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104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-458
_______________________________________________________________________



 
                     TELECOMMUNICATIONS ACT OF 1996

                                _______


                January 31, 1996. Ordered to be printed

_______________________________________________________________________


 Mr. Bliley, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                         [To accompany S. 652]

      The committee of conference on the disagreeing votes of 
the two Houses on the amendments of the House to the bill (S. 
652), to provide for a pro-competitive, de-regulatory national 
policy framework designed to accelerate rapidly private sector 
deployment of advanced telecommunications and information 
technologies and services to all Americans by opening all 
telecommunications markets to competition, and for other 
purposes, having met, after full and free conference, have 
agreed to recommend and do recommend to their respective Houses 
as follows:
      That the Senate recede from its disagreement to the 
amendment of the House to the text of the bill and agree to the 
same with an amendment as follows:
      In lieu of the matter proposed to be inserted by the 
House amendment, insert the following:

SECTION 1. SHORT TITLE; REFERENCES.

    (a) Short Title.--This Act may be cited as the 
``Telecommunications 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.
    ``Sec. 273. Manufacturing by Bell operating companies.
    ``Sec. 274. Electronic publishing by Bell operating companies.
    ``Sec. 275. Alarm monitoring services.
    ``Sec. 276. Provision of payphone 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 Communications 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 materials 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.
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 following: ``, 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 
        antitrust 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 Telephone Company of Nevada, Illinois Bell 
                Telephone Company, Indiana Bell Telephone 
                Company, Incorporated, Michigan Bell Telephone 
                Company, New England Telephone 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 Company, 
                Southwestern Bell Telephone Company, The Bell 
                Telephone Company of Pennsylvania, The 
                Chesapeake and Potomac Telephone Company, The 
                Chesapeake and Potomac Telephone Company of 
                Maryland, The Chesapeake and Potomac Telephone 
                Company of Virginia, The Chesapeake 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 company that provides wireline 
                telephone exchange service; but
                    ``(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 
        `customer 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 
        designation from among 2 or more telecommunications 
        services providers (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 
        service' means the offering of a capability for 
        generating, acquiring, storing, transforming, 
        processing, retrieving, utilizing, or making 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 telecommunications 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 company 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 company 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 telecommunications service. Such term also includes 
        features, functions, 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 provision 
        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 numbers without 
        impairment of quality, reliability, or convenience when 
        switching from one telecommunications carrier to 
        another.
            ``(47) Rural telephone company.--The term `rural 
        telephone 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 
        `telecommunications' 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 
        `telecommunications carrier' means any provider of 
        telecommunications services, except that such term does 
        not include aggregators of telecommunications services 
        (as defined in section 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 
        `telecommunications equipment' means equipment, other 
        than customer premises equipment, used by a carrier to 
        provide telecommunications services, and includes 
        software integral to such equipment (including 
        upgrades).
            ``(51) Telecommunications service.--The term 
        `telecommunications service' means the offering of 
        telecommunications 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.''.
    (b) Common Terminology.--Except as otherwise provided in 
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 paragraphs (1) through (32);
            (5) by indenting such paragraphs 2 em spaces;
            (6) by inserting after the designation of each such 
        paragraph--
                    (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 paragraphs 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 inserting ``section 3'';
            (2) in section 332(d), by striking ``section 3(n)'' 
        each place it appears and inserting ``section 3''; and
            (3) in sections 621(d)(3), 636(d), and 637(a)(2), 
        by striking ``section 3(v)'' and inserting ``section 
        3''.

                  TITLE I--TELECOMMUNICATION SERVICES

                Subtitle A--Telecommunications Services

SEC. 101. ESTABLISHMENT OF PART II OF TITLE II.

    (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.

    ``(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
            ``(2) not to install network features, functions, 
        or capabilities 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 telephone toll service, and the duty to 
        permit all such providers to have nondiscriminatory 
        access to telephone numbers, operator 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 paragraphs (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 facilities and equipment of any requesting 
        telecommunications carrier, 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 carrier'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 requirements 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 network 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 
        conditions of the agreement and the requirements of 
        this section and section 252. An incumbent local 
        exchange carrier shall 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 telecommunications 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 interconnection or access to 
        unbundled network elements at the premises of the local 
        exchange carrier, except that the carrier may provide 
        for virtual collocation if the local exchange carrier 
        demonstrates to the State commission that physical 
        collocation is not practical for technical reasons or 
        because of space limitations.
    ``(d) Implementation.--
            ``(1) In general.--Within 6 months after the date 
        of enactment 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 elements 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 elements 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 
        requirements 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
                    ``(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 portability 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 
        companies.--
                    ``(A) Exemption.--Subsection (c) of this 
                section shall not apply to a rural telephone 
                company until (i) such company 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 
                feasible, and is consistent with section 254 
                (other than subsections (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 interconnection, services, or network 
                elements shall submit a notice of its request 
                to the State commission. The State commission 
                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 provided by this paragraph shall not 
                apply with respect to a request under 
                subsection (c) from a cable operator providing 
                video programming, and seeking to provide any 
                telecommunications 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 
                Telecommunications Act of 1996.
            ``(2) Suspensions and modifications for rural 
        carriers.--A local exchange carrier with fewer than 2 
        percent of the Nation's subscriber lines installed in 
        the aggregate nationwide may petition a State 
        commission for a suspension or modification of the 
        application of a requirement or requirements 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 technically 
                        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 carriers.
    ``(g) Continued Enforcement of Exchange Access and 
Interconnection Requirements.--On and after the date of 
enactment 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 apply 
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 
Commission after such date of enactment. During the period 
beginning on such date of enactment and until such restrictions 
and obligations are so superseded, such restrictions and 
obligations shall be enforceable in the same manner as 
regulations of the Commission.
    ``(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 
                Telecommunications 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 
        incumbents.--The Commission may, by rule, provide for 
        the treatment of a local exchange carrier (or class or 
        category thereof) 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 comparable to the 
                position occupied by a carrier described in 
                paragraph (1);
                    ``(B) such carrier has substantially 
                replaced an incumbent 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 
construed to limit or otherwise affect the Commission's 
authority under section 201.

``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 negotiate 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 interconnection 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 
Arbitration.--
            ``(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 documentation 
                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.
            ``(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 imposing appropriate 
                conditions as required to implement subsection 
                (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 negotiations, 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 prescribed 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 reasonable 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 subsection (c)(3) 
        of such section--
                    ``(A) shall be--
                            ``(i) based on the cost (determined 
                        without reference to a rate-of-return 
                        or other rate-based proceeding) of 
                        providing the interconnection or 
                        network element (whichever is 
                        applicable), and
                            ``(ii) nondiscriminatory, and
                    ``(B) may include a reasonable profit.
            ``(2) Charges for transport and termination of 
        traffic.--
                    ``(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 
                conditions 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 reciprocal 
                        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 
        services.--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 agreement, 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) discriminates against a 
                        telecommunications carrier not a party 
                        to the agreement; or
                            ``(ii) the implementation of such 
                        agreement or portion is not consistent 
                        with the public interest, convenience, 
                        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.
            ``(3) Preservation of authority.--Notwithstanding 
        paragraph (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 telecommunications 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 arbitration 
        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 agreement 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 preempting 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 
        proceeding 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, nothing 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 paragraph (2) (including any 
                reconsideration thereof), unless the submitting 
                carrier agrees to an extension of the period 
                for such review; or
                    ``(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 disapproving 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 responsibilities 
under this Act.
    ``(h) Filing Required.--A State commission shall make a 
copy of each agreement approved under subsection (e) and each 
statement 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).

``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 interstate 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 necessary to preserve and advance universal 
service, protect the public safety and welfare, ensure the 
continued quality of telecommunications 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 competitively 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 
government has permitted or imposed any statute, regulation, or 
legal requirement that violates subsection (a) or (b), the 
Commission 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.

    ``(a) Procedures to Review Universal Service 
Requirements.--
            ``(1) Federal-state joint board on universal 
        service.--Within one month after the date of enactment 
        of the Telecommunications 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 recommendations 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 mechanisms and a specific timetable for 
        implementation. Thereafter, the Commission shall 
        complete any proceeding to implement subsequent 
        recommendations from any Joint Board on universal 
        service within one year after receiving such 
        recommendations.
    ``(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 available at just, reasonable, and affordable rates.
            ``(2) Access to advanced services.--Access to 
        advanced telecommunications and information services 
        should be provided 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, including 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 preservation 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 service.
            ``(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, convenience, 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, convenience, and necessity.
            ``(2) Alterations and modifications.--The Joint 
        Board may, from time to time, recommend to the 
        Commission modifications in the definition of the 
        services that are supported by Federal universal 
        service support mechanisms.
            ``(3) Special 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).
    ``(d) Telecommunications Carrier Contribution.--Every 
telecommunications carrier that provides interstate 
telecommunications services shall contribute, on an equitable 
and nondiscriminatory 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 contribution 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 equitable 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 additional 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 
months after the date of enactment of the Telecommunications 
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 subscribers in urban areas. Such rules 
shall also require that a provider of interstate interexchange 
telecommunications services shall provide 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 Providers.--
            ``(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, 
                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 telecommunications 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, secondary 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 Commission, 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 contribute 
                        to the mechanisms to preserve and 
                        advance universal service, or
                            ``(ii) notwithstanding the 
                        provisions of subsection (e) of this 
                        section, receive reimbursement 
                        utilizing the support mechanisms to 
                        preserve and 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 telecommunications 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 telecommunications 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 telecommunications 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 subsection shall be entitled to preferential rates 
        or treatment as required by this subsection, if such 
        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 
                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 Assistance 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 
telecommunications carrier may not use services that are not 
competitive 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.

    ``(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 
telecommunications 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 with existing peripheral devices or 
specialized customer premises equipment commonly used by 
individuals with disabilities to achieve access, if readily 
achievable.
    ``(e) Guidelines.--Within 18 months after the date of 
enactment of the Telecommunications Act of 1996, the 
Architectural and Transportation Barriers Compliance Board 
shall develop guidelines for accessibility of 
telecommunications equipment and customer 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.

``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 products 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 information 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 effective 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 provide telecommunications service;
                    ``(B) network capabilities and services by 
                individuals with disabilities; and
                    ``(C) information services by subscribers 
                of rural telephone 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 
enactment 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 information without degeneration, and to interact in 
concert with one another.

``SEC. 257. MARKET ENTRY BARRIERS PROCEEDING.

    ``(a) Elimination of Barriers.--Within 15 months after the 
date of enactment of the Telecommunications Act of 1996, the 
Commission shall complete a proceeding for the purpose of 
identifying and eliminating, by regulations pursuant to its 
authority under this Act (other than this section), market 
entry barriers for entrepreneurs 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 
competition, technological advancement, and promotion of the 
public interest, convenience, and necessity.
    ``(c) Periodic Review.--Every 3 years following the 
completion 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, convenience, 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.

    ``(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 accordance with such verification procedures 
as the Commission shall prescribe. Nothing in this section 
shall preclude any State commission from enforcing such 
procedures with respect to intrastate services.
    ``(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 service 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 remedies 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 
Telecommunications 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 infrastructure, 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 telecommunications services, or 
to provide access to information services, in the service area 
in which such qualifying carrier has requested 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 unreasonable 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 qualifying carrier;
            ``(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 functions 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 benefit 
        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 section;
            ``(5) establish conditions that promote cooperation 
        between local exchange carriers to which this section 
        applies and qualifying carriers;
            ``(6) not require a local exchange carrier to which 
        this section applies to engage in any infrastructure 
        sharing agreement 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 
        infrastructure 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 
telecommunications services and equipment, including any 
software or upgrades of software integral to the use or 
operation of such telecommunications equipment.
    ``(d) Definition.--For purposes of this section, the term 
`qualifying 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).

``SEC. 260. PROVISION OF TELEMESSAGING SERVICE.

    ``(a) Nondiscrimination Safeguards.--Any local exchange 
carrier 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 telecommunications services.
    ``(b) Expedited Consideration of Complaints.--The 
Commission shall establish procedures for the receipt and 
review of complaints 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, 
transcribe, or relay messages (other than telecommunications 
relay services), and any ancillary services offered in 
combination with these services.

``SEC. 261. EFFECT ON OTHER REQUIREMENTS.

    ``(a) Commission Regulations.--Nothing in this part shall 
be construed to prohibit the Commission from 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 regulations prescribed prior to the date of enactment 
of the Telecommunications Act of 1996, or from 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 
telecommunications 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 implement 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--
            (1) the designation and heading of each title of 
        the Act shall be in the form and typeface 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 
        carriers.--A State commission shall upon its own motion 
        or upon request designate a common carrier that meets 
        the requirements of paragraph (1) as an eligible 
        telecommunications carrier for a service area 
        designated by the State commission. Upon request and 
        consistent with the public interest, convenience, 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 additional requesting 
        carrier meets the requirements of paragraph (1). Before 
        designating an additional eligible telecommunications 
        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 
        carriers 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 carrier for that community or 
        portion thereof.
            ``(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 carrier designated as 
        an eligible telecommunications carrier to cease 
        providing universal service in an area served by more 
        than one eligible telecommunications carrier, the State 
        commission 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 
        telecommunications 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 support 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 definition 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 new section after section 33:

``SEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES.

    ``(a) Definitions.--For purposes of this section--
            ``(1) Exempt telecommunications company.--The term 
        `exempt telecommunications company' means any person 
        determined by the Federal Communications Commission to 
        be engaged directly or indirectly, wherever located, 
        through one or more affiliates (as defined in section 
        2(a)(11)(B)), and exclusively in the business of 
        providing---
                    ``(A) telecommunications services;
                    ``(B) information services;
                    ``(C) other services or products subject to 
                the jurisdiction 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 telecommunications company 
        under this section, with all of the exemptions provided 
        by this section, until the Federal Communications 
        Commission makes such determination. The Federal 
        Communications 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 
Facilities.--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 connection with, assets of a public 
utility company that is an associate company 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 company 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 ETCS 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 
telecommunications companies.
    ``(d) Ownership of ETCS by Registered Holding Companies.--
Notwithstanding any provision of this Act, a registered holding 
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 
telecommunications 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 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), and such 
        ownership by a registered holding company 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 construction 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 
Systems.--
            ``(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 holding 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 system.
            ``(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 registered 
        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 from 
        Congress, or prevent the Commission from complying with 
        a request for information from any other Federal or 
        State department or agency requesting the information 
        for purposes 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 
public 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 company of the public utility company only if--
            ``(1) every State commission having jurisdiction 
        over the retail rates of such public utility company 
        approves such contract; 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.
    ``(l) Books and Records.--(1) Upon written order of a State 
commission, a State commission may examine the books, accounts, 
memoranda, contracts, and records of--
            ``(A) a public utility company subject to its 
        regulatory authority under State law;
            ``(B) any exempt telecommunications company selling 
        products 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 telecommunications 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 Commissions.--
            ``(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 demonstrated 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.
            ``(B) The public utility company and the exempt 
        telecommunications company shall cooperate fully with 
        all reasonable requests necessary to perform the audit 
        and the public utility company shall bear all costs of 
        having the audit performed.
            ``(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 II.--Title II is 
amended 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

``SEC. 271. BELL OPERATING COMPANY ENTRY INTO INTERLATA SERVICES.

    ``(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.
            ``(4) Termination.--Nothing in this section 
        prohibits a Bell operating company or any of its 
        affiliates from providing termination 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 excluding exchange access) to 
                residential and business subscribers. For the 
                purpose of this subparagraph, such telephone 
                exchange service may be offered by such 
                competing providers either exclusively over 
                their own telephone exchange service facilities 
                or predominantly 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 pursuant 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 Telecommunications 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 subsection (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 company 
                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 provider's failure to 
                comply, within a reasonable period of time, 
                with the implementation schedule contained in 
                such agreement.
            ``(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 interconnection pursuant to 
                        one or more agreements described in 
                        paragraph (1)(A), or
                            ``(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 
                interconnection provided or generally offered 
                by a Bell operating company to other 
                telecommunications carriers meets the 
                requirements of this subparagraph if such 
                access and interconnection includes each of the 
                following:
                            ``(i) Interconnection in accordance 
                        with the requirements 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 numbers; 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, compliance 
                        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 
                        number portability through remote call 
                        forwarding, direct inward dialing 
                        trunks, or other comparable 
                        arrangements, with as little impairment 
                        of functioning, quality, 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).
                            ``(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 sections 
                        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.--The Commission shall notify the 
                Attorney General promptly of any 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 Attorney 
                General considers appropriate. The Commission 
                shall give substantial weight to the Attorney 
                General's evaluation, 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 
        receiving 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 provided pursuant to 
                        subsection (c)(1)(A), has fully 
                        implemented the competitive checklist 
                        in subsection (c)(2)(B); or
                            ``(ii) with respect to access and 
                        interconnection generally 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.
            ``(4) Limitation on commission.--The Commission may 
        not, by rule or otherwise, limit or extend the terms 
        used in the competitive checklist set forth in 
        subsection (c)(2)(B).
            ``(5) Publication.--Not later than 10 days after 
        issuing a determination under paragraph (3), the 
        Commission shall publish in the Federal Register a 
        brief description of the determination.
            ``(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 
                opportunity 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 
        services.--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 enactment 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 subsection (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 
                Telecommunications 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.
    ``(f) Exception for Previously Authorized Activities.--
Neither 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 programming, or other programming 
        services;
            ``(C) to distributors of audio programming or video 
        programming 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 services 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 section 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 information for storage in, information 
        storage facilities of such company 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 information from, common 
        carriers offering interLATA services at any location 
        within the area in which such Bell operating company 
        provides telephone exchange services 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 telecommunications 
market.
    ``(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 
        generally 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 
operating 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).

``SEC. 272. SEPARATE AFFILIATE; SAFEGUARDS.

    ``(a) Separate Affiliate Required for Competitive 
Activities.--
            ``(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 electronic 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;
            ``(2) shall maintain books, records, and accounts 
        in the 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 principles designated or approved by 
        the Commission.
    ``(d) Biennial Audit.--
            ``(1) General requirement.--A company required to 
        operate 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 
        commissions.--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 provides 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 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 company 
                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)--
            ``(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 
        services.--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 considered to violate the 
        nondiscrimination provisions of subsection (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.

    ``(a) Authorization.--A Bell operating company may 
manufacture 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 thereunder, 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 affiliates.
    ``(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 development of hardware, 
        software, or combinations thereof related to such 
        equipment.
            ``(2) Certain research arrangements; royalty 
        agreements.--Subsection (a) shall not prohibit a Bell 
        operating company from--
                    ``(A) engaging in research activities 
                related to manufacturing, and
                    ``(B) entering into royalty agreements with 
                manufacturers of telecommunications equipment.
    ``(c) Information Requirements.--
            ``(1) Information on protocols and technical 
        requirements.--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 
        company 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 manufacturers 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 company makes 
        available to any manufacturing affiliate or any 
        unaffiliated manufacturer.
            ``(4) Planning information.--Each Bell operating 
        company shall provide, to interconnecting carriers 
        providing telephone 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 customer premises equipment as 
                long as it is an affiliate of more than 1 
                otherwise unaffiliated Bell operating company 
                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 manufacturer from 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 
        establishes standards for telecommunications equipment 
        or customer premises equipment, or generic network 
        requirements for such equipment, or certifies 
        telecommunications equipment or customer 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 
        prohibited 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--
                    ``(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--
                    ``(i) not discriminate in favor of its 
                manufacturing affiliate in the establishment of 
                standards, generic requirements, 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 certification 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 certifies 
        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 substantial 
                modification of an existing industry-wide 
                standard or industry-wide generic requirement 
                for, telecommunications equipment or customer 
                premises equipment only in compliance 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 comments 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 funding party may 
                        utilize the dispute resolution 
                        procedures established pursuant to 
                        paragraph (5) of this subsection;
                    ``(B) engage in product certification for 
                telecommunications equipment or customer 
                premises equipment manufactured by unaffiliated 
                entities only if--
                            ``(i) such activity is performed 
                        pursuant to published criteria;
                            ``(ii) such activity is performed 
                        pursuant to auditable criteria; and
                            ``(iii) such activity is performed 
                        pursuant to available 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 
                telecommunications 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, telecommunications equipment 
                and customer premises equipment.
            ``(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 
        customer 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 
        party'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 penalties 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 
        telecommunications equipment or customer premises 
        equipment available in the United States. Alternative 
        sources shall be deemed to exist when such sources 
        provide commercially viable alternatives that are 
        providing such services to customers. The Commission 
        shall act on any application for such a determination 
        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 regulations prescribed thereunder, the Commission 
        shall have the same remedial authority as the 
        Commission has in administering and enforcing the 
        provisions of this title with respect to any common 
        carrier subject to this Act.
            ``(8) Definitions.--For purposes of this 
        subsection:
                    ``(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 Communications 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 description 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 process 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 members 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 
        manufacturing.--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 requirement for a 
        separate subsidiary including manufacturing under this 
        Act--
                    ``(A) shall consider such equipment, 
                produced or supplied by unrelated persons; and
                    ``(B) may not discriminate in favor of 
                equipment produced or supplied by an affiliate 
                or related person.
            ``(2) Procurement standards.--Each Bell operating 
        company or any entity acting on its behalf shall make 
        procurement decisions and award all supply contracts 
        for equipment, services, 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 participant in such 
        planning shall be allowed to delay the introduction of 
        new technology or the deployment 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 
        company 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 procurement 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 
section 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 
Commission determines are necessary to carry out the provisions 
of this section, and otherwise to prevent discrimination and 
cross-subsidization in a Bell operating company's dealings with 
its affiliate and with third parties.
    ``(h) Definition.--As used in this section, the term 
`manufacturing' has the same meaning as such term has under the 
AT&T; Consent Decree.

``SEC. 274. ELECTRONIC PUBLISHING BY BELL OPERATING COMPANIES.

    ``(a) Limitations.--No Bell operating company or any 
affiliate may engage in the provision of electronic publishing 
that is disseminated 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;
            ``(4) value any assets that are transferred 
        directly or indirectly from the Bell operating company 
        to a separated affiliate 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 common 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, trademarks, 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 maintenance of equipment on 
                behalf of a separated affiliate, except for 
                telephone service that it provides under tariff 
                or contract 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 determining 
                compliance during the preceding calendar year 
                with any provision of this section; and
                    ``(B) the results of which are maintained 
                by the separated affiliate or joint venture and 
                the Bell operating company for a period of 5 
                years subject to review by any lawful 
                authority; and
            ``(9) within 90 days of receiving a review 
        described in paragraph (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 
                separated 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 be made 
                available to all electronic publishers on 
                request, on nondiscriminatory terms.
                    ``(B) Teaming arrangements.--A Bell 
                operating company 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 
                authorized 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, affiliate, 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 company 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 personnel and 
                services to such joint venture.
    ``(d) Bell Operating Company Requirement.--A Bell operating 
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 
        practice of any Bell operating company, affiliate, or 
        separated affiliate 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 separated 
        affiliate shall be liable as provided in section 206 of 
        this Act; except that damages may not be awarded for a 
        violation 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 
        provisions of paragraph (1), any person claiming that 
        any act or practice of any Bell operating company, 
        affiliate, or separated affiliate constitutes a 
        violation of this section may make application to the 
        Commission for an order to cease and desist such 
        violation or may make 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 unaffiliated 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 gateway 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.
                    ``(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 entertainment 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 Securities and Exchange Commission pursuant to 
        the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
        seq.) or any successor provision to such section.
            ``(5) The term `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.
            ``(9) The term `separated affiliate' means a 
        corporation under common ownership or control with a 
        Bell operating company 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.

    ``(a) Delayed Entry Into Alarm Monitoring.--
            ``(1) Prohibition.--No Bell operating company or 
        affiliate thereof shall engage in the provision of 
        alarm monitoring services 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 monitoring operations, on 
        nondiscriminatory terms and conditions; and
            ``(2) not subsidize its alarm monitoring services 
        either directly or indirectly from telephone exchange 
        service operations.
    ``(c) Expedited Consideration of Complaints.--The 
Commission shall establish procedures for the receipt and 
review of complaints 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, or any other entity. Any regulations 
necessary to enforce this subsection 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 premises 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.

``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 
        competition 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 enactment 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 payphone, 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 
                nonstructural safeguards equal to those adopted 
                in the Computer Inquiry-III (CC Docket No. 90-
                623) proceeding;
                    ``(D) provide for Bell operating company 
                payphone service providers to have the same 
                right that independent 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 carriers 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, 
                subject to the terms of any agreement with the 
                location provider, to select and contract with, 
                the carriers that carry intraLATA calls from 
                their payphones.
            ``(2) Public interest telephones.--In the 
        rulemaking conducted pursuant to paragraph (1), the 
        Commission shall determine 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 
        payphones are supported fairly and equitably.
            ``(3) Existing contracts.--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 
requirements 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 
services 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.

    ``(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 to operate a television 
        broadcast station or hold a permit to construct such a 
        station (or both); and
            ``(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 multichannel 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 necessity.
    ``(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 Commission 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 frequency--
                    ``(A) for which the payment of a 
                subscription fee is required in order to 
                receive such services, or
                    ``(B) for which the licensee directly or 
                indirectly receives compensation from a third 
                party in return for transmitting material 
                furnished by such third party (other than 
                commercial 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 paragraph (2).
            ``(2) Collection of fees.--The program required by 
        paragraph (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 regulations 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 
                subparagraph (B), all proceeds obtained 
                pursuant to the regulations required by this 
                subsection shall be deposited in the Treasury 
                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 available 
                for obligation subject to the terms and 
                conditions of the receiving appropriations 
                account, and shall be deposited 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 
Commission first issues additional licenses for advanced 
television services, the Commission shall conduct an evaluation 
of the advanced television services program. Such evaluation 
shall include--
            ``(1) an assessment of the willingness of consumers 
        to purchase the television receivers necessary to 
        receive broadcasts of advanced television services;
            ``(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 
        Television Broadcast Service', MM Docket 87-268, 
        adopted September 17, 1992, and successor proceedings.
            ``(2) Designated frequencies.--The term `designated 
        frequency' means each of the frequencies designated by 
        the Commission for licenses for advanced television 
        services.
            ``(3) High definition television.--The term `high 
        definition 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.''.

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 
limiting 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 (inclusive) 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 (inclusive) 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 
        authorized 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 determines that such 
        ownership, operation, control, or interest will 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 limitation 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 ``networks'' 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, provides 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 
        Commission shall revise such regulations if necessary 
        to ensure carriage, 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 determine whether any of such rules are necessary in the 
public 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 
        paragraphs (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(l).''.

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 judgment, 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 affect the granting or denial of 
        such application, but the Commission may require any 
        new or additional facts it deems necessary to make its 
        findings.
            ``(3) Continuation pending decision.--Pending any 
        hearing 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.--
            ``(1) Standards for renewal.--If the licensee of a 
        broadcast station submits an application to the 
        Commission for renewal of such license, the Commission 
        shall grant the application if it finds, with respect 
        to that station, during the preceding term of its 
        license--
                    ``(A) the station has served the public 
                interest, convenience, 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, including renewal for a 
        term less than the maximum otherwise permitted.
            ``(3) Standards for denial.--If the Commission 
        determines, after notice and opportunity for a hearing 
        as provided in subsection (e), that a licensee has 
        failed to meet the requirements specified in paragraph 
        (1) and that no mitigating factors justify the 
        imposition of lesser sanctions, the Commission shall--
                    ``(A) issue an order denying the renewal 
                application filed by such licensee under 
                section 308; and
                    ``(B) only thereafter accept and consider 
                such applications 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 
apply to applications filed after May 1, 1995.

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 services,'' after ``programming,''.
    (b) FCC Jurisdiction Over Direct-to-Home Satellite 
Services.--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 
provision 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 operators. This section shall take 
effect for each vessel upon a determination 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 condition.''.

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 dwellings 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.--
            (1) Upper tier regulation.--Section 623(c) (47 
        U.S.C. 543(c)) is amended--
                    (A) in paragraph (1)(B), by striking 
                ``subscriber, franchising authority, or other 
                relevant State or local government 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 following:
            ``(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 complaint under this paragraph unless, within 90 
        days after such increase becomes effective it receives 
        subscriber complaints.
            ``(4) Sunset of upper tier rate regulation.--This 
        subsection shall not apply to cable programming 
        services provided after March 31, 1999.''.
            (2) Sunset of uniform rate structure in markets 
        with 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 dwelling 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(l)(1) (47 
        U.S.C. 543(l)(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 franchise area of an 
                unaffiliated cable operator which is providing 
                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.''
    (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 
        decisionmaking.--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 television 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 
                        Telecommunications Act of 1996, if 
                        later), the Commission shall grant or 
                        deny the request.''.
            (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, 
condition, 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. 
544A) is amended--
            (1) in subsection (a) by striking ``and'' at the 
        end of paragraph (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 recorders, 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.'';
            (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 product and service 
                options of converter boxes and other cable 
                converters unrelated to the descrambling or 
                decryption 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 developed under the authority of 
                this section to ensure compatibility 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 
amended--
            (1) by redesignating subsection (c) as subsection 
        (d); and
            (2) by inserting after subsection (b) the following 
        new subsection:
    ``(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''.
    (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 subsection (b)(3), to 
                aggregate, on a franchise, system, regional, or 
                company level, their equipment costs into broad 
                categories, 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 Telecommunications 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.--
            (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.''.
            (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 September 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

``SEC. 651. REGULATORY TREATMENT OF VIDEO PROGRAMMING SERVICES.

    ``(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 requirements 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, but shall not otherwise be subject 
        to the requirements of this title. This paragraph shall 
        not affect the treatment under section 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 
        common carrier that is providing video programming in a 
        manner described in paragraph (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.

    ``(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 otherwise acquire directly or indirectly more than 
a 10 percent financial interest, or any management interest, in 
any cable operator providing cable service within the local 
exchange carrier's telephone service 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 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, 
        management 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 system, 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.--
        Notwithstanding 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 
                subscribers 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 operators existed on 
                May 1, 1995; and
                    ``(D) the system with the most subscribers 
                in the television market is owned by or under 
                common ownership or control of any one of the 
                10 largest cable system operators as such 
                operators existed on May 1, 1995.
            ``(4) Exempt cable systems.--Subsection (a) does 
        not apply to any cable system if--
                    ``(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 nonurbanized 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.--
        Notwithstanding 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 economically 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.

    ``(a) Open Video Systems.--
            ``(1) Certificates of compliance.--A local exchange 
        carrier may provide cable service to its cable service 
        subscribers in its telephone service area through an 
        open video system that complies with this section. To 
        the extent permitted by such regulations as the 
        Commission may prescribe consistent with the public 
        interest, convenience, and necessity, an operator of a 
        cable system or any other person may provide video 
        programming through an open video system that complies 
        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 Commission that such carrier 
        complies with the Commission's regulations 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 regulations 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 sanctions. 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 unreasonably 
                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 programming 
                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 provider (including 
                the local exchange carrier's video programming 
                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 
                subscribers 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 holders (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 unaffiliated 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 negotiating 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 Systems.--
            ``(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 regulations 
                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 
        Commission has approved a certification under this 
        section.
            ``(2) Implementation.--
                    ``(A) Commission action.--In the rulemaking 
                proceeding 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 regulations 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 programming in the franchise area, as 
                determined in accordance with regulations 
                prescribed by the Commission. An operator of an 
                open video system may designate that portion 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 a 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.
            (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 termination 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 telecommunications services; and
            ``(ii) the provisions of this title shall not apply 
        to such cable operator or affiliate for the provision 
        of telecommunications services.
    ``(B) A franchising authority may not impose any 
requirement under this title that has the purpose or effect of 
prohibiting, limiting, restricting, or conditioning the 
provision of a telecommunications 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 franchise 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.

    ``(a) Commercial Consumer Availability of Equipment Used To 
Access Services Provided by Multichannel Video Programming 
Distributors.--The Commission shall, in consultation with 
appropriate industry standard-setting organizations, adopt 
regulations to assure the commercial availability, to consumers 
of multichannel video programming and other services offered 
over multichannel video programming systems, of 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, from manufacturers, retailers, and other 
vendors not affiliated with any multichannel 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 
jeopardize 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 equipment provider, that such waiver 
is necessary to assist the development or introduction of a new 
or improved multichannel video programming or other service 
offered over multichannel video 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.--
        Determinations made or regulations prescribed by the 
        Commission with respect to commercial availability to 
        consumers of 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, before the date of enactment of 
        the Telecommunications Act of 1996 shall fulfill the 
        requirements 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 services.
    ``(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 communications equipment, used in 
        conjunction with that service is fully competitive; and
            ``(3) elimination of the regulations would promote 
        competition 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 
enactment 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:

``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 shares achieved, or any 
other related factors. The Commission shall submit to the 
Congress a report on the results of such inquiry.
    ``(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
            ``(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 contracts in effect on the 
        date of enactment of the Telecommunications 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 
significant difficulty or expense. In determining whether the 
closed captions necessary to comply with the requirements of 
this paragraph would result in an undue economic burden, the 
factors to be considered 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 financial 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 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 
impairments, 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 standards 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 thereunder. 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:

``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 telecommunications carriers or telecommunications 
services, in any or some of its or their geographic markets, if 
the Commission determines that--
            ``(1) 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 telecommunications 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 applying 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 
consider whether forbearance from enforcing the provision or 
regulation will promote competitive market conditions, 
including the extent to which such forbearance will enhance 
competition among providers 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 
carrier, 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 subsection (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 
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.

    ``(a) Biennial Review of Regulations.--In every even-
numbered 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 meaningful 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, regulation, 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 paragraph (1) and 
                        inserting ``filed.''.
            (2) Extensions of lines under section 214; armis 
        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 any 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 subsection shall be construed to limit the 
        authority of the Commission to waive, modify, or 
        forbear from applying 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 
        made by paragraph (1) of this subsection shall apply 
        with respect to any charge, classification, regulation, 
        or practice filed on or after one year after the date 
        of enactment of this Act.
    (c) Classification of Carriers.--In classifying carriers 
according to section 32.11 of its regulations (47 C.F.R. 32.11) 
and in establishing reporting requirements pursuant to part 43 
of its regulations (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 requirements to account for inflation as of the 
release date of the Commission's Report and Order in CC Docket 
No. 91-141, and annually 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 Procedures.--
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)'' and 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 subparagraphs (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 
sentence 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 subsection (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 
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 certification.''.
    (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 Commission 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
            (2) in paragraph (4), by striking ``of which any 
        officer or more than one-fourth of the directors are 
        aliens, or''.
    (l) 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.--
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 requirement 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 Commission shall not waive the requirement for 
a construction permit unless the Commission determines that the 
public interest, convenience, and necessity would be served by 
such a waiver.''.
    (n) Conduct of Inspections.--Section 362(b) (47 U.S.C. 
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 
        Commission'' after ``The Commission''; and
            (2) by adding at the end thereof the following: 
        ``In accordance 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 
        from the license holder for travel and expense costs of 
        any employee conducting an inspection or 
        certification.''.

                    TITLE V--OBSCENITY AND VIOLENCE

      Subtitle A--Obscene, Harassing, and Wrongful Utilization of 
                     Telecommunications 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 
        lieu thereof:
    ``(a) Whoever--
            ``(1) in interstate or foreign communications--
                    ``(A) by means of a telecommunications 
                device knowingly--
                            ``(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 knowingly--
                            ``(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 
                communication placed the call or initiated the 
                communication;
                    ``(C) makes a telephone call or utilizes a 
                telecommunications device, whether or not 
                conversation or communication 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 repeatedly or continuously to ring, 
                with intent to harass any person at the called 
                number; or
                    ``(E) makes repeated telephone calls or 
                repeatedly initiates communication with a 
                telecommunications device, during 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--
                    ``(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 subsection 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 subsection 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 this section authorizes the Commission 
        to enforce, or is intended to provide the Commission 
        with the authority to approve, sanction, 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 
        products 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 specified 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 complementary oversight, 
liability, and regulatory systems, procedures, and 
requirements, so long as such systems, procedures, and 
requirements govern only intrastate services and do not result 
in the imposition of inconsistent rights, duties or obligations 
on the provision 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 (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 meaning 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 meaning provided in section 1201 of the Higher 
        Education Act of 1965 (20 U.S.C. 1141).
            ``(5) The term `library' means a library eligible 
        for participation 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:

``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 understandable 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:

``SEC. 641. SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE 
                    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.
    ``(b) Implementation.--Until a multichannel video 
programming distributor complies with the requirement set forth 
in subsection (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 understandable manner.''.
    (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''.
    (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 COMMUNICATION 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 Distribution.--
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 commerce,'' and inserting ``of''.
    (c) Interpretation.--The amendments made by this section 
are clarifying and shall not be interpreted to limit or repeal 
any 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 OFFENSIVE 
                    MATERIAL.

    ``(a) Findings.--The Congress finds the following:
            ``(1) The rapidly developing array of Internet and 
        other interactive computer services available to 
        individual Americans represent an extraordinary advance 
        in the availability of educational 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 minimum of government regulation.
            ``(5) Increasingly Americans are relying on 
        interactive media for a variety of political, 
        educational, cultural, and entertainment 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 utilization of blocking and filtering technologies 
        that empower parents 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 
Screening 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 another 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 provider or user considers to 
                be obscene, lewd, lascivious, filthy, 
                excessively violent, harassing, or otherwise 
                objectionable, whether or not such material is 
                constitutionally protected; 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 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.--
        Nothing 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 
        international computer network of both Federal and non-
        Federal interoperable packet switched data networks.
            ``(2) Interactive computer service.--The term 
        `interactive 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 specifically a service 
        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 
        `information content provider' means any person or 
        entity that is responsible, in whole or in part, for 
        the creation or development of information provided 
        through the Internet or any other interactive computer 
        service.
            ``(4) Access software provider.--The term `access 
        software 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:
            (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 established 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.
            (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 television, 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 
        technological tools that allow them easily to block 
        violent, sexual, or other programming that they believe 
        harmful to their children 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, guidelines 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.''.
            (2) Advisory committee requirements.--In 
        establishing 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;
                    (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 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 
following:
    ``(x) Require, in the case of an apparatus designed to 
receive television signals that are shipped in interstate 
commerce or manufactured 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 
        amended--
                    (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 
subsection 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 supervision 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 
consumers. If the Commission determines that an alternative 
blocking technology exists that--
            ``(A) enables parents to block programming based on 
        identifying programs without ratings,
            ``(B) is available to consumers at a cost which is 
        comparable to the cost of technology that allows 
        parents to block programming 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 technology that allows parents to block 
        programming based on common ratings,

the Commission shall amend the rules prescribed pursuant to 
section 303(x) to require that the apparatus described in such 
section be equipped with either the blocking technology 
described in such section or the alternative blocking 
technology described in this paragraph.''.
            (2) Conforming amendment.--Section 330(d), as 
        redesignated 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)''.
    (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 Commission 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 indecent material about which 
                parents should be informed before it is 
                displayed to children, and such rules are 
                acceptable 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.

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 development 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 development 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 necessary to effectively utilize 
        blocking technology and to encourage the availability 
        thereof to low income parents.

                      Subtitle C--Judicial Review

SEC. 561. EXPEDITED REVIEW.

    (a) Three-Judge District Court Hearing.--Notwithstanding 
any other provision of law, any civil action challenging the 
constitutionality, on its face, of this title or any amendment 
made by this title, or any provision thereof, shall be heard by 
a district 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 restrictions 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 any 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 restrictions 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 
        paragraph (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 in sections 
        622 and 653(c) of the Communications Act of 1934 and 
        section 602 of this Act.
    (d) Commercial Mobile Service Joint Marketing.--
Notwithstanding section 22.903 of the Commission's regulations 
(47 C.F.R. 22.903) or any other Commission regulation, a Bell 
operating company 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 antitrust 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 December 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 District 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 section 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 taxing 
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, except 
        at the subscribers' premises or in the uplink process 
        to the satellite.
            (2) Provider of direct-to-home satellite service.--
        For purposes of this section, a ``provider of direct-
        to-home satellite 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 INFORMATION OR 
                    SERVICES PROVIDED OVER TOLL-FREE TELEPHONE 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 
                        electronic medium) that meets the 
                        requirements of paragraph (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
                    (C) by adding at the end the following new 
                paragraphs:
            ``(8) Subscription agreements for billing for 
        information 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 
                material 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 type, 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 number 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 number 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 
                        number 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.
                    ``(E) Termination of service.--On receipt 
                by a common carrier of a complaint by any 
                person that an information 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 
        calling card in absence of agreement.--For purposes of 
        paragraph (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 incurring 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 providers 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 
        subsection, 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 
        Commission 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 (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 follows:
            ``(1) The term `pay-per-call services' has the 
        meaning provided in section 228(i) of the 
        Communications Act of 1934, except that the Commission 
        by rule may, notwithstanding subparagraphs (B) and (C) 
        of section 228(i)(1) of such Act, extend such 
        definition to other similar services providing audio 
        information or audio entertainment if the Commission 
        determines 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:

``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 manufacturers, and customers, including 
telecommunication carriers reselling telecommunications 
services provided by a telecommunications carrier.
    ``(b) Confidentiality of Carrier Information.--A 
telecommunications 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 
        telecommunications carrier shall disclose customer 
        proprietary network information, upon affirmative 
        written request by the customer, to any person 
        designated by the customer.
            ``(3) Aggregate customer information.--A 
        telecommunications carrier that receives or obtains 
        customer proprietary network information by virtue of 
        its provision of a telecommunications 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.
    ``(d) Exceptions.--Nothing in this section prohibits a 
telecommunications carrier from using, disclosing, or 
permitting access to customer proprietary network information 
obtained from its customers, either directly or indirectly 
through its agents--
            ``(1) to initiate, render, bill, and collect for 
        telecommunications services;
            ``(2) to protect the rights or property of the 
        carrier, or to protect users of those services and 
        other carriers from fraudulent, abusive, or unlawful 
        use of, or subscription to, such services; 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 
subsections (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 
        information.
            ``(2) Aggregate information.--The term `aggregate 
        customer 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 
                classifications 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, 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 
        `telecommunications 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 services'' and inserting ``the services 
        offered via such attachments'';
            (6) by inserting after subsection (d)(2) the 
        following:
    ``(3) This subsection shall apply to the rate for any pole 
attachment 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:
    ``(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.
    ``(4) The regulations required under paragraph (1) shall 
become effective 5 years after the date of enactment of the 
Telecommunications 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 any 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 
telecommunications carrier access to its poles, ducts, 
conduits, or rights-of-way, on a non-discriminatory basis where 
there is insufficient capacity and for reasons of safety, 
reliability and generally applicable engineering purposes.
    ``(g) A utility that engages in the provision of 
telecommunications services or cable services shall impute to 
its costs of providing 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 opportunity 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 STANDARDS.

    (a) National Wireless Telecommunications Siting Policy.--
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, 
                construction, 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 services.
                            ``(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 or instrumentality 
                        thereof to deny a request to place, 
                        construct, or modify personal wireless 
                        service facilities shall be in writing 
                        and supported by substantial evidence 
                        contained in a written record.
                            ``(iv) No State or local government 
                        or instrumentality thereof may regulate 
                        the placement, construction, and 
                        modification of personal wireless 
                        service facilities on the basis of the 
                        environmental effects of radio 
                        frequency emissions to the extent that 
                        such facilities comply 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 petition the Commission 
                        for relief.
                    ``(C) Definitions.--For purposes of this 
                paragraph--
                            ``(i) the term `personal wireless 
                        services' means commercial mobile 
                        services, unlicensed wireless services, 
                        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 
enactment 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, property, rights-of-way, and easements under their 
control for the placement 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 
jurisdiction available for such purposes.

SEC. 705. MOBILE SERVICES DIRECT ACCESS TO LONG DISTANCE CARRIERS.

    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 are denied 
        access to the provider of telephone toll services of 
        the subscribers' choice, and 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.

    (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, convenience, and necessity, price cap 
regulation, regulatory forbearance, measures that promote 
competition in the local telecommunications market, or other 
regulating methods that remove barriers to infrastructure 
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 telecommunications capability to all Americans 
(including, in particular, 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 telecommunications 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 deployment 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, without 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).

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 competitive 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 Commission (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:

``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 industry;
            ``(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 established a 
body corporate to be known as the Telecommunications 
Development 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.
            ``(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 of--
            ``(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 subsection (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 purchase 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 
extensions of credit from the Fund shall be made available in 
accordance with the requirements of the Federal Credit Reform 
Act of 1990 (2 U.S.C. 661 et seq.) and any other applicable law 
to an eligible small business on the basis of--
            ``(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 promotes the purposes of this section; and
            ``(4) other lending policies as defined by the 
        Board.
    ``(g) Return of Advances.--Any advances appropriated 
pursuant 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 corporate 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 management 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 
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 telecommunications 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 
        Telecommunications Development Fund established 
        pursuant to this section.
            ``(3) Telecommunications industry.--The term 
        `telecommunications industry' means communications 
        businesses using regulated or unregulated facilities or 
        services and includes broadcasting, telecommunications, 
        cable, computer, data transmission, software, 
        programming, advanced messaging, and electronics 
        businesses.''.

SEC. 708. NATIONAL EDUCATION TECHNOLOGY FUNDING CORPORATION.

    (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 
                governed by a Board of Directors, as prescribed 
                in the Corporation's articles of incorporation, 
                consisting of 15 members, of which--
                            (i) five members are representative 
                        of public agencies 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 Corporation, 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 agencies 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 interactive 
                                high capacity networks capable 
                                of providing 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 
                                network 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 telecommunications 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 
                        technology 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, contributions, 
        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 technical assistance only for 
                activities which the Board of Directors of the 
                Corporation determines are consistent with the 
                corporate purposes described in subsection 
                (a)(1)(C);
                    (B) to review the activities of State 
                education technology agencies and other 
                entities receiving assistance from 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 Directors 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 appropriate 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 
        construed 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 employees of the Federal 
        Government.
    (d) Audits.--
            (1) Audits by independent certified public 
        accountants.--
                    (A) In general.--The Corporation's 
                financial statements shall be audited annually 
                in accordance with generally accepted auditing 
                standards by independent certified public 
                accountants who are certified by a regulatory 
                authority 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 
        examination 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 assistance;
                            (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;
                                    (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 
                Corporation shall ensure that the Corporation, 
                or any of the Corporation'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 General shall also have such 
                access for such purpose.
    (e) Annual Report; Testimony to the Congress.--
            (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 Congress with respect to the report 
        described in paragraph (1), the report of any audit 
        made by the Comptroller General pursuant to this 
        section, or any other matter which any such committee 
        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, medical, 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.

    (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.
    (b) Effect on Fees.--For the purposes of section 9(b)(2) 
(47 U.S.C. 159(b)(2)), additional amounts appropriated pursuant 
to subsection (a) shall be construed to be changes in the 
amounts appropriated 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 available until expended.''.
      And the House agree to the same.

                From the Committee on Commerce, for 
                consideration of the Senate bill, and the House 
                amendment, and modifications committed to 
                conference:
                                   Tom Bliley,
                                   Jack Fields,
                                   Michael G. Oxley,
                                   Rick White,
                                   John D. Dingell,
                                   Edward J. Markey,
                                   Rick Boucher,
                                   Anna G. Eshoo,
                                   Bobby L. Rush,
                Provided, Mr. Pallone is appointed in lieu of 
                Mr. Boucher solely for consideration of sec. 
                205 of the Senate bill:
                                   Frank Pallone, Jr.,
                As additional conferees, for consideration of 
                secs. 1-6, 101-04, 106-07, 201, 204-05, 221-25, 
                301-05, 307-11, 401-02, 405-06, 410, 601-06, 
                703, and 705 of the Senate bill, and title I of 
                the House amendment, and modifications 
                committed to conference:
                                   Dan Schaefer,
                                   Joe Barton,
                                   J. Dennis Hastert,
                                   Bill Paxon,
                                   Scott Klug,
                                   Dan Frisa,
                                   Cliff Stearns,
                                   Sherrod Brown,
                                   Bart Gordon,
                                   Blanche Lambert Lincoln,
                As additional conferees, for consideration of 
                secs. 102, 202-03, 403, 407-09, and 706 of the 
                Senate bill, and title II of the House 
                amendment, and modifications committed to 
                conference:
                                   Dan Schaefer,
                                   J. Dennis Hastert,
                                   Dan Frisa,
                As additional conferees, for consideration of 
                secs. 105, 206, 302, 306, 312, 501-05, and 701-
                02 of the Senate bill, and title III of the 
                House amendment, and modifications committed to 
                conference:
                                   Cliff Stearns,
                                   Bill Paxon,
                                   Scott Klug,
                As additional conferees, for consideration of 
                secs. 7-8, 226, 404, and 704 of the Senate 
                bill, and titles IV-V of the House amendment, 
                and modifications committed to conference:
                                   Dan Schaefer,
                                   J. Dennis Hastert,
                                   Scott Klug,
                As additional conferees, for consideration of 
                title VI of the House amendment, and 
                modifications committed to conference:
                                   Dan Schaefer,
                                   Joe Barton,
                                   Scott Klug,
                As additional conferees from the Committee on 
                the Judiciary, for consideration of the Senate 
                bill (except secs. 1-6, 101-04, 106-07, 201, 
                204-05, 221-25, 301-05, 307-11, 401-02, 405-06, 
                410, 601-06, 703, and 705), and of the House 
                amendment (except title I), and modifications 
                committed to conference:
                                   Henry Hyde,
                                   Carlos J. Moorhead,
                                   Bob Goodlatte,
                                   Steve Buyer,
                                   Mike Flanagan,
                As additional conferees, for consideration of 
                secs. 1-6, 101-04, 106-07, 201, 204-05, 221-25, 
                301-05, 307-11, 401-02, 405-06, 410, 601-06, 
                703, and 705 of the Senate bill, and title I of 
                the House amendment, and modifications 
                committed to conference:
                                   Henry Hyde,
                                   Carlos J. Moorhead,
                                   Bob Goodlatte,
                                   Steve Buyer,
                                   Mike Flanagan,
                                   Elton Gallegly,
                                   Bob Barr,
                                   Martin R. Hoke,
                                   Howard L. Berman,
                                 Managers on the Part of the House.

                                   Larry Pressler,
                                   Ted Stevens,
                                   Slade Gorton,
                                   Trent Lott,
                                   Fritz Hollings,
                                   Daniel K. Inouye,
                                   Wendell Ford,
                                   J.J. Exon,
                                   Jay Rockefeller,
                                Managers on the Part of the Senate.
       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and the Senate at 
the conference on the disagreeing votes of the two Houses on 
the amendments of the House to the bill S. 652, to provide for 
a procompetitive, de-regulatory national policy framework 
designed to accelerate rapidly private sector deployment of 
advanced telecommunications and information technologies and 
services to all Americans by opening all telecommunications 
markets to competition, and for other purposes, submit the 
following joint statement to the House and the Senate in 
explanation of the effect of the action agreed upon by the 
managers and recommended in the accompanying conference report:
      The House amendment to the text of the bill struck all of 
the Senate bill after the enacting clause and inserted a 
substitute text.
      The Senate recedes from its disagreement to the amendment 
of the House with an amendment that is a substitute for the 
Senate bill and the House amendment. The differences between 
the Senate bill, the House amendment, and the substitute agreed 
to in conference are noted below, except for clerical 
corrections, conforming changes made necessary by agreements 
reached by the conferees, and minor drafting and clerical 
changes.

       Joint Explanatory Statement of the Committee of Conference

                       Section 1--Short Title and

                      Section 2--Table of Contents

Senate bill
      Section 1 provides that the bill may be cited as the 
``Telecommunications Competition and Deregulation Act of 
1995.'' Section 2 contains a table of contents for the Senate 
bill.
House amendment
      Section 1 designates the short title as the 
``Communications Act of 1995.'' Section 2 contains a table of 
contents for the House amendment.
Conference agreement
      Section 1 designates the title of the bill as the 
``Telecommunications Act of 1996.'' Section 2 contains a table 
of contents for the conference agreement.

                         Section 3--Definitions

Senate bill
      Section 8(a) includes definitions of the Modification of 
the Final Judgment (MFJ), the GTE Consent Decree, and an 
``integrated telecommunications service provider.'' An 
``integrated telecommunications service provider'' means a 
person engaged in the provision of multiple services, such as 
voice, data, image, graphics, and video services, which make 
common use of all or part of the same transmission facilities, 
switches, signaling, or control devices.
      Section 8(b) adds several definitions to section 3 of the 
Communications Act of 1934 (47 U.S.C. 153) (``the 
Communications Act'') including definitions for ``local 
exchange carrier,'' ``telecommunications'' ``telecommunications 
service,'' ``telecommunications carrier,'' ``telecommunications 
number portability.'' ``information service,'' ``rural 
telephone company,'' and ``service area.''
      New subsection (kk) defines ``local exchange carrier'' to 
mean a provider of telephone exchange service or exchange 
access service. ``Telephone exchange service'' is already 
defined in section 3 of the Communications Act.
      ``Telecommunications'' is defined in new subsection (ll) 
to mean the transmission, between or among points specified by 
the user, of information of the user's choosing including 
voice, data, image, graphics, and video, without change in the 
form or content of the information, as sent and received, with 
or without benefit of any closed transmission medium.
      The term ``telecommunications service'' defined in new 
subsection (mm) of section 3 of the communications Act means 
the offering of telecommunications for a fee directly to the 
public or to such classes of users as to be effectively 
available to the public, regardless of the facilities used to 
transmit the telecommunications service. This definition is 
intended to include commercial mobile service (``CMS''), 
competitive access service, and alternative local 
telecommunications services to the extent they are offered to 
the public or to such classes of users as to be effectively 
available to the public.
      Subsection (nn) defines ``telecommunications carrier'' to 
mean any provider of telecommunications service, except that 
the term does not include aggregators of telecommunications 
services as defined in section 226 of the Communications Act. 
The definition amends the Communications Act to explicitly 
provide that a ``telecommunications carrier'' shall be treated 
as a common carrier for purposes of the Communications Act, but 
only to the extent that it is engaged in providing 
telecommunications services.
      New subsection (oo) defines ``telecommunications number 
portability'' to mean the ability of users of 
telecommunications services to retain, at the same location, 
existing telecommunications numbers without impairment of 
quality, reliability, or convenience when switching from one 
telecommunications carrier to another. Number portability 
allows consumers remaining at the same location to retain their 
existing telephone numbers when switching from one 
telecommunications carrier to another.
      New subsection (pp) defines ``information service'' 
similar to the Federal Communications Commission's (``the 
Commission'') definition of ``enhanced services.'' The Senate 
intends that the Commission would have the continued 
flexibility to modify its definition and rules pertaining to 
enhanced services as technology changes
      Subsection (rr) adds a definition of ``rural telephone 
company'' that includes companies that (i) do not serve areas 
containing any part of an incorporated place of 10,000 or more 
inhabitants, or any incorporated or unincorporated territory in 
an urbanized area, or (ii) have fewer than 100,000 access lines 
in a State.
      New subsection (ss) adds to the Communications Act a 
definition of ``service area.'' ``Service area'' means a 
geographic area established by the Commission and the State for 
the purpose of determining universal service obligations and 
support mechanisms. The service area of a rural telephone 
company means such company's study area until the Commission 
and States, based on a recommendation of a Federal-State Joint 
Board, establish a different definition.
House amendment
      Subsection (a) of section 501 adds new definitions, 
including for ``information service,'' ``telecommunications,'' 
``telecommunications service,'' ``telecommunications 
equipment,'' ``local exchange carrier,'' ``affiliate,'' 
``customer premises equipment,'' ``electronic publishing,'' 
``exchange area,'' and ``rural telephone company.'' 
``Information service'' and ``telecommunications'' are defined 
based on the definition used in the Modification of Final 
Judgment. The definition of ``telecommunications'' refers to 
transmission ``by means of an electromagnetic transmission 
medium.''
      The term ``local exchange carrier'' does not include a 
person insofar as such person is engaged in the provision of 
CMS under section 332(c) of the Communications Act, except to 
the extent that the Commission finds that such service as 
provided by such person in a State is a replacement for a 
substantial portion of the wireless telephone exchange service 
within such State.
      The term ``telecommunications service'' is defined as 
those services and facilities offered on a ``common carrier'' 
basis, recognizing the distinction between common carrier 
offerings that are provided to the public or to such classes of 
users as to be effectively available to a substantial portion 
of the public, and private services.
      This section defines the term ``rural telephone company'' 
to mean a local exchange carrier (LEC) to the extent that such 
carrier an services unincorporated area of less than 10,000 
residents, or any territory defined by the Bureau of the Census 
as a rural area; or if such carrier has fewer than 50,000 
access lines; or if such carrier provides telephone exchange 
service to a local study area with fewer than 100,000 access 
lines; or if such carrier has less than 15 percent of the 
access lines in communities of more than 50,000 residents.
      The definition of a ``Bell Operating Company'' does not 
include an entity that owns a former Bell Operating Company's 
wireless operations that are no longer affiliated with a Bell 
Operating Company's wireline exchange facilities.
Conference agreement
      Section 3(a) of the conference agreement both amends and 
adds definitions to section 3 of the Communications Act. The 
Senate recedes to the House with respect to the definitions of 
``cable system,'' ``customer premises equipment,'' ``dialing 
parity,'' ``interLATA service,'' ``LATA,'' ``rural telephone 
company,'' and ``telecommunications equipment,'' as well as on 
the House amendment to the existing definition of ``telephone 
exchange service.'' The Senate recedes to the House with 
amendments regarding the definitions of ``Bell Operating 
Company,'' ``exchange access,'' ``information service,'' and 
``local exchange carrier.''
      The Senate definition of ``Bell Operating Company'' was 
included; however, the conference agreement included the 
language in the House amendment clarifying that the term the 
``successor and assign'' is limited to those providing wireline 
telephone exchange service so that Airtouch Communications, a 
former affiliate of Pacific Telesis that does not provide 
wireline telephone exchange service, or any other similarly 
situated former affiliate of a Bell Operating Company 
(``BOC''), is not included in that definition. The Senate 
definition of ``local exchange carrier'' was included to ensure 
that the Commission could, if future circumstances warrant, 
include CMS providers which provide telephone exchange service 
or exchange access in the definition of ``local exchange 
carrier.''
      The House recedes to the Senate with respect to the 
definitions of ``affiliate'' and ``cable service.'' The House 
recedes to the Senate with amendments with respect to the 
definitions of ``number portability,'' ``telecommunications,'' 
``telecommunications carrier,'' and ``telecommunications 
service.''
      The conference agreement includes two new definitions to 
clarify certain provisions in the Senate bill and the House 
amendment. The term ``AT&T; Consent Decree'' was substituted for 
``Modification of Final Judgment'' in order to characterize 
more accurately the intent of the Senate bill and House 
amendment with respect to the supersession issues addressed in 
title VI. The term ``network element'' was included to describe 
the facilities, such as local loops, equipment, such as 
switching, and the features, functions, and capabilities that a 
local exchange carrier must provide for certain purposes under 
other sections of the conference agreement.
      The House recedes to the Senate with an amendment with 
respect to new subsection 3(b) of the conference agreement, 
which provides that, except where otherwise provided, the terms 
used in the conference agreement have the same meaning as those 
terms have in the Communications Act.
      The Senate recedes to the House amendment with respect to 
new subsection 3(c) of the conference agreement, which amends 
section 3 of the Communications Act to reorder the definitions 
in that section alphabetically and to make other stylistic 
changes.

                  TITLE I--TELECOMMUNICATIONS SERVICES

                Subtitle A--Telecommunications Services

                      section 101--interconnection

Senate bill
      The Senate bill creates new sections of the 
Communications Act to create competitive markets.
House amendment
      The House amendment creates new sections of the 
Communications Act to create competitive markets.
Conference agreement
      Section 101 of the conference agreement establishes a new 
``Part II'' of title II of the Communications Act. Part II 
contains new sections 251-261 of the Communications Act to 
create competitive communications markets.

                    new section 251--interconnection

Senate bill
      New subsection 251(a) imposes a duty on local exchange 
carriers possessing market power in the provision of telephone 
exchange service or exchange access service in a particular 
local area to negotiate in good faith and to provide 
interconnection with other telecommunications carriers that 
have requested interconnection for the purpose of providing 
telephone exchange service or exchange access service. The 
obligations and procedures prescribed in this section do not 
apply to interconnection arrangements between local exchange 
carriers and telecommunications carriers under section 201 of 
the Communications Act for the purpose of providing 
interexchange service, and nothing in this section is intended 
to affect the Commission's access charge rules. Local exchange 
carriers with market power are required to provide 
interconnection at reasonable and nondiscriminatory rates.
      The Commission will determine which local exchange 
carriers have market power for purposes of this section. In 
determining market power, the relevant market shall include all 
providers of telephone exchange service or exchange access 
service in a local service area, regardless of the technology 
used to provide such service.
      The obligation to negotiate interconnection shall apply 
to a local exchange carrier or a class of local exchange 
carriers that are determined by the Commission to have market 
power in providing exchange services. The references to a 
``class'' of carriers are intended to relieve the Commission of 
the need to make a separate market power determination for each 
individual carrier. These references are not intended to 
require the local exchange carriers to engage in negotiations 
as a class, although subsection 251(a)(2) provides that 
multilateral negotiations are permitted. However, a local 
exchange carrier that chooses to participate in multilateral 
negotiations will be subject to an individual obligation to 
negotiate in good faith and will remain subject to the time 
limitations contained in this and other provisions of section 
251.
      New section 251 provides two alternative methods for 
reaching interconnection agreements.
      New subsection 251(b) provides a list of minimum 
standards relating to types of interconnection the local 
exchange carrier must agree to provide, if sought by the 
telecommunications carrier requesting interconnection. The 
minimum standards include unbundled access to the network 
functions and services of the local exchange carrier's network, 
and unbundled access to the local exchange carrier's 
telecommunications facilities and information, including 
databases and signaling, that are necessary for transmission 
and routing and the interoperability of both carriers' 
networks. The negotiation process established by this section 
is intended to resolve questions of economic reasonableness 
with respect to the interconnection requirements. That is, 
either the parties resolve the issue or the State will impose 
conditions for interconnection consistent with section 251 and 
the Commission's rules.
      The minimum standards also require interconnection to the 
local exchange carrier's network that is at least equal in 
type, quality, and price to the interconnection the carrier 
provides to any other party, including itself or affiliated 
companies. At a minimum, the Senate intends that any 
technically feasible point would be any point at which the 
local exchange carrier provides access to any other party, 
including itself or any affiliated entry. Access to poles, 
ducts, conduits, and rights-of-way owned or controlled by the 
local exchange carrier is also a minimum standard.
      Number portability and local dialing parity are included 
in the minimum standards of subsection 251(b). If requested, a 
local exchange carrier must take any action under its control 
to provide interim or final number portability as soon as it is 
technically feasible. Section 307 of the bill adds new section 
261 of the Communications Act which establishes a neutral 
telecommunications numbering administration and defines interim 
and final number portability. The Commission will determine 
when final number portability is technically feasible. A 
similar requirement applies to local dialing parity.
      The minimum standards also cover resale or sharing of the 
local exchange carrier's unbundled telecommunications services 
and network functions. The carrier is not permitted to attach 
unreasonable conditions to the resale or sharing of those 
services or functions. Subsection 251(b) provides certain 
circumstances where it would not be unreasonable for a State to 
limit the resale of services included within the definition of 
universal service.
      Additional minimum standards relate to reciprocal 
compensation arrangements, including in-kind exchange of 
traffic or traffic balance measures, reasonable notice of 
changes in the information necessary for transmission and 
routing of services over the carrier's network, and schedules 
of itemized charges and conditions.
      Subsection 251(i) requires the Commission to promulgate 
rules to implement section 251 within 6 months after enactment. 
If a State fails to carry out its responsibilities under 
section 251 in accordance with the rules promulgated by the 
Commission, the Senate intends that the Commission assume the 
responsibilities of the State in the applicable proceeding or 
matter.
      Subsection 251(i) also requires the Commission or a State 
to waive or modify the requirements of the minimum standards of 
subsection 251(b) in the case of a rural telephone company, and 
allows the Commission or a State to waive or modify those 
requirements in the case of a local exchange carrier with fewer 
than two percent of the nation's subscriber lines installed in 
the aggregate nationwide. In order to waive or modify the 
requirements of subsection 251(b) for such companies or 
carriers, the Commission or a State must determine that the 
application of such requirements would result in unfair 
competition, impose a significant adverse economic impact on 
users of telecommunications services, be technically 
infeasible, or otherwise not be in the public interest. The 
Senate intends that the Commission or a State shall, consistent 
with the protection of consumers and allowing for competition, 
use this authority to provide a level playing field, 
particularly when a company or carrier to which this subsection 
applies faces competition from a telecommunications carrier 
that is a large global or nationwide entity that has financial 
or technological resources that are significantly greater than 
the resources of the company or carrier.
      New subsection 251(j) provides that nothing in section 
251 precludes a State from imposing requirements on 
telecommunications carriers with respect to intrastate services 
that the State determines are necessary to further competition 
in the provision of telephone exchange service or exchange 
access service, so long as any such requirements are not 
inconsistent with the Commission's rules to implement section 
251.
      New subsection 251(k) provides that nothing in section 
251 is intended to change or modify the Commission's rules at 
47 CFR 69 et seq. regarding the charges that an interexchange 
carrier pays to local exchange carriers for access to the local 
exchange carrier's network. The Senate also does not intend 
that section 251 should affect regulations implemented under 
section 201 with respect to interconnection between 
interexchange carriers and local exchange carriers.
      Section 307 of the bill adds a new section 261 to the 
Communications Act. New section 261 requires local exchange 
carriers to provide for number portability and also requires 
the neutral administration of a nationwide telephone numbering 
system.
      Subsection 261(a) requires that, as of the date of 
enactment, interconnection agreements reached under section 251 
must, if requested, provide for interim number portability.
      Interim number portability may require that calls to or 
from the subscriber be routed through the local exchange 
carrier's switch. Some method of call forwarding or similar 
arrangement could be used to satisfy this requirement. The 
method of providing interim number portability and the amount 
of compensation, if any, for providing such service is subject 
to the negotiated interconnection agreement, pursuant to 
section 251.
      Subsection 261(b) provides that final number portability 
shall be made available, upon request, when the Commission 
determines that final telecommunications portability is 
technically feasible. Subsection 261(d) states that the cost of 
such number portability shall be borne by all providers on a 
competitively neutral basis.
      Subsection 261(c) of new section 261 requires that all 
providers of telephone exchange service or exchange access 
service comply with the guidelines, rules, or plans, of the 
entity or entities responsible for administering a nationwide 
neutral number system. This provision is not intended to affect 
the Commission's ongoing proceeding on numbering 
administration.
      Subsection 261(c)(2) requires that all telecommunications 
carriers which provide local exchange or exchange access 
service in the same telephone service area be assigned the same 
numbering plan area code.
House amendment
      Section 241 of section 101 of the House amendment 
restates the obligation contained in section 201(a) of the 
Communications Act on all common carriers to interconnect with 
the facilities and equipment of other providers of 
telecommunications services and information services.
      Section 242(a)(1) sets out the specific requirements of 
openness and accessibility that apply to LECs as competitors 
enter the local market and seek access to, and interconnection 
with, the incumbent's network facilities. Under section 
242(a)(2), LECs have the duty to offer unbundled services, 
elements, features, functions, and capabilities whenever 
technically feasible. Section 242(a)(3) imposes the duty to 
offer resale at wholesale rates, which are defined as retail, 
less the avoided costs. Section 242(a)(4) sets out the duty to 
provide number portability, to the extent technically feasible. 
Section 242(a)(5) sets out the duty to provide dialing parity. 
Section 242(a)(6) sets out the duty to afford access to the 
poles, ducts, conduits, and rights-of-way of the incumbent 
carrier, as provided under the pole attachment provisions of 
the Communications Act. Section 242(a)(7) places the 
responsibility on local telephone companies not to install 
network features, functions, and capabilities that violate the 
requirement of network functionality and accessibility. Section 
242(a)(8) places a duty on both parties to negotiate in good 
faith on all requirements relating to interconnection 
agreements.
      Section 242(b)(1) describes the specific terms and 
conditions for interconnection, compensation, and equal access, 
which are integral to a competing provider seeking to offer 
local telephone services over its own facilities. Under section 
242(b)(2), any interconnection agreement entered into must 
provide for mutual and reciprocal recovery of costs, and may 
include a range of compensation schemes, such as an in-kind 
exchange of traffic without cash payment (known as bill-and-
keep arrangements). Under section 242(b)(3), the LEC has a 
responsibility to offer reasonable and nondiscriminatory access 
on an unbundled basis ``that is equal in type and quality'' to 
that which it affords itself or any other person. Section 
242(b)(4) directs the Commission to establish regulations 
requiring actual collocation, or physicial collocation, of 
equipment necessary for interconnection at the premises of an 
LEC, except that virtual collocation is permitted where the LEC 
demonstrates that actual collocation is not practical for 
technical reasons or because of space limitations.
      This section also directs the Commission to establish 
regulations requiring full compensation to the LEC for costs of 
providing services related to equal access, interconnection, 
number portability, and unbundling and requires a carrier, to 
the extent it provides a telecommunications service or an 
information service over its own network, to impute to itself 
the charge for access and interconnection that it charges other 
persons for providing such services. Subsection 242(c) mandates 
the manner in which number portability and dialing parity must 
be provided. This section does not require intraLATA toll 
dialing parity until a BOC is authorized to offer long distance 
service.
      Section 242(d)(1) prohibits a provider from joint 
marketing of local and interLATA toll service until the BOC in 
that State is authorized to provide long distance service 
pursuant to section 245. Section 242(d)(2) grandfathers joint 
marketing arrangements in place before the date of enactment. 
Section 242(e) grants to the Commission the authority to waive 
or modify, in whole or in part, the requirements of section 242 
for any carrier that has, in the aggregate nationwide, fewer 
than 500,000 access lines installed, to the extent that the 
Commission determines the effect of the requirements would be 
economically burdensome, or technologically infeasible. Section 
242(f) gives State commissions the authority to waive section 
242 requirements with respect to rural telephone companies, and 
subsection 242(g) sets out the time and manner for compliance 
if the State determines that the exemption should not apply.
Conference agreement
      The conference agreement adopts a new model for 
interconnection that incorporates provisions from both the 
Senate bill and House amendment in a new section 251 of the 
Communications Act. New section 251(a) imposes a general duty 
to interconnect directly or indirectly between all 
telecommunications carriers and the duty not to install network 
features and functions that do not comply with the guidelines 
and standards established under new sections 255 and 256 of the 
Communications Act.
      New section 251(b) imposes several duties on all local 
exchange carriers, including the ``new entrants'' into the 
local exchange market. These include the duties: (1) not to 
prohibit resale of their service; (2) to provide number 
portability; (3) to provide dialing parity; (4) to afford 
access to poles, ducts, conduits, and rights-of-way consistent 
with the pole attachment provisions in section 224 of the 
Communications Act; and (5) to establish reciprocal 
compensation arrangements for the transport and termination of 
traffic. The conferees note that the duties imposed under new 
section 251(b) make sense only in the context of a specific 
request from another telecommunications carrier or any other 
person who actually seeks to connect with or provide services 
using the LEC's network.
      New section 251(c) imposes several additional obligations 
on incumbent LEC's. These include the duties: (1) to negotiate 
in good faith, subject to the provisions of section 252, 
binding agreements to provide all of the obligations imposed in 
new sections 251(b) and 251(c); (2) to provide interconnection 
at any technically feasible point of the same type and quality 
it provides to itself, on just, reasonable, and 
nondiscriminatory terms and conditions; (3) to provide access 
to network elements on an unbundled basis; (4) to offer resale 
of its telecommunications services at wholesale rates; (5) to 
provide reasonable public notice of changes to its network; and 
(6) to provide physical collocation, or virtual collocation if 
physical collocation is not practical.
      New section 251(d) requires the Commission to adopt 
regulations to implement new section 251 within 6 months, and 
states that nothing precludes the enforcement of State 
regulations that are consistent with the requirements of new 
section 251. New section 251(e) clarifies the Commission's 
authority for numbering administration. The costs for numbering 
administration and number portability shall be borne by all 
providers on a competitively neutral basis.
      New section 251(f)(1) provides for the exemption of rural 
telephone companies from the requirements of new subsection (c) 
until a bona fide request is received that the State commission 
determines is not unduly economically burdensome, is 
technically feasible, and is consistent with the universal 
service provisions of new section 254, except the specific 
public interest determinations thereunder. The State commission 
receiving notice of a bona fide request must rule on it within 
120 days and, if no exemption is granted, shall establish a 
schedule for compliance with the request. The exemption is not 
available where an incumbent cable operator makes a request to 
an incumbent telephone company providing video programming in 
the same service area, except where rural telephone companies 
offer video programming directly to subscribers on the date of 
enactment.
      New section 251(f)(2) allows a local exchange carrier 
with less than 2% of the subscribed access lines nationwide to 
petition for a suspension or modification of the requirements 
under new sections 251(b) and 251(c) for the telephone exchange 
service facilities specified in the petition. The State 
commission shall grant the petition to the extent that it is 
necessary to avoid significant adverse impacts on consumers, 
imposing an undue economic burden or a technically infeasible 
requirement on the incumbent, and provided that the 
modification or suspension is in the public interest.
      The approach of both the Senate bill and the House 
amendment assumed that Bell Operating Companies (``BOCs'') 
would be required to continue to provide equal access and 
nondiscrimination to interexchange carriers and information 
service providers under those parts of the AT&T; Consent Decree 
that would have remained in effect under either approach. 
Because the new approach completely eliminates the prospective 
effect of the AT&T; Consent Decree, some provision is necessary 
to keep these requirements in place. By the same token, 
although not specifically addressed in either the Senate bill 
or the House amendment, some provision is also needed to ensure 
that the GTE Operating Companies that provide local exchange 
services continue to provide equal access and nondiscrimination 
to interexchange carriers and information service providers.
      Accordingly, the conference agreement includes a new 
section 251(g). This section provides that, on and after the 
date of enactment, each local exchange carrier, to the extent 
that it provides wireline services, shall have a statutory duty 
to provide equal access and nondiscrimination to interexchange 
carriers and information service providers. In the interim, 
between the date of enactment and the date the Commission 
promulgates new regulations under this section, the substance 
of this new statutory duty shall be the equal access and 
nondiscrimination restrictions and obligations, including 
receipt of compensation, that applied to the local exchange 
carrier immediately prior to the date of enactment, regardless 
of the source. When the Commission promulgates its new 
regulations, the conferees expect that the Commission will 
explicitly identify those parts of the interim restrictions and 
obligations that it is superseding so that there is no 
confusion as to what restrictions and obligations remain in 
effect. These interim restrictions and obligations shall be 
enforceable in the same manner as Commission regulations.
      Even though the substance of the interim restrictions and 
obligations on the BOCs and GTE Operating Companies will be 
taken from the respective consent decrees, these restrictions 
and obligations shall not be enforceable under either consent 
decree because the provisions of section 601(a) of the bill 
eliminate the prospective effect of both consent decrees. The 
use of the provisions of the respective consent decrees to 
provide, on an interim basis, the substance of the new 
statutory duty in no way revives the consent decrees. In 
particular, the use of the provisions of the GTE consent decree 
relating to equal access and nondiscrimination on this interim 
basis should not be construed in any way as recreating or 
continuing the GTE Consent Decree's prohibition on GTE's or the 
GTE Operating Companies' entry into the interexchange market.
      The old consent decree obligations no longer exist with 
respect to post-enactment conduct, and the new obligations flow 
only from the statute. These new statutory obligations shall be 
enforceable only through the means provided under law for the 
enforcement of Commission regulations. Nothing in this section 
should be construed as providing any authority for the 
enforcement of these statutory obligations under either of the 
consent decrees from which their substance will be taken. 
Nothing in this section should be construed as requiring any 
parties to renegotiate any agreements currently in existence 
unless the new Commission regulations under this section 
require such renegotiation.
      New subsection 251(h) provides the definition of 
``incumbent local telephone carrier.''
      New subsection 251(i) makes clear the conferees' intent 
that the provisions of new section 251 are in addition to, and 
in no way limit or affect, the Commission's existing authority 
regarding interconnection under section 201 of the 
Communications Act.

new section 252--procedures for negotiation, arbitration, and approval 
                             of agreements

Senate bill
      Section 251(c) makes clear that a local exchange carrier 
may meet its section 251 interconnection obligations by 
negotiating and entering into a binding agreement that does not 
reflect the minimum standards listed in section 251(b). Each 
such negotiated interconnection agreement must include a 
schedule of itemized charges for each service, facility, or 
function included in the agreement, and must be submitted to a 
State under section 251(e).
      Section 251(d) provides procedures under which any party 
negotiating an interconnection agreement may ask the State to 
participate in the negotiations and to arbitrate any 
differences arising in the negotiations. A State may be asked 
to arbitrate at any point in the negotiations.
      In addition to the possibility of arbitration by the 
State, section 251(d) provides a more formal remedy under which 
any party may petition the State to intervene in the 
negotiations. If issues remain unresolved more than 135 days 
after the date the local exchange carrier received the request 
to negotiate, any party to the negotiations may petition the 
State to intervene for the purpose of resolving any issues that 
remain open in the negotiation. Requests to the State to 
intervene must be made during the 25 day period that begins 135 
days after the local exchange carrier received the negotiation 
request. The State is required to resolve any open issues and 
conduct its review of the agreement under section 251(e) not 
later than 10 months after the date the local exchange carrier 
received the request to negotiate. In resolving any open issues 
the solution imposed by a State must be consistent with the 
Commission's rules to implement this section, the minimum 
standards required under section 251(b) and the provisions of 
section 251(d)(6) with respect to any charges imposed.
      Section 251(e) requires that any interconnection 
agreement under section 251 must be submitted to the State for 
approval. The State must approve or reject the agreement and 
make written findings as to any deficiencies in the agreement. 
An agreement successfully negotiated under subsection (c) by 
the parties without regard to the minimum standards set forth 
in section 251(b) may only be rejected if the State finds the 
agreement discriminates against a telecommunications carrier 
that is not a party to the agreement. The State may reject 
interconnection agreements negotiated under subsection (d) if 
the State finds the agreement does not meet the minimum 
standards set forth in subsection 251(b), or if the State finds 
that implementation of the agreement is not in the public 
interest.
      Section 251(f) requires a State to make a copy of each 
agreement approved by the State under section 251(e) available 
for public inspection and copying within 10 days after the 
agreement is approved.
      Section 251(g) requires a local exchange carrier to make 
available any service, facility, or function provided under an 
interconnection agreement to which that local exchange carrier 
is a party to any other telecommunications carrier that 
requests such service, facility, or function on the same terms 
and conditions as are provided in that agreement.
      Section 251(i) provides that if a State fails to carry 
out its responsibilities under section 251 in accordance with 
the rules promulgated by the Commission, the Commission shall 
assume the responsibilities of the State in the applicable 
proceeding or matter.
House amendment
      Section 244 of the House amendment requires, within 
eighteen months, an exchange carrier to file with the State 
commission in that State in which it is offering service, and 
with the Commission for interstate services, a statement of 
terms and conditions confirming that it is in compliance with 
the section 242 requirements.
      Section 244(b)(1) provides for State commission review of 
an exchange carrier's statement and permits a State to impose 
its own intrastate service standards. Paragraph (2) requires 
the Commission to conduct a similar review. Under section 
244(c), both reviews must be completed within 60 days of the 
submission of statements to the respective regulatory 
authorities, or simply be allowed to take effect, as commonly 
occurs at present with most tariffs. Section 244(c)(2) 
clarifies that the authority to review the statements does not 
terminate once they take effect.
      Section 244(d) allows an exchange carrier to file an 
agreement as a statement of services under section 244(a). It 
also permits exchange carriers to enter into subsequent 
agreements on different terms and conditions, but with two 
caveats. First, the subsequent agreement must undergo the same 
review process, and second, it may not be discriminatory with 
respect to other agreements it has entered into.
      Finally, subsection (e) sunsets the requirement of filing 
statements of terms and conditions once the local exchange 
market is deemed competitive.
Conference agreement
      In new section 252(a), the House recedes to the Senate 
with an amendment to provide that any party may ask the State 
to participate during a voluntary negotiation period in the 
mediation of agreements. Agreements arrived at voluntarily do 
not need to meet the requirements of new section 251(b) and 
(c).
      The House recedes to the Senate on new section 252(b), 
with an amendment to clarify the role of a State commission in 
arbitrating and resolving agreements at the request of any of 
the parties.
      New section 252(c) requires a State commission to ensure 
that any resolution of unresolved issues in a negotiation meets 
the requirements of new section 251 and any regulations to 
implement that section. To the extent that a State establishes 
the rates for specific provisions of an agreement, it must do 
so according to new section 252(d). In addition, a State must 
provide a schedule for implementation of the terms of the 
agreement.
      New section 252(d) combines the pricing standards in the 
Senate bill and the House amendment. Charges for 
interconnection under new section 251(c)(2) and for network 
elements under new section 251(c)(3) are to be determined based 
on cost and may include a reasonable profit. Charges for 
transport and termination of traffic pursuant to new section 
251(b)(5) are to be based on reciprocal compensation. The 
wholesale rate for resold telecommunications services under new 
section 251(c)(4) is to be determined by the State commission 
on the basis of the retail rate charged to subscribers of such 
telecommunications services, excluding costs that will be 
avoided by the incumbent carrier.
      The House recedes to the Senate on new section 252(e). 
Agreements arrived at through voluntary negotiation or 
compulsory arbitration must be approved by the State commission 
under new section 252(e), which provides a specific timetable 
for State action, provides Commission authority to act if a 
State does not, and preserves State authority to enforce State 
law requirements in agreements approved under this section.
      The Senate recedes to the House with an amendment to new 
section 252(f), which permits a BOC to file a statement of the 
terms and conditions under which it generally offers 
interconnection and access to network elements. Any such 
statement must be approved by the State commission.
      New section 252(g) was included by the conferees to 
permit a State commission, to the extent practical, to 
consolidate certain proceedings required under the 
Communications Act to promote administrative efficiency.
      New section 252(h) requires that all agreements or 
statements approved by a State commission be available from 
such commission for public inspection and copying.
      New section 252(i) requires a local exchange carrier to 
make available on the same terms and conditions to any 
telecommunications carrier that requests it any 
interconnection, service, or network element that the local 
exchange carrier provides to any other party under an approved 
agreement or statement.
      New section 252(j) states that the term ``incumbent local 
exchange carrier'' has the same meaning as that term has in new 
section 251(h).

             new section 253--removal of barriers to entry

Senate bill
      Section 20(a) adds a new section 254 to the 
Communications Act and is intended to remove all barriers to 
entry in the provision of telecommunications services.
      Subsection (a) of new section 254 preempts any State and 
local statutes and regulations, or other State and local legal 
requirements, that may prohibit or have the effect of 
prohibiting any entity from providing interstate or intrastate 
telecommunications services.
      Subsection (b) of section 254 preserves a State's 
authority to impose, on a competitively neutral basis and 
consistent with universal service provisions, requirements 
necessary to preserve and advance universal service, protect 
the public safety and welfare, ensure the continued quality of 
telecommunications services, and safeguard the rights of 
consumers. States may not exercise this authority in a way that 
has the effect of imposing entry barriers or other prohibitions 
preempted by new section 254(a).
      Subsection (c) of new section 254 provides that nothing 
in new section 254 affects the authority of States or local 
governments to manage the public rights-of-way or to require, 
on a competitively neutral and nondiscriminatory basis, fair 
and reasonable compensation for the use of public rights-of-
way, on a nondiscriminatory basis, provided any compensation 
required is publicly disclosed.
      Subsection (d) requires the Commission, after notice and 
an opportunity for public comment, to preempt the enforcement 
of any State or local statutes, regulations or legal 
requirements that violate or are inconsistent with the 
prohibition on entry barriers contained in subsections (a) or 
(b) of section 254.
      Subsection (e) of new section 254 simply clarifies that 
new section 254 does not affect the application of section 
332(c)(3) of the Communications Act to CMS providers.
      Section 309 adds a new section 263 to the Communications 
Act and is intended to permit States to adopt certain statutes 
or regulations regarding the provision of service by competing 
telecommunications carriers in rural markets. Such statutes or 
regulations may be no more restrictive than the criteria set 
forth in section 309. The Commission is authorized to preempt 
any State statute or regulation that is inconsistent with the 
Commission's regulations implementing this section.
House amendment
      The House provisions are identical or similar to 
subsections 254(a), (b) and (c). The House amendment does not 
have a similar provision (d) requiring the Commission to 
preempt State or local barriers to entry, if it makes a 
determination that they have been erected.
Conference agreement
      The conference agreement adopts the Senate provisions.
      New section 253(b) clarifies that nothing in this section 
shall affect the ability of a State to safeguard the rights of 
consumers. In addition to consumers of telecommunications 
services, the conferees intend that this includes the consumers 
of electric, gas, water or steam utilities, to the extent such 
utilities choose to provide telecommunications services. 
Existing State laws or regulations that reasonably condition 
telecommunications activities of a monopoly utility and are 
designed to protect captive utility ratepayers from the 
potential harms caused by such activities are not preempted 
under this section. However, explicit prohibitions on entry by 
a utility into telecommunications are preempted under this 
section.
      The rural markets provision in section 309 of the Senate 
bill is simplified and moved to this section. The modification 
clarifies that, without violating the prohibition on barriers 
to entry, a State may require a competitor seeking to provide 
service in a rural market to meet the requirements for 
designation as an eligible telecommunications carrier. That is, 
the State may require the competitor to offer service and 
advertise throughout the service area served by a rural 
telephone company. The provision would not apply if the rural 
telephone company has obtained an exemption, suspension, or 
modification under new section 251(f) that effectively prevents 
a competitor from meeting the eligible telecommunications 
carrier requirements. In addition, the provision would not 
apply to providers of CMS.

                   new section 254--Universal Service

Senate bill
      Section 103 of the bill establishes a Federal-State Joint 
Board to review existing universal service support mechanisms 
and make recommendations regarding steps necessary to preserve 
and advance this fundamental communications policy goal. 
Section 103 also adds a new section 253, entitled ``Universal 
Service,'' to the Communications Act. As new section 253 
explicitly provides, the Senate intends that States shall 
continue to have the primary role in implementing universal 
service for intrastate services, so long as the level of 
universal service provided by each State meets the minimum 
definition of universal service established under new section 
253(b) and a State does not take any action inconsistent with 
the obligation for all telecommunications carriers to 
contribute to the preservation and advancement of universal 
service under new section 253(c).
      Section 103(a) of the bill requires the Commission to 
institute a Federal-State Joint Board under section 410(c) of 
the Communications Act to recommend within 9 months of the date 
of enactment new rules regarding implementation of universal 
service.
      Section 103(a) also provides that at least once every 
four years the Commission is required to institute a new Joint 
Board proceeding to review the implementation of new section 
253 regarding universal service, and to make recommendations 
regarding any changes that are needed.
      Section 103(b) of the bill requires the Commission to 
complete any proceeding to implement the recommendations of the 
initial Joint Board within one year of the date of enactment of 
the bill, any other Joint Board on universal service matters 
within one year of receiving such recommendations.
      Section 103(c) of the bill simply clarifies that the 
amendments to the Communications Act made by the Senate bill do 
not necessarily affect the Commission's existing separations 
rules for local exchange or interexchange carriers. However, 
this subsection does not prohibit or restrict the Commission's 
ability to change those separations rules through an 
appropriate proceeding.
      Section 103(d) establishes new section 253 in the 
Communications Act. New section 253(a) establishes seven 
principles on which the Joint Board and the Commission shall 
base policies for the preservation and advancement of universal 
service.
      Subsection (b) of new section 253 provides that the 
Commission shall define universal service, based on 
recommendations from the public, Congress, and the Joint Board. 
To ensure that the definition of universal service evolves over 
time to keep pace with modern life, the subsection requires the 
Commission to include, at a minimum, any telecommunications 
service that is subscribed to by a substantial majority of 
residential customers.
      Subsection (c) of new section 253 requires all 
telecommunications carriers to contribute on an equitable and 
nondiscriminatory basis to the preservation and advancement of 
universal service. The Commission or a State may require any 
other telecommunications provider, such as private 
telecommunications providers, to contribute to the preservation 
and advancement of universal service, if the public interest so 
requires.
      Subsection (d) of new section 253 provides that a State 
may adopt additional definitions, mechanisms, and standards to 
preserve and advance universal service within such State, 
provided that they are not inconsistent with the regulations of 
the Commission. A State must adopt separate support mechanisms 
for any additional standards or definitions required by the 
State.
      Subsection (e) of new section 253 provides that only 
telecommunications carriers that are designated as essential 
telecommunications carriers under new section 214(d) shall be 
eligible to receive support payments, if any, established by 
the Commission or a State to preserve and advance universal 
service. Any such support payments must accurately reflect the 
amount reasonably necessary to preserve and advance universal 
service.
      Subsection (e) is not intended to prohibit support 
mechanisms that directly help individuals afford universal 
service.
      Subsection (f) of new section 253 directs the Commission 
and the States to make universal service support explicit and 
to ensure that essential telecommunications carriers are able 
to provide universal service at just, reasonable and affordable 
rates. Carriers receiving such support must use it to provide 
service in the area for which the support was received.
      Subsection (g) of new section 253 simply incorporates in 
the Communications Act the existing practice of geographic rate 
averaging and rate integration for interexchange, or long 
distance, telecommunications rates to ensure that rural 
customers continue to receive such service at rates that are 
comparable to those charged to urban customers. States shall 
continue to be responsible for enforcing this subsection with 
respect to intrastate interexchange services, so long as the 
State rules are not inconsistent with Commission rules and 
policies on rate averaging.
      Subsection (h) of new section 253 prohibits 
telecommunications carriers from subsidizing competitive 
services with revenues from non-competitive services. The 
Commission and the States are required to establish any 
necessary cost allocation rules, accounting safeguards, and 
other guidelines to ensure that universal service bears no more 
than a reasonable share (and may bear less than a reasonable 
share) of the joint and common costs of facilities used to 
provide both competitive and noncompetitive services.
      Subsection (i) of new section 253 requires the Commission 
to submit a report to Congress prior to increasing support for 
universal service or requiring increased participation by 
telecommunications carriers. Any such increase cannot take 
effect until 120 days after the report is submitted to 
Congress.
      Subsection (j) of new section 253 states that nothing in 
new section 253 limits or expands the Commission's authority 
with respect to universal service.
      Subsection (k) of new section 253 states that the 
subsections that provide that all telecommunications carriers 
shall contribute to universal service, preserve the States' 
authority to adopt their own definitions and mechanisms, 
establish eligibility for universal service support, and 
control the level of universal service support shall take 
effect one year after the date of enactment of this bill.
      Section 310 of the Senate bill, known as the Snowe-
Rockefeller-Exon-Kerrey Amendment, provides for preferential 
rates to schools, libraries and rural health care facilities.
House amendment
      Section 247(a) establishes a Federal-State Joint Board, 
pursuant to section 410(c) of the Communications Act, for the 
purpose of recommending actions the Commission and the States 
should take to preserve universal service.
      Section 247(b) sets forth six principles upon which the 
Board shall base its policies for the preservation of universal 
service.
      Section 247(b)(1) states that any plan adopted should 
maintain just and reasonable rates. Section 247(b)(2) states 
that the Joint Board should recommend a definition of the 
nature and extent of services included within the carriers' 
obligations to provide universal service. Section 247(b) (3) 
and (4) state that the plan should provide adequate and 
sustainable support mechanisms and require equitable and non-
discriminatory contributions from all providers to support the 
plan. The plan should also seek to promote access to advanced 
telecommunications services and reasonably comparable services 
between rural and urban areas. Section 247(b)(5) directs that 
the plan include recommendations to ensure access to advanced 
telecommunications services for students in elementary and 
secondary schools.
      Section 247(c) requires the Joint Board, in defining 
carrier obligations with respect to universal service pursuant 
to subsection (b)(2), to consider several factors: (1) the 
extent to which a telecommunications service has been 
subscribed to by customers; (2) whether such service is 
essential to public health, safety, or the public interest; (3) 
whether such service is deployed in the public switched 
network; and (4) whether inclusion of such service is otherwise 
consistent with the public interest, convenience, and 
necessity.
      Section 247(d) requires that the Joint Board be convened 
and report its recommendations within 270 days after enactment. 
The Commission is required to act on the recommendations within 
one year.
      Section 247(e) makes clear that States are free to adopt 
regulations imposing universal service obligations on 
intrastate services.
      Section 247(f) sunsets the Joint Board created by this 
section five years after enactment.
Conference agreement
      The conference agreement amends the Communications Act to 
add a new section 254 entitled ``Universal Service.'' The House 
recedes to the Senate with modifications. New section 254(a) 
incorporates the provisions of section 103(a) of the Senate 
bill, with the addition of a State-appointed utility consumer 
advocate to the Joint Board. The conferees intend that, in 
making its recommendations to the Commission, the Joint Board 
will thoroughly review the existing system of Federal universal 
service support.
      To the extent possible, the conferees intend that any 
support mechanisms continued or created under new section 254 
should be explicit, rather than implicit as many support 
mechanisms are today. In addition, the conferees do not view 
the existing proceeding under Common Carrier Docket 80-286 
(regarding Amendment of Part 36 of the Commission's Rules and 
appointment of a Joint Board) as an appropriate foundation on 
which to base the proceeding required by new section 254(a).
      New section 254(b) combines the principles found in both 
the Senate bill and the House amendment, with the addition of 
``insular areas'' (such as the Pacific Island territories) and 
``low-income consumers'' to the list of consumers to whom 
access to telecommunications and information services should be 
provided.
      New section 254(c) defines universal service as ``an 
evolving level of telecommunications services'' established 
periodically by the Commission. The definition is to take into 
account advances in telecommunications and information 
technology, and should be based on a consideration of the four 
criteria set forth in the subsection. The Commission is given 
specific authority to alter the definition from time to time, 
and to provide a different definition for schools, libraries, 
and health care facilities.
      New section 254(d) requires that all telecommunications 
carriers providing interstate telecommunications services shall 
contribute to the preservation and advancement of universal 
service. The Commission is given specific authority to exempt a 
telecommunications carrier or class of telecommunications 
carriers from this requirement if their contribution would be 
``de minimis.'' The conferees intend that this authority would 
only be used in cases where the administrative cost of 
collecting contributions from a carrier or carriers would 
exceed the contribution that carrier would otherwise have to 
make under the formula for contributions selected by the 
Commission. This section preserves the Commission's authority 
to require all providers of intestate telecommunications to 
contribute, if the public interest requires it, to preserve and 
advance universal service.
      New section 254(e) provides that only eligible 
telecommunications carriers designated under new section 214(e) 
shall be eligible to receive specific Federal universal service 
support. Any eligible telecommunications carrier that receives 
such support shall only use that support to provide, maintain, 
and upgrade facilities and services for universal service in 
the area for which the support is received. In keeping with the 
conferees' intent that all universal service support should be 
clearly identified, this subsection states that such support 
should be made explicit and should be sufficient to achieve the 
purposes of new section 254. The conferees intend that only 
eligible telecommunications carriers should receive support 
from specific Federal universal service support mechanisms; 
however, this restriction should not be construed to prohibit 
any telecommunications carrier from using any particular method 
to establish rates or charges for its services to other 
telecommunications carriers, to the extent such rates or 
charges are otherwise permissible under the Communications Act 
or other law.
      State authority with respect to universal service is 
specifically preserved under new section 254(f). A State may 
adopt any measure with respect to universal service that is not 
inconsistent with the Commission's rules. This subsection also 
requires all providers of intrastate telecommunications to 
contribute to universal service within a State in an equitable 
and non-discriminatory manner, as determined by the State. A 
State may adopt additional requirements with respect to 
universal service in that State, so long as those additional 
requirements do not rely upon or burden Federal universal 
service support mechanisms.
      New section 254(g) is intended to incorporate the 
policies of geographic rate averaging and rate integration of 
interexchange services in order to ensure that subscribers in 
rural and high cost areas throughout the Nation are able to 
continue to receive both intrastate and interstate 
interexchange services at rates no higher than those paid by 
urban subscribers. The conferees intend the Commission's rules 
to require geographic rate averaging and rate integration, and 
to incorporate the policies contained in the Commission's 
proceeding entitled ``Integration of Rates and Services for the 
Provision of Communications by Authorized Common Carriers 
between the United States Mainland and the Offshore Points of 
Hawaii, Alaska and Puerto Rico/Virgin Islands (61 FCC2d 380 
(1976)). The conferees are aware that the Commission has 
permitted interexchange providers to offer non-averaged rates 
for specific services in limited circumstances (such as 
services offered under Tariff 12 contracts), and intend that 
the Commission, where appropriate, could continue to authorize 
limited exceptions to the general geographic rate averaging 
policy using the authority provided by new section 10 of the 
Communications Act. Further, the conferees expect that the 
Commission will continue to require that geographically 
averaged and rate integrated services, and any services for 
which an exception is granted, be generally available in the 
area served by a particular provider. In addition, the 
conferees do not intend that this subsection would require the 
renegotiation of existing contracts for the provision of 
telecommunications services.
      New subsection 254(h) incorporates, with modifications, 
the provisions of section 310 of the Senate bill. New 
subsection (h) of section 254 is intended to ensure that health 
care providers for rural areas, elementary and secondary school 
classrooms, and libraries have affordable access to modern 
telecommunications services that will enable them to provide 
medical and educational services to all parts of the Nation.
      The ability of K-12 classrooms, libraries and rural 
health care providers to obtain access to advanced 
telecommunications services is critical to ensuring that these 
services are available on a universal basis. The provisions of 
subsection (h) will help open new worlds of knowledge, learning 
and education to all Americans--rich and poor, rural and urban. 
They are intended, for example, to provide the ability to 
browse library collections, review the collections of museums, 
or find new information on the treatment of an illness, to 
Americans everywhere via schools and libraries. This universal 
access will assure that no one is barred from benefiting from 
the power of the Information Age.
      New subsection (h)(1)(A) provides that any 
telecommunications carrier shall, upon a bona fide request, 
provide telecommunications services necessary for the provision 
of health care services to any health care provider serving 
persons who reside in rural areas. The rates charged for the 
service shall be rates that are reasonably comparable to rates 
charged for similar services in urban areas. It is intended 
that the rural health care provider receive an affordable rate 
for the services necessary for the purposes of telemedicine and 
instruction relating to such services.
      New subsection (h)(1)(B) requires that any 
telecommunications carrier shall, upon a bona fide request, 
provide services for educational purposes included in the 
definition of universal service under new subsection (c)(3) for 
elementary and secondary schools and libraries at rates that 
are less than the amounts charged for similar services to other 
parties, and are necessary to ensure affordable access to and 
use of such telecommunications services.
      A telecommunications carrier providing service under new 
subsection (h)(1)(B) is permitted either to have the amount of 
the discount treated as an offset to its obligation to 
contribute to the mechanisms to preserve and advance universal 
service; or, to receive reimbursement utilizing the support 
mechanisms to preserve and advance universal service.
      Pursuant to new subsection (c)(3), the Commission is 
authorized to designate a separate definition of universal 
service applicable only to public institutional 
telecommunications users. In so doing, the conferees expect the 
Commission and the Joint Board to take into account the 
particular needs of hospitals, K-12 schools and libraries.
      New subsection (h)(2) requires the Commission to 
establish rules to enhance the availability of advanced 
telecommunications and information services to public 
institutional telecommunications users. For example, the 
Commission could determine that telecommunications and 
information services that constitute universal service for 
classrooms and libraries shall include dedicated data links and 
the ability to obtain access to educational materials, research 
information, statistics, information on Government services, 
reports developed by Federal, State, and local governments, and 
information services which can be carried over the Internet. 
The Commission also is required to determine under what 
circumstances a telecommunications carrier may be required to 
connect public institutional telecommunications users to its 
network.
      New subsection (h)(3) clarifies that telecommunications 
services and network capacity provided to health care 
providers, schools and libraries may not be resold or 
transferred for monetary gain.
      New subsection (h)(4) specifies that the following 
entities are not eligible to receive discounted rates under 
this section: for-profit businesses, elementary and secondary 
schools with endowments of more than $50,000,000, and libraries 
that are not eligible to participate in Statebased applications 
for Library Services and Technology Funds.
      New subsection (h)(5) defines the terms ``elementary and 
secondary schools,'' ``health care provider.'' and ``public 
institutional telecommunications user'' as used throughout this 
subsection. The conferees intend that consortiums of 
educational institutions providing distance learning to 
elementary and secondary schools be considered an educational 
provider for purposes of this section.
      New subsection (i) states that the Commission and the 
States should ensure that universal service is available at 
rates that are just, reasonable and affordable.
      New subsection 254(j) has been added to clarify that this 
section is not intended to alter the existing provision of 
Lifeline Service to needy consumers.
      The House recedes to the Senate with minor technical 
modifications on new subsection 254(k), which prohibits cross-
subsidization and permits the Commission and the States to 
establish cost allocation rules for facilities used in the 
provision of services supported through Federal universal 
support mechanisms.

          New Section 255--Access By Persons With Disabilities

Senate bill
      Section 308(a) of the Senate bill adds a new section 262 
to the Communications Act to require that manufacturers of 
telecommunications equipment and customer premises equipment 
ensure that equipment is designed, developed, and fabricated to 
be accessible and usable by individuals with disabilities, if 
readily achievable.
      Similarly, providers of telecommunications services must 
ensure that telecommunications services are accessible to and 
usable by individuals with disabilities, if readily achievable. 
In addition, the Commission is required to undertake a study of 
closed captioning and to promulgate rules to implement section 
262. Section 308(b) adds a Commission study of video 
description.
      Section 262(a) defines the terms used in this section.
      New section 262(b) requires manufacturers of 
telecommunications and customer premises equipment to ensure 
that such equipment is designed, developed, and fabricated to 
be accessible to and usable by individuals with disabilities, 
if readily achievable.
      New section 262(c) requires providers of 
telecommunications service to ensure that such service be 
accessible to and usable by individuals with disabilities, if 
readily achievable.
      New section 262(d) requires that whenever the provisions 
of subsections (b) and (c) are not readily achievable, the 
manufacturer of telecommunications and customer premises 
equipment, or the provider of telecommunications service, shall 
ensure that such equipment or service is compatible with 
existing peripheral devices or specialized customer premises 
equipment commonly used by individuals with disabilities to 
achieve access, if readily achievable.
      New section 262(e) requires the Architectural and 
Transportation Barriers Compliance Board (``Board'') to develop 
guidelines for accessibility of telecommunications and customer 
premises equipment and telecommunication service, as lead 
agency in consultation with the National Telecommunications and 
Information Administration (NTIA) and the National Institute of 
Standards and Technology (NIST), within 1 year of enactment of 
this Act. The Board shall periodically review and update such 
guidelines. The Senate has elsewhere assigned responsibility 
for promulgating regulations for this new section to the 
Commission.
House amendment
      Section 249(c) of section 101 directs the Commission 
within one year to establish regulations designed to make 
network capabilities and services accessible to individuals 
with disabilities. Section 249(d) prohibits private rights of 
action, and mandates that all remedies are available only 
through the Communications Act.
Conference agreement
      The conferees adopt the Senate provisions with several 
modifications as a new section 255 of the Communications Act. 
Specifically, the conferees adopted the provisions of 
subsections (a), (b), (c), (d) and (e) of new section 262 of 
the Communications Act, as added by the Senate bill. The 
conferees deleted the provision in subsection (e) of the Senate 
bill creating roles for NTIA and NIST. In addition, the 
conferees adopted the provisions of section 249(d) of the House 
amendment, which states that nothing in this section authorizes 
any private rights of action. The remedies available under the 
Communications Act, including the provisions of sections 207 
and 208, are available to enforce compliance with the 
provisions of section 255.

          New Section 256--Coordination for Interconnectivity

Senate bill
      Section 107 of the Senate bill concerns the coordination 
for telecommunications network-level interoperability. The 
provision permits the Commission to participate, in a manner 
consistent with its authority and practice prior to the date of 
enactment of this Act in the development of voluntary industry 
standards-setting organizations to promote interoperability. 
The purpose of the provision is to promote nondiscriminatory 
access to telecommunications networks by the broadest number of 
users and vendors of communications products and services.
House amendment
      Section 249(a) reaffirms the duty of all common carriers 
to ensure network functionality. Section 249(b) directs the 
Commission to establish procedures for Commission oversight of 
coordinated network planning by common carriers and other 
providers of telecommunications services. However, the 
Commission is not given authority to set standards for 
interconnection. Instead, voluntary industry standard-setting 
organizations shall establish any standards. The standard-
setting process described in this provision applies to 
interconnection of the public's switched telecommunications 
networks. It is not intended to apply to telephone equipment or 
other customer premises equipment (CPE). Nothing in section 
249(b) should be construed as limiting or superseding these 
interconnectivity requirements or the existing authority and 
responsibilities of the Commission in enforcing them.
Conference agreement
      The conference agreement adopts the Senate provision with 
minor modifications as a new section 256 of the Communications 
Act.

           New Section 257--Market Entry Barriers Proceeding

Senate bill
      No provision.
House amendment
      Section 250 requires the Commission to adopt rules that 
identify and eliminate market entry barriers for entrepreneurs 
and small businesses in the provision and ownership of 
telecommunications and information services. The Commission 
must review these rules and report to Congress every three 
years on how it might prescribe or eliminate rules to promote 
the purposes of this section.
Conference agreement
      The conference agreement adopts the House provisions with 
minor modifications as a new section 257 of the Communications 
Act.

   New Section 258--Illegal Changes in Subscriber Carrier Selections

Senate bill
      No provision.
House amendment
      Section 251 requires the Commission to adopt rules to 
prevent illegal changes in subscriber selections, a practice 
known as ``slamming.'' The Commission has adopted rules to 
address problems in the long distance industry of unauthorized 
changes of a consumer's long distance carrier. The House 
provision is designed to extend the protections of the current 
rule to local exchange carriers as well.
Conference agreement
      The conferees adopt the House provision as a new section 
258 of the Communications Act. It is the understanding of the 
conferees that in addition to requiring that the carrier 
violating the Commission's procedures must reimburse the 
original carrier for forgone revenues, the Commission's rules 
should also provide that consumers are made whole. 
Specifically, the Commission's rules should require that 
carriers guilty of ``slamming'' should be held liable for 
premiums, including travel bonuses, that would otherwise have 
been earned by telephone subscribers but were not earned due to 
the violation of the Commission's rules under this section.

                New Section 259--Infrastructure Sharing

Senate bill
      Section 106(a) of the Senate bill requires that within 
one year of the date of enactment, the Commission shall 
prescribe rules requiring local exchange carriers that were 
subject to Part 69 of the Commission's rules on the date of 
enactment to share network facilities, technology, and 
information with qualifying carriers. The qualifying carrier 
may request such sharing for the purpose of providing 
telecommunications services or access to information services 
in areas where the carrier is designated as an essential 
telecommunications carrier under new section 214(d). The bill 
does not grant immunity from the antitrust laws for activities 
undertaken pursuant to this section.
      Section 106(b) establishes the terms and conditions of 
the Commission's regulations. Such regulations shall:
            (1) not require a local exchange carrier to take 
        any action that is economically unreasonable or 
        contrary to public interest;
            (2) permit, but not require, joint ownership of 
        facilities among local exchange carriers and qualifying 
        carriers;
            (3) ensure that the local exchange carrier not be 
        treated as a common carrier for hire with respect to 
        technology, information or facilities shared with the 
        qualifying carrier under this section;
            (4) ensure that qualifying carriers benefit fully 
        from sharing;
            (5) establish conditions to promote cooperation;
            (6) not require a local exchange carrier to share 
        in areas where the local exchange carrier provides 
        telephone exchange service or exchange access service; 
        and
            (7) require the local exchange carrier to file with 
        the Commission or State, any tariffs, contract or other 
        arrangement showing the rate, terms, and conditions 
        under which such local exchange carrier is complying 
        with the sharing requirements of this section.
      Subsection (c) requires that local exchange carriers 
sharing infrastructure must provide information to sharing 
parties about deployment of services and equipment, including 
software.
      Subsection (d) defines those carriers eligible to request 
infrastructure sharing under this section.
House amendment
      No provision.
Conference agreement
      The conference agreement adopts the Senate provisions as 
a new section 259 of the Communications Act.

          New Section 260--Provision of Telemessaging Service

Senate bill
      Section 311 of the Senate bill adds a new section 265 to 
the Communications Act, to address certain practices of the 
BOCs with regard to telemessaging. This section is designed to 
prohibit cross-subsidization between a BOC's telephone exchange 
or exchange access services and its telemessaging services.
      This section prohibits a BOC from discriminating between 
affiliated and nonaffiliated telemessaging services, under 
rules set forth by the Commission. If, however, the Commission 
finds that these safeguards are insufficient, the Commission 
may require the BOC's to provide telemessaging services through 
a separate subsidiary.
      New section 265 directs the Commission to complete, 
within 18 months after the date of enactment of the bill, a 
rulemaking proceeding to prescribe regulations to carry out 
this new section. The Commission also is directed to determine 
whether, in order to enforce the requirements of section 265, 
it is appropriate to require the BOCs to provide telemessaging 
services through a separate subsidiary that meets the 
requirements of new section 252, as added to the Communications 
Act by section 102 of the bill.
House amendment
      Section 273(b) prohibits discrimination by a telephone 
company in the provision of telemessaging services, either by 
refusing to provide its competitors with the same network 
services it provides itself, or by cross-subsidizing from its 
local telephone service.
      Section 273(c) establishes procedures for expedited 
consideration of complaints of violations of subsection (b), 
requiring the Commission to make a final determination within 
120 days after the receipt of a complaint. If a violation is 
found, the Commission is required to issue a cease and desist 
order within 60 days.
      Section 601 establishes a new complaint procedure for 
violations of the Communications Act and Commission rules and 
regulations for providers of telemessaging service, or other 
small businesses providing information or telecommunications 
services. This section defines a small business as any business 
entity, including any affiliate or subsidiary, with fewer than 
300 employees.
Conference agreement
      The conference agreement creates a new section 260 in the 
Communications Act relating specifically to the provision of 
telemessaging services. This section prohibits local exchange 
carriers subject to new section 251(c) that are engaged in 
telemessaging from subsidizing their telemessaging services, 
either directly or indirectly, from telephone exchange service 
operations or revenues. It also prohibits such carriers from 
discriminating against nonaffiliated entities with respect to 
the terms and conditions of any network services they provide 
to their own telemessaging operations. This section requires 
the Commission to establish procedures or regulations 
thereunder for the expedited receipt and review of complaints 
alleging discrimination or cross-subsidization that result in 
material financial harm to providers of telemessaging services. 
Such procedures shall ensure that the Commission makes a 
determination regarding any such complaint within 120 days. If 
the complaint contains an appropriate showing that the alleged 
violation occurred, the Commission shall, within 60 days of 
receipt, order such local exchange carrier to cease engaging in 
such violation.

             New Section 261--Effect on Other Requirements

Senate bill
      The Senate bill contains several savings clauses.
House amendment
      The House amendment contains several savings clauses.
Conference agreement
      The conferees included new section 261 of the 
Communications Act to consolidate savings clauses found in both 
the Senate bill and the House amendment. New section 261(a) 
makes clear that the Commission may continue to enforce its 
existing regulations in fulfilling new part II of title II of 
the Communications Act, provided they are not inconsistent with 
that part. New sections 261(b) and (c) preserve State authority 
to enforce existing regulations and to prescribe additional 
requirements, so long as those regulations and requirements are 
not inconsistent with the Communications Act.

           Section 102--Eligible Telecommunications Carriers

Senate bill
      Section 104 of the Senate bill amends section 214(d) of 
the Communications Act by designating the existing text of 
section 214(d) as paragraph (1) and by adding seven new 
paragraphs regarding designation of essential 
telecommunications carriers. The bill provides that the 
Commission shall designate essential telecommunications 
carriers for interstate services and the States shall designate 
such carriers for intrastate services.
      New paragraph (2) of section 214(d) makes explicit the 
implicit authority of the Commission or a State to require a 
common carrier to provide service to any community or portion 
of a community that requests such service. In the event that 
more than one common carrier provides service in an area, and 
none of the carriers will provide service to a community or 
portion thereof in that area which requests service, this 
paragraph gives the Commission or a State the authority to 
decide which common carrier is best suited to provide such 
service. If the Commission or a State orders a carrier to 
provide service to a community or portion thereof under this 
paragraph, it shall designate such carrier an essential 
telecommunications carrier.
      Paragraph (3) of section 214(d) provides that the 
Commission or a State may designate a common carrier as an 
essential telecommunications carrier for a particular service 
area, thus making that carrier eligible for support payments to 
preserve and advance universal service, if any such payments 
are established under new section 253 of the Communications 
Act. Any carrier designated as an essential telecommunications 
carrier must provide universal service and any additional 
services specified by the Commission or a State throughout the 
service area for which the designation is made. In addition, 
these services must be offered throughout that service area at 
nondiscriminatory rates established by the Commission or a 
State, and the carrier must advertise those rates using media 
of general distribution.
      New paragraph (4) of section 214(d) allows the Commission 
to designate more than one common carrier as a communications 
carrier for a particular service area. In addition, the bill 
requires a State to make additional findings before designating 
more than one carrier as an essential telecommunications 
carrier.
      To the extent that more than one common carrier is 
designated as an essential telecommunications carrier, each 
additional carrier so designated must meet the same 
requirements with respect to service throughout the same 
service area at nondiscriminatory rates established by the 
Commission or a State, as well as the advertisement of those 
rates.
      New paragraph (5) of section 214(d) requires the 
Commission and States to establish rules governing the use of 
resale by a carrier to meet the requirements for designation as 
an essential telecommunications carrier, as well as rules to 
permit a carrier that has been designated as an essential 
telecommunications carrier to relinquish that designation so 
long as at least one other carrier also has been designated as 
an essential telecommunications carrier for that area. 
Paragraph (5) also requires the Commission and the States to 
provide appropriate rules to govern how quickly an essential 
telecommunications carrier whose services are to be resold may 
cease service to an area, in order to provide other essential 
telecommunications carriers adequate notice to extend 
facilities or to arrange for the purchase of replacement 
facilities or services.
      New paragraph (6) of section 214(d) sets forth the 
penalties applicable to an essential telecommunications carrier 
with respect to a Commission or State order to provide 
universal service within a reasonable period of time. In 
determining what constitutes a reasonable period of time, the 
bill provides that the Commission or a State must consider the 
nature of the construction required to provide such service, 
the time interval that normally would attend such construction 
and the time needed to obtain regulatory or financial approval.
      New paragraph (7) of section 214(d) of the Communications 
Act requires the Commission or a State to designate an 
essential telecommunications carrier for interexchange services 
for any unserved community or portion thereof that requests 
such service. An essential telecommunications carrier 
designated under this paragraph must provide service at 
nationwide geographically averaged rates, in the case of 
interstate services, and geographically averaged rates in the 
case of intrastate services. The Commission or a State may 
allow a carrier designated under this paragraph to receive 
support payments, if any, that may be provided under section 
253.
      New paragraph (8) of section 214(d) grants the Commission 
authority to promulgate guidelines for the States to implement 
this section.
House amendment
      No provision.
Conference agreement
      The House recedes to the Senate with an amendment. The 
conference agreement amends section 214 of the Communications 
Act by adding a new subsection (e) regarding the provision of 
universal service and the designation of carriers which are 
eligible to receive support through the specific Federal 
universal support mechanisms established under new section 254 
of the Communications Act.
      New section 214(e)(1) states that a common carrier 
designated as an ``eligible telecommunications carrier'' shall 
offer the services included in the definition of universal 
service throughout the area specified by the State commission, 
and that such services must be advertised generally throughout 
that area. Upon designation, a carrier is eligible for any 
specific support provided under new section 254 for the 
provision of universal service in the area for which that 
carrier is designated.
      Upon its own motion or upon request, a State commission 
is required under new section 214(e)(2) to designate a common 
carrier that meets the requirements of new section 214(e)(1) as 
an eligible telecommunications carrier. If more than one common 
carrier that meets the requirements of new section 214(e)(1) 
requests designation as an eligible telecommunications carrier 
in a particular area, the State commission shall, in the case 
of areas not served by a rural telephone company, designate all 
such carriers as eligible. If the area for which a second 
carrier requests designation as an eligible telecommunications 
carrier is served by a rural telephone company, then the State 
commission may only designate an additional carrier as an 
eligible telecommunications carrier if the State commission 
first determines that such additional designation is in the 
public interest.
      If no common carrier will provide universal service to a 
community or portion of a community that requests such service, 
new section 214(e)(3) makes explicit the implicit authority of 
the Commission, with respect to interstate services, and a 
State, with respect to intrastate services, to order a common 
carrier to provide such service. If more than one common 
carrier provides service in an area and none of those carriers 
will provide service to a community or portion thereof, this 
provision gives the Commission or a State the authority to 
decide which common carrier is best suited to provide service. 
Any carrier required to provide service under this paragraph 
shall be designated as an eligible telecommunications carrier 
under new section 214(e)(1) for the community or portion 
thereof such carrier is required to serve. For purposes of new 
section 214(e)(1), the conferees intend that the service area 
for a carrier designated by the Commission or a State under 
section 214(e)(3) shall be the community or portion thereof 
that requests service and for which that carrier is ordered to 
provide service.
      New section 214(e)(4) establishes rules for the 
relinquishment by a carrier of its designation as an eligible 
telecommunications carrier. A State commission must permit an 
eligible telecommunications carrier to relinquish that 
designation if more than one eligible telecommunications 
carrier serves an area, and must require that the remaining 
eligible telecommunications carrier or carriers continue to 
offer universal service to all consumers in that area. The 
conferees note that a carrier must be permitted to relinquish 
the designation within one year after the State commission 
approves the request, and expect that the Commission and the 
States will adopt appropriate mechanisms to ensure that any 
additional carrier designated as an eligible telecommunications 
carrier will be able to acquire or construct any necessary 
facilities for that area within the time limit set in new 
section 214(e)(4).
      New Section 214(e)(5) provides the definition of 
``service area,'' which in general is determined by a State 
commission.

            Section 103--Exempt Telecommunications Companies

Senate bill
      Sections 102 and 205 contained provisions pertaining to 
the entry by utility companies into telecommunications and 
related businesses, and exempting the telecommunications 
activities of registered holding companies from the Public 
Utility Holding Company Act (PUHCA).
House amendment
      No provision.
Conference agreement
      The conference agreement amends PUHCA to allow registered 
holding companies to diversify into telecommunications, 
information and related services and products. The Commission 
must determine that a registered holding company is providing 
telecommunications services, information services and other 
related services through a single purpose subsidiary, 
designated an ``exempt telecommunications company'' (ETC). 
Prior State approval is required before any utility that is 
associated with a registered holding company may sell to an ETC 
any asset in the retail rates of that utility as of December 
19, 1995. State approval is also required for a contract when a 
public utility company seeks to purchase telecommunications 
products or services from an ETC that is an associate company 
or affiliate of such public utility unless the State or State 
commission waives such requirement.
      The financing and other relationships between ETCs and 
registered holding companies shall not be subject to prior 
approval or other restriction by the Securities and Exchange 
Commission (SEC). However, the SEC shall continue to have 
jurisdiction to find violations of the federal securities laws 
(including PUHCA) and to bring enforcement actions related to 
such violations. The section provides reporting requirements 
concerning investments and activities of registered public 
utility holding company systems. Public utility companies are 
prohibited from assuming the liabilities of an ETC and from 
pledging or mortgaging the assets of a utility for the benefit 
of an ETC. State commissions may examine the books and records 
of the ETC and any public utility company, associate company or 
affiliate in the registered holding company system as they 
relate to the activities of the ETC. States may also order an 
audit of a public utility company that is an associate of an 
ETC. Nothing in this section affects the ability of the FCC or 
a State commission to regulate the activities of an ETC. 
Nothing in PUHCA shall preclude the rate review authority of 
the Federal Energy Regulatory Commission or a State commission 
with respect to purchases from or sale to an ETC.
      The relevant portion of section 102 of the Senate bill is 
deleted from the conference agreement.

                Section 104--Nondiscrimination Principle

Senate bill
      Subsection 103(f) adds new section 253A to the 
Communications Act concerning exclusion of telecommunications 
services. New subsection (a) directs the Commission to prohibit 
any telecommunications carrier from excluding from its services 
any high-cost area, any rural location or any resident based on 
the person's income, provided that a carrier may exclude an 
area if the carrier demonstrates that there will be 
insufficient demand for the carrier to earn a return over the 
long term and that providing a service to such area will be 
less profitable for the carrier than providing the service in 
areas to which the carrier is already providing or has proposed 
to provide service. New subsection (b) would direct the 
Commission to provide for public comment on the adequacy of the 
carrier's proposed service area.
House amendment
      Section 201 of the House amendment adds new section 
653(b)(1) to the Communications Act concerning safeguards on 
video platforms. Subparagraph (G) of that section prohibits a 
common carrier from excluding areas from its video platform 
service area on the basis of the ethnicity, race, or income of 
the residents of that area, and provides for public comments on 
the adequacy of the proposed service area on the basis of the 
standards.
Conference agreement
      The conference agreement in section 104 amends section 1 
of the Communications Act by adding a new provision to make 
clear that a purpose of the Communications Act is to make 
available service to all the people of the United States 
``without discrimination on the basis of race, color, religion, 
national origin, or sex.'' This amendment to section 1 applies 
to all entities covered by the Communications Act.

   Subtitle B--Special Provisions Concerning Bell Operating Companies

             Section 151--Bell Operating Company Provisions

Senate bill
      The Senate bill creates new sections of the 
Communications Act with respect to special provisions 
applicable to BOCs.
House amendment
      The House amendment creates new sections of the 
Communications Act with respect to special provisions 
applicable to BOCs.
Conference agreement
      Section 151 of the conference agreement establishes a new 
``Part III'' of title II of the Communications Act. Part III 
contains new sections 271-276 of the Communications Act with 
respect to special provisions applicable to BOCs.

 New Section 271--Bell Operating Company Entry Into InterLATA Services

Senate bill
      Section 221(a) of the Senate bill adds a new section 255 
to the Communications Act. Subsection (a) of new section 255 
establishes the general requirements for the three different 
categories of service: in region interLATA; out of region 
interLATA; and incidental services.
      New section 255(b) establishes specific interLATA 
interconnection requirements that must be fully implemented in 
order for the Commission to provide authorization for a BOC to 
provide in region interLATA services. The Commission is 
specifically prohibited from limiting or extending the terms of 
the ``competitive checklist'' contained in subsection (b)(2). 
The competitive checklist is not intended to be a limitation on 
the interconnection requirements contained in section 251, but 
rather, at a minimum, be provided by a BOC in any 
interconnection agreement approved under section 251 to which 
that company is a party (assuming the other party or parties to 
that agreement have requested the items included in the 
checklist) before the Commission may authorize the BOC to 
provide in region interLATA services.
      Finally, section 255(b) includes a restriction on the 
ability of telecommunications carriers that serve greater than 
five percent of the nation's presubscribed access lines to 
jointly market local exchange service purchased from a BOC and 
interLATA service offered by the telecommunications carrier 
until such time as the BOC is authorized to provide interLATA 
services in that telephone exchange area or until three years 
after the date of enactment, whichever is earlier. New 
subsection 255(c) provides the process for application by a BOC 
to provide in region interLATA services, as well as the process 
for approval or rejection of that application by the Commission 
and for review by the courts. The application by the BOC must 
state with particularity the nature and scope of the activity 
and each product market or service market, as well as the 
geographic market for which in region interLATA authorization 
is sought. Within 90 days of receiving an application, the 
Commission must issue a written determination, after notice and 
opportunity for a hearing on the record, granting or denying 
the application in whole or in part. The Commission is required 
to consult with the Attorney General regarding the application 
during that 90 day period. The Attorney General may analyze a 
BOC application under any legal standard (including the Clayton 
Act, Sherman Act, other antitrust laws, section VIII(C) of the 
MFJ, Robinson-Patman Act or any other standard).
      The Commission may only grant an application, or any part 
of an application, if the Commission finds that the petitioning 
BOC has fully implemented the competitive checklist in new 
section 255(b)(2), that the interLATA services will be provided 
through a separate subsidiary that meets the requirements of 
new section 252, and that the provision of the requested 
interLATA services is consistent with the public interest, 
convenience, and necessity. As noted earlier, the Commission is 
specifically prohibited from limiting or extending the terms 
used in the competitive checklist, and the Senate intends that 
the determination of whether the checklist has been fully 
implemented should be a straightforward analysis based on 
ascertainable facts. Likewise, the Senate believes that the 
Commission should be able to readily determine if the requested 
services will or will not be provided through a separate 
subsidiary that meets all of the requirements of section 252. 
Finally, the Senate notes that the Commission's determination 
of whether the provision of the requested interLATA services is 
consistent with the public interest, convenience, and necessity 
must be based on substantial evidence on the record as a whole.
      Subsection (c) also requires a BOC which is authorized to 
provide interLATA services under this subsection to provide 
intraLATA toll dialing parity throughout the market in which 
that company is authorized to provide interLATA service. In the 
event that the Commission finds that the BOC has not provided 
the required intraLATA toll dialing parity, or fails to 
continue to provide that parity (except for inadvertent 
interruptions that are beyond the control of the BOC), then the 
Commission shall suspend the authorization to provide interLATA 
services in that market until that company provides or restores 
the required intraLATA toll dialing parity. Lastly, subsection 
(c) provides that a State may not order a BOC to provide 
intraLATA toll dialing parity before the company is authorized 
to provide interLATA services in that area or until three years 
after the date of enactment, whichever is earlier. However, 
this restriction does not apply to single LATA States or States 
that have ordered intraLATA toll dialing in that State prior to 
June 1, 1995.
      BOC's (including any subsidiary or affiliate) are 
permitted under new section 255(d) to provide interLATA 
telecommunications services immediately upon the date of 
enactment of the bill if those services originate in any area 
in which that BOC is not the dominant provider of wireline 
telephone exchange service or exchange access service.
      New subsection 255(e) establishes the rules for the 
provision by a BOC of in-region InterLATA services that are 
incidental to the provision of specific services listed in 
paragraph (1) of subsection (e). This list of specific services 
is intended to be narrowly construed by the Commission. A BOC 
must first obtain authorization under new section 255(c) before 
it may provide any in region InterLATA services not listed in 
subsection (e)(1). In addition, the BOC may only provide the 
services specified in subparagraphs (C) and (D) of subsection 
(e)(1), which in general are information storage and retrieval 
services, through the use of telecommunications facilities that 
are leased from an unaffiliated provider of those services 
until the BOC receives authority to provide InterLATA services 
under subsection (c). Finally, subsection (e) requires that the 
provision of incidental services by the BOC shall not adversely 
affect telephone exchange ratepayers or competition in any 
telecommunications market. The Senate intends that the 
Commission will ensure that these requirements are met.
      New section 255(f) provides that a BOC may provide 
interLATA service in connection with CMS upon the date of 
enactment.
      The terms ``interLATA,'' ``audio programming services,'' 
``video programming services,'' and ``other programming 
services'' are defined in new section 255(g).
House amendment
      Section 245 provides the method by which a BOC may seek 
entry to offer interLATA or long distance, service on a State-
by-State basis. Section 245(a) provides that a BOC may file a 
verification of access and interconnection compliance anytime 
after six months after the date of enactment. The verification 
must include, under section 245(a)(1), a State certification of 
``openness'' or the so-called ``checklist'' requirements, and 
under section 245(a)(2), either of the following pursuant to 
section 245(a)(2)(A), the presence of a facilities-based 
competitor; or pursuant to section 245(a)(2)(B), a statement of 
the terms and conditions the BOC would make available under 
section 244, if no provider had requested access and 
interconnection within three (3) months prior to the BOC filing 
under section 245. For purposes of section 245(a)(2)(B), a BOC 
shall not be considered to have received a request for access 
and interconnection if a requesting provider failed to bargain 
in good faith, as required under section 242(a)(8), or if the 
provider failed to comply, within a reasonable time period, 
with the requirements under section 242(a)(1) to implement the 
schedule contained in its access and interconnection agreement.
      Section 245(b) sets out the ``checklist'' requirements 
that must be included in the State certification that the BOC 
files with the Commission as part of its verification. These 
checklist requirements include the following: (1) 
interconnection; (2) unbundling of network elements; (3) 
resale; (4) number portability; (5) dialing parity; (6) access 
to conduits and rights-of-way; (7) no State or local barriers 
to entry; (8) network functionality and accessibility; and (9) 
good faith negotiations by the BOC. Section 245(c)(1) sets out 
the Commission review process for interLATA authorization on a 
Statewide, permanent basis. Under section 245(c)(2), the 
Commission may conduct a de nova review only if a State 
commission lacks, under relevant State law, the jurisdiction or 
authority to make the required certification, fails to act 
within ninety (90) days of receiving a BOC request for 
certification, or has attempted to impose a term or condition 
that exceeds its authority, as limited in section 243. Under 
section 245(c)(3), the Commission has ninety (90) days to 
approve, disapprove, or approve with conditions the BOC 
request, unless the BOC consents to a longer period of time. 
Under section 245(c)(4), the Commission must determine that the 
BOC has complied with each and every one of the requirements. 
As mandated in section 245(d), the Commission has continuing 
authority after approving a BOC's application for entry into 
long distance to review a BOC's compliance with the 
certification requirements under this section.
      Section 245(f) prohibits a BOC from providing interLATA 
service, unless authorized by the Commission. Section 245(f) 
grandfathers any activity authorized by court order or pending 
before the court prior to the date of enactment. Section 245(g) 
creates exceptions for the provision of incidental services.
      Section 245(g)(1) permits a BOC to engage in interLATA 
activities related to the provision of cable services. Section 
245(g)(2) permits a BOC to offer interLATA services over cable 
system facilities located outside the BOC's region. Section 
245(g)(3) allows a BOC to offer CMS, as defined in section 
332(d)(1) of the Communications Act. Section 245(g)(4) allows a 
BOC to engage in interLATA services relevant to the provision 
of information services from a central computer. Section 245(g) 
(5) and (6) allow a BOC to engage in interLATA services related 
to signaling information integral to the internal operation of 
the telephone network.
      Notwithstanding the dialing parity requirements of 
section 242(a)(5), as provided in section 245(i), a BOC is not 
required to provide dialing parity for intraLATA toll service 
(``short haul'' long distance) before the BOC is authorized to 
provide long distance service in that State. Section 245(j) 
prohibits the Commission from exercising the general authority 
to forbear from regulation granted to the Commission under 
section 230 until five years after the date of enactment. 
Section 245(k) sunsets this section once the Commission and 
State commission, in the relevant local exchange market, 
determine that the BOC has become subject to full and open 
competition.
Conference agreement
      The conference agreement adds a new section 271 to the 
Communications Act relating to BOC entry into the interLATA 
market. New section 271(b)(1) requires a BOC to obtain 
Commission authorization prior to offering interLATA services 
within its region unless those services are previously 
authorized, as defined in new section 271(f), or ``incidental'' 
to the provision of another service, as defined in new section 
271(g), in which case, the interLATA service may be offered 
after the date of enactment. New section 271(b)(2) permits a 
BOC to offer out-of-region services immediately after the date 
of enactment.
      New section 271(c) sets out the requirements for a BOC's 
provision of interLATA services originating in an in-region 
State (as defined in new section 271(i)). In addition to 
complying with the specific interconnection requirements under 
new section 271(c)(2), a BOC must satisfy the ``in-region'' 
test by virtue of the presence of a facilities-based competitor 
or competitors under new section 271(c)(1)(A), or by the 
failure of a facilities-based competitor to request access or 
interconnection (under new section 251) as required under new 
section 271(c)(1)(B). This test that the conference agreement 
adopts comes virtually verbatim from the House amendment.
      With respect to the facilities-based competitor 
requirement, the presence of a competitor offering the 
following services specifically does not suffice to meet the 
requirement: (1) exchange access; (2) telephone exchange 
service offered exclusively through the resale of the BOC's 
telephone exchange service; and (3) cellular service. The 
competitor must offer telephone exchange service either 
exclusively over its own facilities or predominantly over its 
own facilities in combination with the resale of another 
carrier's service.
      This conference agreement recognizes that it is unlikely 
that competitors will have a fully redundant network in place 
when they initially offer local service, because the investment 
necessary is so significant. Some facilities and capabilities 
(e.g., central office switching) will likely need to be 
obtained from the incumbent local exchange carrier as network 
elements pursuant to new section 251. Nonetheless, the 
conference agreement includes the ``predominantly over their 
own telephone exchange service facilities'' requirement to 
ensure a competitor offering service exclusively through the 
resale of the BOC's telephone exchange service does not 
qualify, and that an unaffiliated competing provider is present 
in the market.
      The House has specifically considered how to describe the 
facilities-based competitor in new subsection 271(c)(1)(A). 
While the definition of facilities-based competition has 
evolved through the legislative process in the House, the 
Commerce Committee Report (House Report 104-204 Part I) that 
accompanied H.R. 1555 pointed out that meaningful facilities-
based competition is possible, given that cable services are 
available to more than 95 percent of United States homes. Some 
of the initial forays of cable companies into the field of 
local telephony therefore hold the promise of providing the 
sort of local residential competition that has consistently 
been contemplated. For example, large, well established 
companies such as Time Warner and Jones Intercable are actively 
pursuing plans to offer local telephone service in significant 
markets. Similarly. Cablevision has recently entered into an 
interconnection agreement with New York Telephone with the goal 
of offering telephony on Long Island to its 650,000 cable 
subscribers.
      For purposes of new section 271(c)(1)(A), the BOC must 
have entered into one or more binding agreements under which it 
is providing access and interconnection to one or more 
competitors providing telephone exchange service to residential 
and business subscribers. The requirement that the BOC ``is 
providing access and interconnection'' means that the 
competitor has implemented the agreement and the competitor is 
operational. This requirement is important because it will 
assist the appropriate State commission in providing its 
consultation and in the explicit factual determination by the 
Commission under new section 271(d)(2)(B) that the requesting 
BOC has fully implemented the interconnection agreement 
elements set out in the ``checklist'' under new section 
271(c)(2).
      New section 271(c)(1)(B) also is adopted from the House 
amendment, and it is intended to ensure that a BOC is not 
effectively prevented from seeking entry into the interLATA 
services market simply because no facilities-based competitor 
that meets the criteria set out in new section 271(c)(1)(A) has 
sought to enter the market. The conference agreement stipulates 
that a BOC may seek entry under new section 271(c)(1)(B) at any 
time following 10 months after the date of enactment, provided 
no qualifying facilities-based competitor has requested access 
and interconnection under new section 251 by the date that is 3 
months prior to the date that the BOC seeks interLATA 
authorization. Consequently, it is important that the 
Commission rules to implement new section 251 be promulgated 
within 6 months after the date of enactment, so that potential 
competitors will have the benefit of being informed of the 
Commission rules in requesting access and interconnection 
before the statutory window in new section 271(c)(1)(B) shuts.
      New section 271(c)(2) sets out the specific 
interconnection requirements that comprise the ``checklist'' 
that a BOC must satisfy as part of its entry test.
      In new section 271(d), the conference agreement adopts 
the basic structure of the Senate bill concerning authorization 
of BOC entry by the Commission, with a modification to permit 
the BOC to apply on a State-by-State basis.
      New section 271(d) sets forth administrative provisions 
regarding applications for BOC entry under this section. In 
making an evaluation, the Attorney General may use any 
appropriate standard, including: (1) the standard included in 
the House amendment, whether there is a dangerous probability 
that the BOC or its affiliates would successfully use market 
power to substantially impede competition in the market such 
company seeks to enter; (2) the standard contained in section 
VIII(C) of the AT&T; Consent Decree, whether there is no 
substantial possibility that the BOC or its affiliates could 
use monopoly power to impede competition in the market such 
company seeks to enter; or (3) any other standard the Attorney 
General deems appropriate.
      New section 271(e)(1) prohibits joint marketing of local 
services obtained from the BOC under new section 251(c)(4) and 
long distance service within a State by telecommunications 
carriers with more than five percent of the Nation's 
presubscribed access lines for three years after the date of 
enactment, or until a BOC is authorized to offer interLATA 
services within that State, whichever is earlier.
      New section 271(e)(2) requires any BOC authorized to 
offer interLATA services to provide intraLATA toll dialing 
parity coincident with its exercise of that interLATA 
authority. States may not order a BOC to implement toll dialing 
parity prior to its entry into interLATA service. Any single-
LATA State or any State that has issued an order by December 
19, 1995, requiring a BOC to implement intraLATA toll dialing 
parity is grandfathered under this Act. The prohibition against 
``non-grandfathered'' States expires three years after the date 
of enactment.
      The conference agreement in new section 271(f) adopts the 
House provision grandfathering activities under existing 
waivers. Both the House and Senate bill included separate 
grandfather provisions for manufacturing in the manufacturing 
section. The conference agreement combines these separate 
provisions into one provision covering both interLATA services 
and manufacturing, and that provision is included in the 
interLATA section. Because of the new approach to the 
supersession of the AT&T; Consent Decree described below, this 
section was modified to clarify that requests for waivers 
pending with the court on the date of enactment are no longer 
included within this section. Instead, only those waiver 
requests that have been acted on before the date of enactment 
will be included. All conduct occurring after the date of 
enactment will no longer be subject to the AT&T; Consent Decree 
and will be subject to the Communications Act, as amended by 
the conference agreement.
      New section 271(g) sets out the ``incidental'' interLATA 
activities that the BOCs are permitted to provide upon the date 
of enactment.

            new section 272--separate affiliate; safeguards

Senate bill
      Section 102 of the Senate bill amends the Communications 
Act to add a new section 252 to impose separate subsidiary and 
other safeguards on certain activities of the BOCs. Section 102 
requires that to the extent a BOC engages in certain 
businesses, it must do so through an entity that is separate 
from any entities that provide telephone exchange service. 
Subsection 252(b) spell out the structural and transactional 
requirements that apply to the separate subsidiary, section 
252(c) details the nondiscrimination safeguards, section 252(d) 
requires a biennial audit of compliance with the separate 
subsidiary requirements, sections 252(e) imposes restrictions 
on joint marketing, and subsection 252(f) sets forth additional 
requirements with respect to the provision of interLATA 
services.
      The activities that must be separated from the entity 
providing telephone exchange service include telecommunications 
equipment manufacturing and interLATA telecommunications 
services, except out-of-region and incidental services (not 
including information services) and interLATA services that 
have been authorized by the MFJ court. A BOC also would have to 
provide alarm monitoring services and certain information 
services through a separate subsidiary, including cable 
services and information services which the company was not 
permitted to offer before July 24, 1991. In a related 
provision, section 203 of the bill provides that a BOC need not 
use a separate affiliate to provide video programming services 
over a common carrier video platform if it complies with 
certain obligations.
      Under section 252(e) of this section the BOC entity that 
provides telephone exchange service may not jointly market the 
services required to be provided through a separate subsidiary 
with telephone exchange service in an area until that company 
is authorized to provide interLATA service under new section 
255. In addition, a separate subsidiary required under this 
section may not jointly market its services with the telephone 
exchange service provided by its affiliated BOC entity unless 
such entity allows other unaffiliated entities that offer the 
same or similar services to those that are offered by the 
separate subsidiary to also market its telephone exchange 
services.
      Additional requirements for the provision of interLATA 
services are included in new section 252(f). These provisions 
are intended to reduce litigation by establishing in advance 
the standard to which a BOC entity that provides telephone 
exchange service or exchange access service must comply in 
providing interconnection to an unaffiliated entity.
      Section 252(g) establishes rules to ensure that the BOCs 
protect the confidentiality of proprietary information they 
receive and to prohibit the sharing of such information in 
aggregate form with any subsidiary or affiliate unless that 
information is available to all other persons on the same terms 
and conditions. In general, a BOC may not share with anyone 
customer-specific proprietary information without the consent 
of the person to whom it relates. Exceptions to this general 
rule permit disclosure in response to a court order or to 
initiate, render, bill and collect for telecommunications 
services.
      New subsection 252(h) provides that the Commission may 
grant exceptions to the requirements of section 252 upon a 
showing that granting of such exception is necessary for the 
public interest, convenience, and necessity. The Senate intends 
this exception authority to be used whenever a requirement of 
this section is not necessary to protect consumers or to 
prevent anti-competitive behavior. However, the Senate does not 
intend that the Commission would grant an exception to the 
basic separate subsidiary requirements of this section for any 
service prior to authorizing the provision of interLATA service 
under section 255 by the BOC seeking the exception to a 
requirement of this section.
      Public utility holding companies that engage in the 
provision of telecommunications services are required to do so 
through a separate subsidiary under new section 252(i). In 
addition, a State may require a public utility company that 
provides telecommunications services to do so through a 
separate subsidiary. The separate subsidiary for public utility 
holding companies is required to meet some, but not all, of the 
structural separation and nondiscriminatory safeguard 
provisions that are applicable to BOC subsidiaries. Section 
252(i) provides that a public utility holding company shall be 
treated as a BOC for the purpose of those provisions of section 
252 that subsection (i) applies to those holding companies.
      Subsection (b) of section 102 requires the Commission to 
promulgate any regulations necessary to implement new section 
252 of the Communications Act within nine months of the date of 
enactment of this bill. The subsection also provides that any 
separate subsidiary established or designated by a BOC for 
purposes of complying with new section 252(a) prior to the 
issuance of the regulations shall be required to comply with 
the regulations when they are issued.
      Section 102(c) provides that the amendment to the 
Communications Act made by this section takes effect on the 
date of enactment of this bill.
House amendment
      Section 246(a) creates a separate subsidiary requirement 
for the BOC provision of interLATA telecommunications or 
information services. Section 246(b) requires transactions 
between a BOC and its subsidiary to be on an arm's length 
basis. Sections 246(c) and (d) mandates fully separate 
operations and property, including books, records, and accounts 
between the BOC and its subsidiary. Sections 246(e) and (f) 
prohibit discrimination and cross-subsidies, respectively. 
Under section 246(k), this provision sunsets eighteen months 
after the date of enactment.
Conference agreement
      The conference agreement adopts the Senate provisions 
with several modifications. New section 272 of the 
Communications Act does not contain the provision in the Senate 
bill requiring that alarm monitoring services, and the 
interLATA services that are incidental thereto, be provided 
through the separate affiliate required by this section. The 
conferees also accepted the provision in the House amendment 
that requires a separate affiliate for interLATA information 
services, other than electronic publishing and alarm 
monitoring, which permit a customer located in one LATA to 
retrieve stored information from, or file information for 
storage in, information storage facilities of such company that 
are located in another LATA.
      The conferees deleted the Senate provision providing for 
Commission exceptions to the requirements of this section. 
Instead, the conferees adopted a three year ``sunset'' of the 
separate affiliate requirement for interLATA services and 
manufacturing activities. The three year period commences on 
the date on which the BOC is authorized to offer interLATA 
services. In addition, the conference agreement provides that 
the separate affiliate requirement for interLATA information 
services ``sunsets'' four years after the date of enactment of 
the Telecommunications Act of 1996.
      In any case, the Commission is given authority to extend 
the separate affiliate requirement by rule or order.
      New section 272(g)(1) permits the separate affiliate 
required by this section to jointly market any of its services 
in conjunction with the telephone exchange services and other 
services of the BOC so long as the BOC permits other entities 
offering the same or similar services to sell and market the 
BOC's telephone exchange services.
      New section 272(g)(2) permits a BOC, once it has been 
authorized to provide interLATA service pursuant to new section 
271(d), to jointly market its telephone exchange services in 
conjunction with the interLATA service being offered by the 
separate affiliate in that State required by this section.
      New section 272(g)(3) provides that the joint marketing 
authorized by new sections 272(g)(1) and (g)(2) does not 
violate the nondiscrimination safeguards in new subsection (e).

       New Section 273--Manufacturing by Bell Operating Companies

Senate bill
      Section 222 of the Senate bill adds a new section 256 to 
the Communications Act to remove the restrictions on 
manufacturing imposed by the MFJ on the BOC's under certain 
conditions, and allows those companies to engage in 
manufacturing subject to certain safeguards.
      New section 256(a) permits a BOC, through a separate 
subsidiary that meets the requirements of new section 252, to 
engage in the manufacture and provision of telecommunications 
equipment and the manufacture of customer premises equipment 
(CPE) as soon as that company receives authorization to provide 
in region interLATA services under new section 255(c).
      Subsection (b) of new section 256 requires that a BOC 
engaged in manufacturing may only do so through a separate 
subsidiary that meets the requirements of new section 252.
      New section 256(c) requires that a BOC make available to 
local exchange carriers telecommunications equipment and any 
software integral to that equipment that is manufactured by the 
BOC's affiliate under certain conditions. The manufacturing 
subsidiary has the obligation to sell telecommunications 
equipment to an unaffiliated local telephone exchange carrier. 
This obligation may only be enforced on the manufacturing 
subsidiary if the local telephone company either does not 
manufacture equipment (by itself or through an affiliated 
entity), or it agrees to make available to the BOC any 
telecommunications equipment (including software integral to 
such equipment) that the local telephone company manufactures 
(by itself or through an affiliated entity) without 
discrimination or self-preference as to price, delivery, germs, 
or conditions.
      In addition, subsection (c) prohibits a BOC from 
discriminating with respect to bids for services or equipment, 
establishing standards or certifying equipment, or the sale of 
telecommunications equipment and software. A BOC and any entity 
that the company owns or controls also is required to protect 
any proprietary information submitted to it with contract bids 
or with respect to establishing standards or certifying 
equipment, and may not release that information to anyone 
unless specifically authorized to do so by the owner of the 
proprietary information.
      New section 256(d) permits a BOC or its subsidiaries or 
affiliates to engage in close collaboration with any 
manufacturer of customer premises equipment or 
telecommunications equipment not affiliated with the BOC during 
the design and development of hardware, software, or 
combinations thereof related to customer premises equipment or 
telecommunications equipment.
      Subsection (e) requires the Commission to prescribe 
regulations to require each BOC to file information concerning 
technical requirements concerning its telephone exchange 
facilities.
      Subsection (f) of new section 256 simply authorizes the 
Commission to prescribe such additional rules and regulations 
as the Commission determines necessary to carry out the 
provisions and purposes of section 256.
      Administration and enforcement of new section 256 are 
provided for in subsection (g) of that section. Paragraph (1) 
of new subsection 256(g) makes clear that the Commission has 
the same authority, power, and functions with respect to the 
BOC as it has with respect to enforcement or administration of 
title II for any other common carrier subject to the 
Communications Act. Paragraph (2) allows any injured party by 
an act or omission of the BOC or its manufacturing subsidiary 
which violates the requirements of new section 256 to bring a 
civil action in any U.S. District Court to recover the full 
amount of any damages and to obtain any appropriate court order 
to remedy the violation. In the alternative, the party may seek 
relief from the Commission pursuant to sections 206 through 209 
of the Communications Act.
      New section 256(h) makes clear that nothing in new 
section 256 is intended to change the status of Bell 
Communications Research (Bellcore). Subsection (h) specifically 
states that nothing in this section permits Bellcore or any 
successor entity that is jointly owned by any of the BOCs to 
manufacture or provide telecommunications equipment or 
manufacture CPE.
      Subsection (b) of section 222 of the bill permits the 
BOCs to continue to engage in activities in which they were 
authorized to engage prior to the date of enactment of the 
bill.
House amendment
      Section 271(a) allows a BOC to engage in equipment 
manufacturing when the Commission has approved verifications 
that a parent BOC, and each BOC within the parent company's 
region, are in compliance with the access and interconnection 
requirements of section 242. A BOC may engage in manufacturing 
only through a separate subsidiary for the first eighteen 
months after it is authorized.
      Section 271(b) allows a BOC to engage in close 
collaboration with manufacturers during the design and 
development of hardware and software. Notwithstanding 
subsection (a), a BOC may engage in research and enter royalty 
agreements.
      Section 271(c) requires a BOC to file at the Commission 
all protocol and technical requirements relating to connection 
with and proposed changes to the network. The BOCs must provide 
access to this information on a non-discriminatory basis.
      Section 271(d) prohibits Bell Communications Research, or 
``Bellcore,'' from engaging in manufacturing so long as 
Bellcore is owned by one or more BOC or is involved in 
equipment standard setting or product certification activities.
      Section 271(e) requires BOCs to make equipment 
procurement decisions based on objective commercial criteria, 
such as price, quality, delivery, and other commercial factors.
      Section 271(e)(2) prohibits each BOC from restricting 
sales to any other local telephone company. Section 271(e)(3) 
requires that the proprietary information which vendors share 
with BOCs as their transactions are carried out is protected 
from release not specifically authorized by the owner of such 
information.
      Subection 271(f) provides the Commission with the same 
enforcement authority with respect to a BOC as with any common 
carrier.
      Section 271(g) grandfathers all previously authorized 
manufacturing related activities.
Conference agreement
      The conference agreement adopts the Senate provisions 
with modifications as a new section 273 of the Communications 
Act. The agreement permits a BOC to engage in manufacturing 
after the Commission authorizes the company to provide 
interLATA services under new section 271(d) in any in-region 
State. A BOC and its affiliates may not engage in manufacturing 
in conjunction with another unaffiliated BOC or any of its 
affiliates. BOCs may engage in research and enter royalty 
agreements.
      The conference agreement includes provisions governing a 
standards-setting organization such as Bellcore. Additionally, 
the overall intent of establishing a dispute resolution 
provision, as contained in new subsection 273(d)(5), is to 
enable all interested parties to influence the final resolution 
of the dispute without significantly impairing the efficiency, 
timeliness, and technical quality of the activity.
      Further, under new section 273, a BOC may not 
discriminate in favor of equipment produced or supplied by an 
affiliate for the duration of a requirement for a manufacturing 
separate subsidiary under this Act. Each BOC shall make 
procurement decisions on the basis of an objective assessment 
of price, quality, delivery, and other commercial factors.

   new section 274--electronic publishing by bell operating companies

Senate bill
      The Senate bill included electronic publishing in the 
provisions applicable to information services under the 
separate affiliate requirements of section 252 of the Senate 
bill.
House amendment
      Section 272 sets forth regulatory requirements for BOC 
participation in electronic publishing. Subsection (a) of this 
section states generally that a BOC or any affiliate may only 
engage in electronic publishing through a separate affiliate or 
an electronic publishing joint venture.
      Subsection (b)(1) requires the separate affiliate or 
electronic publishing joint venture to maintain books, records, 
and accounts separately from those of the BOC. Under subsection 
(b)(2), the affiliate is prohibited from incurring debt in a 
manner that would permit a creditor upon default to have 
recourse to the assets of the BOC. Subsections (b)(3) and 
(b)(4) govern the manner in which transactions by the affiliate 
must be carried out, so as to ensure that they are fully 
auditable. These subsections also govern the valuation of 
assets transferred to the affiliate to prevent cross subsidies. 
Subsection (b)(5) prohibits the affiliate and the BOC from 
having corporate officers or property in common.
      Under subsection (b)(6), the affiliate is prohibited from 
using the name or trademarks of the affiliated BOC except where 
used in common with the entity that owns or controls the BOC. 
Subsection (b)(7) prohibits a BOC from performing a number of 
activities on behalf of the affiliate, including the hiring or 
training of personnel, the provision of equipment, and research 
and development (R&D;). Subsection (b)(8) and (b)(9) require the 
separate affiliate to have an annual compliance review 
performed for five years and to file a report of any exceptions 
and the corrective action taken. These reviews are to be 
conducted by an independent entity.
      Subsection (c)(1) prohibits a BOC from engaging in joint 
marketing of any promotion, marketing, sales or advertising 
with its affiliate, with certain exceptions. Subsection (c)(2) 
permits three types of joint activities between a BOC and its 
electronic publishing affiliate, under specified conditions. 
Subsection (c)(2)(A) permits a BOC to provide inbound 
telemarketing or referral services related to the provision of 
electronic publishing, if the BOC provides the same service on 
the same terms and conditions, and prices to non-affiliates as 
to its affiliates. The term ``inbound telemarketing or referral 
services'' is defined in subsection (i)(7) to mean ``the 
marketing of property, goods, or services by telephone to a 
customer or potential customer who initiated the call.'' 
Subsection (c)(2)(B) permits a BOC to engage in 
nondiscriminatory teaming or business arrangements. Subsection 
(c)(2)(C) permits a BOC to participate in electronic publishing 
joint ventures, provided that the BOC or affiliate has not more 
than a 50% (or for small publishers, 80%) direct or indirect 
equity interest in the publishing joint venture.
      Subsection (d) provides that a BOC that enters the 
electronic publishing business through a separated affiliate or 
joint venture must provide network access and interconnection 
to electronic publishers at just and reasonable rates that are 
not higher on a per-unit basis than those charged to any other 
electronic publisher or any separated affiliate engaged in 
electronic publishing. Subsection (e) entitles a person 
claiming a violation of this section to file a complaint with 
the Commission or to bring a suit as provided in section 207 of 
the Communications Act. The BOC, affiliate, or separate 
affiliate is liable for damages for any violation found, unless 
it is discovered first through the internal compliance review 
process and corrected within 90 days of such discovery. A 
person may apply for a cease and desist order, or apply to a 
district court of the United States for an injunction. 
Subsection (f) requires separated affiliates to file annual 
reports with the Commission similar to Form 10-K. Subsection 
(g)(1) gives the BOC one year from the date of enactment to 
comply with the requirements of this section. Subsection (g)(2) 
provides that the provisions of this section cease to apply 
after June 30, 2000.
Conference agreement
      The conference agreement adopts the House provisions with 
modifications as a new section 274 of the Communications Act. 
Subsection (b)(6) of the House provisions, relating to use of 
trademarks, was modified to make it clear that the separate 
affiliate or electronic publishing joint venture may not use 
for marketing the name, trademarks, or service marks of an 
existing BOC except for names, trademarks, or service marks 
that are owned by the entity that owns or controls the BOC. 
Subsection (g)(2) was modified so that the sunset date will be 
four years after the date of enactment rather than June 30, 
2000.

               new section 275--alarm monitoring services

Senate bill
      Section 225 of the Senate bill adds a new section 258 to 
the Communications Act authorizing a BOC to provide alarm 
monitoring services four years after the date of enactment if 
the BOC has been authorized by the Commission to provide in-
region interLATA service unless the Commission finds that such 
provision is not in the public interest. It requires the 
Commission to establish rules governing the provision of alarm 
services by a BOC. It provides for expedited consideration of 
complaints and allows the Commission to use title V remedies.
      The one exception to this general rule is contained in 
section 258(f). It provides that the limitations of subsections 
(a) and (b) do not apply to any alarm monitoring services 
provided by a BOC that was in that business as of June 1, 1995, 
as long as certain conditions specified in that subsection are 
met.
House amendment
      Section 273(a) prohibits a BOC from offering alarm 
service until six (6) years after the date of enactment, unless 
a BOC was already providing such service on January 1, 1995.
      Section 273(b) prohibits discrimination by a telephone 
company in the provision of alarm services, either by refusing 
to provide its competitors with the same network services it 
provides itself, or by cross-subsidizing from its local 
telephone service.
      Section 273(c) establishes procedures for expedited 
consideration of complaints of violations of subsection (b), 
requiring the Commission to make a final determination within 
120 days after the receipt of a complaint. If a violation is 
found, the Commission is required to issue a cease and desist 
order within 60 days.
Conference agreement
      The conference agreement adopts the House provisions with 
modifications as a new section 275 of the Communications Act. 
The prohibition on BOC entry is shortened to 5 years. The 
grandfather provision is modified to clarify that new 
subsection (a) does not prohibit or limit the provision, 
directly or through an affiliate, of alarm monitoring services 
by a BOC that was engaged in providing alarm monitoring 
services as of November 30, 1995, directly or through an 
affiliate. However, such a BOC may not acquire an equity 
interest in or obtain financial control of any unaffiliated 
alarm monitoring services entities from November 30, 1995, 
until five years after the date of enactment. This section 
further provides that nothing in the language prohibiting 
acquisitions or control should be construed to prevent the 
exchange of customer accounts and related assets with 
unaffiliated alarm monitoring services entities.
      The House nondiscrimination provisions are adopted with 
the clarification that they apply to incumbent local exchange 
carriers rather than all common carriers. The House provisions 
on expedited consideration of complaints are adopted with the 
clarification that they apply to incumbent local telephone 
carriers rather than all common carriers. The Senate provisions 
on the use of data by local exchange carriers are adopted with 
the clarification that they apply to all local exchange 
carriers. The House definition of ``alarm monitoring service'' 
is adopted with the clarification that the definition applies 
to the transmission of signals by means of the facilities of 
any local exchange carrier rather than just those of a BOC.

            New Section 276--Provision of Payphone Services

Senate bill
      Section 311 of the Senate bill adds a new section 265 to 
the Communications Act, to address certain practices of the 
BOCs with regard to telemessaging and payphone services. This 
section is designed to prohibit cross-subsidization between a 
BOC's telephone exchange or exchange access services and its 
payphone and telemessaging services. Existing joint-cost rules 
are not adequate to prevent such activities.
      This section prohibits a BOC from discriminating between 
affiliated and nonaffiliated payphone and telemessaging 
services, under rules set forth by the Commission. If, however, 
the Commission finds that these safeguards are insufficient, 
the Commission may require the BOCs to provide telemessaging 
services through a separate subsidiary.
      New section 265 directs the Commission to complete, 
within 18 months after the date of enactment of the bill, a 
rulemaking proceeding to prescribe regulations to carry out 
this new section. The Commission also is directed to determine 
whether, in order to enforce the requirements of section 265, 
it is appropriate to require the BOCs to provide payphone 
service or telemessaging services through a separate subsidiary 
that meets the requirements of new section 252.
      Payphone services are defined to include the provision of 
telecommunications service through public or semipublic pay 
telephones, and includes the provision of inmate phone service 
in correctional institutions. Semipublic payphones are also 
included within the definition of payphone services.
      New section 265 prohibits the BOCs from cross-subsidizing 
and from preferring or discriminating in favor of their own 
payphone operations. The Commission is directed to conduct 
rulemaking proceedings to implement new section 265.
      Nothing in section 265 is intended to limit the authority 
of the commission to address these structural issues, or other 
payphone related issues, under the existing provisions of the 
Communications Act.
House amendment
      Section 274 directs the Commission to adopt rules that 
eliminate all discrimination between BOC and independent 
payphones and all subsidies or cost recovery for BOC payphones 
from regulated interstate or intrastate exchange or exchange 
access revenue. The BOC payphone operations will be 
transferred, at an appropriate valuation, from the regulated 
accounts associated with local exchange services to the BOC's 
unregulated books. The Commission's implementing safeguards 
must be at least equal to those adopted in the Commission's 
Computer III proceedings. In place of the existing regulatory 
structure, the Commission is directed to establish a new system 
whereby all payphone service providers are fairly compensated 
for every interstate and intrastate call made using their 
payphones, including, for example, ``toll-free'' calls to 
subscribers to 800 and new 888 services and calls dialed by 
means of carrier access codes. In crafting implementing rules, 
the commission is not bound to adhere to existing mechanisms or 
procedures established for general regulatory purposes in other 
provisions of the Communications Act.
      Section 274(b)(1)(D) also makes it possible for 
independent payphone service providers, as well as BOCs, in all 
jurisdictions, to select the intraLATA carriers serving their 
payphones. However, existing contracts and agreements between 
location providers and payphone service providers, interLATA, 
or intraLATA carriers are grandfathered. Location providers 
prospectively also have control over the ultimate choice of 
interLATA and intraLATA carriers in connection with their 
choice of payphone service providers.
      Section 274(b)(2) directs the Commission to determine 
whether it is necessary to support the maintenance of ``public 
interest payphones.'' This term refers to payphones at 
locations where payphone service would not otherwise be 
available as a result of the operation of the market. Thus, the 
term does not apply to a payphone located near other payphones, 
or to a payphone that, even though unprofitable by itself, is 
provided for a location provider with whom the payphone 
provider has a contract.
      Section 274(c) authorizes the Commission to preempt State 
regulations that are inconsistent with the commission's 
regulations under section 274.
Conference agreement
      The conference agreement adopts the House provision with 
some modifications and a clarification as a new section 276 of 
the Communications Act. The conferees added to subsection 
(b)(1)(D) the phrase ``unless the Commission determines in the 
rulemaking that it is not in the public interest.'' This 
modification would allow the Commission, if it determines that 
it is in the public interest, not to allow the BOCs to have the 
same rights as independent payphone providers in negotiating 
with the interLATA carriers for their payphones. In addition, 
the conferees clarify in subsection (b)(1)(E) that the location 
provider has the ultimate decision-making authority in 
determining interLATA services in connection with the choice of 
payphone providers.

                      TITLE II--BROADCAST SERVICES

             section 201--broadcaster spectrum flexibility

Senate bill
      If the Commission, by rule, permits a licensee to provide 
advanced television services, subsection (a) of section 207 of 
the Senate bill requires the Commission to adopt rules to 
permit broadcasters flexibility to use the advanced television 
spectrum for ancillary or supplementary services. The 
broadcaster must provide at least one free, over-the-air 
advanced television broadcast service on that spectrum. Similar 
rules for existing broadcast spectrum must also be adopted.
      Paragraph (2) requires that if the licensee offers 
ancillary or supplementary service for which payment of a 
subscription fee is required, or is compensated for 
transmitting material furnished by a third party, then the 
Commission will collect an annual fee from the licensee. The 
fee shall be based, in part, on the licensee's total amount of 
spectrum, and the amount of spectrum used and the amount of 
time the spectrum is used for those ancillary and supplementary 
services. The fee, however, cannot exceed the amount, on an 
annualized basis, paid by licensees providing competing 
services on spectrum subject to auction.
      Paragraph (3) states that licensees are not relieved of 
their public interest requirements. Paragraph (4) defines 
``advanced television services'' as a television service using 
digital or other advanced technology to enhance audio quality 
and visual resolution. The paragraph also defines ``existing'' 
spectrum as that spectrum used for television broadcast 
purposes as of the date of enactment.
House amendment
      Section 301 of the House amendment directs the 
Commission, if the Commission issues licenses for advanced 
television services, to limit the initial eligibility for such 
licenses to incumbent broadcast licensees and permittees and 
authorizes the Commission to adopt regulations that would 
permit broadcasters to use such spectrum for ancillary or 
supplementary services. Apart from the restrictions contained 
herein, this section leaves the final determination of the uses 
of spectrum assigned to the broadcasters. This section 
restricts any potential use of spectrum apart from the main 
channel signal to ``ancillary and supplementary'' uses, 
provided 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.
      Paragraph (b)(2) requires the Commission to prescribe 
regulations that avoid the derogation of any advanced 
television services, including high definition television 
(HDTV) services.
      Paragraph (b)(3) clarifies the regulation of ancillary 
and supplementary services. It requires that Commission 
regulations that are applicable to such services be applicable 
to the offering of analogous services by any other person. This 
section, however, specifically does not confer ``must carry'' 
status on any of these ancillary or supplementary services.
      Paragraph (b)(4) requires the Commission to adopt any 
technical or other requirements necessary to assure signal 
quality for ATV services and provides, inter alia, that the 
Commission may review and update its requirements concerning 
minimum broadcast hours for television broadcasters for both 
NTSC and ATV services.
      Subsection (c) provides that if the Commission issues 
licenses for advanced television services, it shall 
precondition such issuance on the requirement that one or the 
other of the licenses be surrendered to the Commission pursuant 
to its regulations. Subsection (c) also requires that any 
license surrendered must be reassigned through competitive 
bidding. This provision is designed to ensure that licensees' 
use of 12 megahertz would be for temporary simulcast purposes 
only, and that, in due course, one of the licensed channels 
will revert to the Commission for assignment by competitive 
bidding. Subsection (c) also requires that the Commission must 
base its decision regarding the surrender of the license on 
public acceptance of the new technology through obtaining 
television receivers capable of receiving an ATV signal or on 
the potential loss of reception for a substantial portion of 
the public.
      Subsection (d) requires the Commission to establish a fee 
program for any ancillary or supplementary services if 
subscription fees or any other compensation fees apart from 
commercial advertisements are required in order to receive such 
services.
      Subsection (e) requires the Commission to conduct an 
evaluation within 10 years after the date it issues its 
licenses for advanced television services.
      In subsection (f), the House adopts the Commission's 
definition of high definition television.
Conference agreement
      The conference agreement adopts the House amendment with 
modifications. The conference agreement retains the requirement 
in the House amendment that the Commission condition the 
issuance of a new license on the return, after some period, of 
either the original broadcast license or the new license. 
However, the conference agreement leaves to the Commission the 
determination of when such licenses shall be returned and how 
to reallocate returned spectrum. With respect to paragraph 
(b)(3), the conferees do not intend this paragraph to confer 
must carry status on advanced television or other video 
services offered on designated frequencies. Under the 1992 
Cable Act, that issue is to be the subject of a Commission 
proceeding under section 614(b)(4)(B) of the Communications 
Act. Further, the conference agreement also adopts the Senate 
language that the Act's public interest obligations extend to 
the new licenses and services. The conference agreement 
modifies the House amendment to provide that if the Commission 
decides to issue additional licenses for ATV services, it 
should limit the initial eligibility to broadcast licensees.

                    section 202--broadcast ownership

Senate bill
      Section 207(b) of the Senate bill requires the Commission 
to change its rules regarding the amount of national audience a 
single broadcast licensee may reach. The current cap is 25% of 
the nation's television households. The Senate bill raises that 
to 35%. Section 207 directs the Commission to eliminate its 
rules regarding the number of radio stations one entity may 
own, either nationally or within a particular market. The 
Commission may refuse a transfer of a radio license if it would 
result in an undue concentration of control or would thereby 
harm competition. Section 207(b)(3) grandfathers existing 
television local marketing agreements (LMAs). Section 207(b)(4) 
eliminates the cable-broadcast crossownership ban in section 
613(a) of the Communications Act, and the Commission is also 
required to review its ownership rules biennially, as part of 
its overall regulatory review required by new section 259 of 
the Communications Act. This provision is effective upon 
enactment.
House amendment
      Section 302 of the House amendment adds a new section 337 
to the Communications Act addressing broadcast ownership. 
Section 337, subject to specified restrictions and consistent 
with the cross-ownership restrictions of section 613(a) of the 
Communications Act, prohibits the Commission from prescribing 
or enforcing any regulation which prohibits or limits, on a 
national or local basis, a licensee from holding any form of 
ownership or other interest in two or more broadcast stations 
or in a broadcast station and any other medium of mass 
communication. This section also prohibits the Commission from 
prescribing or enforcing any regulation which prohibits a 
person or entity from owning, operating, or controlling two or 
more networks of broadcast stations or from owning, operating, 
or controlling a network of broadcast stations and any other 
medium of mass communications. Section 337(b)(1) eliminates 
current limits placed on television audience nationwide and 
places new limits on ownership of television stations by a 
single entity at a national audience reach exceeding 35 percent 
for the year following enactment of this section. This section 
directs the Commission to conduct a study of the operation of 
these national ownership limitations and to submit a report to 
Congress on the development of competition in the television 
marketplace and the need, if any, to revisit these limitations.
      Section 337(b)(2) sets forth the circumstances under 
which one entity may own or operate two television stations in 
a local market. Subparagraph (B) creates a presumption in favor 
of UHF/UHF and UHF/VHF combinations. Subparagraph (C) clarifies 
that the Commission may also permit VHF/VHF combinations where 
it determines that doing so will not harm competition and 
diversity.
      Subsection (c) permits the Commission, under certain 
circumstances, to consider concentrations of local media 
interests in proceedings to grant, renew or authorize the 
assignment of station licenses. In a proceeding to grant, 
renew, or authorize the assignment of any station license under 
this title, the Commission may deny the application if the 
Commission determines that the combination of such station and 
more than one other non-broadcast media of mass communication 
would result in an undue concentration of media voices in the 
respective local market. The Commission shall not grant 
applications that would result in two or fewer persons or 
entities controlling all the media of mass communications in 
the market. There is no requirement that any existing interests 
be divested, but the Commission may condition the grant of an 
application to acquire additional media interests.
      Subsection (d) clarifies that any Commission rule 
prescribed prior to the date of enactment of this legislation 
that is inconsistent with the requirements of this section is 
repealed on the date of enactment. Nothing in subsection (d) is 
to be construed to prohibit the continuation or renewal of any 
television local marketing agreement in effect on the date of 
enactment.
Conference agreement
      Section 202(a) of the conference agreement directs the 
Commission to modify its multiple ownership rules to eliminate 
its limitations on the number of radio stations which may be 
owned or controlled nationally. New subsection (b) directs the 
Commission to further modify its rules with respect to the 
number of radio stations a party may own, operate or control in 
a local market. Subsection (b)(2) provides an exception to the 
local market limits, where the acquisition or interest in a 
radio station will result in an increase in the number of radio 
stations.
      Subsection 202(c)(1) directs the Commission to modify its 
multiple ownership rules to eliminate the number of television 
stations which may be owned or controlled nationally and to 
increase the national audience reach limitation for television 
stations to 35 percent. Subsection (c)(2) directs the 
Commission to conduct a rulemaking proceeding to determine 
whether its rules restricting ownership of more than one 
television station in a local market should be retained, 
modified or eliminated. It is the intention of conferees that, 
if the Commission revises the multiple ownership rules, it 
shall permit VHF-VHF combinations only in compelling 
circumstances.
      Section 202(d) directs the Commission to extend its 
waiver policy with respect to its one to a market ownership 
rules to any of the top fifty markets. The Commission now 
generally bans crossownerships of radio and television stations 
in the same market, but has implemented a waiver policy which 
recognizes the potential for public interest benefits of such 
combinations when bedrock diversity interested are not 
threatened. The conferees in adopting subsection (d), intend to 
extend the benefits of this policy to the top fifty markets. 
Also, in the Commission's proceeding to review its television 
ownership rules generally, the Commission is considering 
whether generally to allow such local crossownerships, 
including combinations of a television station and more than 
one radio station in the same service. The conferees expect 
that the Commission's future implementation of its current 
radio-television waiver policy, as well as any changes to its 
rules it may adopt in its pending review, will take into 
account the increased competition and the need for diversity in 
today's radio marketplace that is the rationale for subsection 
(d).
      Subsection (e) directs the Commission to revise its rules 
at 47 CFR 73.658(g) to permit a television station to affiliate 
with a person or entity that maintains two or more networks 
unless such dual or multiple networks are composed of (1) two 
or more of the four existing networks (ABC, CBS, NBC, FOX) or, 
(2) any of the four existing networks and one of the two 
emerging networks (WBTN, UPN). The conferees do not intend 
these limitations to apply if such networks are not operated 
simultaneously, or if there is no substantial overlap in the 
territory served by the group of stations comprising each such 
networks.
      Subsection (f) directs the Commission to revise its rules 
to permit crossownership interests between a broadcast network 
and a cable system. If necessary, the Commission is directed to 
revise its rules to ensure carriage, channel positioning and 
nondiscriminatory treatment of non-affiliated broadcast 
stations by cable systems affiliated with a broadcast network.
      Subsection (g) grandfathers LMAs currently in existence 
upon enactment of this legislation and allows LMAs in the 
future, consistent with the Commission's rules. The conferees 
note the positive contributions of television LMAs and this 
subsection assures that this legislation does not deprive the 
public of the benefits of existing LMAs that were otherwise in 
compliance with Commission regulations on the date of 
enactment.
      Subsection (h) directs the Commission to review its rules 
adopted under section 202 and all of its ownership rules 
biennially. In its review, the Commission shall determine 
whether any of its ownership rules, including those adopted 
pursuant to this section, are necessary in the public interest 
as the result of competition. Based on its findings in such a 
review, the Commission is directed to repeal or modify any 
regulation it determines is no longer in the public interest. 
Apart from the biennial review required by subsection (h), the 
conferees are aware that the Commission already has several 
broadcast deregulation proceedings underway. It is the 
intention of the conferees that the Commission continue with 
these proceedings and conclude them in a timely manner.
      Subsection (i) amends section 613(a) of the 
Communications Act by repealing the restriction on broadcast-
cable crossownership. The conferees do not intend that this 
repeal of the statutory prohibition should prejudge the outcome 
of any review by the Commission of its rules. Subsection (i) 
also amends 613(a) by revising the cable-MMDS crossownership 
restriction so that it does not apply in any franchise area in 
which a cable operator faces effective competition.

                     Section 203--Terms of Licenses

Senate bill
      Section 207 of the Senate bill amends section 307(c) of 
the Communications Act to increase the term of license renewal 
for television licenses from five to ten years and for radio 
licenses from seven to ten years.
House amendment
      Section 306 of the House amendment contains a similar 
provision but amends section 307(c) of the Communications Act 
to provide for a seven year license term for all broadcast 
licenses.
Conference agreement
      The conference agreement adopts the House provisions but 
extends the license term for broadcast licensees to eight years 
for both television and radio.

           Section 204--Broadcast License Renewal Procedures

Senate bill
      Subsection (d) of section 207 amends the broadcast 
license renewal procedures. This subsection amends section 309 
of the Communications Act by adding a new subsection (k) which 
gives the incumbent broadcaster the ability to apply for its 
license renewal without competing applications. A broadcaster 
would apply for its renewal, and the Commission would grant 
such a renewal, if, during the preceding term of its license 
the station has served the public interest, convenience, and 
necessity, has not made any serious violations of the 
Communications Act or of the Commission's rules, and has not, 
through other violations, shown a pattern of abuse.
      The Commission may not consider whether the granting of a 
license to a person other than the renewal applicant might 
serve the public interest, convenience, and necessity prior to 
its decision to approve or deny the renewal application. Under 
this section, the Commission has discretion to consider what is 
a serious violation of the Communications Act. If a licensee 
does not meet those criteria, the Commission may either deny 
the renewal, or impose conditions on the renewal. Once the 
Commission, after conducting a hearing on the record, denies an 
application for renewal, it is then able to accept applications 
for a construction permit for the channel or facilities of the 
former licensee.
      Subparagraph (4) would require broadcast licensees to 
attach a summary of comments regarding violent programming to 
its renewal application.
House amendment
      Section 305 of the House amendment similarly amends 
section 309 of the Communications Act by adding a new 
subsection (k) mandating a change in the manner in which 
broadcast license renewal applications are processed. 
Subsection (k) allows for Commission consideration of the 
renewal application of the incumbent broadcast licensee without 
the contemporaneous consideration of competing applications. 
Under this subsection, the Commission would grant a renewal 
application if it finds that the station, during its term, had 
served the public interest, convenience, and necessity; there 
had been no serious violations by the licensee of the 
Communications Act or Commission rules; and there had been no 
other violations of the Communications Act or Commission rules 
which, taken together, indicate a pattern of abuse. If the 
Commission finds that the licensee has failed to meet these 
requirements, it could deny the renewal application or grant a 
conditional approval, including renewal for a lesser term. Only 
after denying a renewal application could the Commission accept 
and consider competing applications for the license.
Conference agreement
      The conference agreement adopts the House provisions with 
modifications to include the Senate provision requiring a 
renewal applicant to attach to its application a summary of 
comments regarding violent programming. The conference 
agreement sets the effective date for this section at May 1, 
1995.

            section 205--direct broadcast satellite service

Senate bill
      Section 312(a) of the Senate bill amends section 
705(e)(4) of the Communications Act to extend the current legal 
protection against signal piracy to direct-broadcast services.
      Section 312(b) amends section 303 of the Communications 
Act to clarify that the Commission has exclusive jurisdiction 
over the regulation of direct broadcast satellite (DBS) 
service.
House amendment
      The House has identical provisions in sections 308 and 
311 of the House amendment.
Conference agreement
      The conference agreement adopts the Senate provision with 
a conforming change to the definition of ``direct-to-home.''

        section 206--automated ship distress and safety systems

Senate bill
      Section 306 of the Senate bill provides that 
notwithstanding any other provision of the Communications Act, 
any 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 is not required to be equipped with a radio 
telegraphy station operated by one or more radio officers or 
operators.
House amendment
      This House provision is identical.
Conference agreement
      The conference agreement adopts the Senate provision with 
a modification placing the provision as an amendment to section 
364 of the Communications Act. This provision permits a ship 
that fully complies with the Global Maritime Distress and 
Safety System (GMDSS) provisions of the Safety of Life at Sea 
Convention to be exempted from requirements to carry a radio 
telegraph station operated by one or more radio operators. Due 
to the conferees' concern about the proper implementation of 
the GMDSS, the provision specifies that this exemption shall 
only take effect upon the United States Coast Guard's 
determination that the system is fully installed, maintained, 
and is operating properly on each vessel.

      section 207--restrictions on over-the-air reception devices

Senate bill
      No provision.
House amendment
      Section 308 of the House amendment directs the Commission 
to promulgate rules prohibiting restrictions which inhibit a 
viewer's ability to receive video programming from over-the-air 
broadcast stations or direct broadcast satellite services.
Conference agreement
      The conference agreement adopts the House provision with 
modifications to extend the prohibition to devices that permit 
reception of multichannel multipoint distribution services.

                       TITLE III--CABLE SERVICES

                     section 301--Cable Act Reform

Senate bill
      Section 203(a) of the Senate bill amends the definition 
of ``cable system'' in section 602 of the Communications Act.
      Section 203(b) of section 204 of the bill limits the rate 
regulations currently imposed by the 1992 Cable Act.
      Paragraph (1) amends the rate regulation provisions of 
section 623 of the Communications Act for the expanded tier. 
First, it eliminates the ability of a single subscriber to 
initiate a rate complaint proceeding at the Commission. 
Franchising authorities are the relevant State and local 
government entities that still retain the ability to initiate a 
rate proceeding. Second, rates for cable programming services 
will only be considered unreasonable, and subject to 
regulation, if the rates substantially exceed the national 
average for comparable cable programming services.
      Paragraph (2) amends the definition of effective 
competition in section 623(l)(1) to allow the provision of 
video services by a local exchange carrier either through a 
common carrier video platform, or as a cable operator, in an 
unaffiliated cable operator's franchise area to satisfy the 
effective competition test.
      Section 203(c) eliminates cable rate regulation for small 
cable operators serving areas of 35,000 or fewer subscribers.
      Section 203(d) provides that any programming access rules 
that apply to a cable operator under section 628 of the 
Communications Act also apply to a telecommunications carrier 
or its affiliate that provides video programming directly to 
subscribers.
      Section 203(e) provides for expedited decisions by the 
Commission regarding market determinations under section 614 of 
the Communications Act.
      Section 203(f) provides that the provisions of this 
section take effect on the date of enactment.
House amendment
      Section 307(a) of the House amendment amends the 
definition of ``cable service'' in section 602(6) of the 
Communications Act by adding ``or use'' to the definition, 
reflecting the evolution of video programming toward 
interactive services.
      Subsection (b) prohibits the Commission from requiring 
the divestiture of, or preventing or restricting the 
acquisition of, any cable system based solely on the geographic 
location of the system.
      Subsection (c) amends section 623(a) of the 
Communications Act to deregulate equipment, installations, and 
additional connections furnished to subscribers that receive 
more than basic cable service when a cable system has effective 
competition pursuant to section 623(l)(1)(b).
      Subsection (d) amends section 623(a) of the 
Communications Act to limit basic tier rate increases by a 
cable operator to once every six months and permits cable 
operators to implement such increases after 30 days notice. 
Subsection (d) limits the franchising authority's scope of 
review to the incremental change in the basic tier rate 
effected by a rate increase.
      Subsection (e) amends section 623(a) of the 
Communications Act to promote the development of a broadband, 
two-way telecommunications infrastructure. Under this 
paragraph, cable operators are permitted to aggregate equipment 
costs broadly. However, subsection (e) does not permit 
averaging for equipment used by consumers that subscribe only 
to basic service tier. Subsection (e) directs the Commission to 
complete its revisions to current rules necessary to implement 
this subsection within 120 days.
      Subsection (f) amends section 623(c) of the 
Communications Act governing review of complaints by inserting 
a new paragraph (3) requiring that the Commission receive 
complaints from three percent of a system's subscribers, or 10 
subscribers, whichever is greater, before it initiates a rate 
case.
      Subsection (f) extends from 45 days to 90 days the amount 
of time after a cable programming service rate increase goes 
into effect that during which subscribers may file a complaint. 
Pending rate cases will be subject to the new complaint 
threshold and complaining parties are granted a 90-day 
extension to bring complaints into conformance with the new 
complaint threshold requirement. Subsection (f) clarifies that 
the Commission 's scope of review is limited to the last 
incremental consumer programming service rate increase 
consistent with the intent of the 1992 Cable Act.
      Subsection (g) clarifies that a cable operator must 
comply with the uniform rate structure requirement in section 
623(d) of the 1992 Cable Act only with respect to regulated 
services. Subsection (g) also amends section 623(d) of the 
Communications Act to exempt bulk discounts to multiple 
dwelling units (``MDUs'') from the uniform rate requirement.
      Subsection (h) amends section 623(l)(1) of the 
Communications Act by adding a fourth effective competition 
test. Under this new test, effective competition for cable 
programming service tier and subscriber equipment (other than 
that necessary for receiving the basic service tier) is 
present: (1) where a common carrier has been authorized to 
provide video dialtone service in the cable franchise area; (2) 
where a common carrier has been authorized by the Commission or 
pursuant to a franchise to provide video programming directly 
to subscribers in the cable franchise area; or (3) when the 
Commission completes all actions necessary to prescribe the 
video platform rules pursuant to section 653(b)(1). When any of 
these events occurs, the rates for a cable system's cable 
programming services, as well as equipment, installations, and 
additional television connections are deregulated.
      Subsection (h) does not apply to basic cable service. 
Basic service, including all equipment, additional television 
connections, and installations furnished to basic-only 
subscribers, remains subject to regulation until the cable 
operator meets one of the effective competition tests contained 
in section 623(l)(1)(A), (B), and (C) of the Communications 
Act.
      Subsection (i) amends section 623 of the Communications 
Act to deregulate the rates for the cable programming service 
tiers of small companies and the rates for the basic service 
tier of small company systems that offered only a single tier 
of service as of December 31, 1994. Subsection (i) does not 
deregulate the basic tier of small cable systems that offer 
multiple tiers of cable service.
      In order to qualify as a ``small cable operator,'' a 
cable operator must: (1) directly, or through an affiliate, 
serve in the aggregate fewer than one percent of all cable 
subscribers nationwide; and (2) not be affiliated with any 
entity whose annual gross revenues in the aggregate exceed 
$250,000,000.
      Subsection (j) amends section 624(e) of the 
Communications Act by prohibiting States or franchising 
authorities from regulating in the areas of technical 
standards, customer equipment, and transmission technologies.
      Subsection (k) amends section 624A(b)(2) of the 
Communications Act and directs that no Federal agency, State, 
or franchising authority may prohibit a cable operator's use of 
any security system, including scrambling, but permits the 
Commission to prohibit scrambling of video programming on the 
broadcast-basic service tier unless scrambling is necessary to 
prevent signal piracy.
      Subsection (l) amends section 624A of the Communications 
Act to direct the Commission to set only minimal standards when 
implementing regulations to assure compatibility between cable 
``set-top'' boxes, televisions, and video cassette recorders, 
and to rely on the marketplace for other features, services, 
and functions to ensure basic compatibility. This subsection 
clarifies section 624(c)(1)(A) further to ensure that 
Commission efforts with respect to cable compatibility do not 
affect unrelated markets, such as computers or home automation 
communications, or result in a preference for one home 
automation protocol over another.
      Subsection (m) amends section 625(d) of the 
Communications Act by clarifying that a cable operator may move 
any service off the basic service tier at its discretion, other 
than the local broadcast signals and access channels required 
to be carried on the basic service tier under section 
623(b)(7)(A) of the Communications Act.
      Subsection (n) amends section 632 of the Communications 
Act to provide cable operators with flexibility to use 
``reasonable'' written means to convey rate and service changes 
to consumers. Notice need not be inserted in the subscriber's 
bill.
      Subsection (n) also provides that prior notice is not 
required for any rate change that is the result of a regulatory 
fee, franchise fee, or any other fee, tax, assessment or change 
of any kind imposed by the Government on the transaction 
between a cable operator and a subscriber.
      Subsection (o) amends section 623 of the Communications 
Act to clarify that losses incurred prior to the enactment of 
the 1992 Cable Act by a cable system owned and operated by the 
original franchisee may not be disallowed in determination of 
rate regulation.
Conference agreement
      The conference agreement adopts the House provisions with 
modifications. It adopts the House provision amending the 
definition of cable service. The conferees intend the amendment 
to reflect the evolution of cable to include interactive 
services such as game channels and information services made 
available to subscribers by the cable operator, as well as 
enhanced services. This amendment is not intended to affect 
Federal or State regulation of telecommunications service 
offered through cable system facilities, or to cause dial-up 
access to information services over telephone lines to be 
classified as a cable service. The conference agreement adopts 
the Senate provision amending the definition of cable system to 
clarify that the term does not include a facility that serves 
subscribers without using any public right-of-way.
      The conference agreement sunsets regulation of the cable 
programming services tier on March 31, 1999. The agreement 
directs the Commission to review a rate increase for an 
operator's cable programming services tier within 90 days of a 
complaint.
      The conference agreement amends the Communications Act's 
requirements for a uniform rate structure to clarify that such 
requirements do 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 
dwelling units shall not be subject to the uniform rate 
requirement except that a cable operator 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.
      The conference agreement adopts an amendment to section 
623(l) of the Communications Act to expand the effective 
competition test for deregulating both basic and cable 
programming service tiers. The test provides that effective 
competition exists when a telephone company or any multichannel 
video programming distributor is offering video programming 
services directly to subscribers by any means in the franchise 
area of an unaffiliated cable operator. ``By any means,'' 
includes any medium (other than direct-to-home satellite 
service) for the delivery of comparable programming, including 
MMDS, LMDS, an open video system, or a cable system. For 
purposes of section 623(l)(1)(D) of the Communications Act, 
``offer'' has the same meaning given that term in the 
Commission's rules as in effect on the date of enactment of the 
bill. See 47 CFR 76.905(e). The conferees intend that 
``comparable'' requires that the video programming services 
should include access to at least 12 channels of programming, 
at least some of which are television broadcasting signals. See 
47 CFR 76.905(g).
      The conference agreement adopts the Senate provision with 
respect to deregulation of small cable systems with the 
modification that the franchise area served by such system must 
reach 50,000 or fewer subscribers. The agreement adopts the 
House provisions on market determinations, technical standards, 
cable equipment compatibility, and subscriber notices. The 
agreement amends section 628 of the Communications Act to 
extend the program access requirements to satellite cable 
programming vendors in which a common carrier providing video 
programming by any means has an attributable interest. This 
provision clarifies that such common carrier shall not be 
deemed to have an attributable interest in such programming 
vendor (or its parent company) solely as a result of the common 
carrier's holding, or having the right to appoint or elect, two 
or fewer common officers or directors. The conference agreement 
amends section 617 of the Communications Act to repeal the 
anti-trafficking restrictions. The conference agreement adopts 
the House provisions on equipment aggregation and treatment of 
prior year losses.
      The conference agreement also adopts the House provision 
on cable equipment compatibility. As used in section 624A of 
the Communications Act, the term ``affect'' means to produce a 
material influence upon, or alteration in, such features, 
functions, protocols, and other product and service options. 
The conferees intend that the Commission should promptly 
complete its pending rulemaking on cable equipment 
compatibility, but not at the risk that premature or overbroad 
Government standards may interfere in the market-driven process 
of standardization in technology intensive markets.

       Section 302--Cable Service Provided by Telephone Companies

Senate bill
      The Senate bill creates new sections of the 
Communications Act to provide for the provision of video 
programming by telephone companies.
House amendment
      The House amendment creates new sections of the 
Communications Act to provide for the provision of video 
programming by telephone companies.
Conference agreement
      Section 302 of the conference agreement establishes a new 
``Part V'' of title VI of the Communications Act. Part V 
contains new sections 651-653 to provide for the provision of 
video programming by telephone companies.

  New Section 651--Regulatory Treatment of Video Programming Services

Senate bill
      Section 202 of the Senate bill eliminates the cable/
telephone cross ownership restriction and grants telephone 
companies the option of providing video programming to 
subscribers over a cable system or over a video platform. It 
also states that a BOC need not use a separate affiliate if it 
provides facilities, services or information to all programmers 
on the same terms and conditions as it provides to its own 
operations, and if it does not use telecommunications services 
to subsidize the provision of video programming. In addition, 
it states that when a BOC provides cable service as a cable 
operator, it must do so through a separate affiliate, except 
that if the cable service is provided using the company's own 
telephone exchange facilities, it is not required to make 
capacity available on a nondiscriminatory basis to other video 
service providers because of such use.
House amendment
      Section 201 of the House amendment permits a common 
carrier that provides video programming directly to subscribers 
in its telephone service area, to do so either over a video 
platform or over a cable system. In addition, it requires the 
carrier to provide notice to programming providers and to 
submit detailed information to the Commission concerning its 
intention to establish capacity for the provision of video 
programming. Carriers are required to establish channel 
capacity sufficient to meet all bona fide demand and to expand 
capacity in response to demand for additional capacity.
Conference agreement
      New section 651 of the Communications Act specifically 
addresses the regulatory treatment of video programming 
services provided by telephone companies. Recognizing that 
there can be different strategies, services and technologies 
for entering video markets, the conferees agree to multiple 
entry options to promote competition, to encourage investment 
in new technologies and to maximize consumer choice of services 
that best meet their information and entertainment needs.
      New section 651 (a)(1) states that common carriers, or 
other persons, that use radio communication to provide video 
programming will be regulated under title III of the 
Communications Act, and are subject to the requirements of new 
section 652 of the Communications Act but are not otherwise 
subject to the requirements of title VI. This will create 
parity among providers of services using radio communication.
      New section 651(a)(2) states that when common carriers 
provide only video transmission on a common carrier basis, they 
are subject only to title II and to new section 652, and are 
not otherwise subject to the requirements of title VI merely by 
engaging in common carrier transport of video programming.
      New section 651(a)(3) states that common carriers 
providing video programming to subscribers by any means other 
than those described in new section 651(a)(1) or (a)(2), are 
subject to the requirements of title VI, unless such 
programming is provided by means of an open video system that 
has been certified by the Commission. New section 651(a)(3) 
also states that carriers that provide programming using a 
certified open video system are subject to the requirements of 
part V, and only those provisions of parts I through IV of 
title VI as are specifically provided in new section 653(c). 
Open video systems are not subject to the requirements of title 
II for the provision of video programming or cable services.
      Common carriers that provide video programming using 
radio communication or using common carriage transmission, or a 
combination of those services, also may choose to provide an 
open video system. New section 651(a)(4) provides that such 
systems are subject to the same requirements as other open 
video systems.
      New section 651(b) states that a local exchange carrier 
that provides cable service by means of an open video system, 
or by means of an integrated cable system utilizing its own 
telephone exchange facilities, is not required by title II to 
also make transmission capacity and related services available 
on a nondiscriminatory basis to any other person for the 
provision of cable service or video programming directly to 
subscribers. This provision clarifies that the open video 
system operator's obligation to provide system capacity and 
facilities to others is limited to, and governed by, part V and 
the other requirements specifically provided in new section 
653(c). Likewise, a local exchange carrier that utilizes its 
own telephone exchange facilities and services to provide cable 
services other than through an open video system is required by 
such use only to make cable and video programming capacity and 
facilities available to others for the provision of cable 
service to the extent provided in parts I through IV of title 
VI, regardless of whether those facilities also are used to 
provide telephone exchange service under title II. Similarly, 
under new section 651(c) common carriers that establish video 
delivery systems, including cable and open video systems, are 
not required to obtain section 214 authority prior to 
establishing or operating such systems. This requirement has 
served as an obstacle to competitive entry and has 
disproportionately disadvantaged new competitors. Eliminating 
this barrier to entry will hasten the development of video 
competition and will provide consumers with increased program 
choice.

                new section 652--prohibition on buyouts

Senate bill
      Section 202 of the Senate bill adds to section 613(b) of 
the Communications Act several provisions restricting the 
ability of a local exchange carrier to acquire more than a 10 
percent financial interest or any management interest in a 
cable operator in its telephone service area and restricting 
the ability of a cable operator to acquire similar interests in 
a local exchange carrier in the cable operator's franchise 
area. It includes certain exceptions for acquisitions in non-
urban areas with less than 50,000 inhabitants, and it 
authorizes the Commission to grant waivers for economic 
distress, economic viability of the cable system, or where any 
anticompetitive effects of the proposed transaction are clearly 
outweighed by the public interest, and where the local 
franchising authority approves the waiver. The bill directs the 
Commission to act on such waiver requests within 180 days of 
filing. The Senate provisions also permit a local exchange 
carrier, if certain conditions are met, to use excess capacity 
of a cable company for that portion of the transmission 
facilities of the cable operator from the last multi-user 
terminal to the premises of the end user.
      Section 706 of the Senate bill authorizes a local 
exchange carrier or any of its affiliates to purchase or 
otherwise acquire more than 10 percent of the financial 
interest or any management interest in any cable system in its 
telephone service area so long as (1) the cable system serves 
no more than 20,000 cable subscribers and (2) no more than 
12,000 of those cable subscribers live in an urbanized area.
House amendment
      Section 655 of the House amendment contains a general 
prohibition on buy-outs by a common carrier of a cable system 
within its service territory. Subsection (b) provides 
exceptions that would permit a common carrier to purchase a 
cable system or systems under circumstances including the 
following: (1) the cable system serves a rural area; (2) the 
total number of subscribers served by such systems adds up to 
less than ten percent of the households served by the carrier 
in the telephone service area, and no such system or systems 
serve a franchise area with more than 35,000 inhabitants for an 
affiliated system, or more than 50,000 inhabitants for any 
system that is not affiliated with any system whose franchise 
area is contiguous; and (3) the exemption would permit a 
carrier to obtain, by contract with a cable operator, use of 
the ``drop'' from the curb to the home that is controlled by 
the cable company, if such use was reasonably limited in scope 
and duration as determined by the Commission.
      The exception under subparagraph (4) is intended to 
address a market situation where a dominant cable operator that 
is a large multiple systems operator (MSO) shares a market with 
a small independent cable system.
      Subsection (c) also contains the waiver process for the 
buy-out provision under which the Commission may grant a waiver 
upon a showing of undue economic distress by the owner of the 
cable system if a sale to a telephone company is blocked. The 
Commission is directed to act on a waiver application within 
180 days after it is filed.
Conference agreement
      The conference agreement adopts the provisions of the 
Senate bill limiting acquisitions and prohibiting joint 
ventures between local exchange companies and cable operators 
that operate in the same market to provide video programming to 
subscribers or to provide telecommunications services in such 
market. Such carriers or cable operators may enter into a joint 
venture or partnership for other purposes, including the 
construction of facilities for the provision of such 
programming or services. With respect to exceptions to these 
general rules contained in new section 652 (a), (b), and (c), 
the conferees agreed, in general, to take the most restrictive 
provisions of both the Senate bill and the House amendment in 
order to maximize competition between local exchange carriers 
and cable operators within local markets.
      In new section 652(d)(1) the conference agreement allows 
a local exchange carrier to obtain a controlling interest in, 
management interest in, or a joint venture or partnership with 
a cable system operator for the use of such system located 
within its telephone service area to the extent that such 
system or facilities only serve places or territories that have 
fewer than 35,000 inhabitants and are outside urbanized areas. 
The agreement further stipulates that such systems in the 
aggregate serve less than 10 percent of the households in the 
telephone service area of such local exchange carrier. New 
section 652(d)(1) also permits a cable operator to obtain a 
controlling interest in, management interest in, or a joint 
venture or partnership with a local exchange carrier for the 
use of such carrier's facilities if such facilities serve 
places or territories that have fewer than 35,000 inhabitants 
and are outside of urbanized areas. The agreement contains 
other very limited exceptions to the general rules contained in 
new section 652 (a), (b), and (c). In new section 652(d)(3) 
acquisitions would be permitted in competitive markets where a 
local exchange carrier seeking to obtain a controlling interest 
or form a joint venture with a cable system may do so if 
narrowly drawn requirements are met. New section 652(d)(4) 
provides that new section 652(a) shall not apply to certain 
cable systems serving less than 17,000 subscribers outside of 
the top television markets. New section 652(d)(5) of the 
conference agreement allows a non-Tier I local exchange carrier 
to obtain more than a ten percent interest in, or to form a 
joint venture or partnership with, a small cable system that 
serves no more than 20,000 cable subscribers within the 
telephone company's service territory, provided that no more 
than 12,000 of those subscribers live within an urbanized area.
      The conference agreement also allows for limited joint 
use of certain cable system facilities. In new section 
652(d)(2) the agreement adopts language from the Senate bill 
that will allow a local exchange carrier to 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. The agreement stipulates that 
such joint use is permitted if such use is reasonably limited 
in scope and duration as determined by the Commission.
      The conferees also provided for the establishment of a 
waiver process of the statutory rules. In new section 
652(d)(6), the conferees give specific guidance to the 
Commission with respect to granting waivers. In that regard, 
the conferees allow the Commission to waive the various 
restrictions in this section if: the cable company or telephone 
company would be subjected to undue economic stress, the cable 
system of local exchange facilities would not be economically 
viable, the anticompetitive effects of the proposed transaction 
are clearly outweighed by the public interest, and the local 
franchising authority approves of such waiver.
      Finally, new section 652(e) contains a definition of 
telephone service area for the purposes of this section.

          New Section 653--Establishment of Open Video Systems

Senate bill
      Section 202 of the Senate bill amends section 613(b) of 
the Communications Act to state that nothing precludes a 
telecommunications carrier from carrying video programming 
provided by others directly to subscribers over a common 
carrier video platform. It also states that nothing precludes a 
video program provider that makes use of a common carrier video 
platform from being treated as an operator of a cable system 
for purposes of section 111 of title 17, U.S.C.
      It also requires providers of common carrier video 
platform services to provide local broadcast stations, and 
public, educational and governmental entities, access to 
platforms for the purpose of transmission of television 
broadcast programming at rates no higher than the incremental-
cost-based rates of providing such access.
      It states that video program providers may be required to 
pay fees in the lieu of franchise fees, if the fees are 
competitively neutral and are separately identified in consumer 
billing. It also states that common carries are not required to 
obtain certificates under section 214 in order to construct 
facilities to provide video programming services. Within 1 year 
after enactment, the Commission must prescribe regulations that 
set forth a number of safeguards. Finally, it specifies that 
the amendment made by subsection (a) takes effect on the date 
enactment, while the amendment made by subsection (b) (which 
states that no section 214 is required to build platform 
facilities) takes effect 1 year after enactment.
House amendment
      Section 201 of the House amendment adds new section 653 
to the Communications Act. Section 653 permits common carriers 
to establish video platforms but requires them to notify the 
Commission of their intent to do so; it also specifies the 
information that must be included in such notification. 
Carriers establishing platforms are required to establish 
channel capacity for the provision of video programming in 
response to bona fide requests for capacity and must notify the 
Commission if there is a delay in or denial of capacity and are 
required to construct additional capacity to meet excess 
demand. The Commission is required to resolve disputes arising 
from requests for capacity within 180 days of notice of such a 
dispute.
      The Commission is given 6 months from the date of 
enactment to complete all actions necessary (including any 
reconsideration) to prescribe regulations that--prohibit 
carriers from discriminating among video programming providers 
with regard to carriage on the platform; determine what 
constitutes a bona fide request for capacity; permit channel 
sharing; extend regulations concerning sports exclusivity, 
network nonduplication and syndicated exclusivity to video 
platforms; require platforms to provide service, transmission 
and interconnection to unaffiliated programmers that is 
equivalent to that provided to the common carrier's video 
affiliate; prohibit unreasonable discrimination in favor of the 
common carrier's video affiliate concerning material or 
information needed to select programming; and, prohibit a 
common carrier from excluding areas from its video platform 
service area on the basis of ethnicity, race or income.
      Section 656, as added by the House amendment, set forth 
the applicability of parts I through IV of title VI to any 
video programming affiliate established by a common carrier in 
accordance with the requirements of part V. Subsection (a) 
states that, in general, any provision that applies to a cable 
operator under the following sections also applies to such 
affiliate--section 613 (other than subsection (a)(2)), 616, 
617, 628, 631, 632 and 643 of title VI. Sections 611, 612, 614 
and 615 of title VI and section 325 of title III also apply to 
such affiliates in accordance with the regulations prescribed 
under subsection (b). Parts III and IV (other than sections 
628, 631, 632 and 634) of title VI to apply to such affiliates.
      Subsection (b) addresses implementation. The Commission 
is required to prescribe regulations to ensure that common 
carriers that operate video platforms provide: capacity, 
services, facilities and equipment for public, educational and 
governmental use; capacity for commercial use; capacity for 
broadcast television stations; and, an opportunity for 
commercial broadcast stations to choose between mandatory 
carriage and reimbursement for retransmission. It also directs 
the Commission to impose obligations that are no greater or 
lesser than the corresponding cable operator obligations 
referenced in subsection (a)(2) of section 656.
      Finally, this subsection also states that video 
programming affiliates of common carriers that establish 
platforms, and multichannel video programming distributors that 
use such platforms to offer competing service, are subject to 
the payment of local franchise fees. It adds that such fees are 
in lieu of fees imposed under section 622 and that the rate of 
such fees may not exceed the rate at which franchise fees are 
imposed on cable operators in the same franchise area.
Conference agreement
      The conference agreement adds a new section 653 to the 
Communications Act. The conferees recognize that telephone 
companies need to be able to choose from among multiple video 
entry options to encourage entry, and so systems under this 
section allowed to tailor services to meet the unique 
competitive and consumer needs of individual markets. New 
section 653(a) focuses on the establishment of open video 
systems by local exchange carriers and provides for reduced 
regulatory burdens subject to compliance with the provisions of 
new section 653(b) and Commission certification of a carrier's 
intent to comply. New section 653(a) also gives the Commission 
authority to resolve disputes (and award damages), but requires 
such resolution to occur within 180 days after notice of the 
dispute is submitted to the Commission.
      New section 653(b) gives the Commission six months from 
the date of enactment to complete all actions necessary, 
including any reconsideration, to prescribe regulations to 
accomplish the following--
            except as required by section 611, 614 or 615, to 
        prohibit open video system operators from 
        discriminating among video programmers with regard to 
        carriage, and ensure that the rates, terms and 
        conditions for carriage are just and reasonable and are 
        not unjustly or unreasonably discriminatory;
            if demand exceeds channel capacity, to prohibit an 
        open video system operator and its affiliates from 
        selecting the video programming services that occupy 
        more than one-third of the activated channel capacity 
        of the system; but this limitation does not in any way 
        limit the number of channels a carrier and its 
        affiliates may offer to provide directly to 
        subscribers;
            to permit an open video system operator to require 
        channel sharing; that is, to carry only one channel of 
        any video programming service that is offered by more 
        than one video programming provider (including the 
        local exchange carrier's video programming affiliate), 
        provided that subscribers have ready and immediate 
        access to any such video programming service;
            to extend the Commission's regulations concerning 
        sports exclusivity, network nonduplication and 
        syndicated exclusivity to the distribution of video 
        programming over open video systems, must carry for 
        commercial and noncommercial broadcast stations, and 
        retransmission content; and,
            to prohibit an open video system operator from 
        unreasonably discriminating in favor of itself and its 
        affiliates with regard to material or information 
        provided for the purpose of selecting programming or 
        presenting information to subscribers; to require an 
        open video system operator to ensure that video 
        programming providers or copyright holders are able to 
        identify their programming services to subscribers; to 
        require the operator to transmit such identification 
        without change or alteration; and to prohibit an open 
        video system operator from omitting television 
        broadcasters or other unaffiliated video programming 
        services from carriage on any navigational device, 
        guide, or menu.
      New section 653(c) sets forth the reduced regulatory 
burdens imposed on open video systems. There are several 
reasons for streamlining the regulatory obligations of such 
systems. First, the conferees hope that this approach will 
encourage common carriers to deploy open video systems and 
introduce vigorous competition in entertainment and information 
markets. Second, the conferees recognize that common carriers 
that deploy open systems will be ``new'' entrants in 
established markets and deserve lighter regulatory burdens to 
level the playing field. Third, the development of competition 
and the operation of market forces mean that government 
oversight and regulation can and should be reduced.
      New section 653(c)(1)(A) states that the following 
provisions that apply to cable operators also apply to 
certified operators of open video systems--sections 613 (other 
than subsection (a)(2) thereof), 616, 623(f), 628, 631, and 
634; new section 653(c)(1)(B) states that the following 
sections--611, 612, 614, and 615, and section 325 of title 
III--apply in accordance with regulations prescribed under 
paragraph (2); and, new section 653(c)(1)(C) states that 
sections 612 and 617, and parts III and IV (other than sections 
623(f), 628, 631, and 634), of this title do not apply.
      With respect to the rulemaking proceeding required by new 
section 653(b)(1), new section 653(c)(2)(A) requires that the 
Commission shall, to the extent possible, impose obligations 
that are no greater or lesser than the obligations contained in 
the provisions described in new section 653(c)(1)(B).
      New section 653(c)(2)(B) states that open video system 
operators may be subject to fees imposed by local franchising 
authorities, but that such fees are in lieu of fees required 
under section 622. A State governmental authority could also 
impose taxes, fees or other assessments in lieu of franchise or 
franchise-like fees imposed by municipalities. In another 
effort to ensure parity among video providers, the conferees 
state that such fees may only be assessed on revenues derived 
from comparable cable services and the rate at which such fees 
are imposed on operators of open video systems may not exceed 
the rate at which franchise fees are imposed on any cable 
operator in the corresponding franchise area. Open system 
operators would have the same flexibility as their cable 
operator competitors to state separately these fees on their 
customer bills.
      The conferees intend that an operator of an open video 
system under this part shall be subject, to the extent 
permissible under State and local law, to the authority of a 
local government to manage its public rights-of-way in a 
nondiscriminatory and competitively neutral manner.
      New section 653(c)(3) is a further attempt to ensure that 
operators of open video systems are not burdened with 
unreasonable regulatory obligations. It states that the 
requirements of new section 653 are intended to operate in lieu 
of, and not in addition to, the requirements of title II. The 
conferees do not intend that the Commission impose title II-
like regulation under the authority of this section.
      Rules and regulations adopted by the Commission pursuant 
to its jurisdiction under title II should not be merged with or 
added to the rules and regulations governing open video 
systems, which will be subject to new section 653, not title 
II. Section 302(b)(3) of the conference agreement specifically 
repeals the Commission's video dialtone rules. Those rules 
implemented a rigid common carrier regime, including the 
Commission's customer premises equipment and Computer III 
rules, and thereby created substantial obstacles to the actual 
operation of open video systems.
      New section 653(c)(4) provides that nothing in the 
Communications 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.
      New section 653(d) contains the definition of the term 
``telephone service area'' to be used in conjunction with the 
provisions of new section 653.
      Section 302(b) of the conference agreement contains 
technical and conforming amendments. Paragraph (1) repeals 
subsection (b) of section 613 of the Communications Act (47 
U.S.C. 533(b)). Paragraph (2) amends paragraph (7) of section 
602 of the Communications Act to clarify that the provision 
solely of interactive on-demand services over a common carrier 
facility or the provision of an open video system does not 
render the facility a cable system and redesignates paragraphs 
(12) through (19) as (13) through (20), and inserts paragraph 
(12), defining ``interactive on-demand services.'' Paragraph 
(3), as noted previously, provides that the Commission's video 
dialtone regulations, adopted in CC Docket No. 87-266, are 
repealed on the date of enactment and shall not apply to the 
operation of an open video system. Repeal of the Commission's 
video dialtone regulations is not intended to alter the status 
of any video dialtone service offered before the regulations 
required by this section become effective.

    section 303--preemption of franchising authority regulation of 
                      telecommunications services

Senate bill
      Subsection 201(b) of the Senate bill establishes the 
principles applicable to the provision of telecommunications by 
a cable operator. Paragraph (1) of this subsection adds a new 
paragraph 3(A) to section 621(b) of the Communications Act, 
which sets forth the jurisdiction of and limitations on 
franchising authorities over cable operators engaged in the 
provision of telecommunications services. Specifically, a cable 
operator or affiliate engaged in the provision of 
telecommunications services is not required to obtain a 
franchise under title VI of the Communications Act, nor do the 
provisions of title VI apply to a cable operator or affiliate 
to the extent they are engaged in the provision of 
telecommunications services. Franchising authorities are 
prohibited from ordering a cable operator or affiliate to 
discontinue the provision of telecommunications service, 
requiring cable operators to obtain a franchise to provide 
telecommunications services, or requiring a cable operator to 
provide telecommunications services or facilities as a 
condition of initial grant of franchise, franchise renewal, or 
transfer of a franchise. However, the Senate intends that 
telecommunications services provided by a cable company shall 
be subject to the authority of a local government to manage its 
public rights of way in a non-discriminatory and competitively 
neutral manner and to charge fair and reasonable fees for its 
use. These changes do not affect existing Federal or State 
authority with respect to telecommunications services.
House amendment
      Section 106 of the House amendment creates a new section 
621(b)(3)(A) of the Communications Act that provides that, to 
the extent a cable operator is engaged in providing a 
telecommunications service other than cable service, it shall 
not be required to obtain a franchise, and the provisions of 
title VI of the Communications Act shall not apply. 
Subparagraph (B) provides that a franchising authority may not 
impose any requirement that has the effect of prohibiting or 
limiting the provision of telecommunications service by a cable 
operator.
      Subparagraph (C) provides that a franchising authority 
may not terminate an operator's offering of a 
telecommunications service or cable service because of the 
failure of the operator to obtain a franchise for the provision 
of telecommunications services. Subparagraph (D) establishes 
that franchising authorities may not require a cable operator 
to provide any telecommunications service or facilities, other 
than intergovernmental services, as a condition of the initial 
grant of a franchise or renewal.
      Subsection (b) amends section 622(b) of the 
Communications Act by inserting the phrase ``to provide cable 
services.'' This amendment makes clear that the franchise fee 
provision is not intended to reach revenues that a cable 
operator derives for providing new telecommunications services 
over its system, but only the operators cable-related revenues.
Conference agreement
      The conference agreement adopts the House provision with 
some minor, technical modifications. The conferees intend that, 
to the extent permissible under State and local law, 
telecommunications services, including those provided by a 
cable company, shall be subject to the authority of a local 
government to, in a nondiscriminatory and competitively neutral 
way, manage its public rights-of-way and charge fair and 
reasonable fees.

      section 304--competitive availability of navigation devices

Senate bill
      No provision.
House amendment
      Section 203 of the House amendment directs the Commission 
to adopt regulations to assure the competitive availability to 
consumers of converter boxes, interactive communications 
devices, and other customer premises equipment from 
manufacturers, retailers, and other vendors not affiliated with 
a telecommunications operator. Section 203 does not prohibit 
telecommunications system operators from also offering 
navigation devices and other customer premise equipment to 
customers provided that the system operators' charges for 
navigation devices and equipment are separately stated, and are 
not subsidized by the charges for the network service.
      Section 203 specifically recognizes that cable and other 
telecommunications system operators have a valid interest, 
which the Commission should continue to protect, in system or 
signal security and in preventing theft of service and, 
therefore, the Commission may not prescribe regulations which 
would jeopardize signal security or impede the legal rights of 
a provision to preempt theft of service.
      Section 203 directs the Commission to waive a regulation 
for a limited time where the telecommunications system operator 
has shown that the waiver is necessary to the introduction of a 
new telecommunications subscription service.
      Section 203(f) sunsets the regulations adopted pursuant 
to this section when the Commission determines that the market 
for customer premises equipment, including navigation devices, 
has become competitive.
Conference agreement
      The conference agreement adopts the House provision with 
modifications as a new section 629 of the Communications Act. 
The scope of the regulations are narrowed to include only 
equipment used to access services provided by multichannel 
video programming distributors. In prescribing regulations to 
ensure the commercial availability of such equipment to 
consumers, the Commission is directed to consult with private 
standard-setting organizations, such as IEEE, DAVIC (Digital 
Audio Video Council), MPEG, ANSI and other appropriate bodies. 
The conferees intend that the Commission avoid actions which 
could have the effect of freezing or chilling the development 
of new technologies and services. One purpose of this section 
is to help ensure that consumers are not forced to purchase or 
lease a specific, proprietary converter box, interactive device 
or other equipment from the cable system or network operator. 
Thus, in implementing this section, the Commission should take 
cognizance of the current state of the marketplace and consider 
the results of private standards setting activities.
      The conference agreement also directs the Commission to 
act on waiver requests within 90 days. The agreement sunsets 
the regulations when the Commission determines the following: 
the market for the multichannel video programming distributors 
is competitive; the market for equipment used in conjunction 
with the services is competitive; and elimination of the 
regulations are in the public interest and would promote 
competition. The agreement makes clear that nothing in this 
section expands or limits current Commission authority.

              Section 305--Video Programming Accessibility

Senate bill
      Section 308 of the Senate bill adds a new section 262 to 
the Communications Act in part to require the Commission to 
ensure that video programming is accessible through closed 
captions and that video programming providers or owners 
maximize the accessibility of video programming previously 
published or exhibited through the provision of closed 
captions. New section 262(f) further provides the Commission 
with authority to exempt various program and providers of video 
programs from this requirement. In addition, a provider of 
video programming or program owner may petition the Commission 
for an exemption from the requirements of this subsection.
      Section 262(f) also requires the Commission to undertake 
a study of the current extent of closed captioning of video 
programming and of previously published video programming; 
providers of video programming; the cost and market for closed 
captioning; strategies to improve competition and innovation in 
the provision of closed captioning; and such other matters as 
the Commission considers relevant.
      New section 262(g) requires the Commission to prescribe 
regulations to implement all provisions of this new section, 
not later than eighteen (18) months after the date of enactment 
of this Act. As noted above, such regulations shall be 
consistent with the standards developed by the Board in 
accordance with section 262(e) of this new section.
      New section 262(h) authorizes the Commission to enforce 
this new section. The Commission shall resolve, by final order, 
a complaint alleging a violation of this section within 180 
days after the date such complaint is filed.
      Subsection (b) section 308 requires that the Commission 
undertake within 6 months of enactment of this Act a study of 
the feasibility of requiring the use of video descriptions on 
video programming in order to ensure the accessibility of video 
programming to individuals with visual impairments.
House amendment
      Section 204 of the House amendment is designed to ensure 
that video services are accessible to hearing impaired and 
visually impaired individuals. Subsection (a) requires the 
Commission to complete an inquiry within 180 days of enactment 
of this section to ascertain the level at which video 
programming is closed captioned. In its inquiry, the Commission 
should examine the level of closed captioning for live and 
prerecorded programming, the extent to which existing or 
previously published programming is closed captioned, the type 
and size of the provider or owner providing the closed 
captioning, the size of the markets served, the relative 
audience shares achieved, and any other relevant factors. The 
Commission also should examine the quality of closed captioning 
and the style and standards which are appropriate for the 
particular type of programming. Finally, the Commission should 
examine the costs of closed captioning to programs and program 
providers.
      Subsection (b) provides that, consistent with the results 
of its inquiry, the Commission is instructed to establish an 
appropriate schedule of deadlines and technical requirements 
regarding closed captioning of programming. Accordingly, the 
Commission shall establish reasonable timetables and exceptions 
for implementing this section. Such schedules should not be 
economically burdensome on program providers, distributors or 
the owners of such programs.
      Section 204(d) allows the Commission to exempt specific 
programs, or classes of programs, or entire services from 
captioning requirements. Any exemption should be granted using 
the information collected during the inquiry, and should be 
based on a finding that the provision of closed captioning 
would be economically burdensome to the provider or owner of 
such programs.
      The term ``provider'' contained throughout section 204(d) 
refers to the specific television station, cable operator, 
cable network or other service that provides programming to the 
public. When considering such exemptions, the Commission should 
focus on the individual outlet and not on the financial 
conditions of that outlet's corporate parent, nor on the 
resources of other business units within the parent's corporate 
structure.
      When considering exemptions under paragraph (d)(1), the 
Commission shall consider several factors, including but not 
limited to: (1) the nature and cost of providing closed 
captions; (2) the impact on the operations of the program 
provider, distributor, or owner; (3) the financial resources of 
the program provider, distributor, or owner and the financial 
impact of the program; (4) the cost of the captioning, 
considering the relative size of the market served or the 
audience share; (5) the cost of the captioning, considering 
whether the program is locally or regionally produced and 
distributed; (6) the non-profit status of the provider; and (7) 
the existence of alternative means of providing access to the 
hearing impaired, such as signing.
      Paragraph (d)(2) recognizes that closed captioning should 
not be required where it would be inconsistent with programming 
contracts between program owners, distributors, or providers, 
already in effect as of the date of enactment of this section, 
or inconsistent in effect as of the date of enactment of this 
section, or inconsistent with copyright law. In addition, cable 
operators and common carriers establishing video platforms may 
not refuse to carry programming or services which are required 
to be carried under the carriage provisions of title VI of the 
Communications Act or pursuant to retransmission consent 
obligations due to closed captioning requirements.
      Paragraph (d)(3) authorizes the Commission to grant 
additional exemptions, on a case-by-case basis, where providing 
closed captions would constitute an undue burden. In making 
such determinations, the Commission shall balance the need for 
closed captioned programming against the potential for 
hindering the production and distribution of programming.
      Subsection (f) directs the Commission to initiate an 
inquiry within six months of the date of enactment, regarding 
the use of video descriptions on video programming in order to 
ensure the accessibility of video programming to persons with 
visual impairments. The Commission shall report to Congress on 
its findings. The report shall assess appropriate methods for 
phasing video descriptions into the marketplace, technical and 
quality standards for video descriptions, a definition of 
programming for which video descriptions would apply, and other 
technical and legal issues. Following the completion of this 
inquiry the Commission may adopt regulations it deems necessary 
to promote the accessibility of video programming to persons 
with visual impairments. It is the goal of the House to ensure 
that all Americans ultimately have access to video services and 
programs, particularly as video programming becomes an 
increasingly important part of the home, school and workplace. 
Subparagraph (h) makes clear that the Commission has exclusive 
jurisdiction over complaints arising under this section.
Conference agreement
      The conference agreement adopts the House provision with 
modifications which are incorporated as new section 713 of the 
Communications Act. The agreement deletes the House provision 
referencing a Commission rulemaking with respect to video 
description. The remedies available under the Communications 
Act, including the provisions of sections 207 and 208, are 
available to enforce compliance with the provisions of section 
713.

                      TITLE IV--REGULATORY REFORM

                  SECTION 401--REGULATORY FORBEARANCE

Senate bill
      Section 303 of the Senate bill adds a new section 260 of 
the Communications Act, under which the Commission must forbear 
from regulation of a carrier or a service if it determines that 
enforcement is not necessary to ensure that charges are just 
and reasonable and not unjustly or unreasonably discriminatory 
or to protect consumers, and that forbearance is consistent 
with the public interest. In making the determination to 
forbear, the Commission shall consider whether forbearance 
would promote competition. This section allows a carrier to 
petition the Commission to request that the Commission exercise 
the authority granted by this section, and such petition shall 
be deemed granted if the Commission does not deny the petition 
within 90 days (unless extended for an additional 60 day 
period). The Commission may grant the petition in whole or in 
part, and must justify its decision in writing.
House amendment
      Section 103 of the House amendment adds new section 230 
to the Communications Act. Section 230 requires that the 
Commission forbear from applying regulation from part I or part 
II of title II (except for sections 201, 202, 208, 243, and 
248) to a common carrier or service unless it determines that 
enforcement is necessary to ensure that charges are reasonable 
and not unjustly or unreasonably discriminatory or to protect 
consumers, or that forbearance is inconsistent with the public 
interest. In making the determination to forbear, the 
Commission shall consider whether forbearance would promote 
competition.
      Section 230 allows joint marketing of mobile services in 
connection with telephone exchange service, exchange access, 
intra- and interLATA telecommunication service and information 
services.
Conference agreement
      The conferees agree to create a new section 10 in title I 
of the Communications Act. New subsection (a) of section 10 
requires the Commission to forbear from applying any provision 
of the Communications Act or from applying any of its 
regulations to a telecommunications carrier or 
telecommunications service, if the Commission determines that 
enforcement is not necessary to:
              ensure that charges, practices, classifications 
        or regulations for such carrier or service are just and 
        reasonable, and not unjustly or unreasonably 
        discriminatory;
              protect consumers; and
              protect the public interest.
      In making its public interest determinations, the 
Commission under new subsection (b) of section 10 shall 
consider whether or not forbearance will promote competition.
      New subsection (c) permits carriers to petition for 
forbearance and these petitions shall be deemed granted if the 
Commission does not deny such petition within one year of the 
Commission's receipt of the petition. The Commission may only 
extend this one-year time period for 90 days. The Commission 
can also approve or deny the petition in whole or in part.
      New subsection (d) provides that the Commission may not 
forbear from applying the requirements of new sections 251(c) 
or 271 until the Commission determines that those requirements 
have been fully implemented.
      New subsection (e) provides that a State may not continue 
to apply or enforce any provision of the Communications Act 
that the Commission has determined to forbear from applying 
under new subsection (a). This new subsection is not intended 
to limit or preempt State enforcement of State statutes or 
regulations.

     section 402--biennial review of regulations; regulatory relief

Senate bill
      Section 302 of the Senate bill adds a new section 259 of 
the Communications Act, under which every two years the 
Commission and a Federal-State Joint Board must review all 
regulations issued under the Communications Act or any State 
legislation to determine whether they are still necessary in 
the public interest as a result of meaningful competition. The 
Commission is required to repeal any of its regulations found 
to be no longer necessary.
House amendment
      No provision.
Conference agreement
      The conferees agree to create a new section 11 in title I 
of the Communications Act. New subsection (a) of section 11 
requires the Commission, beginning in 1998 and in every even 
numbered year thereafter, to review all of its regulations that 
apply to the operations and activities of providers of 
telecommunications services and determine whether any of these 
regulations are no longer in the public interest because 
competition between providers renders the regulation no longer 
meaningful.
      New subsection (b) of section 11 requires the Commission 
to eliminate the regulations that it determines are no longer 
in the public interest.
      New subsection (b) of section 402 of the conference 
agreement addresses regulatory relief that streamlines the 
procedures for revision by local exchange carriers of charges, 
classifications and practices under section 204 of the 
Communications Act. New subsection (b) of section 402 also 
eliminates the section 214 approval requirement for extension 
of lines and permits carriers to file ARMIS reports annually.
      New subsection (c) of section 402 of the conference 
agreement requires the Commission in classifying carriers 
according to 47 CFR 32.11, and in establishing reporting 
requirements pursuant to 47 CFR part 43 and 47 CFR 64.903, to 
adjust revenue requirements to account for inflation as of the 
date the Commission's Report and Order on Docket No. CC 91-141 
was released, and annually thereafter.

  Section 403--Elimination of Unnecessary Commission Regulations and 
                               Functions

Senate bill
      Section 302(b) of the Senate bill is intended to 
eliminate unnecessary Commission regulations and functions. 
Subsection (b)(1) repeals the current requirement that the 
Commission set depreciation rates for common carriers, thus 
allowing the Commission flexibility to assess whether doing so 
would serve the public interest.
      Subsection (b)(2) authorizes the Commission to hire 
outside, independent licensed CPA's to audit telecommunications 
carriers and vests those outsiders with the same authority as 
Commission staff auditors.
      Subsection (b)(3) streamlines the Federal-State 
coordination process by allowing states and the Commission to 
select the least formal method appropriate in resolving 
specific regulatory issues.
      Subsection (b)(4) allows for inspection of ship radio 
stations by private entities and provides the Commission with 
authority to waive the current mandatory annual inspection 
while providing greater flexibility in scheduling ship 
inspections.
      Subsection (b)(5) would give the Commission flexibility 
in determining whether broadcast construction permits are 
required where the likelihood of interference is minimal or 
does not exist.
      Subsection (b)(6) allows automatic cancellation of a 
broadcaster's license if the station does not transmit for 12 
consecutive months.
      Subsection (b)(7) provides Commission staff with 
authority to process routine comparative ITFS applications.
      Subsection (b)(8) permits the Commission to delegate, 
subject to established Commission standards, testing and 
certification of telecommunications devices and home 
electronics equipment to private laboratories.
      Subsection (b)(9) eliminates the requirement that a 
public hearing be held for a station to make routine changes in 
frequency, hours of operation, and authorized power.
      Subsection (b)(10) also eliminates the individual 
licensing requirement currently imposed on domestic ships and 
aircraft, citizens band radio and personal radio services, if 
the Commission determines it is in the public interest.
      Subsection (b)(11) expedites the licensing of fixed 
microwave service by eliminating the requirement that 30 days 
public notice be given prior to granting these licenses.
      Subsection (b)(12) also ends redundant Commission 
jurisdiction over ship radios owned by other government 
agencies.
      Subsection (b)(13) broadens the number of individuals 
authorized to administer amateur radio examinations and reduces 
the amount of paperwork that must be kept.
      Subsection (b)(14) authorizes the Commission to 
streamline and reduce its renewal procedures for non-broadcast 
radio license renewal applicants such as cellular licensees.
House amendment
      The House has no comparable provisions, except for the 
provision delegating equipment testing authority.
Conference agreement
      The conference agreement adopts the Senate provisions, 
except for subsection (b)(3), with modifications. Specifically, 
subsections (b)(4), (b)(7), (b)(10) and (b)(11) of the Senate 
bill have been modified to incorporate provisions as passed in 
the House budget reconciliation legislation (House Report 104-
280).
      The conference agreement also amends section 310(b) of 
the Communications Act to remove the restrictions on 
corporations having foreign officers or directors.

                    TITLE V--OBSCENITY AND VIOLENCE

      Subtitle A--Obscene, Harassing, and Wrongful Utilization of 
                     Telecommunications Facilities

section 502--obscene or harassing use of telecommunications facilities 
                  under the communications act of 1934

Senate bill
      Section 401 of the Senate bill updates section 223(a) of 
the Communications Act by using the term ``telecommunications 
service'' as a replacement for or in addition to ``telephone'' 
references in the present law. The term ``communication'' is 
added to current law references to ``conversation.'' An intent 
requirement is added to section 223(a)(1)(A) that liability is 
incurred for ``obscene, lewd, lascivious, filthy, or indecent'' 
communications with the intent to ``annoy, abuse, threaten, or 
harass another person.''
      Current law ``Dial-a-Porn'' provisions (sections 223(b) 
and (c)) are untouched by the Senate bill.
      A new section 223(d) is added to prohibit the use of a 
telecommunications device to make or make available an obscene 
communication.
      A new section 223(e) is added to prohibit the use of a 
telecommunications device to make or make available an indecent 
communications to minors.
      New defenses are provided to assure that the mere 
provision of access to an interactive computer service does not 
create liability. The access providers provision is not 
available to one who provides access to a system with which 
they conspire or own or control. Employers are provided a 
defense for actions by employees unless the employee's conduct 
is within the scope of employment and is known, authorized, or 
ratified by the employer. A good faith defense is provided for 
``reasonable, effective, and appropriate'' measures to restrict 
access to prohibited communications. The word ``effective'' is 
given its common meaning and does not require an absolute 100 
percent restriction of access to be judged ``effective.''
      Nothing in the defenses to section 223 are intended to 
narrow or effect the application of the existing dial-a-porn 
law or other Federal criminal law or to provide a defense for 
the person who created and sent a prohibited communication.
      The use of the good faith defenses which are otherwise 
legal shall not expose an individual to liability and the 
States may not impose obligations for commercial activities 
which are inconsistent with the treatment of activities or 
actions described in this section.
House amendment
      No provision.
Conference agreement
      The conference agreement adopts the Senate provisions 
with modifications. New subsection 223(d)(1) applies to content 
providers who send prohibited material to a specific person or 
persons under 18 years of age. Its ``display'' prohibition 
applies to content providers who post indecent material for 
online display without taking precautions that shield that 
material from minors.
      New section 223(d)(1) codifies the definition of 
indecency from FCC v. Pacifica Foundation, 438 U.S. 726 (1978). 
Defenses to violations of the new sections assure that 
attention is focused on bad actors and not those who lack 
knowledge of a violation or whose actions are equivalent to 
those of common carriers.
      The conferees intend that the term indecency (and the 
rendition of the definition of that term in new section 502) 
has the same meaning as established in FCC v. Pacifica 
Foundation, 438 U.S. 726 (1978), and Sable Communications of 
California, Inc. v. FCC, 492 U.S. 115 (1989). These cases 
clearly establish the principle that the federal government has 
a compelling interest in shielding minors from indecency. 
Moreover, these cases firmly establish the principle that the 
indecency standard is fully consistent with the Constitution 
and specifically limited in its reach so that the term is not 
unconstitutionally vague. See also Action for Children's 
Television v. FCC, 58 F. 3d 654, 662-63 (en banc) (D.C. Cir. 
1995), cert. denied, 64 U.S.L.W. 3465 (1996); Alliance For 
Community Media v. FCC, 56 F. 3d 105, 1124-25 (D.C. Cir. 1995) 
cert. granted sub. nom., Denver Area Education 
Telecommunications Consortium v. FCC, 116 S.CT. 471 (1995), 
Dial Information Services Corp. of New York v. Thornburgh, 938 
F.2d 1535, 1540-41 (2d Cir. 1991) cert. denied sub. nom., Dial 
Information Services Corp. of New York v. Barr, 502 U.S. 1072 
(1992); Action for Children's Television v. FCC, 932 F. 2d 
1504, 1508 (D.C. Cir. 1991).
      The precise contours of the definition of indecency have 
varied slightly depending on the communications medium to which 
it has been applied. The essence of the phrase--patently 
offensive descriptions of sexual and excretory activities--has 
remained constant, however. At the time of this writing, the 
Supreme Court will consider at least one constitutional 
challenge to federal indecency statutes. Importantly, the 
question whether indecency is overly broad or 
unconstitutionally vague is not seriously at issue in that 
challenge. See Alliance for Community Media, supra, (whether 
State action exists as to private decisions by cable 
operators). There is little doubt that indecency can be applied 
to computer-mediated communications consistent with 
constitutional strictures, insofar as it has already been 
applied without rejection in other media contexts, including 
telephone, cable, and broadcast radio.
      The conferees considered, but rejected, the so-called 
``harmful to minors'' standard. See Ginsberg v. New York, 390 
U.S. 629, 641-43 (1968). The proponents of the ``harmful to 
minors'' standard contended that that standard contains an 
exemption for material with ``serious literary, artistic, 
political, and scientific value,'' and therefore was the better 
of the two alternative standards. (``Harmful to minors'' laws 
use the ``variable obscenity'' test and prohibit the sale, and 
sometimes the display, of certain sexually explicit material to 
minors.) This assertion misapprehends the indecency standard 
itself, and disregards the Supreme Court's various rulings on 
this issue. See Pacifica, 438 U.S. at 743, n. 18, and its 
progeny.
      The gravamen of the indecency concept is ``patent 
offensiveness.'' Such a determination cannot be made without a 
consideration of the context of the description or depiction at 
issue. It is the understanding of the conferees that, as 
applied, the patent offensiveness inquiry involves two distinct 
elements: the intention to be patently offensive, and a 
patently offensive result. In the Matter of Sagittarius 
Broadcasting Corp. et al, 7 FCC Rcd. 6873, 6875, (1992); In the 
Matter of Audio Enterprises, Inc., 3 FCC Rcd. 930, 932 (1987). 
Material with serious redeeming value is quite obviously 
intended to edify and educate, not to offend. Therefore, it 
will be imperative to consider the context and the nature of 
the material in question when determining its ``patent 
offensiveness.''
      In view of the solid constitutional pedigree of the 
indecency standard (see Pacifica), 438 U.S. at 743 (describing 
indecency as low value and marginally protected by the First 
Amendment)), use of the indecency standard poses no significant 
risk to the free-wheeling and vibrant nature of discourse or to 
serious, literary, and artistic works that currently can be 
found on the Internet, and which is expected to continue and 
grow. As the Supreme Court itself noted when upholding the 
constitutionality of indecency prohibitions, prohibiting 
indecency merely focuses speakers to re-cast their message into 
less offensive terms, but does not prohibit or disfavor the 
essential meaning of the communication. Pacifica, 438 U.S. at 
743, n. 18. Likewise, requiring that access restrictions be 
imposed to protect minors from exposure to indecent material 
does not prohibit or disfavor the essential meaning of the 
indecent communication, it merely puts it in its appropriate 
place: away from children.
      Violators of this section shall be fined under title 18, 
U.S. Code, or imprisoned not more than two years, or both.
      Each intentional act of posting indecent content for 
display shall be considered a separate violation of this 
subsection, rather than each occasion upon which indecent 
material is accessed or downloaded from an interactive computer 
service or posted without the content provider's knowledge on 
such a service. New subsection 223(d)(2) sets forth the 
standard of liability for facilities providers who 
intentionally permit their facilities to be used for an 
activity prohibited by new subsection 223(d)(1).
      New subsection 223(e) includes statutory defenses for 
violations of new sections 223 (a) and (d) that supplement 
other defenses available at law, such as common law defenses. 
New subsections 223 (e)(1), (e)(2) and (e)(3) set forth the 
``access provider'' defense. The defense protects entities from 
liability for providing access or connection to or from a 
facility, network or system not under their control. The 
defense covers provision of related capabilities incidental to 
providing access, such as server and software functions, that 
do not involve the creation of content.
      The defense does not apply to entities that conspire with 
entities actively involved in the creation of content 
prohibited by this section, or who advertise that they offer 
access to prohibited content. Nor does it apply to provision of 
access or connection to a facility, system or network that 
engages in violations of this section and that is owned or 
controlled by the access provider. In the absence of these 
conditions, commercial and non-profit Internet operators who 
provide access to the Internet and other interactive computer 
services shall not be liable for indecent material accessed by 
means of their services. This provision is designed to target 
the criminal penalties of new sections 223(a) and (d) at 
content providers who violate this section and persons who 
conspire with such content providers, rather than entities that 
simply offer general access to the Internet and other online 
content. The conferees intend that this defense be construed 
broadly to avoid impairing the growth of online communications 
through a regime of vicarious liability.
      New subsection 223(e)(4) provides a defense to employers 
whose employees or agents make unauthorized use of office 
communications systems. This defense is intended to limit 
vicarious or imputed liability of employers for actions of 
their employees or agents. To be outside the defense, the 
prohibited action must be within the scope of the employee's or 
agent's employment. In addition, the employer must either have 
knowledge of the prohibited action and affirmately act to 
authorize or ratify it, or recklessly disregard the action. 
Both conditions must be met in order for employers to be held 
liable for the actions of an employee or agent.
      The good faith defenses set forth in new subsection 
223(e)(5) are provided for ``reasonable, effective, and 
appropriate'' measures to restrict access to prohibited 
communications. The word ``effective'' is given its common 
meaning and does not require an absolute 100% restriction of 
access to be judged effective. The managers acknowledge that 
content selection standards, and other technologies that enable 
restriction of minors from prohibited communications, which are 
currently under development, might qualify as reasonable, 
effective, and appropriate access restriction devices if they 
are effective at protecting minors from exposure to indecent 
material via the Internet.
      New subsection 223(e)(6) permits the Commission to 
describe its view of what constitute ``reasonable, effective 
and appropriate'' measures and provides that use of such 
measures shall be admissible as evidence that the defendant 
qualifies for the good faith defense. This new subsection 
grants no further authority to the Commission over interactive 
computer services and should be narrowly construed.
      New subsection 223(f)(1) supplements, without in any way 
limiting, the ``Good Samaritan'' liability protections of new 
section 230.
      New subsection 223(f)(2) preempts inconsistent State and 
local regulations of activities and actions described in new 
subsections 223(a)(2) and (d). This provision is intended to 
establish a uniform national standard of content regulation for 
a national, and indeed a global, medium, in which content is 
transmitted instantaneously in point-to-point, and point-to-
multipoint communications. As originally passed by the Senate, 
this subsection excluded non-commercial content providers. The 
conferees have expanded this section to provide for consistent 
national and State and local content regulation of both 
commercial and non-commercial providers. The conferees 
recognize and wish to protect the important work of nonprofit 
libraries and higher educational institutions in providing the 
public with both access to electronic communications networks 
like the Internet, and valuable content which they are uniquely 
well-positioned to provide. Accordingly, nonprofit libraries 
and educational institutions, like commercial entities, are 
assured by this provision that they will not be subjected to 
liability at the State or local level in a manner inconsistent 
with the treatment of their activities or actions under this 
legislation.
      The conferees also recognize the critical importance of 
access software in making the Internet and other interactive 
computer services accessible to Americans who are not computer 
experts. Accordingly, provisions of ``access software'' is 
included within the access provider defense. As defined in new 
subsection 223(h)(3), in term includes software that enables a 
user to do any of an enumerated list of functions that are set 
forth in technical language. It includes client and server 
software, such as proxy server software that downloads and 
caches popular web pages to reduce the load of traffic on the 
Internet and to permit faster retrieval. The definition 
distinguishes between software that actually creates or 
includes prohibited content and software that allows the user 
to access content provided by others.

          section 503--obscene programming on cable television

Senate bill
      Section 403 of the Senate bill amends section 639 of the 
Communications Act to increase the maximum fine for 
transmitting obscene programming on cable television from 
$10,000 to $100,000.
House amendment
      No provision.
Conference agreement
      The conference agreement adopts the Senate provision with 
modifications, $10,000 is struck from the current law and 
``under title 18, United States Code'' is inserted.

      section 504--scrambling of cable channels for nonsubscribers

Senate bill
      Section 407 of the Senate bill adds a new section 640 to 
the Communications Act requiring cable television operators to 
fully scramble or otherwise block upon subscriber request and 
at no charge to the subscriber, the audio and video portions of 
programming not specifically subscribed to by a household and 
unsuitable for children in the judgment of the subscriber.
House amendment
      No provision.
Conference agreement.
      The conference agreement adopts the Senate provision with 
modifications as a new section 640 of the Communications Act. 
The ``unsuitable for children'' standard is dropped. 
Programming not subscribed to by a household shall be blocked 
on request without charge.

   section 505--scrambling of sexually explicit adult video service 
                              programming

Senate bill
      Section 408 of the Senate bill requires that cable 
operators offering sexually explicit adult programming or other 
programming that is indecent on any channel of its service 
primarily dedicated to sexually-oriented programming fully 
scramble or block the video and audio portions of such channel 
or channels so that one not a subscriber does not receive it.
House amendment
      No provision.
Conference agreement
      The conference agreement adopts the Senate provision with 
modifications as a new section 641 of the Communications Act.

     Section 506--Cable Operator Refusal to Carry Certain Programs

Senate bill
      Section 408 of the Senate bill amends title VI of the 
Communications Act to allow cable operators to refuse to 
transmit any public access or leased access program or portion 
of a program which contains obscenity, indecency, or nudity.
House amendment
      No provision.
Conference agreement
      The conference agreement adopts the Senate provision.

  Section 507--Protection of Minors and Clarification of Current Laws 
    Regarding Communication of Obscene Materials Through the Use of 
                               Computers.

Senate bill
      No provision.
House amendment
      Section 403(a)(2) of the House amendment made conforming 
and clarifying amendments to sections 1462, 1467, and 1469 of 
title 18, United States Code. Those statutes currently prohibit 
the interstate transportation of obscenity for the purpose of 
sale or distribution, whether commercial or non-commercial in 
nature. These statutes outlaw the importation of obscenity, by 
whatever means. These provisions were intended to simply 
clarify sections 1462, 1465, and 1467 of title 18, United 
States Code.
Conference agreement
      The Senate recedes to the House with modifications. 
Section 507 simply clarifies that the current obscenity 
statutes, in fact, do prohibit using a computer to import and 
receive an importation of, and transport to sell or distribute, 
``obscene'' material.
      The amendments made by this section are clarifying and 
shall not be interpreted to limit or repeal any prohibition 
contained in sections 1462 or 1465 of title 18, United States 
Code, before such amendment, under the rule established in 
United States v. Alpers, 338 U.S. 680 (1950).

             section 508--coercion and enticement of minors

Senate bill
      Several provisions of the Senate bill protect children 
from harassing, indecent or obscene communications.
House amendment
      Several provisions of the House amendment protect 
children from obscene or indecent communications.
Conference agreement
      Section 508 would amend section 2422 of title 18 to 
prohibit the use of a facility of interstate commerce which 
includes telecommunications devices and other forms of 
communication for the purpose of luring, enticing, or coercing 
a minor into prostitution or a sexual crime for which a person 
could be held criminally liable, or attempt to do so. On July 
24, 1995, the Senate Judiciary Committee held a hearing on 
online indecency, obscenity, and child endangerment. The record 
of this hearing supports the need for Congress to take 
effective action to protect children and families from online 
harm.

                 section 509--online family empowerment

Senate bill
      No provision.
House amendment
      Section 104 of the House amendment protects from civil 
liability those providers and users of interactive computer 
services for actions to restrict or to enable restriction of 
access to objectionable online material.
Conference agreement
      The conference agreement adopts the House provision with 
minor modifications as a new section 230 of the Communications 
Act. This section provides ``Good Samaritan'' protections from 
civil liability for providers or users of an interactive 
computer service for actions to restrict or to enable 
restriction of access to objectionable online material. One of 
the specific purposes of this section is to overrule Stratton-
Oakmont v. Prodigy and any other similar decisions which have 
treated such providers and users as publishers or speakers of 
content that is not their own because they have restricted 
access to objectionable material. The conferees believe that 
such decisions create serious obstacles to the important 
federal policy of empowering parents to determine the content 
of communications their children receive through interactive 
computer services.
      These protections apply to all interactive computer 
services, as defined in new subsection 230(e)(2), including 
non-subscriber systems such as those operated by many 
businesses for employee use. They also apply to all access 
software providers, as defined in new section 230(e)(5), 
including providers of proxy server software.
      The conferees do not intend, however, that these 
protections from civil liability apply to so-called 
``cancelbotting,'' in which recipients of a message respond by 
deleting the message from the computer systems of others 
without the consent of the originator or without having the 
right to do so.

                          Subtitle B--Violence

         section 551--parental choice in television programming

Senate bill
      Sections 501-505 of Senate bill gives the industry one 
year to voluntarily develop a ratings system for TV programs. 
If the industry fails to do so, a Federal TV Ratings Commission 
would set the ratings. The Commission would be appointed by the 
President, subject to confirmation by the Senate and would 
establish rules for rating the level of violence and other 
objectionable content in programs. The Board would also 
establish rules for TV broadcasters and cable systems to 
transmit the ratings to viewers. The Commission would be 
authorized funds necessary to carry out its duties. The Senate 
bill requires TV manufacturers to equip all 13 inch or greater 
TV sets with circuitry to block rated shows.
House amendment
      Section 305 of the House amendment gives the cable and 
broadcast industries one year to develop voluntary ratings for 
video programming containing violence, sex and other indecent 
materials and to agree voluntarily to broadcast signals 
containing such ratings. If the industry fails to come up with 
an acceptance plan, the Commission must develop guidelines for 
rating programs based on recommendations from an advisory 
committee that is fairly balanced politically. If a program is 
rated, the broadcasters must transmit the signal of the rating. 
The House amendment requires TV manufacturers to equip 13 inch 
or greater sets with circuitry that will enable the set to 
block out all programs with a common rating.
Conference agreement
      The conference agreement adopts the House provisions with 
modifications. In subsection (a), Congress makes findings 
concerning the adverse impact of violent and indecent video 
programming on children, the compelling interest of the 
government in addressing this problem, and the promise of 
technological tools that allow parents to protect their 
children by blocking harmful programming on their television 
sets.
      In subsection (b), Congress provides the Commission the 
authority to set up an advisory committee to recommend a system 
for rating video programming that contains sexual, violent or 
other indecent material about which parents should be informed 
before it is displayed to children. It also provides the 
Commission with authority to prescribe rules requiring a 
distributor to transmit a rating if the distributor has decided 
to rate a video program. However, in subsection (e), Congress 
delays the Commission's exercise of this authority to no sooner 
than one year after the date of enactment, and only if it 
determines that distributors of video programming have not 
established an acceptable voluntary system for rating 
programming nor agreed voluntarily to broadcast signals that 
contain ratings of such programming.
      In subsection (b)(1), the Commission is authorized to 
prescribe guidelines and recommended procedures for a rating 
system based on the recommendations from the advisory 
committee. Nothing in this language is intended to preclude 
publishing the rating in print advertisements or on the air, 
but under this subsection the distributor must include the 
electronic transmission of the rating as an additional method 
of empowering parents to block programming carrying the rating.
      The rules prescribed for transmitting a rating are 
requirements. In contrast, the guidelines and recommended 
procedures for a rating system are not rules and do not include 
requirements. They are intended to provide industry with a 
carefully considered and practical system for rating programs 
if industry does not develop such a system itself. However, 
nothing in subsection (b)(1) authorizes, and the conferees do 
not intend that, the Commission require the adoption of the 
recommended rating system nor that any particular program be 
rated.
      In subsection (b)(2), Congress directs the Commission to 
ensure that the advisory committee is composed of 
representatives from the private sector and be fairly balanced 
in terms of political affiliation, the points of view 
represented, and the functions to be performed by the 
committee. It also directs the Commission to provide to the 
committee such staff and resources as may be necessary and 
require the committee to submit a final report no later than 
one year after the appointment of its members.
      In new subsections (c) and (d), the conferees have 
removed language from the House amendment concerning the 
importation of televisions, and clarified that the requirements 
of these subsections apply to all televisions above a certain 
size shipped in interstate commerce (regardless of where they 
were manufactured) or televisions manufactured in the United 
States. Such sets are required by these two subsections to 
include a feature designed to enable viewers to block display 
of programs carrying a common rating in compliance with rules 
prescribed by the Commission. Under subsection (c)(4), the 
Commission is authorized to amend these rules as appropriate to 
allow set manufacturers to comply with this subsection using 
alternative technology that meets certain standards of cost, 
effectiveness and ease of use.
      Under subsection (e)(1), the effective date for 
subsection (b) (regarding the appointment of an advisory 
committee to recommend a rating system and the rules for 
transmitting a rating) is no less than one year after the date 
of enactment. The actual effective date has also been made 
contingent on a determination by the Commission that 
distributors of video programming have not, by such date, 
established a voluntary system for rating video programming and 
such programming is acceptable to the Commission and have also 
agreed to include ratings in the transmission of signals to 
television sets for blocking.
      Under subsection (e)(2), the effective date for 
subsection (c) (regarding the rules for the manufacture of 
television sets capable of blocking) is no less than two years 
after the date of enactment. The conferees intend that the 
actual effective date be specified by the Commission after 
consultation with the television manufacturing industry.

                      Section 552--Technology Fund

Senate bill
      No provision.
House amendment
      Section 304 of the House amendment encourages broadcast, 
cable, satellite, syndication, and other video programming 
distributors to establish a technology fund to encourage TV and 
electronics equipment manufacturers to facilitate the 
development of blocking technology that would empower parents 
to block TV programming they deem inappropriate for their 
children.
Conference agreement
      The conference agreement adopts the House provision with 
modifications to encourage the availability of blocking 
technology to low income families.

                      Subtitle C--Judicial Review

                     section 561--expedited Review

Conference agreement
      The conference agreement adds new language to provide for 
expedited judicial review of the indecency, obscenity and 
violence provisions of this title. In any civil action in which 
a party makes a facial challenge to these provisions, the 
challenge shall be heard by a three-judge district court 
convened under 28 U.S.C. Sec. 2284. Any decision of the three-
judge district court holding a provision unconstitutional shall 
be directly appealable to the Supreme Court as a matter of 
right. However, the direct right of appeal provided in 
subsection (b) in this limited circumstance does not limit any 
appeal rights applicable to other circumstances under general 
statutes.
      The conferees emphasize that these provisions are limited 
in several ways. They apply only in civil actions. If a party 
makes a facial challenge in a criminal context, that party 
would not be able to use the procedures provided in this 
section. These provisions apply only to facial challenges. 
These provisions do not apply to actions in which the party 
only challenges the provision as applied to the particular 
party involved. However, the three-judge district court could 
hear both a facial challenge and an ``as applied'' challenge if 
they were combined in the same action, and facial validity had 
not yet been determined. Thus, the conferees intend that these 
provisions should be invoked in only the limited number of 
cases necessary to determine the facial validity of these 
provisions. If that facial validity is upheld by the courts, 
these provisions may not be used in every ``as applied'' 
challenge brought thereafter.

                     TITLE VI--EFFECT ON OTHER LAWS

      section 601--Applicability of Consent Decrees and Other Law

Senate bill
      Section 7(a) of the Senate bill provides that except for 
the supersession of the Modification of Final Judgment, nothing 
in the Communications Act shall be construed to modify, impair, 
or supersede the applicability of any antitrust law. Section 
7(b) provides that the Communications Act shall supersede the 
Modification of Final Judgment to the extent that it is 
inconsistent with the Communications Act. Section 7(c) of the 
bill transfers jurisdiction of any parts of the Modification of 
Final Judgment which are not superseded to the Commission. 
Section 7(d) supersedes the GTE consent decree.
      Section 201(c) of the Senate bill provides that except as 
provided in section 202, nothing in the Communications Act 
shall be construed to modify, impair, or supersede any State or 
local tax law.
      Section 226 of the Senate bill provides that 
notwithstanding any other provision of law or any judicial 
order, no person shall be subject to the provisions of the 
Modification of Final Judgment solely by reason by having 
acquired CMS or private mobile service assets or operations 
previously owned by a BOC or an affiliate of a BOC.
House amendment
      Section 401(a) of the House amendment provides that 
certain specified sections of the Modification of Final 
Judgment are superseded. Section 401(b) provides that nothing 
in the Communications Act or the amendments made by the 
conference agreement shall be construed to modify, impair, or 
supersede any of the antitrust laws. Section 401(c)(1) provides 
that parts II and III of title II of the Communications Act 
shall not be construed to modify, impair, or supersede Federal, 
State, or local law unless expressly so provided in such part. 
Section 401(c)(2) provides that notwithstanding section 
401(c)(1), nothing in the Communications Act or the amendments 
made by the conference agreement shall be construed to modify, 
impair, or supersede any State or local tax law except as 
provided in sections 243(e) and 622 of the Communications Act 
and section 402 of this Act.
      Section 401(d) of the House amendment provides that the 
GTE consent decree is superseded. Section 401(e) provides that 
no person shall be considered an affiliate, successor, or an 
assign of a BOC under section III of the Modification of Final 
Judgment by reason of having acquired wireless exchange assets 
or operations previously owned by a BOC or an affiliate of a 
BOC. Section 401(f) defines the term ``antitrust laws'' as used 
in section 401. Section 401(g) provides that for the purposes 
of this section, the terms ``Modification of Final Judgment'' 
and ``Bell Operating Company'' have the same meanings provided 
such terms in section 3 of the Communications Act.
Conference agreement
      The conference agreement adopts a new approach to the 
supersession of the Modification of Final Judgment (now called 
the AT&T; Consent Decree in the conference agreement) and the 
GTE consent decree, and it adds language superseding the AT&T-;
McCaw Consent Decree (``McCaw Consent Decree''). The conferees 
sought to avoid any possibility that the language in the 
conference agreement might be interpreted as impinging on the 
judicial power. Congress may not by legislation retroactively 
overturn a final judgment. Plaut v. Spendthrift Farm, Inc., 115 
S.Ct. 1447 (1995). On the other hand, Congress may by 
legislation modify or eliminate the prospective effect of a 
continuing injunction. Robertson v. Seattle Audubon Society, 
503 U.S. 429 (1992); Plaut, 115 S.Ct. 1447; Pennsylvania v. 
Wheeling & Belmont Bridge Co., 59 U.S. 421 (1856).
      The conferees believe that the AT&T; Consent Decree, the 
GTE Consent Decree, and the McCaw Consent Decree are continuing 
injunctions rather than final judgments. The Committee has 
chosen to use the term ``AT&T; Consent Decree'' rather than 
``Modification of Final Judgment'' to emphasize that point.
      To avoid any possible constitutional problem, the 
conferees adopted the following new approach. Rather than 
``superseding'' all or part of these continuing injunctions, 
the conference agreement simply provides that all conduct or 
activities that are currently subject to these consent decrees 
shall, on and after the date of enactment, become subject to 
the requirements and obligations of the Communications Act and 
shall no longer be subject to the restrictions and obligations 
of the respective consent decrees.
      The conferees intend that the court shall retain 
jurisdiction over the three consent decrees for the limited 
purpose of dealing with any conduct or activity occurring 
before the date of enactment. Nothing in the language 
eliminating the prospective effect of the three consent decrees 
should be construed as eliminating the jurisdiction of the 
Court to deal with preenactment conduct or activities under the 
consent decrees.
      At the time of the divestiture of AT&T; under the AT&T; 
Consent Decree, AT&T; and the BOCs entered into a number of 
long-term contracts that dealt with pensions, contingent 
liabilities, and the like. These contracts are not incorporated 
by reference in the AT&T; Consent Decree, and nothing in the 
language eliminating the prospective effect of the AT&T; Consent 
Decree should be construed as affecting these contracts.
      By eliminating the prospective effect of the GTE Consent 
Decree, this language removes entirely the GTE Consent Decree's 
prohibition on GTE's and the GTE Operating Companies' entry 
into the interexchange market. No provision in the 
Communications Act should be construed as creating or 
continuing in any way the GTE Consent Decree's prohibition on 
GTE or its operating companies' entry into the interexchange 
market.
      Language explicitly overturning the McCaw Consent Decree 
was not included in either bill. However, the new approach to 
the AT&T; and GTE Consent Decrees, as well as intervening 
events, justify the overturning of the McCaw Consent Decree in 
the conference agreement.
      The McCaw Consent Decree includes three major elements: 
(1) equal access and interconnection requirements for AT&T;'s 
cellular business, (2) restrictions on AT&T;'s manufacturing 
business, and (3) a separate subsidiary requirement for AT&T;'s 
cellular business. Both bills contained language that would 
have overturned the equal access and interconnection 
requirements for all cellular businesses, and that language is 
included in the conference agreement. Since the passage of the 
original bills in both the House and Senate, AT&T; has announced 
that it will spin off its manufacturing business, and so the 
manufacturing aspects of the decree will soon become moot. 
Finally, a recent decision of the Sixth Circuit, Cincinnati 
Bell Tel. Co., v. FCC, 69 F.3d 752 (6th Cir. 1995), may lead to 
the removal of the separate subsidiary requirement for other 
cellular businesses. Accordingly, there is little reason to 
keep the McCaw Consent Decree in place.
      The McCaw Consent Decree presents a slightly different 
problem than the other two consent decrees because it has not 
yet been formally entered by the court. The parties agreed to 
the McCaw Consent Decree and filed it with the court on July 
15, 1994. AT&T; entered into a stipulation to abide by the 
proposed consent decree until the court completed its review 
under the Tunney Act. That review is still continuing. 
Nonetheless, the conferees believe that the same basic 
principles of law set forth above relating to modifying the 
prospective effect of injunctions apply to the McCaw Consent 
Decree, which is defined to include the stipulation.
      The new approach adopted in the Committee required that 
several new provisions be added to the conference agreement. 
Two of these provisions are described below. Two other 
provisions, relating to equal access and nondiscrimination for 
interexchange carriers and existing activities under consent 
decree waivers, are also related to this change and they are 
described in the appropriate sections of this Joint Statement.
      Both the Senate bill and the House amendment specifically 
provided that a company would not be considered a successor to 
a BOC or otherwise subject to restrictions imposed on BOCs 
solely because the company acquired (by spinoff, transfer, or 
any other manner) wireless exchange assets or operations from a 
BOC. The language of these provisions provided this protection 
under the AT&T; Consent Decree. Because of the new approach to 
the AT&T; Consent Decree, the language in the bills no longer 
worked to provide the protection that was intended. For that 
reason, those specific provisions in both bills are omitted 
from the conference agreement.
      In lieu of those provisions, the conference agreement 
modifies the definition of BOC so that successors or assigns of 
the listed BOC's fall within the definition only if they 
provide wireline telephone exchange service. This change of 
definition is intended to provide the same protection that the 
provisions in the two bills provided--that a successor to a 
BOC's wireless assets shall not be treated as a BOC simply 
because of the acquisition of those assets.
      The conference agreement adopts the House antitrust 
savings clause with modifications. The antitrust savings clause 
provides that except as provided in paragraphs two and three, 
nothing in this Act or the amendments made by the conference 
agreement shall be construed to modify, impair, or supersede 
the applicability of any of the antitrust laws. The clause was 
modified to include the repeal of section 221(a) of the 
Communications Act (47 U.S.C. Sec. 221(a)). Congress enacted 
section 221(a) in the days when local telephone service was 
viewed as a natural monopoly. Its purpose was to allow 
competing local telephone companies to merge without facing 
antitrust scrutiny. Thus, the statute provides that when any 
two telephone companies merge, the Commission should determine 
whether the merger will be ``of advantage to the persons to 
whom service is to be rendered and in the public interest.'' If 
so, the Commission can render the transaction immune from ``any 
Act or Acts of Congress making the proposed transaction 
unlawful.'' In a world of regulated monopolies, this idea made 
sense.
      However, section 221(a) could inadvertently undercut 
several of the provisions of the Telecommunciations Act of 
1996. The problem arises for at least two reasons. First, the 
critical term ``telephone company'' is not defined. In the old 
world of regulated monopolies, a definition probably was not 
necessary. However, in the new world of competition, many 
companies will be able to argue plausibly that they are 
telephone companies.
      Second, section 221(a) allows the Commission to confer 
immunity from any Act of Congress (including the 
Telecommunications Act of 1996) after performing a public 
interest review. Section 221(a) could be used to avoid the 
cable-telco buyout provisions of the Telecommunications Act of 
1996. Any cable company that owned any telephone assets could 
become a telephone company and be bought out by a BOC by 
applying for immunity under this section.
      In addition, if immunity were conferred under section 
221(a), it would allow mergers between telecommunications 
giants to go forward without any antitrust or securities 
review. In the old world, the statute was usually used to 
confer immunity on mergers between non-competing Bell operating 
subsidiaries or mergers between Bells and small independents 
within their territories. Neither of these situations involved 
competitive considerations.
      However, in the future, the conferees anticipate that 
cable companies will be providing local telephone service and 
the BOCs will be providing cable service. Mergers between these 
kinds of companies should not be allowed to go through without 
a thorough antitrust review under the normal Hart-Scott-Rodino 
process. The new language contains a conforming change to 
clarify that these mergers will now be subject to Hart-Scott-
Rodino review. By returning review of mergers in a competitive 
industry to the DOJ, this repeal would be consistent with one 
of the underlying themes of the bill--to get both agencies back 
to their proper roles and to end government by consent decree. 
The Commission should be carrying out the policies of the 
Communications Act, and the DOJ should be carrying out the 
policies of the antitrust laws. The repeal would not affect the 
Commission's ability to conduct any review of a merger for 
Communications Act purposes, e.g. transfer of licenses. Rather, 
it would simply end the Commission's ability to confer 
antitrust immunity.
      The conference agreement adopts the House provision 
stating that the bill does not have any effect on any other 
Federal, State, or local law unless the bill expressly so 
provides. This provision prevents affected parties from 
asserting that the bill impliedly preempts other laws.
      The conference agreement adopts the House version of the 
State tax savings clause with a modification to clarify that 
fees for open video systems are excluded from the savings 
clause.

  section 602--preemption of local taxation with respect to direct-to-
                             home services

Senate bill
      No provision.
House amendment
      Section 402 of the House amendment preempts local 
taxation on the provision of direct-to-home (DTH) satellite 
services. This section exempts DTH satellite service providers 
and their sales and distribution agents and representatives 
from collecting and remitting local taxes on satellite-
delivered programming services. Section 402 does not preempt 
local taxes on the sale of the equipment needed to receive 
these services.
Conference agreement
      The conference agreement adopts the House provisions with 
modifications. This section exempts DTH satellite service 
providers from collecting and remitting local taxes and fees on 
DTH satellite services. DTH satellite service is programming 
delivered via satellite directly to subscribers equipped with 
satellite receivers at their premises; it does not require the 
use of public rights-of-way or the physical facilities or 
services of a community.
      The conferees adopt the House language, but narrow the 
language to ensure that the exemption is only provided for the 
actual sale of the programming delivered by the direct-to-home 
satellite service. The conference agreement amends the House 
provisions to clarify that the exemption applies to taxes 
``on'' direct-to-home satellite service rather than ``with 
respect to the provision of'' such service. The conference 
agreement deletes the language specifying that the sale of 
equipment was not within the exemption. The conference 
agreement amends the definition of ``direct-to-home satellite 
service'' so that it includes only programming transmitted or 
broadcast by satellite.
      The intent of these amendments is to clarify that the 
exemption applies only to the programming provided by the 
direct-to-home satellite service. To give two illustrative 
examples, the exemption does not apply to the sale of 
equipment; that language was deleted only because it could have 
created a negative implication that the exemption was broader 
than intended. In addition, the exemption does not apply to 
real estate taxes that are otherwise applicable when the 
provider owns or leases real estate in a jurisdiction. Also, 
States are free to tax the sale of the service and they may 
rebate some or all of those monies to localities if they so 
desire.

                  TITLE VII--MISCELLANEOUS PROVISIONS

Section 701--Prevention of Unfair Billing Practices for Information or 
            Services Provided Over Toll-free Telephone Calls

Senate bill
      Section 406 of the Senate bill amends section 228(c) of 
the Communications Act to add protection against the use of 
toll free telephone numbers to connect an individual to a 
``pay-per-call'' service. Published reports have indicated that 
toll free numbers have been used to defeat the blocking of 
``pay-per-call'' numbers by connecting a caller to a ``pay-per-
call'' service after a toll free connection has been made. 
Households, businesses and other institutions have been billed 
for ``pay-per-call'' charges even though ``pay-per-call'' 
blocking techniques were used. This provision is intended to 
stop that practice.
      Section 703 of the Senate bill also amends section 228(c) 
of the Communications Act to clarify that subscribers who call 
an 800 number or other toll-free numbers shall not be charged 
for the calls unless the calling party agrees to be charged 
under a written subscription agreement or other appropriate 
means. Section 703(a) enumerates findings made by Congress 
concerning the prevention of unfair billing practices for 
information or services provided over toll-free telephone 
calls.
House amendment
      Section 110 protects unsuspecting callers from being 
charged for 800 calls that they expect to be toll-free--thereby 
preserving the toll-free status and integrity of the 800 number 
exchange and $8 billion industry--by requiring strict cost 
disclosure requirements to ensure that consumers clearly know 
when there is a charge for a call, how much the charge will be, 
and how they will be billed.
      Pursuant to the provisions of this section, information 
providers must obtain legal, informed consent from a caller 
through either a written pre-authorized contract between the 
information providers and the caller, or through the use of an 
instructive preamble at the start of all non-free 800 calls. 
Both of these options ensure that consumers know there is a 
charge for the information service and that they are giving 
their consent to be charged.
Conference agreement
      The conference agreement adopts the Senate provisions 
with modifications. The conferees agreed to close a loophole in 
current law, which permits information providers to evade the 
restrictions of section 228 by filing tariffs for the provision 
of information services. Many information providers have taken 
advantage of this exemption by filing tariffs--especially for 
1-500, 1-700 and 10XXX numbers--and charging customers high 
prices for the services. This exemption has proven to be a 
problem because consumers have none of the protections that 
were enacted as part of the Telephone Disclosure and Dispute 
Resolution Act (P.L. 102-556). Section 701(b) of the conference 
agreement closes that loophole.

              Section 702--Privacy of Customer Information

Senate bill
      Section 102 of the Senate bill amends the Communications 
Act to add a new section 252 to impose separate affiliate and 
other safeguards on certain activities of the BOCs. Subsection 
(g) of new section 252 establishes rules to ensure that the 
BOCs protect the confidentiality of proprietary information 
they receive and to prohibit the sharing of such information in 
aggregate form with any subsidiary or affiliate unless that 
information is available to all other persons on the same terms 
and conditions. In general, a BOC may not share with anyone 
customer-specific proprietary information without the consent 
of the person to whom it relates. Exceptions to this general 
rule permit disclosure in response to a court order or to 
initiate, render, bill and collect for telecommunications 
services. For purposes of this subsection the term ``customer 
proprietary information'' does not include subscriber list 
information.
      Subsection 301(c) of the Senate bill defines the term 
``subscriber list information'' and requires local exchange 
carriers to provide subscriber list information on a timely and 
unbundled basis and at nondiscriminatory and reasonable rates, 
terms and conditions to anyone upon request for the purpose of 
publishing directories in any format.
      Subsection 301(d) provides that telecommunications 
carriers have a duty to protect the confidentiality of 
proprietary information of other common carriers and customers, 
including resellers. A telecommunications carrier that receives 
such from another carrier may not use such information for its 
own marketing efforts.
House amendment
      Section 105 of the House amendment adds a new section 222 
to the Communications Act. Section 222 establishes privacy 
protections for customer proprietary network information 
(CPNI). Section 222(a) imposes on carriers a statutory duty to 
provide subscriber list information on a timely basis, under 
nondiscriminatory and reasonable rates, terms and conditions, 
to any publisher of directories upon request.
      Section 222(b)(1)(B) prohibits the use of CPNI ``in the 
identifications or solicitation of potential customers for any 
service other than the service from which such information is 
derived.''
      With respect to section 222(b)(2), the House recognizes 
that carriers are likely to incur some costs in complying with 
the customer-requested disclosures contemplated by this 
section. This section does not preclude a carrier from being 
reimbursed by the customers or third parties for the costs 
associated with making such disclosures. In addition, the 
disclosures described in this section include only the 
information provided to the carrier by the customer. A carrier 
is not required to disclose any of its work product based on 
such information.
      In section 222(b)(3), the term ``aggregate information'' 
should not be construed as a mechanism whereby carriers are 
forced to disclose sensitive information to their competitors. 
Indeed, the key component of ``aggregate information'' is that 
such information would have to be able to be disclosed only to 
those persons who have the approval of the customer. Thus, the 
House intends that the use of ``aggregate information'' would 
be rather limited or restricted.
      Section 222(c) states that this section shall not prevent 
the use of CPNI to combat toll fraud or to bill and collect for 
services requested by the customers.
      Section 222(d) allows the Commission to exempt from its 
requirements of subsection (b) carriers with fewer than 500,000 
access lines, if the Commission determines either that such an 
exemption is in the public interest or that compliance would 
impose an undue burden.
      Section 222(e) defines terms used in this section.
      Section 104(b) directs the Commission to review the 
impact of converging communications technologies on customer 
privacy. This section requires the Commission to commence a 
proceeding within one year after the date of enactment to 
examine the impact of converging technologies and globalization 
of communications networks has on the privacy rights of 
consumers and possible remedies to protect them. This section 
also directs changes in the Commission's regulations to ensure 
that customer privacy rights are considered in the introduction 
of new telecommunications service and directs the Commission to 
correct any defects in its privacy regulations that are 
identified pursuant to this section. The Commission is also 
directed to make any recommendations to Congress for any 
legislative changes required to correct such defects within 18 
months after the date of enactment of this Act.
      This section defines three fundamental principles to 
protect all consumers. These principles are: (1) the right of 
consumers to know the specific information that is being 
collected about them; (2) the right of consumers to have proper 
notice that such information is being used for other purposes; 
and (3) the right of consumers to stop the reuse or sale of 
that information.
Conference agreement
      The conference agreement adopts the Senate provisions 
with modifications. Section 702 of the conference agreement 
amends title II of the Communications Act by adding a new 
section 222.
      In general, the new section 222 strives to balance both 
competitive and consumer privacy interests with respect to 
CPNI. New subsection 222(a) stipulates that it is the duty of 
every telecommunications carrier to protect the confidentiality 
of proprietary information of and relating to other carriers, 
equipment manufacturers and customers, including carriers 
reselling telecommunications services provided by a 
telecommunications carrier.
      New subsection 222(b) provides that a telecommunications 
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.
      In new subsection 222(c) use of CPNI by 
telecommunications carriers is limited, except as provided by 
law or with the approval of the customer. New subsection (c) 
specifies that telecommunications carriers shall only use, 
disclose, or permit access to individually identifiable CPNI in 
its provision of the telecommunications service for which such 
information is derived or in its provision of services 
necessary to or used in the provision of such 
telecommunications service, including directory services. The 
conferees also agreed upon a provision that will require 
disclosure of CPNI by a telecommunications carrier upon 
affirmative written request by the customer, to any person 
designated by the customer.
      The conference agreement also asserts carriers' rights in 
new subsection 222(d) to use CPNI to initiate, render, bill, 
and collect for telecommunications service. New subsection (d) 
also allows use of CPNI to protect the rights or property of 
the carrier. The conferees intend new subsection 222(d)(2) to 
allow carriers to use CPNI in limited fashion for credit 
evaluation to protect themselves from fraudulent operators who 
subscribe to telecommunications services, run up large bills, 
and then change carriers without payment.
      New subsection 222(e) stipulates that subscriber list 
information shall be made available by telecommunications 
carriers that provide telephone exchange service on a timely 
and unbundled basis to any person upon request for the purpose 
of publishing directories in any format. The subscriber list 
information provision guarantees independent publishers access 
to subscriber list information at reasonable and 
nondiscriminatory rates, terms and conditions from any provider 
of local telephone service.
      New subsection 222(f) contains definitions of CPNI, 
aggregate information and subscriber list information.

                      secton 703--pole attachments

Senate bill
      Section 204 of the Senate bill amends section 224 of the 
Communications Act. Section 204 requires that poles, ducts, 
conduits and rights-of-way controlled by utilities are made 
available to cable television systems at the rates, terms and 
conditions that are just and reasonable regardless of whether 
the cable system is providing cable television services or 
telecommunications services. Section 204 further requires the 
Commission to prescribe additional regulations to establish 
rates for attachments by telecommunications carriers. Such 
rates will take effect five years from date of enactment and be 
phased in over a five year period.
House amendment
      Section 105 of the House amendment is intended to remedy 
the inequity of charges for pole attachments among providers of 
telecommunications services. First, it expands the scope of the 
coverage of section 224 of the Communications Act. Under 
current law, section 224(a)(4) currently defines ``pole 
attachment'' to mean any attachment by a cable television 
system to a pole, conduit, or right of way owned or controlled 
by a utility. This section expands the definition of ``pole 
attachment'' to include attachments by all providers of 
telecommunications services.
      Second, it amends section 224 to direct the Commission, 
no later than one year after the date of enactment of the 
Communications Act of 1995, to prescribe regulations for 
ensuring that utilities charge just and reasonable and 
nondiscriminatory rates for pole attachments to all providers 
of telecommunications services, including such attachments used 
by cable television systems to provide telecommunications 
services.
      The new provision directs the Commission to regulate pole 
attachment rates based on a ``fully allocated cost'' formula. 
In prescribing pole attachment rates, the Commission shall: (1) 
recognize that the entire pole, duct, conduit, or right-of-way 
other than the usable space is of equal benefit to all entities 
attaching to the pole and therefore apportion the cost of the 
space other than the usable space equally among all such 
attachments; (2) recognize that the usable space is of 
proportional benefit to all entities attaching to the pole, 
duct, conduit, or right-of-way and therefore apportion the cost 
of the usable space according to the percentage of usable space 
required for each entity; and (3) allow for reasonable terms 
and conditions relating to health, safety, and the provision of 
reliable utility service.
      This new provision further provides that, to the extent 
that a company seeks pole attachment for a wire used solely to 
provide cable television services (as defined by section 602(6) 
of the Communications Act), that cable company will continue to 
pay the rate authorized under current law (as set forth in 
subparagraph (d)(1) of the 1978 Act). If, however, a cable 
television system also provides telecommunications services, 
then that company shall instead pay the pole attachment rate 
prescribed by the Commission pursuant to the fully allocated 
cost formula.
      Finally, the new provision requires that whenever the 
owner of a conduit or right-of-way intends to modify or to 
alter such conduit or right-of-way, the owner shall provide 
written notification of such action to any entity that has 
obtained an attachment so that such entity may have a 
reasonable opportunity 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 conduit or right-of-way accessible.
Conference agreement
      The conference agreement adopts the Senate provision with 
modifications. The conference agreement amends section 224 of 
the Communications Act by adding new subsection (e)(1) to allow 
parties to negotiate the rates, terms, and conditions for 
attaching to poles, ducts, conduits, and rights-of-way owned or 
controlled by utilities. New subsection 224(e)(2) establishes a 
new rate formula charged to telecommunications carriers for the 
non-useable space of each pole. Such rate shall be based upon 
the number of attaching entities. The conferees also agree to 
three additional provisions from the House amendment. First, 
subsection (g) requires utilities that engage in the provision 
of telecommunications services or cable services to impute to 
its costs of providing such service an equal amount to the pole 
attachment rate for which such company would be liable under 
section 224. Second, new subsection 224(h) requires utilities 
to provide written notification to attaching entities of any 
plans to modify or alter its poles, ducts, conduit, or rights-
of-way. New subsection 224(h) also requires any attaching 
entity that takes advantage of such opportunity to modify its 
own attachments shall bear a proportionate share of the costs 
of such alterations. Third, new subsection 224(i) prevents a 
utility from imposing the cost of rearrangements to other 
attaching entities if done solely for the benefit of the 
utility.

   section 704--facilities siting; radio frequency emission standards

Senate bill
      No provision.
House amendment
      Section 108 of the House amendment required the 
Commission to issue regulations within 180 days of enactment 
for siting of CMS. A negotiated rulemaking committee comprised 
of State and local governments, public safety agencies and the 
affected industries were to have attempted to develop a uniform 
policy to propose to the Commission for the siting of wireless 
tower sites.
      The House amendment also required the Commission to 
complete its pending Radio Frequency (RF) emission exposure 
standards within 180 days of enactment. The siting of 
facilities could not be denied on the basis of RF emission 
levels for facilities that were in compliance with the 
Commission standard.
      The House amendment also required that to the greatest 
extent possible the Federal government make available to use of 
Federal property, rights-of-way, easements and any other 
physical instruments in the siting of wireless 
telecommunications facilities.
Conference agreement
      The conference agreement creates a new section 704 which 
prevents Commission preemption of local and State land use 
decisions and preserves the authority of State and local 
governments over zoning and land use matters except in the 
limited circumstances set forth in the conference agreement. 
The conference agreement also provides a mechanism for judicial 
relief from zoning decisions that fail to comply with the 
provisions of this section. It is the intent of the conferees 
that other than under section 332(c)(7)(B)(iv) of the 
Communications Act of 1934 as amended by this Act and section 
704 of the Telecommunications Act of 1996 the courts shall have 
exclusive jurisdiction over all other disputes arising under 
this section. Any pending Commission rulemaking concerning the 
preemption of local zoning authority over the placement, 
construction or modification of CMS facilities should be 
terminated.
      When utilizing the term ``functionally equivalent 
services'' the conferees are referring only to personal 
wireless services as defined in this section that directly 
compete against one another. The intent of the conferees is to 
ensure that a State or local government does not in making a 
decision regarding the placement, construction and modification 
of facilities of personal wireless services described in this 
section unreasonably favor one competitor over another. The 
conferees also intend that the phrase ``unreasonably 
discriminate among providers of functionally equivalent 
services'' will provide localities with the flexibility to 
treat facilities that create different visual, aesthetic, or 
safety concerns differently to the extent permitted under 
generally applicable zoning requirements even if those 
facilities provide functionally equivalent services. For 
example, the conferees do not intend that if a State or local 
government grants a permit in a commercial district, it must 
also grant a permit for a competitor's 50-foot tower in a 
residential district.
      Actions taken by State or local governments shall not 
prohibit or have the effect of prohibiting the placement, 
construction or modification of personal wireless services. It 
is the intent of this section that bans or policies that have 
the effect of banning personal wireless services or facilities 
not be allowed and that decisions be made on a case-by-case 
basis.
      Under subsection (c)(7)(B)(ii), decisions are to be 
rendered in a reasonable period of time, taking into account 
the nature and scope of each request. If a request for 
placement of a personal wireless service facility involves a 
zoning variance or a public hearing or comment process, the 
time period for rendering a decision will be the usual period 
under such circumstances. It is not the intent of this 
provision to give preferential treatment to the personal 
wireless service industry in the processing of requests, or to 
subject their requests to any but the generally applicable time 
frames for zoning decision.
      The phrase ``substantial evidence contained in a written 
record'' is the traditional standard used for judicial review 
of agency actions.
      The conferees intend section 332(c)(7)(B)(iv) to prevent 
a State or local government or its instrumentalities from 
basing the regulation of the placement, construction or 
modification of CMS facilities directly or indirectly on the 
environmental effects of radio frequency emissions if those 
facilities comply with the Commission's regulations adopted 
pursuant to section 704(b) concerning such emissions.
      The limitations on the role and powers of the Commission 
under this subparagraph relate to local land use regulations 
and are not intended to limit or affect the Commission's 
general authority over radio telecommunications, including the 
authority to regulate the construction, modification and 
operation of radio facilities.
      The conferees intend that the court to which a party 
appeals a decision under section 332(c)(7)(B)(v) may be the 
Federal district court in which the facilities are located or a 
State court of competent jurisdiction, at the option of the 
party making the appeal, and that the courts act expeditiously 
in deciding such cases. The term ``final action'' of that new 
subparagraph means final administrative action at the State or 
local government level so that a party can commence action 
under the subparagraph rather than waiting for the exhaustion 
of any independent State court remedy otherwise required.
      With respect to the availability of Federal property for 
the use of wireless telecommunications infrastructure sites 
under section 704(c), the conferees generally adopt the House 
provisions, but substitute the President or his designee for 
the Commission.
      It should be noted that the provisions relating to 
telecommunications facilities are not limited to commercial 
mobile radio licensees, but also will include other Commission 
licensed wireless common carriers such as point to point 
microwave in the extremely high frequency portion of the 
electromagnetic spectrum which rely on line of sight for 
transmitting communication services.

  section 705--mobile service direct access to long distance carriers

Senate bill
      Subsection (b) of section 221 of the Senate bill, as 
passed, states that notwithstanding the MFJ or any other 
consent decree, no CMS provider will be required by court order 
or otherwise to provide long distance equal access. The 
Commission may only order equal access if a CMS provider is 
subject to the interconnection obligations of section 251 and 
if the Commission finds that such a requirement is in the 
public interest. CMS providers shall ensure that its 
subscribers can obtain unblocked access to the interexchange 
carrier of their choice through the use of interexchange 
carrier identification codes, except that the unblocking 
requirement shall not apply to mobile satellite services unless 
the Commission finds it is in the public interest.
House amendment
      Under section 109 of the House amendment, the Commission 
shall require providers of two-way switched voice CMS to allow 
their subscribers to access the telephone toll services 
provider of their choice through the use of carrier 
identification codes. The Commission rules will supersede the 
equal access, balloting and prescription requirements imposed 
by the MFJ and the AT&T-McCaw; consent decree. The Commission 
may exempt carriers or classes of carriers from the 
requirements of this section if it is consistent with the 
public interest, convenience, and necessity, and the provision 
of mobile services by satellite is specifically exempt from 
this section.
Conference agreement
      The conference agreement adopts the House provision with 
modifications as a new paragraph (8) of section 332 of the 
Communications Act. Specifically, no CMS provider is required 
to provide equal access to common carriers providing telephone 
toll services. However, the Commission may impose rules to 
require unblocked access through the use of mechanisms such as 
carrier identification codes or toll-free numbers, if it 
determines that customers are being denied access to the 
telephone toll service provider of their choice, and such 
denial is contrary to the public interest, convenience, and 
necessity. The requirements for unblocked access to providers 
of telephone toll service shall not apply to mobile satellite 
services unless the Commission finds it to be in the public 
interest.

          section 706--advanced telecommunications incentives

Senate bill
      Section 304 of the Senate bill ensures that advanced 
telecommunications capability is promptly deployed by requiring 
the Commission to initiate and complete regular inquiries to 
determine whether advanced telecommunications capability, 
particularly to schools and classrooms, is being deployed in a 
``reasonable and timely fashion.'' Such determinations shall 
include an assessment by the Commission of the availability, at 
reasonable cost, of equipment needed to deliver advanced 
broadband capability. If the Commission makes a negative 
determination, it is required to take immediate action to 
accelerate deployment. Measures to be used include: price cap 
regulation, regulatory forbearance, and other methods that 
remove barriers and provide the proper incentives for 
infrastructure investment. The Commission may preempt State 
commissions if they fail to act to ensure reasonable and timely 
access.
House amendment
      No provision.
Conference agreement
      The conference agreement adopts the Senate provision with 
a modification.

            section 707--telecommunications development fund

Senate bill
      No provision.
House amendment
      Section 112 creates the Telecommunications Development 
Fund (TDF). The TDF is an organization to provide funds for 
small businesses involved in telecommunications applications. 
The TDF is formulated to serve as a quasi-governmental entity 
that will provide low interest loans as well as financial 
guarantees. The capital for the Fund will be derived from the 
deposit of up-front payments for spectrum auctions into an 
interest bearing account.
      Businesses with gross assets of less that $50 million 
will be eligible to receive loans, based upon an assessment of 
their loan application. The fund will be administered as a not-
for-profit organization, and funds will be disbursed on a race 
and gender neutral basis. The board of directors will consist 
of seven members: four from the private sector, and one from 
three Federal agencies (the Commission, Department of Treasury, 
and the Small Business Administration).
      The fund will provide for reinvestment, create jobs, and 
promote technological innovation in the telecommunications 
industry. A unique aspect of the Fund is that it will promote 
public/private sector partnerships to enhance fund assets, and 
promote technology development and transfer.
Conference agreement
      The conference agreement adopts the House provision as a 
new section 714 of the Communications Act.

     section 708--national education technology funding corporation

Senate bill
      Title VI of the Senate bill adds the National Education 
Technology Funding Corporation Act of 1995. The provisions of 
this title authorize a corporation, established in the District 
of Columbia as a private, nonprofit corporation which is not an 
agency or independent establishment of the Federal Government, 
to receive financial assistance from Federal departments and 
agencies. The Corporation will receive such assistance to 
leverage resources and stimulate private investment in 
education technology infrastructure, to encourage States to 
create and upgrade interactive high capacity networks for 
elementary schools, secondary schools and public libraries, to 
provide loans, grants and other forms of assistance to State 
education technology agencies, and other educational purposes. 
The Corporation's financial statements shall be audited 
annually, and the Corporation shall publish an annual report to 
the President and the Congress.
House amendment
      No provision.
Conference agreement
      The conference agreement adopts the Senate provision.

section 709--report on the use of advanced telecommunications services 
                          for medical purposes

Senate bill
      No provision.
House amendment
      The House amendment directs the Assistant Secretary of 
Commerce for Communications and Information, in consultation 
with the Secretary of Health and Human Services, to submit a 
report on telemedicine grant programs conducted by the 
government.
Conference agreement
      The conference agreement adopts the House provision.

              section 710--authorization of appropriations

Senate bill
      No provision.
House amendment
      This section authorizes appropriations for the Commission 
of such sums as may be necessary to carry out this Act, and 
provides that additional amounts appropriated to carry out this 
Act shall be construed to be changes in the amounts 
appropriated for the performance of the activities described in 
section 9(a) of the Communications Act.
Conference agreement
      The conference agreement adopts the House provision with 
a technical modification to section 309(j)(8)(B) of the 
Communications Act.
                    From the Committee on Commerce, for 
                consideration of the Senate bill, and the House 
                amendment, and modifications committed to 
                conference:
                                   Tom Bliley,
                                   Jack Fields,
                                   Michael G. Oxley,
                                   Rick White,
                                   John D. Dingell,
                                   Edward J. Markey,
                                   Rick Boucher,
                                   Anna G. Eshoo,
                                   Bobby L. Rush,
                    Provided, Mr. Pallone is appointed in lieu 
                of Mr. Boucher solely for consideration of sec. 
                205 of the Senate bill:
                                   Frank Pallone, Jr.,
                    As additional conferees, for consideration 
                of secs. 1-6, 101-04, 106-07, 201, 204-05, 221-
                25, 301-05, 307-11, 401-02, 405-06, 410, 601-
                06, 703, and 705 of the Senate bill, and title 
                I of the House amendment, and modifications 
                committed to conference:
                                   Dan Schaefer,
                                   Joe Barton,
                                   J. Dennis Hastert,
                                   Bill Paxon,
                                   Scott Klug,
                                   Dan Frisa,
                                   Cliff Stearns,
                                   Sherrod Brown,
                                   Bart Gordon,
                                   Blanche Lambert Lincoln,
                    As additional conferees, for consideration 
                of secs. 102, 202-03, 403, 407-09, and 706 of 
                the Senate bill, and title II of the House 
                amendment, and modifications committed to 
                conference:
                                   Dan Schaefer,
                                   J. Dennis Hastert,
                                   Dan Frisa,
                    As additional conferees, for consideration 
                of secs. 105, 206, 302, 306, 312, 501-05, and 
                701-02 of the Senate bill, and title III of the 
                House amendment, and modifications committed to 
                conference:
                                   Cliff Stearns,
                                   Bill Paxon,
                                   Scott Klug,
                    As additional conferees, for consideration 
                of secs. 7-8, 226, 404, and 704 of the Senate 
                bill, and titles IV-V of the House amendment, 
                and modifications committed to conference:
                                   Dan Schaefer,
                                   J. Dennis Hastert,
                                   Scott Klug,
                    As additional conferees, for consideration 
                of title IV of the House amendment, and 
                modifications committed to conference:
                                   Dan Schaefer,
                                   Joe Barton,
                                   Scott Klug,
                 As additional conferees from the Committee on 
                the Judiciary, for consideration of the Senate 
                bill (except secs. 1-6, 101-04, 106-07, 201, 
                204-05, 221-25, 301-05, 307-11, 401-02, 405-06, 
                410, 601-06, 703, and 705), and of the House 
                amendment (except title I), and modifications 
                committed to conference:
                                   Henry Hyde,
                                   Carlos J. Moorhead,
                                   Bob Goodlatte,
                                   Steve Buyer,
                                   Mike Flanagan,
                 As additional conferees, for consideration of 
                secs. 1-6, 101-04, 106-07, 201, 204-05, 221-25, 
                301-05, 307-11, 401-02, 405-06, 410, 601-06, 
                703, and 705 of the Senate bill, and title I of 
                the House amendment, and modifications 
                committed to conference:
                                   Henry Hyde,
                                   Carlos J. Moorhead,
                                   Bob Goodlatte,
                                   Steve Buyer,
                                   Mike Flanagan,
                                   Elton Gallegly,
                                   Bob Barr,
                                   Martin R. Hoke,
                                   Howard L. Berman,
                                 Managers on the Part of the House.

                                   Larry Pressler,
                                   Ted Stevens,
                                   Slade Gorton,
                                   Trent Lott,
                                   Fritz Hollings,
                                   Daniel K. Inouye,
                                   Wendell Ford,
                                   J.J. Exon,
                                   Jay Rockefeller,
                                Managers on the Part of the Senate.