process is agreed to by 
all the parties, a fimding party may utilize the dispute 
resolution procedures established pursuant to para-
graph (5) of this subsection; 
"(B) engage in product certification for telecommuni-
cations equipment or customer premises equipment manu-
factured by unaffiliated entities only if— 
Publication. 
Notice. 
110 STAT. 98 
PUBLIC LAW 104-104—FEB. 8, 1996 
Penalties. 
"(i) such activity is performed pursuant to pub-
lished criteria; 
"(ii) such activity is performed 
pursuant 
to 
auditable criteria; and 
"(iii) such activity is performed pursuant to avail-
able industry-accepted testing methods and standards, 
where applicable, unless otherwise agreed upon by the 
parties funding and performing such activity; 
"(C) not undertake any actions to monopolize or 
attempt to monopolize the market for such services; and 
"(D) not preferentially treat its own telecommuni-
cations equipment or customer premises equipment, or that 
of its affiliate, over that of any other entity in establishing 
and publishing industry-wide standards or industry-wide 
generic requirements for, and in certification of, tele-
communications equipment and customer premises equip-
ment. 
"(5) ALTERNATE DISPUTE RESOLUTION.—Within 90 days 
after the date of enactment of the Telecommunications Act 
of 1996, the Commission shall prescribe a dispute resolution 
process to be utilized in the event that a dispute resolution 
process is not agreed upon by all the parties when establishing 
and publishing any industry-wide standard or industry-wide 
generic requirement for telecommunications equipment or cus-
tomer premises equipment, pursuant to paragraph (4)(A)(v). 
The Commission shall not establish itself as a party to the 
dispute resolution process. Such dispute resolution process shall 
permit any funding party to resolve a dispute with the entity 
conducting the activity that significantly affects such funding 
part/s interests, in an open, nondiscriminatory, and unbiased 
fashion, within 30 days after the filing of such dispute. Such 
disputes may be filed within 15 days after the date the funding 
party receives a response to its comments from the entity 
conducting the activity. The Commission shall establish pen-
alties to be assessed for delays caused by referral of frivolous 
disputes to the dispute resolution process. 
"(6) SUNSET.—The requirements of paragraphs (3) and (4) 
shall terminate for the particular relevant activity when the 
Commission determines that there are alternative sources of 
industry-wide standards, industry-wide generic requirements, 
or product certification for a particular class of telecommuni-
cations equipment or customer premises equipment available 
in the United States. Alternative sources shall be deemed to 
exist when such sources provide commercially viable alter-
natives that are providing such services to customers. The 
Commission shall act on any application for such a determina-
tion within 90 days after receipt of such application, and shall 
receive public comment on such application. 
"(7) ADMINISTRATION AND ENFORCEMENT AUTHORITY.—For 
the purposes of administering this subsection and the regula-
tions prescribed thereunder, the Commission shall have the 
same remedial authority as the Commission has in administer-
ing and enforcing the provisions of this title with respect to 
any common carrier subject to this Act. 
"(8) DEFINITIONS.—For purposes of this subsection: 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 99 
"(A) The term 'affiliate' shall have the same meaning 
as in section 3 of this Act, except that, for purposes of 
paragraph (1)(B)— 
"(i) an aggregate voting equity interest in Bell 
Communications Research, Inc., of at least 5 percent 
of its total voting equity, owned directly or indirectly 
by more than 1 otherwise unaffiliated Bell operating 
company, shall constitute an affiliate relationship; and 
"(ii) a voting equity interest in Bell Communica-
tions Research, Inc., by any otherwise unaffiliated Bell 
operating company of less than 1 percent of Bell 
Communications Research's total voting equity shall 
not be considered to be an equity interest under this 
paragraph. 
"(B) The term 'generic requirement' means a descrip-
tion of acceptable product attributes for use by local 
exchange carriers in establishing product specifications for 
the purchase of telecommunications equipment, customer 
premises equipment, and software integral thereto. 
"(C) The term 'industry-wide' means activities funded 
by or performed on behalf of local exchange carriers for 
use in providing wireline telephone exchange service whose 
combined total of deployed access lines in the United States 
constitutes at least 30 percent of all access lines deployed 
by telecommunications carriers in the United States as 
of the date of enactment of the Telecommunications Act 
of 1996. 
"(D) The term 'certification' means any technical proc-
ess whereby a party determines whether a product, for 
use by more than one local exchange carrier, conforms 
with the specified requirements pertaining to such product. 
"(E) The term 'accredited standards 
development 
organization' means an entity composed of industry mem-
bers which has been accredited by an institution vested 
with the responsibility for standards accreditation by the 
industry. 
"(e) BELL OPERATING COMPANY EQUIPMENT PROCUREMENT AND 
SALES.— 
"(1) 
NONDISCRIMINATION STANDARDS FOR MANUFACTUR-
ING.—In the procurement or awarding of supply contracts for 
telecommunications equipment, a Bell operating company, or 
any entity acting on its behalf, for the duration of the require-
ment for a separate subsidiary including manufacturing under 
this Act— 
"(A) shall consider such equipment, produced or sup-
plied by unrelated persons; and 
"(B) may not discriminate in favor of equipment pro-
duced or supplied by an affiliate or related person. 
"(2) PROCUREMENT STANDARDS.—Each Bell operating com-
pany or any entity acting on its behalf shall make procurement 
decisions and award all supply contracts for equipment, serv-
ices, and software on the basis of an objective assessment 
of price, quality, delivery, and other commercial factors. 
"(3) NETWORK PLANNING AND DESIGN.—A Bell operating 
company shall, to the extent consistent with the antitrust laws, 
engage in joint network planning and design with local 
exchange carriers operating in the same area of interest. No 
110 STAT. 100 
PUBLIC LAW 104-104—FEB. 8, 1996 
47 use 274. 
Records. 
participant in such planning shall be allowed to delay the 
introduction of new technology or the deplo3anent of facilities 
to provide telecommunications services, and agreement with 
such other carriers shall not be required as a prerequisite 
for such introduction or deployment. 
"(4) SALES RESTRICTIONS.—Neither a Bell operating com-
pany engaged in manufacturing nor a manufacturing affiliate 
of such a company shall restrict sales to any local exchange 
carrier of telecommunications equipment, including software 
integral to the operation of such equipment and related 
upgrades. 
"(5) PROTECTION OF PROPRIETARY INFORMATION.—A Bell 
operating company and any entity it owns or otherwise controls 
shall protect the proprietary information submitted for procure-
ment decisions from release not specifically authorized by the 
owner of such information. 
"(f) ADMINISTRATION AND ENFORCEMENT AUTHORITY.—For the 
purposes of administering and enforcing the provisions of this sec-
tion and the regulations prescribed thereunder, the Commission 
shall have the same authority, power, and functions with respect 
to any Bell operating company or any affiliate thereof as the 
Commission has in administering and enforcing the provisions of 
this title with respect to any common carrier subject to this Act. 
"(g) ADDITIONAL RULES AND REGULATIONS.—The Commission 
may prescribe such additional rules and regulations as the Commis-
sion determines are necessary to carry out the provisions of this 
section, and otherwise to prevent discrimination and cross-sub-
sidization in a Bell operating company's dealings with its affiliate 
and with third parties. 
"(h) DEFINITION.—^As used in this section, the term 'manufactur-
ing' has the same meaning as such term has under the AT&T 
Consent Decree. 
"SEC. 274. ELECTRONIC PUBLISHING BY BELL OPERATING COMPA-
NIES. 
"(a) LIMITATIONS.—No Bell operating company or any affiliate 
may engage in 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, except that nothing in this section 
shall prohibit a separated affiliate or electronic publishing joint 
venture operated in accordance with this section from engaging 
in the provision of electronic publishing. 
"(b) SEPARATED AFFILIATE OR ELECTRONIC PUBLISHING JOINT 
VENTURE 
REQUIREMENTS.—A separated 
affiliate 
or 
electronic 
publishing joint venture shall be operated independently from the 
Bell operating company. Such separated affiliate or joint venture 
and the Bell operating company with which it is affiliated shall— 
"(1) maintain separate books, records, and accounts and 
prepare separate financial statements; 
"(2) not incur debt in a manner that would permit a creditor 
of the separated affiliate or joint venture upon default to have 
recourse to the assets of the Bell operating company; 
"(3) carry out transactions (A) in a manner consistent with 
such independence, (B) pursuant to written contracts or tariffs 
that are filed with the Commission and made publicly available, 
and (C) in a manner that is auditable in accordance with 
generally accepted auditing standards; 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 101 
"(4) value any assets that are transferred directly or 
indirectly from the Bell operating company to a separated affili-
ate or joint venture, and record any transactions by which 
such assets are transferred, in accordance with such regulations 
as may be prescribed by the Commission or a State commission 
to prevent improper cross subsidies; 
"(5) between a separated affiliate and a Bell operating 
company— 
"(A) have no officers, directors, and employees in com-
mon after the effective date of this section; and 
"(B) own no property in common; 
"(6) not use for the marketing of any product or service 
of the separated affiliate or joint venture, the name, trade-
marks, or service marks of an existing Bell operating company 
except for names, trademarks, or service marks that are owned 
by the entity that owns or controls the Bell operating company; 
"(7) not permit the Bell operating company— 
"(A) to perform hiring or training of personnel on behalf 
of a separated affiliate; 
"(B) to perform the purchasing, installation, or mainte-
nance of equipment on behalf of a separated affiliate, except 
for telephone service that it provides under tariff or con-
tract subject to the provisions of this section; or 
"(C) to perform research and development on behalf 
of a separated affiliate; 
"(8) each have performed annually a compliance review— 
"(A) that is conducted by an independent entity for 
the purpose of de^termining compliance during the preced-
ing calendar year with any provision of this section; and 
"(B) the results of which are maintained by the sepa-
rated affiliate or joint venture and the Bell operating com-
pany for a period of 5 years subject to review by any 
lawful authority; and 
"(9) within 90 days of receiving a review described in para- Reports. 
graph (8), file a report of any exceptions and corrective action 
with the Commission 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) JOINT MARKETING.—-
"(1) IN GENERAL.—Except as provided in paragraph (2)— 
"(A) a Bell operating company shall not carry out any 
promotion, marketing, sales, or advertising for or in 
conjunction with a separated affiliate; and 
"(B) 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. 
"(2) PERMISSIBLE JOINT ACTIVITIES.— 
"(A) JOINT TELEMARKETING.—A Bell operating company 
may provide inbound telemarketing or referral services 
related to the provision of electronic publishing for a sepa-
rated affiliate, electronic publishing joint venture, affiliate, 
or unaffiliated electronic publisher: Provided, That if such 
services are provided to a separated affiliate, electronic 
publishing joint venture, or affiliate, such services shall 
110 STAT. 102 
PUBLIC LAW 104-104—FEB. 8, 1996 
be made available to all electronic publishers on request, 
on nondiscriminatory terms. 
"(B) TEAMING ARRANGEMENTS.—^A Bell operating com-
pany may engage in nondiscriminatory teaming or business 
arrangements to engage in electronic publishing with any 
separated affiliate or with any other electronic publisher 
if (i) the Bell operating company only provides facilities, 
services, and basic telephone service information as author-
ized by this section, and (ii) the Bell operating company 
does not own such teaming or business arrangement. 
"(C) ELECTRONIC PUBLISHING JOINT VENTURES.—A Bell 
operating company or affiliate may participate on a 
nonexclusive basis in electronic publishing joint ventures 
with entities that are not a Bell operating company, affili-
ate, or separated affiliate to provide electronic publishing 
services, if the Bell operating company or affiliate has 
not more than a 50 percent direct or indirect equity interest 
(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 electronic publishing joint 
venture. Officers and employees of a Bell operating com-
pany or affiliate participating 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 affiliate to have 
a larger equity interest, revenue share, or voting control 
but not to exceed 80 percent. A Bell operating company 
participating in an electronic publishing joint venture may 
provide promotion, marketing, sales, or advertising person-
nel and services to such joint venture. 
"(d) BELL OPERATING COMPANY REQUIREMENT.—A Bell operat-
ing company under common ownership or control with a separated 
affiliate or electronic publishing joint venture shall provide network 
access and interconnections for basic telephone service to electronic 
publishers at just and reasonable rates that are tariffed (so long 
as rates for such services are subject 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 affiliate engaged 
in electronic publishing. 
"(e) PRIVATE RIGHT OF ACTION.— 
"(1) DAMAGES.—Any person claiming that any act or prac-
tice of any Bell operating company, affiliate, or separated affili-
ate constitutes a violation of this section may file a complaint 
with the Commission or bring suit as provided in section 207 
of this Act, and such Bell operating company, affiliate, or sepa-
rated affiliate shall be liable as provided in section 206 of 
this Act; except that damages may not be awarded for a viola-
tion that is discovered by a compliance review as required 
by subsection (b)(7) of this section and corrected within 90 
days. 
"(2) CEASE AND DESIST ORDERS.—In addition to the provi-
sions 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 applica-
tion to the Commission for an order to cease and desist such 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 103 
violation or may make application in any district court of the 
United States of competent jurisdiction for an order enjoining 
such acts or practices or for an order compelling compliance 
with such requirement. 
"(f) 
SEPARATED AFFILIATE 
REPORTING 
REQUIREMENT.—Any 
separated affiliate under this section shall file with the Commission 
annual reports in a form substantially equivalent to the Form 
10-K required by regulations of the Securities and Exchange 
Commission. 
"(g) EFFECTIVE DATES.— 
"(1) TRANSITION.—Any electronic publishing service being 
offered to the public by a Bell operating company or affiliate 
on the date of enactment of the Telecommunications Act of 
1996 shall have one year from such date of enactment to 
comply with the requirements of this section. 
"(2) SUNSET.—The provisions of this section shall not apply 
to conduct occurring after 4 years after the date of enactment 
of the Telecommunications Act of 1996. 
"(h) DEFINITION OF ELECTRONIC PUBLISHING.— 
"(1) IN GENERAL.—The term 'electronic publishing' means 
the dissemination, provision, publication, or sale to an unaffili-
ated entity or person, of any one or more of the following: 
news (including sports); entertainment (other than interactive 
games); business, financial, legal, consumer, or credit materials; 
editorials, columns, or features; advertising; photos or images; 
archival or research material; legal notices or public records; 
scientific, educational, instructional, technical, professional, 
trade, or other literary materials; or other like or similar 
information. 
"(2) EXCEPTIONS.—The term 'electronic publishing' shall 
not include the following services: 
"(A) Information access, as that term is defined by 
the AT&T Consent Decree. 
"(B) The transmission of information as a common 
carrier. 
"(C) The transmission of information as part of a gate-
way to an information service that does not involve the 
generation or alteration of the content of information, 
including data transmission, address translation, protocol 
conversion, billing management, introductory information 
content, and navigational systems that enable users to 
access electronic publishing services, which do not affect 
the presentation of such electronic publishing services to 
users. 
"(D) Voice storage and retrieval services, including 
voice messaging and electronic mail services. 
"(E) Data processing or transaction processing services 
that do not involve the generation or alteration of the 
content of information. 
"(F) Electronic billing or advertising of a Bell operating 
company's regulated telecommunications services. 
"(G) Language translation or data format conversion. 
"(H) The provision of information necessary for the 
management, control, or operation of a telephone company 
telecommunications system. 
110 STAT. 104 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(I) The provision of directory assistance that provides 
names, addresses, and telephone numbers and does not 
include advertising. 
"(J) Caller identification services. 
"(K) Repair and provisioning databases and credit card 
and billing validation for telephone company operations. 
"(L) 911-E and other emergency assistance databases. 
"(M) Any other network service of a type that is like 
or similar to these network services and that does not 
involve the generation or alteration of the content of 
information. 
"(N) Any upgrades to these network services that do 
not involve the generation or alteration of the content 
of information. 
"(O) Video programming or full motion video entertain-
ment on demand. 
"(i) ADDITIONAL 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 control with, a Bell operating 
company. Such term shall not include a separated affiliate. 
"(2) The term 'basic telephone service' means any wireline 
telephone exchange service, or wireline telephone exchange 
service facility, provided by a Bell operating company in a 
telephone exchange area, except that such term does not 
include— 
"(A) a competitive wireline telephone exchange service 
provided in a telephone exchange area where another entity 
provides a wireline telephone exchange service that was 
provided on January 1, 1984, or 
"(B) a commercial mobile service. 
"(3) The term 'basic telephone service information' means 
network and customer information of a Bell operating company 
and other information acquired 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 promulgated by the Securi-
ties 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 'electronic publishing joint venture' means 
a joint venture owned by a Bell operating company or affiliate 
that engages 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. 
"(6) The term 'entity' means any organization, and includes 
corporations, partnerships, sole proprietorships, associations, 
and joint ventures. 
"(7) The term 'inbound telemarketing' means the marketing 
of property, goods, or services by telephone to a customer or 
potential customer who initiated the call. 
"(8) 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. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 105 
"(9) The term 'separated affiliate' means a corporation 
under common ownership or control with a Bell operating com-
pany that does not own or control a Bell operating company 
and is not owned or controlled by a Bell operating company 
and that engages 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. 
"(10) The term 'Bell operating company' has the meaning 
provided in section 3, except that such term includes any entity 
or corporation that is owned or controlled by such a company 
(as so defined) but does not include an electronic publishing 
joint venture owned by such an entity or corporation. 
"SEC. 275. ALARM MONITORING SERVICES. 
47 USC 275 
"(a) DELAYED ENTRY INTO ALARM MONITORING.— 
"(1) PROHIBITION.—No Bell operating company or affiliate 
thereof shall engage in the provision of alarm monitoring serv-
ices before the date which is 5 years after the date of enactment 
of the Telecommunications Act of 1996. 
"(2) EXISTING ACTIVITIES.—Paragraph (1) does not prohibit 
or limit the provision, directly or through an affiliate, of alarm 
monitoring services by a Bell operating company that was 
engaged in providing alarm monitoring services as of November 
30, 1995, directly or through an affiliate. Such Bell operating 
company or affiliate may not acquire any equity interest in, 
or obtain financial control of, any unaffiliated alarm monitoring 
service entity after November 30, 1995, and until 5 years after 
the date of enactment of the Telecommunications Act of 1996, 
except that this sentence shall not prohibit an exchange of 
customers for the customers of an unaffiliated alarm monitoring 
service entity. 
"(b) NONDISCRIMINATION.—An incumbent local exchange carrier 
(as defined in section 251(h)) engaged in the provision of alarm 
monitoring services shall— 
"(1) provide nonaffiliated entities, upon reasonable request, 
with the network services it provides to its own alarm monitor-
ing operations, on nondiscriminatory terms and conditions; and 
"(2) not subsidize its alarm monitoring services either 
directly or indirectly from telephone exchange service oper-
ations. 
"(c) EXPEDITED CONSIDERATION OF COMPLAINTS.—The Commis-
sion shall establish procedures for the receipt and review of com-
plaints concerning violations of subsection (b) or the regulations 
thereunder that result in material financial harm to a provider 
of alarm monitoring service. Such procedures shall ensure that 
the Commission will make a final determination with respect to 
any such complaint within 120 days after receipt of the complaint. 
If the complaint contains an appropriate showing that the alleged 
violation occurred, as determined by the Commission in accordance 
with such regulations, the Commission shall, within 60 days after 
receipt of the complaint, order the incumbent local exchange carrier 
(as defined in section 251(h)) and its affiliates to cease engaging 
in such violation pending such final determination. 
"(d) USE OF DATA.—A local exchange carrier may not record 
or use in any fashion the occurrence or contents of calls received 
by providers of alarm monitoring services for the purposes of 
marketing such services on behalf of such local exchange carrier, 
29-194 O - 96 - 5 : QL 3 Part 1 
110 STAT. 106 
PUBLIC LAW 104-104—FEB. 8, 1996 
or any other entity. Any regulations necessary to enforce this sub-
section shall be issued initially within 6 months after the date 
of enactment of the Telecommunications Act of 1996. 
"(e) DEFINITION OF ALARM MONITORING SERVICE.—The term 
'alarm monitoring service' means a service that uses a device located 
at a residence, place of business, or other fixed premises— 
"(1) to receive signals from other devices located at or 
about such premises regarding a possible threat at such prem-
ises to life, safety, or property, from burglary, fire, vandalism, 
bodily injury, or other emergency, and 
"(2) to transmit a signal regarding such threat by means 
of transmission facilities of a local exchange carrier or one 
of its affiliates to a remote monitoring center to alert a person 
at such center of the need to inform the customer or another 
person or police, fire, rescue, security, or public safety personnel 
of such threat, 
but does not include a service that uses a medical monitoring 
device attached to an individual for the automatic surveillance 
of an ongoing medical condition. 
47 use 276. 
"SEC. 276. PROVISION OF PAYPHONE SERVICE. 
"(a) NONDISCRIMINATION SAFEGUARDS.—After the effective date 
of the rules prescribed pursuant to subsection (b), any Bell operating 
company that provides payphone service— 
"(1) shall not subsidize its payphone service directly or 
indirectly from its telephone exchange service operations or 
its exchange access operations; and 
"(2) shall not prefer or discriminate in favor of its payphone 
service. 
"(b) REGULATIONS.— 
"(1) CONTENTS OF REGULATIONS.—In order to promote com-
petition among payphone service providers and promote the 
widespread deployment of payphone services to the benefit 
of the general public, within 9 months after the date of enact-
ment of the Telecommunications Act of 1996, the Commission 
shall take all actions necessary (including any reconsideration) 
to prescribe regulations that— 
"(A) establish a per call compensation plan to ensure 
that all payphone service providers are fairly compensated 
for each and every completed intrastate and interstate 
call using their pa3TDhone, except that emergency calls and 
telecommunications relay service calls for hearing disabled 
individuals shall not be subject to such compensation; 
"(B) discontinue the intrastate and interstate carrier 
access charge payphone service elements and payments 
in effect on such date of enactment, and all intrastate 
and interstate payphone subsidies from basic exchange and 
exchange access revenues, in favor of a compensation plan 
as specified in subparagraph (A); 
"(C) prescribe a set of nonstructural safeguards for 
Bell operating company payphone service to implement 
the provisions of paragraphs (1) and (2) of subsection (a), 
which safeguards shall, at a minimum, include the non-
structural safeguards equal to those adopted in the Com-
puter Inquiry-Ill (CC Docket No. 90-623) proceeding; 
"(D) provide for Bell operating company payphone serv-
ice providers to have the same right that independent 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 107 
payphone providers have to negotiate with the location 
provider on the location provider's selecting and contracting 
with, and, subject to the terms of any agreement with 
the location provider, to select and contract with, the car-
riers that carry interLATA calls from their payphones, 
unless the Commission determines in the rulemaking 
pursuant to this section that it is not in the public interest; 
and 
"(E) provide for all payphone service providers to have 
the right to negotiate with the location provider on the 
location provider's selecting and contracting with, and, sub-
ject to the terms of any agreement with the location pro-
vider, to select and contract with, the carriers that carry 
intraLATA calls from their payphones. 
"(2) PUBLIC INTEREST TELEPHONES.—In the rulemaking con-
ducted pursuant to paragraph (1), the Commission shall deter-
mine whether public interest payphones, which are provided 
in the interest of public health, safety, and welfare, in locations 
where there would otherwise not be a payphone, should be 
maintained, and if so, ensure that such public interest 
pa3TDhones are supported fairly and equitably. 
"(3) EXISTING coNTRACTS^-r^Nothing in this section shall 
affect any existing contracts between location providers and 
payphone service providers or interLATA or intraLATA carriers 
that are in force and effect as of the date of enactment of 
the Telecommunications Act of 1996. 
"(c) STATE PREEMPTION.—To the extent that any State require-
ments are inconsistent with the Commission's regulations, the 
Commission's regulations on such matters shall preempt such State 
requirements. 
"(d) DEFINITION.—As used in this section, the term 'payphone 
service' means the provision of public or semi-public pay telephones, 
the provision of inmate telephone service in correctional institutions, 
and any ancillary services.". 
(b) REVIEW OF ENTRY DECISIONS.—Section 402(b) (47 U.S.C. 
402(b)) is amended— 
(1) in paragraph (6), by striking "(3), and (4)" and inserting 
"(3), (4), and (9)"; and 
(2) by adding at the end the following new paragraph: 
"(9) By any applicant for authority to provide interLATA serv-
ices under section 271 of this Act whose application is denied 
by the Commission.". 
/ 
TITLE II—BROADCAST SERVICES 
SEC. 201. BROADCAST SPECTRUM FLEXIBILITY. 
Title III is amended by inserting after section 335 (47 U.S.C. 
335) the following new section: 
"SEC. 336. BROADCAST SPECTRUM FLEXIBILITY. 
47 USC 336. 
"(a) COMMISSION ACTION.—If the Commission determines to 
issue additional licenses for advanced television services, the 
Commission— 
"(1) should limit the initial eligibility for such licenses 
to persons that, as of the date of such issuance, are licensed 
110 STAT. 108 
PUBLIC LAW 104-104—FEB. 8, 1996 
to operate a television broadcast station or hold a permit to 
construct such a station (or both); and 
Regulations. 
"(2) shall adopt regulations that allow the holders of such 
licenses to offer such ancillary or supplementary services on 
designated frequencies as may be consistent with the public 
interest, convenience, and necessity. 
"(b) CONTENTS OF REGULATIONS.—In prescribing the regulations 
required by subsection (a), the Commission shall— 
"(1) only permit such licensee or permittee to offer ancillary 
or supplementary services if the use of a designated frequency 
for such services is consistent with the technology or method 
designated by the Commission for the provision of advanced 
television services; 
"(2) limit the broadcasting of ancillary or supplementary 
services on designated frequencies so as to avoid derogation 
of any advanced television services, including high definition 
television broadcasts, that the Commission may require using 
such frequencies; 
"(3) apply to any other ancillary or supplementary service 
such of the Commission's regulations as are applicable to the 
offering of analogous services by any other person, except that 
no ancillary or supplementary service shall have any rights 
to carriage under section 614 or 615 or be deemed a multi-
channel video programming distributor for purposes of section 
628; 
"(4) adopt such technical and other requirements as may 
be necessary or appropriate to assure the quality of the signal 
used to provide advanced television services, and may adopt 
regulations that stipulate the minimum number of hours per 
day that such signal must be transmitted; and 
"(5) prescribe such other regulations as may be necessary 
for the protection of the public interest, convenience, and neces-
sity. 
"(c) RECOVERY OF LICENSE.—If the Commission grants a license 
for advanced television services to a person that, as of the date 
of such issuance, is licensed to operate a television broadcast station 
or holds a permit to construct such a station (or both), the Commis-
sion shall, as a condition of such license, require that either the 
additional license or the original license held by the licensee be 
surrendered to the Commission for reallocation or reassignment 
(or both) pursuant to Commission regulation. 
"(d) PUBLIC INTEREST REQUIREMENT.—Nothing in this section 
shall be construed as relieving a television broadcasting station 
from its obligation to serve the public interest, convenience, and 
necessity. In the Commission's review of any application for renewal 
of a broadcast license for a television station that provides ancillary 
or supplementary services, the television licensee shall establish 
that all of its program services on the existing or advanced television 
spectrum are in the public interest. Any violation of the Commission 
rules applicable to ancillary or supplementary services shall reflect 
upon the licensee's qualifications for renewal of its license. 
"(e) FEES.— 
"(1) SERVICES TO WHICH FEES APPLY.—If the regulations 
prescribed pursuant to subsection (a) permit a licensee to offer 
ancillary or supplementary services on a designated fre-
quency— 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 109 
"(A) for which the payment of a subscription fee is 
required in order to receive such services, or 
"(B) for which the Hcensee directly or indirectly receives 
compensation from a third party in return for transmitting 
material furnished by such third party (other than commer-
cial advertisements used to support broadcasting for which 
a subscription fee is not required), 
the Commission shall establish a program to assess and collect 
from the licensee for such designated frequency an annual 
fee or other schedule or method of payment that promotes 
the objectives described in subparagraphs (A) and (B) of para-
graph (2). 
"(2) COLLECTION OF FEES.—The program required by para-
graph (1) shall— 
"(A) be designed (i) to recover for the public a portion 
of the value of the public spectrum resource made available 
for such commercial use, and (ii) to avoid unjust enrichment 
through the method employed to permit such uses of that 
resource; 
"(B) recover for the public an amount that, to the 
extent feasible, equals but does not exceed (over the term 
of the license) the amount that would have been recovered 
had such services been licensed pursuant to the provisions 
of section 309(j) of this Act and the Commission's regula-
tions thereunder; and 
"(C) be adjusted by the Commission from time to time 
in order to continue to comply with the requirements of 
this paragraph. 
"(3) TREATMENT OF REVENUES.— 
"(A) GENERAL RULE.—Except as provided in subpara-
graph (B), all proceeds obtained pursuant to the regulations 
required by this subsection shall be deposited in the Treas-
ury in accordance with chapter 33 of title 31, United States 
Code. 
"(B) 
RETENTION 
OF 
REVENUES.—Notwithstanding 
subparagraph (A), the salaries and expenses account of 
the Commission shall retain as an offsetting collection such 
sums as may be necessary from such proceeds for the 
costs of developing and implementing the program required 
by this section and regulating and supervising advanced 
television services. Such offsetting collections shall be avail-
able for obligation subject to the terms and conditions 
of the receiving appropriations account, and shall be depos-
ited in such accounts on a quarterly basis. 
"(4) REPORT.—Within 5 years after the date of enactment 
of the Telecommunications Act of 1996, the Commission shall 
report to the Congress on the implementation of the program 
required by this subsection, and shall annually thereafter 
advise the Congress on the amounts collected pursuant to such 
program. 
"(f) EVALUATION.—Within 10 years after the date the Commis-
sion first issues additional licenses for advanced television services, 
the Commission shall conduct an evaluation of the advanced tele-
vision services program. Such evaluation shall include— 
"(1) an assessment of the willingness of consumers to pur-
chase the television receivers necessary to receive broadcasts 
of advanced television services; 
110 STAT. 110 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(2) an assessment of alternative uses, including public 
safety use, of the frequencies used for such broadcasts; and 
"(3) the extent to which the Commission has been or will 
be able to reduce the amount of spectrum assigned to licensees. 
"(g) DEFINITIONS.—As used in this section: 
"(1) ADVANCED TELEVISION SERVICES.—The term 'advanced 
television services' means television services provided using 
digital or other advanced technology as further defined in the 
opinion, report, and order of the Commission entitled Advanced 
Television Systems and Their Impact Upon the Existing Tele-
vision Broadcast Service', MM Docket 87-268, adopted Septem-
ber 17, 1992, and successor proceedings. 
"(2) DESIGNATED FREQUENCIES.—The term 'designated fre-
quency' means each of the frequencies designated by the 
Commission for licenses for advanced television services. 
"(3) HIGH DEFINITION TELEVISION.—The term 'high defini-
tion television' refers to systems that offer approximately twice 
the vertical and horizontal resolution of receivers generally 
available on the date of enactment of the Telecommunications 
Act of 1996, as further defined in the proceedings described 
in paragraph (1) of this subsection.". 
Regulations. 
SEC. 202. BROADCAST OWNERSHIP. 
'\ 
(a) 
NATIONAL 
RADIO 
STATION 
OWNERSHIP 
RULE 
CHANGES 
REQUIRED.—The Commission shall modify section 73.3555 of its 
regulations (47 C.F.R. 73.3555) by eliminating any provisions limit-
ing the number of AM or FM broadcast stations which may be 
owned or controlled by one entity nationally. 
(b) LOCAL RADIO DIVERSITY.— 
(1) APPLICABLE CAPS.—The Commission shall revise section 
73.3555(a) of its regulations (47 C.F.R. 73.3555) to provide 
that— 
(A) in a radio market with 45 or more commercial 
radio stations, a party may own, operate, or control up 
to 8 commercial radio stations, not more than 5 of which 
are in the same service (AM or FM); 
(B) in a radio market with between 30 and 44 (inclu-
sive) commercial radio stations, a party may own, operate, 
or control up to 7 commercial radio stations, not more 
than 4 of which are in the same service (AM or FM); 
(C) in a radio market with between 15 and 29 (inclu-
sive) commercial radio stations, a party may own, operate, 
or control up to 6 commercial radio stations, not more 
than 4 of which are in the same service (AM or FM); 
and 
(D) in a radio market with 14 or fewer commercial 
radio stations, a party may own, operate, or control up 
to 5 commercial radio stations, not more than 3 of which 
are in the same service (AM or FM), except that a party 
may not own, operate, or control more than 50 percent 
of the stations in such market. 
(2) EXCEPTION.—Notwithstanding any limitation author-
ized by this subsection, the Commission may permit a person 
or entity to own, operate, or control, or have a cognizable 
interest in, radio broadcast stations if the Commission deter-
mines that such ownership, operation, control, or interest will 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. I l l 
result in an increase in the number of radio broadcast stations 
in operation. 
(c) TELEVISION OWNERSHIP LIMITATIONS.— 
(1) NATIONAL OWNERSHIP LIMITATIONS.—The Commission 
shall modify its rules for multiple ownership set forth in section 
73.3555 of its regulations (47 C.F.R. 73.3555)— 
(A) by eliminating the restrictions on the number of 
television stations that a person or entity may directly 
or indirectly own, operate, or control, or have a cognizable 
interest in, nationwide; and 
(B) by increasing the national audience reach limita-
tion for television stations to 35 percent. 
(2) LOCAL OWNERSHIP LIMITATIONS.—The Commission shall 
conduct a rulemaking proceeding to determine whether to 
retain, modify, or eliminate its limitations on the number of 
television stations that a person or entity may own, operate, 
or control, or have a cognizable interest in, within the same 
television market. 
(d) RELAXATION OF ONE-TO-A-MARKET.—With respect to its 
enforcement of its one-to-a-market ownership rules under section 
73.3555 of its regulations, the Commission shall extend its waiver 
policy to any of the top 50 markets, consistent with the public 
interest, convenience, and necessity. 
(e) DUAL NETWORK CHANGES.—The Commission shall revise 
section 73.658(g) of its regulations (47 C.F.R. 658(g)) to permit 
a television broadcast station to affiliate with a person or entity 
that maintains 2 or more networks of television broadcast stations 
unless such dual or multiple networks are composed of— 
(1) two or more persons or entities that, on the date of 
enactment of the Telecommunications Act of 1996, are "net-
works" as defined in section 73.3613(a)(1) of the Commission's 
regulations (47 C.F.R. 73.3613(a)(1)); or 
(2) any network described in paragraph (1) and an English-
language program distribution service that, on such date, pro-
vides 4 or more hours of programming per week on a national 
basis pursuant to network affiliation arrangements with local 
television broadcast stations in markets reaching more than 
75 percent of television homes (as measured by a national 
ratings service). 
(f) CABLE CROSS OWNERSHIP.— 
(1) ELIMINATION OF RESTRICTIONS.—The Commission shall 
revise section 76.501 of its regulations (47 C.F.R. 76.501) to 
permit a person or entity to own or control a network of 
broadcast stations and a cable system. 
(2) SAFEGUARDS AGAINST DISCRIMINATION.—The Commis-
sion shall revise such regulations if necessary to ensure car-
riage, channel positioning, and nondiscriminatory treatment 
of nonaffiliated broadcast stations by a cable system described 
in paragraph (1). 
(g) LOCAL MARKETING AGREEMENTS.—Nothing in this section 
shall be construed to prohibit the origination, continuation, or 
renewal of any television local marketing agreement that is in 
compliance with the regulations of the Commission. 
(h) FURTHER COMMISSION REVIEW.—The Commission shall 
review its rules adopted pursuant to this section and all of its 
ownership rules biennially as part of its regulatory reform review 
under section 11 of the Communications Act of 1934 and shall 
110 STAT. 112 
PUBLIC LAW 104-104—FEB. 8, 1996 
determine whether any of such rules are necessary in the pubHc 
interest as the result of competition. The Commission shall repeal 
or modify any regulation it determines to be no longer in the 
public interest. 
(i) ELIMINATION OF STATUTORY RESTRICTION.—Section 613(a) 
(47 U.S.C. 533(a)) is amended— 
(1) by striking paragraph (1); 
(2) by redesignating paragraph (2) as subsection (a); 
(3) by redesignating subparagraphs (A) and (B) as para-
graphs (1) and (2), respectively; 
(4) by striking "and" at the end of paragraph (1) (as so 
redesignated); 
(5) by striking the period at the end of paragraph (2) 
(as so redesignated) and inserting "; and"; and 
(6) by adding at the end the following new paragraph: 
"(3) shall not apply the requirements of this subsection 
to any cable operator in any franchise area in which a cable 
operator is subject to effective competition as determined under 
section 623(1).". 
SEC. 203. TERM OF LICENSES. 
Section 307(c) (47 U.S.C. 307(c)) is amended to read as follows: 
"(c) TERMS OF LICENSES.— 
"(1) INITIAL AND RENEWAL LICENSES.—Each license granted 
for the operation of a broadcasting station shall be for a term 
of not to exceed 8 years. Upon application therefor, a renewal 
of such license may be granted from time to time for a term 
of not to exceed 8 years from the date of expiration of the 
preceding license, if the Commission finds that public interest, 
convenience, and necessity would be served thereby. Consistent 
with the foregoing provisions of this subsection, the Commission 
may by rule prescribe the period or periods for which licenses 
shall be granted and renewed for particular classes of stations, 
but the Commission may not adopt or follow any rule which 
would preclude it, in any case involving a station of a particular 
class, from granting or renewing a license for a shorter period 
than that prescribed for stations of such class if, in its judg-
ment, the public interest, convenience, or necessity would be 
served by such action. 
"(2) MATERIALS IN APPLICATION.—In order to expedite 
action on applications for renewal of broadcasting station 
licenses and in order to avoid needless expense to applicants 
for such renewals, the Commission shall not require any such 
applicant to file any information which previously has been 
furnished to the Commission or which is not directly material 
to the considerations that afiect the granting or denial of such 
application, but the Commission may require any new or addi-
tional facts it deems necessary to make its findings. 
"(3) CONTINUATION PENDING DECISION.—Pending any hear-
ing and final decision on such an application and the disposition 
of any petition for rehearing pursuant to section 405, the 
Commission shall continue such license in effect.". 
SEC. 204. BROADCAST LICENSE RENEWAL PROCEDURES. 
(a) RENEWAL PROCEDURES.— 
(1) AMENDMENT.—Section 309 (47 U.S.C. 309) is amended 
by adding at the end thereof the following new subsection: 
"(k) BROADCAST STATION RENEWAL PROCEDURES.— 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 113 
"(1) STANDARDS FOR RENEWAL.—If the licensee of a broad-
cast station submits an application to the Commission for 
renewal of such license, the Commission shall grant the applica-
tion if it finds, with respect to that station, during the preceding 
term of its license— 
"(A) the station has served the public interest, conven-
ience, and necessity; 
"(B) there have been no serious violations by the 
licensee of this Act or the rules and regulations of the 
Commission; and 
"(C) there have been no other violations by the licensee 
of this Act or the rules and regulations of the Commission 
which, taken together, would constitute a pattern of abuse. 
"(2) CONSEQUENCE OF FAILURE TO MEET STANDARD.—If any 
licensee of a broadcast station fails to meet the requirements 
of this subsection, the Commission may deny the application 
for renewal in accordance with paragraph (3), or grant such 
application on terms and conditions as are appropriate, includ-
ing renewal for a term less than the maximum otherwise per-
mitted. 
"(3) STANDARDS FOR DENIAL.—If the Commission deter-
mines, after notice and opportunity for a hearing as provided 
in subsection (e), that a licensee has failed to meet the require-
ments specified in paragraph (1) and that no mitigating factors 
justify the imposition of lesser sanctions, the Commission 
shall— 
"(A) issue an order den3dng the renewal application 
filed by such licensee under section 308; and 
"(B) only thereafter accept and consider such applica-
tions for a construction permit as may be filed under section 
308 specifying the channel or broadcasting facilities of the 
former licensee. 
"(4) COMPETITOR CONSIDERATION PROHIBITED.—In making 
the determinations specified in paragraph (1) or (2), the 
Commission shall not consider whether the public interest, 
convenience, and necessity might be served by the grant of 
a license to a person other than the renewal applicant.". 
(2) CONFORMING AMENDMENT.—Section 309(d) (47 U.S.C. 
309(d)) is amended by inserting after "with subsection (a)" 
each place it appears the following: "(or subsection (k) in the 
case of renewal of any broadcast station license)". 
(b) SUMMARY OF COMPLAINTS ON VIOLENT PROGRAMMING.— 
Section 308 (47 U.S.C. 308) is amended by adding at the end 
the following new subsection: 
"(d) SUMMARY OF COMPLAINTS.—Each applicant for the renewal 
of a commercial or noncommercial television license shall attach 
as an exhibit to the application a summary of written comments 
and suggestions received from the public and maintained by the 
licensee (in accordance with Commission regulations) that comment 
on the applicant's programming, if any, and that are characterized 
by the commentor as constituting violent programming.". 
(c) EFFECTIVE DATE.—The amendments made by this section 47 use 308 note. 
apply to applications filed after May 1, 1995. 
110 STAT. 114 
PUBLIC LAW 104-104—FEB. 8, 1996 
47 u s e 363. 
Effective date. 
Regulations. 
47 u s e 303 note. 
SEC. 205. DIRECT BROADCAST SATELLITE SERVICE. 
(a) DBS 
SIGNAL SECURITY.—Section 705(e)(4) (47 U.S.C. 
605(e)(4)) is amended by inserting "or direct-to-home satellite serv-
ices," after "programming,". 
(b) FCC JURISDICTION OVER DIRECT-TO-HOME SATELLITE SERV-
ICES.—Section 303 (47 U.S.C. 303) is amended by adding at the 
end thereof the following new subsection: 
"(v) Have exclusive jurisdiction to regulate the provision of 
direct-to-home satellite services. As used in this subsection, the 
term 'direct-to-home satellite services' means the distribution or 
broadcasting of programming or services by satellite directly to 
the subscriber's premises without the use of ground receiving or 
distribution equipment, except at the subscriber's premises or in 
the uplink process to the satellite.". 
SEC. 206. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS. 
Part II of title III is amended by inserting after section 364 
(47 U.S.C. 362) the following new section: 
"SEC. 365. AUTOMATED SHIP DISTRESS AND SAFETY SYSTEMS. 
"Notwithstanding any provision of this Act or any other provi-
sion of law or regulation, a ship documented under the laws of 
the United States operating in accordance with the Global Maritime 
Distress and Safety System provisions of the Safety of Life at 
Sea Convention shall not be required to be equipped with a radio 
telegraphy station operated by one or more radio officers or opera-
tors. This section shall take effect for each vessel upon a determina-
tion by the United States Coast Guard that such vessel has the 
equipment required to implement the Global Maritime Distress 
and Safety System installed and operating in good working condi-
tion.". 
SEC. 207. RESTRICTIONS ON OVER-THE-AIR RECEPTION DEVICES. 
Within 180 days after the date of enactment of this Act, the 
Commission shall, pursuant to section 303 of the Communications 
Act of 1934, promulgate regulations to prohibit restrictions that 
impair a viewer's ability to receive video programming services 
through devices designed for over-the-air reception of television 
broadcast signals, multichannel multipoint distribution service, or 
direct broadcast satellite services. 
TITLE III—CABLE SERVICES 
SEC. 301. CABLE ACT REFORM. 
(a) DEFINITIONS.— 
(1) DEFINITION OF CABLE SERVICE.—Section 602(6)(B) (47 
U.S.C. 522(6)(B)) is amended by inserting "or use" after "the 
selection". 
(2) 
CHANGE IN DEFINITION OF CABLE SYSTEM.—Section 
602(7) (47 U.S.C. 522(7)) is amended by striking "(B) a facility 
that serves only subscribers in 1 or more multiple unit dwell-
ings under common ownership, control, or management, unless 
such facility or facilities uses any public right-of-way;" and 
inserting "(B) a facility that serves subscribers without using 
any public right-of-way;". 
(b) RATE DEREGULATION.— 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 115 
(1) UPPER TIER REGULATION.—Section 623(c) (47 U.S.C. 
543(c)) is amended— 
(A) in paragraph (1)(B), by striking "subscriber, fran-
chising authority, or other relevant State or local govern-
ment entity" and inserting "franchising authority (in 
accordance with paragraph (3))"; 
(B) in paragraph (1)(C), by striking "such complaint" 
and inserting "the first complaint filed with the franchising 
authority under paragraph (3)"; and 
(C) by striking paragraph (3) and inserting the follow-
ing: 
"(3) REVIEW OF RATE CHANGES.—The Commission shall 
review any complaint submitted by a franchising authority 
after the date of enactment of the Telecommunications Act 
of 1996 concerning an increase in rates for cable programming 
services and issue a final order within 90 days after it receives 
such a complaint, unless the parties agree to extend the period 
for such review. A franchising authority may not file a com-
plaint under this paragraph unless, within 90 days after such 
increase becomes effective it receives subscriber complaints. 
"(4) SUNSET OF UPPER TIER RATE REGULATION.—This sub-
section shall not apply to cable programming services provided 
after March 31, 1999.". 
(2) SUNSET OF UNIFORM RATE STRUCTURE IN MARKETS W^ITH 
EFFECTIVE COMPETITION.—Section 623(d) (47 U.S.C. 543(d)) is 
amended by adding at the end thereof the following: "This 
subsection does not apply to (1) a cable operator with respect 
to the provision of cable service over its cable system in any 
geographic area in which the video programming services 
offered by the operator in that area are subject to effective 
competition, or (2) any video programming offered on a per 
channel or per program basis. Bulk discounts to multiple dwell-
ing units shall not be subject to this subsection, except that 
a cable operator of a cable system that is not subject to effective 
competition may not charge predatory prices to a multiple 
dwelling unit. Upon a prima facie showing by a complainant 
that there are reasonable grounds to believe that the discounted 
price is predatory, the cable system shall have the burden 
of showing that its discounted price is not predatory.". 
(3) EFFECTIVE COMPETITION.—Section 623(1)(1) (47 U.S.C. 
543(1)(1)) is amended— 
(A) by striking "or" at the end of subparagraph (B); 
(B) by striking the period at the end of subparagraph 
(C) and inserting "; or"; and 
(C) by adding at the end the following: 
"(D) a local exchange carrier or its affiliate (or any 
multichannel video programming distributor using the 
facilities of such carrier or its affiliate) offers video 
programming services directly to subscribers by any means 
(other than direct-to-home satellite services) in the fran-
chise area of an unaffiliated cable operator which is provid-
ing cable service in that franchise area, but only if the 
video programming services so offered in that area are 
comparable to the video programming services provided 
by the unaffiliated cable operator in that area.". 
110 STAT. 116 
PUBLIC LAW 104-104—FEB. 8, 1996 
(c) GREATER DEREGULATION FOR SMALLER CABLE COMPANIES.— 
Section 623 (47 U.S.C 543) is amended by adding at the end 
thereof the following: 
"(m) SPECIAL RULES FOR SMALL COMPANIES.— 
"(1) IN GENERAL.—Subsections (a), (b), and (c) do not apply 
to a small cable operator with respect to— 
"(A) cable programming services, or 
"(B) a basic service tier that was the only service 
tier subject to regulation as of December 31, 1994, 
in any franchise area in which that operator services 50,000 
or fewer subscribers. 
"(2) DEFINITION OF SMALL CABLE OPERATOR.—For purposes 
of this subsection, the term 'small cable operator' means a 
cable operator that, directly or through an affiliate, serves 
in the aggregate fewer than 1 percent of all subscribers in 
the United States and is not affiliated with any entity or 
entities whose gross annual revenues in the aggregate exceed 
$250,000,000.". 
(d) MARKET DETERMINATIONS.— 
(1) 
MARKET DETERMINATIONS; EXPEDITED 
DECISIONMAK-
ING.—Section 614(h)(1)(C) (47 U.S.C. 534(h)(1)(C)) is amended— 
(A) by striking "in the manner provided in section 
73.3555(d)(3)(i) of title 47, Code of Federal Regulations, 
as in effect on May 1, 1991," in clause (i) and inserting 
"by the Commission by regulation or order using, where 
available, commercial publications which delineate tele-
vision markets based on viewing patterns,"; and 
(B) by striking clause (iv) and inserting the following: 
"(iv) Within 120 days after the date on which 
a request is filed under this subparagraph (or 120 
days after the date of enactment of the Telecommuni-
cations Act of 1996, if later), the Commission shall 
grant or deny the request.". 
47 use 534 note. 
(2) APPLICATION TO PENDING REQUESTS.—The amendment 
made by paragraph (1) shall apply to— 
(A) any request pending under section 614(h)(1)(C) of 
the Communications Act of 1934 (47 U.S.C. 534(h)(1)(C)) 
on the date of enactment of this Act; and 
(B) any request filed under that section after that 
date. 
(e) TECHNICAL STANDARDS.—Section 624(e) (47 U.S.C. 544(e)) 
is amended by striking the last two sentences and inserting the 
following: "No State or franchising authority may prohibit, condi-
tion, or restrict a cable system's use of any type of subscriber 
equipment or any transmission technology.". 
(f) CABLE EQUIPMENT COMPATIBILITY.—Section 624A (47 U.S.C. 
47 use 544a. 
544A) is amended— 
(1) in subsection (a) by striking "and" at the end of para-
graph (2), by striking the period at the end of paragraph (3) 
and inserting "; and"; and by adding at the end the following 
new paragraph: 
"(4) compatibility among televisions, video cassette record-
ers, and cable systems can be assured with narrow technical 
standards that mandate a minimum degree of common design 
and operation, leaving all features, functions, protocols, and 
other product and service options for selection through open 
competition in the market."; 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 117 
(2) in subsection (c)(1)— 
(A) by redesignating subparagraphs (A) and (B) as 
subparagraphs (B) and (C), respectively; and 
(B) by inserting before such redesignated subparagraph 
(B) the following new subparagraph: 
"(A) the need to maximize open competition in the 
market for all features, functions, protocols, and other prod-
uct and service options of converter boxes and other cable 
converters unrelated to the descrambling or decr5^tion of 
cable television signals;"; and 
(3) in subsection (c)(2)— 
(A) by redesignating subparagraphs (D) and (E) as 
subparagraphs (E) and (F), respectively; and 
(B) by inserting after subparagraph (C) the following 
new subparagraph: 
"(D) to ensure that any standards or regulations devel-
oped under the authority of this section to ensure compat-
ibility between televisions, video cassette recorders, and 
cable systems do not affect features, functions, protocols, 
and other product and service options other than those 
specified in paragraph (1)(B), including telecommunications 
interface equipment, home automation communications, 
and computer network services;". 
(g) SUBSCRIBER NOTICE.—Section 632 (47 U.S.C. 552) is amend-
ed— 
(1) by redesignating subsection (c) as subsection (d); and 
(2) by inserting after subsection (b) the following new sub-
section: 
"(c) SUBSCRIBER NOTICE.—A cable operator may provide notice 
of service and rate changes to subscribers using any reasonable 
written means at its sole discretion. Notwithstanding section 
623(b)(6) or any other provision of this Act, a cable operator shall 
not be required to provide prior notice of any rate change that 
is the result of a regulatory fee, franchise fee, or any other fee, 
tax, assessment, or charge of any kind imposed by any Federal 
agency. State, or franchising authority on the transaction between 
the operator and the subscriber.". 
(h) PROGRAM ACCESS.—Section 628 (47 U.S.C. 548) is amended 
by adding at the end the following: 
"(j) COMMON CARRIERS.—Any provision that applies to a cable 
operator under this section shall apply to a common carrier or 
its affiliate that provides video programming by any means directly 
to subscribers. Any such provision that applies to a satellite cable 
programming vendor in which a cable operator has an attributable 
interest shall apply to any satellite cable programming vendor 
in which such common carrier has an attributable interest. For 
the purposes of this subsection, two or fewer common officers or 
directors shall not by itself establish an attributable interest by 
a common carrier in a satellite cable programming vendor (or 
its parent company).". 
(i) ANTITRAFFICKING.—Section 617 (47 U.S.C. 537) is amended— 
(1) by striking subsections (a) through (d); and 
(2) in subsection (e), by striking "(e)" and all that follows 
through "a franchising authority" and inserting "A franchising 
authority". 
110 STAT. 118 
PUBLIC LAW 104-104—FEB. 8, 1996 
(j) AGGREGATION OF EQUIPMENT COSTS.—Section 623(a) (47 
U.S.C. 543(a)) is amended by adding at the end the following 
new paragraph: 
"(7) AGGREGATION OF EQUIPMENT COSTS.— 
"(A) IN GENERAL.—The Commission shall allow cable 
operators, pursuant to any rules promulgated under sub-
section (b)(3), to aggregate, on a franchise, system, regional, 
or company level, their equipment costs into broad cat-
egories, such as converter boxes, regardless of the varying 
levels of functionality of the equipment within each such 
broad category. Such aggregation shall not be permitted 
with respect to equipment used by subscribers who receive 
only a rate regulated basic service tier. 
"(B) REVISION TO COMMISSION RULES; FORMS.—Within 
120 days of the date of enactment of the Telecommuni-
cations Act of 1996, the Commission shall issue revisions 
to the appropriate rules and forms necessary to implement 
subparagraph (A).", 
(k) TREATMENT OF PRIOR YEAR LOSSES.— 
47 use 543. 
(1) AMENDMENT.—Section 623 (48 U.S.C. 543) is amended 
by adding at the end thereof the following: 
"(n) TREATMENT OF PRIOR YEAR LOSSES.—Notwithstanding any 
other provision of this section or of section 612, losses associated 
with a cable system (including losses associated with the grant 
or award of a franchise) that were incurred prior to September 
4, 1992, with respect to a cable system that is owned and operated 
by the original franchisee of such system shall not be disallowed, 
in whole or in part, in the determination of whether the rates 
for any tier of service or any type of equipment that is subject 
to regulation under this section are lawful.". 
47 use 543 note. 
(2) EFFECTIVE DATE.—The amendment made by paragraph 
(1) shall take effect on the date of enactment of this Act and 
shall be applicable to any rate proposal filed on or after Septem-
ber 4, 1993, upon which no final action has been taken by 
December 1, 1995. 
SEC. 302. CABLE SERVICE PROVIDED BY TELEPHONE COMPANIES. 
(a) PROVISIONS FOR REGULATION OF CABLE SERVICE PROVIDED 
BY TELEPHONE COMPANIES.—Title VI (47 U.S.C. 521 et seq.) is 
amended by adding at the end the following new part: 
"PART V—VIDEO PROGRAMMING SERVICES 
PROVIDED BY TELEPHONE COMPANIES 
47 u s e 57L 
"SEC. 651. REGULATORY TREATMENT OF VIDEO PROGRAMMING SERV-
ICES. 
"(a) LIMITATIONS ON CABLE REGULATION.— 
"(1) RADIO-BASED SYSTEMS.—To the extent that a common 
carrier (or any other person) is providing video programming 
to subscribers using radio communication, such carrier (or other 
person) shall be subject to the requirements of title III and 
section 652, but shall not otherwise be subject to the require-
ments of this title. 
"(2) COMMON CARRIAGE OF VIDEO TRAFFIC—TO the extent 
that a common carrier is providing transmission of video 
programming on a common carrier basis, such carrier shall 
be subject to the requirements of title II and section 652, 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 119 
but shall not otherwise be subject to the requirements of this 
title. This paragraph shall not affect the treatment under sec-
tion 602(7)(C) of a facility of a common carrier as a cable 
system. 
"(3) CABLE SYSTEMS AND OPEN VIDEO SYSTEMS.—To the 
extent that a common carrier is providing video programming 
to its subscribers in any manner other than that described 
in paragraphs (1) and (2)— 
"(A) such carrier shall be subject to the requirements 
of this title, unless such programming is provided by means 
of an open video system for which the Commission has 
approved a certification under section 653; or 
"(B) if such programming is provided by means of 
an open video system for which the Commission has 
approved a certification under section 653, such carrier 
shall be subject to the requirements of this part, but shall 
be subject to parts I through IV of this title only as provided 
in 653(c). 
"(4) ELECTION TO OPERATE AS OPEN VIDEO SYSTEM.—A com-
mon carrier that is providing video programming in a manner 
described in paragi-aph (1) or (2), or a combination thereof, 
may elect to provide such programming by means of an open 
video system that complies with section 653. If the Commission 
approves such carrier's certification under section 653, such 
carrier shall be subject to the requirements of this part, but 
shall be subject to parts I through IV of this title only as 
provided in 653(c). 
"(b) LIMITATIONS ON INTERCONNECTION OBLIGATIONS.—A local 
exchange carrier that provides cable service through an open video 
system or a cable system shall not be required, pursuant to title 
II of this Act, to make capacity available on a nondiscriminatory 
basis to any other person for the provision of cable service directly 
to subscribers. 
"(c) ADDITIONAL REGULATORY RELIEF.—A common carrier shall 
not be required to obtain a certificate under section 214 with 
respect to the establishment or operation of a system for the delivery 
of video programming. 
"SEC. 652. PROHIBITION ON BUY OUTS. 
47 USC 572. 
"(a) ACQUISITIONS BY CARRIERS.—No local exchange carrier or 
any affiliate of such carrier owned by, operated by, controlled by, 
or under common control with such carrier may purchase or other-
wise acquire directly or indirectly more than a 10 percent financial 
interest, or any management interest, in any cable operator provid-
ing cable service within the local exchange carrier's telephone serv-
ice area. 
"(b) ACQUISITIONS BY CABLE OPERATORS.—NO cable operator 
or affiliate of a cable operator that is owned by, operated by, 
controlled by, or under common ownership with such cable operator 
may purchase or otherwise acquire, directly or indirectly, more 
than a 10 percent financial interest, or any management interest, 
in any local exchange carrier providing telephone exchange service 
within such cable operator's franchise area. 
"(c) JOINT VENTURES.—A local exchange carrier and a cable 
operator whose telephone service area and cable franchise area, 
respectively, are in the same market may not enter into any joint 
venture or partnership to provide video programming directly to 
110 STAT. 120 
PUBLIC LAW 104-104—FEB. 8, 1996 
subscribers or to provide telecommunications services within such 
market. 
"(d) EXCEPTIONS.— 
"(1) RURAL SYSTEMS.—Notwithstanding subsections (a), (b), 
and (c) of this section, a local exchange carrier (with respect 
to a cable system located in its telephone service area) and 
a cable operator (with respect to the facilities of a local exchange 
carrier used to provide telephone exchange service in its cable 
franchise area) may obtain a controlling interest in, manage-
ment interest in, or enter into a joint venture or partnership 
with the operator of such system or facilities for the use of 
such system or facilities to the extent that— 
"(A) such system or facilities only serve incorporated 
or unincorporated— 
"(i) places or territories that have fewer than 
35,000 inhabitants; and 
"(ii) are outside an urbanized area, as defined by 
the Bureau of the Census; and 
"(B) in the case of a local exchange carrier, such sys-
tem, in the aggregate with any other system in which 
such carrier has an interest, serves less than 10 percent 
of the households in the telephone service area of such 
carrier. 
"(2) JOINT USE.—Notwithstanding subsection (c), a local 
exchange carrier may obtain, with the concurrence of the cable 
operator on the rates, terms, and conditions, the use of that 
part of the transmission facilities of a cable system extending 
from the last multi-user terminal to the premises of the end 
user, if such use is reasonably limited in scope and duration, 
as determined by the Commission. 
"(3) 
ACQUISITIONS IN COMPETITIVE MARKETS.—Notwith-
standing subsections (a) and (c), a local exchange carrier may 
obtain a controlling interest in, or form a joint venture or 
other partnership with, or provide financing to, a cable system 
(hereinafter in this paragraph referred to as 'the subject cable 
system'), if— 
"(A) the subject cable system operates in a television 
market that is not in the top 25 markets, and such market 
has more than 1 cable system operator, and the subject 
cable system is not the cable system with the most subscrib-
ers in such television market; 
"(B) the subject cable system and the cable system 
with the most subscribers in such television market held 
on May 1, 1995, cable television franchises from the largest 
municipality in the television market and the boundaries 
of such franchises were identical on such date; 
"(C) the subject cable system is not owned by or under 
common ownership or control of any one of the 50 cable 
system operators with the most subscribers as such opera-
tors existed on May 1, 1995; and 
"(D) the system with the most subscribers in the tele-
vision market is owned by or under common ownership 
or control of any one of the 10 largest cable system opera-
tors as such operators existed on May 1, 1995. 
"(4) EXEMPT CABLE SYSTEMS.—Subsection (a) does not apply 
to any cable system if— 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 121 
"(A) the cable system serves no more than 17,000 cable 
subscribers, of which no less than 8,000 live within an 
urban area, and no less than 6,000 live within a nonurban-
ized area as of June 1, 1995; 
"(B) the cable system is not owned by, or under common 
ownership or control with, any of the 50 largest cable 
system operators in existence on June 1, 1995; and 
"(C) the cable system operates in a television market 
that was not in the top 100 television markets as of June 
1, 1995. 
"(5) SMALL CABLE SYSTEMS IN NONURBAN AREAS.—Notwith-
standing subsections (a) and (c), a local exchange carrier with 
less than $100,000,000 in annual operating revenues (or any 
affiliate of such carrier owned by, operated by, controlled by, 
or under common control with such carrier) may purchase 
or otherwise acquire more than a 10 percent financial interest 
in, or any management interest in, or enter into a joint venture 
or partnership with, any cable system within the local exchange 
carrier's telephone service area that serves no more than 20,000 
cable subscribers, if no more than 12,000 of those subscribers 
live within an urbanized area, as defined by the Bureau of 
the Census. 
"(6) WAIVERS.—The Commission may waive the restrictions 
of subsections (a), (b), or (c) only if— 
"(A) the Commission determines that, because of the 
nature of the market served by the affected cable system 
or facilities used to provide telephone exchange service— 
"(i) the affected cable operator or local exchange 
carrier would be subjected to undue economic distress 
by the enforcement of such provisions; 
"(ii) the system or facilities would not be economi-
cally viable if such provisions were enforced; or 
"(iii) the anticompetitive effects of the proposed 
transaction 
are clearly outweighed in the public 
interest by the probable effect of the transaction in 
meeting the convenience and needs of the community 
to be served; and 
"(B) the local franchising authority approves of such 
waiver, 
"(e) DEFINITION OF TELEPHONE SERVICE AREA.—For purposes 
of this section, the term 'telephone service area' when used in 
connection with a common carrier subject in whole or in part 
to title II of this Act means the area within which such carrier 
provided telephone exchange service as of January 1, 1993, but 
if any common carrier after such date transfers its telephone 
exchange service facilities to another common carrier, the area 
to which such facilities provide telephone exchange service shall 
be treated as part of the telephone service area of the acquiring 
common carrier and not of the selling common carrier. 
"SEC. 653. ESTABLISHMENT OF OPEN VIDEO SYSTEMS. 
47 USC 573 
"(a) OPEN VIDEO SYSTEMS.— 
"(1) CERTIFICATES OF COMPLIANCE.—A local exchange car-
rier may provide cable service to its cable service subscribers 
in its telephone ser\dce area through an open video system 
that complies with this section. To the extent permitted by 
such regulations as the Commission may prescribe consistent 
110 STAT. 122 
PUBLIC LAW 104-104—FEB. 8, 1996 
Publication. 
with the pubhc interest, convenience, and necessity, an operator 
of a cable system or any other person may provide video 
programming through an open video system that comphes with 
this section. An operator of an open video system shall qualify 
for reduced regulatory burdens under subsection (c) of this 
section if the operator of such system certifies to the Com.mis-
sion that such carrier complies with the Commission's regula-
tions under subsection (b) and the Commission approves such 
certification. The Commission shall publish notice of the receipt 
of any such certification and shall act to approve or disapprove 
any such certification within 10 days after receipt of such 
certification. 
"(2) DISPUTE RESOLUTION.—The Commission shall have the 
authority to resolve disputes under this section and the regula-
tions prescribed thereunder. Any such dispute shall be resolved 
within 180 days after notice of such dispute is submitted to 
the Commission. At that time or subsequently in a separate 
damages proceeding, the Commission may, in the case of any 
violation of this section, require carriage, award damages to 
any person denied carriage, or any combination of such sanc-
tions. Any aggrieved party may seek any other remedy available 
under this Act. 
"(b) COMMISSION ACTIONS.— 
"(1) REGULATIONS REQUIRED.—Within 6 months after the 
date of enactment of the Telecommunications Act of 1996, the 
Commission shall complete all actions necessary (including any 
reconsideration) to prescribe regulations that— 
"(A) except as required pursuant to section 611, 614, 
or 615, prohibit an operator of an open video system from 
discriminating among video programming providers with 
regard to carriage on its open video system, and ensure 
that the rates, terms, and conditions for such carriage 
are just and reasonable, and are not unjustly or unreason-
ably discriminatory; 
"(B) if demand exceeds the channel capacity of the 
open video system, prohibit an operator of an open video 
system and its affiliates from selecting the video program-
ming services for carriage on more than one-third of the 
activated channel capacity on such system, but nothing 
in this subparagraph shall be construed to limit the number 
of channels that the carrier and its affiliates may offer 
to provide directly to subscribers; 
"(C) permit an operator of an open video system to 
carry on only one channel any video programming service 
that is offered by more than one video programming pro-
vider (including the local exchange carrier's video program-
ming affiliate): Provided, That subscribers have ready and 
immediate access to any such video programming service; 
"(D) extend to the distribution of video programming 
over open video systems the Commission's regulations 
concerning sports exclusivity (47 C.F.R. 76.67), network 
nonduplication (47 C.F.R. 76.92 et seq.), and syndicated 
exclusivity (47 C.F.R. 76.151 et seq.); and 
"(E)(i) prohibit an operator of an open video system 
from unreasonably discriminating in favor of the operator 
or its affiliates with regard to material or information 
(including advertising) provided by the operator to subscrib-
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 123 
ers for the purposes of selecting programming on the open 
video system, or in the way such material or information 
is presented to subscribers; 
"(ii) require an operator of an open video system to 
ensure that video programming providers or copyright hold-
ers (or both) are able suitably and uniquely to identify 
their programming services to subscribers; 
"(iii) if such identification is transmitted as part of 
the programming signal, require the carrier to transmit 
such identification without change or alteration; and 
"(iv) prohibit an operator of an open video system 
from omitting television broadcast stations or other unaffili-
ated video programming services carried on such system 
from any navigational device, guide, or menu. 
"(2) CONSUMER ACCESS.—Subject to the requirements of 
paragraph (1) and the regulations thereunder, nothing in this 
section prohibits a common carrier or its affiliate from negotiat-
ing mutually agreeable terms and conditions with over-the-
air broadcast stations and other unaffiliated video programming 
providers to allow consumer access to their signals on any 
level or screen of any gateway, menu, or other program guide, 
whether provided by the carrier or its affiliate. 
"(c) 
REDUCED REGULATORY BURDENS FOR OPEN VIDEO SYS-
TEMS.— 
"(1) IN GENERAL.—Any provision that applies to a cable 
operator under— 
"(A) sections 613 (other than subsection (a) thereof), 
616, 623(f), 628, 631, and 634 of this title, shall apply, 
"(B) sections 611, 614, and 615 of this title, and section 
325 of title III, shall apply in accordance with the regula-
tions prescribed under paragraph (2), and 
"(C) sections 612 and 617, and parts III and IV (other 
than sections 623(f), 628, 631, and 634), of this title shall 
not apply, 
to any operator of an open video system for which the Commis-
sion has approved a certification under this section. 
"(2) IMPLEMENTATION.— 
"(A) COMMISSION ACTION.—In the rulemaking proceed-
ing to prescribe the regulations required by subsection 
(b)(1), the Commission shall, to the extent possible, impose 
obligations that are no greater or lesser than the obligations 
contained in the provisions described in paragraph (1)(B) 
of this subsection. The Commission shall complete all action 
(including any reconsideration) to prescribe such regula-
tions no later than 6 months after the date of enactment 
of the Telecommunications Act of 1996. 
"(B) FEES.—An operator of an open video system under 
this part may be subject to the payment of fees on the 
gross revenues of the operator for the provision of cable 
service imposed by a local franchising authority or other 
governmental entity, in lieu of the franchise fees permitted 
under section 622. The rate at which such fees are imposed 
shall not exceed the rate at which franchise fees are 
imposed on any cable operator transmitting video program-
ming in the franchise area, as determined in accordance 
with regulations prescribed by the Commission. An opera-
tor of an open video system may designate that portion 
110 STAT. 124 
PUBLIC LAW 104-104—FEB. 8, 1996 
of a subscriber's bill attributable to the fee under this 
subparagraph as a separate item on the bill. 
"(3) 
REGULATORY 
STREAMLINING.—With respect to 
the 
establishment and operation of an open video system, the 
requirements of this section shall apply in lieu of, and not 
in addition to, the requirements of title II. 
"(4) TREATMENT AS CABLE OPERATOR.—Nothing in this Act 
precludes a video programming provider making use of an 
open video system from being treated as an operator of a 
cable system for purposes of section 111 of title 17, United 
States Code. 
"(d) DEFINITION OF TELEPHONE SERVICE AREA.—For purposes 
of this section, the term 'telephone service area' when used in 
connection with a common carrier subject in whole or in part 
to title II of this Act means the area within which such carrier 
is offering telephone exchange service.". 
(b) CONFORMING AND TECHNICAL AMENDMENTS.— 
(1) REPEAL.—Subsection (b) of section 613 (47 U.S.C. 
533(b)) is repealed. 
47 use 522. 
(2) DEFINITIONS.—Section 602 (47 U.S.C. 531) is amended— 
(A) in paragraph (7), by striking ", or (D)" and inserting 
the following: ", unless the extent of such use is solely 
to provide interactive on-demand services; (D) an open 
video system that complies with section 653 of this title; 
or (E)"; 
(B) by redesignating paragraphs (12) through (19) as 
paragraphs (13) through (20), respectively; and 
(C) by inserting after paragraph (11) the following 
new paragraph: 
"(12) the term 'interactive on-demand services' means a 
service providing video programming to subscribers over 
switched networks on an on-demand, point-to-point basis, but 
does not 
include 
services 
providing video 
programming 
prescheduled by the programming provider;". 
(3) TERMINATION OF VIDEO-DIALTONE REGULATIONS.—The 
Commission's regulations and policies with respect to video 
dialtone requirements issued in CC Docket No. 87-266 shall 
cease to be effective on the date of enactment of this Act. 
This paragraph shall not be construed to require the termi-
nation of any video-dialtone system that the Commission has 
approved before the date of enactment of this Act. 
SEC. 303. PREEMPTION OF FRANCHISING AUTHORITY REGULATION 
OF TELECOMMUNICATIONS SERVICES. 
(a) PROVISION OF TELECOMMUNICATIONS SERVICES BY A CABLE 
OPERATOR.—Section 621(b) (47 U.S.C. 541(b)) is amended by adding 
at the end thereof the following new paragraph: 
"(3)(A) If a cable operator or affiliate thereof is engaged in 
the provision of telecommunications services— 
"(i) such cable operator or affiliate shall not be required 
to obtain a franchise under this title for the provision of tele-
communications services; and 
"(ii) the provisions of this title shall not apply to such 
cable operator or affiliate for the provision of telecommuni-
cations services. 
"(B) A franchising authority may not impose any requirement 
under this title that has the purpose or effect of prohibiting, limit-
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 125 
ing, restricting, or conditioning the provision of a telecommuni-
cations service by a cable operator or an affiliate thereof. 
"(C) A franchising authority may not order a cable operator 
or affiliate thereof— 
"(i) to discontinue the provision of a telecommunications 
service, or 
"(ii) to discontinue the operation of a cable system, to 
the extent such cable system is used for the provision of a 
telecommunications service, by reason of the failure of such 
cable operator or affiliate thereof to obtain a franchise or fran-
chise renewal under this title with respect to the provision 
of such telecommunications service. 
"(D) Except as otherwise permitted by sections 611 and 612, 
a franchising authority may not require a cable operator to provide 
any telecommunications service or facilities, other than institutional 
networks, as a condition of the initial grant of a franchise, a 
franchise renewal, or a transfer of a franchise.". 
(b) FRANCHISE FEES.—Section 622(b) (47 U.S.C. 542(b)) is 
amended by inserting "to provide cable services" immediately before 
the period at the end of the first sentence thereof. 
SEC. 304. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES. 
Part III of title VI is amended by inserting after section 628 
(47 U.S.C. 548) the following new section: 
"SEC. 629. COMPETITIVE AVAILABILITY OF NAVIGATION DEVICES. 
Regulations 
"(a) COMMERCIAL CONSUMER AVAILABILITY OF EQUIPMENT USED 
To ACCESS SERVICES PROVIDED BY MULTICHANNEL VIDEO PROGRAM-
MING DISTRIBUTORS.—The Commission shall, in consultation with 
appropriate industry standard-setting organizations, adopt regula-
tions to assure the commercial availability, to consumers of multi-
channel video programming and other services offered over multi-
channel video programming systems, of converter boxes, interactive 
communications equipment, and other equipment used by consum-
ers to access multichannel video programming and other services 
offered over multichannel video programming systems, from manu-
facturers, retailers, and other vendors not affiliated with any multi-
channel video programming distributor. Such regulations shall not 
prohibit any multichannel video programming distributor from also 
offering converter boxes, interactive communications equipment, 
and other equipment used by consumers to access multichannel 
video programming and other services offered over multichannel 
video programming systems, to consumers, if the system operator's 
charges to consumers for such devices and equipment are separately 
stated and not subsidized by charges for any such service. 
"(b) PROTECTION OF SYSTEM SECURITY.—The Commission shall 
not prescribe regulations under subsection (a) which would jeopard-
ize security of multichannel video programming and other services 
offered over multichannel video programming systems, or impede 
the legal rights of a provider of such services to prevent theft 
of service. 
"(c) WAIVER.—The Commission shall waive a regulation adopted 
under subsection (a) for a limited time upon an appropriate showing 
by a provider of multichannel video programming and other services 
offered over multichannel video programming systems, or an equip-
ment provider, that such waiver is necessary to assist the develop-
ment or introduction of a new or improved multichannel video 
programming or other service offered over multichannel video 
110 STAT. 126 
PUBLIC LAW 104-104—FEB. 8, 1996 
programming systems, technology, or products. Upon an appropriate 
showing, the Commission shall grant any such waiver request 
within 90 days of any application filed under this subsection, and 
such waiver shall be effective for all service providers and products 
in that category and for all providers of services and products. 
"(d) AVOIDANCE OF REDUNDANT REGULATIONS.— 
"(1) 
COMMERCIAL AVAILABILITY DETERMINATIONS.—Deter-
minations made or regulations prescribed by the Commission 
with respect to commercial availability to consumers of con-
verter boxes, interactive communications equipment, and other 
equipment used by consumers to access multichannel video 
programming and other services offered over multichannel 
video programming systems, before the date of enactment of 
the Telecommunications Act of 1996 shall fulfill the require-
ments of this section. 
"(2) REGULATIONS.—Nothing in this section affects section 
64.702(e) of the Commission's regulations (47 C.F.R. 64.702(e)) 
or other Commission regulations governing interconnection and 
competitive provision of customer premises equipment used 
in connection with basic common carrier communications serv-
ices. 
"(e) SUNSET.—The regulations adopted under this section shall 
cease to apply when the Commission determines that— 
"(1) the market for the multichannel video programming 
distributors is fully competitive; 
"(2) the market for converter boxes, and interactive commu-
nications equipment, used in conjunction with that service is 
fully competitive; and 
"(3) elimination of the regulations would promote competi-
tion and the public interest. 
"(f) COMMISSION'S AUTHORITY.—Nothing in this section shall 
be construed as expanding or limiting any authority that the 
Commission may have under law in effect before the date of enact-
ment of the Telecommunications Act of 1996.". 
SEC. 305. VIDEO PROGRAMMING ACCESSIBILITY. 
Title VII is amended by inserting after section 712 (47 U.S.C. 
612) the following new section: 
47 use 613. 
"SEC. 713. VIDEO PROGRAMMING ACCESSIBILITY. 
"(a) COMMISSION INQUIRY.—Within 180 days after the date 
of enactment of the Telecommunications Act of 1996, the Federal 
Communications Commission shall complete an inquiry to ascertain 
the level at which video programming is closed captioned. Such 
inquiry shall examine the extent to which existing or previously 
published programming is closed captioned, the size of the video 
programming provider or programming owner providing closed 
captioning, the size of the market served, the relative audience 
Reports. 
shares achieved, or any other related factors. The Commission 
shall submit to the Congress a report on the results of such inquiry. 
Regulations. 
"(b) ACCOUNTABILITY CRITERIA.—Within 18 months after such 
date of enactment, the Commission shall prescribe such regulations 
as are necessary to implement this section. Such regulations shall 
ensure that— 
"(1) video programming first published or exhibited after 
the effective date of such regulations is fully accessible through 
the provision of closed captions, except as provided in subsection 
(d); and 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 127 
"(2) video programming providers or owners maximize the 
accessibility of video programming first published or exhibited 
prior to the effective date of such regulations through the 
provision of closed captions, except as provided in subsection 
(d). 
"(c) 
DEADLINES 
FOR 
CAPTIONING.—Such regulations 
shall 
include an appropriate schedule of deadlines for the provision of 
closed captioning of video programming. 
"(d) EXEMPTIONS.—Notwithstanding subsection (b)— 
"(1) the Commission may exempt by regulation programs, 
classes of programs, or services for which the Commission 
has determined that the provision of closed captioning would 
be economically burdensome to the provider or owner of such 
programming; 
"(2) a provider of video programming or the owner of any 
program carried by the provider shall not be obligated to supply 
closed captions if such action would be inconsistent with con-
tracts in effect on the date of enactment of the Telecommuni-
cations Act of 1996, except that nothing in this section shall 
be construed to relieve a video programming provider of its 
obligations to provide services required by Federal law; and 
"(3) a provider of video programming or program owner 
may petition the Commission for an exemption from the 
requirements of this section, and the Commission may grant 
such petition upon a showing that the requirements contained 
in this section would result in an undue burden. 
"(e) UNDUE BURDEN.—The term 'undue burden' means signifi-
cant difficulty or expense. In determining whether the closed cap-
tions necessary to comply with the requirements of this paragraph 
would result in an undue economic burden, the factors to be consid-
ered include— 
"(1) the nature and cost of the closed captions for the 
programming; 
"(2) the impact on the operation of the provider or program 
owner; 
"(3) the financifd resources of the provider or program 
owner; and 
"(4) the type of operations of the provider or program 
owner. 
"(f) VIDEO DESCRIPTIONS INQUIRY.—Within 6 months after the Reports. 
date of enactment of the Telecommunications Act of 1996, the 
Commission shall commence an inquiry to examine the use of 
video descriptions on video programming in order to ensure the 
accessibility of video programming to persons with visual impair-
ments, and report to Congress on its findings. The Commission's 
report shall assess appropriate methods and schedules for phasing 
video descriptions into the marketplace, technical and quality stand-
ards for video descriptions, a definition of programming for which 
video descriptions would apply, and other technical and legal issues 
that the Commission deems appropriate. 
"(g) VIDEO DESCRIPTION.—For purposes of this section. Video 
description' means the insertion of audio narrated descriptions of 
a television program's key visual elements into natural pauses 
between the program's dialogue. 
"(h) PRIVATE RIGHTS OF ACTIONS PROHIBITED.—Nothing in this 
section shall be construed to authorize any private right of action 
to enforce any requirement of this section or any regulation there-
110 STAT. 128 
PUBLIC LAW 104-104—FEB. 8, 1996 
under. The Commission shall have exclusive jurisdiction with 
respect to any complaint under this section.". 
TITLE IV—REGULATORY REFORM 
SEC. 401. REGULATORY FORBEARANCE. 
Title I is amended by inserting after section 9 (47 U.S.C. 
159) the following new section: 
47USC160. 
"SEC. 10. COMPETITION IN PROVISION OF TELECOMMUNICATIONS 
SERVICE. 
"(a) 
REGULATORY 
FLEXIBILITY.—Notwithstanding 
section 
332(c)(1)(A) of this Act, the Commission shall forbear from applying 
any regulation or any provision of this Act to a telecommunications 
carrier or telecommunications service, or class of telecommuni-
cations carriers or telecommunications services, in any or some 
of its or their geographic markets, if the Commission determines 
t h a t -
'll) enforcement of such regulation or provision is not 
necessary to ensure that the charges, practices, classifications, 
or regulations by, for, or in connection with that telecommuni-
cations carrier or telecommunications service are just and 
reasonable and are not unjustly or unreasonably discriminatory; 
"(2) enforcement of such regulation or provision is not 
necessary for the protection of consumers; and 
"(3) forbearance from appl)dng such provision or regulation 
is consistent with the public interest. 
"(b) COMPETITIVE EFFECT TO BE WEIGHED.—In making the 
determination under subsection (a)(3), the Commission shall con-
sider whether forbearance from enforcing the provision or regulation 
will promote competitive market conditions, including the extent 
to which such forbearance will enhance competition among provid-
ers of telecommunications services. If the Commission determines 
that such forbearance will promote competition among providers 
of telecommunications services, that determination may be the basis 
for a Commission finding that forbearance is in the public interest. 
"(c) PETITION FOR FORBEARANCE.—Any telecommunications car-
rier, or class of telecommunications carriers, may submit a petition 
to the Commission requesting that the Commission exercise the 
authority granted under this section with respect to that carrier 
or those carriers, or any service offered by that carrier or carriers. 
Any such petition shall be deemed granted if the Commission 
does not deny the petition for failure to meet the requirements 
for forbearance under subsection (a) within one year after the 
Commission receives it, unless the one-year period is extended 
by the Commission. The Commission may extend the initial one-
year period by an additional 90 days if the Commission finds 
that an extension is necessary to meet the requirements of sub-
section (a). The Commission may grant or deny a petition in whole 
or in part and shall explain its decision in writing. 
"(d) LIMITATION.—Except as provided in section 251(f), the 
Commission may not forbear from applying the requirements of 
section 251(c) or 271 under subsection (a) of this section until 
it determines that those requirements have been fully implemented. 
"(e) STATE ENFORCEMENT AFTER COMMISSION FORBEARANCE.— 
A State commission may not continue to apply or enforce any 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 129 
provision of this Act that the Commission has determined to forbear 
from applying under subsection (a).". 
SEC. 402. BIENNIAL REVIEW OF REGULATIONS; REGULATORY RELIEF. 
(a) BIENNIAL REVIEW.—Title I is amended by inserting after 
section 10 (as added by section 401) the following new section: 
"SEC. 11. REGULATORY REFORM. 
47 USC 161. 
"(a) BIENNIAL REVIEW OF REGULATIONS.—In every even-num-
bered year (beginning with 1998), the Commission— 
"(1) shall review all regulations issued under this Act in 
effect at the time of the review that apply to the operations 
or activities of any provider of telecommunications service; and 
"(2) shall determine whether any such regulation is no 
longer necessary in the public interest as the result of meaning-
ful economic competition between providers of such service. 
"(b) EFFECT OF DETERMINATION.—The Commission shall repeal 
or modify any regulation it determines to be no longer necessary 
in the public interest.". 
(b) REGULATORY RELIEF.— 
(1) STREAMLINED PROCEDURES FOR CHANGES IN CHARGES, 
CLASSIFICATIONS, REGULATIONS, OR PRACTICES.— 
(A) Section 204(a) (47 U.S.C. 204(a)) is amended— 
(i) by striking "12 months" the first place it appears 
in paragraph (2)(A) and inserting "5 months"; 
(ii) by striking "effective," and all that follows in 
paragraph (2)(A) and inserting "effective."; and 
(iii) by adding at the end thereof the following: 
"(3) A local exchange carrier may file with the Commission 
a new or revised charge, classification, regulation, or practice 
on a streamlined basis. Any such charge, classification, regula-
tion, or practice shall be deemed lawful and shall be effective 
7 days (in the case of a reduction in rates) or 15 days (in 
the case of an increase in rates) after the date on which it 
is filed with the Commission unless the Commission takes 
action under paragraph (1) before the end of that 7-day or 
15-day period, as is appropriate.". 
(B) Section 208(b) (47 U.S.C. 208(b)) is amended— 
(i) by striking "12 months" the first place it appears 
in paragraph (1) and inserting "5 months"; and 
(ii) by striking "filed," and all that follows in para-
graph (1) and inserting "filed.". 
(2) 
EXTENSIONS 
OF LINES 
UNDER 
SECTION 
214; ARMIS 
47 use 214 note. 
REPORTS.—The Commission shall permit any common carrier— 
(A) to be exempt from the requirements of section 
214 of the Communications Act of 1934 for the extension 
of £iny line; and 
(B) to file cost allocation manuals and ARMIS reports 
annually, to the extent such carrier is required to file 
such manuals or reports. 
(3) FORBEARANCE AUTHORITY NOT LIMITED.—Nothing in this 
47 use 204 note. 
subsection shall be construed to limit the authority of the 
Commission to waive, modify, or forbear from appl3n[ng any 
of the requirements to which reference is made in paragraph 
(1) under any other provision of this Act or other law. 
(4) EFFECTIVE DATE OF AMENDMENTS.—The amendments 
47 use 204 note. 
made by paragraph (1) of this subsection shall apply with 
respect to any charge, classification, regulation, or practice 
110 STAT. 130 
PUBLIC LAW 104-104—FEB. 8, 1996 
filed on or after one year after the date of enactment of this 
Act. 
(c) CLASSIFICATION OF CARRIERS.—In classifjdng carriers accord-
ing to section 32.11 of its regulations (47 C.F.R. 32.11) and in 
establishing reporting requirements pursuant to part 43 of its regu-
lations (47 C.F.R. part 43) and section 64.903 of its regulations 
(47 C.F.R. 64.903), the Commission shall adjust the revenue require-
ments to account for inflation as of the release date of the Commis-
sion's Report and Order in CC Docket No. 91-141, and annually 
Effective date. 
thereafter. This subsection shall take effect on the date of enactment 
of this Act. 
SEC. 403. ELIMINATION OF UNNECESSARY COMMISSION REGULATIONS 
AND FUNCTIONS. 
(a) MODIFICATION OF AMATEUR RADIO EXAMINATION PROCE-
DURES.—Section 4(f)(4) (47 U.S.C. 154(f)(4)) is amended— 
(1) in subparagraph (A)— 
(A) by inserting "or administering" after "for purposes 
of preparing"; 
(B) by inserting "of after "than the class"; and 
(C) by inserting "or administered" after "for which 
the examination is being prepared"; 
(2) by striking subparagraph (B); 
(3) in subparagraph (H), by striking "(A), (B), and (C)" 
smd inserting "(A) and (B)"; 
(4) in subparagraph (J)— 
(A) by striking "or (B)"; and 
(B) by striking the last sentence; and 
(5) by redesignating subparagraphs (C) through (J) as sub-
paragraphs (B) through (I), respectively. 
(b) AUTHORITY TO DESIGNATE ENTITIES TO INSPECT.—Section 
4(f)(3) (47 U.S.C. 154(f)(3)) is amended by inserting before the 
period at the end the following: ": and Provided further, 
That, 
in the alternative, an entity designated by the Commission may 
make the inspections referred to in this paragraph". 
(c) EXPEDITING INSTRUCTIONAL TELEVISION FIXED SERVICE 
PROCESSING.—Section 5(c)(1) (47 U.S.C. 155(c)(1)) is amended by 
striking the last sentence and inserting the following: "Except for 
cases involving the authorization of service in the instructional 
television fixed service, or as otherwise provided in this Act, nothing 
in this paragraph shall authorize the Commission to provide for 
the conduct, by any person or persons other than persons referred 
to in paragraph (2) or (3) of section 556(b) of title 5, United States 
Code, of any hearing to which such section applies.". 
(d) REPEAL SETTING OF DEPRECIATION RATES.—The first sen-
tence of section 220(b) (47 U.S.C. 220(b)) is amended by striking 
"shall prescribe for such carriers" and inserting "may prescribe, 
for such carriers as it determines to be appropriate,". 
(e) USE OF INDEPENDENT AUDITORS.—Section 220(c) (47 U.S.C. 
220(c)) is amended by adding at the end thereof the following: 
"The Commission may obtain the services of any person licensed 
to provide public accounting services under the law of any State 
to assist with, or conduct, audits under this section. While so 
employed or engaged in conducting an audit for the Commission 
under this section, any such person shall have the powers granted 
the Commission under this subsection and shall be subject to sub-
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 131 
section (f) in the same manner as if that person were an employee 
of the Commission.". 
(f) DELEGATION OF EQUIPMENT TESTING AND CERTIFICATION 
TO PRIVATE LABORATORIES.—Section 302 (47 U.S.C. 302) is amended 
47 use 302a. 
by adding at the end the following: 
"(e) The Commission may— 
"(1) authorize the use of private organizations for testing 
and certifying the compliance of devices or home electronic 
equipment and systems with regulations promulgated under 
this section; 
"(2) accept as prima facie evidence of such compliance 
the certification by any such organization; and 
"(3) establish such qualifications and standards as it deems 
appropriate for such private organizations, testing, and certifi-
cation.". 
(g) MAKING LICENSE MODIFICATION UNIFORM.—Section 303(f) 
(47 U.S.C. 303(f)) is amended by striking "unless, after a public 
hearing," and inserting "unless". 
(h) ELIMINATE FCC JURISDICTION OVER GOVERNMENT-OWNED 
SHIP RADIO STATIONS.— 
(1) Section 305 (47 U.S.C. 305) is amended by striking 
subsection (b) and redesignating subsections (c) and (d) as 
(b) and (c), respectively. 
(2) Section 382(2) (47 U.S.C. 382(2)) is amended by striking 
"except a vessel of the United States Maritime Administration, 
the Inland and Coastwise Waterways Service, or the Panama 
Canal Company,". 
(i) PERMIT OPERATION OF DOMESTIC SHIP AND AIRCRAFT RADIOS 
WITHOUT LICENSE.—Section 307(e) (47 U.S.C. 307(e)) is amended 
to read as follows: 
"(e)(1) Notwithstanding any license requirement established 
in this Act, if the Commission determines that such authorization 
serves the public interest, convenience, and necessity, the Commis-
sion may by rule authorize the operation of radio stations without 
individual licenses in the following radio services: (A) the citizens 
band radio service; (B) the radio control service; (C) the aviation 
radio service for aircraft stations operated on domestic flights when 
such aircraft are not otherwise required to carry a radio station; 
and (D) the maritime radio service for ship stations navigated 
on domestic voyages when such ships are not otherwise required 
to carry a radio station. 
"(2) Any radio station operator who is authorized by the 
Commission to operate without an individual license shall comply 
with all other provisions of this Act and with rules prescribed 
by the Commission under this Act. 
"(3) For purposes of this subsection, the terms 'citizens band 
radio service', 'radio control service', 'aircraft station' and 'ship 
station' shall have the meanings given them by the Commission 
by rule.". 
(j) EXPEDITED LICENSING FOR FIXED MICROWAVE SERVICE.— 
Section 309(b)(2) (47 U.S.C. 309(b)(2)) is amended by striking 
subparagraph (A) and redesignating subparagraphs (B) through 
(G) as subparagraphs (A) through (F), respectively. 
(k) FOREIGN DIRECTORS.—Section 310(b) (47 U.S.C. 310(b)) is 
amended— 
(1) in paragraph (3), by striking "of which any officer or 
director is an alien or"; and 
110 STAT. 132 
PUBLIC LAW 104-104—FEB. 8, 1996 
(2) in paragraph (4), by striking "of which any officer or 
more than one-fourth of the directors are aHens, or". 
(1) LIMITATION ON SILENT STATION AUTHORIZATIONS.—Section 
312 (47 U.S.C. 312) is amended by adding at the end the following: 
"(g) If a broadcasting station fails to transmit broadcast signals 
for any consecutive 12-month period, then the station license 
granted for the operation of that broadcast station expires at the 
end of that period, notwithstanding any provision, term, or condition 
of the license to the contrary.". 
(m) MODIFICATION OF CONSTRUCTION PERMIT REQUIREMENT.— 
47 use 319. 
Section 319(d) is amended by striking the last two sentences and 
inserting the following: "With respect to any broadcasting station, 
the Commission shall not have any authority to waive the require-
ment of a permit for construction, except that the Commission 
may by regulation determine that a permit shall not be required 
for minor changes in the facilities of authorized broadcast stations. 
With respect to any other station or class of stations, the Commis-
sion shall not waive the requirement for a construction permit 
unless the Commission determines that the public interest, conven-
ience, and necessity would be served by such a waiver.". 
(n) CONDUCT OF INSPECTIONS.—Section 362(b) (47 U.S.C. 
47 use 360. 
362(b)) is amended to read as follows: 
"(b) Every ship of the United States that is subject to this 
part shall have the equipment and apparatus prescribed therein 
inspected at least once each year by the Commission or an entity 
designated by the Commission. If, after such inspection, the 
Commission is satisfied that all relevant provisions of this Act 
and the station license have been complied with, the fact shall 
be so certified on the station license by the Commission. The 
Commission shall make such additional inspections at frequent 
intervals as the Commission determines may be necessary to ensure 
compliance with the requirements of this Act. The Commission 
may, upon a finding that the public interest could be served 
thereby— 
"(1) waive the annual inspection required under this section 
for a period of up to 90 days for the sole purpose of enabling 
a vessel to complete its voyage and proceed to a port in the 
United States where an inspection can be held; or 
"(2) waive the annual inspection required under this section 
for a vessel that is in compliance with the radio provisions 
of the Safety Convention and that is operating solely in waters 
beyond the jurisdiction of the United States: Provided, That 
such inspection shall be performed within 30 days of such 
vessel's return to the United States.". 
(o) INSPECTION BY OTHER ENTITIES.—Section 385 
(47 U.S.C. 
385) is amended— 
(1) by inserting "or an entity designated by the Commis-
sion" after "The Commission"; and 
(2) by adding at the end thereof the following: "In accord-
ance with such other provisions of law as apply to Government 
contracts, the Commission may enter into contracts with any 
person for the purpose of carrying out such inspections and 
certifying compliance with those requirements, and may, as 
part of any such contract, allow any such person to accept 
reimbursement fi*om the license holder for travel and expense 
costs of any employee conducting an inspection or certification.". 
PUBLIC L.\W 104-104—FEB. 8, 1996 
110 STAT. 133 
TITLE V—OBSCENITY AND VIOLENCE 
c
o
m
m
u
n
i
c
a
t
i
o
n
s 
Decency Act of 
1996. 
Subtitle 
A—Obscene, 
Harassing, 
and L
a
w e
n
f
o
r
c
e
m
e
n
t 
, 
, 
t* 
rrt 
t 
• 
and crime. 
Wrongful 
Utilization 
of Teleeommuni- P
e
n
a
l
t
i
e
s 
cations Facilities 
SEC. 501. SHORT TITLE. 
This title may be cited as the "Communications Decency Act 
of 1996". 
SEC. 502. OBSCENE OR HARASSING USE OF TELECOMMUNICATIONS 
FACILITIES UNDER THE COMMUNICATIONS ACT OF 1934. 
Section 223 (47 U.S.C. 223) is amended— 
(1) by striking subsection (a) and inserting in heu thereof: 
"(a) Whoever— 
"(1) in interstate or foreign communications— 
"(A) by means of a telecommunications device know-
ingly— 
"(i) makes, creates, or solicits, and 
"(ii) initiates the transmission of, 
any comment, request, suggestion, proposal, image, or other 
communication which is obscene, lewd, lascivious, filthy, 
or indecent, with intent to annoy, abuse, threaten, or harass 
another person; 
"(B) by means of a telecommunications device know-
ingly— 
"(i) makes, creates, or solicits, and 
"(ii) initiates the transmission of, 
any comment, request, suggestion, proposal, image, or other 
communication which is obscene or indecent, knowing that 
the recipient of the communication is under 18 years of 
age, regardless of whether the maker of such communica-
tion placed the call or initiated the communication; 
"(C) makes a telephone call or utilizes a telecommuni-
cations device, whether or not conversation or communica-
tion ensues, without disclosing his identity and with intent 
to annoy, abuse, threaten, or harass any person at the 
called number or who receives the communications; 
"(D) makes or causes the telephone of another repeat-
edly or continuously to ring, with intent to harass any 
person at the called number; or 
"(E) makes repeated telephone calls or repeatedly initi-
ates communication with a telecommunications device, dur-
ing which conversation or communication ensues, solely 
to harass any person at the called number or who receives 
the communication; or 
"(2) knowingly permits any telecommunications facility 
under his control to be used for any activity prohibited by 
paragraph (1) with the intent that it be used for such activity, 
shall be fined under title 18, United States Code, or imprisoned 
not more than two years, or both."; and 
(2) by adding at the end the following new subsections: 
"(d) Whoever— 
"(1) in interstate or foreign communications knowingly— 
47 u s e 609 note. 
110 STAT. 134 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(A) uses an interactive computer service to send to 
a specific person or persons under 18 years of age, or 
"(B) uses any interactive computer service to display 
in a manner available to a person under 18 years of age, 
any comment, request, suggestion, proposal, image, or other 
communication that, in context, depicts or describes, in terms 
patently offensive as measured by contemporary community 
standards, sexual or excretory activities or organs, regardless 
of whether the user of such service placed the call or initiated 
the communication; or 
"(2) knowingly permits any telecommunications facility 
under such person's control to be used for an activity prohibited 
by paragraph (1) with the intent that it be used for such 
activity, 
shall be fined under title 18, United States Code, or imprisoned 
not more than two years, or both. 
"(e) In addition to any other defenses available by law: 
"(1) No person shall be held to have violated subsection 
(a) or (d) solely for providing access or connection to or from 
a facility, system, or network not under that person's control, 
including transmission, downloading, intermediate storage, 
access software, or other related capabilities that are incidental 
to providing such access or connection that does not include 
the creation of the content of the communication. 
"(2) The defenses provided by paragraph (1) of this sub-
section shall not be applicable to a person who is a conspirator 
with an entity actively involved in the creation or knowing 
distribution of communications that violate this section, or who 
knowingly advertises the availability of such communications. 
"(3) The defenses provided in paragraph (1) of this sub-
section shall not be applicable to a person who provides access 
or connection to a facility, system, or network engaged in the 
violation of this section that is owned or controlled by such 
person. 
"(4) No employer shall be held liable under this section 
for the actions of an employee or agent unless the employee's 
or agent's conduct is within the scope of his or her employment 
or agency and the employer (A) having knowledge of such 
conduct, authorizes or ratifies such conduct, or (B) recklessly 
disregards such conduct. 
"(5) It is a defense to a prosecution under subsection 
(a)(1)(B) or (d), or under subsection (a)(2) with respect to the 
use of a facility for an activity under subsection (a)(1)(B) that 
a person— 
"(A) has taken, in good faith, reasonable, effective, 
and appropriate actions under the circumstances to restrict 
or prevent access by minors to a communication specified 
in such subsections, which may involve any appropriate 
measures to restrict minors from such communications, 
including any method which is feasible under available 
technology; or 
"(B) has restricted access to such communication by 
requiring use of a verified credit card, debit account, adult 
access code, or adult personal identification number. 
"(6) The Commission may describe measures which are 
reasonable, effective, and appropriate to restrict access to 
prohibited communications under subsection (d). Nothing in 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 135 
this section authorizes the Commission to enforce, or is intended 
to provide the Commission with the authority to approve, sanc-
tion, or permit, the use of such measures. The Commission 
shall have no enforcement authority over the failure to utilize 
such measures. The Commission shall not endorse specific prod-
ucts relating to such measures. The use of such measures 
shall be admitted as evidence of good faith efforts for purposes 
of paragraph (5) in any action arising under subsection (d). 
Nothing in this section shall be construed to treat interactive 
computer services as common carriers or telecommunications 
carriers. 
"(f)(1) No cause of action may be brought in any court or 
administrative agency against any person on account of any activity 
that is not in violation of any law punishable by criminal or civil 
penalty, and that the person has taken in good faith to implement 
a defense authorized under this section or otherwise to restrict 
or prevent the transmission of, or access to, a communication speci-
fied in this section. 
"(2) No State or local government may impose any liability 
for commercial activities or actions by commercial entities, nonprofit 
libraries, or institutions of higher education in connection with 
an activity or action described in subsection (a)(2) or (d) that is 
inconsistent with the treatment of those activities or actions under 
this section: Provided, however, That nothing herein shall preclude 
any State or local government from enacting and enforcing com-
plementary oversight, liability, and regulatory systems, procedures, 
and requirements, so long as such systems, procedures, and require-
ments govern only intrastate services and do not result in the 
imposition of inconsistent rights, duties or obligations on the provi-
sion of interstate services. Nothing in this subsection shall preclude 
any State or local government from governing conduct not covered 
by this section. 
"(g) Nothing in subsection (a), (d), (e), or (f) or in the defenses 
to prosecution under subsection (a) or (d) shall be construed to 
affect or limit the application or enforcement of any other Federal 
law. 
"(h) For purposes of this section— 
"(1) The use of the term 'telecommunications device' in 
this section— 
"(A) shall not impose new obligations on broadcasting 
station licensees and cable operators covered by obscenity 
and indecency provisions elsewhere in this Act; and 
"(B) does not include an interactive computer service. 
"(2) The term 'interactive computer service' has the mean-
ing provided in section 230(e)(2). 
"(3) The term 'access software' means software (including 
client or server software) or enabling tools that do not create 
or provide the content of the communication but that allow 
a user to do any one or more of the following: 
"(A) filter, screen, allow, or disallow content; 
"(B) pick, choose, analyze, or digest content; or 
"(C) transmit, receive, display, forward, cache, search, 
subset, organize, reorganize, or translate content. 
"(4) The term 'institution of higher education' has the mean-
ing provided in section 1201 of the Higher Education Act of 
1965 (20 U.S.C. 1141). 
110 STAT. 136 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(5) The term library' means a library eligible for participa-
tion in State-based plans for funds under title III of the Library 
Services and Construction Act (20 U.S.C. 355e et seq.).". 
SEC. 503. OBSCENE PROGRAMMING ON CABLE TELEVISION. 
Section 639 (47 U.S.C. 559) is amended by striking "not more 
than $10,000" and inserting "under title 18, United States Code,". 
SEC. 504. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS. 
Part IV of title VI (47 U.S.C. 551 et seq.) is amended by 
adding at the end the following: 
47 use 560. 
"SEC. 640. SCRAMBLING OF CABLE CHANNELS FOR NONSUBSCRIBERS. 
"(a) SUBSCRIBER REQUEST.—Upon request by a cable service 
subscriber, a cable operator shall, without charge, fully scramble 
or otherwise fully block the audio and video programming of each 
channel carrying such programming so that one not a subscriber 
does not receive it. 
"(b) DEFINITION.—As used in this section, the term 'scramble' 
means to rearrange the content of the signal of the programming 
so that the programming cannot be viewed or heard in an under-
standable manner.". 
SEC. 505. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE 
PROGRAMMING. 
(a) REQUIREMENT.—Part IV of title VI (47 U.S.C. 551 et seq.), 
as amended by this Act, is further amended by adding at the 
end the following: 
47 use 561. 
"SEC. 641. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERV-
ICE PROGRAMMING. 
"(a) 
REQUIREMENT.—In 
providing 
sexually 
explicit 
adult 
programming or other programming that is indecent on any channel 
of its service primarily dedicated to sexually-oriented programming, 
a multichannel video programming distributor shall fully scramble 
or otherwise fully block the video and audio portion of such channel 
so that one not a subscriber to such channel or programming 
does not receive it. 
Children and 
"(b) IMPLEMENTATION.—Until a multichannel video program-
youth, 
ming distributor complies with the requirement set forth in sub-
section (a), the distributor shall limit the access of children to 
the programming referred to in that subsection by not providing 
such programming during the hours of the day (as determined 
by the Commission) when a significant number of children are 
likely to view it. 
"(c) DEFINITION.—As used in this section, the term 'scramble' 
means to rearrange the content of the signal of the programming 
so that the programming cannot be viewed or heard in an under-
standable manner.". 
47 use 561 note. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall take effect 30 days after the date of enactment of this Act. 
SEC. 
506. 
CABLE 
OPERATOR 
REFUSAL 
TO 
CARRY 
CERTAIN 
PROGRAMS. 
(a) PUBLIC, EDUCATIONAL, AND GOVERNMENTAL CHANNELS.— 
Section 611(e) (47 U.S.C. 531(e)) is amended by inserting before 
the period the following: ", except a cable operator may refuse 
to transmit any public access program or portion of a public access 
program which contains obscenity, indecency, or nudity". 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 137 
(b) CABLE CHANNELS FOR COMMERCIAL USE.—Section 612(c)(2) 
(47 U.S.C. 532(c)(2)) is amended by striking "an operator" and 
inserting "a cable operator may refuse to transmit any leased access 
program or portion of a leased access program which contains 
obscenity, indecency, or nudity and". 
SEC. 507. CLARIFICATION OF CURRENT LAWS REGARDING COMMU-
NICATION OF OBSCENE MATERIALS THROUGH THE USE 
OF COMPUTERS. 
(a) IMPORTATION OR TRANSPORTATION.—Section 1462 of title 
18, United States Code, is amended— 
(1) in the first undesignated paragraph, by inserting "or 
interactive computer service (as defined in section 230(e)(2) 
of the Communications Act of 1934)" after "carrier"; and 
(2) in the second undesignated paragraph— 
(A) by inserting "or receives," after "takes"; 
(B) by inserting "or interactive computer service (as 
defined in section 230(e)(2) of the Communications Act 
of 1934)" after "common carrier"; and 
(C) by inserting "or importation" after "carriage". 
(b) TRANSPORTATION FOR PURPOSES OF SALE OR DISTRIBU-
TION.—The first undesignated paragraph of section 1465 of title 
18, United States Code, is amended— 
(1) by striking "transports in" and inserting "transports 
or travels in, or uses a facility or means of,"; 
(2) by inserting "or an interactive computer service (as 
defined in section 230(e)(2) of the Communications Act of 1934) 
in or affecting such commerce" after "foreign commerce" the 
first place it appears; 
(3) by striking ", or knowingly travels in" and all that 
follows through "obscene material in interstate or foreign com-
merce," and inserting "of. 
(c) INTERPRETATION.—The amendments made by this section 
18 use 1462 
are clarifying and shall not be interpreted to limit or repeal any note. 
prohibition contained in sections 1462 and 1465 of title 18, United 
States Code, before such amendment, under the rule established 
in United States v. Alpers, 338 U.S. 680 (1950). 
SEC. 508. COERCION AND ENTICEMENT OF MINORS. 
Section 2422 of title 18, United States Code, is amended— 
(1) by inserting "(a)" before "Whoever knowingly"; and 
(2) by adding at the end the following: 
"(b) Whoever, using any facility or means of interstate or foreign 
commerce, including the mail, or within the special maritime and 
territorial jurisdiction of the United States, knowingly persuades, 
induces, entices, or coerces any individual who has not attained 
the age of 18 years to engage in prostitution or any sexual act 
for which any person may be criminally prosecuted, or attempts 
to do so, shall be fined under this title or imprisoned not more 
than 10 years, or both.". 
SEC. 509. ONLINE FAMILY EMPOWERMENT. 
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. 230. PROTECTION FOR PRIVATE BLOCKING AND SCREENING OF 47 USC 230. 
OFFENSIVE MATERIAL. 
"(a) FINDINGS.—The Congress finds the following: 
29-194 O - 96 - 6 : QL 3 Part 1 
110 STAT. 138 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(1) The rapidly developing array of Internet and other 
interactive computer services available to individual Americans 
represent an extraordinary advance in the availability of edu-
cational and informational resources to our citizens. 
"(2) These services offer users a great degree of control 
over the information that they receive, as well as the potential 
for even greater control in the future as technology develops. 
"(3) The Internet and other interactive computer services 
offer a forum for a true diversity of political discourse, unique 
opportunities for cultural development, and myriad avenues 
for intellectual activity. 
"(4) The Internet and other interactive computer services 
have flourished, to the benefit of all Americans, with a mini-
mum of government regulation. 
"(5) Increasingly Americans are relying on interactive 
media for a variety of political, educational, cultural, and enter-
tainment services. 
"(b) POLICY.—It is the policy of the United States— 
"(1) to promote the continued development of the Internet 
and other interactive computer services and other interactive 
media; 
"(2) to preserve the vibrant and competitive free market 
that presently exists for the Internet and other interactive 
computer services, unfettered by Federal or State regulation; 
"(3) to encourage the development of technologies which 
maximize user control over what information is received by 
individuals, families, and schools who use the Internet and 
other interactive computer services; 
"(4) to remove disincentives for the development and utili-
zation of blocking and filtering technologies that empower par-
ents to restrict their children's access to objectionable or 
inappropriate online material; and 
"(5) to ensure vigorous enforcement of Federal criminal 
laws to deter and punish trafficking in obscenity, stalking, 
and harassment by means of computer. 
"(c) PROTECTION FOR 'GOOD SAMARITAN' BLOCKING AND SCREEN-
ING OF OFFENSIVE MATERIAL.— 
"(1) TREATMENT OF PUBLISHER OR SPEAKER.—No provider 
or user of an interactive computer service shall be treated 
as the publisher or speaker of any information provided by 
£inother information content provider. 
"(2) CIVIL LIABILITY.—No provider or user of an interactive 
computer service shall be held liable on account of— 
"(A) any action voluntarily taken in good faith to 
restrict access to or availability of material that the pro-
vider or user considers to be obscene, lewd, lascivious, 
filthy, excessively violent, harassing, or otherwise objection-
able, whether or not such material is constitutionally pro-
tected; or 
"(B) any action taken to enable or make available 
to information content providers or others the technical 
means to restrict access to material described in paragraph 
(1). 
"(d) EFFECT ON OTHER LAWS.— 
"(1) No EFFECT ON CRIMINAL LAW.—Nothing in this section 
shall be construed to impair the enforcement of section 223 
of this Act, chapter 71 (relating to obscenity) or 110 (relating 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 139 
to sexual exploitation of children) of title 18, United States 
Code, or any other Federal criminal statute. 
"(2) No EFFECT ON INTELLECTUAL PROPERTY LAW.—Nothing 
in this section shall be construed to limit or expand any law 
pertaining to intellectual property. 
"(3) STATE LAW.—Nothing in this section shall be construed 
to prevent any State from enforcing any State law that is 
consistent with this section. No cause of action may be brought 
and no liability may be imposed under any State or local 
law that is inconsistent with this section. 
"(4) No EFFECT ON COMMUNICATIONS PRIVACY LAW.—Noth-
ing in this section shall be construed to limit the application 
of the Electronic Communications Privacy Act of 1986 or any 
of the amendments made by such Act, or any similar State 
law. 
"(e) DEFINITIONS.—As used in this section: 
"(1) INTERNET.—The term 'Internet' means the inter-
national computer network of both Federal and non-Federal 
interoperable packet switched data networks. 
"(2) INTERACTIV]^ COMPUTER SERVICE.—The term 'inter-
active computer service' means any information service, system, 
or access software provider that provides or enables computer 
access by multiple users to a computer server, including specifi-
cally a sendee or system that provides access to the Internet 
and such systems operated or services offered by libraries or 
educational institutions. 
"(3) INFORMATION CONTENT PROVIDER.—The term 'informa-
tion content provider' means any person or entity that is respon-
sible, in whole or in part, for the creation or development 
of information provided through the Internet or any other inter-
active computer service. 
"(4) ACCESS SOFTWARE PROVIDER.—The term 'access soft-
ware provider' means a provider of software (including client 
or server software), or enabling tools that do any one or more 
of the following: 
"(A) filter, screen, allow, or disallow content; 
"(B) pick, choose, analyze, or digest content; or 
"(C) transmit, receive, display, forward, cache, search, 
subset, organize, reorganize, or translate content.". 
Subtitle B—^Violence 
SEC. 551. PARENTAL CHOICE IN TELEVISION PROGRAMMING. 
(a) FINDINGS.—The Congress makes the following findings: 
47 USC 303 note. 
(1) Television influences children's perception of the values 
and behavior that are common and acceptable in society. 
(2) Television station operators, cable television system 
operators, and video programmers should follow practices in 
connection with video programming that take into consideration 
that television broadcast and cable programming has estab-
lished a uniquely pervasive presence in the lives of American 
children. 
(3) The average American child is exposed to 25 hours 
of television each week and some children are exposed to as 
much as 11 hours of television a day. 
110 STAT. 140 
PUBLIC LAW 104-104—FEB. 8, 1996 
(4) Studies have shown that children exposed to violent 
video programming at a young age have a higher tendency 
for violent and aggressive behavior later in life than children 
not so exposed, and that children exposed to violent video 
programming are prone to assume that acts of violence are 
acceptable behavior. 
(5) Children in the United States are, on average, exposed 
to an estimated 8,000 murders and 100,000 acts of violence 
on television by the time the child completes elementary school. 
(6) Studies indicate that children are affected by the 
pervasiveness and casual treatment of sexual material on tele-
vision, eroding the ability of parents to develop responsible 
attitudes and behavior in their children. 
(7) Parents express grave concern over violent and sexual 
video programming and strongly support technology that would 
give them greater control to block video programming in the 
home that they consider harmful to their children. 
(8) There is a compelling governmental interest 
in 
empowering parents to limit the negative influences of video 
programming that is harmful to children. 
(9) Providing parents with timely information about the 
nature of upcoming video programming and with the techno-
logical tools that allow them easily to block violent, sexual, 
or other programming that they believe harmful to their chil-
dren is a nonintrusive and narrowly tailored means of achieving 
that compelling governmental interest. 
(b) ESTABLISHMENT OF TELEVISION RATING CODE.— 
(1) AMENDMENT.—Section 303 (47 U.S.C. 303) is amended 
by adding at the end the following: 
"(w) Prescribe— 
"(1) on the basis of recommendations from an advisory 
committee established by the Commission in accordance with 
section 551(b)(2) of the Telecommunications Act of 1996, guide-
lines and recommended procedures for the identification and 
rating of video programming that contains sexual, violent, or 
other indecent material about which parents should be informed 
before it is displayed to children: Provided, That nothing in 
this paragraph shall be construed to authorize any rating of 
video programming on the basis of its political or religious 
content; and 
"(2) with respect to any video programming that has been 
rated, and in consultation with the television industry, rules 
requiring distributors of such video programming to transmit 
such rating to permit parents to block the display of video 
programming that they have determined is inappropriate for 
their children.". 
47 u s e 303 note. 
(2) ADVISORY COMMITTEE REQUIREMENTS.—In e s t a b l i s h i n g 
an advisory committee for purposes of the amendment made 
by paragraph (1) of this subsection, the Commission shall— 
(A) ensure that such committee is composed of parents, 
television broadcasters, television programming producers, 
cable operators, appropriate public interest groups, and 
other interested individuals from the private sector and 
is fairly balanced in terms of political affiliation, the points 
of view represented, and the functions to be performed 
by the committee; 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 141 
(B) provide to the committee such staff and resources 
as may be necessary to permit it to perform its functions 
efficiently and promptly; and 
(C) require the committee to submit a final report Reports, 
of its recommendations within one year after the date 
of the appointment of the initial members. 
(c) REQUIREMENT FOR MANUFACTURE OF TELEVISIONS THAT 
BLOCK PROGRAMS.—Section 303 (47 U.S.C. 303), as amended by 
subsection (a), is further amended by adding at the end the follow-
ing: 
"(x) Require, in the case of an apparatus designed to receive 
television signals that are shipped in interstate commerce or manu-
factured in the United States and that have a picture screen 13 
inches or greater in size (measured diagonally), that such apparatus 
be equipped with a feature designed to enable viewers to block 
display of all programs with a common rating, except as otherwise 
permitted by regulations pursuant to section 330(c)(4).". 
(d) SHIPPING OF TELEVISIONS THAT BLOCK PROGRAMS.— 
(1) REGULATIONS.—Section 330 (47 U.S.C. 330) is amend-
ed— 
(A) by redesignating subsection (c) as subsection (d); 
and 
(B) by adding after subsection (b) the following new 
subsection (c): 
"(c)(1) Except as provided in paragraph (2), no person shall 
ship in interstate commerce or manufacture in the United States 
any apparatus described in section 303(x) of this Act except in 
accordance with rules prescribed by the Commission pursuant to 
the authority granted by that section. 
"(2) This subsection shall not apply to carriers transporting 
apparatus referred to in paragraph (1) without trading in it. 
"(3) The rules prescribed by the Commission under this sub-
section shall provide for the oversight by the Commission of the 
adoption of standards by industry for blocking technology. Such 
rules shall require that all such apparatus be able to receive the 
rating signals which have been transmitted by way of line 21 
of the vertical blanking interval and which conform to the signal 
and blocking specifications established by industry under the super-
vision of the Commission. 
"(4) As new video technology is developed, the Commission 
shall take such action as the Commission determines appropriate 
to ensure that blocking service continues to be available to consum-
ers. If the Commission determines that an alternative blocking 
technology exists that— 
"(A) enables parents to block programming based on identi-
fying programs without ratings, 
"(B) is available to consumers at a cost which is comparable 
to the cost of technology that allows parents to block program-
ming based on common ratings, and 
"(C) will allow parents to block a broad range of programs 
on a multichannel system as effectively and as easily as tech-
nology that allows parents to block programming based on 
common ratings, 
the Commission shall amend the rules prescribed pursuant to sec-
tion 303(x) to require that the apparatus described in such section 
be equipped with either the blocking technology described in such 
110 STAT. 142 
PUBLIC LAW 104-104—FEB. 8, 1996 
section or the alternative blocking technology described in this 
paragraph.". 
(2) CONFORMING AMENDMENT.—Section 330(d), as redesig-
47 use 330. 
nated by subsection (d)(1)(A), is amended by striking "section 
303(s), and section 303(u)" and inserting in lieu thereof "and 
sections 303(s), 303(u), and 303(x)". 
47 u s e 303 note. 
(e) APPLICABILITY AND EFFECTIVE DATES.— 
(1) APPLICABILITY OF RATING PROVISION.—The amendment 
made by subsection (b) of this section shall take effect 1 year 
after the date of enactment of this Act, but only if the Commis-
sion determines, in consultation with appropriate public 
interest groups and interested individuals from the private 
sector, that distributors of video programming have not, by 
such date— 
(A) established voluntary rules for rating video 
programming that contains sexual, violent, or other inde-
cent material about which parents should be informed 
before it is displayed to children, and such rules are accept-
able to the Commission; and 
(B) agreed voluntarily to broadcast signals that contain 
ratings of such programming. 
(2) EFFECTIVE DATE OF MANUFACTURING PROVISION.—In 
prescribing regulations to implement the amendment made 
by subsection (c), the Federal Communications Commission 
shall, after consultation with the television manufacturing 
industry, specify the effective date for the applicability of the 
requirement to the apparatus covered by such amendment, 
which date shall not be less than two years after the date 
of enactment of this Act. 
47 u s e 303 note. 
SEC. 552. TECHNOLOGY FUND. 
It is the policy of the United States to encourage broadcast 
television, cable, satellite, syndication, other video programming 
distributors, and relevant related industries (in consultation with 
appropriate public interest groups and interested individuals from 
the private sector) to— 
(1) establish a technology fund to encourage television and 
electronics equipment manufacturers to facilitate the develop-
ment of technology which would empower parents to block 
programming they deem inappropriate for their children and 
to encourage the availability thereof to low income parents; 
(2) report to the viewing public on the status of the develop-
ment of affordable, easy to use blocking technology; and 
(3) establish and promote effective procedures, standards, 
systems, advisories, or other mechanisms for ensuring that 
users have easy and complete access to the information nec-
essary to effectively utilize blocking technology and to encour-
age the availability thereof to low income parents. 
Subtitle C—Judicial Review 
47 u s e 223 note. 
SEC. 561. EXPEDITED REVIEW. 
(a) THREE-JUDGE DISTRICT COURT HEARING.—Notwithstanding 
any other provision of law, any civil action challenging the constitu-
tionality, on its face, of this title or any amendment made by 
this title, or any provision thereof, shall be heard by a district 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 143 
court of 3 judges convened pursuant to the provisions of section 
2284 of title 28, United States Code. 
(b) APPELLATE REVIEW.—Notwithstanding any other provision 
of law, an interlocutory or final judgment, decree, or order of the 
court of 3 judges in an action under subsection (a) holding this 
title or an amendment made by this title, or any provision thereof, 
unconstitutional shall be reviewable as a matter of right by direct 
appeal to the Supreme Court. Any such appeal shall be filed not 
more than 20 days after entry of such judgment, decree, or order. 
TITLE VI—EFFECT ON OTHER LAWS 
SEC. 601. 
APPLICABILITY 
OF CONSENT DECREES 
AND OTHER LAW. 
(a) APPLICABILITY OF AMENDMENTS TO FUTURE CONDUCT.— 
(1) AT&T CONSENT DECREE.—Any conduct or activity that 
was, before the date of enactment of this Act, subject to any 
restriction or obligation imposed by the AT&T Consent Decree 
shall, on and after such date, be subject to the restrictions 
and obligations imposed by the Communications Act of 1934 
as amended by this Act and shall not be subject to the restric-
tions and the obligations imposed by such Consent Decree. 
(2) GTE CONSENT DECREE.—Any conduct or activity that 
was, before the date of enactment of this Act, subject to £iny 
restriction or obligation imposed by the GTE Consent Decree 
shall, on and after such date, be subject to the restrictions 
and obligations imposed by the Communications Act of 1934 
as amended by this Act and shall not be subject to the restric-
tions and the obligations imposed by such Consent Decree. 
(3) MCCAW CONSENT DECREE.—Any conduct or activity that 
was, before the date of enactment of this Act, subject to any 
restriction or obligation imposed by the McCaw Consent Decree 
shall, on and after such date, be subject to the restrictions 
and obligations imposed by the Communications Act of 1934 
as amended by this Act and subsection (d) of this section 
and shall not be subject to the restrictions and the obligations 
imposed by such Consent Decree. 
(b) ANTITRUST LAWS.— 
(1) SAVINGS CLAUSE.—Except as provided in paragraphs 
(2) and (3), nothing in this Act or the amendments made 
by this Act shall be construed to modify, impair, or supersede 
the applicability of any of the antitrust laws. 
(2) REPEAL.—Subsection (a) of section 221 (47 U.S.C. 
221(a)) is repealed. 
(3) CLAYTON ACT.—Section 7 of the Clayton Act (15 U.S.C. 
18) is amended in the last paragraph by striking "Federal 
Communications Commission,". 
(c) FEDERAL, STATE, AND LOCAL LAW.— 
(1) No IMPLIED EFFECT.—This Act and the amendments 
made by this Act shall not be construed to modify, impair, 
or supersede Federal, State, or local law unless expressly so 
provided in such Act or amendments. 
(2) STATE TAX SAVINGS PROVISION.—Notwithstanding para-
graph (1), nothing in this Act or the amendments made by 
this Act shall be construed to modify, impair, or supersede, 
or authorize the modification, impairment, or supersession of, 
any State or local law pertaining to taxation, except as provided 
47 u s e 152 note. 
110 STAT. 144 
PUBLIC LAW 104-104—FEB. 8, 1996 
in sections 622 and 653(c) of the Communications Act of 1934 
and section 602 of this Act. 
(d) COMMERCIAL MOBILE SERVICE JOINT MARKETING.—Notwith-
standing section 22.903 of the Commission's regulations (47 C.F.R. 
22.903) or any other Commission regulation, a Bell operating com-
pany or any other company may, except as provided in sections 
271(e)(1) and 272 of the Communications Act of 1934 as amended 
by this Act as they relate to wireline service, jointly market and 
sell commercial mobile services in conjunction with telephone 
exchange service, exchange access, intraLATA telecommunications 
service, interLATA telecommunications service, and information 
services. 
(e) DEFINITIONS.—As used in this section: 
(1) AT&T CONSENT DECREE.—The term "AT«&T Consent 
Decree" means the order entered August 24, 1982, in the anti-
trust action styled United States v. Western Electric, Civil 
Action No. 82-0192, in the United States District Court for 
the District of Columbia, and includes any judgment or order 
with respect to such action entered on or after August 24, 
1982. 
(2) GTE 
CONSENT DECREE.—The term "GTE Consent 
Decree" means the order entered December 21, 1984, as 
restated January 11, 1985, in the action styled United States 
V. GTE Corp., Civil Action No. 83-1298, in the United States 
District Court for the District of Columbia, and any judgment 
or order with respect to such action entered on or after Decem-
ber 21, 1984. 
(3) MCCAW CONSENT DECREE.—The term "McCaw Consent 
Decree" means the proposed consent decree filed on July 15, 
1994, in the antitrust action styled United States v. AT&T 
Corp. and McCaw Cellular Communications, Inc., Civil Action 
No. 94-01555, in the United States District Court for the Dis-
trict of Columbia. Such term includes any stipulation that 
the parties will abide by the terms of such proposed consent 
decree until it is entered and any order entering such proposed 
consent decree. 
(4) ANTITRUST LAWS.—The term "antitrust laws" has the 
meaning given it in subsection (a) of the first section of the 
Clayton Act (15 U.S.C. 12(a)), except that such term includes 
the Act of June 19, 1936 (49 Stat. 1526; 15 U.S.C. 13 et 
seq.), commonly known as the Robinson-Patman Act, and sec-
tion 5 of the Federal Trade Commission Act (15 U.S.C. 45) 
to the extent that such section 5 applies to unfair methods 
of competition. 
SEC. 
602. PREEMPTION OF LOCAL TAXATION WITH RESPECT TO 
DIRECT-TO-HOME SERVICES. 
(a) PREEMPTION.—A provider of direct-to-home satellite service 
shall be exempt from the collection or remittance, or both, of any 
tax or fee imposed by any local tsixing jurisdiction on direct-to-
home satellite service. 
(b) DEFINITIONS.—For the purposes of this section— 
(1) DIRECT-TO-HOME SATELLITE SERVICE.—The term "direct-
to-home satellite service" means only programming transmitted 
or broadcast by satellite directly to the subscribers' premises 
without the use of ground receiving or distribution equipment, 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 145 
except at the subscribers' premises or in the uphnk process 
to the satelhte. 
(2) PROVIDER OF DIRECT-TO-HOME SATELLITE SERVICE.—For 
purposes of this section, a "provider of direct-to-home satelhte 
service" means a person who transmits, broadcasts, sells, or 
distributes direct-to-home satellite service. 
(3) LOCAL TAXING JURISDICTION.—The term "local taxing 
jurisdiction" means any municipality, city, county, township, 
parish, transportation district, or assessment jurisdiction, or 
any other local jurisdiction in the territorial jurisdiction of 
the United States with the authority to impose a tax or fee, 
but does not include a State. 
(4) STATE.—The term "State" means any of the several 
States, the District of Columbia, or any territory or possession 
of the United States. 
(5) TAX OR FEE.—The terms "tax" and "fee" mean any 
local sales tax, local use tax, local intangible tax, local income 
tax, business license tax, utility tax, privilege tax, gross receipts 
tax, excise tax, franchise fees, local telecommunications tax, 
or any other tax, license, or fee that is imposed for the privilege 
of doing business, regulating, or raising revenue for a local 
taxing jurisdiction. 
(c) PRESERVATION OF STATE AUTHORITY.—This section shall 
not be construed to prevent taxation of a provider of direct-to-
home satellite service by a State or to prevent a local taxing 
jurisdiction from receiving revenue derived from a tax or fee 
imposed and collected by a State. 
TITLE VII—MISCELLANEOUS 
PROVISIONS 
SEC. 701. PREVENTION OF UNFAIR BILLING PRACTICES FOR INFORMA-
TION OR SERVICES PROVIDED OVER TOLL-FREE TELE-
PHONE CALLS. 
(a) PREVENTION OF UNFAIR BILLING PRACTICES.— 
(1) IN GENERAL.—Section 228(c) (47 U.S.C. 228(c)) is 
amended— 
(A) by striking out subparagraph (C) of paragraph 
(7) and inserting in lieu thereof the following: 
"(C) the calling party being charged for information 
conveyed during the call unless— 
"(i) the calling party has a written agreement 
(including an agreement transmitted through elec-
tronic medium) that meets the requirements of para-
graph (8); or 
"(ii) the calling party is charged for the information 
in accordance with paragraph (9); or"; 
(B)(i) by striking "or" at the end of subparagraph (C) 
of such paragraph; 
(ii) by striking the period at the end of subparagraph 
(D) of such paragraph and inserting a semicolon and "or"; 
and 
(iii) by adding at the end thereof the following: 
"(E) the calling party being assessed, by virtue of being 
asked to connect or otherwise transfer to a pay-per-call 
service, a charge for the call."; and 
110 STAT. 146 
PUBLIC LAW 104-104—FEB. 8, 1996 
(C) by adding at the end the following new paragraphs: 
"(8) SUBSCRIPTION AGREEMENTS FOR BILLING FOR INFORMA-
TION PROVIDED VIA TOLL-FREE CALLS.— 
"(A) IN GENERAL.—For purposes of paragraph (7)(C)(i), 
a written subscription does not meet the requirements 
of this paragraph unless the agreement specifies the mate-
rial terms and conditions under which the information 
is offered and includes— 
"(i) the rate at which charges are assessed for 
the information; 
"(ii) the information provider's name; 
"(iii) the information provider's business address; 
"(iv) the information provider's regular business 
telephone number; 
"(v) the information provider's agreement to notify 
the subscriber at least one billing cycle in advance 
of all future changes in the rates charged for the 
information; and 
"(vi) the subscriber's choice of payment method, 
which may be by direct remit, debit, prepaid account, 
phone bill, or credit or calling card. 
"(B) BILLING ARRANGEMENTS.—If a subscriber elects, 
pursuant to subparagraph (A)(vi), to pay by means of a 
phone bill— 
"(i) the agreement shall clearly explain that the 
subscriber will be assessed for calls made to the 
information service from the subscriber's phone line; 
"(ii) the phone bill shall include, in prominent tj^e, 
the following disclaimer: 
'Common carriers may not disconnect local or 
long distance telephone service for failure to pay 
disputed charges for information services.'; and 
"(iii) the phone bill shall clearly list the 800 num-
ber dialed. 
"(C) USE OF PINS TO PREVENT UNAUTHORIZED USE.— 
A written agreement does not meet the requirements of 
this paragraph unless it— 
"(i) includes a unique personal identification num-
ber or other subscriber-specific identifier and requires 
a subscriber to use this number or identifier to obtain 
access to the information 
provided and 
includes 
instructions on its use; and 
"(ii) assures that any charges for services accessed 
by use of the subscriber's personal identification num-
ber or subscriber-specific identifier be assessed to 
subscriber's source of payment elected pursuant to 
subparagraph (A)(vi). 
"(D) EXCEPTIONS.—Notwithstanding paragraph (7)(C), 
a written agreement that meets the requirements of this 
paragraph is not required— 
"(i) for calls utilizing telecommunications devices 
for the deaf; 
"(ii) for directory services provided by a common 
carrier or its affiliate or by a local exchange carrier 
or its affiliate; or 
"(iii) for any purchase of goods or of services that 
are not information services. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 147 
"(E) TERMINATION OF SERVICE.—On receipt by a com-
mon carrier of a complaint by any person that an informa-
tion provider is in violation of the provisions of this section, 
a carrier shall— 
"(i) promptly investigate the complaint; and 
"(ii) if the carrier reasonably determines that the 
complaint is valid, it may terminate the provision of 
service to an information provider unless the provider 
supplies evidence of a written agreement that meets 
the requirements of this section. 
"(F) TREATMENT OF REMEDIES.—The remedies provided 
in this paragraph are in addition to any other remedies 
that are available under title V of this Act. 
"(9) CHARGES BY CREDIT, PREPAID, DEBIT, CHARGE, OR CALL-
ING CARD IN ABSENCE OF AGREEMENT.—For purposes of para-
graph (7)(C)(ii), a calling party is not charged in accordance 
with this paragraph unless the calling party is charged by 
means of a credit, prepaid, debit, charge, or calling card and 
the information service provider includes in response to each 
call an introductory disclosure message that— 
"(A) clearly states that there is a charge for the call; 
"(B) clearly states the service's total cost per minute 
and any other fees for the service or for any service to 
which the caller may be transferred; 
"(C) explains that the charges must be billed on either 
a credit, prepaid, debit, charge, or calling card; 
"(D) asks the caller for the card number; 
"(E) clearly states that charges for the call begin at 
the end of the introductory message; and 
"(F) clearly states that the caller can hang up at or 
before the end of the introductory message without incur-
ring any charge whatsoever. 
"(10) 
BYPASS OF INTRODUCTORY DISCLOSURE MESSAGE.— 
The requirements of paragraph (9) shall not apply to calls 
from repeat callers using a bypass mechanism to avoid listening 
to the introductory message: Provided, That information provid-
ers shall disable such a bypass mechanism after the institution 
of any price increase and for a period of time determined 
to be sufficient by the Federal Trade Commission to give callers 
adequate and sufficient notice of a price increase. 
"(11) DEFINITION OF CALLING CARD.—As used in this sub-
section, the term 'calling card' means an identifying number 
or code unique to the individual, that is issued to the individual 
by a common carrier and enables the individual to be charged 
by means of a phone bill for charges incurred independent 
of where the call originates.". 
(2) REGULATIONS.—The Federal Communications Commis- 
47 USC 228 note. 
sion shall revise its regulations to comply with the amendment 
made by paragraph (1) not later than 180 days after the date 
of enactment of this Act. 
(3) EFFECTIVE DATE.—The amendments made by paragraph 
47 USC 228 note. 
(1) shall take effect on the date of enactment of this Act. 
(b) CLARIFICATION OF "PAY-PER-CALL SERVICES".— 
(1) 
TELEPHONE DISCLOSURE AND DISPUTE RESOLUTION 
ACT.—Section 204(1) of the Telephone Disclosure and Dispute 
Resolution Act (15 U.S.C. 5714(1)) is amended to read as fol-
lows: 
110 STAT. 148 
PUBLIC LAW 104-104—FEB. 8, 1996 
"(1) The term *pay-per-call services' has the meaning pro-
vided in section 228(i) of the Communications Act of 1934, 
except that the Commission by rule may, notwithstanding sub-
paragraphs (B) and (C) of section 228(i)(l) of such Act, extend 
such definition to other similar services providing audio 
information or audio entertainment if the Commission deter-
mines that such services are susceptible to the unfair and 
deceptive practices that are prohibited by the rules prescribed 
pursuant to section 201(a).". 
(2) COMMUNICATIONS ACT.—Section 228(i)(2) (47 U.S.C. 
228(i)(2)) is amended by striking "or any service the charge 
for which is tariffed,". 
SEC. 702. PRIVACY OF CUSTOMER INFORMATION. 
Title II is amended by inserting after section 221 (47 U.S.C. 
221) the following new section: 
47 use 222. 
"SEC. 222. PRIVACY OF CUSTOMER INFORMATION. 
"(a) IN GENERAL.—Every telecommunications carrier has a duty 
to protect the confidentiality of proprietary information of, and 
relating to, other telecommunication carriers, equipment manufac-
turers, and customers, including telecommunication carriers resell-
ing telecommunications services provided by a telecommunications 
carrier. 
"(b) 
CONFIDENTIALITY 
OF 
CARRIER 
INFORMATION.—A tele-
communications 
carrier that 
receives or obtains 
proprietary 
information from another carrier for purposes of providing any 
telecommunications service shall use such information only for such 
purpose, and shall not use such information for its own marketing 
efforts. 
"(c) 
CONFIDENTIALITY OF CUSTOMER PROPRIETARY NETWORK 
INFORMATION.— 
"(1) 
PRIVACY REQUIREMENTS FOR TELECOMMUNICATIONS 
CARRIERS.—Except as required by law or with the approval 
of the customer, a telecommunications carrier that receives 
or obtains customer proprietary network information by virtue 
of its provision of a telecommunications service shall only use, 
disclose, or permit access to individually identifiable customer 
proprietary network information in its provision of (A) the 
telecommunications service from which such information is 
derived, or (B) services necessary to, or used in, the provision 
of such telecommunications service, including the publishing 
of directories. 
"(2) DISCLOSURE ON REQUEST BY CUSTOMERS.—A tele-
communications carrier shall disclose customer proprietary net-
work information, upon affirmative written request by the cus-
tomer, to any person designated by the customer. 
"(3) AGGREGATE CUSTOMER INFORMATION.—A telecommuni-
cations carrier that receives or obtains customer proprietary 
network information by virtue of its provision of a telecommuni-
cations service may use, disclose, or permit access to aggregate 
customer information other than for the purposes described 
in paragraph (1). A local exchange carrier may use, disclose, 
or permit access to aggregate customer information other than 
for purposes described in paragraph (1) only if it provides 
such aggregate information to other carriers or persons on 
reasonable and nondiscriminatory terms and conditions upon 
reasonable request therefor. 
PUBLIC lAW 104-104—FEB. 8, 1996 
110 STAT. 149 
"(d) EXCEPTIONS.—Nothing in this section prohibits a tele-
communications carrier from using, disclosing, or permitting access 
to customer proprietary network information obtained from its cus-
tomers, either directly or indirectly through its agents— 
"(1) to initiate, render, bill, and collect for telecommuni-
cations services; 
"(2) to protect the rights or property of the carrier, or 
to protect users of those services and other carriers from fraudu-
lent, abusive, or unlawful use of, or subscription to, such serv-
ices; or 
"(3) to provide any inbound telemarketing, referral, or 
administrative services to the customer for the duration of 
the call, if such call was initiated by the customer and the 
customer approves of the use of such information to provide 
such service. 
"(e) SUBSCRIBER LIST INFORMATION.—Notwithstanding sub-
sections (b), (c), and (d), a telecommunications carrier that provides 
telephone exchange service shall provide subscriber list information 
gathered in its capacity as a provider of such service on a timely 
and unbundled basis, under nondiscriminatory and reasonable 
rates, terms, and conditions, to any person upon request for the 
purpose of publishing directories in any format. 
"(f) DEFINITIONS.—As used in this section: 
"(1) CUSTOMER PROPRIETARY NETWORK INFORMATION.—The 
term 'customer proprietary network information' means— 
"(A) information that relates to the quantity, technical 
configuration, type, destination, and amount of use of a 
telecommunications service subscribed to by any customer 
of a telecommunications carrier, and that is made available 
to the carrier by the customer solely by virtue of the 
carrier-customer relationship; and 
"(B) information contained in the bills pertaining to 
telephone exchange service or telephone toll service 
received by a customer of a carrier; 
except that such term does not include subscriber list informa-
tion. 
"(2) AGGREGATE INFORMATION.—The term 'aggregate cus-
tomer information' means collective data that relates to a group 
or category of services or customers, from which individual 
customer identities and characteristics have been removed. 
"(3) SUBSCRIBER LIST INFORMATION.—The term 'subscriber 
list information' means any information— 
"(A) identifying the listed names of subscribers of a 
carrier and such subscribers' telephone numbers, addresses, 
or primary advertising classifications (as such classifica-
tions are assigned at the time of the establishment of 
such service), or any combination of such listed names, 
numbers, addresses, or classifications; and 
"(B) that the carrier or an affiliate has published, 
caused to be published, or accepted for publication in any 
directory format.". 
SEC. 703. POLE ATTACHMENTS. 
Section 224 (47 U.S.C. 224) is amended— 
(1) in subsection (a)(1), by striking the first sentence and 
inserting the following: "The term 'utility' means any person 
who is a local exchange carrier or an electric, gas, water, 
110 STAT. 150 
PUBLIC LAW 104-104—FEB. 8, 1996 
steam, or other public utility, and who owns or controls poles, 
ducts, conduits, or rights-of-way used, in whole or in part, 
for any wire communications."; 
(2) in subsection (a)(4), by inserting after "system" the 
following: "or provider of telecommunications service"; 
(3) by inserting after subsection (a)(4) the following: 
"(5) For purposes of this section, the term 'telecommuni-
cations carrier' (as defined in section 3 of this Act) does not 
include any incumbent local exchange carrier as defined in 
section 251(h)."; 
(4) by inserting after "conditions" in subsection (c)(1) a 
comma and the following: "or access to poles, ducts, conduits, 
and rights-of-way as provided in subsection (f),"; 
(5) in subsection (c)(2)(B), by striking "cable television serv-
ices" and inserting "the services offered via such attachments"; 
(6) by inserting after subsection (d)(2) the following: 
Applicability. 
"(3) This subsection shall apply to the rate for any pole attach-
ment used by a cable television system solely to provide cable 
service. Until the effective date of the regulations required under 
subsection (e), this subsection shall also apply to the rate for any 
pole attachment used by a cable system or any telecommunications 
carrier (to the extent such carrier is not a party to a pole attachment 
agreement) to provide any telecommunications service."; and 
(7) by adding at the end thereof the following: 
Regulations. 
"(e)(1) The Commission shall, no later than 2 years after the 
date of enactment of the Telecommunications Act of 1996, prescribe 
regulations in accordance with this subsection to govern the charges 
for pole attachments used by telecommunications carriers to provide 
telecommunications services, when the parties fail to resolve a 
dispute over such charges. Such regulations shall ensure that a 
utility charges just, reasonable, and nondiscriminatory rates for 
pole attachments. 
"(2) A utility shall apportion the cost of providing space on 
a pole, duct, conduit, or right-of-way other than the usable space 
among entities so that such apportionment equals two-thirds of 
the costs of providing space other than the usable space that would 
be allocated to such entity under an equal apportionment of such 
costs among all attaching entities. 
"(3) A utility shall apportion the cost of providing usable space 
among all entities according to the percentage of usable space 
required for each entity. 
Effective date. 
"(4) The regulations required under paragraph (1) shall become 
effective 5 years after the date of enactment of the Telecommuni-
cations Act of 1996. Any increase in the rates for pole attachments 
that result from the adoption of the regulations required by this 
subsection shall be phased in equal annual increments over a 
period of 5 years beginning on the effective date of such regulations. 
"(f)(1) A utility shall provide a cable television system or any 
telecommunications carrier with nondiscriminatory access to £iny 
pole, duct, conduit, or right-of-way owned or controlled by it. 
"(2) Notwithstanding paragraph (1), a utility providing electric 
service may deny a cable television system or any telecommuni-
cations carrier access to its poles, ducts, conduits, or rights-of-
way, on a non-discriminatory basis where there is insufficient capac-
ity and for reasons of safety, reliability and generally applicable 
engineering purposes. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 151 
"(g) A utility that engages in the provision of telecommuni-
cations services or cable services shall impute to its costs of provid-
ing such services (and charge any affiliate, subsidiary, or associate 
company engaged in the provision of such services) an equal amount 
to the pole attachment rate for which such company would be 
liable under this section. 
"(h) Whenever the owner of a pole, duct, conduit, or right-
of-way intends to modify or alter such pole, duct, conduit, or right-
of-way, the owner shall provide written notification of such action 
to any entity that has obtained an attachment to such conduit 
or right-of-way so that such entity may have a reasonable oppor-
tunity to add to or modify its existing attachment. Any entity 
that adds to or modifies its existing attachment after receiving 
such notification shall bear a proportionate share of the costs 
incurred by the owner in making such pole, duct, conduit, or right-
of-way accessible. 
"(i) An entity that obtains an attachment to a pole, conduit, 
or right-of-way shall not be required to bear any of the costs 
of rearranging or replacing its attachment, if such rearrangement 
or replacement is required as a result of an additional attachment 
or the modification of an existing attachment sought by any other 
entity (including the owner of such pole, duct, conduit, or right-
of-way).". 
SEC. 704. FACILITIES SITING; RADIO FREQUENCY EMISSION STAND-
ARDS. 
(a) 
NATIONAL WIRELESS TELECOMMUNICATIONS SITING POL-
ICY.—Section 332(c) (47 U.S.C. 332(c)) is amended by adding at 
the end the following new paragraph: 
"(7) PRESERVATION OF LOCAL ZONING AUTHORITY.— 
"(A) GENERAL AUTHORITY.—Except as provided in this 
paragraph, nothing in this Act shall limit or affect the 
authority of a State or local government or instrumentality 
thereof over decisions regarding the placement, construc-
tion, and modification of personal wireless service facilities. 
"(B) LIMITATIONS.— 
"(i) The regulation of the placement, construction, 
and modification of personal wireless service facilities 
by any State or local government or instrumentality 
thereof— 
"(I) shall not unreasonably discriminate among 
providers of functionally equivalent services; and 
"(II) shall not prohibit or have the effect of 
prohibiting the provision of personal wireless serv-
ices. 
"(ii) A State or local government or instrumentality 
thereof shall act on any request for authorization to 
place, construct, or modify personal wireless service 
facilities within a reasonable period of time after the 
request 
is duly filed 
with 
such government 
or 
instrumentality, taking into account the nature and 
scope of such request. 
"(iii) Any decision by a State or local government Records, 
or instrumentality thereof to deny a request to place, 
construct, or modify personal wireless service facilities 
shall be in writing and supported by substantial evi-
dence contained in a written record. 
110 STAT. 152 
PUBLIC LAW 104-104—FEB. 8, 1996 
Courts. 
Rules. 
President. 
47 u s e 332 note. 
"(iv) No State or local government or instrumental-
ity thereof may regulate the placement, construction, 
and modification of personal wireless service facilities 
on the basis of the environmental effects of radio fre-
quency emissions to the extent that such facilities com-
ply with the Commission's regulations concerning such 
emissions. 
"(v) Any person adversely affected by any final 
action or failure to act by a State or local government 
or any instrumentality thereof that is inconsistent with 
this subparagraph may, within 30 days after such 
action or failure to act, commence an action in any 
court of competent jurisdiction. The court shall hear 
and decide such action on an expedited basis. Any 
person adversely affected by an act or failure to act 
by a State or local government or any instrumentality 
thereof that is inconsistent with clause (iv) may peti-
tion the Commission for relief. 
"(C) DEFINITIONS.—For purposes of this paragraph— 
"(i) the term 'personal wireless services' means 
commercial mobile services, unlicensed wireless serv-
ices, and common carrier wireless exchange access 
services; 
"(ii) the term 'personal wireless service facilities' 
means facilities for the provision of personal wireless 
services; and 
"(iii) the term 'unlicensed wireless service' means 
the offering of telecommunications services using duly 
authorized devices which do not require individual 
licenses, but does not mean the provision of direct-
to-home satellite services (as defined 
in section 
303(v)).". 
(b) RADIO FREQUENCY EMISSIONS.—Within 180 days after the 
enactment of this Act, the Commission shall complete action in 
ET Docket 93-62 to prescribe and make effective rules regarding 
the environmental effects of radio frequency emissions. 
(c) AVAILABILITY OF PROPERTY.—Within 180 days of the enact-
ment of this Act, the President or his designee shall prescribe 
procedures by which Federal departments and agencies may make 
available on a fair, reasonable, and nondiscriminatory basis, prop-
erty, rights-of-way, and easements under their control for the place-
ment of new telecommunications services that are dependent, in 
whole or in part, upon the utilization of Federal spectrum rights 
for the transmission or reception of such services. These procedures 
may establish a presumption that requests for the use of property, 
rights-of-way, and easements by duly authorized providers should 
be granted absent unavoidable direct conflict with the department 
or agency's mission, or the current or planned use of the property, 
rights-of-way, and easements in question. Reasonable fees may 
be charged to providers of such telecommunications services for 
use of property, rights-of-way, and easements. The Commission 
shall provide technical support to States to encourage them to 
make property, rights-of-way, and easements under their jurisdic-
tion available for such purposes. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 153 
SEC. 705. MOBILE SERVICES DIRECT ACCESS TO LONG DISTANCE CAR-
RIERS. 
Section 332(c) (47 U.S.C. 332(c)) is amended by adding at 
the end the following new paragraph: 
"(8) MOBILE SERVICES ACCESS.—A person engaged in the 
provision of commercial mobile services, insofar as such person 
is so engaged, shall not be required to provide equal access 
to common carriers for the provision of telephone toll services. 
If the Commission determines that subscribers to such services Regulations. 
are denied access to the provider of telephone toll services 
of the subscribers' choice, £ind that such denial is contrary 
to the public interest, convenience, and necessity, then the 
Commission shall prescribe regulations to afford subscribers 
unblocked access to the provider of telephone toll services of 
the subscribers' choice through the use of a carrier identification 
code assigned to such provider or other mechanism. The 
requirements for unblocking shall not apply to mobile satellite 
services unless the Commission finds it to be in the public 
interest to apply such requirements to such services.". 
SEC. 706. ADVANCED TELECOMMUNICATIONS INCENTIVES. 
47 USC 157 note. 
(a) IN GENERAL.—The Commission and each State commission 
with regulatory jurisdiction over telecommunications services shall 
encourage the deployment on a reasonable and timely basis of 
advanced telecommunications capability to all Americans (including, 
in particular, elementary and secondary schools and classrooms) 
by utilizing, in a manner consistent with the public interest, conven-
ience, and necessity, price cap regulation, regulatory forbearance, 
measures that promote competition in the local telecommunications 
market, or other regulating methods that remove barriers to infra-
structure investment. 
(b) INQUIRY.—The Commission shall, within 30 months after 
the date of enactment of this Act, and regularly thereafter, initiate 
a notice of inquiry concerning the availability of advanced tele-
communications capability to all Americans (including, in particu-
lar, elementary and secondary schools and classrooms) and shall 
complete the inquiry within 180 days after its initiation. In the 
inquiry, the Commission shall determine whether advanced tele-
communications capability is being deployed to all Americans in 
a reasonable and timely fashion. If the Commission's determination 
is negative, it shall take immediate action to accelerate deplo5anent 
of such capability by removing barriers to infrastructure investment 
and by promoting competition in the telecommunications market. 
(c) DEFINITIONS.—For purposes of this subsection: 
(1) 
ADVANCED 
TELECOMMUNICATIONS 
CAPABILITY.—The 
term "advanced telecommunications capability" is defined, with-
out regard to any transmission media or technology, as high-
speed, switched, broadband telecommunications capability that 
enables users to originate and receive high-quality voice, data, 
graphics, and video telecommunications using any technology. 
(2) ELEMENTARY AND SECONDARY SCHOOLS.—The term 
"elementary and secondary schools" means elementary and 
secondary schools, as defined in paragraphs (14) and (25), 
respectively, of section 14101 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 8801). 
110 STAT. 154 
PUBLIC LAW 104-104—FEB. 8, 1996 
SEC. 707. TELECOMMUNICATIONS DEVELOPMENT FUND. 
(a) DEPOSIT AND USE OF AUCTION ESCROW ACCOUNTS.—Section 
309(j)(8) (47 U.S.C. 309(j)(8)) is amended by adding at the end 
the following new subparagraph: 
"(C) 
DEPOSIT 
AND 
USE 
OF 
AUCTION 
ESCROW 
ACCOUNTS.—Any deposits the Commission may require for 
the qualification of any person to bid in a system of competi-
tive bidding pursuant to this subsection shall be deposited 
in an interest bearing account at a financial institution 
designated for purposes of this subsection by the Commis-
sion (after consultation with the Secretary of the Treasury). 
Within 45 days following the conclusion of the competitive 
bidding— 
"(i) the deposits of successful bidders shall be paid 
to the Treasury; 
"(ii) the deposits of unsuccessful bidders shall be 
returned to such bidders; and 
"(iii) the interest accrued to the account shall be 
transferred to the Telecommunications Development 
Fund established pursuant to section 714 of this Act.". 
(b) ESTABLISHMENT AND OPERATION OF FUND.—Title VII 
is 
amended by inserting after section 713 (as added by section 305) 
the following new section: 
47 use 614. 
"SEC. 714. TELECOMMUNICATIONS DEVELOPMENT FUND. 
"(a) PURPOSE OF SECTION.—It is the purpose of this section— 
"(1) to promote access to capital for small businesses in 
order to enhance competition in the telecommunications indus-
try; 
"(2) to stimulate new technology development, and promote 
employment and training; and 
"(3) to support universal service and promote delivery of 
telecommunications services to underserved rural and urban 
areas. 
"(b) ESTABLISHMENT OF FUND.—There is hereby estabUshed 
a body corporate to be known as the Telecommunications Develop-
ment Fund, which shall have succession until dissolved. The Fund 
shall maintain its principal office in the District of Columbia and 
shall be deemed, for purposes of venue and jurisdiction in civil 
actions, to be a resident and citizen thereof. 
"(c) BOARD OF DIRECTORS.— 
"(1) COMPOSITION OF BOARD; CHAIRMAN.—The Fund shall 
have a Board of Directors which shall consist of 7 persons 
appointed by the Chairman of the Commission. Four of such 
directors shall be representative of the private sector and three 
of such directors shall be representative of the Commission, 
the Small Business Administration, and the Department of 
the Treasury, respectively. The Chairman of the Commission 
shall appoint one of the representatives of the private sector 
to serve as chairman of the Fund within 30 days after the 
date of enactment of this section, in order to facilitate rapid 
creation and implementation of the Fund. The directors shall 
include members with experience in a number of the following 
areas: finance, investment banking, government 
banking, 
communications law and administrative practice, and public 
policy. 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 155 
"(2) TERMS OF APPOINTED AND ELECTED MEMBERS.—The 
directors shall be eligible to serve for terms of 5 years, except 
of the initial members, as designated at the time of their 
appointment— 
"(A) 1 shall be eligible to service for a term of 1 
year; 
"(B) 1 shall be eligible to service for a term of 2 
years; 
"(C) 1 shall be eligible to service for a term of 3 
years; 
"(D) 2 shall be eligible to service for a term of 4 
years; and 
"(E) 2 shall be eligible to service for a term of 5 
years (1 of whom shall be the Chairman). 
Directors may continue to serve until their successors have 
been appointed and have qualified. 
"(3) MEETINGS AND FUNCTIONS OF THE BOARD.—The Board 
of Directors shall meet at the call of its Chairman, but at 
least quarterly. The Board shall determine the general policies 
which shall govern the operations of the Fund. The Chairman 
of the Board shall, with the approval of the Board, select, 
appoint, and compensate qualified persons to fill the offices 
as may be provided for in the bylaws, with such functions, 
powers, and duties as may be prescribed by the bylaws or 
by the Board of Directors, and such persons shall be the officers 
of the Fund and shall discharge all such functions, powers, 
and duties. 
"(d) ACCOUNTS OF THE FUND.—The Fund shall maintain its 
accounts at a financial institution designated for purposes of this 
section by the Chairman of the Board (after consultation with 
the Commission and the Secretary of the Treasury). The accounts 
of the Fund shall consist o
f
— 
"(1) interest transferred pursuant to section 309(j)(8)(C) 
of this Act; 
"(2) such sums as may be appropriated to the Commission 
for advances to the Fund; 
"(3) any contributions or donations to the Fund that are 
accepted by the Fund; and 
"(4) any repayment of, or other payment made with respect 
to, loans, equity, or other extensions of credit made from the 
Fund. 
"(e) USE OF THE FUND.—^All moneys deposited into the accounts 
of the Fund shall be used solely for— 
"(1) the making of loans, investments, or other extensions 
of credits to eligible small businesses in accordance with sub-
section (f); 
"(2) the provision of financial advice to eligible small 
businesses; 
"(3) expenses for the administration and management of 
the Fund (including salaries, expenses, and the rental or pur-
chase of office space for the fund); 
"(4) preparation of research, studies, or financial analyses; 
and 
"(5) other services consistent with the purposes of this 
section. 
"(f) LENDING AND CREDIT OPERATIONS.—Loans or other exten-
sions of credit fi*om the Fund shall be made available in accordance 
110 STAT. 156 
PUBLIC LAW 104-104—FEB. 8, 1996 
with the requirements of the Federal Credit Reform Act of 1990 
(2 U.S.C. 661 et seq.) and any other appHcable law to an eligible 
small business on the basis o
f
— 
"(1) the analysis of the business plan of the eligible small 
business; 
"(2) the reasonable availability of collateral to secure the 
loan or credit extension; 
"(3) the extent to which the loan or credit extension pro-
motes the purposes of this section; and 
"(4) other lending policies as defined by the Board. 
"(g) RETURN OF ADVANCES.—Any advances appropriated pursu-
ant to subsection (d)(2) shall be disbursed upon such terms and 
conditions (including conditions relating to the time or times of 
repayment) as are specified in any appropriations Act providing 
such advances. 
"(h) GENERAL CORPORATE POWERS.—The Fund shall have 
power— 
"(1) to sue and be sued, complain and defend, in its cor-
porate name and through its own counsel; 
"(2) to adopt, alter, and use the corporate seal, which 
shall be judicially noticed; 
"(3) to adopt, amend, and repeal by its Board of Directors, 
bylaws, rules, and regulations as may be necessary for the 
conduct of its business; 
"(4) to conduct its business, carry on its operations, and 
have officers and exercise the power granted by this section 
in any State without regard to any qualification or similar 
statute in any State; 
"(5) to lease, purchase, or otherwise acquire, own, hold, 
improve, use, or otherwise deal in and with any property, 
real, personal, or mixed, or any interest therein, wherever 
situated, for the purposes of the Fund; 
"(6) to accept gifts or donations of services, or of property, 
real, personal, or mixed, tangible or intangible, in aid of any 
of the purposes of the Fund; 
"(7) to sell, convey, mortgage, pledge, lease, exchange, and 
otherwise dispose of its property and assets; 
"(8) to appoint such officers, attorneys, employees, and 
agents as may be required, to determine their qualifications, 
to define their duties, to fix their salaries, require bonds for 
them, and fix the penalty thereof; and 
"(9) to enter into contracts, to execute instruments, to incur 
liabilities, to make loans and equity investment, and to do 
all things as are necessary or incidental to the proper manage-
ment of its affairs and the proper conduct of its business. 
"(i) ACCOUNTING, AUDITING, AND REPORTING.—The accounts of 
the Fund shall be audited annually. Such audits shall be conducted 
in accordance with generally accepted auditing standards by 
independent certified public accountants. A report of each such 
audit shall be furnished to the Secretary of the Treasury and 
the Commission. The representatives of the Secretary and the 
Commission shall have access to all books, accounts, financial 
records, reports, files, and all other papers, things, or property 
belonging to or in use by the Fund and necessary to facilitate 
the audit. 
"(j) REPORT ON AUDITS BY TREASURY.—A report of each such 
audit for a fiscal year shall be made by the Secretary of the 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 157 
Treasury to the President and to the Congress not later than 
6 months following the close of such fiscal year. The report shall 
set forth the scope of the audit and shall include a statement 
of assets and liabilities, capital and surplus or deficit; a statement 
of surplus or deficit analysis; a statement of income and expense; 
a statement of sources and application of funds; and such comments 
and information as may be deemed necessary to keep the President 
and the Congress informed of the operations and financial condition 
of the Fund, together with such recommendations with respect 
thereto as the Secretary may deem advisable. 
"(k) DEFINITIONS.—As used in this section: 
"(1) ELIGIBLE SMALL BUSINESS.—The term 'eligible small 
business' means business enterprises engaged in the tele-
communications industry that have $50,000,000 or less in 
annual revenues, on average over the past 3 years prior to 
submitting the application under this section. 
"(2) FUND.—The term 'Fund' means the Telecommuni-
cations Development Fund established pursuant to this section. 
"(3) 
TELECOMMLTNICATIONS 
INDUSTRY.—The term 'tele-
communications industry' means communications businesses 
using regulated or unregulated facilities or services and 
includes broadcasting, telecommunications, cable, computer, 
data trginsmission, software, programming, advanced messag-
ing, and electronics businesses.". 
SEC. 708. NATIONAL EDUCATION TECHNOLOGY FUNDING CORPORA-
TION. 
(a) FINDINGS; PURPOSE.— 
(1) FINDINGS.—The Congress finds as follows: 
(A) CORPORATION.—There has been established in the 
District of Columbia a private, nonprofit corporation known 
as the National Education Technology Funding Corporation 
which is not an agency or independent establishment of 
the Federal Government. 
(B) BOARD OF DIRECTORS.—The Corporation is gov-
erned by a Board of Directors, as prescribed in the Corpora-
tion's articles of incorporation, consisting of 15 members, 
of which— 
(i) five members are representative of public agen-
cies representative of schools and public libraries; 
(ii) five members are representative of State 
government, including persons knowledgeable about 
State finance, technology and education; and 
(iii) five members are representative of the private 
sector, with expertise in network technology, finance 
and management. 
(C) CORPORATE PURPOSES.—The purposes of the Cor-
poration, as set forth in its articles of incorporation, are— 
(i) to leverage resources and stimulate private 
investment in education technology infrastructure; 
(ii) to designate State education technology agen-
cies to receive loans, grants or other forms of assistance 
from the Corporation; 
(iii) to establish criteria for encouraging States 
to— 
(I) create, maintain, utilize and upgrade inter-
active high capacity networks capable of providing 
110 STAT. 158 
PUBLIC LAW 104-104—FEB. 8, 1996 
audio, 
visual 
and data 
communications 
for 
elementary schools, secondary schools and public 
libraries; 
(II) distribute resources to assure equitable 
aid to all elementary schools and secondary schools 
in the State and achieve universal access to net-
work technology; and 
(III) upgrade the delivery and development 
of learning through innovative technology-based 
instructional tools and applications; 
(iv) to provide loans, grants and other forms of 
assistance to State education technology agencies, with 
due regard for providing a fair balance among types 
of school districts and public libraries assisted and 
the disparate needs of such districts and libraries; 
(v) to leverage resources to provide maximum aid 
to elementary schools, secondary schools and public 
libraries; and 
(vi) to encourage the development of education tele-
communications and information technologies through 
public-private ventures, by serving as a clearinghouse 
for information on new education technologies, and 
by providing technical assistance, including assistance 
to States, if needed, to establish State education tech-
nology agencies. 
(2) PURPOSE.—The purpose of this section is to recognize 
the Corporation as a nonprofit corporation operating under 
the laws of the District of Columbia, and to provide authority 
for Federal departments and agencies to provide assistance 
to the Corporation. 
(b) DEFINITIONS.—For the purpose of this section— 
^ 
(1) the term "Corporation" means the National Education 
Technology Funding Corporation 
described in 
subsection 
(a)(1)(A); 
(2) the terms "elementary school" and "secondary school" 
have the same meanings given such terms in section 14101 
of the Elementary and Secondary Education Act of 1965; and 
(3) the term "public library" has the same meaning given 
such term in section 3 of the Library Services and Construction 
Act. 
(c) ASSISTANCE FOR EDUCATION TECHNOLOGY PURPOSES.— 
(1) RECEIPT BY CORPORATION.—Notwithstanding any other 
provision of law, in order to carry out the corporate purposes 
described in subsection (a)(1)(C), the Corporation shall be 
eligible to receive discretionary grants, contracts, gifts, con-
tributions, or technical assistance from any Federal department 
or agency, to the extent otherwise permitted by law. 
(2) AGREEMENT.—In order to receive any assistance 
described in paragraph (1) the Corporation shall enter into 
an agreement with the Federal department or agency providing 
such assistance, under which the Corporation agrees— 
(A) to use such assistance to provide funding and tech-
nical assistance only for activities which the Board of Direc-
tors of the Corporation determines are consistent with the 
corporate purposes described in subsection (a)(1)(C); 
(B) to review the activities of State education tech-
nology agencies and other entities receiving assistance from 
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 159 
the Corporation to assure that the corporate purposes 
described in subsection (a)(1)(C) are carried out; 
(C) that no part of the assets of the Corporation shall 
accrue to the benefit of any member of the Board of Direc-
tors of the Corporation, any officer or employee of the 
Corporation, or any other individual, except as salary or 
reasonable compensation for services; 
(D) that the Board of Directors of the Corporation 
will adopt policies and procedures to prevent conflicts of 
interest; 
(E) to maintain a Board of Directors of the Corporation 
consistent with subsection (a)(1)(B); 
(F) that the Corporation, and any entity receiving the 
assistance from the Corporation, are subject to the appro-
priate oversight procedures of the Congress; and 
(G) to comply with— 
(i) the audit requirements described in subsection 
(d); and 
(ii) the reporting and testimony requirements 
described in subsection (e). 
(3) CONSTRUCTION.—Nothing in this section shall be con-
strued to establish the Corporation as an agency or independent 
establishment of the Federal Government, or to establish the 
members of the Board of Directors of the Corporation, or the 
officers and employees of the Corporation, as officers or employ-
ees of the Federal Government. 
(d) AUDITS.— 
(1) AUDITS BY INDEPENDENT CERTIFIED PUBLIC ACCOUNT-
ANTS.— 
(A) IN GENERAL.—The Corporation's financial state-
ments shall be audited annually in accordance with gen-
erally accepted auditing standards by independent certified 
public accountants who are certified by a regulatory author-
ity of a State or other political subdivision of the United 
States. The audits shall be conducted at the place or places 
where the accounts of the Corporation are normally kept. 
All books, accounts, financial records, reports, files, and 
all other papers, things, or property belonging to or in 
use by the Corporation and necessary to facilitate the audit 
shall be made available to the person or persons conducting 
the audits, and full facilities for verifying transactions with 
the balances or securities held by depositories, fiscal agents, 
and custodians shall be afforded to such person or persons. 
(B) REPORTING REQUIREMENTS.—The report of each 
annual audit described in subparagraph (A) shall be 
included in the annual report required by subsection (e)(1). 
(2) RECORDKEEPING REQUIREMENTS; AUDIT AND EXAMINA-
TION OF BOOKS.— 
(A) RECORDKEEPING REQUIREMENTS.—The Corporation 
shall ensure that each recipient of assistance from the 
Corporation keeps— 
(i) separate accounts with respect to such assist-
ance; 
(ii) such records as may be reasonably necessary 
to fully disclose— 
(I) the amount and the disposition by such 
recipient of the proceeds of such assistance; 
110 STAT. 160 
PUBLIC LAW 104-104—FEB. 8, 1996 
(II) the total cost of the project or undertaking 
in connection with which such assistance is given 
or used; and 
(III) the amount and nature of that portion 
of the cost of the project or undertaking supplied 
by other sources; and 
(iii) such other records as will facilitate an effective 
\ 
audit. 
(B) AUDIT AND EXAMINATION OF BOOKS.—The Corpora-
tion shall ensure that the Corporation, or any of the Cor-
poration's duly authorized representatives, shall have 
access for the purpose of audit and examination to any 
books, documents, papers, and records of any recipient 
of assistance from the Corporation that are pertinent to 
such assistance. Representatives of the Comptroller Gen-
eral shall also have such access for such purpose. 
(e) ANNUAL REPORT; TESTIMONY TO THE CONGRESS.— 
Publication. 
(1) ANNUAL REPORT.—Not later than April 30 of each year, 
the Corporation shall publish an annual report for the preceding 
fiscal year and submit that report to the President and the 
Congress. The report shall include a comprehensive and 
detailed evaluation of the Corporation's operations, activities, 
financial condition, and accomplishments under this section 
and may include such recommendations as the Corporation 
deems appropriate. 
(2) TESTIMONY BEFORE CONGRESS.—The members of the 
Board of Directors, and officers, of the Corporation shall be 
available to testify before appropriate committees of the Con-
gress with respect to the report described in paragraph (1), 
the report of any audit made by the Comptroller General pursu-
ant to this section, or any other matter which any such commit-
tee may determine appropriate. 
SEC. 709. REPORT ON THE USE OF ADVANCED TELECOMMUNICATIONS 
SERVICES FOR MEDICAL PURPOSES. 
The Secretary of Commerce, in consultation with the Secretary 
of Health and Human Services and other appropriate departments 
and agencies, shall submit a report to the Committee on Commerce 
of the House of Representatives and the Committee on Commerce, 
Science, and Transportation of the Senate concerning the activities 
of the Joint Working Group on Telemedicine, together with any 
findings reached in the studies and demonstrations on telemedicine 
funded by the Public Health Service or other Federal agencies. 
The report shall examine questions related to patient safety, the 
efficacy and quality of the services provided, and other legal, medi-
cal, and economic issues related to the utilization of advanced 
telecommunications services for medical purposes. The report shall 
be submitted to the respective committees by January 31, 1997. 
SEC. 710. AUTHORIZATION OF APPROPRIATIONS. 
47 use 156 note. 
(a) IN GENERAL.—In addition to any other sums authorized 
by law, there are authorized to be appropriated to the Federal 
Communications Commission such sums as may be necessary to 
carry out this Act and the amendments made by this Act. 
47 use 156 note. 
(b) EFFECT ON FEES.—For the purposes of section 9(b)(2) (47 
U.S.C. 159(b)(2)), additional amounts appropriated pursuant to sub-
section (a) shall be construed to be changes in the amounts appro-
PUBLIC LAW 104-104—FEB. 8, 1996 
110 STAT. 161 
priated for the performance of activities described in section 9(a) 
of the Communications Act of 1934. 
(c) FUNDING AVAILABILITY.—Section 309(j)(8)(B) (47 U.S.C. 
309(j)(8)(B)) is amended by adding at the end the following new 
sentence: "Such offsetting collections are authorized to remain avail-
able until expended.". 
Approved February 8, 1996. 
LEGISLATIVE HISTORY—S. 652 (H.R. 1555): 
HOUSE REPORTS: No. 104-204, Pt. 1 accompanying H.R. 1555 (Comm. on Com-
merce). 
SENATE REPORTS: Nos. 104-23 (Comm. on Commerce, Science, and Transpor-
tation) and 104-230 (Comm. of Conference). 
CONGRESSIONAL RECORD: 
Vol. 141 (1995): June 7-9, 12-15, considered and passed Senate. 
Aug. 2, 4, H.R. 1555 considered and passed House. 
Oct. 12, S. 652 considered and passed House, amended, in 
UeuofH.R. 1555. 
Vol. 142 (1996): Feb. 1, House and Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 32 (1996): 
Feb. 8, Presidential remarks and statement.